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July 31, 2008
Board Lesson No. 2 - Do It Today, Do Not Wait Until a Crisis Time
Here is my second lesson in the series. Boards, practice proactive tactics when something comes up that tells you trouble may be broiling. Scuttlebut or rumor mills are not good for much other than an indication that BAD OR MIS-INFORMATION may be being passed around and CONJUECTURE may be at work. Bearing witness to or receiving a complaint of malfeasance that has longer reaching implications should not be ignored. And, the worst thing that can happen is to be surprised beyond repair at a members' meeting, a board meeting, a committee meeting or an election with problems that cannot be resolved at that meeting, but might have been beforehand had the Board sought the right kind of help or paid more attention.
In other words, do some investigation and attempt to figure out if the problem needs to be addressed before it festers. Remember at least two things:
If any "damage control" needs to be done, it is better to diffuse the bomb before it goes off.
and
Putting out fires is usually much more expensive than preventing them.
Posted by Beth Grimm at 6:33 PM
BOARD LESSON NO. 1 - CHOOSE APPROPRIATE COMMITTEE MEMBERS
Sometimes I cannot wait to get my fingers to the keyboard and send a blog. I see and hear so many mistakes (fixing mistakes is after all one of the facets of my business), and am always anxious to pass on helpful information to Boards and owners in common interest developments in California. So I am starting a series of Board and Owner Lessons. These are the straight-on-short-and-sweet-really-think-about-doing-this-easy-to-read-and-understand blogs!
So for this one: BOARDS ... choose appropriate members to serve on committees, or do the job yourself!
This question comes up alot with regard to the Architectural Committee, one which serves a very valuable purpose and one which can serve as the basis for serious legal claims.
Committee members who know nothing about architectural issues (or other matters about the subject and purpose of the committee); do nothing to educate themselves; are incapable of looking around, listening and paying attention, or reaching to outside sources to get information; have no independent thinking mechanisms; are uncreative, unpersonable, unbusinesslike and/or too busy to do a good job ARE NOT GOOD CHOICES! Yes, I am shouting. Seat fillers are not wanted here.
I cannot tell you how many legal disputes arise because of this problem of choosing the uninformed and unconscientious folks. I know there is a shortage of people willing to serve, but placing people who do not strive to be "prudent" in their "job" and make no effort to educate themselves if they are not knowledgeable are NOT right for the job - appointing them is a BIG MISTAKE.
Here is an example. HOA in condo or townhome development has review/approval criteria in the docs for any changes that show on the exterior or affect the structure or the neighboring properties, or affect the "quiet enjoyment" of residents. That covers many HOA documents in California.
Board appoints ACC committee members that really don't want the job (note the Board could do the job but wants to delegate because it is already overloaded). No one wants to pay someone to review applications, so they do not promote applying.
Owner comes to Board and asks about adding hardwood or laminate flooring in upper unit that is carpeted (yes, in this hypothetical the owner does ask, which does not always occur, but read on, there is something for everyone here). Board refers question to Architectural committee who says " WHAT???? How would I know. You tell me."
Neither body makes any attempt to determine what this means to the structure, the neighbors, or the HOA in general. Changing out carpeted floors to hard surface flooring on upper floors, especially ones that have concrete subfloors INCREASES THE NOISE TRANSMISSION.
That is not rocket science. In fact, the web is cluttered with information and problems in condos and townhomes regarding installation of hard surface flooring.
If any Board or and Architectural Committee fails to recognize that, it's a problem. Leaving the question to a floor installer is just plain stupid. They will quote different prices to the owner and even if they recommend the more appropriate (but expensive) subfloor or underlayment of cork, they do not make the final decision. Money talks here. Leaving the question to the owner who wants to install to make a decision on their own is stupid. The owner has one person's interest in mind - their OWN!
As I have said before, some practitioners suggest that Boards stay out of disputes between owners over hard surface flooring and noise. That can be really short sighted thinking. I say, Boards, pay attention to the HOA documents. If you avoid your due diligence in the first place, you (and the HOA mostly) will be drug back in kicking and screaming, and possibly bearing the brunt of the legal battle that may ensue.
