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Ask the HOA Expert
Q&A |
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Board Spending Answer: Why is the Board spending money outside of its authority? Are the documents vague on what the association is responsible for? If this is the case (and it often is), the Board needs to establish clear guidelines on what the association will, or won't, spend money for. This can be accomplished be enacting an Areas of Responsibility resolution that divides specific maintenance responsibilities between homeowners or the association. Once approved, the Board should filter all spending decisions through the approved policy. Occasionally the Board may want to override the policy but, as a rule, it should serve in 99% of all cases. It’s also imperative that the Areas of Responsibility policy be distributed to all homeowners so they are put "on notice". It has the added benefit of clarifying insurance responsibility so that owners are buying the right type of insurance. Question: I don't feel the Board spends money in our best interests. I protest by withholding payment until year end. Recently, I received a notice saying if I didn't pay, they would put a lien on my home. Can they do this? Am I wrong to protest this way? Answer: Withholding assessments in protest is not the way to get your point across and, yes, the Board has both the right and duty to process collection on delinquencies. I assume your concerns are for the community as a whole and not for personal issues. Your points and solutions should be made in writing to the Board. Whether they act on them or not is another question. If they don't and you feel strongly that they should, I encourage you to run for election so that you can have a direct affect on the outcome. It's every owner's duty to serve. BACK
Special Assessments
vs. Borrowing Answer: Loans usually make sense for major renovation projects that cost each owner $10,000 or more and that have a recognizable benefit to future owners. While $2,000 each is not insignificant, it is manageable. Also, lenders are usually interested in loans of at least $100,000 or more and the application work and cost to package a loan is fairly significant. I suggest you do a special assessment for this one and if you haven’t performed a reserve study to plan for other periodic maintenance and replacements, invest in one now as well. BACK
Board President Authority Answer: The President has the authority to make decisions on behalf of the association unless it involves an extraordinary issue and cost which clearly require Board or owner approval. If legal costs are budgeted for (and they should be) and the particular cost relatively small, the President has the right to do what was done. BACK
Special
Assessment Responsibility Answer: Unfortunately, there is no magic money and if one owner defaults, the rest are on the hook until the debt is paid. Fortunately, the association has the right and should pursue aggressive collection on the defaulting owner. At minimum, a lien should be filed against the unit so that the association has some recourse to collect the debt. State law may allow foreclosing on the property but that makes sense only if there is enough equity to pay the association debt plus resale costs. You may also have the right to shut off common utilities like water and sewer as well. These actions should be handled through an attorney that specializes in homeowner association law. Timely collections on delinquent account are critical. The longer delayed, the bigger the problem. BACK
Naming Names Answer: There is no faster way to generate community wide ill will than by humiliation tactics. The general rule is "innocent until proven guilty" and names should be kept anonymous. Even when guilt is confirmed, treat the offender with respect remembering that this is a neighbor and not a convicted criminal. Also, if something slanderous is said at the Board Meeting, there is always a chance the Board and Association could get sued. This is one area that showing them who's boss will never work. Tread carefully. BACK
Board Authority
to Add Costs Answer: The Board has the right to organize and appoint volunteer committees as appropriate. If committee events are being paid for out of the general fund and this is a new cost, the Board should get homeowner approval first. If there is no cost or the events are funded voluntarily by interested owners, no issue and no problem. BACK
Service Dog Policy Answer: While the board needs to make reasonable accommodations for seeing eye and hearing dogs, "therapy dog" is a new one and certainly a stretch. (Aren’t most pets kept for "therapy" reasons?) Since this pet owner had ample opportunity to know and understand the No Dogs rule and ignored it, it's right that the Board move forward with enforcement. However, these matters can get very costly if contested. Pets are like family and this one may be willing to go the legal distance...hiring a lawyer, etc. If so, it may be prudent for the Board to settle based on a medical exception. Sometimes practicality is the better part of valor. BACK
Starting
a Management Company Answer: What? Are you crazy? (Just kidding). Homeowner association management is probably the most challenging form of property management there is and you need the best training you can get. CAI - Community Associations Institute offers a variety of management seminars, resources and designations. I suggest you join the organization and get properly accredited. Also, get your state's equivalent of a property management license. BACK
Recording
Comments at Homeowner Forums Answer: A Homeowner Forum is a wonderful way to include owners in the process. However, it is not technically part of a Board Meeting so the secretary is correct. But homeowner comments are noteworthy and should be recorded separately from the meeting minutes (unless the comments are inflammatory or libelous, of course). They, like the minutes, should be circulated to the other owners to encourage others to get involved. BACK
