Bailey v. Stonecrest Condominium Association

304 Ga.App. 484 (2010)

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Nature of the Case

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Facts

The Declaration of Condominium and Bylaws for D were initially recorded in 1984. D could amend its Declaration and Bylaws by obtaining approval of any amendments by two-thirds of those members eligible to vote. The Bylaws also provided that a member's eligibility to vote could be suspended by the Board of Directors if the member were in violation of any duties imposed by the Declaration and Bylaws. D claims that sometime around the summer of 2003, the Board began discussing the possibility of amending the Bylaws to include a restriction on unit owners' ability to lease their property. The members feared that property values would be affected because of the perception that rental units are typically not maintained as well as owner-occupied units and because an increase in rental units could result in higher interest rates for potential buyers, thereby reducing the marketability of all units. The minutes from the Board's meetings from 2003 through 2004 do not mention such discussions. In June 2004, P purchased a condominium to use as her primary residence. In late August or early September 2004, she purchased a second unit for the purpose of leasing it. Neither P nor her real estate agent was informed that leasing restrictions were being proposed. On December 11, 2004, P entered into a one-year lease agreement with Kimberly Ragland, an African-American woman with a small child. P informed Lagrit Morris, who served as the president of D's Board of Directors. Morris responded that she was unsure how other residents would receive an African-American woman. Ragland moved into the unit and P received a telephone call from Claire Jackson, another Stonecrest resident, during which Jackson used racial epithets to complain about P's new tenant and stated that unit owners did not want that kind of person living there. The next day Morris reminded P of their earlier conversation and further stated that P's renting her unit to an African-American had gotten other unit owners into an 'uproar' and that some owners were skeptical of minorities based on the fact that a previous African-American owner had his unit foreclosed upon a few years earlier. Morris told P that because of P's tenant, amendments to the Bylaws that would prohibit the leasing of units were being proposed. On February 19, 2005, the Board sent a letter reminding tenants of the upcoming annual meeting and informing them that amendments to the Bylaws that would restrict leasing were being proposed. The stated purpose of the lease restriction was 'to preserve the character of the condominiums as predominantly owner-occupied, and to comply with the eligibility requirement for financing in the secondary mortgage market.' The letter further stated that the leasing restriction would 'prevent units from being bought as investment property and [would] keep the appreciation value of our units intact.' At the meeting, the only person whom P could specifically recall stating that the amendments should be passed to keep out minorities was Jackson. The amendment passed. Ragland took a new job elsewhere and had to break the lease. P never attempted to apply for a hardship exception, which, if approved by the Board, would have allowed her to lease her unit under the new amendments. P sued Ds claiming that the adoption of the amendments to the Bylaws that prohibited leasing, with certain exceptions, constituted racial discrimination in violation of OCGA §§ 8-3-202 (a) and 8-3-222 of the Georgia Fair Housing Act. Ds moved for summary judgment, and it was granted. P appealed.