Dealing with Dysfunctional Massachusetts Condominium Trustees & Homeowner Associations

Condominium living can offer convenience and a sense of community. However, it can also bring its fair share of challenges, mainly when condominium associations or trustees are dysfunctional. From financial mismanagement to power struggles, these issues can create stress and impact the quality of life for all residents. This guide provides insight into dealing with dysfunctional Massachusetts condominium trustees and homeowner associations.

Signs of Dysfunctional Condominium Management

A condominium association’s functionality can make or break the living experience for residents. Common signs of dysfunction include:

• Financial Mismanagement: Failure to handle the condo’s finances properly, resulting in unpaid bills, lack of reserves, or excessive fees.
• Power Struggles: Trustees overstepping their roles, leading to conflicts and a lack of proper decision-making.
• Poor Communication: Lack of transparency regarding decisions, financial status, and changes in rules.
• High Delinquency Rates: An increased number of unit owners are not paying their condo fees, which affects overall maintenance and services.
• Transition Issues: Problems with transitioning management from developers to the association, particularly in newer condominiums.

Financial Mismanagement in Condos

Proper financial management is the cornerstone of a well-functioning condominium association. Mismanagement can result in unpaid utility bills, lack of maintenance, and a depleted reserve fund.

How to Identify Financial Mismanagement

• Inconsistent Financial Reports: Incomplete or missing financial reports can indicate a lack of proper accounting.
• Excessive Special Assessments: Frequent special assessments might suggest that regular budgeting and planning are not being followed.
• Poorly Funded Reserve Account: The reserve fund covers major repairs and improvements. A lack of funding is a red flag.

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Dealing with Power-Hungry Trustees

Some trustees may overstep their authority, imposing rules without consulting unit owners or acting in their own interest. When this happens:

• Hold Special Meetings: Unit owners can call for special meetings to address concerns and discuss trustee conduct.
• Vote Out Trustees: If trustees are not fulfilling their duties, consider removing them through a vote, following the procedures outlined in the condominium by-laws.
• Legal Recourse: In cases of severe overreach, unit owners can sue for a “breach of fiduciary duty.”

Legal Recourse for Unit Owners

Massachusetts law provides unit owners with legal avenues to address issues. “Breach of fiduciary duty” claims can be filed against trustees who fail to act in the association’s best interest.

• Filing a Lawsuit: Consult with an attorney specializing in condominium law to explore options for taking legal action.
• Court Remedies: Courts may grant injunctions to prevent trustees from acting further if they are harming the unit owners.

Managing Unpaid Condo Fees

Unpaid condo fees can affect the association’s ability to cover expenses, leading to a decline in property value and quality of life.

Massachusetts’ “Super Lien Law”

The “Super Lien Law” allows condominium associations to file a lien for unpaid fees and gives the association priority over the mortgage lender for the first six months of delinquent fees.

• Collection Measures: The association can foreclose on the unit, sell it at auction, or require the tenant to pay rent directly to the association to cover unpaid fees.
• Attorney’s Fees: Associations can pursue attorneys’ fees and collection costs, which can financially burden the delinquent owner.

Transition Issues in New Construction Condominiums

In new developments, developers often retain control of the association until a certain percentage of units are sold. This situation can lead to conflicts, especially if the developer fails to manage finances properly.

• Unit Owner Rights: Unit owners have the right to demand financial transparency and proper maintenance during the transition.
• Legal Action: If the developer-trustees fail to fulfill their responsibilities, unit owners can file a lawsuit for breach of fiduciary duty.

Handling Dysfunctional Self-Managed Condos

Self-managed condos, especially in smaller buildings, often face unique challenges:

• Lack of Professional Oversight: Without a professional management company, associations may struggle with accounting, maintenance, and legal compliance.
• Consider Hiring Professional Management: Larger or more complex condominiums can benefit from professional management, which brings experience in governance and day-to-day operations.

Questions to Ask Before Buying a Condominium

Before purchasing a condo, gathering information about the association’s management practices is crucial. Here are key questions to ask:

1. What are the condominium by-laws, rules & regulations?
   • Ensure you or your attorney reviews these documents to understand the governance structure.
2. What is the monthly condominium fee, and what does it cover?
   • Clarify what expenses are included and how they contribute to the community’s upkeep.
3. How much money is in the capital reserve account?
   • A poorly funded reserve can lead to unexpected special assessments.
4. Are there any contemplated or pending special assessments?
   • Find out if large projects or repairs are planned that could incur additional fees.
5. Is there a professional management company, or is the association self-managed?
   • Professionally managed condos tend to have better financial planning and governance.

Preventing Dysfunction in Condominiums

To maintain a well-run condominium association:

• Regular Communication: Meet unit owners about financial health and upcoming projects.
• Annual Financial Reviews: Conduct reviews of the association’s finances, including reserve funds, to ensure proper planning for future repairs.
• Transparency: Trustees should openly share information with unit owners to foster trust and cooperation.

Calling a Special Meeting

Unit owners can call a special meeting to discuss issues if concerns arise.

• Follow Proper Procedures: Check the condominium by-laws for instructions on calling a meeting, including notice requirements.
• Effectively Communicate: Be clear about the meeting’s purpose and desired outcomes to ensure productive discussions.

Enforcing Internal Governance Rules

Maintaining order within the association requires adherence to internal rules.

• Addressing Violations: Trustees should enforce the by-laws and handle violations promptly.
• Removing Trustees: If trustees consistently fail to meet their responsibilities, unit owners can call for a vote to remove them.

Resolving Disputes and Conflicts

Disagreements within a condominium community can escalate quickly.

• Mediation: Consider mediation a first step to resolve disputes before pursuing legal action.
• Legal Counsel: Consult an attorney to understand the legal implications and options available.

FAQs

Conclusion: Navigating and Overcoming Dysfunctional Condo Management

Dealing with dysfunctional condominium management can be challenging, but unit owners have rights and resources at their disposal. By being proactive, well-informed, and involved in the association’s governance, unit owners can work together to address problems and maintain a positive living environment. If you’re experiencing issues, consult a professional for guidance on protecting your investment and quality of life.

Need help navigating condo issues? Reach out to LoPriore Insurance for expert advice on protecting your condo and ensuring a smooth living experience.