Tag Archives: Attorney

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!

Hoarder Refusing Unit Access Adds to Hurricane Irma Damage

E.E. from Florida writes:

Dear Mister Condo,

We just suffered flooding due to Hurricane Irma in 3 of our 6 townhome buildings. The building where we are having an issue has 6 units adjoined by a 2-hour firewall. We have 1 unit owner is a hoarder – very bad, almost no walkpath. The unit flooded and we need her to move everything on the 1st floor for the repairs that the Association’s insurance is willing to do so that she doesn’t have a black mold issue. The drywall, the cabinets and flooring all have to be removed. She is saying she has no plan to move anything out or make repairs. The concern is not only for her but the adjoining unit owners. Can we make her comply for repairs?

Mister Condo replies:

E.E., I am sorry that your community suffered Irma’s wrath. Like so many other condominiums in your region, damage was significant and clean-up efforts will be ongoing for quite some time. You now face a serious challenge with a hoarder blocking access to her unit for clean-up. While most folks would welcome the cavalry arrival to get things back to normal, the hoarder’s brain works in a different manner. All is not lost, although I think you will find this a difficult battle. It’s all about where the line is drawn between unit owner’s rights and the rights of the HOA. My first call would be to the association attorney who can help guide you through what may become a lengthy legal process of actually having access granted. Of course, your first step is to work with the unit owner and/or any known family members who may be able to step in and let the restoration company get in and do its work. However, if the unit owner refuses to voluntarily provide access (typical hoarder behavior from my experience), the association needs to take more aggressive action. While the unit owner’s health is most certainly at stake, so are the neighboring units and even the entire building. Mold isn’t just unsightly; it can be deadly. This is an unfortunate complication to an already bad situation but, trust me, you will get through this. I wish you all the best in your recovery efforts.

Delinquency Usually Leads to Collection Action by the Condo Association

R.A. from Fairfield County writes:

Dear Mister Condo,

I was previously 3 months delinquent on my common charges with no assessments and the condo association attorneys told me that I had to pay a total of $2000 dollars in order not to go into foreclosure. It seems to me that I am being extorted for money and I am on disability. The reason the attorney said I had to pay the $2000 dollars was for title search, legal letters and other fees that I do not understand. My delinquent fees are only $690 and they are trying to tact $2000 on top of that fee. My HOA dues are $230 a month. I was also told by the management Company that I could not talk to the Board because the matter was out of their hands and I had to deal with them or their attorneys. Being an owner in a condo I know I have rights other than to do nothing. I have been paying my common charges with an extra $100 dollars to put toward the delinquent balance. I know I’m being taken advantage of, can you please help me? Thank you.

Mister Condo replies:

R.A., you most certainly do have rights as a condo owner but not paying your common fees is not one of them. I am sorry you find yourself in this position but what choice does the association have? For the three months that you were delinquent, all of the bills of the association were still paid. Your insurance, your grounds keeping, your maintenance, your unit management, all of this and more were still paid. By not paying your fees on time, you triggered a legal action against yourself. The association turned the matter over to the collections folks (the attorney) and they did what they do which is take steps to insure the association gets paid. In this case, that meant lots of legal fees. While I appreciate that you may face special challenges as a disabled person, I am sure you know there are certain expenses of owning a condo that are recurring monthly – mortgage, common fees, utilities. If you don’t pay your mortgage or utilities, what happens? The bank can take your home or the utilities will turn off your supply. It is the same with common fees. I am sure you will always pay them on time in the future so this may just be an expensive lesson in why. You should speak with the collection folks about your $100 per month repayment schedule to make sure it is acceptable. Ideally, you would just pay off what you owe and be done with it. If you feel your rights as a homeowner were violated, you should most definitely speak with an attorney. I am not a lawyer so I cannot offer you any legal advice on the matter. From what you have told me, you were treated the same as any other delinquent homeowner would be treated. Good luck!

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!

Questionable Dialogue Deleted from Condo Association Board Meeting Recording

J.J. from Florida writes:

Dear Mister Condo,

I serve on the Board of Directors as Vice President of a Florida condominium. Recently, the Secretary of the Board relayed via email that she had deliberately removed from tape dialogue between the President and Property Manager during a board meeting. Is this an illegal or actionable matter?

Mister Condo replies:

J.J., since I am not an attorney, I cannot offer you legal advice in this column. You should speak with a qualified community association attorney in your state (there are many!) for a legal answer. Let me offer some friendly advice instead. Do you know what kind of statements were deleted? For instance, “How about that Marlins game last night?” and the associated banter that accompanies such a statement is hardly scandalous or of interest to the association. Even off the cuff remarks about anything other than association business are hardly of interest to unit owners or other Board Members. If the dialogue was specifically about association business and you suspect foul play is going on, you should certainly speak to an attorney and describe what you know to have happened. Presumably, you were at the Board Meeting and know what was said. Minutes of Board meetings are the official record of what happened. Motions, votes, and so on. If it isn’t in the Minutes, it never happened. If you suspect foul play, take action. If not, let it go, and keep an eye on the situation. If this is an ongoing problem, there may be more to it than meets the eye. All the best!

