Bank won't accept current condo association?
September 9, 2019 1:05 PM   Subscribe

This is a weird situation, and I genuinely have no idea what do to. Long story short, the bank says that the members of my condo association aren't really the members of my condo association? And the deed is wrong? All we want to do is switch bank accounts for the condo association, damn it.

Last year, my husband and I bought a condo. Yay! The building is made up of 4 units. Each unit equals 25% of the condo association. We are an informal bunch -- there are condo bylaws, and dues, and rules, but we don't meet regularly or have, like, staff or anything. My husband and I are the condo board co-presidents. Complicating things a little, three of the four units all sold last year, right around the same time, so there's only one member who has lived in the building, and thus been on the board, for about ten years.

The condo bylaws were drafted and notarized and filed in 2006. We all got copies of them from our realtors when we bought our units. All's been well for a year, until now. We decided to move the condo association's account from the bank it's been at, which charges fees out the wazoo, to a non-fee-happy bank. My husband and the long-term owner, who is the condo treasurer, went to the bank on Saturday to try to do this, and could not, because the treasurer didn;t have the tax ID with her. The person at the bank said they would look over the rest of the paperwork we provided and let us know if we needed anything else. Today, she emailed to say this:

"Our Business Service Advisor Robert Boley said the letter isn’t sufficient to open the accounts. The bylaws and letter don’t link you and the current members to this condo association. He also went ahead and reviewed the Hillsborough County Registry of Deeds website and it still lists the old members. He said that means the deed hasn’t been updated or that it could have been filed incorrectly. If you are not sure where to go from here Robert did say that according to your bylaws, on page 32, any changes should be filed with the state so that might be where you go next."

I checked the Registry of Deeds site, and what they have is the condo bylaws that were drafted in 2006, and a floor plan. That's it. We all have our own deeds to our own units. I called the Registry, and the woman there was all "I have no idea what to tell you, we just file the documents. Call a lawyer, I guess." This association does not have a lawyer. I don't even know what to ASK a lawyer. I didn't even know what title to give this question! I don't know what category to put this question in!! I don't know what we're supposed to do from here, and have no idea where to even start. Help?
posted by sarcasticah to Home & Garden (13 answers total)
What state and county are you in?
posted by dum spiro spero at 1:30 PM on September 9, 2019

Call a competent real estate lawyer in your jurisdiction (looks like MA?). Tell them the prior members of the condo board didn’t observe all the requisite formalities and the current owners aren’t properly reflected on the master deed. Tell them to fix it.

A good lawyer ha seen this all before and can handle it. This is definitely something to fix, but not uncharted legal territory.

Don’t use the lawyer who did your real estate closing. They should have caught this.

This is not legal advice and IANYL.
posted by Admiral Haddock at 1:34 PM on September 9, 2019 [10 favorites]

Surely the four owners know some real estate lawyers who know how a condo should be run. Have one of them look over your records and complete the steps that you should have been taking when the apartments changed hands. Apparently you should have filed some papers with the county after each closing. Have your lawyer bring your paperwork up to date.
posted by JimN2TAW at 1:39 PM on September 9, 2019

I'm in Hillsborough County, New Hampshire. And I am absolutely, positively certain that no one in this building knows a real estate lawyer. We do not have a lawyer.
posted by sarcasticah at 1:42 PM on September 9, 2019

I’m pretty much in the same situation as far as the type of condo: only four units, built in the 2000s, and all four households supply a board member. I have been in since the building was new and was part of the process of the creation of the association.

In our situation, we exist as a non-profit entity registered with the state. All four board members (and their position) are listed in the state records. Every couple of years we have to renew our registered status and always make sure any changes to board membership are recorded. We also are required by state law to have one official meeting at least once every two years and we keep official written minutes of those meetings (though the state doesn’t need to see those minutes). Note that the association is a governing body that collects dues and pays for maintenance, etc., but is not in any way an owner of the building on the property deeds.

I think if we were trying to change banks we’d need to bring a copy of the state’s record of our association (listing the board members, addresses, etc.) and something like a printed and signed resolution by the board authorizing opening an account with the new bank. The state registration (with all the info) is publicly-available online for free, making it easy for a bank to verify.

Perhaps this is how things should (or can) be structured in your state, but i’d want a lawyer to sort it out.

[I note also that every time a unit has changed owners, the association has provided current financial data and all past meeting minutes to whoever in the sale process wants those records (probably banks giving loans). I’m surprised this hasn’t been a problem at your building.]
posted by D.C. at 1:49 PM on September 9, 2019

You can try to do it yourself, it's not that complicated. Go down to the county courthouse in Nashua or Manchester and talk to the Records Clerk. Tell them your situation and ask what you can do about it. Or use one of the lawyers in the vicinity — just make sure you get someone who mostly handles real estate, not crime. If you do it that way, it will cost a few hundred dollars, but it may ultimately be easier.
posted by ubiquity at 1:52 PM on September 9, 2019 [1 favorite]

If you're not sure how to find a lawyer, state bar associations do referrals: NH Bar Association Referral Service.

If you call the number at that link and talk through your problem, they'll refer you to a real estate lawyer who will be able to fix things. It'll cost you, but it's a very solvable sounding problem once you have a NH real estate lawyer.
posted by LizardBreath at 1:54 PM on September 9, 2019 [4 favorites]

i'll start with the caveat that this was for a different type of business than a cooperative housing setup, but i can tell you that you can retroactively clean up business for a corporation. that is pretty clearly what needs to happen here. it might not be the worst thing in the world to establish some standard business practices/conventions in the same conversation w the RE attorney - things like regular board meetings w minutes might have been a good way to avoid this paperwork snafu.
posted by Exceptional_Hubris at 1:54 PM on September 9, 2019

You might not want a real estate lawyer, FWIW. Some lawyers do real estate, but not condo board law, which is often quite different. Some folks do condo law, but not real estate transactions. They tend to be small business and local regulatory attorneys (like permits and liquor licensing).
posted by crush at 1:55 PM on September 9, 2019

IANAL, TINLA, etc, and I have no experience with New Hampshire, but in the two states that I've owned condos in, my experience has been like D.C.'s -- the condo association exists as some kind of legal entity such as a nonprofit or "common interest association" and periodically files with the state and submits a list of officers/board members.

Most states have some kind of online business search website - you might try searching with the name of your condo association to see if you can find your last filing. You may be able to submit an updated filing online reflecting the current owners/board members.
posted by zombiedance at 2:08 PM on September 9, 2019

I did search that. The last, and only, filing was in 2006, when the condo association was formed. There is literally nothing else. Whoever did it did not do it correctly, and the "board" has been so informal and loosely-done since then that there have been no other filings of any kind, ever.
posted by sarcasticah at 2:22 PM on September 9, 2019

As your rethink the proper legal approach to the board and deeds, etc., you might also read up on best practice approach to financials for a condo association. In my experience, small associations tend to think small, and put all their fees into a little pot that basically covers operating expenses and just a little more. This does not account for the sudden maintenance of a boiler, roof or basement, at which point all hell breaks loose because not everybody has the money, and somebody refuses to pay. Those are my two cents, anyway.
posted by Violet Blue at 8:32 PM on September 9, 2019 [1 favorite]

That's exactly how we handle the money -- it goes into the bank account, and is used to cover the bills, and the extra gets saved. Again, there are only 4 units, and we're all... well, we're not rolling in money. We literally cannot raise the condo fees beyond what they are now, because none of us can afford that. I don't really know how we can handle the financials differently.
posted by sarcasticah at 8:57 AM on September 10, 2019

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