Withholding Assessments Won't Work

Sometimes community residents become dissatisfied with the association for some reason. In this case, let’s use maintaining the parking lot as an example. Mr. Homeowner is unhappy because several small potholes have appeared in the parking lot, and the association hasn’t repaired them. He called the manager who said that all potholes will be repaired in the spring. “It’s much easier and cheaper to fix them now, while they’re small,” Mr. Homeowner states. The manager explains the association’s maintenance schedule and states that parking lot repairs are scheduled, and budgeted, for spring.

Mr. Homeowner wants the potholes fixed now, so he decides to withhold his assessment payment until the potholes are filled. Sorry Mr. Homeowner, withholding assessments will not get the potholes filled. Here’s why:

You signed a contract with the association called the Declaration, or CC&Rs, in which you agreed to pay assessments. Period. There are no Unless Clauses in the Declaration—“I agree to pay assessments, unless . . .”

Yes, the association has an obligation to maintain the common areas. Since the repairs are on the maintenance schedule and in the budget, the association is fulfilling that obligation.

Filling every pothole as it appears throughout the winter isn’t economical. Agreed, it’s less expensive to fill a small pothole. However, it’s far less expensive to have only one visit from the asphalt company to repair all potholes—even the big ones.

Unfortunately, Mr. Homeowner, instead of getting the potholes filled immediately, you get a lien filed against your home for failing to pay your assessments.

But, let’s say the potholes get especially large before the end of winter and Mr. Homeowner fears they’re dangerous. He’s believes the potholes may cause damage to his car or he injure himself. He should call the manager and explain the situation. The association will make emergency repairs to protect owners and avoid liability.

If the association still fails to repair what Mr. Homeowner believes is a hazard, he has the right to pursue other legal channels to require the association to perform its duties. But, withholding assessments isn’t one of them.

We're Having What Kind of Meeting?

We're having what kind of meeting?

If you live in an HOA or Condominium, or are on the board in one, you are probably getting notices left and right about meetings.

What's the difference between a board meeting and a town meeting, or an annual meeting and a special meeting? Confused? Here's some clarification.

ANNUAL MEETINGS

Annual meetings—or annual membership meetings—are usually required by your governing documents, which specify when they’re to be conducted and how and when members are to be notified about the meeting. This is the main meeting of the year when members receive the new budget, elect a board, hear committee reports and discuss items of common interest. Click here for our HOA/Condo annual review meeting checklist or view below.

SPECIAL MEETINGS

Special meetings are limited to a particular topic. When the Board calls a special meeting (which they can do at any time), they must notify all members in advance. The notice will specify the topic so interested members can attend. Special meetings give the board an opportunity to explore sensitive or controversial matters—perhaps an assessment increase. Members do not participate in the meeting, unless asked directly by a board member, but they have a right to listen to the board discussion.

TOWN MEETINGS

Town meetings are informal gatherings intended to promote two-way communication; full member participation is essential to success. The board may want to present a controversial issue or explore an important question like amending the bylaws. The board may want to get a sense of members’ priorities, garner support for a large project or clarify a misunderstood decision.

BOARD MEETINGS

Most of the business of the association is conducted at regular board meetings. Board members set policy, oversee the manager’s work, review operations, resolve disputes, talk to residents and plan for the future. Often the health and harmony of an entire community is directly linked to how constructive these meetings are.

EXECUTIVE SESSION

The governing documents require the association to notify you in advance of all meetings, and you’re welcome—in fact, encouraged—to attend and listen. The only time you can’t listen is when the board goes into executive session. Topics that the board can discuss in executive session are limited by law to a narrow range of sensitive topics. Executive sessions keep only the discussion private; no votes can be taken. The board must adjourn the executive session and resume the open session before voting on the issue. In this way, members may hear the outcome, but not the private details.

PARTIES

Occasionally the association notifies all residents of a meeting at which absolutely no business is to be conducted. Generally these meetings include food and music, and they tend to be the best attended meetings the association has. Oh, wait! That’s a party, not a meeting. Well, it depends on your definition of meeting.

Take a look at our annual meeting checklist below.

