Everyone gets a copy of their Association Bylaws both when they put an offer in for a Condo and after they close. Too often, this is the first and last time Owners think about their Bylaws – until the Association does something they don’t like. People don’t fully appreciate (and perhaps, real estate agents don’t fully make clear) the depth of the legal covenant you’re agreeing to when you buy a Condo. Between the powers of your state’s Condo Act, your Condo’s Bylaws, and then additional Condo rules, there are layers upon layers of regulations that govern your existence as a Condo Owner. People’s failure to understand the power that Associations have leads to stories like this. Bylaws can be dense, so to help you figure out what condo bylaws matter the most, here’s a list of what to look for as the biggest things that will impact your quality of life in an Association.
Transparency Around Financial Operations
You will also find information in the Bylaws about your annual budget process, and what notice must be given by the Association prior to raising Condo fees. Typically it is a 30-day notice, and a copy of the budget must be provided. Condos must also make their operational budget accessible to Owners in most cases. You want to make sure you have access to the Board’s books – if the Board isn’t making its financials available, it is likely violating the Bylaws, and you likely have a Board that’s up to no good. Remember – that’s YOUR money they’re spending! You have a right to know what’s going on and be informed.
Transparency Around Governance
This is, in my mind, one of the biggest things you need to be aware of. If you read some of the scarier and more depressing Association stories that people will talk about online, they typically relate to Boards that operate in secrecy and then do bad things. Many people don’t realize that the procedures for Board operation are spelled out in the Bylaws, so you can quickly find out if your Board is operating legally or not. Your Bylaws will include information on how notice must be given for the meetings (including annual meetings, monthly meetings and special meetings). They may include information about how the record of those meetings (or “minutes”) are to be distributed, but that may also reside in your state’s Condo Act. All of this is VERY important – if your Condo is not following its Bylaws with regards to meeting transparency, you likely have a Board that’s up to no good.
The Bylaws will spell out how Special Assessments are handled. Hopefully your building is in strong financial condition, but you should know how much money your Association can levy on you. The Bylaws spell out how much a building can assess you without a vote of the Owners and how much notice they need to give you after such an Assessment. This could be a relatively small amount – a few hundred dollars – or quite large – even tens of thousands of dollars – and it could be payable as quickly as 30 days. With 70% of Associations under funding reserves, understanding your financial exposure around Special Assessments is more critical than ever.
The Bylaws and the rules of the Condo will tell you what the Condo can and can’t control. Some things are intuitive – like the color of your blinds – but others you might not realize – like permission to remodel your bathroom. Boards often institute these for reasons beyond just aesthetics – for example, plumbing systems in large buildings often have special needs that mean the Board wants to ensure that work in units is done correctly and does not screw up other units. Make sure you understand what you can and can’t do.
Common elements – further broken down into general vs. limited common elements (here is an article that explain this very well) – will drive what you’re responsible for paying for. Some Associations include things like HVAC as common elements, others don’t. There may be routine items you’re responsible for you need to be aware of. You should have a strong understanding of what is your responsibility to maintain and what is the Association’s to ensure everyone is doing their part.
The Bylaws are the foundation of your Association’s governance and you need to know what condo bylaws matter the most. On top of the Bylaws, your Association will also make rules which will further clarify processes, so make sure you know about those. But most importantly – make sure your Association is following its own rules around transparency. If it isn’t operating transparently, it likely isn’t operating with the Owner’s interests, and that’s the first step towards breaking bad.