## Facts

- Coventry Square Condominium was a 633-unit condominium complex; about 80 units were occupied by tenants.
- The Coventry Square Condominium Association (the Association) adopted a regulation/bylaw, effective November 1, 1977, requiring each unit owner who rented a unit to deposit $225 per rented unit with the Association.
- The Association stated the deposit was intended to cover allegedly higher maintenance expenses associated with rented units, including inadequate watering, excessive glass breakage, more frequent pest control, and garbage being put out on the wrong days.
- The regulation provided that the Association would place the money in an interest-bearing account and return it if no damage to common elements occurred that was attributable to the owner’s tenant.
- No comparable deposit was imposed on owner-occupied units.
- Existing condominium rules already allowed the Association to charge individual units for certain added costs and violations (including wrong-day garbage placement and additional lawn expenses due to neglect), and made the unit owner responsible regardless of whether the unit was owner-occupied or tenant-occupied.
- The Association sued nonoccupant unit owners who rented their units (including Halpern and related entities) to collect the $225 deposits.

## Issues

1. Whether the Association could require only unit owners who rent their units (and not owner-occupants) to pay a $225 per-unit “security deposit” to cover potential tenant-related damage or added maintenance involving the common elements.
2. Whether the landlord-only deposit was beyond the Association’s authority and invalid as an unequal, unreasonable financial burden not imposed on all unit owners.

## Decision

- The court held the $225 landlord-only security-deposit regulation invalid and unenforceable.
- The court rejected the Association’s attempt to collect the deposits from the nonoccupant owners.
- Judgment was entered for the defendant unit owners on the Association’s claim to enforce the deposit requirement.

## Legal Principles

- A condominium association’s power to impose financial obligations on unit owners is limited by the condominium statute and the association’s governing documents; the association cannot impose extra charges not authorized as common expenses or otherwise permitted by those sources.
- A rule that imposes a special payment obligation on one class of unit owners (here, owners who rent) is invalid when it is not properly authorized and is unequal in operation compared to similarly situated owners (here, owner-occupants).
- Where the governing scheme already permits charging a unit for specific, proven rule violations or added expenses traceable to that unit, a blanket advance “security deposit” aimed only at landlord-owners is not a proper substitute for those existing enforcement tools.
- Labeling a charge a “security deposit” does not cure a lack of authority or unequal treatment when the charge functions as an extra, landlord-only assessment for generalized concerns rather than a unit-specific, documented loss.

## Conclusion

Coventry Square Condominium Association v. Halpern held that a condominium association could not enforce a bylaw requiring only owners who rent their units to post a $225 per-unit security deposit for potential tenant-related common-element damage, because the landlord-only charge was an unauthorized and unequal financial burden, especially given that existing rules already allowed the association to charge any unit owner for specific violations and added expenses.


Coventry Square Condominium Association v. Halpern, 436 A.2d 580 (1981)