Category Archives: Volunteer

Conflicts of Interest Arise as Condo Board Member is Hired to Serve as Property Manager

B.B. from Fairfield County writes:

Dear Mister Condo,

Our condo manager is also a resident in our association. Is he permitted to serve on the condo board? Our condo board allows him to sit at their table and speak freely at the board meetings while making other residents wait until the end to speak. Aside from the obvious conflicts of interests, are there any laws/rules about this sort of thing?

Mister Condo replies:

B.B., I am not aware of any laws or rules that would prohibit a resident of your association from serving as the condo manager. Obviously, any unit owner can serve on the Board if elected. Unless your governing documents forbid it, there is no reason a unit owner could not be elected to the Board and also serve as the condo manager. Your point about the conflicts of interest is valid and any Board that decides to hire a unit owner, and especially a Board member, to serve as the Property Manager has to be extremely aware of the possible conflict of interest. I have written about this extensively in this website. You can read the previously addressed issues here: http://askmistercondo.com/?s=conflict+of+interest. In a world where it is not necessary to hire unit owners to work for the association, I contend that there are always better ways to find and hire a property manager that protects the association from these possible conflicts. That being said, I am now aware of any laws or rules that are being broken. All the best!

How Too Many Non-Resident Unit Owners in a Condo Association Changes Everything

E.C. from Litchfield County writes:

Dear Mister Condo,

The same people who established the condominium in which I live still control it. Though units were first sold in 1990, one of the developers maintains 15 of the 130 units. This block of condo units represents 15 votes, which when added to condo units controlled by their friends on the board, leads to a lot of apparent financial shenanigans and bullying of owners who simply want a little transparency. About 70% of the owners currently rent out their units, mainly because they hate the way this place is run. Those of us who are left living here cannot seem to oust the trouble-making board, nor win the support of the non-resident owners who are generally apathetic, now that they’re gone and have a paying tenant to cover their costs. Many resident owners, however, are either angry, stressed, depressed, chronically ill, demoralized, etc. as a direct result of feeling powerless to do anything about their maltreatment by the current board, which has both directly and indirectly ruled the roost since the beginning. This is one miserable place. We have turned to lawyers and they say get a petition together to call a special meeting and vote the board out. This is not possible, given the apathy of so many non-resident owners — many of whom also fear retaliation by certain board members and their property management company, which has been with them from the very start. The resident owners who really care about reform — and who have been suffering physical and emotional harm — have already been burned by one attorney who proved incompetent, so we are wondering if a class action lawsuit might be a viable avenue for us. We would let the attorney have all the winnings. We just want to see some justice done after all these years.

Mister Condo replies:

E.C., I am sorry for your situation. Associations that are largely under developer control even after the developer transition period is over can be tricky. Associations with large percentages of rental units come with their own problems. You have a double whammy at your association. Your best bet is increasing the numbers of resident owners who are willing to volunteer and serve on the Board if elected. As long as the resident owners are the minority, nothing will change, in my opinion. At their core, condo associations are democracies. The people with the most votes are the ones who govern the association. As long as those people are not resident owners, I don’t see much motivation for them to change how they govern. You indicate that this behavior has been going on for years. If it were me, I would have sold my unit by now. Unless you see the pendulum swinging towards more resident owners, I would encourage you and anyone else who is unhappy there to consider moving out. You can contact an attorney to see if you have a case but I haven’t heard of anything you’ve mentioned as being a valid reason for a lawsuit. Please keep in mind that I am not an attorney so my advice is strictly friendly. For a legal opinion, you will need to seek out the services of an attorney who could better guide you legally. Good luck!

This Condo Has it All! Renters, Roaches, Broken Trash Chutes…

S.M. from Miami writes:

Dear Mister Condo,

I live in a condo in Miami and we have the most incompetent Board. The building is self-managed and we currently are under a lot of problems, like roach infestation, water leaks, building trash chute compartment broken and trash coming out of the compartment. The building runs more like an AirBnB. The rental ratio is at 61% and we have no support since there’s so many investors. Please advise, I have approached the Florida Department but they don’t intervene in situations like this.

Mister Condo replies:

S.M., it sounds like your association has really gotten away from what unit owners like you were expecting. Whether the Board is incompetent or not, without rental caps (the percentage of units allowed to be rented at any given time), I am not surprised to hear of so many rental units being used in AirBnB fashion. First things first. The Association is governed by volunteer leaders elected by the membership. If these leaders aren’t making sure that the problems are being addressed (water leaks, roaches, broken trash chutes) then it is time to elect new leaders. You may be able to bring suit against the association for not maintaining itself but that can be costly and still not yield any real results. If it were me, I would consider running for the Board myself on a platform of restoring the association to good working order. If that seems unreasonable, I would consider selling. It seems there is no shortage of investors looking to purchase into this association. I would look carefully at the next association I purchased into. Hopefully, the percentage of investment units would be far lower and the Board would do a better job of maintaining the common elements. Good luck!

Should Condo Owner Get Paid for Condo Gardening?

