Page 1 - New England Condominium June 2021

June 2021 NEWENGLANDCONDO.COM koff tells New England Condominium that a similar bill is being pro- posed in the Garden State. Senate Bill 3649 would adjust the statute of limitations on damage claims for construction defects in a condo- minium, cooperative, or other planned community development to begin running at the time of the transition from developer control, instead of at substantial completion of the project. 205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED THE CONDO, HOA & CO-OP RESOURCE CONDOMINIUM NEW ENGLAND Laws vs. Bylaws Understanding the Similarities & Differences BY A. J. SIDRANSKY Working With Your Legal Counsel The Attorney/Board Relationship BY A. J. SIDRANSKY As the nation starts to regain a semblance of normalcy with COVID-19 vaccinations on the rise and restrictions beginning to ease, legislative dockets have filled with bills and propos- als that have ramifications for the co-op, condo, and HOA sector. Here are some of the biggies that boards, managers, and residents should be aware of, no matter where your particular community is located. Construction Defect Claims Matthew Gaines, attorney with Braintree, Massachusetts-based law firm Marcus, Errico, Emmer, and Brooks, P.C. and co-chair of the Community Associations Institute’s New Eng- land Chapter’s (CAI-NE’s) Legislative Action Committee, explains that January began the legislative session for Massachusetts’ two-year legislative cycle; all bills have been filed and referred to their respective committee, awaiting hearings that will take place in the upcoming year or so. With respect to condominiums, he says, “One of the more interesting ones is House Bill 1501, ‘An act relative to construction defect claims by condominium owners,’”—a bill being proposed by CAI-NE’s Legislative Action Committee. Gaines explains that Massachusetts has a statute of limitations for defect claims against a developer, giving unit owners a certain num- ber of years to sue for any construction problems. However, what ends up happening is that the statute of limitations expires either before completion of the project—especially if it is one that is phased out over many years—or before the developer has ceded control of the board, leaving no remedy for unit owners who suffer original construction defects. “So this bill would kind of deal with that problem,” says Gaines, “and basically says that, for condominiums, the statute of limitations doesn’t even start to run until the developer does, in fact, turn over control \[of the board\] to the unit owners—that will hopefully enable unit own- ers, if there is a problem, to be able to recover something from the developer for that problem.” Attorney David Ramsey of the Morristown, New Jersey office of law firm Becker & Polia- Co-op and condo living is subject to lots of rules—some of which come directly from state laws, some from the building or associ- ation’s own bylaws, and some from its house rules. Every state has statutes that govern the operation of residential communities; every community also has its own set of govern- ing documents, which are almost universally subject to those state laws—and sometimes go even further than state regulations in de- lineating what owners and shareholders can and can’t do on the property. These various laws, bylaws, and rules gov- ern everything from pet ownership to leas- ing and subletting of individual units, and even to who may reside in an apartment. But can a community’s rules conflict with state statutes? And what happens if they do? Governing Documents “As a rule, the law wins; the bylaws lose,” says Richard Brooks, a partner with Marcus, Errico, Emmer, & Brooks, a law firm located in Braintree, Massachusetts. “You can’t make your own rules \[that\] stand in opposition to state laws. It’s like states’ laws versus federal laws; the federal statute rules. There’s a peck- ing order.” “Many condos have provisions about pets or pot smoking in your unit,” explains Brooks. “They are in the bylaws passed by the community. But you have other laws, like federal laws that say you can only smoke marijuana for medical purposes. That has to be permitted, despite the bylaw prohibition. The same concept governs emotional sup- port animals. Federal and state laws say you must permit them, even if you have a no-pet policy.” According to Dennis Greenstein, a part- ner with Seyfarth Shaw, a national law firm with offices in Boston, “The governing docu- ments of cooperative corporations—which For many, the function and relation- ship between the board of directors of a co-op or condominium community and their attorney is more or less opaque. Who does the attorney represent? Indi- vidual owners or shareholders can’t con- tact the community’s counsel for legal advice; if they need counsel, they must find one outside the community’s legal arrangements. So the community’s attor- ney isn’t there as a resource for residents. How about the board members? Tech- nically, the answer is no there as well. While board members certainly may interact with the corporation or associa- tion attorney for community business, they cannot and should not approach the community’s counsel for personal legal advice. It’s the corporation or association that the community’s counsel represents. He or she is there to protect the integ- rity and interests of the community as a whole and functioning entity. Defining the Client “The building’s attorneys are hired with the approval of the board, purely to advise the board and its managing agent regarding day to day matters and with the interests of the corporation or association as whole in mind,” says Mark Hakim, an attorney with Schwartz Slad- kus Reich Greenberg & Atlas in New York City. “Attorneys for the building do not represent the board or the indi- vidual residents. The board members are generally voted into office and man- age the building with authority derived from the governing documents (e.g., the bylaws, lease, etc.) and applicable statutes. When requested, we advise on a myriad of matters, from day-to-day matters such as sales, leasing, house rule and other enforcement, to disputes, to negotiating contracts for management, repairs, alterations, telecommunications, etc. to attending to litigation and other similar matters, to attendance at annual and other meetings. That’s by no means continued on page 8 continued on page 9 Legal & Legislative Roundup Looking at the Past Year in Law BY DARCEY GERSTEIN continued on page 8