Category Archives: condominiums

What to know before you buy in a community association

People choose to live in community associations for numerous reasons. Many owners value the inherent benefits of community associations, which are designed to manage common areas of the property, manage the property interests of owners, provide services for owners, and develop a sense of community through social activities and amenities. Yet community association living isn’t for everyone.

Do your due diligence by learning all you can about a community before you buy or rent a home in it.

First, ask your real estate agent to see copies of the governing documents, including the bylaws or Covenants, Conditions and Restrictions (sometimes referred to as CC&Rs).

Next, take the time to talk to people who live in the community. Find out how they feel not only about the neighborhood, but also about how the community is governed and managed. Ask to talk to the president of the association, members of the elected board, or the professional who manages the community.

Don’t forget to check out the common areas. Are the amenities—pools, tennis courts, and playgrounds—well-maintained? Is there ample parking?

You should be able to answer the following questions before you buy or rent:

  • How much are the assessments? When are payments due? How much are they likely to increase? What do they cover? What don’t they cover?
  • Does the community have a viable reserve fund for major projects in the future?
  • Are there renting restrictions?
  • Do the architectural guidelines suit your preferences?
  • What are the rules with respect to pets, flags, outside antennas, satellite dishes, clotheslines, fences, patios, and home-based businesses?

While assessments, rules, and regulations are important, don’t overlook other fundamental questions: Is it the right kind of community for you and your family? Does it fit your lifestyle and sense of community? Does it provide the amenities you want? Is it a good investment? The more you know in advance, the more likely you’ll enjoy your new home and community association.

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An unbiased, unfiltered guide to 2018 midterm election signs

Getty Images/Alexeys

The 2018 midterm elections are less than two weeks away, which means, of course, campaign signs are popping up like dandelions in yards and along roads.

These signs become a particular pain point for community associations every election season. Without fail, some communities end up on the evening news or in the local newspaper for attempting to enforce their covenants on signs.

We asked James A. Gustino, a community association attorney in Winter Garden, Fla., to provide some guidance on the subject. What should associations do about the signs? This is what he had to say:

Strict enforcement of association sign prohibitions, particularly as they relate to political signs on an owner’s property during the election season, is almost always unwise.

Check your state’s highest court rulings and the specific “freedom of speech” verbiage in your state’s constitution. Most federal and state courts currently don’t protect political signs from association enforcement. However, the New Jersey Supreme Court issued a pair of decisions in 2012 and 2014 protecting political speech. These opinions could influence other state courts considering similar legal issues in the future.

Covenants restricting signs often incorporate exceptions for security, developer, “for sale” and other board-approved signs. Under such circumstances, an association actively enforcing bans against political signs is unnecessarily exposing itself to charges of selective or arbitrary enforcement. When a ban on signs is universal but an association permits residents’ holiday decorations—another kind of speech—it also exposes itself to claims of selective or arbitrary enforcement. This nuance is often overlooked.

Practically speaking, political signs usually are posted for just a few weeks. By the time the typical association cycles through its standard three noncompliance notifications, the signs will likely have been removed.

Lastly, political beliefs and affiliations—like religious beliefs—tend to produce strong feelings that lead to costly and time-consuming litigation. Even if litigation isn’t the end result, is it sensible to pursue actions that invite unnecessary friction?

I recommend that my clients permit political signs but enact reasonable time, place, and manner restrictions. For example:

  • They can only be placed on the property for 45 days prior to an election
  • They must be removed within three days after the election
  • They cannot contain any profanity
  • They must be limited in number
  • They cannot create a sight obstruction or other safety concern.

I also advocate involving community members to help craft the association’s specific restrictions and then prominently posting (via email blasts, special notices on your website and at entry signs) the rules to encourage compliance.

