Our firm’s South Florida community association attorneys are often called upon by journalists for their insights into the issues impacting condo communities and HOAs. When The New York Times “Wealth Matters” columnist Paul Sullivan decided he needed to turn to a highly experienced community association attorney for input for a major article on association living, he called on shareholder Laura Manning-Hudson in our West Palm Beach office.
Paul’s article, which is titled “When Condo Boards and Residents Clash, Legal Bills Mount” and appeared in the Your Money section on Saturday, March 30, 2019, focuses on some of the most common issues that can cause disruptions and financial strains for community associations. It reads:
My mother-in-law recently regaled me with a tale of intrigue, money and power in her South Florida homeowners association.
Seeking to raise about $6 million to refurbish the 20-year-old community, the association’s board had voted to assess each homeowner $7,000. But a group of vocal residents fought back, setting up a power struggle.
This conflict is nothing new to anyone who has dealt with a condominium board or homeowners association, which has well-defined obligations to the residents. As the overseer, it hires workers to cut the lawn, take out the trash, clean lobbies and common areas and maintain pools, tennis courts, golf courses and other amenities. If the elevator breaks or the roof leaks, the board gets it fixed.
But if it wants to do something cosmetic — renovate the lobby, add pickle ball courts or install a fitness center — the board needs to put its idea to a vote of the residents.
. . . In Miami Beach, Fla., a condo called Nine Island Avenue became a case study in how not to remodel a pool area. One resident, the daughter of the developer, sued the condo president over renovations that were done to the building, including changing the color of a koi pond, removing an old trellis and selecting new pool furniture. The case went to arbitration, and the judge sided with the resident, saying the changes were never approved by the residents and had to be undone.
Most of these battles are settled in arbitration, but the legal costs can still run into the tens of thousands of dollars.
Laura Manning-Hudson, a partner at the law firm Siegfried Rivera, said she used Nine Island Avenue as an example for boards thinking of acting without input from the owners. “I try to keep my clients out of litigation as much as possible,” she said.
. . . When boards and residents clash, tempers flare, residents take sides and big legal bills often follow. Yet determining who is at fault is never easy. One person’s selfless board volunteer is another person’s condo commando. But at the root of many disputes are issues of transparency, misunderstanding, overreach and, of course, money.
Ms. Manning-Hudson said a good rule of thumb for board members was to put big decisions to a vote. But they also need to know that deferring required maintenance can make a board member personally liable for negligence. Whether postponing a large assessment to complete a cosmetic renovation is good or bad often depends on neighboring buildings. Sometimes, a new development can depress the value of the older properties nearby.
The article concludes:
. . . Sometimes, however, residents win the battle. In my mother-in-law’s community, the group challenging the assessment prevailed. It ousted the board, halted the assessment and set aside the renovations. Moreover, it did so without incurring hundreds of thousands of dollars in legal bills.
Our firm salutes Laura for being selected by this business columnist with The New York Times to provide legal insights on association disputes for the newspaper’s millions of readers across the globe. Click here to read the complete article in the newspaper’s website.