Ask the Expert

Marjorie Jean Meyer, CMCA®, PCAM®
Vice President and National Director of Education and Certification
ASSOCIA

Hello, We have our annual HOA meeting coming up in a few weeks. I would like to address the Board of Directors (Other home owners) of their fiduciary responsibility to the other 61 homeowners in our HOA to implement fines when necessary and to enforce current CC&R's as clearly outlined for our community. There have been many issues and violations ignored or overlooked by the current members. In many areas on your site you mention the fiduciary responsibility that all boards have and I certainly agree, however is there some general written information you can point me to that I could read or refer to at this meeting. Any suggestions you provide would be greatly appreciated. Best regards.

- Bob G

Rather than attempting a discussion about fiduciary responsibility at the annual meeting, I would encourage you to make an appointment to meet with your board privately to discuss your concerns. The annual meeting is truly not a forum for such serious discussion -- its purpose is to elect directors and for the current board to report on the "state of the community".

Your topic deserves more thoughtful dialogue than can be accomplished at an annual meeting at which time is already at a premium.

With regard to material relating to the fiduciary responsibilities, after you peruse all the information available at www.associationtimes.com, go to www.caionline.org. The Community Associations Institute is a national research and education organization that focuses on fostering successful, responsive communities by teaching board members to be educated, productive and reasonable volunteers.

Sincerely,

Margey

When my Homeowners association held their first meeting, they held it at a time of day that was inconvenient for a lot of people, at least me. At that meeting they set up their fee structure and their officers. My question is, should they not have sent out voting proxies to homeowners who were unable to attend the meeting before adopting their rules and fees? One other question, what is the formula used to assess late fees? My dues are $100 dollars per year but the late fee is a whopping $20 dollars. I thank you in advance for your help.

- Samuel

The answers to your questions should be in your association's governing documents. Most bylaws specify the date and time, or perhaps a range for each, of membership meetings. Your association's Declaration/Master Deed/Deed Restrictions (their names vary according to the region of the country) should detail the late fee amount or percentage.

On the other hand, it's possible that the meeting you described in your question is a board meeting, and not a membership meeting. Again, your association's bylaws, as well as state statutes, should detail what decisions could be made in meetings of the board such as approving rules and regulations and the amount of maintenance assessments.

If you can find time, perhaps you could read all the governing documents for your community to better understand the limits and authority of your board as well as of each homeowner. It can be interesting reading!

Sincerely,

Margey

I understand the structure of the homeowners association should be the same as a corporation. However, there are disagreements as to what job belongs to whom among those in our association. (Apparently the last board abused some other members, and I want to be fair and intelligent about my delegating.) We interpret the Florida states guidelines differently than others? It all seems logical to me, but how do I enforce the guidelines? Is there a written proceedure I can produce to back myself up that is less likely to be interpreted incorrectly and equally distribute the responsibilities involved in running a board effectively. Thanks for any help.

- Kathy

You are so fortunate to live in Florida, because State of Florida's Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes offers free classes in condominium and cooperative association operations. I applaud your commitment of personal time to help in the operations of your community, and encourage you to sign up for these classes which are available in various Florida cities as well as online. You can obtain more information at http://www.caionline.org/florida/.

Sincerely,

Margey

Is it considered a conflict of interest if the president of our association is also a realtor who sells most of the condominums in our association? I live in Minnesota. Thank you.

- C. R.

While the resource I previously sent you (see below) may have information specific to Minnesota state statute, in general there are two specific actions to take when in a potential conflict of interest situation such as the one you described:

1. disclose the conflict to the board of directors before becoming involved in the conflict;
   
   
2. obtain prior written approval from the board of directors acknowledging that the president is in the real estate business and that he has a right to practice his profession within the community, just like all other real estate agents.

If your president is just being an aggressive real estate agent who works hard with your neighbors to obtain their trust in his sales abilities, there's really no conflict. If he gets the inside track on which units are delinquent in their maintenance fees and pursues a sales contract with those owners, it's a conflict of interest and the board should tell him to immediately cease such activities.

Sincerely,

Margey

I am President of a homeowners association in Florida. We have a person on the board who serves as a board member. She is also a real estate broker. When she sends out post cards she states that she specializes in our community. I checked our by-laws and nothing states that she can not do that. Is there a law of ethics in the real estate business that this is a conflict of interest? A few people that live in the association are saying that its a conflict of interest and that she shouldn't be on the board. She was appointed to the board for one year. Since she was appointed to the board can the board remove her? My question is is there a conflict of interest? Thank you.

- Steve

The appropriate way for a board to address the potential conflict of interest situation with a board member is to pass a motion acknowledging that the board member may benefit from her position, which provides her with exposure to all the members in the association, and that the board does not believe that such activities are a conflict of interest or negatively impact the board's ability to act in the best interests of the community as a whole. The board member broker should not vote on any issues that may impact her personally, such as rules affecting leasing or sales of units in your community.

However, if a homeowner association's governing documents prohibit residents from conducting a business from their homes (the intent of such restriction being to limit both vehicular and client traffic to and from the unit), the board should ensure that the board member broker has an office outside of the community.

With regard to removing the broker from your board, only your bylaws can provide you with the answer to that question. Typically, while most bylaws authorize the board to appoint someone to fill an unexpired term, the membership is the only entity that can remove a board member. However, your bylaws may contain a different removal process, so it would be best to either read and interpret it yourselves, or consult with an attorney knowledgeable in Florida community association law.

Sincerely,

Margey

We recently found out that a former trustee who served 2 terms was not a unit owner, but lived in a unit where the deed stated the mother as the owner. Our management company was not aware of this either. Whose responsibility is it to make sure unit owners are actual owners and not the tenant and how do we accomplish this feat?

- Cindy M.

To ensure that only owners are running for the board, your board should develop a procedure for vetting potential board candidates. Included in the procedure could be requiring each candidate to provide verification of ownership by submitting a copy of his or her recorded deed naming the candidate as an owner. Once the procedure is in place, the management company would be responsible for implementing it.

As a matter of practice, no person should be added to the owners' roster, or to the computerized ownership records, without proof of ownership in the form of a recorded deed of trust.

Sincerely,

Margey

We are a small condominium association comprised of 16 units: 8 townhouses and 8 condos. The building is classified as a multi-dwelling unit and therefore we divide all assessments by percentage of ownership. Currently, we are experiencing the lack of interest in homeowner participation as Board of Directors. Our By-Laws state that we must have 5 Board of Trustee members, but typically we run with a maximum of 4 and minimum of 3 to satify legal quorum ramifications. At this juncture, homeowners are showing little interest and for those few that have come forward, they really have no business experience whatsoever and have clearly indicated that they cannot afford to devote much of their time and effort to Board duties. Of course, the incumbent Board members realize the ramifications and are currently seeking legal advise on next steps if we clearly can't get competent homeoweners to replace the incumbent Board members. Can you shed any light on our situation and offer suggestions as to how perhaps we can avoid the legal costs which could potentially occur as a result of dissolution of the Association and court assigned management?

