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Serious financial violations in our condo association

  
  
  
  
  

There are serious financial violations of the bylaws in our condominium for a long period of time. Is there an organization or a government agency I could appeal to to correct it? Please advise.

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Comments

what in the world does a "serious violation of the bylaws" mean ??
Posted @ Friday, September 23, 2011 7:23 AM by brian
Being on a board is a license to steal and no government agency cares. There are many serious violations, I believe it should have been stated but don't act so surprised Brian - it happens every day.
Posted @ Friday, September 23, 2011 7:29 AM by Jean
Condo law is state by state. In CT, I am not aware of any regulatory agency holding an Association's Board of Directors accountable. 
 
I do know that state law provides for lawsuits against the association and against other owners. Of course, criminal law applies against board members. 
 
Posted @ Friday, September 23, 2011 7:45 AM by George Cameron, Farmington, CT
Jean, you said it perfectly. I have been through so many government agencies only to find out that when some seemed to want to help they really had no where to go. A well known detective thought everything done was horrible and illegal but still nothing was done. The board members w/the help of the management company and the condo attorney are still getting away with everything. The management company even had an insurance agent lie for them about the reason he visited my condo when there were 3 witnesses at my condo. The management company turned in the wrong insurance claim which was too old and refused and the management company tried to make believe the insurance claim was the correct one. I still don't know if this will ever be taken care of. There seems to be nothing that can't be done by corrupt people and our government lets them get away with it.  
 
The management company and the condo attorney are fully aware that they do not have to worry as they just follow the board's instructions even though the management company & the condo attorney know more about what was being done than some of the board members. It appears that profit made from doing jobs in our community is split between all of those involved. The board doesn't seem to know that they will be held more responsible than anyone else. The condo attorney against the lien law put a lien on a deceased person's condo for close to $4,000 for fines which under our state is not allowed to be done. The deceased person was fined for burned out light bulbs that happened after she passed away and before her condo was sold. The board allowed the property manager to go to the closing and pick up close to $4,000 at the closing. Since the deceased person's family was not at the closing, they have no clue that almost $4,000 was stolen from them by the people who their Mom paid to maintain her condo. The property manager involved in doing this horrible deed bragged about it and wasn't educated enough to know that this is something you don't spread around about yourself.  
 
Brian, a serious violation is when board members change items on condo for the reason of profiting only. They remove upscale items and put in very inexpensive items. They hire inexperience contractors to do the job who damage property and make a mess out of the condos involved inside and outside but no one wants to repair anything that doesn't cause a leak as the leaks from the new roof were repaired on the outside of our condos only. If you happen to be the person with the most damage inside and outside that doesn't cause water to run in, you are forgotten about and no repairs are made. If you do ask for repairs to be made and tell them that the items you received are not those promised, you are harassed more than anyone deserves. If you still complain after no repairs are made, the condo attorney makes up fake liens for items you never received but were promised and if you are not scared to death by that, the condo attorney can fabricate a summons which prohibits you from speaking to the contractors which is absolutely unheard of when dealing with condo owners but corruption goes right into lawyer's laps also when profit is given. The association paid over $50,000 to do the project that was never needed and I would have to spend about $50,000 just to put my condo back to the condition it was in before the corrupt board decided to profit from changing items that didn't need to be changed. There were many lies told to everyone to get this project done including the condo attorney lying to the Dept. of Community Affairs but even that didn't cause a slap on the wrist for this horrible condo attorney.  
 
Brian, I did nothing wrong but was an honest decent retired person and this is how people can behave when given the power they do not deserve. 
Posted @ Friday, September 23, 2011 8:44 AM by Chilly
I always wonder when I read some of these comments, what the commenter really knows about the managment and operation of their association. 
 
A common thread seems that there is always someone, other than ourselves, responsible or at fault.  
 
Part of the problem is the failure of owners to pay attention to or understand the problems and costs involved in the operation and maintenance of the associations. 
 
We often act as if 'condo living' is like renting so far as responsibility for maintenance and upkeep of the property. 
 
