Every HOA needs an attorney

Our HOA retains the services of an attorney whose area of expertise is community association law. Attorneys assist community association boards in many significant ways that safeguard and benefit each member’s assets.
- Provide legal opinions: Counsels the HOA board about all issues relevant to the association.
- Review documents: Examines governing documents, potential rules suggested by the HOA board, and service provider contracts.
- Educate: Participates in meetings to respond to questions, clarify concepts and documents, and give information to homeowners or HOA board members.
- Collect delinquent assessments: Compose and issue routine demand letters, file claims, process foreclosures, prosecute if needed.
- Enforce deed restrictions: Compose and issue routine demand letters, file lawsuits, prosecute if needed.
- Litigate: to make collections, impose deed restrictions, and protect the board.

Commuity Associations (HOA) and Financial Management

One of the greatest responsibilities of the board is to handle the association’s cash resources — your money. We take this charge seriously; these are the processes we demand to safeguard your money:
- Association financial records are reviewed every year by a CPA.
- Bank statements are reconciled without delay every month.
- Balance sheets and profit/loss statements are analyzed every month, and expenses are examined against the budget every month. 
- Association reserve accounts are broken down annually to confirm that they will meet future demands.
- The association has an investment policy that protects invested capital funds, a trademark policy that protects operating funds, and an assessments policy that secures cash flow.
- Every association volunteers and personnel who can access association assets are certified.
- Kickbacks are forbidden and any potential conflict of interest must be divulged.
- Checks and balances are implemented to secure the safety of association assets — for instance, all checks must have two signatures.

HOA Associations and board members, by the numbers

Community associations equal Big Business. Reflect on the statements below:

- In excess of 1.7 million volunteers act as community association board members, and another 400,000 act as committee members. There are 230,000 yearly association meetings with freely-held elections and another nearly 2.5 million board meetings during the year where owners argue and guide their community’s future. To aid boards, more than 1.4 million committee meetings are held every fiscal year. The monetary worth, in the year 2000, of this volunteer participation approached $275 million. The dollar equivalent for volunteer time, based on data from the 1998 Economic Report to the President, comes out to $15.39 per hour volunteered.

- Community association boards oversee the assessment of over $34 billion in annual levies and hold investment accounts of another $35 billion in reserve.

- Associations provide dwelling space for almost 60 million people in homes that have an approximate resale value of nearly $2.5 trillion. 

- These owners lay out an additional $25 billion for improvements to home interiors and an estimated $85 billion for interest on mortgages and real estate taxes.

 

HOA homeowners: rights and responsibilities

As an association homeowner, you possess particular rights, as well as responsibilities. 

You have the right to . . .
-  A receptive and capable community association.
-  Truthful, reasonable, and conduct towards you by community leaders and managers.
-  Be present at meetings, participate in committees, and run for association office.
-  Have rightful access to association records.
-  Careful financial administration of fees and other levies.
-  Reside in a community where the property is maintained in keeping with set standards.
-  Balanced treatment relating to financial and other association responsibilities, including the chance to comment on payment plans and options before the association takes any legal action, and the right to challenge judgements.
-  Obtain all rules and regulations ruling the community association — if not before purchase and settlement, then upon entry into the community.

You also have the responsibility to . . .
-  Keep up your property in a manner fitting established standards.
-  Engage with association leaders in a truthful and respectful way.
-  Learn and adhere to the rules and regulations of the community and make sure that your tenants and guest do as well.
-  Vote in community elections and on additional matters.
-  Pay association levies and fees in a timely manner.
-  Communicate with association leaders or managers, as needed, to converse about financial requirements and payment option choices.
-  Request reevaluation of material judgements that impact you directly.
-  Give your up-to-date contact information to the association so you get all information provided by the community.

Tips on renting out your house

Roughly 4 out of 10 homes in US suburbs have renters as residents. If your unit is among those homes — or soon will be — here are some tips to aid you, your renters, and the association. 

- Talk to the Manager

The association manager can provide vital information about what the association expects of owners and renters and tips regarding the rental process that will be greatly useful, particularly if you’re a first time lessor. The manager has sample leases you can refer to, and copies of the association rules to provide your tenants.

- Check the Documents

Ensure you comply with the association’s ruling documents—the bylaws and CC&Rs. They might include special demands for nonresident owners who lease their units.

- Educate Prospective Tenants

Make sure you inform would-be renters about the special particulars of living in a community association before they sign a lease. The association will be glad to provide you a copy of the rules to give to them.

