Both Condominium board members and unit owners should be mindful of limitations placed on them via the Rhode Island Condominium Act through requirements that unanimous unit owner approval be obtained before a condominium’s declaration is amended in specific circumstances. A condominium’s “declaration” is the document recorded in a municipality’s land evidence records in order to create the condominium, and, as a general matter, most residential condominium declarations can be amended if 67 percent of the unit owners vote in favor of the amendment. The Rhode Island Condominium Act, however, places important, additional restrictions on certain types of declaration amendments.
Requiring unanimous unit owner approval in some circumstances – such as declaration amendments increasing the number of units or changing the boundaries of any unit – makes eminent sense and is obviously designed to protect individual unit owners. A unit owner should be able to exercise a veto power if, for example, the rest of the fellow unit owners vote in favor of changing the boundaries of his or her unit. R.I. Gen. Laws § 34-36.1-2.17(d). Such restrictions are essential components of the Rhode Island Condominium Act, which is a consumer protection statute. Amer. Condo. Assoc., Inc. v. IDC, Inc., 870 A.2d 117, 128 (R.I. 2004) (describing the Rhode Island Condominium Act as a consumer protection statute).
Two other similar types of restrictions, however, are less obvious, but just as important to the proper administration of a condominium association. One such restriction relates to a change in use. More specifically, the Rhode Island Condominium Act states that “no amendment may . . . change . . . the uses to which any unit is restricted in the absence of unanimous consent of the unit owners.” R.I. Gen. Laws § 34-36.1-2.17(d). Thus, for example, if the condominium itself is in a mixed use zone, a unit owner also must be cognizant of the limitations found in the condominium declaration regarding permitted uses. If a use such as commercial activity is “restricted” by the existing condominium declaration, unanimous approval is required to amend the declaration to permit such uses. A unit owner who engages in commercial activities that are not permitted under the existing declaration is likely to face a scenario at some point in which the condominium board will fine or otherwise enjoin those commercial activities, unless that unit owner can convince each and every one of his or her fellow unit owners to agree to amend the declaration to permit those commercial activities. Depending on the size of the association, obtaining such an approval can prove impossible.
The other restriction relates to a condominium’s common area. The Rhode Island Condominium Act states that “no amendment may . . . change . . . the allocated interests of a unit . . . in the absence of unanimous consent of the unit owners.” R.I. Gen. Laws § 34-36.1-2.17(d). The classic application of this particular unanimity requirement is when unit owners seek to designate what was previously general common area as limited common area, thereby limiting the access to that specific area to only certain unit owners. Unanimous approval in such instances permits an individual unit owner to veto an amendment that threatens to deprive him or her of rights to general common area. However, the language “the allocated interests of a unit” is arguably broader in scope than mere changes from common area to limited common area. Interesting questions arise when a condominium association entertains the possibility of acquiring additional property rights, such as when an oceanfront condominium decides to build a structure to allow access to water and dock vessels, which is referred to as the legal right to “wharf out.” Is unanimous approval needed to construct the dock or other structure on the water, because it changes “the allocated interests of a unit”? Or can a subset of unit owners agree to wharf out and to cover all the costs associated with the construction, and then amend the declaration to designate the structure as limited common area strictly for the benefit of the unit owners who covered the costs of construction?
These types of situations frequently result in intra-condominium litigation if not addressed properly at the earliest possible stage. Sound legal advice as to when unanimous unit owner approval is required – in relation to changes either to “the uses to which any unit is restricted” or to “the allocated interests of a unit” – is the best way to avoid such a dispute.