Q: In the wake of the tragic Florida condominium hi-rise collapse last year, I understand that Fannie Mae and Freddie Mac are now requiring additional information about the safety and maintenance of condominium buildings before they will guarantee mortgages.

If we as a board of directors of a condominium association are asked to provide such information, what are our obligations?

A: You do not have an obligation to respond to the lender questionnaire in part or in its entirety, and there may be other avenues by which the lender may be able to confirm the safety and habitability of the structures, such as through the seller.

That said, if the lender is unable to confirm same, your association may be placed in a database and labeled as ineligible for loan guarantees from Fannie Mae / Freddie Mac, and that may impact the marketability of your units. So there is some incentive for you to cooperate to the best of your knowledge.

If you feel the least bit unsure or hesitant to answer any of the questions, you should obtain guidance from an attorney on how to address a particular question. Generally speaking, it would likely be appropriate to provide any non-privileged documentation regarding assessments, reserves, minutes, etc. that would provide evidence that the association is properly addressing maintenance issues.

It is likely that the seller has a right to those documents in any case. However, you should consider asking your attorney to prepare a disclaimer clarifying that you are not an expert in the areas of construction, repair, etc. and are only answering to the best of your knowledge.

Rescuers continue to search through the rubble of the Champlain Towers South Condo collapsein Surfside Florida on Monday , June 28, 2021


Frankly, we have seen too many situations over the years where boards of directors have been reluctant to spend the money to properly maintain and repair the condominium project or would not otherwise build up adequate reserves, so this may be a wise move on the part of Fannie Mae / Freddie Mac.

While not a requirement in Michigan, other states such as California require periodic reserve studies to be performed, where an expert will examine the common elements and provide estimates for when and how much will be required for repair or replacement of each element.

The new requirements from the federal government seem to be encouraging all condominiums to get reserve studies performed, but again, check with your experienced condominium attorney for a recommendation.