Tips for Saving on Homeowners and Renters Insurance

How to save on your homeowners and renters insurance policy.

Note to renters: Renters, if you don't have insurance you should. Paying $3-5 a month (less than $100 a year), will save you and your bank account a world of pain if disaster strikes on your rental. For example, if the roof leaks or if there's a bug infestation and you need to leave your apartment for a few days, your rental insurance policy will often cover hotel expenses while the landlord remedies the problem.

Whether you own or rent your home, insurance is essential to protect your property and household goods. Comparison shopping for the best rates will certainly save you some money, but you also can save by following these tips:

• Choose a higher deductible—increasing your deductible by just a few hundred dollars can make a big difference in your insurance premium.
• Ask your insurance agent about discounts. Dead bolts, smoke and carbon monoxide detectors, security systems, storm shutters and fire-retardant roofing material are just some of the home safety features that can often lower your rate. You also may be able to get a lower premium if you are a long-term customer or if you bundle other coverage, such as auto insurance, with your provider. Some companies also offer senior discounts for customers who are older than 55 years.
• Don’t include the value of the land when you are deciding how much coverage to buy. If you insure your house, but not the land under it (e.g. in a condominium) , you can avoid paying more than you should. Even after a disaster, the land will still be there.
• If you’re a renter, don’t assume your landlord carries insurance on your personal belongings. They likely don’t provide renters insurance. Purchase a separate renters’ policy to be sure your property—like furniture, electronics, clothing and other personal items—is covered.

Don’t wait until you have a loss to find out whether you have the right type and amount of insurance. For example, many policies require you to pay extra for coverage for high-ticket items like computers, cameras, jewelry, art, antiques, musical instruments, and stamp and coin collections.

Furthermore, not all coverage will replace fully what is insured. An “actual-cash-value” policy will save you money on premiums, but it only pays what your property is worth at the time of loss (your cost minus depreciation for age and wear). “Replacement” coverage gives you the money to rebuild your home and replace its contents.

Finally, a standard homeowners’ policy does not cover flood and earthquake damage. The cost of a separate earthquake policy depends on the likelihood of earthquakes in your area. Homeowners who live in flood-prone areas should take advantage of the National Flood Insurance Program.

Are You Ready for Cold Weather?

Fall is the time to prepare for winter—cold and wet conditions not only make you miserable, but they can damage your home. Now is the time to start if you haven't already. Better late than never. Some winterizing can wait, some can’t. Make a list of what needs to be done, and tackle the time-sensitive tasks first. Here’s a few tips to help you get a jump on winter and stay cozy when the temperatures drop.

Robert's Rules for Condominiums and HOAs

Most community associations use parliamentary procedure to govern board and owner meetings. In the United States, the most popular form of parliamentary procedure is Robert’s Rules of Order. Complicated? Surely. But if you understand a few basics, you can learn how to run a civil and efficient meeting. Here’s the key to Robert’s Rules: 1) Motion 2) Second 3) Debate 4) Vote. The entire meeting should follow those steps.

First, a member of the assembly makes a motion. This is how business is brought before the group. Standing up and complaining, or voicing a concern, is not a motion and is “out of order.” Instead of standing up to complain about the state of disrepair of the clubhouse, I can make a motion. For example: “I move that we spend $2000 to repair the clubhouse.”

Next, another member of the assembly must second the motion. This simply ensures that at least one other member wishes to debate the motion. If a second is not received, the motion dies and a new motion may be entertained.

Now is the time to debate the motion. Members of the assembly take turns explaining why the assembly should vote for or against the motion.

Once the debate is closed, the assembly votes on the motion. Then the chair announces the outcome of the vote and a new motion may come before the assembly. The process repeats itself until a motion to adjourn the meeting is made.

To be sure, there are dozens of nuances and technical details. For example, during debate of a motion the maker of the motion speaks first, you alternate between those for the motion and those against the motion, those who haven’t spoken get precedence over those that have, etc., etc. Don’t get hung up on the technical aspects—-just remember: Motion, Second, Debate, Vote. That’s 99% of knowing Robert’s Rules.

