Category Archives: Buying

Criminal Record May Keep Potential Condo Owner Out of Association

J.L. from outside of Connecticut writes:

Dear Mister Condo,

Should I discuss my personal background history with an association member before I decide to place a bid on a unit? I want to be honest and not hide anything or make it be a surprise when they run my background check. I have somewhat of a low credit score according to association approval guidelines, but not that low from what they are looking for as a requirement. In addition, I have a criminal record that is pending and it will soon be dismissed. I am not a murderer nor am I a pedophile. I just took the wrap for my son’s wrongdoing to protect him and now I am feeling and paying the consequences of my actions. However, I do not regret doing what I did for the sake of my son. Your thoughts and answers are appreciated. It just hinders me trying to get approved by an association. Thank you.

Mister Condo replies:

J.L., I think discussing those issues that will surface in your background check is a double-edged sword. If the association member that you are telling is a friendly ear and will advocate on your behalf after the background check is complete and the Evaluation Committee or Board will determine your eligibility to enter the community, then I think explaining your situation in advance is a good idea. If the association member is not going to be able to advocate for you, then why bother? The credit check will show that you are eligible from what you have told me. That is very important. The criminal background check is another story and may very well be the reason you are turned down if the decision goes that way. Regardless of your reasons, you now have a criminal history. You may be able to explain it to the Board’s satisfaction but they are the ones who are accountable to the other community members who expect the Board to protect them from criminals entering their association. Keep in mind that these folks are not criminal law experts. They will simple interpret the data and make a decision. They were elected by their fellow unit owners to follow the protocols outlined by the association’s governing documents, no more, no less. If your background makes you ineligible to enter the community, they really have no right admitting you. I hope it goes your way but I am skeptical. All the best!

Must the Landlord Furnish a Copy of the Lease to the Condo Board?

C.M. from New Haven County writes:

Dear Mister Condo,

Can a condo board ask for references from potential buyers or renters? Must a landlord furnish the lease to the board?

Mister Condo replies:

C.M., two very different topics there. Let’s start with the references from buyers or renters. Depending on what the by-laws say, the Board may be well within its right to ask for references, credit checks, and whatever else is in the by-laws. If the by-laws are silent, the Board may wish to pass some rules or new by-laws requiring these things if needed. Of course, the Board will need to follow the rules for adding such measures. The Board also needs to take care to make sure it isn’t using these rules to create a potential discrimination lawsuit from a buyer or renter who didn’t measure up in the Board’s opinion. I would certainly recommend any such rules be reviewed by the association’s attorney to make sure they are in compliance with any local, state, or federal housing laws.

The lease is a totally different matter. The Board certainly has a right (and a need) to know who is leasing a unit within the association. This is typically in most condo docs. It protects both the tenant and the landlord in the event there are any problems with the unit. Absentee landlords are common but the Board may need to communicate with the resident of the unit for a number of reasons. The landlord is typically obligated to provide a copy of the lease and can usually be fined or have their tenant removed if they don’t. Condo documents are legally binding on the landlord and enforcement of the association’s covenants is the duty of the Board. If a landlord refuses to provide a copy of the lease, there are several legal remedies available to the Board. Again, it is time to involve the association’s attorney if this happens. All the best!

Property Manager Purchases Condo in Managed Association

B.S. from Florida writes:

Dear Mister Condo,

Wondering if you see any conflicts for a Florida CAM to purchase a unit to reside in and still remain as the onsite property manager. The Board sees no conflict of interest but some owners are questioning if there is a conflict, as the onsite manager may have some inside information that other owners may not be privy too. Your thoughts on if you think there are any conflicts?

Mister Condo replies:

B.S., I do not see any conflict of interest but I do appreciate the concern of some owners for the potential for a conflict of interest although as a unit owner who would be affected directly by insider information, I would also think the conflict of interest might even go in the direction of the association. What unit owner wants to see his/her own association make financial mistakes or poor decisions? Not only does the property manager need to worry about his/her job performance but also has a personal interest in the success of the association. On the flip side, if the property manager’s unit gets preferential treatment, unit owners would be right to call foul. My advice would be to allow the property manager the ownership of the unit and to keep a vigilant eye on how the unit is treated. The Board keeps an eye on the Property Manager by default. They might need to make sure there is nothing unusual going on but I really doubt the manager would risk his/her job over abusing their power to give themselves preferential treatment. Good luck!

