#348 HOA Homefront – Preparing for and Dealing with Disaster

#348 HOA Homefront – Preparing for and Dealing with Disaster

An unfortunate reality is that occasionally communities can be confronted with disaster, when earthquake, wildfire, or other calamity can transform a community within a few hours. Planning for the unthinkable can improve the association’s recovery prospects. Preparedness Enhance communication. Embark upon an aggressive campaign to build email contact points for every association resident or owner. The ability to flash bulletins to owners is critical in emergencies and saves labor and postage and increases communication in normal times. Check the association insurance. Does the association have replacement cost or code upgrade coverage? What is covered? Some years ago, an association sustained hundreds of thousands of dollars of landscaping and irrigation equipment destroyed in a major brush fire. Fortunately, their policy covered landscaping and the insurance paid to restore common area hillsides. Does the association have earthquake coverage? Check the deductible and inform members of the amount that will be the association’s responsibility in the event of major seismic damage. A meeting with your broker may reveal gaps or inadequacies in the association’s insurance protection. Create emergency policies and plans. The manager should be empowered to respond to emergencies, and each director should know association policy regarding who makes emergency calls to vendors if the manager is not available. Risk management. Is the association adjacent to any hillsides or other brush areas? When was heavy vegetation last cleared from the association perimeter? Your local fire department or a consultant may provide a risk assessment. The Emergency Immediate Actions. Call first responders. Call management. Issue an update via email and bulletin board, avoiding unsubstantiated reports or anything promoting panic. If evacuation is...
#347 HOA Homefront – Reader Questions – Should Our Assessments Increase?

#347 HOA Homefront – Reader Questions – Should Our Assessments Increase?

Hello Mr. Richardson, Our board is against raising our fees which have been the same for at least 10 years! Obviously, we are not keeping up with inflation. According to our reserve study we are over $1000 per unit underfunded. We have [decades old] buildings. My concerns are falling on deaf ears despite the encouragement of our management company to raise fees. I would deeply appreciate your opinion. J.E., Irvine Dear J.E.: Association boards are responsible to budget and spend association funds wisely.If a board decides in advance that it will not increase the budget, it is quite likely such a board has placed, as its first priority, the artificial preservation of assessments and that the upkeep of the property (and the association’s long-term financial health) is a lower priority. Properly caring for the common property and keeping vendor expenses flat for over ten years is unbelievable (and not in a good way). Because of the fact of inflation, cost increases should be factored into the healthy HOA budget. Otherwise, the association is probably deferring maintenance, hiring cheap (instead of the most competent and appropriate) vendors, and is not properly funding its reserve account. Such association are not financially healthy and are akin to people who live on credit cards. Such an association eventually has to face a day of unhappy reckoning when the deferred bills all come due and the association is forced to borrow. Qualified and certified managers are trained to prepare budgets and should be heeded in this regard. Maintaining property, keeping up with inflation, and depositing faithfully in reserves are all actions preserving the community’s...
#345 HOA Homefront – Reader Questions – Executive Session Misused?

#345 HOA Homefront – Reader Questions – Executive Session Misused?

Mr. Richardson: Members of our board mention discussions in executive session when they are discussing agenda items at board meetings. For instance, at a recent meeting the board tabled a matter relating to rules. The president said the matter would be discussed further in executive session. Also, three board members attend committee meetings. Two directors will be designated to participate with the committee and the third will not participate but just listen. What subjects are allowed under Davis-Stirling in executive session? Also, should a majority of the board be attending committee meetings, even if one of them does not participate? T.M., Canyon Lake Dear T.M.: Closed session is only permissible under Civil Code 4935(a) to discuss a very few items: litigation, paid personnel, contract negotiations, disciplinary and common area damage hearings, hearings re delinquency payment plans, lien foreclosures (Civil Code 5705(c)) and requests for accommodation of disabilities (required by Fair Housing law to be kept confidential). Anything else must be handled in open session – period. When a board handles other topics in closed session it not only violates the Open Meeting Act (Civil 4900-4955) but also violates the members’ trust. As to committees, if a board majority attends a gathering in which association topics are discussed, that is a “board meeting” under Civil 4090(a). Even if the third director is silent, that committee meeting has become a board meeting and the Open Meeting Act applies. If a board majority needs to attend a committee’s meetings, why have the committee? Committees should support the board by helping share the load. When a majority of the board is attending anyway,...