Click here for a simple chart of parliamentarian motions: Motions Chart

Amending Governing Documents

Amending your condominium or homeowners association governing documents is no easy chore. It can be a long and costly process, and even then, you may not receive enough votes to approve the amendments. The process of amending goes like this:

1. Identify the reasons for amendments 2. Determine any statutory requirements 3. Determine voting requirements 4. Decide on the method of voting 5. Solicit owner feedback on proposed amendments 6. Conduct the vote 7. Prepare the amendments for recording 8. Sign and notarize 9. Secure any governmental approvals 10. Record the amendments with the county recorder

Here are some things to consider before embarking on an amendment project:

Identify the Reasons for the Amendments

There are many reasons to amend governing documents. Common reasons include:

1. Legislative changes 2. Ambiguous provisions 3. Outdated provisions 4. Community demographic has changed 5. Removal of “declarant” language 6. Adding or removing restrictions

It’s critical that the reasons for each amendment are conveyed to the owners. After all, most amendments require owner approval. Making a convincing case to the ownership will result in higher voter turnout and more “yes” votes.

Find out What’s Required

Most CC&R amendments require a vote of between 65%-75% of the entire ownership. Bylaw amendments typically require a majority vote of the owners. However, sometimes state law will require different approval requirements. For example, in Oregon condominiums the approval of 75% of all owners is required for any amendment related to pet restrictions or the rental or leasing of units. (ORS 100.410(4)). In Washington, a homeowners association may amend its governing documents to remove discriminatory provisions by a majority vote of just the board of directors (RCW 64.38.028)

Method of Voting

Most associations will find it impossible to approve a governing document amendment at a physical meeting of the owners. For a CC&R amendment requiring 75% approval, the chances of that many owners attending a physical meeting in person or proxy is slim. The most common method is to conduct the vote by written ballot. Better yet, some communities may conduct the vote via online ballot. This often generates the most voter turn out. For an example of an online ballot, click here.

Finalize and Record

Once the required number of votes have been received, the amendment must be prepared for signature and recording. In some cases, approval by the state or a governmental authority must be received and reflected on the amendment. The amendment should contain references to the original documents which are subject to the amendments, and must be signed and notarized. The amendments do not become effective until recorded with the county recorders office.

To learn more, check out our document amendment timeline.

Thinking Green This Tax Season

Tax season is among us— get green for going green this year. If you've purchased energy-efficient products or energy systems, you may be eligible for a $100 to $6,000 tax credit. Don't wait until next year, Oregon energy programs expire in December 2017.

Click here for article

For more information on Oregon's Residential Energy Tax Credit Program See Here.

Oregon Legislative Alert

Portland Landlord/Tenant Ordinance 188219 Also known as the “relocation assistance” ordinance, the temporary measure mandates that if a landlord raises rent on a tenant by more than 10% or evicts a tenant without cause, the tenant can demand the landlord to reimburse them for up to $4500 in moving costs. Actual amounts vary depending on size and cost of the unit, and the neighborhood. Small-scale landlords who manage only one rental unit are exempt. The short-term measure took effect immediately on February 2 and is retroactive for tenants who had received a 90-day no-cause eviction notice within the last 89 days. The law is meant to provide temporary relief for up to 8 months as the city remains under its official housing crisis.

Oregon currently has a statewide ban on rent control. Opponents to the new ordinance claim the ban violates this law. Supporters argue that it’s an effective policy in reducing forced displacement. On March 2, the Oregon House began hearings for House Bill 2004— an expanded version of the city ordinance that allows cities to impose rent control and prohibits no-cause evictions except in certain circumstances.

See House Bill 2004

See Relocation Assistance Ordinance

6 Ways to Take a Vote

Nearly all condominium and homeowners associations use Robert's Rules of Order ("RRO").  RRO describes multiple methods of taking votes.  Depending on the type of motion which the assembly is voting on, some methods of voting are better than others. For example, any vote which may be subject to challenge should be done by written or electronic ballot. This method provides a paper trail of the votes and can be re-counted and audited. For motions which are obviously going to be uncontested, it may make sense to take a voice vote by calling for "Ayes" and "Nays."