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HOAs, BOTs, CC&Rs, and more: Defining community association terms

Today, 70 million Americans live in 344,500 common-interest communities. Even if you haven’t lived in a condo, co-op, or HOA, chances are you’ve at least heard of these communities. Admittedly, those who live in, volunteer in, and work for common-interest communities tend to throw around terms like “ARC,” “CC&Rs,” “D&O” or “CMCA” that make things sound more complicated than they really are. So let’s pull back the curtain on some important terms related to living in and working in community associations.

Types of communities

CA: Community Association

CID: Common-Interest Development

Co-op: Cooperative

Condo: Condominium

HOA: Homeowners Association

PD: Planned Development

POA: Property Owners Association

PUD: Planned Unit Development

TOA: Townhouse Owners Association

Community leadership, governance and operations

ARC: Architectural Review Committee

BOD: Board of Directors

BOT: Board of Trustees

CC&Rs: Covenants, Conditions and Restrictions

D&O: Directors & Officers liability insurance

E&O: Errors & Omissions insurance

RFP: Request for Proposal

SOP: Standard Operating Procedures

General CAI terms

CAI: Community Associations Institute

CAMICB: Community Association Manager International Certification Board, a sister organization to CAI.

FCAR: Foundation for Community Association Research, also a CAI affiliate

CCAL: College of Community Association Lawyers

LAC: Legislative Action Committee

PMDP: Professional Management Development Program

Designations, Certifications, and Accreditations
AAMC: Accredited Association Management Company

AMS: Association Management Specialist

CIRMS: Community Insurance & Risk Management Specialist

CMCA: Certified Manager of Community Associations

LSM: Large-Scale Manager

PCAM: Professional Community Association Manager

RS: Reserve Specialist

Whatever the acronym, all community associations—CA, condo, HOA, POA, TOA, etc.—share a few essential goals: preserving the nature and character of the community, providing services and amenities to residents, protecting property values and meeting the established expectations of owners.

Stumped by other acronyms or industry terms? Ask a question in the comments below.

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27 million reasons why a condo would ‘deconvert’

 Lake Michigan from the North Shore, Chicago

In a deal worth $27 million, Edgewater Beach condominium owners in Chicago plan to sell their lakefront building to Greenstone Property Group, a New York- based real estate investor that will convert its 188 units to apartments.

Almost 80 percent of unit owners accepted the offer in a vote over the summer. Under Illinois law, bulk con- dominium sales must be approved by 75 percent of unit owners. The sale is expected to close this year.

“I think owners were beginning to realize that if we don’t sell, we will be required to raise several special assessments to fund crucial deferred maintenance issues, many of which are not prepared for,” says Shawn Swift, president of the Surfside Condominiums board. “We felt it was important that all owners have the choice to decide the building’s fate collectively, rather than a board of directors’ decision to move forward with $3–$4 million in special assessments over the next two years.”

Owners will receive approximately 40–50 percent more on average for their units than if they were to sell on their own, explains Swift, and without the worry of paying hefty assessments in the future.

“We have also negotiated favorable leaseback terms for any owners who wish to stay in their units post-closing,” Swift adds. “The buyer will honor any cur- rent leases in place between an owner and their tenant. About half the building is currently being rented.”

The sale will be one of the largest condominium-to- apartment conversions—also known as deconversions—in the city’s history, according to the Chicago Tribune.

“Condominium deconversions became popular a few years ago because of the increased rental rates in Chicago,” says Patrick T. Costello, a shareholder at Keay & Costello law firm and a legislative liaison to CAI’s Illinois Chapter Legislative Action Committee.

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Smoking Ban Goes Up In … Smoke

A failed smoking ban remains a point of contention between residents at a nearly 40-year-old condominium building in St. Paul, Minn., according to the Star Tribune.

The Gallery Tower board voted to ban smoking in the summer of 2017. The ban, which was due to go into effect this past April, was supposed to apply to units and the balconies outside them, according to reports. However, earlier this year, newly elected board members who smoke took control and voted to rescind the ban before it took effect.

