Monthly Archives: February 2014

Small Condo; Big Problems!

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R.C. from Fairfield County writes:

Dear Mister Condo,

I live in a four unit condo.  We have no association and every owner wants to do their own things. The ongoing problem is the parking issue. Each owner has two legal parking space but all the other owners (3) except for me have more than two cars in the small parking space that we have. When the police are called because I cannot get in my space because the space is tight from all the extra cars I am told that “it is private property” and that I need to discuss the issue with my Association. That is exactly the problem! We don’t have an association! That is why the owners are not respecting each other and are only looking out for #1. I am bullied on a daily basis to accept whatever they do because I am outnumbered. Where can I go to get some legal results because talking to those owners is not an option? They do not want to work together. Any kind of good advice would be really appreciated.

Mister Condo replies:

R.C., that is quite a conundrum you have presented me with! Condominiums are a very specific type of real estate commodity and they come with a very specific group of rules and protocols that are outlined in very legal documents, namely, the covenant, the declaration, and the rules and by-laws. Collectively, these documents are more commonly referred to as the “condo docs” and that is where you have to begin to get to the bottom of this whole issue of whether or not you have an association. You should have been presented with a package of condo docs when you purchased your condo. Since your condo is less than 10 units, you may have some peculiar wording as to who makes up the Board but I am quite certain your association has a governing body of some sort. How else could you function as a condo and take care of common elements and common items like snow removal, landscaping, building maintenance, and so on? Who is paying the bills? Who do you send your common fee payments to? The answer to these questions will help you get to the bottom of your community’s governance.

If you are being bullied you may have a case to sue your Board for discrimination. Keep in mind that for you to claim bullying or discrimination you will have to document the incidences and make your case before a judge which will likely require you to get legal representation for yourself. No one should be bullied or discriminated against.

Once you get to the bottom of your association governance, you will likely see that there is a procedure for documenting your complaints and presenting them to the Board. From what you have told me, the Board is not likely to take action as the action would be against them. Again, you are likely left to the option of bringing suit against the Board for not enforcing rules and regulation of the condo.

Of course, I have another piece of advice that I strongly encourage you to consider. You live in a four unit condo where 2 or more of your fellow unit owners are unpleasant people who are abusive to you and the system. In such a small condo you cannot avoid these people. I would strongly consider selling your unit and moving to a more agreeable place. Perhaps a larger condo where the rules are far more likely to be enforced would be more to your liking? Your fellow owners sound like real miserable people to have for neighbors. Rather than spend so much time and effort on legal actions to make them behave better, why not just leave? These folks are going to do what they are going to do. You will always be in the minority with 3 of the 4 votes going against you.

Whatever you decide, R.C., I wish you all the best and a pleasant place to call home. Good luck!

Hung Out to Dry in Hoboken Condo

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Unhappy in Hoboken writes:

Dear Mister Condo,

Due to the recent snow storms, my individual condo unit and the building of which it is a part suffered severe damage. My unit and several others continue to receive severe storm damage and water intrusion as the President of the Association has decided to delay fixing the roof until insurance proceeds are received for the building. Meanwhile, wet rot of the supporting beams, mold and water leakage continue unabated into my unit. What is my best course of action? The Association does not cover D&O insurance on the officers of the Association and the President was elected recently in a hastily held emergency unit owners meeting. Any referrals to effective law firms in the Hoboken area for this very issue or any other advice would be much appreciated.

Mister Condo replies:

Unhappy, I am sorry for your troubles. Winter has not been kind this year and your story of damage is all too common right now. Your reference to D&O insurance has me thinking that you feel this is an issue where you would like to go after the newly elected President of your association. I can appreciate your frustration with him and his decision to postpone repairs until insurance proceeds are received but that isn’t your real problem here. You need storm damage repairs and restoration to your unit now.

