How to Maintain HOA Operations
Adams Stirling PLC
  California's Leader in Community Association Law March 27, 2020
Yesterday, I covered the rising tide of delinquencies caused by mass layoffs related to the coronavirus. This morning, I will cover how boards can keep operations moving despite the delinquencies.
Borrow from Reserves. To meet cash flow problems created by the pandemic, boards are allowed to borrow from the association’s reserves without a vote of the membership. (Civ. Code §5515(a).)
Notice of Borrowing. Boards are required to give notice of their intent to borrow reserve funds by listing it as an agenda item in their notice of board meeting. The notice must include the reasons the reserve transfer is needed, some of the options for repayment, and whether a special assessment may be considered. If a board authorizes a transfer, it must issue a written finding, recorded in the minutes, explaining the reasons for the transfer, and describing when and how the money will be repaid to the reserves. (Civ. Code §5515(c).)
Repayment. Monies borrowed from the reserves must be repaid within one year of the date of the initial transfer, except that boards may temporarily delay repayment. (Civ. Code §5515(d).)
Defer Expenses. The next step is to defer discretionary spending. For now, any major projects that can be delayed, provided they are not life/safety related, can be rescheduled for a later date.
SBA Loan. The Small Business Administration might be making loans available to associations that need them. It appears monies for nonprofits were included in the rescue packed approved by the Senate.

Senate Stimulus Bill. Wednesday night, the Senate approved a stimulus bill for the economy. The bill is scheduled for approval by the House today, which will then be signed by the President. Following are some key provisions:

-Direct payments to low and middle-income families ($1,200 per adult + $500 per child)
-Extend unemployment benefits by 13 weeks and a 4-month enhancement of benefits by an additional $600 per week
   · Benefits expanded to include furloughed employees
   · Funding to pay for first week of unemployment

-Deferral of payroll taxes for employers
-Refundable employee retention payroll tax credit for 50% of wages paid during the crisis

Distressed Businesses
-$500 billion fund for distressed businesses (such as airlines)
  · $454 billion for federal loans to distressed companies
  · $46 billion for industry-specific loans
  · must agree not to conduct furloughs or reduce pay rates
-Loan program for mid-size businesses (500 to 10,000 employees)

Small Business
$375 billion federally guaranteed loans, partially forgiveable for small businesses and non-profits that continue paying employees through the crisis
   · Loans available through June 30
   · $10 billion in SBA grants up to $10,000

State and Local
-$150 billion for state and local government coronavirus relief fund
-$1 billion in community services block grants to address unemployment and business interruption
-$1.5 billion to the Economic Development Administration for economic adjustment assistance

Financial Institutions
-FDIC program to guarantee debt of solvent insured depositories
-Exception to lending limits for non-bank financial companies
-Financial institutions may suspend GAAP requirements

Housing and Real Estate
-Prohibits foreclosures on federally backed mortgages for 60 days
-Up to 90 days forbearance for multifamily borrowers
-Temporary moratorium on eviction filings

-$30.75 billion in emergency education funding
-Defers student loan payments for through 9/30/20 for all federally owned loans

Summary. Boards have the ability to pay bills and keep their associations on track as the country starts to recover. Delinquencies caused by the coronavirus should abate once businesses restart and workers are rehired. The $2 trillion stimulus package will help alleviate some of the disruption until the economy restarts. Although the coronavirus has not yet peaked, it will soon and the economy will recover.

Confused. In your newsletter today, a person complained that the president of the association was being controlling by shutting down the pool area. The response was along the lines that “of course it was for control. What other reason would there be?” Please tell me that was a sarcastic response. Three people have looked at it and did not think so. -Jan C.

Satire. Although satire is usually meant to be humorous, its greater purpose is often constructive social criticism, using wit to draw attention to both particular and wider issues in society. Thanks for the newsletter. Informative, entertaining, and FREE. -Scott C.

Masked Man. “Who was that masked Man”? He left us a world of great information–sure is a “Swell Guy”! Thanks for all you and your firm do for so many! Recalls Churchill: “So few for so many!” -Bob A.

National Emergency. One of your best in real time, unfortunately during our nation's national emergency. -Ty W.

Helpful. I want to thank you for all the accurate, useful information you send out with regularity. Your newsletters are extremely helpful to many homeowners associations. -Gary F.

Brilliant. Brilliant newsletter as usual. I offer this hopeful post by
Pema Chodron: “You are the sky. Everything else–it’s just the weather.” -Henry C.

Riverside Pools. In your March 26, 2020 newsletter under the section called “All Pools Closed” you make reference that the County of Riverside Department of Public Health stated all Pools must be closed. You said this info was published on Riverside County Public Health FAQ’s quoting the Governors Office. I cannot find the link to the webpage to read the facts. -Don S.

The report by Ronald Z. does not appear to be accurate. I spent part of yesterday looking for the order and could not find it either.

Closing Pools. You state that "before a board decides to reopen facilities (swimming pools), they should carefully consider the spread of the virus ...etc". However, our Management Company advised our Association that Riverside County has told us to we must close pools and tubs. Please advise: does our Board have the discretion to reopen our pools, or not? -Stephanie A.

RESPONSE: Boards have the discretion to close or keep open their pools. The problem is not the water, its the transmission of the virus on all the other surfaces related to the pool.

Oregon Chuckle. I still read your newsletter although I moved to a beach condo complex in Oregon some years ago. The vacation renters in this area were told to leave by noon. We have had limited food for 2 weeks now, doctors working in ERs, not seeing patients, and your readers complaining about pools causes me to shake my head. Our clubhouse closed some time ago. Our excellent restaurants are closed even to takeout. Stay well and keep writing, it's always good for a chuckle. -Sandy
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Adrian J. Adams, Esq.
Boards can contact us for friendly,
professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
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