69 N.Y.2d 987 (1987)

When a purchaser knows that a homeowners’ association provides facilities and services for the benefit of community residents, buying property there can be seen as accepting the conditions of ownership, including paying for the services.

Summary

The Seaview Association, a homeowners’ association, sued the Williams family to recover unpaid assessments for community services. The Williams family owned multiple properties in the Seaview community but refused to pay assessments, arguing they were non-members and didn’t use the recreational facilities. The trial court found an implied contract existed based on the Williams’ knowledge of the community’s nature when they purchased the properties. The appellate court affirmed. The New York Court of Appeals affirmed, holding that purchasing property in a community with known homeowners’ association services implies acceptance of the obligation to pay for those services.

Facts

The Seaview Association of Fire Island owns and maintains streets, walkways, beaches, and various facilities in the Seaview community. They also provide services like a community manager and a rent-free home for a doctor. Property owners are assessed a share of the annual costs. The Williams family owned seven houses in Seaview and had lived in the adjoining community prior to purchasing their first house in 1963. They refused to pay assessments, claiming they were not members of the Association and did not use the recreational facilities. Two of the three defendants were in the real estate business and were among only five year-round residents.

Procedural History

The Seaview Association sued the Williams family to recover unpaid assessments from 1976-1984. The trial court ruled in favor of the Association, finding an implied contract existed. The Appellate Division affirmed the trial court’s decision. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.

Issue(s)

Whether the purchase of property in a community with a known homeowners’ association providing services and facilities implies an acceptance of the conditions of ownership, including the obligation to pay assessments for those services.

Holding

Yes, because where there is knowledge that a private community homeowners’ association provides facilities and services for the benefit of community residents, the purchase of property there may manifest acceptance of conditions of ownership, among them payment for the facilities and services offered.

Court’s Reasoning

The court reasoned that the Williams family’s knowledge of the Seaview community and its homeowners’ association, combined with their purchase of multiple properties, implied an acceptance of the conditions of ownership, including paying assessments. The court stated, “Where there is knowledge that a private community homeowners’ association provides facilities and services for the benefit of community residents, the purchase of property there may manifest acceptance of conditions of ownership, among them payment for the facilities and services offered.” The court emphasized that the issue of notice and knowledge were largely factual and were the focus of the trial court. The Court found that the trial court had sufficient evidence to determine that the Williams family knew the nature of the community. The court also cited Sea Gate Assn. v Fleischer, stating the implied contract includes obligation to pay a proportionate share of the full cost of maintaining facilities, not merely the reasonable value of those actually used.