Posts Tagged ‘condominium’

Is This Condo Board President Overstepping?

Tuesday, October 22nd, 2013

L.M. from Hartford County writes:

Dear Mister Condo,

We have a condo president who has let the power go to her head. She is constantly sending us letters and most recently told us that if our daughter was not supervised by an adult at the playground she would fine us for each and every occurrence. She also harassed us about tree trimming and having our cat on a leash. Nowhere is it written in our by-laws that we have to leash our cat or supervise our 6 year-old daughter on the playground. No other parents supervise their kids and we do not believe she is sending them threatening letters. We feel like we are being singled out. Does she have the power to do this?

Mister Condo replies:

L.M., condo presidents are volunteer members of the Board of Directors who were elected by their Boards of Directors to fulfill the duties of presiding over the Board. It is often a challenging assignment and can lead to situations like you have described if the person in the role misinterprets their presidency to include behaving as the condo cop on top of the regular duties of a Board President. While I commend this volunteer for her service to your community it sounds to me like she would benefit from a better understanding of what her role is with regards to individual unit owners such as yourself. Of course, you and your fellow unit owners need to understand your roles as well.

All unit owners are tasked with living within the rules of the condominium association. This is a voluntary agreement that all unit owners agree to abide by when they purchase into the community. Renters, as an extension of their rental agreement, must also abide by the rules of the association. If your rules call for all pets to be leashed (most do), and all children to be supervised in play areas (again, most do), then it is incumbent upon all residents to follow the same rules. That being said, if only some of the rules are being enforced against only some of the residents, a case could be made for discrimination. If you truly feel you have been singled out, you may wish to contact an attorney to see if legal action is in order. Keep in mind that you will need to demonstrate that you and only you have been cited for breaking the rules. The attorney can better advise you than can I as to whether or not you would be likely to prevail in court.

The Common Interest Ownership Act (also referred to as CIOA) outlines the correct procedure for a Board to take corrective action against residents who do not follow rules. A written warning must first be issued and the offending unit owner is invited to speak before the Board at the Board’s next regularly scheduled meeting. If the violations persist, a fine or series of fines may be issued. Fines may be issued for each and every occurrence but the idea behind the fine system is to correct the behavior; not force a unit owner to be repeatedly fined for the same offense. My advice is for you to review your condo documents once more and make sure you are not mistaken about walking a pet off leash and leaving children unattended in play areas. If you still feel that you are in the right, ask to speak to the Board at their next meeting or hire an attorney to protect your rights. All the best!

High Overhead Costs for this Condo Roof Project!

Monday, October 21st, 2013

S.C. from New Haven County writes:

Dear Mister Condo,

The association never put money aside for roofs. They couldn’t get a loan so they had a meeting and decided at that meeting to raise our common fees $100 per month. They said they sent a letter so you could vote but I didn’t get one. I don’t think many people knew. We have almost 100 units and I was told that only about 20 people voted. We had been paying $35 a month towards the roofs for the past 2 years. Now they want $100.00 a month for 2 years. Is it time for a CPA audit?

Mister Condo replies:

S.C., an audit by a CPA may be a good idea but it is hardly what is at the root of your association’s fiscal challenges. It would appear that not nearly enough money was set aside for the roof replacement project that your buildings needed. A proper Reserve Study is more likely what is needed to stop this from happening again. What if the same math is applied to the roadways, or the pool and clubhouse, or the building exteriors? You and your fellow unit owners could find yourselves reaching for your checkbooks every time such a repair is needed. If I have done the math correctly, your association set aside $35 X 24 months X 100 units = $84,000 for the roof repair. In reality, the repair is costing $100 X 24 months X 100 units = $240,000. That means the project was underfunded by more than $150,000! I can see being off a few thousand dollars here and there. Even coming up short by 10,000 or 15,000 or 20,000 dollars in a project that size is understandable. It would appear the Board had no real barometer by which to measure the project’s real cost. That is where a Reserve Study can be invaluable in helping the association prepare for known upcoming expenses. An audit can come in handy to catch items that might be missed during standard review of the Profit and Loss statements by the Board but unless you think someone has stolen or misappropriated funds an audit will only confirm what you already know. Enough money has not been set aside for years to cover the cost of this roof replacement. The good news is you and your neighbors will have new roofs over your heads to protect you and your investments. The bad news is that you will pay for it in a relatively short period of time versus over the lifetime of the roof.

As for the procedures followed by the Board in calling the meeting and modifying the common fees I cannot say if they violated any of your rules or state law for Common Interest communities. If they did, you may challenge their change to the common fees. However, the long term outcome is likely to be the same. I assume you need new roofs and as an owner, it is your common fees that will pay for them. All the best!