A 19-year resident of the Gallery Tower, Marge Romero, felt she should be able to do what she wants within the confines of her home—and that includes smoking cigarettes.

In January, Romero and two other residents who opposed the smoking ban were elected to the board, and the following month the board voted to rescind the ban, citing it was a big overreach.

Yet that hasn’t stopped other buildings from outright bans.

“I think there has been a definite trend toward banning smoking in condominiums, and I expect that to continue,” says Matt Drewes, president of the CAI Minnesota Chapter. “Efforts at redirecting, controlling, or containing smoke has had mixed results and have often fallen short of making all parties happy, and they come at a certain expense that the owners involved may not be willing or equipped to pay.”

The fight at Gallery Tower may not be over yet. Residents like Jeff Tentinger and his wife, Robin— who spent more than $8,000 on air purifiers—were stunned people needed to vote on a smoking ban in 2018, especially given the health problems related to secondhand smoke.

States, cities, and other local governments have been moving to ban smoking in public places for years. Residents of public housing facilities in the U.S. can no longer smoke in or near the buildings in a new rule that went into effect July 31.

Many community associations have been outlawing the practice in common areas and on amenities but letting owners continue to smoke inside their units. Some condominiums are trending toward full bans, yet as the Gallery Tower situation proves, they may have a fight on their hands.

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Are Our Rules Reasonable?

Rules and regulations help community associations maintain property values and protect a quality of life. These standards are typically described in detail in an association’s governing documents, which all homeowners should have an opportunity to review before purchasing a home in a common-interest community.

Association rules and regulations should be reasonable. When board members—along with their community manager, attorney, and other expert advisors—are reviewing association rules or considering establishing new rules, they should follow these guidelines:

  • Develop rules only if they’re necessary
  • Base rules on the proper authority—either governing documents or local/state/federal law
  • Consider how rules will be enforced, taking extra care to be sure they’re enforced uniformly
  • Implement rules that encourage understanding and compliance
  • Write rules that tell owners what they should do instead of what they shouldn’t, and explain why that rule is necessary

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Why Scoop the Poop?

Americans adore their pets. More than 43 million dogs and 36 million cats live in U.S. households—and many of them belong to the 68 million Americans who live in homeowners associations, condominiums, cooperatives, and common-interest communities. Besides being a nuisance, uncollected pet waste is a serious problem. Remember these facts:

1. Under the Clean Water Act, community associations could be fined by the Environmental Protection Agency if pet waste goes uncollected. If fined by the EPA, a community association could face a potential special assessment that would be levied against all residents—not just pet owners.

2. The appearance and quality of the common areas are known to affect home sales—not just whether and for how much they sell, but how quickly.

3. The more residents complain about pet waste, the more time board members and community managers must spend on enforcement rather than serving the association.

4. Uncollected pet waste can spread disease and attract rodents who feed on pet waste.

Read more about pet problems and solutions in Pet Policies: How Community Associations Maintain Peace & Harmony.

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Fly Old Glory Fly

On June 14, 1777, the Marine Committee of the Second Continental Congress at Philadelphia adopted a resolution that “the flag of the United States be thirteen stripes, alternate red and white; that the union be thirteen stars, white in a blue field representing a new constellation.” Though the American flag has changed a few times over the years, we’ve stuck to the Stars and Stripes format since. It’s why we celebrate Flag Day today.

The U.S. flag has profound meaning for many Americans, which is why CAI applauded the 2006 enactment of the Freedom to Display the American Flag Act, giving residents the right to fly an American flag despite any community association rules or restrictions that prevent doing such. CAI believes, however, that associations should be able to determine the appropriate size, placement, and installation of flags. A few tips for flying Old Glory, based on the U.S. Flag Code, are included in the graphic at left. 

Every community association has different rules for displaying flags, whether they be the American flag, a garden flag, or a flag with a resident’s favorite football team. These rules are conceived and enforced to promote uniformity within community associations and avoid the potential proliferation of all flags, banners, and emblems.

