Month: February 2009
Facts: In response to observations of water damage to a condominium building's balconies, an association hired consultants to inspect the building's waterproofing systems as well as the decks and balconies.
Facts: A water leak developed directly above a member's condominium. The member permitted a restoration company into his condo to dry the carpet and an environmental inspection group to inspect the premises. The inspection results showed that the member's condo contained visible microbial growth on the closet and bathroom walls. The association then asked the member to move from his condo so the remediation could be performed. The member denied that his condo had any mold and refused to vacate unless the association paid his relocation expenses.
As nonsmokers become more assertive about their right not to breathe secondhand smoke, there has been increasing litigation over the issue of smoking in condominiums.
A recent California case is an example of this, and it may push boards to consider eliminating smoking in the common areas of condominium communities. Although the case involves an apartment complex, there are similarities with how smoking in condominiums has been litigated—and will continue to be litigated.
Facts: A property owner wanted to profit from his land by establishing a common interest development. He subdivided his land into 16 lots and a large common area. He built homes on six of the lots, sold five of them, and kept one house for himself. The community was governed by an association in name only. There were no formal meetings from 1980 through 1997, and the original property owner acted informally on the association's behalf.
As the number of foreclosures and communities experiencing budget constraints rises across the country, many associations are taking a close look at how they can manage their community in an efficient and cost-effective manner. Some have been forced to increase assessments and cut back on services provided.
Facts: A member sued her condo association and the president of its management company for imposing an allegedly invalid assessment on its members. According to the member, this assessment violated the governing documents and led to the illegal attempted foreclosure on her home.
Facts: After a member purchased a terrace-level condominium, he discovered drainage problems on his terrace that eventually caused mold and water damage to his condominium. The terrace-level condominiums in the community are surrounded on three sides by a wrap-around balcony. The initial damage from faulty drainage was further exacerbated by two hurricanes. The member sued the association, and the association asked the court to dismiss the lawsuit because the member's complaint technically failed to state a claim.
Many record inspection requests by members are legitimate and take relatively little office time. Unfortunately, sometimes requests may be driven by unfounded suspicions, with the intent to harass the board or manager. Also, these requests may be attempts to gather confidential information to which members are not entitled so that they may sue the association or other members. Therefore, to protect the interests of the association, it is important for board members to know which requests to grant and which to deny.
The Federal National Mortgage Association, or Fannie Mae, has taken steps to make the cost of purchasing or refinancing a condo more expensive, unless the purchaser makes a sizable down payment.
With many lenders already wary of condo loans because of their default rate, Fannie Mae has added a fee of .75 percent of the loan amount of a 30-year fixed mortgage, for borrowers who put down 25 percent of the purchase price or less, effective April 1, 2009.