Monthly Archives: October 2015

Condo Association Delinquent on Insurance; Condo Owner Delinquent on Fees

mc_money

D.B. from outside of Connecticut writes:

Dear Mister Condo,

My question is pretty clean cut, but first let me say I am trying to fix my obligation. So my question is this. I have condo fee $183 each month, I have not paid in awhile, lets say $8000 worth (includes $25 late fee monthly) however, I am paying my own insurance for home for mortgage purposes due to my policy has not been renewed with condo association. My question is this, if my home is not covered under the insurance policy that involves the other 7 units, is it right to still charge me $183 a month from past fees owed and the fee included condo insurance? I just wanted to make sure before I pay this debt that I am being charged correctly.

Mister Condo replies:

D.B., I am sorry you find yourself in this unfortunate situation. Common fees are the lifeblood of the association and cannot be withheld by individual unit owners, for any reason, without serious consequences. The association has the upper hand here and can take legal action against you to collect the unpaid fees. These collection actions include filing suit against you where the courts could award them the right to seek relief through your checking and savings accounts, wage garnishment, and even foreclosure on your unit. Of course, you can seek your own legal remedy, including bankruptcy to protect yourself but let’s hope it doesn’t come to that.

The issue of insurance is entirely separate and may require you take a separate action. If your condominium association is not providing insurance as required by your condo by-laws and/or state law, you may have an action against them. Your best advice is to speak with an attorney to determine if that is the case. Keep in mind that the association is not bound to provide insurance for the satisfaction of the mortgage company. It is possible that your mortgage company is requiring an amount of insurance above what the association has deemed appropriate. I have seen this most commonly in flood insurance arrangements. If that is the case, you may need to work closely with your mortgage company to make sure you are getting credit for the insurance already in place with the association. You may only need to purchase a small amount of additional insurance to cover the gap.

I hope you are able to work out your deficiency in common fees with your association in short order. Your delinquency could be causing a great deal of financial stress in a small association like yours. I wish you all the best in getting your finances with the association back in order.

How Often Should the Condo Association Change Auditors and Attorney?

amc_image

C.T. from Hartford County writes:

Dear Mister Condo,

Thank you for being there to answer questions. What a grand resource!!!!

–How often should one change auditors for a large condo with a budget [excluding reserves] of over 3.5 M?

–Is there a standard/recommended amount of time to have the same auditor year after year?

–Also, the same question re a condo’s lawyer?

Mister Condo replies:

C.T., thank you for the kind words. Let me see if I can repay you with some kind advice.

Generally speaking, auditors are outside third parties that have no vested interest in the association, meaning they have an assignment of reviewing “the books” for the association and giving an opinion as to whether or not everything is in order. Unless there has been a problem of some sort with the auditor’s performance, I am not certain there is any need to change auditors. Keep in mind that your auditor also works for other associations and businesses. If there are no complaints against the auditor from any of these sources, I think I would keep the auditor. Of course, it is a two way street and if the auditor is showing signs that he or she is no longer interested in auditing your association’s records, then it is most definitely time for a new auditor. You need sharp eyes and keen business acumen to do a good job of auditing association records, especially the dollar volume of an association as large as yours.

Condominium lawyers are another story, in my opinion. Many condominium associations suffer from “institutional memory loss” as Boards change leadership and members over the years. Many times, the condo lawyer is one of the few constants for the association, which can be quite useful so the same mistakes are not made again and again by new Board members. That being said, if the association feels their attorney isn’t best serving it, there is no shortage of qualified community association attorneys that could be considered. However, to simply change attorney for the sake of changing attorneys makes no sense to me at all. In fact, it might even create duplicate work for the association if a new attorney were asked to help out with a legal matter a previous attorney had already handled for the association.

The bottom line is that these professionals are external to the association and have no vested interest as unit owners within the association might. If they are performing to the expectations of the association, I see no reason to change them simply for the sake of change. Good luck!