Condo Volunteer Seeks Nomination to the Nominating Committee

Friday, October 18th, 2013

R.B. from Middlesex County writes:

Dear Mister Condo,

How are nominating committees formed? How do I get on the committee?

Mister Condo replies:

R.B., I like your desire to get involved with your community. Almost all committees derive their status from the Board of Directors. In some larger communities, committees may be called for in the condo’s governing documents. Either way, there is a protocol where committees are appointed by the Board to make studies, recommendations, or accomplish a specific task. Depending on the type of work being performed, the committee may also have a small budget and the ability to oversee certain association expenses. A good example might be the Pool Committee who is tasked with making recommendations about pool safety and conditions as well as decide opening and closing hours, etc.. This committee might make a recommendation that the hand rails need replacing which the Board would then vote on to approve.

The Nominating Committee is tasked with finding suitable volunteer candidates to serve on the Board of Directors. In healthy, vibrant communities there are usually more than enough volunteers who are willing and able to serve. However, that is not always the case and the Nominating Committee may be tasked with seeking out individuals to serve. It is not uncommon for former members of the Board to be asked to serve on this committee as they have first-hand knowledge of what it’s like to serve on the Board. Like other committees, the Board would select member(s) to serve. If you have an interest to serve on the Nominating Committee, it may be as simple as letting someone on the current Board know that you are interested. If you have already served on other committees and are known to the Board you could be an easy selection. If your first volunteer effort is to ask to serve on this committee the Board may simply thank you for volunteering. Either way, the Board is under no obligation to appoint you to the Nominating Committee.

Thanks for the question. Happy Volunteering!

Volunteer State Condo Issues Continue

Thursday, October 17th, 2013

C.P. from Tennessee writes:

Dear Mister Condo,

Mr. Condo, thank you so much for responding to me. I have already tried just about everything but hiring a lawyer. I joined a bylaws committee (the only committee we have which is dead now). We have studied our documents frontwards and backwards, along with TN law in the annotated codes. When we asked the Board to meet with us so we could all go over our findings they refused. They will not even talk to us. That is really frustrating. I have sent them so much information but I don’t think they even read it. They talk to us as though they know everything and the rest of us are idiots. It is humiliating and so wrong. We have decided to try and get more people involved so we can stop some of the nonsense. They also want us all to pay for extra parking pads and told them we never got to vote on that and they can’t change a common area without a percentage of people agreeing but they just ignore me. And now they passed an amendment so they get paid, so they are not volunteers. It really is awful to be treated so badly, especially when you’re almost 70 and don’t deserve this kind of treatment. Thanks for your help. Appreciate just being able to be heard, and appreciate any other help you can suggest. I did talk to someone in our state government offices and he said I am right and to keep trying. It’s awful to think we will have to hire a lawyer just to get them to do things legally. Sorry to go on so much. Thanks again.

*** (Editor’s Note: This follow up question is in reference to the original post http://caict.org/askmistercondo/volunteer-condo-leader-issues-in-volunteer-state/)

Mister Condo replies:

C.P., you are most welcome for my original advice and you are also welcome in advance for what I am about to suggest. I am not certain of the laws in your state but most states prohibit volunteer Board members from receiving any type of pay for their volunteer service to the Board. It completely violates the nature of volunteerism to be paid for services rendered to the association to which they belong.

Hiring an attorney makes perfect sense when either your rights or your pocketbook are being abused. Though not insignificant, the amount spent on counsel will come back to you many times over in the money and time you will save by having a legal professional drive this process. There are times when the simple act of having an attorney contact the Board will get the Board’s attention and get them to behave properly. From what you have described to me, I would not hesitate to hire an attorney and take action.

You may end up suing the current Board but you will protect the rights of all of the affected homeowners. Of course, it goes without saying that you and your neighbors need to vote better volunteers into office and be sure to vote out the volunteers who have misbehaved. Your condo association is a democratic organization and your vote is your voice in electing leaders that will best represent the interests of the community members. From what you have told me, you and your fellow unit owners who have spent time analyzing your condo documents are very likely contenders for service on the Board. Be sure to nominate right-minded folks and take back control of your association.

Of course, I still strongly recommend you get in touch with your local chapter of CAI at http://www.caitenn.org/contact.html. You don’t need to go this alone and you have local resources to assist you. I look forward to hearing from you again when this ugliness is behind you. Good luck.

How Much Money Can A Condo Board Member Spend on Behalf of the Association?

Wednesday, October 16th, 2013

L.L. from Fairfield County writes:

Dear Mister Condo,

What is the law regarding the autonomous spending limit of a board director?

