By: Benny Kass
DEAR BENNY: My wife and I own a condo in a two-unit building. Our downstairs neighbor, who bought the property only two years ago, recently put her unit on the market. Her inability to cover her mortgage obligation is the reason she is forced to sell now, instead of waiting for the market to improve.
During the last two months, the listing agent has had three open houses per week: two hours on Tuesdays, and three hours each on Saturdays and Sundays. This is creating quite a bit of interference in our lifestyles in terms of commotion, driveway blocking, etc. In addition, the asking price now has been significantly reduced, thus lowering our "comparable" value.
Do we have the right to limit formal "open houses" to the more respectful one time per week? Do we have any rights in the agent's publication of the lowered price (i.e., "Price Reduced" on the for-sale sign on our building)? Do we have any rights of "approval" of the financial condition of a prospective buyer? --Mark
DEAR MARK: If you lived in a condominium with more units, your board of directors could impose reasonable restrictions. Most condominium legal documents prohibit actions that create a nuisance.
But, unfortunately, it's you against your neighbor. Have you talked with her and explained that her agents are disturbing your peace and quite, and that your driveway -- which I assume is a common element -- is constantly being blocked?
Short of cooperation, I am afraid that your only remedy is to seek an injunction in court, although there is no guarantee that you will be successful.
As for your other questions, there is nothing you can do about the low sales price. Property owners have the right to sell their property at any price they want; they can also give it away should they so desire.
In a cooperative apartment, the board of directors generally has the right to reject a prospective purchaser based on inadequate financial situation.
However, very few condominiums have this right. Your only hope is that a purchaser's lender will look very carefully at the financial situation -- not only of the purchaser but also of the association. In today's market, lenders are very conservative.
DEAR BENNY: I would like to know what can be done to the president of our condo association, who spent approximately $4,000 on projects that the board didn't approve and weren't emergencies. At the time I was a board member. These two projects were never discussed with the board as required by our bylaws. --Sue
DEAR SUE: You have a number of options. But first, I have to ask you a question: Have you talked with the other members of the board of directors? Are they on board with you or are they supporting the president?
Assuming that all of your other board members are in agreement, the board has the right to remove the president from office. Board members are elected by the unit owners, and only the unit owners by a majority vote can remove a board member. (Note: This answer is general in nature; you have to review your own legal documents -- declaration and bylaws -- to determine the process for removing a board member.)
However, in most condominiums the board elects its own officers, and the board can also remove an officer. In your case, assuming that (1) you have properly noticed the time and place for a board meeting, (2) you have a quorum present at the meeting, and (3) a majority of the board members are in agreement, the board can ask the president to step down and the board will elect a replacement. As noted above, however, that board member will still remain on the board.
Next, the board can call a special meeting of the owners for the sole purpose of removing that board member off the board. Again, you have to look at your bylaws and strictly comply with its requirements. Every legal condominium document I have ever reviewed contains a provision as to how a board member can be removed, but you may want to ask your association attorney for assistance.
Finally, the board should formally ask the association attorney for a legal opinion as to whether the expenditure was permitted under your legal documents. If the attorney confirms that it was not a valid expenditure, the board should formally confront the president. This can be in an executive session of the board. Give him an opportunity to respond, and if he wants he can retain his own attorney to assist him.
Once the board has met with the president and remains satisfied that this was not a valid expenditure, the board can (1) ask him to return the money out of his own pocket, and (2) after a hearing (which is usually informal) fine the president. Again, your association attorney will have to guide you on this process.
Finally, and only if you and the association attorney are satisfied that the president did not have the authority to authorize this expenditure, you can publicly censure the president by sending a memorandum outlining the facts to all unit owners.
Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column.