Ask the Expert

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

As new homeowners in Arizona we had to go through the due process of getting our backyard approved by HOA (pool, landscaping, etc.).  4 weeks after submission (!!), our original proposal was rejected by our HOA because of lack of adequate information (whatever that means!).  Our proposal was resubmitted with all the required information and now it has been another 4 weeks and we have not heard anything.  Any phone calls to the HOA regarding this matter is handled in an extremely vague manner- such as they don't know when they are meeting next, etc.  I would like to know how long we have to wait for HOA approval?  I was told by someone that Arizona law states that if HOA does not respond (in writing) to your proposal within 30 days, we are within our rights to go ahead without their approval.  Is this correct?  If so, where could I find this in writing? 

- J.

According to Ms. Patti Jo Lewis of Lewis Management Company in Tucson, Arizona (www.lmri.org), "There is no state law regarding architectural submittals.  CC&Rs may state that once the Association receives the submittal application, the ARC or board has 30 days in which to approve/disapprove the application or the submittal is deemed approved. However, most Arizona CC&Rs do not specify any time limit for the association in which to review and make a decision." You can access Arizona's state statutes through Association Times State Resources page. You should also review your association's governing documents to determine if there is a specific time frame in which the board must render a decision and what recourse an owner might have if the a decision is not issued within the specified period of time.

To expedite a response from your board, consider sending them a certified letter cordially asking them to review your application and offering to provide additional information if it would help them reach a timely conclusion.

Sincerely,

Margey

Two board members (a husband and wife) of our HOA in California have sold their home and moved to a different community. It was just made known to the membership (buried in the monthly newsletter) that these two individuals have "announced" that they will remain on the board until their positions are filled. Non-residents making decisions on behalf of their former community and former neighbors just doesn't make sense, does it?

Based on the lack of homeowner involvement in our community (there were no homeowner volunteers for the HOA during the last several elections), finding replacements may be extremely challenging. That brings up the question of how long former residents can serve on the board of their former community HOA.

One director has one year left on her term and the second director was just re-elected to a two-year term, even though the couple's home already was in escrow [or may even have closed] when the elections were held.

What are your thoughts on this situation? Thank you.

- Philip

Typically, board members must be owners of the association and their involvement terminates upon close of escrow when they sell their home. However, there are some community associations' Bylaws that state that it is not necessary for board members to own a home in the community. Check your association's Bylaws as well as California state statutes to determine the criteria for your community's board members.

With regard to the apathy that appears to exist among your community's homeowners, it sounds like there needs to be a general membership meeting to discuss this serious issue. Provide food and beverages (no alcohol, though!), invite a guest speaker who will draw a crowd, and ask your association's legal counsel to lead the discussion. Hopefully, the congenial atmosphere and the eloquence of your attorney will galvanize your neighbors to volunteer for service on the board and on committees. For more information on reviving apathetic communities, read other articles in Association Times.

Sincerely,

Margey

I live in ******, Florida. My question is: Are the board members of our Homeowners Association required to take classes on how to properly operate a HOA and comply with Florida statutes?

- Joan B.

It's my understanding from briefly viewing Florida's community association requirements that board education is not mandatory, although free classes are offered to board members and homeowners through Florida's Community Associations Institute.

For specific information regarding Florida board member requirements, consider contacting:

Hal Hildebrandt, PCAM, AMS
President and CEO
Community Management Concepts, Inc.
4175 East Bay Dr. Suite 205
Clearwater, FL 33764
An Associa Member Company
Associa- The Leader in Community Association Management
hhildebrandt@cmcfla.com
www.cmcfla.com

Mr. Andy Meyrowitz, President and CEO
DCI Association Services - An Associa Member Company
2035 Harding Street, #200
Hollywood, FL 33020
ameyrowitz@dci-inc.com
www.dci-inc.com

Mr. Kirk Bliss, ARM, AMS, CAM,
Vice President
Kramer-Triad Naples Management Group
3050 Horseshoe Drive North
Unit 275
Naples, Florida 34104-7908
kbliss@kramertriad.com
www.kramertriadcommunity.com

(CAI offers education programs for board members and homeowners in other states. For a full listing of available CAI programs please see CAI Education Programs.)

Sincerely,

Margey

We just recently had an election and we now have a new board member. He is a realtor. The new B of D found out there was a home in foreclosure and he approached the homeowner and offered to cut this homeowner a deal if he used him to sell the property. Are there any laws that prohibit a B of D to use the association for financial gain? What should our board do? Are there any legal issues of concern with a B of D doing this? Thank you.

- K.

Without knowing in which what state your community is located, I cannot answer whether or not there are any state statutes that might apply to the situation you described. However, to avoid any perception of misconduct, most Directors abide by an unspoken or sometimes written "code of conduct" whereby each board member agrees not to jeopardize his or her fiduciary duty to the member of the association by, among other potential issues, becoming involved in conflict of interest situations.

In most cases, when the mortgage company schedules a home for foreclosure, the association could risk losing all the funds the delinquent owner owes it because a homeowners association's lien is subordinate to the mortgage company's. That means that if the lender forecloses on a home for just the balance of the loan, neither the lender nor any new owner is obligated to pay delinquent amounts due the association prior to the date of foreclosure. On the other hand, if the homeowners association forecloses and there is a third-party buyer, the buyer must pay to the association all amounts due the association. In the situation you described, the Director may have simply been trying to help the owner sell his home in order for the association to collect the delinquency.

If the intent of the Director was indeed to protect the association from potential loss of income, his actions could possibly be interpreted as honorable. On the other hand, if the Director used "insider knowledge" that he gained as a board member to personally benefit from representing the seller, the Director's actions could be considered a conflict of interest. Please review Association Times' Ask the Expert Archives for more discussion on conflicts of interest situations.

To ensure that each Director understands the responsibilities of serving on the board of a homeowners association, I recommend that your board work with your association's legal counsel to craft a "Board Member Rules of Conduct" policy that current and successor Directors must execute. The board members could also consider executing the "Rights and Responsibilities for Better Communities" developed by the Community Associations Institute.

Sincerely,

Margey

Is their a standard or requirement pertaining to one's criminal, or police record history, that should be placed in a Board of Director election package required in order to be a candidate for the Board of Directors, or employment in a non-profit home owners association?

Please check your state statutes as well as your community's governing documents (in particular the Declaration and Bylaws) for any limitations for service as a board member or as an employee in a homeowners association.

Absent any board member requirements in state statutes or governing documents, the board could consider preparing a proposed Bylaws amendment detailing criteria for service. The owners would then vote on the proposed amendment in accordance with the amendment provisions in the Bylaws.

With regard to employment in a homeowners association, so long as the criteria approved by the board is reasonable and not in conflict with local, state and federal law, the board may craft requirements for potential and current employees, such as no misdemeanor or criminal convictions for a specific period of time and random drug testing. However, I encourage you to consult with a qualified human resources expert to ensure that no law is being broken by the requirements the board is considering adopting.

Sincerely,

Margey

Does a HOA automatically dissolve if the board is not doing their jobs, never have and do not meet at all. Term limits have expired and no one is really doing anything. The last meeting had no quorum and a few of the members elected themselves. This is not a legitimate board. I guess my real question is, if no one is doing anything and no one is stepping up (it is all voluntary after all) is it dead?

- Dave

A homeowners association can only be dissolved by complying with very specific provisions in its governing documents that detail the dissolution process. It sounds like there is a core of volunteers willing to step up to the plate to try to reconstitute a board, even without a majority mandate. My suggestion is to support their efforts by getting involved yourself, with the goal of obtaining enough proxies or attendance at an annual or special meeting to obtain a quorum to legally elect the current board and ratify the services the directors performed prior to their official election.