Also, maybe you may have some suggestions that we haven't thought of to motivate homeowners to get on the Board. I failed to mention earlier that we are self managed, but was once managed by several property management companies who failed miserbly at their responsibilities. Any help you could offer is greatly appreciated. Thank you.

- Denise G.

Owner apathy is probably one of the most frustrating issues confronting community associations, and there's no one simple answer to resolving the problem. Here are some possible actions you can take to ensure that your association continues to operate properly and in compliance with your governing documents and state statutes:

1. persuade your members to approve an amendment to your bylaws that would reduce the required number of board members so there is less problem attaining a quorum in order to conduct official business;
   
   
2. when you amend your bylaws to reduce the number of directors, consider reducing the term of service as well to one year so no one feels burdened with too much responsibility over too long a period of time;
   
   
3. hire a management company only for financials and consulting services so you are sure to comply with corporate requires, if your association is an incorporated entity, and to have resources available if you need them;
   
   
4. with a management company in place to take care of the financial requirements, perhaps your owners will feel more inclined to volunteer their services for the less demanding responsibilities, knowing that the management company is available to guide them as necessary;
   
   
5. if your previous experience with management companies left too bitter of a taste in your mouth to try it again, consider purchasing "The CAI Treasurer" software from the Community Associations Institute (www.caionline.org) which was designed for small, self-managed associations and contains basic operational guidance as well as a financial program;
   
   
6. hold a monthly or quarterly "work day" for members at which the majority of the administrative work can be accomplished -- one volunteer day monthly or quarterly from each member could go a long way in addressing the many issues that need resolution. Make it more than just work -- try incorporating fun activities as well to make it a family adventure.
   
   
7. directly ask a neighbor to serve on the board. People find it more easy not to volunteer than to say no to a personal plea.

Being a volunteer on a community association board is not glamorous, but it fulfills a civic responsibility and, if spread out among enough people, does not create a heavy burden on any one individual. Good luck in your efforts.

Sincerely,

Margey

When making an amendment that requires a 2/3 majority vote, can blank or absent ballots be counted as approval? Same question for majority vote to remove Board Members. Thank you!

- J.M.

For an answer to your questions regarding ballots, look for provisions in your association's bylaws for specific information regarding the voting procedure. Absent specific information regarding absentee ballots and proxies, try one or more of the following websites on parliamentary procedure:

• Cagle's Parliamentary Procedure
• National Association of Parliamentarians
• Parliamentary Procedure Online

In general, proxies must be assigned to a specific individual and legally executed in order to be valid. Absentee ballots must be properly completed before they can be counted. Your bylaws may say that owners who are delinquent in the assessments or in violation of the deed restrictions relinquish their right to vote, so their ballots may not be valid.

For much more information that will help board members understand the operations and complexities of their communities, go to the Community Associations Institute at www.caionline.org.

Sincerely,

Margey

My HOA has an enormous problem with our HOA President. Half through the year (every year since 2001) the other board members quit because she is impossible to get along with and drives them crazy. She claims that "running" our building is a full time job. I could send you documentation of what we have done in an attempt to get her off of our board. The problem is that we have an investor that owns 4 units (out of 30). She lets him have a monopoly on renting the units, as we have a percentage limit on the number of rentals. In addition to that, we have new people move in that vote for her, because it takes a certain amount of time to figure out the situation. Our management company (****) has called us "a building in crisis" because we cannot maintain a functioning board and she impedes upon the management company doing their job for our building. We have very low attendance at our annual meeting because the residents that have been there since we became an assocation in 2001 have given up on trying to make changes. The management company doesn't want to step in because legally it's not their place. We elected a nominating committe at our meeting (which our **** Management representative attended). This is protocol according to our docs. She came back and said that we were just short of a quorum, so the nominating committee wasn't in effect. (She was obviously not nominated). Anyway, she changed the ballot process (it seems within the confines of our docs) and now once again, we are having difficulty securing the votes. She added so many people to the ballot, that they are getting split. We feel such a sense of urgency, that 5 of us have been campaigning as much as we can on such short notice. Can you offer us any advice?

- Erin C.

Where are your board members and why are they allowing your president to run the association? Unless your bylaws differ from those of typical not-for-profit corporation bylaws, the president serves at the direction of the board. While the board members are usually elected by the membership and can only be removed by the membership, the president is appointed by the board and can be removed by the board at any time. It would appear that this would be an appropriate time for the other board members to accept their responsibility to the association and its members by removing the president and installing someone more reasonable, more credible, and more committed to serving in the best interests of your community as a whole.

If your board members do not act quickly to replace the president, it's possible that they may be considered negligent in their fiduciary duty to the homeowners. The consequences of such a determination could be severe, potentially resulting in personal judgments against each director. Serving as a volunteer on a homeowners association board of directors is serious business, and your board members must either act as board members or resign and help elect homeowners who recognize their fiduciary obligations and are committed to enforcing your association's governing documents.

Sincerely,

Margey

We have a board of 5-- There seems to be two members running the BOD and make decisions, sign contracts etc-- over the recommended % without a BOD meeting, or consulting the other 3 members, my question, should the whole 5 BOD members have a vote and vote recorded??? We even have a BOD member that charges to his American Express or in the past writes checks to himself??? What can we do to stop this poor business practice??? We are a condo of 120 units (?) with an income of + 1/2 million-- We need help!!

- A.C.

You have a five-member board and decisions should be made by all five board members. Each of you is a fiduciary agent of the association, meaning that you have been entrusted by your neighbors to represent the best interests of the community as a whole, not the interests of individual homeowners or board members.

There are only two board members who appear to be acting inappropriately in their position. The three remaining directors constitute a majority and have an obligation to ensure that any improprieties cease. It's time to focus on the most productive and reasonable manner in which to operate your half-million dollar annual budget so you can protect your community's property values and foster a sense of community among your neighbors.

Sincerely,

Margey

Thank you for this site. I live in the Great State of TEXAS! I am a Past President and Director of our HOA. There are so many issues with this HOA there are too many to list, but I must start somewhere. I guess after not being re-elected, and petitioned off the Board for the reason of getting too close to the money, I should just let it go. But, I can't do that. If you could give me a starting point it would be appreciated. Let's start with the CC&Rs, dated, 1970!! I think they need updating. Need the procedure, please. And the By-laws, last update, 1994!! I got shot down there, too. Before steering me to CAI, please understand that, that would not be an option for the BOD who bully their way, move/meet in their homes, changed the regular scheduled meetings from the 2nd Saturday, to whenever "they" want to. Believe me I know it's disgusting, please HELP!!

- Mike

I applaud your determination and concern for the proper operations of your community association, despite the setbacks you've experienced. It seems to me that your neighbors should be just as troubled about the board's apparent inappropriate actions and behavior. I would recommend that you inform the membership of your concerns in a non-inflammatory letter specifying just the facts, and asking for their support in recalling the board. Your bylaws should detail the process necessary to petition the board for a special meeting at which an election can be held for new directors.

