Which HOA Documents Take Precedence Over the Others?

If your HOA governing documents are in conflict with one another, how do you know which one to follow? Which one would win between HOA bylaws vs state laws? And what if some HOA documents are in violation of your state or national rights?

The Hierarchy of HOA Documents Explained

As an HOA board member, you have a responsibility to uphold and follow the association’s governing documents. However, these documents were written by people, and people aren’t perfect. Conflicts in provisions happen all the time. So, what do you do when you find two or more documents advising different courses of action?

The answer is to simply look at the hierarchy of documents within your association. Some documents take precedence over others. If you don’t know which one supersedes the others, take a look at the list below:

1. Federal and State Laws and Statutes

Book with title federal law on a table | hoa bylawsThe laws of the land take precedence over all other HOA documents. State laws come before local laws, while federal laws outweigh everything else. Whether you’re drafting your governing documents or deciding which one to follow, it’s important to always check the law first. This way, you’re not acting against the laws of the land.

So if your HOA CC&R documents have restrictions on things like sex and religion when it comes to potential homeowners, that would be in conflict with the Fair Housing Act. In this case, the related provisions in your CC&Rs violate federal law, which makes them unenforceable.

2. Recorded Map, Plan, or Plat

Next up on the HOA documents hierarchy is the map or plat that your association recorded with the county office. It’s simply the recorded plan of your entire subdivision or community. This document establishes maintenance responsibility and property location. It also shows the exact dimensions of each unit, easements, and setback requirements. Other items of note include:

  • Trash enclosures specifications
  • Restrictions on vehicular access
  • Handicapped parking spaces and parking restrictions
  • Landscaping restrictions
  • Lighting requirements and prohibitions
  • Areas for future development
  • Lighting and other requirements/restrictions

3. CC&Rs

The Declaration of Covenants, Conditions, and Restrictions (CC&Rs) take the third spot on the HOA documents hierarchy. This document details the rights of homeowners and the responsibilities of the HOA board members. Typically, the CC&Rs also contain stipulations associated with assessment obligations, maintenance responsibilities, and enforcement authority. This is also where you’ll find specific procedures on how to handle various issues such as disputes and violations.

Others know the CC&Rs as the rules of the community. This document guides homeowners on what they can and can’t do, particularly when it comes to property use and other aspects of HOA living. Before purchasing your home in an HOA community, you’ll be informed of the CC&Rs and asked to agree to them. You may even need to sign something as proof of agreement.

When a homeowner violates a covenant, certain consequences take place. Most associations send out a notice of warning on the first offense. Fines and the suspension of privileges are typical courses of action for future violations. Failure to settle these fines can eventually lead to legal action.

4. Articles of Incorporation

The Articles of Incorporation includes essential information such as the legal name of the HOA, address, and the association’s corporate status. Some articles also contain a few basic functions of the HOA. This document, while necessary, doesn’t consist of much. It’s filed with the state upon the formation of the association.

Coming in fourth on the HOA documents hierarchy means the Articles of Incorporation supersede the HOA bylaws and the operating rules. However, they don’t take seniority over the state laws or the CC&Rs. So, if something in your Articles of Incorporation comes into conflict with a provision in your CC&Rs, the latter takes precedence.

5. HOA Bylaws

The HOA bylaws consist of important information related to how the association is run. Like a business, a board of directors oversees the workings of an HOA. The bylaws simply state the particulars of how to operate the HOA, such as how often to conduct meetings, the process of holding meetings, and voting rights. This document also includes how many board members there should be as well as the functions of each of those board members.

As fifth on the list, the only document the HOA bylaws prevail over is the operating rules and regulations. So, if your bylaws clash with, say, your Articles of Incorporation, you must follow the latter document. If you wish to see your HOA bylaws or any other governing document, you can request a copy from your HOA board or with the county recorder’s office.

6. Rules, Regulations, and Resolutions

Whereas the CC&Rs and bylaws determine the procedures and responsibilities of the HOA board, the rules and regulations focus on the day-to-day aspect of operations. This can include rules regarding clubhouse use, pets, and even architectural or landscaping specifications.

These rules can change from time to time, though the board must ensure that new rules or amendments don’t come into conflict with other governing documents. Moreover, it’s a good idea to have the association’s attorney look over these policy changes to make sure the board is acting within their scope.

On the other hand, if you’re a homeowner who disagrees with one or some of the operating rules, you’re not entirely powerless. Make sure to let the board know why you (and/or others) oppose the rule. You can also check your local laws or reference other governing documents to see what else you can do. After all, every state and association is different, so what may work for one HOA might not work for another.

