The Condominium Phenomenon

It has been nearly 30 years since I first became involved in the representation of a condominium association that was confronted with construction defect issues. That case was litigated for several years, and eventually grew to engulfing a multitude of parties, including developer entities, the general contractor, design professionals, engineers, numerous subcontractors and suppliers, and all of their law firms and insurers. It ultimately resulted in a resolution that allowed the condominium to repair the significant deficiencies in the exterior envelope of their high-rise building. Since that time, condominium construction defect matters have come to constitute the majority of my work. This has resulted from two phenomena: The first has been the explosion of condominium development since the 1980s, with the wide acceptance of the condo as a desired form of housing. The second is the nature of residential construction and its tight profit margins, in which inspection, supervision and coordination of trades are often the first casualties of budget constraints.

In the years since that first construction defect case, I have litigated, and tried many more equally complex matters, and have resolved still more by other means of dispute resolution. Because condominiums are usually large multi-family housing complexes, they are much more like commercial buildings than they are typical housing, and the impact of design and construction issues are multiplied by the sheer size of the project. As a result, the consequences of failure to act diligently and properly have the potential to be enormous and prohibitively expensive.

This blog is devoted to the things that I have learned from these experiences that can benefit condominium owners, homeowner associations, and property managers in dealing with their ownership and maintenance responsibilities, as well as the means by which developers, designers, builders, and contractors can produce residential projects that do not become a source of liability and unhappy customers. I look forward to our discussions.

9 Comments


  1. Mr Burke
    I live in Port Deposit MD in a condo, and we have recived a special assesment for pool repairs, 225.00
    but we have not received a final bill for the repairs, and the board is guessing about the amount,
    if it is less, the remainder will be put in the operating fund, is this legal? can they do a special assesment without a actual bill, then keep the balance if it is not needed for the actual bill?

    I would appreciate your help
    Thank You
    Pat M


    1. Thank you for your note. Generally, a special assessment for any amount and any purpose is valid if it is adopted in accordance with the condominium’s governing documents. The community would have had to approve the assessment with the understanding that the final cost of the pool repairs was uncertain, and that there was a provision for the manner in which any excess funds would be allocated. Accordingly, the wording of the special assessment notice for the vote is usually the determining factor is its validity.

      One of the most critical aspects of condominium living is the need for a capable board of directors, which, in most instances,is vested with the governing authority for day-to-day operations. That authority is subject to abuse, particularly where the membership is, for the most part, inactive and uninvolved. Each condominium is unique in terms of the provisions of its governing documents, which need to be reviewed to determine how best the unit owners can review and control the actions of the directors. Generally, however, there are usually specific methods that give the unit owners a say in the community’s governance.

      The most significant means of controlling director misconduct is through the election process. Owners need to protect their interests by exercising their say in who among them is placed in charge.

      Another means of oversight is the monthly meeting which all owners are entitled to attend and where issues can be aired on the record.

      It should also be remembered that every unit owner is entitled to have access to all of the books and records of the condominium. Availing oneself of that privilege provides a means of oversight with respect to all condominium expenditures. Similarly, the operations all condominiums are subject to a periodic audit by an independent auditor.

      It is highly advisable to have the advice of counsel with regard to understanding the condominium’s governing documents and the rights of unit owners.

      The matter of “taking” property is a function of law, the circumstances by which the property did or did not become attached to the real estate, and the terms of the condominium documents. The specifics of any such situation need to be reviewed by a competent attorney to ensure that nothing improper occurs.

      [INFORMATION OFFERED HEREIN IS NOT LEGAL ADVICE, AND NO ATTORNEY-CLIENT RELATIONSHIP EXISTS OR IS INTENDED BY VIRTUE OF THE EXCHANGE OF INFORMATION HEREIN]


  2. Dear Mr. Burke, Our Ocean City Condo, small building only 23 units, has a pohibition in the bylaws against leasing units for less than 6 months at a time. Since the building opened 25 years ago weekly summer rentals have been common, and this has been known to all. Can the Association now start enforcing this prohibition and prohibit weekly rentals. If people ignore them what can they do, as the bylaws provide no penalty for violations.

    Regards,

    John Anderson


    1. Mr. Anderson,
      Without reviewing the bylaws, the rental limitation could still be enforeceable. Although there is no provision for a penalty, a board is usually empowered to adopt rules and regulations to provide for one. Consideration should be given to amending the bylaws to comport with reality and the wishes of the owners. Consideration should also be given to the impact such a rental limitation might have on re-sale value.

      [INFORMATION OFFERED HEREIN IS NOT LEGAL ADVICE, AND NO ATTORNEY-CLIENT RELATIONSHIP EXISTS OR IS INTENDED BY VIRTUE OF THE EXCHANGE OF THIS INFORMATION]


  3. Dear Mr. Burke,

    Than you for replying to my quesstion. The information that you provided is most helpful.

    Regards,

    John Anderson


  4. Dear Mr. Burke,

    Regarding limitations on the length of time that a co-owner may rent out his unit to a tenant, as set by rules imposed by the condominium’s board of director’s, is there a legal foundation which would allow the board to restrict how a co-owner chooses to use his condominium? Assuming no zoning violations are at issue, what legal right does a condominium association have to restrict a co-owners use of his unit and possibly cause financial hardship to the co-owner?

    Thank you for your thoughtful response.

    Yours truly,

    Patricia Marsh


    1. Ms. Marsh,

      The extent of a council’s rule-making authority is governed by the condominium documents. In general, they may adopt any regulation reasonably intended to promote the welfare of the community, provided that it does so in accordance with the rule-making procedures established by the governing documents. Whether any particular restriction is improper is not a question that can be answered as a generality. It will depend on the provisions of the governing documents, and the nature of the activity proposed to be restricted.


  5. I UNDERSTAND THAT CONDO ASSOC. RULES FOR SMALL CONDOS (E.G. 6 UNITS) ARE SOMETIMES DIFFERENT THAN FOR LARGE CONDOS. WHERE CAN I FIND THESE “SMALL CONDO” RULES?


    1. There are provisions in Section 11-135 of the Maryland Condominium Act that provide for different resale disclosure requirements for condominiums with less than seven units.

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