The unit owners of a condominium make up a collective Homeowner’s Association (HOA). This board of directors creates bylaws for the residents which govern the pet policy, quiet time, and overall upkeep of the condos. While the board of directors is elected by the residents of the condominium, it holds a degree of executive authority over the collective. In matters of infringement and enforcement of the bylaws, both sides (board of directors and unit owners) are entitled to legal representation-a branch of real estate law all unto its own.
Matters of collection of dues are perhaps the most common legal discrepancies in condos. Oftentimes there is a dispute between the board and the residents over dues owed to the HOA for membership and upkeep. Another possible disagreement between the two parties in this matter involves the allocation of these dues.
A unit owner may take legal action against the board of directors if he or she disagrees with the way dues are being allocated. The laws governing these litigation’s often vary from state-to-state, but heavy scrutiny is placed upon the articles/bylaws of the unit in question. The Federal Housing Authority grants a considerable weight to the stipulations set forth by the board of directors of a condominium.
As condominium residents are private owners of their personal living spaces, they often are entitled to buy or sell their condos at their discretion. Many owners may also rent their condos to prospective tenants. While these are private transactions, some housing agreements in condos designate the Right of First Refusal (ROFR) to the board of directors. The ROFR refers to the right of the board of directors to intervene in any private transaction between the unit owner and a third party.
The ROFR is often used to prevent the sale or lease of the unit to another party who does not meet the holder’s standards for ownership. While contracts with the ROFR allow for the holder to sue the owner for damages in the event of a prohibited sale or lease, the holder may have a hard time preventing or reversing the prohibited transaction. Courts often recognize the ROFR as a strict financial agreement; they rarely will overturn a finalized sale based on the holder’s discriminatory standards for ownership.
An important distinction from collection of dues, yet equally common matter of condominium representation is the matter of liens and lien defense. When an owner cannot pay the mortgage holder, the holder may place a lien on the owner’s unit and eventually foreclose the mortgage. Litigation in this matter sides overwhelmingly with the holders, however, there are attorneys that specialize in lien defense for condominium owners.
Such valid defenses include misappropriation of funds and failure to manage in accordance with the most up-to-date standards of the Fair Housing Act. While bylaws and contracts govern owner/holder relations within condos, disagreements are often settled in court by legal counsel specializing in matters of condominium representation.