Here is an overview of the different methods of voting found in RRO:

1. Voice Vote

For a voice vote, the chair (after debate is over) instructs the assembly to say "Aye" or "Nay".  The chair, using their discretion, then announces the outcome.

2. Roll Call Vote

This may take much longer, but it provides a record of who voted "yes" or "no".  The chair reads through the names on the roll of the assembly, including those present by proxy, and records a yes or no vote for each member.

3. Standing Vote / Raise of Hand Vote

Similar to a voice vote, the chair asks all those in favor of the motion to stand or raise their hands. Then again for those voting no.  This is useful if the vote is close and a voice vote is too difficult to determine the outcome.  Remember though, if some members are holding multiple proxies (i.e. the owner is casting one vote for themselves and 4 votes on behalf of proxy givers) it may be complicated to get an accurate count.

4. Written Ballot

For any issue which may be contested, a written ballot is always the best course of action.  A written ballot provides physical evidence of who voted which way and the total number of votes for and against the motion.  Written ballots should be kept with association records for at least one year from the date of the meeting.

5. Electronic Ballot

By statute or bylaw provisions, many associations may use electronic ballots.  Many communities have seen a dramatic increase in voter turnout when using electronic or online ballots.  Electronic ballots work similar to written ballots in lieu of a meeting.  Here's an example of an online ballot: https://calaw.attorney/online-voting/

6. Unanimous Consent

For a series of procedural or uncontested motions, the chair may announce each item or motion and then ask the assembly to approve the motions by unanimous consent.  The chair does this simply by asking the assembly if there is anyone opposed to the motions.  If there are no objections, all motions pass without debate or discussion.

Insurance Policies Every Community Association Should Carry

The right insurance policies with the right coverage amounts are critical for every community association. State law may mandate insurance policies, and your association’s governing documents likely require certain types of coverage. Each association should review (on an annual basis) its coverage and coverage limits. Here are the policies every association should carry:

1. Property Insurance

Property insurance covers real property and insurable improvements owned or controlled by the association. Common examples include: clubhouses, restrooms, play structures, entrance monuments and fences.

The policies limits should be sufficient to cover replacement of any of the buildings or structures. If the association’s clubhouse is valued at $500,000, the property policy covering the clubhouse should be at least that much.

2. General Liability

Liability insurance covers the association and board against claims arising out of bodily injury. When an owner’s guest slips and falls on the association’s sidewalk, it’s the liability policy which is triggered and will provide coverage.

3. Directors & Officers Insurance

Some older governing documents may refer to this policy as “Errors & Omissions.” This policy will provide legal defense and coverage for claims asserted against the board or the association related to mismanagement, breach of fiduciary duty, or errors in judgment. The policy should cover the association, past and present board members, committee members, and managers of the association.

4. Fidelity Insurance

Fidelity policies cover theft of association funds. This type of coverage is especially important in self-managed associations which may not have sophisticated financial safeguards in place. Your policy limits on fidelity insurance should be least as much as the association has in all of its bank accounts.

5. Other Insurance Policies

In some cases, it may be appropriate (or required) for the association to carry earthquake or flood insurance. These policies are often expensive, but shouldn’t be overlooked if the risk is present. Lastly, if the association has employees worker’s compensation insurance is absolutely necessary.

Avoiding Personal Liability as a Board Member

Board members in community associations owe fiduciary duties to the association and the membership.  Fiduciary duties are duties above and beyond the normal obligations which a person owes to the public and to fellow citizens. This means that board members must act and make decisions which are in the best interest of the community, even at the expense of the board member’s individual interests.  Just because you’re a volunteer, this duty is not diminished.

Under the scope of fiduciary duties, the law imposes two duties: the duty of loyalty and the duty of care.  The duty of loyalty requires board members to avoid self-dealing during the course of decision making.  The duty of care means that a board member must consider the best interests of the association when acting as a board member. 

Fortunately, courts have adopted the “business judgment rule”.  This rule states that the court will not second guess a decision of the board or hold a board member personally liable. The rule will apply so long as the board members fulfilled their duty of care and duty of loyalty.  Thus, if an owner sues the board over a decision the court will apply the business judgment rule and insulate individual board members from personal liability. 

