Condo Governing Documents Explained
Every condo owner knows their unit, and the floor plan are a major consideration in their decision to purchase that particular unit. The same goes for the property surrounding their unit. Are there amenities, is there a pool, are pets allowed, and most importantly are pets not allowed. The list of considerations is immense. All of these considerations and all of those considerations involve legal rules and restrictions. This leads to the topic of this article, understanding what legally binds the owners in your condominium. It also leads us to the question of who enforces those rules?
The answer to the first question is the governing documents such as your bylaws, declaration and rules and regulations. The answer to the second question is your Chair of the Board, the Board of Directors, the Strata Manager, the property manager, and in the end, the Declarant. Most developers have the right to displace those running the condominium for a period of time. The length of the displacement varies from 4 years to 50.
What is in your governing documents? Well this is where the fun starts. The governing documents are broken into 3 documents; your bylaws, declaration, and rules and regulations.
Bylaws: Bylaws set out the basic rules for the administration and management of the condominium corporation. These include such things like voting rights, how to hold meetings, designate the fiscal year, the power of the board of directors and what they can and cannot do, how to deal with amendments to bylaws, etc. Your bylaws should outline all the rules for how your Strata or Condo is run. It is usually the politest of all the documents as it does not like confrontation.
Declaration: Your declaration is made pursuant to your Land Titles Act registration of the condominium. It states the unit numbers in the building and outlines the square footage of the units. It also outlines how many votes each owner is entitled to by the square footage of the unit. Every square foot is equivalent to one vote. The more a unit is worth , the more votes that owner is entitled to.
Rules and Regulations: Rules and regulations are what your owners abide by. They are not normally framed, posted, and cheerfully considered. This document is usually the most contentious of all the documents. It is usually the source of problems between owners and the board. Owners often will argue with the rules and regulations stating they are unfair. There are two types of rules: reasonable and unreasonable. A reasonable rule can be enforced by the corporation unless it is found to jeopardize the safety or health of the owners. Such things as noise levels, smoking in the common areas, use of common areas for storage are examples of reasonable regulations. Unreasonable regulations are harsher and involve punitive measures. Owners will argue over the definition of reasonable. For example, if there is a no pet policy, owners will argue about cats versus dogs. A smart board will have a no pets rule to eliminate all argument.
It is important to understand and know what rules apply to your home. While you are still charged with an obligation to determine if any changes happened that you are not aware of, if you are provided with the governing documents, you cannot argue later whether or not you knew about them. If a reasonable owner moves onto the property, and voluntarily abides by the rules, you cannot expect that a reasonable board is going to enforce the rules on just one owner. Once the owner has been allowed to violate the rules, the owner is no longer reasonable and the board may be held liable.
Common Legal Problems For Condo Owners
As one of the many hats that a condo lawyer wears, the New York City Condominium team has handled almost every sort of issue and conflict that can arise in a condominium. While this article is intended as an overview, if you have legal questions about a specific issue, contact a professional who is experienced in condominium law.
Condo Purchase or Sale
We’ve helped many folks over the years in purchasing and selling their condo units. We’ll review the condo documents to make sure there’s nothing in there that you should be aware of before you close and start living in your new condo. If you’re selling, we’ll help with the process and negotiate on your behalf, as well as keep you organized with all the required due diligence, so that you can get to closing with the least amount of stress.
Assessments and Common Charges
You don’t pay your assessments or common charges, and the building starts sending you letters, demanding that you do. If you don’t…then they ask you in writing, "when do you plan to pay". You should immediately get yourself a condo lawyer, because for some folks, this is going to end in a lien being placed against their unit, an eventual foreclosure of their unit down the road, and then (in the worst case scenario) being kicked out of their home:
Repairs and Alterations
You make a change to your unit, and it is (or is alleged to be) in violation of the requirements of the board of managers of your condo. If the board demands that you return the unit to its original state and remove the changes, you’ll want to speak to a lawyer immediately in these circumstances, as well:
Quiet Enjoyment
The board of managers or your neighbors get aggressive about something you’re doing, are threatening you, and it’s getting worse—and you don’t know why. You may alienate them further or entrench them in their position by responding to their elder-brother-to-you tone when you really need to assert yourself and reestablish some level of civility. There are ways to position your communication and, often, your approach. Reach out to a condo lawyer, and we can help you to get back on track.
