New Year’s Resolutions of HOA Service Providers

New Year’s Resolutions of HOA Service Providers

[This is the fourth and final installment of this series, which previously addressed directors, homeowners, and managers.] As the association’s service provider, I resolve to: NUMBER ONE:1. Follow the Golden Rule. [treating others how I want to be treated] PROPOSALS:2. Give the association the best proposal I can. If the association’s request for proposal omits important elements of the work, I will add those elements to my proposal and disclose the proposed extra cost now instead of charging it later as an “extra.” 3. Tell them if they really don’t need my services right now.4. Disclose the less expensive (and possibly less profitable) alternative they didn’t ask about.5. Explain my recommendations, and never tell them just to “trust me.” 6. Promise only what I know I can deliver.7. Not seek a contract of more than one year in length, unless the work cannot be completed in less than a year. KNOWLEDGE:8. Pursue professional designations and attend seminars to keep current.9. Take CAI’s Educated Business Partner course to ensure my understanding of the unique needs and characteristics of common interest communities. SERVICE:10. Promptly answer the board’s or manager’s questions.11. Explain my company’s charges, taking no offense.12. Take instruction only from the manager or from the person designated in the contract as my point of contact.13. Immediately alert management if a homeowner, even a committee chair or director, interferes with the work.14. Obtain written authorization if any work outside the contract becomes necessary and for which I have in writing quoted a price.15. Not attempt to perform work outside my expertise and immediately advise the association of the need for other...
New Year’s Resolutions of HOA Managers

New Year’s Resolutions of HOA Managers

[After two previous columns proposing resolutions for directors and HOA members, here are ideas for managers. Next week – service providers] As an association professional manager, I resolve to: NUMBER ONE:1. Follow the Golden Rule. ATTITUDE CHECK:2. Remember I am a professional, and will give the board the best advice I can. I am not employed to be silent. 3. Strive to give the board the answers it needs to hear, regardless if it is the answer the board hopes for.4. Avoid reacting defensively to upset homeowners, and will make sure they are informed as to the “whys,” and not only the “whats.” 5. Confirm in writing my advice to the board if it disregards my advice.6. Not attempt to give specialized advice, but will refer the board to the appropriate specialized professional service provider.7. Try my best to please all, while knowing that I can’t. BE KNOWLEDGEABLE:8. Pursue professional designations and attend seminars to keep me up to date.9. Be prepared at any board meeting to explain significant deviations from budget or unbudgeted expenses.10. Understand the Business Judgment Rule, and ensure the board has sufficient information to make each decision.11. Encourage the board members to join the Community Associations Institute, knowing educated boards are better boards. BETTER BOARD MEETINGS:12. Protect the board from overly long or disorganized meetings.13. Create agendas with consent calendars to quickly handle non-controversial items.14. Alert the board when an agenda is too ambitious.15. Become comfortable with the fundamentals of parliamentary procedure.16. Help the board stay on topic and on agenda. 17. Alert the board if it is handling matters in closed session which should...
New Year Resolutions for HOA Members

New Year Resolutions for HOA Members

[Second in a four-part series, with possible resolutions for the HOA owner.  Next week’s installment will suggest ideas for managers.] I, the HOA member, resolve to: NUMBER ONE: Follow the Golden Rule. (paraphrase: “Treat others as you would like to be treated”) MY ATTITUDE: Not refer to the HOA or board as “they,” since it is all “us.” The directors are also members who pay assessments and spend their time working to benefit us all. Be neighborly, because shared ownership fails without cooperation. Assume our directors are doing their best as volunteers, and give them the benefit of the doubt. Not first assume the board is incompetent or dishonest when I believe it is overspending. Avoid the “my home, my castle” attitude. We share the benefits of common interest ownership, which means we also agree to share control of our property. Ask questions before making statements, criticizing, or even accusing others. Acknowledge the board may have more information than me. This doesn’t mean the board is always right, but it does mean my opinion might not be fully informed. Take the long view of our association property, supporting growth of our capital reserve fund and maintaining our buildings. BE KNOWLEDGEABLE: Read the information the HOA sends to me. Be familiar with the CC&R’s, bylaws, and rules. I will be a better neighbor by understanding the use restrictions and rules. Read the association budget and reserve study. I will ask informed questions, particularly about deviations from budget. If I ask to review financial documents, I will not ask for “everything,” and request only documents which I really need, acknowledging my...
New Year Resolutions of HOA Directors

