Monthly Archives: July 2013

Property Tax Exemptions for 55+ Community Members?

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J.B. from Hartford County writes:

Dear Mister Condo,

Hello! I am wondering whether you know of any states or towns (in the country) offer or require a property tax exemption for 55+ communities that do not receive municipal services, such as trash pick-up. Thank you, J.B.

Mister Condo replies:

J.B., hello to you as well! Property tax exemptions are a bit unusual because most times the original developer of the community was the one who accepted the city or town’s terms for developing the condo community. Most municipalities look at condominiums as High Density Housing (HDH) developments which put a potential burden on the community’s general services. So even if things like road maintenance, lighting, and trash removal are not provided, services like police, fire and rescue, and more are provided. Sure, the municipality comes out ahead on some measures but short on others. The end result is that many municipalities simply tax the unit owners within the community the same as every other property owner in town. That being said, I know of some communities here in our state that have successfully negotiated to have their municipality handle their trash removal. They still plow their own roads in the winter and maintain their own streetlights but at least they’re getting the same trash removal as all other taxpayers.

The biggest issue I hear about from 55+ communities is having their property taxes used for education. They argue that they and their children are past the age of school so why should they be taxed for something they’ll never use. This is especially true for retirees who move into a new community where they nor their children or grandchildren have sued the local schools. Sun City in Arizona is the only community I am aware of that has specifically given a tax exemption to 55+ communities for education services. And they did this through an unusual move where the communities removed themselves from the school district.

There is a great website on the subject at http://www.55places.com/. In particular, take a look at this article – http://www.55places.com/blog/10-great-low-tax-retirement-communities. Sorry to say that Connecticut did not make that list. Maybe, next time!

Hot Deal on Fire-Damaged Condo!

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L.S. from Fairfield County writes:

Dear Mister Condo,

Hi! I am thinking about purchasing a condo with known fire damage which was caused by the resident living above the unit. No repairs have been done to the building yet so I am very hesitant as I am really not familiar with the process. Here are my questions:

  1. Who is responsible for the repair knowing that the damage was not caused by the previous owner?
  2. If it is under the condominium insurance coverage, will they cover all the walls and structures or simply the exterior structure of the building?
  3. Since I don’t believe the previous owner or the bank had kept up with their common fee, how does that work? Will it still be cover by the condominium insurance?
  4. I would imagine they would not leave a section of the building not fixed, right?

Sorry for all those impossible questions and thank you in advance.

Mister Condo replies:

L.S., no need to apologize for those questions. They are all good and you are wise to seek answers BEFORE you purchase. The purchase of a damaged condo unit is similar to the purchase of a new construction unit in that you should have a new unit once the construction process is complete. However, fire damage carries some other risk factors that you would be wise to consider before the purchase. First and foremost is safety. You should insist on a safety inspection from the local building authority (usually a city inspector) before you agree to purchase the unit. Just because the esoteric surfaces like floors, doors, and windows are new you want peace of mind in knowing that all of the unseen structures subfloor, walls, roof, etc. are structurally sound and have been inspected.

Typically, the association insurance would cover the basic repair of a fire-damaged unit. However, not all policies are the same and not all events are covered. If improvements were made to the unit and the policy was written to only cover originally installed materials, you may find the association only rebuilds to the original specifications. That could mean downgraded flooring materials, basic cabinets, and such. Ask how the association plans on rebuilding the unit and ask how it will be paid for. If the entire job is being paid for from insurance proceeds, you may be good to go. If the association is suing the upstairs unit owner for the monies to repair the unit, a long legal battle may ensue. If that is the case, I would suggest you take a pass on the unit until the lawsuit is settled and the funds are in place to repair the unit.

If the previous owner of the unit did not keep current with the common fees as you think, there is a process by which the association will collect as much of the uncollected fees as possible. The Connecticut law that was on the books at the time would allow for the association to collect up to six months of uncollected fees and reasonable legal expenses at the time of closing through a super lien. That means the seller would have those funds deducted from the proceeds of the sale before anyone else was paid. The new unit owner becomes responsible for new fees from the date of sale moving forward but has no obligation to pay for previously assessed fees. The new law in Connecticut will allow associations to renew their claim to uncollected fees on a renewable basis so that their super lien includes all uncollected common fees and legal expenses. That is still on the previous owner; not the new owner. Either way, uncollected common fees are not covered by insurance.

You asked “I would imagine they would not leave a section of the building not fixed, right?” I would imagine the last thing they would want to do is leave a section of the building unfixed. It is an eyesore and hurts property values of the entire community. However, if the community did not have adequate insurance coverage or the negligent owner were unable to pay for the damage caused that was not insured, it is possible that the association could wait until the lawsuits are settled before reconstruction began. If the community did not have enough financial reserve to fund the project in the short term, it is entirely possible that this section of building could remain unrepaired for quite some time. For that reason alone, you need to exercise extreme caution before purchasing this fire-damaged unit. If you are working with a realtor, I would have them get as many of these answers for you as possible. I would also hire an attorney to guide me through the process from offer to closing to protect my interests. If all looks good and you know the risks and still wish to purchase this fire-damaged unit I wish you all the best. If the deal gets dicey, I have no problem suggesting you look for another unit. Good luck!

