The Iowa Supreme Court has ruled a Des Moines condo association board took proper action to make repairs under rules that apply to businesses. The case involved $200,000 in repairs made to the garage of the West Grand Towers Condominiums after approval by the board of the condo association.
The owners of four units withheld payment of their share of the cost to the association, saying the amount violated an association bylaw requiring a majority of the owners to approve expenses over $25,000. The district court ruled in favor of the condo owners, but the Iowa Supreme Court ruled the bylaws of the association were ambiguous and the directors were covered under what’s called the “good business judgment rule.”
The court says the association directors acted in good faith to do what was best for the association, were open and honest about the need for repairs, and were not acting in their self interest. The Supreme Court ordered the condo owners to pay the fees with interest, and ordered the district court to determine the proper attorney fees the owners must pay the association.
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