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.]

Avoiding Fraud in Condominium and Homeowners Associations

Last week an Indiana newspaper published an article titled "Homeowners association supervisor faces 21 counts of forgery." (Click here to read article) The article states:

A McCordsville woman is charged with 20 counts of forgery and one count of theft of at least $100,000 in Marion County.

Marcy M. Smitley, 39, the owner of MCS Management Group Inc., was hired to supervise the Winslow Crossing apartment and condo complex on the southeast side of Indianapolis.

Court documents state Smitley repeatedly wrote and cashed checks without the permission or knowledge of Winslow Crossing Homeowners Association, pocketing more than $120,000 during the course of four years.

Fraud and embezzlement can occur in any condominium or homeowners association.  Here are some steps to help minimize your risk:

1. Purchase fidelity insurance to protect your association from theft of funds.  Your fidelity policy limits should match the amount of funds in your accounts.

2. Require two signers for all checks.

3. Have an independent CPA perform an annual financial review or audit.

4. Require monthly bank account reconciliation.

5. Keep blank checks in a secure location.

6. Consider background checks for any employee or contractor who may have access to association funds.

Solar Panels in Homeowners Associations

Solar panels are becoming increasingly popular, even in the cloudy Northwest. Oregon and Washington both have statutory provisions which apply to homeowners associations. In most cases, these statutes will override prohibitions in the CC&Rs related to solar panels. The best approach is to work with owners and develop reasonable guidelines for the installation of solar panels. Washington - RCW 64.38.055

Washington’s statute governing homeowner associations and solar panels states:

The governing documents may not prohibit the installation of a solar energy panel by an owner or resident on the owner's or resident's property as long as the solar energy panel:

(a) Meets applicable health and safety standards and requirements imposed by state and local permitting authorities;

(b) If used to heat water, is certified by the solar rating certification corporation or another nationally recognized certification agency.

However, there are some restrictions that an association may place on the installation of solar panels. For example, the governing documents of the association may prohibit visibility of a roof-mounted panel above the roof line or require the materials and installation hardware to be color coordinated.

Oregon - ORS 105.880

Oregon’s law governing solar panels is not as broad as Washington’s. ORS 105.880 reads:

Conveyance prohibiting use of solar energy systems void. No person conveying or contracting to convey fee title to real property shall include in an instrument for such purpose a provision prohibiting the use of solar energy systems by any person on that property.

Any provision executed in violation of subsection (1) of this section after October 3, 1979, is void and unenforceable. For the purposes of this section, “solar energy system” means any device, structure, mechanism or series of mechanisms which uses solar radiation as a source for heating, cooling or electrical energy. [1979 c.671 §5]

Forest Heights Homeowners Association in Oregon has adopted and published a great set of guidelines for solar installations within the association. Click here to view.

Open Meetings and Executive Session

Open Meetings Requirement Washington and Oregon require homeowner association board meetings to be open to the membership. (ORS 94.640 / RCW 64.38.035)

First, it is important to understand what constitutes a “board meeting.” Oregon law defines a board meeting as “a convening of a quorum of members of the board of directors at which association business is discussed, except a convening of a quorum of members of the board of directors for the purpose of participating in litigation, mediation or arbitration proceedings”

If a quorum of the board is discussing association business, whether in person or by electronic means, the board communication is considered a “meeting" which must comply with the open meetings requirements as set forth by statute.

In general, all meetings of the board must be open to owners and properly noticed, except for emergency meetings. There is no specific definition of an “emergency,” but it would likely include addressing items such as threats to the immediate health, life or safety of residents or preventing significant or irreparable damage to the common property of the Association.

Board members often ask if it’s okay to communicate with other board members via email. Oregon law addresses this issue: “the meeting and notice requirements in this section may not be circumvented by chance or social meetings or by any other means”.

In other words, alternate forms of communication, such as email, cannot and should not be used for the purpose of circumventing the open meetings requirements. It is crucial to understand the risk that any decisions that the Board makes at, or as a result of, improper meetings could potentially be invalidated.

Executive Session

Oregon and Washington provide an exception to the open meetings requirement. Boards may meet in executive session, outside the presence of the owners, to discuss certain topics.

In Washington, those topics include:

1. Consideration of personnel matters; 2. Consultation with legal counsel or to consider communications with legal counsel, and discuss likely or pending litigation, 3. Matters involving possible violations of the governing documents of the association; and 4. Matters involving the possible liability of an owner to the association.

In Oregon, executive session topics include:

1. Consultation with legal counsel; 2. Personnel matters, including salary negotiations and employee discipline; 3. Negotiation of contracts with third parties; and 4. Collection of unpaid assessments.

Here’s how executive session works: During a normal, open board meeting, any board member may make a motion to convene in executive session. The minutes of the meeting should reflect the motion to convene in executive session. The board members then discuss the relevant issues in executive session.  Once the discussion is complete, the board reconvenes to the open meeting. If any motions or decisions need to be made, they are done so once the board has returned to the open meeting. There are no motions, and no voting, during the executive session.

Remember, the purpose of the open meetings laws is to ensure that owners are able to observe the deliberations, debates and decision making of the board of directors. Open meetings and transparency are critical to a well-run association.

Renters and Rental Amendments

There are usually three types of occupants in condominium or homeowner associations:

1. Owners - motivated to maintain value and foster relationships

2. Investors - motivated by profit; usually less interested in quality of community

3. Renters - often view community association living as apartment living

The term “renters” often carries a stigma in condominium and homeowner associations. Not all renters are bad (and not all owners are good). If renters are a problem in your community, your best bet is to deal with the behavior rather than attempting to ban or limit rentals. If renters are causing parking issues, adopt a parking resolution. If renters are causing noise, enforce the noise or nuisance provisions in your governing documents.

