May 4, 2010
Public Flogging - What is the Worst That Can Happen?
I receive a lot of emails from all over the country about goings on. I know that people get seriously angry when things happen that they think are unfair. Many come to lawyers wanting to sue. Some, when they find out the cost of a lawsuit (which seems to be a mentality that is hard to shake), turn to things they CAN DO cheaply. But choosing the easier path doesn't always turn out to be the cheapest form of blowing off steam.
Here is one story that you won't want to ignore, which is taken from a Press Release issued by the owner of the property.
"PRESS RELEASE - FOR IMMEDIATE RELEASE
Gatlinburg, Tennessee Home Owners Association Files $1 Million Lawsuit
Against Blog Author and Property Owner
A Tennessee Home Owners Association has filed a $1 million lawsuit against one of its property owners for defamation, libel, slander, and false light invasion of privacy. The property owner, Robert Goodman, has operated a blog that has heavily criticized the actions of the HOA’s general manager and board of directors for alleged violations of both its own HOA controlling documents and Tennessee state law. The HOA board has filed the lawsuit in an attempt to force virtually all content to be removed from the blog and prevent any new entries."
The blog is at www.DeerRidgeOwners.com. I provide this information and not because I have any specific information take on which side is right or wrong, but merely as straight up information of a possible "worst case scenario" to consider illustrating what can happen when an owner speaks out in a derogatory way publicly about his or her association or board, especially in a way that can reach millions of people. Use of the internet communication systems as a mean of lambasting any party can escalate any differences and damages in any lawsuit that might occur.
I have not visited the blog, but it seems it might serve as a model of what-not-to-do if you don't want to get sued. This type of situation could happen in the reverse as well if a board defames an owner (the only defense to defamation is the truth but as you can imagine, there are other potential issues like violating rights of privacy, etc, when negative information about a party is sent distributed publicly). And, even when there is a viable defense, litigation is painful and costly in many ways.
In California there are many ways for an unhappy owner to approach your board or for the board to approach owners about association issues short of public flogging (by either side).
Posted by Beth Grimm at 10:38 AM
November 24, 2009
Should You Include Proposals in HOA / Condo Board Packages?
Here is a question about what goes into the Board packet:
"I read your updates and articles regularly and find them enlightening and extremely informative. I'm hoping you can help with a dilemma I'm facing. As a manager for the last few years, I have included in my packages (general session) proposals/contracts for various types of maintenance to be reviewed by the BOD and discussed in open session for general information to the membership. I consider these either old or new business and have believed that the membership has the right to be informed on what we are considering. Since our agenda does refer to unfinished/old and new business, doesn't a proposal fit into this category? One of my Board Presidents has asked that the proposals be handled primarily in Executive Session.
What is your take on this issue?"
I always appreciate good questions that are generic enough to help others. Here is what I would say about these things (relating to California law).
Old/New Business on an Agenda is an "old" concept that should not be used as a "catchall" in California HOAs or Condo associations these days because the agenda law which requires notice of the agenda to owners consistent with notice of the open meetings intends that owners should be advised of what business is up for discussion/action at the upcoming meeting. If a contract is going to be discussed (with a cavaet discussed below about what is subject to executive/closed session), that should be noted. There is also provision in the law for addressing emergency items (see prior blogs).
Proposals/Contracts are subject to executive session meetings (not open) if there are negotiations taking place with regard to the contract. If the Board is going to discuss work that is being performed or complaints about the contractors, without any negotiations, then I believe it is subject to open business meetings. (Except be sure not to speak in a manner that constitutes slander of a contractor, that is an actionable offense.)
There are many "ifs, ands and buts" to consider about contract discussions so I would want to know specific circumstances before telling a client which is appropriate. If the subject is reserved for executive session, then still, the fact that an executive session was held and the subject/purpose of the meeting (such as to discuss contract negotiations) should be noted at the next open board meeting and show up in the minutes.
Contracts are subject to inspection by members if they are not subject to confidentiality - I would not normally suggest they be attached to minutes. They may be provided to the board members if there is to be discussion on them.
Other attorneys may feel differently. You get what you pay for so if you are looking for specific advice on a particular scenario, it's best to seek the advice of counsel.
