Legislative activity in regards to condominium law varies widely among the six New England states this year, although a few common themes are evident. The concept of state licensing, with standards for property managers seems to be gaining ground in the Northeast and beyond, and may see widespread adoption because both boards and managers see it as a benefit. Other bills that have hit the desks of New England legislators are of the more “housekeeping” variety, especially in states that are catching up with issues such as open meeting protocols.

Through its local chapters, the Community Associations Institute (CAI) organizes a legislative action committee [LAC] in each state. Committee members monitor House and Senate bills that affect community associations and help legislators craft them and get them passed—or not.

Massachusetts

Matthew Gaines, an attorney with the Braintree, Massachusetts law firm of Marcus, Errico, Emmer & Brooks, reports that the state’s current legislative session, which is on an 18-month cycle, is ending this July. “Of the 45 or 50 bills which were filed that had anything to do with condominiums,” he says, “most of them have been given a ‘refer to study order’ which essentially kills them. However, a couple of measures reported favorably out of committee. One House bill [H.3933] would set up a special commission to study condominium law.” It encompasses a lengthy list of topics, including things like unit owners’ rights and enforcement; association and management responsibilities to owners; how condo fees are determined and are increased; and the feasibility and potential responsibilities of a statewide office of condominium ombudsman. It is summarized with the following directive: “The commission shall submit a written report … no later than January 1, 2014, which shall identify recommendations, if any, for legislation, regulation, or policy.”

The LAC in Massachusetts, Gaines points out, “is not opposed to [creation of] this commission, just who is represented on it.” The bill’s text specifies that “the committee shall consist of nine members,” including several senators and congressmen along with “five persons to be appointed by the Governor, including the following individuals: An attorney (1) who specializes in condominium law and whose client base is comprised mostly (over 51%) of condo unit owners, unit owner groups or aggrieved unit owners and whose client base is not comprised mostly of Property Management companies and/or condo Boards of Trustees; an individual condo unit owner who is not a member of his or her condominium board of trustees; a Certified Property Manager who possesses either the PCAM, CMCA and/or the AMS designation.” Associations, in the form of board members, trustees or their attorneys, notes Gaines, are not represented at all.

Another bill that he cites is H.1547, an amendment to Chapter 183A of the General Laws, in the section outlining how management has to keep records. If this bill passes, the result would ultimately spare a unit owner from certain legal costs. Specifically, in the event that a unit owner engages in a court action or sues to gain access [to records or documents], the association or management must pay legal costs.

State law, such as Chapter 183-A in Massachusetts, notes Gaines, “is an enabling statute, that enables condo communities” to regulate themselves. “Almost all condo-related bills [received by the legislature] are the result of disgruntled unit owners who complain to their elected officials… who then file a bill.” However, legal experts agree that adopting new state laws is not an effective solution for problems that are often unique to individual communities. Gaines mentions, as an example, recent controversies over the outdoor clothes-drying prohibitions that are in many condo regulations. Giving residents the “right” to clotheslines makes no sense as a state law, when condos can be as different as an urban high-rise building is and a country cottage. Gaines suggests instead, “If you’re not happy, amend your condo docs.”

Connecticut

Attorney Scott Sandler of the law firm of Perlstein, Sandler & McCracken, LLC, in Farmington, Connecticut, is chair of the CAI-Connecticut LAC. He says that “there’s been talk of a condo ombudsman bill with some state agencies, the attorney general and the Department of Consumer Protection… It’s been proposed but it requires funding, so it will probably die. In the last session [February – May 2012] Gov. Dannel P. Malloy promised no consideration of any bills which cost money—except for [those addressing] education.”

CAI-CT also worked with the legislature on a proposal for licensure of property managers, which passed in May. Without such legislation, he notes, “a property manager only has to pay a fee and submit a form, to receive a certificate in Connecticut. We do all agree on setting minimum requirements for managers, and would like to use standards that are set by the CAI designation of Certified Manager of Community Associations (CMCA). There is a feeling that upgrading quality [standards] and raising the bar for management performance will reduce conflicts between associations and unit owners.” This legislation, he says, [had] the support of everyone involved—from management staff and board members to unit owners.

“I am pleased that CAI-CT was able to educate lawmakers and advocate for our members to see this bill become law. It is an important piece of legislation for both community association members and community association managers,” says Sandler.

“Another initiative is institution of a mediation program, to provide unit owners and associations with an out-of-court means of settling disputes. We’re looking at a model from Montgomery County in Maryland. We are looking at what other states are doing in regard to both of these proposals,” Sandler says.

