Monthly Archives: April 2014

Right to Inspect Condo Contracts

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G.A. from New Haven County writes:

Dear Mister Condo,

Am I correct that as a unit owner of my condominium complex I am entitled to see, for example, the snow removal contract?

Mister Condo replies:

G.A., for the most part, all unit owners are entitled to see any of the signed contracts that the association has entered into. This allows for greater transparency in association operations and unit owners, who pay into the association’s Reserve and Operating funds every month in the form of common fees, can see where their money is being spent. However, there is the practical consideration that someone (usually an employee of the management company) will need to spend time to produce the signed contract for you to review. There may be a fee charged to you in order for you to see the record. It is still your right to see the contract but it also the right of the record holder to charge a service fee for their time in producing the record for you to inspect. All the best!

Expensive Flood Insurance Raises Common Fees Too High!

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E.R. from New Haven County writes:

Dear Mister Condo,

Because of some people with high mortgages and/or second mortgages we had to purchase extra flood insurance. Now that the fee has gone up over 100 dollars more, no one can sell. We get nothing for it, no amenities, no pool, nothing at all. What can be done?

Mister Condo replies:

E.R., your community is not alone in its need to purchase flood insurance although I question your reasons as to why the flood insurance is needed. Connecticut was particularly hard hit when the Federal Emergency Management Agency (FEMA) remapped the country following the flooding in New Orleans during Hurricane Katrina. Many properties that were previously deemed relatively safe from flooding were reclassified to highly likely to flood. There are a myriad of reasons for this but the bottom line is that condominiums that are situated in a flood zone have little alternative when it comes to providing flood insurance. State law is largely interpreted that if the property is in a flood zone, the association should provide the flood insurance. Increased flood insurance costs are passed along in the form of increased common fees. Increased common fees can cause hardships to those unit owners looking to sell. However, any buyer looking to take a mortgage to purchase a condo that is in a flood zone would need to purchase the flood insurance separately if it wasn’t provided by the association. The exception might be the cash buyer who does not see the need for flood insurance to protect his or her investment. It is a tricky situation at best and you really can’t blame the association for providing insurance that FEMA recommends. Heaven forbid that your property were to experience flood damage and not have the proper insurance in place. That could be truly catastrophic to all unit owners. All the best!

Condo-Hired Contractor Damages Interior of Unit

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M.S. from Chicago writes:

Dear Mister Condo,

My Chicago condominium management company sent this email yesterday after 90 days of requests for repair:

“The owner of “ABC” Plumbing spoke with his plumber regarding your report that he scratched your toilet while rodding. According to his plumber, he did not scratch your toilet.  Because we do not have a before and after picture of the toilet, Mr. “X” has to take the word of his employee.  However, without admitting fault, he is willing to compensate you $150.00 for the damage.”

I would love to say this was the only time the management company “had” to access my unit then found later that the contractor they chose had damaged something but it’s not. In 2013, a different plumbing company somehow broke a mixing valve in one of the showers; now it only has hot water and the estimates for the repair include removing part of the wall for the replacement. What rights do I have as a unit owner when I let their contractor in my unit and things get broke? The 2014 incident has details that were taken care of to my satisfaction; it’s just this last thing. Thanks!

Mister Condo replies:

M.S., I am sorry that your condo unit has been damaged by an association-hired contractor. I am pleased that the second plumbing company compensated you for the damage that they “don’t admit” to causing. Without video evidence or personal eyewitness accounting of who did what, it does become quite difficult to prove what damage was caused to the interior of your unit by an outside contractor. I am familiar with mixing valves that are buried in walls and the potential damage and expense that the resulting repair can cost. As you know, I am not an attorney. If you feel you have a significant enough expense that you are unwilling to bear and you feel as though you need legal representation to bring suit against the association and the contractor who caused the damage, I suggest you consult with an attorney to see if you would likely prevail. Otherwise, I would go ahead and hire a contractor to make the repair which will likely involve creating an access entry point in the wall behind the shower (hopefully, in a closet) and replacing or repairing the mixing valve. While they are there, may I suggest that they install an access panel in the area of the wall that they remove? This will give you and future owners of your unit a quick way to inspect the mixing valve for any leaks which could lead to mold. You certainly don’t want that.