Young Couple Seeks Entry Into 55+ Condo Community

S.M. from Florida writes:

Dear Mister Condo,

We are a young couple interested in a condo that at the moment is not an over 55 age restricted community, but the tenants are trying to make it a 55+ community. If we purchase the condo now, and it becomes a 55+community later, what does it mean for us? We live in Florida. Thanks.

Mister Condo replies:

S.M., I would recommend that you speak with a local attorney about what would happen to you if the community decided to become a 55+ association. I am not an attorney so I cannot offer you legal advice. From a practical standpoint, I am not sure why you, as a young couple, would want to live in an age-restricted community. I am going to assume that once you are an owner, any rule or covenant changes such as becoming age-restricted are subject to “grandfathering” of current unit owners, meaning you wouldn’t be forced out of your home just because the age restriction went into place. The bigger challenge for the association may be adhering to Florida’s 80/20 rule which basically states that 80% of the units must be occupied by a person of the stated age group. There are a few other requirements as well, which you can read about in this excellent blog article: http://www.floridacondohoalawblog.com/2010/04/01/55-over-housing-what-is-the-8020-rule/ The bottom line is whether or not you will find life in a 55+ community to your liking. If you think it is the lifestyle you want and there are currently no restrictions in place, you may be just fine in making your purchase. However, you might also consider nearby community associations without these restrictions as you find the lifestyle there more compatible to folks in your age group. Whatever you decide, I wish you an enjoyable new home

Must I Reveal Possible Special Assessment to a Condo Buyer?

R.R. from Hartford County writes:

Dear Mister Condo,

I recently was advised that our Board has started to address and extremely large repair required by the state. It has been mentioned in the Condo Minutes but no formal acknowledgment or assessment has been determined. I would like to run for the hills without telling the buyer and sell my unit before the news if official. Can I do that?

Mister Condo replies:

R.R., special assessments are very official and legal levies placed against the unit owner of record once ratified by the Board and the association. Once levied, they are the responsibility of the unit owner of record at the lime the assessment was levied. As a unit owner, you would receive notice and a payment date or payment schedule depending on how the assessment was levied. A “mention” in the Condo Minutes about an upcoming assessment is not the same as a levy of assessment. You would need to reveal (and pay off) an assessment as a term of your sale. You are not bound to reveal the possibility of an assessment. However, if the assessment has been announced and ratified and is not revealed to a potential buyer, you would very likely be sued for the assessment by the new buyer. If you are using an attorney for the sale, you would do well to explain what is going on and make sure you don’t set yourself up for that to happen. Good luck

Pre-Sale Special Assessment Assigned to Current Condo Owner

K.K. from Florida writes:

Dear Mister Condo,

When I purchased my condo in 2014, I was told no upcoming assessments. Surprise! Last August, I was told assessments for work done will cost me $15k or $155/month for 10 years. Now, I am selling my condo, can the remaining monthly 155 be transferred to buyer?

Mister Condo replies:

K.K., I am sorry you got hit with a “surprise” Special Assessment. In my opinion, there are no “surprise” Special Assessments unless the community experienced an unexpected and/or uninsured loss or a lawsuit that requires an unforeseen infusion of cash. If the assessment were for something as common as a replacement of a roof or to repair old decks or sidewalks, it was no surprise. That being said, the assessment is made against the unit owner at the time of the assessment. That was you. The association has an interest in you making the payments, not the new owner. You will very likely have to pay off the assessment before you can sell the property. It seems unfair but that is how it works. I hope your new home has no surprises like this for you. Good luck!

HOA Board Ain’t Fixin’ Nuttin!

R.M. from outside of Connecticut writes:

Dear Mister Condo,

4 months ago, I purchased a duplex which has 3 buildings and 6 owners. I had a hard time getting documents during the sale and did not understand the dynamics involved. The first email I got from the treasurer was on the day the fees were due. Our first meeting when I met the other owners was a nightmare. The president has been in position for 20 years and has Alzheimer’s so her daughter had appointed herself to the position. The treasurer was appointed by her, not vote, and the secretary had been behind 6 months in fees which they were trying to cover up. When I brought up concerns about the outside of our building, I was yelled at by the President’s son-in-law and told “we ain’t fixing nuttin, we got no money!” Then my neighbor brought up a repair not done properly and he stood up screaming and swearing at her and everyone started fighting. I asked for the bylaws and I was told by the president to find them myself. She doesn’t have them.

