June 25, 2009
HOA and CONDO Board Meetings-May Members Participate?
Ctd. from an earlier blog ... Pt II
Alot of people have questions about HOA and Condo meetings, what is required, how can owners participate, is an agenda a requirement, how much power should management have, etc. I am tackling some of the questions I have received recently about meetings in this and some companion blogs. Given the facts and background, a lot of feedback is needed and the topics are wide-ranging, so look for the companion blogs based on the following background including more on the management's role and responsibilities.
Background Information Provided: Our Management Company interprets the new Agenda Law, as to when and how members can approach the board, to mean that Members can only address the Board during the homeowner forum. The problems we are experiencing are as follows: Even after informing the Board about the new Agenda Law, it continues to mail Agendas with unclear topics as well as the use of the generic language "Old Business" and "New Business"." [See the companion blog response on Agendas.] Hence, when attempting to ask for clarifications when the topic is being discussed by the Board, the inquiring Member(s) is/are told by the Board's President, with the support of the Management Company, to wait to speak/ask questions/clarifications until the "Open Forum" period of the Board Meeting. The problem with that is that by then the Board has already made their decision(s) about (a) certain topic(s). The "Open Forum" portion is at the end of the Board Meeting....not at the beginning. Not that it matters in our situation as our Board refused to submit clear Agenda Topics."
Comment: I agree wholeheartedly that this situation could frustrate inquiring homeowners no end. Boards have many "motives" for setting a specific time for homeowner forum. Some are very reasonable reasons and others are not. And sometimes a board does things to minimize time spent with what they consider "difficult owners". Although, the "difficult owner" may also have very good motives, or very bad ones. In any case, I think it fair to acknowledge that most owners that are considered "difficult" earned that badge by expressing frustration with the association and board. Now, we could go on for hours about where that frustration came from (and have in other blogs), but the purpose of this blog is to cover why boards limit forum time at meetings and why they choose a particular time for the forum. This is a common practice that owners would not generally fully understand, unless they asked. As such, it commonly becomes a source of frustration for certain owners who want to comment about association business and feel stifled.
One acceptable reason for seeking "containment" of the time for the homeowner forum is that it helps move the board business meetings along and the board members are volunteers who commonly (1) do not like interruptions at every subject brought up and (2) want to get home at a decent hour as most board meetings take place in the evenings and people are already tired and spent. One "bad motive" is that the board wants to discourage members from participating either because the forum is held early enough that computer owners are not home in time to attend during the forum time, or that owners in attendance will lose interest by the end of the meeting and leave before the forum time. A plausible reason for having the forum at the beginning or end of the meeting is that it can save the HOA or Condo money if the manager does not have to be there, and minutes do not have to include the homeowner comment ("forum") period. Most management contracts have some limitations on meeting time without going into "extra compensation time", which answers the next question/statement posed by the owner who wrote in to me which is addressed in the third companion blog - asking about the manager's role.
All that said, there are many boards that allow comment upon topics discussed in the board meeting, because they feel that if owners are willing to come to the meetings, they ought to be able to "weigh in". Likewise, there are many situations where owners come to the board meetings and try to direct the board to their way of thinking by disrupting the process of doing business. Some of these owners are not willing to serve, but are certainly willing to tell the board how to do its job, and some get belligerent and abusive.
So, the important thing is to strike a balance, and that balance could be found by publishing a realistic informative Agenda which lists the topics that are going to be discussed, and thus allow owners who are interested in coming the opportunity to "weigh in" on the topic, whether before it is discussed or during. Making them wait to "weigh in" after the action is taken does not make a lot of sense. However, the law on homeowner participation was enacted to give owners the opportunity to address the board directly, not to usurp the business portion of the meeting, so keep that in mind too.
For much much more on meetings issues, visit www.californiacondoguru.com and look through the publications. Look specifically for the Primers on Operations (I and II) and the Operations Forms primer which sets forth forms related to meetings, including a sample agenda and discussion about it.
Posted by Beth Grimm at 9:39 AM
HOA and CONDO Meetings - Is an Agenda a Requirement?