Please take heart. Due diligence on the Board (remember that you have a fiduciary duty which is a higher standard than just being in a leadership role) and/or Committee service functions is critical!
Posted by Beth Grimm at 6:04 PM
July 30, 2008
Getting Belligerent Gets You Nowhere
I had a call this morning (I get a lot of calls from people wanting to ask "a simple question"). This one was particularly idiotic. Maybe you have been guilty of making a similar call.
Owners call all the time and want to know if they can "do something". In this case the owner prefaced the call with "I just have a simple question." He wanted to know if he could rent his unit when his HOA had a quota, or maybe why not. It was hard to respond. I did get the opportunity to let him know how I work with owners, for legal advice, start with consultation, 1 hr minimum at hourly rate, paid in advance. Simple. He went on and on and on about why he could rent, stating that he did not need a lawyer, he was not in a lawsuit or anything, and that a person could figure it out themselves so why pay that kind of money. Finally, I felt it appropriate to say: "If you feel you can figure it out, you do not need me." And I hung up. I hate it when I hang up on people, but come on ...
Would you say to the car mechanic "It's just a simple problem" and imply he or she should not get paid to do the diagnostic work? Would you say that or imply that to your computer technician, your doctor, your dentist, or any other person that offers a valuable service?
Anyone who has a simple problem can surf my website at http://www.californiacondoguru.com and while there can find answers to frequently asked questions, articles on almost everything, explanations of complicated laws, and links to many other resources.
Maybe if "Tom" is reading this, he will see what a faux pas it is to waste the time of a service provider from whom he does not "need" services.
With regard to his question and many others (Can I have a Doberman? Why can't I park my extra car in guest parking? Can they do anything if I ignore the denial of my architectural application and make the modification? My dog had puppies, doesn't that trump the limit on pets? What if I want to have a Pilates Studio in my garage? What can they do about "it" ? (being any of the above?), maybe its best to know what a board can and cannot do before you end up with hefty fines, a reimbursement assessment, or in court. For me to determine that, I often need to review the governing documents for the association. When someone balks at paying for the time to do so and says to me, well, I can read those and figure it out myself - I say "more power to you."
Posted by Beth Grimm at 9:37 AM
July 29, 2008
AFFORDABLE HOUSING ... BMR UNITS ... WHAT IS THE ANSWER?
I have been writing about the problems owners of BMR (Below Market Rate) units experience when the majority of owners want to upgrade or when rehabilitation of the condo building is needed and it takes a large special assessment. I worked with a BMR owner for about a year trying to find solutions - communicating with the Association representatives and City representatives, to no avail. The solutions offered (get a room-mate, sell the place, etc.) were simply not acceptable. Most BMR contracts have prohibitions on room-mates and even if the City will lift them - how many do you need to fund a $10,000 special assessment? And if even if they sell, they are responsible personally for the special assessment, and limited in collecting on the gain if there is one, and have to go somewhere else. Where will that be?
I recently received an email from another frustrated BMR unit owner. This person got into a situation where the monthly assessment doubled in a few years, and two large assessments (over $10,000 each) were imposed in a five year period. I referred that owner to my earlier blogs on the subject, and asked for suggestions on solutions. Legislation has been proposed in California that would allow BMR unit owners to vote independently of other owners on whether they wanted to approve special assessments proposed by the Board, and which actually allows the BMR faction in a common interest development to veto special assessments they cannot afford.
One of the bills (which are AB952 & AB567) is discussed in an earlier blog if you want to read about it.