A few weeks ago, the fascia that needed repair was hanging off of my roof. I called the president and son in law started screaming and threatening me and said we have no money to fix it. I mentioned the Reserves that we should have had when I moved in, and both him and the treasurer admitted it was fudged to make the sale happen and accused my realtor of fraud. I had her call them and the next day the son-in-law apologized and paid out of pocket to have the fascia repaired.

They had previously called a special meeting to discuss the budget so I told them I did not want the son-in-law there as he has no business there; they agreed. The meeting started off ok until we brought up questions about missing payments from a couple of owners. We started getting bullied again. When the argument was brought up about the fascia I defended myself telling what the son-in-law said to me. He came running down the stairs screaming and swearing and threatening me again and threw me out of his mother-in-law’s house. I called the police.

I want to have the President, Treasurer, and Secretary removed by law for keeping false books, hostile environment, favoritism, harassment and negligence. If I have solid proof (which I do), will I be able to charge the association for the attorney since it’s in the best interest of the owners? It’s the board who caused all of these problems.

Mister Condo replies:

R.M., your tale of woe reads like a comedy of errors. I am glad you got your fascia replaced but the rest of this tale is a nightmare! This is a small homeowner’s association (6 units if I understood your opening statement). Small associations face the same challenges as larger associations but have far fewer resources to handle the issues. A functioning Board is a good start but there are legal remedies available to you. I want to ask you about your own purchase into this association. Did you use an attorney? Did the attorney review the governance documents? They can’t go missing as they are part of the closing process. Of course, if you somehow waived your right to these critical documents in an eagerness to make the purchase, you are experiencing a major case of “Buyer Beware!” It sounds to me like there is awful lot of impropriety going on here. You need to speak with an attorney, which I am not. I offer friendly advice; an attorney will offer you legal advice. You may end up suing the association, individual officers, anyone else associated with these misdeeds in an attempt to get the association back on sound footing. By the way, 6 owners don’t guarantee deep enough pockets to do that. In fact, you may be throwing good money after bad in an attempt to correct this problem. Your attorney can better advise you if you can include your own legal fees in any litigation but winning the litigation is just the beginning. You need to collect from these folks, who clearly don’t have the money from what you have told me. If it were me, I think I would try to sell and cut my losses. Otherwise, be ready to deal with an ongoing problem for months and even years to come. Keep the police on speed dial because these folks clearly have no idea what they are supposed to be doing and will likely continue doing what they have always done. Good luck!

Condo Developer Transition Litigation Nightmare

N.P. from outside of Connecticut writes:

Dear Mister Condo,

I am in a large condo association that was in litigation with the developer when I purchased many years ago. We were never told of the litigation, and strangely enough had no problem getting our mortgage, which was not the case with many potential buyers from what I have been told. Over the years, the board, which is a veiled one, never fully disclosed the extent of the deficiencies until 6 years after the litigation ended. Now every member has been told we will be assessed potentially over $60,000! (They have not done bids yet for the work.) The board will not allow us to see a cost breakdown as to how the engineering company got to this amount. The property manager has also said that in times of litigation open meetings are not required even to ratify any binding action. The minutes of open meetings cannot be accessed because this management company has said anything before their time (3 management companies in 7 years) is missing. To top it off, there was a recent election in which the property manager was bad mouthing certain people running as write-ins to people just turning in their proxies. Faced with this huge looming bill, I am feel like this community is in huge trouble. I fear numerous foreclosures and the association going belly up! What can we do?!

Mister Condo replies:

N.P., I am truly sorry for your situation. The developer transition period is a unique time in an association’s history and it is a time that requires all unit owners to be wide-eyed, leery, and as well-represented as possible. I have written numerous columns on the subject which you can read by following this link: http://askmistercondo.com/?s=developer+transition

I would love to say that your situation is unique but that is hardly the case. The dollar amount in question is unusually high but I have heard of worse, especially when the transparency is lacking between the developer and unit owners. It is not too late to take corrective actions but the underlying financial damage is likely to remain and perhaps intensify if the association needs to take legal action against the developer. Here is what I would recommend you and your fellow unit owners do to protect yourselves.

First and foremost, speak with a qualified community association attorney (NOT the Developer’s Attorney!). You need legal guidance here and each state has its own version of condominium and incorporation acts that will likely come into play. Construction defect lawsuits are not uncommon, can be very expensive, and tricky to pursue. However, money invested in a construction defect lawsuit that may yield millions for the association is money well spent, in my opinion.

