Predicting the Future of Community Associations

Co-operative, private maintenance of commonly owned land and structures in small villages and towns has been around for hundreds, probably thousands, of years.  But in California, “common area,” and the community associations that maintain it, have only been regulated by statute for a few decades. The first California Condominium Act was enacted in 1963.  The Davis-Stirling Act, in use today, was enacted in 1985.  We began seeing condominiums massed produced for California consumers in the early Sixties when the McKuen Corporation started building their ubiquitous fourplex buildings throughout California.[1] Consequently, California’s experience with this form of housing dates back less than 50 years, and with so little history, predicting the future requires a lot of speculation.  We do have some data, however, and from those sources we can piece together a picture of how community associations, and the projects they maintain, might evolve over the next half century. Some of this comes from other writer’s accounts, and some from our own experience.  We tried to make practical predictions, based on recognized trends, so you won’t see anything here about condos on the moon!  The following facts are already evident:   Read more

What Financial Matters Should be Included in the Minutes?

Question:  I am new to the board of directors and I have been elected secretary. I am in charge of taking the minutes for the board of directors meetings. I have been secretary of several organizations in the past and feel comfortable with taking minutes, but have been told that there are financial matters of the association which need to be recorded. What specifically do you look for when you are reading an association’s minutes during the audit process?   Answer:  Here is a brief review of the key financial areas that we look for when reading the minutes during an audit and brief comments as to why it is important to the audit process.  Read more

Management Evaluation

An interesting feature of homeowner associations is that they are either self-managed or managed by a community association management firm under the direction of elected volunteers of various backgrounds. Experience has shown that there are some drawbacks to this concept: 

• Many associations are run more as social organizations instead of business enterprises that are comprised of assets often valued into the millions of dollars.
• Continuity in running a community association is often difficult to maintain because board members usually serve for a few years at most and there are turnover issues with professional community association management.
• Board members and managers often lack training and education.

The Community Association Institute offers professional training for managers and board members.  Listed below are some pointers taken from its’ M-! 00 course material.  (A highly recommended course for new board members and managers.) What are some of the signs of a weak or ineffective management situation at a community association?  Read more

Mortgage scam snagged scores

More than half of River Ridge's 45 units were auctioned off in sheriff's sales between last October and March, Dakota County foreclosure records show. Nearly all the foreclosed units were owned by investor-buyers arranged through Blackstone, according to people who bought there and a list of dozens of investor-buyers that one buyer created. The directory at River Ridge's front door shows about 19 units are occupied, some of them rentals. The condo's homeowners association declined to comment. Some residents are furious about what happened to their homes. It's bad enough living in a ghost complex, one said, but the rash of foreclosures means just a handful of legitimate owners are paying monthly association fees to maintain the entire building.   Read more

Professionalism and Customer Service First Contact to Last

You are at a local department store. You can’t seem to find the type of pants you want. You look for a sales associate. You look high and you look low. You look over in the next department. And the next. Finally you find that lone sales person. As you walk up, you just know this 19 year-old with a ring in her nose madly texting behind the counter is not going to be able to help you. And you’re right. In fact, she doesn’t even look up and see you for a full 30 seconds. You say to yourself: “&%**$%#@@!” This experience leaves you, the customer/client, angry and disgusted and vowing never to purchase from that retailer again. This scenario speaks of poor communication skills, which result in poor customer service. Why talk about customer service? Customers, or clients, are our life blood. No clients = no business. Happy clients mean continued business and can be more understanding and forgiving when we make inevitable mistakes. So in light of the above situations, have you ever thought about how you are communicating and providing customer (client) service?   Read more

Law Review: Riverwalk Bridge Obscured Neighbors' View

Landowners claim that structure interferes with their 'right to a view.' Generally, a property owner whose property abuts a lake, river, or stream possesses certain riparian rights, a bundle of rights that turns on the physical relationship of a body of water to the land abutting it. These rights pertain to the use of water in a waterway adjoining the owner's property. Riparian rights of the owners of lands fronting navigable waters are derived from common law as modified by statute. In the case of Center Townhouse Corporation v. City of Mishawaka (Ind. App. 2/20/2008), Center Townhouse Corp. ("CTC") and individual townhome owners ("Landowners") brought an action against the city of Mishawaka, Ind., and its park and recreation board in response to planned construction of a pedestrian bridge connecting Lincoln Park and Kamm Island.   Read more

