## Facts

- Dennis and Mary Fogarty owned property in the Hemlock Farms Community in Pike County, Pennsylvania and, by a covenant in their deed, were required to be members of Hemlock Farms Community Association, Inc. (HFCA), a nonprofit homeowners association.
- The deed covenant required the Fogartys to pay annual dues, fees, and assessments for specified purposes, including the control, maintenance, and repair of streets, roads, and recreational facilities; it did not expressly address funding new capital facilities.
- HFCA’s membership approved a resolution imposing special assessments on all members to fund construction of a community mail office, an administration building, and a clubhouse (capital improvements estimated in the millions of dollars).
- HFCA billed the Fogartys for their share of the special assessments; the Fogartys refused to pay.
- The Fogartys filed a declaratory-judgment action in the Court of Common Pleas challenging HFCA’s authority to impose the special assessments, arguing the deed covenant authorized assessments only for maintenance and repair of existing roads and recreational facilities, not new capital projects.
- The Fogartys also challenged the financing of the improvements as inconsistent with a debt-service limitation in HFCA’s bylaws (a percentage cap tied to the annual operating budget).
- After discovery, both sides moved for summary judgment; the trial court granted summary judgment for HFCA and upheld the special assessments.
- The Fogartys appealed to the Commonwealth Court of Pennsylvania.

## Issues

1. Whether a homeowners association may impose special assessments for capital improvements (mail office, administration building, and clubhouse) when the deed covenant requires membership and payment of certain assessments but does not expressly mention capital improvements or expressly forbid them, and the association’s bylaws authorize special assessments.
2. Whether a declaratory-judgment claim alleging violation of a bylaw debt-service cap is justiciable when the claimed violation is speculative or not shown to be occurring.

## Decision

- The Commonwealth Court of Pennsylvania affirmed the order granting summary judgment to HFCA.
- The court held that HFCA had authority—based on the deed’s mandatory membership covenant, HFCA’s bylaws, and Pennsylvania nonprofit-corporation law—to levy special assessments for the challenged capital improvements, and the Fogartys were obligated to pay them.
- The court rejected the Fogartys’ debt-cap theory because no present, concrete violation was shown and the request for declaratory relief on that point was premature.

## Legal Principles

- Summary judgment is proper when, viewing the record in the light most favorable to the nonmoving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
- A property owner who takes title subject to a covenant requiring membership in a homeowners association is bound by the association’s bylaws governing dues and assessments.
- Under Pennsylvania law governing nonprofit corporations, an association may levy dues and assessments when authorized by its bylaws.
- Deed covenants and association bylaws may be read together to determine the scope of assessment authority; where the deed does not expressly forbid a type of assessment, bylaw authority can support imposition of reasonable assessments for community purposes.
- Declaratory relief requires an actual, present controversy; a claim based on a hypothetical or not-yet-realized breach of a bylaw limitation is not ripe.

## Conclusion

Fogarty v. Hemlock Farms Community Association holds that a nonprofit homeowners association may impose special assessments for community capital improvements when the deed mandates membership and payment of assessments, the deed contains no express prohibition on such assessments, and the bylaws authorize special assessments; it also holds that a declaratory-judgment challenge based on an alleged future or unproven violation of a bylaw debt-service cap is premature, so summary judgment for the association was properly affirmed.


Fogarty v. Hemlock Farms Community Association, 685 A.2d 241 (1996)