Q. I live in a 50-unit, self-managed condominium project. Board members are not experienced in competent building operations. Common-area cleaning is performed by a resident or a low-end cleaning service. Carpeting has never been professionally cleaned. Painting projects are incomplete. Parking lot repairs and lobby-renovation projects were shoddy and required costly reworking.
Several board members oppose professional property management, saying that owners’ assessments would increase substantially. Requests for timely financial statements have been disregarded. What is the alternative for us who are disappointed in the appearance of our property? Does the board have an obligation to the owners to release periodic certified statements?
A. The board is responsible for managing the property at the same level as a professional property manager. A self-managed condominium operation can work if the board is organized and recognizes when it is necessary to obtain independent advice and services.
Professional management gives the board the assurance competent, experienced personnel are managing the association and have the necessary contacts to retain vendors at competitive prices.
In either case, the board must spend money to maintain the property and preserve values. If the association has deteriorated to the point you describe, it is worth the expense to hire professional property management or retain an experienced individual manager.
The Condominium Act requires the board to distribute an annual summary of income and expenses. Owners may request and inspect the financial books and records of the association at any time.
Q. In December, one of our resident owners suddenly passed away. At the time of his death, he was three months delinquent in assessments. Almost immediately, his children started living in the unit but also have failed to pay assessments. They have told us that the owner’s will has been filed in probate court.
What course of action should we follow to make sure that the obligations of the association are paid?
A. Conduct a title search to determine the party who owns the unit. Search the probate court records to confirm that an estate has been opened in the individual’s name and determine the date for filing claims with the estate. Record a lien against the unit, and if an estate has been opened, file a claim for assessments with the probate court. At some point, there will be a hearing on claims that will take place approximately six months from the date of the opening of the probate estate.
While it may be necessary to file an eviction action, the probate court will be the appropriate forum to resolve the assessment claim. Review the declaration to determine whether the association has any rights to question occupancy of a deceased owner’s unit.
Q. Our building was turned over to the owners in December. Only 44 percent of the units have been sold. The developer has rented most of the unsold units.
As the new board, we received our first financial report, along with a proposed 2011 budget, from the management company. The report showed that the developer has not paid any assessments for his units and has used most of our reserve fund. The attorney hired by the management company sent a demand letter to the developer, but no other action has been taken.
What is the board’s responsibility and what action should we take to ensure that there are funds to pay our bills?
A. Treat the developer as any other delinquent owner. If a demand was sent to the developer for all of the unsold units, the next step is to file an eviction action against each of the developer units. If the association obtains a judgment for delinquent assessments, the board should obtain an assignment of rents from the tenants of the developer units. The rent collections would satisfy the assessment obligations.
The current board may consider a claim against the developer board members to return reserve funds used for noncapital expenditures.
