Tag Archives: Financial

Outside Condo Stairway Being Treated as Unit Owner Responsibility

J.L. from outside of Connecticut writes:

Dear Mister Condo,

I just received a letter stating that I have to replace the rug on the outside stairway of a four-unit condo. The building has a first-floor landing and stairs that go to the two second floor units that are in open air under the building roof. Isn’t the stairway considered a common area?

Mister Condo replies:

J.L., generally speaking, any shared portion of a condominium such as an externa staircase as you have described would be considered a common element, owned by the association. But, just because you and I think it should be a common element, small condos like yours often come with unusual wording in the condo documents which might cast some doubt as to who owns what. You need to look at the condo documents and see if the staircase is described as part of your unit or a common element. If the documents are unclear as to the ownership of the stairs, you would do well to question the cost of the carpet replacement. You might wish to hire an attorney to review your documents and give you a proper legal opinion. I would certainly push back before simply paying for the carpet. Good luck!

Small Condo; Big Governance Problem!

J.P. from Florida writes:

Dear Mister Condo,

I live in a small condo association in Florida. While being a new owner, I have noticed that the whole board and the running of the property is out of control. The President has been in place for several years as I can tell since no one else wanted to be on the board. It is a 55+ community. He also put himself as the property manager. The budget is less than $100K, so no property management company is required. He does not pay any HOA fees as he says that is in lieu of his property manager position. The association never voted for this, he just took this over on his own. He bullies the owners who are old and some do not speak good English. When he gets mad at you, he is very vindictive and knocks on people’s doors late at night. This guy is in his 70’s and a heavy drinker. I voted myself onto the board recently as Treasurer to have a voice and he has yet to hand over the books, check writing, etc. Many people believe he is hiding stuff and he now refuses to answer his door or calls from me. He feels threatened and believes I will expose what he has been doing the past 5 years or so. What do you recommend the best course of action to get control of the situation? I have spoken to the association’s lawyer who says to file a complaint with the state (Florida), I plan to do so in hopes of getting the ball rolling to have him removed. We also have cameras throughout the property which he installed but he is the only one who has control of them as it is set up in his unit. Many people feel uncomfortable as he watches all day and approaches people when they get home. I have to assume that is not legal as when we ask to see a clip he does not allow it. As you can see this place is a mess and would be happy to hear any suggestions you may have before I contact the state. Thank you for your advice.

Mister Condo replies:

J.P., there is very little that I can add before you contact the state, which I hope you have already done. The association attorney can only do as much as the association (the Board) instructs him or her to do. You do need to review your governance documents (or have the attorney review them for you) to see what steps will be necessary to remove the President from office and from the Board. If funds are missing or misappropriated, there may very well be criminal charges as well. Right off the bat, I can tell you that the association should go after the unpaid common fees. Board members are not exempt from common fees and unless there is some kind of formal agreement between the President and the Association for him to serve as a paid Property Manager, he will have to make good on those unpaid fees as well as any late fees. Shame on your fellow unit owners who took no action until now. From what you have said, this behavior has been going on for years. Who knows what financial perils this person has brought upon the association. What about other Board members? Are there none? This situation stinks to high heaven and you are correct to pursue a remedy for you and all of the other unit owners are at serious financial risk as long as this individual has the association checkbook. The time for action is now. Good luck!

Insurance Runaround Leaves Condo Renter with Uncovered Losses

P.P. from New Haven County writes:

Dear Mister Condo,

I was a tenant in a condo that was damaged by water that entered the unit causing complete damage to 800 square feet of the hardwood flooring, Sheetrock and our personal property/furniture. Since owners’ insurance approved full compensation for damage, cause described as ice dam. Our tenants’ insurance declined claim because of owners’ insurance ‘ice dam’. Upon demo of floors and walls it was discovered that the damage was long term and was the result of gross negligence. It was discovered that incorrect installation of replacement windows which cause a gap under the windows causing water to enter the full length of the wall. Our furniture against that wall was no only water damaged, but infested with mold. A total loss. The condo association also received insurance money to pay the owners deductible and repair the gap and siding. Our tenant’s insurance refuses to revise the original decline. Neither the owner, who had the Windows replaced without a permit from the condo, nor the condo association is taking responsibility for the cost of our damage. We continued to pay rent during the three-months-time to repair, without access to the main level of the house. We’ve contacted the state of CT INSURANCE DEPARTMENT and representative simply sends us the original ice dam determination from Liberty Mutual. We are in contact with the association’s insurance who points to owner’s liability so points back at negligence of association. We have lost 50% of our furniture and damage to the rest. Where can we go from here?

Mister Condo replies:

P.P., I am sorry for all of your problems. As a tenant, your renter’s insurance should be your primary method of recovery for loss such as this. Unfortunately, your insurer is looking to shift the burden and has pointed a finger at the association, delaying your claim and leaving you stuck in the middle. For starters, I would not renew my lease when it is up. You have identified enough underlying problems that you would be wise to seek a new rental. Your claim of loss is most likely going to be against your Landlord and his claim will be against the association. However, before you get into the expense and ongoing legal battle with insurers, your landlord, and the condo association, you need solid legal advice from a local attorney who can tell you what to expect. I would think your insurer is going to be your best bet for getting money back. You paid them a premium and they offered you the coverage. You put in a claim with them and they denied the claim. They are the most direct path to recovering your money. Then, they can take on the expense of suing the association’s insurance company for damage caused by negligence, and so on. If you try to tackle all of these issues on your own, you could end up spending thousands of dollars with little to show for it at the end of the day. At least with your own insurer, you can demonstrate the coverage you had in place at the time of the loss. They have their own attorneys who may be willing to settle with you to avoid a lawsuit. Speak to an attorney today to get a legal opinion on your best course of action. Good luck!

