Maine Condo

This post is one of a series about 10 Most Common Misperceptions About Condominium Laws And Operations, which I presented at the Maine Condo Forum and Expo in Portland, Maine, on September 25, 2010.

Email is a wonderful thing, and is especially useful if Board members are away and cannot attend a meeting in person.  Decision by email correspondence seems to be very common but, unfortunately, the Nonprofit Corporation Act requires all decisions to be made at a Board meeting, except under the circumstances below.  Decisions made by email could be challenged by someone who does not like the decision.

Recommendation.  The Board can make legal decisions in the following ways, in addition to a meeting physically attended by a quorum of Board members:

1. Unanimous written consent of all Board members, before or after the effective date of the action, with the consents filed with meeting minutes.

2. Meetings by conference call where all persons participating in the meeting can hear each other.

3. Informal action without prompt objection by a unit owner or other director, filed in writing with the secretary or the clerk.

This post is one of a series about 10 Most Common Misperceptions About Condominium Laws And Operations, which I presented at the Maine Condo Forum and Expo in Portland, Maine, on September 25, 2010.

The Maine Condominium Act has “statutory” limited common elements; those things that are limited common elements unless the documents otherwise provide:

“Except as provided by the declaration: … (4) Any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patios and all exterior doors and windows or other fixtures designed to serve a single unit, but located outside the unit’s boundaries, are limited common elements allocated exclusively to that unit.”

Responsibility and control of decks and other limited common elements is commonly misunderstood by Boards.   Limited common elements are a subset of the common elements and are not a part of the condominium unit.  They are subject to the same rules regarding maintenance, repair, replacement and appearance, as other common elements, unless the condominium act or your documents say otherwise.

Unit owners, and the Board, frequently believe otherwise.   Since an owner has exclusive use of a deck she may mistakenly believe that she “owns” it and is free of the control that the Board otherwise exercises over common elements.  The Board may feel the same way.    Conversely, the Board may wrongly believe that it is the unit owner, not the Board, which has legal responsibility for maintenance,  repair and replacement.

The Board usually has authority to regulate the appearance of limited common elements by virtue of a specific provision in the Maine Condominium Act.

Windows present special problems.  First, the Condominium Act does not define what it means by “window”.  Is it only the window glass or does it include the window frame as well?  If the “window” does not include the frame, then who determines whether the window needs to be replaced when the window and its frame are manufactured as a single unit and cannot be separated?  the frame may be part of the unit, or part of the common elements, and therefore subject to different rules regarding maintenance, repair and replacement.  The area surrounding windows frequently leak, raising questions whether the unit owner or the association is responsible for any resulting damage.

Recommendation:  Carefully check what your documents say about maintenance, repair and replacement of decks, outside doors and windows, and other limited common elements, and make clarifying amendments to your documents if necessary.

This post is one of a series about 10 Most Common Misperceptions About Condominium Laws And Operations, which I presented at the Maine Condo Forum and Expo in Portland, Maine, on September 25, 2010.

Boards frequently write their own rules and regulations.  I see many rules which are poorly drafted or which violate the declaration, bylaws or the condominium act, or both.

Generally, rules are trumped by contrary provisions hidden in the condominium acts, the declaration and the bylaws.  Rules cannot violate other ordinances or state or federal law either.

It is not easy to draft rules.  Poorly drafted rules may not achieve the ends which the drafter intended; it is the words themselves, not what you may have intended but did not express, which usually prevails if they are challenged.

Trying to enforce poorly drafted rules presents risks to the association.  Owners may not understand the rule.   It may be difficult to prove that someone has violated a rule that is not clear.  If the association ever finds itself in court, the exact language of the rule will receive a higher standard of scrutiny than one would imagine.  And if the Board fails in court, it could be assessed the attorney’s fees of the unit owners.

Recommendation.  When in doubt about the legality or clarity of a rule, ask that it be reviewed by an attorney.

This post is one of a series about 10 Most Common Misperceptions About Condominium Laws And Operations, which I presented at the Maine Condo Forum and Expo in Portland, Maine, on September 25, 2010.

