Condo Association Management Blog

If you have a realtor on the board and he has sold some of the condos, can he be held resposible for not telling the new homeowers about additional assessments? This is in Michigan. Also he had access to the square footage of the condos from the master deed and sold the units as bigger than they are.

Interesting question. I live in a 250 unit community. I estimate that 30% of our residents are renters. there is currently 1 member of our board that owns 3 units and lives off site. There are several prior board members that own 3 units. Our CAM owns 3 units and doesn't live on site. I think this is common in many communities. If the Board is honest and has the best interest of the community first in their actions, what's the difference? Would it be better or worse if they were a Real Estate Attorney or Contractor? I think it depends on the individual and their motivation to serve on the board.

It is good to have a realtor on the Board--he/she can make Board members aware of current trends in the thinking of buyers, needed improvements also from the point of view of buyers.  
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A firewall must be built, however, between the office's knowledge about potential sellers and buyers, and the broker who sits n the Board.

Read your governing documents...is your president alone allowed to appoint directors? In Florida, the entire Board has to be elected by the membership; if a board member resigns then the entire Board decides who they will appoint as a replacement depending if you are a condo or HOA, there are some fine points to the two types. I would also say the realtor/board member may be in conflict of interest on most issues involving assessments or finances that impact assessments. If it was an illegal appointment, bring it up immediately at the board meeting and in writing to the board.

(imo) it IS a conflict of interests since she certainly 'now' may be privy to information about the units for sale. I would move to recall her on those grounds. If she was a retired realtor that would be acceptable, but since she is still an active realtor, that is where the problem lies.  
 
 
 
Even if she agreed to stop selling real estate in your complex, she could still pass-on tips to her associates - that could give them an unfair advantage...

I'm a Realtor and I'm an officer on our HOA executive board. First I would say that as a Realtor I have a fiduciary responsibility to my client and will disclose all that I know. Deliberately overstating square footage, or not disclosing known information about a property, is an ethical violation but in Utah most Realtors will put the burden on the buyer to verify. As a board member I’m able to bring valuable information to the attention of the members and they are not bound to use me as their Realtor, but most have. Any assessments not paid by a unit owner, while it has never happened here, should be disclosed to a buyer or a buyer’s agent. We have one unit in here that is being sold by owner and I’m pretty sure the owner has not told the potential buyer of a transfer assessment that will be assessed by the association. Unfortunately they will find out when they go to close. I think having a resident Realtor is a good thing and having one on the board, especially having knowledge of a potential foreclosure, can be a benefit to the association. Most important though is that the Realtor is totally honest and ethical and will conduct the affairs of the association and those of a Realtor at arm’s length.

Having brokers on the board is smart as long as you can avoid conflicts of interest. Be sure that all brokers in your area have a equal shot at obtaining listings.

Check your bylaws and state Condominium Act for qualification for a candidate to be elected to become a member of the Board. It would be unusual to find a bar for real estate agents. In my condo over pasrt 35 years we've have a number of reraln estate salesfolks o9n our board and have never had any problem. But there are two posts here--one says President appointed a new member of then board. Does the bylaws in this case permit this. Usualoly a vacancy on a board is filled by a majority vote of the remaining members. The other post refers to a board member who is non resident in the condo. Does your bylaws not require a board member to be a resident unit owner??

A non-resident can still be an owner.It is owners who need to be on the Board. They do not have to be full-time or part timers. In fact, they have different interests than full time residents and should be represented on a board.  
 

Our condo is a very large one. About 25% are full time residents. the snow-birds are wealthier and like Sally Santiago said have different interests than the full timers. Many full timers are retired and have smaller incomes than the majority of owners; but because they are here full-time they are better organized and have come to control the Board. They reduce services and maintenance. Result: the condo is not as pleasant to be in as it once was. I think that the longer term result will be a downturn in the value of a wonderful property on the ocean.  
But, they don't care. The want things to be cheap, and sacrifice quality of living for money. Everything is measured in dollars.  
It's too bad, because this could be a prime Condo in our town.  
The latest is a return to rule by decree--something that they complained about in the past.  

