A new condominium board member requests a repair bill be
paid without the approval of the other board members. This
bill is for work that was not part of your approved maintenance
projects, and you didn’t know about it. Do you appease him and
pay the bill? Or alternatively, do you suggest that this new board
member add the bill to the warrant for approval, which will be
included at the next meeting of the board?
Article 4 of the IREM Code of Professional Ethics (the Code)
covers protection of funds. Taking into account your fiduciary
responsibility under this article, the ethical option is to inform the
new board member that the bill must go through the approval
process at the next board meeting before the bill can be paid.
While it might seem like this is an appropriate occasion for an
exception—new member, lack of training, the small amount of
the bill—there is an order and approval for disbursing funds from
a condominium. It is your responsibility to follow the prescribed
procedures and refuse to pay the bill until it has been included in
the upcoming warrant.
This speaks to the need for training of new board members,
which should begin as soon as they join the board, so that these
types of issues can be avoided. It is also a good idea going forward for all associations to set up educational sessions at their
annual owner meetings to explain the condominium financial
process and how invoices are handled.
the Ethics of
By Colleen Costa, CPM
The Pool Committee decided to put up a sign in the pool area
without first discussing its content with management and the
board. The new sign states adult-only swim times in the pool
between the hours of 3 p.m. and 5 p.m. The Federal Fair Housing Act includes familial status as a protected class. Knowing
this, you believe the policy expressed by the sign is unreasonable
and thus is a fair housing violation, as it discriminates against
children. Do you ignore it? If not, what do you do?
Article 10 of the Code states that all members shall conduct
business with knowledge of and in compliance with all applicable
laws and regulations. As well-meaning as the Pool Committee is,
permitting the association to have an adults-only pool rule has
been held to be discriminatory and in violation of the Federal Fair
Housing Act. You are obligated to tell the board that the sign has
to come down.
With the help of a third-party manager hired by the homeowners’ association, condominium
operations can run like a well-oiled clock most of the time. However, once in a while, an
owner or group of owners decides to do things on its own, which can unintentionally bring
serious consequences upon the entire association and test the management team.
Colleen P. Costa, CPM, is principal of CPC Management, LLC in