Condo Owners Association Seeks Fire-Damaged Detached Home Rebuilt

mc_money

J.C. from North Carolina writes:

Dear Mister Condo,

Detached condos in my area (North Carolina) typically don’t pay for the homeowner’s fire insurance (i.e. owners have to get their own insurance policy for loss).

So, if the COA isn’t named insured, and therefore can’t collect on a policy in the event of a loss, can they still force the detached condo owner to rebuild after a total loss to the single-family detached structure?

Mister Condo replies:

J.C., I am not an attorney nor am I an expert in North Carolina common interest community law so please accept my advice as friendly and not legal. I expect that your best answer will come from an attorney who specializes in common interest real estate law in your state. I will say that your governing documents would be the first place I would look to see what responsibilities the individual unit owners have with respect to the COA. It is quite possible that the association has the right to require that any damaged home be restored to its original condition as part of the covenant for being in the association. If so, they likely have every right to enforce the rebuilding of a fire-damaged home within the COA. Even though they may not be named as insured, they may have other legal rights to pursue an owner who does not rebuild after a fire, including placing a lien on the property and even foreclosing.

My advice is for you to speak to an attorney who can give you full legal advice in this matter. All the best!

Grumpy Old Condo President Needs to Go

mc_horrified

K.G. from Litchfield County writes:

Dear Mister Condo,

We just purchased a unit in a small condominium association. The President has lived here for 28 years since the old home was conserved into a condominium. He is very old and seems very unhappy as he picks part everything other unit owners do. He is rude and aggressive in his language, constantly asking for opinions, and then sending nasty emails reiterating his point of view, never listening to others. We have recently agreed to assign, then we voted, on having each unit be the liaison for a provider. The reason was that we all felt it could be confusing for the provider, listening to too many directives, and therefore, the liaison allowed them to only have to listen to one person. Everyone is following the new rule, contacting the liaison if they have a concern, then they contact the provider. Of course, you can probably guess, the President is not. He is sending letters, nasty emails and telling the landscaper not to perform certain work. Nothing has been discussed with other board members. Doesn’t the President of an Association need to still check with other board members or does he have the right to act without our vote? If not, how do we get him to stop? We are afraid he is going to cause the landscaper to quit, leaving us with no one to finish out the year.

Mister Condo replies:

K.G., the simple answer is to remove him as Board President at your earliest convenience. Either vote him out of office at your Annual Meeting or gather enough unit owners to hold a recall election and have him removed. However, you need to follow your condo’s governance documents to do so. The easiest path is to simply vote him out at your next election cycle. Small condo associations like yours can be especially challenging in matters of governance, especially if a Board member has gone unchallenged for many years. He is likely doing as he sees fit because he believes that he can. And if you don’t vote him out of office, he is likely right! You may have grounds for a costly and protracted legal action but I can’t imagine that is in anyone’s best interest. If you need true legal advice, kindly consult with a locally qualified attorney. Otherwise, simply get him off the Board and replace him with a leader who will better serve the community. Good luck!

Is It Against the Law for Association Vendors To Donate Money To Condominium?


mc_scales

L.D. from Middlesex County writes:

Dear Mister Condo,

Our executive board agreed unanimously to accept monies solicited by a Unit Owner from our vendors who wishes (along with a few other unit owners) to install a flagpole with lights in the community. By accepting this contribution, isn’t this a violation of the CHAPTER 828* COMMON INTEREST OWNERSHIP ACT Sec. 47-245

(j) No person shall provide or offer to any executive board member or a person seeking election as an executive board member, and no executive board member or person seeking election as an executive board member shall accept, any item of value based on any understanding that the vote, official action or judgment of such member or person seeking election would be or has been influenced thereby.

The Board unanimously voted to do this because the money influenced them and this is verified in the minutes that they accepted this money under these circumstances, thanking the solicitor for their initiative. So they made this decision without involving the community at large stating they have the power as the Executive Board to make changes to the Common Elements. This has upset the community as they feel they have been railroaded into something that is going to have maintenance and other expenses going forward and needs more due diligence before pursuing. People that question it are being called unpatriotic which is unfair. This community already allows people to display the American Flag and many do. What is your take on this? Are they breaking the law? What remedies do we have? If they are not, how can we put a hold on this and make it a community based vote not just the BOD. Thank you.