Alot of people have questions about HOA and Condo meetings, what is required, how can owners participate, is an agenda a requirement, how much power should management have, etc. I am tackling some of the questions I have received recently about meetings in this and some companion blogs. Given the facts and background, a lot of feedback is needed and the topics are wide-ranging, so look for the companion blogs based on the following background including more on the management's role and responsibilities.
Background Information Provided: Our Management Company interprets the new Agenda Law, as to when and how members can approach the board, to mean that Members can only address the Board during the homeowner forum. The problems we are experiencing are as follows: Even after informing the Board about the new Agenda Law, it continues to mail Agendas with unclear topics as well as the use of the generic language "Old Business" and "New Business"."
Comment: This is common, still, even after the agenda law. The intention of the California law on providing an agenda is that owners will be informed ahead of time on topics that the Board is going to be addressing in the meetings, so they can come if they are interested. (Owners should come anyway, and pay attention to what is occurring if only to keep abreast of what is happening in the association and to see their elected officials at work.) Since the law prohibits the boards from discussing topics not on the agenda, the intent is that the owners will not be blind-sided by decisions on topics of material interest, simply by avoiding noting them in the meeting notices.
Simple references to "old busines" and "new business" are not enough, in my opinion, to allow the board to freely discuss various topics that might fall into one of those categories. It does not satisfy the new law. I don't think they even come close. There are exceptions the Board should follow when topics come up that need discussion or action and the need for discussion or action was not known at the time the agenda had to be out (at least 4 days before the open board meeting). That said, what is the price to be paid for failure to follow the law? Not a big one really, unless someone wants to pursue their rights legally, which can be done, but when is it worth it?
For much much more on this issue, visit www.californiacondoguru.com and look through the publications. Look specifically for the Primers on Operations (I and II) and the Operations Forms primer which sets forth forms related to meetings, including a sample agenda and discussion about it.
Posted by Beth Grimm at 9:21 AM
June 23, 2009
HOA / CONDO - Questions On Soliciting Nominees and Filling Positions
Here are some questions I recently received about soliciting nominees, qualifications, and filling positions:
Soliciting Candidates
"Is it written in the law or is it simply a recommendation, that a written solicitation be mailed to the owners at least 30-60 days prior to sending out the ballots?"
Answer: There is nothing in the law that requires sending out a solicitation letter to the members; however, my position would be that it is in line with having a fair election. Some HOAs or Condo Associations post the information on the Association website - however, it may not be likely that all members will frequent the site and find this information. Since the Board cannot prevent a "qualified" nominee from running for the board I believe sending the solicitation helps prevent a claim related to fairness of an election. If a board conducts a "tight-fisted" election trying to shut qualified candidates out, it could backfire.
What candidates are "qualified"?
Answer: This is "document specific" for each HOA or Condo Association. That means what the association governing documents (Bylaws, CC&Rs, Articles of Inc. etc.) say is critical. For instance, board members may have to be "in good standing", be on title, have taken training classes, etc.
"If there are three positions open for election and only two incumbents/nominees are running, how is the third position filled? Is the vacancy filled by nomination of elected board w/majority approval or does this position have to be filled through another election process?"
Answer: There may be language in the governing documents or election rules that pertains. If not, then it would be up to the board (by majority approval) to appoint someone to fill the third position, and that person would serve for the full term that was subject to election. However, check the documents because some say that positions must be filled by election of the members, in which case the board's job will be to pull someone forward (kicking and screaming perhaps??) and get their name on the ballot, or wait until there is a willing volunteer and then hold a special membership election if it is not the usual election time, or schedule an election, and then declare the willing volunteer to fill the position by acclamation.
All of these ideas about filling positions with or without going through with an actual election are dicey and controversial, so if you are contemplating any, I suggest getting good legal advice and an opinion letter for the file. The law is less clear than one would like, and so there are fights ... yes, heated fights ... over what it means. Don't wait until the fire is raging as it is much more expensive to put out than to prevent.
One great preventive tool is to gather more information and educate yoursule about elections and the processes. You get can an incredible amount of information by visiting the website
(1) For free (see the link to "Elections After SB 61") or
(2) Through a series of very low cost Primers on Elections, including a forms Primer to help Condo and HOA boards set up proper elections. The website is http://www.californiacondoguru.com and the links are evident - look for the link to Publications for the scoop on all available Primers including the Elections Primers.