Posted by Beth Grimm at 2:29 PM
August 25, 2009
EVALUATING VENDORS FOR HOAs and CONDO ASSOCIATIONS INCLUDING MANAGERS
Should the HOAs and Condo Associations regularly evaluate vendors of the association, or just let them continue to serve until there are complaints or an uprising?
Evaluations at least on an annual basis are as important, in my view, as choosing the right contractor in the first place. This is for at least these reasons:
(1) It provides the contractor, the board, and manager the opportunity to speak with each other about job performance, any gripes or concerns, and any other matters that may have arisen (such as owner harassment or use of contractor, etc.).
(2) It tends to resolve issues and diffuse differences if any have arisen between the parties, and to pave the way for a smoother year in working together.
(3) It tends to remind the board and vendor that renewal of the contract is important, so that the parties are not lingering without the benefit of a contract and a clear understanding of the terms and obligations.
I once suggested to a manager who was fumed about a board’s request that the manager submit to a formal “evaluation” after the owners had been polled about satisfaction with the management that I thought it was a good idea, for both parties. The seemingly defensive posture indicated to me some concern that the manager either was expecting very bad comments or was suspecting the board might be looking for a way to get out of the contract and simply did not want to be confronted. However, the truth is that the dragon you see is much less dangerous than the one that is lingering in the cave behind you. In other words, you can better deal with issues that you can see than those that you can’t see coming. Anyway, Boards should, in my view, have some vendor evaluation processes in place.
Waiting until there is a fire to put out (burning differences) or restlessness among the "natives" (owner members) does not work well.
You can find out much more about choosing vendors, managers, and others to serve the association in a new Primer (available soon on the condoguru website, in the webstore and on the publications page) which contains information on all aspects of choosing, contracting with, and evaluating vendors and managers, and which includes a sample Resolution that a board could use as a basis for evaluating vendors and managers.
Posted by Beth Grimm at 9:45 PM
May 6, 2009
CHOOSING A VENDOR FOR AN HOA - INCLUDING MANAGEMENT
Boy, is this a great subject. A question from a reader about how the process works to choose a manager or get the board to put contracts out to bid caused me to do some research and talk to some friends in the "biz" and I came across a GREAT blog article on the subject which can be found on the same site that hosts my blog, namely, communityassociations.net.
The article is written by a long time community associations (same as HOA) manager, Gayle Hasley, who actually wrote a software program on how to keep track of everything that needs keeping track of as a manager. The software is incredibly helpful to HOA managers and in fact, it is helpful to everyone who comes into contact with, works with, provides services for the HOAs, and determines how to resolve legal issues for any HOAs or condos the manager manages. Why? Because it puts the historic information of all aspects of the HOA at the manager's fingertips.
This incredible community associations management software can be seen at http://www.campro.us.
The wonderful blog article on choosing association vendors can be viewed at http://www.communityassociations.net/CAM_blog/2009/02/choosing_a_vendor_.html.
The article sets out how to go about choosing vendors, what is important, and what is not, how the bidding process works, etc. It is a comprehensive article and I could not say anything on this subject that tops what is contained in the article.
Check it out!
Posted by Beth Grimm at 11:54 AM
May 5, 2009
Looking For a New Manager? ECHO To The Rescue!
I am going to write a few blogs on finding a manager, starting right here and now. Here is the trigger question for this quest:
"I would like to have the management contract put out for competitive bid. But I do not know how to even start going about doing this. Can you provide any general advice about how to go about doing this?"
Many HOAs form a search committee to locate and investigate, meet, question, and interview potential manager prospects. Many board members are able to speak with other board members and potential manager contacts at seminars like the ECHO (Executive Council of Homeowners) June 13 seminar. Check it out at www.echo-ca.org!
And check out this link too, for what you need to ask managers!
https://www.echo-ca.org/catalog/product_info.php?cPath=42&products_id=68&osCsid=8933add04e479fff9820c8a68e1a67b8.
This is the link to the following product:
Board Member’s Guide for Management Interviews $20.00
Description: This guide for use by boards for conducting complete and effective interviews with prospective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.
This is a product for purchase that should be of great help.
You can also purchase a directory listing many managers and contact them for the interviews. There are other resources as well. Watch for another blog!
Posted by Beth Grimm at 10:17 PM
March 16, 2009
TURNOVER OF RECORDS AND MANAGEMENT
Questions about management turnover come up all the time. HOA boards get frustrated with HOA or condo management in various ways.
