Monthly Archives: April 2015

Management Company Employee Assaulted on Condo Grounds

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K.D. from Fairfield County writes:

Dear Mister Condo,

There was an altercation between Management’s employee and a condo tenant. The tenant swung a bag of garbage at the Management’s employee head and it hit the employee in the head. Police were involved but charges were not pressed against the tenant. What would be an appropriate fine to the condo unit owner? Notice and hearing letter sent; hearing is coming up.

Mister Condo replies:

K.D., well that is quite a disturbing tale. If the police were involved and the employee decided not to press charges or the police decided that no crime was committed, there may be no further legal action that can be taken. It seems like a clear case of assault to me but I am not a law enforcement professional. As far as what type of fine is appropriate, I am afraid you are “after the fact” on this occurrence. Unless you already had a rule in place that was violated by the tenant, you may be quite powerless to issue a fine for this event. You can create a rule that will be in effect if such an incident happens again but that is for future offenses; not this one. You can set the fine to whatever amount you want but keep in mind that the Board is not a law enforcement agency and that the fine should be in line with other fines. For instance, if littering carries a $25 fine, then swinging a bag of garbage may be a similar offense and carry the same fine. Fines are used to keep the peace and allow reasonable enforcement of rules. They are not a penalty and they do not substitute for calling the police when appropriate. Clearly, this tenant made an assault and that is a crime. Why the police took no further action is unknown to me but I suspect the management company employee declined to press charges. In some instances, filing an assault charge works both ways, meaning the employee may have been charged as well and decided to drop the charge. There is nothing the association can do about that. However, if the bag of garbage opened up and littered the property during the scuffle and you have a preexisting rule in place against littering, by all means enforce that rule. If this tenant is a problem in other areas (parking, noise violations, etc.) keep an eye on them and issue fines accordingly. However, be sure to be fair in your administration of fines and violation notices. The same scrutiny applied to this tenant need to be applied to all residents or the association could find itself defending against a discrimination suit. I hope you are able to restore the peace to your community. Good luck!

Right to Inspect Association Employee Salaries

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L.M. from Florida writes:

Dear Mister Condo,

In Florida, can unit owners inspect individual salaries of the 6 association employees?

Mister Condo replies:

L.M., in so much as salaries and payroll records are association records, it would follow that as a unit owner within the association, you and your fellow unit owners should be able to see salaries of association employees. However, the association does not have to turn over all employment records as there is sensitive information, including social security numbers, and even criminal background checks and so on that may be a part of the employee’s personnel file that unit owners are not entitled to see and, in fact, should be prohibited from seeing. This assumes that the association directly employs the employees. If a property management firm on behalf of the association employs these employees then their salaries are the business of the management company and not the association. In that case, all a unit owner would be able to request is a copy of the management company agreement. May I ask why you would want to know the salary of an association employee? As a unit owner, you have entrusted the decision to hire and compensate association employees to the Board of Directors. They are the ones who are in the best position to make sure these individuals are compensated properly for their efforts and that their work provides value to the association. All the best!

Condo Owner Cited for Kitchen Remodel Done Years Prior by Previous Owner

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R.S. from outside of Connecticut writes:

Dear Mister Condo,

Can the HOA cite the current owner for an architectural change (remodeled kitchen) done by a previous owner? Is there a statute of limitations on such issues? The CC&Rs do not clearly say that the current owner is at fault. Does it make a difference if the current owner is two owners removed from the owner who had made the modifications?

Mister Condo replies:

R.S., as you can imagine, there are a lot of variables for me to consider before offering you my response. The association should clearly seek legal advice from a local, qualified attorney before proceeding against this unit owner for a previous unit owner’s remodeling violation. State laws vary and there may well be a statute of limitations in play with regards to how long the association took to take action against the unit owner and when the association first became aware of the violation to the architectural compliance that the current owner is being cited for. There will be lots of money in question here as kitchen remodeling is not an inexpensive undertaking. That being said, there are many states where there is no statute of limitation on rules enforcement but there is a requirement for equal application of the rules. That is to say, has the association inspected all kitchens that have been remodeled or just this one owner. The association cannot single out just one unit without applying the same scrutiny to all units or they risk facing a discrimination lawsuit. Clearly, the new unit owner did nothing wrong but that doesn’t mean he or she is immune from needing to follow the architectural compliance guidelines of the association. However, I can’t imagine the new unit owner will voluntarily agree to a $20,000+ kitchen remodeling project just because the association says he or she has to. This is very likely headed to court, which is one more reason for the association to work with its own attorney from the outset to make sure that all of the rules and laws are followed. Good luck!