Rhode Island

In Rhode Island, the LAC is chaired by attorney Frank Lombardi from the firm Goodman, Shapiro & Lombardi, with offices in Dedham, Massachusetts, and Providence, Rhode Island. He states, “We are currently responding to a proposed bill that would start eliminating certain transfer fees. This proposal is aimed at banks and lenders, and nonprofits are exempted. We also want community associations to be exempted. There are some document-related fees unique to condominiums that could mistakenly be considered ‘transfer fees.’ These could include resale certificates that are meant to warn buyers about pending assessments or unpaid fees, or other things outlined in the condo docs [regulations] regarding capital improvements or moving fees [in or out].”

One issue that the Rhode Island LAC is concerned about is the current mortgage lending environment—an issue for condo communities nationwide, Lombardi admits. “We’re communicating with our U.S. senators. They could help us out with HUD and FHA… and give them the hard press. These agencies have over-reacted [to the mortgage crisis] and condo buyers are having trouble getting loans. “

Vermont

David Boston, CMCA, AMS, is regional manager at TPW Management based in Manchester Center, Vermont. He says, “We are looking at five bills that are being tracked right now. One that is in the Commerce & Economic Development Committee, H. 522, but it’s just creating more bureaucracy… we don’t think it has any legs. There’s a S. 98 bill that has to do with licensing lenders… we’re not getting involved. Another Senate bill, S.224, proposes binding arbitration to settle disputes over liens and assessments… It’s now in the Judiciary Committee, and we don’t feel there’s a benefit [for community associations]… It puts another step into the foreclosure process, so we’re involved, because we don’t want to see it move forward.”

Foreclosures in Vermont currently drag on for about two years, Boston pointed out this spring, “so we’ve been monitoring H.403.” The bill subsequently passed through both houses of the legislature and was signed into law by Gov. Peter Shumlin on May 3. “It addresses statutory provisions regarding foreclosures, by clarifying the process…” Boston continues, “and will hopefully accelerate the procedure.”

As other state groups are reporting, Vermont condo associations are also considering the licensing of property managers. Boston reports, “We are looking at the Rhode Island model, maybe for the next [legislative] session. Association boards and trustees are kind of in the dark, when someone, who may not be qualified, steps up to do the management at their property.” He notes that at his firm, “all our managers have CMCA designation.”

Another bill, H.21, Boston says, “will form a new business entity, a ‘limited cooperative association,’ that has almost no application in Vermont, so we have not focused on that.”

New Hampshire

For LAC members in New Hampshire, reports committee member Deana Cowan, “We’ve been very quiet recently… There were not many condo-related proposals in [the most recent] session.” She is the property manager at Island Shores Estates of Penacook, New Hampshire, and notes that the LAC took a major step forward with the state’s passage of a ‘super-lien’ provision that puts condo association fees ahead of the first mortgage in priority. “That went into effect January 1st of 2011,” she adds, “although, unfortunately, mortgages written before that date are not subjected [to the provision].”

“We did review HB 1261 that is titled ‘Delinquent Condominium Fees’,” she continues. This bill permits a condominium unit owners’ association to file multiple liens for unpaid condominium fees. The bill also removes the grandfathering provision for mortgages executed prior to January 1, 2011. However, the bill is dead for this year because it got stuck in committee. The CAI-NH LAC may be watching it next year.

Maine

Bruce McGlauflin chairs the Maine LAC. He is an attorney with Petruccelli, Martin & Haddow, LLP, of Portland, Maine. He acknowledged that the state’s “ legislative session has been focused on budgets and not much else… the session will be over in June. We had our LAC meeting recently and we’ve decided to sit this session out. We have attempted—twice—to get a lien in place to collect condo fees… covering a six-month period. I believe Maine is the only New England state without some version of a super-lien provision that would put condo fee collection ahead of the first mortgage. Our attempt failed for a second time, owing to strong opposition from banking and lending interests.”

“Last year we got the state’s condominium statute amended to include ‘best practices’ provisions, and that went into effect on September 1, 2011. It clarified the lien provision for non-payment of dues, extending it from three years to five years, and gave associations the right to deny privileges to non-payers. Other standard ‘best practices’ were record-keeping and what can be deemed confidential, also, making it clear that unit owners have a right to attend board meetings… Nothing was in the statute before. It also clarified executive session exclusion,” he says.

“At our committee meeting we got a sense that people are supporting the September 1 changes,” he notes. “We believe [the effort] has been a success.”

Marie Auger is a Massachusetts freelance writer and a frequent contributor to New England Condominium.