G.W. from outside of Connecticut writes:

Dear Mister Condo,

Can you volunteer to do gardening at a condo without pay?

Mister Condo replies:

G.W., the very nature of volunteering indicates that there will be no pay. If pay is offered, it is employment, not volunteerism. Typically speaking, it is bad policy to hire condo residents to work for the association. Why? Because it leads to question of impropriety, favoritism, unfairness, and so on. Many associations have Gardening Committees where the committee members routinely donate their time to maintain the association’s greenery and gardens. If the work is extensive enough that it requires paid workers to manage, it is time to have the Board hire a caretaker. That way the work gets done by a licensed and insured professional, guaranteeing no claims of impropriety and offering the association the peace of mind in knowing they are insured in the event of injury. All the best!

Uncollected and Unaccounted Condo Common Fees!

T.N. from outside of Connecticut writes:

Dear Mister Condo,

I’ve lived in a 3-unit condo for almost 2 years. For the first year I tried to get in touch with its only Trustee—I wanted to become involved in the HOA and help plan an annual meeting—but he continually put me off (he lived elsewhere and rented his unit). A week or two before a new owner closed on his unit, this guy asked me to take up the mantle as Trustee (this was also the first I was finding about him selling!). He cancelled 2 meetings with me, and then on the day of his closing, texted me that he was in the city and could I take a long lunch to settle business. At this lunch meeting (which took 2hrs!), we got my status as Trustee notarized, my name on the bank accounts, and I got a giant bag full of paper records.

To say the least, I was completely unprepared for being the Trustee. After spending 8 weeks going through these incomplete and disorganized records, I came to find that for years the common bills and landscaping were paid late or not at all (apparently 2 companies quit over non-payment). I intervened with the electric company terminating our service and the city issuing a lien. After doing what I could with the records, I hired a forensic accountant to do some triage, and she was appalled at what she found. For years the association has increasingly been coming in hundreds of $$ under budget, and the reserves have been being drained and not replenished to compensate (basically as an association we have $600 to our name).

It’s also clear that he didn’t keep track of HOA dues—there is no ledger to speak of and some of the “deposit notes” are written on napkins and sundry receipts—and, from what I can tell, over the past 7 years we’re missing nearly $4K in HOA dues mostly from the unit owned by an elderly couple.

The accountant and I had a long discussion and we decided that since we have no records proving who owes what and since it’s been years, we should forgive the HOA dues, but put them on a payment plan for the 10K they owe in back assessments. The elderly couple had been claiming we were not a legit association and thus not under the same governing rules as one, so I dug up the declaration of trust and the master deed I got during my purchase for them to see (5 months in and we finally all agreed on a payment plan).

When I closed I had my lawyer look over the docs and synopsize them for me, but I didn’t really read too much about the duties of a Trustee at the time. Now I’m seeing that according to the by-laws we *have* to have 3 Trustees, each one a rep for each unit. I want to eat my own face. The new guy is busy with a PhD and has no interest in taking on this responsibility, and the elderly couple has no idea how an association is run or how HOA fees or assessments work (they called me each time they received a monthly HOA fee invoice, asking me what this bill was; they also don’t know why I can’t “get a guy” to repaint their unit, for example).

Right now, I feel like the only interested, sane, informed person trying to make sure the association doesn’t collapse (I’ve contacted several property managers who have haughtily told me they don’t manage associations this small). How terrible would it be if I remained as the only Trustee for another year, just until I get us out of this financial mess and put processes in place to ensure it doesn’t happen again?

Mister Condo replies:

T.N., I would love to tell you that yours is the first horror story I have heard from very small (2 or 3 unit) associations but, unfortunately, the situation you describe is far too common, although not always as financially shocking to read about. The phrase “Buyer Beware” comes to mind when I read your list of wrongdoings by the previous Trustee and unit owners. I admire your realistic approach at fixing the problem but, honestly, you are the only person who can correct what is going on and, perhaps, right this sinking ship. Or you can abandon the ship by selling your unit to an unaware individual. There seems to be an endless demand for these units in smaller associations although, personally, I would never own one unless the other unit owners were family. As you have seen, most property managers are loath to manage these small associations. How can they make any money doing so? Even a modestly sized association would yield several thousand dollars per year for the efforts. Your association would have numerous management issues and they would be lucky to make a few hundred dollars a year for their time. Not going to happen. As far as you remaining the only trustee, technically, you are operating outside of the scope of the governing documents. However, who is going to challenge you? The PhD candidate with no time or the elderly couple with no understanding of what they own? I think you are free to do as you see fit. If it were me, I’d sell and consider this a lesson in something to never do again. Good luck!

Condo Board Member Education Expense

C.L. from Hartford County writes:

Dear Mister Condo,

Can the association pay for a class or course upfront for a board member instead of the board member paying for the course first and then getting reimbursed?

Mister Condo replies:

C.L., I don’t see how it matters. Either way, the association is paying for the course. Unless your documents forbid the association from paying for such items upfront (most unusual), the Board Member can have the association either pay up front or reimburse them for the class or course. I am glad they are getting training! All the best!

