citylog
The E-
Edition:
CW
page
by page

Tumblr.jpg Google_Plus.jpg

 

 

 

 

 

 

 
Home / Articles / News / Cover Story /  The Condo Republic Page 1
Cover Story

The Condo Republic Page 1

Condo owners rise up against undemocratic homeowners board regimes.

By Eric S. Peterson
Photo by Mario Zucca 
Posted // December 22,2010 -

Residents were restless at the January 2009 Towne Park Homeowners Association board meeting. Like guerrilla insurgents, the condo owners hoped to stage a coup against the HOA board “dictatorship.”

According to homeowners, the group’s mistrust grew out of the board’s botched attempt to repair the roof of Building 1, located at 300 East and 600 South in downtown Salt Lake City. When contractors declared bankruptcy in the middle of the job, condo owners found they had shelled out hundreds of thousands of dollars for an unfinished roof, which led to major water damage across multiple floors of the building.

At the January 2009 meeting, the board proposed another assessment for other repairs to skeptical owners who were already incensed after discovering that one of their board members had spent nearly a month in 2008 at a downtown hotel while condo renovations were underway, with condo owners footing the $4,867 hotel bill, according to homeowners who spoke to City Weekly.

When the vote failed to muster a majority of owners willing to foot the bill for building repairs, the board took the proposal back, amended it, and presented the proposal to the condo owners again in February 2009—this time, the assessment was approved. Or, at least that’s what owners were told, until one owner requested to see the vote tally and found the numbers didn’t add up. According to owners including Dylan Zwick, who now sits on the board for Towne Park, owners continued to demand to see the ballots until May 2010, when the board president told the owners they could not see the ballots and that she had stored them with her own personal lawyer.

Embattled by angry owners, the president eventually relented and produced the ballots, revealing a tally that fell far short of the numbers necessary to enact the assessment, Zwick says. Amid the furor over the recount, the president resigned and a number of the outspoken critics like Zwick took on board positions.

Regime change may have been needed at the Towne Park, but new board members say it wasn’t easy, considering that HOA boards operate in a shadowy area of state property laws where little accountability is required of them while being accorded nearly no legal liability and a lot of power over fellow homeowners.

“This combination is a perfect recipe for—if not outright corruption—then abuse,” says Zwick, a 30-year-old University of Utah mathematics student and new board member of the Towne Park Homeowners Association. “They’re kind of like these private little governments.”

Zwick and others faced intimidation from board members who had the power to behave either like benevolent monarchs or dictators.

DylanCondo_Daenitz.jpgWhile Zwick (pictured at left) and others have seen these problems and believe it takes active involvement to monitor board politics, they also are seeking help from the Utah Legislature to help regulate undemocratic condo politics. Simple reforms, like requiring transparency for meetings and elections, is the rhetoric for some like Zwick, while legislators like Rep. David Litvack, D-Salt Lake City, are exploring the idea of a state-funded ombudsman who could operate independently to help resolve condo conflicts.

However, an ombudsman’s office would mean spending more on more government—a concept few legislators on the Hill are fans of—and there’s also the challenge that many Utah lawmakers are landlords themselves or are involved with property-management companies. In fact, Utah Senate President Michael Waddoups, a more-than-well-known face in local HOA communities, operates Cooperative Property Management, a company that, according to its Website, works with many “notable properties,” including “Foxboro, Country Springs Centerville, Stansbury Condos, Vine Street Mod, and Homestead Farms,” offering a slate of accounting and maintenance services. Waddoups’ company was even contracted to Towne Park’s HOA during its recent upheaval.

Because of Waddoups’ property-management background and his elevated position of trust in the community, it is easy for condo owners to believe their HOA is in good hands when he’s involved. Often that’s the case—but not always, as Arlington Place HOA board members (which, in 2006-07, included City Weekly editor Jerre Wroble) learned the hard way. There, the HOA board—which contracted with Waddoups’ company to provide accounting assistance in 2004—discovered only too late it had long been employing an unlicensed and uninsured maintenance man whose criminal past included allegations of stalking and two separate charges of lewdness—nearly all of which was unknown until he left the employ of the HOA.

God of the Gaps
Before Zwick became the vice president of the Towne Park HOA, he, like many newcomers to the Condo Republic, had no idea what the CC&Rs, or the Covenants, Conditions and Restrictions agreement was, when he signed it. Zwick realizes now how important the agreement is, especially for what it leaves out.

“They’re essentially the governing documents of the condominium. They’re fairly long, but there are still a lot of possible situations left out,” Zwick says, adding that boards end up with a lot of power in interpreting all the things the documents don’t spell out explicitly. “The HOA board becomes a god of the gaps—anything not specifically addressed within the CC&Rs is almost completely up to the discretion of the board.”

Hand that leeway to a volunteer board, tasked with a lot of responsibility, a big bank account, and little or no compensation, and Zwick says you have a situation where boards can abuse their power, often out of sheer vindictiveness.

Zwick says he was once blissfully ignorant of condo politics until his dad, then retired and also a Towne Home condo owner, started telling him about bruising and nasty exchanges at meetings he had attended between frustrated condo owners and an intractable board. Zwick’s father started a Website challenging the board’s actions—including the board member’s hotel bill and the voting tallies on the assessments.

