Are Community Associations Responsible for Lot Erosion?

A Kentucky couple claimed that they shouldn’t have to pay assessments on their two lots because, as a result of erosion, one had “ceased to exist as a recognizable land mass.” The state court of appeals disagreed (Thompson v. Lake Cumberland Resort Cmty. Ass’n*).

William and Theresa Thompson own two lots in the Lake Cumberland Resort Community. The lots, which they purchased for $100,000, were treated as a single lot for purposes of assessments.

Beginning in the spring of 2016, the lots became subject to severe erosion into the Cumberland River, with one ceasing to exist. As a result, the value of the lots dropped significantly. In 2017, the county valuation administrator appraised them at $300 each.

The Thompsons sought a waiver or relinquishment of any claims or dues for the lots and didn’t pay any further assessments. The association eventually filed liens against the lots. The owners responded by filing a lawsuit seeking a declaration that they didn’t owe any assessments for the lots and release of the liens.

“Their argument was that they shouldn’t have to pay anything because they can’t use it,” says David Wilson, an attorney with Law Firm Carolinas which works with community associations in North and South Carolina.

The trial court denied them the declaration and release. On appeal, the Thompsons argued that the association shouldn’t be allowed to collect dues for lots that are no longer of any use — particularly as it hadn’t attempted to mitigate the erosion problem. They also asserted that they didn’t waive or abandon the lots. Rather, the lots abandoned them, through erosion.

In a new article, our association experts weigh in and give their take on why lot erosion didn’t absolve the owners of paying assessments in this case. We’ll also reveal some of the common reasons why owners don’t pay assessments and explain why they are not necessarily legitimate reasons for withholding payment.

Read the full article now: Lot Erosion Doesn’t Erode Obligation to Pay Assessments

Best regards,
Matt Humphrey
President