It appears to me that at the heart of this issue is money. If your association does not have a well-funded Reserve Fund, your association president may just be claiming that there is no money to perform the repairs. This is unfortunate but not uncommon. What’s worse is that your newly elected association president inherited this problem. It may be that your association is a candidate for alternate funding like a community association loan or even a special assessment to raise the capital for the repair of the common elements. The damage that was done to the interior of your unit is likely covered your homeowner’s insurance policy. Hopefully, you had a good policy in place before this disastrous event occurred.

I do believe you need some legal assistance on this issue and you have a wealth of attorneys in your neck of the woods that can help. The Community Associations Institute (CAI) has an excellent chapter in New Jersey with a website at http://www.cainj.org/. They have many law firms and attorneys who specialize in community association law. You can search for an attorney at http://www.cainj.org/online-directory/filter-by-category/attorneys. They also have several members who specialize in Disaster Restoration who may be able to help – http://www.cainj.org/online-directory/filter-by-category/restoration-reconstruction-fire-water.

The bottom line is that you, your neighbors, and your association have been struck by a disaster. The next steps taken by all of the players are crucial in limiting and reducing the long-term effects of this disaster. You need professional help and your association may need professional guidance as well. If common sense solutions are not enacted in short order, you are well advised to seek legal representation to secure your investment. All the best!

More Insurance Woes for a Wet Condo Owner

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A.M. from Litchfield County writes:

Dear Mister Condo,

I have a wet floor in my bedroom and my entry way is icy. How can they tell where the water is coming from and can it be repaired? The inside walls of the condo appear dry.  I need a new rug and subflooring. What steps do I have to take to get this issue repaired by the condo association? If it is a roof issue, what must be done?

Mister Condo replies:

A.M., I am sorry for your soggy floors. Welcome to the watery world of wet condos which we have seen in no short supply this winter. Traditionally, damage to the interior of your unit is protected by your homeowner’s insurance policy (commonly known as HO-6 here in Connecticut). I certainly hope you have such a policy in place. As for the determination of where the water is coming from and who may be at fault, that will likely be a battle for your insurance company, especially if they deny your claim based on faulty maintenance of your entry way by your association. The same would be true if the source of the water is the roof (which is far more likely, in my opinion, as water tends to come down from above).

In order, I would contact my insurance company to make claim for the damage. I would also contact the property manager or Board if you are part of a self-managed association so that they can be alerted and take whatever action they are going to take. Then I would likely wait a bit to see if everything was going to be handled to my satisfaction. If not, my next step would be to seek legal remedy in the form of advice from an attorney who could best advise you what your next steps might be. It’s been a difficult winter. Dealing with damage and insurance claims doesn’t make it any easier. Hopefully, you will have a successful outcome and a drier spring. All the best!

Yet Another Leaky Condo Roof Problem

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S.G. from New Haven County writes:

Dear Mister Condo,

Who is responsible for damage to newly installed kitchen caused by roof leak; owner or association?

Mister Condo replies:

S.G., this has been a particularly bad year for condo roof leaks. It’s been an even worse year for condo insurers who seem to be involved in a game of volleyball when it comes to handling the claims. I am sorry you are yet another victim. The truth is that as a matter of responsibility there are no clear answers from the insurer’s viewpoint. Traditionally, regardless of responsibility, the homeowner’s policy covers interior damage. Of course, homeowner’s insurance companies don’t want to pay for damage caused by negligence on the part of the association so they do what they can to fight back and shift the responsibility, and therefore, the liability. While the insurance companies battle it out it is often the unit owner who is caught up in the battle while the claim gets resolved. It often comes to the point where a unit owner needs to sue their own insurance company as well as the association and the association’s insurance company. Let’s hope it doesn’t come to that for you, S.G..