Posted by Beth Grimm at 10:50 AM
June 17, 2009
HOA / CONDO Association Rules Violations & Due Process - The Continuing Debate
There is a continuing debate going on about HOA and Condo Association hearings. And it is an interesting one. Debate is healthy. It stirs interest in a topic. The point under discussion: what is required of a board to address a situation where there is a continuing or recurring (someone wrote and asked me to stop using re-occurring which is fine with me) violation of the rules? And what is the difference between continuing and recurring?
I think we all agree that continuing means something that goes on day to day without changing, such as a paint color or vehicle parked without being moved. "Recurring" would be something that happens, and then happens again, and then happens again, such as slamming a door or parking a vehicle in the wrong place each day. Whew! Glad we can agree on something (or do we???).
Now, the big question is about imposing fines for these violations - after notice and a hearing of course. Does the Board have to hold more than one hearing for continuing or recurring violations. You can read my earlier blog for what I, and some colleagues have opined. My question for this day is:
Are HOA and Condo hearings on par with criminal proceedings, where due process is critically important? Obviously the stakes are much higher in a criminal proceeding, and "state action" is clearly involved because the penalties come straight from the Penal Code.
Fining an owner for continuing or recurring conduct - once they have been clearly given the message that such conduct will subject them to a fine or suspension of other rights (such as pool use - yes, that too), is in my opinion fundamentally fair.
And what is also important is that it is fair to the volunteer board members and the rest of the community, that violators should be subject to some penalty.
One commentator weighed in and said that a board could give notice and hold the hearing, and then provide the owner with a "probationary" period, with the cavaet that if "probation" was violated, another fine would be imposed. I do not think that is a bad idea - it might make alot of sense in a situation like pool abuse, where fines are imposed for disruptive conduct at the pool, and the "probation sentence" is that if the same conduct recurs, the punishment is suspension for the season.
But of course (there is always a "but" isn't there?), if there is reason to suspect the proof or complaint is unreliable, then imposing any fines is risky and possibly unfair.
That is why we should focus some discussion on what is reliable and credible proof/evidence. If the board can have it independently confirmed, then it is reliable. If more than one person has complained, it likely is reliable information, but certainly more investigation can be performed. If it is Joe Blow and Patty Mouth throwing insults and complaints about each other's conduct, there is reason to investigate and seek out further truths (or possibly even "butt out").
As to fining into infinity, at some point the Board has to make a decision to "sh__" or get off the "p_t" (anyone familiar it that saying)? This decision should be a good sense one. If someone constructed a deck over common area for all others to see, then this situation would dictate more assertive action than "forever fines". If the owners' tenants cannot control themselves at the pool and create turmoil every time they attend, then they should be banned for a reasonable period each time it occurs. Evidently, some "training" is required here. If an owner lets their dog poop in the laundry room every time they do laundry, then a fine each time, possibly even escalating, might be "fine".
If an HOA or Condo Association is challenged on a fine or fines, the most likely venue is small claims court, which is a court of "equity" (fairness in other words).
So, I say again, HOA and Condo Association hearings and fines or suspension of use of facilities are not on par with criminal proceedings. And HOAs and Condo Associations are not police, judges, or jailers who have it in their power to confine people to bread and water, or solitary confinement, or time in jail, or the electric chair. Certainly, there are boards that have taken action with regard to fines that is unreasonable, unfair, unwarranted, and downright ridiculous. But that does not taint the pool of volunteer board members that are just trying to do the right thing when dealing with the perpetual violator (at least not until there is some appeal court case in California or legislation that dictates processes and procedures further).
Posted by Beth Grimm at 10:01 AM
June 16, 2009
WHOM AND HOW MAY AN HOA OR CONDO OWNER CONTACT THE BOARD? VENDORS?
Here are a couple of questions that came in recently, a bit unusual as the questions go, but pertinent:
Can by law a home owner in a condo complex get in touch with a board
of directors member thru email ?
There is no law on this. Boards are not required to accept or respond to emails, so if the Association policy is to communicate otherwise, such as coming to a meeting and addressing the Board during homeowner forum time, or the old fashioned "write a letter" method, I would suggest following it. Remember directors are volunteers and are providing a service to the HOA or Condo Association, and may not want to be inundated with emails. There may be required channels of communication through management so that there is assurance that all communications relating to association business go through one portal.
