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Ask the HOA Expert
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President Withholding Info Answer: The President is authorized to make decisions between board meetings that are in keeping with the governing documents, established Board policy and approved budget. If the issue falls outside these guidelines, they need to be presented to the whole board for review and decision. If the President continues to act independently, the board majority has the right to remove her and appoint someone else. BACK
Chimney Cap Repairs Answer: If your association has exterior maintenance and repair responsibility, that includes chimney caps and chimney repairs even if only some have them. The HOA concept is based on sharing costs to save money. Trying to allocate every cost based on benefit just doesn’t work. The benefit differential is usually considered in the assessment level that each owner pays. If it isn’t, it’s not going to change because it takes 100% of all owners to agree to change it. Better to focus on the big picture. All will profit in the end. BACK
Withholding Voting Rights & Amenities Answer: If state statutes or your governing documents don’t prevent it, the HOA can withhold voting rights and access to amenities like pool, clubhouse and tennis court besides the normal financial penalties of late fees, finance charges, etc. But the process needs to be clearly described in a collection policy that is uniformly applied to all delinquents. BACK
Allocating Reserves Contributions Answer: Unless the governing documents assign costs for limited common areas to the owner, reserves for them are funded the same way as any other common area component. BACK
Restricting Pool Access Answer: If the pools are identical, than the Board may have the authority to rearrange the user base. But they need to be careful about discriminating against children. Frankly, this proposal doesn't address the real issue: Rowdy kids should be disciplined and restricted from the pool if necessary. The Board also has the right to enforce rules requiring parents to accompany minor children. That will probably address what’s driving this campaign. BACK
Excess Income vs. Reserves Answer: The IRS terminology is confusing. Typically, an HOA does not have "excess assessment income". There is, or should be, an amount collected with the monthly assessment that is designated for Reserves. The problem is that many HOA budgets do not actually plan for reserves or include it in the budget. Reserves only happen by sheer luck, when there is money left over, and when does that ever happen. So from the IRS’s definition, if reserves aren’t planned, money left over could be considered "excess assessment income" and taxable. Reserves should not be funded by "what’s left over" at the end of the year. Proper reserve planning requires a Reserve Study that outlines a long range (typically 30 year) maintenance schedule and funding plan that systematically sets money aside for repairs like painting, roofing, etc. This should be performed by a knowledgeable Reserve Analysis. The IRS also requires that reserve funds be held in a separate bank account apart from operating funds. If funds are being accumulated exclusively for capital repairs and replacements, no taxes are owed on the funds themselves although the interest earned is taxable. If an HOA has any significant reserves, a knowledgeable CPA should assist in filing the proper form (1120 or 1120H). For more on this topic, see Reserve Planning. BACK
Publish Member Directory Answer: Inclusion in such a list should be voluntary and each resident should provide specific written authorization. The association should respect all desires for privacy. BACK
Charging Initiation Fees Answer: Depends. Sometimes there is a requirement in the governing documents for all new owners to make a "contribution to working capital". I’ve seen flat dollar amounts up to two months worth of regular assessments. There may also be a practical reason for a Move In/Move Out Fee when there are actual related costs incurred by the HOA. This is particularly true in a secure building or gated community where access and elevators must be scheduled, reprogramming done to the entry access system and clean up after the movers. The fee should be commensurate with the actual cost, not a mechanism to make money. Gouging newcomers is not good way to begin a relationship. BACK
Unfair Assessment Prorations Answer: Usually, if there are significant differences in unit square footage and number of parking spaces, the fees are allocated based on a percentage proration. For example, if a unit had 2000 square feet plus 400 square feet of parking space out of a total 100,000 square feet, it would pay 2.4% of the total annual fees (2000 + 400 = 2400 divided by 100,000 = 2.4%). Another unit having 1000 square feet plus 200 square feet of parking would pay 1.2% of the total annual fees or half as much as the larger unit. However, in your case, this is probably all moot. If the governing documents divide all fees equally, regardless of unit size or parking, that's the way it is, fair or not. You agreed to it when you bought the unit. Changing it to a "fair" split requires 100% agreement of all owners. While theoretically possible, it’s highly unlikely to happen. BACK
