Category: General

The topic of earthquake and flood insurance was the subject of much debate at the 39th CAI National Conference held in Baltimore, Maryland, in October. The community association industry continues to wrestle with how best to deal with these issues. In California, earthquake insurance is very difficult to get, the deductibles have been increased dramatically and Freddie Mac (Federal Home Mortgage Corporation) has threatened to discontinue buying mortgages on condominium units in certain geographical areas [Read More...]

n an ideal world, all Community Associations would undertake an annual review of their governing documents, their contracts, their residents’ manual, their standard operating procedures, their employment handbook and all other matters relating to the operation of the Community Association. If this task were undertaken, Community Associations could continuously update their operations and procedures in light of new cases, new law, input from owners and advances in technology. However, the world is not ideal and [Read More...]

Last month, I discussed a curious battle California community associations were waging over proposed legislation which would prohibit community associations from restricting motorcycles from their property. In order to ensure fairness as well as to indicate that unreasonableness is not something reserved solely for California, I will discuss a Florida matter as well as a Massachusetts matter which appear to me to be even more curious than the California motorcycle debate. Because community associations are [Read More...]

For many years now there has been an issue of whether either the state or federal fair debt collection practices act applies to the collection of common area fees. A series of recent federal trial court decisions interpreting the federal act have analogize condominium fees to real estate taxes and held that because there is no extension of credit the act did not apply. Most Massachusetts attorneys took heart in this reasoning since the Supreme [Read More...]

A few months ago I discussed a case from a Federal Court in Illinois which held that as a result of the agency relationship between a manager and an association there was an implied obligation of indemnification. This month I will discuss whether a unit owner can properly state a claim against a manager when the essence of the claim is that there has been a failure to maintain the common elements. As a general [Read More...]

At the recent National Conference a reoccurring theme was the need for boards to adopt a kinder and gentler approach in dealing with homeowners. Though to some degree, much of this is a swing of the pendulum to the opposite extreme from rigid, aggressive covenant enforcement and the bad press that has resulted from it, there are aspects of this new mantra which warrant attention. Many of us in this field have repeatedly noted that [Read More...]

On many occasions in the past I have discussed various issues surrounding condominium insurance matters. The recent report in the CAI Law Reporter of a case arising in Florida in the aftermath of Hurricane Andrew pointed to an issue oftentimes overlooked when a casualty loss occurs. All too often the association will file and negotiate a claim and then dole out the proceeds to the various unit owners who have suffered a loss. Doing so [Read More...]

A reader recently wrote inquiring whether a Board may prohibit specific breeds of dogs which have reputations for being aggressive. The answer to this question, as one might expect from a lawyer, is, “it depends”. At the threshold a Board cannot ban the keeping of any pet at a condominium unless there is an appropriate restriction in either the Master Deed or By-Laws. This was the holding of the Massachusetts Supreme Judicial Court in the [Read More...]

It seems that whenever a condominium association is sued these days, a claim for violation of the Massachusetts General Laws c.93A can be expected. Chapter 93A, the so-called “Consumer Protection Statute,” prohibits entities involved in “trade or commerce” from committing any “unfair and deceptive trade practices. Recently, Massachusetts Courts have adopted the position that condominium associations, acting through their Boards of Trustees, are not considered to be involved in trade or commerce as defined by [Read More...]

Sometimes, we get so wrapped up in new and emerging trends in Community Association law that we forget to look at the basics. It is sometimes easy to forget that although many professionals have been involved with Community Association law for years, that new Board Members are getting elected daily throughout the country. Recently, I have heard several instances where Board Members have stated that they could not be sued individually. More importantly, we have [Read More...]

In mixed use condominiums there is often substantial concern over to what uses commercial units can be put and whether an owner of such a unit can obtain a change in such use without the consent of either the association and/or the other unit owners. In the case of The 39 Joy Street Condominium Association v. Board of Appeal of Boston, Et Al., Suffolk Superior Court No. 95-0788 (7/31/96), at least one Judge has provided [Read More...]

As usual, this title is far more interesting than the article. However, associations, association managers and association practitioners should reexamine the unique relationship among the three parties. Obviously, everybody knows that the attorney’s client is the condominium association and not the property manager. Therefore, the duty of loyalty is only to the condominium association. However, the reality is that the association practitioner typically deals with the property manager and not the condominium board members on [Read More...]

A recent trial court decision has caused a great deal of concern among managers and attorneys who have learned about it. As you will see in the discussion which follows, this case poignantly points out the importance of ensuring that contractors have adequate insurance and that associations, additionally, carry adequate liability insurance. The relevant facts of the case are relatively simple. A condominium association contracted with a painting contractor to have the exterior of their [Read More...]