By law, can a member of the association get in touch with one of the
vendors that works for the association ?
Again, there is no law, however, whether it is a good idea would depend on "motive". If you want to tell the vendor what to do or complain about something, I would say the better way to proceed is through the appropriate means of communication with the association board or manager. A homeowner can be reprimanded, subject to paying extra costs, and even subject to disciplinary action if he or she interferes with a vendor and the work they are trying to accomplish for the association.
Of course, if the contact relates to something constructive, like arranging inspections or entry as needed, that is normally okay, unless a liasion is appointed to communicate with owners over such things.
If you want work done by a vendor used by the Association, that might be allright too, but the Association should know, and the vendor should make it clear any work for the owner is under separate contract with the owner.
So, without a law, and given that associations have varied practices and policies in these areas, I have provided the common lawyer-like answer of "it depends" [on association policy]. The Association may not have one at the present; however, if an owner becomes overenthusiastic or abusive with communications, the Board will likely adopt one.
Posted by Beth Grimm at 10:28 AM
June 15, 2009
Must an HOA or Condo Board Allow "The Accused" to Confront Witnesses?
As part of a series on hearings (see E-Newsletter for June on the subject of whether multiple hearings are required for continuing or re-occurring fines - in the E-news Archives at http://www.californiacondoguru.com), I thought I would write about my opinion on whether owners subject to disciplinary action have the right to "confront witnesses".
If you read the E-Newsletter on fines, you will see that HOA and Condo boards are not really "state actors" (governmental or public entities) and therefore not necessarily subject to legal "due process" standards in all cases. There are some court decisions suggesting otherwise in the country. In any case, the position I see as viable is that at the least, HOA and Condo Boards should engage in fundamental fairness in holding hearings (which process is governed by California law) and in considering disciplinary action such as fines or suspension of membership rights for violations of the governing documents or rules.
I am not necessarily in the "camp" that believes owners in HOAs or Condo Associations have the right to technically "confront" witnesses that have complained of conduct which put the owner before the board in a disciplinary hearing. In other words, cross-examination, in my view, should not be a right that extends to homeowner associations. However, a board that is intuitive can, if inviting both parties (the accused and the accuser) to the hearing, and allowing each to present their side of things, find out a lot about what is going on, which will help in making a reasonable decision about whether disciplinary action should be imposed.
For any situation that can be independently verified - I do not believe the "accuser" or "complainer" needs to be invited to the hearing at all.
And, if it appears there is any chance of actual physical or abusive "confrontation" by the accused, or the accuser, get some legal help from an experienced practitioner in formulating a plan for the hearing, or protecting identities, or whatever you believe is needed.
Watch for more on this. In a later blog, I will address whether I believe tenants should be invited to hearings when they are the subject of the conduct being examined.
If you want extensive detailed information on enforcement, hearings, policy setting, etc., check out the Enforcement Primers available on my website in the webstore at http://www.californiacondoguru.com.
Posted by Beth Grimm at 9:02 PM
June 10, 2009
SHOULD HOA BOARDS LET OWNERS KNOW WHO IS BEING FORECLOSED?
I have written a lot about foreclosures, bankruptcies and delinquencies and know they have put a lot of strain on homeowner associations and everyone associated including the "dues-paying" owners and all HOA vendors. I have received an email that I believe deserves answering, although you may not agree with my answer - and you are certainly entitled to your own opinion. Here goes (the email question):
"Love your site...it is very helpful... I have a question I thought you may be able to help with...I understand if you cannot answer... What are your feeling in regards to a Board's responsibility in terms of letting owners know about foreclosures within our complex...some members feel it is our fiduciary duty to notify all residents regarding foreclosures, while others feel we shouldn't say anything, especially if the resident in foreclosure is current on their monthly HOA dues...the same question has been posed for both foreclosures discovered doing "Google" searches, as well as foreclosures recorded in our county documents.... Thanks for any feedback..."
Here is my response (and I have answered the question similarly in an earlier blog about the idea of publishing the names of persons who are in collections):
To what end???!!!
