Knowledge is Power Know Your Governing Documents

 While essential to the successful operation of all cooperatives or condominiums,  governing documents are often only glossed over by otherwise well-intentioned  board members, residents and property managers leading to potential pitfalls.  As a result, it is often suggested by counsel that boards revisit, and in some  cases relearn, the various components of these all-important and varied  documents.  

 Matthew Perlstein of Perlstein, Sandler & McCracken LLC, a condominium and homeowner association law firm in Farmington,  Connecticut, said that condo owners often are in the dark about the  responsibilities of community living and never even bother to read the  documents they are given when they move in.  

 “I think it’s a fair statement to say that the majority of people who buy a unit in a condo,  or a co-op, or a planned community, usually do not have a full understanding of  all of their rights, their duties or the limitations on their rights that are  set up by the statutes and by the documents,” Perlstein contends. “Most homeowners have not read the documents. So people come with the  expectations that they bring from their prior lives and until somebody explains  it to them, they’re sometimes surprised. You say, ‘Well, I own this. So I can do whatever I want.’”  

 The first step is differentiating between cooperatives and condominiums. Co-ops  are typically governed by a proprietary lease, a certificate of incorporation  and a set of bylaws. A condominium is traditionally governed by a master deed  and bylaws along with a declaration of condominium or a declaration of  covenants, conditions and restrictions (CC&R’s). The declaration is usually recorded with the recorder of deeds in your town  and county, while the bylaws, which govern the operation of the board, will  typically stay within the building.  

 The fundamental difference between co-op and condo ownership is what buyers are  actually purchasing, and this difference is reflected in the building’s documents, Saul Feldman of Boston-based law firm of Feldman & Feldman, P.C., says. “The documents for a condo in Massachusetts are a master deed, which is a  declaration for a condominium and a condominium trust. For a cooperative it’s articles of incorporation and bylaws. It’s shares in the cooperation, which the residents get, and they get a proprietary  lease. In a co-op [buyers] are both a shareholder and a tenant under the  proprietary lease which gives them the rights to occupy their unit. In a  condominium they actually get a deed, they actually own their space,” Feldman says.  

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