Category Archives: Volunteer

Condo Owner Seeks Association Employee Salary Info

D.U. from outside of Connecticut writes:

Dear Mister Condo,

Can a condo owner demand or file freedom of information form to see how much the maintenance people are paid, that work for the management company? Their salaries are set by the condo association in their budget. I know they are paid well and receiving hefty bonus payments twice a year.

Mister Condo replies:

D.U., This is a question I get quite often. You can see some of my previous replies here: http://askmistercondo.com/?s=salaries I can understand your curiosity about how much employees of the association are making, especially since their salaries are paid by you and your fellow unit owner through your common fee contributions. However, I would liken it to the same way your tax dollars pay for municipal employees. Just as municipal employees are employed by the city, association employees are employed by the association and under the purview of the Board. You do have access to the budget, which details certain expenses of the association, including salaries and benefits. Your democratically elected Board of Directors is keeping an eye on the details for you and they do know what the employees are making, including bonuses. They most likely have their reasons for doing so (competitive pay, rewards for work done, etc). You can ask for these records but unless your documents specifically give you the power to review individual salaries, I doubt you will get it. May I ask what you will do with that information? As a unit owner, you have no power to pay employees less or alter their bonuses. If you have an issue with how the Board is handling the salaries and bonuses, you should take it up with them. Ask them how they decide when to offer bonuses. If you are satisfied with their answers, you’re all set. If you don’t like their answers, you are free to vote for other candidates for the Board or run for the Board yourself. I hope that helps.

Condo Board Vacancy Filled; Volunteer Overlooked

C.W. from Florida writes:

Dear Mister Condo,

If a condo Board has a 5-member Board and one resigns, and a new homeowner elects to offer his services for the Board to fill that seat and the remaining 4 Board Members decline to allow that member to become a Board member but would select another homeowner who does not want to be a Board Member and it is personal and they do not allow the one volunteering his services simply because they do not like him, is this collusion, unethical?

Mister Condo replies:

C.W., I would say it is unfortunate but not unethical. Your governing documents spell out how the Board can fill a vacancy. Typically, it is completely up to the Board to make the appointment. Just because there is a willing volunteer from the association looking to be appointed, the Board is not obligated to do so. In a small association like yours, I would simply suggest that the eager volunteer get on the ballot for the next election. At that time, it is up to the unit owners, not just the Board. All the best!

Florida Condo President Facing Multiple Challenges

R.H. from Florida writes:

Dear Mister Condo,

My 24-unit condo by laws say that an audit must be conducted once a year. Florida statutes say every 3 years. In addition, the property manager pushed through a specific contractor and that was 3 times the price but the other directors back her up. I am the president but I can’t get any info from her because she is aggressive and doesn’t let me say a word without attacking me verbally. I am now taping the meetings. A woman is unofficially taking notes but doesn’t sign them. They are not a good synopsis. What do I do?

Mister Condo replies:

R.H., thank you for your service to your community. I am sorry it isn’t a better experience for you. Let’s try and break down a few of the symptoms and see if we can’t get you on the right path. The audit requirement in your governing documents likely override the state requirement as they call for more frequent auditing. If your bylaws called for audits every 5 years, then the state law would supersede your documents and you would need to audit every three years. The contractor performing the audit is hired by the Board. As long as the rest of the Board is OK with this auditor then there may not be too much you can do about it. Ideally, hiring an auditor is no different than any other vendor. Bids should be collected and a contractor selected. If your Board doesn’t function that way, there may not be too much you can do about this particular vendor. Unofficial notes are not the proper method of taking Minutes of meetings. Are there formal Minutes of your meetings? If not, the association is opening itself up to all kinds of troubles. Minutes are the official and legal records of your meetings. The Board Secretary has the responsibility of keeping these vital records. As President, you are functioning as the executive of the association and it is important that you know what needs to be done. If any vital functions are not being handled correctly, you may need to offer assistance or seek new volunteer leaders from within your community to get the job done. Typically, property managers work closely with their Boards to manage the association. The adversarial relationship you have described to me makes me wonder why the association would renew their agreement with the manager. I would encourage you to take a good look at the management company agreement and get competitive bids for when the renewal comes up. There is no reason for the association to continue using a manager that doesn’t work well with the Board. However, if the rest of the Board is satisfied you may find them reluctant to change management companies. I wish you all the best.

Condo Executive Board Deferring Common Fees as Payment for Service!