There is a perception, often but not always justified, that investor owned units occupied by renters lead to a reduction in the quality of life of other residents.  New rules of the secondary mortgage market, and more aggressive enforcement of existing rules, may mean that condominiums having a high percentage of renter occupied units may be shut out of the secondary mortgage market, reducing unit values.

In addition, absentee owners might not care about the quality of the tenants they rent to.  Tenants may not know the standards expected of the condominium and numberswiki.com

may not care.

tenants should be made liable for violations of the documents and for fines.

Recommendation:  If the percentage of non-owner occupied units is rising, take action to amend your documents to limit the number of such units. Once the number of such units reaches a certain threshold, it may be impossible to get the votes to make this change, because the investor owners will vote against it.  Consider rules requiring owners to give copies of the property documents, including rules, to new tenants.  Consider revising your documents to make it clear that the tenant is subject to fines for violation of the documents and that the owner is also responsible.   Consider a mandatory lease addendum to be signed by the owner and the tenant.

This post is one of a series about 10 Most Common Misperceptions About Condominium Laws And Operations, which I presented at the Maine Condo Forum and Expo in Portland, Maine, on September 25, 2010.

My survey indicates that condominium associations get burned frequently by contractors hired to do repair or maintenance work because of badly written agreements with the people they hire to do work.  Much of the blame goes to the associations themselves for failing to properly investigate their needs, evaluate the reputation of the bidders, and especially enter into a contract which assures completion of what they want done, when they want it done, to the standards they specify, and with adequate financial and other guarantees that the work will be done properly.  Contracts provided by the contractor are almost always inadequate in this respect.

The general contracting business is in some respects still the wild west.    While there are minimum standards for some types of work, such as plumbing and electrical work, anyone can hang out more info

their shingle and call themselves a contractor.

When asked to bid a contract, many contractors will provide an incomplete description of the materials they will use and the work they will do, making it difficult to evaluate one bid against another.

As one Maine property manager put it:

“There isn’t an association in Maine that knows how to adequately prepare an RFP so that bids are apples to apples.  That is why there are so many construction problems.  Associations do not always check the insurance of the contractors prior to starting the project.”

Court remedies are almost always impractical because of the cost involved, which is why most contracts have an arbitration clause, which reduces, but does not eliminate costs.

Recommendation:  For construction or repair contracts of significant size, get the help of professionals that can help you prepare proper specs and requests for proposals, evaluate the reputations of the bidders, and prepare a contract which protects the association.  Have an independent person oversee or check the work for larger projects.

Introduction.

This series of posts contains my list of the 10 most common misperceptions about condominium laws and operations.  It is a slightly modified version of a presentation I gave at the Community Associations Institute Condo Expo and Forum held in Portland, Maine on September 25, 2010.  I will post one of the ten each Friday at 6:00 a.m.

This list is necessarily subjective and some would undoubtedly disagree with it.   In compiling this material, I have conducted a survey of a number of attorneys and managers, and reviewed my experience with associations I have represented the past 25 years.  Many thanks to Pete Garret of Maine Properties, Inc. Bob Keegan of R&E Property Management and attorney Sanford Roberts for their review  and their suggestions.

Many legal misperceptions have no consequences.  The contractor does a good job notwithstanding a bad contract.  The owner pays the fine you assess without challenging it.  The decision you make by email instead of at a legally called meeting, goes unnoticed.

This list is not about the most common legal misperceptions.  It is a list of the most common mistakes that have, or could have, serious consequences, and I hope it will help you avoid some traps.  The list is in approximate order of importance, with number 1 being the most important.  The topics covered here can be categorized in different ways, so in that respect it is arbitrary

Boards want to do the right thing; the complex nature of condominium law and the fact that they are volunteers makes that job difficult.  Further, they wish to avoid disputes if they can, and if they can’t, to be on good legal ground if someone wants to take them to court.  Many of the recommendations here are designed to avoid litigation and all its attendant costs in money, stress and loss of community.