Ramped Up Assessments, Where To Pay

Ramped Up Assessments, Where To Pay

Mr. Richardson, This year our HOA dues increased 20%. The reason given was plumbing issues due to sewage backups. When I asked about just having a special assessment to cover the plumbing issues, I was told a special assessment would require a vote by association members. What can homeowners do to prevent this from continuing? J.L, Newport Beach Dear J.L., Most CC&R’s or bylaws limit increases in regular assessments by boards to no more than 20% per year. Per Civil Code 5605(b), governing documents cannot impose any smaller assessment limits to board power. Some boards, discouraged by lack of participation, address major expenditures by using the maximum increase in assessments for a few years, eliminating the need for a special assessment. While expedient, this does create a few issues. Since members are not voting on it, boards often skip the critical step of having “town hall” meetings and newsletter bulletins to inform the members the reasons for the expenditure. Also, once the need for the increase ends, will the board remember to reduce the assessment amount? Members really should be more involved in their associations, and it is discouraging for a board to try to have to avoid member votes simply because the members won’t vote. Thanks, Kelly Hello Kelly, Recently, I signed up for e-statements, by which my monthly statement is available online. I asked my HOA if I could still receive my monthly assessments through mail as well as being signed up for e-statements. Their reply to me was that I could only chose one way or the other. Is this allowed? J.K., Irvine Dear J.K., The Civil Code...
We Have Unwritten Rules

We Have Unwritten Rules

Dear Mr. Richardson, Our board frequently adopts new rules, generally following the required process of providing 30-day notice to homeowners prior to voting at an open board meeting. The new rules are documented only in the board meeting minutes. Consequently, many of these rules have been “lost” throughout the years as homeowners come and go and memories fade. New homeowners moving in have no knowledge of these undocumented rules and naturally they are upset when the board enforces them. So, where should new and/or modified rules be documented? D.W., Cerritos Dear D.W., If the rule change is not published in writing, it is not a rule, per Civil Code 4350(a). Once the board has completed the rule-making process, the final steps are sending notice of adoption of the change and amending the rules document to include the change. If a new owner is not provided a copy of the rule, it might not be enforceable against that owner. Also, per Civil Code 4525(a)(1), all governing documents are to be provided to a member upon request so that they can be given to a prospective buyer. Rules are part of the association governing documents, per Civil Code 4150. Hoping this is helpful, Kelly Dear Kelly, I showed our president your article which said Civil 5850 requires associations to have a list of fines and that the list is part of the Annual Policy Statement packet. He said that there is no annual list of fines as we have an Assessment and Collection policy in place, and that the board is not empowered to change it. Our C.C.& R’s on two pages...

New Year’s Resolutions [Part 3] – The Manager

As the association’s professional manager, I resolve to Number one: Follow the Golden Rule. Attitude check: Remember I am a professional, and will give the board the best advice I can. I am not employed to be silent. Strive to give the board the answers it needs to hear, regardless if it is the answer the board hopes for. Avoid reacting defensively to upset homeowners, and will make sure they are informed as to the “whats” but also the “whys.” If the board disregards my advice, I will document it in writing to the board. Not attempt to give specialized advice, but will refer the board to the appropriate specialized professional. Try to please all, while knowing that I can’t. Be knowledgeable: Pursue professional designations and attend seminars to keep me up to date. Be prepared at any board meeting to explain significant deviations from budget. Understand the Business Judgment Rule, and confirm the board has sufficient information to make each decision. Encourage my board members to join the Community Associations Institute, knowing educated boards are better boards. Better board meetings: Protect the board from overly long or disorganized meetings. Create agendas with consent calendars to quickly handle non-controversial items. Alert the board when an agenda is too ambitious. Become comfortable with the fundamentals of Roberts Rules of Order. Help the board stay on topic and on agenda. Alert the board if it is handling matters in closed session which should be in open session. Bring the HOA governing documents, including all rules, to every meeting. On each agenda item, be prepared to provide a recommendation or recommend retention...

New Year’s Resolutions [Part 1] – The Director

As an HOA director, I resolve to: Always: Follow the Golden Rule. Reboot my attitude: I don’t control my neighbors, I serve them. An attitude of service will help me to be less defensive and stressed when neighbors challenge or criticize board decisions. Advocate our board follows the law and governing documents, spends money wisely and properly preserves and maintains community assets, while also being mindful of the board’s relationship with our HOA community. We will balance the legal, financial, property and community considerations in our decisions. Remember that my position as a volunteer is different than my work. Unlike at work, we cannot fire our HOA neighbors. 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 the rules and decisions. Be knowledgeable: Review our governing documents (CC&R’s, bylaws, and rules). Review financial reports on budget, reserves, expenditures and delinquencies. Understand the Business Judgment Rule, and always make sure the board has sufficient basis for each decision. 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: Help to limit our open board meetings to at most 2 hours, with a goal of an average meeting length of 90 minutes. Arrive at meetings prepared, having reviewed the agenda and board packet. Listen attentively during Open Forum without interrupting, and give my neighbors the same level of courtesy and attentiveness which I expect from them during the board deliberations. Stay on topic during discussions. Meet...
11 Sure-Fire Ways to Frustrate HOA Elections

11 Sure-Fire Ways to Frustrate HOA Elections

Most associations have member voting at least annually, and the process required by statute applies to all HOAs, whether 2 units in Redondo Beach or 3,000 units in Oakland. Avoid these mistakes which can doom HOA elections. 1. Ignore the procedure Civil Code Sections 5100-5135 provide a process which must be followed on member votes regarding major assessments, governing document amendments, grants of exclusive use rights, and board elections. Many smaller HOAs either intentionally or ignorantly do not follow the process, leaving their elections open to challenge. 2. Don’t have election rules Civil Code 5105 requires HOAs have written election rules in place. These rules help answer questions in advance, making for more organized and fairer elections. 3. Forget to appoint an inspector of elections When setting an election, associations occasionally fail to appoint or hire an inspector to conduct the process. This appointment must occur in an open board meeting. Inspectors may be paid professional vendors or may be homeowner volunteers. 4. Allow proxies Most developer-supplied original HOA bylaws allow for the use of proxies, by which members give to another member the right to vote on their behalf. California statutes provide little guidance as to what is a valid proxy, and proxy disputes (and sometimes chicanery) are a common problem in HOA elections. Proxies are unnecessary, since on most important HOA votes members receive ballots 30 days ahead of the election. HOAs are better served by, through member vote, amending governing documents to ban proxies except for the narrow purpose of achieving quorum. 5. Skip vote counting in uncontested elections It may make no sense to go...