A lot of us don't seem to spend much time trying to understand and working together to solve our issues.
Posted @ Friday, September 23, 2011 9:02 AM by mel
This is so true. I submitted a list of complaints from condo owners to the State of FL Dept of Business & Professional Regulation regarding our management company and condo president. The investigator was sent over 200 pages of written communications between some board members and homeowners to and from the management co. Her report was then sent up to Tallahassee to the Office of the General Councel. I either phoned or emailed monthly for follow-ups. It was three months before anyone even reviewed it. A few more months, it was sent for "expert review". Every time I emailed or called, I was told they were working on it and to be patient. Almost a year to the day, I was sent a letter stating the case was closed without finding of probable cause that there was any violation. Also stating, "The Dept may reopen this case against the Subject should additional evidence be revealed, or if the Dept determines, upon further review, that the determination to close was in error". (Is this there way of covering their A^^?) 
 
The letter closed by thanking me for bringing this matter to their attention, and if I had any questions to call/email. No response from two phone calls made to this "Assistant General Counsel". Is this our hard tax payers money at work? I wonder if it would have been different if we had hired an attorney?
Posted @ Friday, September 23, 2011 10:24 AM by Chris
The answer is to vote out those unscrupulous board members. Fire the attorney and the management company. Do your homework to replace the mgmt company and attorney. The new board members should take their time in the interview process for contractors; do not pay until at least 4 board members are satisfied with the work done.
Posted @ Friday, September 23, 2011 10:29 AM by Kiki
I wonder if the OP is in cahoots with Jean and Chilly to give them an excuse to post their "I hate HOAs" bunk. 
 
 
 
Sure, some HOA boards may be staffed with people who are less than honest and there may be some HOA attorneys and mgmt co's who also fit that bill. However, any ill will that befalls an HOA can usually be traced back to the apathetic members who are content to let anyone manage the assn as long as it isn't them. I've always said, in most instances, the members get exactly what they deserve.
Posted @ Friday, September 23, 2011 10:31 AM by mary
It's posts like these that make me think the whole idea of condos was one of the worst ideas to come down the pike. I think it IS a license to steal. And when you throw in the crazies who often manage to buy into any condo and make life miserable for everyone else, it's even worse. Condo management laws are seriously flawed and no one is apparently taking up the issue. Government doesn't want to get involved, so condo associations can do as they please. My own small condo complex is fairly well run, but I can see how condos in general can be easily turned into private fiefdoms while the owners have no recourse.
Posted @ Friday, September 23, 2011 11:42 AM by Louise
After reading the comments I understand that almost every condominium experience similar problems with the management and attorneys. Association is violating the bylaws with help of the management company and the attorney. When confronted the management company always refers to the board of directors:"we did what we were told to do by the board" knowing well that the board has no liability, but the obligations of the attorney and management company to act according to the bylaws. 
So, who in this world could brake this circle and force the responsible parties to act according to the bylaws? 
Is anyone in the government could stop this? If I could afford to hire a privet attorney this would stop at once, but, unfortunately I am not rich enough to do so. 
Please help!(not to pay for the attorney, but to find the government enforcing department)
Posted @ Friday, September 23, 2011 1:54 PM by pyotr
Can the Attorney be reported to the Law Board for not conducting himself honorably by the laws that he or she took a Oath to? I have felt the same with my management. Like they live here and they tell you want they will do & harras you per the association request. The Attorney should step in and state they can't do this. We pay his fees through our HOA or Maint. Fees and we should have the right to SUE him. Clearwater, Fl.
Posted @ Friday, September 23, 2011 3:26 PM by Albert Morris
Condo living is not for everyone but you already know that because all new condo owners are given a copy of the rules and regs to review before moving in. All potential condo buyers have the right to tour the property to see if it is being properly maintained. All potential condo buyers have the right to get a copy of the reserve study to make sure reserves are properly funded with budgets set in place to accomplish maintenance projects when due. Every condo owner has the right to vote and/or run for a board position. All condo owners can volunteer to help defray costs by offering their time and energy for smaller projects. 
 
 
 
Yes, there are unscrupulous board members, property managers, and attorneys but isn't that the way it is in any profession? That is why it is so great that each homeowner has the right to fix the situation. Find out why the problem is occuring and try to work with the board members to resolve or understand the situation. Attacking the BOD with vehemence will only make them defensive. The more you interact with the board the more secure you will feel about your situation.
Posted @ Friday, September 23, 2011 7:35 PM by Renee
You seem to overlook the law of unintended consequences.  
 