B.D. from outside of Connecticut writes:

Dear Mister Condo,

 

Our Executive Board of 5 members has about 80% of their monthly HOA fees deferred as compensation for their time spent working on Association issues. Their contention is that 1099’s need not be issued because the Association is a nonprofit entity as defined by IRS regulations. I believe that is incorrect and that they each should have received a 1099, declared the income, and paid whatever taxes were due to the State and Federal Government. I researched the question and found some information from the National Council of Nonprofits that suggests 1099s should have been issued, but the particular circumstance they cite has to do with charitable nonprofits. I don’t think that makes a difference, but would like clarification before I approach them with the information. Thank you for your time and expertise.

 

Mister Condo replies:

B.D., since I am neither an attorney nor an expert on IRS regulations regarding non-profit organizations, I cannot offer you a legal opinion on this issue. However, I will say it is tremendously unusual for any individual to receive tax-free income from any source and would not likely stand up to the scrutiny of an audit by the IRS. Further, do your governing documents allow for compensation to Board Members? Most condominium association by-laws forbid compensation of any kind to Board Members as it is a voluntary service, meaning the volunteers seek election and then volunteer their time on the Board. If your Board has taken it upon itself to claim compensation for their volunteer efforts, the association may have a legal case to take action against them and have all monies paid to the Board Members returned to the association. Taking funds improperly from the association is theft and punishable with fines and/or jail. It is most definitely time to speak to a qualified attorney from your state to discuss how your Board has decided to conduct business. If laws have been broken, they need to be thrown off the Board and charged accordingly. At the very least, they should return any money they have received in compensation for their voluntary service. Good luck!

Condo Developer Transition Turmoil

S.C. from Litchfield County writes:

Dear Mister Condo,

Our Board does nothing. No communication, they don’t respond to our questions very well, they are not transparent when they communicate among each other (which is not too often) and my biggest beef, they refuse to fix our crumbling infrastructure (roads, outside siding, fascia boards, etc.). It’s one delay, one excuse after another and this has been going on for almost 3 years. Money is tight, they do not properly fund our community yet they are raising the dues and still operating with a negative balance. No one on the board lives here full-time and the president and one other member work for the developer. Clearly, their priorities are not in sync with the homeowners. Most residents will not say a word for fear of being the bad one or simply a case of extreme apathy. I want to round up the troops and have all the board members (well, 3 out of 4) removed. Having been the president of the association and property manager, I have plenty of experience.  I do not know what kind of reaction I will get but I do know there will be some support. Any response from you would be great and I look forward to it. Thank you.

Mister Condo replies:

S.C., I am sorry that your condo Board is not performing to your expectations. However, from what you have told me, the association is still under developer control so the Board truly has limited power during this time period. Once control is handed over to the association, things will change because no one will be beholden to the developer. The association governs itself and many of the items you discuss can be addressed through democratic elections of interested and able volunteers. Now, if the developer has broken covenants with the owners and you think a lawsuit is in order, you might want to discuss your situation with an attorney. However, new owners like you describe may not go along with spending money to sue the developer so you may just need to wait until the developer transition period is complete. If I have misread your letter and the developer transition is already complete, you simply need to elect new leaders for your community. You will need volunteers ready, able, and willing to serve. They will need training and support. You should also consider hiring a community association attorney verse in developer transition, and accountant, and a property manager if needed. The developer’s team was there to support the developer, not the community association. Getting the right folks in place is vitally important to your association’s success. Your local CAI Chapter can help you find the resources you need. Visit http://caict.org to learn more. Good luck!

Complacent Condo Owners Liable for Board’s Poor Performance

F.M. from outside of Connecticut writes:

Dear Mister Condo,

I joined the board a year ago. The other board members are there for decades, not by vote but because we never reached the minimum quorum to carry out an election. After investigation, I found several flubs in the past decisions that led us to severe loss to our condominium. One of them, amounts to almost $300,000 in losses with the cost of irrigation water. The association has been paying the local utility company by the highest water rate when it should be 70% lower if they had applied with the utility company for a lower rate based on the size of our property. The lower rate was available since 2008 and it was very easy to learn about. Another issue is the roofs of our buildings. The wooden shakes were replaced in 2004 after damages caused by a hurricane. However, as I learned, the wooden shakes replacement was not done by Standard Building Code. The association did not hire an architect or engineer to guide them in the reconstruction process. As a consequence, the roofs were replaced by local contractors and are now in very bad shape, will not last much longer and the overall aspect is detrimental to our property values. Another issue is the most recent, and involves the resurfacing of our tennis court that had been in bad shape and useless for years. The association knew that the ground soil was sinking and that the soil needed to be addressed beforehand. Instead, they approved a cheap painting for $7,000. The tennis court is visibly off level. Considering the way decisions are made by the board, I am afraid that our condominium will suffer further downgrades if action is not taken to remove and replace the board members. Because of the last recession, more than 50% of our units are now rental units. It will not be an easy task to obtain signatures of 75% of all property owners to remove the board members. My question is whether a legal action to compel them to leave is a valid option.