Holding Executive Sessions Answer: First, you should read your governing documents and state statutes to see what it says about Board Meetings and if the Board is even allowed to meet in Executive Session. Even if the statute is silent or the Board is permitted, executive sessions are often misused by Boards that want to exclude owners from otherwise open meetings. They should only be used for selected issues. In Oregon, they are allowed for: 1. Consultation with attorneys concerning regarding litigation or criminal
matters; In other words, only a few highly sensitive topics should be used for executive session. All other matters need to be discussed in a formal Board Meeting. BACK
Limiting Rentals Answer: There is a good reason for limiting rentals...More than 30% of the total occupancy can limit home loan options and make the homes difficult to sell. If units are difficult to sell, prices will drop. However, rental restrictions can be very difficult to enact and administrate. The Board could easily get into a "cat and mouse" game with some owners who want to rent their unit. Since rental restrictions restrict property rights, it’s a topic that definitely should be discussed at an annual or special meeting with all owners before moving forward. It calls for a bylaw amendment which requires approval of the required number of owners defined in your governing documents. See also the articles "Renter Rights" and "Limiting Rentals". BACK
Nominating Committee
Control Answer: The Nominating Committee's job is to identify good candidates for director positions but they should never interfere with the nomination or election process. That sounds like something that would happen in some third world dictatorship (or Florida). ALL nominees should be included on the ballot. Mail-in ballots are not recommended unless there is a huge percentage of absentee owners because this precludes nominations at the meeting. As you say, if many ballots are already cast by mail, floor nominees don't stand a chance. The alternative is to mail a proxy to all owners which authorizes an appointee who attends the meeting to vote on an absent owner's behalf. The proxy appointee could be a relative, neighbor, a board member or anyone of legal age. This Board and Nominating Committee needs a stern reminder about the democratic process. BACK
Restricting Signs in the
Common Area Answer: The association usually has the right to limit signs in the common area and what is placed in home windows. Small security stickers on the window are usually allowed. The main concern is curb appeal. Uncontrolled signage creates a cluttered look and reduces property values. BACK
Reserving for
Landscaping Answer: It’s wise to include "Landscape Renovation" and "Treework" in the Reserve Study. All bushes and trees have a limited life. Bushes die and outgrow their location. While trees usually have a long life, they require corrective pruning that should be done every 3 - 5 years and is expensive. Hiring an arborist to do a comprehensive inventory and report of the trees also makes a lot of sense. If each tree is tagged and referenced in the report, maintenance can be easily tracked. Consistent corrective pruning will extend the lives of the trees and keep them looking good. Insurance for non-income producing trees provides limited coverage for claims related to fire, lightning, explosion, riot, aircraft, vehicles, vandalism and theft. Most of the claims are related to vehicle damage. Wind, freezing and pest claims are not honored. And the insurance does not actually insure the trees for value but provides replacement in standard nursery sizes. In other words, that wind fallen 80 foot Douglas Fir will probably get you an 8 foot replacement. Based on the coverage available, $5000 coverage will cover quite a few replacements. To avoid the possibility of insect infestation, use native trees that are hardy and pest resistant. If you already have those prone to insects, consult with an arborist for the proper preventive maintenance or cut them down and replacement them. BACK
Maintaining Owner Add-ons Answer: The Board has no authority to expand an owner’s use of the common area. Any redefinition or reconfiguration of common area must be approved by an appropriate majority of owners which may be 100% depending on how your governing documents read. However, what is done is done. If the policy has been that the owners that have installed the additions pay for all maintenance and repair, that should be the policy now and the current Board should take inventory of all owner additions and advise those unit owners of their maintenance responsibilities. To avoid misunderstandings, any unit that is so affected should have a document recorded on the title describing the addition and the owner’s maintenance responsibility. This same principle applies to future modification approvals by the Board. BACK
Audits Between Managers Answer: It's always a good idea to have the books audited at change of management. The new company may insist on it or, at least, not take any responsibility for financial reporting of transactions that took place under old management. An audit is a good idea when there is a total change in the Board as well. If the Board has been reviewing regular financial statements and has verified that the information was accurate (for example, the Treasurer has been comparing financial statements to the bank statements) and bills paid have been reviewed and approved by the Board, it may be okay to skip an audit, but the bigger the budget, the bigger the likelihood of problems. BACK
Blocking Amendments Answer: Any HOA member (whether director or general) can propose a bylaw amendment. Bylaw amendments must be approved by the appropriate majority of general members. The board has no authority to amend the bylaws on its own. And the Board President has no power to block an amendment proposal on his own. He, of course, is entitled to his own opinion and is free to express it. He is not entitled to hold the HOA hostage because of his office. The Board President serves at the pleasure of the other board members. If he is being difficult, the other directors can remove him from office. BACK
