CONDO GOVERNING DOCUMENTS

Your condominium was created under what's called the Condominium Act, the legal framework for how a condominium is structured and operated. Under the act, a condominium has three governing documents:

• a declaration
• the bylaws
• the rules and regulations, commonly called the "house rules"

The declaration defines those parts of the property that make up the common elements, the limited common elements and the units themselves. It also sets forth limits on the ability to sell and lease units in the condo, contains floor plans for each unit and sets forth what's called "the allocation of common interest": the percentage of ownership that each unit has in the common elements.

A declaration in a mixed-use condo — one that has both residential and commercial units — lists those parts of the property that comprise "residential common elements" and those that are considered to be "commercial common elements."

The bylaws establish the governing structure of the condominium. This includes, among other things, the number of members needed for the board of managers; the procedural requirements for having board meetings and unit-owner meetings; the powers of the board; the obligations of unit-owners to pay common charges and assessments; rights and limitations concerning alterations and repairs to units and to the common elements; the procedures for conducting sales and crafting leases of condominium units; and the remedies available to the condominium in the event of unit-owner defaults.

The house rules lay out everyday "quality of life" issue. House rules typically cover such items as limits on harboring pets; prohibitions on the use of common areas for the storage of personal property; the requirement to cover a certain area of an apartment with carpet or other floor covering; and permissible hours for performing work or for playing musical instruments. If the condominium has amenities such as a gym, playroom or lounge, the house rules may set forth the regulations on using them.

House rules can be changed by a vote of the board. However, the declaration and bylaws can only be amended by a supermajority (usually between 60 and 80 percent) of unit-owners at a meeting called for that specific purpose.

Let's apply the information about the governing documents to some typical challenges.

Arrears

A condominium's bylaws empower the board to fix the amount of common charges to be paid by unit-owners. Generally, these charges are based on the amount of money required to run the condo every year. Most often, the lion's share of the annual budget consists of fixed expenses that include payroll, insurance premiums, management fees and utility costs.

The bylaws require that unit-owners to pay common charges in a timely fashion, and that failure will often result in the imposition of a late fee and, in some cases, interest. If the bylaws don't expressly specify the amount of a late fee or interest, they will generally vest the board with the power to impose fines against unit-owners who fail to comply with their obligations.

In the event of a continuing delinquency, most condo bylaws require a board to enforce remedies — namely the start of a lawsuit for breach of contract (the bylaws are considered a contract between the condominium and the unit-owner) or the filing of a lien and, if necessary, a foreclosure action.

So when arrears come up, you should:

1. review your bylaws
2. determine what, if any, late fee is allowed
3. instruct its managing agent to impose the fee and to follow up with the delinquent owner.

If the unit-owner is more than 60 days behind, the board should strongly consider consulting with the condo's counsel about pursuing legal action.

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