Your association documents most likely spell out the association’s right to access your unit for repairs. I am not sure what items they are working on that are association owned but it sounds like they perform some fairly comprehensive maintenance for unit owners, which is a good thing. Of course, always have a good homeowner’s insurance policy in place because, as you’ve seen first-hand, accidents do happen. By the way, be sure to check your homeowner’s insurance coverage, you may have a clause that will cover the damage from the previous plumber. That could help pay for the repair that I strongly encourage you to get taken care of in short order. All the best!

Must Notice of Board Meetings Be Served to All Unit Owners?

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J.Z. from Fairfield County writes:

Dear Mister Condo,

Is there a Connecticut law that says Board meetings need to be posted to let unit members know when happening?

Mister Condo replies:

J.Z., there sure is! The Common Interest Ownership Act, also known as CIOA is a group of rules that include how condo associations must conduct themselves and operate in a highly transparent environment. The spirit of the law is to shed light on the governance process. This includes publishing an agenda of what will be discussed at Board and Annual meetings, where and when the meetings will be held, and also includes a requirement to provide minutes of these meetings to all unit owners upon request. Unit owners have the ability to request all kinds of association records. There may be management fees associated with these requests for information but all of it needs to be available to unit owners. Associations that don’t comply with these laws could find themselves answering to the state’s Department of Consumer Protection who has the task of investigating complaints from unit owners about Boards and Associations that fail to comply with the law. Hope that helps!

Condo Reserve Fund Mortgage Advice

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T.C. from New Haven County writes:

Dear Mister Condo,

From the point of view of a financial institution funding mortgages to acquire individual condo-units, what, in your opinion, is a good level of reserves for a condominium complex in terms of multiple of monthly operating expenses? How about % of assessed value of complex?

Mister Condo replies:

T.C., I am neither a lender nor a Reserve Study specialist so I can only provide my opinion on this topic which is what you have asked for so I will oblige. My opinion is that there is not a “One Size Fits All” answer to your question. The proper level of Reserves for a condominium complex varies by association and has so many factors to take into consideration that I do not think it can be boiled down to a percentage of complex value or a relationship to monthly operating expenses. I think that is one of the reasons that the Fair Housing Administration (FHA) has struggled in providing proper guidelines in this area. The FHA insures or backs many of the lenders that provide mortgages on condominiums. They have requirements that include how many renters occupy units, how many units are in delinquency with regards to their common fee payments, and even a suggested 10% minimum contribution to the Reserve Fund from the monthly common fees. Even with all of those safeguards I think there is still great volatility in the market due to an ever changing job and real estate market and large swings in the actual value of individual units.

My instinct is that that each association requires a full listing of all of its common elements and that each of those elements needs to have an age and an assigned value for replacement. Further, to show that it is financially viable for future investment, I think there should be a plan in place to fund these known future capital expenses. An association with lots of common elements – pools, tennis courts, club house, etc. will carry a much higher burden than an association with nothing more than their buildings and parking lots to maintain. The only thing in common is that they both need to have a solid Reserve Strategy in place to make sure there will be enough money to replace the common elements when they need improvement. Otherwise, the association is planning to levy large special assessments or take loans when this money is needed. Both of those scenarios will stress the unit owners’ ability to pay their mortgages as well as their common fees. Failure to do both could lead to foreclosure of the unit owner and make for a bad investment which I have witnessed at many condominium associations.

Rescheduling the Condo Annual Meeting

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D.L. from New Haven County writes:

Dear Mister Condo,

Is there a proper procedure for rescheduling an annual association meeting on the day of the meeting? Thanks!

