Make a Target! Goals for 2019

Make a Target! Goals for 2019

The late and legendary coach John Wooden said “The most important key to achieving great success is to decide upon your goal and launch, get started, take action, move.” Your association might benefit from setting a few goals, and then moving to achieve them. Here are some ideas for goals in the coming year: Increase the association’s reserve funds by 15%. The closer the association is to a fully funded reserve account, the more financially secure it is. Reduce assessment delinquencies by 20%. Make sure the association has all the Annual Budget Report (Civil 5300) and Annual Policy Statement (Civil 5310) items and annually provides them to owners. Improve member communication and save money by encouraging members to accept communications by email. The law now allows such a consent to be sent by electronic mail. Update the association CC&Rs and bylaws if they are the original documents or are at least 15 years old. Make sure the documents use the current Civil Code references which have been in effect since 2014. Updating the statutory references can be accomplished by board motion (in an open meeting) under Civil 4235. Review and update the rules. Remove rules discriminating against children or which are outdated and no longer enforced. Make sure the HOA has all the legally required rules. Hire an independent consultant to provide a comprehensive assessment of association maintenance and repair needs, to discover any overlooked problems before they become more expensive later. The consultant should NOT be a candidate for the work, so there is no mixed motive in their recommendations. Re-evaluate and update the association web site (or...
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...
Does Your HOA Have the Required Rules?

Does Your HOA Have the Required Rules?

Operating rules are often called “house rules” or “rules and regulations” by associations in California. Under Civil Code 4350(a), rules must be written, and under Civil Code 4340 are adopted by the board of directors. In adopting or changing rules, boards must follow the procedure stated in Civil Code 4360. Most rules are tailored by the board of directors to the needs and desires of a given community, and may address parking, meeting procedures, architectural standards, or other topics. However, many associations are not aware that each association, regardless of size, must have five sets of rules prescribed by statute. Election Rules Civil Code 5105 requires associations to have election rules. The statute gives the basic requirements of election rules. These rules would apply not only to board elections, but also to any matter on which a membership vote is required and which requires the 30 day notice and other procedures required by Civil Code 5100(a). These rules must conform to the bylaws, but also can add additional requirements regarding candidate eligibility, per the appellate case of Friars Village v. Hansing from 2013. Internal Dispute Resolution (“IDR”) Policies Civil Code 5905 requires all associations to adopt a fair and reasonable policy to establish an IDR procedure, in which a homeowner may meet with another homeowner or the board to try to work things out short of litigation. If an association fails to create such a policy, Civil Code 5915 sets forth the procedure. Architectural Modification Request Procedures A frequent board and management function is to respond to homeowners who wish to modify their residence or adjacent common area. Civil Code...

New Year, and New HOA Laws (in 2017)

2016 was a relatively quiet year for HOAs in Sacramento, with only three bills passing to become law in 2017, and another law taking effect in 2017 from a 2014 bill. Another significant new HOA law actually came from Washington D.C. – the Department of Housing and Urban Development. SB 918 Senate Bill (SB) 918 adds a new Civil Code section 4041(a), and at first glance appears to be innocuous. It requires all common interest development owners to annually and in writing provide the HOA their contact information for sending HOA notices, and to inform the association whether the residence is owner-occupied or rented. Associations are required to solicit these notices at least 30 days prior to the annual association disclosures. If an owner does not annually provide this notification, the association must deem the residence address as the address for notifications. There are at least two major issues here – HOAs and their managers now have an additional annual notification to owners which cannot be lumped in with the Annual Budget Report and Annual Policy Statement; and off-site owners now need to tell the HOA each year of the off site address or their notices will be sent to the tenant’s address. Thousands of future notices to landlords will be sent to the wrong location, because they do not annually notify their association as required. AB 2362 Assembly Bill (AB) 2362 adds a new Civil Code section 4777. Under this new section HOAs intending to have pesticides applied (without using a licensed pest control operator) in common area or a residence must post notice of the impending pesticide...