QUESTION: Our board is calling for the community to help paint the common area fences. We prefer it be done professionally by licensed contractors. We paid for a professional paint job last time and I don't want our maintenance being done by amateurs without licenses and warranties. We pay dues to have the common area maintained professionally, not do-it-yourself. What can I do?
ANSWER: It is not unusual for small associations to engage in self-help projects to keep costs down. As long as the projects do not require much skill and the potential for injury is low, it becomes a team building event that benefits the association by keeping costs down.
Evaluate Risk. Risky ventures should be avoided. For example, I would not recommend climbing ladders to clean gutters. Nor would I favor volunteers performing electrical or plumbing repairs. The potential for harm to persons and property is too high. Such work should be done by licensed and insured contractors.
Equestrian Trails. Lower-risk projects can be done by volunteers. I personally worked with volunteer homeowners in cutting equestrian trails for an association. We had our occasional brush with rattlesnakes and poison oak, but never suffered anything more than sore muscles.
Insurance. Painting fences has little potential for property damage or injury. Even so, if the board moves forward with the project, it should first talk to the association's insurance broker to make sure it has proper coverage in the event volunteers are injured.
RECOMMENDATION: If enough owners agree with you about using professionals to paint the fences, you should lobby the board. If the board disagrees and moves forward, you and like-minded owners should run for the board and change the policy once you are elected.
QUESTION: What is the proper protocol for responding to member correspondence? Can we share the correspondence with the entire board? Under what circumstances, if any, can the board discuss member correspondence in executive session?
ANSWER: Most correspondence can go into open meeting board packets for review and discussion by directors. The membership does not have a right to see the correspondence or know who sent it. These are private communications that do not fall into any of the categories of records subject to membership review.
Open Meetings. If the board discusses particular pieces of correspondence in the meeting, it can reference the general topic of the letter without mentioning names. The appropriate person can then be directed to send a response.
Executive Session. Some letters are appropriate for executive session discussion; e.g., letters threatening lawsuits, letters from deranged owners, etc. Those need to be discussed privately and sometimes with legal counsel about how best to handle the situation.
Between Meetings. If a letter is received between meetings that needs immediate attention, the person designated by the board to respond can email the letter to the board along with a draft response. With feedback from directors, the response can be sent. This does not violate the Open Meeting Act if authority has been delegated to someone to handle correspondence (for example, the manager, president or secretary). (Civ. Code §4155.)
RECOMMENDATION: If you have not already done so, boards should designate someone to determine if correspondence received between meetings needs an immediate response or can wait for the next board meeting. Authority should be delegated to the person to send responses as needed. If input is needed from legal counsel, they should have the authority to forward the letter to the association's attorney. Executive session meetings can be called as needed to discuss the best course of action.
CC&R RESTRICTION ON
QUESTION: If our CC&Rs state a maximum annual increase of 10%, can the board raise them 20% based on the Davis-Stirling Act?
ANSWER: Yes they can. Notwithstanding more restrictive limitations in the governing documents, boards of directors may increase regular assessments (dues) up to 20% of the association's preceding fiscal year without membership approval. (Civ. Code §5605.)
The failures by some boards to keep their association's budgets current with rising costs often forces future boards into the uncomfortable position of significant assessment increases. Thus, the 20% override established by the legislature.
VOTE NO ON
POLTERGEIST SB 323!
It's time to send emails to stop the Center for California Homeowner Association Law's (CCHAL) poltergeist bill.
We need your help to encourage the Senate Housing Committee to vote no on SB 323. Please send an email to the Committee when you receive this. You can use your own wording or copy and paste the message below into your email and send to members of the Housing Committee.
As described in earlier newsletters, Senate Bill 323 forces homeowners to accept felons, delinquents and litigants onto their boards of directors. CCHAL dictates what you can and cannot do in setting standards for your boards, complicates the election process, and exposes all owners to identity theft.
EMAIL SUBJECT: VOTE NO on SB 323 (Wieckowski)
EMAIL BODY: SB 323 is anti-consumer legislation that will negatively impact my association. It takes away our right to set standards for who represents us on our boards of directors. It makes elections more complicated, increases the risk of litigation, and exposes homeowners to identity theft when they vote. Please VOTE NO on SB 323.
SEND YOUR EMAIL TO THE FOLLOWING LEGISLATORS:
[email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]
Husband and Wife on the Board. What you forgot to address: if husband and wife are on the board--only one (1) vote per unit is allowed per CC&Rs and bylaws--so there may be a problem if majority rule is needed during a board meeting. -Meri N.
RESPONSE: The one-vote per unit restriction applies to membership votes, not director votes. If husband and wife are both on the board, both get to vote on issues brought before the board. When it comes to membership votes (election of directors, gov doc amendments, etc.), only one of them gets to vote. In most marriages, it's the wife (according to my wife).
