HOAleader.com - Tip of the Week - May 20, 2022
Published: Fri, 05/20/22
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HOAleader.com - Tip of the Week - May 20, 2022
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In this week's tip, we explain why you should be very wary about filling out an updated federal form for condos. Fannie Mae Form 1076 was revised after the Champlain Towers collapse. It now includes questions that essentially require condo board members or managers to certify that their property is structurally sound.
That's causing confusion, including among our readers. Recently, an HOAleader.com reader has asked: "Has anyone seen any guidance/instructions regarding completion of Form 1076? Some of the questions are vague, and our HOA isn't quite sure how to interpret them."
It's the addendum starting on page 6 of the 1076 form that's giving our experts heartburn. The questions probe the structural integrity of the condo's property. One example is question 3, which asks if a condo corporation is aware of deficiencies in the condo's safety, soundness, structural integrity, or habitability.
"In our area, concerns were initiated by FirstService Residential, a management company, which first picked this issue up and apparently said, 'Holy crap!'" reports Phaedra J. Howard, a partner specializing in community association law at Hellmuth & Johnson PLLC in Edina, Minn. "Normally, management companies fill out these forms for condos. FirstService essentially said to its clients in our area, 'We, as a management company, aren't going to be responsible for the answers to these questions. We're just not.'
"They suggested their condo association clients work with their attorney of choice, and many of those condos came to us for help in putting together answers to the questions," she adds. "The questions sort of ask the condo to certify that the building is structurally sound. Also, questions 6 and 7 ask whether there's funding in place for deferred maintenance. That assumes the condo has deferred maintenance. The questionnaire also asks whether the condo expects there will be future code violations."
Universally, the experts we've spoken with say their condo clients are confused and unsure about how to handle this new form, and they're reaching out to our experts for guidance. For a roundup of how four community association lawyers from across the nation are advising clients, read our new article: https://www.hoaleader.com/members/4515.cfm
Best regards,
Matt Humphrey
President
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