Please join Husch Blackwell’s Condominium & HOA Law Team on September 17, 2021 as we outline some frequently encountered legal challenges and issues that can prove time-consuming and costly when mishandled.

Topics

  • Condominium legal document review
  • Collections from a debtor’s perspective
  • Handling disruptive unit owners and residents
  • Arbitration
  • Hoarders and foreclosures
  • Rentals and smoking
  • Construction issues]


Continue Reading Association Academy: If it Weren’t for the People, Association Living Would be Perfect

Facts

A unit owner stopped paying assessments.  The condominium association properly recorded and perfected a lien against the unit for those assessments.  Under the applicable Oregon statute, the condo association lien is prior to all other liens, except tax liens and a first mortgage or deed of trust.  An exception exists, such that the condominium association can gain priority over the first mortgage if (among other things) “the association gives the first lienholder formal notice of the unpaid assessments, and the lienholder ‘has not initiated judicial action to foreclose the mortgage * * * prior to the expiration of 90 days following the notice[.]’”  In this case, five days after the association recorded its lien, the bank filed a judicial foreclosure action against the unit, but did not name the association as party, and therefore the foreclosure suit would not have terminated the lien rights of the association.  To correct this issue, the bank filed an amended complaint naming the association as a party.  Five months later the trial court issued a dismissal of the claim against the association, without prejudice, for failure to prosecute.  Five months after that the association sent the bank notice of the unit owner’s default on assessments.  The bank took no action in the next 90 days to reinstate the dismissal or file a new action against the association.
Continue Reading Lien Priority Statutes and Why They Make Sense

Please join Husch Blackwell’s Condominium & HOA Law Team for this informative seminar. We’ll review fine collection, common zoning regulations and practices, the importance of cyber insurance, and recent updates from the Department of Housing and Urban Development on emotional support animals.
Continue Reading Association Academy: Condo and HOA: Zoning, Cyber Crimes, Fine Collection, and Emotional Support Animals

Summary

The language and definitions in your governing documents reflect the intentions of the Association.  You need to either follow them or amend them, but NOT ignore them.

Facts

Sunnyside Resort Condominiums is a private resort property located on Lake Gogebic in Gogebic County, Michigan, and governed by the Sunnyside Resort Condominium Association, Inc. (SRCA).  In 2006, the Plaintiffs purchased vacant lots within SRCA with an individual value of $13,000.  Unlike other lots, the Plaintiffs’ lots, among other things, lacked improvements to the property, utilities, and septic systems.

Assessments on Vacant Lots.  Although the Plaintiffs’ lots were free from any structures, Plaintiffs were charged assessment fees despite the association documents essentially providing that the Plaintiffs were not required to pay association assessment fees until a structure was built on the lot.  In part this was due to the fact that the percentages of value for the units were calculated based on several factors including, market value, size, and allocable expenses for maintenance. Plaintiffs stopped paying the monthly assessment fees for their two units in July 2015.
Continue Reading Vacant Land Units Can Have a 0% Percentage Interest

Facts

Plaintiffs were two owners (Maples and Brown) at Compass Harbor Village Condominium Association in Maine (the “Association”) who had purchased their respective units sometime in 2007.  The Declarant was an LLC that held more than 50% of the votes (15 of the 24 units) and therefore controlled the board.  For many years the Association common areas were not property maintained in many ways.  In addition, the Association failed to hold meetings, take votes on Association matters, maintain banking or other records and refused to provide financial information to the owners.  The Declarant’s position was that “because it holds a majority of the voting power in the Association and therefore any dispute between it and any of the unit owners would ultimately be decided in its favor.”  Plaintiffs claimed to have lost about $53,000 in value in each of their units because of the actions of the Declarant.
Continue Reading Failing to Maintain and Properly Collect Assessments is a Breach of Fiduciary Duties

Does your homeowners association have a written collection policy?  What duties does the property manager and/or Board have under the policy?  Learn what role the property manager and/or the Board of Directors should have in the assessment collection process.

Want to learn more about Wisconsin condominium and HOA law from experienced condo and HOA

The law does NOT require a Board to extend additional time to owners to pay assessments just because of the COVID 19 pandemic.  While such policies may show a concern for members of a community, probably without realizing it, those policies may also have significant adverse effects on the Association, especially in 2020.  What

The law does NOT require a Board to extend additional time to owners to pay assessments just because of the COVID 19 pandemic.  While such policies may show a concern for members of a community, probably without realizing it, those policies may also have significant adverse effects on the Association, especially in 2020.  What

First, I want to thank Julie Howard and her firm NowackHoward in Atlanta, Georgia for much of this Blog (adjusted for Wisconsin Law and my commentary).  She is the former president of the College of Community Association Lawyers (“CCAL”), an excellent association attorney, and has been kind enough to allow Husch Blackwell to use much of their article.

The law does NOT require a Board to extend additional time to owners to pay assessments just because of the COVID 19 pandemic.  While such policies may show a concern for members of a community, probably without realizing it, those policies may also have significant adverse effects on the Association, especially in 2020.

With this background, Associations should first look to see which of their expenses are variable (those that can be cut or reduced because of the pandemic).  Secondly, the Board must ask can the Association really afford to extend the payment of assessments for some or all of its owners?  Associations faced this same challenge during the last financial crisis.  In an editorial published on February 5, 2008 in The Atlanta Constitution, George Nowack (another former president of the CCAL) explained that because many Associations had allowed members to not pay and suspended collection actions, the balances on unpaid accounts reached levels that members gave up trying to pay.  The lesson learned from that past is that a Board is not doing any member a favor if it allows an Association’s accounts receivable to go unaddressed.  That advice is equally true today.
Continue Reading Assessment Collections and COVID-19