Disagreements With Neighbors (and the Board of Managers)
These are some of the most difficult conflicts to get through. Your neighbor puts out their garbage too late on the day it’s collected, and you can’t stand the smell before it is taken out by the building staff. The board of managers makes a decision that you strongly oppose. These are challenging situations that require a steady, level head, and a lot of forethought about how to go about resolving the issue. Don’t let these problems fester and become worse—speak to a condo lawyer early on.
Working with a Condo Association Legal Counsel
In the unfortunate event that a dispute arises, condo owners must first consult the governing documents for guidance. In most cases, these rules provide a framework for addressing grievances or issues involving the condo association.
For issues or disputes, condo owners should first put their problem in writing. An owner may directly address the issue with the condo board or property manager, or follow the dispute resolution procedures set out in the governing documents. The dispute resolution procedure can vary among different condo associations; however, most will usually consist of: (1) a notice to the board identifying a complaint; (2) a request for a board meeting; and (3) a response to the written complaint by the board.
Condo corporations and owners are also required to participate in mediation where it is available or any other dispute resolution process as set out in the condo corporation’s by-law. Both condo owners and the condominium corporation have a responsibility to consider and aim to resolve disputes without resorting to court proceedings and, if possible, to settle disputes all the way to the end.
A condo corporation’s authority is limited to only what is set out in the bylaws. However, a condo corporation may initiate legal action if the affected members do not take no action. For instance, if a pet owner refuses to take his/her pet off the premises during prohibited hours, the board may need to initiate litigation to enforce the bylaws.
Litigation can be expensive, unpredictable and lead to bad relationships between owners and the board impacting future communications and processes. Therefore, condo owners should avoid litigation at all costs. Condominium disputes should only move to litigation as a last resort where there is no other possibie way to resolve it.
If litigation is necessary, the owner should seek a lawyer specializing in condominium and real estate law. The lawyer can assist the owner with drafting the application paperwork, preparing the owner for the court process, or act on the owner’s behalf in all matters related to the litigation.
In addition, both owners and condominium corporations can get help from the CAC on disputes. The CAC publishes pamphlets and guides on various topics concerning condominium living and has a consumer hotline. Also, information regarding public hearings and decisions, complaints and orders related to the condo system, as well as general information about HCAD can be obtained through the Consumer, Registry and Licensing Branch of Service Alberta.
Legal Rights Of Condo Owners
Condo ownership comes with a unique set of legal rights and obligations. These rights and responsibilities are usually established in the condo association’s declaration of covenants. These covenants are like the code of conduct for owners.
A few of the most important rights of condo owners include:
Privacy and Legal Recourse
Condo owners have the right to privacy, but a few exceptions apply. Condo owners also have the right to take legal action if something falls through the cracks. Condo owners can file suit on behalf of themselves or demand the board take action on an issue.
Responsibilities of Ownership
One of the most important responsibilities of condo owners is to follow the rules and regulations. For example, enforcing the rules keeps the community in order. Condo owners are also responsible for maintaining their property and paying the community fees. Failure to keep the property in good condition could result in the imposition of a fine. The fees are essential for the upkeep of the common areas . Late fees and added fines are imposed on overdue accounts. Condo owners must maintain the property they own and keep it free from damage. If damage occurs, the owner is usually responsible for paying the repair bill. Depending upon the declaration of covenants, the owner’s insurance may cover the damage. Both the owner and the condo association should give the insurance company of the other party the chance to pay the bill.
Helpful Tips for Staying Compliant
All condo owners should keep a copy of the covenants handy. You’d be amazed at how often people unknowingly violate one of the many rules. More importantly, familiarizing yourself with the association’s rules and bylaws will help you understand your rights. It will also give you a better appreciation for the challenges facing the board. To avoid late fee penalties, condo owners must deposit fees into the association’s account on time. Make the payments on the same day of every month to avoid forgetting the payment.
