Condo Media - December 2016 - 31

Because the owners were required to
purchase insurance, Siracusa argued,
they could not look to him to provide
coverage they should have obtained
for themselves.
The board's insurance resolution
said in part: "Each Unit Owner is
solely responsible to obtain his or her
own insurance coverage in appropriate kinds and amounts..."
The court found that wording didn't
actually require owners to obtain
insurance; it simply conveyed "a message" that they should, and that they
failed to do so at their peril. Their
failure to heed that warning, the court
said, did not preclude the owners from
seeking compensation for their loss.
"The court said the message didn't
bind them," Henry Goodman, a partner in Goodman, Shapiro & Lombardi,
LLC, says. "I would argue that if these
provisions were in the bylaws, they
would be binding."
By-law amendments may be
preferable, for mandates like this,
but winning owner approval even
for essential changes is notoriously
difficult. For that reason, some industry executives think the approval
requirement should be lowered. But
association attorneys-at least those
interviewed for this article-don't
much like the idea.
"Bylaw changes shouldn't be taken
lightly," Goodman says. "They affect
the ownership and living arrangements of owners. They alter documents on which owners relied when
they purchased their units. A high bar
for approving changes is appropriate
and necessary."
So how do boards win the owner
approval they need, especially for unpopular proposals (to increase fees) or
controversial ones, such as restricting
rentals or banning smoking? Douglas
Thayer (ARM, CPM), president and
owner of Massachusetts-based Thayer
& Associates, Inc. (AMO), suggests a
well-designed information campaign,
careful follow-up, and patience.
"You want to allow enough time
to get the support you need," he

"Bylaw changes
shouldn't be taken
lightly," Goodman says.
"They affect the ownership and living arrangements of owners.
They alter documents
on which owners relied
when they purchased
their units. A high bar
for approving changes
is appropriate and
necessary."
-Henry Goodman, Partner,
Goodman, Shapiro
& Lombardi, LLC
says. He has worked with association boards that have taken as long
as six months to collect the owners'
signatures required to approve a
bylaw change.
"If we don't get enough signatures
at the initial meeting," when the
proposal is outlined, Thayer notes, "we
suggest that board members make
phone calls, send e-mails, and go
door-to-door if necessary," to connect
with owners who haven't responded.
He also emphasizes the need to listen
carefully to what owners say and
modify the proposal, if possible, to address their concerns.
Equally important, he says, "We
make it easy for owners to approve the
change," with a software program that
allows them to complete the consent
form online and sign it digitally.
"There is a limit to how hard you
can press," Thayer acknowledges, noting that there are some measures that
some owners simply won't support.
"But the more you communicate with
them, the more time you devote to the
process, and the easier you make it
for them, the greater your chances of
success."

than charging interest on the amount
past due. "Everyone understands $25/
month," he notes. "The interest rate
requires a mathematical calculation and
some documents use rate benchmarks
that don't exist anymore."
To address hot button issues. The
obvious examples: Smoking, leasing restrictions (including short-term rentals,
that have been much in the news), and
drones, which have also been getting a
lot of attention. State initiatives to legalize recreational use of marijuana may
require associations that have adopted
bylaw amendments barring smoking to
specify that the ban applies to marijuana
as well as tobacco. Drones raise a host
of complicated questions (privacy and
safety among them) with which associations are just beginning to grapple.
In the rental area, many communities have amended their bylaws, or
considered amending them, to reflect
secondary market caps on the percentage of units in a community that
must be owner-occupied. Industry
attorneys advise communities to build
flexibility into these rental restrictions, recognizing that the secondary
market rules could change in the
future. "We add transition provisions,
safe harbor provisions, and emergency provisions," Lisman says. Instead of
specifying a maximum number or percentage of units that can be rented, he
suggests language stating that "units
may be rented as long as the total does
not violate the [secondary market]
standards in place from time to time."
Associations can decide which secondary market standards they want
to use, Lisman suggests, based on the
mortgage financing profile in their
community.
Lisman also recommends a grandfather provision, to deal with owners who
might get caught by a rule change ("If
Fannie reduces the rental cap, how do
you decide who gets to continue renting
and who doesn't?"), and language giving
boards some discretion to deal with
emergency situations. For example,
the owner who loses his job and has to
December 2016

Condo Media - December 2016

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