Mister Condo replies:

F.M., I am sorry for the situation you find yourself in. I am not an attorney so I cannot offer you legal advice as to whether a legal action to compel the Board to vacate their office is a valid option. However, I will tell you that, in my opinion, it is not a valid option for the following reasons. Your association is a privately held, not for profit, corporation. The corporation was founded to govern the association and unless you can cite an explicitly illegal activity, the Board has done nothing legally incorrect. In fact, for decades, the unit owners of your association have returned them to office at Annual Meetings, where democratic elections have been held. Lack of quorum only shows that unit owners didn’t care enough to participate in the governance of their association. Shame on them for doing so as all unit owners have paid the price over and over again for their lack of attendance. If it were me, I would sell my unit and get out before any further financial damage occurred. That is an option available to you. If you wish to remain and try to effect change, you will need to seek other like-minded unit owners to run for election to the Board and get enough votes to win. If you think you have the votes/signatures to force a recall election prior to the Annual Meeting, you can certainly follow the steps on your governing documents to do so. However, with so many absentee owners, I agree with you that would be unlikely. Annual Meetings are typically your best bet for a changing of the guard. You will need to campaign for new Board Members and be sure they are ready to serve. You should reach out to resident unit owners ahead of time and write to absentee unit owners to encourage them to support these new candidates with a proxy vote. Change to association governance comes from within the association. Simply doing an inadequate job of managing the association resources isn’t enough to have Board members removed. It takes a fresh batch of candidates to unseat incumbent Board Members. And guess what? If your fellow unit owners don’t support that change, it isn’t going to happen. Good Luck!

If the Condo Keeps Doing What It Has Always Done…

K.G. from Litchfield County writes:

Dear Mister Condo,

We are fairly new to our three-unit condo community. Two of the units, the ones where the Secretary and the Treasurer reside, are reasonable and interested in a positive and well-governed board with productive meetings. The other unit, in which the long time President resides, there is dysfunction and a constant need to have its residents (not board members) take over the meetings and highjack the agenda so that nothing is ever accomplished. It appears we need help. I have two questions that I am hoping you can assist me with. The first, is where can one enlist a mediator or someone to monitor these meetings more effectively? You have suggested to us before that the President should be voted out. It won’t happen as no one else is willing to take over. We could hire an attorney but it seems quite costly. Do mediators exist in Connecticut that could only act as moderators and run the meetings and keep them on task? My second question is that I have scanned the webinars on the CAI website for the Connecticut chapter and there are several that look like they might help. Can you suggest one that would be beneficial to a new board member who does not have any legal experience or real experience on a board? I saw several for resolving conflict and behaviors. Also, would my husband and I benefit from becoming members? We are a small condo Association with only five people residing here. We would appreciate any guidance as we would like to move forward in a more positive manner.

Mister Condo replies:

K.G., thank you for writing back. Many attorneys that specialize in community association law can also serve as mediators. However, mediation is only an option when there are two parties looking to reach a settlement. From what you have described to me here, that really isn’t the case. Let me quote your question here: “You have suggested to us before that the President should be voted out. It won’t happen as no one else is willing to take over.” Really? No one else is willing to volunteer their time to fix this problem? Then, guess what? The problem is likely to persist. If no one is willing to volunteer their time to serve then the association is getting what it deserves. I know that sounds harsh but let’s face reality here. People are willing to invest a hundred thousand dollars and much more in their unit but then aren’t willing to step up and serve? That is short-sighted and a formula for many long-term problems. My original response is here: http://askmistercondo.com/grumpy-old-condo-president-needs-to-go/

The local chapter of the CAI offers several excellent and local training programs. Among the very best is a program called “Condo, Inc. 1”. The next session is right around the corner on September 16th. You can learn more and/or register here – http://www.caict.org/events/EventDetails.aspx?id=862691&group I cannot recommend this program strongly enough for an association like yours. I think you (and other interested unit owners and Board Members) need to hear from local experts on how best to run your association. This program fits the bill perfectly. I hope you attend. All the best!

