By John R. Hartnett & Beau Brincefield
Virginia Lawyers Weekly
Even though condominium instruments listed an elevator foyer and surrounding hallways outside a penthouse as a common area, the penthouse owners could show that they created an easement over the area by their conduct, an Arlington Circuit judge has ruled in a case of first impression.
He also held that the owners, by their actions, had reserved a limited common element in the hallways and foyer.
The documents held by the condominium association were in disarray; the case may serve as a wake-up call to associations to make sure their documents are in order.
The case is Tacy v. Ridge House Condominium Owners Assn. A copy of the judge's final declaratory decree is available as VLW 096-8-187.
When the case came to our firm, the Ridge House Condominium Unit Owners Association was demanding that our clients, the owners of the two penthouse units on the top floor of Ridge House, remove their furniture from the elevator foyer and hallways on the penthouse level.
A relevant portion of the recorded plans of the condominium identified those areas as part of the common elements and the association was now taking steps to claim those areas.
Open and shut case? Not exactly. When the penthouse owners told us the history of the disputed areas, they made a strong case for the existence of an easement by implication in the penthouse foyer and hallways as well as a reservation of the areas as a limited common element.
The penthouse owners explained that they had always been led to believe that the areas now in dispute were "part of" their units. They had purchased both units in 1985 from the condominium declarant. The transaction had included a bill of sale for the furniture and furnishings which, for the most part, had remained in the penthouse foyer and hallways since that time.
The purchasers had been provided with the Public Offering Statement, the Declaration and the By-Laws, but not the plats and plans. They had also been provided with a promotional brochure for the two penthouse units (the only units on the top floor) which described a "private elevator foyer," with a private elevator key to the penthouse level and which emphasized the exclusivity and privacy of the entire penthouse level.
For the next 10 years, the penthouse owners and the Ridge House treated the foyer and hallways as if they were the personal responsibility of the penthouse units.
Our investigation began with the private elevator key. As suggested by the promotional brochure, the special key was in the possession of the penthouse unit owners and only the maintenance personnel for the condominium had access to it. The key had never been available to the condominium population in general.
The cleaning and maintenance personnel had no records to demonstrate cleaning and maintenance of the foyer and hallways nor was there evidence of any common use of the disputed areas. To the contrary, one former president of the condominium association had referred to the penthouse foyer and hallways as a "limited common area" in a letter to the penthouse owners.
The areas had not been included in redecorating plans and the association had never repaired damage to the areas caused by water penetration from the roof. It appeared that no one had regarded the penthouse foyers and hallways as common element areas until quite recently.
That assumption was borne out by interviews with prior residents of the building and former maintenance staff.
Ridge House was originally constructed as an apartment building. At the trial, two former residents of the penthouse apartments, prior to conversion, offered testimony that the private key arrangement existed as far back as anyone could remember and that the foyer and hallways had always been treated as part of the penthouse units.
One penthouse tenant had even hosted a Super Bowl party in the area, without interference from the building or assistance at cleanup time.
Although the Virginia Condominium Act creates certain statutory easements (e.g., an easement to facilitate sales), the Act is silent on the subject of common law easements. In other contexts, however, the Virginia Supreme Court has readily adapted common law principles to the ever-growing body of condominium decisions.
The facts of our case, as they developed by investigation and research, suggested the common law remedy of an easement by implication. The elements of an easement by implication are (1) unified ownership at the time of severance, (2) reasonable necessity, and (3) exclusive use.
All elements were present in this case. The declarant had been the common owner of the building prior to "severance" of the condominium space into units and common elements. The testimony at trial, supported by the sales brochure, demonstrated the exclusivity of the area and that privacy was reasonably necessary to the security and enjoyment of the penthouse units.
Upon review of the portion of the recorded plats and plans advanced by the association, it could not be denied that the penthouse foyer and hallways had been marked as common elements. However, there was no evidence at trial to suggest that any unit purchaser had ever been provided with those plans (certainly our clients had not).
The plans, numbering well over 50 pages, had been reduced by photocopying for purposes of recordation and now represented a jigsaw puzzle of schematic designs of the various floors. Although it was true that one portion of the plans designated the disputed areas as part of the common elements, other portions of the plans contained no designation whatsoever for the same areas.
At trial, the association took the position that the portion of the recorded plans designating the penthouse foyer and hallways as part of the common elements served as constructive notice to the penthouse unit owners.
Cross-examination of the condominium manager, however, focused on the disarray of the recorded plans as a whole and persuaded the Court that the pages devoted to the disputed areas were, at best, ambiguous and at worst, internally inconsistent.
Once the Court ruled that the recorded plans could not be relied upon for constructive notice, it looked to the remaining condominium documents for guidance.
The Public Offering Statement, which had been distributed to all unit purchasers, incorporated the Condominium Act's definition for a limited common element: "A portion of the common elements reserved for the exclusive use of those entitled to the use of one or more, but less than all, of the units."
This simple definition, in conjunction with the conduct of the parties over the years, persuaded the Court to find in favor of the penthouse unit owners. Although not one of the condominium instruments requiring recordation, the POS was still a legally binding document, for purposes of establishing rights and responsibilities in the condominium regime.
Accordingly, Judge Sheridan found that the penthouse foyer and hallways had been reserved, by the conduct of the parties, for the use of the two penthouse units, as a limited common element.
The Arlington Court ruled that the penthouse unit owners had established both an easement by implication and a limited common element in the disputed areas. The court found a match among the conduct of the parties, the requirements for a common law easement and the statutory definition of a limited common element.
Judge Sheridan declined the association's invitation to construe isolated parts of the jigsaw puzzle presented by the recorded condominium plans, nullifying their value for purposes of the case.
Ironically, most condominium boards are well aware that their condominium instruments have been recorded and that the recordation is of legal consequence. Yet many condominium associations have never actually reviewed the record instruments for consistency and clarity. This case may serve as a wake-up call for the proposition that a condominium's conduct and the condition of its recorded instruments cannot be taken for granted.