In some cases, adopting a rental amendment makes sense. For example, prospective buyers in community associations may find it difficult to secure financing if the number of rentals is too high.

Adopting a rental amendment is no easy task. In most cases, at least 75% of the ownership must vote “yes” on the amendment. Grandfathering existing rentals will often increase the amount of yes votes. In addition, a good explanation to the ownership about why the board is proposing the amendment and the benefits to the community will go a long way in receiving support for the amendment. Have a lawyer draft or review any proposed amendment to your governing documents.

Here are some things to consider when contemplating a rental amendment:

1. Minimum lease periods - typically a 30 day minimum.

2. Grandfathering existing rentals - any owner renting their unit or lot when the amendment becomes effective is exempt from the rental cap unless that owner sells or transfers their interest in the property.

3. Tenants must receive governing documents - consider requiring owners to put a provision in the lease agreement mandating that tenants receive copies of the association’s governing documents.

4. Contact information - owners should be obligated to provide contact information of each tenant to the association or management company.

5. Hardship provision - think about including a hardship provision allowing an owner to rent their property in excess of the rental cap if circumstances require. A good example of a hardship is military service.

Electronic Voting

By statute, Oregon condominiums and homeowners associations may use electronic voting for association matters. ORS 100.428 governs electronic voting for condominiums in Oregon, and ORS 94.661 applies to Oregon planned communities. (Washington community association may also use electronic voting if the governing documents allow.) In communities where many owners live off-site, this is an effective way to increase participation and voter turnout. Here are a few things to keep in mind:

1) Notice of the electronic vote should be sent via postal mail. The notice should explain what will be voted on and the website address to access the online ballot.

2) The vote is effective as soon as it's electronically transmitted.

3) A vote by electronic ballot may not be revoked.

4) The board must adopt policies or procedures to ensure compliance with the statutory written ballot requirements. Those requirements include specific notice provisions to owners and the right of owners to request secret ballots.

Take a look at a sample electronic ballot here: Sample Online Ballot

Mapping Community Associations and Crime

How should condominium and homeowners associations handle crime in or around association property?  Proactively and carefully.  Certain steps can be taken by the board, such as improved lighting, upgraded locks, or in some cases, onsite security. Some associations have organized community crime-watch programs.  Be careful though--activities by such groups may not be covered by the association's insurance policy.  Many local law enforcement agencies will help associations and the members learn how to prevent crime, how to report suspicious activities, and steps that can be taken to make your community more safe.

The map below is a small section of Portland, Oregon, showing community associations (building icons) with reported crimes during 2013.

Fair Housing Act and Community Associations

In 1988, Congress expanded the scope of the Federal Fair Housing Act ("Act") by adopting the Federal Fair Housing Amendments Act of 1988. These amendments, in part, created a new protected class of disability. Other protected classes include:

1. Race or color

2. Religon

3. Sex

4. National origin

5. Familial status

Requests for reasonable accommodations are as varied as the type of disabilities and the type of rules and regulations. In evaluating requests for accommodations, community associations must normally evaluate whether: (1) the individual is disabled; (2) the requested accommodation is reasonable; and (3) the requested accommodation is necessary for the individual to use or enjoy a dwelling.

The term "disability" means any impairment of a major life activity--things like seeing, hearing, walking, or breathing.  Disabilities include blindness, hearing impairment, mobility impairment, HIV infection, alcoholism, drug addiction, chronic fatigue, learning disability, head injury, and mental illness.

Condominium and homeowners associations are subject to the Act. Here are some recent cases involving the Act and community associations:

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.

Warren v. Delvista Towers Condominium Association, Inc., No. 13-23074-CIV-MARTINEZ-GOODMAN (S.D. Fla. July 29, 2014). A Florida U.S. District Court held that a county ordinance banning pit bull dogs was preempted by the Federal Fair Housing Act with regard to service animals. Under HUD regulations, a request for an assistance animal can be denied if the animal’s behavior poses a direct threat and if its owner takes no effective action to control the animal’s behavior to mitigate or eliminate the threat. However, FHA requires that a significant risk—not a remote or speculative risk—exist to deny the reasonable accommodation. Particularly, HUD adopted a notice stating that a request to accommodate an assistance animal can be denied if “(1) the specific assistance animal poses a direct threat to the health and safety of others that cannot be reduced or eliminated by another reasonable accommodation; or (2) the specific assistance animal would cause substantial physical damage to the property of others that cannot be reduced or eliminated by another reasonable accommodation.”

If you are faced with a Fair Housing accommodation or modification request, speak with a qualified lawyer immediately. Violations of the Fair Housing Act may expose the association and board to legal liability.

For more information:

http://www.justice.gov/crt/about/hce/housing_coverage.php

WA State Supreme Court Case on Implications of Plat Dedications

On February 12, 2015, the Washington State Supreme Court issued a ruling on the implications for municipalities which accept plat dedications. In this case, the recorded plat dedicated certain ground water and storm water systems to the county. The county then accepted those dedications by signature on the plat. The homeowners association (and its members) filed suit after issues arose with a drainage pipe. The lawsuit sought to compel the municipality to take action to fix the drainage pipe. Read the case here: http://www.courts.wa.gov/opinions/pdf/895333.pdf