Board Common Fees Condominium Damage Financial Governance Legal Neighbor Issues

Mixed Use Condo; Mixed Up Board!

M.B. from Middlesex County writes:

Dear Mister Condo,

Hello, I live in a 7 unit plus an office condo. We picked 4 people to manage our finances and they stopped paying maintenance for their apartments. Since 4 of them live in 2 apartments, we basically lost about 20% of our maintenance per month. It’s been like this for 4-5 years already. A couple of years ago, they raised maintenance fees. Now, the wall above my window started to leak and they say that there is no money for the repairs since all utilities went up. They want to raise the fees again. My question is this: Is it legal for them not to pay maintenance? (There is nothing said about it in a condo book) and what can I do about it? Also, can I fix it myself and subtract the amount from maintenance?

Mister Condo replies:

M.B., I am sorry for the water intrusion into your building. What you have described is a really bad system of governance and a series of unfortunate events that is now shining a ray of light onto the truth of what is really going on in your condo. I am not an attorney and my advice to you right out of the chute is to contact an attorney so that you can protect your rights and bring about some needed change at your association.

Mixed use condos like yours are not uncommon. In theory, they can be quite successful because in addition to the traditional condo unit owners like you, the association benefits from having a commercial owner or tenant who shares in the costs of the upkeep of the common grounds. It can be a “win/win” situation when done right. However, what you have described here is not being done right.

Begin with a review of your condo documents. Inside you will find all sorts of important information about governance and the percentage of unit ownership formula that determines what percentage each unit owner pays toward the common fees or maintenance fees as you have called them. My guess is that the governance is provided by a volunteer Board comprised of unit owner volunteers. “Volunteer” is the key word here and unless it is stipulated as such, these folks are not excused from paying their monthly common fees. Those 4 folks who are not paying common fees are very likely going to have to pay their missed common fees for as long as they haven’t been paying. As you can imagine, that can add up to quite a lot of money.

I am not surprised that they are raising the common fees on a regular basis. They would need to if none of them are paying their fair share. Also, I am equally concerned but not surprised that there is “no money” available to address your problem. You should have homeowners insurance. The association should have insurance. There should be money being saved in a Reserve Fund to pay for upcoming maintenance expenses. Technically, you cannot fix it yourself and subtract the amount from your common fees. I am not even sure what you would fix. The wall that has failed and allowed the water intrusion is likely association owned property and, therefore, their responsibility.

It would appear to me that some type of sit down meeting needs to happen and needs to happen fast. The governance documents need to be reviewed and adhered to. That may lead to collection efforts against the folks who have not been paying their common fees as prescribed in the condo docs. This will be costly and time consuming but it needs to be done. An attorney can best guide you as to what your next steps should be. It would not surprise me to see a lawsuit in the association’s future.

As I mentioned at the beginning of my reply, M.B., there are many successful mixed use condominiums in our state. From your description, the one you are in is not one of them. My personal advice is to put your unit up for sale and get out before this gets any worse than it already is. Best of luck!

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