Sincerely,

Margey

I live in a small condo development in NH. Our Bylaws and the state Condo Act do allow for Condo Associations to terminate the condominium. I am having a difficult time finding the application for this process. I found it once and forgot to save it correctly on my computer. (something I do alot) Would you possible have any webistes or information where I can get this material again? Thank you.

- EJ

I can suggest three sources to help you determine the process of dissolving your condominium association:

1. Your association's Declaration and/or Bylaws which should contain specific provisions describing the procedure by which the corporation may be dissolved;
2. Your state statutes (which may contain a Condominium Act) which details the dissolution method;
3. Your state statutes regarding nonprofit corporations.

I encourage you to retain the services of a competent attorney knowledgeable in condominium association law to help guide your board through the complexities of New Hampshire law and your association's governing documents to ensure that all legal ramifications are considered.

Sincerely,

Margey

Our Illinois Condominium Board consists of 5 members. Last year 3 board members resigned and the (2) remaining board members (President and Treasurer) filled the vacancies with appointed members. Our annual meeting in November, 2004 was held and there was no election for the appointed positions. The (2) remaining board members (President and Treasurer) ran instead even though their term of office had not expired, term would have expired 11/05. Our declaration and bylaws do state that the method of filling vacancies on the board shall include authority for the remaining members of the board to fill the vacancy by two-thirds vote until the next annual meeting of unit owners or for a period terminating no later than 30 days following the filing of a petition signed by unit owners holding 20% of the votes of the association requesting a meeting of the unit owners to fill the vacancy for the blance of the term. Was this a properly held election? The unit owners were not given a vote for the appointed board of managers. Thank you for your time.

- Rosemary

Based on the language you referenced, it would appear that the members should have voted on the replacement board members at the annual meeting, in addition to those board members whose terms had expired (if they were not the same as those who had resigned). However, there may be other provisions in the Bylaws that also address this situation. I suggest that you consult with a qualified attorney knowledgeable in your state's community association law to determine if your interpretation of the governing documents is correct, and if there are any state statutes that conflict with or reinforce the procedure detailed in your governing documents. The attorney also will be able to advise you of your recourse if, indeed, an election of board members should have been conducted at the annual meeting.

Sincerely,

Margey

My association is going to lose a lot of money not knowing our history. They have already lost over 11 thousand that now the members in the association is going to have to pay. Is there any way to recall the board and force them to resign if a majority of residents want that, or do we have to go to court to remove them from the board?

- A.

Please review the "Ask the Expert" archives for responses to questions similar to yours regarding questionable board actions.

Sincerely,

Margey

Do you have any provision for sending someone to sit in on a board meeting and then give suggestions to the dysfunctional group? Our new board could certainly use this kind of guidance.

- Joan

I urge you to review the Ask the Expert archives for many articles addressing meeting conduct and the roles of board members. Another resource is the Community Associations Institute.

Sincerely,

Margey

Our entire unit is dissatisfied with our current association president. Formerly, he lived in our community but bought a house a few years ago and moved away. Since then, he has not supported or put the best interest of our community first. He allows anyone to move into our units (some tenants are drug addicts, felons and other hardened criminals). Also, he will not fix problems the tenants are having in a timely manner; when a water pipe broke in a tenants apartment, they could not get him to fix it. They suffered a while with the problem before anything was done. There are many instances of his neglect. We desire a safe environment and maintenance problems taken care of as soon as possible, but this manager does not care anymore since he does not live on property. We want to remove him and put someone in office who lives on property and will look out for the best interest of our community. Please give us any advice you can, we are desperate! We think that funds are being mismanaged as well! Please help!!!

- Carolyn

I'm a little confused about what your president has to do with renters. Does he own the units that are tenant-occupied? Do the governing documents for your association require that the president screen all rental applications and approve or disapprove each one?

Unless your association's Bylaws vary significantly from most others, the president is an appointed position which serves at the direction of the board. The homeowners elect the board, and the board appoints the officers. If your president is not performing his functions as detailed in your association's documents and as desired by the owners, it would seem that the board should consider appointing a new president. If the board is unable or unwilling to do so, the owners should consider electing a new board, the process for which being detailed in your association's Bylaws.

Remember that the owners in a community association have the ultimate authority - the power to vote in like-minded volunteers.

Sincerely,

Margey

1. Can a Homeowners Association be forced by homeowners to hire a management company if they are failing and have failed to enforce covenants?
   
   
2. Is it legal for a homeowner, who has previously been sued in the past, to be on the Board as a Director? One has and he has made a claim and vowed to not let happen to another homeowner what happened to him. He is NOT in favor of the covenants.

Homeowners in a community association have the ultimate authority over the operations of their association. They can follow the procedures detailed in the Bylaws to remove board members who do not reflect the needs and desires of the majority of the membership (while still conforming to the tenets in the governing documents) and elect new board members who are more responsive to them. However, before taking such a drastic measure, I would recommend that a group of owners meet with the board to discuss the situation in a civil, cordial manner. It's possible that the board members are overwhelmed with their responsibilities and obligations as community association volunteer leaders and would welcome your input and assistance. Perhaps you could offer your services either on a committee or as a board member to ensure more attention to your recommendations.

With regard to your second question, both your association's Bylaws and state statutes may contain prerequisites for service on the board of directors. However, board members have no option with regard to enforcing the covenants. They are fiduciary agents legally required to comply with and enforce the governing documents, and may be personally liable for damages awarded the homeowners in any litigation involving deliberate failure to ensure compliance.

Sincerely,

Margey

Hi, I live in Arizona and the membership of the small (3-member) HOA board for my 19-unit complex has recently changed due to annual elections. Until now, everyone got along fairly well and the CC&R's have been both minimal (less than a page or so) and casually enforced, to no-ones real objection. Issues that did raise strong feeling or presented safety issues were always quickly addressed, but for the most part, aside from the usual unavoidable grumbling, people only rarely expressed concerns for small violations such as unkempt patio areas, usage of common areas after the prohibited time of 10pm and the like. People here are generally proud of our comunity and thus are mostly self-regulating in the care of it.

However, since the establishment of a new board, suddenly old rules that have gone unenforced for years - at least 10, I would say - are being summarily brought out again; referenced not even as CC&Rs but simply as demands by "the board". One of these in particular is of concern to a number of residents as it asks the removal of 'personal items' in common areas, meaning apparently things such as firewood and small boats people have stored behind their carports (mostly out of sight). While we are aware this is technically a violation of the CC&R's, it has been such an accepted practice for so long, that we are wondering if a 'precedent' has been set which might void this demand and require a re-vote or something on that particular item. As far as can be told, it is one of a number of fairly random demands (originating with a single board member without awareness of the others) which has more the effect of inconveniencing association members than anything else. Is there a time period in Arizona after which an un-enforced and ignored HOA directive is voided? Thank you, couldn't find the answer to this anywhere else!

- K.

I have three suggestions that may resolve the situation you are currently experiencing as a result of your new board member.

1. Consider having a heart-to-heart talk with the board member, explaining that the association has been running very smoothly with the tacit understanding that everyone would voluntarily comply with the provisions in the governing documents considered appropriate and which contribute to everyone's quality of life.
   
   
2. Consider amending your association's governing documents to delete or revise those provision that no longer reflect the desires or needs of the majority of the owners.
   
   
3. At the next annual meeting, don't re-elect the board member who is causing angst among the other board members and homeowners by trying to run your community according to a strict interpretation of your governing documents.

In defense of your new director, however, remember that your board members have a fiduciary obligation to enforce all provisions of your governing documents. To protect them from potential liability for not fulfilling their fiduciary duty, alternative #2 above is the most appropriate course of action.

