The tragedy of the Champlain Towers South condominium collapse in Surfside, Florida has gripped the nation as its deadly impact unfolds. Since the collapse on June 24, it has been discovered that delayed maintenance may have led to this disaster. This was a wake-up call for many condominium associations as the deferred maintenance and inadequate savings the condominium faced are common concepts. In associations, it is not uncommon that the Trustees who make up the condominium Board are volunteers who have limited expertise in building maintenance or the finances of running the condo. This is especially true in small condo associations that may only have two or three units. However, there are certain procedures and requirements that can be put in place to protect the Trustees and condo owners.
Condo Trustees must be familiar with the procedures of the condominium, such as those found in the condominium trust, master deed, bylaws, rules, and regulations. These procedures detail rules on maintenance, like what approvals are needed and what the procedure is if there are disagreements about making repairs.
Though not explicitly required by Massachusetts law, most condominiums have set in their procedures to have, at minimum, an annual meeting of the unit owners and an annual meeting of the Trustees. The condo should have a yearly budget that includes annual expenses, such as insurance, extermination, maintenance, and perhaps any shared utilities or those for the common areas. The budget should also have line items for capital expenses that don’t need to be performed every year, such as exterior painting, roof repair, repaving a shared driveway, and more, so it will allow the condo to have the financial reserves necessary for larger expenses. The budget will set the condo fees, in proportion to the share of the condo common areas for each unit, which is listed in the master deed.
By some statistics, approximately one-third of condo associations are far behind on their financial reserves, with 30% or less of the funds needed to prepare for those larger expenses such as replacing the roof. This often comes from having a poor budget, aimed at keeping monthly condo fees low. Alternatively, it comes from poor management or not following up on collections from the unit owners that have fallen behind. This can result in a special assessment billed to each unit owner when a sudden large expense is necessary, rather than collecting for it in small amounts over time
If you have questions about the procedures for operating your condominium association, establishing a budget, or collections, and have questions about how to proceed, please contact Attorney Paula Miller at pmiller@pkboston.com or (508) 807-1131 for a consultation.
The above information is designed to provide a helpful overview of a relevant topic. It does not constitute legal advice nor should it be construed as such. Please do not take action based on the above information without seeking formal legal advice.