Mister Condo replies:

D.L., there are a few reasons that I can think of for needing to reschedule an Annual Meeting on the day of the meeting. Once the annual meeting is announced all unit owners have a right to attend and should plan on doing so. If the meeting needs to be rescheduled for whatever reason, all of the events that lead up to the meeting are reset to Day 1, meaning a new notice of meeting must be issued and all unit owners given adequate time to prepare to attend the new meeting. In Connecticut, that means at least 5 day’s (one week’s) notice. It is not unusual for the association to give 10 day’s notice just to make sure unit owners who are able and wish to attend can adjust their schedule. Even if well-intentioned, it is not proper for a meeting to be called for on a Monday and then rescheduled to Wednesday of that same week. In that instance, adequate notice was not given and the meeting can be challenged by unit owners. It is always best to follow the proper procedure if a Board or Annual Meeting needs to be rescheduled. Good luck!

Aluminum Wiring at Condo Unit of a Hoarder

P.D. from New London County writes:

Dear Mister Condo,

I have a hoarder compounded with aluminum wiring.  Is there a precedent for how to deal with this problem?

Mister Condo replies:

P.D., my short answer is “Yikes”! You have two very different and potentially very serious issues here. I am not sure which one should be tackled first but my instinct is that a lot of this will boil down to the association’s right to access the unit for inspection and/or remediation. As you know, I am not an attorney but this is a situation where you are very likely going to want to seek the advice of qualified counsel as you may find yourself in need of assistance from the courts in dealing with the hoarding issue, especially if you require access to the unit to remediate the aluminum wiring issue.

Hoarding, as such, is often not addressed in association governing documents. However, access to unit for safety purposes often is allowed provided adequate notice is served. Boards can generally take action against unit owners who create an unsafe environment within their unit. Hoarding can usually be demonstrated to create a fire hazard and/or a general health and safety concern. The Board may be able to order the unit cleared of debris to create a safe environment for all unit owners.

Aluminum wiring remediation is necessary to avoid potential electrical problems and fire hazards associated with the wiring. Obviously, you will need access to the unit to perform this repair. My guess is that you will need to get the unit in reasonable order so that workers can get the job done.

Neither of these projects will be simple and correcting the hoarding issue could even be quite costly from a legal perspective. You asked about precedents and there are several I have read about online. Search for “Hoarding and condominiums” and you will see what I saw. There is an excellent article at this website – http://www.meeb.com/more-condominium-communities-are-struggling-with-hoarders-and-the-problems-they-create/ which I highly recommend.

This is a difficult problem and I do not envy you your task. Speak with association counsel before you begin and be prepared for lots of little setbacks along the way. However, with patience and proper procedure followed I am confident that you will correct both problems. All the best!

Unit Owner Refuses to Issue a New Check for Common Fees to Replace Lost Check

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N.W. from New Haven County writes:

Dear Mister Condo,

Condo owner paid monthly dues, but check was lost. Now the condo owner will not replace it. How do we get this condo owner to issue a new check?

Mister Condo replies:

N.W., sorry to hear that a common fee check was lost and that the unit owner who issued the original check will not simply issue a new one. Needless to say, there are many ways a check can be destroyed or misplaced before it is cashed and the issuer of the check will not be able to prove that payment on their account was made without an archived version of the processed check which will not exist due to the fact that it was lost. I would notify the check issuer in writing that the check was lost and that they are free to issue a “stop payment” order on the check and to kindly replace the lost check with a new check. If that doesn’t work, the late fee for the missed payment will certainly get their attention and will get them to issue the new check. If the association is feeling that it wants to protect the issuer’s payment history with the association, it may wish to waive the late fee as an act of good faith but there would be no way for the lost check issuer to prove that their payment was made on time – because it wasn’t! I respectfully disagree with your opening statement that the owner “paid” their monthly dues. The act of issuing a check is not the same as making payment. Payment occurs when the funds change hands. So far, that hasn’t happened. All the best!