Let’s start at the beginning and see if I can give you some advice you can use. I hope you had purchased a homeowner’s insurance policy before this leak occurred. In Connecticut, that policy is known as HO-6 and it is necessary to protect you in the event of damage to the interior of your unit amongst other things. Many associations require that this insurance be purchased by the unit owner. My advice is will always be to have a solid HO-6 policy in place to protect your investment. The condo association has all types of insurance to protect the common elements of the association. The Master Policy covers the buildings. When a water incursion event occurs, such as water leaking through the roof, one of those two insurances should kick in depending on the type and terms of the policy that were in place at the time of the event. In your case, it is likely that an ice dam or similarly naturally occurring event caused the water intrusion. In my opinion, that is what your homeowner’s insurance is for. Mother Nature dealt us a nasty winter and the ensuing damage should be covered under your policy. If common elements were also damaged (say, for instance, the gutters came away from the building and need to be replaced) then the association’s insurance policy should cover the damage to the common elements.

Of course, both of those scenarios assume a perfect world, which we don’t live in. If a claim is made against the Master Policy, the association runs the risk of increased premiums and/or denial of future coverage. The same may be true of your homeowner’s policy. After all, insurance companies are in the business of collecting premiums. Paying claims does nothing for their profitability and, as you have seen, they would much rather deny the claim than make payment.

So the real question is what do you do while the insurance companies battle it out? If the association isn’t taking responsibility for the damage then you are likely the one who will need to take action to make the repair. That means you may have some out of pocket expenses up front to make the repairs. At the same time, you should very likely seek legal counsel to guide you in determining if you have a case against your association and their insurance company. If not, you may need to go after your own insurance company to cover the damage. I know it can be argued that it was a common element that failed (the roof) but this really isn’t a maintenance issue as much as it is a disaster issue which is exactly what the HO-6 policy is for. Depending on the dollar amount of your damages, you may be able to handle this yourself via small claims or you may need to escalate it if the dollar amounts are substantial. You may also be able to claim your legal expenses as part of your claim.

The bottom line is that it is not as simple as simply picking up the phone, filing a claim, and waiting for the check to arrive. My guess is that you will prevail against your homeowner’s insurance company but you may be facing a fight. I wish you all the best in arranging a settlement and a dry condo unit.

Collecting Common Fees from Developer for Unsold Units

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F.D. and D.D. from New London County write:

Dear Mister Condo,

Original developer owns 14 unsold units for 5 years never paid common fees. Can we collect on all 5 years?

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Our condo development is 6 years old. We just formed a Board of Directors which I am on. The developer owes condo fees on 10 unfinished units. How many years can we go back to collect the fees?

Mister Condo replies:

F.D. and D.D., your questions came in a few hours apart and I am guessing regarding the same complex. I hope you don’t mind that I lumped them together. Developer transition issues are a very specific portion of condo law and I don’t mind telling you that I am not an expert in the specifics of the process so I reached out to an attorney who specializes in just such law for an expert opinion. Here’s what the attorney had to say:

“Assuming these units have been formally declared and are therefore part of the condominium, the Association’s lien on those units for unpaid common charges lasts for three years from their original due dates.  This means the Association could foreclose the units to recover the previous three years’ worth of unpaid common charges, but not the ones older than that. Whether the liens would have priority over any mortgage on these units will depend on a number of factors, which could affect the recovery.

The Association could also file a “direct” lawsuit against the developer for common charges which go back further than three years, and then file a new judgment lien against the units and/or pursue the developer’s other assets to collect the court’s award.  This kind of lawsuit is rare in the condominium context since foreclosures are usually so much faster and more effective, but at least one court has held that there is no statute of limitations to pursue old common charges this way.”

Sounds like some great advice. All the best!

Sweet Condo Investment Going Sour

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D.B. from Hartford County writes:

Dear Mister Condo,

I own a unit in a small condo complex. I am in the process of painting and what not to get ready to rent the unit. Everything has been a disaster, leaky plumbing, lower floor ceiling replacement, etc.. As I am doing this, the roof starts leaking into the upstairs bedrooms. This exact problem happened last year. I tried reporting it to the Association President with many messages left and no response. I had also called to report the gutters being full and tree saplings starting to sprout out of them. So here I am this year with the same issue. I have stopped by his home and called with no contact made. I am a senior woman and am completely out of my element with laws, etc..

