September 2012

I recently read an article where a homeowner was upset about her condominium association initiating foreclosure proceedings against her for her failure to pay her assessments. While people may read this article and feel sorry for the homeowner, one should keep in mind that the homeowner failed to appear at court to protect her interests and, more likely than not, failed to respond to the Association and its attorneys attempts to contact the homeowner prior to the foreclosure proceedings even being initiated. It does not appear that the homeowner is the helpless victim of the actions of a condominium association, but instead, that the homeowner apparently avoided her obligation to pay assessments and did not take any action to prevent the events that followed.   Continue Reading Before You Start Pointing Fingers….

I recently worked with a client who had purchased a property at the sheriff’s sale on a homeowners association lien.  We frequently take properties through this kind of judicial foreclosure, and so from my perspective, everything was pretty cut and dry.  The client had a lot of questions, and I found myself discussing some basic rules of real property law.  Today, I found this article about a purchaser of a property foreclosed on by an HOA, and decided it might be appropriate to set out some general information about liens and the effect of foreclosure.Continue Reading Foreclosures and Liens – Some Basics

The U.S. Department of Housing and Urban Development (“HUD”) has published FAQs on the latest revisions to the condominium approval guidelines that were published last Thursday in HUD Mortgagee Letter 2012-18. These latest revisions will remain in effect until August 31, 2014 – unless further extended by the Federal Housing Administration (“FHA”). 

During this period…

Those of us who specialize in community association law spend a whole lot of time at HOA board meetings. Based upon experience, I can tell you that how well a meeting is run can make a world of difference in the amount of business which gets accomplished and whether the interactions at the meeting are constructive. While board meetings are open to members and they are encouraged to attend, it’s important to remember that these meetings are held for the purpose of conducting important association business. 

I’m a huge fan of boards blowing the dust off and utilizing their HOA’s Conduct of Meetings Policy. This is one of the 9 required Responsible Governance Policies which HOAs are required to have under Colorado law. (These policies are commonly referred to as the “SB 100 Policies”). A well written Conduct of Meetings Policy will address the procedures utilized to promote productive meetings in the member meeting and board meeting settings. A well written policy should also address the ability of homeowners to speak in an open forum and prior to the board taking formal action on a matter. Continue Reading Rules of the Road for Productive Board Meetings

On Saturday morning, State Senator Linda Newell, who represents most of the South Metro Denver area, held a phenomenal Town Hall Meeting which focused on homeowners’ associations (“HOAs”) and related issues. The turnout for the meeting was excellent and the participants were there to learn and share their stories in a collaborative manner. It was my pleasure to share information about HOAs and to lead this great group of folks in discussing HOA-related issues. It was also an honor to work with Senator Newell who is one of those rare legislators who truly works across the aisle in this hyper-partisan political world we live in. 

While many issues were discussed, a noticeable trend at the Town Hall Meeting was the challenges faced by self-managed HOAs. In particular, the challenges associated with the maintenance, repair and replacement of physical components of structures the HOAs are responsible for and budgeting and setting assessments at a level necessary to meet these obligations. One homeowner shared her story of trying to sell her unit in a condominium association, only to be thwarted by the fact that the concrete patio on the back of her unit is pulling away and is in a horrible state of disrepair. This patio is the responsibility of her HOA and it doesn’t look like the HOA has the funds necessary to deal with the problem. 

 

Let’s face it; serving on the board of directors of an HOA is a big responsibility. The boards of self-managed HOAs have the same responsibilities as the boards which benefit from the advice and assistance of professional community association managers. Without the expertise of these professional community association managers, many self-managed boards struggle to obtain the information necessary to carry out their responsibilities and to fulfill their fiduciary duty to the communities they serve. 

 

So what are these folks to do? Here are some tips:Continue Reading Senator Newell’s Town Hall Meeting Highlights Challenges of Self-Managed HOAs

After a wonderful holiday weekend, it’s time to saddle up and get back to work! For management and boards of homeowners’ associations (“HOAs”), that means budget season is now in full swing. While community association managers play a pivotal role in assisting boards with the creation of budgets, it’s ultimately up to each board to adopt a budget that’s in the best interests of the association they serve. That means boards must be fiscally responsible when creating their budgets. 

Over the past few years, boards have understandably been reticent to do anything to increase assessments. For some HOAs, especially some condominium associations, that has meant making a decision to defer routine maintenance and to either not fund reserves at all or to fund them at a low level. While kicking the reserve can down the road may seem like a short term solution to an assessment increase, if put off too long, this can become a recipe for a fiscal nightmare. 

 

When facing the question of whether – or at what level – to fund reserves, boards should ask themselves the following questions:Continue Reading Budget Season: How is your HOA handling reserves?