Mister Condo replies:

L.D., my first instinct was to tell you that there is a big difference between the association accepting money from vendors (which is allowed) and individual Board members accepting money (definitely not allowed, sound the alarms!). I asked a friend of mine who practices community association law in our state for a further opinion. Here is what the attorney had to offer:

“The statute you’ve referenced was enacted to prevent bribing board members to influence their official actions.  As you describe what happened, apparently money was given to the association itself rather than for board members to keep personally.  Doing this is not illegal or even uncommon.  For example, some laundry machine services will give condominiums a percentage of the revenue from coin-operated machines used on-site, and some cable or satellite television companies will pay an association a cash stipend to help market their products to incoming purchasers.

Generally, the board does have the power to decide whether to change the common elements or to install something on them, like a flagpole.  The bylaws of some communities may restrict this power, often by capping the dollar amount which can be spent on the change without a unit owner vote.  You should carefully review your association’s bylaws for such a provision and consider talking to an attorney about what rights you may have if it has been violated.”

Sounds like great advice to me. All the best!

Laws that Allow Video Cameras Outside of Condo?

amc_image

L.E. from New Haven County writes:

Dear Mister Condo,

Recently my request to place a security camera outside the front door of my condo was rejected by my condo association. Our by-laws state that no items can be attached to the outside of the units however the board did not bother to ask for any details on the planned camera. Are there any state/federal rules such as those on flying flags or attaching satellite dishes that would override the association by-laws? Thank you.

Mister Condo replies:

L.E., there are no laws allowing you to place a security camera outside of the front door or your condo as far as I know. In fact, there are laws that protect the association from allowing you to do so, which you have alluded to. The association owns the unit exterior and can determine what you can or cannot attach to it. Also, your neighbors have privacy rights so that you may not film who comes and goes in their units. You may be quite harmlessly filming your front door but the field of vision for the camera may also include a neighbor’s window. Heaven forbid your neighbor then sue the association for allowing you to film inside your neighbor’s window. You can see how this is a potential problem for the association. What many of your fellow condominium unit owners are doing is placing security cameras inside their homes so that, God forbid, an intrusion occurs, the culprits are filmed in the act. You are well within your rights to film anything you’d like inside of your unit. Stay safe!

Too Many Proxies for Too Few Condo Units

mc_scales

A.K. from New London County writes:

Dear Mister Condo,

I live in a 15-unit condo. In an annual business meeting are 2 residents of one unit allowed to be individual proxy’s for 2 other units?

Mister Condo replies:

A.K., proxy votes can be tricky, especially in smaller associations like yours. With only 15 units like yours, each vote is worth 6-2/3% of the total vote. In Connecticut, the rule is that no one unit owner may control more than 15% of the vote, so one person voting for himself and one other is 13-1/3% of the total vote. Your statement is that 2 unit owners from the same unit are also voting for 2 other units. Depending on how you interpret that, it would appear that one unit is controlling 20% of the vote, which exceeds the 15% rule. Ideally, in your association, one unit owner could vote for themself and one other unit owner by proxy without violating the 15% rule. Your governance rules may state otherwise but it is my friendly opinion that only one proxy can be cast by a voting unit owner without violating the state law. I am not an attorney so please do not consider my advice as legal. You may wish to seek a legal opinion, especially if the outcome of this questionable proxy voting has brought about undesired consequences. Good luck!

Required Notification of Condo Board President Resignation?

mc_scales

C.M. from outside of Connecticut writes:

Dear Mister Condo,

How long does an association board have before notifying the owners of a vacancy or a resignation of its president? Is it even required if they choose to appoint someone to the office?