This is the feedback I received from this reader:
"First of all, BMR units do not belong in high end residences and if they choose do have BMR units they need to offer concessions to the BMRs for costs and improvement assessments since generally BMRs have less expensive amenities (meaning decorations, fixtures, appliances, and sometimes even parking arrangements). Most importantly, all CID residences should assess the HOA dues based on mainly on square footage; at least that way the smaller units aren't subsidizing the larger ones which seems to be the case where I live. I also believe if the developers and DRE were honest about the start up costs (meaning they did not tend to "low ball" budgets in order to sell units), people could make a decision based on more accurate information. If you really want to live in a certain residence or area you will end up having to pay the cost of living for that area. I've been beating my fists against the wall for four years and have decided to walk away. I cannot handle the financial strain or the emotional impact which is just as stressful.
What really distresses me is that the local agencies that work very hard to put people into "affordable" housing, and then turn their backs on those same people when they start to "go under", blaming state laws for their inability to assist homeowners. There are solutions, but they require a government and society that supports social justice and ours isn't quite there yet."
It is true of course that local officials work hard to create "affordable" housing (BMRs)intermixed with other housing by setting requirements and quotas for developers. But I have yet to see a case where those people are farsighted enough to actually propose and carry out a feasible long term solution to keep costs in proportion to the intent of the original plan for the BMR owners which is to "afford" to live there. And the "solutions" that have been proposed such as the legislation giving BMR owners veto power over the imposition of assessments that require an owner vote, which essentially would lower the standards in any development with BMRs to the lowest common denominator, is definitely not the answer. In an earlier blog I made the suggestion that BMRs pay a smaller increase or special assessment than other units and that if this is written into the developer documents, people will know from the start how things will work and costs will be allocated. Of course, the comments back include the issue that this would affect the marketability as between developments with BMRs, and those without BMRs.
The truth is, as I have written, that its a Catch 22 to combine BMR units with regular units where one would expect to profit from the investment. It does not seem to work well for either group, because those not BMR tend to want to spend money to maintain, improve, and upgrade and BMR unit owners just want to be able to survive.
Any other suggestions? Send them on to me through my website at http://www.californiacondoguru.com.
Posted by Beth Grimm at 9:13 PM
July 19, 2008
How Does One Determine if Condo Living is for Them?
You are not even in yet, just at the house shopping stage. Would you be a likely candidate for happiness in a condo?
Ask yourselves:
Have you ever experienced apt living? Was it tolerable?
If not, then beware of condo living - it has many of the similar issues that occur when neighbors are living in close quarters, and it is harder to get out of if it becomes intolerable.
Are you someone who considers yourself to be "King of the Castle", without regard for others who live nearby?
"King of the Castle" is fine ... great in fact, if you are "King" of a Castle. In a condo, it can work against you. If you believe you can do anything that you want, and/or claim any areas that you want for your own exclusive use, and believe that the rules are for everyone else, you may end up fighting with everyone around you.
Do you often act out or retaliate when someone does something that makes you mad?
If you respond to difficult situations with anger or retaliation instead of with a calm "take a step back before reacting" and find out what is really happening attitude, you may find that you are unhappy a great deal of the time, perhaps even more so in a close, dense living situation like a condominium.
If you hate hearing people "living" overhead, don't buy a condo that is underneath another one.
If you have 3 cars, and only two parking spaces are offered for use in the development, don't buy the condo.
If you want to convert the garage, and the CC&Rs say that garages are for parking, even if you see that others use their garage for storage, don't assume that it should be "no problem" to ignore the restriction.
On a positive note, are you a really busy person who does not want to be bothered by "house stuff"?
If you appreciate a home where someone else arranges all the maintenance and you just pay a fee, someone else arranges to get the pool cleaned and you just pay a fee, you might be happier in a condo. If you love to travel and want to be able to "lock and go", and live in a place where the neighbors are close and it is not easily obvious that the home is empty because of people coming and going everyday, condo living may be be just the right thing.
If you like amenities like swimming pools and spas, and cannot afford a home with these benefits, you will probably appreciate a condo, but remember, you have to share, and you have to follow the rules.
Condo living is sold as an affordable product and in many cases condos do cost less than single family homes of the same square footage. However, remember that to qualify to buy a condominium, you have to add in the assessment to the costs that will be factored in the ability to qualify for a loan, so you may qualify for less. And remember, other people make the financial decisions for you, when you own a condominium.