Look up the "Director's self-dealing" provision of the California Corporations code on mutual benefit corporations. 
That provision requires directors to disclose whether he or she has an interested transaction or personal interests or relationship in the affairs of the condo board. 
If so, the interested director must recuse (Or excuse) from voting on matters he or she has a personal interest. 
A real estate broker serving in the board can be a two edged sword.

Anyone can sit on a board. Because she is a realtor alone shouldn't disqualify her. What about say a plumber or a landscape contractor? It really is a dumb position to take. Ask this question; Is she astute enough to make rational unbiased decisions for the association? I am the President of a large condo development in Florida. One of our directors is a realtor. He has an interest selling and renting properties within. In our case he actually brings value to our association. Remeber, it is not what a person does for a living but what they bring to the table in the day to day operation of the association. Keep your personal assumptions to yourselfs, suck it up and be an adult.

It really comes down to your docs. Some of the older docs do not require a Board Member to be an owner. At election time the process goes one way and the appointment should it occur upon resignation is merely that. There is no "fair" - only what the docs say and now in Fla - this is affected by delinquency criteria

I agree that uit is desireable to have a non resident owner as a member of the Board of Directors. Such an owner has different pressure points than a resident owner. But The absentee owner must attend the Board Meetings, open as well as closed. Failing being able to perform as other board members is unacceptable.

As far as non-owners becoming Board members (as some commenter have mentioned); I just don't think they can care deeply enough to make the best decisions for the Owners. That is also why I have a problem with hiring property management companies to run a condominium building or complex. (imo) They should only be used as consultants with no powers.

I think that the board governing documents have to outline any restrictions on who can have a position on the board. Unless the Realtor was using the position to get contracts for listing foreclosures, etc; it would seem hard to prove a conflict of interest. Also, owner can definitely have a passion for their community, but a property management firm can really assist in insuring the bylaws and rules are followed. Boards should work in conjunction with property management firms to provide vision, goals, and work with a association management company to help execute it.

Look up California Codes in the Internet search. Select Business and Professions Code. Scroll down to fill in "Certified Common Interest Development Manager" to see what a professionally certified condominium association manager is supposed to know and be certified as one. 
I do not think a realtor can be same as a certified condo manager. A bar certified paralegal that knows accounting may be an equivalent.  
For nonprofessionals who are homeowners. I proposed reading Civil Code sec. 1365.2 and 1363.840. You will find out that only knowledge of those two long sections of the Civil Code of California, besides learning about what is call accounting cycle are needed for a paralegal or certified condo manager to serve a client from a HOA having big troubles such as embezzlement and election fraud. Those two sections will take care of those matters.

Property manager companies can be very professional and add knowledge and experience to operations of a condo or HOA.

Despite of what the law says (Calif. Civil Code sec. 1365.2) there are still lawyers and management companies that says, "No you homeowners cannot audit the books because the financial records are confidential."

I hope all condo owners and managers can read the second half of California Civil Code. sec. 1365.2, which is subsection b.,that says, 
" (b) (1) The association shall make available association records 
and enhanced association records for the time periods and within the 
time frames provided in subdivisions (i) and (j) for inspection and 
copying by a member of the association, or the member's designated 
representative. The association may bill the requesting member for 
the direct and actual cost of copying requested documents. The 
association shall inform the member of the amount of the copying 
costs before copying the requested documents. 
(2) A member of the association may designate another person to 
inspect and copy the specified association records on the member's 
behalf. The member shall make this designation in writing. 
(c) (1) The association shall make the specified association 
records available for inspection and copying in the association's 
business office within the common interest development. 
(2) If the association does not have a business office within the 
development, the association shall make the specified association 
records available for inspection and copying at a place that the 
requesting member and the association agree upon. 
(3) If the association and the requesting member cannot agree upon 
a place for inspection and copying pursuant to paragraph (2), or if 
the requesting member submits a written request directly to the 
association for copies of specifically identified records, the 
association may satisfy the requirement to make the association 
records available for inspection and copying by mailing copies of the specifically identified records to the member by first-class mail 
within the time frames set forth in subdivision (j). 

Seems perfectly clear to me. 
 
Why do any Boards or Managers try to evade the law? How do they get away with it?