Cohousing-L Mailing List: Changes in Bylaws & Bank Approval [was Exterior modifications

[Sharon Villines (sharon]

On Feb 19, 2014, at 10:35 AM, Diana Carroll <dianaecarroll [at] gmail.com> 
wrote:

> Actually what I'm daunted by isn't just the work, but by negotiating with
> lenders.  I see the conversation going like this:
> us: Hey BigBank, the owner of this unit added a deck and thus increased
> their proportion of the condo fees they owed.

I don't think you have to have approval for this. Only for changes in the 
bylaws which should be based on a formula. The individual SF of each unit would 
not be in the bylaws. The percentage interest would be in the condo docs cannot 
be changed without essentially redoing the ownership structure.

Another way would be to levy a fee for each addition separately. If it is an 
outdoor deck, a new owner might want to remove it. Limited Common Elements in 
DC are viewed as fluid -- they are assigned to a unit and can be reassigned. 
Not always practically reassigned but they aren't permanent.

> BigBank: You mean you increased our liability in the case of foreclosure?
> No way.  The owner will need to refi at a bazillion percent interest to
> make us agree to that!
> us: Um...okay, never mind about that.
> BigBank: Actually since you brought it up, now we know, we're going to pull
> some legal maneuvers that put the owner in a bind

When I called my bank, Wells Fargo, they read the bylaws and said there was 
nothing in them that they cared about. All they cared about was the insurance. 
I assume they also cared about anything that limited the ability of the bank to 
foreclose but I suspect those are state laws and cannot be controlled by 
bylaws. Bylaws can't conflict with state laws.

Call your bank and ask.

In surrounding states and being considered in DC, is a provision that you have 
to notify the bank but they don't have to respond unless they object. No 
response within a set time period means approval.

Banks must get tons of such letters. Can they read all of those bylaws and have 
a dialogue about them?

Sharon
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Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org