Non-Resident Owners Can Do Their Share Serving on Board
QUESTION: I have served on the board of my 20-unit condominium for several years. Two of the board members are non-resident owners. They both have their units leased to tenants. These two board members only come to the building once a month for the board meeting. They are not around to help when problems arise.
Is it legal to have non-resident owners serving on the board of directors?
ANSWER: The legal documents of your association contain the answer to your question. You should review the declaration of covenants, conditions and restrictions and the bylaws. In most cases, the legal documents give all owners the right to serve on the board whether they are residents or non-residents.
I understand your complaint that these non-residents are not around to share in some of the day-to-day workload. You probably get stuck with letting in a repairman who needs access to the building or you are the person who has to respond to the other owners’ questions or complaints if there is a burned-out light bulb or a water leak. There are going to be times when you just want some help with these tasks and those other board members are not around. Perhaps you get a bit resentful that you are the one with all these burdens. Wouldn’t it be nice if you received a “thank you” now and then?
Many associations have a difficult time finding any volunteers, either resident or non-resident, to serve on the board. All volunteer board members deserve a pat on the back for giving their time and talents to the association. In some associations, non-resident owners contribute a great deal to the successful operation of the complex.
A non-resident board member who is willing to share in the decision-making process can be just as interested in protecting his or her investment as you are. Unless the legal documents forbid it, the non-resident owners have a right to serve on the board.
Legal Duties Ignored in 11-Unit Complex
Q: I live in an 11-unit townhouse complex. Since I purchased my unit in 1985 there has never been a board meeting or annual meeting of owners. One of the owners is the president of the association but we do not know of any other board members.
There are many problems that are being ignored. Neither I nor any of the other owners have ever received any kind of financial report or any other information about the operation of the association.
Some of the owners are not paying their monthly assessments. I am told that one owner owes assessments for about three years.
We have some repair work that is needed, but the president said that he will have to increase the association fees since there are no reserve funds to cover any additional expenses. Is it legal to increase the assessments without a vote of the owners? Has the board president been breaking the law? Can he be held liable or charged with mismanagement?
A: It appears that your association has been operating without an elected board of directors for some time. The one active board member has made a serious mistake by not fulfilling his fiduciary duty to conduct the association according to the legal documents.
Even small associations like yours must operate in compliance with the law and provide certain reports and financial statements to the owners. Your association is being operated by a dictator. It may be a benevolent dictatorship but the results are simply not acceptable.
The owners have a right to elect a board of directors to handle the management of the association. The president may say that there weren’t any other owners who were willing to serve on the board but that is not a valid excuse. An annual meeting of the members must be conducted in compliance with the legal documents of the association. This is the procedure that should have been occurring in the past. Then if there were no owners willing to serve on the board, the rest of the owners would have been informed of the situation, and they might have been able to find willing volunteers at that point.
Assessments must be collected from all owners based upon an annual budget. It is illegal for the board president to increase the assessments without the vote of a duly elected board of directors. If all of the owners had been paying their fair share, it is possible that there would be enough funds to take care of the required maintenance and repair. Obviously, if there are no reserve funds, an increase in the budget is necessary.
It is time for you and the rest of the owners to take action to protect your rights and your investment. There are many things wrong with the scenario that you describe. The board president can be held responsible for the apparent mismanagement that has occurred. You and the rest of the owners may want to band together and seek the advice of an attorney who specializes in community association law. I would advise you to have an audit done to determine where the funds were spent and to uncover the extent of the delinquencies on the part of the non-paying owners.
It is possible that the self-appointed president is a good person who was unaware of all of the legal requirements and responsibilities of operating the association, but the legal documents cannot be ignored.
No Agency Oversees Management Firm
Q: I am writing on behalf of our association’s board of directors. We are very unhappy with our former management company’s tactics. Is there a governing agency that oversees management companies? Where can we file a complaint?
A: At the present time there is no agency that oversees property management companies. There are no licensing requirements for community association management. Someone who wants to manage a condominium can obtain a business license and a telephone and he or she is in business.
Your complaint is not specific as to the reason for wanting to file a complaint. If funds were mismanaged or missing, then you should notify the police. If the managing agent is a licensed real estate agent or broker, you can contact the Department of Real Estate or your local Board of Realtors to determine if any real estate regulations were violated.
Owner’s Right of Use Transfers to Tenant
Q: I am the owner of a unit in a condominium complex. The board has determined that the non-resident owners are not entitled to have access to the common areas of the association. The board says that I have forfeited my rights to the common areas by renting my unit to a tenant. Furthermore, the board has issued only one key per unit to the common areas so I am locked out of the complex. What are my rights?
A: I believe that since you are an owner, you have the right to have access to the common areas. However, having access to the property does not mean that you have the right to swim in the pool, play tennis or use any of the other amenities. When you leased your unit to a tenant, you transferred those rights to your tenant.
If you review the association’s legal documents, you will probably find a restriction about this. It is not fair to the other owners if both you and your tenant are using the amenities. If you are unsure about your rights after reviewing the legal documents, I urge you to consult an attorney who specializes in community association law to discuss your use of the common areas.
Hickenbottom is past president of the Greater Los Angeles chapter of the Community Associations Institute (CAI), a national nonprofit research and educational organization. She welcomes readers’ questions, but cannot answer them individually. Readers with questions or comments can write to her in care of “Condo Q&A;,” Box 5068, Thousand Oaks, Calif. 91360.