Condo Front Stoop Safety Handrail – Who Pays?

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J.L. from Hartford County writes:

Dear Mister Condo,

I live in a 55+ common interest community. My physical condition at 70+ yrs. of age has changed and I can no longer enter my front entrance without assistance. In addition, I am on continuous oxygen. There is one high step up to the stoop/front porch landing. Currently there is no handrail to grab onto to assist me with stepping up so I can enter the front door of my unit. It is my understanding that the front stoop/porch is a limited common element.

My question: “Who is responsible for the installation expense of a handrail on the front stoop/porch landing to my unit for assisting me to safely enter the front door of my unit?”

I look forward to hearing from you. Thank you.

Mister Condo replies:

J.L., an aging condo population is quite common in Connecticut. There have been quite a few 55+ communities built in the past few years and there are many more on the horizon. As we advance in years increased mobility challenges often surface. You are certainly not alone in your situation and you raise a great question. Condominium associations across the state often face similar challenges. I reached out to an attorney who specializes in community association law for a legal opinion on what your options are. Here’s the advice:

“You are responsible for the installation expense of the handrail. Federal law says that the association must allow a unit owner to make reasonable modifications to the unit and/or limited common elements to accommodate the owner’s physical disability.  The unit owner must arrange and pay for the installation, and the board cannot use rules against altering building exteriors as a reason for withholding permission so long as the modification is reasonable and necessary for the purpose.”

That certainly makes sense to me and sounds like a practical solution. Best wishes and good luck with your new handrail!

Overwatering Neighbor Overreaching Limited Common Area

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S.B. from Hartford County writes:

Dear Mister Condo,

Next door neighbor in my 54-unit PUD is way overwatering his lawn and even has a sprinkler head on my limited common area.  What can I do when the association won’t help?

Mister Condo replies:

S.B., given the summer we’re having here in Connecticut, it’s hard to believe there is such a thing as overwatering! That being said, nuisance behavior from a neighbor is just that; a nuisance. There may not be anything you can do, especially if you have notified your Board and they are not taking action. I know it is hard to understand but your Board can pick and choose their fights. Someone who parks in the fire zone is far more likely to get a fine than someone who overwaters their yard. The sprinkler head on your limited common area is actionable by you, not your Board. You can ask nicely for your neighbor to remove the sprinkler head; you can send a letter; you can sue him if you wish. I would just suggest to you that overwatering is not as bad an offense as, say, playing loud music at all hours of the night or leaving a barking dog unattended. Choose your battles wisely, my friend. Watering season only lasts a few months. The two of you are neighbors year round and maybe for years to come. Best wishes!

Risky Business; HOA Approved Clubs and Organizations

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J.S. from New Haven County writes:

Dear Mister Condo,

We have many independent clubs and organizations which are approved by the HOA.  Many of them collect dues.  What is the HOA’s responsibility or liability if the treasurer or president absconds with the funds?

Mister Condo replies:

J.S., sounds like your HOA is vibrant with many clubs and organizations active. Since you used the word “independent” to describe them, I assume that they have their own charters and by-laws that deal with things like misappropriation of funds and theft. If not, it is still likely their responsibility. You also used the word “approved” by the HOA. I am not sure how an HOA can approve an independent club or organization other than to agree to let them use HOA facilities (clubhouse, common grounds, etc.) for their activities. If the HOA has any liability in their activities, your insurer should be brought in to provide an opinion on any risk to the association caused by these independent clubs and organization. For instance a Chess Club using the club house for tournaments may pose little risk but a skateboarding group using the parking lot for riding lessons may pose a great deal of risk. It would be better to ask your insurer ahead of time what risk is being put on the association before there is a problem. Good luck!

Condo Ice Dam Caused Mold; Who Pays to Have it Removed?

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P.F. from Hartford County writes:

Dear Mister Condo,

Who is responsible for mold remediation resulting from ice dams in between roof and ceilings inside my condo?

Mister Condo replies:

P.F., mold is no laughing matter to be sure. While you can argue who is responsible until you are blue in the face, the remediation should be taken care of at once before you or someone else living in your condo become ill. There are several schools of thought on who is responsible and who should pay. The reality is that you may need an attorney to enforce your rights.

If you haven’t already done so, document the mold damage as best as you can. I am talking photographs, expert opinions, the whole nine yards. Ask a mold remediation expert to come to your unit to explain the problem and their proposed solution. Send a copy of all of this information to your Board for immediate action at their next meeting. If they agree with you that the mold was a result of an ice dam their next step may be to speak with the association’s insurer to see if there is coverage. If so, the Board should arrange to have the mold remediated and the problem is solved.