And, last, but not least, if you are considering looking at condominiums, be sure to read my book THE CONDO ANSWER BOOK, available through Sourcebook Publishing Company, a Division of Sphinx Publishing, through their website, Barnes and Noble, or Amazon.com.
Even if you are already in a condo or shared amenity living situation, the book offers a lot of basic good sense information about how to solve problems and what to do when something gets your goat.
And one more thing. It is important to understand what I call "The Montana Concept". It goes like this. If you live on a ranch in Montana, you probably have very few restrictions placed on use of the property. When you move into a "county regulated" unincorporated area or town, you will probably find zoning, building, and other ordinances that regulate the property. Move into a City, and you will find additional ordinances called municipal ordinances. And last, but not least, when you move into a condominium development or shared amenity development, you will find another layer of restrictions usually in the form of a "Declaration", commonly called CC&Rs in California.
Is this surprising? It should not be. The closer you shove people together and the more you tie their interests together, the more regulations you need (and the more "enforcement" you need too). That is because not everyone lives by an unwritten "Code of Reasonable Conduct" or the Golden Rule.
,
Posted by Beth Grimm at 11:54 AM
One Remedy For Really Bad Neighbors - Sue the B _ _ _ _ _ _ _ _ _s!
Gosh, I do not generally recommend suing anyone except as a last resort. However, many boards and many owners are at the ends of their rope! The economy certainly takes its toll on the average citizen in more ways than even imaginable. Through the trickle down effect of foreclosures, lost jobs, higher costs in gas, utilities and even groceries, things get left undone, and people resort to "other means" of making money. The neighborhoods are at risk!
So what do I mean by Sue the B _ _ _ _ _ _ _ _ _s?
I am not recommending paying an attorney bizillions of dollars to sue in "big court". There is another option in many cases. I have spoken about it before. If you believe that there is such a nuisance, eyesore, bad element hanging out, possible criminal (drug, prostitute, or otherwise) activity going on next door, and you have some proof (pictures are worth a thousand words), consider this possibility.
Neighbors can sue neighbors in small claims court for up to $7500. Boards can sue individuals or even corporate or trust owners in small claims court for $5,000. Boards and owners can sue the persons or banks that take property back or buy it through foreclosure sales and do not fix it up. There is a cavaet on the amount. Iif two other small claims complaints are filed by the person suing within the same year, the amount requested drops to $2500. These are California figures.
Small claims court is especially designed for people and businesses to seek resolutions to their legal complaints in the form of money.
Nuisance that comes in all forms. If you have read earlier blogs or articles on my website (http://www.californiacondoguru.com) about dealing with abusive and nasty neighbors, and criminal activity in the neighborhood, you will find remedies including the one I am speaking about here. More recently, I have been writing about abandoned property, dilapidated, ugly and responsible for bringing down the neighboring property values.
You don't have to hire an expensive attorney to sue and try to prove the lowered value (which is a real uphill battle these days anyway simply because of the subprime mortgage crisis and hurting economy. You, your family, your neighbors, your HOA, and anyone who is affected by the dilapidated property can head on down to the local county small claims court offices and pick up a complaint form. All you have to do is list all owners as defendants. That can be the tricky part, but once determined, one family of 7 can file 7 complaints, seeking $7500 each. 10 neighbors can file 10 complaints each, seeking $7500. The HOA Board can file a complaint seeking $5000 in damages. You can all work together or separately.
This should get the owners attention.
There are other things you should know, and this is an area in which attorneys can provide expertise (providing advice about what to do if this .... or what to do if that happens ...., etc. And the small claims courts have advisors that give guidance on the process itself (not legal advice, but guidance on the process) for free.
What are you waiting for? Just a suggestion. Don't expect big bucks unless the complaint is served properly and the defendant is a "no show", and write a letter BEFORE filing the complaint with your demands.
This is simply one of the tools in my toolbox that I offer to owners in distress, who cannot afford attorneys, and HOAs that are frustrated, concerned, and suffering a tight budget because of all the extra costs and losses these days, and it may or may not work. I have seen it work. There are ways it can backfire, in certain situations.
