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Ask the HOA Expert
Q&A |
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Assigning Guest Parking Answer: Guest parking is just that. No resident may commandeer it nor can the Board assign it unless the bylaws are changed to convert it to resident parking. This may require a 100% vote of the members since it restricts use on the common area and grants a right to some not enjoyed by all. BACK
Filling a Director Vacancy Answer: The Board is under no obligation to go on a search if you have a ready, willing and able candidate. That said, if sending a notice is easily done and there is no particular urgency, why not do it? You may discover several volunteers that would be willing to serve on the Grounds Committee or some such. BACK
Developer Manager Problems Answer: If the manager wants to survive the turnover, it would be advisable to be as cooperative as possible. It sounds like this one doesn't plan to be around long. It’s certainly your right to express dissatisfaction about the manager with the developer. Be specific about the problems and put them in writing. While you could legally pressure the developer to act, the issues should be significant to justify the expense. It's usually easier to wait until turnover when power is vested in a Board of homeowners so pressure can be brought to bear. Of course, smart developers resolve problems long before turnover. Hopefully, yours is one of the smart ones. BACK
Meeting Abusiveness Answer: Members should be welcome Board Meetings but should never be allowed to disrupt them. If there has been a history of unruliness, the President should stipulate prior to the meeting that "Guests are welcome but must listen quietly when the Board Meeting starts. Anyone that disrupts the meeting will be asked to leave." Then, hecklers are forewarned of consequences. BACK
Professional Management
Resources Answer: HOA management is the most challenging form of property management there is. You need both education and experience before plunging in. Community Associations Institute offers a variety of management seminars and certifications. Some states have HOA manager trade organizations that also would be invaluable. For example, there is California Association of Community Managers and Oregon Washington Community Association Managers which provide education, credentialing and networking opportunities. There are similar organizations in Florida, New York and Canada. For a complete list, see the Regenesis.net Links section under "Manager Organizations" One of the best reference books on the subject is "Owner's and Manager's Guide to Condominium Management". It's an excellent general reference book, not cheap but worth every penny. See Books section under "Management" BACK
Board
Member Hostility Answer: The governing documents and state law have some things to say about Board actions. Common sense, ethics and congenial personality, however, cannot be legislated. Either a director has them or doesn't. If a director is acting inappropriately, the members need point it out and demand change or vote in more reasonable and responsible directors. There are a number of articles in the Regenesis.net Article Archive under Management concerning the Board and its responsibilities. BACK
Email
Meetings Answer: Email is invaluable for communicating routine matters. However, if the Board is making decisions, deciding policy and other matters that ordinarily would be handled at Board Meetings, email is inappropriate. The members are entitled to monitor most HOA business in a formal meeting setting except highly sensitive issues like collection matters, litigation, personnel matters and contract negotiations. Some states, like Oregon, allow for closed Executive Sessions for matters such as these. Aside from this, the Board should conduct business at meetings that are accessible by the members. BACK
Exercise Room Liability Answer: This kind of situation is fairly common. For risk management purposes, a sign should be placed in the room stating that the equipment was provided by residents, not owned or maintained by the HOA and that the HOA accepts no responsibility for the use or misuse of it. This should clarify the issue and provide basis for a defense if need be. The exercise room could be an "attractive nuisance" if it attracts people, particularly minors, who misuse or vandalize the equipment. If your group is mature and responsible, it will probably work. If it creates problems, shut it down. BACK
Handicap Parking Answer: HOAs are not required to have designated Disabled Parking although must make "reasonable accommodations". That means, if the HOA has assigned parking, it should provide parking to those legitimately disabled close to their unit. The HOA is not required to create special parking if it doesn’t exist. Those with disabilities are subject to the same parking rules as other residents. If you have a Fire Lane - No Parking with signs posted that violators will be towed, it applies to one and all. BACK
