Monthly Archives: March 2013

Condo Board Won’t Seek FHA Certification

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R.P. from Fairfield County writes:

Dear Mister Condo,

How can I persuade or threaten my condo board to apply for FHA certification so I can get a reverse mortgage?

Mister Condo replies:

R.P., let’s stick with persuasion tactics. Generally speaking, FHA certification is good for all unit owners within a condo. It makes for better funding opportunities for unit owners looking to buy, sell, refinance, or obtain a reverse mortgage as you are seeking. If the current Board is unable to unwilling to seek FHA certification, I would ask to have the FHA certification discussion added to a future Board meeting and bring in an FHA expert to speak with the Board. There are several right here in Connecticut who would be happy to discuss the methodology and why it is in the condo’s best interest.

If that strategy doesn’t work, it is time for a new Board. Elect Board members who understand the value and are willing to work towards FHA certification. Keep in mind there are factors such as how many unit owners are delinquent in common fees and how many units are rented or already mortgaged with FHA-backed loans than could affect your community’s eligibility. For the latest on FHA news, I suggest you check out the FHA Page at the CAI National website at http://www.caionline.org/govt/MortgageMatters/FHA/Pages/default.aspx. Here you’ll find information and more links to web resources to guide you in your quest. All the best!

How Do We Add Sanctions Against Rule-Breaking Condo Owners?

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G.S. from New Haven County writes:

Dear Mister Condo,

How do we, as a condo, add sanctions to our bylaws for unit owners disobeying rules?

Mister Condo replies:

G.S., voluntary compliance with condo rules and regulations is the goal of every great community association. It seems a simple enough principal that people who agreed to follow the rules when they purchased their condo would want to follow the rules so they can peaceably enjoy their unit and expect the same of their neighbors. However, as new unit owners come and go, units become rentals, or just plain unruly or uncaring people move into the condo, rules enforcement becomes a major issue for well-intentioned condo associations.

Begin with your existing bylaws and/or rules and regulations. Chances are the penalties are spelled out. It is not unusual for there to be small fines associated with minor offenses. I have seen fines as low as $5 per occurrence but none much higher than $25, which may be a good number to shoot for if your community does not have a fine system in place to “encourage” good behavior amongst residents.

Adding or updating your fine structure is as simple as having the item added to a Board meeting or homeowners meeting and adopting the new system. You will need to notify all unit owners of the new fine schedule and allow adequate time for the word to be spread before implementing it. Also, I would encourage you to inform all renters and landlords if you have those folks within your community.

Finally, you should familiarize yourself with the state laws found in the Common Interest Ownership Act, also known as CIOA regarding fining any resident. Basically, a notice must be sent before the fine is levied notifying the offender of the rule that was broken and the intention to levy a fine for the infraction. The unit owner must be given an opportunity to appear before the Board to explain why the infraction occurred. The Board may then take action against the unit owner by levying the fine, letting them off with a warning, or dismissing the charge if an adequate explanation were offered. If you do not follow these procedures, the unit owner could refuse to pay the fine and, if taken to court over the matter, would likely prevail against the association.

That’s an awful lot of work to get unit owners to play nice but that is the process in the state of Connecticut. I encourage you to try honey before vinegar and begin with friendly warning letters notifying offenders that they break a rule. The fine system is designed to encourage people to behave as good neighbors. A better strategy would be to create good neighbors by education. Use the fines as a last resort. Good luck!

Can Sales Tax on Condo Rental Units be Passed Along to Owners?

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D.Y. from Tolland County writes:

Dear Mister Condo,

I own and rent out several condos in a condo complex. Recently, they started charging a “renter’s fee” to cover the portion of sales tax the association had to pay due to rented units. It was $320.00 for tax on the management contract, and $160.00 for tax on roofing work. These amounts were added and then divided by the number of rented units. Each rented unit owes $19.20. Is this legal in CT?

J.D. from Hartford Country writes:

Can the management fee sales tax on a rented/leased unit be passed on to the unit owner?

Mister Condo replies:

D.Y. and J.D., your questions were so similar I decided to lump them together. As long as the sales tax is attributable to the rented units and no others, it is a limited common tax and should be split by the limited units effected using whatever formula is in place to divide the tax. Even if it weren’t “legal”, it sure sounds fair. Should the non-rented unit owners bear the burden for a tax brought about by rented unit owners? Thankfully, it is such a small amount of money that it really shouldn’t be too heavy a burden for the rented unit owners, such as you, to bear. Best wishes.

My Condo Neighbor Has Gas! (Natural Gas, that is)

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T.B. from Fairfield County writes:

Dear Mister Condo,

The condo complex I live in has 14 units. All heat, water and appliances are electric. One buyer moved in and wants to have a gas stove. There is gas on the street. Is this permitted with condos to allow one unit to have gas when the others don’t?

