Category Archives: Governance

New Condo Owner Asks to See Association Records

J.S. from outside of Connecticut writes:

Dear Mister Condo,

Does a new owner, 7 days, have the right to see minutes and running balance sheets from previous years? She did not ask for any of this before she bought. If so, is there a time limit to which I have to get her this information? Thanks!

Mister Condo replies:

J.S., all unit owners, regardless of how long they have owned, have a right to inspect association records. That certainly includes bank statements and Minutes of meetings as these are official records of the association. Unless the association has something to hide, this should be a request that is simply honored. Failure to do so, on the other hand, could lead to a lawsuit from this new owner as you would be violating the unit owner’s rights by withholding this information. There may or may not be a time limit on honoring this request depending on your by-laws and your state law. My advice is to offer it forthwith. All the best!

Condo Board Refuses to Hold Annual Meeting!

J.W. from outside of Connecticut writes:

Dear Mister Condo,

Our condo association elects board members at the annual association meeting. The current board will not schedule the annual election. The current board just keeps making decisions. How can a non-board member force the board to schedule an annual meeting so that new board members can be elected? The By-Laws call for the annual meeting to be held in April and they must give a minimum of 21 days’ notice.

Mister Condo replies:

J.W., if your Board is operating outside of the governing documents (it sure sounds like they are), you can do a few things to correct the situation. First, you can speak with other unit owners and call a Special Meeting of the unit owners following the method to do so outlined in your governing documents. This requires some organizational skills on your part and you do need to follow the proper procedures to do so. Your goal in this meeting would be to recall the current Board (essentially remove them from office) and replace them with better volunteer leaders who will follow the rules of governance for the association. This is serious business and I would even recommend that you speak with an attorney who specializes in community association law to guide you. This will cost money but is worth every penny, in my opinion. Your second option is to sue the Board for not following the governance rules of the association. This option may force the annual meeting but will do little to remove the Board members who are not following the rules. Your third option is to leave this community. That is a drastic measure but if you can’t find better volunteer leaders to run this association, you can either live with the out of rule-breaking Board or sell your unit. Communities get the Boards they deserve. If your fellow unit owners aren’t outraged that this Board isn’t operating by the rules, it is time to leave. It is only a matter of time before more than missed meetings are unearthed. Boards that operate in this renegade fashion are usually breaking multiple rules. This can cost every member of the association dearly in their pocketbook if left unchecked. You have your work carved out for you. Good luck!

Condo Association Approaching 50% Rental Mark

H.W. from Fairfield County writes:

Dear Mister Condo,

Our 306-unit condo is now at 48% rentals. The Board relies on a manager to do this type of work. What will happen when we get to 50%?

Mister Condo replies:

H.W., thank you for writing. There are many challenges to managing and living in a community with a high rental rate. For starters, fewer owner occupied units usually means that fewer of the residents have a long-term concern for the well-being and stability of the community. After all, they have no investment in the property and are likely to leave when it suits them by simply not renewing their lease. Many associations with high rental rates also report difficulty in enforcing parking and other rules. Again, some renters (certainly not all) tend not to pay close attention to the rules of the association. The biggest challenge the community may face is qualification for FHA-backed mortgages, which dominate the mortgage world. Many condominiums will lose their eligibility for FHA-backed mortgages if the community becomes more than 50% rental units. FHA changes its rules from time to time so you should really check with a mortgage company that specializes in FHA-backed mortgages for an idea of the impact your association may face if/when the 50% rental threshold is surpassed. I found an excellent article on the subject at Housingwire.com. You can read it here: https://www.housingwire.com/articles/38374-fha-lowers-owner-occupancy-requirements-for-condos. All the best!

Condo Move In Fees Create Budget Excess!

J.G. from Illinois writes:

I’ve tried submitting this blog question online, but I keep getting an error message saying I didn’t enter the “recaptcha” correctly.  It’s just a check box, so I’m not sure what I’m doing wrong.  I hope you’ll consider this question for your blog. We’re trying to determine the proper treatment of fees collected that are outside the normal monthly assessments.  We have a move-in fee and occasionally collect late fees for monthly assessments.