Sincerely,

Margey

Our condo board recently had a group of investors buy about 1/3 of the condos in our building. They stated that since they have 1/3 of the condos they have to have 3 board member seats. They are lending the board money to have things repaired. They aren't going through the proper channels and having bids on the work that is going on. They now have a majority of the Board to have anything done, with the rest of the owners or board members with no say so. Can they come in and take over and make all of the decisions?

- Tammy

While I can understand why the investors would like to control the operations of your community because of their large commitment of funds in both their purchase of 1/3 of the units and their loan to the association, they still must comply with your association's governing documents. Your association's bylaws probably detail the process by which board members are elected and removed; your board of directors is obligated to comply with that procedure.

If you disagree with the way the new investors are running your community, remember that they only control 1/3 of the votes. If you can persuade your fellow owners that the investors and the board are not acting in the best interests of your community as a whole, you will have enough votes to elect board members more reflective of the majority of the owners.

Sincerely,

Margey

The president of our HOA has done over 100 hours of volunteer work at our pool over the last year. The Board wants to use a merit system to compensate him for these hours and show appreciation. We are considering reducing his annual dues for the 2005 for work done in 2004. Our dues are $200 per year in our 80 unit single family home development. In the past the merit system was abused by some people so we don't want to open the door to future misuse. What are your suggestions for a merit system, accountability, and reducing annual fees? We do not have any paid staff for our HOA.

- Cynthia

While the concept of reducing maintenance fees for your president is appealing, the board cannot exceed its authority granted by the governing documents. If the documents state that no volunteer can be paid for his or her services, then the board cannot approve any form of payment, including a reduction in maintenance fees. If the documents state that all owners must pay their portion of the maintenance fees, it's very clear that the board has no power to reduce those fees. However, most documents do have a provision that allows the board to reimburse volunteers for out-of-pockets expenses.

Further, some documents may actually state that the board may pay a volunteer a comparable amount as would have been paid to an independent contractor for the same work. If your documents have that language, then the board should solicit bids from contractors for the exact work the president is performing. By doing its due diligence, the board can justify the amount it ultimately agrees to pay to the president.

For tax purposes, remember that the association must issue a 1099 form to the president if payments to him exceed $600 in a calendar year.

Sincerely,

Margey

Can the board president reject a letter of resignation from a board member? A board member resigned recently & the board president wants this individual to remain on the board until she finds another qualified person to fill this vacancy. The individual who has resigned has other commitments and cannot stay on the board. This person's term of office will be up October 2005 and the board president wants a person to finish out the 9 months and then run for re-election for another 2 years. If the person who resigned from the board as a volunteer, does he have to go along with the board president's statement that your letter of resignation is not being accepted. It is only a volunteer position and the Bylaws and governing docs do not address this issue.

- M.R.

It is not unusual for the bylaws of a homeowners association to state that a director must serve until his or her replacement has been named. However, if your association's bylaws do not contain that provision, but state only that the remaining board members must appoint a new director to fill the unexpired term of a resigning director, then there is no obligation on the part of the resigning director to remain on the board.

There's a "however", though. If there are very pressing issues that the board must address, and if the resigning board member leaves the board without a quorum, I think that board member should try very hard to continue to serve until the crisis is over and there are a sufficient number of directors to constitute a quorum.

Sincerely,

Margey

We live in a new townhouse development in Atlanta, GA and the association is still under control of the developer. We have not been happy with the developer, so we are eager to take control of the association. The Georgia Condominium Act states that once 4/5ths of the units have been sold, the right to appoint directors to the association board automatically passes to the residents. Over 4/5th of the units in this development have now been sold. However, the Developer is insisting it still has the right to appoint directors. They have not explained their legal basis for insisting they have this right, even though I have asked for an explanation. Can you provide me with an opinion as to whether the residents can ignore the developer's attempts to appoint Board members and go ahead and hold direct elections? ? Thanks!!!!

- Jeff

Rather than attempt to create a "shadow board", why not provide the developer with a copy of the relevant provision of Georgia state statutes (go to http://www.legis.state.ga.us/cgi-bin/gl_codes_detail.pl?code=44-3-220 for the Georgia Property Owners Association Act for townhomes that are property owners association, and http://www.legis.state.ga.us/cgi-bin/gl_codes_detail.pl?code=44-3-70 for the Georgia Condominium Act for a townhome which is a condominium) and your community association's governing documents that mandate transition to homeowner control once 4/5 of the townhomes have been sold. Please check to see if the language says "sold" or "closed", because there's a big difference between the two words, and also check to see if there's a time frame within which the developer must call the transition meeting after the percentage or number of units sold/closed is achieved. Giving the developer the benefit of the doubt, perhaps he is unaware of the absolute mandate for transition, or perhaps the required percentage or number has not yet been attained.

If, after receipt of irrefutable proof that he must transfer control of the association to the owners, the developer ignores your communications and continues to maintain operational control, contact your district attorney or Attorney General to see if they will intervene on your behalf. If not, you may need to hire an attorney knowledgeable in community association law to help you wrest control of your association away from the developer and into the hands of the homeowners.

Sincerely,

Margey

Our community is approaching the transition phase when the Developer will transfer operation of the condominium association to the owners. There are numerous and major defects in construction, e.g. poor drainage, water standing in front yards, etc. The forthcoming over council or board does not want to assume the responsibility and cost of curing these known defects. Can the owners prevent the transition from the Developer to the owner council until the defects are cured by the Developer? Can the owners impose conditions to be complied with by the Developer before the transfer? The condo is in the State of Delaware.

- E. D.

Not being familiar with Delaware law, I went to an expert who is -- attorney Robert Diamond of the law firm of Reed Smith (rdiamond@reedsmith.com). Here's what Mr. Diamond said:

"First, the condominium unit owners association cannot refuse the common elements--the unit owners already own the common elements in undivided interests. If the association refuses to take responsibility for upkeep, the developer could just stop providing that upkeep and the association would be stuck. On the other hand, the condominium documents may contain a process for transferring the responsibility for upkeep and so-called "acceptance" of the common elements; if so, then that process can be enforced.

Finally, many local jurisdictions require the developer to post a bond for public improvements, which may include parking areas, sidewalks, curb and gutter and storm water management facilities. If so, the association can contact the local jurisdiction and request that the bond not be released until the defects are remedied. In any case, the association should try to negotiate a resolution with the developer because it is quicker and less expensive than litigation. Refusing to take responsibility for the common elements does not get the developer to remedy the defects."

Sincerely,

Margey

The developer of our community of PUDs & Condos (less than 2 years old & planned for 1500 units - less than 100 current HO's) has changed CAM's twice and now plans to start its own management company. What would be the pros and cons of this for our community especially since it will obviously be some time before conveyance?

