Tag Archives: Governance

Condo Board Dictates Condo Parking Lot Rules

T.P. from outside of Connecticut writes:

Dear Mister Condo,

Our condo bylaws include parameters for parking clearly aimed at owners. The HOA passed a rule stating that owners cannot use the parking spaces (the units have garages). Can HOA rules override bylaws? If so, what is legally required for them to do so?

Mister Condo replies:

T.P., the Board controls the common elements. Parking lots are common elements so the Board controls their use and can place whatever restrictions upon them that they see fit. The good news is that you control who gets to serve on the Board through democratic vote. If you and your fellow unit owners don’t like the parking lot rules, vote out the rule-makers and replace them with Board members who see it your way. That is the beautiful part of having democratically elected members of your Board. All the best!

Can the Condo Association Limit My 2nd Amendment Rights?

L.C. from New Haven County writes:

Dear Mister Condo,

Can condo association limit your 2nd amendment rights? If I have a legal permit to own a firearm, can they deny that?

Mister Condo replies:

L.C., no one can limit your constitutional rights. However, the association can ban firearms from the property, meaning if you want to own a gun, you would have to keep it somewhere else. You may see this as a challenge to your rights but it isn’t. The courts have held that condos and HOAs are not governmental agencies and are therefore not violating your right by disallowing firearms on the property. You may see it differently (I’m guessing you do) but unless the courts change their minds, the association can prohibit firearms. Of course, they cannot take away your right to live elsewhere, which might just be the best solution for you if you insist on bringing firearms into a condo that doesn’t allow it. All the best!

Condo Board Not Sticking to Agenda or Rules of Order

D.C. from Texas writes:

Dear Mister Condo,

Does a condominium association in Texas have to follow an A-Z or 1-10 process in running the meeting? Or is it okay to run the meeting any way felt best after the meeting is called to order and last month’s minutes are read? Some people think it has to be strict step by step, no altering, all the way to closing the meeting; and, some say as long as the meeting is called to order and there is quorum and the last meetings minutes were read, it’s up to the board to cover the topics required in any order they feel is fit since sometimes there is little or nothing in some areas of the meeting to discuss, like landscaping, or external lighting.

Mister Condo replies:

D.C., when you say “A-Z or 1-10 process in running the meeting”, I assume you are referring to Robert Rules of Orders and a published agenda for the meeting. Most association can dispense with the formality of Roberts Rules with a simple vote of the meeting attendees. The whole point of having meeting agendas is to assist in the order of business and to make sure important topics aren’t missed. Every association is different and the nature of having volunteer Board Members can make controlling the meeting difficult. The agenda gets rid of that problem and keep the meeting on track. My personal experience with Boards that don’t stick to an agenda is that their meetings tend to run long and they don’t always get as much accomplished as they might had they stuck to the written agenda. I am not an attorney nor an expert in Texas law so if you need a legal opinion, kindly seek out someone who can provide it. My friendly advice is to dispense with Roberts Rules of Order unless needed and stick to the published agenda. You’ll get more done and keep the meeting to a reasonable length. Good luck!

Violent Condo Resident Danger to Himself and Others

A.O. from outside of Connecticut writes:

Dear Mister Condo,

I reside in a 4-unit condominium, all owner occupied, in Massachusetts. We are a self-managed property and three years ago a new resident purchased one of the units; this owner’s Master Deed is both in their name and his mother’s; his mother does not live on the premises.

Since this individual has moved into the Association there have been significant violations of bylaws as well as safety concerns that have involved the police: spray painting the exterior of his door with red spray paint, stating obscenities; screaming for hours on end at night while also causing physical destruction within his own unit; threatening to murder people; leaving pools of his own blood in common area; taking a baseball bat to the fire alarm; and a series of other disconcerting behaviors.

We, and our neighbors, routinely call the police and they have taken him into custody on some occasions and not others. In some cases, unfortunately, association members have not called the police out of fear of escalating the situation (fears include that this individual could hurt himself, others or cause damage to our property). We have attempted to engage the parent, who is also on the deed, who only assures us that this individual is harmless.

While we are not certain that this individual is mentally ill, we assume that the presenting behaviors are indicative of such, so we are at a loss as to how to protect ourselves and our property while also being mindful of the law.

What can we legally do?

Mister Condo replies:

A.O., there isn’t too much that you can do other than what you have already done. There are no laws that prohibit mentally ill people from owning real estate. The police have been called (as they should be) and have taken appropriate action as they deem fit. That takes care of the criminal activity. As for the violations of rules and by-laws, the Board should be taking whatever action is appropriate to protect the association. However, if you have a violent or mentally unstable resident in your building, there is little that can be done by the Board. Ideally, this person would leave your condo and get the help they need. Until then, I am afraid the only other option you have is likely to put up with the behavior or sell your unit. I know which one I would do. Good luck!

