|
Ask the HOA Expert
Q&A |
|
Newsletter Editorials Question: One of our board members, also the newsletter editor, was recently out voted 6 to 1 on a motion. She recently published an editorial in the newsletter criticizing the board's decision and for over a month continues to bring up new objections. Advice? Answer: The HOA's newsletter is not the proper forum for airing grievances, especially for a board member. She should be warned not to repeat it or be removed from this position which she is clearly using to undermine the board's decision. If she decides to continue her campaign privately, it's appropriate to ask for or force her resignation from the board. HOAs are representative democracies and as such, majority rules. That means someone may not always get their way. If this director can't work within the system as designed, she should not participate. She, of course, is entirely entitled to her opinion...just not in the way she goes about making it known. BACK
Board Meeting Proxies Answer: While proxies are allowable at the Annual Homeowner Meeting, they are not allowed at board meetings unless the governing documents say so. If not, only directors present at the meeting may participate and vote. BACK
Borrowing from Reserves Answer: Reserves are intended solely for capital repairs and replacements. They are not a slush fund for operating budget shortfalls. While seasonal demand and emergencies may require a temporary loan from reserves, the money needs to be repaid. Some states have strict guidelines about borrowing reserves. As a general rule, reserves should be spent only for what they were intended. BACK
Reviewing Secret Ballots Answer: Unless the vote is handled by a motion to approve the slate of candidates by acclamation (unanimous), ballots should be kept secret. But someone not running for election has to count them. Why not appoint this person to the election committee to assist in ballot counting? Kills two birds with one stone. BACK
Board
Scofflaws Answer: Why would the board choose to have such a scofflaw as leader? It's up to the board to enforce the rules and if the President is one of the worst offenders, the remaining board members need to remove this person from office if not from the board altogether. This will take someone with gumption to stand up to this person. The confrontation is best done in writing with specifics (time, place, details) so the accusations are not viewed as personal. The message should be clear: Comply with the rules or leave the board. BACK
Management
at Meetings Also, the minutes from the previous meeting are not distributed to board members until a few days before the next meeting. At the meeting we’re asked if there are any corrections. Over a period of a month it’s hard to remember the details of what transpired during from the previous meeting. Answer: It's normal and proper for the property manager to give input to board discussions even if it involves a motion. The manager is paid, among other things, to give perspective and management advice. The Board is wise to heed such counsel when given. The Board should always have a motion on the table before serious discussion begins on any topic. The property manager, of course, has no vote in the outcome. A month's delay is bound to cause distortion and omission in the minutes. The Board is not the only entity interested in the minutes. The owners are entitled to know what was discussed as well. To ensure timely and accurate minutes, they should generally be completed and distributed to all owners within a week of the meeting. BACK
Competitive
Assessments Answer: Even if similar size, age and configuration, comparing the monthly assessment of one HOA to another is meaningless if both aren’t properly reserving for future repairs and replacements. If your condo association is properly reserving, somewhere between 20-40% of the monthly assessment should be going for reserves (more, if playing catch up). Yet, many associations don’t reserve adequately and their assessments are going to be much lower. And if they don't do regular maintenance adequately (and many don't), they'll be even lower. But there is a big price to pay...substantially reduced market values and special assessments to address deferred maintenance. This is no way to run an HOA. Every association needs a formal Reserve Study and Funding Plan to assist the Board in budgeting and scheduling reserve related work. Only when this information is known can the board properly set monthly assessments. BACK
Publishing
Owner Directory Answer: Each owner should be given the clear option of being included or not in a written request for information. Those that want to participate should authorize it with their signature. The information should be restricted to residents. Those that choose not be listed can still have the property address included in the directory, just no personal information. BACK
Freedom
of Information Answer: Association members are entitled to know how budget numbers are developed. If the answer can’t be provided by phone, the normal procedure is to book an appointment and request review of specific records. The information should be set out where it can be easily reviewed, like a conference table. The files should not be taken off site but if copies are desired, the owner should pay a reasonable cost for the copying. The Board and management should comply with requests for information without any approval process. This requirement only raises greater suspicion of mismanagement or fraud. On the other hand, just make sure to respect their time and not use your right to know as a means of harassment. BACK
Firing
