TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-11-00332-CV
Randy Dennis, Appellant
v.
Beacon Ridge Townhomes Condominium Association of Owners, Inc.
and Debra D. Mathis, Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. D-1-GN-09-004395, HONORABLE RHONDA HURLEY, JUDGE PRESIDING
MEMORANDUM OPINION
The Beacon Ridge Townhomes Condominium Regime (the “Regime”) was formed
when the Declaration of Beacon Ridge Townhomes Condominium Association (the “Declaration”)
was filed with Travis County. See Tex. Prop. Code § 82.051 (specifying manner in which
condominiums may be formed). Under the terms of the Declaration, the Regime is governed by the
Beacon Ridge Townhomes Condominium Association of Owners, Inc. (the “Association”). When
the Declaration was filed, a portion of the property was subdivided into 24 units with each unit
having a 1/24th interest in the remaining undivided common areas.
After the property had been subdivided but before any condominiums had been
constructed, Randy Dennis purchased eight of the units, which were subject to the terms described
in the Declaration. Subsequent to Dennis’s purchase, the Association began sending Dennis
assessments, which Dennis paid for months. When Dennis stopped paying the assessments, the
Association began charging him late penalties, and liens were imposed on the property by Debra
Mathis who was acting on behalf of the Association as the property manager. Ultimately, Dennis
elected to put his property up for sale and to file suit against the Association and Mathis. In his suit,
Dennis challenged acts by the Association as well as Mathis; however, for ease of reading, we will
generally refer to those parties jointly as the Association.
In his suit, Dennis challenged the assessments that the Association charged as well
as the liens imposed on his property. In addition, Dennis asked the district court to declare that he
was not obligated to pay any of the assessments and that the Association breached the terms of the
Declaration by imposing the charges, to determine that the Association fraudulently imposed liens
on his property, to order the Association to compensate him for the value of the money that he had
previously paid to the Association for the imposed assessments as well as the value of a lost sale
caused by the imposition of the liens, and to enter a judgment quieting title and removing the
imposed liens. In response, the Association filed a counterclaim arguing that the assessments and
fines were proper, seeking a declaration that Dennis was required to pay the assessments and fines,
asking for a judgment for the assessments and fines owed by Dennis, and requesting authorization
to foreclose on his property.
In addition to the various petitions filed by the parties, Dennis filed a traditional
motion for summary judgment, and the Association filed a joint traditional and no-evidence motion
for partial summary judgment. After reviewing the motions, the district court denied Dennis’s
motion but granted the Association’s motion. In its judgment, the district court dismissed Dennis’s
claims, declared that Dennis is a member of the Association and is required to pay the assessments,
2
ordered Dennis to pay the imposed assessments and fines, and determined that the Association was
entitled to foreclose on Dennis’s property. On appeal, Dennis challenges the district court’s rulings.
In two issues on appeal, Dennis contends that the district court erred by denying his
motion for summary judgment and by granting the Association’s motion. See Mann Frankfort Stein
& Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009) (outlining standard for reviewing
summary judgment rulings and explaining that when trial court grants one party’s summary-
judgment motion but denies motion filed by other party, appellate courts review all evidence,
determine all presented issues, and render judgment that trial court should have).
Regarding his motion for summary judgment, Dennis argues that he proved as a
matter of law that he was not obligated to pay any of the assessments or fines imposed by the
Association and, accordingly, that he was entitled to summary judgment in his favor. When making
this claim, Dennis acknowledges that the Declaration does allow for the imposition of assessments
but notes that his units had not been constructed during the time that the Association imposed the
assessments and then points to various parts of the Declaration as support for the idea that the
Declaration only pertains to completed and fully constructed units. For example, he refers to the
portion of the Declaration evidencing an intention to create a plan with individual ownership of
apartment units, to the definition of “Unit” as “a physical portion of the condominium . . . for
separate ownership and occupancy,” and to the definition of “Condominium” as “the separate
ownership of single units in a multiple-unit structure or structures with common elements.” In light
of the preceding and other portions of the Declaration, Dennis insists that none of those “provisions
make sense if the Units are not built” and, therefore, that the Declaration only allows for assessments
“to be imposed on owners of completed Units.”
