Sunday, 09 December 2018
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This Old House - Do-it-Yourself

Defining Who Owns What is Critical

Written by Posted On Thursday, 11 October 2018 06:00

Q. I am on the Board of Directors of our homeowner association, and as winter is around the corner, we know we will start getting calls from owners to make repairs to such things as the streets, our tot lot, and the community recreational facility. However, we often get requests to repair (or replace) such other areas as roofs, ice-damaged bushes, and the like. How do we know what is in our area of responsibility and what areas are under the control of the homeowners?

A. In every community association -- whether a condominium or a homeowner association (HOA) -- there are two basic elements of ownership: common elements (called "common areas" in an HOA), and units (referred to as "lots" in an HOA). Additionally, in a condominium association, there are limited common elements (LCE).

Let's take a minute to define these three concepts:

1. Common elements (areas) are those areas which are under the control of the association. In reality, the association does not own the condominium common elements, but rather each owner owns his/her percentage interest in those elements.

Only the Board of Directors can make the decision as to whether to repair or replace common elements; however, some association documents put restrictions on the amount of money that a Board can spend to replace -- not repair -- and you must look at your documents each and every time you are planning to spend association funds.

2. Units (lots) are the apartments or houses that are owned in fee simple by the members of your association. Your documents -- and the recorded plats and plans -- will define these units.

Generally speaking, maintenance, repair and replacement of units is in the exclusive control of the unit (home) owner. In addition, with homeowner associations, the owner is responsible for his or her "Lot," which is shown on the subdivision plats.

3. A limited common element (LCE) is defined as "those common elements identified in the declaration or on the condominium plan as reserved for the exclusive use of one or more but not less than all of the unit owners."

A balcony or a patio (and even a mailbox) is often an LCE since not all members of the association have access to those areas.

Whenever you have a question as to who owns what, you must refer to your association legal documents and the plats. And that leads to a very important question: do you have a current set of the actual recorded documents and plats?

In our practice of law, we have encountered too many situations where the Board of Directors is functioning without the correct documents. Indeed, on a couple of occasions, I have witnessed Board members having different sets of materials.

How does this happen? Very simply: the developer hands out the required disclosure documents to prospective purchasers, including the then-current set of documents. However, before the first unit is sold, the developer makes changes to these documents -- either because a lender or a governmental authority insists on such change, or because the developer wants to improve sales within the complex.

However, all too often these changes (amendments) are not furnished to all unit owners. They then become Board members, and begin to function with the wrong set of legal documents.

What should you do? Your management company should be instructed to obtain -- either from the online recorder of deeds in the jurisdiction where the property is located or from association’s legal counsel -- a complete set of the actual recorded association documents, including the plats and plans.

Each Board member must have complete copy for his/her use. Keep it handy and read it thoroughly at least once a year while you are on the Board.

These documents should give you the answer as to who owns what. Unfortunately, all too often the language is written in legalese, and you may have to ask the association attorney for guidance.

Thus, when a unit or homeowner ask the Board to make certain repairs, check your documents and plats first. Is this really within your responsibility? Is the homeowner trying to pass the cost of the repairs onto the association? Or is the area in question owned by the association or the County -- such as the streets or the storm water management systems.

Speaking of streets, I have just read a case which will be of interest to our readers. A Missouri homeowner association consisting of 44 homes had a provision (covenant) in its legal documents prohibiting pick-up trucks weighing more than one-half ton from parking on association parking spaces or streets. The association brought legal action against a homeowner who admitted violating the covenants. The homeowner's sole defense was that the association lacked authority to enforce the covenants, because the streets had been dedicated to the city in which the association was located.

The Missouri Court of Appeals dismissed the homeowner's arguments, and upheld the authority of the Board. According to the Court, the covenant was a contract between the owner and the association; when the homeowner purchased a house in that association, he became a party to that contract. Accordingly, the Court upheld the authority of the association to obtain an injunction against the owner.

Who owns what is perhaps the most asked question. The answer will be found in your own documents and plats. Read them carefully -- and often.

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Benny L Kass

Author of the weekly Housing Counsel column with The Washington Post for nearly 30 years, Benny Kass is the senior partner with the Washington, DC law firm of KASS LEGAL GROUP, PLLC and a specialist in such real estate legal areas as commercial and residential financing, closings, foreclosures and workouts.

Mr. Kass is a Charter Member of the College of Community Association Attorneys, and has written extensively about community association issues. In addition, he is a life member of the National Conference of Commissioners on Uniform State Laws. In this capacity, he has been involved in the development of almost all of the Commission’s real estate laws, including the Uniform Common Interest Ownership Act which has been adopted in many states.

kasslegalgroup.com

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