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Common Area Assessments FAQ
Question: We have several projects that require the Board to assess additional funds to complete the projects. Should we designate these as a separate special assessment or attempt to amend our budget?
Answer: It is our suggestion that the Board consider amending their budget to increase the monthly common area fee rather than to impose a special assessment. The Massachusetts priority lien does not allow collection of special assessments and therefore it is more desirable to impose an increase in the monthly common area fees and not carry a special assessment as a separate line item on a unit owner’s ledger sheet.
Question: There are unit owners in our Association that want to extend their decks and make other permanent changes to the common area/limited common area. Does the Board have the authority to do this, or is a unit owner vote required?
Answer: Massachusetts General Laws Chapter 183A (the Massachusetts Condominium Statute) was amended several years ago to allow the Board to create limited common areas and assign the same to unit owners. Consent must be obtained from all owners and first mortgage holders of units which are shown on the recorded condominium plans as immediately adjoining the limited common area to be created. Consent must also be obtained from 51% of the first mortgage holders who have requested notice. We normally suggest to Boards that they utilize a Limited Common Area Agreement to comply with this section as well as to define other important aspects of the creation of the limited common area including the maintenance, repair and replacement responsibility of the area to be created, as well as insurance and allocation of risks associated with the same.
Question: Mold has become a hot issue at our Association. Don’t we have insurance to cover any claims?
Answer: The answer is maybe or maybe not. Insurance companies are taking the position that mold exclusions and pollution exclusions in the insurance policies, provide a defense to any coverage issues. Certainly the Board should review its current policy and check with its insurance agent for any changes in any new policies.
Question: Can a person under the age of 55 purchase a unit in a 55 and older housing community?
Answer: An individual may purchase a unit in a 55+ community; however a person under the age of 55 cannot permanently occupy the unit unless there is at least one other person residing in the unit who is 55 or older.
Question: Does the Housing for Older Persons Act require that all units in a 55+ community be occupied by persons over the age of 55?
Answer: Under this law, 80% of the residents must be 55 years of age or older. Community associations may create any type of restrictions or no restrictions regarding occupancy of the remaining 20% of the units. Associations may choose to restrict the 20% to 55 and older or open it up to families with children as long as the 80% requirement is met.
Question: Our Association is faced with a major capital improvement expense and we do not have the funds in our reserve account to cover the expense. Should we levy a special assessment or finance the capital improvement?
Answer: In increasing numbers, Associations are turning to lenders to finance their capital replacements. By obtaining a loan, the Association will have immediate funds available to do the work, as opposed to collecting special assessments over a period of time. By spreading out the repayment of the loan over a longer term, the Board can implement a slight increase in unit owner common area fees, eliminating the need for large special assessments.
Question: Should our Association’s Board meetings be open or closed to unit owners as a general rule?
Answer: Maintaining closed Board meetings or having open Board meetings with excessive use of executive sessions can create the impression that the Board is operating in secrecy. We recommend that as a compromise, that Boards call a quarterly meeting that is open to all unit owners to keep them apprised of developments
within the Association and to foster discussion amongst the residents. The Board should further develop a process that allows unit owners to petition the board to appear at any meeting to present issues that may be affecting the unit owner and/or the Association.
Question: Our Association has elected new Board members. What are the recording requirements?
Answer: In order to comply with the provisions of M.G.L. Chapter 400 of the Acts of 1992, Condominium Associations must record at the Registry of Deeds a Certificate of Election along with appropriate Acceptance and Resignation forms for newly elected or resigning Board members.
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