HOA Project, Old Spa

Kelly, Our board hired a landscape architect to give a proposal on redoing our entrance area. The proposal includes replacing original asphalt with pavers and installing or extending planters plus redoing all the plants. The cost will be over $90,000. I told our board that according to our CC&R’s it takes a majority vote by the membership if any new project exceeds 5% of our operating budget (budget is $255,000). I was told that the law firm we have on a retainer said this would not be considered a new project. I asked for a copy of the lawyer’s letter and they denied my request. Can the board legally deny me from seeing the lawyer’s opinion? Our board is thinking about awarding the contract for doing the work without a membership vote. Thanking you in advance, B.B., Huntington Beach Dear. B.B., Many HOAs have CC&Rs which ban boards from authorizing “capital improvement” projects costing more than 5% of the annual budget, unless there is a membership approval vote. The question here is not the expense amount, but whether it is “capital” or replacement. I assume your HOA’s lawyer decided it was an upgrade, not a capital improvement. The HOA can indeed keep the attorney letter confidential. However, if the opinion guides and benefits the entire community and if there is no harm in doing so, a board might choose to disclose it. How is the HOA funding this expense? There might be a membership vote on the special assessment that could be necessary to fund the work. It is a good idea to hold “town hall” meetings to discuss...

Adding More Directors: Fees at Time of Sale

Dear Mr. Richardson, At our HOA meeting last night – it was announced by the board that they are adding a 6th member, a 2nd member at large! I’m perplexed! Can they do that? Can you please shed some light on this! D.B., Reseda Dear D.B., The number of authorized directors normally is found in the bylaws. The most common number of directors is five, but what is important is what your bylaws say, not what most associations do. If the bylaws only authorize five directors, the sixth is not a director. What the bylaws say is more important than what the board says. The board normally may appoint to fill a vacancy caused by resignation or disqualification, but the members vote on vacancies caused by a term expiring or because of recall. So, I would need to look at your bylaws to be sure, but the sixth person is most likely not a director, and not entitled to vote or attend closed sessions meetings. If your board needs more help, rather than create a new “director” position, perhaps create a committee. Committees can help the board, and also help to discover potential future directors. Committees should have a defined scope, noted in the motion creating the committee, and recommend actions to the board within the committee’s scope of responsibility. Perhaps this sixth person would be a great committee chair. Have people serve on the committee and advise the board on topics within the scope of the committee. Regards,Kelly Kelly, I am in a large scale HOA. In the beginning, the developer charged a [significant] transfer fee to all...
Hard to Find Volunteers, We Want to Form a CID

Hard to Find Volunteers, We Want to Form a CID

Dear Mr. Richardson, What happens when the owners of the units in a home owners association are no longer willing or perhaps even able to serve on the Board of Directors? Circumstances indicate that if the present board, aging and increasingly infirm, resign, our HOA may find itself unable to get other members to serve on the board. I have heard several people say that the state will take over the operation of the association. I would very much like to know what the process is and also cost.  I am the association president. Please do not use the name or location of this association publically, until we know what we are doing! Sincerely,B.R., Pasadena B.R., If no one is willing to serve on the Board, the state will not take over the association. On petition to the Superior Court, a judge might order the association into receivership. That would be horrible for your community. The receiver will be paid a fee awarded by the court – your association would have no say in the matter. The fee would be much more than what normal management companies charge. If you can’t get volunteers for the board, there usually are reasons. Is your board doing everything itself, or does the Association have a management company? Does the Board conduct itself unprofessionally? Are meetings far too long and conflict-filled? Years ago one of my client associations (100+ condominiums) was managed by a pair of retired members. One handled the finances and records, and the other managed the building. They wondered why nobody would volunteer to serve as a director, but it...