Cigarette Smoking Answer: The HOA Board is charged with controlling obnoxious or harmful behavior in the common area. There is no constitutional right to smoke and the saying "The right to swing your fist ends at my nose" aptly applies in this case. There is a growing body of case law that makes it clear that the Board can and should restrict smoking in the common areas, particularly indoors, and also has the right to do so outside where residents congregate, like the pool, tennis courts, etc. The Board also has the right and duty to impose restrictions on unit smoking if the smoke is migrating outside the unit. Smokers can be required to install air purification systems and weather stripping to prevent the migration, although since opening windows and exterior doors defeat these methods, they will only reduce, not eliminate, the problem. For more on this subject, read the article "Clearing the Air" BACK
Move In/Move
Out Fee Answer: It's not uncommon to charge a Move In/Move Fee if there are actual costs incurred by the HOA but it should apply to all residents, not just renters. BACK
Annual Audit Requirement Answer: CPAs perform several levels of financial records inspection:
When governing documents talk about "audit", it means the highest form of service. Depending on the size and complexity of your HOA, this may be overkill and audits are not cheap. It makes sense to amend the governing documents to add something like "...unless a majority of the owners vote at the Annual Meeting to not have an audit done in that year." This still holds the Board and Management accountable to an audit unless the members say otherwise. BACK
Financing Special Assessments Answer: The HOA is not responsible for owner personal finances. Most homeowners have financing alternatives beyond home equity loans. While it's possible for the HOA to accept a payment plan for special assessments, collecting multiple payments is time consuming and expensive. Also, there is always a risk that some owners may default on any or several payments. Then, the HOA must engage in lengthy and expensive collection efforts. Ask yourself this: If you owned a single family home and had to pony up big money for urgent repairs, what would you do? Answer: One way or another, you'd raise the money even if it meant borrowing from friends or relatives. The HOA should stay out of the banking business. But the bigger question is why is there so much deferred maintenance? Usually it happens due to failure to plan for predictable events. It sounds like your HOA desperately needs a professional Reserve Study so major maintenance can be scheduled well in advance and funds collected systematically so special assessments can be avoided altogether. BACK
Water
Leak Damage Answer: Unless your governing documents assign responsibility to the HOA for common wall plumbing (a very important factor), the location of the plumbing leak is critical. If the leak came from a common water supply line, the HOA should fix the plumbing. If the leak came from a supply line serving only a particular unit, that unit owner is responsible for fixing the leak. The plumber should be instructed to determine which it is when performing the repair. However, even if the leak came from a common water line, it doesn't mean the HOA should fix the resulting damage to units unless the HOA was negligent in responding to the plumbing repair in a timely manner. If there was no negligence, the resulting unit damage should be paid for by the affected unit owners or their insurance. The same principle would apply to a leaking roof or errant sprinkler head that did unit damage. And the HOA is under no obligation to reimburse unit owner insurance deductibles. Some repairs and costs should be shouldered by the HOA and some should be borne by the owners, including the deductible. Most governing documents require owners to insure their unit and personal property for this very reason. To protect the HOA's insurability, the Board should enact an Areas of Insurance & Maintenance Policy which clearly defines by building and grounds component who is responsible, owner or HOA. Since HOA insurance is very broad and will pay almost any claim submitted, this policy will determine which claims qualify. An Areas of Responsibility Policy will put both unit owners and their insurance companies on notice of how it works at your HOA so most disputes can be settled before they start. The Areas of Responsibility Policy cannot shuffle responsibility for maintenance or insurance where the HOA clearly is obligated. It simply should describe the dividing line. BACK
What is an Executive Session? Answer: There may be a state statute that defines "executive session". If so, you need to follow it. If there is not a statute, the board generally is permitted to hold an executive session to discuss litigation, employee or contractor issues, or collection matters involving specific individuals. The board should not abuse this by using it to discuss controversial topics normally discussed in regular board meetings. As a rule, executive sessions should be rare. Executive sessions can be announced at a regular board meeting when a topic arises that warrants it. The board then goes into private chambers to discuss the matter and then returns to the public meeting. An executive session can also be scheduled in advance but should disclose the general nature of the meeting so the members understand why the meeting is not public. BACK
Collecting from Bank Owned Properties Answer: Bank owned
properties can become common in HOAs when the real estate market is not moving
homes quickly enough. Foreclosed homes can remain vacant for long periods, may
have yards full of weeds, maintenance issues and HOA fees may go unpaid in
months.
