PORTLAND — A judge has thrown out a homeowners association vote that would have allowed a developer to move ahead with plans for a “hotelminium” on Great Diamond Island.

The Superior Court decision throws into disarray a developer’s plan to turn two derelict buildings on the island’s former Army post into about 20 condominiums. The units would be owned by investors who could live in them part of the year and rent them out the rest. The arrangement would also allow bedrooms in the units to be rented individually, like rooms in a hotel.

The plans date back to 2005, when the city acquired the two buildings — a former barracks and hospital — for unpaid taxes. Under the plan for the Diamond Cove development, those buildings could house as many as 23 units.

The city eventually negotiated a purchase and sale agreement with David Bateman, one of the original developers of the upscale Diamond Cove community, to sell the buildings for $1.

In 2007, the Diamond Cove Homeowners Association narrowly approved a change in its rules to allow a hotel, with the key votes being supplied by the city. The association consists of 145 units, both built and unbuilt, each of which gets one vote. The two city-owned buildings account for 23 votes — which were cast in favor of the rule change.

The Portland Planning Board and City Council approved a rezoning to allow the hotelminium about a year ago.

But in the meantime, dissident homeowners sued the homeowners association, saying the vote for the rule change was improperly conducted.

On Tuesday, Superior Court Justice John C. Nivision agreed, citing instances of one unit casting two votes, a discrepancy between the number of votes and the number of proxies, and that some votes were cast in a manner that violated association rules.

Tim Norton, the lawyer representing the homeowners who filed the lawsuit, said his clients objected to the way the vote was conducted and also worry that the project would not fit into the Diamond Cove development. Homeowners consider the development a neighborhood, and say it would be inappropriate to put a hotel in the middle of it, Norton said.

Diamond Cove hasn’t yet opened for the season and attempts to reach homeowner’s association board members Tuesday were unsuccessful.

The judge’s decision also negated an agreement between the association and the city that spelled out that Portland was not responsible for paying association dues on the 23 units it owns.

Norton said the association has never taken a vote to waive the dues and believes the total since the city has owned the property could be nearly $1 million.

But Nicole Clegg, a spokeswoman for Portland, said the city believes it shouldn’t owe any dues because it doesn’t benefit from the things dues support, such as maintenance of the grounds, a pool, croquet courts and a marina. She also said the sale agreement with Bateman says the city is not responsible for dues and that Bateman can’t seek to recover any money from the city to cover dues.

She said the sale agreement spells out that it is to be executed 30 days after litigation ends or by July 1, 2012, for the barracks building and July 1, 2013, for the hospital building.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

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