Mister Condo replies:

C.M., the loss of a Board President can be concerning to any community association. Ideally, the resignation is done publicly and unit owners are notified in timely fashion via the association’s newsletter, website, or even a mailed notice. However, unless your governing documents state elsewise, I am not aware of any requirement that required the Board to notify unit owners of the resignation. In fact, the Board President’s resignation should have little to no impact on the typical unit owner as the Board President is simply the Board member who fills the office position. When the Board President resigns, the Board Vice President fills the role until the next election cycle, which is usually within the year at the Annual Meeting. Hope that helps!

Condo Wood Siding Left in Disrepair; Unit Owner Blamed

mc_horrified

T.D. from Virginia writes:

Dear Mister Condo,

We rent out our condo. The outside is wood siding, which is warped and falling down. “Band-aid” fixes can be seen all over. I have a leaky ceiling inside, especially when there’s sideways rain. All other times it stays dry. The condo property management sent out a contractor in December, who said it was due to a problem with our deck (our responsibility) and not the siding. He then sent me a quote for his guy to fix the deck, at $1,200. I should insert here that we replaced the deck three years ago at a cost of over $4,000 and it appears fine. We had our deck contractor go out and make some adjustments around the door. While there, he sent us pictures of the missing and damaged siding. After more hard rain and a grumpy tenant, they finally got someone else out there, who pulled up some boards and said he could patch it for $650.00. When I asked the manager why the disparagement between the two estimates for the same problem (different solutions, but always pointing to the deck) he did not respond. So, here’s my problem: do I pay $650.00 to his guy since they are saying that’s the problem? When it rains again and the problem is as I suspect with the siding, what recourse do I have? It seems an easy fix to tell owners the problem is caused by their area of responsibility, when it’s pretty clear, the problem is in fact the siding. Any suggestions?

Mister Condo replies:

In a word, T.D., it is probably time to hire an attorney and sue the association for not fulfilling their maintenance responsibilities. Your building should look like it did when it was first built. Yes, there will be wear and tear over the years but there should never be siding that is “warped and falling down” without the association making the necessary repairs. Their argument that your deck is the culprit for your leaks may or may not be true but a simple engineering inspection should end that discussion. If it is your deck then you should take the steps to reengineer the deck so that there are no further water intrusions. It sounds like you are confident that your deck is in good order and not the problem. You can submit a report from your deck contractor supporting that statement or you can hire an engineer to support your claim. The Board is free to refute that report and hire their own engineer to make a different determination. If they do so and their report finds different from your deck engineer’s report then additional action may be necessary. This is where the attorneys may need to battle it out in court.

Siding is the responsibility of the association. Unless your governing documents state otherwise, it is the responsibility for the association to keep the common elements properly maintained. It is completely possible that your association has not been properly saving money for these repairs and that has led to the current deterioration but the cannot simply choose to let it be. In order to pay for the repairs, the Board may need to raise common fees, take out a loan, or pass a Special Assessment to raise the necessary cash. That could be very expensive for you and your fellow unit owners but it is the correct procedure for keeping the association’s common elements in top order. All the best!

Deeded Parking Versus Association-Owned Parking

mc_parking

E.B. from Massachusetts writes:

Dear Mister Condo,

 

Can the trustees of a condo association force the owner of deeded parking from their deeded spaces to accommodate someone with disabilities? The disabled person has 2 deeded spaces with his condo – which he saw before moving in – but finds he has to back up his van into minor traffic in the parking garage in order to get into his van via a wheelchair lift.

 

Mister Condo replies:

E.B., since I am not an attorney please consider my replay as friendly and not legal. For a legal opinion, I would strongly suggest you speak with a qualified attorney in your area. For the most part, parking spaces that are under the direct control of the Board of Trustees are commonly owned by the association and the association can do with them as they see fit. So if the parking spaces in question are owned by the association, the Trustees may be well within their rights to reassign the parking spaces. However, you have mentioned that the spaces in question are deeded parking spaces, meaning that the parking spaces are actually owned by the individual unit owner versus the association. If that is the case, the Trustees may be overstepping their authority to reassign the spaces. The true answer to your question lies in the deed to the unit and the association’s governing documents. Ownership of the actual parking spaces is the heart of the issue. It may require a legal opinion to get a true answer and a legal action to bring about a correct result. Good luck!