Our condo rules state:

“There is a $500.00 fee for moving in that is non-refundable to cover cleaning and future rekeying of the building. ”

Our condo declaration states:

“…the Board shall supply to all unit owners an itemized accounting of the common expenses for the preceding year actually incurred and paid, together with a tabulation of the amounts collected pursuant to the budget or assessments, and showing the net excess or deficit of income over expenditures plus reserves.  Any amount accumulated in excess of the amount required for actual expenses and reserves shall be credited … to the next monthly installments due…”

The IL Condo Act gives the Board the right to determine how to distribute excess as long as it’s not prescribed in the condo documents.

We’re expecting an excess this year due to a large number of unit turnovers.   Are we obligated to credit this to the owners?  Or, can we move any excess to reserves since it wasn’t “collected pursuant to the budget” (i.e. not part of the budget that all owners paid assessments for)? Thanks for any advice, opinions, or references!

Mister Condo replies:

J.G., I am sorry if the “recaptcha” tripped you up and I am glad that you emailed me instead. The “recaptcha” is needed due to deter the large amount of attempted SPAM that used to flood the website. Thank you for your vigilance. I am neither and attorney nor an expert in Illinois condo law so please accept my advice as friendly and not legal. For a legal opinion, you should contact a local attorney who specializes in community association law. At face value, I would say that you should return any monies that were over-collected before simply depositing them to the Reserve Fund. This would be in keeping with the spirit and intention of the law which is to protect homeowners from paying more than needed or agreed to in their vote to approve the budget at the Annual Meeting. At the very least, I would offer the unit owners a vote on how to use those funds at next year’s Annual Meeting. Chances are, it isn’t such a large amount that you would get much pushback to moving the funds to the Reserve Fund where it can be used to protect all unit owners. I salute your thinking and commend you for increasing your Reserve Fund but my advice is to follow the spirit and intention of the law and even your own governing documents so that no init owner can cry foul and demand their money back. All the best!

Two for One: Condo Parking Space Rental

A.Z. from Brooklyn, NY writes:

Dear Mister Condo,

I have a condo in Brooklyn. The condo has parking spot. I believe it is in my deed. Do I have the right to rent my parking spot? Thank you.

AND

E.P. from outside of Connecticut writes:

Dear Mister Condo,

I need your help. I live in 3-unit condo. The condo is self-managed. I have a parking space, which belongs to me but I do not have a car. My neighbor, who doesn’t live in our condo, is parking his car in my parking space with my permission. One of our neighbors, who lives in our condo said, that this is an unauthorized car and it should be removed. May I allow to parking any car on my parking lot if it is a part of my property? Thank you!

Mister Condo replies:

A.Z. and E.P., unless your association governing documents prevent it (many do, especially in high-density urban markets, so be sure you check your governing documents), you may have the right to rent your space. The reason many associations ban parking space rental is that it can create a potential problem for the association who owns the parking lots. Technically, your parking space rental enterprise sets up business on the common grounds, which is generally prohibited. What happens if the renter decides to sue you if their car is damaged in the space. Who can you rent to? Will it be another owner or someone who is looking for long-term vehicle storage? Can the renter sue the association if there is a problem? Rather than set themselves up for possible problems like these, may associations simply deny the rental of parking spaces. Check your documents. Ask the Board or Property Manager if you aren’t sure. Don’t be surprised if the answer is “no”. Good luck!

Condo Electronic Key Deactivated by Property Manager

O.P. from outside of Connecticut writes:

Dear Mister Condo,

The property manager disconnected my electronic key because I authorized a person HE DOESNT LIKE IT to enter to my property as desired.

Mister Condo replies:

O.P., I am sorry that your electronic key privileges were revoked. Without knowing the rules of how your electronic keys are allowed to be used, I am not certain if sharing it with anyone is allowed, let alone a person disliked by the Property Manager. I doubt the Property Manager can simply disable a key without having to report such activity to the Board, to whom the Property Manager must answer. If you feel your key was deactivated inappropriately, complain to the Board so they can take action. On the other hand, if you have violated the rules of the electronic key use by sharing the code with someone who you shouldn’t have shared it with, I would advise you not to do it again. I assume the reason there are electronic keys in the first place is to provide building security. They are convenient to be sure but must be protected if they are to be useful as a security measure. All the best!