Unchaperoned Pool Guests Answer: Having residents accompany their guests is a standard that should be upheld. If it’s not in place, what’s to stop a resident from inviting their friends over to swim any time they want? Hold the line on this one. BACK
Are "Partners" Owners? Answer: In most HOAs, only owners are allowed to serve on the board. You need to read your governing documents to see if that is the case in yours. On the other hand, committee members can be unmarried partners, renters and non-residents. BACK
Management Company Surveys Answer: Since the majority of owners are disconnected from the day to day HOA business and have little understanding of the manager’s scope of work, most would not have an informed basis for evaluating the manager’s effectiveness. An input form might be more effective. List the various tasks the HOA is responsible to perform in general categories like General Maintenance, Landscaping, Pool, Janitorial, Communications, Newsletters, Rules Enforcement, Financial Reporting etc. and ask for specific recommendations for improvement. If the suggestions are directly related to things the manager should be taking care of, the board has something concrete to discuss about job performance. BACK
Password Protected Websites Answer: Concealing (password protecting) information that an informed buyer needs to know is a major weakness of the HOA system. There are few business matters that an HOA should concealed from potential buyers. The budget and reserve study are definitely high on the list of things to disclose. Protecting individual owner privacy is another matter and should be respected. BACK
Publishing Employee Salaries Answer: Disclosing this kind of information could create animosity between employees or prompt interference from members who feel someone is paid too much or too little. It is something the board should keep confidential. It is appropriate, however, to disclose the total amount of wages/salaries paid in the annual budget. BACK
Denying A/C Requests My son has a rare disease and a compromised immunize system. His doctor has recommended carefully controlled temperatures (not too hot and not too cold). I can control the cold part but need A/C to control excessive heat. Shouldn’t I be able to get an exception due to health reasons? I don't want to have to pay his doctor to write a letter to the board. Answer: The board should make a reasonable accommodation for this purpose. You should ask your doctor to provide a letter at no charge explaining the need for it so the board has the ammunition it needs to make an exception to the rule. BACK
Door to Door Collections Answer: Sure, but why do it? The HOA has extraordinary collection powers. Ask nicely. If no response, then swing the collection hammer using a qualified attorney. BACK
Guest ID Procedure Answer: Yes, the board has the authority to enact and enforce this policy. Requiring identification is not the same as denying entry. You live in a gated community for a reason...to restrict access to all but invited guests and vendors. This requires certain protocol. While this policy is certainly more restrictive than some, it does deter those with bad intent. BACK
Straw Polls Answer: Straw polls are not very effective, particularly for sensitive issues, since the poll does not allow discussion of deeply held feelings and beliefs. Sensitive issues are bound to set somebody off and create a public relations problem for the board. If there is an sensitive issue, the board should hold a special meeting to discuss it. Rather than have some rambling discussion, there should be a specific proposal to do such and such. Those that like or oppose it will then have something specific to bounce their ideas off of. BACK
Owner Comments in Minutes Answer: No. If she has something to say, she should attend the meetings. And even if she did, what she has to say is not appropriate for the meeting minutes. Minutes should reflect board business decisions, not visitor discussions or opinions. BACK
Who Provides Governing Docs? Answer: It is not management’s responsibility. It is the unit seller’s responsibility. The fact that this new owner did not receive them does not relieve him of the obligation to adhere to them. His beef, if there is one, should be with the seller or the seller’s agent. Management can also provide copies at a reasonable charge or post them to the HOA’s website if it has one (highly recommended). BACK
Director Undermining Answer: The board president should speak to this board member reminding him that he’s entitled to his personal opinion but is personally responsible for misrepresenting the board. What does that mean? It’s fine for him to state that he did not agree with the vote, but the board is ruled by majority vote. If he continues to undermine that vote, he will find himself marginalized by the rest of the board. BACK
Board
Reverses Approval Answer: No, the board 10 years ago approved the installation and the current board cannot reverse that decision. But try to maintain the high road on the matter. Offer a compromise: The next time the fence needs to be replaced, agree that it will be done with a conforming design. Offer to sign a recordable document that discloses this requirement to future owners. BACK
CPA Services Answer: An audit involves examination of financial statements, on a test basis, evidence supporting amounts and disclosures in financial statements. It also includes assessing the accounting principles used as well as evaluating the overall financial statement presentation. In conducting an audit, CPAs are required to obtain reasonable assurance about whether the financial statements are free of material errors or irregularities. An audit offers assurance that the statements present a homeowner association’s financial position, results of operations and cash flows in conformity with Generally Accepted Accounting Principles (GAAP). CPAs also offer two other types of services: review and compilation. In performing a review, the CPA applies analytical procedures to financial statements and makes certain inquiries of the bookkeeper. Review procedures are substantially less comprehensive than those performed in an audit. They allow CPAs to express limited assurance on conformity of the financial statements with generally accepted accounting principles. In compilations, CPAs put financial information supplied by the clients into the form of financial statements, but do not express any assurance on the statements. BACK
Board Meeting Forums Answer: The format you describe is the recommended way of holding board meetings. If non-directors are allowed to interject, the meetings would invariably be overly long or degrade into shouting matches. You do have the right to speak or ask questions during the board meeting if the Chair allows it. Directors are elected to serve without interruption to accomplish business in an orderly way. If you disagree with how the board handles business, you should run for the board, get elected and start making a change. You also have the right to speak your mind at the annual homeowner meeting or call a special meeting if supported by an appropriate percentage of owners (as defined in the governing documents) requests one. BACK