Replacing Unit Appliances Answer: A condominium unit belongs to its owner and the HOA cannot take on this kind of expense unless every individual owner agrees to it. It often makes financial sense, however, for the HOA to arrange group buying for owners. For example, in some states, exterior windows are a unit owner's responsibility to replace. If the building has old, single pane aluminum windows, it makes enormous sense for the HOA to coordinate a full window replacement project because individual owners could save up to 50% of the cost. Similarly, having the HOA purchase many dishwashers at once will doubtless save owners a lot of money. However, the HOA cannot force an owner to participate and some might opt out for any reason. BACK Hardwood Floors Question: We live in a four story building. Is there any law that prohibits installing hardwood floor because of sound transmission problems? Answer: There is no law that restricts installation of hardwood flooring although some governing documents might prohibit it. Most new construction designs anticipate the noise issue and the desire for hardwood flooring, so install concrete subfloors to address noise transmission. In older buildings without concrete floors, this can definitely be a real problem for downstairs neighbors. In these buildings, hardwood flooring would definitely create a noise problem if it was installed without proper sound dampening. To safeguard all owners’ quiet enjoyment, it is perfectly within the Board's authority to require hardwood flooring include sound dampening. There are several sound dampening materials that can be used including cork and Mass Loaded Vinyl (see www.soundproofing.org/infopages/flooring.htm). The Board should research alternatives and adopt a standard for such installations. Once adopted, the information should be made known to all owners and that failure to comply will result in an order to remove the flooring. BACK
Group Contractor Meetings Answer: It makes a lot of sense to have a joint walk through. It will save time for all concerned, all questions get answered at the same time and all bidders get the same information to craft their bids. BACK
Temporary Parking Rules Answer: Rather than trying to micromanage these kinds of things, the board should revise the parking policy to allow parking of boats, storage containers and construction dumpsters for a specified period of time. The neighbors will let the board know if the time limits are being abused. BACK
Publishing Delinquencies Answer: Distributing a list of this kind is a very bad idea. It’s akin to the humiliation of the stocks and pillary. But today, it could get the board sued for libel. There are also good and practical reasons for not doing this:
1. All delinquencies are not created equal and
not all delinquents are deadbeats. There could be legitimate extenuating
circumstances like job loss, disability, divorce, etc. The board should cease this action immediately. If they insist on publishing a list of delinquencies, the amounts, days overdue and action taken will suffice. Names and addresses are unnecessary. BACK
Developer Mismanagement Answer: Developers that control the board always have a conflict of interest. They have homes to sell and having them look nice will help move them. However, if the developer is paying for his marketing costs (like enhanced landscaping) out of HOA fees, you have a right to cry "FOUL"! If the developer wants to add flowers and other eye candy that the HOA normally would not do, he needs to pay for it out of his developer marketing budget. If you are paying HOA fees, you are entitled to see monthly financial (income and expense) reports that detail how that money is being spent. If the developer is allowing things that are clearly prohibited in the governing documents, again, current owners have the right to hold him accountable. The developer is not above the law when it comes to following the governing documents, rules and regulations that other owners are required to follow. I suggest that you gather owners and compose a letter to the developer listing specific concerns and what you would like to see happen. This makes your complaints a matter of record. If the developer ignores your reasonable requests, a letter from an attorney may be necessary. Smart developers know that once the HOA is turned over to a board of owners, bad things could happen if he has not acted reasonably. Let’s hope this one gets the message the first time. BACK
Good
Neighbor Fence Answer: You have a golden opportunity to improve neighbor relations by building a "good neighbor" style fence which looks the same from either side. It costs a bit more than a board fence but maybe the neighbor would be willing to share in the extra expense or even pay 50/50. Even if they don’t, the small increased cost is a great way to improve relations. Win-win. You can find specifications for a Good Neighbor Fence in the Specifications section. BACK
Wind Chime
Noise Answer: Complaining about a wind chime sound seems pretty extreme but if your location is given to frequent wind, the sound could get loud and obnoxious. If this is the case, wind chimes, just like loud music are subject to the "nuisance" restriction which exist in virtually every HOA. This owner needs to remove the wind chime or install one that is small and less noisy. BACK
Changing Annual Meeting Date Answer: Directors terms are tied to the annual meeting which conforms to their term (one, two or three years). Changing of meeting date doesn’t change their term of office. This time around, it will simply be three months longer. BACK
Front Yard Vegetable Gardens Answer: The board has the authority to enact reasonable standards to preserve property values. Generally speaking, HOAs should have standards when it comes to landscaping which restricts vegetable gardens to backyards or out of view from the street to promote curb appeal. BACK
Changing Repair Responsibility
Hard Times Collections
Determining Management Fees B
Purging Names from Minutes
Approving Parking Rules
President Voting Proxies |
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