HOA Case Law Journal
with Julie McGhee Howard
Sander v. Country Brook Homeowners’ Association, Inc.,
153 N.E.3d 565 (Ct. App. Ohio 2020)
Two emerging trends collided to create confusion when one owner family sought to install solar panels on their home. Michael and Katherine Sander requested approval from their HOA to add solar panels to their roof. As new sustainable energy options increase, boards are working hard to balance their governing documents and community aesthetics with owner requests. However, the ordinarily straightforward process of reviewing an architectural request became dramatically more difficult because this Board reviewed the solar panel request through HOA email communication in lieu of a meeting. Conducting board member discussion through email has become an increasingly prevalent form of communication, but it can create legal liabilities for associations.
The Facts:
- The Sanders submitted an application to the Country Brook HOA to install solar panels on their home, which was received and documented by the Board.
- The Board sent the application to an architect for review, and the architect sent it back recommending approval so long as the panels were only on the rear slope of the house.
- There were three serving members of the Country Brook Board: Tim, Andrew, and Sheila.
- After the Board got the architect’s recommendation, Tim discussed it with Andrew and later talked separately with Sheila.
- The application was discussed in-person and through emails and phone calls. Tim testified that all three board members agreed to disapprove the application, but Andrew and Sheila had never spoken together about it directly.
- Tim had the Association’s attorney prepare a denial letter.
The Issue:
The Sanders filed suit on the basis that the Board’s disapproval of their application did not comply with the Association’s Declaration, which required the Board to have a formal meeting or take formal action outside a meeting to disapprove the application within 14 days. There were, however, discussions between Board members by HOA email communication and phone in lieu of an in-person meeting, which the Board argued was appropriate. While this type of discussion among Board members has become increasingly customary, there was no formal record of the Board’s disapproval of the Sanders’ application as required by the governing documents.
Court Decision
The trial court in this case held that the email exchanges amongst the Board members were sufficient to satisfy the requirements of the Board acting without a formal meeting and ruled for the HOA. However, the Sanders appealed the trial court’s decision which ultimately resulted in the Sanders’ winning their case.
The Court of Appeals held that the HOA had not satisfied all three elements under Ohio law required for a nonprofit Board of Directors to take action without a meeting:
- The unanimous approval of all directors;
- Evidenced by a signed writing; and
- Filed in the corporate records.
The Court held that a HOA email communication could be a signed writing but needed to include an expression of an affirmative vote or take an approval of the corporate action. In this case, even though the Board had in-person, telephone, and email discussion, there was no writing or other evidence of the Board’s formal disapproval of the Sanders’ application.
The Ohio Court of Appeals found for the homeowners.
The Cautionary Tale
With the casual nature of email communications, it is easy to miss a detail or fail to document a decision as Board discussion progresses. Both the trial and appellate courts found that emailing could serve to replace an in-person meeting. However, those email exchanges must still comply with the association’s governing documents and state law.
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