Sometimes the board of the HOA or condo association created the merciless swirling and scary "eddy" and everyone goes down together.
Sometimes the manager has become a real problem. (Sometimes they do not know what they are doing - imagine that!)
Managers come in different "flavors" when it comes to transitioning:
Some cling with claw like tenacity, even when the blood begins to seep from the wounds.
Some conveniently "lose" records or turn over a disarray of "stuff" relishing the difficulties the board will have in straightening out the bookkeeping and materials.
Some cut out early on the contract termination clauses and do nothing during their "lame duck" (just an analogy) period "in office" (again, just an analogy), leaving the Board in a lurch. Don't get me wrong, some boards pull out early and do not understand that the manager has certain things they need to do to "wrap up".
On the other hand,
Some managers work with boards in a professional and business-like way, even when relations have broken down, just to keep things reasonable and copacetic, and to make the transition more smooth for all (sometimes to "be the better 'person').
It is good to remember that sometimes relations break down over very little and can later be repaired, and sometimes managers are asked back by a new or changed board. And it is always good to strive for a good reputation for being reasonable under any circumstances.
Now, all that said, here is a common question:
"Our condominium’s property management company has been the keeper of all and complete financial and legal documents ... what is the recourse of an HOA when it changes to another property management company to have the previous company turn over all documents to the new company?"
Right off the bat, the manager generally does keep all the records unless the contract with management says otherwise. (A "contract" duh you might say - what a concept!)
So first look to the contract for the termination provisions/requirements, and, hopefully, some guidance and requirements related to turnover of records.
If there are guiding provisions, and either party does not do what is required, there is recourse in the form of a "breach of contract" cause of action, allowing for recovery of commonly anticipated losses for such a "breach".
However, EVEN IF THERE IS NO GUIDANCE IN THE CONTRACT, that is not an excuse to be sloppy, mean, spiteful, lackadaisical (word?) or careless about record turnover. And it does not mean there is no remedy for losses. Managers would be expected, as a general rule, to keep the records of the HOA and most contracts specify what type of records must be kept. Thus, there would be a reasonable expectation that the common HOA records would be turned over at time of transition in some form that is business-like. Managers do not always turn over their reports, confidential or otherwise, believing them to be their work product; however I believe that in most cases a board would be entitled to have them as part of the historical record. There is commonly a lot of "meat" in those reports.
Sometimes people get upset because management wants to turn over electronic files and boards want paper. Sometimes managers refuse to allow boards to utilize the same programs for continuation of the recordkeeping that management used, citing trade secret or lack of "license" for certain use of programs types of arguments which make sense. However, if the information that is turned over in electronic form is incomprehensible because the underlying program access is denied, that could cause losses that a board might recover. In fact, if the records that are turned over are a mess, a board might be able to recover some or all of the costs of paying someone to go through and pull out what the board needs for its financial and other records.
But then, if there is no contract defining what records must be kept and who keeps them, or general confusion arose during the working relationship over who was keeping what records and no one did anything about it for a period of time, and/or there is little to no guidance as to who had what duties, there is little chance of making a good enough argument to recover losses for trying to restore some semblance of records.
There is one common way that this happens. No one is appointed as the "gate keeper" of records or communications, the one that receives and disseminates communications to all proper parties. When there is no "gatekeeper", boards and management tend to send out all kinds of communications and emails that cross, do not reach all pertinent parties, or are lost in the process. When board members email each other or the manager directly for example, but not all emails are sent to all board members or the manager, things start to get out of hand. I have adopted a policy where I will accept only one person from any HOA (manager or board member) as my point of contact with the understanding that that person is responsible to
Transmit what I send to all the board members and the record keeper for the HOA or Condo Association records.
Receive all communications that are for me and digest or piece them together in such a way that I am answer one set of questions or hearing one cogent set of facts and not hearing from 5 different board members what is up.
In essence ... a "gatekeeper".
No matter how ugly it gets, the party (or parties) that remain(s) above-board, business-like and professional in the transition process is/are winner(s) in my book, and quite possibly (in case my opinion does not matter) in the eyes of any hearing officer or court.
Posted by Beth Grimm at 5:53 PM
February 27, 2009
Management Practices - What's Happening?