The Importance of Homeowner Association Documents

Communicate Important things | hoa bylawsHOA documents are clearly essential for all homeowners associations, no matter the size. They define what HOAs can and can’t do, how to do them, and when to do them. Every organization needs a set of documents governing its operations. Without these documents, an association would fall into anarchy.

Consistency is important when it comes to HOA documents. So, whether you’re just beginning to draft your governing documents or considering amending them, make sure they’re in line with the laws and provisions that precede them. This way, you won’t run into conflict or, worse yet, legal trouble.

 

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How to Increase Annual HOA Meeting Attendance

As an HOA board member, you know full well that attendance is one of the most challenging aspects of the annual meeting. Most community members do not seem to be interested in hearing from their HOA — mainly because they don’t think that the annual meeting agenda applies to or impacts them. However, not all hope is lost. Here’s how you can improve your HOA annual meeting attendance.

HOA Annual Meeting Attendance: The Problem with Low Turnouts

Let’s face it, the annual HOA board meeting doesn’t sound like the most exciting event. Indeed, the HOA board uses these annual meetings to discuss the more technical aspects of community management, such as the annual budget, assessment fees, board elections, and capital improvement projects. As a result, homeowners tend to brush off the annual meeting.

To encourage homeowners to attend the annual meeting, the HOA board must explain why their presence is so important in the first place. Why is their annual HOA meeting attendance such a big deal? Simply put, it is the most important meeting for your association. The annual meeting is where the board decides on the most important community matters — and these decisions can significantly affect the lives of your homeowners.

Attending the annual meeting means that homeowners can voice their thoughts and opinions. For instance, if the HOA is thinking of increasing HOA fees, homeowners may want to negotiate with the board members during the annual meeting.  But if homeowners do not attend, they won’t have a choice but to accept the higher monthly assessments.

Low attendance at HOA meetings can impact the quality of your HOA board of directors as well. If the community is not adequately represented during HOA board elections, the people who are in attendance can influence the results. It’s possible that new board members will be the ones who had the most backing and not necessarily the one who was most qualified for the position.

So, if you want the best outcomes for your community, it’s important to improve HOA meeting attendance.

How to Increase HOA Annual Meeting Attendance

HOA boards cannot do anything about the seriousness of the annual meeting agenda. However, they can incorporate fun HOA annual meeting ideas to encourage more community members to attend. Here’s how to increase attendance at meetings

calendar | improve homeowner attendance1. Give Adequate Notice

Sometimes, a low HOA annual meeting attendance is because homeowners were not given adequate notice. They may have found out about the annual meeting too late and thus, could not make room in their busy schedules.

Start advertising the annual meeting as early as two months before the schedule. You can mention the annual meeting in your newsletter, post signs, or invitations on the community board, and promote the event on your social media accounts. Then, as the event draws near, ramp up your advertising efforts to keep the annual meeting on homeowners’ minds.

2. Choose the Right Time and Place

If you want to improve homeowner attendance, choose the most convenient time and place for your annual meeting. Some communities have a set schedule for their annual meeting, which is stated in their governing documents. However, if there is none, find a schedule that is most appropriate for your community members.

For instance, if your community is made up of young professionals, scheduling the annual meeting during cocktail hour can encourage them to attend. Meanwhile, for communities with families, it would be convenient to have the annual meeting after work but before dinner time so that parents still have time to attend to their children.

When it comes to location, choose a venue that can accommodate your most — if not all — of your community members. It could be the function hall of your community center or the basketball court. Just keep in mind If the space is cramped, homeowners could leave even before the annual meeting begins. The venue should also be appropriate for the kind of activities that you are planning.

3. Collect Homeowner Questions and Concerns

Prior to the annual meeting, the HOA board or HOA management company can collect questions, requests, and concerns from the homeowners. Tell them that all these will be addressed during the annual HOA meeting. So, if homeowners want to hear the HOA’s response to their input, they will be encouraged to attend the annual meeting.

4. Share the Annual Meeting Agenda

As soon as the HOA board finalizes the annual meeting agenda, they can send it to the homeowners to read. This way, community members will know what to expect during the annual meeting. They may also see topics or activities that pique their interest and encourage them to attend.

The annual meeting agenda should also have clear start and end times. It’s good for homeowners to know how much time is allotted per item so that they can also manage their expectations. If schedules are tight, they can also make an effort to attend the more important events such as board elections.

5. Incorporate Interactive Elements into Your Presentation

During the annual meeting, there’s no way of going around the technical aspects of the HOA budget. However, if you incorporate interactive elements such as pictures, graphs, and videos into your presentation, it will help homeowners understand the information much better. You can even enlist the services of homeowners who may have excellent presentation skills or comedic skills to make the presentation as fun and lighthearted as possible.

raffle | improve homeowner attendance6. Introduce a Social Aspect

Having a static, straightforward meeting will not do you any favors when it comes to increasing homeowner attendance. But, by introducing social aspects such as food, games, or raffles, you can increase participation in your annual meeting.

