This is something so near and dear to my heart that I couldn’t resist sharing some of the information I’ve found on the subject.  I think these traits are the key to a successful Condominium Board of Directors.

Openness and transparency should be the heart of a Board of Director’s ethical standards.  Why would any association keep records, funds, or meetings secret?  There should be no reason, after all, they have a fiduciary responsibility to the Council of Owners.  A successfully run board would make transparency a priority, but evidently this can be a big problem for some associations.  Boards get defensive and nervous when asked for records.  I know my dad always told me to “avoid the appearance of evil”, I think every board should do the same.  The keys to transparency are open communication, open spending, and open records.  I can’t tell you how many articles I have read that say that secrecy of board members may give an exaggerated sense of empowerment.  They may forget their function is administrative.

Most owners don’t care about seeing records unless they suspect something is wrong.  So, when asked for records, some boards get a little up in arms.  They may be concerned that someone may find something in the records that could lead to them being accused of doing things improperly.  Unfortunately, most people mismanage their own money so, when they are elected to the Board, there is a very good possibility that they mismanage the association’s money.  They are secretive because they are embarrassed and they were hoping no one would notice.

Another reason is simply a lack of knowledge.  Some boards do not understand the legal requirements and their duty to provide records to the owners. We condominium owners in Montgomery County are fortunate that training is required, they saw the need and they implemented it – good for them, other jurisdictions have yet to follow.

Of course, we have other laws and regulations that should guide Condominium boards towards openness and transparency.  Maryland has its Open Meetings Act, sometimes referred to as the “Maryland Sunshine Law” – it requires many entities, including community associations, to hold open board meetings.  Many articles on the subject warn that boards of directors must not meet in the shadows, they must follow the law and not hold meetings behind closed doors.  The exception is when the board directors need to meet with the board’s attorney to seek legal advice, or, if the board is meeting to discuss employee and personnel matters, or owner’s personal information.

Also, financials should be disclosed at each board meeting. Approval for the expenditure of funds should always be a resolution of the board in an open meeting. (That means any association money spent should be voted on at the meeting by the board directors in front of all the members.) Contracts – including management, maintenance, and security to name a few – should also be voted on and approved in an open meeting of the board. Further, the vote should be recorded in the minutes and become a permanent record of the association.

Each board member is equally responsible and liable for the association affairs.  I can’t find one good reason why any board member should not have access to records “at will,” as long as protections are in place to preserve the integrity of the records.”

During my research, I have found that many managers and attorneys will refuse to work with a secretive board since it creates potential liability for all involved.  Some even try to educate the misled board members.  Unfortunately, there will always be the attorney or manager who looks the other way when the board of directors acts improperly, and this is unfortunate.

Successful board members should be honest and open and willing to work with their neighbors and fellow owners and respect their ideas and concerns.  There is a common goal between board members and owners, there’s no personal agenda, it’s to do what’s best for all in a manner that will keep the majority happy.

“The very word, secrecy, is repugnant in a free and open society, and we are as a people, inherently and historically opposed to secret societies, to secret oaths and to secret proceedings.”  – President John F. Kennedy

 

In the last year, I’ve had the opportunity to meet many of my fellow owners and residents, and I must say they are a very nice group of people.   The common thread of many of the conversations I’ve had with them revolves around people being unaware of how many of the rules, policies, improvements and equipment came about.  Well, until I was elected to the board I had never even attended a meeting where rules, policies, improvements and equipment were discussed and voted on by the Board of Directors, so I was curious too.  Certainly, someone must know when and how these things came about, shouldn’t they?

So I turned first to the bylaws to see what I could find.  To my delight, I realized that Article XIII, Section 5 was titled “Inspection of Books”, which stated that records shall be available for examination by the unit owners.  Just out of curiosity, I checked the Maryland Condominium Act.  There it was in Article 11.116 and everywhere else I looked, it was clear that an owner has the right to see how these things came about.

Every owner has a right to view documents and books, so I sent a letter to management, who is the keeper of our records, and they asked me to fill out a small form.  I requested minutes and resolutions from January, 2013 to present. I had to pay a reasonable copying fee of around $30 and within 21 days my copies were ready for me to pick up.  Wow – quite an eye opener and I definitely found a lot of the information I was looking for and more!

So if you really want to know where security fobs, cameras, rules or anything else came from you should request copies too.  The documents hold all kinds of interesting facts about what the board has done with your money, your rules and your property. These laws are created to protect you, it’s your right as an owner.  You should certainly feel free to exercise your right to request minutes, resolutions and/or books and other financial information.

Much to my surprise, I found that our great state of Maryland has devised a great plan for how condominiums make rules. Obviously, rules are needed, after all there are a bunch of people living under one roof – pretty close quarters, closer than your average neighborhood!  Common community owners frequently have to share a parking lot, trash area, lobby, elevators, hallways and maybe more and this sharing needs to be somewhat orderly to make most everyone happy.  We remember the old saying that “you can please all of the people some of the time and some of the people all of the time, but you can’t please all of the people all of the time.”  So, it obviously takes some finesse to keep the masses happy.