Too Little Deeded Condo Parking

L.L. from outside of Connecticut writes:

Dear Mister Condo,

I understand the condo board controls and manages the parking lots. Our particular lot does not have overflow like other lots within our complex. So, we have assigned parking. Our lot is also very active because we are next to the pool. Without fail, people ignore the “no pool parking” sign and still use our only three extra unassigned spots. On top of that an overflow lot that is separate from our lot but the closest gets full easily during pool season. This all makes parking a huge inconvenience for residents. We live in a three-bedroom unit. The other units are one and two Bedroom. In other areas of our condo property, there are three-bedroom townhouses with two assigned spots. We have requested a second assigned spot in the past before noticing the town house spots. We were shut down. How should parking be assigned in an equitable way? Is it a fair argument that our three-bedroom condo is comparable to a three-bedroom townhouse in regards to parking? They are designed to house the same number of people unlike the two and one bedrooms we are being compared to and being given one spot. Condo is about 1375 square feet and townhouse is about 1600, if square footage matters in this. Any advice on how to respectfully request a second spot is appreciated.

Mister Condo replies:

L.L., I am sorry for your parking conundrum. It sounds to me as though the “No Pool Parking” needs better enforcement if unit owners sharing that parking lot are to have any true Visitor Parking. That being said, I can’t see any reason for the Board to grant your request for additional assigned parking. Neither square footage, number of bedrooms, or any other factor determine or influence assigned parking decisions. When you purchased your unit, you knew exactly what was included for assigned parking. That is really the end of the story. You can ask and you can cite square footage and bedroom similarities to other units that came with more assigned parking but my guess is you will not succeed in your quest. In fact, from what you have told me, the pressure to provide parking spaces is so great, the Board would really have a hard time justifying any decision that removed visitor parking. Put yourself in their shoes and I think you will see it just isn’t to the community’s advantage to give up a parking space. Good luck!

HOA Repairs Handled in Untimely Fashion

T.S. from outside of Connecticut writes:

Dear Mister Condo,

I made a request to repair flashing and downspout to our townhome exterior? How long should it take for the repair to be completed? Unit owners are now responsible for exterior insurance coverage.

Mister Condo replies:

T.S., responsiveness to unit owner requests for repairs is a function of several items at HOAs and condominium associations. If the association is professionally managed, there is usually a process of issuing a work order and then the order being fulfilled, either by the management company or the contractor hired to do the work. In self-managed associations, the process is similar although there may not be as robust a response if the work coordination is handled by volunteer Board members who may need time to bid out the work, hire a contractor, and actually get the work done. In both situations, there needs to be ample money available to pay for the work and there may be some bureaucracy that slows the process. For instance, if the repair cost exceeds a threshold for spending that the management company does not have, say $2500 or more, the repair may need to be approved by the Board at the next Board meeting. Depending on how frequently the Board meets, this could be a significant delay. The job may have to be sent for bid, another process that could delay the repair by months. Finally, if the association is cash-strapped and doesn’t have enough money to pay for the repair, the project could be delayed for quite some time. Your job doesn’t sound too complicated or expensive so my guess is you just need to keep on top of the folks who handle the repair. The squeaky wheel usually gets the grease but be polite when you inquire about the delay. My guess is that the repair should be handled within a few months of the request. If not, write to the Board and ask for an explanation of the delay. Keep on top of them until your repair is made. 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!

Fairness of Condo Common Fees Questioned

A.L. from Hartford County writes:

Dear Mister Condo,

Mr. Condo, how should HOA fees be calculated in a condo association in the State of Connecticut? Is it fair that everyone pay the same fee every month even if all the units are not the same size?

Mister Condo replies:

A.L., common fees are typically defined in the condo governing documents and usually are derived using the percentage of unit ownership formula which does take square footage into consideration. However, neither the state nor the governing documents require the use of this formula and there are many other perfectly legitimate methods of determining common fees. The only universal rule is that the governing documents dictate the formula and that formula can only be changed by very strict rules for doing so. It is extremely uncommon for the formula to be changed and typically requires a full consent vote of the unit owners and, many times, even the mortgage holders of the units. Some of the other factors that I have seen that determine common fee allotment include: water-view versus non-water-view, top floors versus middle and bottom floor units in a high-rise, and end units versus middle units. Some associations like yours use a simple “everyone pays the same” common fee, which may not be fair, but is certainly not illegal and is well known before anyone purchases into the association. There isn’t too much you can do about it, A.L., as changing the common fee schedule is a major legislative ordeal. You can talk to your Board but I doubt you will see things change. Good luck!