Pelican is pleased to welcome David Hosmer as an association bookkeeper. He has over 5 years of property management experience with residential and commercial properties in Baltimore and Harford County and is a Certified Bookkeeper through the American Institute of Professional Bookkeepers. He is also a frequent blood and platelet donor and enjoys crabbing and baseball games in his spare time.
Question: Do you have any advice on dealing with hostile neighbors? There is a couple in our HOA that make the rest of us miserable with their constant complaining and badgering the board about rule violations.
Answer: Difficult people rarely change their ways. But if there is someone in your group that has the ability to communicate to them what you have just described, it might make a difference. Maybe they don’t realize how abusive they are. Also, the board is not required to respond to every opinion and complaint. If it’s pointed out to these folks that their demands are likely to fall on deaf ears if they are aren’t more restrained, that too may help them change. But if they refuse to mend their evil ways, simply refusing to respond to them may be the best alternative.
There is an excellent article in the www.Regenesis.net Article Archive titled “Dealing with Difficult People” that will be helpful in understanding personality types and how to cope successfully with them.
Question: Our board is considering a surcharge to owners that rent out their units. Any problem with this?
Answer: This kind of surcharge is illegal since it changes the homeowner fee allocation. Changing that allocation takes a 100% approval vote of the membership and, possibly, their mortgagees. However, if any resident causes extraordinary costs to the HOA like damage to common elements, those costs can be passed on for reimbursement. It is fairly common to charge Move In/Move Out fees when there is documentable costs incurred by the HOA but those fees should apply to all residents, not just renters.
Question: Our HOA has provisions in the governing documents requiring board approval for certain additions like awnings. The board recently received several requests for awnings and the board has decided not to allow awnings of any kind. Is this a correct interpretation of the board authority?
Answer: It’s reasonable for members to assume that since the awning option is mentioned in the governing documents, the intention was to allow them. The board cannot enact a policy that contradicts the governing documents. If the board feels that awnings aren’t desirable in any form, the governing documents should be amended by an appropriate vote of the membership. Otherwise, the board should honor the provision as it is written, arrive at a awning standard and approve requests under those conditions. Adopting a standard is important because of consistency, quality and curb appeal considerations. It also saves both board and petitioner a lot of time and guesswork.
Question: Our regularly scheduled board meeting fell on a holiday. At the last minute, our management company informed us that they could not make the meeting and failed to provide reports or materials for us to review. I cancelled the meeting and reschedule it for another date. Some directors disagreed with my decision stating I was letting the management company run the HOA instead of the board. Was I wrong?
Answer: A board meeting scheduled on a holiday is never a good idea and the management company should have advised you well in advance about not being available to attend. Presumably, there was just a miscommunication. But you made the right decision to reschedule.
One of the most important benefits of professional management is the counsel the manager provides. Having the manager attend board meetings is critical to get objective feedback and adequate information for the board to make informed decisions.
It sounds like some directors are maneuvering to self manage. In most cases, this is a very bad decision. There is a lot more to it than they imagine, not the least of which is having to collect money and enforce rules on neighbors. It rarely works and all members suffer the consequences. The management company is hired to manage and distance the directors from these sources of conflict. Written by: Richard Thompson
As homeowner associations age, certain illegal “additions” to the common area tend to creep in like storage sheds, fences, patio roofs, awnings and gardens. These add ons flourish when the board is asleep at the wheel or disinclined to challenge the offenders. Eventually, a board is elected that understands things have gotten out of hand and a campaign is begun to rein in the offenders. Most of the offenders will claim that a prior board or the developer gave them permission.
While the board has a fair amount of power, it has no authority to allow individual owners exclusive use of the common area unless an appropriate majority of the members approve an amendment that allows it. So, to tie up these loose ends, a list of violations must be compiled. If the type of violation is widespread, it’s best to grandfather it rather than face an angry mob. If the violation is unique and glaring (like that 8′ pink flamingo), put it on the It’s Gotta Go list.
All violators should be given written notice of their violation together with a request to remove it. All requests should be done with respect, cite the reasons it doesn’t work and offer an opportunity to appeal. If the board has a number of similar violations, it needs to be careful not to make radically different deals with different owners. In other words, be as consistent as possible to avoid the perception of playing favorites. While the board may compromise, the burden of that compromise should be placed on the petitioner. That means, the owner needs to make an offer that removes the violation at the owner’s expense. The board can compromise on the timetable but not whether it stays or not.
To avoid future misunderstandings or misinterpretations of the governing documents, it best to enact a Board Resolution or amend the governing documents (amending is better) which outlines the issue clearly. This should include these conditions:
1. The board has no authority to grant an owner’s exclusive use of the common area. It may, however, grant permission to modify a limited common area which is used solely by one owner such as a deck or patio.
