This case involved a dispute between a homeowner (Owner) and his homeowners association (Association) over the non-payment of an HOA annual assessment by Owner. The Owner contended that Association had stopped maintaining the common areas in the neighborhood and did not take action against other owners who were not maintaining their properties and who were renting out their homes in violation of the governing documents. After Owner refused to pay his 2018 HOA annual assessment, Association filed suit against him for the amount of the assessment plus attorneys fees and costs.

The trial court ruled in favor of Owner after finding that Associations failures to maintain the property as it is required to do resulted in a radical change in the community. The trial court commented on dead fish in the community pond, dangerous conditions around the pond, and health and safety issues. In finding in favor of Owner, the Court stated that the maintenance issues kind of shock my conscience. And when it shocks a trial judges conscience, I think it is sufficient. Association then appealed the judgment in favor of Owner.

The appellate court found that, although Association did not deny Owners complaints about the failure to maintain and it sympathized with Owners situation, the law does not allow for homeowners to withhold payment of an HOA annual assessment due to dissatisfaction with the way the association is performing its responsibilities. The court commented that Owner had other legal remedies that would be far more beneficial to Owner and the other residents such as: (i) mount a campaign to oust the current board members; (ii) participate in board meetings or strive to become a board member in order to influence Associations decision-making process; (iii) seek injunctive relief against Association; (iv) seek the appointment of a receiver for Association; or (v) sue board members for a breach of their fiduciary duty. Accordingly, the appellate court reversed the trial courts judgment in favor of Owner and ordered that judgment be entered in favor of Association.

Indiana Appellate Court decision (September 24, 2019).

See case decision: Feather_Trace_Homeowners_Ass’n_v._Luster