Ask the HOA Expert

Common Area Smoke
Question: Our HOA has ongoing problems with cigarette smoke which permeates the hallways and stairwells every time a resident smoker comes and goes from their unit. The ventilation system recycles the smoke throughout the common areas. Besides the bad odor, I’m concerned about health hazards.

Answer: Second hand smoke (also called ETS-Environmental Tobacco Smoke) is a serious health hazard and the board is obligated to deal with it if is impacting residents and their guests. The numerous deaths related to second hand smoke are well documented. For details, www.smokefreeapartments.org

This issue is much more than just a nuisance and the board needs to respond to complaints with real action. The easiest place to start is a ban on smoking in all common areas, including decks, patios, common hallways, stairwells, elevators, lobbies, building entries and meeting rooms. You might consider the pool area as well.

Some boards worry that bans on smoking will negatively impact property values. In reality, there is growing support for smoke free HOAs which would be highly prized by non-smokers who would pay a premium to live there. Something to think about.

There is no Constitutional right to smoke. Moreover, inflicting a health hazard on others is against the law. The board should take this issue seriously. For a sample No Smoking Policy, see Policy Samples. BACK

Residents Using Guest Parking
Question: Our HOA has extra parking spaces which are first come/first serve. There are several residents which park extra vehicles and boats there long term. This doesn’t seem fair.

Answer: If the HOA has extra parking spaces, it should not allow any one resident to commandeer them, especially for no cost. These are revenue generating assets which can be rented long term at market rate. In many urban settings, a reserved parking spot is worth $50 or more a month. The board should charge market rent on a yearly basis. This way, parking revenue benefits all HOA members by helping reduce HOA fees. BACK

Co-Owner Board Members
Question: Our governing documents, like most, prohibit co-owners from serving on the board at the same time. Does this principle apply to committees?

Answer: No. Committees can be composed of anyone that has an interest in serving, including renters. As long as the members are serving effectively, the board should encourage such participation. Since committee members are appointed rather than elected, the board can unappoint them if they aren’t doing their job. BACK

Reserve Study Questions
Question: Our HOA board wisely ordered a reserve study this year. The study was completed and indicates that we are seriously under funded. The study includes a funding recommendation that will substantially increase our fees. Is increasing reserve contributions a decision that the board alone can make? Do the general members have the right to voice their opinions, concerns, etc. prior to the board’s decision. Should the reserve study be available to the membership to review?

Answer: As long as the governing documents give the board authority to set the budget (usually the case), the board alone can make the decision. The board doesn’t have to follow the reserve study provider’s recommendation but departing from it will encourage greater challenge from members, particularly those that don’t want to pay more. ("If the board can propose an increase lower than the professional, why not propose one even lower still?")

If the governing documents require the board to get member approval for increases over a certain amount, the board will have to bring the matter for a vote. In either case, it’s wise for the board to hold a special meeting to discuss the reserve study and its implications, particularly if there is a significant increase in fees indicated. Ask the reserve study provider to present the study and answer questions. This will add a much higher level of credibility to the process and take the spotlight off the board.

One mistake some boards make is deciding ahead of time that the members won’t approve a large increase so a much smaller one is proposed. It is always preferable to present the higher recommendation and let the chips fall where they may. If the case for the professional’s funding recommendation is made and a majority of the members still vote it down, future shortfalls can be blamed on the membership, not the board. If the board decides on its own to under fund, it has failed in its fiduciary duty to budget properly and can be held responsible for shortfalls. For more on this topic, see Reserve Planning. BACK

Collections Paid by Rent
Question: We have an owner who has not paid an assessment for several years. The property is being used as rental property. Is there a way to collect from the renter?

Answer: Your board needs to adopt a formal Collection Policy such as the one found in Policy Samples. That policy calls for filing a lien against the property and other aggressive measures which can include an assignment of rents provision. Have the proposed Collection Policy reviewed by a knowledgeable attorney to ensure it complies with the governing documents, federal and state statutes. Then, the proposed Collection Policy should be circulated for comment to the members before enactment. Once enacted, start enforcing the provisions on any owner who is delinquent. BACK

Management Company Survey
Question: Our board would like to evaluate our management company’s effectiveness by way of a member survey. What questions do you recommend?

