Condo Media - July 2020 - 34

The Region

NEW HAMPSHIRE

Granite State in
a COVID-19 World

Financial Management and the Law
[by Gary M. Daddario, Esq., CCAL]

I will assume that by now you are
tired of hearing about COVID-19
and all of its negative impacts on all of
our lives. I will also assume that you have
already come to expect higher prices
for goods and services and, in a "perfect
storm" sort of way, increased delinquencies among your association's residents.
So, I will quickly turn to mentioning
some aspects of New Hampshire law that
you should keep in mind as you make
your financial plans.
EMERGENCY ASSESSMENT
First, note that the newest version of
RSA 356-B:40-c, III, does provide a
procedure by which a board can levy an
emergency assessment at an association.
Although the procedure entails specific
voting requirements, notice to the community, and a strict limitation on the
use of the funds (only for the emergency
purposes described in the board's vote),
it hopefully provides some relief to board
members to know that it is possible to
raise funds if the association finds itself
staring down yet another emergency. If
the need arises, I recommend consulting
with the association's legal counsel, as a
condominium law practitioner can easily
provide the board with the specifics of
the process and a procedure for complying with the details of the Act.
SPECIAL ASSESSMENT
Next, I caution boards to keep in mind
the new language of RSA 356-B:40-c, II.
Here, the New Hampshire Condominium

34

CONDOMEDIA July 2020

Act now requires that a board wishing
to levy a special assessment undertake
the same procedure as that for passing
the annual budget. Yes, this means an
adoption by the board, followed by notice
to the community and, ultimately, a community meeting at which the possibility
exists that the community rejects the
special assessment. Now, chances are that
circumstances were not particularly great
for your association if you were looking
to levy a special assessment, but your
problems could increase drastically if a
needed special assessment is attempted
and fails. So, particularly during these difficult times, prudence dictates that boards
engage in financial planning designed to
avoid the need for special assessments.
It is my belief that the simplest way to
plan to avoid the need for special assessments is to be generous in your budget
line items. This practice just makes logical sense anyway, since most of us don't
get consistently surprised about how
our required goods and services cost less
than expected. However, in a world of
increasing prices, increasing delinquencies, and a full-blown budgetary process
required for special assessments, now is
an excellent time to be generous on the
budget line items. Consider this - the
worst-case scenario that results from
over-budgeting any of your line items
is that the association has some funds
remaining at the close of the fiscal year.
Not a bad problem to have and, in fact,
easily solved by transferring any surplus
funds to your reserves.

PLANNING FOR THE FUTURE
Finally, and please forgive what may
look like a sales pitch at first glance, New
Hampshire associations may wish to set
some funds into their "legal" line item.
Although the law allows you to recoup
legal fees from a delinquent owner or one
who misbehaves, cases that hit the court
system always involve some element of
uncertainty. Given that the pandemic
created almost universal negative impacts, it would not be surprising to find
courts somewhat sympathetic to unit
owners in the near future. This means
that associations might find themselves
bearing more of their own legal expenses.
Another reason to budget for some legal
expenses is to amend your governing
documents. The pandemic experience
has caused some boards to seek amendments providing for certain "emergency"
powers in the event of a future state of
emergency here in New Hampshire. It
could certainly help in a future crisis if
questions regarding your ability to postpone meetings, hold virtual meetings,
and tighten temporary restrictions on
use of common areas were explicitly set
forth in your governing documents. Thus,
you might want to make such amendment before the next need arises.
n GARY M. DADDARIO, ESQ., CCAL,
IS A PARTNER WITH THE LAW FIRM
OF MARCUS, ERRICO, EMMER &
BROOKS, P.C. AND CHAIR OF THE
NEW HAMPSHIRE LEGISLATIVE
ACTION COMMITTEE (NHLAC).



Condo Media - July 2020

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Contents
Condo Media - July 2020 - Cover1
Condo Media - July 2020 - Cover2
Condo Media - July 2020 - Contents
Condo Media - July 2020 - 2
Condo Media - July 2020 - 3
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Condo Media - July 2020 - Cover3
Condo Media - July 2020 - Cover4
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