Special Assessment Surplus Not Returned to Unit Owners

J.P. from Boston writes:

Dear Mister Condo,

I am a unit owner and keep the books for a 12-unit, self-managed association in Boston, MA. At issue is disposition of a special assessment surplus. A vote was taken to “replace the roof”. Trustees then obtained bids, selected a contractor (no vote) and the special assessment amount was based on the possibility there would be a cost overrun of $10k (no vote). The trustees “said” any surplus would be refunded pro-rata. Now there IS a surplus and the trustees say they have changed their minds and are exercising their rights, as trustees, to use the surplus for other projects or save in reserve for future years. I and another unit owner are selling and want our pro-rata surplus share refunded. The master deed and bylaws are silent on a surplus situation, only on the right of trustees to impose special assessments for shortfalls. Help, the clock is ticking and this is worth $1,000 each my neighbor and I. Plus what feels like a violation of trustee rights.

Mister Condo replies:

J.P., I am sorry to have not been able to get to your question a bit sooner. I answer all questions on a “first come, first served” basis and I imagine you have already moved on from this unfortunate bit of business. Each state has their own laws about Special Assessments. I am neither an attorney nor an expert is Massachusetts Condo law so I can only offer you my friendly opinion. Special Assessments are a scourge upon condo and HOA living. They typically signify a lack of forethought about common element repair or replacement that should have been budgeted for years ago. Typically, they must be used for the specific intent of what they were levied for. In your case, the Assessment was used as planned but the surplus was not returned to unit owners, which is almost always the case. While the trustees had the best interest of the association in mind when they decided that the surplus should just be rolled over in to the association’s Reserve Fund, I am guessing they overstepped their rights and trampled upon yours in doing so. The question is what can you do about it? Since we are only talking about a thousand dollars, it may not be worth the time and investment of hiring an attorney to sue the association. You can certainly talk to an attorney who is verse in Massachusetts Condo law, but I am guessing they will tell you same thing that I am and that is you would likely have to spend more than a thousand dollars to try and recoup your thousand dollars. Whether to take on that battle is your choice but I think it might be a fool’s errand. Live and learn, my friend. You may have the moral high ground but they have your money. Let’s hope this doesn’t happen to you again. Good luck!

Can A Group of Condo Owners Lend Money to the Association?

G.H. from Middlesex County writes:

Dear Mister Condo,

Can an owner loan the association money?

We were in the midst of estimated $6k repairs to the exterior of the building when one of our Unit owners put their unit on the market. The contractor indicated the problem was more severe than they initially thought and advised us to contact insurance. Insurance sent an adjuster. Meanwhile, our unit owners got antsy and got a second contractor’s quote for $9k. Since we had $12k in the bank, the trustees agreed to proceed with the repairs figuring that if we got paid by insurance, great, if not we decided we would do a special assessment. The contractor removed some drywall from the interior of the “for sale” unit and wants to fix that and other areas in a phase 2 which he estimates at $6k. So, at this point we don’t have the money but the unit owners want the repairs made and have offered to loan the condo association money to just get it done now. Is there a way to do that? The repairs would likely need to be made down the road at any rate…

Mister Condo replies:

G.H., the association’s ability to borrow money from anyone – a bank, a group of owners, whatever, is defined in the condo’s governing documents. If the documents are silent on the subject (many are) then the Board needs to adopt a resolution that allows the association to borrow money. Further, the unit owners need to ratify that resolution with a vote that satisfied the requirement for amending the documents. Sometimes it requires more than a simple majority so take a look at your documents to determine if the Board has the authority to borrow money on behalf of the association. The next question becomes one of competitiveness and convenience. Let’s assume that the Board can borrow the money. Why would they go to a group of unit owners versus a bank? How much interest is involved? If it is such a low amount of money and a Special Assessment is planned any way, why not just levy the Special Assessment and be done with it? If the association can’t raise the money to pay back the unit owners, what then? Will they withhold their common fees until they are paid? Borrowing from unit owners may be convenient but it opens up the association to a lot of risk and a potential nightmare down the road. If it were me, I would simply issue the Special Assessment and be done with it. Also, the trustees getting antsy shouldn’t have triggered all of this confusion. They had already hired a contractor. Getting a second opinion after the fact may not have been such a good business practice. Is the first contractor suing the association for reneging on the contract? Then, you could end up paying twice for the work. Protecting the association from such liability is the primary role of the Board. Practicing good fiscal policy is equally important. I question some of the decisions they are making here and would suggest they would benefit from important Board Member training. “Condo Inc.”, offered by the local chapter of CAI, would be a great start. All the best!

Frequency of Condo Book Audit

L.L. from Litchfield County writes:

Dear Mister Condo,

How often should a condo complex’s books be audited? When they are audited, is the Board required to advise the owners that one has taken place and what the outcome was? Many thanks.

Mister Condo replies:

L.L., unless your condo documents require that the association conduct an annual or periodic audit, there is currently no legal requirement to have one performed in our state. That being said, many associations choose to have their records audited every three to five years or any time there is suspicion of funds gone missing. Larger associations are more vulnerable just because there is so much more money available to be pilfered. Many smaller associations will not take on the expense of having an outside CPA firm conduct an audit because there just enough money to be worth auditing. If the money coming in and the money going out look to be in good order, that is enough for most small and mid-sized associations. Larger associations almost always conduct annual or every other year audits because the cost of the audit far outweighs the risk of having a large amount of money stolen. One of the best people to ask is your Association Treasurer. In theory, this officer looks at the association’s cash on hand and savings and reconciles it with bank statements each month. They would be the first to see a problem. If money goes missing or the Treasurer suggest an audit, I would heed the call and get one done. There are several CPA firms here in Connecticut that specialize in auditing the books for condominiums and HOAs. I strongly recommend that use one of these firms with specific industry expertise to assist you in your audit. All the best!

