FIGHTING ONLINE

QUESTION: I live where the board fights a lot and now they're making a nuisance on the web. Are they allowed to fight online?

ANSWER: I checked your website and saw that you have a board recall in play. It is not surprising that there are a lot of charges and counter-charges flying. If directors are being accused of mismanagement, they have a right to defend themselves. They may have perfectly good explanations for their actions and owners should hear them before casting their vote. The political process is messy but it can't be helped.

DIRECTOR NOT IN
GOOD STANDING

QUESTION: What about a director currently serving on the board who is in the process of foreclosure and delinquent in his association dues?  Doesn't seem responsible to have someone on the board making financial decisions for the membership if they can't keep themselves out of financial hot water. Can the board remove the director having the financial woes?

ANSWER: Not all owners with financial woes are financially irresponsible. A lot of people are out of work through no fault of their own. If you want to prevent delinquent owners from serving on the board, you need to amend your bylaws to add director qualifications. Absent any provision in your bylaws, your board cannot remove a delinquent director.

FHA REGULATIONS

The Federal Housing Administration issued new letters regarding mortgage insurance for condominium associations, Letter 2009-46A, and Letter 2009-46B. In addition, the Western Regional HUD office is reportedly backing off its 60% reserve funding requirement and will be following the national guidelines described in the above letters. Discussions are ongoing with the FHA and there may be additional changes to report. U.S. Approvals, a company that provides HUD/FHA and VA project review services published a summary of the requirements.

COMMERCIAL CONDOS

QUESTION: The Davis-Stirling Act requires that an association maintain documents for owners. Section 1368 requires the seller to turn over some of those documents in a resale transaction. Do commercial sellers and associations have the same requirement?

ANSWER: As you noted, residential sellers are required to produce governing documents, financial statements, a schedule of assessments, a list of defects, and make other disclosures as provided for in Civil Code 1368. Commercial and industrial condos, however, are exempt from these Davis-Stirling requirements. Civil Code 1373. The legislature decided that buyers of industrial and commercial condos do not need the same level of protection as homebuyers. -Matthew Gardner, Esq.

BUDGET DEADLINE

QUESTION: Our bylaws contain a 45-day requirement for distributing the budget but the Code allows 30 days. Which controls?

ANSWER: The statute controls: “Notwithstanding a contrary provision in the governing documents, a copy of the operating budget shall be annually distributed not less than 30 days nor more than 90 days prior to the beginning of the association's fiscal year.” Civil Code §1365(a)4.

NOMINATION FORMS

QUESTION: What is the notification requirement for informing owners of the right to self-nominate? Is the board obligated to mail self-nomination forms to the members?

ANSWER: The association is required to notify members when and how tonominate themselves. However, forms are not required unless called for in your Election Rules.