Mister Condo replies:

L.L., although I am not an attorney, I am not aware of any law that limits the amount a Board Director may spend on behalf of the association. I thought that association by-laws might address the issue but I wasn’t certain so I checked with a community association attorney who specializes in such matters who had this to say:

“If by “autonomous spending limit” you mean how much one board member can use or pledge for condo business, the limit is whatever the board decides to authorize that member to spend. There is no specific statute on this, and most bylaws wouldn’t cover it either except to require one or more authorized signatures on checks and contracts.”

All the best!

Condo Board vs. Hot Tubs; The Battle Continues!

Tuesday, October 15th, 2013

J.Q. from New Haven County writes:

Dear Mister Condo,

Hot tubs are allowed at my condo according to our CCR. However, I have requested to install one on my deck and am being denied by the Board. How can it be denied if the CCRs allow it?

Mister Condo replies:

J.Q., hot tubs have been getting condo owners and condo association in hot water for years. Unit owners that wish to install a hot tub are usually quite passionate about their desire to do so. Boards that have had problems with previous unit owners who installed improperly or failed to maintain once installed hot tubs are usually the reason the Board tries to prevent new installations. Suffice to say that if the CCRs are on your side, you may be able to prevail but you should be prepared for a battle. Boards can cite architectural compliance issues, safety issues, insurance issues, and more to prevent an unwanted hot tub from being installed. You may find that you even need to hire an attorney to bring suit against the Board to allow you to install your hot tub. Even then, there is no guarantee that you will prevail. If the hot tub is that important to you, by all means, pursue your dream. If it really doesn’t matter, I might suggest you let it go. The Board is charged with protecting the community and surely has its reasons for not wanting the hot tub installed. All the best!

Lack of Proper Reserve Funds Stops Condo Mortgage from Closing

Monday, October 14th, 2013

D.G. from New Haven County writes:

Dear Mister Condo,

I am purchasing a condo and I was supposed to close on my loan today. However, the bank contacted me last week and informed that the condo is not currently meeting the 10% budget reserve required by the FHA guidelines. My loan is a conventional 30 year fixed, and is not FHA backed. Why is this guideline preventing me from receiving the loan? How likely is it that I can find another lender that may look past the reserve issue?

Mister Condo replies:

D.G., I am sorry for your mortgage loan closing troubles. I wish I could tell you that you are describing an isolated incident but the truth is that I am hearing more and more about missed condo closings due to mortgage issues every day. The government shutdown, which has effectively stopped condominium associations from renewing or applying for FHA certification certainly isn’t helping matters any. I am not certain how your lender is offering you mortgage money that isn’t FHA-backed (almost all are) but, clearly, they are still applying the same guidelines as an FHA-backed loan which makes sense as almost all lenders will turn around and sell your mortgage to a secondary market after your loan has closed. The secondary purchaser will certainly require that the loan is FHA eligible so that is the likely reason the condo’s lack of FHA certification has halted your loan from moving forward. Unfortunately, unless you can find a source for the mortgage that isn’t FHA-backed or reselling the mortgage to a secondary market, I think it is unlikely that you will find financing at this time. Once the federal government is reopened and the FHA is taking applications for certification, the current owner can ask the Board of the condo to seek certification. Of course, the Board is under no obligation to do so and may not even be able to if their Reserve Fund is not properly funded. This limits both buyers and sellers to purchasers who will either pay cash or secure funding through a non-FHA approved third-party vendor. I am afraid it isn’t pretty no matter how you look at it. Best wishes.

Who Pays for Interior Condo Damage Caused by Leaky Roof?

Friday, October 11th, 2013

K.H. from Fairfield County writes:

Dear Mister Condo,

The association of my Condo has failed to fix the roof properly over the years and has done patch work to fix spots here and there.  In June, we had heavy rain. Water came in to my condo and has damaged my windows, cabinets, flooring and back splash in my kitchen.  The Board states that the interior is my responsibility.  However, the roof repairs have been neglected for years because they did not want to spend the money on properly repairing the roof.  Should they be paying to fix the damage in my kitchen?  Thank you!

Mister Condo replies:

K.H., I am sorry that your unit faced water damage. I can only imagine the horror of having windows, cabinets, and flooring ruined by water. Of course, now that the damage is done the real question is who is on the hook for the clean-up expense? I hope you have homeowner’s insurance (HO6 here in Connecticut) or this could be a very expensive lesson in why you need it.

Regardless of your assessment of the Board’s history of repair on the roof, generally speaking, their responsibility ends where your unit interior begins. The condo association is generally responsible for insuring the common elements of the condo; unit owners are responsible for insuring unit interiors and contents. So, to that end, the Board is correct in telling you that the interior is your responsibility. However, if you have insurance to cover the damage, your insurer should pay for the repair and then, at their discretion, they could go after the association (or the association’s insurer) for damage caused by negligent repair. That would be very unlikely in my opinion as you have mentioned that the association has done repairs to the roof which would indicate they are trying to maintain the roof’s integrity. If the roof is long overdue for repair or replacement and the Board had taken no action to maintain or upkeep the roof that would be a different story.