A Washington State Court of Appeals Case applied the business judgment rule after an owner sued the board and association for alleged maintenance issues.  The board undertook an investigation and even hired different experts to determine the cause of a water leak into the owner’s unit.  Nevertheless, the owner sued the board.  The Court refused to hold the board members liable:

Because they are given this wide latitude, the law will not hold directors liable for honest errors, for mistakes of judgment, when they act without corrupt motive and in good faith, that is, for mistakes which may properly be classified under the head of honest mistakes. And that is true even though the errors may be so gross that they may demonstrate the unfitness of the directors to manage the corporate affairs. This rule is commonly referred to as the "business judgment rule."

Keep in mind that the business judgment rules requires that board members:

1. Are informed about association business and affairs;

2. Attend and participate in meetings;

3. Are knowledgable about the governing documents of the association; and

4. Seek outside help (accountants, lawyers, or other experts) when necessary.

With any major decision each board member should ask if they have done everything necessary in order for the business judgment rule to apply.

Community Association Record Retention

Condominium and homeowner association accumulate large amounts of records over the years.  Community associations should consider adopting a record retention resolution which indicates the types of records and the amount of time those records will be kept.  Here is a list of common association records, along with recommendations for how long you should keep the records.

Permanent Records.

1.  As-built architectural, structural, engineering, mechanical, electrical, and plumbing plans.

2.  Original specifications indicating thereon all material changes.

3.  Plans for underground site service, site grading, drainage and landscaping together with cable television drawings.

4.  All other plans and information relevant to future repair or maintenance of the property.

5.  A list of the general contractor and the electrical, heating and plumbing subcontractors responsible for construction or installation of common property.

6.  Ownership meeting minutes.

7.  Board meeting minutes

8.  Corporate action taken by members or directors without a meeting.

9.  Records of all actions taken by committees of the board of directors in place of the board on behalf of the association.

10.  Resolutions adopted by the board relating to characteristics, qualifications, rights, limitations and obligations of members.

Records to Keep for 3 Years

1.  All written communications made to members in prior three years.

Records to Keep for 1 year

1.  Proxies and Ballots (one year from date of meeting).

Records to Keep Current Copies Of:

1.  Articles of Incorporation and amendments currently in effect.

2.  Bylaws and amendments currently in effect.

3.  List of names and business or home addresses of the current directors and officers.

4.  Most recent annual report delivered to the Secretary of State.

Recommended Non-Statutory Retention Periods.

1.  Contracts - 10 years from date of completion of contract.

2.  Insurance Policies - 10 years.

3.  Insurance Claims- 10 years.

4. Legal files-pleadings, judgments, other documentation - 10 years.

5. Tapes of board and association meetings - 1 year

Enforcing Parking Restrictions on Public Streets

Many association CC&Rs prohibit owners from parking on the streets within the community. But what if those streets are public streets? Can the association still regulate parking? The short answer is “yes.” When owners purchase property in a community association, they do so subject to the restrictions in the governing documents. In a sense, it’s a contractual relationship between the owner and the association. The owner is agreeing to do (or not do) certain things on their property or within the community. With that in mind, ownership of the streets (whether public or private) doesn’t matter. The owner agreed, via the CC&Rs, not to park in a certain place.

Keep in mind that state law may control an association’s authority to tow a vehicle from public streets. Nevertheless, in most communities the association may still levy fines against an owner for parking violations occurring on public streets.

Several court cases address this issue. Let’s take a look at a few of them.

1. Verna v. Links at Valleybrook, 852 A.2d 202 (NJ Super 2004)

The owner in the association owned a small business. Occasionally, he would park his work vehicle on the street in front of his townhome. The association’s CC&Rs contained the following language:

No trailers or commercial vehicles shall be permitted to remain on any Lot or street in The Links without the written consent of the Board....

The owner claimed that because the streets were public, the association had no authority to regulate parking on those streets. The court rejected the owner's position, stating that the regulation of parking through the CC&Rs is “a matter of contract” which may impose greater limits on an owner’s use of property than governmental restrictions.

