06/23/09: Housing Counsel Privacy In Your Condominium?

Housing Counsel

By Benny L. Kass

Q: My wife and I own a condo in a 4 unit building. One of our neighbors, who bought the property only 2 years ago, put her unit on the market in early April. Since then, the listing agent has held 3 open houses per week; 2 hours on Tuesdays, and 3 hours on each Saturday and Sunday and continues to do so, creating quite a bit of interference in our lifestyles in terms of commotion, driveway blocking, etc. In addition, the asking price now has been significantly reduced, thus lowering our “comparable” value.

Do we have the right to limit formal “open houses” to the more respectful one time per week?

Do we have any rights in the agent’s publication of the lowered price (i.e., “price reduced” on the For Sale sign on our building)?

Do we have any rights of “approval” of the financial condition of a prospective buyer (Our neighbor’s inability to cover her mortgage obligation is the reason she is forced to sell now, instead of waiting for the market to improve.)

A: Living in a condominium has its pluses and negatives. When you buy into the association, you give up some privacy. You have to comply with the legal documents, and the rules and regulations enacted by the Board of Directors.

But it’s a two-way street. Your neighbors also have to comply with those same legal requirements.

Have you discussed the problem with your neighbor? I appreciate that she wants to sell in this difficult market, and clearly holding open houses is one way to attract potential buyers. But she may not understand the magnitude of this problem – at least as it impacts on your life style – and perhaps some compromise arrangement can be entered. My definition of a settlement is that both parties walk away unhappy, but nevertheless walk away.

If you are unable to reach an agreement with your neighbor, then you should review your legal documents. That’s first place to look when involved with any aspect of community living. In a condominium, they generally consist of a Declaration, the Bylaws, and the Rules and Regulations.

Every unit owner must have a complete set of these documents and should periodically review them to assure compliance – by you as well as your neighbors.

Is there anything in your legal documents covering this issue? Some associations have enacted rules that restrict open houses, or limit hours when the property can be shown to prospective tenants.

There should also be a section entitled “Nuisance”. A typical condominium bylaw section would read:

No nuisances shall be allowed in the Condominium nor shall any use or practice be allowed which is a source of annoyance to residents or which interferes with the peaceful possession or proper use of the Condominium by its residents

If you lived in a large multi-unit condominium, you would have to file a formal complaint with your Board of Directors. However, there are only four units in your complex, so I suggest that you try to get everyone together either in person or through an electronic conference call. Explain your position and your concerns.

Your neighbors may or may not be sympathetic. They may also plan to sell their unit, and want the same aggressive representation by their real estate agent.

If your neighbors turn you down, that’s condominium living. In my opinion, it is democracy at its best and at its worst. The only alternative is to move out and either rent or sell.

You also asked if you can control the advertisements and sign that indicate “price reduced”. Again, you have to review your legal documents. Some associations do impose restrictions on advertising; others do not.

Finally, do you (and the remaining owners) have any rights to approve a prospective owner? The simple answer is no. In cooperative housing, the “membership committee” of the cooperative (or the Board itself) does have the right to reject a potential owner if the financials are not acceptable. Unfortunately, this “right of refusal” has often been misused, and indeed sometimes is just pure (illegal) discrimination against the buyer.

But in the Washington Metropolitan area, to my knowledge, no condominium association has this right.

This does not mean that you may be stuck with an insolvent owner. Lenders have significantly tightened up their loan requirements in recent months, and I suspect that if the potential buyer passes muster with a lender, this should satisfy you that at least currently, the buyer has good credit.

– Boilerplate –