Florida Condo Renter Questions Who is the Real Landlord

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J.D. from Florida writes:

Dear Mister Condo,

I began renting a one bedroom condo in late November, located in New Port Richey, FL. I was not given a lease nor provided with one even though I have asked for a lease several times. As I was unemployed at the time, the “landlord” agreed verbally that I could pay the rent every two weeks. I have been doing that and have not missed a rent payment. Over the course of the past few months, I have come to find out that my “landlord” does not own the condo, nor does the Association. The Pasco County Tax Collector shows the owner of record is Estate of Frank A. Belli, c/o Citimortgage.

When I questioned the “landlord” about this he said according to the Association’s attorney, they can rent out the property and that I was not a “squatter”. The “landlord” has become verbally abusive in his demands that the rent be paid the first of each month, completely ignoring the fact that he agreed verbally. I know I should have gotten the agreement in writing, but “landlord” won’t provide any written agreements.

If the “landlord” and the Association do not own the property, can they rent it out? Should I continue to pay rent to the “landlord”? Should I contact Citimortgage to inquire about the validity of the rental situation?

I do not feel comfortable in this situation and am also concerned that Citimortgage may ask me to move out. I just recently began working and am trying to get back on track financially. When I have asked to speak to the condo board about my situation, landlord refuses to provide information, other than the treasurer is his girlfriend and the president is a friend.

This whole situation is not on the up and up. If I could move, I would, but right now I can’t afford a security deposit, first and last month rent. Any suggestions on what I can do to protect myself and find out if I continue to pay landlord?

Thank you very much for your assistance.

Mister Condo replies:

J.D., what you have described here is not all that uncommon in your state from what I have read. When associations find themselves owed large sums of common fees from unit owners that have become delinquent, the association has a right to lease out the unit and collect their fees. This makes sense from the association’s point of view. They are simply collecting monies that are owed to them by using their legal right to do so. However, your lack of a lease does concern me and your landlord’s abuse seems completely unnecessary and may even border on harassment. However, you also need to remember the Golden Rule; he who has the gold makes the rules! In this case, your landlord has the gold by controlling your ability to live in the unit. You can sue and claim foul but you may also need to be prepared for a legal battle and maybe even need to vacate the unit. Neither sound like a very good option for you as you are don’t have the financial resources to make that move.

If I were you, I would very likely pay my rent when the landlord is asking for it and understand that your housing situation is less than ideal and you need to save up for a new place. If a legal battle ensues between the estate of the previous unit owner, the current mortgage holder, the association, and whoever else may claim an interest in the property, you would likely receive a notice to vacate. At that time, you would know what date you were being asked to be out of the property and you should plan accordingly. Moving forward, I cannot stress enough how important it is for you to get a written copy of your new lease and to have that lease reviewed by a competent attorney if you want to protect your peace of mind. I’d hate to see you jump out of the frying pan and into the fire. We all deserve to have a place we can comfortably call home. All the best!

Condo Owner Getting Snowed with a Snow Removal Special Assessment

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T.R. from New Haven County writes:

Dear Mister Condo,

My condo Board of Directors just assessed each unit $200 for snow removal. They said it was because they didn’t budget enough for all of the snow we got this last year. I don’t think that is fair. Do I have to pay the $200?

Mister Condo replies:

T.R., we sure had a lot of the white stuff this year, didn’t we? Local and state municipalities had to find creative ways to pay for keeping the highways and byways of our great state clear from snow and open for business. Many condo associations faced the same challenge. Even in the small association where I live, we went more than 30% over budget in snow removal this year. Back when your budget was prepared a certain amount was allocated for snow removal. Since that amount fell short, monies were “borrowed” from elsewhere in the budget to cover the snow removal cost. Those monies now need to be returned so the other bills of the association can be paid. If the Board determines that the best way to do so is to levy a special assessment then that is how it must be paid. Honestly, $200 sounds like a very reasonable number given the amount of times you probably saw snow plows hard at work on your property. It is very likely that the real number is even higher but the Board found a way to balance the books without passing the full amount of cost on to you at this time. Don’t be surprised if your common fees are increased next year due to the increased projected cost of next year’s snow removal. Let’s home Mother Nature treats a bit better next winter. All the best!