New Year Resolutions of HOA Directors

Many of us start the new year with commitments to improve, so why leave out the HOA? This four-part series suggests resolutions for association directors, homeowners, managers and service providers. As an HOA director, I resolve to: ALWAYS:1) Follow the Golden Rule. CHECK MY ATTITUDE:2) I don’t control my neighbors; I serve them. A servant’s attitude will help me be less defensive and stressed when neighbors challenge or criticize board decisions.3) Advocate our board follows the law and governing documents, spends money wisely, and preserves and maintains our community assets, while also attending to the board’s relationship with our members. We will balance legal, financial, property, and community considerations in our association governance.4) Remember that my position as a volunteer is different than my work. Unlike at work, we cannot fire our HOA neighbors.5) Be aware that not all neighbors know their rights and responsibilities under the law and governing documents, and I will be patient and willing to explain our rules and decisions. BE KNOWLEDGEABLE:6) Review our governing documents (CC&R’s, bylaws, and rules).7) Regularly review financial reports on budget, reserves, expenditures and delinquencies.8) Understand the Business Judgment Rule, and always ensure the board has sufficient basis for each decision.9) Encourage my board colleagues to join a Community Associations Institute Chapter, and take advantage of the written materials, seminars and classes CAI offers to volunteers. IMPROVE BOARD MEETINGS:10) Help to limit our open board meetings to at most 2 hours, with a goal of an average meeting length of 90 minutes. 11) Arrive at meetings prepared, having reviewed the agenda and board packet.12) Listen attentively during Open Forum without...
The HOA Holiday Wish List

The HOA Holiday Wish List

During the holiday season, we often struggle to find the perfect gift for those who are important to us. Sometimes we need a little help, and we ask for a “wish list” of gifts to guide us. What would wish lists from the key players in the HOA world look like? For the homeowner membership: Regular communications from the board. Organized and efficient board meetings. An attentive board during open forum. A board committed to follow the law and the governing documents, and to improve the sense of community within the association. Directors who govern with a sense of service, not control. Directors who are not defensive when homeowners bring new ideas or even criticism. A board which will tell the truth to members, even if it is a hard truth (such as the assessments are too low and should be increased). A realistic budget and an increased commitment to funding the HOA’s reserve fund. A written explanation of any significant changes from last year’s budget to the current proposed budget. Neighbors who do not automatically assume that annoyance from another neighbor is intentional. Civility. For the board of directors: Respectful homeowners who acknowledge that the board and committee members serve the community without compensation (and typically without appreciation). Volunteers for committees and board service. Homeowners who use open forum effectively. Homeowners who attend and listen without interfering with board deliberations. Homeowners willing to pay for the level of maintenance and service they desire. A manager who has attained or is actively pursuing the management profession credentials. A manager modeling the highest level of ethical behavior, avoiding conflicts of...
Who Is Watching The HOA?

Who Is Watching The HOA?

Mr. Richardson, Is there an oversight/audit department on a state level that oversees the management of an association? I am finding contradicting and wrong information in the minutes. Thank you, M.H, Laguna Woods   Kelly: Is there a governing body that oversees all HOA groups?  Ours is not enforcing its CC&Rs. What can we do besides sue them?  L.T., Rancho Bernardo Dear MH and LT: Some states, including Nevada, Colorado, and New Jersey, have agencies dealing with homeowner association problems, but statistically none of these three states are in the “top 10” in terms of total number of HOAs. California has about 50,000 HOAs, more than 2 ½ times the total of those three states combined, yet has no state agency enforcing any requirements for HOAs or their managers (Statistics Courtesy of Foundation for Community Association Research 2018 Factbook). The Department of Fair Employment and Housing will handle discrimination claims, but outside of that, California HOA owners with errant HOAs or managers have only one place to turn to – the courts. The Davis-Stirling Act has many provisions providing for a private right of action and an award of attorney fees to the successful homeowner. The door swings both ways on the issue of enforcement, as HOAs generally also rely on litigation to enforce their governing documents (hopefully only as a last resort), seeking attorney fees under Civil Code 5975(c). One may wonder why the state with the largest number of HOAs of any state other than Florida (also approximately 50,000) has no resource to correct errant HOAs other than the courts. The answer may well be in the...
CC&Rs or Rules, and a Forgotten Bylaw Amendment

CC&Rs or Rules, and a Forgotten Bylaw Amendment

Hi Kelly, I’m confused between “rules” and “CC&R’s.” Our board, over the years, has implemented new rules. What I don’t understand is: How is this different than making changes to the CC&R’s, which would require homeowner approval? For example, the board passed a rule that prohibited playing sports in the street. When I bought my house, there was no such prohibition. Now, after my kids started playing sports in the streets, they prohibit it. I didn’t get to vote on this, and had it been in the CC&R’s when I was contemplating my purchase, I would not have bought in this neighborhood because they obviously were not “children friendly.” Do I have any recourse? Can the board just implement new rules whenever they want? Thanks for your insight. R.D., Vista Dear R.D., Rules are called various things by HOAs, including “house rules” or “regulations,” but the Davis-Stirling Act calls them “operating rules.” Per Civil Code 4340, an “operating rule” is “a regulation adopted by the board that applies generally to the management and operation of the common interest development or the conduct of the business and affairs of the association.” If homeowners voted to approve it, it would not be an operating rule. Rules are meant to be somewhat fluid, allowing boards to adapt them to the community’s changing needs and desires. CC&R’s are more permanent since a membership vote is normally required to amend them, and are recorded as equitable servitudes binding all property owners subject to the CC&R’s. If the homeowners largely object to a rule change, Civil Code 4365 authorizes a petition for a membership vote...
Rules Regarding Children, and Blocked Driveways

