Condominium associations are made up from a collection of ordinary people, and therefore are equally susceptible to the entirety of human flaws that any of us are capable of possessing: greed, power, corruption, dishonesty, apathy, ignorance, discrimination, fraud, and pride (just to name a few).
Such standard human faults often easily invade and infect every association, as well as the population at large. Just take a look at government and political parties today to see evidence of these faults and foibles. They’re often inevitable even in the most well-intentioned of people.
For starters, all condominium associations have a board of directors that governs the association and implements both the financial policy and rules and regulations that are set forth by the membership CC&R’s or bylaws. These board members’ only qualifications are that they a) be current in their dues and b) own a unit within the association. There’s no requirement for experience or industry knowledge or awareness.
These member roles are volunteer positions and for unpaid work while on the board, often a thankless and scrutinized position for which they have no experience. Someone must govern, and so whoever volunteers, good or bad, these people are the ones who are going to run the show.
Personally, I’ve never understood why anyone in their right mind would want to sit on a board. Such individuals are usually only one of five voices on the board, which is forced to meet and hash out many issues both big and small, with people on a monthly basis that you might not particularly like or respect.
Additionally, and more importantly, board members are conflicted. Truthfully, if you were to write the requirements of a board of directors, “conflicted” would be one of the absolute last issues you would want the board to have. The challenge is that they are often conflicted because they are not independent. Every financial decision they make regarding the association affects them.
For example, when considering raising the dues to cover the actual costs of the association, the board members are voting on raising the dues on themselves and not just the other owners. Everyone wants low dues and payments, regardless of whether low dues are even a good idea. Low dues are, in almost every single case, not a good idea.
Most boards are also constantly rotating members, which prevents continuity in governing the association. Owners with their own self-interests at heart will run for the board, simply to try and overturn a pet or parking regulation that adversely affects them personally or that they don’t like. Upon success or failure, they will resign and let someone else takeover.
On top of this quagmire is that, most of the time, even with a managing agent or management company, it means that there is yet another collection of individuals who can bring all of the frailties of the human condition to bear on the association, effecting it’s operation and financial decision making. Both management companies and their property managers are a revolving door within an association; each is susceptible to replacement at any time by the board with minimal notice and for any petty reason. This adds yet another layer of dysfunction and disaffection to an already problematic environment.
And on top of all this, is a large, codified body of condominium law that is supposed to be adhered to, but is largely ignored with impunity by many associations every day. Associations get away with flaunting and violating the state law simply because they can. There is no “condo police” investigating or ensuring that these associations abide by the law, and the majority of the people affected by the laws are in the fact the property owners themselves. Which is the irony, given that board members are also property owners, who may think they benefit from short cutting the legislation that is in place. They’re not going to call the authorities on themselves, are they?
The one uniformed party that is adversely affected by these failures is the prospective and uninformed buyer. Until now, a potential new buyer hasn’t been advised by his agent to investigate the practices and policies of the HOA. He has no expertise or knowledge about condominiums or the pitfalls of owning one. He isn’t an aggrieved party until he buys in and inherits the problems plaguing the association that he had no advice or opportunity to investigate in the first place.
Now, once in the association and now having both hands around the falling knife, what are his or her options? He could sue both the seller and the association for failure to disclose, as well as his own real estate agent representing the buyer in the purchase for professional negligence for failing to advise. However, to do so requires a lot of money in the first place just to pay for the litigation against these parties. This is money that most buyers of condominiums do not have, especially after the expensive costs of purchasing a new home in the first place.
So say the buyer has both the knowledge that he’s been wronged, and the money to address his legitimate claims. What would he have to do at that point?
Apart from suing his agent and the seller, he would also likely name in his complaint the association, which are his current co-owners and neighbors with whom he now has to live with for years to come. On the top 100 list of bad ideas, this might rank pretty high on the list. A popular saying comes to mind, at this point: “don’t s*** where you eat”. Suing your co-owners would be a defecation of the most offensive type. Most sensible buyers recognizing their options most likely would pass on this distasteful option and just lick their wounds.
Condominium associations are a big problem – one solved for the buyer not after the fact, but before. Buyers should be given a thorough, comprehensive review of all of the documents, financials, and operational history of their potential future HOA. In today’s day and age, condo buyers should not have to rely on caveat emptor, and should have the benefit of full disclosure and analysis of an entity that has proven over the last sixty years of existence that it maintains its poor history and practices.