A General Synopsis on Louisiana Condominium Regimes
Louisiana regulates condominium regimes through the Louisiana Condominium Act (See LA R.S. 9:1121.101 et seq.) Condos have recently become more prevalent in many parts of Louisiana, and areas like New Orleans and Jefferson Parish have experienced significant growth in new condominium developments. Buyers that are looking for low maintenance living arraignments like to purchase condos because most of the maintenance and management of the property is taken care of through the condo association.
The first step in establishing a condominium regime is to draft and execute a condominium declaration. This is a legal document that includes specific descriptions of the property as outlined in the Louisiana Condominium Act. Before a developer can sell or enter into a contract to sell a condominium unit they must provide a prospective purchaser with a copy of the public offering statement. The public offering statement contains certain descriptive provisions that are required by law. Some of these provisions include proof of the insurance coverage for the common elements, a copy of the bylaws, the condominium declaration, diagram of the unit’s floor plan, a projected operating budget for the association and a copy of the articles of incorporation.
Condominium regimes can also be established on leased land. This is not very common, but still can exist, and the expiration or termination the lease may terminate the condominium or reduce its size.
The Condominium Association
Condominium regimes are governed and run by an association. The association’s responsibility is to maintain, repair, and replace elements of the common area.
The administration and operation of a condominium regime is governed by bylaws. Bylaws include provisions deemed necessary or desirable for the administration of the condominium property. Most standard bylaws include the methods of adopting and amending administrative rules and regulations and will detail the operation and use of the condominium property. They also serve to outline procedures for submitting disputes among unit owners, and establish rules on the working capital of the condominium association and reserve funds that provide for the maintenance, improvement and replacement of common condominium property.
The association must also maintain a sufficiently detailed financial record of the associations activities. These financial records must be available for examination by any condominium owner and/or his authorized agents.
Assessments and Taxes
Each unit owner pays dues, also called assessments, to the association throughout the year. Dues are outlined in the bylaws and condominium declaration and serve to pay for common element liabilities and maintenance. In the event that the association runs out of money and requires additional funds to continue its operations, the association can require what is called a “special assessment”. The special assessment is an additional fee that is separate from normal condo dues.
Both the condominium declaration and bylaws have the force of law between the individual condominium owners, and can be enforced through suits for damages, injunctions, or other remedies provided by law. If a condominium owner does not pay their dues or is penalized for breaking a bylaw, the association is entitled to have a legal privilege attached to the condominium unit for all unpaid sums that were assessed by the association. This privileged may also include a charge for interest on the delinquency and attorney fees incurred by the association in collecting the assessment. Unpaid assessments levied against a condominium create a lien only upon the individual condominium and not any distinct or separate portion of the common elements.
Each condominium unit is a separate and distinct taxable property. For property tax purposes, each condominium unit’s taxable value is based on the unit’s interior space and its respective percentage in the common elements. If a unit owner fails to pay its property taxes, the Parish can only place a lien on the individual condominium parcel and not the property as a whole. The common elements are not deemed to be a distinct parcel for tax purposes.
The Individual Condominium Owner
Individual unit owners are shareholders in the association and play a role in regulating the association. Owners elect board members and vote on management decisions during association meetings. All owners must abide by the rules and regulations set forth in the associations bylaws. Violations of the bylaws may result in fines or injunctions.
Unit owners are responsible for the maintenance, repair and replacement of their particular unit as it is described in the condominium’s public offering statement. Each owner can make alterations to their individual unit, subject to certain restrictions. First, the condominium declaration may limit the extent to how and when a unit may be altered. By law, each unit owner must not alter their unit in any way that could impair the structural integrity or mechanical systems of the condominium as a whole. Also, an individual owner cannot alter the exterior appearance of their or the appearance of the common elements without express permission by the association. If an owner acquires an adjoining unit they can combine the two by removing or altering the partition walls, even if the partition wall is considered a part of the common elements. However, they can only do so if combining the units does not impair the structural integrity or mechanical systems of any portion of the condominium property.
Whether you are buying or selling a condominium, it is critical to inform yourself about the organizational structure of the association and how a particular condo unit matches up with other units in the marketplace. Tribute Real Estate’s agents have years of experience representing clients in condominium transactions, and our broker Thad D. Ackel, Jr. is always available to provide legal counseling to clients who are buying, selling or renting a condo. Contact us today for assistance in either buying, selling or renting a condo.