Sincerely,

Margey

Our HOA president has become accustomed to making all decisions or procrastinating. Never has meetings and when pressed for information he provides an answer that is eventually proven false. Pressure to have open meetings has created an air of hostility. At one point the board signed a paper authorizing providing him with a cell phone so the board could get in touch with him. He rarely calls the board. He refuses to use e-mail or any other means of communication with the board. Says he hates computers. A review of the cell bills show calls to other states taking advantage of the free minutes of the service. He uses the phone approximately 100 or less minutes a month locally and about the same for out of state calls I do not know for what. He is very precise about submitting mileage costs promptly at the end of each month. Yet he fails to deal with the issues that directly impact the association. I have found attorney letters and correspondence from St. John's Water Management that has never been shared with the board. I never heard of a cell phone being provided to someone who has no day to day maintenance responsibilities. It seems to me a short trip to the Post Office could be woven into other personal trips without a mileage reimbursement being necessary. Our records are in disarray and I am concerned about a suit for misfeasance.

- A. & J.

The board of directors of your association is ultimately responsible for everything that happens in your association. Since the board typically appoints the president, it sounds like it's time to appoint another volunteer to serve in that position.

Please review the Association Times' Ask the Expert Archives for in depth discussions regarding options available to owners in a community association in which the president or the board is not acting in the best interests of the members.

Sincerely,

Margey

At last year's Annual Meeting, the Board had decided to mail out proxies indicating that failure to return the proxy to the Board is considered authorization of the Board to act as their proxy. This was done for the purpose of ensuring a quorum.

We've had differing legal advice: Our Association attorney has stated that wasn't proper and we should ensure that proxies are returned; and the previous Board members took a class from another lawyer that, according to them, indicated that this was legitimate.

I believe in a "belts and suspenders" approach to protect the Association as a whole, but this came under attack from the previous Board members at last nights meeting. I'm curious about your take on this, but I will say that the current Board intends to abide by our attorney's recommendation. Thanks.

- Brian

As a community association management professional and not an attorney, I concur with your association attorney's opinion that only executed proxies are valid unless your governing documents or state statutes specifically provide for intended consent by not returning the proxy.

Sincerely,

Margey

Hi. I live in a 60 home development in the state of Washington. As is typically with most associations, we have tremendous homeowner apathy. Apparently the apathy has also spread to the board.

We have very well documented CC&R's and bylaws. However, we also have alot of rented homes in the community and it seems as if each time the renters change, we go through the aggravation of getting them up to speed and abiding by the CC&R's.

My perception is that the board selectively enforces certain CC&R's. For example, I completely spaced over the due date for paying my annual dues. So, instead of being able to take advantage of paying on a quarterly basis I had to pay the amount in full. Not a problem, I did that, but I did not pay the $20 late fee I was charged. In not paying I explained that I did not feel it was equitable to hold certain homeowner's accountable for certain CC&R's when others aren't being enforced. Such as... street parking, garbage cans in site, animals roaming freely, yards in bad shape etc... I was sent a not so polite letter from the President telling me that they were not going to waive the $20 late fee and that the board is not and will not be the "neighborhood police" as it is not their job. What exactly then, is the boards job if not to be "neighborhood police" and what recourse do I have for them not enforcing all CC&R's? Please understand, the $20 is not the issue, the principle and fairness of this is the issue.

Thanks for any advice you may be able to offer. By the way, we do have management company and I'm not exactly sure what service we get from them for the amount of money they are paid!

- Janice

The role of the board is to craft policy, ensure that the governing documents are enforced, and represent the best interests of the association as a whole. Note that I did mention the obligation to enforce the governing documents. Since you have a management company, the duty to implement the association's policies and procedures typically is delegated to the manager.

While the board may not view themselves as the "neighborhood police", it is indeed their obligation to ensure that the residents in your community comply with the governing documents. Some boards feel that they do not have to cite a deed restriction violation unless an owner complains about it to them. Such an attitude results in selective enforcement -- requiring one owner to comply with parking rules while overlooking another one committing the same violation. In fact, the board must ensure that all rules are fairly and equitably enforced through proactive management of the community.

With regard to the $20 late charge assessed against your account, I encourage you to pay it. It sounds like you've made your point, but you sure don't want to end up paying additional late fees. Even though the board may not be reasonably enforcing the governing documents, their actions or inactions don't authorize you to violate the documents as well.

Perhaps you could attend the board meetings as a spectator to determine what your board and management company do on behalf of the association members. You might gain an appreciation of their commitment and dedication to the association, or you may determine that you should volunteer your own services to help them keep up with all the issues they must address. Serving on a Conciliation Committee to help find resolutions to violations of governing documents might be just what your community needs.

Sincerely,

Margey

Our H.O.A. is in the middle of a battle to change the percent to votes to change amendments. We  currently have a 2/3rds number (153 or 230 owners) Our over zealous Board  President wants to change it to 50% plus 1. WHAT IS THE AVERAGE OR "NORMAL" percent used by most  associations?

- Donna

More entities than you would think may have an interest in the percentage vote necessary to amend your association's governing documents. For example, there may be state statutes that establish a minimum percentage below which would be considered illegal. To determine your state's requirements, if any, go to the Association Times' State Resources page.

The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation often require developers to maintain document amendment percentages at a certain level, below which they will not fund or buy mortgages from lending institutions. Reducing the percentage beyond the requirement could result in fewer sales in your community, affecting everyone's property values.

What's "typical"?  Older associations have documents requiring nearly 100% of all members'approval to amend the Declaration. Newer, more enlightened documents lower the percentage to between 51 and 67 percent of all members. If the members of your association are active and participate in the operations of your community, and if there is little difficulty in obtaining a quorum for annual and special meetings, I suggest staying with the current 67%. Requiring the higher   percentage allows more homeowners to decide on the direction and effectiveness of their association.

Sincerely,

Margey

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In October of 2001 I bought house in 55+ community in Arizona. I, nor my wife were 55. Builder said it was ok as long as someone stayed at least one day in our house and was over 55. I've lived here ever since and used a relative who visits as over 55. Board members knew of situation and never acted. This year I was elected to the Board. Now, a resident is making my age an issue to live here. I will be 55 in 9/2006. The property manager claims there is a latch key rule in my favor. Is there? Any thoughts?

- Robert

The Department of Housing and Urban Development (HUD) offers a website specifically for senior housing issues. As you will see on this site, an "active adult" community that is marketed to homeowners 55 years of age and older must have at least one person who is 55 or older in at least 80 percent of the occupied units and adhere to a policy that demonstrates intent to house persons who are 55 or older. Based on that simple requirement, it seems to me that you fit into the 20% who can call themselves youngsters and still enjoy living in the community.

Sincerely,

Margey

A few months ago, I emailed the officers of our board concerning the fact that my neighbor and past board president was taking out his standard door, all of which are supposed to be similar, and adding one that might be too different. I was concerned that the board had not noticed he was changing it and they might make him remove it afterwards. My intent was to point out that the board was not enforcing this and other policies, NOT to complain about my neighbor. I was also interested in putting a similar door in if permitted.

The HOA board secretary proceeded to take my words out of context, add quote marks to them, and send them in an email to my neighbor! The result looked like I was complaining expressly about him! Of course, my neighbor confronts me the next day. I am very lucky he is a Christian man and allowed me to explain. They also told him there were 5 other people that did complain about him. None of their names or quotes were in this letter, only mine. I was expressly singled out in her diatribe. These days, I'm lucky it did not end very differently.

I have lived there for 15 years and have served on the board myself. The secretary is the girlfriend of the president, whom was also just voted in to be manager. They are on several condo boards in the area so they are savvy enough to know this is unethical. When I asked the president the reason for this action, he said that the idea in my email was a good one and they wanted to "share" it with my neighbor:)

It looks like this was a personal attack on me. She would not speak to me a couple of days before. What confidentiality is supposed to be between boards and residents? Can this be considered harassment? What recourse do I have?