And be advised that if you go into small claims un- or ill-prepared, be prepared to lose. There must be some believable evidence to present. Just saying it is so does not often convince a judge or hearing officer that it is.
Posted by Beth Grimm at 11:27 AM
Who Chooses Officers in an HOA?
This question below seems like a simple question to me ... probably because I already know the answer, but to the untrained, or the "tortured", it is not so simple. A reader asks:
"How are the HOA officers decided. Our Property Manager decided which job was given to each elected person. Is this the correct way?"
The real answer is that the Board by majority has the authority appoint the officers unless the governing documents (Bylaws, CC&Rs - in California terms which is aka the Declaration, or the Articles of Incorporation) specify otherwise.
As to the suggestion that the manager chose the officers, and is that okay, the answer is that managers can certainly make recommendations on any matters association related, unless their contract or scope of management is more restrictive, but the bottom line is that unless the documents call for election of officers specifically, by the members, (not to be confused with election of directors), then the Board makes the final decision or, at least, takes responsibility for it. It should be done by motion, second, and a vote recorded in the minutes of the first board (sometimes even called organizational) meeting after the annual election. The reason it makes sense is that the Board members can among themselves choose those best suited for the job, after a discussion of who has what knowledge and who among the directors has the skills and time to properly serve the officer duties.
However, if often appears that managers or one powerful board member chooses. It's all about power in some cases, and simple knowledge and understanding in others. Managers may have more insight about which directors might be capable of doing the duties required. They certainly have more insight than incoming board members, unless those members have taken an active role in HOA affairs.
So, take another look if you have questions about officer appointments. Don't be afraid to address the Board at the owner forum time at an open board meeting, to ask how the officers were chosen.
Posted by Beth Grimm at 10:55 AM
July 14, 2008
WHO DO THEY THINK THEY ARE - TELLING ME WHAT TO TAKE DOWN?
Sometimes one wonders all of the whys and the wherefores. Especially when they hear only one side of the story.
Here is a recent post from a reader (and see my answer in italics following the questions):
"There is an enclosed balcony in my condo with two open air windows. The
space was unusable due to high winds and salt off the sea. So I built very tasteful clear vinyl wind blocks so I could use the space, very similar to blinds, but clear. I thought this was okay.
Earlier, I had met with the owners of the condo and mentioned I was thinking of putting up something there to block the wind. They said they thought if I didn't put up a big sign with a slogan on it or something that it would be ok.
Within a very short time after putting up the wind blocks, I got a letter from the management company saying the wind blocks violate hoa rules andt they tell me they need to be taken down right away.
Do I have to comply even though I did not enter into a contract with the hoa? If I don't take them down, and there are fines against the owners, willm y rental insurance pay for it? The rental insurance includes legal fees if I am sued.
If I leave them up temporarily or permanently, can you see what problems that might cause?"
First of all, I would be asking the question: If the windblocks are clear and cannot be seen without close scrutiny, why object to their presence? It seems obvious in areas by the coast or otherwise subject to high winds that windbreaks are often needed to allow people to fully enjoy the outdoor spaces adjacent to their living units. One sees them everywhere. Just take a walk along the coast in Carmel or Monterey.
I can understand if the Board would be concerned about deteriorating, scratched or discolored windbreaks or mismatched or patchwork styling, but standards can be adopted for consistency and windbreaks that become a hazard or eyesore can be ordered removed or replaced, with penalties for failure to do so. So I invite the readers to tell me what a good reason is to disallow windbreaks in a situation like this (so I can be informed).
That said, the Condo Board does have the legal authority to set and enforce rules and the rules are presumed reasonable and enforceable unless an owner can (essentially) prove they are against the good of or harmful to the community as a whole (in very loosely paraphrased legal terms). That is a tough burden to meet.
