Articles

In an already difficult condominium market, Fannie Mae, the largest provider of financing for U.S. home loans, has adopted new underwriting guidelines that have since resulted in an increase in mortgage application rejections. The revised rules are a response to rising loan delinquencies and defaults. But the new policies also reflect long-standing concerns about the need for lenders to assess the financial strength of community associations, as well as the credit profiles of the prospective members borrowing money to purchase homes in condominium buildings.

Facts: A member had lived in her community until she had to move into a nursing home after her husband's death. To qualify for Medicaid and to finance her care, she rented out her home, in violation of her community's restriction against renting. The member died and the association sued her estate, arguing that the rental ban was needed to protect property values within the community.

Facts: A cell phone company wanted to build a tower near an association community. When the association found out about this proposal, it filed an objection with the city. The association board then negotiated with the company. After the negotiations, the tower was built 150 feet from the location originally proposed, and the color and type of tower were changed. The company also agreed to pay the association an initial payment of $7,500 and $400 per month for the duration of the 20-year lease.

Facts: A community's common areas included parcels of land used as a parking lot and a tennis court. A town's assessor valued the common areas in excess of $100,000 by comparing their square footage to other home values in the community. In effect, the tax assessor, assuming the best use of these lands would be to build homes, assessed them at a far higher value than at their previous assessment.

One type of request a member may make to the board is to modify the member's home. From the association's perspective, a board or committee may deny that request for reasons such as obstruction of views and maintaining the uniform aesthetics of the community. Members often see a denial as unfair and against their rights…

Defamation is the communication of a statement that makes a false claim, expressively stated or implied to be factual, that may harm the reputation of an individual. In a community association context, defamation lawsuits typically arise when an association distributes information on delinquent members.You can distribute the names of members who are delinquent in their…

Another source of disputes for many community associations is parking rules. When rules are implemented to distribute limited resources, such as parking spaces, or to preserve the community's appearance by prohibiting commercial vehicles, members may seek an exception to those rules or interpret the rules in their favor. Tensions may rise, and lawsuits may occur…

Your association's board is often called upon to make judgments about various important community issues. Sometimes board judgments can lead to lawsuits when members feel that their rights were trounced upon or that a board decision negatively affects them. The Insider put together this special issue to survey situations in the past two years when…

Facts: Two association members were involved in a dispute over the height of trees along their adjoining properties. One member complained that his neighbor's trees blocked his view of a nearby mountain range, in violation of the association's governing documents. The complaining member brought a covenant violation petition against his neighbor according to the association's covenant compliance process. An outside arbitrator determined that six of the neighboring member's trees were too tall.

Facts: A condo association sued to stop the developers from making changes to a governing document that would have altered the rights of the existing members. Before the trial began, a court had granted the association a temporary stop order against the developer as long as the association could post a $300,000 bond. Twenty-two association members agreed to pledge personal assets worth $230,000 to secure the bond. Four years later, the court ruled for the association and ordered the bond to be released.