Many condominiums appoint a committee to speak with the residents and come up with a list of logical rules that will make everything run smoothly. Once the committee is finished and the board puts in its two cents, the board must send a draft of the proposed rules to the entire community for comments and an open meeting held for the purpose of discussing the new rules.  The Maryland Condominium Act (MCA) section 11.111 outlines the procedure that must be followed for the rules to be finalized.  That procedure includes these steps:

1. The board must send proposed rules to each unit owner.
2. Notice must be given that the unit owners are permitted to submit written comments on proposed rules.
3. An open meeting must be held to allow each owner or tenant to comment on the proposed rules and each owner must receive written notice at least fifteen days before the open meeting is held.
4. After considering the owner’s comments and if no changes are needed, the board will vote in an open session to accept or reject the rules.

If some owners do not agree with the board’s decision to pass the new rules, there is a system for that too. To nullify a rule or stop it from being final, this is the way it has to go:

• To initiate a vote to vote down the new rule, 15% of the owners must sign a petition for a special meeting within 15 days of the open meeting.
• The rule(s) are not valid unless the requested special meeting is held.
• A quorum of owners (no mention that proxies can’t be used for this) must attend this special meeting.
• If at least 50% of the unit owners present at that meeting disapprove the rule and if they represent at least 33% of the total votes of the owners the rule is considered void.
• Any unit owner can ask for an exception to the rule, the request must be done in writing to the board within 30 days of the rule being passed.

Hopefully this will help all the owners feel they have a voice in the rules and regulations of their community. From what I’ve read, many of the complaints are a result of owners feeling that a board of three or five people have the right to give orders to the entire Council of Owners.  Let’s see how it goes for us!

Take a look for yourself, here’s the link: http://sos.maryland.gov/Documents/CondominiumBooklet.pdf

 

Boy there is a lot of stuff to read when you decide on a new interest, but it’s kind of like a mystery and you get wrapped up in it. When I was younger I would research a little and assume the rest . . . well now that I’m older and wiser I know too well what assume does!   These days with my extensive maturity, it seems I tend to take the detective approach, once I find a little information I go on a quest to find out all I can.  I need the facts!  So, after I finished the CCOC training and then the bylaws, I realized I had to read the Maryland Condominium Act (MCA), which lies in the middle of the Maryland Code.  It has much more legal wording than the user friendly CCOC training, but I’ve worked in a law firm for more years that I care to mention so it was not too difficult, and what a plethora of information.

The MCA gives very specific information regarding open and closed meetings, notices, common areas, rules and regulations, fines, the budget, distribution of written information, insurance coverage, books and records, voting, proxies and many other issues.  All these regulations, if different than the bylaws, can override the bylaws that were established by the developer.  Of course, that’s not all, there’s also the CCOC Resource Guide and the Maryland Homeowners Association Act, and they have additional information too!

In the next few posts l will breakdown areas covered in the Bylaws, MCA and CCOC and we’ll see how things are supposed to go!

By: Deb Munsey

My first experience with voting for a Board of Directors came on 6/17/2016 when I attended the annual meeting of Mutual 22, Condominium of Rossmoor, and was elected to the board. Of course, before I became a candidate I had to do a lot of research. I wondered, what does a board member do?

As soon as I started to poke around I found that Montgomery County Maryland Department of Housing and Community Affairs has a Commission of Common Ownership Communities (CCOC). Their mission statement told me they were “committed to providing owners, tenants, residents, board of directors, and management companies of self-governing residential communities with information, assistance, and impartial dispute resolution programs that: Improve the quality of life in the community; Strengthen the self-governing community structure and; Enhance the value of residential property in community associations.  The CCOC provides these services to the public with integrity, transparency, and a commitment to the highest ethical standards.”

The CCOC had just established a new regulation that every board member elected in 2016 had to take on online training course within 90 days of being elected. So even though I hadn’t been elected yet I thought, why not take it, it will probably give me the information I’m looking for. So I took it and though it was long and time consuming, it was absolutely great!

As a matter of fact, the training is free and I think all condominium owners should take it. It covers pretty much everything about what the board’s responsibilities are and what the owner’s responsibilities are and how condominium business is supposed to be handled. Of course, that training led me to start looking further into condominium law and I learned so many things that had never before crossed my mind. It made me see how much responsibility and trust is placed on the board of directors. They are responsible for doing things accurately and telling the Council of Owners that it’s being done right!

It is a funny thing that such a system has been devised that we, the owners, give all our power to a few volunteers we might not even know, who haven’t been vetted in any way, yet we allow them to make decisions on our behalf! The training was a real eye opener and just the tip of the iceberg of information about condominium governing.

It definitely put me well on my way to understanding what a board member does!

If you’re interested in the training follow this link: http://www2.montgomerycountymd.gov/ccoc-training/