- Ray

The advantage of having a third-party management company during the period of developer control is the independence of its handling of association funds. However, so long as your developer ensures that association funds are in an account in the name of your association, and those funds are segregated from all other accounts the developer controls, a major concern is ameliorated.

Another critical issue is the difference between developer warranty responsibility and the association's maintenance obligations. If there is a construction defect for which the developer is responsible, he certainly cannot expend association funds to rectify the problem.

Perhaps a reasonable compromise would be for the developer to appoint one or two homeowners to the board of directors. These homeowners can be the "watchdogs" for the community, protecting the association's funds and assets while ensuring frequent and thorough communications with the owners. Producing monthly financial reports which are available for review by any homeowner will go a long way in reducing suspicion and ensuring that the association's assets are protected.

Sincerely,

Margey

The Home Owners are wanting to transition responsibility from the Builder to the HOA. Are there any written guidelines to make this a more informed process for the home owners? I have volunteered for the transition committee and I would like to gather as much information as possible to better understand responsibilities and pitfalls. Thank you.

- TJ

The Community Associations Institute published a Best Practices paper on transition from developer control. I can think of no better resource for you on this issue.

Sincerely,

Margey

Does the chairman have the right to vote at a board meeting? We have 9 board members including chairman. In our by laws it does not state that he can not vote. It only says that each member of the board has the right to vote which consists of 9 members and the chairman is a member.

- Steve

Yes, indeed the chairman of the board has the right to vote just like the other members of your board.

Sincerely,

Margey

I am a Board President of a Condominium Association. Our Association had never been professionally managed or run by the governing documents until we were elected in October. A disgruntled unit owner who had been paid to be the bookkeeper has the unit owners riled up in an attempt to remove us from the Board. They are doing this in a way that is totally contrary to the bylaws: 1) They didn't petition the Secretary for the Board to call a special meeting, they are calling the meeting themselves; 2) They didn't mail out notices certified mail; 3) Their proxies say that a no response will be counted as an approval vote; 4) Their notices included false and slanderous information. I feel that attending this meeting will give it validity. They have no way of knowing that the Board received a notice. Suggestions? Hire an attorney? Make them hire an attorney to prove they did it legally? Thanks.

- J.M.

It's a shame that the peacefulness of your community is being compromised by neighbors who may not have all the information they need to understand the intentions and actions of your new board. My first suggestion would be to schedule a meeting between the board and an equal number of owners, including the disgruntled former bookkeeper, at a neutral location such as a library, restaurant or clubhouse. Prepare for the meeting by addressing each issue that was alleged by the dissident group, using unemotional facts and providing substantiation for your responses. Include in your discussion copies of the provisions in your association's bylaws that specify the procedure by which board members may be removed.

If you fear that the meeting may not be cordial of if you would prefer some additional help, don't hesitate to ask an attorney knowledgeable in community association law to represent the board's position at the meeting. Trained to be articulate and to mediate disputes, an attorney may be able to clarify misunderstandings and diffuse the emotionally-charged atmosphere. Persuading the group of your good intentions will go a long way to resolving the discontent among the other members.

Sincerely,

Margey

I take the monthly and annual shareholder minutes for a lake community in New York. I have been doing this job for 5 years, without any complaints of my ability. In July, at our annual shareholder meeting, I took the minutes. When I presented my minutes to the board in September, there were some corrections I knew needed to be made. Correct spelling of people's names, etc. At the next meeting, several of the board members wanted to add whole passages to my minutes. I explained to them that I did not feel adding such volume to my minutes especially putting in what this shareholder had said that I cannot attest to recalling. Most of the changes, I felt were redundant. Also, one board member felt that the minutes did not reflect how much time and energy the board had put into preparing the reports and presentation for the annual meeting. I do not feel the minutes are meant to glorify the work done by the board. Please advise. Thank you.

- C.

I respect your commitment to your community by taking minutes of your association's meetings for the past five years. Minutes are intended to reflect the actions and decisions of the board, not verbatim discussion. While the minutes can contain a brief explanation of the board's actions, especially in situations in which the decision was difficult, most attorneys who focus on community association law say that it's better to keep the minutes brief.

If the board wants to include additional information for the record, they should consider approving committee and officer reports and attaching them to the minutes as ancillary information.

The Community Associations Institute offers publication #5834 in its Bookstore entitled "The Board Secretary" which provides excellent information about and examples of proper minute taking. It supports your contention that minutes should not contain extraneous information or be biased in favor of the board or any individual.

Sincerely,

Margey

As the Secretary/Treasurer of our HOA condo association in Colorado, my question is: Who is required to give information on the new homeowner (name, address, phone number) when a condominium sells?

- Julie

Many states have statutes requiring the homeowners association to provide sales/closing information to new buyers. If there is a management company involved that maintains the books and records of the association, then typically the management company is the entity that actually completes the resale forms and disclosure questionnaires.

However, there may be additional reporting forms that must be completed by the seller, such as a form disclosing if there are defects in the home, pending lawsuits that may cloud the title, or other issues about which new owners should be aware.

Once the unit sells, it is usually the obligation of the new owner to provide contact information to the association. Again, there may be a state statute that mandates that such information be disclosed within thirty days of the date record ownership of the home changed. Such a requirement makes sense when you think about the many reasons why an association may need to contact current owners -- notification of an annual meeting, update on a construction project, explanation of new rules taking effect, and a summary of local or state legislative issues affecting community associations, among many other motives.

Sincerely,

Margey

Our association has recently been turned over to an outside management company. The Board of Directors have that right, but in doing so they have increased our dollars monthly. We have no structures other than two entrance signs, we have a common area, no walking paths, no landscape to maintain other than a yearly fire break. Our CC&R state that they cannot raise our assessments over 19.9% yearly without 67 percent approval of the residents. Our Board says they have the right, because assessments aren't dues and they have to raise the dues to meet the budget which now includes $2300.00 monthly which must be paid to the management company. Is this correct? Thank you.

- Dena J.

There are several line items in your association's budget that may not be visible but are still valid expenditures such as property and liability insurance; permits, fees and licenses; and other administrative costs. However, if your documents clearly establish the maximum annual increase to less than 20%, than your board can not re-interpret the definition of a maintenance fee to circumvent the documents.

While contracting with a management company may indeed be the best course of action for your community because board members have burned out and no longer have the time to commit to your association, the board must still comply with the governing documents. What are your alternatives? It seems clear that the current board no longer wants to expend as much time and effort on your association's operations but, rather, would prefer to have professionals on board to address the daily needs of your community and its residents. Are there other owners who are prepared to step up to the plate and volunteer their services either to replace the current board or serve on committees to support the board? If there are an insufficient number of volunteers prepared to devote the necessary amount of time to their community, then the owners should approve the necessary increase in maintenance fees to hire a professional management company. It's just not reasonable to expect your neighbors to sacrifice their diminishing private time to work on association issues, when a management company will assume much of the administrative and oversight responsibilities so the board members can return to some semblance of a personal life.

