New Haven Condo on the Verge of Fiscal Collapse

S.Z. from New Haven County, Connecticut writes:

Dear Mister Condo,

We have three buildings of four units/townhouses in each built in 1986. The majority of owners have not and will not approve major improvements that are necessary for the complex including new roadway and walkways, flat roof redesign and repair, major water damage to structures due to vinyl siding installed incorrectly and over rotted wood, reengineer drainage, replace outside lighting, replacing 25 year old heating/cooling systems, etc.  The BOD was wondering if we can convert the condo association into individual homes with a home owner association that will take care of snow removal, lawn mowing, and trash removal only.  If this is possible, how does the BOD do so?

Mister Condo replies:

S.Z., I am truly sorry to learn that your condo association has fallen into such a sad state of disrepair. It would appear that the Board has not been effective at carrying out their charge to “maintain, protect, and enhance” the association’s common elements. I am not an attorney so my advice here should be considered friendly and not legal.

Since your buildings each contain four units and were clearly designed to be condominiums, I think it would be far more practical to put a plan in place to address the aging common elements and combat the decay. I know that money is a sticking point for your association members but there really is no other solution that I can think of but to begin the process of raising revenue. The Board could call for special assessments. It would appear that the common fees have been far too low for far too long so a significant increase to common fees is very likely in order. Your association may also be eligible to seek financial assistance in the form of a loan from a bank or other lending institution. Other than striking oil on the property, I don’t know of any other way for your association to raise the funds it should have been collecting all along.

A very serious plan needs to be put in to place. Not only do the damaged common elements need to be repaired but a plan to replace them again in the future needs to be discussed and budgeted for. The same roof you replace today will need to be replaced in 20 to 25 years. Why not start saving for its inevitable replacement now so you can avoid this problem in the future. If the association can afford it, I would order a Reserve Study to guide future Boards down the proper path to fiscal responsibility.

If you cannot get enough support from community members to make these repairs and plan for the future, I would get out while the getting is good. This condominium appears to be heading for failure. If you are an owner of record when that happens, you could find yourself on the hook for a great deal of money. I had a similar question posed recently and did get an opinion from an attorney. You might find this article useful as well: https://askmistercondo.com/house-to-condo-condo-to-house-question/