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ASSOCIATIONS : Ignore a difficult owner? Bad idea

November 15, 2009|Stephen Glassman and Donie Vanitzian

Question: We are an association with less than 10 units. We have an extraordinarily difficult owner in our midst. The things this person demands have been considered by our association's board and rejected with the support of the rest of the owners. But this owner keeps coming back with the same stuff over and over.

We are at a loss as to how to deal with this person. Some of us think this owner's behavior is something we must disclose if we sell our units. All of us would like to find a way to not have to deal with what we perceive as this person's craziness. Our management company charges us for this person's time and is often placed in a potential conflict of interest situation because of this person's demands. What should we do?

Answer: An owner's "craziness" doesn't exempt the board from dealing with the owner's queries and concerns. It is the duty of the board to be dealing with this owner, especially if your management company is charging extra for doing the job of responding to homeowners.

As difficult as it may be, the individual who complained is a homeowner, just like you. And just like you, he or she expects the board to listen to complaints and take them seriously.

There are no limits to the number of complaints a titleholder may bring to the board, and whether or not the complaints are valid, such as a request for documents, a board is required to treat each with equal seriousness. If boards categorically reject owner complaints and concerns, they breach their duty to the association and all the titleholders to act in good faith. A cavalier and judgmental approach could land a board and all titleholders in legal hot water.

Investigating all titleholder complaints and concerns is worthwhile, if for no other reason than that the insurance policy's Directors and Officers indemnification criteria may require it. The potential liability for a board's nonperformance or for acting in an imprudent manner may be too great to ignore.

Your opinions about this owner are purely subjective, and there is no obligation for disclosure of the type described to any potential buyer. Nothing prevents potential buyers from questioning homeowners about their future neighbors, the board of directors, the association, the management company and the association's attorneys. The best disclosures are ones that prospective buyers ferret out for themselves.

The management company's potential conflict of interest has not been identified, but the very fact that one appears to exist should be reason enough for the board to consider its termination.

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Send questions to P.O. Box 11843, Marina del Rey, CA 90295 or e-mail noexit@mindspring.com.

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