Taylor, Eldridge & Endres PC | Blog | Long Island Co-Op Lawyers

Private Mortgage Insurance (“PMI”) FAQ’s

What is PMI?

PMI is a type of mortgage insurance policy that provides compensation by the insurance company to the Lender in the event a borrower defaults on the mortgage. PMI does not protect the borrower from having to pay the mortgage if they are unable to do so. It is an insurance policy only for the Lender and has no benefit to the borrower other than to allow a borrower who would not normally qualify for a mortgage to be approved for a mortgage. Typically, PMI is a monthly amount paid by the borrower with the mortgage payment or a one-time payment made by the borrower at closing. Sometimes, the bank will pay for the one-time payment option, but this is not common.
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Paws for Thought

Community association Board members may squawk at the idea of allowing pets in their no-pet community, or at making communities more pet-friendly, but instituting such changes should not necessarily be a concern.

Rather, Boards may want to consider implementing changes to their pet policies to accommodate the growing population of pet owners. In keeping with this trend, many community associations are creating amenities for pets, as well as imposing reasonable and workable restrictions on pets and their owners.
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AVOIDING “US v. THEM” PART I – INCLUSION

Too often, hardworking community association Boards find themselves at odds with their homeowners.

Conscientious Board members, who are volunteering their time, talents and energy to better the community, wonder why their efforts are unappreciated and why they are constantly under attack. The tendency is to “circle the wagons,” which only serves to perpetuate and exacerbate the feelings of animosity between board members and the constituents they are trying to serve.
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Grandfathered … or not?

A Westchester County cooperative apartment corporation decided to prohibit washing machines in apartments by creating a new House Rule.

The basis for the new rule was a finding by the Board that the plumbing system in the building was “not sufficiently robust” to handle washing machines. The co-op’s Board of Directors, however, took no steps to demand that shareholders remove any existing washing machines from their units. Implicitly, the Board appeared to have granted these shareholders some form of “grandfather” status.
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CLOTHESLINES and other new technologies

Most Long Island community associations have a House Rule that prohibits homeowners from hanging their laundry outside to dry on a clothesline.

Most Board Members in these communities would be dismayed to learn that, in community associations in other parts of the country, such rules are being eliminated — either by popular demand or legislation.
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Community Associations in the News

You may have read recently about the homeowners association in Las Vegas in which a teenage resident was severely injured in a playground accident (see the July/August 2018 issue of CAI’s Common Ground Magazine, pages 20-25).

The jury rendered a $20 million verdict for the plaintiff, which overwhelmed the HOA’s liability insurance policy limit of $2 million.

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Board Member E-mails

While e-mail has become one of the most common and preferred means of communication, it may not always be the wisest or safest method for board members of community associations. At the very least, certain precautions need to be taken.

First and foremost, boards should not be making decisions and taking votes by e-mail. Decisions need to be made at a board meeting. A decision made by e-mail, if challenged, will likely not be upheld in a court of law. The only instance when an e-mail vote might have some validity would be in an emergency situation, where an issue arises that could not have been anticipated and requires immediate attention. Any such decision should be confirmed in the minutes of the next board meeting – ideally held soon after the vote. Even under such circumstances, a conference call of the board members would be preferable to an e-mail decision. Continue reading “Board Member E-mails”

Broken Pipes = Headaches for Condominium Boards

With the recent spate of frigid temperatures, we have received numerous calls from condominium Boards of Managers about incidents of broken pipes due to freezing.

When the pipes thaw, water floods and damages the unit and, often, neighboring units and common areas. The board invariably accuses the homeowner(s) of negligence for failing to properly winterize the home before heading south for the winter, or for setting the thermostat too low. However, even if the claim of homeowner negligence is correct – and it usually is – the burden for fixing the unit in most communities will fall upon the board and its insurance coverage. Continue reading “Broken Pipes = Headaches for Condominium Boards”

A Board’s Map To Successful Collection Of Common Charges And Assessments In Condominiums And Homeowners Associations

COLLECTIONS OVERVIEW

In order to successfully operate a planned community, payment of certain expenses associated with the operation, maintenance, and control of the association are required. The Board creates a budget for these expenses, including proper reserve funding, and thereafter assesses the owners. The obligation of the owners to make payment of these assessments and the liability for non-payment is found in the association’s governing documents.

If too many owners fail to make payment of their common charges and assessments, the association may be unable to pay its bills and keep the community running in the fashion and at the level the owners expect. Whenever an owner fails to make payment, all other owners must pay that delinquent owner’s share. As a result, Boards have little choice but to move forward against delinquent owners. Failure to do so can be seen as a Board not satisfying its fiduciary obligation and affirmative duty to the community. Continue reading “A Board’s Map To Successful Collection Of Common Charges And Assessments In Condominiums And Homeowners Associations”

New Conflict of Interest Law

The NYS Legislature recently passed a new law, signed by the Governor in September 2017, which purports to impose conflict-of-interest reporting requirements upon condominiums and cooperative housing corporations.

The law requires, first of all, that at least once each year, each “director” of a condominium or co-op board receive a copy of the Related Party Transactions section from the NYS Not-for-Profit Corporation Law (Section 715) or, for a co-op board, a copy of the Interested Directors section from the Business Corporation Law (Section 713). These provisions are similar to each other and prohibit boards from entering into contracts where a conflict of interest exists, unless the conflict has been disclosed by the interested director. Continue reading “New Conflict of Interest Law”