eNotes: Liability – November 2023 – Virginia

SIGNIFICANT CASE SUMMARIES

Virginia Case Summary

Tel. Square II, A Condo. Unit Owners v. 7205 Tel. Square, LLC
Virginia Court of Appeals
No. 0222-22-4

Decided: April 25, 2023

A condominium association can violate the requirement that all unit owners be treated equally when converting common elements to limited common elements.

Background

A condominium association in Fairfax, Virginia contained five “phases.” Under the association’s by-laws, the parking spaces in Phase I were common elements, accessible to all. Conversely, the parking scheme in Phases II, III, IV, and V were limited common elements and assigned on a per-square-foot basis to each unit owner in the five phases of the condominium. In 2015, the board decided to reallocate parking by restricting parking for each unit owner to parking only inside the unit’s designated phase, while still assessing fees for Phase I parking to unit owners in all five phases. Essentially, parking was reallocated by designating the common element parking in Phase I for the exclusive use of Phase I unit owners and requiring unit owners to park only in their designated phase. This diminished unit owners’ interest in the condominium’s common elements, and one owner brought suit.

The parking re-allocation also diminished the value of the Plaintiff unit owner’s condominium units by significantly reducing the number of parking spaces available. The condominium association argued at trial that the by-laws allow for the board of the condominium association to grant revocable or conditional licenses in designated common elements to any unit owners as a “reserved common element.” The association reasoned that because it did not follow the designated procedure under the Virginia Condominium Act to change a common element to a limited common element, the parking re-allocation permissibly designated the parking as reserved common elements rather than limited common elements.

Holding

In Virginia, there is an implied requirement for all unit owners to be treated equally with respect to common elements. By changing a common element to a limited common element, without following the procedure outlined in the Virginia Condominium Act, the condominium association violated this requirement. The Court found that the re-allocation did not qualify as a reserved common element. While the association did not explicitly state it was changing a common element to a limited common element, the intent was to convert a common element to a limited common element. Unit owners have an interest in common elements, and limiting common elements violates the implied requirement to assign common elements equitably.

Questions about this case can be directed to Nicolette DeFrank at (571) 470-0395 or ndefrank@tthlaw.com.