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Ask the HOA Expert
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Recall Meetings Question: I serve on our HOA board. Certain members have circulated a recall petition against two of the directors and obtained the required number of signatures based on our bylaws. The next board meeting is coming up soon and the petitioners want the recall resolved then. What is the normal process to handle a recall? Answer: Normally, a recall would be handled at a special meeting called for that purpose. As such, it needs to be noticed to all owners well in advance so all have a chance to attend. This should not be handled at a normal board meeting since the topic is likely to take quite a while unless the target directors yield to the pressure and step down early. BACK
Email Meetings Answer: Yes, making board decisions by email constitutes a board meeting. If the bylaws do not prohibit it, the board could possibly enact a resolution which allows doing business this way but it still would probably be construed to be a closed meeting. An alternative to email is to hold teleconferences. There are free services available including www.freeaudioconferencing.com. The notice of a board teleconference could be emailed to all members so any that wanted to attend could. Consult with a knowledgeable HOA attorney in your state to make sure this is allowable. BACK
Defining Single Family Answer: What gets written into governing documents often sounds reasonable but is unworkable for practical reasons. The board is simply not positioned to research or enforce this kind of standard and shouldn't because it assumes that related persons are superior to non-related persons. "Related" generally means by blood or marriage. So, for the board to enforce this rule, all occupants must show convincing records (like birth or marriage certificates) that prove the relationship. Good luck. Asking isn’t getting. And just try to evict an owner. Just because the governing documents say something doesn't makes it reasonable or enforceable. The board has the right to make a judgment on this and choose how it's interpreted. Rather than some arbitrary standard like "single family" the board should focus on behavior. If either owners, renters, married or singles are violating HOA rules, they should all be treated the same. It is the behavior that is at issue, not family status. BACK
Disability Installations Answer: The HOA is not responsible for or required to install special equipment but the board should make "reasonable accommodations" by allowing those that request it to do so at their own cost. The installation should be professional and not detract from the curb appeal. The board can also require the unit owner to remove the installation when it is no longer needed. That said, if a majority of owners are in favor of installing ramps, handrails and the like, there is nothing wrong with installing them. HOAs are democracies and the members can have anything the majority are willing to pay for. BACK
Non-Owner Directors Answer: Unless the governing documents allow otherwise (rare), only property owners are allowed to serve on the board. The board may appoint anyone to a committee since they aren’t elected positions and subject to oversight by the board. BACK
Keeping Up With Inflation Answer: Assuming that $140/month was adequate to pay the bills and reserve requirements seven years ago, the effects of inflation alone would indicate $180/month today is more than reasonable. But since past boards have kept the fees flat, inflation has eroded the value of the monthly fees and reserves have been starved. The lesson here is clear: The board should at minimum increase fees each year at least the amount of prevailing area inflation. That way, the buying power of the dollars remains competitive. Even better, each year the board should analyze the most recent 12 month’s expenses, consider increased costs of contract services (management, landscaper, etc.) and utilities plus review and revise the reserve study (your HOA has one right?) to determine the proper fee level. This is how successful HOAs are run. Yours has been running on empty for years and you finally have a board with enough gumption to face up to it. An HOA with proper budgeting and funding is much more attractive to buyers than one whose fiscal head is in the sand. Buyers are willing to pay more for this kind of property because the HOA has the funds to do proper and timely maintenance and the property shows it. When the property shows it, it will sell for more money and faster than those that don’t. There is no free lunch. If you starve the HOA budget, you starve your own property value. BACK
Demand for Records Answer: What you describe is a common tactic to gain control. The logic goes something like this: All owners have a right to most HOA information and records. So, an owner that is unhappy for some reason initiates a series of demands with the message that "I want it now or else!" Getting the requested information is secondary to keeping the board off balance. Intimidation tactics are highly effective when they get the board worrying about the "consequences". Usually, though, when the board complies, it triggers another demand letter. It's a game the board can't win. While it's true that members are entitled to most information, the board is not obligated to provide it at no cost. Charge a reasonable cost for requested records in advance. When a price is put on the demands, they usually go away. Or better, post rules, policies, governing documents, budgets, financial statements, minutes and newsletters on an HOA website so all members can self-help. BACK
Volunteer Repair Work Answer: As long as the work is not precarious (ladder work, on the roof, etc.) there is nothing wrong with allowing volunteers to do certain tasks. In fact, the board should encourage such volunteerism and find outlets for those that are so inclined. BACK
Public Violation Hearings Answer: All collection and rule violation issues should have an established process which includes notifying violators in writing, stating the specific details, the correction needed, the penalties for failure to comply and the right of appeal. If an appeal is requested, a private hearing should be held at a convenient time and place where the board and accused can discuss the issue. It is not appropriate to hold public meetings since the accused may not be guilty or there may be extenuating circumstances. In no case should the board engage in public humiliation of its members. Besides stirring up a legal challenge from an offended owner that could embroil the HOA in a lawsuit, it just makes practical sense when neighbors are governing neighbors. BACK
Commingling Funds Answer: Operating and reserve funds should be kept in separate bank accounts for exactly the reason you point out. Some states, like Oregon, require it. Reserve funds are intended for specific major renovation scheduled to take place in the future, some times many years away. If reserve funds aren’t protected from operating budget shortfalls, the money won’t be there in the future when it’s needed and the HOA will be forced into unfair and unpopular special assessments. BACK
Paying for a Reserve Study Answer: It depends. It’s reasonable to pay for the initial reserve study with reserve funds. Afterwards, some states require annual reserve study updates. Whether mandated by state law or not, it makes good sense to update the reserve study annually to keep it accurate, just like the Operating Budget. So the cost of an annual update should be included in the Operating Budget. If the reserve study is only being updated every few years, it makes sense to plan for it in the reserve study. BACK |
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