Do you know when the current roof was initially installed? Is it still under warranty? If it is past its serviceable life it may be time for replacement. If the replacement has been budgeted for that should be no problem. However, many communities have opted to keep their common fees low and have not saved adequately for aging elements like a roof. That could mean a special assessment is on the way to pay for the new roof. Still, better to pay for the new roof than face the consequences of another water intrusion event. All the best!

Volunteer Condo Leader Issues in Volunteer State!

Thursday, October 10th, 2013

C.P. from Tennessee writes:

Dear Mister Condo,

We retired and moved to a condo to simplify our life. We love our condo, but are becoming frustrated with things being done by the Board. They insist on having 4 HOA meetings a year, and do not inform us of anything to be on the agenda or voted on. It’s as though the only people who get to vote are those who go to all the meetings. I believe in fairness and the right to vote for everyone. Now they have even said they get to choose one of our 3 directors themselves. Also, they do a budget but don’t send us a proxy with it to vote on it. Any suggestions?

Mister Condo replies:

C.P., greetings to you and all our friends in the “Volunteer State”. Thank you for writing and welcome to the world of condo living. Like many retirees, you were probably drawn to the condo lifestyle for ease of living and simple maintenance and upkeep tasks delegated to paid staff. The billboards sure make it look wonderful, don’t they? What they don’t show is the potentially challenging part of the equation which is governance. A group of elected volunteers is tasked with interpreting the association’s by-laws as well as state law on community association governance. While the end result is often good, there are times when situations like yours occur.

I am not an attorney so please accept this following advice as friendly and not legal. All states have laws that govern the establishment of condominiums and other community association properties. Within these laws are the outlined rights of unit owners, including such rights as voting powers and budget ratifications. Closer to home, your own condo documents (that big packet of papers you were provided when you purchased) will detail how the community is to be governed and what rights are included with unit ownership. I would be very surprised if the process of elections and annual budget ratification details are not included. FYI, in the event of a resignation or vacancy, the Board very likely does have the power to fill the vacancy of the Board by making an appointment. However, they are not likely empowered to pass a budget without a vote of the unit owners and the notice of that vote should need to be provided in advance of the meeting and allow for proxy voting.

Additionally, you have a local resource in Tennessee that you should seek out for advice and guidance. The Community Associations Institute (CAI) has a state chapter with an excellent website. You should visit them at http://www.caitenn.org/ to see what education and resources they have for you locally. IF things get really difficult, they even have a list of attorneys who specialize in community association law. You can see that list at http://www.caitenn.org/directory.php?type=4&par1=3&par2=ATTORNEYS. I hope it doesn’t come to that for you but it’s nice to know there are professionals available if you need them. All the best!

Where Can I Learn About Condo Laws in Connecticut?

Wednesday, October 9th, 2013

L.S. from New Haven County writes:

Dear Mister Condo,

I am a second-year Board member at my condo. I keep hearing about new laws and changes to laws that have an impact on the relationship between the Board and the unit owners. As far as I know, my fellow Board members and I are doing a good job running the place but I am concerned that we don’t have all of the information we need to make sure we are in compliance with state law. Is there a central place where all of this legal information is available?

Mister Condo replies:

L.S., thank you for your service and thank you for your question. Volunteering to serve on your Board is a noble venture and I wish you and your fellow Board members continued success. There have been several changes and additions to laws that effect Common Interest communities in Connecticut over the past few years. First and foremost is the Common Interest Ownership Act (often referred to as CIOA). It expanded unit owner’s access to information and records of the association among other things. This past year, new laws were enacted that cover a wide range of topics such as required community association manager licensing, priority liens on units that are delinquent in common fee payments, budget ratification procedures and more. Keeping up with these laws can be tricky and even well-meaning Boards such as yours can find themselves on the wrong side of the law if they don’t keep current on these matters.

On Thursday, October 17th, the Connecticut Chapter of CAI (CAI-CT) will be holding a legislative symposium at Oronoque Village in Stratford from 2:30 to 6:00 p.m. to address this very issue. While the topics covered are too many to list here, it is fair to say that this one afternoon will cover you and your Board from soup to nuts on legislative issues facing today’s condominium volunteer leaders. You can read much more about the event here as well as register – http://caict.org/legsymSESSIONS.html.

I can’t recommend this event highly enough as this one day investment can save your Board from a years’ worth of legal troubles. I know I’ll be there and I hope you will too. All the best!