Category: General

You probably don’t need me to tell you that these are difficult times.  And community associations are not immune from the financial storms that are rattling the windows of consumers, businesses and government offices from one end of the economy to the other. Managing association finances — never an easy task in the best of times – becomes even more challenging and possibly overwhelming as homeowners, struggling with financial problems of their own, fall behind [Read More...]

Conflicts between smoking and non-smoking condominium residents aren’t new, but the legal landscape surrounding those battles is changing.  As complaints about second-hand smoke  have grown louder, and the evidence of its dangers more conclusive, the courts have become more inclined to weigh the rights of homeowners to breathe clean air in their homes more heavily than the rights of other owners to blow smoke in theirs. This balancing act is difficult, however. Courts do not [Read More...]

Lenders financing a condominium purchase typically and understandably require basic information about the community association’s governance and finances, which association managers have provided more or less willingly for many years. But what had been a reasonably smooth process has turned bumpier of late. More lenders are refusing to accept the standardized form most Massachusetts managers have been using for more than a decade, insisting that managers complete the lenders’ own questionnaires instead, and increasingly seeking [Read More...]

By Stephen Marcus Inertia and disinterest are common problems in common interest ownership communities, which are often hard-pressed to find owners willing to serve on boards, volunteer for committee assignments, or even vote in association elections. So it is interesting and somewhat  surprising to find that some homeowner associations are facing pressure to become more involved in local, state, and even national political affairs. That pressure comes in the form of requests from owners and [Read More...]

When Indy-Mac, the California bank giant, failed in July, an estimated $600 million of its $19 billion in deposits were not insured. Based on historical patterns, the consumers, businesses (and homeowner associations, if any) holding those uninsured deposits could expect to recover about 72 cents of every dollar. Think about that. Would you want to be a member of an HOA board that had to inform owners that the association’s reserves or operating funds had [Read More...]

It is not hard to understand why military veterans who have seen action in war are likely to be among the strongest advocates of diplomacy. For similar reasons, also easy to understand, the Community Associations Institute (CAI), which has seen decades of litigation involving homeowner associations and owners, encourages the use of alternative dispute resolution “whenever possible and wherever appropriate.” The advantages of avoiding litigation are obvious, even to litigators. Non-judicial solutions can be achieved [Read More...]

The English politician, Tony Benn, described war as “a failure of diplomacy.” The same might be said of legal battles between condominium owners and community association boards; a bit more diplomacy and a lot more common sense on both sides could probably avoid most of these encounters and community associations would be better off as a result. A recent decision by the Seventh Circuit Court of Appeals, resolving a dispute over the placement of religious [Read More...]

Condominium insurance coverage questions are notoriously complicated and often confusing for industry professionals as well as condominium owners and their governing boards. But for owners and insurers in Maryland, this admittedly confusing issue has become bewildering and more than a little unsettling following a state appeals court ruling that homeowner associations are not required to cover casualty losses for individual units under the association’s master policy. As the headline in one newspaper report noted, the [Read More...]

True or False: 1) Owner-occupants have more invested in the property and will be more concerned about maintaining it. 2) A large concentration of tenants in a common interest ownership community can threaten the value not only of the units they occupy but of the community as a whole. You won’t find many owners or professionals in the common interest ownership world who would challenge either assertion. The assumption that owner-occupants are preferable to tenants [Read More...]

An already difficult condominium market is likely to become more challenging for buyers, sellers, and especially for lenders as a result of new underwriting guidelines adopted recently by Fannie Mae and mirrored, in key respects, by Freddie Mac. The revised rules respond to the mounting loan delinquencies and defaults that have bruised the bottom lines of Fannie, Freddie, and just about everyone else involved in financing residential mortgages. But the new policies also reflect concerns [Read More...]

The Department of Housing and Urban Development (HUD) and the Department of Justice have issued new joint guidance explaining the obligations of rental property owners and homeowner associations to allow the “reasonable modification” of individual residences and common areas when those modifications are requested by disabled residents. These obligations stem from the Fair Housing Act, which forbids discrimination in the sale or rental of housing and specifies that disabled individuals are entitled to the reasonable [Read More...]

Foreclosures are setting new records nationally and locally, and common interest ownership communities are feeling the impact. As foreclosures and mortgage delinquency rates have increased, so have association accounts payable as more owners fall behind in the payment of their common area fees. There was a time when a foreclosure wave like the one we are witnessing today (2 percent of all mortgages were in foreclosure in the fourth quarter of last year) would have [Read More...]

Community associations will no longer be able to play favorites, at least when it comes to the selection of companies providing cable services. In a decision that has infuriated cable companies and unsettled common interest ownership communities , the Federal Communications Commission (FCC) has decided to prohibit contracts giving large cable companies the exclusive right to provide services to multi-unit properties. The order, published in November and approved unanimously by the five-member commission, applies to [Read More...]

 Majority rules. That is the simple but essential concept on which a democracy rests, and it works reasonably well most of the time in common interest communities, where volunteer board members set policies and make rules for their self-governing communities. But some board members don’t understand, or are unwilling to accept, that in order for the majority to rule, the minority must support decisions with which it disagrees. When these board members find themselves on [Read More...]

Behavioral scientists differ on whether it is the first three minutes, the first three months, or the first three years that are most important in the development of a child. But they agree that what happens or doesn’t happen during the formative years, however defined, plays a huge role in determining a child’s future well-being and success. A common interest ownership community also goes through a formative period comparable to a child’s early years. And [Read More...]

