Condo Association Management Blog

In which state are you located?

This is the most interesting situation I've heard in years. While I can't offer any specific coaching, other than the obvious, get a really, good lawyer or a really good mediator, I would want to follow or be aware of the process and outcome. Perhaps a blog for your community and others would be a good way to keep everyone communicating.

I certainly agree with Sherry, you have one interesting association!! 
 
All of the CC&R's and Bylaws that I have seen have a provision in them for removing owners, broad members, etc. Now, this is one heck of an undertaking given the size of your association. Generally, it requires 67% of the vote of the unit owners. Some quick arithematic tells me that's 310 folks have to agree, AND VOTE, that the apartments must go. that's a lot of door to door signature gathering. Basically, you have to undo the annexation. The other possibility would be that the 66 apartment unit owners could vote to succeed from your association. Now that would likely take some doing, talking, bribing, etc because they would be cutting their own throats. Their new association would go from a 20 or 30% rental/owner ratio to 100%. I wouldn't if I were them. 
 
Finally, this will cost some money because you all are going to have to agree and then record the amended bylaws at the county. I do think it'd be worth it though because you can't get a normal condo approval as it is. The banking situation isn't going to improve anytime soon so if you want a financable condo, you'll have to fix it yourself. 
 
Good Luck 
 
Darron Hay 
 
HOA Receivables Management, LLC

The apt. building is owned by one person who holds all 66 votes. The County's parcel map only shows the apt. as one unit, not divided up like our condos are. The Bank that instigated the power grab has been bought out by a larger bank. That larger bank sold the apt. building to the current corporate owner who obtained his own financing. The apt. building has a different lender now. But the company that manages the apartments continues to influence and control board members, giving gifts, free dinners with the owner when he comes to visit, and reminders to members that they have 66 proxies to influence the elections in their own favor. This is criminal and outrageous abuse of perceived power. "Perceived" because they legally don't have it. They still don't meet the definition of what a condo is. When our numbers were increased by 66, their building was not added to our map filed with the County Recorder. We live in a northern California city. There is no regulation of the industry here in the County or the State. They now have 15% of the votes which gives them contolling interest. We called the State Dept.of Real Estate. A Deputy Director referred us to ECHO, a non-profit group advising homeowner associations. Their opinion is that what happened with the annexation was impossible and invalid. All lien holders should have been advised and their cosent obtained, along with all owners votibg. Our attorney gave mediation notice to the Association's Board President. He has failed to respond. Are there any really good real estate attorneys in between San Fransciso and Sacramento that would take the case on contingency? We suspect that the apt. management company is handing out money to some directors so that they will comply. It is a mess. Is there any other advice you can give us?

Dear Mess: 
 
Sounds like I have a better picture now. Check your CC&R's to see if the consent of mortgagee's is required to expand the association. If it is, then you've hit the jackpot. Conscent likely wasn't obtained and you could sue on those grounds to dissolve the annexation. Now, the likelihood with finding someone to take this on contingency is not good. There is no monetary settlement from which the attorney can get paid. The reason they take insurance claims, liability cases, etc on contingency is because they will be paid if they win a monetary settlement. You don't have that. I'd estimate 10 to 20k in this kind of case for legal fees. That's only $50 spread out among all 396 owners. 
 
The other, less expensive option, I still believe is to simply vote them out. Get your walking shoes on and start talking to 309 neighbors. If ten of you agree, you only have to talk to 30 people each. :) 
 
Darron

please forgive my spelling an grammar. That's multi-tasking at its finest....

Thank you for pointing out the provision to expand the association requires mortgagee approval.  
 
 
 
It is in our CC&Rs and requires 75% of the mortgagees to approve expansion. The Board did not get those votes.  
 
 
 
We were considering suing the Bank for damages due to interference in the voting process as the apt. building's 66 votes have over time decimated our ability to keep up a reserve fund to cover maintenance costs. Pillars which hold up many condos over garage stalls are weakening. The Board has decided not to replace them because it would require a special assessment the the apt. building owner doesn't want to pay. 
 
 
 
I'm getting a fast lesson in how power corrupts people. I'll keep you all posted as to how this concludes.

You are facing a complex legal issue. Get a comnopetent lawyer whose practice is devoted to Condo and HOA problems.The cost will be well worth it if you get the right atty to help you,