- MM

I agree that it would have been more appropriate for the association secretary to have written your neighbor a general letter advising her that the door was a violation of your association's deed restrictions. Including your comments and name only served to exacerbate the situation and did nothing to clarify the issue.

However, I do believe that association members have the right to know who complained about them, and that the board should craft a Compliance Policy detailing the procedure by which violations will be enforced. I suggest including in the policy that owners have the right to ask for the names of those who complained, and that the board should require all complaints to be in writing. Further, if possible physically and time-wise, either the board or the manager, if applicable, should view the violation to ensure that it exists and is not simply the result of a personal feud between neighbors. If the board or manager personally observes the violation, it may not be necessary to advise the violator of the name of the complainant.

I don't believe the board's actions were meant to be a personal attack against you. Rather, it may have simply been a matter of not knowing the appropriate method of responding to reports of violations. Give the secretary and your board the benefit of the doubt, and encourage them to develop a resolution that will address similar situations in the future.

I hope that relations have calmed down by now between you and your neighbor and that the issue that gave rise to the controversy -- the door -- has been satisfactorily addressed.

Sincerely,

Margey

Our association dues are based on the following calculation:

• Home owners 100% dues
• Land 100% dues
• Additional land 25%

Situation: Speculators buying land, qualify for 2nd 3rd, 10th lot discount. Consequence: Revenue needed is divided among fewer members thus cost increase. State: California. Fair? Legal?

- HC

Please review California's Davis-Stirling Act at Association Times' State Resources page to determine if your association's document provision regarding assessment calculation is legal.

Sincerely,

Margey

I live in North Carolina. I purchased my home in May 2000. May 2005 I finally received my first HOA dues bill. The letter stated they were unaware I purchased the home and owed dues at $99/quarter from May 2000 to current. This is about $2000. Isn't there a statute of limitations on how far back they can charge me? Any help would be appreciated.

- Marv

I would think that at least one of the documents that you signed when you purchased your home indicated that you were automatically a member of your homeowners association and would owe dues quarterly. In fact, you probably paid a prorated portion of the dues at closing. Your association depends on every owner to remit his or her share of the common area expenses in order to adequately maintain the community and every home's property values.

Rather than your arguing over statutes of limitation, I urge you to pay the amount due and ensure your timely payment from now on. Yes, the association should have done a better job of determining ownership of your home and attempting to collect your delinquency, but you have benefited from your membership in the association through maintenance of the common elements and any special services that were provided. You could have notified the association of their oversight, and you should pay your debt.

Sincerely,

Margey

I live in a condo building that has 12 one-bedroom units and 12 two-bedroom units. People are wanting to restructure the system for paying monthly dues. Ideas put forward have included a structure reflecting square footage, or a flat dfferential between one vs. two bedrooms, or a differential based on a percentage, e.g., 30% extra for two bedrooms. These do not seem fair to me. Please advise on the factors one should consider in calculating a fair amount owners should pay in dues. We do not have a management company, nor a security guard, nor a pool/gym/courts, etc, just the units. Thank you.

- V.

Typically but not always, condominium assessments are calculated based on the square footage of each unit. The formula is to divide each unit's square footage by the total square footage of all units, then multiply the resulting percentage by the annual budgeted maintenance fee income line item.

Before trying to change the current method of calculating assessments, review your association's Declaration/Master Deed to ensure that the current method is indeed the procedure detailed in the document. It's possible that over the years, the board decided to change the calculation method without the necessary vote of the appropriate parties. If the calculations are correct, then look for the provision that details the process for amending the documents and, more specifically, for changing the manner in which assessments are calculated. It's possible that such a significant revision requires approval of the primary lienholder of each unit, since a recalculation may impact their vested interests. If lienholder approval is necessary, consider if your amendment efforts are realistic, based on the difficulty in obtaining lienholder consent.

I encourage you to consult with a competent attorney knowledgeable in your state's community association law to ensure that the board complies with all applicable governing document provisions and state statutes. The amendment process can be overwhelming, and it's reassuring to have someone at your side who's familiar with the process.

Sincerely,

Margey

My parents have owned a camp for 40 years.  When she purchased the property there was no home owners association.  Eventually one was apparently formed and she never signed anything agreeing to be part of the association.  They are now threatening to put a lien on the property for failure to pay dues.  Can they do this if the deed says nothing about an association?

- B.

The ability of the association to force your mother to pay association dues depends on how the association was formed and if the creation complied with state statute. Some state statutes provide for mandatory membership of all property owners if a certain number of owners approve the formation of the association. Other states exclude from membership property owners who did not vote to join the association. I suggest that you investigate how your mother's association was created and the requirements of your state statutes.

Be aware that time may be of the essence. If your mother's association has commenced collection procedures, it's possible that she may be incurring legal fees and potential loss of her property. You may want to consult as quickly as possible with a competent real estate attorney knowledgeable in your state's community association law to ensure that your mother's property is protected.

Sincerely,

Margey

I live in a condo in Ohio and within the last two years our condo fees have gone up twice. Can I challenge this and refuse to pay the increase? Can the condo owners challenge the board? How many times a year can they increase your fees and is there a dollar amount. I would like to resolve this issue on my own so I don't have to pay a lawyer due to the cost invovled. Also is there a website I can go to for Ohio laws on this subject. Thank you!

- Leslie

The answers to your questions can be found in your association's governing documents and state statutes. The Condominium Declaration should contain provisions specifically addressing the frequency and limits of assessment increases.

If your board violated the documents by increasing the assessments more frequently than authorized, or by an amount larger than permitted, then the owners should challenge the new assessment. However, I urge you to talk with your board about the increase -- why was it necessary? What are the alternatives? The additional amounts may be necessary to keep your association afloat financially, even though the board may have imposed them in an inappropriate manner.

If after speaking with the board you determine that the increase was necessary, perhaps you could help them communicate the issues to the members of your association and educate them about the provisions in the governing documents addressing the appropriate manner in which to increase fees. On the other hand, if you disagree with the board's efforts, you might consider running for a board position yourself so you can have more input into the operations of your community.

State statutes may also address limits to assessment increases. To access your state's community association laws, go back to Association Times' State Resources page.

Sincerely,

Margey

What is audit expectation gap? How to reduce this gap?

- T.

While I'm not familiar with the term "audit expectation gap", I can extrapolate it to mean, in community association terms, that the board of directors and homeowners expect an audit to discover any fraud that may have been perpetrated on the association. However, the purpose of an audit is to determine if the year-end financial report prepared by a management company or self-managed association fairly reflects the financial condition of the community.

If the board prefers to have a more detailed study of the payables and receivables to determine if fraud or misappropriation of funds occurred, the directors should request a forensic audit or a special payables or receivables audit which, of course, will cost more money to perform. However, if there is any doubt about how the association's funds were handled, it may well be worth the additional expense to engage a CPA for a more detailed analysis.

If I’ve missed the intent of your question and you are trying to determine the differences between an audit, review and compilation, please review Association Times’ Ask the Expert Archives for a detailed discussion on these three types of year-end reports.

Sincerely,

Margey

I am part of a not for profit incorporated HOA in NY State. Our board has turned over pretty significantly this past January with a new president. She is not managing to the letter of the CCRs so I have a question for you. The Treasury function was moved over to a new person after 3 years with one person serving in that capacity. No financial review or audit was ever compiled (and I believe that to be true dating back at least 10 years or more). Since this past transition occurred in January to a new Treasurer and since it is already the middle of June, does it make sense at this time to push for a review or do you suggest to wait til the next round of transitions at the end of 2005? The current Treasurer has already stated he will be doing this only this year despite our requirement that this is a 3 year post. We have never spent the money with a CPA firm or the like so we are in unchartered water.