Dryer Vent Cleaning Answer: Dryer vents are the source of fires and water damage (leaks in the ceiling) so should be checked and cleaned at least once a year or when alerted by residents. Surveying the exterior vent openings determines the scope of work since it's easy to see evidence of lint buildup. Removing selected vent covers and using a shop vac with extended hose attachment to remove the lint usually does the trick although a snake with pipe brush attachment may be needed to remove heavy buildup. Be careful to use appropriate equipment based on whether you are cleaning solid metal or plastic pipe versus the more flimsy flexible plastic pipe. The wrong kind of snake will easily damage the flexible pipe. Clean only those vent pipes that have an obvious need except in the cases where there is documented interior water damage. In those cases, cleaning is necessary to remove water from the vent pipe. It may also be necessary to open the ceiling to correct the vent pipe orientation since water leaks from laundry vents are usually caused by a flexible pipe that has bellied out. Vents with broken exterior flappers should be replaced to prevent bird nesting. This should be done as necessary when alerted by residents, management or maintenance. BACK
Late Night Noise Answer: Disturbing the peace is against the law. You've done what any reasonable person could do. Remind your neighbor in writing one more time how many times you have requested his cooperation and inform him that the next time it happens, you will call the police. And DO it. If he insists on being inconsiderate, he should reap the consequences. BACK
Yard Sales Answer: Life is fraught with risk but yard sales don’t generally come to mind as high risk activities. It sounds like the board has been terrorized by an attorney or insurance agent. Usually, the issue in HOA garage/yard sales is the additional traffic and parking they generate. Some HOAs have almost no extra parking or narrow streets so sales create a real problem. In those situations, sales are not appropriate. If this isn't the case, the board is overreacting. BACK
Reserve Study
Estimates Answer: Reserve studies include building and grounds components that require cyclical replacement or repair. All reserve components require regular and adequate preventive maintenance to last their predicted lives. Wood decks typically last 20 years and siding 30-50 years when properly installed. However when improperly installed or maintained, decks and siding can contribute to dryrot by allowing water into places they were supposed to protect against. Reserve studies inspections are visual only which means that no special equipment is used to detect what is may be going on beneath the surface, like water intrusion that could lead to dryrot. Special equipment is used by qualified inspectors to detect moisture in and beneath siding. This is referred to as a "forensic" inspection which can involve destructive testing (like removing siding) to determine what is going on beneath. A reserve study inspection may detect the evidence of dryrot in siding and decks but dryrot is like an iceberg...most is hidden from view. Dryrot can travel from siding to building sheeting to stud walls and floor joists and generally does so at an accelerated rate relative to normal wear and tear. And the longer the repair is delayed, the costlier it becomes. In wet climates like the Pacific Northwest, building designs with little or no roof protection (flat roofs or pitched roofs with little overhang) are most likely to develop premature deterioration to exposed siding, trim and decks. To complicate matters, windows are often mis-installed and leak water into the structure. So, there are many reasons why dryrot occurs: poor design, badly installed building components and failure to provide regular and adequate maintenance. While reserve studies aren’t designed to detect dryrot, doing one with a visual site inspection at least every three years will help detect dryrot conditions early and reduce substantial repair costs. BACK
One Year Live
In Requirement Answer: The board does not have the authority to enact this kind of resolution since it negates basic property rights. Typically, only an appropriate vote (as defined by your governing documents which may be up to 100%) of the members may approve this kind of requirement. But if having rental units is undesirable for the majority of unit owners, it is more common to enact either rental restrictions (allowing only a certain number or percentage of units) or ban them altogether. Out of fairness, if restricting rentals is desired, a total ban on rentals is the recommended approach. Administering a partial Rental Restriction Policy is a constant cat and mouse game between unit owners and the board with the renter caught in the middle. Finally, whatever policy is adopted, there needs to be a hardship exception. There are two sample rental policies in the Policy Samples section. BACK
Using
Member Contact Information Answer: The board needs accurate contact information to communicate news and notices, process rule violations and collections, and other HOA business. Making contact information public is fine if each member listed agrees to it. So, before doing so, get an approval email or letter from each member. If you don’t get one, it counts as a "no" (failure to respond is not a "yes"). BACK
Violating Paint
Standards Answer: It’s up to the unit owner to follow the approved paint color standard. Violating that standard and claiming he’s exempt because the board didn’t catch him in time is quite an imaginative argument. It’s not up to the board to discover violations like these. But once they are discovered, the board does need to take action in a reasonable time frame. It sounds like the board acted in a timely way once informed so should continue to press for compliance and enforce fines if compliance isn’t forthcoming. BACK
Time Limiting
Board Meetings Answer: Generally, board meetings should not go longer than two hours which seems to be the limit of concentration for most people. Meetings are more efficient when the agenda, related information and recommendations are circulated to the board in advance for review. In other words, if the board comes prepared to make decisions, most of the rambling discussions can be curtailed. Remember, the board is not elected to talk about things but to make informed decisions and get things done. Having lengthy meetings discourages people from running for the board. Successful business people (the kind you hope to attract to the board), want business to be handled efficiently. Endless meetings with droning discussions are a deal killer. An effective meeting is not the product of time but how well that time is handled. When information is organized, the goal to make decisions and a president prepared to keep the discussion moving toward that goal, an enormous can be accomplished in 1½ hours. BACK |
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