This case involved a dispute between a condominium owners association (Association) and the owners of a unit within the condominium association (Owner) over Owners right to have more than six people occupy their condominium unit. Associations Declaration contained a provision limiting the occupancy of a unit to a maximum of six people. In disregard of the limitation, Owner was renting out his unit to up to ten people at a time, so Association filed suit seeking an injunction to prohibit Owner from renting the unit to more than six people.

In considering the case, the trial court addressed the issue of whether Association could satisfy the requirements of showing irreparable harm if the injunctive relief were not granted, and that the balance of equities weighs in favor of issuing an injunction. In defining irreparable harm, the court stated, irreparable harm consists of harm for which there can be no adequate recompense at law, i.e., an award of compensatory damages will not suffice.

In addressing the irreparable harm issue, Association contended that absent the requested injunctive relief, the other units whose interests Association represented in bringing the action, because Owners continued breach of the occupancy limitation contained in the Declaration diminished the other unit owners enjoyment of their own property. Association argued that Owners conduct increased crowding in the common areas and the possibility of disruptive group rentals, and absent a grant of the requested injunctive relief, there would be no way to stop Owner from renting to more than six people. Considering these facts, the court concluded that a denial of the requested injunctive relief would cause irreparable harm to Association (the other owners).

In considering the balance of equities between the parties, Association contended that remedying Owners clear violations of the Declaration would honor the reasonable expectations of Associations unit owners and that a failure to grant the requested permanent injunction would result in the other unit owners being denied the benefits that they were entitled to under the Declaration. Recognizing that Owner would possibly suffer economic consequences by not being able to rent to groups in excess of six people if the injunction were granted, the court found that the balance of equities favored Association because giving weight to Owners argument would create a perverse economic incentive by benefiting those homeowners who breach the social contract at the expense of those who abide by the rules.

The court found that Association, and the other unit owners that it represented, would suffer irreparable harm absent the issuance of a permanent injunction and further, the balance of equities weighed in favor of issuing the requested injunction. Thus, the court issued the permanent injunction prohibiting Owner from renting its unit to groups in excess of six people.

Delaware Court of Chancery decision (May 13, 2020).

See case decision: Council_of_Ass’n_of_Unit_Owners_of_Pelican_Cove_Condo._v._Yeilding