I have no idea if we have an association or just a President. All I know is everything goes ignored. I nearly fell on my front walk today due to ice though when I got down to his building I noticed clean gutters and de-icer spread all over the walkways. Thank you.

Mister Condo replies:

D.B., I am sorry for your troubles and I hope I can offer some advice that will steer you in the right direction as you move forward with your plans to rent out your unit. Let’s start with the most basic issue of what makes a condo and how you will know if there is an association or just a president. Of course, this research would have been best completed BEFORE you purchased this unit but now that you are an owner you have been provided with a set of the association’s documents as part of your purchase. If you used an attorney for the purchase you probably had the attorney review these for you but you really need to look at the documents yourself.

Inside your condo documents you will find the method of governance for the condo which very likely describes a volunteer Board of Directors and their method of election and how they then go on to vote amongst themselves who will be President, Vice-President, Treasurer, and Secretary. Remaining Board members are usually “at large” meaning they are Board Members without additional title. Boards can decide to self-manage or they can hire an outside management firm. Where do you send your monthly common fees? If they go to a management company then you are likely professionally managed and you should contact your management company to discuss your problems. That’s one of the things they get paid for. If you determine that your condo is self-managed then you may be correct to contact the Board President to discuss your problems but keep in mind that the Board President is nothing more than a volunteer leader who needs to bring your problems to the attention of the full Board at the next meeting. Generally speaking, he is not empowered to hire a roofing contractor or gutter repair company simply to fix the problem at your individual unit. Also, you need to document your issues in writing and with photos. As you have seen simply calling the Association President is not fruitful. By all means, attend any Board meeting where your issues will be discussed and be sure to attend and vote at the Annual Meeting.

I appreciate you being out of your element with state laws that protect you but you do need to know exactly what you purchased and what your rights are. It is not uncommon for me to recommend professional help in the form of an attorney to guide you with any concepts of condo ownership that you may not understand. Since you bought this unit as an investment property, I have to assume you have a little more savvy than you are letting on. If you have ever purchased other condo units as investment properties you know how important it is that the association governance (self-managed or professionally managed) is in good condition as part of your investment decision. Purchasing into an association that is poorly run or in decay can be quite costly as you may end up facing special assessments as part of your unit ownership in such a condo. It makes no difference if you are a resident or an investor when special assessments hit.

From what you have shared with me, I would guess that you have invested in a poorly run, self-managed condo. If it were me, I would hire an attorney to discuss my options and look to sell the unit before I threw more of my money into a potential money pit. If the association is not maintaining its buildings and common areas properly it is only a matter of time before there is a major financial crisis. It could come in the form of a large capital improvement project or it could come from a slip and fall lawsuit from someone falling as nearly happened to you. Either way, I wouldn’t want you to be there when that happens. All the best!

Change of Condo Meeting Agenda Details and Validity of the Vote

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J.B. from New Haven County writes:

Dear Mister Condo,

A previous notice for a special meeting states that there will be a vote, and the details of what they are going to vote on are specific. My question is this: can those specifics be changed at the meeting and then proceed to a vote? What about the right of previous notice, those who decided not to attend that meeting? They will not have been informed of the new change so can there be a vote?

Mister Condo replies:

J.B., you entered into a very technical part of the Common Interest Ownership Act, also known as CIOA that requires associations to give adequate notice and provide an agenda for items that are to be discussed and voted upon at an upcoming meeting. From what you are telling me, most of that was followed. The fine line between notice of agenda and actual agenda may have been crossed but without knowing the specifics it would be hard for me to offer you a particularly useful opinion. Let me paint a couple of pictures for you and you can decide if the association behaved properly.