Condo Association Not Paying Bills!

H.F. from Hartford County writes:

Dear Mister Condo,

Help! My condo association is not paying its bills! What can be done?

Mister Condo replies:

H.F., that is shocking! If your condo association is unable to pay its bills, it is likely a sign of a very large problem. The annual budget should take into account all of the likely expenses for the year and offset that expense with common fees and assessments if needed. If many unit owners default on their common fee or assessment payments, the association could find itself out of money when the bills come due. That can lead to many problems for the association, especially if a vendor sues the association. A court of law could order the association into receivership, where a court-appointed receiver (usually an attorney) takes over the finances of the association and will issue assessments and take other actions to get the association back on solid financial footing. Let’s hope it doesn’t come to that. Ask to see the books of the association and see if you can figure out what has gone wrong. Encourage the Board to raise the funds they need to pay their bills. The alternatives are dire. Good luck!

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.

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!

Big Amenities Still Being Added to this Big Apple Condo!

L.L. from New York City writes:

Dear Mister Condo,

Hi, Mr. Condo! We are in a 90-unit newer (2009 built) condo in NYC with doorman, gym, roof/grill facilities. A bike storage was originally promised by the sponsor. However, they have not been cooperative in fulfilling that promise. Currently the board presented a bike storage design that features another grill/kitchen, a still reflecting pool, fire pit and many seemingly excessive designs. Also, there is no budget or cap on this current project. Although we have an adequate Reserve Fund for the building, the board is planning on taking out a loan in addition to using cash to fund this project.

How much would a second grill/kitchen, small reflecting still water pool and fire pit add to the selling price of units in this building? Will the cost and maintenance/liability outweigh the positive? (To be honest I am failing to see any positives on these added features)

Mister Condo replies:

L.L., sounds like you live in a lovely condominium, despite the problems you are now facing with the sponsor fulfilling all of the promised amenities. Despite the potential for increased costs and maintenance liability, it is likely that these additional amenities will make the condo more desirable, which is what drives up market value as well as outside factors like real estate prices for competitive units. I am a bit confused about why the Board needs the loan if the sponsor is still in the picture but these amenities are likely part of the master plan that was approved and need to be either completed or, if possible, removed from the plan by a vote of the unit owners. You may also face pushback from the city as the project approved is the only one that can be built without going through the approval process again with no guarantee changes would be acceptable. In other words, in for a penny, in for a pound and the most likely course is for the original plans to be honored, regardless of the price and regardless of whether or not individual unit value will increase because of the amenities. I’ve never known property values to decrease because of increased amenities and my guess is that it will enhance the value of your existing units. All the best!

Who Owns the Carpeting on a Carpeted Condo Balcony?

L.B. from outside of Connecticut writes:

Dear Mister Condo,

My condo association installed carpeting on balconies many years prior to my purchasing my unit. The association is now requiring the carpet be removed at my expense. I claim that I did not install the carpet therefore I am not responsible for its removal.

Mister Condo replies:

L.B., that is an interesting quagmire you find yourself in. Are you certain of the carpet installation history? Balconies are typically limited common elements for the use of the unit owner who has exclusive use of the balcony. If that is the case, the Board may feel as though individual unit owners are responsible for the carpet maintenance as it is for the limited use of the unit owner, in this case, you. Your claim that you did not install the carpet may be true but you really need to find out who owns the carpet. If the association owns it, then they are responsible for the upkeep. If it was installed by a previous unit owner or by the association but at a previous unit owner’s request or expense, then it is quite possible that the Board is correct. However, it is worth your time in getting a straight answer. Ask to see the records from when the carpet was originally installed. See if you can’t find definitive proof of who owns the carpet. Good luck!

Inadequate Condo Board Meeting Notice

N.T. from California writes:

Dear Mister Condo,

I am a first-time condo owner in California for a year. I wrote a letter to the board requesting for reimbursement for an expense that my condo insurer and I felt was a responsibility of the HOA to prevent further damage to the interior since the HOA contractor was overwhelmed and was unavailable. I wanted to attend the next board meeting in case my issue comes up on the agenda. The board typically meets on a certain day of the week every other month. The community newsletter typically indicates which day the month prior or it has been rescheduled. However, the past month the date was left empty on the newsletter but there was a meeting and my issue was raised and I was not there to clarify the statement the manager made which was not true. My question, is the board required to publicize the dates of the board meeting? I plan on attending the next board meeting which was publicized in this month newsletter which listed both the prior month meeting date that occurred and the upcoming meeting date. Thank you in advance and will greatly appreciate any information you can provide.

Mister Condo replies:

N.T., I am sorry that your introduction to condo living has been so controversial and that you experienced problems right off the bat. You asked about meeting notice requirements and the short answer is, yes, the Board does need to give advance notice to all unit owners of the association as outlined in either the governing documents or local or state law. Typically, the notice requirement is in writing to the individual unit owners, although other methods may be acceptable as long as they are agreed to by the unit owners. If the newsletter is the standard and medium used then that is how it is done in your community. I will say that a newsletter alone is not typically considered due process for serving notice of a Board meeting and that email would be more common in this day and age. The notice needs to include the agenda as well as the date and time. Board meetings are open for unit owners to attend but unit owners don’t participate unless asked by the Board to do so. In your case, you wanted to clarify your petition to the Board for reimbursement for expenses you made to prevent further damage. Ideally, the Board would have undertaken this expense and you wouldn’t have been out of pocket in the first place. The Board, and only the Board, can make repairs or alterations to common elements even though common sense likely drove you to take the action you took. I hope you are not out a tremendous amount of money. It might be best to write this one off and understand that you need to let the Board take this action if it comes up again. Good luck!