- D.

My first suggestion is to check your association's governing documents and state statutes to determine if there are legal requirements for an annual audit, review or compilation. The American Institute of Certified Public Accountants (AICPA) recommends that all common interest ownership associations have an annual audit to ensure that the financial statements prepared by the bookkeeper adequately reflect the financial condition of the association. Since you have not had an audit in ten years, it probably makes more economic sense to wait until the end of this fiscal year to have the audit performed. In conjunction with the audit, the CPA should also prepare the tax return for your association.

As an alternative, you could consider having an audit performed through the end of the term filled by the previous treasurer. The downside is that it would be more expensive to perform a mid-year audit; the upside is that it gives the outgoing treasurer a "clean bill of health" and it provides the incoming treasurer a "clean slate" from which to begin handling the books -- something everyone should want. Again, general audits are not intended to ferret out improprieties or illegal activities. You would need a forensic audit if you were concerned with potentially improper expenditures or misapplication of deposits.

It's difficult to "require" a volunteer to serve a specified period of time. Conditions change both personally and professionally that may impact a homeowner's ability to serve. A three-year mandate may scare away homeowners who want to help their community but worry about the long-term commitment. Even through your Bylaws may state that each board member must serve a three-year term, be more lenient with your colleagues if they want to resign before their term expires! There is probably a provision in your Bylaws that describe the simple procedure involved in filling a vacant board position. On the other hand, officers of the association are usually appointed by the board to serve for one year or at the discretion of the board, so those terms are even more flexible.

Sincerely,

Margey

We are fairly new condominium with a Board that was just elected last December 2004. We are wanting to establish a fee chart for owners to pay for repeated violations. Does anyone you know have a chart already established that we could use as a guideline to charge owners for the standard violations? Any help you can give us would be greatly appreciated.

- Laurie

Establishing a fine schedule is not as easy as one would think. The association's governing documents and/or state statutes may set limitations or restrictions on the board's authority to implement a fine or penalty program. Therefore, the first step in crafting a fining system is to ensure that the board has the authority to do so! Utilizing the expertise of a qualified attorney knowledgeable in your state's community association laws will ensure that the policy the board implements is valid and enforceable.

Please review the "Ask the Expert" archives for a detailed discussion regarding establishing a fine policy.

Sincerely,

Margey

Our community carries adequate reserves for replacement of roads, amenities, clubhouse repair, pool etc.(in business this would be fixed

assets.) In addition there is a reserve of 70% of annual operating expenses, this is over and above the dues collected to cover operating costs. In addition another $160,000 reserve exists due to excess dues collected. Our annual operating expenses approximate $450,000. Can the association continue to add to the excess reserve of $160,000 without violating any accounting principles or legal or tax requirements.

- Frank C.

Not knowing what "adequate" implies, I would encourage you to review other "Ask the Expert" responses as well as Association Times' articles on the need for a fully funded reserve to provide the monies necessary for the eventual replacement of the fixed assets/capital components of your community.

With regard to tax implications, community associations maintain their nonprofit status as long as 60% of their revenue comes from maintenance fees. To my knowledge, there are no legal, accounting or tax implications for overfunding reserves. However, on the practical side, it makes little sense to collect more funds than are necessary for the eventual replacement of the capital components. Most owners would prefer to keep that money in their pocket for as long as possible.

Sincerely,

Margey

We are a young townhome development (5 yrs or less) located in Minnesota with 56 units. We are just now starting to experience homes being put up for re-sale. Recently an original owner sold their home and moved out of state. They placed 'excess' trash that was picked up by our trash hauler and then billed to our Association. Our monthly dues cover regular one container trash pickup. Steps to collect this charge from the seller for extra trash have been unsuccessful.

I would like to be pro-active and recommend to my BOD that they impose an additional regulation so that we do not have to pay this type of charge in the future for someone who has moved. What steps should we take as an association to prevent this from happening in the future. Should we be collecting a 'trash retainer' from each homeowner to avoid an unnecessary expense such as this in the future?

Also - at closing the original homeowners were required to deposit 2 months of association dues into our association. What steps do we need to take to pass this requirement on to new owners so everyone has invested an equal amount into the association? Thank you.

- Doreen

Unless the governing documents for your association or state statutes authorize the imposition of a "trash deposit" or, perhaps more appropriately, a general deposit to address any expenditures incurred by the owner but unwillingly paid for by the association, then it is unlikely that the board has the authority to create such a fee without an affirmative vote of the membership. Please review the Association Times' "Ask the Expert" archives for detailed responses regarding the amendment process.

With regard to the two-month payment original owners were required to deposit into the association's operating account, review the language in your documents to determine if the money is considered a deposit or a contribution. If it's a contribution, the association doesn't have to reimburse the owner when the home is sold. If the board would like to continue the practice of collecting two months worth of maintenance fees at closing to fund the operating account, it's again an issue of asking the membership for approval of the policy unless the governing documents or state statues authorize the board to independently enact such a fee.

Sincerely,

Margey

Each month we have a monthly assessment fee due. The fee for each unit owner is by the square footage they own so each unit owner pays a different amount, which is acceptable, however we are having a special assessment due next month for gutters, driveway repair, etc. Should the special assessment be the same for all unit owners or should each nit owner pay a different special assessment fee due to their square footage? Thanks.

- Brittany

The governing documents for your community, in particular the Declaration/Master Deed, should contain a provision specifying the manner in which special assessments are calculated. Typically, the formula mirrors the manner in which the monthly assessment is determined, but it's critical that your board follow the specific directions in your association's documents regarding special assessments.

Sincerely,

Margey

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Insurance | Legal | Maintenance | Management | Rules

At the Board meeting of our condo Association there was an agenda item "Building Warranty and inspection update" as a result of several approaches to the Board about what were felt to be problems in the integrity of our new building. There was discussion on getting a surveyor to carry out an inspection but at quite considerable expense - $13K - which would have required an assessment. As a good percentage of the owners were present one suggested that the Board just get a straw poll of reaction to the levying of such an assessment which would help them making their ultimate decision. The Board rejected this proposal saying that the item was not on the agenda for that sort of discussion, that it was the Boards prerogative to decide on the issue but they might hold a special meeting at some later date to canvas opinions. As this item was on the agenda and as there had been quite a lengthy discussion on the matter, was the Board correct in refusing to take a general reaction on the grounds that the item was not for general discussion? 

- John

In a community association, homeowners elect board members as representatives of the membership. Homeowners also delegate to the board the right and obligation to set policy and make decisions on behalf of the members. It seems to me that the board is attempting to take a more deliberative and thoughtful approach to determining the best procedure to follow with regard to the building defects. Or, the board members may have received so many suggestions and so much pressure from the owners that the directors are unable to reach consensus on which direction to pursue. Perhaps they should consider retaining the services of a competent attorney knowledgeable in your state's laws regarding community associations to help the board members work together to determine the best course of action to benefit the association and its members.

Sincerely,

Margey

I need business plan for starting up management company for Associations, do you have template available? Thank you for your time.

- DS

Our service is designed to address the operations of community associations. For information regarding a business plan for a management company start-up, try Small Business Administration.

Sincerely,

Margey

I was hoping you could help me answer some questions I had about condo ownership. I was looking at condo properties in Florida (nowhere specific) and thought it best to consider what my costs might be should I decide to purchase a unit. I hope my inquiry isn't too open-ended, but I hope you understand I know little about condominium ownership. My questions are: As a unit owner, approximately what can I expect to pay in management fees on an annual basis? Are they determined as a flat fee or a % of my unit's value? Is there a license or certification that condo managers are required to have? If I'm not occupying my unit can I lease it out and if so, is that something the managing company helps with? I have read up on some stipulations included in some samples of condo docs and understand that there's a bit more to it, but simply wanted an estimate of what I might expect to pay a managing company for something around 200 units in size at around $120 per sf. Again, anything that estimates my costs attributable to management will be greatly appreciated.

