Governance

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As you have probably figured out by now, I follow HOA headlines from across the country. Yesterday, a story reported by WFAA.com really caught my eye and not because there is a dispute in a Dallas area HOA about how funds are being expended by the association. Unfortunately, disputes of this ilk aren’t all that uncommon. What caught my eye is the level to which the anger has escalated. Residents have allegely been receiving threatening letters, have been physically threatened in the community and one resident evidently got so out of control that he was tased by local law enforcement. 

Based upon what I can piece together from the story, there are some real questions about how funds are being expended and accounted for by the association. There are also allegations of impropriety by directors. I have no idea whether there is any truth to these allegations. However, at least in Colorado, there are constructive ways to deal with this scenario. Continue Reading Dial It Back Before You Get Tased!

For those of you who love to bake, you know that carefully following a recipe to bake the perfect loaf of bread is a must. While I’m not a plumber, I suspect these fearless folks don’t leave home without their trusty plungers!  For those of you who serve on the board of directors of your homeowners’ association (“HOA”), you know that your tools of the trade are the governing documents of your association. Right?!

As a director for your HOA, you have the fiduciary duty to comply with and enforce the governing documents of your association. How can you fulfill this duty if you aren’t familiar with or don’t have your association’s governing documents available at board meetings? The short answer is – you can’t. However, it’s never too late to get prepared to govern! Here are the documents for your HOA you should locate, review, put in a binder and take to meetings:Continue Reading Are you a plumber without a plunger?

September is National Preparedness Month. For the past few years, we have  devoted a September post to reminders of preventative steps that can help keep your community safe and prepared for emergencies. By implementing preventative measures now, your association may reduce injury and liability later. The following focus areas may assist your association in identifying how prepared it is for the next emergency:

Review governing documents and insurance policies. Ensure that insurance coverage and reserve funds meet the association’s needs as well as the requirements set forth in the declaration and state statutes. An insurance and maintenance chart and insurance guidelines prepared by the association’s attorney, in consultation with the insurance agent, can serve as one way of notifying owners of their responsibilities. We also recommend that associations check their fidelity coverage and purchase crime coverage to protect against fraud and embezzlement.Continue Reading Prevention and Preparedness: How does your community deal with emergencies?

Have you ever attended or participated in an HOA board meeting that could be best described as an unproductive hostage crisis? You know what I’m talking about! These meetings last literally for hours with very few decisions being made. As a director, you really want to sneak out the back door but understand it’s your duty to participate in the governance of your community. These meetings reach a critical point when directors are found staring aimlessly into space or begin drooling with their eyes rolled back in their heads. 

Here are a few tips for just saying NO to these painful and unproductive meetings:Continue Reading Just Say NO to Unproductive HOA Board Meetings!

A receivership can be a useful tool for associations to collect delinquent assessments and fees against homeowners whose property is tenant-occupied or vacant. Assuming there are paying tenants, the process is typically smooth and the association recovers its delinquents assessments together with the costs of the receivership. In some cases, however, the tenants refuse to pay their rent or pay reduced rent to their landlords if they are Section 8 qualified. The former situation allows the receiver to evict them for non-payment, but the later presents a problem.

An article in the SunSentinel reported that the Willoughby Estates Homeowners Association in Lake Worth, Florida was presented with such a dilemna when it filed a receivership lawsuit and was faced with collecting rental income from a Section 8 tenant. The tenant was only paying $275.00 of the $1,784.00 in rent owed each month with the remainder subsidized by the county Housing Authority. Not a bad deal if you ask me! The association, however, had other plans and demanded that the Housing Authority forward the rent that it sent to the landlord each month. Interestingly, the Court agreed and required the Housing Authority to forward all future payments to the association until it was paid in full.Continue Reading Another Victory for Receiverships

Wrong.

Yes, you are a member of a homeowners association. With that membership comes rights and responsibilities, such as the obligation to comply with the association’s governing documents and to pay assessments, and the right to select the people who will represent you on the Association’s Board of Directors.

It’s important to remember that as a member of an association, you are represented by the Board – you do not have the power as a member to act for the association.  Much like you’re represented in Congress by Mike Coffman or Diana DeGette, you are represented in your association by your Board members.  It is the Board’s obligation to take actions for the association.  Sometimes, these actions are different than the action you would’ve taken in the same position.

Your difference of opinion with your Board does not, however, give you the right to interfere with the association’s actions, taken through and approved by the Board.Continue Reading But I’m a Member! I’m Allowed to Stop That Contractor…Right?

As a result of increasing numbers of foreclosures, associations now have to deal with collecting delinquent balances against not only its individual homeowners but also against the foreclosing lenders/banks. With the sheer number of foreclosures that any given bank must deal with, a depressed economy and a saturated and slow moving real estate market, it is currently not uncommon for banks to retain ownership of a property following a foreclosure sale for up to a year or more. I am not aware of many associations that can carry that kind of debt for such an extended period of time.Continue Reading Place An End To Bank Owed Debt!

It’s important that associations follow their governing documents and understand the procedures they should follow when dealing with collection of assessments, fines and other fees. The easiest way to do this is to review the association’s governing documents and the relevant provisions having to do with collections of delinquent accounts. This is especially important should the file proceed to court as a judge will review the case to determine whether the association followed its own rules before finding against a homeowner who did not. Continue Reading Collections: Are you following the rules?

Stephane Dupont, the head of our collections department, is also an avid home brewer.  He recently brought several bottles of his India Pale Ale to share with the office, and so Friday evening found me with a frosty mug (per Stephane’s explicit instruction) and a Mad Men DVD.

The juxtaposition of beer with work, and the Mad Men DVD got me to thinking about how business is conducted today, versus the way it worked back in the 1960s.  According to Mad Men, men (because they were all men) would gather around a bottle of scotch and conduct business through the haze of cigarette smoke.  This wouldn’t fly today, but it seems some homeowners associations haven’t gotten the memo.

We’ve had association board meetings open with uncorking a bottle of wine.  Seriously.  While we believe that a congenial atmosphere and neighborliness are good things to encourage in the association context, boards must always remember that they are conducting business, not throwing a party. Continue Reading Take a Bottle Drink it Down…Pass it Around….