In Lakeside Village Homeowners Association, Inc. v. Belanger,1 the Texas Court of Appeals found an HOA violated the Declaration of Covenants when it delayed repairing common areas of the Lakeside Village townhome community in Rockwall County, Texas.
Lakeside is a gated townhome community comprising 498 units by a lake in Rockwall County, Texas. The HOA (referred to as “Lakeside”) owned and controlled the common areas, which was defined in the Declaration of Covenants as “all real property owned by [Lakeside] for the common use and enjoyment of the owners.” As the court explained it, Lakeside was responsible for “the 13,500 square feet of streets, 7,800 square feet of retaining walls, street lights, tennis courts, the pool, the gym, and the golf course.” When the HOA failed to repair faulty retaining walls that caused damages to a duplex, the duplex owners sued.
Belanger and Drennan were the owners of two townhomes connected by an interior wall and a foundation wall, making the units a duplex. When the property was purchased, railroad tie retaining walls were on the common areas to the north, east, and south of the duplex property. Unfortunately, these walls proved to be structurally failing. Rather than divert water, its faulty structure allowed the water to build up and exert pressure against the foundation, eventually compromising the foundation and structure of the property and walls and stucco to separate.
In 2007, Belanger noticed water damage to the property caused by the faulty common area’s retaining walls. And, in 2011, Drennan became a resident of Lakeside townhomes and noticed cracks and flooding to the driveway. Although Lakeside was aware of their faulty structure in 2006, nothing was done to fix the problem, even after several complaints from Belanger and Drennan.
In 2011, Belanger and Drennan sued Lakeside and its management company, Principal, for breach of contract, trespass, negligence, and diversion of water claims, and the trial court ruled in their favor. Although Lakeside and Principal appealed, the Texas Court of Appeals found the association had breached its contractual duties to maintain the common areas, and their failure to repair or maintain the common area retaining wall caused water to be unlawfully diverted onto the owners’ property, causing property damage in violation of Water Code and a trespass on the owners’ property.
Ultimately, the HOA and its management company’s decision to delay paying for the repair of the faulty retaining walls resulted in the court ordering payment for the repair, trespass and Water Code violations.