Page 9 - CooperatorNews Chicagoland Spring 2021

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many are coming from a rental environment
and wrongly see the association or corpora-
tion board as their landlord—which it most
certainly is not.
Condos vs. Co-ops: Who’s in Charge
Here?
To understand the role and powers of the
board, it’s important to understand the dif-
ference between condo and co-op ownership
versus single-family homeownership, as well
as the difference between condos and co-ops
themselves.
Single-family homeownership is very
simple: You buy a home and the land under-
neath it. There may be some interface with
local governmental authorities for provision
of such necessary infrastructure as utilities,
roads, and basic services such as trash collec-
tion, but as the homeowner, you’re in charge
of maintaining your property, both the struc-
ture you call home and the land upon which
it sits. If it snows, you remove the snow from
your driveway. If your water pipes freeze and
burst, you are responsible for repairing them.
You are the king of your castle—and all the
responsibilities that come along with it.
There is a short step between condo and
co-op ownership and single-family home-
ownership, and that is the HOA—the home-
owner’s association. In these communities,
the owners within the community own their
homes (which may be free-standing and not
attached to anyone else’s dwelling) outright,
but band together to assume certain respon-
sibilities that would not normally be attended
to by individual homeowners. These include
things like maintenance and management of
roads inside the community’s borders; a com-
munity clubhouse, pool, and any other pri-
vate amenities; and common elements that
may include utilities, facades, or landscaping,
depending on how the association is set up.
But generally, like single-family homeowners,
HOA members are in charge of their homes,
both inside and out.
From HOA membership, the next step to
a communal ownership structure is condo-
minium ownership. Like owners of single-
family homes and units in HOAs, condomin-
A LOOK...
continued from page 1
ium owners own their property outright—but
their owned property encompasses only what
is within the dividing walls of their units. All
other parts of the property, whether in a high-
rise, mid-rise, or townhouse setting, is owned
and maintained by the condominium asso-
ciation, of which the unit owner is a mem-
ber. The condominium owner is for the most
part free to sell—or even rent out—their unit
without the interference or approval of the
condominium association.
Co-op ownership is significantly more
restrictive. Co-op owners don’t own their
apartments in the sense of having a deed to
a piece of real property. They own
shares
in
a cooperative corporation that in turn owns
the building in which their apartment is lo-
cated, and are issued a proprietary lease for
their unit by the corporation. They can sell
those shares and transfer the lease applicable
to their apartment—but only to an approved
buyer. That approval is given (or withheld)
by the co-op’s board of directors—and most
boards flatly forbid renting or subletting
units, though there are some exceptions.
The ‘Landlord Complex’
Many owners—both co-op and condo
alike—have a misconception that their board
and/or manager functions just like a land-
lord, and that as such,
all
of their complaints,
minor or major, should be directed to either
or both of those entities. “The biggest mis-
conception condo owners have,” says Ellen
Shapiro, a partner in the law firm of Marcus,
Errico, Emmer & Brooks (MEEB), located in
Braintree, Massachusetts, “is that the board
exists to serve the owners individually. The
board is
not
the landlord; the board is rep-
resenting the community as a whole. It rep-
resents the organization, not the individual
owners—and many owners don’t understand
that. This problem is created when unit own-
ers have (or are given) the impression that
they can call management, the board, or
even the association attorneys at any time
and speak with them about anything in their
interest. The board governs the common el-
ements, not the individual units—although
decisions they make may affect individual
units. ‘If it happens in my unit, the board has
to deal with it,’ is not how it works. The board
is not your landlord, or your parent, and it
can’t fix your individual problems.”
This misunderstanding tends to be even
more prevalent in co-op buildings—which
is perhaps understandable, given how much
power co-op boards do actually have over
how their buildings are governed—but is no
less incorrect. Co-op owners in New York,
where the housing model is especially com-
mon, often move directly from being rental
tenants to being co-op shareholders with little
instruction and extremely limited knowledge
of who is responsible for what in their new
community. Accustomed for years to call-
ing the landlord when anything goes wrong
in their apartment, they’re often surprised to
learn that repairs that would be required of a
landlord—fixing a leaky faucet, for example,
or replacing a ceiling light fixture—are now
very much
their
responsibility, and are actual-
ly detailed in the proprietary lease they were
furnished with upon closing on the apart-
ment. The transition from a tenant mentality
to a cooperator mentality may take time, and
it is sometimes met with resistance along the
way.
“People need to realize that living in a co-
op or a condo is very different from renting
an apartment,” says Julie Schechter, an attor-
ney with the law firm of Armstrong Teasdale
in New York City. “Whereas a landlord re-
mains responsible for most repairs in a rental
apartment even though a tenant is occupying
it, the owner of a cooperative or condomini-
um unit is responsible for many of their own
repairs within the apartment.
“Typically, as a general rule of thumb,”
Schechter continues, “shareholders and unit
owners are responsible for whatever is within
the four walls of their individual unit, and the
cooperative or condominium is responsible
for everything in the common areas of the
property, and any building system that serves
more than one apartment. However, there are
some gray areas where it is not always obvi-
ous who is responsible for the maintenance
and repair; for example, HVAC systems,
plumbing risers and valves, and windows.”
Read the Fine Print
The pros agree that the best way for a new
shareholder or unit owner to educate him-
self/herself about individual responsibilities
is simply to read the governing documents
for the building—and if questions arise, or if
any of the legal terminology throws them, to
ask for clarification from their closing attor-
ney or another qualified legal expert.
“There’s no application process in condo
purchases” as there is in a co-op, says Shapiro.
“Condo buyers get a copy of their governing
documents from their attorney—if he’s worth
his salt—but supplying it isn’t required by law.
Typically, the documents can be found at the
local registrar of deeds. Attorneys should in-
clude these documents in a purchase and sale
agreement that the seller will provide to the
buyer. If they’re not in the purchase and sale
agreement, the seller has no obligation to do
so in Massachusetts.”
Shapiro adds that “more often than not,
buyers don’t review these documents. They
don’t understand the importance of them.
They often don’t want to pay their attorney to
review the documents for them either—but
that’s a big mistake. A good example of why
that is is when a purchaser has a dog, but the
community has a ‘no pets’ policy and the new
unit owner didn’t know that until after mov-
ing in.
“You can’t legislate or mandate taking
a class to learn about documents,” Shapiro
notes. “It would be unenforceable. It’s a ques-
tion of human behavior and mindset. People
don’t want to be told what they can and can’t
do in their home. Owners not in compliance
will often say, ‘I wish someone had told me
this—I’d never have bought a condomini-
um.’ If you’re not willing to pay your lawyer
to read and explain the documents, they
aren’t doing extra work for free”—and con-
sequently, you may wind up with some un-
pleasant surprises if you transgress rules and
continued on page 11
“The biggest
misconception condo
owners have is that the
board exists to serve the
owners individually.”
—Ellen Shapiro