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The Impact of Federal Regulations on Condo Communities

*This Article is originally from HOA Management


There are several federal regulations on condo communities. Both unit owners and condo board members should familiarize themselves with these regulations. In doing so, unit owners can understand their rights, and board members can protect the association from potential liability. THE DIFFERENT FEDERAL REGULATIONS ON CONDO ASSOCIATIONS Condominiums are a popular form of housing in the United States. This is mainly because they offer a unique blend of shared community living and individual property ownership. Individual unit owners are responsible for the upkeep and maintenance of their own units. On the other hand, the condo association shoulders the responsibility for common area maintenance, using revenue from condo fees to fund this and other expenses.

Federal regulations on condominium associations play a significant role in governance. Several federal laws impact these communities, including the Fair Housing Act, the Americans With Disabilities Act, the Freedom to Display the American Flag Act, the Fair Debt Collection Practices Act, the Over-the-Air Reception Devices Rule, the United States Bankruptcy Code, and the Servicemembers Civil Relief Act. FAIR HOUSING ACT One of the most prominent federal regulations on condo associations is the federal Fair Housing Act (FHA). Enacted in 1968, this Act serves as a way to protect people from housing discrimination. The FHA prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, disability, familial status, or national origin. The FHA legally binds condo associations to ensure that all residents and buyers receive fair treatment without prejudice. It promotes diversity and inclusivity within condo communities. It also helps foster a welcoming environment for all unit owners and residents. Condo board members should be aware of the requirements outlined in the FHA. This will push them to uphold fair housing practices and prevent potential liability diligently. Similarly, unit owners (or potential buyers) should understand their rights under the FHA to fight discrimination. AMERICANS WITH DISABILITIES ACT The Americans With Disabilities Act (ADA) is a landmark federal law enacted in 1990 that prohibits discrimination against individuals with disabilities in various areas, including public accommodations, employment, and housing. Condo associations must comply with ADA requirements to ensure that individuals with disabilities have equal access to the community’s amenities and facilities. This act substantially impacts condo communities, requiring modifications to common areas and units to accommodate individuals with disabilities. Elevators, ramps, wider doorways, and accessible parking are just some of the accommodations required to comply with the ADA. FREEDOM TO DISPLAY THE AMERICAN FLAG ACT The Freedom to Display the American Flag Act passed in 2005, ensures that condo residents have the right to display the American flag on their property. Under this Act, condo associations may not prohibit residents from displaying the American flag. It aims to give Americans the freedom to show their patriotism. That said, condo associations can enact reasonable restrictions concerning the time, place, and manner of displaying the flag. Furthermore, residents must comply with the U.S. Flag Code. FAIR DEBT COLLECTION PRACTICES ACT The Fair Debt Collection Practices Act (FDCPA) is a federal law regulating third-party debt collectors’ behavior and collection strategies. While it primarily applies to debt collection agencies, condo associations that engage in debt collection activities must adhere to its guidelines.

Condo associations must ensure that their debt collection practices are fair, ethical, and compliant with the FDCPA to protect residents’ rights. Additionally, the FDCPA applies to debt collection agencies. If a condo association wishes to employ a collection agency to settle delinquent fees, it should do its due diligence and ensure its selected agency acts within the law. Otherwise, the agency’s unfair or deceptive practices may implicate the condo association. OVER-THE-AIR RECEPTION DEVICES RULE The Over-the-Air Reception Devices Rule (OTARD Rule) allows residents of condos and other housing types to install satellite dishes and antennas on their property. Condo associations may not enact unreasonable restrictions regarding the installation of these devices. THE UNITED STATES BANKRUPTCY CODE The United States Bankruptcy Code contains provisions that can impact condo associations, especially in cases where condo owners file for bankruptcy. It outlines the rights and obligations of unit owners and the condo association. If a unit owner files for bankruptcy, the association may not exercise collection actions related to the bankruptcy case. That means the association can’t file a lien or a civil complaint while the case is pending. THE SERVICEMEMBERS CIVIL RELIEF ACT The Servicemembers Civil Relief Act (SCRA) protects active-duty military personnel regarding legal and financial matters, including housing. Under this act, condo associations must make necessary accommodations to support service members on active duty. It also provides the same protections for activated reservists and members of the National Guard who have been active for over 30 consecutive days. Interestingly, the SCRA applies to all creditors, whereas the FDCPA applies mostly to debt collectors. MAKING CONDOS SAFER AND AFFORDABLE ACT OF 2023

The Making Condos Safer and Affordable Act of 2023 is a piece of legislation that was recently introduced in Congress. The objective of the Act is to address critical issues within condo associations. It seeks to enhance safety and affordability after the tragic Surfside building collapse. If passed, this Act will unlock resources for countless condo communities.

Not too long ago, Congress introduced a similar bill called SAFER in the Condos Act. However, that bill failed to make much progress.

The Champlain Towers tragedy in Surfside, FL, cast light on a growing concern regarding condominium safety. Many condo buildings are outdated and don’t meet stringent safety standards anymore. Repairs, though, can be very costly and most condo associations don’t have sufficient reserves to fund them. While condo associations can levy special assessments, unit owners may not be financially prepared to pay such large assessments, especially in one go. FEDERAL REGULATIONS IMPACT ON CONDO COMMUNITIES

Federal regulations significantly impact condo communities by ensuring fairness, inclusivity, and compliance with various legal requirements. The Fair Housing Act and the Americans With Disabilities Act are fundamental in promoting fairness and accessibility. Meanwhile, the Freedom to Display the American Flag Act emphasizes individual rights.

Furthermore, regulations like the FDCPA and the OTARD Rule provide guidelines for ethical practices and connectivity. It is essential to understand and adhere to these federal regulations. This way, condo associations can maintain a harmonious and legally compliant living environment.

The introduction of the Making Condos Safer and Affordable Act of 2023 shows that there is movement at the federal level to improve safety and affordability among condo communities. It remains to be seen, though, whether or not this bill will pass into law. THE BOTTOM LINE Unit owners and residents should understand the different federal regulations on condo associations. This way, they can preserve their rights and obligations. For board members, it is equally important to familiarize themselves with these laws. In doing so, they can act according to the law and protect the association (and themselves) from liability.

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