Limits of Board Power Use vs. Abuse—and How to Tell the Difference

 Everybody sometimes disagrees with the decisions of their co-op, condo or  homeowners association board. Maybe the choice to rearrange the garbage  receptacles out front seems ridiculous, or the ongoing clattering of machinery  on the roof is driving the top-floor residents nuts—but the board seems determined to let it fix itself. These are the kinds of  inevitable complaints that every board has to deal with sooner or later, and  most manage to handle such issues with prudence and aplomb.  

 But what if the board does things that seem to be beyond the pale—perhaps even illegal? Where do boards’ powers end? While the board is the governing body of the co-op or condo  association, there are certain boundaries and limitations that they should  operate within.  

 There are numerous examples across the country of alleged abuse of power by  condo boards and HOAs from preventing owners to put up political signs or flags  or changing the color of their paint trim or window shades. Pets are also a  sticking point as this California woman found out: Pamela McMahan didn’t expect her cocker spaniel Ginger to become a problem at a historic condominium  building in Long Beach. But she was fined $25 each time she walked her dog  through the lobby because HOA rules required all dogs had to be carried.  McMahan, an elderly woman who walks with a cane, said she couldn’t carry the dog. She racked up $1,600 in fines and has since moved from the  building.  

 Overreaching?

 Overreaching boards may call to mind white-glove, old-money co-ops in  prestigious zipcodes, but the truth is that the issue is just as troublesome in  suburban condo developments as it is in ultra-exclusive urban high-rises. One  recent example of the turmoil caused by board stagnation and overreach is the  450-unit Shadowood condominium complex in Reston, Virginia. According to a  recent article in The Washington Post, "the Shadowood Condominium Association imposed fees for things like calling  the management office or having the wrong color blinds. It towed tenants’ cars for unpaid fees—on the day before Thanksgiving. It turned off the heat or air conditioning to  apartments of owners who were in arrears or in violation of its many rules."  

 In 2011, a judge ruled that the association could not level fines and fees not  explicitly spelled out in the condo's original master deed, and issued a legal  injunction prohibiting the Shadowood board from collecting any more such fines.  The board appealed to the state Supreme Court—and lost. Even with the most recent decision in favor of the condo's residents  however, the issue is far from settled. According to the Postcoverage, residents are still furious at the association board for allegedly  spending common funds on legal bills, failing to provide documentation for  contracting expenses, and fostering an antagonistic, "intimidating" atmosphere  in the development. On the other hand, Shadowood administrators argue that  collecting fines and fees is the only effective tool they have to enforce house  rules and insure that residents and renters pay their fair share of the  complex's operating expenses.  

Read More...

Related Articles

Board Do’s & Don’ts

Doing What’s Right, Avoiding What’s Not

Q&A: Can a board member unilaterally implement new sales requirements/procedures?

Q&A: Can a board member unilaterally implement new sales requirements/procedures?

The Best Boards

Going Above and Beyond

Dysfunctional Boards

Learning From the Worst

Q&A: I Recanted My Board Resignation. Am I Legally Still on the Board?

Q&A: I Recanted My Board Resignation. Am I Legally Still on the Board?

Q&A: Carrying Dogs Through the Building's Front Door?

Q&A: Carrying Dogs Through the Building's Front Door?

 

7 Comments

  • how to get rid of an illegal board and management company
  • how to get rid of an illegal board and management company
  • Great article. I have a question -- what are a co-op's board's obligations (legal? moral?) when it comes to notifying residents of a crime that has occurred on the property? In my building, cars were vandalized in the garage. The board and management company have refused to notify shareholders (only the "lucky few" have found out by word of mouth from the people whose cars were damaged). This seems like a real failure on the part of the board and management company; how can residents protect themselves and their property if they are denied the opportunity to heighten their awareness after a breach of security has occurred? Any insight you can offer would be greatly appreciated.
  • Does anyone know what a coop shareholder's rights are if accused without ground of being a nuisance to to the building, and being threatened with the lease termination. (All in revenge for asking that radiator noise be repaired) ?
  • our by laws require that a certain percentage of your floor should be carpeted in order to avoid noise. However the board has declined to enforce it and now I am awakened by my neighbor who comes home at 3 AM
  • Does the board of directors members have the right to go through personal resident files where their private info is regarding SS #, background check, etc...?
  • I am an owner of one of six condominiums in St. John, US Virgin Islands, five of which, including mine, are Vacation Rentals. They were completed in 2004. Not having originally intended to purchase a condominium, but a single residence instead, when I did finally purchase the condominium, shortly after closing, I naturally had some questions for the owner of the vacation rental agency: 1) Is there a COA? Yes. 2) Does it have a President? Yes. 3) Has there every been a COA meeting? No. (For all sorts of reasons it didn't take me long to have a bad gut feeling.) I contacted the President and together we jump started an in-name-only entity into existence and began having bi-annual meetings. Since the agency had been in existence for 20+ years I believed in good faith that all was in financial order as it should be, but queasy feelings trailed me and it became clear that the vacation manager was trying to sink my rental business by renting my condo out for very few nights. I left the agency in 2013 and have steadily grown my single rental condo business ever since. Not long ago the current Board President (not the same person) "slipped" and made reference to paying the vacation agency a "quarterly management fee" which I had never heard of. I asked him if he would kindly tell me the amount of monthly COA dues he pays. He says he pays none at all and to ask the vacation agency owner about it. I politely asked agency owner to refresh my memory and tell me what amount of my COA dues went to "Management." I have received no answer and it is not difficult to figure out why he won't answer. According to my calculations I have paid approx. $82,000 more than my neighbor "to the COA" since I closed. No financial reports are ever issues, I have no idea how much anyone else pays to the COA, I don't know if a separate bank account exists, or how much money is in it. I see an occasional Excel spreadsheet from the angency upon occasion. It certainly looks like trouble to me. According to the deed each owner owns an exactly same percentage of the property. This is a breach of fiduciary conduct by one or more persons is it not? I suspect there's more to it than that. Wilffull malfeasance? Deliberate non-disclosure. ETC. I am sickened by the situation and also terrified. No one else has ever asked questions before and the last one anyone would expect to ask questions is me, English major who hates math and budgets. Our Treasurer resigned so I asked the "original President" to be "Acting Treasurer" which of course means basically nothing. He agreed but said he "doesn't understand budgets." I know he has an MBA from Harvard and holds a "privately held family investment company." I am playing "dumb blonde" and am attempting in various ways to lead several people to believe I have forgotten the matter entirely or am too busy to care. Since the agency owner has a great deal more money than I do am I already legally done in before I begin? I am about to purchase contents insurance and am waiting (rather long) for an overview from a stateside attorney. In the meantime any comment that might enlarge my understanding of the matter or broaden my perspective about it would be appeciated very much.