There seem to be at least two contrasting views of expensive community association recreational amenities – one that’s favorable, and another that’s cautiously skeptical. The first view is generally held by a minority of a condominium’s residents who actually use a condominium’s swimming pool, community room, or tennis court. The second, more cynical, view is often held by condominium boards who must wrestle with the myriad of fiscal and practical realities attendant to managing association amenities.
Managing common amenities is fraught with potential peril for even the most well-intentioned board. The board must become familiar with, and be sensitive to, anti-discrimination laws as it formulates both rules of conduct and operating hours for amenities – for example, resisting the temptation to establish “adult-only” usage hours that may be deemed to inadvertently discriminateagainst families with children.
And association boards must also manage the risk of potential injuries to those who use the association’s amenities, with an eye toward potential lawsuits. These risks are best managed in consultation with the association’s insurance agent who can best advise the board as to both the extent and types of coverage options for the board to consider in anticipation of potential amenities-related personal injury lawsuits.
Most significantly these days, condominium boards must deal with the financial realities attendant to association amenities – both as part of the association’s regular operating budget and, perhaps equally important, as part of the association’s longer term replacement reserve plan.
Good financial planning and management practice requires boards to consider the cost of replacing particular amenities over time as part of the association’s reserve replacement strategy. Otherwise, the day will come when the cost of resurfacing the tennis courts, re-roofing the clubhouse, or replacing the common swimming pool will certainly rear its ugly head – whether or not the board has planned appropriately.
Costs Carefully Weighed
Association boards must face the longer term, albeit costly, financial consequences of planning today to replaceamenities years in the future. The recent country-wide economic downturn has created an obvious tension for association boards, causing many boards to carefully weigh the costs – both short-term and long-term – of continuing to operate all of the common amenities that seemed so attractive not so long ago.
Quite often, boards realize that the tenniscourts are used by just a few unit owners – or that the clubhouse is hardly used at all. Discussions of eliminating some, or all, of an association’s expensive recreational amenities have become more commonplace as the financial climate worsens.
With increasing frequency, we’re being asked about the proper legal way in which to eliminate some, or all, of an association’s recreational amenities – most often due to the financial strain of continuing to operate the amenities for the enjoyment of a few unit owners. The answer is that all unit owners should have a say in whether to eliminate an association’s recreational amenity. In fact, Massachusetts law arguablyrequires the unit owners’ consent to eliminate an association’s recreational amenity.
For some, it’s hard to imagine describing the elimination of an amenity such as a tennis court, swimming pool or clubhouse as a common area “improvement” – but that’s exactly what its legal classification is.
Massachusetts’ condominium statute requires common area “improvements” to be affirmatively approved by unit owners holding at least 75% of the condominium’s beneficial interest before the governing board can charge the amenity removal costto all unit owners as a common expense.
So, condominium boards are well-advised to obtain the requisite unit owner consent before embarking upon eliminatinga common amenity – whether or not the board is absolutely convinced that the association would be better off without the amenity.
In fact, association boards must resist the temptation of going it alone when it comes to deciding whether to eliminate a common amenity. This is something that the unit owners simply must decide.
Of course, association boards outside of Massachusetts should consult with their ownlegal counsel before deciding to eliminate an amenity, as the Massachusetts statute is necessarily specific only to that state’s condominiums.