Rules for Condominium Government
Unit ownership in a condo project is subject to certain restrictive covenants (deed restrictions). These are usually spelled out in a recorded legal document called a "Declaration of Condominium" which is recorded at the county Register of Deeds office.
The Declaration of Condominium, also known as Master Deed; Declaration of Covenants, Conditions and Restrictions and Plan of condominium Ownership, when recorded, extends the condominium laws of the state to the property. It establishes an association, and gives authority and power to the Board of Directors to administer the affairs of the condominium.
The bylaws are the bible for the day-to-day operation of your condominium association. The bylaws provide for meetings and voting, the manner in which the condominium budget should be prepared, the determination and handling of assessments, the filing of assessment liens, the nature of insurance coverage and restrictions on the use of the units and the common elements.
The bylaws also provide that the board of directors of the association has the power to establish rules and regulations governing the use of the condominium.
Boards of directors usually will adopt rules and regulations that cover matters that either are not contained in the bylaws (such as how and where to store bicycles) or that need further amplification. For example, the bylaws may allow pets. The board can enact a rule spelling out the rights and responsibilities of pet owners.
The bylaws are viewed as secondary to the Declaration of Condominium. Changes in the declaration generally require consent of 100% of the unit owners. A change in bylaws, however, generally requires only a simple majority.
Common areas are fully described in the Declaration of Condominium of each project and vary widely. Generally, common areas include the land, main walls, foundations, roofs, hallways, elevators, swimming pools and other recreational areas and parking lots. Detached carports and garages are sometimes owned by the association and assigned to individual unit owners, and sometimes they are owned with the unit. Garage and carport spaces owned by the association and assigned to a unit owner, along with decks, patios and storage areas, are typically referred to as "limited" or "restricted" common areas. The use of these areas is limited to one unit owner even though the association retains ownership. Fees are charged on a monthly basis to each owner for the upkeep of the common property and payment of other common expenses.
The Declaration of Condominium contains the bylaws of the association. Condo Associations are created in condominiums through the bylaws. The association is usually operated as a nonprofit entity, but does not have to be. The bylaws of the association outline the means by which a board is elected to oversee the operation of the project and address the care and maintenance of the common areas. The bylaws also give the board authority to assess and collect necessary money to maintain the common area and maintain the financial stability of the project. The bylaws also provide for enforcement of unpaid dues or special assessments through the placing of liens on the individual units of those owners who fail to pay as agreed.
Condominiums are an exercise in community living, and the majority rules. You need to know if any of the restrictions in the by-laws will hinder the way you hope to live in your new home. There can be some very restrictive rules.
Even when something is permitted, there can be underlying restrictions. For example, a development might allow pets, but strictly limit ownership. It is very common for condos to restrict cats to one per unit or limit dogs by weight.
If you are buying a condo because of amenities such as the club house, tennis court, pool or gym, make sure that they can be used when and how you want to use them, and that they have not been abandoned by the Condo Association because of insurance or other problems.
Each unit owner is typically given one vote, but there may be other formulas used to determine the undivided interest in the common area. Other ways to determine undivided interests include:
- By living area. By dividing the living area of the single unit by the living area of all units.
- In equal shares. By dividing the total number of units into 1.
- By market price. By dividing the market price of the single unit by the market price of all units.
Regardless of the formula used, the ratio should remain fixed. Any ability for the unit ratio to change in the future could have an adverse affect on the individual apartment unit. Generally, a change in ratio would require a change in the declaration.
Note: Your real estate agent or even the closing attorney will not necessarily furnish you with a copy of the declaration of condominium unless you request it. You may want to directly consult your attorney and/or the condo’s homeowner’s association for an up-to-date copy of this legal document.