Condo May Need to Rewrite Declaration, Bylaws, and Rules

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J.R. from Middlesex County writes:

Dear Mister Condo,

We are rewriting all our documents. Where should the processes/procedures be included? Are they just noted as available in our documents so they will be checked or are they actually written in the bylaws? Do all the new laws get written into the Bylaws? Ex: bidding contracts, holding open meetings, becoming a new board member, process for closing documents and process for formal collections of common fees?

Mister Condo replies:

J.R., when questions like yours hit my desk, I turn to one of my community association attorney friends for advice. That’s what I did and here’s what the attorney had to say:

“The answers to your questions depend on the date your community was founded, the type of community, what language you are adding, and exactly what you are looking to accomplish. The law requires that some things be written into the declaration, others in the bylaws, and others in the rules. The law also regulates how the changes should be worded, circulated, approved, and/or recorded in the land records. I strongly recommend that you get an attorney familiar with these laws involved at every stage of the document rewrite process.”

That sounds like great advice to me, J.R.. Thanks for writing!

Small Condo with Big Governance Issues

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G.M. from New Haven County writes:

Dear Mister Condo,

I own one unit out of a 4-unit condo. The owner of the other three units has total control of all funds and will not release to me how much money is in the Reserve. He will not tell me how much the monthly expenses are for the building and that all bills are paid up to date or that all commons fees for all units are being paid and are up to date. He is also doing lots of construction on the common space as well as on his personal units. He will not tell me how much of the funds have been used to do the work on the common space. Is this legal?

Mister Condo replies:

G.M., smaller condos like yours can be particularly challenging. The short answer is that as a unit owner, you are entitled to whatever records of the association you care to inspect. That being said, the majority unit owner will always control the vote on any issue before the association and, from what you have told me, is treating the association’s funds as his own. My advice to you is two-fold. If you are going to continue to own one of these four units, you can shut up and play nice, sell, or hire an attorney to defend yourself from this non-cooperative owner. Whether he has done anything illegal or not is hard to say. I would say he isn’t complying with the spirit of the Connecticut Common Interest Ownership Act (CIOA), which requires all associations to function in an open environment of transparency, which, clearly, he is not.

If it were I, I would put my unit up for sale and cut my losses. However, if you wish to stay, you have rights under the law but you must take the steps to secure those rights. That means bringing suit against the other unit owner to give you access to association records, bank statements, contractor agreements, bills, etc… That likely means the expense of hiring an attorney to take such action. In such a small living environment as a 4-unit condo, I can’t imagine that will make for the neighborliest of living arrangements. However, if you wish to stay in this condo and you wish to know what’s going on, as you should, you really won’t have any other choice. I wish you all the best!

Should Maintenance Receipts Be Included with the Condo Minutes?

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K.D. from outside of Connecticut writes:

Dear Mister Condo,

Hello. I am Vice-President and Treasurer, recently had annual condo meeting. We were in budget and everything was good, but one new co-owner demanded to see receipts of the general maintenance and wants to put the receipts itemized in the minutes. Do I have to supply her with that information?

Mister Condo replies:

K.D., Vice-President and Treasurer? You’re pulling double duty! Thank you for your service to your association. Minutes of meetings are not the place to put something like general maintenance receipts. In fact, your minutes should simply reflect the agenda, voting record for items voted on, and such. Unit owners who wish to request viewing other records of the association, such as general maintenance receipts have the right to do so but they must make the request of the association and then schedule a time to do so. Depending on your state and local law, the association or Management Company may also have the right to charge a records inspection fee for providing access to such records. For the most part, unit owners have no need to review incidental expenses of the association as they have elected Board members to pay attention and take appropriate action with those records. Good luck!

Condo Meetings Running Wild!

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H.W. from Fairfield County writes:

Dear Mister Condo,

I have always used Roberts Rules to conduct meetings of all government and condo meetings. Our new President is using something called “President’s Rules”? What is this about? They suspend Roberts Rules at the beginning of each meeting and run wild. What can be done to restore order?

