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Ask the HOA Expert
Q&A |
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Rules
Enforcement Procedure Answer: Having a long list of rules is usually not advisable but the Board has the authority to enact reasonable rules and procedures when necessary. The Resolutions Process is a great way to define the complex issues. Resolutions can be used to address things like collections, architectural control, pets and parking. Resolutions enacted by the Board should include: 1. Clear explanation of the issue Maintenance
Request Forms Answer: Three part carbonless forms work well. The original for the file, one copy for the owner and one copy for the maintenance person. I highly recommend using email because the request is filled out by the owner and can be moved quickly along to maintenance, management and accounting. BACK
Appearance
Rules Answer: Rules like this are intended to control the curb appeal standard for the community. The rules tend to soften if the offending issue is relegated to the back yard, presumably out of sight. While the Architectural Committee does have the right to interpret the rules, it does answers to the Board. If you disagree with their interpretation, talk to the Board. BACK Tree Huggers Answer: Trees are one of an association's biggest assets and should not be removed without compelling cause. But some do need to be removed from time to time. For more, read the article entitled "Politics of Trees" which will be of some assistance. There are several other tree articles in the same section. BACK
Leak
Repair Responsibility Answer: The association is not automatically responsible for damage to your unit. For example, if torrential rains caused the gutters to overflow and flood your basement, the damage would be yours to repair and claim should be filed with your insurance. Under the scenario you describe, however, the management company (the association’s agent) obviously failed to respond in a timely manner. This failure resulted in damage which rightly should be paid by the association. Of course, the Board may have an issue with the management company for failure to respond but that’s another Q&A. BACK
Voting
Majority Answer: Failure to vote does not qualify as a "yes" vote. 67% is a relatively high threshold so it’s important to tally every vote, yea or nay. If voting by mail, there may be a number of ballots that aren’t returned for one reason or another. Those owners should be called and reminded or the ballets picked up. If a meeting is held to discuss and vote on an amendment, each owner should be complete and return a proxy in advance of the meeting designating someone that is authorized to vote on their behalf if unable to attend. The combined total of attendees and proxies can usually produce the 67% needed to pass the amendment. BACK
Assessing
by Volume Answer: The assessment allocation is described in your governing documents and cannot be changed without (usually) 100% of all owners agreeing. Some attorneys are of the opinion that even the lenders may have the right to vote since reallocating assessments impacts their collateral. Bottom line, the Board is not authorized to make changes in the allocation on its own. Another mistake that is commonly made is splitting special assessments equally when regular monthly assessments are not equal. The same formula should be applied to special assessments as with the regular assessments. BACK
Comparing
Assessment Levels Answer: As a real estate counselor, you need to know what is included in the monthly assessment. One critical element of comparing monthly assessments is reserve funding. All homeowner associations should have a 30 year reserve study done to identify future repair and replacement costs and have a regular monthly funding plan to pay for those events. A properly done reserve study will eliminate the need for special assessments for predictable events. If the higher assessment includes reserve funding and the other doesn’t, it may actually be a better deal. I’d recommend that the buyer only consider homes in HOAs that have a funded reserve plan to guarantee no special assessments. Those that are properly funding reserves usually handle other business responsibly as well. BACK
Board Training
Resources Answer: Fortunately, there are numerous options at Regenesis.net including:
Pet Rule Enforcement Answer: Pets are among The Three Ps that vex homeowner associations (People and Parking are the other two). The issues you mention are common and somewhat of a moving target. Sometimes the pets aren’t even resident but come from elsewhere. Cat owners can be among the worse offenders as they often feel their pets should be able to roam freely. A cat owner once told me that cats are "liberated" animals under the law. (Can you believe it?) Whether dog, cat or iguana, all pets need to be properly cared for, supervised and restricted from roaming. First, it’s important to have clear pet standards. Suggest to the Board that one be adopted and circulated. After 60 days, identify those residents that ignore the policy and begin a "squeeky wheel" campaign. Be nice about it. Remember, these are neighbors. BACK Personal Items in
Common Area Answer: The Board should be flexible when it comes to decorating the patios and decks as long as it doesn't damage the buildings in any way. Flower pots and wind chimes are commonly allowed. Personal property storage should not be allowed either on decks, patios or common area. If bird feeders are causing a rat problem, regardless where they are, they should be banned for health reasons. They and other personal items in the common area should be removed without warning after written notice to all residents that such is the policy. BACK
Shifting
Maintenance Responsibility Answer: This "half enchilada" approach was doubtless hatched by the Board because of a lack of reserve funds to address the whole enchilada. But there are several BIG problems in it. If the governing documents say that the association is responsible for exterior maintenance, that what it means. That also includes structural damage related to exterior problems. Also, it penalizes individual owners for repairs that should be paid by all owners. Lack of money does not justify shuffling off association responsibilities to individual owners. If there isn't enough funds in reserve, a special assessment needs to be floated to raise the remaining amount. To prevent shortfalls in the future, the Board should have a Reserve Study done to analyze the long term repairs and costs like roofing, painting and paving. It’s imperative that the Board prepare for predictable and expensive events. BACK
