Signs of a dysfunctional condo association [DC]

[Anonymous]

The actually rule for a condo to get a conforming loan is at least half of the units must be owner-occupied.

However, Fannie and Freddie will allow in certain cases confirming mortgages to a primary home owner in a building with over 50 percent rentals as that is how you get more primary owners.

This 15 to 25 percent limit in rentals is a total made up thing.

Now add in an extremely large amount of Condos are not conforming on purpose it is meaningless.

Many many condos including my own are not conforming on purpose aa tons of paperwork requirements and often brings i. Riskier people. Meaning low downpayment mortgages more likely to default.

Some buildings allow zero rentals and don’t have conforming mortgages.

[Anonymous]

Anonymous wrote:Every building should conduct reserve studies. These aren't cheap surveys, but essentially an engineering company will assess the state of the building and identify the state of each of the major systems (roof, plumbing, windows, facade, etc.) and outline the reserve requirements for a 30 year window. That's really the most important thing - if the building does not have a sufficiently detailed reserve study (or does not have reserves to cover the expected costs) then I would say the building is poorly managed. Having intentionally low fees is a pretty slimey thing to do, where basically each owner is hoping to pass the issues on to the next owner.

I would say ask for the most recent reserve study, details of the current state of reserves, and inquire about the dates and details of the most recent renovation projects. Additionally, small details like a well maintained garden, clean trash areas, lack of trash/bulk items in the common areas, and a clean lobby can proxy for a board that at least attempts to care a little bit.

That said, 4-6 units is tough, because one or two people can really throw the building either in one direction or the other. With a building that small, I would hope that there is at least one owner that is there 'long-term' or has been there some time and has knowledge of the history and details of the building.

Or the building is poorly managed as it has one. My building is in a state with no reserve study requirements. From a legal perspective you would be insane to do it. Our lawyer would no recommend it and it is pricey.

A good property manager walks the building each month and as necessary gets quotes and treasurer is aware. As tresurer I can tell you the details. But a good inspector can tell on walk through on smaller building so don’t need me.

[Anonymous]

An easy way to spot dysfunction is ask for a few months of board meeting minutes. A functioning board spends its time discussing and approving capital projects; a dysfunctional board wastes time on meaningless garbage like policing people on minor inconsequential stuff.

[Anonymous]

Anonymous wrote:The actually rule for a condo to get a conforming loan is at least half of the units must be owner-occupied.

However, Fannie and Freddie will allow in certain cases confirming mortgages to a primary home owner in a building with over 50 percent rentals as that is how you get more primary owners.

This 15 to 25 percent limit in rentals is a total made up thing.

Now add in an extremely large amount of Condos are not conforming on purpose it is meaningless.

Many many condos including my own are not conforming on purpose aa tons of paperwork requirements and often brings i. Riskier people. Meaning low downpayment mortgages more likely to default.

Some buildings allow zero rentals and don’t have conforming mortgages.

Thank you - I was getting stressed out about something else!!

[Anonymous]

Anonymous wrote:An easy way to spot dysfunction is ask for a few months of board meeting minutes. A functioning board spends its time discussing and approving capital projects; a dysfunctional board wastes time on meaningless garbage like policing people on minor inconsequential stuff.

Meeting minutes on Covid are hard to find. My condo association the last annual board meeting was October 2019. Our bylaws state if no meeting or no one runs for board stays the same. We actually have open spots so anyone who wants to join board can. No need election.

The board has delegated authority in any repair or improvement under $5,000 and any emergency improvement as long as we have funds above that amount

We have zero large improvement projects planned, no plans to borrow money, do special assessment or raise condo fees. All we do votes on. Last voting item was October 2018.

When we do then just who present and high level summary.

The last few buyers I don’t think they even know there is a board. They deal with managing agent. They got audit financials by out CPA. The minutes are a dated thing. In fact I know many a condo who stopped doing them even though not allowed. Risk of doing them greater than penalty.

