One of the primary differences between a condominium and homeowners' association relates to the ownership of common elements.  In a condominium association, the unit owners each own an undivided interest in the common element property.  Accordingly, there is not a separate deed conveying the common element property to the condominium association.  In a condominium association when the developer conveys a unit to a buyer, the developer is also conveying an interest in the common element property to each unit owner in conjunction with the deed to the unit.  However, in a homeowners' association, the association owns the common elements.  Accordingly, the developer of a homeowners' association must separately convey the common elements to the association.  Therefore, separate deeds for the common element property from the developer to the homeowners' association must be prepared and recorded.

It is important to determine whether the common elements and open space in your community have been conveyed to your association.  Fox example, when overlooked, issues may arise with respect to the taxation of common element property.  Common element property is taxed in a homeowners' association by including the interest of each unit owner in the common element property (by virtue of their membership in the association) as part of the determination of the assessed value of each unit.  We have encountered separate tax bills for common element property in various communities as a result of the failure of the developer to properly convey the common element property to the homeowners' association.

The conveyance of common elements and open space to the homeowners' association typically takes place during your community's transition process from the developer to the unit owner controlled homeowners' association.  A review of the final recorded development plans, tax records and recorder of deeds records is necessary to determine whether the developer has properly conveyed the appropriate real estate parcels to the association as required under the association's governing documents.

Our firm has extensive experience in providing associations with the information they need to successfully navigate through the transition process.  Our involvement in the transition process generally includes working directly with the Board of Directors or its duly designated transition committee, the association's engineers, accountants and the local municipality to complete the transition process and to protect the association's rights with respect to any potential claims in this regard.

If you have any questions or concerns in connection with the association's ownership of its common elements or transition in general, please feel free to contact us.

Illuminated plastic Santas, giant blow-up Rudolphs, thousands of twinkling lights . . . the holiday season is fast approaching and that means decorations may soon be adorning common areas, condominiums and homes within your community.  How should your association respond to the outdoor decorations homeowners may wish to display?

With respect to the common areas, it is important to remember that condominium and homeowner associations are made up of individuals with very diverse backgrounds and beliefs and this diversity must be considered and respected when considering holiday decorations.  Moreover, the Fair Housing Act and other fair housing laws prohibit discrimination on the basis of religion.  While there is certainly nothing wrong with decorating during the holiday season, associations need to be mindful that the holiday displays do not give the impression that the community favors one religion over another.  Therefore, when decorating the common areas, the association should consider using holiday decorations that tend not to pertain to a specific religious faith.  If an association decides to exhibit religious symbols such as nativity scenes or menorahs in a common area, it should give equal treatment to all other religious affiliations.

The Fair Housing Act restrictions do not apply to exterior religious displays by private homeowners.  However, your association's governing documents may prohibit holiday decorations altogether.  If your association does ban holiday decorations, it is essential that all decorative displays be prohibited.  In other words, you should not permit the display of holiday decorations for one holiday and then prohibit the display of decorations for other holidays.

While holiday decorations may be permitted by your association's governing documents, we recommend that associations develop and adopt reasonable rules which address size, illumination and time restrictions.  Typical holiday decoration rules should address how soon before a holiday such decorations may be displayed and how long after the end of the holiday the decorations must be removed -- otherwise, the association may be faced with holiday lights in the summer.  The size or total square footage of decorations should also be addressed.  In the event that the association does have rules and regulations in place, it should ensure that any holiday decorations follows the association's rules and regulations, receives the approval of the necessary committee, causes no damage to the common elements and does not create a safety hazard.

Happy Holidays from Marcus & Hoffman!