Condominium Insider
MEEB’s Condo Law Newsletter
HOW TO DEAL WITH A ‘BAD’ CONDOMINIUM TENANT - CONTACT THE OWNER
If a condominium owner regularly plays loud music, rolls golf balls across an uncarpeted floor, otherwise disturbs other residents or violates association rules, the board’s response is clear: Notify the owner that he or she is violating the rules and fine him/her if the violations continue. But what if the annoying resident is a tenant, not an owner?
The response isn’t quite as straightforward. The board has no direct relationship with the tenant, no authority to enforce the association’s rules against him, and certainly no authority to evict him, unless the governing documents specifically grant that authority, which most do not. The board’s relationship is with the owner of the unit, who is the tenant’s landlord, so any actions the board takes should start there.
MANAGING HIGHER CONDO INSURANCE PREMIUMS:THE NOT SO GOOD, BAD AND VERY BAD OPTIONS ASSOCIATIONS HAVE
“What goes up, comes down” – unless you’re talking about insurance premiums to which that law of physics doesn’t seem to apply. There may be some exceptions, but you are unlikely to find many condo association boards popping champagne corks after opening their premium renewal notices. Increases are averaging from 12 percent to 60 percent nationally. Even properties with pristine claims histories are feeling the pain.
Simple math explains the double whammy driving this trend. Climate change is increasing the number and intensity of weather-related natural disasters, resulting in more insurance claims for the property damage they cause (whammy one). The rising cost of just about everything (whammy two) is dramatically increasing repair and replacement costs. It’s costing insurers a lot more to provide property insurance and they are responding by increasing what they charge for it.
CRIME IS BOTH A CONCERN AND A POTENTIAL LIABILITY RISK FOR COMMUNITY ASSOCIATIONS
Are community associations required to protect residents from the criminal acts of third parties? This question usually arises after press reports of a crime committed in a condominium community for which the association is being sued. Until fairly recently, the generally accepted answer was – no. While boards might be required in some circumstances to address the criminal acts, or potential criminal acts of residents – for example, when one resident threatens to harm others – they had no obligation to protect residents from burglaries, assaults, rapes or other crimes committed by third parties who had no relationship with the association.
WHEN WIRE INSTRUCTIONS GO WRONG: LESSONS FROM A $50,000 CYBER FRAUD
Cyber fraud targeting condos and property management companies is no longer theoretical, it’s the stark reality of today’s world of electronic communications. A recent incident involving a management company illustrates how quickly a seemingly ordinary transaction can become a financial nightmare, and how easily liability disputes can follow.
FRAUD RISKS MAY BE SMALL FOR CONDOS BUT FIDELITY INSURANCE IS ESSENTIAL
Ask board members about their property insurance coverage and you’ll probably get a knowing if somewhat pained look. Questions about fidelity insurance, on the other hand, are more likely to produce a blank stare, because many board members either don’t know what it is or assume they don’t need it. Fidelity insurance covers losses resulting from theft, fraud or other criminal acts. Fortunately, these losses for condominium associations are relatively rare – but they aren’t unknown. The recent collapse of a large Massachusetts condominium management company accused of stealing several million dollars from the more than 200 associations it managed provides a recent case in point, illustrating why all condo associations need this essential insurance coverage.
THE GOOD, THE BAD AND THE HORRID IN COMMUNITY ASSOCIATION CONTRACTS
There are many things that make attorneys cringe, but there is one phrase that makes them want to pull the covers over their heads: “After I signed the contract….” That’s like saying, “After I jumped in the pond, I realized it was infested with snakes.” There’s not much an attorney can do for you at that point, except call an ambulance or an undertaker.
Poorly drafted contracts, unlike snake bites, aren’t going to be fatal for a condominium association, but they may contain conditions that could be expensive and harmful. That’s why the association’s attorney should always review contracts before you sign them. (You knew I was going to say that!) It is also why I’m going to concentrate here on the provisions boards either want to include or want to avoid in construction contracts and contracts with their vendors.
RISKS VS. REVENUE
To rent or not to rent association amenities to non-owners. That is a question boards often ponder as they eye opportunities to increase their revenue. But third party rentals also entail risks that boards must recognize and weigh against the potential benefits.
Liability is the most obvious risk but it isn’t first on the list. That distinction goes to the Americans with Disabilities Act (ADA). By renting space to third parties, a community association might be classified as a “place of public accommodation” subject to the ADA and thus required to make common areas and amenities accessible to individuals with disabilities.
SNOW AND ICE LIABILITY RISKS
An owner sent the board a letter complaining about the association’s snow-removal contractor. He says the contractor waits too long before beginning to plow and doesn’t do an adequate job of clearing the snow and treating the ice. The letter says the owner is putting the board on notice that if anyone slips and falls, the association will be sued for negligence. This is the only complaint about snow removal the board has received. How should we respond?