Recent Important Rulings for Co-ops and Condos A Case to Remember

The most basic structure of our right to own and enjoy our homes emanates from two sources: legislation, and case law. At times, case law is the direct reflection of statutes passed by federal, state, and local levels of our government; at other times, legislation is enacted to reflect and enshrine principles determined by case law. Regardless, these are the rules by which we live  — and most importantly, our vigorous, living system of governance provides for change and amendment of those rules when necessary, through both law and legislation.

State or Federal?

As a general rule, co-ops, condominiums and HOAs are governed under statute at the state level. “Typically,” says Michael C. Kim, the principal of Michael C. Kim and Associates, a Chicago-based firm specializing in co-op, condo and HOA law, “in the condo field there are enabling statutes at the state level which authorize the creation of condominiums and how they should operate. Those statutes vary by state. There is an organization called the [Uniform Law Commission]...that looks at developing commercial statutes which are uniform. If all the states would adopt them, you could go from one state to another and have more or less the same law. There is some value in that. A number of states— approximately 30—have adopted them. Illinois has developed their own.”

There are times though, when federal authority will overrule state authority; specifically, when the matter to be adjudicated is in conflict with a federal law like the Fair Housing Act and other anti-discrimination policies, or fair credit and collection laws meant to protect consumers nationally. Another interesting situation is when there is “diversity” between the parties in a lawsuit. “Diversity” in this context refers to the two parties to the case being domiciled in different states, that is, one party lives in, say, Wisconsin, and the other in Illinois. In that case, though state statutes in the state where the suit was brought would govern the case, the case is tried in federal court.

Phyllis H. Weisberg, a managing partner at the law firm of Montgomery McCracken Walker & Rhoads LLP, which has offices in Pennsylvania, New York, New Jersey and Delaware, says, “In certain respects, the law from state to state can be very different. In Connecticut for instance, there is a statute that requires that certain information be shared with members of the association, and that they be allowed to attend board meetings, which is not the case in New York — unless a building’s by-laws require it.”

Florida, like Illinois, has its own set of statutes and laws pertaining to co-ops, condos and HOAs. “Florida has a far more detailed body of law than other states because it has been developed over the last 40 years. Florida was a very early adopter of the condo form of ownership,” says Lisa A. Magill, a condominium attorney with Kaye Bender Rembaum, a law firm with offices in Florida’s Pompano Beach and Palm Beach Gardens. “Community associations for condos, co-ops and HOAs are regulated on many different levels. Regulations governing operations are primarily found in the state law and administrative rules adopted by the Department of Business & Professional Regulation (DBPR). However in many instances such as discrimination, accommodations and modification associated with disabilities, installation of satellite dishes, etc., federal law applies and local codes and ordinances (i.e, zoning building codes and additional protections against discrimination) also govern community associations.”

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