The 46-Year Mistake: Why "We’ve Always Done It This Way" Failed in Greg Fish vs. Biltmore Assoc.

Can a homeowners association legally ignore its own recorded CC&Rs for nearly half a century simply because "it’s always been done that way"? In the administrative case of Greg Fish vs. Flynn Lane Biltmore Assoc, Inc., the Office of Administrative Hearings (OAH) dismantled the myth that community tradition can override recorded property law. This case serves as a stark warning: when a Board’s fiduciary duty to follow the law clashes with administrative convenience, the law—and the homeowners it protects—will eventually prevail.

The Core Conflict: Square Footage vs. Per-Capita Billing

At the heart of the dispute was a fundamental breach of the association's governing documents regarding how monthly assessments were calculated. For 46 years, the association chose "fairness" through equality, rather than the "legality" of pro-rata distribution.

• The Provision (CC&R 8-B): The recorded documents explicitly mandate that each unit owner’s proportionate share of common expenses must be based on that owner’s "undivided percentage ownership of the Common Elements." In short, assessments must be pro-rata based on square footage.
• The Practice: Since 1968, the association utilized an "equalized billing" method, splitting assessments evenly across all units regardless of size.
• The Compounding Error: When the community was developed, the developer noted that the assessment difference between two- and three-bedroom units was a mere 43 cents. Deciding this was negligible, they opted for equal billing. By 2014, however, this administrative shortcut had ballooned into a $17.00 per month discrepancy—a significant financial burden for owners of smaller units.

Testimonial Breakdown: Admissions of Non-Compliance

The hearing revealed a pattern of "knowing non-compliance," where Board members and managers were fully aware of the breach but relied on community inertia to maintain the status quo.

Michael Latz (The "Smoking Gun" Admission) As the former community manager, Mr. Latz provided the most damaging testimony. He admitted that both he and the Board of Directors understood that the association was not following the CC&Rs for assessments. Despite this knowledge, they continued the equal-split method, even as Latz privately harbored concerns that certain unit owners were being forced to pay more than their legal share.

Greg Fish (The Persistent Petitioner) An owner since 2002, Mr. Fish testified to a decade-long struggle against Board "intransigence." He highlighted that while the developer’s original math only considered two unit types, the community actually consists of four distinct unit sizes. Despite his repeated formal protests that the association was in violation of the law, his concerns were ignored until legal action was initiated.

Maureen Watrous (The Transitionary Manager) The current manager acknowledged that the association had been billing incorrectly for decades, including a 2013 special assessment. Notably, she testified that the Board only began taking concrete steps to create a compliant, percentage-based budget for 2015 after Mr. Fish filed his petition.

Thomas Tower (The "Community Preference" Defense) The Board President, an owner since 1976, admitted he had been aware of the pro-rata assessment requirement since the 1970s. He defended the Board’s inaction by claiming they were following the "expressed direction of the community." He also cited a belief—unsupported by recorded amendments—that the equalized method had been mandated by the Resolution Trust Corporation (RTC) during a 1980s receivership period.

The Financial Toll: Calculating the Overcharges

The hearing established the exact cost of the association's failure to follow its own rules. By comparing the analysis of the Petitioner’s representative and the Association’s own manager, the scale of the error over time became undeniable.

Financial Impact Analysis

\Includes a specific $213.33 overcharge from a 2013 special assessment.*

The Administrative Law Judge's Decision

Administrative Law Judge M. Douglas applied the "Preponderance of the Evidence" standard, determining that the Petitioner’s claims were more likely true than not. Given the Association’s own admissions of known non-compliance, the Judge ruled that the Association had violated CC&R 8(B).

Recommended Order: "It is ORDERED that Petitioner be deemed the prevailing party in this matter. It is further ORDERED that Biltmore shall fully comply with the applicable provisions of its CC&Rs in the future. It is further ORDERED that Biltmore shall pay Petitioner his filing fee of $550.00… and pay a civil penalty in the amount of $200.00 to the Department."

Conclusion: Key Takeaways for HOA Boards and Members

The Fish vs. Biltmore case stands as a landmark example of why "tradition" is no defense for a breach of fiduciary duty.

1. CC&Rs Are Not Suggestions: Recorded governing documents are legally binding contracts. No matter how much time has passed—even 46 years—the Board is the steward of these rules and must follow them until they are formally amended.
2. Fiduciary Duty Trumps Community Consensus: A Board’s duty is to the law and the recorded documents, not the "preferred direction" of a majority of neighbors. If a community wants to change an assessment method, they must pass a formal amendment, not simply vote to ignore the current rules.
3. The Cost of Inaction Compounds: What began as a 43-cent oversight became a $17.00-per-month violation. Boards that ignore "small" discrepancies risk substantial legal and financial exposure as those errors grow over decades.
4. OAH is a Powerful Tool for Redress: This case proves that the Office of Administrative Hearings provides a viable, structured venue for homeowners to hold their associations accountable for violations without the prohibitive costs of Superior Court.

Post-Script: This decision was officially certified as the final administrative decision of the Department of Fire, Building and Life Safety on January 8, 2015, by Acting Director Lewis D. Kowal, after the Department took no action to modify the Administrative Law Judge's recommendation.