Rather than fight your board on this issue, either volunteer to help or agree to the additional expense at a special meeting properly called for the purpose of approving the maintenance fee increase.

Sincerely,

Margey

In October 2004, we purchased a home in ******, for which your firm is the manager. Our account number is ******. In all the purchase displays and disclosures, our monthly dues were quoted to be $49.00. Our monthly payment coupon says the payment amount is $51.00, which is due on January 1, 2005.

Please explain this anomaly as soon as possible so that our payment will not be late.

- D.

Our service is provided to homeowners nationwide, so if you would provide me with the name of your management company, I will be glad to forward your query to it. In the alternative, perhaps you could communicate directly with your manager regarding your important question.

Sincerely,

Margey

I would like to find out from the experts, whether I am entitled to pay association fees under the following scenario.

I closed my loan (construction loan) for my property in May'03. Builder gave me the keys to property on Nov 1st 2003 after completing the work. I moved into the new house on Nov 1st 2003. But the association board of directors decided to assess association fee from May 2003.

- R. R.

Typically, the obligation to pay maintenance fees begins when ownership is acquired -- in your scenario, when you closed on your loan. There should be a provision in your Declaration/CC&Rs/Deed Restrictions (they're called different terms in different parts of the country) specifically describing when the responsibility to pay maintenance fees commences.

Sincerely,

Margey

We have residents who are always late paying their condo fees. The bylaws state there is a 1% delinquency fee if late 5 days. They eventually pay the condo fee but refuse to pay the late fee. We are located in Wisconsin. Any ideas on how to handle this?

- Ruth

On Wisconsin's legislature website, I located Chapter 703 entitled “Condominiums”. The following paragraph very clearly states that interest on late payments is a legitimate collection cost for which a lien may be filed in accordance with the procedure described below. So, even if an owner pays only the delinquent maintenance fee, you can still have an attorney file a lien against the unit so that it cannot sell until the lien amount (which could include attorney’s fees) is paid.

703.165(3)
(3) Assessments constitute lien. All assessments, until paid, together with interest on them and actual costs of collection, constitute a lien on the units on which they are assessed, if a statement of lien is filed within 2 years after the date the assessment becomes due. The lien is effective against a unit at the time the assessment became due regardless of when within the 2-year period it is filed. A statement of condominium lien is filed in the land records of the clerk of circuit court of the county where the unit is located, stating the description of the unit, the name of the record owner, the amount due and the period for which the assessment was due. The clerk of circuit court shall index the statement of condominium lien under the name of the record owner in the judgment and lien docket. The statement of condominium lien shall be signed and verified by an officer or agent of the association as specified in the bylaws and then may be filed. On full payment of the assessment for which the lien is claimed, the unit owner shall be entitled to a satisfaction of the lien that may be filed with the clerk of circuit court.

Sincerely,

Margey

I have located a copy of our Master Deed (see last month's question) and this is a paragraph regarding calculations of assessments:

"Each Unit Owner, including the Declarant, shall be required to pay a proportionate share of comon expenses upon being assessed therefor by the Trust. Such share shall be proportionate to that Unit's undivided interest in the Common Areas and Facilities"

It then goes on to list the % s for each unit, through amendments to the Master Deed as units were built. All units have been completed and I believe I have the copy of the last amendment. The percentage that the Board is using to calculate condo fees differs from the percentages in the Master Deed, and they are trying to assess every unit owner a flat $1,500 special assessment. Can they legally do this? Can they legally change the % per unit without amending the Master Deed? Thank you for any help you can give me.

- Michelle

Your Master Deed is very clear how assessments must be calculated. The only way to change that method is to amend the documents, and I'm confident there's an equally specific paragraph in the Master Deed that addresses that procedure as well. Bottom line, unless the Master Deed was amended before your acquired your unit, your board cannot change the percentages listed in the Master Deed or the method in which regular and special assessments are calculated without a vote of the owners.

Sincerely,

Margey

I am the acting secretary/treasurer of a 76 condo unit in Louisiana . I was appointed to that position after 1 other board member & myself discovered the old secretary/treasurer had taken approximately $105,000 from 1997 to present. (Long story so will skip) During that time he made special deals with a few homeowners for dues. We had him arrested & he is awaiting trial in 2005. Some of the homeowners (approximately 10%) that had the "special deal" worked out want to introduce a motion at the annual meeting Jan 12th to change the way we calculate the regular dues. At present (In bylaws) the dues are distributed equally across 76 units. They want it changed to be calculated by square footage of unit as they all live in smaller units. They are stating that we are the only condo association in greater New Orleans area that does not calculate this way.

My questions are:

1. Are they allowed to try & push this through at the next annual meeting?
2. Where can I go to find if they are correct?
3. Helpful hints to address this.

Footnote!!! We share a wall with the former secretary/treasure. Not Good, Not Good. Thanks In advance.

- Sam   

How terrible that your association experienced the theft of $105,000! I wish you well in the trial and hope you recover every penny.

With regard to the "special deals" the former treasurer made with a few owners, of course he had no authority to do so and the current board has no obligation -- or authority -- to continue them. Your association's Declaration/Master Deed/Indentures (they're called different names in different areas of the country) should contain a section that specifically details the manner in which assessments are calculated for each unit. If your documents call for a flat (or "equal") amount (divide the annual budgeted maintenance fee income by the number of units), it doesn't matter if other condominiums charge by percentage ownership (total square footage divided into unit's square footage, then multiplied by annual budgeted maintenance fee income) UNLESS Louisiana 's state statutes require condominiums to calculate maintenance fees based on the percentage ownership.

Can 10% or so of your membership force the board to switch the method in which assessments are calculated? If your documents currently mandate the flat method of assessments, then the only way to change that method is by amending your documents. There should be a provision in the Declaration/Master Deed/Indentures that details the amendment procedure, which may also require approval of a certain percentage of mortgage holders because of the significance of this type of fundamental revision.

Follow your attorney's advice and the mandates of your governing documents, Mr. Hamilton, and you and your fellow board members will successfully turn around the operations of your community, with the support of the majority of your neighbors.

Sincerely,

Margey

I just bought a new home in a new subdivision. Only 25 out of 200 of the lots are built and sold. I live in Mississippi and the Covenants, conditions, and restrictions say nothing of when the homeowner's association takes over the common area expenses. The developer got us together for our first meeting to approve the maintenance budget. He proposed $250/yr annual assessments and another $200 special assessments just to cover the $12000/yr in regular maintenance fees (mainly lawn mowing). The fees are so high since we only have 25 owners so far. Does teh developer need to pay for any fees until the subdivision gets larger?

- Dave

I spent quite some time researching your Mississippi code and could not find any reference to a Declarant's responsibility to fund shortfalls in a homeowner association's budget or cash flow. The next step would be for you to thoroughly read your governing documents to determine if there are any provisions addressing this issue. If you find nothing, perhaps you could ask your state senator or representative if he or she is aware of any state statutes mandating a developer to ensure that the community association remains financially viable by either paying a pro-rata portion of the assessments or contributing to the operating account when funds run short.