I wrote a blog awhile ago making suggestions for cost cutting for Boards and HOAs and have seen some practices that make me shudder. I hope it is not as a result of my writings on the issue.
One of the things I have heard of happening are management companies and other "so called professionals" that suggest underfunding of reserves is okay and recommend it as a means of saving money.
Yikes. Enough HOAs in this state are underfunded with regard to reserves to sink a ship, or should I say many ships. Studies done by industry vendors with the ability to run credible surveys (David Levy CPA, SF and Tyler Berding, Attorney, Alamo - my hat is off to you) show that a large percentage of HOAs and Condo Associations in this state are underfunded in reserves, being closer to the 50-60% mark than 90-100% (meaning somewhere around 40-50% underfunded).
Hey folks, this does not mean that being 50-60% funded in reserves is where the bar should be set. All HOAs and Condo Associations that are at that mark - and certainly all that are lower - should be looking a plan to improve ... not to lose ground, in the area of reserves savings. I am not saying go out and break the bank of each and every HOA or Condo member during these hard times, but I am saying keeping moving toward a higher standard, not a lower one. I feel quite strongly that the reserves percent funded figures will continue to become more and more important as banks, lenders, the government entities and insurors look more closely at HOAs and Condo Associations situations when considering lending or insuring as time moves forward.
So if you have been exposed to someone that is telling you that they can "save you money" as an association vendor by "trimming" the reserves ... be wary ... in fact, be very wary. You will be losing ground in the overall scheme of saving for those big expenses that come along every so often.
And, there is a great Reserves Primer available on what should be in the Reserves and how to plan appropriately at http://www.bgcondolaw.com - see "Primers Now Available". You can get a Primer on Reserves Investments as well, and learn about the importance of considering safe investments, especially in this day and age.
Posted by Beth Grimm at 3:01 PM
February 23, 2009
Managers Recommending Contractors Who Are Affiliated with Management - Is it Right?
As a followup to a very recent blog, another possible issue has been raised by some boards and owners that I should discuss. Some management companies own maintenance companies and some have their own affiliations with maintenance and construction contractors, landscapers and the like. In other words, some management companies benefit by the Association or owners hiring the contractors recommended by them.
Is that legal?
I know of nothing making it illegal.
Must the management company or contractor make that clear to the HOA and/or owners? In other words, are there disclosure requirements?
That is an interesting question because there are disclosure requirements if a corporate (which in California includes most HOA and Condo Associations) board member gains financial benefit in any contract being considered by the Board. If such benefit is not disclosed, the board member has breached their fiduciary duty. However, if it is disclosed, the transaction is legal, and the benefit does not subject the board member to a conflict of interest claim.
With a manager it is different. To the best of my knowledge, there is no legal duty to disclose such an affiliation.
So the question is - is it "right" to use affiliated contractors that benefit the management company and is it right to not disclose the relationship?
My take: the working relationship and any financial advantage should definitely be disclosed, and HOAs contracting with the management company should be allowed to choose a "degree of separation" and/or bids from contractors not affiliated with the management company.
If there is no "give" in this relationship, there are other companies to consider.
.
Posted by Beth Grimm at 9:19 AM
February 21, 2009
Is It Okay For Managers To Recommend Contractors to Homeowners?
I just attended one of the biggest events in California for managers, the CACM Expo in Oakland. While there, I polled many managers and asked the question, "what do managers want to know?" I was asking for questions for the blog, as I find homeowners and board members tend to pose more questions than managers. So here is one for the managers!
May Managers Recommend Contractors to Owners Who Need To Do Work On Their Individual Lots?
The exact same question might be asked by a Board Member.
My answer is "Certainly, yes, by all means, it is beneficial to point owners to good, responsive, qualified, licensed and bonded contractors."
That said, there are some things to keep in mind. Blending work done by contractors between the HOA or Condo Association and the Owners can lead to problems. Some arise more commonly than others. Here are my favorites (to talk about, not to recommend):
**Manager/Board recommend, contractor gets so busy with owner repairs, no longer has time for the work of the Board.
What can I say? This might be a concern, but if the person is good, and they are doing work for the owners, everyone benefits. Manager, you may have to start looking for a replacement.
** Manager/Board recommend, the contractor does shoddy work for owner, owner blames Board/Management, demands that the Board rectify the matter.
