Month: November 2008
All management companies and associations have to deal with a problem employee at some point, no matter how carefully they hire employees or how diligently they try to create a good work environment. For many managers or directors, deciding whether and how to discipline or fire an employee is one of the most stressful parts of the job.
There are times when even good planning cannot prevent significant and unforeseen budgetary challenges beyond an association's control. The latter half of this year has seen an increase of foreclosures that are affecting entire communities as members are abandoning homes and leaving dues unpaid. And when associations are short on funds, boards may struggle to juggle costs to prevent members from having to make up all the difference.
Q I am the treasurer of a condominium association. I am concerned about how the Emergency Economic Stabilization Act may affect the safety of our association's accounts with banks. Our association collects monthly maintenance payments from members and deposits the funds into three accounts that are used for operating expenses, security deposits, and large-project reserves. Please explain how our accounts might be affected by the act.
Facts: A dispute arose between a condo association and a developer after the developer obtained a permit to construct a parking garage adjacent to the condominium building for its commercial property. In its plans, the developer reduced the parking available for association members and did not provide for guest parking, contrary to agreements made when the condo association sold the land to the developer's predecessor. The association sued the developer.
Facts: Unlike other roads in the city, the roads in a subdivision-style condominium development were owned by the association, which hired contractors to maintain them and perform tasks such as snow removal. The association sued the city for denying road services and creating a heavier burden on members than on owners of single-family homes.
Ruling: A Wisconsin district court dismissed the association's lawsuit.
Q My association publishes a community newsletter and hosts a community Web site. I can readily imagine a situation in which a disgruntled member or local business falsely accuses the board of defamation for something that may be published in the newsletter or on the Web site. What are the defenses against defamation lawsuits?
Facts: A member sued his condo association and the management company for injuries he suffered when he slipped on an ice patch. The association had a contract with a snow removal service. The member alleged that because of the negligent removal of snow, several large patches of ice accumulated on the walkway. The trial court dismissed the member's lawsuit because under Illinois law, anyone in charge of residential property is not liable for any personal injuries allegedly caused by a sidewalk's snowy or icy condition unless the person's acts amount to clear wrongdoing.
Facts: An elderly member transferred ownership of her home to a trust that she had set up. Under the terms of the trust, the ownership of the home would transfer to the member's son at the fifth anniversary of the trust's establishment or when the member died, whichever occurred first.
Many associations are seeing an increase in the number of members defaulting on their mortgages and not paying their association fees. This is a problem for many communities because if even a few members do not pay their assessments on time, an association can face serious financial problems. Reserves can become depleted, and the community might have to make trade-offs about which bills to pay and which services to forgo.
Facts: An association sued a member for violating community building restrictions. The member converted his garage to a recreation room without board approval and in violation of the governing documents. The governing documents provide that all homes are to be used for “none other than single family residential purposes with usual and appropriate outbuildings and a private garage.”