Reserved Common Elements

[JenniferM4]

What is the name of your state? New Mexico
Our Declaration gives power to the Board to designate Common Elements as Reserved Common Elements from time to time, and at their discretion for a reasonable charge for Use and Maintenance thereof. Some have interpreted this to mean that expansion into the common area is allowed. However, our Act states that reallocation of common elements to limited common elements is not allowed without an amendment. Can Boards legally allow select unit owners to expand their pre-designated limited common element patio into the Common area? The Bylaw is completely ambiguous!

[IndianaOwner]

By "Act" I am assuming you are referring to the condo statute of your state.

The Declaration is the controlling document here unless it contradicts the Act. The controlling order is Act, Declaration, Bylaws, and Rules and Regulations.

I suspect that what you are saying is that to take a Common Element and designate it a Reserved Common Element requires an Amendment to the Declaration under the Act. HOWEVER, the Declaration gives the authority to the Board (instead of requiring an Amendment each time) which is permited as long as the Board acts reasonable ---- allowing an expansion of a patio adds values and if the Board requires a fee to be paid to the Association that is reasonable too.

In the absence of reserving the authority in the Board, an Amendment would be needed to designation the Common Element as a Reserved Common Element, but that is not the case here.

The bottom line, from what you have written, my opinion would be that the Board is within its power. I take it you disagree with what they are doing allowing to be done, so best for you to voice your disagreement at the Board meeting if it affects your unit. However, improvements that help property values are desirable.

[Paddy Reagan]

Your observation about the ambiguity of your By Laws is correct. In New Mexico, as in most states, the common elements are jointly owned by members of the association. The ownership interest in these elements provides the basis for allocation of maintenance fees and special assessments. Any alteration of the originally established common elements should also result in a change in ownership shares. Predictably, ALL owners usually must vote for such a change with at least a majority and often two-thirds or more approving an amendment to the Declaration.

As for the re-allocation by the board you describe, your State Statutes offer this direction:

47-7B-8. Limited common elements.

A. Except for the limited common elements described in Subsections B, D and E of Section 47-7B-2 NMSA 1978, the declaration shall specify to which unit or units each limited common element is allocated. That allocation shall not be altered without the consent of the unit owners whose units are affected.

B. Except as the declaration otherwise provides, a limited common element may be reallocated by an amendment to the declaration executed by the unit owners between or among whose units the reallocation is made. The persons executing the amendment shall provide a copy of the amendment to the association, which shall record it. The amendment shall be recorded in the names of the parties and the condominium.

C. A common element not previously allocated as a limited common element may not be so allocated except pursuant to provisions in the declaration made in accordance with Paragraph (7) of Subsection A of Section 47-7B-5 NMSA 1978. The allocations shall be made by amendments to the declaration.

If you would like to read more about the statutes, here's a link:

[url]http://www.conwaygreene.com/nmsu/lpext.dll?f=templates&fn=main-hit-h.htm&2.0[/url]

The underpinnings of the condominium laws regarding common elements exist in this very basic premise: Any change from common element to reserved (limited) common element reduces the holdings of all owners to benefit one or more. Making such a change is possible but rarely without the consent of the owners affected.

[JenniferM4]

Thank you both for your replies! In reference to the statement that an amendment is not required because the Declaration has granted the authority to the Board:

The Declaration States:

No material provision in this Declaration or the Bylaws of the Association may be amended without the approval of 51% of the holders of mortgagees secured by Units. A change to any of the following would be considered as material:

1) reallocation of interests in the general or limited common areas, or rights to their use
2) boundaries of any Unit
Among others**************.

There is no exception listed regarding the Board's authority to reallocate.

[IndianaOwner]

Except it says, according to your post:

"Our Declaration gives power to the Board to designate Common Elements as Reserved Common Elements from time to time, and at their discretion for a reasonable charge for Use and Maintenance thereof."

As such, that was an exception added to the Declaration****************************.....

[JenniferM4]

I guess I'm confused as to why mortgagees are required to grant approval for a Declaration amendment regarding any change in the percentage interest of the limited or general areas, but yet the Board can allow encroachment into the common area at their own discretion?

Only 25% of our condo owners have the ability to expand their patios into the common area because of the lay out of the property. One Board may allow this, but then another Board may not?? ("from time to time") There are no guidelines in our governing documents outlining how those Reserved Common Elements may be used, how often the particular owner is charged--what are they using and maintaining, patios, decks, hot tubs??? What if an owner does not want their percentage interest in the common area reallocated? What are their legal rights? I believe that prior approval of common area encroachment is documented in the Davis-Stirling Act, Posey v. Leavitt (1991), and possibly many other cases.

[IndianaOwner]

Originally Posted by JenniferM4

I guess I'm confused as to why mortgagees are required to grant approval for a Declaration amendment regarding any change in the percentage interest of the limited or general areas, but yet the Board can allow encroachment into the common area at their own discretion?

Yes, you are confused. Allowing a Unit Owner to improve the property (or to "encroach" as you put it) by say adding a reasonble and nice deck which takes a Common Area and in all intents and purposes makes it a Limited Area is NOT a "change in the percentage interest of the limited or general areas". Each Unit Owner still owns X% before and after, hence the requirement of mortgagee approval is not needed. Think about it...