Let’s say the agenda included an item stating that a vote would be held on painting all unit owner doors “red”. After discussing the agenda item at the meeting it was determined that “white” would be the actual color the doors would be painted and the vote was held and in favor of the doors being painted “white” I would argue that the spirit of CIOA was upheld even though the actual door color voted upon was not as proposed in the meeting notice.

Now, let’s say that the meeting included a discussion about borrowing money for a major capital improvement, something like repaving a parking lot or replacing siding. After discussion, it was decided that instead of a loan the association would simply assess all unit owners $5,000.00 per unit to cover the cost. In that case, I would argue that the spirit of CIOA was not followed and that unit owners who were expecting an increase to their common fees to cover a loan were surprised by the special assessment which they may have objected to had they been properly informed.

In both examples, a vote was held on an item that was not “technically” on the agenda. However, it could be argued in the first example that door painting was on the agenda and that the color was the secondary concern. A better way to have worded the agenda item would have simply been to state that painting of doors was an agenda item. Similarly, in the second instance, a better way to word the agenda item would have been to state a vote would be held on how to finance an upcoming capital improvement project.

The bottom line is that Boards need to do a great job of communicating with unit owners in advance of their meetings if they wish to hold votes on items that cannot be questioned by typical unit owners. Otherwise, they face the possibility of a unit owner questioning the legality of their votes and decisions. For a unit owner to prevail on such an issue the unit owner would have to bring suit against the Board which is not uncommon but generally reserved for big money items, such as association loans or special assessments. All the best.

Problems Mounting Up For New Condo Owner, Part 2

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(Editor’s Note: This is a follow up question to an answer that appeared on February 11, 2014. You can read the original question and answer here: http://askmistercondo.com/problems-mounting-up-for-new-condo-owner/)

D.S. from Fairfield County writes:

Dear Mister Condo,

Thank you so much for taking time to reply. I wish I could be as positive as you but unfortunately it is not possible at this point. The board has still not produced all requested documents. I understand that the members/officers are busy with their jobs and life but if they volunteered for their positions, they should be stepping up. And, by the way, they are getting paid. In fact, not long ago, they voted on the increase of their compensation.

From the view of frustrated new condo owner I see incompetence that is inexcusable. You pointed out that they are trying their best but it is very hard to believe when you see things happening around here. I am not upset that my friend’s bid wasn’t accepted, I am livid because it didn’t even get a chance to be presented on the grounds of an already accepted and signed deal. But there was no loan secured as it went in effect – and if they really paid out the deposit then they must have depleted all the money from savings – is that even legal?

Mister Condo replies:

D.S., you are welcome for my earlier answer and I hope you will find some solace in this reply as well. As I mentioned earlier, the bid process usually has dates assigned for the Request for Proposal (RFP) which had likely come and gone when your friend tried to submit a bid. The Board acted correctly in not taking any more bids at that point. If the bid were rejected while that process was still under way, I would agree with your lividness. My advice is to let this one go and get ready for what lies ahead, which may be a more significant challenge.

I am not an attorney so I cannot answer as to the legality of the steps your Board took with regards to the awarding of the bid for this repair. The Board is elected by all unit owners of your association to conduct the business of the association. Now that you are a unit owner, you not only have the ability to vote for Board members that will represent you but you also have the ability to run for the Board which I highly recommend. You sound like a concerned unit owner who wants to look out for the best interests of all unit owners. That is exactly the right mentality for anyone who volunteers to serve.

Volunteering is my next point. Compensation is not part of volunteering. Reimbursement for expenses (postage, for example) is perfectly fine but I cannot think of any circumstance under which a Board member in the state of Connecticut should be paid for their service to their association. It is a volunteer position and needs to be due to the nature of the relationship of the Board to the unit owners and their common fee contributions. I have heard of associations that reward their volunteer Board members with things like gift cards, holiday parties, and such but I am not aware of Board members being paid money for their service. It is most likely against the condo’s by-laws which may have a clause that reads something like “No Director shall receive compensation for any service rendered to the association. If approved by the Board, a director may be reimbursed for actual expenses or costs incurred in the performance of his/her duties as a director.”  It is a clear conflict of interest and the practice should be terminated immediately. Check your by-laws and demand that this practice be halted at once.