Not everything that could happen is outlined in the CC&Rs or the bylaws. Even a crack lawyer couldnt predict the fraud that can go on. When it is uncovered, condo owners may find that their only recourse is to file a lawsuit which could cost an untold amount of money, which could bankrupt the HOA. And it could take literally years to resolve. Meanwhile the complex deteriorates. This doesn't begin to explain what happens when there is a nutcase who moves in and starts trouble. He or she may never actually break the law but drives everyone to distraction. this includes bullies, whiners, inconsiderate people and nags. Many of these situations have been mentioned on this group and much of the time there is nothing that can be done about it.
Posted @ Saturday, September 24, 2011 12:39 AM by Louise
i know its a little late to be posting this comment, but ishould clarify my original comment (answer) posted above. most individuals who are asking questions are asking for advice, and many times what they recrive are "war stories" by the respondent, which i assume is intended to make everyone feel better, and reinforce the idea that we all share mutual problems. the posted question is so broad that the answer to the question must simply be..... no, there is not one agency which will assist. depending on the type of "serious violation", there may very well be an agency or legal recourse to assist with a resolution. could be as simple contacting the states attorneys office. if some of you guys would spend more time trying to help with constructive advice instead of airing your gripes, this blog would be more helpful !
Posted @ Saturday, September 24, 2011 7:13 AM by brian
I feel the original poster's pain.  
 
 
 
If, after trying hard to work serious issues out with your board (law violations, assoc legal document violations, board fiduciary violations), and you are not able to solve the issues, there are some other things that can be tried that could make a difference.  
 
 
 
1. Get the word out to other owners. One way is to create a Website to try to get the word out of what is going on to owners. This is something I did after unsuccessful attempts to access association records and after I was blocked from speaking about association board actions that clearly appeared to violate state law and the association legal documents and created a large financial owner inequity between winners and losers. This was met with limited success because ultimately too many owners simply did not want to get involved so that left important issues to resolve. 
 
 
 
2. Contact your state's Attorney General's Office and ask if they will get involved or if there is some other state agency that might help to mediate or otherwise help with your situation. My condo is in New Hampshire. Unfortunately, the State of New Hampshire does not have any such agency. I was advised by two people at the Attorney General's Office advising though they had a lot of complaints in this area, there was no agency that could help me and condo owners were on their own. 
 
 
 
3. If you feel the board's hired attorney may not have operated properly look into the possibility of filing an ethics complaint against the attorney. I think most, if not all state's Judicial Branches of government have ethics rules of conduct that attorneys are required to adhere to. Most states likely have readily available information on these rules and how to file a complaint if you feel an attorney has violated one or more of these rules. For example, the State of New Hampshire has a public Website at www.nhattyreg.org with links to the rules, information on how to file a complaint, and the ability to do searches for cases where attorneys have received warnings and/or sanctions arising out of filed rules violation complaints. My association board hired an attorney who had multiple New Hampshire Supreme Court Discipline Office warnings and later a sanction for not telling the truth to the court, something which is at the very foundation of the legal system. I recently filed a complaint against this attorney because I think he likely violated the N. H. attorney rules of professional conduct in his dealings with me. 
 
 
 
4. If all else fails do some more thorough research of the law (you should be able to do a lot of that on the Web - for example, N.H. condo law link is www.gencourt.state.nh.us/rsa/html/xxxi/356-b/356-b-mrg.htm ), and your condo legal documents. If you still feel the board is not following the law and/or the association legal documents, then consider filing a civil court action. You can do this without an attorney if you cannot afford the cost of one. Sometimes there is no other way and since my other efforts had some success but ultimately failed, I just filed a civil court action as a pro se party. Pro se means I filed it without representation by an attorney, and therefore will have lower legal fees since I will not have the high attorney fees. The State of New Hampshire does allow you to consult attorneys as needed instead of hiring them for full representation so if I make use of this I will have some attorney fees. You should also read your legal documents to see what they say about board liability. My assoc legal docs say the board is Not protected from liability if they do not follow the law or the legal documents and in my case I believe they followed neither so they may well be held personally liable if I win my case as I fully expect to. Furthermore, the board liability insurance policy seems to give the insurance company an out in covering the board so the board may end up with more financial pain. I pointed these liability issues out (with quotes from the the actual legal docs and ins policy) to the association after the board president claimed the board had no liability whatsoever so I do not feel too bad if they get stuck paying - I tried my best in every way to prevent having to go this far as clearly a lawsuit is one's last resort. 
 