3
As a preliminary matter, we note that the terms of the deed specify that Dennis
purchased eight units in the Regime. In other words, even though construction had not been
completed, the property interest that Dennis sought and purchased from the previous owner was
eight units.
Moreover, we note that in this issue Dennis is not challenging the manner in which
the assessments were calculated and does not allege that the assessments were imposed for improper
purposes. Instead, Dennis limits his challenge to the Association’s ability to impose the assessments
on an owner whose condominiums have not been constructed. Although Dennis correctly points
out that the Declaration does not explicitly mention imposing assessments on owners of incomplete
units, nothing in the Declaration expressly forbids their imposition either. More to the point, when
various provisions of the Declaration are read together, they support the proposition that assessments
may be imposed on an owner even if his unit has not been constructed. See Gulf Shores Council of
Co-Owners, Inc. v. Raul Cantu No. 3 Fam. Ltd. P’ship, 985 S.W.2d 667, 670 (Tex. App.—Corpus
Christi 1999, pet. denied) (applying rules of contract construction to condominium declaration).
First, the Declaration implies that an ownership interest may be purchased before
construction is complete by specifying an intention to establish a plan “for the improvement” of the
property and for ownership under which individuals will own units and that the units to be purchased
and constructed are designated and defined by exhibits attached to the Declaration. In particular, the
Declaration defines an “Owner” as “any person that owns a Unit within the Project” and specifies
that a “Unit” is “a physical portion of the condominium designated by Exhibits B and C for separate
ownership and occupancy,” and the attached exhibits demonstrate the plans for proposed units that
had not been built yet.
4
Second, the Declaration explains that in addition to owning their residential
apartment units, owners also “each have an undivided interest in the” remainder of the property,
which was designated as the Common Elements. Stated differently, even though the structures had
not yet been constructed, Dennis acquired a property interest in the remainder of the property.
Furthermore, other than the units and Common Elements, the Declaration provides for no other type
of property ownership, and the Declaration explains that all of the restrictions and conditions
specified are “binding on all parties” acquiring an interest in the Regime. In other words, the
Declaration does not authorize the conveyance of any other type of property interest, meaning that
Dennis could not have purchased anything other than units along with an undivided interest in the
Common Elements. Consistent with that property structure, the terms of Dennis’s deed specify that
what he purchased was eight units along with “their appurtenant undivided interest in and to the . . .
common elements.”
Finally, the Declaration states that the Association is responsible for “[o]peration
and maintenance of the Common Elements,” including “exterior painting, maintenance, repair, and
landscaping” and that the Association has all of the powers allowed by the Texas Uniform
Condominium Act, including the power to “levy assessments against Owners” to fund its activities.
See Tex. Prop. Code § 82.102(11) (empowering association to impose fees on owners for use of
common elements and for services provided). Moreover, regarding assessments, the Declaration
clarifies that by accepting the deed, each Owner agrees to pay “the regular and special assessments
levied,” that an “Owner may not waive or otherwise escape liability for these assessments by
nonuse of the Common Elements or by abandonment of the Owner’s Unit,” and that the assessments
5
are “separate, distinct, and personal debt[s] and obligation[s] of the Owner against whom the
assessments are assessed.” By authorizing the Association to impose assessments on owners for
the maintenance and operation of the Common Elements, particularly in light of the fact an owner
may not waive his liability, the Declaration obligates individuals who purchase units to cover their
portion of the expenses regardless of whether their units are fully constructed by the time that the
assessment is imposed.