Mister Condo replies:

T.B., while it would be unusual, I wouldn’t say it is impermissible. I assume that this owner has petitioned the Board to seek this change and the Board has granted the change. The change allowed for one unit should be allowed for all, provided the other unit owners follow the same process of petitioning the Board for whatever change is necessary to make the conversion from electric to gas possible. In fact, the Board would be wise to explain the process to all owners as I am sure the gas company would do a more efficient job of delivering gas by connecting all or most of the units at the same time. That being said, if the gas utility company needs to tear up common ground to provide the gas service, I would think the Board had best think twice before allowing the initial installation. Best wishes!

H.B. 6477 – Protecting Condo Unit Owners

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R.G. from New Haven County writes:

Dear Mister Condo,

My monthly condo fees were raised by $40 recently. I got a note from the Board that the reason was that two of the condos in another section of the property went through foreclosure and the unit owners had filed for bankruptcy. One of the units owed almost two years in common fees that the association cannot collect. I have never been late with my common fee payment in the five years I have lived here. I already pay my fair share. Why do I have to pay extra common fees for units I don’t live in?

Mister Condo replies:

R.G., you are not alone in feeling the pinch of increased foreclosures at condominiums here in Connecticut. When a condominium prepares its annual budget, it does so assuming that all of the units will pay their fair share. That is a central pillar of common interest community living. So what happens when unit owners stop paying their fair share? The remaining unit owners must pick up the burden. What is even more shocking is that even though the association is a non-profit corporation, the current bankruptcy and foreclosure laws treat it as just another creditor when the foreclosure eventually goes to court. It really is not fair.

You will be hearing a lot about a 6-month rule and an Evergreen rule about liens in condo communities in our state. This is an attempt to help protect typical unit owners within condo associations in our state. Currently, condo associations have the ability to collect 6 months worth of delinquent common fees and reasonable attorney’s expenses from units that become delinquent and go through the foreclosure process. There is a bill before the legislature that would extend that to 12 months worth of delinquent common fees that will hopefully pass to protect citizens like you. The bill is House Bill 6477 and you can read about it here: http://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=6477&which_year=2013. I encourage you and your neighbors to contact your state representative and state senator and urge them to pass this bill.

The Evergreen rule will also help prevent this type of financial catastrophe from hitting typical condo unit owners like you. Basically, it prevents legal maneuvering by banks from taking too long to foreclose on delinquent units. The idea is to allow the association to file multiple actions against mortgage holders that would keep the association’s claim to be made whole through the repayment of delinquent common fees. Each time a claim was filed, it would be treated as a new claim, thus keeping the claim evergreen, which is where the name comes from.

Again, I encourage you and all condo owners to support these legislative actions by alerting your state representative and state senator how important these issues are to you. Together, we can bring about change that will protect condominium owners!

No Board Member Wants to Be President! Now What?

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P.D. from New Haven County writes:

Dear Mister Condo,

We have a 5 person Board, recently elected. However, no one wants to be President. What are our options?

Mister Condo replies:

P.D., that is an unusual situation. I have heard of associations where they have difficulty to attract volunteers to serve on the Board but I’ve never heard of a group of volunteers being unable to find a leader within their group to serve as President. It’s really not that much more work to be a Board President. You do need to show some additional leadership abilities but that’s about it. Perhaps there is history of unit owners being unfair to previous Board Presidents that is causing this reluctance? Whatever the reason, your association by-laws should spell out what remedies are available to you. Typically, a Board will have a President, a Vice-President, a Secretary, a Treasurer, and several Directors at Large. In the event of no President, the Vice-President would likely take charge. If there is a further line of succession beyond that, then you would follow that line.

My larger concern is why none of the current volunteers would wish to serve as President. While the President is tasked with running meetings, other Board members share in the responsibilities of governance of the association. The President simply presides over the Board and ensures that proper protocols are followed when motions are brought before the Board or votes are cast. In a well-functioning community association, it can be a quite rewarding volunteer calling. I hope you find a leader for your community.

Condo Firewall Law Question

J.J. from Hartford County writes:

Dear Mister Condo,

Is it a state law to that there must be a fire wall between units of a condo complex that consists of only 2 units?

Mister Condo replies:

J.J., while there aren’t any state laws that I am aware of, I suspect you will find your answer within the local building codes of your town or city. I asked Timothy Wentzell, PE and Owner of Connecticut Property Engineering for his opinion on the matter. Here is what Tim had to day:

“There does need to be a firewall between two units however the type and method of construction depends on when it was built. That being said if any major repairs are being done to this area it would need to be done to current codes.”