 
 
While none of these are for the feint of heart, they might meet with some success if other attempts at resolution have failed. If everyone does nothing a rouge board will likely continue to operate the way it has and if more people stood up and got involved, especially at earlier stages, it would benefit all condo owners by helping to reduce some of the problems with condo ownership. 
 
 
 
Sorry if I put too much of my personal info in this but I feel it gives a better picture of options if someone actually has done what he is suggesting are possible options.  
 
 
 
Finally, I would suggest you search the web with Google. There is tons of useful info to look at. Some suggested search terms to try: 
 
1. "new hampshire condo law" replace new hampshire with the name of your state. 
 
2. "minimum expectations of condo boards" 
 
3. "condo association records keeping" 
 
4. "condo association proper maintenance" 
 
5. "Condo Board Fiduciary Responsibility" 
 
 
 
Hint - you may run into the website I created which can make for some interesting reading and has a lot of useful info beyond my personal saga. 
 
 
 
Posted @ Saturday, September 24, 2011 9:46 AM by Rick
rick.... great narrative !! this type of response when someone needs help is exactly what is appreciated, instead of all the b. s. and "war stories" as i call them.
Posted @ Saturday, September 24, 2011 10:12 AM by brian
Thank you Brian. In short: the association consist of three parts. 
Phase I,Phase II and Phase III. 
Phase I is 57 houses on 26.085 acres of land, Phase II is 80 houses on 18.15 acres, Phase III is 40 apartments on 2.717 acres. 
There are HOA monthly charges and maintenance monthly charges the same for all tenants. 
The maintenance monthly charges must be collected and managed by Board of Managers of the Phase.(bylaws) 
The HOA charges to be collected by the Association.(bylaws)  
In reality all the maintenance and HOA charges are collected and controlled by the Board of Directors of the Association. For the last 15years the Board of Managers in the phases were elected only two times. This is, in my opinion, redistribution of funds for no reason. If the budget is run by the bylaws people in different phases could have different maintenance fees, the way it is run today is to the advantage for people of the bigger phase and to disadvantage of people of the smaller one. 
So, one more time: who and how could enforce the bylaws?  
To me the bylaws are our(tenants) constitution. Nobody should have the power to violate it. 
Posted @ Saturday, September 24, 2011 11:47 AM by pyotr
Brian, hopefully some will agree that my narrative could be something of value to those with issues.  
 
 
 
However, I think my narrative suggests the 'war story' that I have lived, just minus most of the details. However, I believe most everything is solvable and I am the type of person that will keep working to solve the problem regardless of obstacles put in the way, and in fact work even harder if I feel the issues are clear and I am being stonewalled and bullied. Unfortunately, one thing I have learned from this experience is most people will not get involved and that is what some boards count on hoping they can continue to ignore the issues and that you will eventually go away if they make life difficult enough for you. In my case that was but one of the board's miscalculations.  
 
 
 
Bottom line - owners can and should get involved to help solve problems and make a difference before a problem escalates into bigger problems.
Posted @ Saturday, September 24, 2011 12:15 PM by Rick
pyotr, Actually, the legal documents including the bylaws act as a contract between the association and the owners and the board is responsible for following and enforcing that contract, indeed it is their fiduciary responsibility to do so. That will be one of my arguments in my lawsuit and if you do some searches on the web you will find more info on this including at the below links.  
 
 
 
1. www.pinegrovelakes.com/board_duties2.html with quotes: 
 
 
 
"Enforcement of Governing Documents 
 
There is perhaps no greater insurance towards the preservation of a co-op's character than strict enforcement of its governing documents, which typically include the corporation's bylaws, covenants, and restrictions, and are designed to regulate and govern the use of the property." 
 