This often happens. Owners assume that if the manager recommended they contractor, they would somehow guarantee the work. Not so, well ... I should say not so if terms are made clear right up front. If owner hires, the relationship is between contractor and owner, not contractor and HOA or condo association.
Key: don't recommend contractors that do shoddy work.
And if you provide names or lists of names, make sure that any recommendation comes with a disclaimer such as: "Board / HOA Management are providing this information to help you locate contractors that have shown us they are dependable and have done satisfactory work for the Association. We do not make any specific recommendations, guarantees or warranties about this/these contractors. This/these contractors at all times when working for us has/have provided adequate proof that he/she/they are licensed for the work being done, and carry insurance that protects the HOA, and those are things that you need to check out with any contractor that you hire to do work in your unit."
** Manager/Board recommends, and contractor does work, owner refuses to pay - contractor looks to board for compensation or resolution.
Don't fall into this trap. The Board needs to make it very clear, preferably in writing, that if a contractor does work for the HOA and the Owner, that the contractor is separately working for each, and that the HOA is not responsible to pay for owner's work, and the owner is not responsible to pay for work done in or about the unit or dwelling that is the HOA responsibility. Contractors must be warned not to blur the two. Separate agreements/contracts/bids must be signed.
** Contractor does not know what work is HOA responsibilty and what is owner responsibility, and so he or she works with the manager and the situation gest so confused, and the contractor does a bunch of work, and then looks to the manager to resolve issues over who pays for what, or the HOA / Condo Association to foot the bill.
My advice has to be: don't let the lines get blurred in the first place. Be clear with contractors that are used by the HOA or Condo Association when they are also doing work for the owners that they must have a separate contract. Be clear with owners that when the HOA / Condo Association contractor is working for them, they need their own contract or agreement. If it is a common practice for owners to use HOA / Condo Association contractors, they (both contractors and owners) may need specific written policies on working relationships. A good policy would help head off problems and would also protect the Association.
If one contractor is doing repairs and some of the work is the HOA responsibility and some is owner responsibility, the separate agreements must specify how the contractor should allocate their time and charges on any particular aspect of the work of construction. This really comes into play when there is water damage or some other kind of damage where the HOA or Condo Board might need to contract to repair the common area but the rest is the owner's responsibility. There certainly may be advantages to using the same contractor to do the work, but the lines need to be drawn clearly, preferably on paper, so that all parties understand their responsibilities clearly. In fact, the Board may need to get a lawyer involved to help spell out how to allocate the time and charges for combined work like this, and how to get the owner to sign on for their share "up front". It's extra work, yes, but worth it. Once the lines get blurred, the finger pointing begins.
And notice, nowhere in this email did I use the word "recommend". Think in terms of being a resource, not making a recommendation for a specific contractor.
In summary, it can be helpful for Managers to give out the names of contractors, and many do it without any history of problems and without thinking about "all the baaaaad things that can happen." Managers tend to have more experience dealing with contractors and hopefully, stick with and would only give out names of the ones that do good work, and who are licensed and bonded, and properly insured. Thus, managers can be a good source. Owners often have no clue whatsoever where to find a contractor that knows how to work in HOAs, and especially in condo buildings where the responsibilities may be harder to determine between common area and separate interests.
And one last thought, when a contractor's name is offered by the Board or Manager for owner work, the contractor may work even harder to please the owner so they do not report back bad things to management or the board.
Posted by Beth Grimm at 11:02 AM
November 24, 2008
HOA Management, What Designation is Acceptable?
People gravitate to my site for all kinds of reasons. I get a lot of email questions about what it takes to be CID (common interest development) manager, and complaints about managers acting badly, or not knowing what they are doing (at least in the eyes of the beholder - the owner who sent the email). HOAs are CIDs in California by the way.
I have articles on my website about what is required, and there are two very active organizations that serve and train managers listed on my resource page (CACM AND CAI). I have developed a class that would satisfy the legal aspects of what is required to call oneself a "Common Interest Development Manager"; however,
(1) I have not had a lot of time to promote or even teach it and
(2) Attendees have to come to me with a group proposal to get me to take 8 hours off from my everyday lawyering to teach; and
(3) My class does not satisfy the overall 30 hours of course training needed for the right to call oneself a "CID Manager".