Handyman #1. You know I adore your Sunday morning newsletter and look forward to reading it every week (or whenever you have time to publish). But this morning, it got my blood percolating a bit when I read the part about employee classification. Handyman? How about maintenance person? Seems like whoever edits your newsletter needs to be reeducated! -Susan K.
RESPONSE: I asked my assistant to immediately enroll me in a Reeducation Camp. She eagerly complied (a little too eagerly, I thought).
Handyman #2. Regarding employee classification, how does an association distinguish between a resident handyman and member that volunteers to do the same work? -Gary G.
RESPONSE: Unpaid volunteers don't need to be classified as employees or independent contractors--they're volunteers. As such, the court case I cited does not apply. Even so, make sure you get workers' comp insurance for your volunteers.
Planned Development #1. Regarding the question about planned units versus condos, when I purchased my unit I received a deed outlining the plot I own. Doesn't that prove it is a planned unit? -Ester V.
RESPONSE: Probably, but I would still want to see your governing documents and your deed. If your development comes with a condo plan, it means you bought a condo that looks like a lot. I see this with mobile home parks. Owners think they bought a lot but in reality they bought a cube of air with the outline of the lot that extends downward 10 feet and skyward thirty feet. The owner can then slide his personal property (the mobile home) into the cube of air.
Mobile home parks can also be structured as planned developments where owners actually own the land. It depends entirely on the governing documents.
Planned Development #2. I manage a community that is made up of all freestanding “single family” homes that are legally condos. They function as a planned development, in that owners are responsible for the structure and the interior, but they are legally defined as condos and their documents state the same. I believe the developer did this so the city would allow more homes to be built in a condensed area. They are very close together but it was permitted since they are “condos.” It has caused a lot of confusion, especially with new owners. -Chelsi R.
Planned Development #3. I have another unusual condominium for you. We were originally sold as patio homes but are incorporated as condominiums. We are stand-alone homes with a house address. Our ownership goes 5' down into the earth from ground level and 25' up from that same point. Our docs state that ownership includes "the single family structure within," yet the association takes care of the outside walls, including stucco, termites, and the roof! And you are right, there are insurance issues. I have always wondered why the association buys our structures' insurance (and thus has control), when it is not stated in our docs. That means they control the deductible. The biggest issue for us personally is that they dropped earthquake insurance a few years ago (against owners' objections) and it is apparently impossible for us to buy it ourselves just for our units. I call our community a "hybrid" because we really don't match the strict definition of a condo. P.S. I LOVE your newsletter and your sense of humor. I started subscribing to it when I got on our board 15 years ago and still do even though I left the board after 4 years. Keep up the wonderful work!!!!!. -Jeanne M.
RESPONSE: Thank you for the kudos! Your patio home's legal structure is similar to the mobile home park I described above. It's remarkable the variations developers use to get their projects through the DRE.
Planned Development #4. You referred to an unusual condominium project with detached SFRs. You mentioned you have only seen one of these before. I believe I may have a listing in a development with similar circumstances. My client is attempting to sell their home now. I believe the “condo” designation has placed a stigma on the development. Marketing properties in the complex is a challenge and sellers are willing to take a significant financial loss while selling their homes. The CC&Rs are rather complex for a layperson. -Robert B.
RESPONSE: Not just laypersons; the documents can be complex for lawyers as well.
Vacation Rentals #1. What happens when your HOA has failed to update or revise CC&Rs that have not changed since 1981 and contain numerous outdated, poorly drafted, and superseded provisions? We are a senior community, average age about 74, with many members who are easily frightened by absurd statements made by those who oppose any and all changes in the documents, no matter how meritorious! Although there are over 1700 units, the fear of potential (and constantly threatened) litigation is so relentless that it is nearly impossible to find capable persons willing to serve on the board of directors. -Elaine J.
Vacation Rentals #2. I strongly disagree with part of your last post. I have 40 years experience selling real estate in Palm Springs and neighboring cities. The developments have average sale price of $400,000. A buyer finds a home they love and the home is priced at $550,000. These neighborhoods are considered vacation destinations or vacation hotspots and usually second homes or part-time residents. The buyer considers the income potential and pays the higher price. This increases the average sale price in the area. Developments allowing short-term rentals have greater appeal and a higher sales price. -Mark S.
RESPONSE: Your example is the exception I referenced in my article. Some associations are not typical residential developments. Many in the Palm Springs area are second homes and investment properties for snow birds. They fly in from northern states and Canada during the winter and then fly home when it warms up again. During the six months their units sit empty, they like to rent them out as short-term rentals.