Condo talk: Pool expenses start to drain association
Q. Times are tough for our financially strapped association, and the board is looking for ways to reduce our expenses. We have a swimming pool that is old and very expensive to maintain for the few residents who actually use it. Can the board close or remove the pool or other similar facilities?
A. An association board has the fiduciary obligation to maintain, repair and replace the common elements and areas. Closing or removing, rather than maintaining, significant common facilities, like a pool, clubhouse or tennis court, is generally not a decision a board can make on its own. Rather, such a decision should require a unit owner vote.
The conservative approach dictates obtaining the same unit owner approval as would be required to amend the association’s declaration. So, for example, if your declaration requires the approval of two-thirds of the owners to approve an amendment to the declaration, the board should call and hold a unit owner meeting and seek to obtain two-thirds approval of owners in the association before closing or removing facilities. Depending on the language of the association’s declaration concerning the facilities at issue, an amendment may be in order. If a board closes or removes a significant common element on its own, without unit owner approval, it is exposed to liability for breach of its fiduciary duty.
Q. Our FHA-certified condominium association is thinking about adopting an amendment to our declaration to prohibit all leasing of units. Will a lease restriction amendment create a problem when we seek FHA recertification?
A. Possibly. Like the weather in Chicago, HUD’s position on lease restrictions is ever-changing and seemingly unpredictable. Under current FHA secondary mortgage market guidelines, at least 50 percent of the units must be owner-occupied. Many associations “protect” themselves from exceeding owner-occupancy guidelines by adopting lease restriction amendments, many of which prohibit all leasing of units. FHA provides that condominium associations may establish a maximum number of rental units; however, the percentage of rental units cannot exceed the current FHA owner-occupancy requirement (now 50 percent).
That said, HUD recently revised its interpretation of its leasing guidelines. Under this new interpretation, total bans on leasing would result in rejection of an application for FHA certification. HUD now interprets its guidelines to require that at least one unit be permitted to be leased at any one time. Therefore, under this current interpretation, associations that have adopted an amendment that establishes a total ban on leasing are at risk for rejection for FHA certification. Amendments that place a cap on the number of units that can be leased at any one time, so long as the cap is no more than 50 percent, are currently acceptable to HUD.
Q. Security cameras are in use throughout our association. Their primary purpose is to deter crime, and to serve as a tool of the board to identify persons who may be engaged in rules violations. We have a resident in the building who thinks their spouse is having an affair, and wants to view and copy the security video from time to time. Does the board have to let residents view and copy security video?
A. Every association that has a security camera should develop a policy that describes the circumstances under which video will be available for viewing and copying, and as to how long security video is maintained. Typically, such a policy should provide that, except for use by the board, video from security cameras will only be made available for viewing and copying to members of law enforcement in connection with an active criminal investigation to which they are assigned, and to other persons (including residents) as may be required by subpoena or court order. This should work to prevent residents from trying to use association security cameras as their own personal surveillance network.
Many surveillance systems “record” over video periodically, and this should be described. If an association does receive an appropriate request for video, the video should be preserved.
Q. An owner in our association inundates the board with abusive, profane emails at all hours of day and night, expressing his dissatisfaction with the board. What can the board do to stop this?
A. The owner should be advised, via regular mail, to stop sending communications to the board by email, and that he may only communicate with the board in writing via regular mail. The letter should also advise the owner that future email from him will be deleted and not read. While it is simple to sit at a keyboard and send emails, many belligerent emailers won’t bother with regular mail. If the emails do continue, simply hit the “delete” key, or “block” incoming emails from this owner.
Ÿ David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to homeowner associations. This column is not a substitute for consultation with legal counsel.