Sunday, January 27, 2013

Is your Condo or HOA Board enforcing phantom rules?

We often hear of boards enforcing a variety of rules restricting pets, leasing, guests, commercial vehicles and more. Many times these restrictions are proper and the board is within its rights to enforce them. However, sometimes it is discovered that a long-standing restriction doesn't really exist.

How does it happen that some boards are enforcing phantom rules?

When association boards are elected, sometimes the new directors do not review the governing documents with care (or even at all) and rely, instead, on longstanding patterns of practice by previous boards. Some directors are astonished to discover that the new purchaser approval language doesn't mention at all a requirement for a personal interview despite the fact that they were themselves subjected to an interview when they moved in. The same false patterns can hold true for something as controversial as a pet restriction or as innocuous as the date of the annual meeting being wrong.

Naturally, at some point an owner may challenge an enforcement action and respond with the obvious: "show me where in the documents it says that." If a board cannot demonstrate the authority to enforce a certain restriction, it may wind up paying attorney's fees and costs to the opposing party as well as undermining membership confidence.

Every board of directors would be well advised to undertake an annual rules and regulation audit to determine which restrictions are currently enforceable pursuant to the association's governing documents as well as current law.

2 comments:

  1. My first encounter with a phantom rule was in my own condo association. When I bought, I had to wait out the first right of refusal process which fortunately was not exercised by any existing members. Years later a unit was sold and the contract was not put through the first right process. The members subsequently found out that first right never existed in the first place even though it had been the practice for decades.

    I ran into it again last week when questioning a board member at a condo where a client is considering a purchase. The board member admitted that they are enforcing pet restrictions and occupancy limits that are not addressed in the condo docs. His response when questioned was "the docs are poorly written and we are doing this for the good of the community." An owner has little recourse other than to lawyer up and potentially alienate the board and some neighbors.

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  2. Our Board of Directors have implemented fines. Which is a great thing providing they are reasonable. At first the manager was sending letters to owners that they must pay a fine for something that they did that did not comply with the condo docs.

    We just stated a fining committee but one member was married and living with a officer of the board. We were fined for being in the wrong place at the wrong time. The fine belonged to another owner and not our unit. After discussing this with management, they did fine the other person and not us.

    Seven months laster we get a second fine stating we now owe late charges to the unpaid fine and we will be charged monthly until its paid. We are not paying it.

    The Association took a fine amount from one of the unit owners monthly maintenance when they didnt pay their fine.

    Now we have new rules that our condo docs say we dont have to. Like going before the association to be approved to rent or purchase. Or non-refundable elevator use when moving in or out. It was always refundable.

    The board is not fined for grievances of their own. I feel rules need to be fair.

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