BIGGER IS BETTER: SMALL CONDO TIPS AND TRAPS!

Published on: January 11, 2013

Whether you sign up for that gym membership promising yourself that this will be the year that you finally shed those unwanted pounds, or you find yourself having just a little extra time to think beyond the day-to-day blur that each of us call our lives – this time of year, for some reason, really does lend itself to new beginnings and planned changes.   If you live in a small condominium, it may be difficult or uncomfortable, or seem un-neighborly, to raise certain issues regarding the management of the association. But the New Year brings a perfect opportunity to suggest a meeting to discuss those issues as well as plan for potential future problems facing your association before they occur, and to quite literally, get your house in order for the coming year.

When things are going well, as in any partnership, most problems in small associations can be easily overcome.   But living in a small association can be tricky at times, especially when things are not going so well.  Small associations generally do not have the benefit of a professional manager and often operate with a small budget and little reserves.   Likewise, in many cases the condominium documents may be poorly drafted and not adequately tailored for a small community.  For instance, it is common for condominium documents in small condominiums to designate each owner as a Board Member, and require unanimous consent of all of the Board Members in order to take action on behalf of the association.  At first glance, that may sound reasonable.  But how can the association act to collect delinquent condominium fees when the delinquent owner can veto such action?

Likewise, even when the condominium documents do provide adequate provisions, many small associations tend to operate informally, rather than following the provisions contained in the condominium’s documents.  Regular meetings and reporting often do not occur and meeting minutes are replaced by each member’s “recollection” of the prior years’ discussions.   Decisions are generally made by a show of hands or a consensus tally of replies to a string of emails.   Undoubtedly, when it comes to planned expenditures, there is always at least one owner who somehow does not remember ever discussing spending three thousand dollars to reseal the driveway.   And while designating one person to care for the bank accounts, handle the insurance policy, trash contract, oil delivery schedule and negotiations with venders may sound efficient; what happens when that individual sells or gets an unexpected divorce, or falls into their own financial hardship?  Will you know where the records are, or how to change the signatory on the bank accounts to pay bills, or even make sure there is oil for the boiler?

It may seem stodgy, boring – even excessive, to break out the association’s condominium documents and force a group of three to follow provisions written twenty years ago.  But, by taking basic steps such as short meeting minutes and formal discussion and votes to decide matters, many stressful situations and arguments can be avoided.  Likewise, reviewing the document provisions to identify areas which may be outdated or ill suited for small associations, and amending the language, can prove crucial in resolving many of the issues that can often feel insurmountable.

Living in a small association can be very rewarding, and relationships with fellow owners can often seem akin to extended family.  But as with any family, relationships have to be managed, and clear boundaries are essential.  The best time to discuss matters – whether financial or personal – is always before there is conflict and when everyone is on an even playing field.  Do not wait until the heat is off and the pipes are freezing to find and review the terms of the oil contract.   You don’t have to become a condominium document militant – but some emergency drilling exercises might be in order.  Make this year’s resolution count by steering your association in the right direction without ruffling too many feathers.  After all, owners living in small associations do not have the luxury of building good fences to make good neighbors.

Please contact Mark Einhorn at 781-843-5000 (x121) or via email meinhorn@meeb.com for further information.