Rebuilding
Fences Answer: It seems this neighbor is the tail wagging the dog. They don't propose to pay the cost but want to call the shots. The Architectural Review Committee (or Board of Directors if there isn’t one) should determine the look and location of the fence. I suggest you make a written request to the Committee for both the fence style and property line location subject to being built according to city building code standards. The neighbor has no right to demand it be moved to a new location unless it is actually encroaching on his lot. Fences rightly belong on the property line. BACK
Appealing
Rules Answer: Yes, you definitely have rights as a homeowner. While the Board has the authority to make reasonable rules (emphasis on "reasonable"), rules work best when the governed understands and is in general agreement with them. If a rule is not reasonable, you have the right to question it. Generally, a small number of homeowners can request a special meeting to discuss such things. Check your governing documents for the percentage required to call a meeting. It’s very important that the Board not forget they are neighbors as well as officers. Rule making should be done thoughtfully and respectfully. The Board should explain and justify why a rule is needed. For example, bikes are usually not banned from city streets. Why should they be banned from the association streets? Is there some extraordinary situation that warrants it? BACK
Composing
an Agenda Answer: Putting an agenda together does not constitute a formal meeting as long as no business decisions are made. If a quorum of directors is not achieved, a legal meeting cannot be held and business should not be transacted. BACK
Paying
Directors Answer: Aside from the fact that your governing documents probably prohibit paying directors, there is a conflict of interest. Since the President is the chief officer, he authorizes his own pay. And who supervises him? Are federal and state withholding, unemployment and workers comp insurance guidelines being followed? He is, after all, an employee if he’s being paid. For a variety of legal and practical reasons, this arrangement should end. The board’s job is to supervise. If the association needs work done, it should hire a professional. BACK
Attracting
Stray Pets Answer: Pet lovers often have tunnel vision when it comes to pets and trying to reason with them may be difficult. Send a non-accusatory letter to all residents about the issues and the consequences. Most people will understand and comply. The rebels may need fines and charging costs for professional removal of cats attracted to their feeding. BACK
Restricting Investor Ownership Answer: Yes, the HOA can limit rentals but it is subject to an appropriate vote of the members as defined by the governing documents which may be a super-majority (2/3 or 3/4) or even unanimous. Of course, the more rentals you have, the tougher it will be to get the vote. But now, lenders are more closely scrutinizing the number of rentals within condominiums. FHA, Fannie Mae and Freddie Mac all impose rental restrictions on loans they insure (FHA) or underwrite (Fannie Mae and Freddie Mac). FHA’s limit on rentals is 15% and 49% on the other two. Since these entities are responsible for the lion’s share of condo loans, failing to adhere to the rental restriction limits could severely compromise the ability to sell or refinance a unit. BACK
Failure to Reserve Answer: Asking for owner input to prioritize maintenance is asking for trouble. Most will ask that something that affects them personally be fixed first. That’s human nature. Instead, the board should develop a plan, share the plan with the members and ask for comment. That way, the board leads with input from the members. BACK
Voting on Rental Restrictions Answer: Rental restrictions are often considered a fundamental property right by the court. Once the matter is put before a judge, anything can happen and, in this case, did. Whether the HOA should appeal is a matter of cost and likelihood of prevailing. A fair amount of money and emotion has probably already been expended. The board should not spend any more of the HOA’s money unless the 75% majority is supportive of spending more in the way of a special assessment. BACK
Special Rules for Rentals Answer: It is reasonable for a unit landlord to provide the board a copy of the Rental Agreement for emergency contact information purposes. It is also reasonable for the board to require that all renters are subject to the same rules and regulations as owners. So, the Rental Agreement should include a copy of the HOA Rules and Regulations and make violation of them subject to fine and/or eviction. However, the board has no authority to single out landlord owners for special fees unless those fees are based on actual costs incurred by the HOA. Sometimes a Move In/Move Out fee is charged because the entry code, mailbox tag and additional janitorial is required to clean up after a move. However, owners move as well as renters. If there is cost incurred by the HOA, it should be charged to both owners and renters. Landlords should not be singled out for special treatment or charges. The board cannot require a specific rental term other than, say, all rental terms must be "a minimum of six months" versus "short term (nightly)" such as those that take place at resort locations. Many state statutes prohibit Rental Agreements longer than 12 months. BACK
Resigning from the Board Answer: Directors are elected by the members and do not need the board’s approval to resign. If a director quits, all she needs to do is communicate that to the board and it’s done. It’s now up to the board to appoint a replacement unless the annual meeting is happening very soon, in which case, a replacement can be elected. BACK
Role of Manager at Meetings Answer: The role of the manager at a board meeting is to keep the board apprised of HOA business by giving a manager's report. That report should include maintenance accomplished or recommended, contractor issues, rules violations and actions, collection report and actions taken and rule/policy recommendations. The manager should request authority or guidance on issues that fall outside of the Management Agreement. The manager should not take meeting minutes since it distracts from the manager’s advisor role. Taking minutes is the Secretary's job. The Annual Meeting is a whole different story. The manager should arrange and process the Meeting Notice and proxies, arrange the venue and check in procedure. The manager should respond to questions from the board and members. BACK