Management Answer: The management company is hired and fired by the Board, not the owners. Homeowners should be allowed to attend Board meetings but they are not authorized to participate, make motions, vote, etc. If there is a concern about management, it’s appropriate for the Board to poll the owners to see if there is compelling reasons to terminate the contract. If the poll reveals a number of significant and recurring problems, the Board should discuss them with management and allow an opportunity to correct the problems. If management is unable or unwilling, the contract should be terminated, ideally, by mutual agreement within 60-90 days. This will allow the Board to locate and interview suitable replacements. Management should only be terminated reluctantly. Being an HOA manager is not a popularity contest and managers will invariably step on some owners’ toes performing their duties...especially with rules enforcement and delinquency collections. That's the nature of the job. BACK Question: What alternatives are available to a Board to restrain a really abusive owner. He is disruptive, combative and obnoxious? Can we ban him from meetings? Answer: Yes, you can ban abusive owners from the meetings. But due to the long history of this kind of behavior, he probably doesn't acknowledge what he's doing. If the Board is agreed it must stop, write him a letter explaining the reasons and the expectations from here on out. Advise him he will be asked to leave the meeting if his behavior ventures into forbidden territory. Keep your promise. If he refuses to leave, adjourn the meeting and advise him he is not welcome at future meetings. Keep your promise. BACK Question: The previous Board allowed fences to be built that do not conform with the standards. We feel that we need to enforce the CC&Rs that are in place. Certain violating owners say that they were not aware of such covenants and that they are not taking the fences down. We're faced with 30 non-conforming fences out of 150 properties. Is there any "middle road" option short of legal action? Answer: Yes. It's much too late to round up horses long out of the barn. If the past board was negligent in enforcing the CC&Rs, you will not likely convince a judge to undo what's been done now. It's even possible that some of them got written permission. The association is not likely to win this battle. I recommend you grandfather the existing installations and advise all owners from hereon out, all standards will be strictly enforced. BACK
Meeting to Recall President Answer: The current President is not likely to want to preside over his own Lynching Party. It’s appropriate for the owners that called the meeting to direct it. If the reason for the meeting is to vote on a recall, all owners need to receive proper advance notice of the meeting and know that a vote will be taken on the matter. That vote probably takes a majority vote of all owners to pass it. All of this assumes you have aired your grievances with the President and asked for certain changes that have not happened. Any elected officer deserves that much. If you haven’t, why not draft a list of grievances and ask him to respond to them? Remember, after all is said and done, this is a neighbor and how you handle this can have lasting repercussions. BACK
Annual Meeting Date Answer: This is one of those annoying things that sometimes gets written into the governing documents. Clearly, there is nothing magical about a certain date and time. But it’s mandated (that’s what "shall be" means), the members must vote to amend the bylaws to change it. Yes, your meeting should be rescheduled to comply until they are. BACK Annual Meeting Quorum Question: Our governing documents indicate that a majority of owners must be represented at the annual meeting either in person or by proxy to constitute a quorum. State statute indicates 30% is allowable. Which one do we follow? Answer: Governing documents can be more or less strict than state statutes. The statutes are generally used as defaults when there is nothing in the governing documents that address a particular issue. The governing documents prevail. BACK
Rejecting Vacancy Candidates Answer: All HOA members in good standing are entitled to serve on the Board and may apply to fill a vacancy. If there are multiple candidates for one vacancy, the remaining directors must choose one but it is not the President’s prerogative to decide who is qualified and who is not. BACK Increasing Board Size Question: Our Board recently decided to increase the number of directors from three to five. Is that legal? Answer: The governing documents dictate how many directors there are. To change that number requires an appropriate vote of the members. The Board does not have the authority to do this on its own. BACK Inconsistent Rule Enforcement Question: Our Board recently fined a resident for parking a junk car on the property. He countered by stating the Board failed to enforce many rules so had no authority to enforce parking regulations. Is this true? Answer: This kind of defense is used from time to time as rationale for rule breaking. If his point is that others are allowed to park junk cars, the Board does have a problem. If a rule applies to one, it should apply to all. But if his point is that other rules are being violated so it’s okay for him to do it too, his argument is bogus. The Board is not compelled to seek out violations, only to notify violators when they are discovered. A good response to this bogus defense is, "We’d be happy to notify the rule violators if you provide us with specific details. However, you are still in violation of parking regulations and all penalties apply until you comply." BACK Vague Governing Documents Question: Our governing documents are extremely vague and we have ongoing arguments between the members and the Board as to interpretation. How can we avoid this? Answer: Governing documents are intentionally left vague so that the HOA can customize them based on the owner mix, local custom, property value impact and other "lifestyle" issues. The Board is generally authorized to formulate these policies but must be careful to judge objectively and not weigh in with personal prejudice. This is not an easy task because we all carry certain bias from our life experience. So, the policy process should include member input. The goal should not be to control the lifestyles of the members as much as facilitate the lifestyle trends that are most common to the members. To that end, the Board should take time in enacting new policies and consider the ramifications carefully. A final note. Board policies cannot contradict the governing documents but may expand on their principles. If a policy contradict the governing documents, the members must vote to amend them so that the policy is legal. BACK