“My dad was retired, bored and I think he was just looking for a battle,” Zwick says with a laugh. Besides the Website, his dad posted flyers around the condo to advertise board actions. Ultimately, this insurrection succeeded, the board president resigned and several new members took positions on the board, including the younger Zwick.

“I have been on both sides of this,” Zwick says. “Some homeowners like to complain about everything and that can be annoying, but it’s what you sign on to.” In Zwick’s experience, a major challenge to fair HOA-board governance is the issue of power. Not only does being a “god of the gap” mean boards have a lot of discretion in interpreting condo rules, but they also have the added ability to punish condo owners with arbitrary fines, or, as he experienced firsthand, face legal intimidation from HOA-board lawyers.

If condo owners attempt to legally challenge their boards, the board’s legal fees are usually provided by the condo-owner fees, which means condo owners challenging their boards pay both for their own lawyers as well as their opposition’s legal fees. This situation gives boards more power to make legal threats, as Zwick’s father experienced when he was issued a cease-and-desist order from their board’s attorney. Zwick says the notice was “all bark and no bite,” since it demanded they stop the Website, threatening serious legal consequences if the Website reported anything libelous or untrue.

Ultimately, Zwick is supportive of a recently formed group, the Condo Owners Coalition of Utah, which is pushing for legislative backing to reforms for condo associations statewide. Zwick advocates for clear protections for condo owners’ access to voting and financial records, as well as articulating when boards can close meetings off from condo owners.

“If all you want to do is live in your condo, pay your dues and be left alone, you should be able to do that—but the problem is what happens if you start running into an issue,” Zwick says. “Then you start realizing how small your power is relative to the board’s.”

Continue reading: Page 1 | Page 2 | Page 3 | Read All
 
  • Currently 3.5/5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
Post a comment
REPLY TO THIS COMMENT
Posted // January 3,2011 at 14:16

The method by which HOA board members are chosen may be to blame.

Instead of allowing moral degenerates possessing political skill sets to campaign for an HOA board and then engage in self-dealing behavior once elected, select board members by lottery. The unwilling can decline and others can be chosen until the slots are filled.

 

REPLY TO THIS COMMENT
Posted // December 27,2010 at 19:45

I live and have lived in dysfunctional HOA's where Boards refuse access to financial records, cut side deals with residents to benefit private businesses, refuse to listen to resident requests for a web site, disburse funds with no invoices or proof of receipt of goods, the Board wouldn't release voting results from elections, etc. One thing common in all these instances is that the Board violated that which is in our by laws and breached its' fiduciary responsibilities. Our Colorado State laws have several bills/Acts concerning HOA's but in not one of them, including our recent Ombudsman Bill for HOA's, is there any mention of enforcement or penalties when Boards act in violation of the by laws, none, nada. Reading about your problems I suspect your State laws are like CO, in favor of realtors and Boards not homeowners. The Small Claims Courts are another avenue but recently CO changed law to allow HOA's to use homeowner's fees to defend the Board in Court. This is important as now the homeowner better hire a costly lawyer if they wish to have a chance in Court: the playing field is not level. A final comment about homeowner's rights. If you don't have term limits and have an apathetic and rubber stamping of elections electorate, your self serving, power hungry Board will be with you for a long time. Term limts at least give the residents a chance to replace abusive Board members every year or two

 

Posted // January 3,2011 at 14:14 - The problem we've had in an 18 unit condo development in Holladay is that there aren't enough interested owners to volunteer for the board, so the board always ends up with a couple of stragglers who should cycle off the board according to by-laws, but there's no one to replace them. They break the rules openly, refuse to vote on improvement expenses because they are cheap and if it doesn't benefit their own unit somehow, they want nothing to do with it. The solution: Find yourself a kick-ass real estate attorney and pay them to write a letter to the board outlining your grievances and nthe consequences for their failure to act under Utah state law. And send the bill for legal services to the board, as well. You'll be surprised how attentive they will become.

 

Posted // December 28,2010 at 13:56 - thank you for response.. That is exactly the problem accross the board, whether condo hoa's bylaws, declaration and Utah condo act, ( the law (s ) that govern" are not enforced anywhere in the nation.. there is no enforcemnt by legislature of Constitutional law or representation...( If there is no penalty, is there really a law )? America's fascination with sports, is because there are rules to the game that is adhered to... Too bad we don't apply the same standard to the Law that governs , our life, liberty and happiness, as they would be thrown out if the pitcher or batter called the rules of the game according what he wanted when he was up... What we need is enlightened citizenry who will, by petition confront the powers that be with violations of the law that protects the people and property.. and keep our voices heard...

 

REPLY TO THIS COMMENT
Posted // December 27,2010 at 12:50

Ms. Hamilton seems to know what she's talking about. My husband and I live in a complex up in Cache Valley, and can see a real nead for legislation to help solve disputes for condo communities. It would be good to update legislation to accommodate the growing needs of this important group.

 

REPLY TO THIS COMMENT
Posted // December 27,2010 at 10:13

Condo Owners are a class action law-suit wating for an attorney and so the system is already biased.

Developers and other liability insurance is high for condos.

The HOA can be grabbed by either, people favorable to any and every lawsuit or those that are against all suits.

Some of the HOA specialty attornies are the worst ambulence chacers on the planet, and have no interest in anyone but themselves.

 

REPLY TO THIS COMMENT
Posted // December 27,2010 at 09:34

thank you to eric peterson for bringing this to light...

 

 
 
Close
Close
Close