Articles

Q: A resident in one of the units in the condominium building I manage denies that she caused damage to the hallway outside of her unit. A family member of the resident is the actual owner of the unit, but she has been permitted by the association to live there. Under the governing documents, the unit’s owner is obligated to pay for this type of damage. I sent the owner several letters notifying him that he must pay for repairs.

A secret settlement between an Orange County homeowner and an association that insisted on traditional lawns in her community has disappointed Sunshine State HOA members who want a legal precedent they can follow. So-called Florida Friendly landscaping, which uses less irrigation and fertilizer than traditional green lawns, has been at the center of legal fights—despite a 2009 state law crafted to protect Floridan aquifer, river, and lake waters from overuse and pollution. The law has been called “weak” by association experts and attorneys.

Unfortunately, community associations—regardless of how well they are run—can fall prey to embezzlement or purposeful misuse of funds or resources. Association managers and board members should be aware of common ways that fraud is perpetrated and how to prevent—or in the worst case scenario, deal with—this white-collar crime, which has the potential to happen on two levels: the management company or the board.

If you’ve noticed that your management staff employees’ productivity has gone down while their online activity unrelated to work has gone up, it’s probably related. And you need to get the problem under control as soon as possible. Take a two-step approach by first holding a meeting with staff members explaining what you’ve noticed and that you feel there is a connection between personal online activities and decreased productivity.

It’s not uncommon for a member who hasn’t paid assessments or other fees to claim that he's withholding funds because of a perceived problem. But the good news for associations is that the obligation to pay assessments isn’t absolved because of alleged bad behavior by the association or management company. In a recent Washington case, a trial court ruled—and an appeals court agreed—that allegedly fraudulent condo sales didn't excuse assessment nonpayment.

Unfortunately, community associations—regardless of how well they are run—can fall prey to embezzlement or purposeful misuse of funds or resources. Association managers and board members should be aware of common ways that fraud is perpetrated and how to prevent—or in the worst case scenario, deal with—this white-collar crime.

A well-funded reserve account is a clear indication of how prepared a community association is to deal with its long-range maintenance needs. Without a well-funded reserve account, most associations’ only option to pay for repair needs that arise is to impose a special assessment on their members. Unless your state law or governing documents specify how your community’s reserve is to be funded and managed, it’s up to the board to create a policy that will bind future boards, so that the community remains protected.

Association members have agreed to abide by governing documents, which provide for payment of assessments that the association relies on to run the condominium building or community. But a member might feel like this gives him leverage when he’s upset. That is, by withholding his monthly assessment because of a grievance he can force the association’s hand in rectifying it. But grievances don’t change the fact that the association must pay bills, management fees, and the cost of other services that keep things up and running.

Facts: A planned community was developed in the 1990s. Prior to development, the developer recorded declarations and covenants that provided for the formation of a homeowners association. It stipulated that certain owners of multiple lots would be required to pay dues on only one lot. Several years later, a dispute arose concerning whether the association acted within its authority when it amended the declaration in 2012.

Sadly, a member in the planned community or condominium that you manage could die. If you and your staff have gotten to know the member or her family well, it could be especially upsetting. But as an association professional, you’ll have to handle the practical aspects involved when a home or condo is no longer occupied for this reason.