Thursday, February 17, 2011

Condominium Boards and Dynamite: How Being Neighborly Can Result in Disaster on the Homefront

So, you've just closed on that fantastic new loft or condo - and you can't contain your excitement about your new granite countertops and stainless steel appliances.  The summer is just around the corner and the BBQ is going to be ablaze, just ripe for your new friendly neighbors to join in.  As time goes on, you begin to realize a pecking order, and that board membership may have some benefits as far as voicing your opinion, getting much needed repairs done, and being a respected part of your community.  That may be true, and most I've spoken with would agree... in part.

However, and there's a "but" just around the corner.... what most people don't say or talk that much about, is what happens when people don't see eye to eye.  What becomes of your newfound friendships when people take sides on issues, problems or solutions?  People get very emotional, fights can break out, and things can go at any time, from bad to worse.  Take the case of a medium sized condominium building, in say, Chicago.  Great potential for a building and a community, but there are problems with the building.  Finances are more than just "tight" ...they are on a shoe-string.  There is not enough money to repair everything that needs fixing.  How does this building prioritize, when some people want to go in one direction and others desire different outcomes?  What about when the lines get blurry between friendship and finances and the safety of the investment into the real estate?  Is it fair to vote by board majority, or building majority?  How do buildings operate when the board principals feel guilty leaving everyone out, so they give them a vote?  Should boards run everything when the unit-owners as whole can be affected?  How should these things be policed?  What about when some officers refuse to work with others?  Dissention among the ranks can make for lots of problems.

Many people forget to analyze, when buying into common interest communities, that they are opening a Pandora's box of problems - because finances are intertwined, as are emotional and rational positions.  People are very sensitive about their hard-earned green-backs, and when are you supposed do care more about your neighbor's future than you do your own?  Is it fair to say that when another neighbor's roof is leaking, we should always put ourselves in their shoes, if our roof is not?  Should we as unit owners agree to pay a portion of our funds for another's problem?  Is it because we know that when the problem is "ours" that the neighbors will then have a corresponding obligation to pay for "our" problem?  Who knows?  What are the rules - and are they followed at all times?  Sometimes yes and sometimes no.

Being on the condo board has even more implications - as I've written about before - because board members have certain obligations.  That said, does anyone at the closing table ever think about the what-ifs of everyone in the building deciding they don't like you because your dog goes to the bathroom in undesirable places, or because you don't shovel snow as often as you should?  Sometimes board members can't be impartial.  Those situations create problems as well.  What about the scenario when people begin to dislike the treasurer of the condo association because they are too financially conservative, and they refuse to agree to "normal" expenditures?  What about when not everyone in a unit participates and helps with work to be done or decisions to be made?  What about when you have members of the community who don't contribute to building maintenance, cleaning or yardwork?  Resentments can brew out of nowhere (just like mushrooms) and when you purchase a condominium, especially in Illinois, it makes sense to do your homework and speak with condo-owning-know-it-alls, so that you get the best of the best, in terms of information.  Knowledge is power, and I always encourage friends and clients alike, to arm themselves.

So what is the beef today?  The issue today, is minding how your "neighborliness" can be swayed to and fro, based upon issues with board voting, participation in the community and financial matters within condominium associations.  When people buy condos, they usually don't ask their lawyers to find out about who lives there, and what they are like.  We leave these exercises for later - assuming that no matter what, we'll soon learn.  That may be true.  However what is important to remember, is that you must evaluate YOU - and what you desire to tolerate, have known about you, what level of involvement you can handle and what you anticipate will be expected of you. Living in a condominium is a lot more like living in a dormitory than most of us "condo people" ever imagined.  Hall passes excepted, there are mini-pseudo-government controls on how much gets allocated to this or that - and regardless of how many of those neighbors you can get to be your Facebook friend - the very MINUTE that things go awry, which they often do, everyone "de-friends" each other, and what was an open-door policy of community gets bifurcated into something, well, less so.

My reminder for February, while condo prices in Chicago and surrounding areas are still painfully low, before you enter into what you think will be a promising investment, do please think long and hard about living in glorified apartments with shiny granite.... Often you get far more than you bargained for.

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