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!

HOA Bills Unit Owner for Repair Team’s Lack of Unit Access

J.C. from outside of Connecticut writes:

Dear Mister Condo,

The unit above me leaked into my garage. The owner happens to be on the Board of Directors. He is having the HOA pay for it. Now, I got a bill from HOA that my tenant was not home for them to do the work.

Mister Condo replies:

J.C., well this is certainly a series of unfortunate events. I am sorry for your troubles. Typically, the association carries insurance for damage caused by your fellow unit owners. The fact that this unit owner serves on the Board of Directors is irrelevant unless you are alleging wrongdoing on the part of the Director. From what you have told me, I do not see any wrongdoing here. The Director is also a unit owner and protected by the same association insurance that you are. The HOA dispatched a repair operation to your unit, which is what they are supposed to do. Was their communication between the HOA, the repair firm, and you or your tenant? If so, and your tenant agreed to be home when the repair team was dispatched yet failed to be there, I can see where the HOA would assess a fee to you for the cost of the repair team not being allowed access to your unit. If there was no communication that a repair team was coming and they are still charging you, I would challenge that fee and maybe even speak to an attorney about the fee to see if it is something you could sue over. Chances are the amount in question is too small to sue over. The bottom line is that you want the repairs to your unit made so work with your HOA to make sure that happens. If your tenant can’t be there, you may have to be there yourself to make sure the repair team has access. All the best!

When Does Delinquency in Condo Common Fees Cause Collections?

A.V. from Hartford County writes:

Dear Mister Condo,

How many months of condo fees do I need to be behind before being sent to attorneys for collection?

Mister Condo replies:

A.V., I am sorry you have to ask such a question. I hope your financial situation improves and you get caught up on your common fees. Associations have the ability to send any overdue account to a collections agent as soon as it becomes overdue. For practicality purposes, most association will allow a 30-day period (with fines or fees after 10 days for late payment). After 30 days, a letter of demand is usually sent. After 60 days, referral to an attorney or other collection agent is common. At that time, the collection agent will take or recommend more aggressive action which can actually lead to foreclosing on the unit for delinquency. This is an extremely aggressive action but it is necessary to keep the association solvent. After all, common fees are the lifeblood of the association. If unit owners stop paying them, the association cannot provide the services these common fees are used to pay for. Unit owners who don’t pay their fees are getting a “free ride” at the association’s expense. They still get snow and trash removed, lawns kept, insurances paid for and much more. It isn’t fair to the association members who pay their fees on time to carry another unit owner. If you do find yourself turned over to a collection agent, my advice is to work out a payment plan if allowed and get yourself current as quickly as possible. Common fees alone can be expensive. Having them compounded with late fees and collection fees will quickly make a bad situation much worse. Good luck!

55+ Condo Reluctant to Allow Young Family Member Residence

C.D. from Florida writes:

Dear Mister Condo,

I live in a condo I own for 55+. Recently, my six-year-old granddaughter was removed from her parents by CPS and placed with me do I have to move?

Mister Condo replies:

C.D., I am sorry that your granddaughter was removed from her parents’ custody. She is fortunate to have loving grandparents to take her in. However, unless your condo documents allow for family members under the designated age for residents of the community, you may very well have to vacate your unit and find a more suitable community to raise her. There are exceptions and you might want to speak with your condo association Property Manager and Board to plead your case. You may also want to speak with a locally qualified attorney who can offer you legal advice on your predicament. I do know of some communities that are willing to bend the rules, but just a bit. For instance, if someone under the stated age inherits a unit and wishes to reside there. Typically, the inheritor is not that far away from the stated age, so the problem corrects itself in short order. I also know of communities that follow an “80/20” rule meaning that as long as at least 80% of the units are adhering to the age rule, the community has some flexibility in allowing a few (less than 20%) of units to house folks that aren’t of the appropriate age. Again, there is no requirement to do so but I do know of some that have made exceptions. I think the real issue here is the young age of your granddaughter. Folks that buy into a 55+ age-restricted community do so with an expectation of finding nothing but folks their age in the community. Perhaps, that is even why you purchased into this community? You certainly wouldn’t expect to hear the sounds of children playing or riding a bike or other activities associated with childhood within such a community. There is also the challenge of providing peer friendship for your granddaughter. She isn’t likely to find playmates here as she would most likely be the only child in the community. I am sure there are no child-friendly amenities like a playground for her to enjoy. It might be in her best interest as well as your own to find a more suitable environment to raise her. That being said, you asked if you “have” to move. My answer is “maybe”. Follow the steps I outlined above for a more definitive answer. I wish you and your granddaughter the best of luck!