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?
A Wisconsin condominium association had a unit owner who was habitually delinquent in the payment of assessments. Neither the association or the property manager had ever spoken to the unit owner. The association hired an attorney who filed one small claims action after another against the unit owner every time she became delinquent. The association was awarded judgment each time, and was paid on the judgment debt each time through numerous garnishments However, the attorney fees were awarded at the time of judgment, so the association was not able to recover the additional attorney fees it incurred for each garnishment. After each garnishment the debt would again accumulate and the collection process would start over. The unit owner was not paying assessments outside of garnishment. Continue Reading Why Foreclosure and Money Judgment at the Same Time?
If your condominium association documents include restrictions on occupancy (how many people can reside in a unit), be aware of what the federal law states on the issue to avoid potentially costly lawsuits brought by disgruntled unit owners.
While it is legal for a condominium association to adopt and enforce occupancy policies, those rules (and enforcement of the rules) must be reasonable and in compliance with state laws and local ordinances. If they are not, the rules run the risk of being found discriminatory based on familial status under the federal Fair Housing Act. The act prohibits discrimination on the basis of (among other things) familial status, which means the presence of children in the family. Continue Reading Enforcing Occupancy Requirements in Your Condominium
Non-action may no longer be a safe choice. In October of 2016, the United States Department of Housing and Urban Development (“HUD”) added certain provisions to the Fair Housing Act (“FHA”) which impose additional liability for condominium associations, homeowners associations, and landlords based on non-action.
One of the main additions to the FHA was the inclusion of a prohibition of quid pro quo harassment. Under the new provision, it is illegal to request or demand conduct in exchange for the sale or rental of a unit or dwelling, the provision of services for a unit, or the terms or conditions of residing in a unit. Continue Reading FHA Update
First mortgage holders continue to be the largest impediment to Association collections, once unit owners fail to pay. This arises because the bank’s lien is superior to the association’s and therefore most associations decide not to proceed with a foreclosure if the bank has begun its foreclosure. This is true even though banks frequently file foreclosures and then don’t proceed to the sheriff sale, adjourn the case indefinitely or very SLOWLY, or never seek to confirm the sale. Accordingly, Associations must have a strategy to combat these issues. Continue Reading Combating First Mortgages
A Wisconsin condominium association was built as many condominium projects are — with privately owned roads. The difference with this development is that it was part of a larger development plan — one that forced it to share its private thoroughfares with neighboring associations and an apartment complex.
Over time, as residents purchased units in the development, the traffic on the Association’s private streets increased greatly, and numerous speeding cars became a safety issue. The City was less than helpful with traffic enforcement, claiming that since the streets were private, it was not the City’s problem. Continue Reading Litigation With City Results in Municipal Ordinance Favoring Association
When a Board or Property Manager sends a Unit Owner to its attorneys for collection, the Board or Property Manager should refer ALL communications from the Unit Owner relative to the debt, including the request for any pay off, to the attorney. Discussion by the Property Manager or Board with the Unit Owner almost always leads to problems. Continue Reading Collections – Reconciliation of Unit Owner Ledgers and Conversations with Unit Owners
It is well known that Association Board members (directors) have fiduciary duties to their unit owners and associations. It is almost as commonly known that the officers have the same fiduciary duties. Yet associations, directors and officers are often sued for failing to meet their duties. Unfortunately, directors and officers often contribute to their risk by doing things that enhance the likelihood of suit. For fun I thought I would write this post from that standpoint. Continue Reading 12 Things My Board and I Do When We Want to Be Sued
A fiduciary duty creates an obligation to act for another’s benefit. A board of director’s fiduciary duty is to the association and its members. So what are the core duties of an association director? Individual loyalty, good faith and fair dealing in conducting the association’s business, care, and obedience to follow and enforce the association’s documents. Continue Reading Fiduciary Duties 101 – Limiting the Liability of the Board