Q&A: Must Errant Condo Boards be Corrected?

Q Do professionals such as attorneys and managers under contract to my condominium have any obligation to see that the boardoperates under the guidelines of the Rhode Island State Condominium Act and our condominium documents?

— Law Abiding Citizen

A Yes. Attorneys and property managers certainly do have an obligation to advise association boards to adhere to the Rhode Island Condominium Act (“Act”) and to the provisions of the condominium documents.

First and foremost, the Act establishes a standard of care and both specific and general duties upon board members as they govern the association. Section 1.11 of the Act imposes a duty of good faith upon the board members regarding actions taken concerning association business. Section 4.17 contains languagepermitting a court to impose punitive damages on parties found to be in violation of the Act. With respect to condominium documents, most bylaws for associations set out the general and specific duties for board members, the violation of which would be grounds for removal of a member or members from the board.

As professionals, both attorneys and property managers under contract are responsible for knowing the provisions of the Act and the condominium documents. Community association attorneysare bound by rules of ethics to have more than just a passing familiarity with the Act.

Moreover, they are held to a standard of care within the profession to give the condominium documents more than just a passing glance.

Should a situation arise where an attorney knows that the board is violating the Act or the bylaws, he or she has a duty to inform the board of the violation and certainly to make board members aware that by taking a particular action, he or she may be exposing the community association to civil and sometimes even criminal liability.

In fact, in some situations, the attorney may even have a duty to advise the board to notify its directors and officers’ (D & O) liability insurance carrier of a potential claim by a unit owner for the subject violation. Most property management contracts contain provisions which either expressly or impliedly require managers to be awareof and adhere to the Condominium Act and the condominium documents.

Accordingly, in my opinion, there is a contractual obligation to advise the board to adhere to the law and documents. Aside from a duty owed to the association, it would be wise for the manager to advise the board it may be violating the documents or the law for the simple reason that by ignoring a blatant violation, a manager mayrisk losing the ability under the contract to have the association indemnify him or her for claims made by unit owners or third parties against boards for negligent acts or omissions.

— Frank A. Lombardi, Esq.

 

Comments

  • Can a condo association that does not follow its bylaws as registered with the state of Rhode Island have the power to enforce its rules and regulations and fine a unit owner?