- Daniel

First and foremost, let me point you to a free service offered by the State of Florida to all condominium owners (and probably potential ones as well). Go to http://66.28.40.213/home/ for more information regarding the classroom and online courses offered by the State through its contract with the Community Associations Institute. I believe these classes will provide you with answers to most of your questions -- and information you didn't yet think to ask.

With regard to average maintenance fees, as you surmised there are too many variables to drill down to a standard formula. Age of buildings, type of construction, expectations of owners, maintenance requirements detailed in the governing documents, degree of deferred maintenance, percentage of assessments collected, type of management (self-managed, onsite or professional management company), insurance premiums, services provided and other considerations determine the assessment amount.

Percentage or flat assessment amount? Condominiums usually calculate assessments based on percentage ownership, determined by dividing the total square footage of all units into the square footage of each unit, then multiplying the result by the annual budget. However, some newer condominium associations have maintenance fees that are determined by dividing the total budget by the number of units, so everyone pays the same amount. The Condominium Declaration contains the provision that determines in which manner assessments must be calculated.

Yes, Florida managers must be licensed through the Department of Business and Professional Regulation.

Good for you for asking questions before you enter into a contract to purchase a home so you understand what you're buying into!

Sincerely,

Margey

What do I have to do to create a Community Association in **********, MD?  I have tried searching the web and my local ****** County website but have not found the answer.  There are only 7 houses in this small development and we have a problem neighbor that is parking on "community property", the community (except for the problem family) have planted shrubs to deter parking on our community space.  They are now driving over the shrubs, the police said there is really nothing they can do, we would probably have to form an association and write in bylaws "no parking in community space or be towed."

- Charles

Please review Maryland's statutes on community associations, accessible through Association Times State Resources page, to determine the process involved in creating a community association in your state. I urge you also to consult with a competent attorney knowledgeable in Maryland community association law to help guide you through the legal intricacies of such an effort.

In addition to your legal endeavors, I suggest that you continue to pursue assistance from your local municipality. While the police officer you spoke with may not be aware of relevant ordinances that affect your community, perhaps your city councilmember's office could assist you in finding relevant ordinances.

Sincerely,

Margey

I live in a 180 unit townhouse in the northwest suburbs of Illinois. This is my problem. The external water spigot used for watering the greens is located outside of our unit. There are 3 of us unit homeowners sharing for that one water spigot. First problem, whenever someone uses that external water spigot, our water bill goes up since it is connected to our water meter. Second problem, if the quarterly water bill goes beyond $58, that is the time my water bill will be sent to the association, and the amount of $58 will be credited to our assessment fee. Our average use is only 49 to 56 dollars and definitely lower than the $58. Furthermore, what can I do to have this stopped for lack of real computation. There are times that I have to prove my point that even though it goes $58, I have to provide proof because it is still considered spring or fall season according to the association and considered outside watering months. However, they keep on saying that anyone can use the spigot during appropriate times. This is so ironic. Please help me on this. I don't have the money to go to a lawyer for advice. Please, please, please. Thank you.

- R.

If the hose bib on your patio is used by other owners and to water the common elements, it should be on a separate meter billed to the association. Alternatively, I suggest that you talk with the water department to determine what normal consumption would be for your unit, based on the number of occupants. Then, present that information to your board, requesting that the association reimburse you every month without delay for the difference between the average amount provided by the water department and the actual bill.

If your board refuses your reasonable request, you might consider going to Small Claims Court (or whatever the local court jurisdiction is called in your area) at which citizens may represent themselves without the need for an attorney. Explain the situation to the judge, providing him or her with

1) the association's governing documents that specifically address your obligation to pay for common water consumption (if such documentation exists), and

2) the information you received from the water department regarding estimated consumption for your unit. Hopefully, the judge will rule that the association must reimburse you monthly for any amounts exceeding the average established by the water department.

Sincerely,

Margey

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Should a volunteer member of a Virginia based condo association board (commercial condos, not residential) take out personal insurance to cover liability issues that could result from legal action taken against the board? What are the personal liability risks of volunteering to serve on a condo board? Thanks.

- Chris

Before agreeing to serve on the board of directors of a community association, a potential director should ensure that the association carries Directors and Officers Liability Insurance to protect the volunteer leaders from accusations of wrongdoing. It's always a good idea to carry personal liability insurance to protect your assets against unforeseen and even invalid lawsuits, if only for the defense costs provided by the policy.

Sincerely,

Margey

We have very minimal landscaping in our California common interest development and there are residents who would like to volunteer their services for the care and maintenance of our landscaping. Are there any liability issues the association should be aware of?

- Debbie Ann

It's wonderful that your neighbors are willing to volunteer to help maintain the appearance and appeal of your community. The association should ensure that it has general liability insurance in place, and require that any individual who performs landscape work has his or her own personal medical and general liability insurance coverages.

Sincerely,

Margey

A question in regards to an association's change in philosophy.  I bought a townhome two years ago in ******, MN at ******* Town Home Association.  I am 44 years old.  My place is a two story town home (all bedrooms upstairs) and not designed for elderly or handicapped citizens. The development is comprised of approximately 75% garden level homes and 25% being two story units.  The current board of directors want to restrict home sales to people who are fifty five years and older.  If this were to pass, my home would depreciate considerably in value due to it's layout.  Can an association change direction six years into it's existence dissolving their original focus and re-writing a highly restrictive covenant, declaration, and by-laws?  What type of process would they be taking on to become a fifty five and older community?  I hope my fears are in vain and the enormity of this project will stop it before it truly starts.

- Renee

Typically, board members must follow specific procedures detailed in the governing documents, and perhaps in state statutes as well, in order to amend those documents to reflect such drastic changes in the intent and purpose of the community association. Further, the U.S. Department of Housing and Urban Development, through the Fair Housing Act, enforces strict limitations on the creation and continuation of communities designated for homeowners aged 55 and older. For more information please see The Housing for Older Persons Act of 1995.

Sincerely,

Margey

I am a new board member of a Colorado HOA. Our Covenants are about 25 years old and somewhat out-of-date. I am having trouble finding out the proper way to amend them. I've heard that a majority of the lienholders (lenders) must agree, which is impossible. How can I verify this and what are the alternatives to change or modify an outdated section? Thank you.

- Bonnie

Your Covenants should contain a provision describing in detail the amendment process. Typically, only certain provisions such as changing voting rights or allocation of common elements require lender approval. However, almost every governing document I've read in the past 30 years contains at least one unique tweak, so it's important that you fully understand the amendment language in your association's documents.

Other possible resources for you to investigate are your state statutes and Nonprofit or Not-for-Profit Corporation Act.

If a provision in your Covenants is now illegal because new local, state or federal laws have been promulgated, such as the Telecommunications act of 1996 which prevents property owners associations from prohibiting satellite dishes, there is no need to amend out that provision in your documents because it has been superseded by a higher governmental authority.

I urge you to retain the services of a competent attorney knowledgeable in Colorado community association law to help guide you through the intricacies of document amendment as well as to ensure that the language your board wants to insert is appropriate and enforceable.

Sincerely,

Margey

What is the time required to grandfather a fence which is over a property line? (State of California)

- A.

Please contact a California attorney competent in real estate law for an appropriate response to your question. "Ask the Expert" focuses more on general questions regarding the operations of community associations.

