Prospective Buyer Deserves to Know of Lawsuit

QUESTION: Our homeowners association has 20 lots with single-family homes. The association has filed a lawsuit against one of the owners for failure to maintain the property and for parking inoperable vehicles on his lot. The legal costs are adding up and a special assessment was recently approved to pay for the lawsuit.

My husband and I must sell our home due to a job transfer. Do we have to disclose to the prospective buyers that a lawsuit is in progress?

ANSWER: Ask your real estate agent for guidance. I usually say, “When in doubt, disclose.� Many of the real estate companies and escrow companies use questionnaires that ask for information about pending litigation.

The prospective buyer is entitled to obtain a copy of the association’s financial information. If the amount of the special assessment and the reason for it is included in the budget or financial statement that is provided to the buyer, then I would say that you have fulfilled your obligation to disclose.

Even Temporary Stay of Pet Can Be Barred

Q: The governing documents of my condominium association state that pets are not allowed. My parents will be visiting for about one month this summer. They have a dog that travels with them.

Does the association have the authority to keep all pets out of the building, even those that are temporary?

A: Yes, depending upon the wording of the legal documents, the association can probably bar even the temporary stay of a pet. In my opinion, it is important for the association to be careful about allowing “guest dogs.�

I have heard of several situations where a “guest� turned into a permanent resident. “I’m just taking care of Aunt Susie’s poodle while she’s gone on vacation,� said the offending owner. That is not an adequate or truthful response when the dog has been on the premises for six months.

Lawyer Should Give Board Estimate of Fee

Q: The board of directors for our homeowners association sincerely appreciates the advice we obtain from your column. You often recommend that community associations refer their problems to an attorney.

One of our board members feels that we have the right to make decisions without checking everything with an attorney. He is very concerned about the cost of legal services, while the rest of us are concerned about the liability of dealing with many of the issues facing the association. Can you give us some tips for keeping our legal expenses under control?

A: Ask questions about the attorney’s billing rates and billing procedures. You have a right to know the hourly rates of the attorneys, paralegals and other staff members who may be doing work for the association. You should receive a detailed billing statement on a monthly basis. Know how much is being spent.

If someone in the association has already researched a problem and compiled information that would be useful to the attorney, this will probably reduce your cost. Good record keeping is always a time saver.

If you want the attorney to write an opinion letter, ask what the estimated cost will be and request that the attorney notify you when you have reached a specified dollar amount.

Only one person from the board of directors should be communicating with the attorney. If everyone on the board calls the attorney with their individual concerns, the bills can add up very fast. Individual homeowners should not expect to have direct communication with the association’s attorney for the same reason.

It is advisable to establish a working relationship with an attorney of record who will have your legal documents in the file ready to provide timely advice when it is needed. It will save dollars for the association if the chosen attorney specializes in community association law. Less research time is needed if the attorney is already familiar with the statutes and the case law that has evolved from court decisions.

The attorney should be asked to review contracts involving large expenditures, especially a management contract, for example. The money spent is well worth the peace of mind and the reduction in potential liability.

Owners Have Right to Association Records

Q: Must the board of directors of our homeowners association furnish a complete list of names and addresses of all homeowners to an individual owner if the owner requests these records?

A: The owners are entitled to have access to the records of the association. This has been established in a number of legal cases around the nation as cited in “The Law of Condominium Operations� by attorney Gary A. Poliakoff.

Having the right of access to records also includes the right to make notes or request photocopies at a reasonable cost. Florida’s Condominium Act explicitly gives association members that right and several other states have similar laws.

Association boards should adopt procedures for allowing this type of access and should instruct their managing agents accordingly, if the association has a management company that keeps the records.