TRACKING BOARD POSITIONS
QUESTION: Are condominium associations required to report the names of newly elected board members whenever the board changes?
ANSWER: That depends on where the association is located. In Massachusetts, the names of a condominium’s trustees are recorded in the Registry of Deeds and the list should be updated when the composition of the board changes.
This seems like a small administrative detail, but boards that overlook it – as many do – could create serious problems for condominium owners and for the association.
When associations apply for a loan or when owners want to sell or refinance a unit, lenders will typically require the board to provide documents and certify the accuracy of the information provided. As part of their due diligence, lenders will want to verify that the trustees certifying the information are the trustees of record. If not --- if the list on file at the registry of deeds hasn’t been updated -- the transaction may be delayed.
This is a fixable problem, but fixing it can take time and the delay could be problematic, if rates change before a loan has been approved, for example, or if a buyer exercises the right to cancel a transaction that doesn’t close by a specified date.
In most cases, the delay just creates a headache for everyone involved, but if you’re dealing with registered land in Massachusetts, it could be more than an inconvenience. Proceedings in the Land Court, which handles registered land, are notoriously complicated and time-consuming, so there’s a greater risk that a delay might derail a transaction.
Recording requirements for board members are different in New Hampshire and Rhode Island. Neither state has a registered land process, so that isn’t a potential concern. Some condos in New Hampshire are structured not as trusts but as corporations whose directors or officers must be filed with the secretary of state. As in Massachusetts, failure to update the board member list could delay transactions, but that isn’t the only concern. If corporations fail to update their records for too long, the New Hampshire Secretary of State may involuntarily dissolve them – a fixable problem, but not one that condominium associations particularly want to confront.
Most New Hampshire condominiums are structured as voluntary associations rather than as corporations
The names of the board members are typically listed in the articles of agreement filed with the secretary of state when a condominium is created, but there is no requirement for updating them. Updating the trustee list is a good practice, to be sure, but in New Hampshire, it is rare for anyone to check state records to verify who is on a condominium board.
In Rhode Island, all incorporated condominium associations must file with the Secretary of State.
Unincorporated condominiums, are required to record the names of their executive board members with the municipal land evidence records department and must update that list “as often as necessary to reflect any changes in the composition [of the board].”
If you have any questions regarding how to register board members for your association’s, please contact your MEEB attorney directly or at law@MEEB.com.