Sincerely,

Margey

Can you please assist in the interpretation of our bylaws regarding maintenance? "Each unit owner shall keep his Unit and its equipment, appliances, and appurtenances in good order, condition and repair and in a clean and sanitary condition, and shall do all redecorating, painting and varnishing which may at any time be necessary to maintain the good apperance and condition of his Unit." "Each Unit owner shall perform normal maintenance on the Limited Common elements appurtenant to his Unit." "The Board shall be responsible for the maintenance, repair and replacement of all of the Common elements (including the Limited Common Elements) as defined herein." "The Unit Owner of any Unit to which a patio, driveway or deck is appurtenant shall perform the normal maintenance for such patio, driveway or deck and shall make all repairs thereto caused or permitted by his negligence misuse or neglect." I'm confused!!!! First the claim is made that the Board is responsible for common elements and limited common elements, but then it says that the Unit owner is responsible for the maintenance of items defined in the Declaration as Limited Common Elements. Common elements are not defined anywhere!! What about the replacement of windows and the painting of doors and garage doors?? We have fences surrounding our patios/balconies. Who's responsible for staining those? Help!

- J.

If your association's governing documents and state statutes are silent or confusing regarding an issue affecting the operations of your association, the board should consider crafting a policy resolution clarifying the ambiguity or addressing the overlooked concern, being sure not to conflict with the documents or statutes. For a primer on preparing a resolution, go to Association Times' Resolution Process page.

Sincerely,

Margey

Part of our Declaration states:"the Board, at the direction of the voting members having 2/3 of the total votes, may adopt such reasonable rules and regulations as it may deem advisable for the maintenance, conservation and beautification of the Property.....etc.; provided, however, that the rules and regulations for the Parking Area and the Storage Area may be adopted by the Board without direction from any of the voting members." Can anyone tell me what "direction of 2/3 of the voting members" means??? I have looked up the term "direction" in legal dictionaries and could not find any reference. Does it mean that the Board needs to have 2/3 of all homeowners by % ownership present at a meeting before the Board can adopt and amend rules and regs? (Voting members was defined as the homeowners earlier in the Declaration.) I have asked three people (2 lawyers and 1 property manager) and cannot get 2 consistent answers!

- Carol

It's unfortunate the some legally-binding documents contain ambiguities such as the provision you quoted. Since you may eventually be challenged by the association membership no matter which interpretation your board accepts, I suggest that you stick with your attorney's recommendation -- just make sure you have it in writing. If two attorneys have issued two conflicting written opinions, your board might consider going to a third lawyer for the tie-breaker.

In general, it's wisest to comply with the most conservative interpretation, considering the intent of the provision rather than the confusing language.

To prevent future problems with interpretation of this provision, you might consider asking the attorney to prepare an amendment to the documents to replace the language in question. The attorney could advise the board regarding the amendment procedure as detailed in your documents or state statute to ensure that the amendment, once approved by the requisite number per percentage of owners, is legally binding.

Sincerely,

Margey

We purchased a condo in California April 2004. We have complied with all CC&R's. Now the association is saying we owe for plumbing repair and damage reimbursement in the sum of $16,000.00 that took place in the unit we currently own in 2002? None of this was disclosed to us at time of sale and the association is saying we are in violation and in Non-Compliance with this charge. We did not even know about this until we were given a letter June 2, 2005 saying we have to attend a hearing on June 15, 2005. This just not seem right we bought in good faith and have been in compliance...Thanks for any answer.

- R. & J.

It doesn't seem reasonable that you would be expected to pay a charge that the previous owner of your unit incurred. Here are some recommendations:

1. Alert your Realtor regarding the situation. He or she may be able to advise you with regard to California law, specifically pertaining to any seller disclosure requirements.
   
   
2. Talk with the title company that closed your home. Did the association file a lien of record for the $16,000 debt? Did the association include the debt in its disclosure/resale document? Does state law require full disclosure by the association or any amount due is waived?
   
   
3. Determine if any of the parties involved in the $16,000 claim has insurance that would cover payment of the amount.
   
   
4. Retain a competent attorney knowledgeable in California real estate and community association law if the first three options do not resolve the matter.

Sincerely,

Margey

Hi! I am here in Georgia, and have a question.  Our little community of 100 homes has been kept well and the values have increased a little. They are constructing a Polo Fields on one side and Country Club of the North on the other and our community lies in the center. These homes go for $500,000 and up.  My question is, we (homeowners association) are concerned because lately owners are leaving and renting out to anybody who comes along, so far there have been five homes rented on one block and we are concerned the values will drop if something is not done to prevent the owners from renting instead of selling.  We are currently trying to rewrite the covenants in order to protect the property values and need to know what to write in order to prevent any more rentals in the neighborhood.  Can we put a lien against those (owners of rentals) that do not abide by the rules? Also, there is one rental that has five families living in it and 10 cars parked outside.  What do we do? Thank you.

- Kristen

Please review the Ask the Expert Archives, in particular May and June 2004 and March and April 2005, for in-depth discussions regarding limiting rentals in community associations.

With regard to the rented home inhabited by five families with ten cars, I suggest you write the homeowner about the situation. It's quite possible that he or she is unaware that more than one family is living in the house. The owner may be very concerned about the condition of the home and thank you for alerting him or her to the situation. If the owner does not respond to your communication, consider reporting the situation to the local municipal authorities. It's very possible that the residents are violating an ordinance that restricts residential occupancy to a certain number of adults per bedroom.

Sincerely,

Margey

I live in a 39 unit townhome association in Illinois. A new board was recently elected. In which the board has newly empowered the Rules & Regulation Committee. The committee has proposed the following amendment to the rules, "these rules and regulations will be presented at a general meeting of the Owners and will be subject to approval by two-thirds (2/3) of the membership present. Upon approval by the membership, the rules and regulations will be enforced by the Board." For obvious reasons this is ridiculous. We can have 3 people show up at a meeting, decide they want fuschia painted trim, and have it voted in by 2 people.  Can you provide me with sound reasoning why this is such a bad idea. And or can you provide with any real examples of the nightmare such a rule could potentially have. Thank you in advance for your assistance.

- Irene

I agree with you -- what a nightmare it would be if the proposed rules adoption process were approved!

Please review the resolution process detailed in Association Times -- the last link on the page. Also, there are several extensive articles discussing the appropriate manner to pass rules that you can review in the Ask the Expert Archives.

Sincerely,

Margey

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Insurance | Legal | Maintenance | Management | Rules

I've just read your excellent article, "Deferred Maintenance..." I have lived at my condo for 7 years now and have encouraged special assessments for the too numerous projects that are part of routine maintenance that need to be done. I am always shot down that there is no money or that people are already budgeted for this year and can't afford it. I've written my trustees & management company with my concerns. Only 1 trustee has responded with the above response. I am concerned about my home value, the integrity of the beautiful old building, safety, etc. Is there anything else I can do to get the trustees to start addressing some of these building repair needs???

- Desperate in Boston

I'm so glad our "Deferred Maintenance" article was helpful! Oftentimes, board members have more respect for the opinions offered by an impartial third party than by a homeowner who may be on the right tract but doesn't have the credentials or expertise to support his or her efforts. I urge you to copy articles regarding reserve funds and deferred maintenance from both Association Times and the Community Associations Institute. Presenting material to your board prepared by experts in the community association management field may persuade your board of the need to properly maintain the property and set aside funds for future repairs in order to preserve each owner's resale values and the marketability and curb appeal of your community.

Sincerely,

Margey

We live in California in the ******* development.  We purchased this condo in April of 2002.  We received a copy of the CC&R's at that time.  It stated the association was responsible for all exterior repairs.  We are now selling, and are being told that the CC&R's have changed, and they no longer do any outside repairs.  They do roof repair and maintenance and repair but not the damage due to a defective roof.  How can we fight this?  The wood damage is approximately $3000.00.

- Denise

Since both the California statutes and your association governing documents are very specific with regard to the proper procedures by which to amend the governing documents, I would suggest that you first determine if the documents were indeed amended, if the amendment process was valid, and how it came to be that you were not aware of the revision. It's possible that rather than amending the documents, your board determined that the roof failure was an original construction defect not covered by the association's maintenance purview.