2. Maryland Estates Homeowners’ Association v. Puckett, 936 SW2d 218 (Mo. App. E.D. 1996)

In this case an owner within the community conceded that the CC&Rs prohibited him from parking his vehicle in the driveway on his lot. However, he argued, the association could not prevent him from parking on the public street adjacent to his lot. The court held that the CC&Rs are “a contract to which each homeowner becomes a party when acquiring property in the subdivision.” The court ruled in favor of the association and granted an injunction prohibiting the owner from parking on the public streets within the community.

3. Sui v. Price (Cal. App. 2011)

While not directly dealing with parking on public streets, this California case answered the question of whether an association may tow a vehicle which is in violation of the CC&Rs. The owner in this case stored a disabled vehicle on his lot. The CC&Rs prohibited the parking or storing of disabled vehicles anywhere in the community. Further, the association had the authority to enforce rules “by appropriate means.” The owner argued that towing his vehicle was outside the scope of the association’s authority. The court responded by stating “One wonders — how else would the prohibition on parking disabled vehicles be enforced against a recalcitrant homeowner?” Ultimately, the association prevailed in the lawsuit.

5 Ways to Invite Lawsuits Against Board Members and Associations

1.  Violating Open Meeting Requirements Board meetings in Oregon (by statute) must be open to the membership. The same is true for Washington condominiums or any community association with open meetings requirements in the governing documents. The purpose of open meeting requirements is to allow the membership to witness the deliberation, discussion, and decision making of the board of directors.

There are exceptions to the open meetings requirements--namely, emergency meetings and executive session. But unless an exception applies, any time a majority of the board convenes and discusses association business, it's likely a "meeting". And if it's a meeting, it requires notice and observation by the membership.

Violating open meeting requirements casts a shadow on board transparency, causes suspicion among the owners, and increasingly, may cause a lawsuit against the association or board of directors.

2.  Failing to Renew Incorporation

Most associations are incorporated as nonprofit corporations. In some cases, it's legally required that the association be incorporated. Incorporation may provide a shield against liability for board members and owners.

In a 2010 Alabama case, a homeowners association attempted to enforce its architectural restrictions against an owner who constructed improvements without approval. The Alabama Court of Appeals held that the association could only enforce the governing documents if the association was incorporated.

Georgia dealt with a similar case in 2007, when an association filed suit against an owner for delinquent assessments. The owner claimed that because the association had become administratively dissolved when it filed the suit, the association was prohibited from collecting assessments. During the course of the lawsuit the association filed the appropriate renewal paperwork and was reinstated with the secretary of state. As a result, the court allowed the association to pursue collections.

For Oregon associations, visit www.filinginoregon.com to check on the association's incorporation status.

Washington associations can search here: https://www.sos.wa.gov/corps/search_advanced.aspx

3. Failing to Enforce Governing Documents

Board members have an obligation to enforce the provisions of the association's CC&Rs and Bylaws. If a board fails to enforce provisions of the governing documents for an extended period of time, many courts will find that the association has "waived" its right to enforce the same or other provisions.

In an Ohio case, an owner built an addition on his property. The association sued the owner, arguing that the additional building violated the CC&Rs. The court said that because the association had allowed other owners to build unapproved additions, the association couldn't require the defendant in this case to remove the building.

Similarly, some governing documents require the association to make architectural decisions within a certain number of days. The association may waive its right to enforce those covenants if it misses the deadline to respond. In a different Ohio case, the association's documents required the board to respond to architectural applications within 30 days. When the owner didn't receive a response, he proceeded with construction. When the association told the owner he could not proceed, the owner sued and prevailed because the association didn't make a decision within the 30 day window.

4. Violating the Fair Housing Act

There are literally hundreds of court cases involving lawsuits against associations for violations of the Federal Fair Housing Act. Here are some examples:

Auburn Woods I Homeowners Association v. Fair Employment and Housing Comm., 121 Cal App 4th 1578 (2004). A married couple suffered from depression and other disorders. The association's governing documents prohibited all animals. The couple bought a small companion dog to accommodate their mental condition and a lawsuit ensued. The association was found liable of discrimination.