You need to understand which phase of developer transition your community is in. Has the developer relinquished governance of the association to the Board or is the Board only functioning as outlined in the development stage, meaning the developer still has large control of the Board? If the developer is no longer in control, different rules apply. This is another discussion to have with your community association attorney. If the Board is in full charge of governing the community, it is also likely time for a new management company as the one originally in place had the best interests of the developer in mind and not necessarily the unit owners. From what you have described, this management company is working for the developer, not the association. 3 management companies in 7 years is not a good thing. Be sure to thoroughly interview thoroughly to make sure the next management company is a better fit for the association.

Finally, consider selling before it gets any worse. This is going to be an expensive and drawn out process. If you don’t have the constitution for it, get out while you can and consider moving into another condo without these problems. Even if you talk a loss to sell your unit, you may be coming out ahead of a $60K special assessment and who knows what else if a legal battle ensues. When money is needed from a community association there is only one source: the unit owners. You might just do better to cut your losses and move on. Good luck!

When Do Monthly Condo Common Fees Begin?

G. from outside of Connecticut writes:

Dear Mister Condo,

Good Day, Mister Condo! Do I need to pay monthly dues even if I sign the certificate of acceptance but have complained (fixture of toilet bowl is not working)? I don’t have a key yet but I have signed an agreement. What will I do?

Mister Condo replies:

G., I am sorry for your situation. Quite honestly, your best bet would have been to not sign any contract until the unit was in good working order and to your liking. Once you have signed the agreement to purchase the unit, you are on the hook for the common fees that accrue from that day forward. So, even if the toilet bowl isn’t working properly, you still have to pay your common fees. If you don’t, the association will be forced to take collection actions against you which can be quite costly. You don’t want that to happen. Pay your fees and work with the association to get your toilet fixed. Hopefully, you’ll be able to enjoy your new unit once that repair is made. All the best!

Condo Let Lapse FHA and VA Certification

C.W. from New Haven County writes:

Dear Mister Condo,

Our complex has always maintained FHA/VA certification. This certification certainly can be viewed as either a positive or negative by some. As I understand it, last fall the government separated the two, requiring two separate certifications. My complex let the certification lapse and then chose only to renew the FHA certification. Now, the FHA cert costs about $1800 with attorney’s fees and is only good for a limited time (I believe 2 years), the VA certification is a lifetime certification and a one-time expense of approximately the same amount. There was nothing in our complex financials reflecting payment or budget for either. There was no notification from the board regarding maintaining or dropping either. I only found this out because I had put my unit for sale and was notified of the lack of certification. After going to the Board, they said they were unaware of the separation of certifications. I lost my first buyer because it was during the lapse of either, and then lost my second buyer because of the non-VA renewal. The board originally asked if I would front the cost and they would reimburse me at the closing, which I agreed. They then reneged and asked me to pay half, then they said they would not reimburse me at all but would supply the attorney with the paperwork. I have lost both buyers because of this. I am now 4 months later with no buyers and multiple price drops. Do I have some sort or recourse because of the lapse and non-renewal and no notification or owner vote regarding this? Certainly, I would think that this certification has a reflection on our unit value. Thanks.

Mister Condo replies:

C.W., I am certainly sorry that you have lost a few buyers for your unit while this debacle unfolds. I should point out that I am not an attorney and offer no legal advice in this column. You should speak with qualified counsel to see if you have any type of legal remedy worth pursuing. You are correct to point out that there are differences between FHA and VA certification. Generally speaking, FHA certification is required for the condominium association for any mortgages that are FHA insured (most are these days). VA certification is specific to the VA-backed loan program and has a different set of requirements. If your complex had VA certification at one time, I am not sure how they lost it. FHA certification is a renewable program so it does have to be sought and reapplied for from time to time as required by the FHA. To optimize mortgage opportunities, many condominium associations opt for FHA certification. Not all bother with VA certification as it is a much narrower pool of buyers who require such certification. Neither are required to be carried by the association, which is why I question your ability to claim an association-caused loss because of the lack of the certification. Your pool of potential buyers is certainly smaller without the FHA certification but you are still unencumbered by the association when you do sell. The Board should take the best interests of all unit owners into consideration when deciding to renew or let lapse FHA certification. Ultimately, if the unit owners want it and the Board refuses to get it, it is time for a new Board. All the best!