The Contractual Community

Community Associations are not Little Governments--They Owe Their Entire Existence to a Contract among the Owners of the Property.

Articles in this and other publications devoted to the science of community association operations and management often discuss the concept of "community association" as if it were just another subdivision of local government. It is a common perception because so much discussion about this unique housing type is devoted to questions of governance. We have boards of directors that, in some respects, appear to be like city councils. There are property managers who carry out many of the same functions as city staff. The property so governed has many of the same physical accoutrements as a town or city-streets, utilities, parking and recreation facilities...

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Condominium Conversions: Owner Equity at Risk?

Why We Should Stop Converting Old Apartments to Condos.

Condominium conversions, a really bad idea, are here again. You don’t need statistics to tell you that condominiums converted from old apartment houses have been all the rage for several years. Just look around. Numerous apartment buildings are being sold as condominiums. We saw it twenty years ago when home prices in California experienced the same kind of super heated run-up that we’ve seen in the first part of this decade. Anything with a door and a roof sold quickly, often with multiple offers. The market has cooled now, but builders with homes to sell made a lot of money...however, the price of admission was often misrepresented. How so? If the actual reserve and operations assessments are many times more than was actually stated by the converter, the association will have to face the possibility that they will never accumulate enough money to maintain the project...

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Stealth Reserves: Tapping Unused Assessment Authority

Thinking Outside the Box...

The latest survey done by Berding & Weil and The Levy Company confirms that  the average community association reserves are only 53% funded. The result of this is that vital repairs—roof replacement, painting, repair of siding and trim, and similar work—may be either deferred or done in a substandard manner all because of lack of necessary funding...Once a problem has a repair price tag that exceeds the available cash in reserves, the board may not be able to easily solve the problem...

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Construction Defects and the Statute of Limitations

Have Changes in the Law Imperiled your Associations Right to Recover for Construction Defects?

It’s 1998. The plumbing in your association’s 5-year old condo project has started to leak. You hire a plumber who discovers that the plumbing lines are made out of imported galvanized pipe and it is corroding from within leaving pinhole leaks throughout. Further investigation reveals that this pipe was withdrawn from the market years ago because of this tendency to corrode and leak. It’s 2008. Same facts as above, except that the condominiums were built in 2003. Although your attorney files suit within a year after you discover these problems, this time the suit is dismissed by the court as being untimely filed. What happened? How can two identical suits, filed 10 years apart by two community associations succeed for one and completely fail for the other?

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Sharing the Internet in a Community Association

No existing law prevents a community association from sharing an internet connection. Of course, agreements with Internet service providers would have to be reviewed to be sure that their contract language did not conflict with the intended use, but with all of the competition among providers, it would seem that some deal could be struck that would allow the connection to be shared by neighbors. The fact is that it is probably already happening informally. How many people who use a wireless connection for their laptop, for example, find multiple networks available when they log on to their computers? In multi-family projects, many of these signals come from neighbors, and if they are not encrypted, anyone can log on to the Internet on one or more of them...

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Construction Problems and Community Association Financial Stability

With many associations surprises have become the rule, and there are no bigger surprises than those that arise from various construction problems. There are, of course the problems found early in an association’s life--those that emanate from defects in original construction. But there are others, also related to the construction of the buildings that can affect financial stability much later...

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The Uncertain Future of Community Associations

Community Associations, especially condominium complexes, are in financial trouble. Most don't know it. Unfortunately, many find out after its too late to solve the problem. Underestimated repairs and rehabilitation costs, and years of inadequate budgeting for them, have exposed many of these projects to massive underfunding from which they may not recover. An explanation of the problem, and some suggestions for solving it, are discussed in the treatise: "The Uncertain Future of Community Associations" which can be read and downloaded from the "Publications Download" section in the column on the left or by simply by clicking on the cover of the publication above.

Please read it and if you agree, discuss it with your fellow owners and board members. You are welcome to print as many copies as you need.  Every condominium owner and board member should have a copy.  It could be the most important information your community association every gets...

Tyler