Jacobs v. Concord Village Condominium X Association, Inc., 2004 U.S. Dist. LEXIS 4876 (S.D. Fla., 2004). The court found that the defendant condominium association had violated the Fair Housing Act by refusing to allow a physically handicapped resident to install a ramp so that the plaintiff could freely store, access and charge her motorized tricycle in a storage closet in the condominium building.

Sabal Palm Condominiums of Pine Island Ridge Association, Inc. v. Fischer, No. 12-60691-Civ-SCOLA (S.D. Fla. March 19, 2014). A Florida district court ruled that a condominium association violated the Fair Housing Act by its unreasonable delay in granting a request by a physically disabled resident to keep a service dog.

Hollis v. Chestnut Bend Homeowners Association, No. 13-6434 (6th Cir. July 29, 2014). A Tennessee homeowners association may have violated the Act when it denied owners from constructing an exterior sun room which was designed to accommodate two children with Downs Syndrome.

Board of Directors of Cameron Grove Condominium, II v. State of Maryland Commission on Human Relations, No. 47 (Md. Mar. 28, 2013). A Maryland appeals court ordered a condominium board to pay damages to unit owners who were denied reasonable accommodation of their disabilities. Bhogaita v. Altamonte Heights Condominium Association, Inc., No. 6:11-cv-1637-Orl-31DAB (M.D. Fla. Dec. 17, 2012). A Florida court found that a condominium association's intrusive search for more information regarding a unit owner's medical condition constituted a denial of his requested accommodation under the Fair Housing Act.

5. Filing Incorrect Liens / Collecting Inconsistent Assessments

May lawsuits involve associations levying assessments which are inconsistent with the governing documents. In a 2004 Texas case, an association's governing documents capped assessments at $50 per month. Nevertheless, the board unilaterally raised assessments to $75 per month. An owner sued the association and the court ordered the association to reimburse the owner for the overpaid assessments, plus pay the owner's attorney fees.

In another case, the owner of a commercial condominium unit in Georgia filed a lawsuit when the association levied assessments against the commercial unit to pay for expenses related exclusively to the residential units. The court's review of the governing documents concluded that the association was prohibited from assessing the commercial unit owners for residential unit expenses.

Make sure you read the assessment provisions of your governing documents carefully, and that all assessments are properly apportioned among the owners!

Free Board Member Consultations During April

During the month of April Community Association Law Group is providing free, customized board consultation sessions. During the 1 hour session we'll: 1. Review your governing documents and identify any outdated, unclear, or ambiguous provisions;

2. Review your association's compliance with state law;

3. Discuss collection of delinquent assessments in your association; and

4. Answer any legal questions relating to your association and board.

Book now by clicking here.

Robert's Rules for Small Boards

Robert’s Rules of Order is the most effective tool to ensure efficient, civil, and effective meetings. However, sometimes the formality of Robert’s Rules isn’t necessary. For small board meetings it may not make sense to follow (the sometimes tedious) formal parliamentary procedure. Under Robert’s Rules a “small” board is 12 individuals or less. Robert’s Rules recognizes that small boards may want to operate in a more relaxed and informal setting. Small boards may opt to use the “Informal Procedure for Small Boards” described in Robert’s Rules, 10th Ed., p. 469-71. Here are the key differences between the formal and informal procedures:

1. Board members do not have to stand or be recognized by the chair in order to speak or make motions.

2. Motions need not be seconded.

3. A board member may speak any number of times on a question, and motions to close or limit debate are generally not permitted.

4. A motion does not have to be pending in order to discuss a subject informally.

5. Votes can be taken initially by a show of hands.

6. If a proposal is perfectly clear to everyone it may be voted on even though no formal motion has been made.

7. In putting questions to a vote, the chairman need not stand.

8. The chairman can participate in debate just as any other board member.

So, for small and informal board meetings it may make sense to use the informal procedures. If a majority of the board agrees to “opt-in” to the small board procedures, reflect that in the minutes and proceed under the informal procedures.