- Use a Lease Addendum

Doubtless you’ll have your renters sign a lease. Please affix an addendum to your lease that goes over the particulars of the community association and insists that renters stick to association rules. This is crucial because it affords you and the association a method of enforcement. A proper lease or lease addendum should reinforce the community by:
-- Obligating the tenant to follow the bylaws, rules, and regulations of the association. (Affix copies!)
-- Obligating the tenant to pay fines for broken association rules.
-- Obligating the tenant to leave if community association rules are broken repeatedly

- Keep the Association Informed

When the lease is signed, provide a copy to the association manager or a member of the board. The more information you can give about your renters, the greater success they will have fitting into our community. Please give the association the information listed below:
-- Renter’s name (as well as those of children and/or roommates) and phone number.
-- Renter’s email address, employer, and any other relevant details.
-- Renter’s vehicle description & license plate numbers. This will permit us to give parking information.
-- How many/what sort of pets, if any.
-- Your forwarding address and phone numbers.

- Encourage Tenants to Participate in the Association

Be the voice of your tenants with the association. Ensure they have use of the recreational and parking areas and that they hold the keys and passes they require. Please provide them with the name and phone number of our association manager.

Although tenants have no direct say in association matters, they are a valuable component of our community. Make them feel accepted, give them information that will help them get to know the association, and inspire them to join in community activities at every opportunity. Today’s renters might become tomorrow’s owners, perhaps even board members. The more effort we all make to bolster a sense of fitting in for renters, the more constructive and fruitful the leasing experience will be for all.

The importance of community association assessments

When you get around to paying your bills every month, do you think of your association assessment as of lesser importance? If you do, reconsider it. 

As stated in the National Consumer Law Center’s (NCLC) publication, 'Guide to Surviving Debt', “Condo fees…should be considered a high priority.” Indeed, NCLC holds community association assessments to be in the same class as mortgage payments and real estate taxes — a grouping rated second in importance only to a family's food requirements — per the “Sixteen Rules about Which Debts to Pay First” found in the guide.

Assessments purchase services such as building maintenance, snow removal, and cleaning that you would buy regardless of where you dwelled — whether coming directly out of pocket or added into a larger rent payment. In contrast, the association has group buying power, so when collective community services and utilities come to you as a monthly fee, you’re actually getting a much better deal.
 So, the next time you grab your checkbook, be sure to place your assessment near the top of the bill pile. You’ll be happy you did.

HOA Budget Committees 101

The budget committee is made up of members of our community association, which allows residents to provide input as to how their money is used. How does the budget committee operate and who works on it?  

The Treasurer’s and Accountant’s Roles

It's clear why the board treasurer should be the budget committee chair. As chair, it’s the treasurer’s role to keep everyone on target as the budget is planned out. The treasurer also puts the budget forward for endorsement by the board and members. If the association uses an accountant, he or she may provide consultation, but the accountant truly has no direct role in the action of putting the budget together.

Who Should Be on the Committee?

The owners who work on the budget committee should comprise a representative sample of the community. Naturally, if there are members disposed to serving who have special knowledge in matters such as insurance, that’s a plus. As far as size goes, a useful overall guideline is that the committee shouldn’t be so great that it becomes unmanageable. 

What the Committee Does

The treasurer ensures that every committee members comprehends the three core elements of the budget:

1. Money required for day-to-day running of the community, such as shared electricity and water, grounds keeping, insurance, and general maintenance. These costs are either contract-based or can be fairly approximated based on experience. A vital matter when examining items in the operating budget is community members' expectations — for instance, do members prefer the landscaper of the “blow, mow, and go” sort, or will they instead opt for a landscaper who provides a superior quality of service?

2. Money required to sustain our reserves at adequate levels. Reserve funds make money available for the fixing and restoration of the community’s holdings - examples include the pool, roofs, pavement, etc. 

3. Money for extensions or upgrades to the current property. This is a result of what members of the community desire and will commit to paying for. The community ought to give input and consent for this element. 

Equipped with this knowledge, the committee will assess total costs for the next year and weigh that sum against the association’s possible income (assessments, interest on investments, concession income, etc.). If costs exceed income, the committee will seek ways to reduce costs without negatively impacting service. If that doesn’t produce a balanced budget, the committee might be compelled to make a hard choice — whether to increase levies or impose a one-time special assessment.