A condominium association in the Milwaukee area was owed more than $2,000 in fines by one unit owner. For more than a year, the unit owner had been fined numerous times due to the same violations of the bylaws which the unit owner refused to correct. While the unit owner paid assessments monthly, the unit owner ignored the fines and the association’s attempts to demand that the unit owner correct the violations. Continue Reading Unit Owner Bad Behavior – When Fines are Ignored
A condominium association had an owner that was uncooperative, didn’t like following rules and paid assessments on her own timeframe for more than 10 years. In the spring of 2009, another law firm started collection against the unit owner for unpaid assessments by filing a lien on the property. During the next year and a half, the lien was foreclosed and judgment entered. In November 2011, the property went to sheriff’s sale. At the sheriff’s sale the attorney for the association opened the bidding at $1 and the property was purchased by a third party for $2. When the third party spoke with the unit owner, he felt sorry for her and sold the property back to her. Although the association’s attorney sought and was granted a deficiency judgment, the judgment was not collectible because the unit owner was retired and had no assets. As a result, the association’s debt had increased to more than $22,000, which the association lost due to the purchase of the unit by the third party for $2. Continue Reading Why Hire an Attorney Who Specializes in Condominium & HOA Law
This is an all too common phrase uttered by members of associations. It is most uttered when the Board is enforcing its condominium documents, including its rules. The chant increases in volume when the violating owner is able to find some other violation of some other rule that they believe the Board is not enforcing. Frequently it has this ring to it: “this is discrimination.” For many reasons that argument fails to hold water. However, courts do listen to owners who can show that an association is only enforcing or selectively enforcing its rules. Continue Reading You Can’t Do That
You might think that when a tenant breaks a rule, that you can simply fine him like you would fine an owner-occupant. Or, you might think that you can just notify and fine the owner/landlord for his tenant’s violation, since he’ll ultimately be responsible for the fine anyway, right? These assumptions are intuitive; however, anyone who has been around condominiums and HOAs long enough can tell you that the laws governing them are not always intuitive. In fact, sometimes it seems like the legislators threw common sense right out the window! Continue Reading Fining for Tenant Violations? You Might be Doing it Wrong.
It has been said that insurance is the only product that both the seller and buyer hope is never used. That certainly rings true when it comes to community Associations’ insurance policies, but it does not diminish the need for Associations to protect themselves and their unit owners from an ever-widening array of damages they could suffer. Wis. Stat. § 703.17 requires Condominium Associations to obtain insurance against potential hazards, but only discusses scope by saying that the Association must acquire insurance “for not less than full replacement value of the property insured against.” Continue Reading It’s Never Too Late to Ensure Your Association is Properly Insured
Governing Documents for Condominium and Homeowner Associations don’t age well. They are not like a fine wine. They are more like cheap cheese. Remember, they were likely written by a developer who really only cared about them until it had sold all of its units or lots (assume 10 years or less). So if your documents were written before 2008, it is unlikely that they have anything in them to deal with:
- Emotional Support Animals;
- Short Term Rentals (AirBnB was founded in 2008 in San Francisco);
- Medical Marijuana; or
- Unit or Lot Owners buying insurance to cover a large insurance deductibles that could be assessed against them if their actions cause an insured loss.
In Wisconsin condominium associations are required to insure all of the property (other than the personal property) of the unit owners. (See, Sections 703.17(1) and 703.02(14) Wis. Stat). Many unit owners worry (needlessly I would contend) that their neighbors have improved their unit more than they have and then argue that they don’t want to pay the insurance for those improvements. Ignoring for the moment that those improvements also likely increase the value of their neighbors unit and therefore increase the value of their unit, which they are more than happy to accept, this argument simply misses how insurance companies actually insure condominiums in Wisconsin. The law requires all of the property to be insured. The law requires that the insurance be paid as a common expense. (Section 703.17(1) Wis. Stat). Accordingly, arguing over who has to insure what, considering the clear language of the statute, wastes both the time and resources of an association. However, there is something a board of directors can do to increase the insurance it provides unit owners without any material cost to the association. To adequately explain where these savings can be obtained, I first need to explain how insurance companies currently charge premiums and pay condominium claims in Wisconsin. Continue Reading Free Money from your Association Insurer
I have written before on the subject of associations’ continuing struggle to convince enough unit owners to attend owner meetings in order to meet quorum requirements, and otherwise to simply get business done. Recognizing that not every condominium association may be ready to take the step to convert to “E-voting,” another way to ease the burden of low-owner attendance at meetings is the proper use of directed proxies or absentee ballots. While similar in concept, the two are legally distinct and it is important for associations to understand the differences to determine which process they can use. Continue Reading Directed Proxies vs. Absentee Ballots: What is the Difference and Can Our Association Use Them?
My points below exaggerate problems that I commonly see, but the advice is sound:
- “Are your three brain cells still talking to each other?” Knowing how to deal with difficult people is a prerequisite to property management. Don’t aggravate a situation by making a challenging person even more difficult to deal with – this won’t solve the problem. Attempt to always maintain a professional, positive attitude. We all fail or become less than we want to be at times. Forgive yourself and others, but even in forgiveness bad actions by unit owners have consequences.
- “This is the insurance company/policy you should approve.” Property managers are usually not licensed insurance brokers or agents, and their recommendation may be wrong. Does your association insurance cover you for those types of opinions if they are wrong? Property managers can certainly identify options. However, the Board, ideally on the advice of an insurance committee, should be deciding on the amount and types of coverage purchased. Continue Reading 6 Things Community Property Managers Should Never Say
Is your condominium or homeowners association currently controlled by the declarant/developer? Would you like to be prepared when the developer is ready to hand over the reins to you, the owners? In Wisconsin, developer turnover is governed by Section 703.15 of the Wisconsin Statutes. To ensure a seamless transition, there are certain steps associations should take both before and after developer turnover.
Before turnover, it is essential that you obtain all financial and corporate records of the association, all construction documents, all association contracts, as well as a complete list of the names, address and contact information for all unit owners and mortgagees. You should meet with the developer and project manager to determine if there are any ongoing issues (financial, construction, etc.). Set up an insurance committee of unit owners to review your insurance policies. Decide if your association is going to hire a management company and interview potential managers. Hire a knowledgeable condominium attorney to represent the association for the turnover. Continue Reading Turnover – Considerations for your Condominium Board of Directors and Officers