 
 
"When considering both the board's duty to enforce its own governing documents and the individual shareholder's duty to abide by them, it's imperative to remember that these documents are a contract governing the legal rights between the association and the owners." 
 
 
 
"On Fiduciary Duty 
 
The immense responsibility vested in every board and the board's special relationship to its members manifests itself most clearly in the execution of fiduciary duties and the requirements of due process, equal protection, and fair dealing with both fellow directors and residents alike." 
 
 
 
2. See: www.vahoalaw.com/board-member-responsibilities-fiduciary-duty-of-board-of-directors.html which has the following quote: 
 
"...many courts across the country have set their firm imprimatur on the well-settled, almost proverbial rule of law that a board's proper exercise of its fiduciary or quasi-fiduciary duty requires strict compliance with the association's bylaws, covenants, and restrictions - which were initially set down to preserve not just quality of life and building character, but also shareholder investment. While each individual board member is responsible for acting in compliance with his or her duties, failure to act in discharge of that duty to properly administer the rules of the corporation can be held liable for the consequences of their malfeasance to those whom the duty was owed - namely, the shareholders and/or owners." 
 
 
 
 
 
Posted @ Saturday, September 24, 2011 12:39 PM by Rick
pyotr, 
 
 
 
It sounds like you have a master assn that has overall control over all the individual assn's. If that is the case, then the board of each individual assn is resp. for enforcing the gov docs of that assn and the board of the master assn is resp for enforcing the gov docs of the master assn. The members of each individual assn must abide by the gov docs of their assn and also the gov docs of the master assn. It's just one more layer of "gov't", so to speak.
Posted @ Saturday, September 24, 2011 1:55 PM by mary
Mary, it looks as you are reading from the bylaws, but so what? 
The question still remain: who from the government could and should enforce the law?  
Posted @ Saturday, September 24, 2011 2:12 PM by pyotr
pyotr, 
 
 
 
I believe the state should have an agency that would adjudicate HOA disputes. Sadly, most states do not, and in that case disputes can only be settled in a court of law. 
 
So, pyotr, if you think your BOD is violating the gov docs and/or state law and your state does not have an agency that oversees HOAs your only recourse is to take them to court. Don't expect the attorney general of your state to be of any help to you!
Posted @ Saturday, September 24, 2011 4:06 PM by mary
I am an owner of a NH condo. I am going to Court next month for a motion hearing in NH for Condo Bylaw violations. The issue is over door and window replacement that the owners own. This is a huge amount as each condo has two sliders. I am in agreement with the other repairs. The Condo Attorney at mediation refused to mediate and the Condo Association withdrew that lawyer and sent another. Now the Condo lawyer is billing me and the Property Manger is billing me again for the Condo lawyer for the same amount. My lawyer wrote the objection to summary judgement and now it is going to a court motion hearing. I have stood up for 2 years at the Condo Annual meetings and have told everyone that the owners own their doors and windows I have e-mailed the Condo President twice, mailed letters to the owners twice, contacted the attorney general, contact WBZ call to action, and have been to the SCOPE free lawyer program at the State Courthouse in Ossipee and, now I am going to court. Everything I do, say, or write goes to the Condo lawyer and the Condo lawyer charges me double for exactly what I do not know. It just appears on my condo bill. At the last Annual Condo meeting the President said that the Condo Association owns the doors and windows. 
 
There is no question that the Board of Directors are in violation of the Declaration, and my lawyer says that the language is plain. What else can I do? 
 
 
 
THE ISSUE 
 
My Condo Association is assessing every owner for the individual replacement of slider doors and windows. This is not uniform, but the slider doors and windows are being replaced as determined by the Property manager, the Condo President and one Condo owner. Not one, of these three people is a contractor. Not every owner gets the slider doors and windows, but everyone pays the assessment. I believe this against the Condo Declaration, Bylaws, the Condominium Act, and the history and precedence doors and windows being individual, not common property and as such replaceable by the individual owners as required. 
 
 
 
THE DECLARATION AND BYLAWS 
 
The association has no right to replace our slider doors and windows without our individual permission. We, the individual condo owners, own them, and the replacement should be an individual option by each owner. 
 