Answer: Since the vast majority of members are disconnected from day to day HOA operations and have little first hand knowledge of the manager’s contract obligations, few have an informed basis for evaluating the manager’s effectiveness. A suggestion form might be more appropriate. List the various categories of tasks the HOA is responsible to perform like General Maintenance, Landscaping, Pool, Janitorial, Communications, Newsletters, Rules Enforcement, Financial Reporting etc. and ask for specific recommendations for improvement. Don’t be surprised if the recommendations are tied directly to a member’s critique of service quality. BACK

Paying Board Members
Question: Can HOA governing documents be amended to allow compensation to directors for their services as board members? It stands to reason that they could be held more accountable if they received compensation for performance.

Answer: Most governing document stipulate that board members serve without compensation. There is a very good reason for this. Boards are comprised of elected members who rarely have the expertise or training to manage an HOA. They are elected to hire qualified people to do this work (management companies, landscape contractors, maintenance contractors, etc.). When this is done effectively, the board job is relatively simple. When it is done poorly, the board can devote endless time at it and supposedly justify the need for compensation. Paying for poor performance is hardly in the HOA’s best interest.

Also, the board has an unavoidable conflict of interest. Since contracts and other expenditures are approved by the board, so would board compensation. The board is elected to safeguard the interests of all members. It’s best done when the directors serve as unpaid and unconflicted volunteers. BACK

Recording Design Restrictions
Question: Our board is in the process of drafting an Architectural Design Policy. We are thinking about recording the policy with the county.

Answer: Architectural design standards can be complex and subject to change as taste and technology change. It is appropriate for the governing documents to state that an Architectural Design Policy exists, that construction and renovation must conform to it. The specific policy should not be recorded but be easily available upon request or posted on the HOA’s website. As with any policy, the board should have it reviewed for comment by the members and by a knowledgeable attorney prior to implementation. A sample Architectural Design Policy is available in the Policy Samples section. BACK

Expanding Deck Size
Question: A unit owner has requested permission to rebuild her deck and expand the size. What issues should the board consider?

Answer: Having unit owners repair and replace their decks is often a problem because those decks are typically attached to the structure which is an HOA responsibility to maintain. So, the unit owner should also be held responsible for any damage caused by the deck to the structure, like dryrot. This agreement should be in writing, dated, signed, notarized and recorded against the unit title to advise future owners of this responsibility. You should use an attorney to put the agreement in proper recordable form.

Will the new deck match the look, design and material of the original installation? Conformity in common wall housing reinforces market value. The new deck should look like the old unless the board has adopted a new standard.

The board has no authority to allow a unit owner to expand into common area or to enjoy exclusive use of a common area. This must be approved by a vote of the members which may be 100%. BACK

Reserve Funding Level
Question: Our HOA recently had a reserve study update which the board is evaluating to ensure that we are adequately funded. What is a proper funding level? I have heard numbers from "30% Funded" to "80% Funded".

Answer: 100% Funded should be the goal. For example, if you have a 30 year roof that costs $90,000 to replace, you should reserve $3,000/year to be 100% Funded. Reserving anything less will produce a lower level of funding that will have to be made up in the future by others that shouldn’t have to pay it. Being 100% Funded all the time insures that all members pay their fair share.

If you are currently, say, 40% funded, you should institute a plan to increase the level of funding to 100% over a period of years if possible. The board could also special assess to bring it up to 100% this year, although that might be a hard sell unless there is an urgent need, like that 30 year old roof is now 35 years old and leaking like a sieve. Sometimes special assessments are unavoidable because of inadequate funding in the past. But striving for 100% Funding today will eliminate the need for special assessments in the future. BACK

Tree Cutting Policy
Question: Our governing documents have policies regarding tree cutting and clearing. From time to time, the board gets requests from lot owners asking permission to cut a tree because of fear that it will fall on the house. If there is no disease or damage, we deny such requests. It has been suggested recently that the HOA can be held liable for damage and injury from falling trees.

Answer: The HOA is certainly liable for failing to maintain trees in the common area and should have a regular tree maintenance program to keep trees trimmed, healthy and safe. Trees located on private lots is another matter. If an owner maintains a tree is in danger of falling, it should either be obvious to a casual observer or be documented by an arborist. The board should make prudent decisions based on reliable information and safety concerns.

There is also a fire hazard presented by trees that are closer that 30 feet to the structure, especially if they are highly flammable like pine trees. If an arborist believes they are a danger, they should be removed. BACK