Sincerely,

Margey

Dear Sir/Madam,
My homeowner's association took over from the developer this past summer. As a consequence of the developer's failure to keep records, the new homeowner's association is basically re-charging everybody with annual fees for the past years until each homeowner can prove that they have paid the bills. Although I have paid all years, I have no record anymore of the $100 working capital contribution made in 1997, that usually is charged when the owner moves into the new home (that was 1997). Would this not be the burden of the homeowner's association to prove that I have paid bills that are 8 years old? What can a homeowner do in this case? I am not sure if the banks even provide statements this far down.

- Albert

What a quagmire your association has found itself in! However, rebilling homeowners for five years' worth of assessments is probably not the answer. Rather, I would urge the board to put more pressure on the developer to produce -- or create from raw data -- receivables records from the initiation of the association. The developer is a fiduciary agent and obligated to comply with the provisions of the governing documents, some of which require appropriate accounting practices. Breach of the fiduciary trust can result in large judgments or settlements, so I would hope that the developer or his insurance underwriter would do whatever is necessary to reconstruct the payment records of every owner.

Banks can produce statements from five years ago, but they charge to do so. The developer or his insurance underwriter should pay whatever cost is necessary in order to obtain those statements and recreate the records.

Sincerely,

Margey

South Carolina Condo Complex set up as non-profit with CCR and BOD. Is it legally permissible for the BOD to take a vote on borrowing money on the entire Condo Complex which would place a mortgage on the entire complex?

I am personally opposed to this as members would have to pay their share of the mortgage before their condo could be sold to another buyer. I also feel that this jeopardizes the entire complex if there is a default on the loan. This could result in everyone losing their condo.

I would appreciate your answer and await your reply. Thanks.

- Steve

The answer to your first question can be found in two sources -- your association's governing documents and South Carolina state statutes. In your association's Declaration/Master Deed, and/or perhaps the bylaws, may be a list of the powers and authority of the Board of Directors. If you find a provision permitting the board to borrow money on behalf of the association, that's the first step in determining that your elected directors may commit the association to a loan obligation.

The next step is to read other sections of the Declaration/Master Deed and bylaws for provisions that elaborate on the board's authority to borrow money. For example, there may be a requirement that, while the board is authorized to borrow funds, it must obtain prior approval from a specified percentage or number of owners, or perhaps the board may not spend common funds over a certain amount without prior homeowner approval.

Next, check South Carolina 's Horizontal Property Act to see if there are limitations on a condominium board's authority to borrow money. Make sure that there are no exclusions with regard to grandfathering condominium communities that may have been created prior to the implementation of the Act.

Finally, while borrowing money may not be the optimal action for a community association, it may be the most beneficial over the long term. If there are major repair or replacement projects that have been deferred because there were no reserves to fund them, the ultimate impact will be on each owner's lowered property value. Fiscal responsibility would call for obtaining a reserve study and fully funding the reserve account as detailed in the study. If the owners preferred low or no annual maintenance fee increases instead, the need to significantly increase fees, borrow money or special assess is inevitable.

Sincerely,

Margey

I would like to say thanks for the previous question that I posted and for your response.

CRR, Non Profit, with BOD elected by Condo owners, South Carolina, Charleston County.

The BOD is proposing that they be allowed to borrow approximately $500,000 against the regime to be used to completely refurbish the complex. Roofs, roads, buildings, fencing, etc. The regime is trying to sell this idea with the ploy that nobody's condo will be in jeopardy as for foreclosure. The Regime controls the Common Ground, grass, trees, roads, swimming pool, tennis court, and mailbox gazebo. My contention is that if the Regime which has never been that stable with BOD members or money, defaults on the loan that we could end up losing the whole complex which would include our individual condos owned by each owner. Another scenario to me would be that the mortgagor could put up a fence with locking gates and not allow access to the Common Grounds to their condos if the regime could not pay and defaulted on the loan. I also contend that the Mortgage Company or Loan Company could come against all of us for the unpaid balance of the loan.

I also contend that it would be especially hard for a unit owner to sell their condo as I feel that most mortgage companies would be very skeptical about loaning money for someone to purchase a condo in here when the Regime already has a loan of several hundred thousand dollars.

There are only 100 plus Condos in this complex, the structures are wood and require constant maintenance because of the high temperatures and humidity that we have along the coast.

Primary concerns are: Regime default on the loan due to inability to collect regime fees. Condo difficult if not impossible to sell due to the Regime loan and a Mortgage Company would not or the attorney or Real Estate Agent would advise the purchaser to go somewhere else to purchase a condo.

I still don't see how a Regime could borrow this amount of money without some real collateral as a guarantee if there is or was a default on the loan. I would appreciate a reply. Thanks.

- Steve

I'm so glad my answer to your first question was useful.

It's not unusual for a community association to borrow money to pay for needed maintenance. However, banks are very careful not to loan the money unless they are quite sure that the association will be able to pay it back. The only collateral most banks can have is the association's receivables, and the bank officers know that if they confiscate the receivables the community doesn't operate and still won't be able to pay back the loan.

Just because an association borrows money doesn't mean it's a risk for a prospective owner. Borrowing money can be the wisest action if its purpose is to repair or replace an association physical component that is failing and will cost more to repair or replace over time. So long as the association can produce valid cash flow projections that indicate its financial solvency, including the monthly note payment, there should be no detrimental impact on property values or future sales.

Sincerely,

Margey

I have asked trustee for disclosure and information on the association financials, don't get responses or pass the buck to ask the management company. What can I do?

- Joe

If you've only telephoned the trustees and management company to ask for information on your association's financial condition, try sending each a certified letter asking for an appointment to inspect the books and records of your association. Include in your letter the relevant sections of your governing documents (primarily the Declaration/Master Deed) which state that owners have the right to see the books and records, and also any state statute that reiterates that right. In your letter, provide several date and time alternatives to demonstrate your reasonableness and willingness to work with the trustees and management company.

If, after all your efforts, your requests are denied, perhaps you should talk with your neighbors about the unavailability of the records. If you can get enough other neighbors concerned about this issue, perhaps you can elect new board members at your next annual meeting who are more willing to open the records to owner scrutiny.

Sincerely,

Margey

Is an escrow deposit considered an assessment? I have learned of an Association's attorneys taking people to court for escrow deposits where the Association and seller's failed to disclose the escrow prior to closing? Is a dispute over the escrow subject to ADR provisions in the by-laws? Thanks.

- Janet

Your governing documents -- probably the Declaration/Master Deed/CC&Rs (the name varies by region) -- and/or state statute should define the escrow deposit. It could be refundable, it could be applied to future maintenance fees, or it could be allocated to the reserve account to pay for future replacement of your association's capital components. It all depends on how your documents and state statute address this issue.

