Villas at Hidden Lakes Condominium Association v. Geupel Construction Company

Developers Geupel Construction Company and R.G.W. Investment, Co., Inc. (collectively, the developer) (defendants) built The Villas at Hidden Lakes condominium and formed The Villas at Hidden Lakes Homeowners’ Association (the association) (plaintiff). Under the declaration and amended declaration, which anticipated 53 units, the developer was required to pay the association monthly assessments on each condominium unit the developer owned. The declaration and state condominium law authorized the association to collect interest on late payments and to charge late-payment penalties on overdue assessments. After selling four units, the developer, under its declaration authority, withdrew 23 of the original 53 units from the project and stopped paying the assessments on the withdrawn units. Many months later, the association adopted a late charge and retroactively applied it to monthly assessments already delinquent. When the association sued to recover the developer’s unpaid unit assessments, plus late fees and interest, the developer counterclaimed that it did not owe the assessments and late fees on the lots it withdrew. The trial court granted summary judgment for the association, and the developer appealed. On appeal, the developer challenged the association’s authority to impose a fee that would exceed the interest rate specified in the bylaws to be imposed on late payments.