2. Prior written approval of the modification must be obtained.
3. The modification must receive regular and adequate maintenance, repairs and replacement by the owner. “Regular and adequate” is in the board’s sole discretion.
4. Cost of repair of damage to common area landscaping and structures caused by the modification is the sole responsibility of the owner.
5. If not properly maintained and the owner does not bring it up to standard within 30 days after written notice from the board, the board has the authority to have the addition removed and get reimbursement from the owner.
6. The HOA has no maintenance responsibility for the addition.
7. A description of the modification and the conditions of approval will be recorded against the unit title to give notice to future purchasers. Document preparation and recording fees are to be paid by the owner.
Having this kind of procedure in place protects the interests of all the members and give clear guidance to the board. Don’t leave loose ends that will unravel the HOA’s appearance standards. Tie them up with accord. Written by Richard Thompson
One of the toughest parts of our job is working with our Boards to tackle delinquency problems within the Associations. One person not paying their share of dues can off balance an entire years budget! At Pelican we realize that Board Members are volunteers and the last thing they feel like dealing with is an awkward situation with one of their neighbors. Pelican has several creative tactics to get those delinquent owners to PAY UP. Our tactics are both aggressive and effective!
But we can’t give away all our secrets……
Below you will find seven tips to getting your neighbors to PAY UP!
1. Bone up on the law. State laws limit how your association can respond. Laws governing condo associations differ from state to state. (See links to each state’s law at LexisNexis Lawyers.com.)
2. Act promptly and firmly. There is no perfect solution to delinquencies. The key in every situation, Rathbun says, is for a board to act quickly and firmly. He urges associations: “Tell delinquent owners, ‘You have a contractual obligation to pay. That’s what you agreed to do by moving into that community.’ It’s not fair to those who do pay to allow others to slide. It’s also not sustainable.” Strictly enforce the collection policies in the association’s agreement, adds Norman L. Rosensteel, president of Associated Management, which manages 90 homeowners associations in Nevada. Harsh as that sounds, you’ll create an atmosphere in which everyone knows what to expect and all are treated equally.
3. Keep it professional. Rely on pros — accountants, lawyers, managers and collection agencies — for advice. As a volunteer, recognize the limits of your expertise. Apart from encouraging your entire association to pay assessments, avoid advising neighbors or unduly pressuring anyone into paying dues. Refrain from discussing other owners’ financial problems outside of board meetings. “People threaten people’s lives over things like this,” cautions Rosensteel. Hire professional managers and collectors to get payment from overdue accounts.
4. Levy a special assessment. Boards historically use special assessments to pay for one-time projects or to supplement operating expenses. State law and association documents set the rules. In some states, owners must vote to approve an assessment. In others, only board approval is needed. Today, however, boards are using special assessments as a (not ideal) crisis management tool to bridge the gap between expenses and the dues they can collect. The assessments further burden owners who are solvent to cover even more of their neighbors’ debts.
5. Change your rules. Your association’s governing documents — the bylaws and CC&Rs (covenants, conditions and restrictions) — also limit what your association can do. Some boards amend association collection policies to get more latitude in working with delinquent members, for instance by shortening the time frame for going to court or filing a lien in the case of delinquencies. A board vote can establish a payment plan that lets delinquent members bring back dues up to date as long as monthly payments are kept current going forward. It’s critical for board members to apply such plans uniformly, offering them to everyone and enforcing the conditions strictly and equally, experts say. If possible, let professional management rather than board members work out the payment arrangements and work with attorneys to ensure you’re within state law.
6. Go to court. When you simply cannot collect a unit’s fees, you can take a property owner to court — usually small claims court, given the size of the debts — to obtain a judicial order that lets you garnishee wages or other assets, says Brandon Bickel, a San Francisco Bay Area attorney specializing in condo association law. That’s what one San Diego association did recently to get payments from a condo owner more than $16,000 in arrears. “She’s suddenly making good. She apparently has other assets they can go after,” says Sandra Melville, an agent who focuses on downtown San Diego properties. Condo association delinquencies don’t show up on an owner’s credit record, but failing to pay a court-ordered debt does. The problem is, few defaulting owners have anything worth garnisheeing.
7. File a lien. A board’s most potent weapon is a lien, filed against a delinquent property. A lien is a legal claim that ensures payment of a debt from any profit when a property is sold. If your board can’t collect association fees, don’t let the situation drag on; file a lien as quickly as the law and your collection policy allow, Rathbun advises. It’s important to get the association’s claim on record, even though the bank has priority in collecting payment if the home is sold. In a foreclosure, properties are often worth less than the mortgage so there’s nothing for the associations to collect. But some states — Nevada, for example — require the bank to pay some of the delinquent fees. In any case, a lien serves another purpose: It signals to a homeowner that the board is serious about collection and may inspire some owners to start paying.