Adequate Reserves Answer: If a special assessment is required to pay for reserve repairs or replacements, the board has not been reserving adequately and can be held responsible for the shortfall unless the members refused to approve (if their approval was required) annual budgets adequate to fund reserves. In other words, the board cannot be held accountable for something under the control of the members. For most condominiums, 10% (the default amount in the statute) is not nearly adequate. Most condos should set aside 25-35% of their monthly fees into reserves (more, if the common elements are extensive or the number of owners small). Only a properly prepared reserve study with a funding plan based on the "fully funded" funding model will instruct the board how much is adequate. BACK
Hosting Margarita
Parties Answer: It is a very bad idea for the HOA to host parties serving alcohol particularly when it’s free. The free part is bound to get out of hand unless carefully controlled. The insurance agent can explain the liability angle. A BYOB (Bring Your Own Beverage) party is okay as long as someone is monitoring for excessive consumption and cutting off offenders. BACK
Abusive Emails Answer: This director acted inappropriately and everyone knows it but him. The board president should apologize to the resident as soon as possible on behalf of the rest of board to disassociate itself from this kind of behavior. If the resident shows up to the next board meeting to continue the matter, the president can simply repeat the apology and ask him to direct future emails to the president only or manager, if you have one. The president should speak directly and clearly to the abusive director and remind him that he is entitled to his opinion but should respond to member inquiries with respect or not at all. He should be told in no uncertain terms that his actions were inappropriate and he should make amends so that the rest of the board doesn’t have to continue dealing with the fall out. He may ignore all this advice but it’s important for the board to take a stand on the matter and not appear to defend him by silence. Email, as you point out, can easily careen out of control. To avoid this kind of thing in the future, remove all personal email addresses from newsletters and websites and use one official email address for HOA business which is responded to only by one designated person (usually the president or property manager). BACK
Responding to
Crazies Answer: The operative word here is "irrational". As tempting as it may be to respond, let it be. Whatever the response, it will only serve as fodder for more rant. BACK
Locating
Storage Buildings Answer: It is not uncommon for HOAs to have or add a storage building for the uses you describe. Most boards have the authority to make such a decision unless the governing document require approval from the members. The kind of building you describe sounds like it will cost up to $10,000 as opposed to a storage shed that costs several thousand dollars. The cost alone might trigger a requirement for member approval. Storage building placement should take into consideration curb appeal and impact on neighboring units. It typically is placed in an unobtrusive location. If there really isn’t a location that would not impact neighboring units, the design and material should be harmonious with existing construction or be shielded by landscaping to minimize the impact. BACK
Drip Irrigation Answer: Drip systems use less water than sprinkler systems and work well in planting beds. You would need some kind of sprinklers for the turf unless you replace it with a drought tolerant ground cover. Include a rain override sensor regardless which system you pick so you are not wasting water. BACK
Banning
Skateboards Other area HOAs have enacted similar bans but our attorney warns it could be a 50/50 chance of winning in court. I understand the risks and think we have a better chance than that of winning. Answer: Skateboarding is not a suitable or safe activity for the street, parking lots or sidewalks and is commonly banned by city ordinance so the HOA has some powerful allies. And skateboarding is certainly not limited to children. Some of the most extreme and dangerous skateboarding is done by men in their twenties and older. Your lawyer states the obvious: once a matter goes before a judge, it can go either way depending on how persuasive a particular argument is. But the reasons for this ban are reasonable and going to court is not cheap. Is this small group really willing to pay thousands of dollars to make its point? A threat to sue is not a reality. Until it becomes a reality, the board should enforce this rule. If a real lawsuit develops, the board can always negotiate some compromise. BACK
Photographing
Violations Answer: Yes, date stamped photographs should be taken for the record and to communicate clear evidence of a problem that needs to be corrected. A picture is still worth a thousand words. BACK |
© Copyright
by Regenesis.net
All rights reserved