Odor Nuisance Answer: It’s not up to the board to track down and deal with every disturbance, particularly if it involves criminal activity. However, this activity may actually be legal if the resident has an approved "medical marijuana" permit available is some states. Regardless, if the neighbor is smoking marijuana, a direct communication with the neighbor is appropriate to discuss the matter. Like cigarette smoke, marijuana can adversely affect the health of others and there is no Constitutional protection to engage in it. BACK
Resisting Reserves Answer: If the HOA is responsible for maintaining the roof and paint, no owner has the right to "opt out" nor does the board have the authority to give up the HOA’s responsibility to do the work. The board should press on and do what the governing documents said it should. However, your HOA desperately needs a reserve study so that the board can properly plan for repairs and collect money for reserves without special assessments. Special assessments are the result of poor or no planning and unfair to those that have to pay them. See Reserve Planning at www.Regenesis.net. BACK
Mandating
Unit Plumbing Answer: Great points. While the HOA generally cannot require unit owners to install particular fixtures or equipment, logically it should when the HOA pays the water and sewer bill. Leaking toilets can waste thousands of gallons a year. So monitoring the water bills closely is imperative by comparing the current cycle with the same cycle for the prior year (and from period to period) to detect significant and unexplained increases. Your local water utility can provide average consumption figures for comparable properties. If your HOA uses a lot more than the average, it’s time to do a leak detection audit. Some leak detection techniques are incredibly cheap. For example, toilet leak dye kits are available for 50¢ each. Simply drop a dye tablet in the toilet tank. If the water in the bowl changes color, you’ve got a leak. This test can be easily performed by individual residents. Leaks in the main water supply lines can often be detected by acoustic detection equipment. Call a plumber. When it comes to upgrading units to water efficient fixtures (toilets, faucets and shower heads), it may be more expedient and practical for the HOA to fund the process since doing so could cut water and sewer bills in half. The savings alone could justify the expense since the payback period is often very short. And once the conversion cost is repaid, it’s a gift that keeps on giving. BACK
Prohibiting Second Homes Answer: A secondary residence is one used by the owner as a vacation or part time home. As secondary implies, the owner has a primary home elsewhere where he lives most of the time. Secondary residences are not used for rental purposes. If they are, they are considered investment or rental property. Some HOAs have restrictions on rental property. It is very unusual to control occupancy based on secondary residence. It probably has to do more with failure to maintain the landscaping which can affect neighboring property values. Of course, even full time residents can fail to maintain their landscaping. As long as the property is properly maintained, this restriction seems arbitrary. BACK
Opting Out of Special Assessments Answer: If the homeowner association is responsible for replacing common elements, no owner has the right to "opt out". The board should press on and do what the governing documents said it should. Also, your HOA desperately needs a reserve study so that the board can properly plan for these kinds of repairs and collect money for reserves without special assessments. Special assessments are the result of poor planning and unfair to those that are forced to pay them. And the thinking of leaving money on the table is flawed. Money contributed to reserves is held in trust to pay for future events. Each contributor pays a share relative to the benefit they received. For example, if a member owns a unit for 60 months, he pays a 60 month share of those future reserve costs. Another member that owns for 30 months pays a 30 month share. Future owners pay there fair share too. Each pays according to the benefit received. BACK
Squelching a Muckracker Answer: Maintain the high ground and don’t try to control this individual. Members are entitled to use the clubhouse for meetings if they like. The more you try to control this individual, the more fuel you provide for his fire. Of course, if he is inviting members to attend his meeting, board members are members too and could attend to correct misinformation he might be ladling out. It’s a good idea to provide the members with regular progress reports on the renovation project to help kill the rumor mill. BACK
Delegating Meeting Responsibilities Answer: "Preside" means runs the meeting. The vice president takes over for the president only when the president is unable to attend the meeting. The president should not otherwise delegate his duties to avoid conflict. The real solution to this issue is to establish clear rules of conduct at board meetings. The board meeting is designed for the board to discuss and decide HOA business. If the meeting is being disrupted by non-board members, those members need to be told not to interrupt or be asked to leave. Don’t let the tail wag the dog. BACK
Prohibiting Faith Based
Groups Answer: The clubhouse is designed for use by members and their guests. As long as the HOA allows member groups to reserve the facilities for private meetings, there should be no restriction on the subject matter. The Bible, Torah, Koran etc are not banned books (in the United States at least). Faith based groups should be given equal access along with other groups and should not be restricted what they say (scripture, prayers) because, your attorney is correct, it is a matter of free speech. As a private entity, the HOA could enact a policy to restrict access by all private groups. But this would be throwing the baby out with the bath water. The clubhouse is there to be used. If a group's legal activity interferes with other members' enjoyment, the HOA could provide for a group's exclusive use and charge rent which would benefit all members. BACK |
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