For more information about rules and regulations regarding flags, read Everyday Governance: The Community Association’s Guide to Flags, Rentals, Holiday Decorations, Hoops, and Other Headaches, available from CAI Press.

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Be a Neighbor

The following initially appeared as “In This Issue” in Common Ground‘s May/June 2018 issue.

Fred Rogers had a unique ability to address difficult topics, such as disability, Robert F. Kennedy’s assassination, and racial integration, in a thoughtful and compassionate way that related to children and adults in his show “Mister Rogers’ Neighborhood.”

The iconic program, which ran from 1968 to 2001, emphasized uplifting philosophies, kindness, and courage. I wonder how he would address the polarizing times we live in today.

Research shows the partisan divide on political values has never been higher in the U.S., and an informal poll of CAI members indicates that animosity among residents in community associations may be increasing. See a few results from Member Pulse at right, then read “Divide and Conquer” in the issue for a discussion on the topic.

Partisan animosity in politics has never been higher. Have you noticed an increase in animosity among residents in your community?

To be sure, there are many reasons other than politics for animosity in communities, yet if it’s true that all politics is local, there are no governing bodies more local than community associations. Maybe common-interest communities are where any divide that exists can begin to be solved. Many associations work hard to bring their residents together and create harmony. There are many projects worth rallying around.

At Seabrook Island, S.C., its residents rallied around efforts to preserve the area’s delicate habitat. That’s how the community recently became the first in the state to be designated as a Certified Sustainable Community by Audubon International. Read all about Seabrook’s work in “Sea, Sand, and Sustainability.”

Residents of Venture Out in Mesa, Ariz., have dedicated themselves to comprehensive long-range planning. When Common Ground profiled the wagon-wheel shaped recreational vehicle community in the May/June 2016 issue, the community was benefiting from the fruits of its first long-range plan and about to embark on its second. Now, you can read in “Another Worthy Venture” how both plans came together. Inclusion, engagement, transparency, and constant communication were critical elements.

Have you noticed an increasing number of homeowners resistant to being governed by their community association in the polarizing times we live in now?

Those values would be important in nearly every situation, including when your high-rise is at the center of construction-defect and fraud litigation (“That Sinking Feeling”) and when your community is dealing with a board recall (“Total Recall”).

Fittingly, a new documentary called “Won’t You Be My Neighbor?” about Fred Rogers’ transcendent show will be released this summer. Maybe we can pick up some additional bridge-building, divide-conquering solutions there.

>>CAI members can access the May/June Common Ground and each of the articles mentioned above at www.caionline.org/cg.

>>Nonmembers may download a PDF of “Sea, Sand, and Sustainability” and—for a limited time only—can access the entire May/June issue through the magazine’s digital edition.

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Three Realities of Community Associations

All community associations have three things in common:

  1. Membership is mandatory. Buying a home in a community association automatically makes you an association member—by law.
  2. Governing documents are binding. Association governing documents can be compared to contracts. They specify the owners’ obligations like following the rules and paying assessments and the association’s obligations, including maintaining common areas and preserving home values.
  3. Assessments must be paid. A homeowner could lose his or her home if they fail to pay assessments. Associations have a legal right to place a lien on the property if a homeowner doesn’t pay.

But, take heart homeowners: Associations also have three realities they can’t escape. Associations have an obligation to provide three broad categories of service to residents.

  1. Community. This can include maintaining a community website, orienting new homeowners or organizing social activities.
  2. Governance. This can include establishing and maintaining design review standards, enforcing rules, and recruiting new volunteer leaders.
  3. Business. This can include competitively bidding maintenance work, investing reserve funds responsibly, developing long-range plans, and collecting assessments.

By delivering these services fairly and effectively, community associations not only protect and increase home values, but they provide owners an opportunity to participate in decisions affecting their community and quality of life. And those are realities we can live with.

Read more about community associations in CAI’s publication An Introduction to Community Association Living.

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