Condo Media - May 2022 - 36

Industry Perspective
Scrambling
to Respond
EXPERTS AGREE that decades
of deferred maintenance and
aging infrastructure at the
Champlain South Tower in
Surfside contributed to the fall
of the 12-story building that
killed 98 people. As a result,
Fannie Mae and Freddie Mac,
the two companies that back
a majority of residential mortgages
in the United States,
updated their mandates for
loans secured for units in condominium
and cooperatives.
These new requirements apply
to community associations that
have fi ve or more attached
units. Communities with free
standing individual homes
are not subject to these regulations.
Their updated condominium
questionnaire is meant to
gather information related to
the issue of signifi cant deferred
maintenance required under
the new requirements. They
also ask about any current or
pending special assessments
intended to pay for major
repair and reconstruction.
Associations are now left
scrambling to respond.
What do these new rules
have to do with condo
miniums in New England?
Are property managers obligated
to comply? How should
associations handle these new
requirements? Two industry
experts shed light on the concerns
affecting the new rules
for individual condo buyers.
36 CONDOMEDIA May 2022
SCOTT WOLF, CMCA, AMS, PCAM
CEO, BRIGS, LLC, BOSTON, MASS.
WHEN AN OWNER GOES TO SELL HIS UNIT, the lender, if federally backed,
will send the questionnaire to the association. The new questions present the challenge.
Scott Wolf, who heads a property management company serving 14,500 units
in New England, says unit owners are going to their boards asking questions; boards
don't have the answers. Some owners have threatened to sue if they can't sell.
Wolf explains, " Property
managers and association
board members are being
asked questions they aren't
qualifi ed to answer; they
aren't structural engineers.
The questions are too broad.
There is no way to answer them without taking on liability. We can't answer questions
beyond the scope of our expertise. It's making it diffi cult for people to sell or
refi nance their homes. "
Wolf is fi nding, however, that most trustees and owners understand when he
New requirements apply to
community associations that
have fi ve or more attached units.
explains the reasoning behind the new rules: to protect borrowers from physically
unsafe or fi nancially unstable projects. He says that associations and property
managers need to be aware that this matter of new requirements and questions
is an issue everyone is working to resolve. " We all need to be patient. It will work
itself out over time; it's just a matter of when, " he says.
The new questions are written with a high-rise condominium near the ocean
in Florida in mind and fail to take into account variations in structures. Wolf sees
some possible future scenarios. He says, " Fannie Mae may change its questionnaire
to make it more reasonable, modifying the questions to be less broad,
and allowing for different types of building construction. " Either way, he notes,
associations will have to have reserve and engineering studies done, make repairs
if needed, and increase their budgets to have the studies, work, and reports done.
" Everyone called counsel on this one, " adds Wolf. " When someone wants
to sell, it's best to let counsel deal with the lender. "
Condo Media - May 2022

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