In addition to the fact that the terms of the Declaration seem to authorize the
imposition of assessments in the circumstances present in this appeal, our construction of the
Declaration is also consistent with a prior case from this Court that addressed a similar issue. See
Fairway Villas Venture v. Fairway Villas Condo. Ass’n, 815 S.W.2d 912 (Tex. App.—Austin 1991,
no writ). In that case, as in the present case, the condominium association imposed an assessment
on the owner of undeveloped units, and the owner disputed the propriety of the assessment on
the grounds that assessments may not be imposed on owners of incomplete units and that the
governing framework only applies to fully constructed structures. Id. at 913-14. Ultimately, this
Court determined that the provisions governing the imposition of assessments applies to owners of
“existing and proposed apartments.” Id. at 915.1
1
We note that the decision in Fairway Villas Venture v. Fairway Villas Condo. Ass’n, 815
S.W.2d 912 (Tex. App.—Austin 1991, no writ), was based on the predecessor to the current Texas
Uniform Condominium Act, see Tex. Prop. Code §§ 82.001-.164 (containing Texas Uniform
Condominium Act), 81.001-.210 (comprising Texas Condominium Act, which applies to
condominiums created before enactment of Texas Uniform Condominium Act). Further, we note
that the pertinent definitions in the prior statute included both existing and proposed structures and
that the current statutes do not expressly mention proposed structures. Compare Tex. Prop. Code
§ 81.002(2), with id. § 82.003. However, we believe that the analysis from the prior case is still
relevant to the current issue in dispute.
6
For all of these reasons, we conclude that the district court did not err by denying
Dennis’s motion for summary judgment, and accordingly, we overrule Dennis’s first issue on appeal.
In his second issue on appeal, Dennis urges that the district court erred when it
granted the Association’s motion for summary judgment and determined that he was obligated to
pay the assessments and fines imposed by the Association.
In his brief, Dennis contends that his assertions from his prior issue apply equally
to this issue and demonstrate that there is a material fact issue regarding whether the assessments
could be levied against him given that his condominiums have not been constructed. Alternatively,
Dennis contends that the Declaration is “ambiguous as to whether [it] allows the Association to
impose assessments on owners of Units that have not yet been constructed.” For the reasons set
out in our resolution of the first issue, we conclude that the Declaration is not ambiguous and
that the Declaration authorizes the imposition of assessments on owners even if their units have not
been constructed.
In his second issue, Dennis also alleges that the district court erred when it granted
the Association’s motion for summary judgment because granting the motion improperly disposed
of his claims for breach of contract, for money had and received, for the imposition of fraudulent
liens, and for slander of title. The arguments Dennis makes on appeal as to why his claims should
not have been dismissed are based on Dennis’s assertion that the Declaration does not authorize
the imposition of assessments on owners whose units have not been constructed. However, as
discussed above, we have already concluded that the Declaration does allow for the imposition of
that type of assessment.
7
In his final set of arguments in his last issue, Dennis asserts that the district court
erred when it rendered summary judgment in favor of the Association and awarded it $50,080.00 as
fines for late payments on the imposed assessments. As with his other contentions, Dennis is not
challenging the manner in which the fines were calculated and instead insists that the Association
did not have the authority to impose the fines. As support for this proposition, Dennis refers to the
affidavit of Mathis in which she explained that Dennis was charged $10 per unit per day for each
month that he failed to timely pay his assessments and that Dennis was charged after the Association
complied with the notice requirements found in rule 14 of the Rules of Conduct for the Regime.
When disputing the propriety of the imposition of the fines, Dennis argues that the rules of conduct
do not govern the failure to pay assessments and that rule 14 does not expressly authorize the
Association to impose fines for the failure to pay assessments and instead applies to complaints
regarding the management of the condominium or regarding the actions of owners, sets out a four-
step process for handling the complaints, and allows for the imposition of fines only for violations
of the rules of conduct.
Although Dennis correctly points out that the rules of conduct do not directly
mention fines for failing to timely pay assessments, the Declaration as well as the Texas Uniform
Condominium Act do authorize the Association to impose assessments on owners as well as fines
for failing to timely pay assessments and for other violations. See Tex. Prop. Code § 82.102(a)(11)-
(12). Accordingly, the fact that the Association chose to follow the procedures set out in rule 14
when imposing fines for Dennis’s failure to pay the imposed assessments would not seem to
somehow divest the Association of the authority to impose the fines.
8
For all of these reasons, we conclude that the district court did not err when it granted
the Association’s motion for summary judgment, and therefore, we overrule Dennis’s second issue
on appeal.
Having overruled both of Dennis’s issues on appeal, we affirm the judgment of the
district court.
__________________________________________
David Puryear, Justice
Before Justices Puryear, Rose, and Goodwin
Affirmed
Filed: August 7, 2013
9