Any disciplinary action would normally be rendered against an owner for a renter's conduct (or misconduct, violation of the rules and regulations, etc.) so it is up to an owner to deal with a tenant who creates a situation where penalties are being considered. Of course, a landlord owner can write into their lease (and should, for their own protection), that if the renter violates the rules or regulations of the Condo Association and there are any penalties involved, the renter has to reimburse the owner, and can (and definitely should) include a clause that says if a renter violates the rules and regulations, that is grounds for the owner to terminate the lease. That probably does not sound helpful to this renter who asked the questions, but it is the way it should be.
Now, for the questions about what can happen if a violation continues.
If the documents allow, and California law has been followed with regard to the processes required, fines might be imposed. If the Condo Board has to get legal assistance and the documents allow, and California law has been followed with regard to the processes required, reimbursement assessments might be imposed. The latter, if unpaid, could lead to liens and such, and possibly even foreclosure, so the penalties can be severe.
I wonder if this renter is not telling me something, like any reason given by the Condo Board for not allowing windbreaks. I wonder if you out there can tell me why a Board would not look for some options in this regard to offer owners (at their own expense) in properties subject to high winds?????
I feel the need to be enlightened on this one.
As to renter's insurance, it is very important to have. However, I do not know of any that pays for fines or legal defense for taking action that one knows is likely to lead to fines or legal action.
Posted by Beth Grimm at 10:26 PM
July 9, 2008
BANK OWNED OR ABANDONED HOA PROPERTY FALLS INTO DISREPAIR - WHAT TO DO?
Because of the economy, the mortgage crisis, and other negative factors for HOAs today, HOA boards and neighbors are having to deal with more and more properties that are being foreclosed and abandoned (owners simply walking away). I am receiving many questions from HOAs and managers asking what to do when the lawn falls into disrepair or dries up and creates an eyesore in the neighborhood. Here is a recent email:
"I have a quick question. Can an HOA maintain/replace a front lawn that is dead or dying on an empty REO (bank owned property), put a lean [sic] on the property for the maint. fee, and collect the maint. fee when the foreclosed property is sold?"
Wish I had a "quick" answer. There are about 16 topics that would need to be discussed to answer this question. I plan to do my next free E-newsletter on this very subject so go to the website at http://www.californiacondoguru.com right away and sign up. If you prefer not to do that, watch the E-newsletter Archives after the end of July to see the newsletter.
What are all the questions that need to be considered to give an answer to the above "simple" question?
Is the Owner responsible for the lawn maintenance, or is the problem that the Owner was providing the irrigation and the water was turned off for lack of payment. This happens in many associations where the HOA maintains the front areas but the Owner is responsible for the irrigation, and when they abandon, the irrigation system breaks down, stops working, or the water is turned off.
What do the documents say about collecting money for something that is an owner obligation? Are there provisions for assessing a reimbursement assessment? Can it be done with, or without, a hearing (because of California law, in California a hearing will likely be required)? Is it necessary to seek a judgment to collect per the documents? Is the assessment subject to the lien (per the documents)? Or Not?
Does the HOA have the money to maintain lawns for abandoned or Bank Owned property in its coffers (these days, it could be expensive if there are several properties in the same boat).
How long would the HOA intend to maintain? Does it give potential purchasers a false sense of security to buy in the development without being aware there are bank owned or abandoned properties in the development? Is that actionable misrepresentation to hide the fact through maintaining the property for an absentee owner?
Do you know if the property is really bank owned or simply in the lien/foreclosure process (in which case it could be many months before the bank assumes any responsibility for the costs)?
As to the above question sent in by the website visitor, generally, HOA documents have some sort of recourse in them for the HOA to collect the costs of performing maintenance what the owner fails to maintain. So if a property is really bank owned, eventually the HOA may be able to recover the costs from the first day the bank took ownership, if the HOA follows the HOA document requirements to make the charges, and if the HOA can locate the right person at the bank to respond.
As for the rest of the questions and answers, watch for the upcoming "E-News" called "What's New In HOA Land" on the subject.
Posted by Beth Grimm at 10:28 PM
July 7, 2008
MORE ON PARKING - WHAT RULES ARE RIGHT?
