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The separate accounting practice became a controversial issue,
however, around 1993.
The balconies of the Phase II units began to deteriorate to
the point that they became a safety hazard. They had to be
repaired or replaced. The governing document of the condominium
development, the Declaration of Covenants, Conditions, and
Restrictions and Power of Attorney of Pennant Village (CC&Rs)
dating from 1976, assessed charges and assessments to unit owners
in Phase I and Phase II in equal one one-hundred-twenty-eighth
shares. In 1995 the association proposed a change to the CC&Rs
that would reduce the Phase II assessment to 90 percent of the
Phase I assessment. Some of the owners of Phase I units came to
believe that the association was improperly using cash reserves
from Phase I to make repairs to condominiums in Phase II.
For a period before petitioner's November 1995 purchase of
the condominium, he had rented it from the family trust.
Petitioner had attended meetings of the association and felt that
there were "irregularities" in the adoption of the "new" CC&Rs as
well as the election of certain members of the association's
board of directors. Petitioner approached the board at
association meetings to address the problems he perceived. In
his view, members of the board refused to allow him to formally
address the board, refused to allow him to vote at meetings,
alleged that he did not actually purchase his property, called
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Last modified: May 25, 2011