Peak Investments v. South Peak Homeowners Association, Inc.

Peak Investments and homeowners Norman and Rita Lesman (plaintiffs) sued the South Peak Homeowners Association (the association) (defendant) to reduce the percentage of homeowner votes needed to amend the declaration of covenants, conditions, and restrictions (CCRs) after a vote at a meeting of homeowners failed to yield the required votes of two-thirds of the lot owners. At the homeowners’ meeting, only 32 of a possible 63 votes were cast in person or by proxy, with 21 voting in favor of the amendment and 11 against it. The Lesmans asked the court to reduce the percentage necessary to amend the CCRs because the CCRs required a supermajority and not enough homeowners attended or cast a proxy. The trial court granted the Lesmans’ petition after finding that the 21 of 32 votes in favor of the amendment more than satisfied the state’s condominium act—the Davis-Stirling Act—which the court found required more than 50 percent of those actually voting to vote in favor of the amendment. The trial court also found that the amendment was reasonable, which was also required under state law. The association appealed, arguing that the state law required an affirmative vote by more than 50 percent of all owners, not just those who attended the meeting or voted by proxy. The amendment in question sought to clarify a typographical error in the minimum sideline setback. The lawyer for the association’s board of directors who prepared the prior amendment with the incorrect value advised the Lesmans that the error was inadvertent and that he had proposed a corrected version, which the association declined to execute.