CONCORD — The House Commerce Committee is scheduled to act today Tuesday on a bill (HB 160) that would make it easier for condominium owners to vote down the condo association budget.
One in seven housing units in the state is part of a condominium association, and the rules governing those associations are dictated by state statute.
The statute was amended in 2016 to make it impossible for a condo association budget to be defeated by a simple majority of condo owners voting in person or by proxy at the annual meeting.
The law states that two-thirds of owners must be present or voting by proxy, and that a majority of them must vote against the budget to defeat it and revert to the past year’s budget.
“We should be ashamed of what we did to condominium owners,” said state Rep. Jim Webb of Derry, himself a condo owner. “We took away their right to vote by requiring a threshold that can never be reached.”
Typical turnout at condo association meetings is in the range of 20 to 40 percent of owners, making it unlikely that any association would be able to muster the critical mass to overturn a board of directors’ budget developed in cooperation with the management company.
Webb has filed a bill that would reduce the required attendance for a binding vote on the budget to 50 percent of condo owners in person or by proxy.
“The bill attempts to restore the right to vote to a condominium owner, and it still gives the advantage to the board of directors,” he said. “If fewer than 50 percent of the people show up, the budget automatically passes.”
Condo management companies and attorneys representing condo associations turned out in force to testify against the bill at a public hearing last week, claiming that most condo owners are content to leave management to the board, and only malcontents show up at the meetings.
“The majority of unit owners get their annual meeting notice, look at the budget, see small increases in fees, and if they think things are running smoothly, don’t come to the meeting,” said Andrea Kokko with Kokko Realty and Property Management in Milford.
“The people who do come to the meeting are the ones who don’t want an increase in their fees. The people who have a problem with the budget are the ones who come to the meeting, generally.”
Following the logic of Webb’s bill, she said, an association of 100 members could have 51 show up at a meeting or vote by proxy, and 26 voters could vote down the budget.
“The minority are the ones who will get control,” she said.
Dean Lennon, an attorney with the Community Associations Institute, said the power of condo owners to control the budget lies in their ability to elect board members.
“Condo associations are a representative government, not a pure democracy,” he said.
“You elect people to act on your behalf. People don’t live in condos to make all their own financial decisions. This idea that people are getting the wool pulled over their eyes or there are rogue boards out to get them is just not true.”
A similar measure proposed by Webb last year failed in the House.