## Facts

- Gier’s Liquor & Sporting Goods, Inc. (Gier’s) owned a unit in the Driftwood Shores Surfside Inn Condominium in Oregon.
- The Association of Unit Owners of Driftwood Shores Surfside Inn Condominium (the association) governed the condominium under the Oregon Condominium Act (ORS ch. 100) and the condominium’s recorded declaration and bylaws, acting through a board of directors.
- In May 1985, the condominium’s restaurant and conference facility—located on property subject to the declaration—was destroyed by fire.
- In September 1985, at a duly constituted meeting, 52 percent of the unit owners selected adjacent real property (not then owned by the association) as the site for a replacement facility and approved $1,200,000 in financing for the project.
- At two later meetings, the unit owners approved an additional 10 percent in financing and approved a per-unit assessment to pay for the financing.
- Gier’s objected to the project and demanded that it not be assessed, but the association assessed Gier’s unit along with the others. Gier’s did not pay.
- The replacement facility was constructed and began operating in October 1986.
- In June 1988, the association recorded an assessment lien against Gier’s unit for unpaid assessments.
- Gier’s sued, alleging the lien was a cloud on title. The association counterclaimed to foreclose the lien and joined as parties the beneficiaries of a trust deed granted by Gier’s.
- The parties submitted stipulated facts and filed cross-motions for summary judgment. The trial court ruled for the association, allowed foreclosure, and held the trust-deed beneficiaries’ interest was subrogated for purposes of foreclosure. Gier’s appealed.

## Issues

1. Whether the association had authority under ORS chapter 100 and the condominium’s declaration and bylaws to purchase adjacent real property to replace the destroyed restaurant and conference facility and to finance that project through assessments against unit owners.
2. Whether the purchase and use of adjacent real property required compliance with statutory “annexation” procedures (such as recording a supplemental declaration and plat), making the assessments and lien invalid when those procedures were not followed.
3. Whether the declaration and bylaws required an amendment and a 75 percent vote to authorize the purchase and financing, and whether any purchasing authority in the bylaws was limited to day-to-day operational needs.
4. Whether the association’s recorded lien for unpaid assessments was enforceable by foreclosure, including the trial court’s treatment of the trust-deed beneficiaries’ interest.

## Decision

- The Oregon Court of Appeals affirmed.
- The court upheld the association’s authority, under the Oregon Condominium Act and the governing declaration and bylaws, to acquire adjacent property for a replacement common facility and to fund it through owner-approved financing and assessments.
- The court rejected Gier’s argument that the association’s actions were invalid because it did not complete statutory annexation steps (including recording a supplemental declaration and plat).
- The court upheld the validity of the assessment lien and affirmed the foreclosure relief, including the trial court’s subrogation ruling regarding the trust-deed beneficiaries’ interest.

## Legal Principles

- A condominium association’s powers are determined by the Oregon Condominium Act together with the condominium’s recorded declaration and bylaws.
- When authorized by the governing documents and consistent with ORS chapter 100, an association may finance a replacement facility serving the condominium through special assessments approved by the owners.
- The statutory annexation process (including recording supplemental documents) applies when property is formally added to the condominium regime in the manner contemplated by the statute and governing instruments; acquiring adjacent property for a common facility does not automatically trigger those requirements.
- Unpaid condominium assessments may be secured by a lien against the unit and enforced through foreclosure when the assessment was properly authorized.

## Conclusion

The Court of Appeals held that the Driftwood Shores association could purchase adjacent land to rebuild the condominium’s destroyed restaurant and conference facility, levy assessments to pay for the approved financing, and enforce nonpayment through an assessment lien and foreclosure, rejecting arguments that annexation procedures or a higher approval vote were required under ORS chapter 100 or the governing documents.


Gier's Liquor & Sporting Goods v. Association of Unit Owners of Driftwood Shores Surfside Inn Condominium, 862 P.2d 560 (1993)