…… the Massachusetts Supreme Judicial Court rendered a decision on an insurance claim which has import to condominiums. The case, Peterson v. Silva, involved a subrogation claim (a claim brought by an insurance company who has paid its insured against the person who caused the damage) against a tenant who had caused a fire which substantially damaged the insured’s building. The lease contained a standard clause providing that the tenant would indemnify and save the landlord [Read More...]

At a recent meeting I was attending progressed, a board member turned to me and asked, “You’ve been doing this for a while now, what makes a board successful?” I thought for a moment, flipping through the pictures in my mind of good and bad meetings, crises and successes, and then turned to my questioner and replied, “If there was one thing I could point to its a board which knows its community.” Often I [Read More...]

Let me focus this month on something which, if individual Board Members fail to do, will only result in a fracturing of a Community. What I’m referring to is failing to respect the confidences of the Board’s workings. Often times an issue comes before a Board which has the potential for being, or already is, a controversial matter. In these situations different Board Members may have differing opinions. Only if each Board Member feels free [Read More...]

everal weeks ago a article appeared in a local newspaper which raised an issue of considerable concern to most communities – the conduct of home businesses. In this day of the need for two incomes and with the widespread acceptance and use of computers, home businesses are becoming a more reoccurring issue. And, if trends continue in the direction they are currently going, this will be an ever increasing issue. In reviewing this situation, boards [Read More...]

In July, the Seventh Circuit of the United States Court of Appeals, in a case of first impression, decided that community association practitioners who collect common expenses for condominiums and homeowner associations are debt collectors under the Federal Fair Debt Collection Practices Act. It should be noted that the Eleventh Circuit has affirmed without a published decision a decision which stated that the collection of community association fees is not the collection of a debt [Read More...]

The Massachusetts Appeals Court in two recent decisions has provided some clear guidance with respect to the transferability of exclusive use parking spaces, or what many in the industry call deeded parking. It should be noted, however, that in the majority of situations we are not really talking about “true” deeded parking. True deeded parking would be where the parking spaces themselves are units with their own percentage interest. (There is some question whether from [Read More...]

In past columns I have written about the need for boards to communicate with the owners on a regular basis. Unfortunately, owners tend to become suspicious of “what is going on” when their contact with or from the board is limited to annual meeting or some isolated memo or letter which, more often than not, is announcing some unpleasant fact, such as a special assessment. To lessen this problem I have previously suggested mailing copies [Read More...]

On a number of occasions, governing documents for multiple condominiums with overriding umbrella associations have crossed my desk. More often than not these “grouped condominium” arrangements are premised upon a Declaration of Covenants, Easements and Restrictions. More often than not such documents have no termination date, or if they do, no provision for their extension. Others which have a termination date contain various provisions for what amounts to automatic extensions, unless there are sufficient numbers [Read More...]

With the continuation of our strong real estate market, it is easy enough for boards and managers to focus on other issues besides adding value to an association. However, such a period is likely a perfect time to focus on such a concept. Prices are rising, people are buying and selling. Thus, marketing can feed on this positive climate. But what role does a board or a manager have in facilitating the marketing of units? [Read More...]

Many associations, as a part of their amenity package, offer such things as exercise classes, yoga, tennis lessons and similar organized activities. As might be expected, these activities are fertile grounds for injuries and, therefore, law suits. Where they are part of the regular operation of the association there is a good probability that this liability would be covered by the association’s general liability policy. However, to be sure that no gap exists, informing the [Read More...]

n a recent issue of Common Ground, CAI National’s bi-monthly magazine, there was an article which offered that author’s opinion that Boards, or Covenants Enforcement Committees, should not periodically tour a complex looking for violations. That, the author felt, resulted in unwarranted intrusions on owners’ privacy and fostered a police state mentality. To his view the issue of violations should be complaint driven. Interestingly, a number of readers responded to this article vociferously criticizing the [Read More...]

Over the years, the business judgment rule has protected the actions of community association board members. Although various states have given the business judgment rule different standards towards its application, in essence the business judgment rule requires that in the absence of fraud or lack of good faith in a conduct of a community association’s internal affairs, the courts will not second guess the decisions of a board. Obviously, fraud, self-dealing or unconsciousable conduct will [Read More...]

In the negotiation of management contracts, boards are often are troubled by fairly standard clauses requiring the association to indemnify and defend the management company. Though to be sure there are appropriate limitations to such a clause, boards should understand that the concept of indemnification flows not only from an insistence by the manager that the association stand behind them when they properly perform their designated tasks, but from basic legal principles. As recently noted [Read More...]

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