Different Meanings of Majority

Condominium and homeowners association governing documents require certain association issues to be voted on. Depending on the specific issue, there may be a different voting threshold, or number of votes required for approval. Let's start with some basics. Robert's Rules of Order defines a "majority vote" as more than half of the votes cast, excluding blanks and abstentions. [RONR, 10th ed., 387)

A "super" majority is anything greater than half. However, avoid using the term "super majority," because that term may have different meanings. An amendment to your governing documents may require 75% approval by the owners. An increase in assessments may require 2/3rds of the owners to approve. Both are technically "super majorities", yet very different numbers.

You must look carefully at the language in your governing documents to understand how many votes are necessary. Here's a hypothetical:

There are 200 lots in the association. At the annual meeting 100 owners are in attendance in person or by proxy. 97 owners cast votes related to the approval of a special assessment, 3 owners abstain.

Depending on the language in your governing documents, the required votes could be very different. Here are some common voting requirements along with the votes necessary under our hypothetical:

1) "A majority of owners present in person or proxy at a meeting" = 51 2) "A majority of votes cast by owners present in person or proxy at a meeting" = 49 (remember, only 97 votes were "cast") 3) "A majority of all lot owners" = 101

Very small differences in the language results in very different outcomes. So, pay close attention to the language used in your governing documents, and make sure you know with certainty the voting thresholds before you take a vote!

March 12 Vancouver Board Training Recap

More than 30 board members and managers attended the education seminar in Vancouver, WA, on March 12, 2015.  Community Association Law Group attorney Kevin Harker presented "EFFECTIVE BOARDS: EFFICIENT MEETINGS, UNDERSTANDING GOVERNING DOCUMENTS, AND OWNER COMMUNICATION."  A copy of the slide show can be downloaded here: EFFECTIVE BOARDS. For information about future seminars, visit www.calaw.attorney/events

Effective Collections Policies

At some point every condominium or homeowners association experiences delinquencies. Assessments are critical for the association to pay insurance, maintain common property, or hire professional management. When an owner is delinquent, the association has two options. It can foreclose on the association’s lien against the lot or unit, or file a personal lawsuit against the owner.

Every association should have a collections policy which outlines the steps that will be taken when an owner is delinquent. It’s critical that the policy is followed each time an owner is delinquent, and that the same steps are used with each owner.

The policy should include the following:

1. Citations to the authority to levy and collect assessments (usually the governing documents and state statutes)

2. The amount of the late fee and when the late fee will be charged.

3. Interest rate.

4. A statement that the association may file a foreclosure action.

5. When the first demand letter will be sent.

6. When the file will be turned over to an attorney or collection agency.

7. When a lien will be filed against the property.

8. If a judgment is obtained, how the association will collect on the judgment (garnishment, writ of execution against personal property)

Click here for a sample collections policy: CALAW COLLECTIONS RESOLUTION

For more information about Community Association Law Group's collections program, click here.

The Difference Between Board Members and Officers

There is often confusion about the difference between directors and officers in condominium and homeowner associations.  Much of the confusion stems from the business world, where typically the board members of a corporation are different individuals than the officers.  For example, IBM has 13 individuals on its board of directors, and nearly 20 officers--all different individuals. In community associations, however, the individual board members are usually the same individuals who serve as officers.  There are distinctions between the roles.

First, board members are almost always elected by a vote of the association's owners.  And (usually) may only be removed or recalled by a vote of the owners.  Officers, on the other hand, are typically elected or appointed by the board members, without a vote and without the input of the ownership.  Most governing documents provide that officers can be removed by a majority vote of the board members--without a vote of the ownership.

You may have heard that the chair of the association only votes in the event of a tie.  This is true--especially in the corporate world.  However, at an association board meeting, the board members are voting in their capacity as board members, not in their capacity as officers.  Assuming the chair of the association is also a board member, the chair has a duty to vote!

Lastly, many governing documents outline specific duties of board members and officers.  Review those provisions carefully and look for differences between the roles.

[As always, your association's governing documents may have provisions which are different than the general information provided above.  Consult legal counsel if questions arise.]