I like it when people email me their questions and concerns. It gives me the perspective of both sides. There would be fewer disputes in the HOA world if people could see clearly in all directions, and have some understanding and compassion for others in their own actions, whether a director or a homeowner or anyone else.
Here is the latest comment on parking:
"There was some good reading on your blog about condo community parking (where, how, ethics, etc.), so I thought it would be helpful if you could provide information about what HOA's can't do as far parking rules. In my community, they banned all residents from parking anywhere but their garages. I understand that residents cannot park in the visitor parking places, but they banned the street as well. This makes myself as well as many others upset mostly because we have tandem 2-car garages (one car in front of the other). So its nice to be able to use the street to park the car in front temporarily while we use the car in the back of our garage. So while there is no other parking literally for miles, I guess my question is: Can they banish residents to only use their garage for parking and not provide any other places at all?"
They can, and do. HOA Boards that have to deal with a lack of adequate and convenient parking have to do something to control parking, or it can easily get out of hand. Of course there are boards and board members that abuse power, and I believe it is fair to acknowledge that.
However, the problem above started with tandem parking. Whoever invented that? Of course its inconvenient. And it causes all kinds of problems. Why have it? ... So more can be crammed into a smaller area, obviously, which means more bang for the buck for the persons who created the "footprint" and plan for the development.
Who pays? The citizen who buys there. Is that fair? Did you not think of the ramifications when purchasing?? I am guessing not. So whose fault is it? Who should pay?
If the HOA lets people park on the street temporarily, people will park on the street permanently, and if there are set hours, people will move their cars every so many hours. If a lot of people park on the street, a lot more will start parking on the street. People will think since there is plenty of street parking, its okay to have extra cars. I can almost guarantee that will happen over time. And HOAs that did not start controls early in the game, which left open the door to parking expectations, can develop big problems. And those problems become the owners problems. Bumper to bumper street parking has occurred in many HOAs where parking is limited - and especially where tandem garages were implemented to save space.
That said, the HOA gets its authority for parking and other rules from the governing documents. If the documents say that the streets may be used for parking or that the open parking spaces are restricted to non-exclusive use, then the documents control what can be put into rules on those points and the HOA Board should not adopt rules that conflict with the language.
If, however, the documents say that the Board can adopt rules related to parking in the development, then that controls over what the owners might want.
That's the best answer I can give you. My experieince is that Boards that come to me for advice generally tend not to adopt overly restrictive rules until there is a good reason. In some cases, I may be the culprit by suggesting more rules than they have, simply because I have seen many times what a lack of restrictions in the areas of people, pets and parking can lead to over time.
I would be surprised if anyone got "nailed" for parking on the street just long enough to move cars around in the garage, but if someone wants to run off to the store, the movies, or the park, while parking the car that is usually used more often on the street, then I assume there could be ramifications for that .... and right or wrong, you out there can be the judge of that. I imagine your sympathies will come down on the side of whichever problem you face ... wanting to park your car on the street at times for convenience ... vs. having to look at and maneuver through a crowded "parking lot" on your street every day.
Posted by Beth Grimm at 11:04 AM
July 3, 2008
Charging Assessments With No Backup - Can the HO Withhold Payment?
I have written several blogs about what an HOA can do if a homeowner does not pay assessments on time. It's brutal. Most documents and the law allow HOAs with the document authority to resort to nonjudicial foreclosure if homeowners don't pay. And if that does not work the HOA in most cases can pursue a personal debt action against the owner. This blog is not to argue the merits of that, but rather to answer a question/comment that was written about one of those blogs. The gist of the blog was that HOAs have to work to diligently collect assessments as a matter of their fiducuary duty, or the innocent who do pay their assessments suffer since they have to pick up the slack. But this commenter has a point. Read on.
"Does this situation apply to Special Assesment. We have had three Special Assesment in the last 5 years and not once will they give us an accounting of the funds and the work completed. I have been holding back my last special Assessment because it was over $3500.00 and I still have not accounting of what was done with prior monies..Management has elections, but they keep holding on to their seats, since they are the ones who make the decision on who can serve on the board after the election."
