Seaview Association of Homeowners, Inc. v. Williams, 69 N.Y.2d 987 (1987)

When a purchaser buys property in a community knowing that a homeowners’ association provides services and facilities, the purchase can create an implied-in-fact contract obligating the purchaser to pay a proportionate share of the association’s costs, regardless of actual usage.

Summary

The Seaview Association of Homeowners sued the Williams family to recover unpaid assessments for community services. The Williamses owned seven houses in Seaview, a private Fire Island community, but refused to pay assessments, arguing they were not association members and did not use the recreational facilities. The trial court found an implied contract existed based on the Williamses’ knowledge of community conditions when purchasing the properties. The Appellate Division affirmed. The New York Court of Appeals affirmed, holding that purchasing property with knowledge of the association’s services can manifest acceptance of the obligation to pay for those services, creating an implied-in-fact contract.

Facts

The Seaview Association of Homeowners maintained streets, walkways, beaches, and provided various community services in Seaview, Fire Island. The Association assessed property owners to cover these costs. The Williams family owned seven houses in Seaview and had lived in the adjoining community before purchasing their first house in Seaview in 1963. Two of the three family members were in the real estate business. They refused to pay the homeowners’ assessments, claiming they were not members of the association and did not use the recreational facilities. The Association then sued to recover assessments from 1976-1984.

Procedural History

The trial court ruled in favor of the Seaview Association of Homeowners, finding an implied contract existed. The Appellate Division affirmed the trial court’s decision based on the trial court’s reasoning, with one Justice dissenting. 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 private community with knowledge that a homeowners’ association provides services and facilities for the benefit of residents constitutes an implied-in-fact contract to pay a proportionate share of the association’s costs.

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 of Appeals reasoned that an implied-in-fact contract arises when a purchaser buys property knowing that a homeowners’ association provides services and facilities. This knowledge manifests acceptance of the conditions of ownership, including the obligation to pay for those services. The obligation extends to a proportionate share of the full cost of maintaining the facilities and services, not just the reasonable value of those actually used by the resident. The court emphasized the factual nature of the issues regarding notice and knowledge. They deferred to the lower courts’ findings that the Williamses knew the nature of the Seaview community and impliedly accepted the conditions of ownership through their purchases, particularly their successive purchases. 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.” Because the issues of notice and knowledge were factual and had been affirmed by the Appellate Division, the Court of Appeals found the issue beyond their review. The court cited Sea Gate Assn. v Fleischer as precedent.