Condo talk

Questionable activity plagues condo owners

By Kay Senay

June 2009

Our condominium is plagued by the questionable activity of a corrupt board, attorney and management company. When I was on the board, we found several members stealing funds. The attorney wrote violation letters to those who questioned the board. The property manager writes the checks and monitors the bank accounts for the condominium. So the current board, the attorney, and the management company are in cahoots. We paid $52,000 for road repairs two years ago that were never done, and we cannot find out where our money went. Two of us got on the board in March, but the old board members said there was a problem in the voting and did a recount off site. The condominium attorney backed it. How do we remove the board? — S.K., Florida

Dear S.K.: This is a horrible situation. It is the fiduciary duty of every board to ensure the safety of association funds. Unfortunately, condominiums all over the United States are plagued with questionable activity. In Ohio last year, a management company closed its doors, absconding with all the funds for 50 condominium associations. The company was found guilty and awaits sentencing. If the attorneys and/or management companies for these associations were involved in any corruption, this criminal activity may have been without remedy.

You must follow the procedure in your bylaws to remove a board member, or the entire board. In addition, there are some actions you can take to avoid or resolve the questionable activity.

Annual or special meeting
All owners have the right to campaign for election to the condominium board at the Annual Meeting. The Bylaws should provide the method for election of board members and to recall one or more of them. A special meeting can also be used for this purpose. A disruptive owner must not be allowed to control or thwart a meeting and the decisions made there.
If an owner or group of owners tries to obstruct a meeting, owners can make a motion and second to temporarily recess it. If things get completely out of hand, a motion and second to adjourn the meeting to a later time may neutralize the unacceptable activity.

Financial committee
Typically, a financial committee provides guidance and recommendations to the board through its ongoing review of the financial status of the condominium. Some of the activity of this committee can include review of financial reports and bank statements, scheduling outside audits, tracking project finance, and proposed budget justification for expenses.

Examine records/review meeting minutes
The records of a condominium association are open to inspection by owners. Normally, the only records that would be unavailable are those involving employees and delinquencies. Examination of bank statements will reveal questionable transactions.

Hire a CPA and/or an attorney
Maybe a number of the owners could collectively hire these professionals. The money spent on them could be less than it may cost to do nothing and continue to be plagued by this questionable activity.

When new board members are elected, they can replace the attorney and the management company!

Kay Senay is the author of “Condo Buying & Ownership Made Simple: Tips to Save Time & Money.” Visit her website at www.condo-condominium.com for a free tip sheet. Send your questions and stories to Kay at condotalk07@yahoo.com.

Copyright © Kay Senay 2008

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