Condo Law Series: Governance Issues for Lawyers

According to the Community Associations Institute, approximately 21% of Americans live in a condo, cooperative or other housing type governed by a homeowners or community association. What makes condominium associations particularly interesting to lawyers is that buildings worth tens or hundreds of millions of dollars, with revenues of several million dollars, are governed by volunteer boards with little or no experience in corporate governance, finance or the many other issues that must be decided by the boards. Management companies typically focus primarily on the management of the physical plant, receiving the association dues and preparing budgets, referring most of the other issues to legal counsel. In many states, there is a specific Condominium Act that governs elements of a condominium's Declarations and Bylaws. In addition, condominium associations in many states are incorporated as not-for-profit corporations. In many states, there is a body of case law that applies to issues ranging from transparency in governance and fiduciary responsibilities to dispute resolution. Finally, the actual Declaration and Bylaws as well as rules passed by the Board govern individual condominium associations. This session of LexVid's Condo Law Series will give an overview the typical components of the state laws as well some common legal issues related to governance, whether or not these rise to the level of actual lawsuits. Sample issues include the role of committees vs commissions, the use of leases vs licenses for parking spaces and lockers, the identification of non-unit owners living in units and malfeasance of various kinds by board members.