Can Non-Resident Unit Owner Serve on Condo Board?

L.M. from Pennsylvania writes:

Dear Mister Condo,

Our development has been condos since 1985 and this issue has never arisen before. Can a non-resident owner be on the Executive Board, and now that the issue has arisen, can the board discuss and adopt and vote on a resolution to clarify that a non-resident (investor; never resided in development) cannot be a board member as such positions are open to residents only?

Mister Condo replies:

L.M., I am not surprised to learn that this question has not come up before. Without reviewing your condo documents, I wouldn’t have any way of giving you a definitive answer. I will say that the first place you should look is your Declaration and By-laws. Typically, there is a section on governance and who is and isn’t eligible to hold a director or Board Member position. If your documents are silent on the subject, you would then turn to your state laws for common interest communities and/or corporations as those apply to your condominium. It is not uncommon to have an ownership requirement for a director to serve. A requirement to reside in the association is far less common and truly unfair as there are many times when an owner is not a resident. All owners, regardless of whether they reside in the condo or not, have a vested interest in the well-being of the community. If the Board passed a rule requiring residency that violated any non-resident unit owner’s rights, don’t be surprised if the association gets sued. I would advise speaking with the association’s attorney before taking any such action. Good luck!

Former Condo Board Member Maligned by Fellow Board Member

T.S. from outside of Connecticut writes:

Dear Mister Condo,

I was on a condominium board for several years, sometimes having to do two positions. At one point, I was the President and Treasurer. My question is that I wasn’t very good at keeping receipts. I would occasionally give them to the manager. but when a check was written I put a memo where that check went and to whom.
Now I have an ex-board member that thinks I took money. How can I defend myself if I do not have the receipts to prove all of the transactions? He said he has the bank statement. What can that prove?

Mister Condo replies:

T.S., thank you for your service to your community. Seems that no good deed goes unpunished here. If you are being accused of a crime, you should speak with an attorney in order to defend yourself. If you are being slandered by an ex-board member, you might want to speak to an attorney about what rights you have to stop this slandering. Bank statements are nothing more than a record of checks, deposits, and transfers. If you didn’t write any checks to yourself or transfer any money into your private account, you likely have nothing to worry about. Someone “thinking” you took money is far different from someone claiming you took money and filing a criminal report against you. If you have nothing to hide, you can confront this person and ask them to either prove their allegations or stop slandering you or you will sue them. That will usually quiet a contentious accuser who cannot prove his/her case. Remember that in this country you are innocent until proven guilty. From what you have shared with me, you did nothing wrong and there is no proof that you did. That really is the end of the story. Good luck!

Mishandled Condo Elevator Maintenance Contracts Causes Special Assessment

M.C. from Florida writes:

Dear Mister Condo,

I live in Florida, so I will take your advice in good faith, but: we are being charged a special assessment of almost $2000 to repair the elevators of the condo complex. Normally I would have no complaint, but the reason the Special Assessment has become necessary is because of poor management of the repair contracts of the original repair work that was in budget.

Basically, the elevators were to be fixed and brought up to Florida building code nearly a year ago. However, the Board did not sign any labor contract and paid for the work up front. At some point, the work was abandoned and the elevators have stayed in disrepair and out of inspection compliance (which they were fined for) until a few weeks ago. The Special Assessment of almost $2000 per unit owner has arisen as a result of not signing those original labor contracts and the abandoned work being paid for with maintenance budget funds.

Bottom line, I want the elevators fixed, so I will pay the assessment. But, do we have any legal recourse against the board to recover those funds as a “breach of fiduciary responsibility”?

Mister Condo replies:

M.C., in my non-legal opinion, you do not have recourse against the Board. From what you have described there was no premeditated malfeasance or crime, just some poor business decisions that caused an increase in the overall expense of the association-owned asset. It may have managed less than ideally but I don’t see any breach of duty here. Hopefully, there has been a lesson learned and there will be better stewardship of the elevator maintenance program moving forward. Of course, Board Members are democratically elected volunteers from within your association and they do need to run for reelection at some point. If you feel there are better candidates for the position, you and your fellow unit owners will have opportunity to replace them with different volunteers at some point. All the best!