Let’s assume it’s not that simple. The Board doesn’t agree with you or the insurer says it isn’t covered; now what? Most likely, you will hire an attorney and bring suit against the Board to have them pay for the remediation. Alternatively, if the remediation cost is minimal (under $1000) you might just want to go to Small Claims Court if the Board refuses to pay for the remediation. Keep in mind that any legal action you bring against the Board will cause the Board to hire its own attorney to defend. The unfortunate part of this transaction is that the association’s legal costs are partly yours through your common fees.

The bottom line is that you should not live with mold in your condo. Hopefully, you will notify your Board and they will fix the problem. If not, take matters into your own hands and get rid of the mold. Legal wrangling aside, mold can be toxic and lead to serious health problems and even death if left unchecked. Good luck!

House to Condo : Condo to House Question

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L.H. from Fairfield County writes:

Dear Mister Condo,

I own all 3 units in a 3-condo building that was originally a 3-family house. For tax purposes, I would like to convert back to a 3-family house without using a lawyer. The condo documents state that I can just vote to dissolve the condo association. Do you know what my next steps would be?

Mister Condo replies:

L.H., as you know, I am not an attorney. While I appreciate your desire to be frugal and not hire an attorney to assist you, I strongly recommend that you do. That being said, I did check with one of my attorney friends for an answer that should guide you quite nicely. Please note that this attorney also recommended you seek legal counsel to assist. Here’s what my friend had to offer:

“The next step would be to sign a document that explains the steps you took to terminate the condominium in front of a notary and two witnesses.  It must also specify a deadline for filing it in the land records after which it will be void, and then you must actually file it by that deadline.  You would be wise to reconsider getting a lawyer involved because the document should contain the same level of legal detail as a deed (such as a description of the property’s boundaries, volume and page references to the original declaration and amendments, and citations to the relevant statutes) and there may also be additional requirements in your bylaws, tax implications, zoning consequences, or prohibitions under the terms of your mortgage that you haven’t thought about.”

What Questions Does the Bank Need to Ask my Condo Association?

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S.J. from New Haven County writes:

Dear Mister Condo,

I want to sell my condo but the bank needs to ask questions to the condo association. What information do they need?

Mister Condo replies:

S.J., I assume the bank in question here is the one that will be providing financing to a prospective buyer. Most of today’s mortgages for condominiums require that the condo qualify for FHA-approved financing so my best guess is that the bank needs to ask about the association’s FHA certification (or lack thereof). Even if the mortgage is not from a lender requiring FHA certification the lender is likely performing due diligence in finding out about the state of the association’s financial affairs. After all, if they are going to lend $100,000 or more to a prospective buyer, they want to make sure that there are no upcoming special assessments, pending litigation, or any other potential financial burden heading towards their borrower who may be able to repay the loan if these other factors exist. If it is FHA-related, the bank has a checklist of questions including the percentage of delinquent accounts, rental units, and other factors effecting FHA eligibility. These lending rules have been in place for some time now so the questions are fairly standard and the responses from the association will determine whether the lender will make the loan. Best wishes.

Volunteer Labor – Big Condo Liability!

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A.K. from New London County writes:

We are a small association of 12 units, and some of the residents like to do light maintenance volunteer work. Should each volunteer sign a liability waiver form before doing any work?

Mister Condo replies:

A.K., I love it when community volunteers tackle small projects at associations. It can save the community lots of money and it gives neighbors an opportunity to bond while tackling a mutually beneficial project. However, before the first paint stroke or hammer strike, it is wise to seek out what the association’s liability is in the event of a problem or injury. I posed the question to one of our member attorneys who offered this advice:

“At the risk of putting people off, ask this question to your association’s liability insurer, which will probably say yes.”

I think that is great advice! Better to be safe than sorry! Best Wishes!

All Keyed Up Over Condo Access Door

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M.F. from Middlesex County writes:

Dear Mister Condo,

Can my board not give me a key to an entrance to the building? On another note, this is an awesome site! Thank you!

Mister Condo replies:

M.F., thank you! I think it is an awesome site as well! As for your query, I am not fully sure I understand. If you own a unit within a secured building, you certainly have a right to entry. If that entry is through a locked door, you have a right to that key (or security code) so that you can gain access. Whether it is from the Board or the Property Manager, getting a key should be as simple as providing proof of ownership. There may be safeguards in place to protect the key. They could charge a security deposit on the key in case it is lost or stolen. Did a previous owner of your unit not leave the key behind when they left? Did you lose your key? There are lots of questions I have before I just tell you to demand a key but I think you get the idea. Of course, if you are a renter, the responsibility of providing you a key falls on your landlord; not the association.

If you can show proof of ownership and they refuse to give you a key, I would contact an attorney or bring suit on your own against the association. I have no doubt you will prevail and be awarded legal costs as well. Good luck!