Q: For the past seven years we have owned a condo on a golf course that we rent out to supplement our income. It is an older community built in the early 1970s, but still is a desirable place to live with a good reputation. However, due to the poor economy and an increase in the number of delinquencies that have reduced their assessment income, the association is implementing some new cost-saving measures that have us concerned.
Right near our particular unit is a very attractive fountain with a natural rock waterfall and a large pond. To date this has been well maintained by ourselves and the owner before us. We have always considered it part of our property because the association has never maintained it. We have retained and pay for a service company that performs a quarterly maintenance program that keeps the water feature clean and operating properly. We even paid for a new motor and pump for the fountain only three months ago.
Recently, we received a letter from the association board of directors that they are turning off the water to the fountain because the cost of the water is being borne by the association and they pay for the electricity for the equipment, which is wired into the common-area house lights. They also indicate that they want to drain the pond to prevent any future problems with standing water and mosquitoes or West Nile virus. Their actions will clearly devalue our property, as the fountain/waterfall/pond is a very attractive asset to the property. Do we have any recourse on this issue?
A: You may or may not have any recourse but you should do some homework and find out, as boards of directors often have good intentions but do not thoroughly check out the facts before making such decisions.
Of course, the association does have the right to look into ways to cut costs, as many associations are finding that the delinquencies and bad debt in their dues assessments are creating severe cash-flow challenges. Associations are no different than any other governmental or business entity that is facing a reduction in income and must find ways to balance their budgets. With the rising cost of water in many areas, your association’s plan to turn the fountain off might make financial sense.
You indicate that your condominium community is nearly 40 years old, so the fact that the association pays for the water is not unusual and indicative of the responsibility for the water feature as virtually all associations built in that time frame had master water meters. However, the wiring of the equipment to the association electric meter would be another indicator that the association does have the right to control the use of the water feature.
While that anecdotal information is helpful, the first step I would recommend you take is to review your governing documents and the condominium plan to see if there is any definitive language as to who is responsible for this particular element of the property. The governing documents may also formally outline who is responsible for the repair and maintenance of the fountain, waterfall and pond that are on the association property. Unfortunately, the governing documents for associations that were written in the 1970s are often unclear and generic, addressing responsibilities in broad rather than specific terms. …CONTINUED
If you determine that the association does have the right to take the water feature out of commission, you could offer a written agreement or a maintenance easement under which you would underwrite the ongoing costs of proper maintenance. But the board of directors may not be interested in such an arrangement because it creates a gray area if there are ever any problems.
Another important factor could be whether the existing water feature is fully lined with concrete or a similar impervious material so water is not being lost to absorption into the ground. With older water features, often there was no consideration about the scarcity or cost of water.
Today all water features should be lined and provide that the water is recycled or recirculated, and thus the water loss would be only the nominal amount that spills out or evaporates while the water feature is in use. If the water feature is not state-of-the-art then you could offer to make the necessary improvements, which may sufficiently lower the operating costs.
Another legitimate concern would be that such a practice might establish a precedent that the board does not want to support throughout the project. In other words, you may be a responsible homeowner and fulfill your commitment, but the board would have to treat others making similar proposals in the same manner.
However, all owners might not be as diligent as you are in properly maintaining components of the association — with negative repercussions for the association.
You should also consider putting your concerns in writing in a positive manner. I would suggest that you point out the loss of this feature to the community rather than strictly recite concerns about your own personal interests. My experience is that most boards are likely to be swayed by a community perspective than simply your own loss of value, which is not the direct concern of the board.
This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and "Property Management Kit for Dummies" and co-author of "Real Estate Investing for Dummies."
E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com.
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