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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118067
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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This query is on the behalf of myself and other owners whose

Customer Question

This query is on the behalf of myself and other owners whose association board has persuaded slightly over 50% of the owners to approve a complete renovation of all units costing a $1,000,00 and imposing a $37,500 special assessment to be paid by raising the monthly dues from $225 to $525 because we believe the board mispresented the facts of the case to win approval. And we want to know if we have actionable case.
The board's sales pitch was that
1. some units have substantial damage to their siding that has to be repaired (due, of course, to the failure of the board, for years, to fulfill their obligation for maintenance)
2. for the sake of uniformity all units will have to be redone, whether their actual state warrants it or not.
3. the project, costing $37,500 per unit and an increase of $300 in dues to $525 per month will actually increase the value of the units
4. the engineering company hired by the management company put on a very emotionally loaded powerpoint show for this as the only reasonable solution (no other choices analyzed).
The first issue is that 3 and 4 above are misrepresentations. The board has not presented impartial expertise on their allegations and realtors that I have consulted have opined that the project is not only irrational but insane because the location does not support a prices of around $237,500, and a condo with monthly dues of $525 is probably not even marketable.
My stake in this is that I own a condo with no maintenance needs, with a current market value, at best $200,000 and mortgages totaling $184,000. I 81 years old and retired. I cannot afford this assessment - and probably, in view of the project — which fortunately has yet to be funded by a bank — can no longer sell it even at its current value. Others in this group are in the same situation.
My name is***** please call me at XXX XXX XXXX
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
This is sadly the problem with many HOA and Condo Associations, that members get hit with charges from actions taken by the board. However, under the bylaws, the board has the right to make improvements and repairs and issue assessments.
If they coerced the vote by providing false information to members to induce them to vote for something, the members can file a motion for a new referendum in accordance with the bylaws to seek to rescind the vote and present the true facts to the members. However, if the board presented their facts in a light most favorable to their position and did not present completely false information, that is not something that is grounds to rescind the vote.
If there is proof the board used known false information, the first step is presenting a motion before the members to rescind the approval based on the false information. If that fails, then the next step is the members would have to engage an attorney to sue the board on behalf of the association for breach of fiduciary duty by giving false information to secure funds.
However, many people in these associations disagree with assessments when their units do not receive the benefit of the assessments and that is not a basis for rescinding the vote, you have to prove actual false statements to secure the vote.
Customer: replied 2 years ago.
Am I to understand that failure to provide complete essential information. e.g. a professional estimate of the increase in value, is not grounds for demanding rescinding the approval?
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your reply.
I did not say you did not have grounds to file a motion within the assocaition to rescind the approval in light of the new information, I just said you would have a legal action in civil court only if you can prove they provided false information (as incomplete information is not enough for a court to get involved).