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Tag Archives: governing documents

Protecting Against Slip & Fall Claims

Posted on Author By The Association Lawyers

It happens every winter. The Association is hit with yet another bad snowstorm. The snow removal crew arrives early and is attempting to clear the snow faster than it falls. Meanwhile a resident has decided to take his daily constitutional around the Association. The resident slips at the end of his driveway on a patch of ice and breaks his wrist during the fall. He sues the Association and is awarded significant damages. In addition to a snow assessment to cover the unpredicted snowfall, owners can now expect increased insurance premiums due to the slip-and-fall lawsuit.

This situation occurs frequently within associations.  However, an association can protect itself from this expense by passing a Tort Immunity Amendment. A Tort Immunity Amendment helps insulate an association from liability in a lawsuit filed by one of its members for a personal injury, such as a slip-and-fall claim.  Without this amendment in place, if an owner slips and falls on the association’s common property, the association often times is held liable for damages. This expense is then passed on to all owners through increased insurance premiums.

With a Tort Immunity Amendment in place, an owner’s ability to be successful in a lawsuit against the association is limited. It is important to note that this amendment does not grant the association complete immunity to act without the potential for liability.  The association may still be held responsible for any willful, wanton or grossly negligent act or failure to act.

With the winter months quickly approaching, it is imperative to review your association’s governing documents to ensure that the association and its members are protected against personal injury claims that frequently arise during this season and the resulting expenses. If an association does not yet have tort immunity, it can adopt an amendment to its bylaws providing for such immunity. By statue, at least 2/3 of the membership must vote to approve such an amendment.

How a Leasing Amendment Pays for Itself

Posted on Author By The Association Lawyers

Passing a leasing amendment is desirable because it helps to maintain the quality and character of the community.  A leasing amendment benefits a community in two main ways:

  1. By providing an association with a means of evicting nuisance tenants
  2. By enabling the association to collect rent directly from tenants when unit owners become delinquent.

A leasing amendment will also pay for itself in the time and money saved in these two scenarios.

Scenario 1: The Problem Tenant

Every association encounters problem tenants.  However, without a leasing amendment, many associations are limited in their ability to evict such tenants.  A leasing amendment provides an association with the authority to evict a nuisance tenant if the owner fails to do so in a timely manner.  Thus, a leasing amendment enables an association to quickly and effectively remove problem tenants from the community.  This not only saves time, it also maintains a pleasant community atmosphere which helps to attract and retain good unit owners and tenants.

Scenario 2: The Delinquent Unit Owner

Unit owners who fail to pay assessments have a huge effect on an association’s bottom line.  A leasing amendment permits an association to collect rent directly from a unit owner’s tenant when the unit owner becomes delinquent.  This is particularly beneficial to an association because the association can do so without taking on the duties of a landlord.  Instead, the owner remains responsible for all duties as landlord.  Once the association has collected enough rent from a tenant to satisfy the owner’s obligations, the owner simply resumes collecting the rent.

Without a leasing amendment, an association will usually be forced to file a complaint against the landlord, obtain a judgment and attempt to execute a rent levy. Compared to the automatic assignment of rents that can be implemented through a lease amendment, this is a long and expensive process.   A leasing amendment solves the collections problem when a tenant is paying rent in a delinquent unit.  Not only can the association avoid going to court, the association has automatic access to a source for collections.  The collections obtained based upon adopting a leasing amendment can easily pay for the amendment itself—usually with the first rent check collected.

Why Not Just Pass a Resolution instead of an Amendment?

An amendment to an association’s governing documents takes more time and effort than the board passing a resolution.  Why not pass a resolution to deal with the issues outlined above?  The simple answer is that while a resolution may be easier to pass in the short term, it can create enforcement challenges down the road.  In order to be able to enforce the same type of provisions outlined above with a resolution, every tenant would have to sign a lease rider permitting the association to collect rent directly.  This creates excess administrative work and takes up valuable time—if it can even be accomplished.

Interest vs Late Fees

Posted on Author By Francis J. McGovern, Jr., Esquire

“Interest” and “late fees” are different things.  Governing documents may provide for interest and/or late fees.  Judges are sensitive to the difference.  Judges will not allow interest if only late fees are authorized in the governing documents and judges will not allow late fees if only interest is authorized by the governing documents.

Judges essentially conclude that “late fees” only accrue on late payments while “interest” is charged on a continuing balance.  Many management companies are not set up to accrue interest; nevertheless, posting late fees (if not authorized by the governing documents) is improper.

Late fee postings are particularly troubling when late fees are compounded because of a single missed or late payment.  These “late fees” should really be interest on the continuing balance.