Association Law Services
When you purchase a condominium, townhouse or other type of property within a community association, you typically become a member of the association and bound by the governing documents merely taking title to your property. You don’t have to sign anything to be bound by the governing documents of the association, which is a common misconception. A condominium or homeowners association is a creature of the governing documents which created the association. The Declaration which creates the association and the Bylaws which set forth how the association will conduct itself are viewed as contracts between the association and its members. Courts may enforce the association’s governing documents and order specific compliance with these documents. Courts can enforce their orders with contempt proceedings if necessary.
Condominium or homeowner associations are operated by a governing body usually called the Board of Directors. The members of the Board are elected by the other owners. The members of the Board of Directors have a fiduciary duty to the Association. This fiduciary duty arises because the Directors are entrusted with operations of the Association and the care and protection of the Association’s funds and property. Generally speaking, a director can meet his duty of care by exercising his good faith business judgment of the best interests of the Association. That said, associations often face complex issues and it is best for board to use outside experts when facing difficult decisions.
The two main duties of the Board of Directors is to maintain the common elements (condominiums) or common area (homeowners association) and to make sure that all owners comply with the governing documents. Assessments are paid by the owners to cover the expenses incurred by the Association. Condominium dues are significantly higher than HOA dues because condominiums have significantly more shared expenses. In a condominium, an owner’s unit typically consists of the wall board and everything within it. The condo association is therefore responsible for the building roofs, walls, common plumbing and utilities, parking lots and other common elements which is significant. In a homeowner association, the owners are responsible for their houses and the association is responsible for the common area.
Things to know before buying property in a condominium or homeowners association.
- Obtain a resale disclosure packet from an association before buying property in the association. Then review the packet which should include an association’s governing documents before buying property in an association. Remember, once you own the property, you are bound by the Association’s governing documents.
- Examine the association’s finances, annual budget and assessments owed by each owner. This information should also be in the resale disclosure packet. An association with financial problems will mean higher assessments in the future.
- Look at the minutes of recent Board of Directors meetings which should be in the resale disclosure packet. This may make you aware of any major problems facing the Association.
- Find out how much insurance an association has. It is not uncommon for associations to get sued. If an association does not have enough insurance to cover a liability, the homeowners may have to contribute to payment of the liability.
Contact the team to see these services in action. We can advise, review, negotiate, and more.