Owner locked in losing battle with condo board
Neighbors At War
02 January 2016
by Donie Vanitzian (LA Times columnist)
Here is what can happen to a condo owner who gets into a dispute with the board that spins out of control. When
you have an issue with your board, you have to be careful and get legal
advice from an experienced condominium lawyer very quickly.—editor
Question:
Eleven years ago I bought the perfect townhome. I read
all governing documents, attended board meetings, talked to owners then
closed escrow. After I moved in, the board fined me for something
preposterous. I paid it just to get them off my back.
Since then, reserve accounts have been depleted and special assessments
reign. There’s perpetual maintenance but nothing gets fixed.
My countless meetings with the board yield nothing of consequence. I
preface letters to the board “in anticipation in litigation” but no one
responds. The same board stays in power because of inertia and a
complicit management company.
I’m now acting as my own attorney in a dispute with the association. I
want to sue the board but can’t afford it. My home has become a paper
jungle of file cabinets, faxes, copy machines, and chalk boards.
All my savings has been spent fighting this association and I lost my
job because of it. How did I get in this mess and what can I do
about it?
Answer:
Perhaps you were too focused on the perfect town home and not
enough on pre-purchase diligence about the homeowner association’s
functioning. Concentrating on tenure of the board, management, accounts
payable and receivable, turnover sales, maintenance issues or the lack
thereof might have proved more valuable in making a decision on whether
to buy.
Before committing to a purchase, buyers need to realize that nothing
stays the same. Governing documents could change during escrow or after
purchase and nothing prevents owners from being fined after newly
moving in.
Upon realizing there were problems, you should have catalyzed joint
action with like-minded titleholders to effect meaningful change
without litigation. If self-help efforts don’t work, regroup and try
again. This is usually impossible once you get into the court system,
making litigation a riskier option.
Quietly gather evidence
When a lawsuit is contemplated, effective litigation starts
strategically: Owners carefully and quietly gather evidence while
evolving a plan and maintaining a low profile. Documentary evidence is
crucial and far more effective than proving who-said-what-when.
Low profile means not telegraphing your potential suit; that can cause
a board to alter its public behavior and become more oppressive toward
you, as well as to hide, fabricate or destroy evidence.
Threatening litigation is rarely effective against business entities or
bad directors. Not only are bad boards accustomed to such threats, they
also can defend against litigation with the association’s deep pocket
or insurance.
Even if an insurer believes that a board’s liability is not covered, it
may still defend with a reservations-of-rights, which means that it
will seek to recover its legal expense from the association regardless
of the outcome. Against such resources your threats stood to have
little effect, as the past 11 years bear out.
Long history of threats
Your long history of threats has not only alerted the board and its
counsel to your legal position, but also put most all your evidence in
their hands, giving them a big and cheap head start to fashion defenses
should a suit be filed.
Given your history, any suit you pursue has become much harder and more
expensive. You provided your evidence for free while enabling the
opposition to force you into expensive discovery to obtain theirs.
Unfortunately, you bit off more than you could chew, in effect acting as your own lawyer and naively prejudicing your cause.
The right letter
No doubt early on you thought the right letter would induce the board
to see the error of its ways. This rarely happens. Despite more and
ever stronger letters, such battles can become an addiction for some
titleholders.
This sorry, protracted trail renders the case especially unappealing
for all but hourly-fee lawyers. Even so, the extensive history and
documentary volume would be a quagmire for any attorney.
Michael
Krieger, a Los Angeles lawyer practicing business contract, technology
and intellectual property law, co-wrote this column. Vanitzian is an
arbitrator and mediator.
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