C.J. from Fairfield County, Connecticut writes:
Dear Mister Condo,
Who would I report my condo board to? My condominium board is made up of three unit owners. Who are their supervisors or superiors? There are no property managers or other outside management overseeing us.
Mister Condo replies:
C.J., condominiums, believe it or not, are largely autonomous organizations. Property Managers do not oversee the Board, rather the Board oversees the Property Manager. Condo associations are typically organized as not-for-profit businesses under your state’s business laws and are governed according to their governing documents. There is no one to “report” the condo board to. However, you and your fellow homeowners have the right to elect or, in extreme cases, recall Board members who aren’t doing the job that the homeowners elected them to do. In fact, a recall can be held for no particular reason at all but you must follow the rules for doing so in both your governing documents and any state laws that apply. In Connecticut, most associations are subject to the laws outlined in the Common Interest Ownership Act (CIOA). Since you didn’t explain what the Board has actually done to make you ask about reporting them, I really can’t advise you as to what your next steps are. If you are interested in serving on the Board, I would suggest you let your intentions be known. If there has been some type of malfeasance or embezzlement of funds, you would be well advised to speak to an attorney. The usual action is for the homeowners to sue and seek criminal charges against anyone who steals from the association. I hope that helps. All the best!
Regarding your comment that most condominiums are “not-for-profit businesses,” did you mean to say “non-profit businesses?” I live in NJ and “not-for-profit businesses” are charities. The condominium I live in is a “non-profit corporation.”
A Non-profit organization is a separate legal entity which can accept donations and not required to pay income tax as they are created for the charitable purposes whereas the Not for profit organizations conducts operations earns profits but neither can they distribute those profits nor can they accept any donations as they are not a separate entity and are not tax-exempt rather they have specified purposes.
The problem with small condo associations is that 100% of the owners are the Board and you cannot recall or remove them. When the majority ignores the documents or devalues/damages your investment, there is zero recourse unless you can afford a lawyer. An owner often is left with a choice of paying more for damages that s/he is not legally responsible for (per state laws and governing documents) or paying astronomical legal fees with no guarantee of recovery.
It’s a no-win for owners in small associations unless condo associations can be governed under Consumer Protection or a State oversight committee is enacted.