If the seller and the association did not disclose the escrow requirement, it may still be applicable if the requirement is in recorded governing documents or state statute. If you paid for a title insurance policy, you might consider filing a claim for the omitted funds which the association is apparently attempting to collect.

ADR (Alternative Dispute Resolution - see Glossary) is always a good option to resolving disagreements. If you are unable to reach a consensus with your association, certainly try to resolve it with the help of a trained mediator.

Sincerely,

Margey

Is is it legal in Ohio to put your association fees into an escrow account for failure by the HOA to provide required services?

- Mike

You didn't mention in your question whether your community is a condominium or a planned community development (subdivision or non-condominium townhome), but I'm going to guess it's a condominium based on the nature of your question.

If I guessed correctly, Chapter 5311.18 of the Ohio Civil Code entitled "Condominium Property", which can be found online at http://onlinedocs.andersonpublishing.com/oh/lpExt.dll?f=templates&fn=main-h.htm&cp=PORC, states:

"(6) In any foreclosure action, it is not a defense, set off, counterclaim, or crossclaim that the unit owners association has failed to provide the unit owner with any service, goods, work, or material, or failed in any other duty."

This statute clearly prohibits an owner from withholding payments to the condominium association for perceived shortcomings in service. If you believe your association is not providing the services delineated in your Condominium Declaration/Master Deed, I urge you to calmly and rationally discuss the matter with your board of directors, offering documentation for your claims. If you are still not satisfied with their response, perhaps you could rally your neighbors together to collect enough proxies or votes to elect new board members more responsive to their constituents and the association's governing documents.

Sincerely,

Margey

I live in a 19 home co-housing community. Do you have any advice on how much money we should be putting in a "sinking/reserve" fund? We already have one, but are trying to evaluate if it is adequate. Are there lists of typical big, infrequent expenses, their frequency, and their costs, for example? Are there good numbers for the average annual maintenance costs for a community (club?) house of a given square footage?

- Jim K.

There's only one way to be sure that your association is setting aside adequate funds to replace the major physical components of your community -- a reserve study. To conduct a reserve study, an engineer, preferably one with the Reserve Specialist designation from the Community Associations Institute (www.caionline.org), will identify all the capital components in your community for which the association is responsible. He or she will then determine the replacement cost, replacement life and remaining life, and develop a 20-year cash flow projection detailing when each component is expected to fail and how much the association should have in its reserve account to pay for it.

Long range planning is critical to the successful operations of your community. Good for you for considering it.

Sincerely,

Margey

I live in Chicago, Illinois in a 9 unit condominium. It was wisely suggested that we collect a special assessment to replace windows and plumbing early in 2004. We collected approximately $12,000 and when our plumbing system needed to be replaced in December 2004 (after another unit owner (president of our association) was having work done in her bathroom) we were slapped with a $3000 special assessment. When I inquired about the special assessment collected for this purpose it came to my attention that the $12,000 reserve had been depleted during the year. The explanation was that $2000 was spent on plumbing repairs during the year and the other $10,000; it has gone for "legal fees". Is there any law governing use of special assessments for purposes for which they were not designated? By the way, our management company stated that they never asked the board to use special assessment money for the legal fees.

- C.

To ensure that I give you an answer relevant to Illinois state statutes, I asked Ms. Christine Evans, President and CEO of Vanguard Community Management in Schaumburg , Illinois (cevans@vanguardcommunity.com) if there are laws regulating the allocation of condominium associations' special assessments.

According to Ms. Evans, there is no Illinois law that requires the board of directors of a condominium community to spend special assessment funds for their stated purpose. However, Ms. Evans continued, there certainly does appear to be either poor planning by or, in the least, miscommunications from your board regarding the disposition of the funds. If other urgent common area maintenance or administrative needs arose for which operating funds were not available, they board must meet the association's financial obligations with whatever monies are available. However, the board should have immediately informed

the association members of the new financial condition, and kept members updated on the status of the legal issue as well as the diminishing funds.

It sounds like your board may be overwhelmed with the obligations and responsibilities of their leadership roles. Since your community is so small, why not ask your neighbors to pitch in to help the board with the operations of your and their community?

Sincerely,

Margey

I purchased a condo in December 2003 and there was a special assessment voted on one month before I moved in. Who is responsible to pay? Would it be the owner since the special assessment took place prior to my moving in, even though it wasn't due until the next summer July 2004? By the way, I wasn't aware of the special assessment prior to moving in. The owner did not disclose this information which could have swayed my decision.

- S.

Many states have statutes specifically addressing full disclosure of all liabilities and defects prior to selling a home. The escrow/title company, Realtor, or previous owner may be liable for a pending debt that was not disclosed in a state-required report. To find out the repercussions for such an omission in your state, go to "(your state) legislature" (without the quotation marks), then enter keyword "resale disclosure".

You might also call your escrow/title company to tell them about the oversight and express your desire to file a claim against the title insurance policy. That will certainly start the wheels in motion.

Sincerely,

Margey

Can the Board of directors randomly assess the homeowners or does a budget need to be approved by the homeowners before an assessment is levied? Our association is in Alaska. I believe AS 34.08 limits the boards power to assess but my fellow board members disagree.

- B.D.

The answer to your questions lies in two places -- your association's governing documents (probably the Declaration) and state statute. Most documents require the board to approve a budget within a specific number of days before the end of the fiscal year, and from that budget determine each owner's maintenance fee or assessment based on the formula or equation detailed in the documents.

Similarly, the Board's authority to special assess is detailed in the governing documents and perhaps in state statutes as well. Some documents require a vote of the membership to approve a special assessment, while others vest that authority in the board members only.

Even more important, though, is that the preparation of the budget provides the board with the opportunity to plan the annual expenses for their association. The governing documents and state statutes require associations to provide certain services to its members; preparing the budget requires that the board members thoughtfully address all the operational, social and mandatory expenditures that the association could incur during the year. A budget limits surprises and lets the members do their own financial planning that includes what they expect to pay in maintenance fees to their community association.

Absent a budget, board members and owners cannot foresee when additional funds may be necessary to ensure the continuation of their community. The Board has a fiduciary obligation to the members to protect their property values and maintain the common elements in their community. Without a budget, neither can be accomplished.

Sincerely,

Margey

I have found myself on the Board of Directors in my Home Owners Association. From what I can see, we do everything wrong as far as procedure and law. I want to change it or not be liable for dumb decisions.

What types of things can the board vote on & approve (without having the homeowners vote) when it involves spending a "reserve"? ie landscaping, lights, Mail boxes.

We have a reserve that they have in certificated of deposit. Since we are "non-profit", isn't this illegal?

I've asked for a balance sheet to show the reserve assets but they haven't given it to me. All our HO get is a yearly income statement? Should we get the balance sheet as well as part of the "financial statement".

Can I request a check register or list of deposits/expenses? Our annual revenue is less than $100K. Are we require to get an audit each year?