Rules Regarding Children, and Blocked Driveways

Dear Mr. Richardson: Can an HOA come up with new house rules that ban children from playing outside the units? Especially with many young children that live here. G.G., Lawndale Dear G.G., Under the California Fair Employment and Housing Act (Government Code 12900-12996), “familial status” is protected against discrimination by Government Code 12955(a). This means one cannot discriminate against residents with children. Rules targeting the activities of children are illegal discrimination, even if they are well-intentioned and appear to be based upon safety reasons. If due to safety concerns an association wishes to curtail recreational activities in common areas, an operating rule should not mention the age of the person doing so, but instead should simply focus on the activity. For example, would skateboarding by legendary skater Tony Hawk be OK in the common areas? What about Lionel Messi playing soccer in the parking lot or drive aisles? If not, then simply ban skateboarding and soccer and avoid mentioning the age of the participants. California law specifically allows senior communities to discriminate based upon familial status, by exempting them from Government Code 12955. Section 12955.9 specifically excludes “housing for older persons” from the ban on familial status discrimination. Associations should be careful in drafting rules to avoid discrimination. Not only does the Department of Fair Employment and Housing pursue violations, but private housing rights organizations and aggrieved residents all can pursue lawsuits as well. Thanks, Kelly. Dear Kelly, I am disabled and cannot walk easily, properly, or safely when there are obstacles in my way. It is very easy to trip and fall. My HOA has been allowing large numbers of...
Fair Housing Regulations Are Here, and a New Protected Class

Fair Housing Regulations Are Here, and a New Protected Class

After five years of work and hearings, the California Fair Employment and Housing Council has completed what appear to be the first state Fair Housing regulations in the country. While in the short space of this column a thorough summary of the regulations is impossible, here are some highlights for associations and their managers to consider. HOAs are “Housing Providers” under the regulations, as are HOA boards and their managers. Managers can also be subject to enforcement or civil liability if they discriminate or fail to respond appropriately to discrimination. The regulations do not cover all fair housing issues but provide helpful guidance regarding the housing provider’s obligation to make reasonable accommodations upon request of the disabled. The regulations describe how disabilities are documented and who can attest to the need for an accommodation. One such reasonable accommodation is allowing assistance animals. Under the regulations, a mere internet certificate or labeled vest is not acceptable to document the animal as an accommodation – a person attesting to a disability must be familiar with the resident’s needs. The regulations do not permit species or breed limitation for assistive animals. The test of “reasonableness” is whether the animal causes damage or danger to persons or property, and the mere fear or suspicion of problems is insufficient reason to deny the animal. A person needing an assistance animal cannot be required to obtain extra insurance or pay a fee or deposit for the assistance animal. The regulations also ban harassment based upon membership in a protected class, meaning a resident may not be harassed because of their race, gender, religion, familial status,...
Is the Handyman An Employee? AB5 May Increase HOA Payrolls in 2020

Is the Handyman An Employee? AB5 May Increase HOA Payrolls in 2020

Traditionally, many businesses often hire part-time or occasional workers and characterized them as “independent contractors.” The IRS and State Franchise Tax Board had guidelines to help determine who was an employee and who could fairly be called an independent contractor. There were many factors which played a role in that characterization. HOAs often hire persons they considered “independent contractors” to perform specific maintenance, repair, or other routine tasks. This avoided payroll tax withholding and other legal obligations. All that began to change in 2018 with a California Supreme Court case called Dynamex v. Superior Court, in which the traditional test of employment vs. independent contractor was replaced with a simple 3-part test, often called the “ABC” test. That ruling was incorporated in Assembly Bill (AB) 5, which was quickly signed by the Governor after passing the Legislature. AB 5 creates a new Labor Code Section 2750.3 and affects any hirer, including HOAs, using “independent contractors” which might be reclassified as “employees.” This new statute adopts the “ABC” test, which determines a worker as an independent contractor if: A) The hirer actually and contractually does not control or direct the person in the course of their work; B) The work performed is outside the hirer’s normal business; and C) The worker also normally and independently performs that work for others. If the hired person meets all of those three requirements, they can be treated as an independent contractor. As before, the element of control over how the person performs their work is key. Some HOA service providers are expressly exempted from the law, such as attorneys, architects, engineers, and accountants....