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socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 34687
Experience:  Attorney and Real Estate broker -- Retired (mostly)
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Our condo board and management corp. claimed they needed at

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Our condo board and management corp. claimed they needed at least $2,000,000.00 to finance according to them 'mandated' new or updated sewer treatment plant. They aquired the loan prior to obtaining any bids for the job, stating it's easier to get the money before the bids are in. All condo owners have been paying for the loan for the past year, with each home owner paying up to $70.00 more per month for the next 15 years. We have yet to see any work done on the plant, as the board members claim they are waiting for the town to write the requirements. Is this fair? What are they doing with this money and or interest? We have over 40% of homeowners not paying thier association fees, which I believe why they obtained the loan.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  socrateaser replied 1 year ago.
Hello,

Thanks for visiting justanswer.com. I have read your question, and I understand your annoyance -- however, I'm not sure that I understand your question. You ask, Is this fair? and What are they doing with this money and/or interest?

Are you seeking a general commentary on whether or not the board's activities are typical?

Please clarify what you would like to know and I will be happy to try to help.

Thanks!
Customer: replied 1 year ago.


Can the condo association take a loan for $2,000,000.00 for work they have no idea when they will start, how much it will cost and if and when the town will approve, and or make demands to have sewer treatment plant done. I have been an owner for 9 years and ever since I moved into complex they claim they need to update sewer plant. Last year was the first time they acted upon it, by obtaining the large loan. Also, could they use this money for normal condo expenses, maintence.

Expert:  socrateaser replied 1 year ago.
There is no specific statutory restriction the board obtaining a loan. However, the association board has a fiduciary duty to the members, and the failure to act upon well-informed business judgment creates individual liability for damages caused to association members. See Caprer v. Nussbaum, 36 AD 3d 176, 189 (2006).

If the board actions are generating unnecessary costs to the members, any member as an individual, or a group of members could sue the board for the breach of fiduciary and attempt to obtain damages from the board members as individuals. However, the damages would be payable to the association as a whole, not to the individuals who would bring the lawsuit. So, you could not directly recover your additional assessment fees. You would increase the net value of the association assets, and thereby, hopefully, reduce the assessment fees for everyone.

It seems to me that based upon how you describe the circumstances, the board appears to have borrowed this money for no particular reason, and it's costing everyone a small fortune to maintain the interest. All of which argues to payoff the loan and eliminate the debt (or, build the treatment plan).

You will need a competent lawyer, but perhaps you could settle the matter without legal action, and save litigation fees.

For a competent civil litigation attorney referral, see this link.

Please let me know if I can be of further assistance.
Customer: replied 1 year ago.


is there a condo board association that i could write to

Expert:  socrateaser replied 1 year ago.
If you mean a government regulatory agency -- then "no" there is no such agency with control over the association's activities. This is purely between the homeowners and the association board.

You'll have to talk to the other homeowners and see if there is any interest in trying to push back against the association board.

Hope this helps.
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 34687
Experience: Attorney and Real Estate broker -- Retired (mostly)
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socrateaser
socrateaser
Real Estate Lawyer
34687 Satisfied Customers
Attorney and Real Estate broker -- Retired (mostly)