New Neighborhoods–Charging Wrong Maintenance Fees and Closed Board Meetings

New Neighborhoods

By Gary A. Poliakoff and Ryan Poliakoff

Charging Wrong Maintenance Fees and Closed Board Meetings

Dear Poliakoffs,

My condominium association issued monthly assessment fees for 2012 to commence January 1, 2012.  Upon review, I concluded that all the fees were incorrect for the 140 unit owners.  I contacted the manager that calculated the numbers as well as the president of the association prior to the budget meeting and compared numbers.  I was assured that they would re-evaluate their numbers.  At the budget meeting they did announce that there were some corrections made to the original numbers.  The budget was passed by the directors and subsequently mailed to all owners.  My analysis revealed that all 140 unit owners are now going to pay an inaccurate sum.   The new numbers were so inaccurate that the owners called the office and strongly complained.   The management company posted a new set of figures on the bulletin board and apologized for their error, however, the new numbers are still wrong.  To what authority may a complaint be registered, as in my view, the owners are being forced to pay an incorrect fee.  Signed, H.G.

Dear H.G.,

It’s a little hard to tell from your letter exactly why the fees are incorrect.  Are the fees incorrect because there are individual line items in the budget that are miscalculated?  Or are they incorrect because, despite an accurate budget, management is miscalculating the share owed by each owner?

If the budget itself were wrong, the primary recourse would be to have the board again re-notice a budget meeting and approve a new, correct budget.  The board can do this at any time, as long as they follow the “budget meeting” notice requirements in the Condominium Act.  If the board will not take action, a campaign to educate owners may be worthwhile to help put pressure on the board and management.

If it’s a calculation issue, know that once the budget is promulgated by the board the unit owners’ share of the common expenses must be prorated exactly as it is stated in the Declaration of Condominium and cannot be changed without the written consent of 100% of the unit owners and all lien holders of record.  The board has no option to do otherwise.  If the manner of sharing the common expenses is misstated, it must be changed.  If the board or management refuses, you should file a complaint with the Division or seek help from the Ombudsman.

Dear Poliakoffs,

Our condominium board has been meeting illegally.  Closed meeting notices were posted in which the agenda stated “discussions regarding personnel” and “new business”.  On another occasion I walked into our meeting room to find a majority of the board members present as well as a representative from management.  No meeting notice had been posted and no one objected when I remained.  During this meeting the board interviewed a cleaning company and conducted other condominium business.  What is the legal definition of “personnel” for a closed meeting?  How are minutes handled for a closed meeting?  What should be included, and is an owner entitled to review the minutes?  Signed, E.S.

Dear E.S.,

As a general statement meetings of the board at which a quorum is present are open to all unit owners.  There are two exceptions to this rule.  The requirement that board meetings and committee meetings be open to the unit owners does not apply to: (a) meetings between the board or a committee and the association’s attorney, with respect to proposed or pending litigation, if the meeting is held for the purpose of seeking or rendering legal advice, or (b) board meetings held for the purpose of discussing personnel matters.  The Act does not define the term “personnel.”  The Merriam-Webster dictionary defines the term as a “body of persons employed.”  While there have not been any case or arbitration decisions on the legislative content, We believe it will ultimately be determined that closed meetings to discuss personnel will be narrowly construed to mean year-end evaluations, salary issues, hiring/firing decisions and disciplinary issues.  The Act does not permit closed board meetings to interview management companies.  If a condominium has amended its By-Laws to permit committees to meet in closed sessions, it would be possible for a committee to interview potential managers and/or management companies on condition that the committee was not empowered to make the final hiring decision.

Minutes should be taken and kept for closed board meetings, but they would be kept confidentially, for management and the board’s eyes only—otherwise, it would defeat the purpose of having closed board meetings in the first place.

Gary A. Poliakoff and Ryan Poliakoff are co-authors of New Neighborhoods—The Consumer’s Guide to Condominium, Co-Op and HOA Living.  Gary Poliakoff is a founding principal of Becker & Poliakoff, P.A., and Ryan Poliakoff is the Vice President of Management at AKAM On-Site.  Email questions to condocolumn@becker-poliakoff.com.  Please be sure to include your hometown.

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