Condo Owner Feeling Ripped Off Over Ripped Up Flooring

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D.W. from New Haven County writes:

Dear Mister Condo,

We tore up old carpet and tile when we moved in to our condo. We put laminate flooring down only to find that the laminate cracked and squeaked. We were told by the management that the concrete floor was their responsibility. So the laminate floor was torn up and the concrete leveled by the corporation with the board’s approval. Another floor was put back down. Unfortunately, it was done improperly as the concrete was uneven. We were told the management would resolve this for us. We now have been thrown under the bus saying the concrete is our responsibility as the laminate is an upgrade. But we feel by telling us and having a contractor pour concrete in our unit it shows that we should be compensated or have our floor fixed. What do you think?

Mister Condo replies:

D.W., I am sorry for your predicament. It sounds like you were trying to perform a simple upgrade only to find the construction standards didn’t allow for the upgrade to be so simple. You are treading into potential lawsuit territory here so let me start with some simple advice. Hire an attorney to review your rights and then decide if it makes sense to sue the association for the work they performed on your unit, especially if the work was poor or improper.

For the most part, building interiors are the responsibility of the unit owner. However, all upgrades must be in adherence to condo rules and regulations. Installing a laminate floor where there was previously carpet qualifies as an upgrade so you were wise to seek out the Board’s approval before you installed the upgrade. My gut feel is that the Board is not responsible for the condition of the floors that were previously installed by either a previous owner or the original builder. Had you simply installed new carpet, I don’t think any of these other issues would have surfaced. That being said, if the association agreed to modify your floor by pouring new concrete, I would think you have a case for that job to have been performed correctly. An attorney could better advise you on that. As for subsequent expense of installing, removing and reinstalling laminate flooring, that may be an issue best determined by the courts if your lawyer advises legal action. Good luck!

How Do I Find Boards of Directors at Condominiums in Connecticut?

T.H. from Hartford County writes:

Dear Mister Condo,

How can I contact various boards of directors at different condo properties?

Mister Condo replies:

T.H., that is an interesting question. Boards of Directors at condominiums are volunteers and can be quite difficult to find when you are not a member of the condominium. They don’t have special colored doors on their units or gold ribbons on their windows identifying them as Board members. The Secretary of the State of Connecticut does require that non-profit corporations which are LLCs register with the secretary’s office. Provided the condo is an LLC and that the registration information is correct and current, a list could be procured through the secretary’s office. You can visit online at http://www.sots.ct.gov/sots/site/default.asp and conduct your search.

However, my favorite way to meet many Board members is to attend CAI-CT events, like the upcoming CAI-CT Condo / HOA Conference & Expo (http://www.caict.org/events/event_details.asp?id=508728&group=). That event usually draws more than 100 Board presidents and many other Community Association Volunteer Leaders (Board members and other). See you there!

Who Can Call a Special Meeting of the Condo Unit Owners?

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J.P. from New Haven County writes:

Dear Mister Condo,

Can a unit owner request the calling of a special meeting of fellow owners to discuss changes to by-laws, and rules and regulations? What % of unit owners have to “sign up” and what rules apply to such a planned meeting?

Mister Condo replies:

J.P., without knowing the specifics of why this meeting would be called, I will confine my answer to the more technical aspects of how association members can call for a special meeting. As you know, I am not an attorney so please consider this friendly advice rather than legal opinion. Your first option is to review your condominium documents and read about how special meetings are called. Generally speaking, you will find a clause under the governance section that gives instruction as to who can call for a special meeting (usually the Board president, a majority of the executive Board, or unit owners holding 20% of the votes in the association.). Again, check your by-laws as the % may be different for your community.

You can’t just assemble and discuss or vote upon by-law changes, assessments, etc.. Adequate notice of the meeting as well as an agenda for the meeting must be given to all members. Items discussed are limited to what is on the agenda. Here is some official wording from the State of Connecticut’s website. You can see the original text at http://www.cga.ct.gov/2006/rpt/2006-R-0561.htm

“State law requires that a meeting of the condominium association be held at least once each year. Special meetings of the association may be called by the president, a majority of the executive board, or by unit owners having 20%, or any lower percentage specified in the bylaws, of the votes in the association.

The law requires the secretary, or other officer the bylaws specify, to cause notice of an association meeting to be hand-delivered or sent prepaid by U.S. mail to the mailing address of each unit or to any other mailing address the unit owner designates in writing not fewer than 10 nor more than 60 days before the meeting. The notice must state the time and place of the meeting and the items on the agenda, including (1) the general nature of any proposed amendment to the declaration or bylaws, (2) any budget changes, and (3) any proposal to remove an executive board officer or member.”

The bottom line is that a group of unit owners can call a special meeting if they deem it necessary. A far better solution, in my opinion, is to organize those same interested parties and elect members to the Board of Directors who will better serve the common interest. When a Board is functioning in the best interest of its members, there shouldn’t be a need for individual unit owners to call their own special meetings. Good luck!