We have no common property, so we have no insurance of any kind. As a board member, I'm I liable for any errors?? Please help.

- Lori

You've got several excellent questions, so I'm going to answer them in the same order they were presented. Before I start, though, I want to congratulate you on realizing that there is a lot to learn about serving as a board member for a homeowners association and wanting to do a good job as a volunteer.

1. Information regarding reserve expenditures should be detailed in your association's governing documents, usually the Declaration. If not, I recommend you talk with a CPA who is familiar with community association operations and the guidelines established by the American Institute of Certified Public Accountants (AICPA). Another excellent resource for information regarding the operations of community associations, including the preparation of a reserve study and expenditures of reserve funds is the Community Associations Institute.
   
   
2. Certificates of deposit are usually a recommended financial vehicle for community association funds. Look again to your governing documents (this time both the Declaration and they bylaws) to determine if there are limitations on where association funds can be invested. Typical language requires federally-insured accounts.
   
   
3. At the minimum, you should receive a quarterly balance sheet, statement of revenues and expenses that compares monthly and year-to-date expenses to budget, check register and delinquency/receivables report. Monthly is even better. The board is ultimately responsible for the financial well-being of the community; the only way to ensure that funds are adequate and are being spent wisely is to look at the financial reports.
   
   
4. Your Declaration, bylaws or state statute probably addresses the audit requirement. Some states require all condominiums to be audited annually, but planned communities can have less scrutiny through a compilation or a review.
   
   
5. I'm confused over your statement that your association has no common property, since you referenced landscaping, lights and mailboxes in your first question, all of which are considered common elements. However, even if there is no common area in your community, your association still needs to have liability insurance to protect the board, the association and the membership from damage, injury or loss to others. Typical policies include general and umbrella liability. No volunteer should serve on a committee or on the board without the protection of the Directors and Officers Liability Policy. You might also consider having a minimum-value workers compensation policy in case a contractor hired by the association fails to pay his premium and his worker is injured while performing a repair for the association. If there is common area as defined in your documents, then your association should have a Comprehensive Commercial Package which includes both property and liability coverage. It's best to consult with an insurance agent very familiar with community association insurance to be sure you are adequately protected.

I hope I've answered all your questions -- at least the first round of them. There are many publications available at CAI to help guide you in your role as a community association board member -- happy reading!

Sincerely,

Margey

What are the benefits an association (525 units) being incorporated? If incorporated, how can an associationterminate the agreement? Are condominiums located in Northern VA mostly incorporated?

- Marge R.

By entering "benefits of incorporation" in Google's keyword search field, I came up with 33,321 results! Here are some of the sites that appeared to directly address your question:

• Legal Database
• My Corporation - The Corporate Bee Newsletter
• Nolo Law Center
• Proactive Management
• Thompson & Thompson

With regard to Northern Virginia condominiums, most are not-for-profit corporations, but not all. If you are considering changing the corporate status of your community, I strongly urge you to consult with both an attorney knowledgeable in community association law and a tax expert. For a list of such experts in your area, go to http://www.caidc.org/.

Sincerely,

Margey

Our HOA has only Covenants, no restrictions as such, and no by-laws. Only a QuitClaim deed is on file in the Marion County, State of Indiana Recorder's Office. Dues are collected - whenever, but should be annually, we have a Pres & VP and that is it! Resisting the usage of a lawyer, is there another outlet to obtain a "template" for by-laws for our association?

- John O.

The Foundation Center (www.fdncenter.org) provides a list of resources for sample nonprofit organizations as follows:

Minnesota Council of Nonprofits
(http://www.mncn.org/bylaws.htm) has an excellent sample bylaws template available on its site.

Montana State University
(http://healthinfo.montana.edu/volclin/bylaws.html) has the bylaws of Gallatin Community Clinic, a nonprofit organization in Montana.

The Klingon Language Institute
(http://www.kli.org/kli/KLI.Bylaws.html), a Pennsylvania nonprofit, offers these sample bylaws (in English).

International Academy of Mediators (http://www.iamed.org/constitution.htm), a nonprofit organization from Nevada, makes its bylaws available on its site.

You can also try a number of Internet search engines such as Google using the keywords "sample nonprofit bylaws" or "sample HOA bylaws". However, keep in mind that sample bylaws are specific to the organization involved. Your situation may differ.

One other resource for you may be your local courthouse where a sympathetic employee might help you find bylaws that have been filed for other homeowner associations.

Sincerely,

Margey

What would be the finite definition for "commercial" vehicle?  Some H-O's feel it is a commercial vehicle only if it has a state issued commercial license tag on it.

- O. C.

The term "commercial vehicle" can have so many definitions that I went to my favorite search engine, Google, to see if I could find the definitive meaning. If your association's governing documents do not clarify what a commercial vehicle is, try the following explanation from the City of Santa Ana, California.

In order to formalize the definition for your community, however, your board should approve a resolution defining a commercial vehicle, and distributing the definition to all homeowners so everyone is aware of the meaning. For the resolution process, click on the September 2004 archive of Ask the Expert.

Sincerely,

Margey

Our bylaws do not define the common elements for our Association. Can you give me a general definition? Some unit owners think that individual heaters/air conditioners should be considered common elements because they are on top of the roof even though the bylaws state that unit owners are responsible for their own appliances, equipment and appurtenances.

- Jennifer

While there is no general definition of common elements because each community association is unique, I can tell you that, typically, individual air conditioners/heaters are not considered common elements because they serve only a single unit, one of the relatively common criteria in determining what's association and what's owner responsibility.

If the definition or description of common elements was omitted from your association's governing documents, I recommend that your board consult with an attorney to craft language defining common elements relevant to your association, and further detailing whether the association or the owner is responsible for maintenance of each item defined. Once the board agrees with the wording, it should pass a resolution adopting that definition (see September's Ask the Expert Archives for the process in which a resolution is developed and adopted).

Sincerely,

Margey

What do I do knowing now that after 13 years of working for my company as an Independent Contractor that I am really an employee. I feel they owe me for all back taxes and etc. Can you suggest an attorney who would be willing to take the case on. I know of 7 others in the company who are the same. We have all made in excess of 100K in the last 5 years so were not low paid help. Thanks.

- Robert

I see by your email address that you live in Texas (if I've assumed incorrectly, there are similar agencies in every state). The Texas Workforce Commission will investigate your complaint without your having to hire an attorney. If you live in another state, enter "(your state) government employment agency", without the quotations, in the keyword field of any Internet search engine.

Sincerely,

Margey

In the December 2004 "Ask the Expert" column you quoted part of "Out, Out, Damn Tenants" by Dana James in Common Ground and at the end gave a web site to read the rest of the article.  Since some of the members in association I am a member of wants to limited renting and I don't I would like to read the rest of this article.  I have tried to, but can't seem to bring it up but can't.  Is there some way you can help me?

- Grace

CAI copyrights its articles, so in order to benefit from the information in their electronic library, one most join the organization.