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Can a Declarant Levy A Special Assessment on New Unit Owners?

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M.K. from Middlesex County writes:

Dear Mister Condo,

We live in a condominium development where the declarant is still in charge and there is not yet a managing HOA. The declarant has been remiss in his maintenance of our common properties with no painting despite exposed wood, inadequate reserves, etc.. Presently, the Board that he controls is planning to levy an assessment on the owners. It has always been my belief that this can only be done by an HOA and that the declarant needs to take care of any cost overruns above and beyond our maintenance while he is still in charge. The documents do mention the ability of a “Board” to level an assessment, but does not specifically address whether it must be after the declarant is no longer in charge. I would appreciate any guidance you might have. We are debating retaining council. Any suggestions?

Mister Condo replies:

M.K., I am excited for you and your fellow owners of your brand new condominium units. However, as you are seeing first-hand, the birth of an association and the transition from developer to Association control of the property is not without significant challenges. To make matters worse, the rules that apply during this transitional phase differ from the rules of government that will be in place once the transition is complete. For that reason alone, I cannot stress how important it is that your Board consults with a qualified attorney who will represent your best interests during this transition period. It may not be inexpensive to do so but it may save you far more than it costs you in the long run.

I did reach out to an attorney friend of mine who practices in this specialized area of community law. Here is what the attorney had to say:

“The board can propose a special assessment at any time, even while it’s controlled by the declarant. Unless the declaration says otherwise, the special assessment will be valid so long as it is noticed properly and a majority of all the unit owners does not vote to reject it. Nevertheless, it’s possible that a declarant-controlled board which proposes a special assessment to make the unit owners pay for fixes which violate the declarant’s own construction warranties or for undeclared portions of the community may be violating the board’s legal duties of care and loyalty to the association.  The unit owners should definitely talk to an attorney about the situation.”

I hope that helps. If you need a list of qualified attorneys, may I suggest the list of CAI member attorneys and firms found at the CAI-CT website – http://www.caict.org/?page=Directory. These firms specialize in community association law. I am sure you will find the qualified legal assistance your association needs to help guide you through the developer transition period. Welcome to the growing number of Connecticut community associations. We’re here to help. All the best!

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