Controlling Water Use Answer: It makes sense for the HOA to pay to have shower head and faucet water restrictors and toilet tank dams installed. The cost per unit is about $25 material and labor and will usually pay for itself within a year. Some owners may resist having low flow devices installed but the vast majority understand that they pay for the waste. Maybe the ones that resist won't mind paying a "water surcharge" for the luxury of having unrestricted water. BACK
Security Bars Answer: The main HOA concerns about security bars are curb appeal and market value. If homes in the neighborhood have bars on them, prospective buyers will perceive the area to be high in crime. Fear of crime will reduce the number of prospective buyers which, in turn, reduces market values. If some owners are determined on installing them, require the installation be inside the windows and that they be painted white so they don't stand out. BACK
Property Tax Dispute Answer: Unless the association has specific authority under the governing documents or state statute to represent its members in actions that would otherwise be individual homeowner responsibility, the Board cannot require participation in a group tax protest. However, it makes a lot of sense for the Board to facilitate a group action with costs being reimbursed by those that participate. This is an excellent example of how association members can benefit from substantial savings by banding together. Before the board moves forward with any such group action, it should consult with an attorney that specializes in homeowner association law. BACK
Board Rule Breakers Answer: If it’s okay for one, it's okay for all. If not okay for all, none should do it. A developer has no right to violate the governing documents by granting a right to one that is not enjoyed by all. The board should either adopt a policy allowing all members to use the common area this way or advise the offender the practice should cease. BACK
Reversing Passed Motions Answer: No. If the first motion is properly executed, the proper course is to pass another motion to void or reverse the first motion. That follow-up motion will demonstrate the sequence of events and the thought process behind it. Purging the first motion from the minutes will not. Moreover, a motion to reverse or void the first motion is educational for all HOA members as well as the Board. It points to the fact that the Board can't make up new rules when it suits them and that members should not try to induce the Board to bend the rules when it suits them either. BACK
Updating Governing Documents Answer: The Board does not have the authority to amend bylaws. Bylaw amendments may be proposed by the Board (or any member, for that matter) but must be approved by the members by written ballot. This is usually done at the Annual Meeting unless there is a particular urgency to the amendment. The Board has the authority to enact rules and regulations that are in keeping with the bylaws. Any that currently contradict should either be eliminated or the bylaws amended to make them legal. There have been many changes to HOA law since the 70s but you only need to change those things that do not conform to current law. Bylaws should only be amended with the help of an attorney that specializes in HOA law. BACK
Shuffling Repair Responsibility Answer: If the fences are common elements, the Board cannot unilaterally reassign maintenance responsibility to the owners. To do this, an amendment to the governing documents must be approved by the owners. But even if it could be done, this is ill advised. One of the advantages of an HOA is reducing the cost of maintenance by joining together and making sure the maintenance gets done properly and in a timely manner. Requiring individual owners to be responsible is more expensive and bound to fail due to inadequate or improper maintenance. BACK
Lack of Board Quorum Answer: You cannot transact board business legally without a quorum. The remaining directors should request that the two non-attending directors resign. Assuming they do (and they should), the remaining directors can appoint replacements to fill the remaining terms of the vacancy. If the non-attending directors refuse to resign, call a special meeting to recall them. Usually this isn’t necessary but may be for the contrarian. An alternative to appointment would be to hold a special election if there are several candidates for each directorship. As a fallback position, if the remaining directors absolutely can't get anyone to serve, send a letter to all owners explaining the situation and that the two remaining directors will continue to conduct day to day business until others come forward. If an extraordinary issue comes up, a special owners meeting can be called to deal with it. Usually, only a majority of those showing up is needed to make a decision other than amending the governing documents. BACK © Copyright
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