QUESTION: I live in a PUD where members own their lots, which includes a small fenced in backyard. We have an over-zealous president who looks over fences for violations. He upset a husband who caught him gawking at his wife sunning herself in a bikini.
ANSWER: I suspect most residents would find it unseemly and an invasion of their privacy for a board member to be peering over their fence looking for violations.
Inspection Notice. Most sets of CC&Rs allow for the inspection of lots. However, they also include a prior notice requirement. Unless there were an emergency, no board members, managers or agents should enter onto lots or peer over fences without first giving appropriate notice to the owner. Even then, there should be a good reason to conduct the inspection.
RECOMMENDATION: A fence creates an expectation of privacy and board members should respect that privacy. If violations cannot be seen from the common areas, directors should not be climbing fences looking for them.
QUESTION: Is it legal for the association's newsletter to publish that a member has passed away without first consulting the deceased family who still reside in the community?
ANSWER: Is it legal? Yes. Your newsletter is reporting an event that occurred in the community that would be of interest to the membership. Hopefully, dying is a rare event in your community. If it were to happen again, contacting resident family members first to express sympathy would be appropriate.
JEFFREY A. BARNETT
JOINS AS PARTNER
I am pleased to announce that the highly qualified attorney Jeffrey Barnett joined ADAMS | STIRLING as a Partner in our firm.
Bay Area. Mr. Barnett is a well-respected attorney with extensive experience as general and litigation counsel to associations throughout San Francisco's Bay Area and the Central Coast.
Los Gatos Office. He brings with him a staffed office in Los Gatos where he provides legal services to approximately 300 residential, commercial and mixed-use associations.
Education. Jeffrey has a rich academic background. As an undergraduate, he attended UCLA and then Wadham College in Oxford England before graduating from UC Berkeley with great distinction and Phi Beta Kappa. He then earned his Juris Doctorate from the University of Santa Clara School of Law where he graduated magna cum laude and served on Law Review.
ECHO Author. Mr. Barnett has written extensively for ECHO Journal and we are excited about the knowledge and experience he brings to the firm. If your association needs legal services, contact us for a proposal. For more information about Jeffrey see his website bio.
Airport HOA. Our board manages our small HOA’s airport. Items come up regularly that require immediate action that can vary from trivial to major. Any available board member can take the lead and decide if the consent of the board is called for. Sometimes we take action and formally approve it at the next scheduled meeting. While this system works well for us, we feel we are operating in gray areas. How concerned should we be about our practices? -John W.
RESPONSE: A small HOA with its own airport? That's impressive. Unfortunately, the Davis-Stirling Act is not designed for small associations. The laws affecting common interest developments have become so burdensome that management companies and legal counsel are increasingly necessary for boards to rely on. However, small associations can rarely afford them. Thanks to the legislature, the problem gets worse each year.
Fortunately, management decisions do not fall under Davis-Stirling's Open Meeting Act requirements. It sounds like most of the decisions you referred to are management decisions. Anything requiring full board approval (large expenditures, setting policy, etc.) should be done in a properly-noticed open meeting of the board.
Saving Emails. Thank you for another excellent newsletter. I was very impressed with the data retention and backup policies you mentioned. I would be cautious about burning information to CDs or other media and storing them indefinitely with other records. Technologies change. Software changes. Imagine trying to read data off an old floppy disk in this day and age. I recommend associations recall, restore, and re-save their data at least annually to insure it remains accessible. This should be part of an organization's disaster response and recovery plan. Organizations often forget that the objective is not the maintenance of data backups but the recoverability and accessibility of the information stored. -Al P-Y
RESPONSE: The technology is moving so fast that most kids today will have no idea what a floppy disc is (no it's not a social disease). Fortunately, most data stored by an HOA will have little value after a few years. See: Records Retention Policy.
Reserves. I’ve been thinking about your comments regarding Robert Norlund’s study showing that property values are affected by the strength of an association’s financial reserves.
I’m wondering if you might be confusing cause and effect. In other words, do good financial reserves promote property values, or do higher property values mean the association is more likely to be better financed?
In my experience, higher HOA fees tend to reduce home prices. Personally, I don’t know anyone who bought their home based upon the HOA’s reserve funding. Rather I think people are more likely to recognize value in how the property looks and how well it appears to be run. -Edward T.
RESPONSE: You would be surprised at how sophisticated some buyers have become. No one wants to spend their last dime squeezing into the condominium of their dreams only to be hit six months later by a huge special assessment. That's also why lenders are interested in reserve funding levels.
I agree that excessive dues tend to drive down property values. However, rebuilding reserves does not have to be done on a crash-course basis. They can be rebuilt over time in a sensible fashion that keeps dues within market levels.
I think Robert's study was spot on. He did not compare expensive HOAs against lower-end ones. By comparing (as best as could be done) similar associations so the primary variable is reserve funding strength, a picture emerges that well-funded reserves have a positive effect on property values. Not surprisingly, well-run associations and well-funded reserves tend to go hand-in-hand.
Politicians. I read and enjoy your newsletter. Your topic about utilizing HOA common area for general public political discussions caught my eye. HOAs should not open the door to general public free speech activities. Yes, the KKK did set the precedent by demonstrating/marching at a shopping center that had been allowing other organizations to demonstrate. The courts ruled in favor of the KKK. As you can imagine, this rocked the industry and it took many years and bags of money to get to the middle ground of “reasonable time place and manner rules.” -Carolle V.
RESPONSE: Too often, the legislature does things with the best of intentions that produce terrible results. Sometime, somewhere, someplace when it least expects it, an association will get burned by Senate Bill 407.
Restating Documents. Our association tried twice to gain the necessary votes (2/3) and failed each time. We considered going to court but our attorney advised us that the process is VERY expensive. This was painful to hear because we had already had our previous attorney revise our documents and now, after these expenses, we are apparently restricted by further legal costs. Do you have any specific knowledge of these extra legal costs? Any input would be appreciated. -Allan S.
RESPONSE: Most restatement petitions are not that expensive. It can change, however, if an owner mounts a vigorous challenge and the judge is uncertain what to do. When that happens, the court may set multiple hearings and briefings. I had that happen once. We eventually prevailed but it was much more expensive than it needed to be. Because there is no attorneys' fees provision in the statute for restatement petitions, the association could not recover its fees as the prevailing party.
If an association spends money and time modernizing its governing doucments and the enormous effort required to get at least half the membership to vote in favor of the restatement, it makes sense to spend the money required to get court approval of the documents.
Throwing Away Mail. We have a board member who walks around our mailbox areas and if a piece of mail is on top of the boxes for whatever reason, he picks it up and throws it away. What can be done? -Jim W.
RESPONSE: You might remind him that it's a federal crime to open, tamper with or destroy someone else's mail. (18 U.S. Code 1702.) If that doesn't work, see if the Post Office will install a return mail box for misdelivered mail. If your board member feels compelled to tidy up the mail room, he can drop unclaimed mail in the box instead of the trash.