Management, Maintenance Fees – Make Sure to Review Agreements Regularly
By Hans G. Huessy, Esq.
[Published in Condo Media magazine – September 2019 Issue]
Many condominium projects in Vermont are located in resort areas and consist almost exclusively of second homes that are also primarily used as rental properties. In such projects, finding volunteers for board positions and keeping such positions filled can be difficult, as it can be a time-consuming and thankless task. Even when all such positions are filled, the amount of time an absentee owner is willing to spend on project management is often very limited. Under these circumstances, boards tend to rely very heavily on third-party management companies.
These management companies are often closely associated with the resort and with certain service providers. An annual audit will ensure that payments for maintenance are properly accounted for, but will not verify that the amount paid for the services is reasonable or market rate.
I am currently representing all the condominium owners at a ski resort on a claim that the resort regularly overcharged the condo owners for snow removal, road maintenance, grounds keeping and security services. The services were provided to all the properties located in the resort “village,” some of which were owned by the resort. The condo owners sought review of how those charges were allocated between the resort and the condo owners. After an extensive exchange of information, it appears likely that the resort’s share of those costs will more than double as a result of the litigation.
This scenario underlines the importance of engaging in some kind of regular review, perhaps every five years, of a project’s agreements with its various service providers to assure the amounts being charged are consistent with the market rate and fairly distributed between all property owners that benefit from the services.