From what you have told me, D.S., it looks like you need some fresh blood running your association. You need caring volunteers, like yourself to come forward and run for the Board. New Board members need training and commitment to guide your community back to fiscal health and proper governance. Your friends at the local chapter of the Community Associations Institute are here to help. Visit the website at http://caict.org/. In fact, I strongly encourage you to attend the upcoming CAI-CT Conference and Expo at the Aqua Turf in Plantsville, CT on Saturday, March 8, 2014. I’ll be there and so will all of the experts you can count on to help you and your community thrive. You can register at http://www.caict.org/events/event_list.asp?show=&group=&start=7%2F17%2F2014&end=&view=&cid=12105. Hope to see you there!

Complaining About the Frequent Condo Complainer!

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J.J. from New Haven County writes:

Dear Mister Condo,

Hi, Mr. Condo! Does a property manager or board have recourse against constant (three-plus weekly) complaints or inquiries from a unit owner?

Mister Condo replies:

J.J., that’s a lot of complaining! I am sorry that this unit owner is so dissatisfied with the condo living experience that they feel they must complain on so regular a basis. Honestly, I am not aware of any rule or regulation that limits the amount of complaints any unit owner can make. However, much like the boy in the Aesop fable who cried “wolf” so many times that the villagers stopped listening, this unit owner is very likely going to find that his or her complaints are falling on deaf ears. The property manager is most likely on the receiving end of these complaints and is tasked with keeping a log. Unfortunately, that is part of the job but they do get paid for it. The Board can simply acknowledge the complaints at their regularly scheduled meeting and take action only if they deem it necessary. Unless the complainer escalates by bringing legal action against the Board, that should be the end of it. If these complaints are baseless or unreasonable then no one has anything to worry about. Of course, if these complaints are legitimate, corrective action should be taken. There needs to be some level of diplomacy practiced so that the unit owner’s complaints are acknowledged even if they are not going to lead to any action. The boy who called “wolf” learned his lesson when the wolf really attacked and ate all of his sheep. Perhaps this unit owner will also learn that complaining about every little thing can lead to not being heard when a true complaint needs to be lodged. All the best!

48 Months Behind in Condo Common Fees; Can this Unit Owner Still Vote?

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P.P. from Fairfield County writes:

Dear Mister Condo,

Does a unit owner who is 48 months behind in condo fees and refuses to pay roof assessment have a right to vote in association meetings? Our condo was formed in 1979.

Mister Condo replies:

P.P., I can’t imagine why the association hasn’t taken foreclosure measures against this seriously delinquent unit owner. You and your fellow unit owners are effectively subsidizing this unit owner’s share of the common fees. In a small condo like yours, I would imagine that impacts every facet of the association’s finances. Obviously, I encourage you to follow up with your Board and demand that the Board take the appropriate steps to recover as much of that delinquency as possible. But your question was about voting rights. I reached out to a local legal expert for an expert opinion. Here is the response:

“Yes, the delinquent unit owner may vote. According to Section 47-244(a)(19) of the Common Interest Ownership Act, regardless of when the Association was formed, its Board “[m]ay suspend any right or privilege of a unit owner who fails to pay an assessment, but may not … (B) Suspend a unit owner’s right to vote or participate in meetings of the association….””

In other words, P.P., the Board can prohibit the delinquent unit owner from using an amenity like visitor parking or a pool but the Board cannot suspend the unit owner’s right to vote at association meetings. Good luck in recovering your community’s delinquent funds. I hope you attract a new unit owner who will uphold his or her agreement to pay common fees to the association.