Declaration ( My condo ) Liber 838, Page 19, 3 (d) (iii) (e)  
 
“…The Owner of Unit shall be deemed to own the aforesaid finished interior surfaces, the interior walls and partitions which are contained in said Owner’s Unit, and shall also be deemed to own the window glass and glass vents of his Unit, the entrance doors, and window frames (to the unfinished exterior surface thereof). Any glass doors connecting his Unit with Limited Common Area reserved for his Unit, and the sinks, bathtubs, and other plumbing facilities, refrigerator, oven and other appliances, located in his Unit and serving solely his Unit.”  
 
 
 
There has been no fire or other casualty that would allow the board to arrange for and supervise the repair.  
 
Bylaws Woodland Pines Condominium Article VII, 1, Liber 838, Page 48  
 
“When repair and reconstruction are required, subject to the provisions of paragraph 3 (i) of the Declaration, in the event of damage to or destruction of all or part of the buildings in the condominium as a result of fire or other casualty, the Board of Directors shall arrange for and supervise the prompt repair and restoration of the damaged or destroyed portion of the buildings.”  
 
 
 
THE LAW: THE CONDOMINIUM ACT 
 
This act says that the doors and windows belong to the units, while all other walls, floors or ceilings shall be part of the common area. Clearly doors and windows are NOT part of the common area.  
 
NH Condominium Act, 356-B: 12 Construction of Condominium Instruments, II, page 203,  
 
“To the extent that walls, floors, and/or ceilings are designated as the boundaries of the units or of any particular units without further specification, all doors and windows therein, and all lath, wallboard, plaster, paneling, tiles, wallpaper and windows therein, and all lath, wallboard, plaster, paneling, tiles, wallpaper, paint, finished flooring, and any other materials constituting any part of the finished surfaces thereof, shall be deemed a part of such units, while all other portions of such walls, floors, and or ceilings shall be deemed a part of the common area.” See Appendix D 
 
 
 
THE HISTORY of replacing doors and windows by individual owners 
 
Owners in the past have paid for doors and windows. I personally have paid for my Entrance Door in 2005 as well as my front bedroom window in 2007 and I have my bills.
Posted @ Sunday, September 25, 2011 10:32 AM by NHcondo
NHcondo, 
 
 
 
It looks to me you are correct in your interpretation of whose responsible for non common windows and doors. Your situation has some similarities to my NH condo where I am taking the Association and board members to court. 
 
 
 
In addition to what you stated the NH Condo Act in reference to the windows also states "Except to the extent otherwise provided by the condominium instruments:" (see link at www.gencourt.state.nh.us/rsa/html/XXXI/356-B/356-B-12.htm ). And since both the association legal docs and the N.H. Condo act both say that non common windows and doors are the owners responsibility the board does not seem to have anything to back up their position. So it would seem they are in violation of the law and are in breech of contract as the legal documents serve as a legal contract between the association and each owner and the board is responsible for adhering to and enforcing the association documents. I have links above in a previous post on this thread which talk about the fact that the legal docs serve as a contract.  
 
 
 
It sounds like you tried to work things out and avoid court by bringing to the boards attention and the owners attention what the law said and what your condo legal documents state. Hopefully, you were clear and kept records of any correspondence. 
 
 
 
I do not think there is anything else besides your court action that you can do except perhaps look into making an ethics complaint against the boards attorney. You can look at the ethics rules of professional conduct which can be found at www.courts.state.nh.us/rules/pcon/ and decide if you may have grounds to win an ethics complaint . As an example, the attorney billing you seems like it may be improper though it is unclear what he is billing for in your statement. Also, he is supposed to make only 'meritorious claims and contentions' by Rule 3.1 which can be seen at www.courts.state.nh.us/rules/pcon/pcon-3_1.htm . I do not know your case other then what you have stated but based on what you stated and given the Condo Act and the condo legal docs, I do not see how his arguments have any merit.  
 
 
 
Good luck. I am not a lawyer but from what you have stated the issues seem clear to me and I would expect your attorney to help you win your case. 
 
 
 
I would very much like to know the board and their attorney's rationalization for taking the stand that they do. I would also like to know the progress and outcome of your case since it has similarities to mine.
Posted @ Sunday, September 25, 2011 8:30 PM by Rick
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