Must Board Members Attend Condo Special Meeting Called by Unit Owners?

F.C. from New Haven, County writes:

Dear Mister Condo,

When members hold a special meeting, can they make decisions that override Board, cause Board to do things they do not believe are in best interests of association? What happens if a special meeting is called and no Board members attend?

Mister Condo replies:

F.C., without seeing your community association governance documents first-hand, I can only offer you an overview of what could be going on here. The situation you describe is uncommon. Most associations are governed by their elected Board of Directors. If the Board isn’t doing their job to the satisfaction of unit owners, they are typically voted out of office and replaced with more popular candidates. It sounds to me like you have a group of unit owners who are trying to completely circumvent the Board by holding their own meetings. While there are protocols that allow them to do so, they need to follow the rules for calling a special meeting of unit owners. Typically, those meetings are for very specific purposes, including recalling Board members and electing new Board members to serve in their place. There is no requirement for sitting Board members to attend a special meeting called by unit owners but there may be no grounds for a group of unit owners to call a special meeting and take actions that are beyond the scope of the special meeting. My advice is to remove and replace the seated Board members, either by special meeting as outlined in the association’s governance documents or at the next election. You might also want to consult with an attorney who specializes in community association law to make sure the incoming Board does not make any legal blunders that could lead to lawsuits. Unit owners may want new leadership but there are rules they need to follow. The condo’s governance documents and your local state law will instruct the right way to do so. Good luck!

Former Condo Board President Feeling Threatened by New President

W.R. from New Haven County writes:

Dear Mister Condo,

I been having serious issues with the new president and other board members since I stepped down a year ago. This position went to the new president’s head to the point where she put all my neighbor’s business out in the community and when my neighbor addressed her via email she then called the management company to tell them she felt threatened by her. Then we were going back and forth via email about some of the bylaws & rules and as well as rumors that she was talking trash about me, she turned around and falsely accused me of threatening her and called the cops. The officers could not find any evidence of me doing that. Life for me has never been the same since. She doesn’t like to be told what to do and put my personal business concerning my email address in an email that went out to the entire community instead of addressing me only. How do I have her removed or handle this? Can I file a harassment charge against her and the board?

Mister Condo replies:

W.R., I am sorry for your troubles. As you know, I am not an attorney nor do I offer any legal advice in this column. If you are serious about filing charges against the President or the association, I think you should speak with an attorney to see if you have a case. As far as having her or any other Board member removed from office, you need only to vote them out at the next opportunity. Board members are democratically elected by all unit owners. If they aren’t serving the needs of the community, there is no need to return them to office. Of course, that means you will need to have other candidates willing and able to serve. You say that you just stepped down. You know what the commitment to serve is like. Perhaps you should run again or encourage a fellow unit owner to run. If you don’t replace these folks, you will very likely get more of the same. If they violate the rules of governance for your association, you can take action. Again, this may require the services of an attorney. I hope it doesn’t come to that. All the best!

Who Wins Tied Election Between a Condo Owner and a Board Member?

S.F. from New Jersey writes:

Dear Mister Condo,

According to the NJ Condo act, who wins an election between a condo owner and a Board member if there is a tie?

Mister Condo replies:

S.F., I am not sure that the New Jersey Condo Act addresses such an issue. Typically, the association’s governance documents spell out how elections are handled. They may or may not address what happens when there is a tie between eligible candidates. Absent that, it is likely a matter to be decided by the association or its Board as the elected representatives of the association. I am curious as to the distinction you are trying to make between “a condo owner and a Board member”. If the association allows for Board members that are not condo owners to serve on the Board, there may be no distinction. Typically, associations are governed by their own unit owners as they have a vested interest in the success of the property. Again, look to your governing documents to see what they say. If they are silent, as I suspect they are, it may be time to amend them to address this unusual situation. Good luck!

Condo President Refuses to Relinquish Association Checkbook

T.C. from New Haven County writes:

Dear Mister Condo,

We recently changed management companies because they violated CT laws. Our President dragged his foot for 4 months before receiving a letter from the state ordering us to change companies. He was given the check book until we found a company. We found a company and he refuses to turn over the check book. Is this legal?

Mister Condo replies:

T.C., I am not an attorney and offer no legal opinions here. If you are asking me what I think of the President holding on to the checkbook and refusing to turn it over to the management company, I would say that is not a very friendly gesture and not stepping off on the right foot with the new management company. Is it criminal? Not in my book but it isn’t very sportsmanlike either. The great news is that your Board President can be voted out of office at the next Annual Meeting. Why don’t you and a group of like-minded unit owners volunteer to serve on the Board? That way, after you are elected, you can determine who will hold the various offices of the Board. If, on the other hand, the Board President has held the checkbook because there is evidence of missing money or such in there, and he has done something criminal, it is time to call the police. Stealing from the association is a crime. Work with your new management company to see what, if any, wrongdoing has occurred. If there is no harm, there is no foul. Either way, it sounds like it is time for a Board President who will act in the best interest of the association. Good luck!