Hiring Legal Help – When Do You Need A Condo Attorney?
While not all scenarios need the expertise or cost of hiring a condo lawyer, it is important to understand when having a condo lawyer on your side can help shield you from costly mistakes and save you worry.
One of the best opportunities to save money is to obtain legal advice on that seemingly straightforward offer to purchase. The listing price may be fair but basically "give-away pricing" might require that you forfeit your right to an audit of the records and your right to cancel if the records do not meet your approval. Strangely enough, sellers are being asked to give up their most important rights to protection for only a $5,000 to $10,000 raise in sales price. Unfortunately, in an effort to "save" on legal fees, you may be blindsided by holes in the condominium corporation’s records that could cost you thousands of dollars if not millions as well as more problems ongoing in your costly future.
Not surprisingly, developers sell units within their own complexes at a sales price below closing costs including your share of the discount condo fee and real estate taxes that will be paid by you after closing. These discounts and the absorption of these costs are more substantial than the trade-off you receive. Your offer should be substantially more, reflecting the closing costs you will incur on closing.
Front end legal advice should also include reviewing the status certificate, which would include the answers to your specific questions if you know what to ask. All too often, on reviewing the answers and omissions in the status certificate, your lawyer cannot protect you because you have limited or no indemnity against the condominium corporation for the errors. Ask your real estate agent, at minimum, for an incomplete status certificate so your lawyer can make appropriate inquiries before you are on the hook for "past" payments for such things as common elements repairs and lacking reserve fund contributions.
Front end legal advice should also be solicited about rights and obligations on breaches under the condominium’s by-laws and rules. Since these will be yours post-closing, they should be obtained from the condominium corporation or its property manager and reviewed by your lawyer.
Condo lawyers know all too well that many condo owners, including directors, may not fully appreciate or understand the impact of the judicial process to enforce breach of by-laws and rules. It is not uncommon for owners, directors and the corporations themselves to be involved in court proceedings for non-payment of condo fees and special assessments or in enforcement of their by-laws, including restrictions on rentals, pets and construction changes to units. Litigation is expensive, can last years, and if you lose, moving along with your neighbours will be in your best interest as your credit rating and the integrity of your unit will be negatively impacted.
Litigation is generally not worth it and the importance of trying to mediate and resolve differences must be paramount in the mind of every good lawyer. As there is no guarantee of success, the value of the litigation, cost/benefit/likelihood of obtaining recovery and reasonable likelihood of success must be weighed.
If you have ever been involved in litigation or mediation, you will be impressed by your lawyer’s ability to maximize the impact of your evidence, minimize the impact of adverse evidence and neutralize the other party’s evidence and thoroughly understand and make persuasive arguments from legal precedents to statutory obligations.
Condo Owners – Preventive Legal Advice
While it is important to be ready to engage legal help when necessary, it is equally important that property owners take the necessary steps to avoid legal trouble. There are a number of proactive strategies that owners can utilize to keep a condo association on the right side of the law.
One of the simplest methods of preventing legal issues at a condo association is to keep the lines of communication open. This involves both the property owners and the board maintaining channels of communication, which helps to develop a more collegial atmosphere in the association. If everyone feels free to voice their concerns without fear of retaliation, problems are likely to be addressed before they become bigger issues. If you have an issue, it is best to communicate it right away and not allow it to fester.
Another crucial element of avoiding legal trouble is ensuring that you are as informed as possible about the rules and regulations of the association. Associations with bylaws and CC&Rs that are clearly written and distinguished are less likely to have instances of legal trouble , as there will be fewer ambiguities. Keep in regular communication with fellow owners and board members to ensure that you are up to date on amendments to these documents, as board minutes can be a valuable resource.
Also keep all of the important information you receive regarding the association organized and secure. Maintain an accurate record of all communications with fellow owners, board members and any other relevant parties, as well as any payments you’ve made associated with the property. This also goes for copies of bylaws, CC&Rs and other documents related to the association. In the event of any discrepancies, these documents and records can serve as your most critical proof.
While condo owners should be prepared to engage legal help when needed, there are a number of steps they can take to avoid the situation altogether.