Seaview Ass'n of Fire Island, N.Y. v. Williams

Court of Appeals of the State of New York · 1987 · Contracts

Contractsimplied-in-fact contracthomeowners' associationprivate communityassessmentspurchase with knowledgeacceptance by conductproportionate share

Facts

Plaintiff is a homeowners' association in Seaview, an unincorporated Fire Island community, and it owns and maintains the streets, walkways, and beaches while also providing various community services and facilities. Seaview property owners are assessed a share of plaintiff's annual costs, covering all services and facilities except the water company and tennis courts. Defendants, who own seven houses in Seaview and hold deeded easements to use ocean beaches and walkways, refused to pay assessments on the ground that they were not association members and did not use the recreational facilities. The trial court found that defendants purchased property in Seaview with knowledge of the nature of the community and the conditions attached to ownership there.

Issue

Whether purchasers of property in a private community may be bound by an implied-in-fact contract to pay homeowners' association assessments when they are not association members and claim not to use some of the facilities. More specifically, does purchase with knowledge of the community's services and ownership conditions manifest acceptance of an obligation to pay a proportionate share of the association's costs?

Rule

Where a purchaser knows that a private community homeowners' association provides facilities and services for the benefit of residents, the purchase of property there may manifest acceptance of the conditions of ownership, including payment for those facilities and services. The resulting implied-in-fact contract obligates the owner to pay a proportionate share of the full cost of maintaining the facilities and services, not merely the reasonable value of those actually used by that resident.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nina Patel bought a cottage in a private lakeside enclave near Traverse City, Michigan. Before closing, she received a neighborhood packet stating that Willow Shore Council maintains the roads, docks, shoreline paths, and a seasonal first-aid station for residents, and that each owner pays an annual share of those costs. After moving in, Nina refused to pay because she never signed any membership form.

Is Nina most likely obligated to pay the annual assessment?

Explanation. Where a purchaser knows that a private community association provides facilities and services for residents, the act of purchasing property there may manifest acceptance of the conditions of ownership, including payment obligations. The obligation arises from an implied-in-fact contract and is not dependent on formal membership or a signed membership form. It also requires payment of a proportionate share of the full maintenance costs, not merely the value of the amenities personally used. (Derived from Seaview Ass'n of Fire Island, N.Y. v. Williams (n.d.).)