Mister Condo replies:

H.W., while Roberts Rules are the gold standard for conducting condo association meetings, they are not required to be used, so long as there is a vote to suspend their use, which is exactly what you have described here. However, if the meetings are “running wild” as you say and there is a need to restore order, it might make sense for the Board to stick to Roberts Rules to avoid problems. While they are not obligated to use Roberts Rules, they are obligated to conduct the association’s business in good order and to keep minutes of such important items as budgets, elections, and resolutions and rules. It would seem to me that keeping minutes of meetings that been “running wild” would be quite difficult. Also, there is a requirement that a meeting agenda be published prior to the meeting. The Board is bound to act only on items that are part of the published agenda. With or without Roberts Rules they are bound to keep to the agenda. In other words, if the agenda says items A, B, and C will be voted upon and, out of nowhere, a vote was held on a special assessment to fund Item D that was never on the Agenda, any unit owner could question the legitimacy of such a vote and nullify the action taken by the Board.

My advice would be for you to offer your guidance to the current President. Explain that you would like to see him succeed and that Roberts Rules are an effective method of keeping order during the meetings. The current President would be under pressure to accept your suggestion but might be open to the idea as presiding over meetings that are “running wild” is not fun and can be quite demoralizing as the business of the association tends to get handled poorly. If the President accepts your offer perhaps you can help restore order. If the meetings continue to “run wild” you may need to either go with the flow or keep a close eye on how they hold votes and handle the agenda items. Don’t be afraid to cry foul or bring suit against them if they step out of line. All the best!

Unit Owner Filming Other Unit Owner Violating Condo Rules

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A.B. from outside of Connecticut writes:

Dear Mister Condo,

If an owner is using cameras to record actions of neighbor in order to have fines levied, is this legal and what action can be taken?

Mister Condo replies:

A.B., cameras are all around us these days. Everything from traffic and security cams to cell phones and wearable devices like Google Glass keep a seemingly endless amount of footage of all sorts of activities. The real question here is how is this video evidence being gathered and are any privacy laws being violated or skirted. I am not an attorney so I can only offer my friendly advice. If you require a true legal opinion on this matter, I must insist you speak with a qualified attorney who can better advise you.

Many HOAs are using surveillance equipment within their association to monitor their common areas. This is especially true at associations that have pools, golf courts, and tennis courts. If someone is using or abusing any of these facilities, chances are there is a video record of what happened which can be quite useful to keeping association liability minimized. However, in these instances the cameras are not secretly filming activity in private space. If one homeowner is filming a second homeowner while they are within their own unit, they may be violating their rights and the law. If they are simply filming them throwing cigarette butts or not picking up after their pet while on association common grounds, they are likely not violating their rights or the law. Either way, since this a unit owner versus unit owner situation, the association really doesn’t need to take action. If the unit owner being filmed feels their rights or the law is being violated, they are free to contact the local authorities that will deal with the issue.

The bigger issue for me is why is the unit owner being filmed violating association rules? Is the board taking action each and every time the rule violation is being reported? Why do the violations continue? If the unit owner stops breaking the rules, my guess is that there will be no reason to film them. That gets rid of two problems for you and keeps the peace in the community. Good luck!

Can We Pay Ourselves for Work Done at the Condo?

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E.K. from outside of Connecticut writes:

Dear Mister Condo,

Our small 4-family has some residents who do most of the chores voluntarily. Snow removal, cleaning of stairwells, taking in and out trash, book keeping, and bidding and supervising special projects have all long been done by volunteers. Unfortunately, only 2 households are ever willing to take on any of this work and it is requiring between four and six hours per month to handle these tasks.

All households unanimously voted to approve a system where we could deduct an agreed upon hourly rate for time spent on behalf of the condo. I am now meant to take over the books (which will require some more hours!)… Is there a legal way to manage this, if good records are kept and all parties agree? Can we treat this like a credit or a deduction or are we basically turning this into a job that requires IRS forms and such.

If this wouldn’t work, can you suggest other ways we could build a system that fairly allows some folks to not pitch in and others to save the building a lot of money by doing it themselves without the current imbalances that tend to cause tension among neighbors?

Mister Condo replies:

E.K., you have stumbled upon a very grey area of small condo ownership and management. Paying residents in any way, shape, or form opens the door to a great many potential problems, the least of which is your compliance with tax laws and the IRS. Let’s start at the beginning and talk it through.