Aside from the comment about management having elections (because while many feel that management has too much control - I do not know of any association that elects management or management that chooses who serves on the board), I feel this reader's pain.
Owners should get information on the backup for assessments. What happens when an owner asks for backup information for the assessment and does not get it? Does it matter whether it is an increase in the regular assessments, a special assessment, or an emergency assessment? Does the board have to give it?
I would say yes. Now, how do you get it if the Board refuses to give it? Here are some options:
1. Sue the B _ _ _ _ _ _ _s! (You did not hear it from me though.) Of course, I abhor this remedy. And I would never suggest suing except as a last resort, but if it were to come to fruition, the owner would be asking for a court order to provide the information, and would probably get it, and would probably be able to recover attorney fees, if, that is, the request was legitimate (meaning that the owner did not simply ignore the information that was sent out by the Association or fail to keep the mailing address current to receive Association communications).
2. Make a written demand for information. Written demands tend to engender more accountability than phone calls or gripes behind the Board's back.
3. Run for the Board. If elected, you would have access to all of the HOA information. If you can get like thinking folks elected too, perhaps the HOA management would improve.
So - a little more information.
A Board cannot increase the regular assessments legally if it has not provided the required budget and reserve study information to the members for the prior year, unless the members approve the increase.
A Board cannot impose an emergency assessment without notifying the members of it, and of the grounds for it, and certain grounds (reasons) require certain findings. For example, covering a safety issue may not require findings, but it does need to be explained to owners, but imposing for a repair that came up, needs to be done, and which was not apparent at the time the budget was completed requires findings about the urgency, the need and the reason the Board did not know about it before.
For special assessments that exceed 5% of the budgeted gross expenses, the special assessment requires owner approval and it is hard to understand how owners would approve something if they did not know what it was for. (Pretty dumb if they do.)
Still, I can understand how it happens that an owner might get a notice of a special assessment or special assessments, and does not have any backup. Some boards, still operating pre the 2006 HOA election rules changes, call meetings, get the owners present to approve an assessment, and fail to notify any of the other owners in the development about what went on at the meeting, and fail to give them a chance to vote yes or no.
Good, or bad? If the Board does not provide information to those who do not attend the meeting, or put the information in writing and make it available in that form, I would say there could be a problem. They may have their own (protective or otherwise) reasons for not putting anything in writing. But it is not right. The whole community needs to be given the information and chance to vote.
Owners are entitled to know what they are paying for. Failure to inform does not absolve the board of anything. While it is true that owners are not entitled to withhold assessments, and that they can end up in a quagmire of added costs and threats if they do not pay, they are not prevented from taking action to get them back if the Board acts improperly. California offers a small claims remedy of up to $7500 if an owner brings in a good case. The owner would have to show that the Board actually did something wrong to get a judgment for a special assessment (but would have to pay it first in order to even establish a claim for damages), "Wrong" might encompass any of these:
1. The Board did not follow the California election laws and send out a double envelope secret ballot for voting.
2. The Board did not seek owner approval at all when it was required.
3. The Board did not send out the budget and reserve study information and did not get owner approval.
4. The Board did not make any findings justifying an emergemcy assessment.
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And even then, in the Board can usually go back, do things right, and get the money that way. If there is a need for the money, the Board needs to do it right.
Working with a tightlipped or uninformed board is frustrating, that is for sure. Owning a unit in an association that seems to be poorly run, hit with assessment after assessment, can also be very frustrating. The less educated or informed the board is, the more "closed" they tend to be, so sometimes it takes drastic action to get the board to be accountable.
Sometimes it requires a new board, and sometimes it requires a lawsuit (small claims or superior court). Often, simply getting other owners involved to work for board turnover can work. Getting involved and doing something is the key to results. But withholding assessments is a risk - as it just ups the ante of risk and problems for the homeowner.
Posted by Beth Grimm at 8:13 PM