Are homeowner associations governmental or quasi-governmental entities? Until last year, most attorneys who practice community association law would have said the answer was clearly, and appropriately, no. But a New Jersey appeals court called that long-standing assumption into question when it decided that a community association, in fact, plays the role of a municipal government, and its rules and regulations must, therefore, pass constitutional muster. That decision, in Committee for a Better Twin Rivers v. [Read More...]

The housing market is still struggling, keeping home sales and new home construction activity in the cellar. But the development of housing for mature (don’t call them old) adults is booming. The National Association of Home Builders predicts that at least 15 percent of this year’s housing starts will be in communities designed for residents who are 55 or older. Although only about 10 percent of older Americans currently live in age-restricted communities, surveys indicate [Read More...]

We are often warned that “the devil is in the details”—an admonition to read carefully and understand fully the terms of any agreement before signing it. That is good advice, to be sure. But community associations are as likely to be harmed by their failure to include essential details in the contracts they negotiate as by their failure to heed the details proposed by others.  We know now that it is, in fact, possible (and [Read More...]

Judging by the press reports, construction defect litigation seems to have become something of a growth industry. A recent media scan turned up, in fairly short order, a $3 million judgment awarded to a Vermont community association and a $12 million settlement negotiated by a Colorado community to resolve their claims of serious construction flaws, along with a reference to the largest construction defect award to date – a $35 million judgment in favor of [Read More...]

Meetings of community association boards are rarely enjoyable; given the option, most people would usually rather be doing something else. But the board meeting I attended recently was particularly unpleasant. The room was crowded, the atmosphere was tense, and the owners, who were shouting, listening, or both, clearly weren’t happy. Neither were the board members, who were targets both of the owners’ anger and of a petition to remove the trustees from office. As recently [Read More...]

Anti-smoking activists and some community association attorneys have been predicting that it was only a matter of time before the courts would allow communities to bar smoking entirely – not just in common areas, but inside individual homes. A Colorado District Court recently did just that. The court upheld a by-law amendment enacted by the Heritage Hills Condominium Owners Association prohibiting smoking anywhere within the boundaries of the four-unit community. Owners of two of the [Read More...]

Spurred by headlines about hard-hearted, heavy-handed homeowner associations foreclosing on “helpless” homeowners to collect often miniscule unpaid assessments, lawmakers in several states have enacted measures limiting the authority of associations to use foreclosure, or the threat of it, to encourage delinquent owners to pay their fees and to recover unpaid assessments from those who refuse. The negative headlines often obscure two essential points: Homeowners living in common interest ownership communities have an absolute obligation to [Read More...]

Every profession has its war stories. For community associations, these stories increasingly involve owners who, because of age, emotional problems, or both, pose a threat to themselves and to others in the community. Like the woman with Alzheimer’s, who wandered regularly from her complex when her son, with whom she lived, was traveling on business. Or the elderly owner whose toilet overflowed, creating a mess in his unit and a stench unbearable to everyone else [Read More...]

Discussions of controversial and even not so controversial community association issues are not always models of civility and reasoned political discourse. In this respect, the decision-making process in many homeowner associations does not differ much from what passes for intelligent debate in the halls of Congress today. Insults, name-calling, and allegations of evil intent are not uncommon forms of expression for owners expressing their dissatisfaction with board policies and the trustees who adopt them. These [Read More...]

The transition from developer to unit owner control of the board can be a stressful, uncertain and overwhelming time in the life of a community association. A new board may be confronted with questions regarding the condition of the common area, the financial health of the association and a myriad of operational issues. Many of the steps the board takes, or fails to take, in this critical period will have long-lasting impacts on the health [Read More...]

The development community greeted the permitting reform bill that Gov. Mitt Romney signed into law a few weeks ago with relief and high hopes that it will eliminate many of the costly and time consuming legal logjams in which Massachusetts real estate projects regularly become ensnared. But a realistic review of the law and its likely effects suggests that developers would be well-advised to curb their enthusiasm and scale back their hopes for sweeping changes [Read More...]

Question: How can community association boards alter the uses of common areas? Answer: Very carefully, and with scrupulous attention to the requirements of the community’s governing documents and the wishes of its residents. A recent decision by a California appeals court illustrates what happens when a board ignores that common sense advice. The story, which reads like a case study in what not to do, takes place at Pelican Hill Community Association in Orange County, [Read More...]

The condominium association’s board of directors has just approved a large special assessment to finance the replacement of an aging heating and cooling system, and owners are not pleased, to say the least. But one owner in particular is infuriated by the decision. He shouts obscenities at the board during the meeting and continues to hurl insults at the board president after the session ends, blocking the door as the president tries to leave the [Read More...]

Thoreau famously advised writers to “simplify, simplify.” But for community associations writing or negotiating management contracts, “Specify, specify” is far better advice. When relationships between associations and their managers break down, as they do occasionally, the problems can often be traced to the failure on both sides to articulate their expectations at the outset and state them clearly in the contract they sign. A well-drafted contract can avoid many problems and provide a framework for [Read More...]

Jayne and Ed Elebiari said their dog “Pooky” helped them cope with the debilitating depression from which they both suffered, and asked the board of their condominium association to waive the community’s “no-pet” policy so they could keep their tiny companion. The board said no – a decision that cost the association $12,500 in damages, awarded by a court that found the association had improperly denied the Elebiaris’ request. Following similar logic, a Michigan court [Read More...]

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