Is the purpose to
Let everyone know what units are vacant or will be soon so the burglars and thieves can step in in the dark of night? (Because that could happen.)
Let everyone know the value of the places are going down because of foreclosures leading to a mentality of "that place is going to the dogs" or "sell and get out quick"???!!! (Because that could happen.)
Let the "vigilantes" loose on those who owe money so that they can hassle them, threaten them, or worse (setting the Association up for a lawsuit if the action taken is offensive enough)???!!! (Again, could happen...)
Or
Try and shame the owners who cannot pay or have decided to walk away into paying???!!! (That does not work, people either pay, do not have the money to pay, or have made an economic decision that in better times might not have been made.)
I have to say ... if you are in it for the shame game... then [I could say] shame on you [ but I might make some people mad]. Are we back in the days of the witch-hunt or scarlett letter?
I have said before, collections should be carried out in a "reasonable manner", business-like and professionally, taking advantage of all practical options, and a board does have a fidiuciary duty to be diligent in its attempts to collect outstanding delinquencies as those negatively impact the HOA's bottom line. However, "laying shame" on those whose homes are being foreclosed?????". That is not one of the items that is included in my "tool kit".
If you want to know what is included, visit the guru at http://www.californiacondoguru.com and check out the very affordable Primers in the webstore. There are 6 on assessments alone, 3 of which deal specifically with collections processes.
Posted by Beth Grimm at 11:40 AM
May 31, 2009
HOA and CONDO Disciplinary Hearings - Which is Best? Open or Closed Sessions?
While we are on the subject of enforcement (did you see the last post on fines?) there are other prickly issues to consider.
We were talking about the California Civil Code section that speaks to what matters can be heard in executive session ... and disciplinary actions are included (see Civil Code Section 1363.05 - the Common Interest Development Open Meetings Act). The statute says that the meeting to consider discipline shall be held in exec session if the member requests it, which is totally incongruous. Why? because owners (1) do not know they can request an open session and (2) usually do not want their "dirty laundry aired in "open session" hearings.
Thus, I have taken the position that the Boards should put in their letters/notices to owners of a hearing that the meeting will be held in executive session unless the member requests an open meeting . In doing this, ...
1. The Board is letting the owner know it is the board's intention to hold the meeting in exec session BUT
2. That if the owner does not want it heard in executive session, they do have the option to ask that it not be.
Of course, this is not in perfect alignment with the statute, but I feel that it should overcome any argument by an owner that the board held a hearing in executive session without their (albeit implicit) consent.
Most boards just hold the hearings in executive session without regard for the technical issues around the statute language. However, I have seen a board get challenged on not allowing an owner a hearing in an open meeting. If the owner wants the hearing in open session, they have that right because of the way the statute reads. On the other hand, if the Board feels that having a hearing in open session presents other issues such as violation of someone else's privacy (a witness perhaps), it is best to seek the assistance of knowledgeable legal counsel to set up a reasonable process. Sometimes, different people's interests collide and there is not a way to technically satisfy both without "bending" (notice I did not say "breaking") the law.
My take on witnesses is that when a board holds a hearing, it normally states the charges and complaints but does not give out names specifically or share anything with an owner that could be embarrassing or damaging to others. Other legal practitioners take a different position that anyone charged with any violation has a right not only to know who complained, but to confront them. If a violation can be verified by someone not involved, then why create stress and promote actions that could result in retaliation? If the matter cannot be verified by anyone else, and there are no other witnesses, and it has become a "he said, she said" situation, much can be learned by holding a "meeting" of the two parties, by a person that is intuitive, a good listener, and interested in finding out what actually is occurring, before disciplinary action is meted out.
The law is what it is .... but it is not always easy to figure out what to do when interests collide, so get help when needed.
There are 5 Enforcement Primers available on the condoguru website so you can find out alot more about rule setting, policies, hearings and good enforcement practices if you wish to avail yourself of this valuable and affordable resource.
Posted by Beth Grimm at 7:11 PM
HOA and CONDO Association Fines -How Many Hearings Are Required!
In case you missed it, there has been a discussion on the website of a colleague about what is required with regard to fine hearings. Question: is there a hearing required every time that a fine is being considered for a violation of the rules or other governing documents?
