Small Condo Complexes Can Quickly Become Nightmares

When considering buying a condo in a small complex, keep in mind the fewer the units the more potential there is for nightmares.

On the surface, everything may look fine in a complex with fewer than 50 units, but things can turn ugly quickly.

I am sure that the handful of people who purchased condos at 2020 Broad Street in Hartford had seen this column before purchasing their units in a complex with only 9 homes they would have investigated a lot closer.

And if they had, they would have found the associations financials in shambles, maintenance fees uncollected, no capital reserves, unpaid water bills, a lack of meeting minutes, contradictory financial documents, no budgets, and no bylaws, rules or regulations available. It raises questions as to what due diligence the real estate agents involved in the sales provided.

The tiny association and some of its owners are now in court suing the developer, who still owns one of the units. They claim that the developer failed to pay condo fees, and never provided full financial documentation or even bylaws to the people he sold units to. In total they are seeking more than $300,000 in damages.

Despite state laws requiring the developer to provide the association with full financial records as well as a complete set of bylaws within 30 days of turning the association over to the unit owners, few documents were given, the suit says. It is not even clear when the association was turned over to the owners.

Attorney Kenneth J. Krayeske of Meriden, who represents the Metro 2020 Condominium Association, says the bookkeeping had been so haphazard that unit owners have no idea what the association’s financial situation is. Of course all this makes it difficult for the owners to now sell their units.

The suit claims that Charles J. Cowles of Glastonbury, who converted the apartments in condos, owes the association $93,675 from 1989 to the present on unpaid fees to the association including interest.

The suit says that Cowles was the president of the association until this January and that his children were two other officers. His son James Cowles served as acting president during the past few years because the father was infirmed. The daughter Kathy Ann Cowles, was secretary until January. The children also did work for the complex, the suit says.

Attorney Patrick Tomasiewicz of Tomasiewicz and Fassano of Hartford, who represents the Cowles family, declined to comment on the suit.

In January owners Chrystal Gittens became president and Angela Williams became secretary and attempted to piece together the documentation.

The two, according to the suit, repeatedly requested bylaws and financial documents from the Cowles family, but received only a small portion of them.

The Cowles children – the suit says – claimed this year that the family gave up control of the complex in 2009 and had turned it over to the present owners.

They backed up their claim by turning over alleged minutes from an August 2009 meeting, which the new owners claimed never took place. They said the handoff took place this year.

“At the January 25, 2012 meeting, defendant Kathy Ann Cowles and Defendant James Cowles turned over a black plastic accordion file about 3.5 inch thick which they said contained all documents of the association they had in their possession,” says the suit claiming that all meeting minutes, agendas and financial records going back to 1989 should have been provided.

And, the suit says, the bank statements turned over only went back to January 2010 while expense receipts only went back to 2009.

Another document, the suit says, claimed that unpaid fees totaled $28,800, but there were no documents verifying who owed how much.

The defendants “failed to produce any bank account statements, ledgers or other accounting records which would back up claims of unpaid fees and show the current financial status of the association,” the suit says.

The issues are further complicated as a memo was given to the owners last January claiming that an Attorney James Ripper had been given all the documents in August 2009, but Atty. Ripper died a few months later and no one knows what happened to those documents.

Then there is a question as to how much money should have been in the reserves account. Each unit is required to pay $150 a month of for a total of $16,200 a year in income. Expenses were apparently between $8,000 and $12,000 a year.

But at the January meeting Kathy Ann Cowles only turned over a check for $960, which according to the suit, means about $125,000 in capital reserves are missing.

While such serious issues are rare even in small complexes, other problems can be just as troubling.

I have had complaints from condo owners about how the president of small complexes act like dictators. Other complaints are about complexes where no one is in charge and no one knows what is going on.

One owner recently wrote me that her condo association can’t kind a single copy of its bylaws.

So keep in mind, the larger the complex the safer you are because there is more money to hire a professional management firm and people who are available for the board of directors. The smaller the complex the more risks that you will be left with a mess you may not be able to get out of.


3 Responses to Small Condo Complexes Can Quickly Become Nightmares

  1. Josea says:

    How can we get information without it costing an arm and a leg. I requested copies of minutes and financials for the past two years and was told it would cost almost $400. $70 per hour with a minimum of 5 hours plus tax plus copying costs. I was also told I may not get everything since the association changed management companies. I would think board members would have copies of minutes and financials but apparently not.

    • Chris says:

      Join the club, I hear you. Had the same problem a few years ago. We even hired an attorney and still did not get our records. If you live in a self managed property you basically have no rights. Who can help?
      Unless of course you get on the board and somehow manage it. Best of luck to you.

  2. diane Salls says:

    Try living in Pine Lake Manor in Bristol there are 6 units. They have dropped insurance back in 2010 NEVER told a sole until buildings roof leaked,treasurer refuses books, maintenance is slim to none. All lawyers want is money to help. Who has thousands of dollars up front.

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