WHY RESIDENTS WON'T RUN FOR THE BOARD — AND WHY THAT'S SO DANGEROUS

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And that may happen one day. The narrow ruling of the Jennifer Realty case notwithstanding, developers and conversion sponsors may want to start retaining sufficient ownership rights to allow them to manage a property for years or in perpetuity — with a set management fee and assessment formula in the governing documents that would allow the manager to assess whatever is necessary to maintain the project without a vote of the members. Or developments could be joined into large special districts with sufficient governmental powers, including the power to tax, to manage their constituent developments — again without a vote of the owners.
 
I call these and similar ideas the "de-democratization" of co-op and condo communities. That sounds bad, but what good is representative democracy if there are no representatives? For the democratic volunteer management system to work, there have to be volunteers. But the trend is to fewer, not more, people willing to serve their neighbors in this capacity.

The Literal Cost

If this trend continues, your co-op or condo's funds could be exhausted through legal fees and the fees of a court-appointed receiver — or local government may have to act to protect habitability by condemnation of the project. If those situations become widespread we could see either a wholesale change in the governance of owned, multifamily housing or a major shift of that type of housing into rentals.
 
If owners are unwilling to govern themselves, then condominiums are merely apartments, and if they are unwilling to make the contributions that must be made for a community association to survive, then they must be willing to surrender their ownership interests and be renters.This is a housing crisis as serious as the present economic one, and it may be worse, because the crisis in community-association government is not likely to end in a year or two.
 

Tyler Berding, a partner at Berding|Weil received a Ph.D. in Government from Claremont Graduate School and his law degree from the University of California, Davis. His firm has represented community associations for over 30 years. This is adapted from his blog post "Why Won't They Serve?"

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