Condo Media - January 2012 - 42
LEGAL
by Saul J. Feldman, Esq.
Amending Condominium Documents
Provisions Most Often in Need of Review
ondominium documents are drafted by the attorney for the condominium developer, or the attorney for the condominium converter, whose main goal is to draft documents that maximize flexibility and marketability and minimize liability. Usually little or no consideration is given to whether the documents cover operational matters properly. For that reason, it is often beneficial for condominium trustees and unit owners to review and amend the documents. FHA, given its large market share and new FHA regulations. • Insurance Coverage Insurance coverage has become important. The documents should describe what the Master Insurance Policy must cover, as well as the deductibles and the types of insurance the unit owners could, or must, get on their own. The insurance provisions, therefore, need to be carefully reviewed. For example, many documents provide for a fidelity bond. A fidelity bond is more expensive than fidelity insurance. The documents should be amended to allow for either a fidelity bond or fidelity insurance. • Quorum Quorum requirements are often too high. This makes it difficult to hold a meeting of the unit owners. The quorum requirements should be lowered. Many condominiums require 50 percent of the unit owners (based on percentage of ownership in the condominium) present in person, or by a written proxy, in order to have a quorum. It is often difficult, if not impossible, to obtain 50 percent. Documents should be amended to require a smaller percentage, such as 25 or 30 percent. • Leasing Leasing is often a troublesome matter in a condominium. The documents
C
Topics Often Amended in Condominium Documents:
• Compliance with FHA As 30 to 40 percent of all home loans are now Federal Housing Administration (FHA) loans, it is important that condominium documents comply with FHA requirements. Also, attention should be paid to compliance with Fannie Mae and Freddie Mac. Portfolio loans, which are held by the original lender, are becoming the exception rather than the rule. In the past, lawyers would put language in the condominium documents that the documents were intended to comply with FHA, Fannie Mae and Freddie Mac. I never really understood why this was done or what it really accomplished. If the documents violate FHA and other agency requirements, such self-serving language does not correct the violation. Rather, the documents need to be reviewed and, if necessary, amended to actually comply with FHA and the other players in the secondary mortgage market. This is most important with respect to the
42
CONDO MEDIA • JANUARY 2012
Condo Media - January 2012
Table of Contents for the Digital Edition of Condo Media - January 2012
Condo Media - January 2012
Table of Contents
From the CED’s Desk
President’s Message
CAI News
CAI Regional News
Asked & Answered
Red Tape
Vendor Spotlight
Homeowner’s Corner
Communication
Legal
Operations
Advertisers Index
Classified Service Directory
Condo Media - January 2012 - Condo Media - January 2012
Condo Media - January 2012 - Cover2
Condo Media - January 2012 - Table of Contents
Condo Media - January 2012 - From the CED’s Desk
Condo Media - January 2012 - 3
Condo Media - January 2012 - President’s Message
Condo Media - January 2012 - 5
Condo Media - January 2012 - CAI News
Condo Media - January 2012 - 7
Condo Media - January 2012 - 8
Condo Media - January 2012 - 9
Condo Media - January 2012 - 10
Condo Media - January 2012 - 11
Condo Media - January 2012 - 12
Condo Media - January 2012 - 13
Condo Media - January 2012 - 14
Condo Media - January 2012 - 15
Condo Media - January 2012 - 16
Condo Media - January 2012 - 17
Condo Media - January 2012 - CAI Regional News
Condo Media - January 2012 - 19
Condo Media - January 2012 - 20
Condo Media - January 2012 - 21
Condo Media - January 2012 - 22
Condo Media - January 2012 - 23
Condo Media - January 2012 - 24
Condo Media - January 2012 - 25
Condo Media - January 2012 - Asked & Answered
Condo Media - January 2012 - 27
Condo Media - January 2012 - Red Tape
Condo Media - January 2012 - 29
Condo Media - January 2012 - 30
Condo Media - January 2012 - 31
Condo Media - January 2012 - 32
Condo Media - January 2012 - 33
Condo Media - January 2012 - 34
Condo Media - January 2012 - 35
Condo Media - January 2012 - Vendor Spotlight
Condo Media - January 2012 - 37
Condo Media - January 2012 - Homeowner’s Corner
Condo Media - January 2012 - 39
Condo Media - January 2012 - Communication
Condo Media - January 2012 - 41
Condo Media - January 2012 - Legal
Condo Media - January 2012 - 43
Condo Media - January 2012 - 44
Condo Media - January 2012 - 45
Condo Media - January 2012 - Operations
Condo Media - January 2012 - 47
Condo Media - January 2012 - 48
Condo Media - January 2012 - 49
Condo Media - January 2012 - 50
Condo Media - January 2012 - Classified Service Directory
Condo Media - January 2012 - 52
Condo Media - January 2012 - 53
Condo Media - January 2012 - 54
Condo Media - January 2012 - 55
Condo Media - January 2012 - 56
Condo Media - January 2012 - Cover3
Condo Media - January 2012 - Cover4
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