I recommend that you do some more investigating into the actual reason your board told you that association funds may not be used to repair the roof over your unit. If you believe the board acted outside its authority in denying your request, you may need to retain the services of a competent attorney knowledgeable in California community association law to help you reach a satisfactory resolution to this issue.

Sincerely,

Margey

Our Board has spent $1,000 to replace a personal owners fence. There is nothing in Covenants or the County Plat Map or blueprints that show private fencing, within a persons property lines, to be the responsibility of the HOA. The builder put up a perimeter fence at the onset of building the homes. We each have accepted the perimeter fence as part of the lot and we assumed responsibilty for maintenance and liability. Have you ever heard of this? We are homes, not condos. Thanks for all you do!

- Janice

A community association's board of directors is obligated to maintain the property's physical components which the governing documents define as association responsibility. Conversely, the board may not expend association funds on components that are the responsibility of the owners.

If your documents clearly delineate the fence as an owner responsibility or indicate that all structures constructed on a lot are the owners' responsibility, the board should understand the potential gravity of their overstepping their authority by spending common funds on a physical component which the association has no duty to maintain. On the other hand, if the documents are unclear as to which entity is responsible for maintaining structures other than buildings located on a lot, the board should craft a policy resolution assigning repair obligations either to the association or to the owners. Please review the September archives of "Ask the Expert" at for a detailed process for creating and approving resolutions.

A third possibility comes to mind, however. Perhaps the board replaced the fence because the owner of the fence was unwilling or financially unable to do so. Worried about the effect of the deteriorated fence on neighboring lots, the board decided to impose a self-help action on the owner by replacing the fence and charging the owner with all expenses involved in performing the work. If your association's governing documents permit the board to enforce the governing documents with whatever means available, then having the fence replaced at the owner's expense may fall within the parameters of the board's authority.

Sincerely,

Margey

I live in a condo in SW Washington state. In Sept. 2004 a teenager lost control of his car and slammed into our chain link fence causing $800 damage. He fled the scene and the only witness did not get his license plate number. It is now June 2005 and the board has still not fixed the fence. It looks terrible and gives the appearance that we don't care about our property. I have repeatedly asked the board to repair the fence. They say they don't have the money right now. At the last annual board meeting I asked that dues be raised to the level where we could not only meet monthly expenses, but save for unexpected expenses. Only two other people agreed with me and we raised dues a paltry sum. What can I do to get the board to live up to their responsibilty of keeping the complex in good repair? My unit is directly adjacent to the fence and I'm ashamed of how it looks. Thank you in advance for any advice you can offer.

- Joann

We've got two issues to discuss -- the damaged fence and the need for adequate funding for the replacement of the association's capital components. Let's first address the fence.

I would hope that your association has property insurance that would repair your fence, less any deductible. I suggest that you find out if there's more to the story regarding the delay in restoring the fence to its original condition. Perhaps an insurance claim has indeed been filed and the board is awaiting the claim adjuster. It's the board' fiduciary duty to maintain the common elements, and allowing the fence to remain in its current state may be considered negligent.

With regard to adequate funding for regular maintenance as well as replacement of items such as paving, roofing, sidewalks and fencing, please review the "Ask the Expert" archives for articles on reserve funding and budgeting.

Sincerely,

Margey

Recently we had a roof leak and 3 units were damaged. The board made the repairs to each unit, which was about $1,000 each. One unit owner is unhappy with the job the contractor did on her flooring. The existing flooring is parquet and is about 10 years old. Supposedly her husband is in a wheelchair. The contractor replaced the flooring with new parquet, but the shade is about one shade off. The unit owner wants her whole floor replaced. The new flooring has ranged from $1700 to $3000 for carpet to pergo or laminate. Is the board responsible for making this owner happy? Where do we draw the line on this sort of thing?

- Jamie

Your association's governing documents, in particular the Condominium Declaration/Master Deed, should contain provisions detailing the maintenance responsibility of both the association and the homeowners. There may even be a state statute addressing this issue; go back to Association Times' State Resources page to access your state's legislative website.

While current trends seem to allocate interior damage repairs to the owner, there is no universal requirement one way or the other. Another fairly common Declaration provision is to require the association to restore the damaged portion only (not the entire floor or wall), and only to the original material. So, the association fulfilled its obligation by replacing the damaged area with parquet matched as closely as possible. Further, if the flooring was originally carpet and the homeowner subsequently installed wood flooring, the association would only be responsible for the cost of installing new carpet in the damaged area, and the homeowner would pay the difference between the carpet and the wood floor.

Absent language in both the Declaration and state statute, the board should consider crafting a policy resolution addressing maintenance responsibility for this and other conceivable circumstances. Please go to the Links and Resources page for a detailed resolution development procedure.

Another recourse to consider is the homeowner's insurance policy. While the association's property insurance probably would not pay for roof leak damage unless the roof itself was damaged by a falling limb or high winds, the homeowner's policy may have broader coverage and may pay to replace the entire floor.

Sincerely,

Tom Miller
Lewis Management Resources, Inc.
Tucson, Arizona
www.lmri.org

I have a question with regard to the repair of a limited common element. We live in a three unit building. Our roof deck door was incorrectly installed lower than the roof deck itself, with the result that when it rains, it leaks under the door and into our bathroom one floor below. The contractor has explained to us that the door is incorrectly placed too low in the wall. In order to fix the problem, the door will need to be replaced and raised. According to the condo association bylaws, the roof and walls are common elements, but the door is a limited common element. Our board is now refusing to pay for the repairs stating that it has no responsibility to repair or replace a limited common element. Is this correct since the misplaced hole in the wall (a common element) is the problem? Thank you.

- Jennifer S.

There's a difference between determining what is a limited common element and who's responsible for maintaining that limited common element. Your Declaration should contain provisions identifying whether the owners or the association is responsible for maintaining the front door frames of each unit.

If the Declaration is silent with regard to assignment of maintenance responsibility, the next place to look is your state statutes, which you can access through Association Times' State Resources page. There may be a reference in the statutes regarding who must maintain the front door frames in a condominium or townhome association.

Typically, associations are not "guarantors" of original construction defects. Most governing documents for community associations state that the purpose of the association is to repair and maintain specified components of buildings and common areas, not to rebuild a component which was improperly constructed during the original development of the community. However, there may be case law in your jurisdiction that states otherwise. You may need the services of a qualified attorney knowledgeable in your state's laws to help you determine whether you or your association should bear the expense of replacing the door frame in your unit.

Sincerely,

Margey

The condo unit above me is leaking from above in the bathroom area. It has been leaking for almost a year and i have contacted the owner. He said he would take care of it but nothing yet has occurred. He said the contractor who fixed the leak before does not work for the condo association and he wanted the association to recommend and pay for the repair. What is my next step?

- Steve

If you believe or have been able to confirm that the source of the leak is a common or limited common element for which the association is responsible for maintaining, then I suggest that you immediately notify your board or management company of the leak and request attention as quickly as possible to resolve the problem.

If you believe the source of the leak is the repair responsibility of the upstairs owner, then I recommend that you send him or her a certified letter demanding that the repair be effected within ten days of receipt of your correspondence. If your letter does not prompt your neighbor to repair the leak and any subsequent damage, you might consider one of the following:

1. Filing an insurance claim with your personal insurance company which may, in turn, subrogate against the upstairs owner for reimbursement of all monies expended to resolve the leak;
   
   
2. Filing a claim with your local municipal court (perhaps a Small Claims Court) so you will have the opportunity to ask a judge to require your neighbor to not only fix the leak but pay your legal expenses as well.

Sincerely,

Margey