**Case Summary: Griggs v. Executive Towers Homeowners Association**
**Case No.** 15F-H1516004-BFS
**Hearing Date:** January 6, 2016
**Judge:** Diane Mihalsky, Administrative Law Judge (ALJ)

**Proceedings and Background**
Petitioner John W. Griggs, a condominium owner, filed a petition against the Respondent, Executive Towers Homeowners Association, alleging violations of the Association's Covenants, Conditions, and Restrictions (CC&Rs). The dispute arose from the Board's decision to convert "Suite 7," a vacant revenue-generating commercial space within the building, into a fitness center.

The Board had previously solicited feedback via a survey, in which a majority of responding owners favored the fitness center, but the participation level did not constitute a majority of the *entire* membership's voting power. The Respondent proceeded with the conversion based on the survey results and Board approval.

**Key Arguments**
The Petitioner argued that the Board acted outside its authority by proceeding without a formal majority vote of the entire membership. His claims relied on two main legal points:
1. **Structural Alteration:** The Petitioner argued the project constituted a "structural alteration" under CC&Rs Paragraph 13, which requires prior approval from a majority of owners. He contended that "structural" should be interpreted to include mental or monetary implications, not just physical changes.
2. **Capital Expenditure:** The Petitioner argued the project violated Article 4, § 6 of the Bylaws, which prohibits the Board from approving capital expenditures over $5,000 without a two-thirds vote of total ownership. He asserted that the total cost, including equipment leasing payments, exceeded this limit.

The Respondent argued that:
1. The renovation was not structural (removing non-load-bearing walls and flooring) and required no permits.
2. The refurbishment costs were approximately $4,000 (under the $5,000 cap), and the equipment was leased rather than purchased, meaning it was not a capital asset.
3. The Board had the discretion to repurpose common elements to protect property values and utilize vacant space.

**Legal Analysis and Findings**
The ALJ placed the burden of proof on the Petitioner to establish a violation by a preponderance of the evidence.

* **Structural Alteration:** The ALJ defined "structural alteration" as a significant change creating a different building or structure. The evidence showed the work involved removing temporary walls, replacing flooring, and electrical upgrades, none of which required permits or affected load-bearing walls. Consequently, the ALJ found the project was not a structural alteration requiring membership approval under CC&Rs Paragraph 13.
* **Capital Expenditure:** The ALJ accepted testimony that the refurbishment cost was $4,000, falling below the $5,000 Bylaw threshold. Regarding the equipment, the ALJ defined "capital expenditure" as an outlay to acquire or improve a fixed asset.