CA Appellate Court rules Rossmoor Leisure World is a CID

Leisure World/Seal Beach seniors bagged yet another victory on last week, when the California Court of Appeal Fourth Appellate District in Santa Ana ruled in their favor and against the Golden Rain Foundation (GRF).  In an 18-page decision, the Appeals Court reaffirmed a lower court ruling that Leisure World is indeed a common interest development and, therefore, subject to the state laws governing associations.  The battle began in January 2004 when seven seniors filed 16 suits in small claims court, because the Golden Rain Foundation, which operates Leisure World, refused to turn over financial records. Civil Code 1365.02 lets homeowners > sue in small claims court if an association refuses to grant access to records. Since 2004, both Orange County small claims and superior courts have repeatedly ruled in favor of Carol Franz, Edmund Loritz, David Lyon, Jacklyn Shaw, and several other residents.  The Foundation then tried another legal tack: countersuing the seniors and arguing that Leisure World wasn’t a common interest development to begin with and that the Foundation “wasn’t a homeowner association.” It concluded, therefore, that neither entity was subject to the state statutes governing California’s 45,000 common interest communities. > Golden Rain has been battling the seniors in Orange County courts for four-and-a-half years -- and losing every round.   Read the opinion  (PDF)

6 Ways to Silence the Barking Dog

Summer night breezes, a cool walk in the park and a barking dog…These are the ingredients for a great evening.  If dog barking has become a problem in your community, here are six easy solutions to silence the barking.   Read more

HOA Management: A Breed Apart

Homeowner association management is one of the most challenging forms of property management there is. In residential, commercial and industrial rental management, there is a revocable agreement that allows the property owner a fair amount of control over the tenant. If the tenant doesn't live up to the agreement, the owner can terminate the agreement (and vice versa). This is not the case in HOAs which are controlled by the board, governing documents, HOA statutes and property rights.   Read more

Poor Documents and Insufficient Reserves = A Big Headache

The era of community associations really began to flourish in the late 1970s. The legal documents for those early homeowner associations and condominiums reflected the best thinking and analysis of the time regarding the future financial and operational needs of the individual communities. Actually, it is a tribute to the attorneys who crafted some of those fledgling documents with foresight to include flexibility for future boards with regard to assessment levels. However, in most cases, that flexibility was not included and community associations were limited to a small percentage annual increase – or none at all -- without a high percentage of membership approval. Those communities face a serious economic challenge today. Let me describe an actual situation involving a townhouse community in a suburb of a large metropolitan area that was built in the early 1970s. The community has private streets and parking lots, a clubhouse, and a swimming pool, in addition to wood perimeter fencing, two retaining walls, and some decorative brick walls. Their documents specify that the annual assessments can only be increased by a maximum of three percent per year.  Read more

Condo Units: The New No-Smoking Frontier

“My home is my castle.” Maybe, maybe not, if you’re a condominium owner. After pushing through smoking bans in bars and restaurants, anti-smoking advocates have begun to set their sights on another target: condominium units. These advocates have been predicting that it is only a matter of time before condominiums bar smoking entirely, not just in common areas, but inside individual condominium units as well. In fact, in 2006, a Colorado court upheld an amendment to the Declaration of Condominium prohibiting smoking anywhere within the boundaries of the condominium property, including the individual condominium units.   Read more

How Older Buildings Can Go Green by Taking the LEED

Brand-new green buildings with fancy, environmentally friendly features make headlines all the time. But the vast majority of the city's housing stock is not new. How can they catch up, to make their buildings more appealing and help the the environment at the same time? That's where the program "LEED for Existing Buildings: Operations and Maintenance" can come in.   Read more

Site To See: Green Condo Life

Just because you live in a homeowner association (HOA) governed community doesn't mean you always need permission to go green at home. Granted, a condo, townhome, loft or other home in an HOA community isn't always your castle when it comes to certain home improvements, but there are many other approaches you can take to help save the planet. Community Associations Institute (CAI) has launched an interactive, Net-based initiative, Community Green to help HOA communities turn global thinking into local action through environmental awareness and activism by community association leaders and the 60 million people who live in HOA communities.  Read more

Hiring a Great Maintenance Worker

Great community association maintenance workers are a major asset in so many ways. They bring a huge sense of pride to their supervisors and the community they work for and are often referred to as “gems”. This comparison to valuable merchandise is accurate and that is exactly what great maintenance workers are: a precious commodity. So how do we increase our chances of finding that “gem” when in the market for a maintenance worker? Patience is the key. It is important to be patient during the search process. All too often, a lesser candidate is “settled for” because of our busy schedules and the immediate need to fill the position. Desperation can cause a lowering of standards that can have long-lasting, negative effects. Dealing with an unqualified worker will cost much more in valuable time and money than taking the extra time needed to find a good worker. If several interviews do not turn up that “gem”, don’t settle. Keep looking. If possible, set up more interviews and keep trying. The more interviews conducted, the better chance a great worker will be found.   Read more