Here is the most recent email question presented to me:
"i recently decided to venture into HOA management and have my first client up and running. I found my way to your site and have been receiving your newsletters ever since. Very helpful!
I do have a question, though. I am a CPM, not a CCAM. Is the world going to require that I obtain the CCAM designation despite my having my CPM?"
My answer to this question is that while the world will not require that a manager has a CACM (or PCAM which is the highest CAI designation for professional managers), the "world" of HOA management is different than the "world" of property management (apartments, commercial buildings, and residential) in some very distinct, specific, and important ways.
The application of the entire DAVIS STIRLING COMMON INTEREST DEVELOPMENT ACT is one very big difference. The application of portions of the NONPROFIT MUTUAL BENEFIT CORPORATIONS ACT is another. The fact that an HOA is not generally a landlord (although there are a few cases that defy this premise) is another. The fact that HOAs are compared to municipalities in their governance is another.
I could go on and on. For a start, CPMs without training specific to HOA management might want to purchase "The Davis Stirling Act in Plain English", available on my website. A perusal of that 100+ page booklet will surely point out that specialized knowledge is critical in the industry of HOA management. One might read my blogs, and articles on the elections law, records inspection, assessments collection dilemmas and processes, and many other important topics to get a taste of just how complicated HOA law is. One should get on the E-news list, and review past E-news articles on the liability of HOA managers and other hot topics to be "enlightened" as to some of the most potentially serious subject matter that needs to be heeded, and last but certainly not least, one ought to sign up for some CACM or CAI classes to hone the knowledge base to logically include HOAs.
And HOA Boards, you should be asking questions about HOA specific knowledge and experience when interviewing management candidates. Otherwise, you could end up paying a "lotta" money and land in a "heap-a-trouble".
Posted by Beth Grimm at 11:47 AM
April 10, 2008
Are California HOA Managers Immune From Liability?
In California, there are at least two well-known industry groups that serve and train homeowner association managers. In this training, managers are presented with "model" management contracts to offer clients. This makes sense. Managers want as much protection as they can get from Boards who do not follow their advice and from the membership or other outsiders that decide that the manager is the cause of whatever grief they suffer. Being an HOA manager is not an easy job. They are often expected to provide advice on a myraid of subjects for which they are not fully trained, such as construction matters, legal matters, insurance matters, etc.
So, back to the contracts. As with other vendor proposals, these contracts are designed to specify what the manager is paid to do, and to protect the manager legally, for mistakes or errors that lead to legal culpability.
These contracts, unless they contain "mutual protections", are geared to favor the managing agent, not the other party to the contract (the HOA). By "mutual protections", I mean things like indemnification and insurance coverage.
Most of these contracts specify the insurance the HOA must carry, but not anything about insurance the manager must carry. For instance, the Association would be required to carry commercial liability (for accidents on premises, etc.) and directors and officers liability coverage for lawsuits that allege Board misbehavior or negligence. The contacts require that the manager be named as "an additional insured" on these insurance policies.
Most of these contracts specify that the manager shall be protected (held harmless and indemnified) by the Association for any claims against the manager because of something that happens HOA related. This is a somewhat complicated legal concept but simply put, it is intended to make sure that the manager is covered by the Association if there is any legal claim against the manager made ... by anyone.
"Mutual Protections" would mean there were provisions that both parties be insured for their mistakes, and each indemnifies the other for liability that arises because of the misconduct or negligence of the other.
It is fair that managers get some protection from claims against the HOA, as managers can become a target, even for acts of board members, disgruntled owners, contractors, employees etc. Sometimes the manager did nothing to invite the wrath, or legal claim. Sometimes they are the sole cause. Sometimes the problem is a combination of poor management and an inattentive board. There are very many reasons why a legal complaint can be brought, some justified, some not. The point is that managers tend to have a lot of protection, sometimes more than deserved.
The California courts have recently spoken to this problem. In two cases, managers have been found to have to account for their roles in (1) choosing vendors and signing contracts for the HOA and (2) violating the HOA contract.
I will be addressing both of these cases in E-Newsletters in April and May. If you want to receive these free newsletters via email, you need to sign up for the list. Go to my website at http://www.californiacondoguru.com, "enter", and you will find the option to sign up for the newsletter. Please do not send me your email address and asked to be added. You need to do this through the website.