[Anonymous]

Anonymous wrote:

Anonymous wrote:When we bought our condo (six unit building), I was told that having more than 25% rented could make it more difficult to secure a mortgage. We also received data on how many units were behind in their HOA fees. Ours was self-managed and it took forever for any decisions to be made. Also, challenging personalities stand out more in such a small group.

agreed, I live in 5 units TH, last year we got a manager because of multiple personality clashes especially after it became evident that our treasurer is stealing money by paying to his contractors from the association account, However all the difficult people are still here and the building looks neglected... It is ironic that the owners who were against some TLC are now cannot sell their unit for almost 9 months

OP here: wow, why don't you fire the manager and ...stealing money- disgusting , I do not want neighbors like that

[Anonymous]

For investment properties, at least 50% of the units are owner-occupied or second homes
For owner-occupied transactions, there is no owner occupancy requirement

[Anonymous]

Anonymous wrote:

Anonymous wrote:A lot of rentals. Low condo fees.

I wouldn't say "a lot of rentals" is a red flag at all. Low condo fees I agree with.

I wouldn’t say that’s a sure thing. My building charges mid-range condo fees and is a hot mess. We don’t get anything for them.

[Anonymous]

Look at common areas: hallways, stairs ,especially trash area. I have idiots neighbors who are selling their unit and at the same time objecting to all the cosmetic repairs of common areas, as a results their unit has been on a market for 9 months

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of rentals. Low condo fees.

I wouldn't say "a lot of rentals" is a red flag at all. Low condo fees I agree with.

I wouldn’t say that’s a sure thing. My building charges mid-range condo fees and is a hot mess. We don’t get anything for them.

What do you expect to get?
Managing agent, electricity, heat common areas, cpa, lawyers fees, insurance and building maint and any snow/grass outside plus a little in reserve each month it is nearly all gone.

Plus my condo we discussed storage area, benches, small gym, garden area but each time only few want to use so we have zero amenities in building. Then the older buildings things pop up.

Then if you have a large lobby, elevators, laundry room, garages and large flat roof and building liable outside windows and doors or outside pools ouch

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of rentals. Low condo fees.

I wouldn't say "a lot of rentals" is a red flag at all. Low condo fees I agree with.

I wouldn’t say that’s a sure thing. My building charges mid-range condo fees and is a hot mess. We don’t get anything for them.

What does "get anything" mean in this context. My building doesn't offer much in the way of shared services with mid-range fees... A person that doesn't stay up-to-date on the buildings financial health and the health of the building's systems would say that "we don't get anything"

[Anonymous]

My condo association has more than 60+ units and I was told that previous board members were embezzling money. Eventually, DC govt stepped in and sued the condo board for receivership. The owners set-up new board members, hired a new property management company, and start dealing with a lot of concerns including delinquent dues. They are also working with the DC govt and court to get more time to bring house in order so fingers crossed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of rentals. Low condo fees.

I wouldn't say "a lot of rentals" is a red flag at all. Low condo fees I agree with.

I wouldn’t say that’s a sure thing. My building charges mid-range condo fees and is a hot mess. We don’t get anything for them.

What do you expect to get?
Managing agent, electricity, heat common areas, cpa, lawyers fees, insurance and building maint and any snow/grass outside plus a little in reserve each month it is nearly all gone.

Plus my condo we discussed storage area, benches, small gym, garden area but each time only few want to use so we have zero amenities in building. Then the older buildings things pop up.

Then if you have a large lobby, elevators, laundry room, garages and large flat roof and building liable outside windows and doors or outside pools ouch

I expect a functioning staff, not managers who steal from the condo association and who the management company refuses to fire. A competent board, not people who've embedded themselves into the power structure 40+ years ago and refuse to leave, who get kickbacks from forced building projects and who reject any opposition votes/concerns. Our voting process makes N. Korea look like a beacon of democracy. People who do attempt to change the power structure are bullied out of the building entirely. We have an unqualified, racist and xenophobic guy who's not qualified to do maintenance, so he refuses to do anything. We have contractors who refuse to work with the building because of him, and the building isn't maintained. We have building-wide issues multiple times a week. We had some great equipment in the gym, but that was completely overhauled and replaced with the cheapest, most unworkable crap imaginable. We have staff who don't show up to work and nothing can be done. Our common areas are saunas in the summer, except where the building manager sits. There, the temperature is regulated perfectly.

So I'd expect the opposite of all of the above.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of rentals. Low condo fees.

I wouldn't say "a lot of rentals" is a red flag at all. Low condo fees I agree with.