Condo Board Members Vote by Email; Changes Vote After the Fact

D.L. from Fairfield County writes:

Dear Mister Condo,

Dear Mr. Condo – I am a unit owner in a 26-unit condominium. The Board of Directors voted unanimously via email to hire a contractor to perform emergency work due to the flooding of a unit by a renter.

Approximately two (2) days after the vote the Secretary notified the Management Company and the Board that she was changing her vote after speaking to the homeowner whose renter caused the water damage, as his contractor was the one not agreed to be hired.

As a result of the vote change, the President, one of only three (3) directors resigned and there are only two (2) directors (less than a quorum) remaining on the board.

I have the following three (3) questions:

1. Does the original internet vote stand?

2. The annual meeting is coming up on June 21st. Can that meeting take place without a quorum?

3. If the annual meeting cannot take place due to the lack of a quorum, what is the process by which the unit owners can call a meeting to elect a new board and adopt the annual budget?

Mister Condo replies:

D.L., Wow! You have a lot if issues at your condo, don’t you? If the internet vote was legal, meaning the association has allowed for the Board to vote by email, then the vote was valid. Unless your by-laws allow for Board members to change their vote after the fact (highly unlikely) then the vote should have stood, regardless of who resigned after the vote. That being said, there is the issue of practicality and what can actually be done now that the Board has fallen apart. The concept of quorum is an important one and you need to look at your governing documents and state law to determine when a quorum is achieved and what happens when the quorum is not achieved. Keep in mind that a quorum for an Annual Meeting is far different than a quorum for a Board meeting. As long as you achieve quorum at your Annual Meeting, you can simply elect new Board Members to fill the vacancies. With only 26 units, you have the added challenge of finding interested candidates. If quorum is not achieved, typically the previous year’s budget continues in place until next year’s Annual Meeting. The remaining Board members typically have the power to appoint directors to fill vacancies if warranted. If there is no quorum requirement for the Board, the existing members can serve out their terms and run for reelection when the time comes. Your question demonstrates some of the challenges faced by smaller associations. You have the same need for volunteers to serve on your Board but a much smaller pool of unit owners to choose from. I hope that you and few of your well-meaning neighbors will consider running for the Board at your next election. If it cannot wait until then, your condo documents very likely spell out the rules for calling a Special Meeting of Unit Owners. This is not that common but it can be done. My advice is to wait until your Annual Meeting and have a qualified and interested slate of candidates who will do a better job of running your association. Good luck!

Condo Board Allows Unit Owner to Custom Landscape

J.B. from outside of Connecticut writes:

Dear Mister Condo,

One of our residents asked for permission to build a berm of trees and shrubs behind his home to help block noise. I say that is a common area and that the entire community should vote on this. The board granted permission. Are they correct in so doing?

Mister Condo replies:

J.B., unless your documents specifically limit the Board’s authority on its management of the common grounds, the Board was likely within its right to grant the permission. If your documents do not allow for the Board to do what they did, then you are right. However, in my experience, the Board is very likely empowered to make this type of decision. Without seeing your condo documents, I’m afraid I can’t offer more of an opinion than that. Take a look at the documents. If you think the Board has overstepped their authority, call them on it. Other than that, the Board was elected by the owners to handle the business of the association. Sounds to me like they did just that. All the best!

Can the HOA File for Bankruptcy?

X.Y. from New Jersey writes:

Dear Mister Condo,

Can an HOA file for bankruptcy in NJ? If the HOA has debts that the HOA cannot pay and keep the property properly maintained and operating? Because of a loophole in the law, a homeowner sued the HOA and lost, but the expenses were sufficient to defend.

Mister Condo replies:

X.Y., it is very unusual for an established HOA to file for bankruptcy, especially without first having the courts appoint a receiver for the association. The receiver would likely levy special assessments against the unit owners to make good on the debts of the association. Since I am neither an attorney nor an expert in New Jersey law regarding common interest communities, I can’t offer an opinion as to the legality of the bankruptcy filing. My guess is that there is no difference between an HOA or any other business filing bankruptcy. However, as I stated at my opening, it would be truly unusual. If the HOA fails to maintain the property it could be sued by a disgruntled unit owner or owners or, in some truly decrepit state of repair, could face condemnation from local authorities. Even that wouldn’t cause a bankruptcy but could force owners out of their units, which might lead to eventual bankruptcy. I am sure there are underlying issues that have set the association on this path. I highly recommend you seek legal advice from qualified local legal counsel before thinking of such a drastic measure. My guess is you will be advised against it and seek another method of satisfying the debts of the association. Good luck!