Some legal practitioners believe a hearing is required for each violation, except continuing violations for which a daily or weekly or other fines might be imposed. Some believe that more than one fine can be imposed - but there should be a limit, for example, one colleague has expressed a "3 Strikes - Rule" philosophy, essentially suggesting that the purpose of fines is to deter bad conduct and "If three fines haven’t done the job, then fines are not going to work and the board must either stop wasting its time on enforcement attempts for this violation, or move on to injunctive relief.".
I have a different take on fining for repeat violations. I do agree that it is an important subject. I take a different approach because I believe that volunteer board members should not have to be parents, reminding their owners who are acting like irresponsible or spiteful "children" again and again and again that there are ramifications to bad behavior.
So, I thought I would write and give my take on fining for repeat or continuing violations ... without the need for multiple hearings.
My position is that it is appropriate for HOA and Condo Association Boards to impose multiple fines for bad behavior without having multiple hearings. I suggest specifically addressing the ramifications of reoccurring and/or continuing violations in multiple formats, and the more the better, ... at the least, (1) in the fine policy, (2) in the letter to the owner who is subject to disciplinary action, (3) in the hearing, and (4) in writing in the hearing decision letter to the owner. That provides at least 4 opportunities for an owner who is subject to the fines to understand that the conduct cannot continue without repercussions!
I recommend the following theme be included in all 4 venues: “Continuing and/or re-occurring fines may be imposed for continuing or re-occurring violations of the same or similar nature.” (Of course, the final hearing decision letter would say "A fine will be imposed each time the violation noted below is repeated [or each day that the violation continues, or for ongoing nuisances like loud music plus other loud disturbances - each time a loud disturbance from your unit occurs, among those noted below].
Does that satisfy any potential "due process" requirements (if in fact they exist - there is a whole other debate on how far "due process" invades HOAs and Condo Associations since they are not governmental agencies). I think "yes".
With 4 notices in the least (and 5 or more if explanatory warning letters are sent, which I believe are a very good idea, prior to the pre-hearing notice letter) that continuing or re-occurring violations will subject them to continuing or re-occurring fines, what excuse does the owner have for not correcting the conduct? As far as I am concerned, this way of dealing with the continuing and re-occurring bad conduct constitutes reasonable due process.
I mean, how many times should you have to take time out of your life and money out of the association coffers to "remind" someone ...
Not park resident vehicles in guest parking spaces
Not let your dog bark all day and night
Not let your guests create a disturbance at the pool such that others cannot enjoy it
Not disrupt an association meeting
Not let your children vandalize property or throw rocks and debris at passing cars
Not to leave the dog poop behind for others to step in
I could go on and on ... but 4 warnings should be due process enough for any continuing OR re-occurring similarly offensive behavior. And, yes, I know that fines are hard to collect; however, if a board wants to, at any time, it can go to small claims court to enforce the fines, and if it does not want to expend the time or money to do that, remember that if the fines letters are in the file, they and the total fines due can be presented with any escrow demand that might come through from sale or refinance of the property.
So - there are ways to make life a bit easier if you are a board member, and ways to engender more accountability if you are an owner who (or whose tenants) are habitual rules violators.
Just my "two cents worth" on the subject!
And for the other "98 cents" worth, visit the California Condo Guru where you will find free articles on enforcement, FYIs on fines, hearings, and adoption requirements for new rules and rule modifications, and best of all, incredibly useful (and affordable) Primers. Be sure to peruse the Publications and/or the Webstore to find the set of Enforcement Primers which were written to assist boards in formulating enforcement policies and practices that work. You will find a series of 5 Enforcement Primers that cover basic rule setting and enforcement, sample forms and letters, and for everyone who encounters problematic neighbors or violators, advanced Primers on Noise and Nuisance issues, Neighbor to Neighbor disputes, and Parking and Towing matters. It is my belief that success in enforcement comes through organized, professional and business-like handling of these matters, combined with good efforts to engender cooperation, communication, and peer pressure as part of the process of getting owners to conform voluntarily with the rules and regulations of the association. You will recognize that as a recurring theme throughout the tools I produce for the benefit of boards, owners, managers, association vendors and anyone who deals with home owner and condominium owner associations.
Posted by Beth Grimm at 6:44 PM