I plan to put some focus on these subjects in the coming weeks. It is my belief that the parties who act irresponsibly or with disregard for the rights of others ought to be the ones who make it right. One of the courts in a manager contract case agreed with me in this statement:
"On top of all of this, there is the reductio ad absurdum of the property management company's position vis-à-vis the association's contract claims (as distinct from negligence claims). Under the property management company's interpretation, it could just outright plain fail to do any work at all for the association, such as hiring a gardening company or arranging for insurance or the typical things that property managers do, and the clause would protect it even from a breach of contract action by the association for having paid for services never performed." Queen Villas Homeowners Association v. TCB Property Management - February 2007.
Perhaps you want to "get on board" and read more on this subject. Join the E-News team. Sign up now. http://www.californiacondoguru.com.
Posted by Beth Grimm at 9:34 AM
January 9, 2008
The Perils of the Uneducated Manager
Sorry, I have been away the last week in Hawaii. I needed to get out of the raging California weather (relatives in the midwest, ignore this!).
A reader asked me if I would write about the perils of the uneducated homeowner as manager. This person noted that the association needs a competent manager who can help the Board!
Not necessarily as easily said as done, at least for the small associations. I do not know how large an association this person was writing about, but imagine that it probably is a smaller association. The thing that is harder for the smaller associations is twofold (1) harder to bear the expense and (2) harder to find willing managers to serve the smaller associations. But nothing is impossible, so keep looking until you find the right people. If you cannot afford full service management, look for companies that offer "menu" services, or people that are willing to "train on the job". Just beware that someone who does not know what they are doing can create legal liability and put large sums of money at risk so make sure to ask the right questions. I believe that CAI (Community Associations Institute) - the National organization in Alexandria, Virginia, offers a publication that assists HOAs in asking the right questions of a management applicant. I am in the process of putting together a publication as well. Watch my publications page at http://www.californiacondoguru.com
Any HOA can run into considerable problems if operating with an uneducated board or manager. By uneducated, I mean in the ways of running an HOA, not seeking higher education such as Phd or Masters material. Although it's not rocket science, it involves running a non-profit business that is taking people's money and investing it in their future. A home in California is the number one investment for many people. One can only hope (or take a more assertive step and make sure) it is being invested wisely. An HOA is also like a city, with elected officials making decisions for spending the HOA members' money to get important services. So some expertise in these areas is helpful, of course. Anyone who has served (successfully) in a leadership position in a volunteer organization will also have something to bring to the table. If you find volunteers, or paid managers, with all of the above qualities and experience, give yoursel a pat on the back. If you don't, seek out the right kind of person to run your "ranch".
I could say the same for managers and boards. Training in the area of HOA management and operations is critical. Homeowner associations are a different "animal" than apartments or other forms of property managed real estate. There are a host of legal requirements and a lot of "fiduciary" responsibility involved in doing things properly. And having some "people skills" (such as mastering active listening) all help to form good leadership.
Those wishing to manage HOAs in California can take classes through CACM (go to cacm.org) and CAI (go to caionline.org), and through providers like myself (a handful maybe, in the State). There are no state sponsored classes at this time that I know of, although there probably should be. In order to call themselves a "Certified Common Interest Development Manager" in California, there are educational requirements and some of the management designations are "grandfathered" in the law.
To be an educated board, there are more options. In addition to the above, there is ECHO - EXECUTIVE COUNCIL OF HOMEOWNERS (go to echo-ca.org or call information in San Jose if you want to speak with someone about offerings). there are attorney firms that put on classes and some management companies have board orientation programs.
Above all, whomever is chosen to lead or manage the association must stay abreast of the changing legal requirements for disclosures, owner rights, board obligations and everything else in the Davis Stirling Act. One does not need to know the law inside and out (that is for the attorneys who serve HOAs) but it is important to understand that laws exist in many areas and seek out help in setting up association rules, policies, procedures, accounting and finances from those who understand what is required.
Don't put an ad in the local newspaper if you are looking for a manager. Go to the organizations that can help you find trained people. And if you are using local resources, send them to the industry classes that are offered and get them the education they need. By 2009, there may be legal requirements for board training. Get the jump on it. Check with the above and also watch my website at http://www.californiacondoguru.com) and get on my newsletter and class email lists to keep up with offerings.
Posted by Beth Grimm at 1:56 PM