Your condominium is a non-profit corporation. As such, you are required to file forms every year with the IRS, even if no income is produced (which is typical for a smaller condo like yours). Once the non-profit corporation gets into the business of hiring workers (even unit owners who are hired to perform the work on the property or keeping the books) the corporation now becomes an employer and needs to comply with state and federal employment laws. If these workers are treated as contractors and perform services that exceed $1200 per year, which means issuing tax statements so they can claim that taxable income on their own tax return. Since the association is employing people, it is also taking on additional risk and should consult with the association’s insurance provider to make sure the association is covered. For instance, if a unit owner’s “job” is to remove snow and they lose a hand in the snow blower, the association has liability. Yikes!

A more reasonable approach might be to look at your governing documents and see what they say about handling the day-to-day business of the association. For the most part, associations are run by volunteer leaders from within the association for those tasks they can easily handle and outside vendors are hired to perform the “work” of the association. Of course, these vendors need to be insured and licensed to keep association risk minimized. The typical challenge in a small association like yours is cost. No one wants to see their common fees raised to handle “jobs” they can do themselves. While this works for many associations, this is not correct and it creates potential liabilities and, as was your case, disquiet amongst residents who can tire of always cutting the grass, or always picking up after their neighbors who litter in the hall or having to give up four or more hours per month to pay the bills and keep the books.

My best recommendation for you is to speak to a local community association lawyer about what other communities in your situation are doing to deal with these issues. My guess is that they are either on an “all volunteer” method or they have elected to hire professionals to do the work and raised their common fees accordingly. Once you start paying yourselves for the work, you have violated the spirit of the governing documents and set the stage for true legal problems down the road. All the best!

By the Numbers: California Condo Special Assessment

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R.W. from California writes:

Dear Mister Condo,

Quoting the California Civil Code:

5605.
(b) Notwithstanding more restrictive limitations placed on the board by the governing documents, the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association’s preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members, pursuant to Section 4070, at a member meeting or election.

(c) For the purposes of this section, “quorum” means more than 50 percent of the members.

4070.
If a provision of this act requires that an action be approved by a majority of a quorum of the members, the action shall be approved or ratified by an affirmative vote of a majority of the votes represented and voting in a duly held election in which a quorum is represented, which affirmative votes also constitute a majority of the required quorum.

Question 1: For 5605(b): Do an association’s more restrictive governing documents prevail over the Civil Code, or is it the other way around?

Question 2: For 5605(b)(c) and 4070: A quorum in a 50-member association is 26. A majority of 26 is 14. Does the code mean that if only 26 members vote, 14 of them prevail?

Mister Condo replies:

R.W., since I am not an attorney, I usually quake at any question that begins by quoting laws or civil codes. Add to that the fact that I am not an attorney nor am I an expert in California Civil Code, I hope you will respect my answer as being only friendly. For a legal opinion, I must insist you speak with a qualified attorney from your state. That being said, I do have an opinion and maybe some friendly advice you will find useful. Here goes:

My opinion on your first question is that whichever is more restrictive prevails. The clue is in the wording of the code where it states “Notwithstanding more restrictive limitations placed on the board by the governing documents”. To me, that means whichever of the two is more restrictive is the winner.

My opinion on your second question is that the governing documents may define a quorum. Absent that definition, the civil code defines a quorum as more than 50% of the unit owners. In your example, the quorum for a 50 member association would be 26 members. If 26 members attended the meeting where such a vote was to be held, at least 14 of them would have to vote in favor for the motion to prevail. Of course, if all 50 were present, it would take a vote of 26 for the measure to prevail.

I take it your association is grappling with a special assessment and trying to figure out how best to pass it correctly. Special assessments can be tricky and controversial. Depending on the overall temperament of your condominium owners, it can be almost impossible. If your association has retained the services of a qualified community association attorney, this is a great example of when it is time to consult with them to make sure that proper notice of the meeting is given and that all of the proper laws are observed, including the association’s own governing documents. There is nothing worse than doing all of the hard work involved in levying a special assessment just to find that a procedure was not properly followed and that a unit owner who is against the assessment then decides to sue the association to block the action. Consulting with the community association attorney may cost a little money upfront but it could prevent a lot of problems down the road. All the best!