I wouldn’t say that’s a sure thing. My building charges mid-range condo fees and is a hot mess. We don’t get anything for them.

What do you expect to get?
Managing agent, electricity, heat common areas, cpa, lawyers fees, insurance and building maint and any snow/grass outside plus a little in reserve each month it is nearly all gone.

Plus my condo we discussed storage area, benches, small gym, garden area but each time only few want to use so we have zero amenities in building. Then the older buildings things pop up.

Then if you have a large lobby, elevators, laundry room, garages and large flat roof and building liable outside windows and doors or outside pools ouch

I expect a functioning staff, not managers who steal from the condo association and who the management company refuses to fire. A competent board, not people who've embedded themselves into the power structure 40+ years ago and refuse to leave, who get kickbacks from forced building projects and who reject any opposition votes/concerns. Our voting process makes N. Korea look like a beacon of democracy. People who do attempt to change the power structure are bullied out of the building entirely. We have an unqualified, racist and xenophobic guy who's not qualified to do maintenance, so he refuses to do anything. We have contractors who refuse to work with the building because of him, and the building isn't maintained. We have building-wide issues multiple times a week. We had some great equipment in the gym, but that was completely overhauled and replaced with the cheapest, most unworkable crap imaginable. We have staff who don't show up to work and nothing can be done. Our common areas are saunas in the summer, except where the building manager sits. There, the temperature is regulated perfectly.

So I'd expect the opposite of all of the above.

Sounds like you are the other folks like you are letting this happen. Don’t sit there waiting for someone else to join board to fix it or current board to change go gather up the votes and join. I had a worse building. We went door to door, phone calls hunting folks down to get their proxies weeks before meeting. We did it very low key. We got over 50 percent of proxies pre meeting and just voted ourselves in and fired over next three years landscaper, cpa, lawyer, managing agent and replaced all contractors and put in bidding process in everything.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of rentals. Low condo fees.

I wouldn't say "a lot of rentals" is a red flag at all. Low condo fees I agree with.

I wouldn’t say that’s a sure thing. My building charges mid-range condo fees and is a hot mess. We don’t get anything for them.

What do you expect to get?
Managing agent, electricity, heat common areas, cpa, lawyers fees, insurance and building maint and any snow/grass outside plus a little in reserve each month it is nearly all gone.

Plus my condo we discussed storage area, benches, small gym, garden area but each time only few want to use so we have zero amenities in building. Then the older buildings things pop up.

Then if you have a large lobby, elevators, laundry room, garages and large flat roof and building liable outside windows and doors or outside pools ouch

I expect a functioning staff, not managers who steal from the condo association and who the management company refuses to fire. A competent board, not people who've embedded themselves into the power structure 40+ years ago and refuse to leave, who get kickbacks from forced building projects and who reject any opposition votes/concerns. Our voting process makes N. Korea look like a beacon of democracy. People who do attempt to change the power structure are bullied out of the building entirely. We have an unqualified, racist and xenophobic guy who's not qualified to do maintenance, so he refuses to do anything. We have contractors who refuse to work with the building because of him, and the building isn't maintained. We have building-wide issues multiple times a week. We had some great equipment in the gym, but that was completely overhauled and replaced with the cheapest, most unworkable crap imaginable. We have staff who don't show up to work and nothing can be done. Our common areas are saunas in the summer, except where the building manager sits. There, the temperature is regulated perfectly.

So I'd expect the opposite of all of the above.

Sounds like you are the other folks like you are letting this happen. Don’t sit there waiting for someone else to join board to fix it or current board to change go gather up the votes and join. I had a worse building. We went door to door, phone calls hunting folks down to get their proxies weeks before meeting. We did it very low key. We got over 50 percent of proxies pre meeting and just voted ourselves in and fired over next three years landscaper, cpa, lawyer, managing agent and replaced all contractors and put in bidding process in everything.

PP you're responding to here and I completely agree. Everyone complains about it, and people do attempt to bring change in small groups (think 3-5), but it goes nowhere. We had a small group attempt to speak at the last board meeting, but they were literally shouted down in anger by the board chair. This happens to everyone, no matter the issue; even the sweet, extremely elderly women who speak up about benign things get the same treatment. How many people were involved in your case and how long did it take to get the issue resolved? How did you address residents feeling powerless and convincing them that their voices could be heard?