The annual HOA meeting can also serve as a welcoming party for new homeowners. You may even want to incorporate an educational seminar — one that can really benefit your homeowners.

Also, strongly consider having a free daycare service at the annual meeting. Parents may not think twice about attending the annual meeting if they won’t have to hire a babysitter to watch their kids. So, if the kids are being taken care of, more homeowners can attend the annual meeting.

7. Keep Annual Meetings Short

Unlike 1-hour board meetings, annual HOA meetings have more comprehensive agendas and so they may last for much longer. Nevertheless, you can still keep your annual meeting short and sweet.

Stick to your annual meeting agenda and avoid straying from the topics being discussed. If the annual meeting will last for several hours, include breaks in between so that homeowners have time to digest the information and decompress. These breaks are also the best time to introduce your social activities.

8. Collect Feedback After the Annual Meeting

If you collect feedback from homeowners, their comments and suggestions will be useful when you’re planning the next annual meeting. If homeowners see that you are really taking to heart their comments and suggestions, they will be more encouraged to attend the HOA’s future annual meetings.

Build a Stronger Community by Increasing HOA Annual Meeting Attendance

Even though there is an HOA board that oversees the association, homeowners should remain engaged and participate in community matters. One of the best ways to do this is to encourage them to attend the annual meeting. But, if your annual HOA meeting attendance is quite low, there’s no need to worry. Just follow these helpful tips so you can increase turnout. When your annual meetings are more interactive and engaging, homeowners will no longer have to think twice about attending.

 

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Handling Short-Term Rentals in an HOA

HOA board members have many decisions to make that impact the association and those within it. As services offering short-term rentals have become more popular in recent years, HOAs have to be prepared for deciding how they’re going to handle these types of services. Make sure you are taking proper safety measures such as installing gates beechboro.

Let’s take a look at the pros, cons, and what your options are when offering short-term rentals in your association.

Pros of short-term rentals:

  • More tax revenue
  • More income for homeowners
  • Better chance of owners improving and/or maintaining their properties
  • Offers distinction in the community for a competitive market

Cons of short-term rentals:

  • More people in the common areas
  • Possible noise problems
  • Potential damage to property, which could decrease property value
  • More loitering
  • Concerns about security and safety of those in community

After going over the pros and cons of short-term renting for your community, you’ll want to think about additional actions you can take when making your decisions. Here are some things to consider:

 

Homeowners are responsible

Owners need to understand that everything that happens on their property is their responsibility — from minor noise issues to larger damages or parking violations. This can be low-risk but also just as easily open up the community to possible illegal activities if owners aren’t careful about renting.

 

Ask owners for their opinions

Have your HOA board or management company send out surveys to owners by mail or email to find out how they would feel about short-term rentals. Get a good understanding of their concerns and feelings around the idea. This will help you consider your residents first and foremost, no matter what you choose.

 

Your association still has power

If your local law allows short-term rentals in your HOA, the association might be able to add text to your CC&Rs for rules on these types of rentals. You might also be able to add language that completely prohibits them. Speak with your attorney to be sure any of these amendments are in line with your federal, state, and local laws.

 

Speak with your HOA management company

Your HOA manager can offer some expert advice on how to best manage short-term rentals. Speak with your management company to talk about the best ways to communicate with owners and residents on the subject, as well as train board members on handling any issues related to short-term rentals.

Why Is A HOA Management Contract So Important?

HOA board of directors are used to dealing with contracts for any type of goods or services needed by the association. Contracts are a standard practice so that both parties understand their specific roles and duties. That’s why a legitimate contract between you and your HOA management company is important too. From daily duties to payment terms, you want everything in your HOA management contract to be clear and fair.

Why Do You Need an HOA Management Contract?

As an HOA board member, you might come across some management companies that offer “no contract services” but involve a signed agreement. These types of agreements most likely do not provide important terms — which can really hurt your community in the long run.

 An HOA management contract is very important. It’s a legal document that states your expectations. The contract should have a clear outline of the services that you expect from the HOA management company.

The HOA contract also contains other important details such as the terms of service. It will specify the beginning and end of the contract, as well as provisions for continuing, exiting, or terminating the partnership between association and management company.

A good HOA management agreement will also detail the number of visits, inspections, and meetings from the manager, as well as fees for additional services.

Should the HOA management company fail to deliver, the management contract will provide the association with protection. That’s why it’s important not only to have a well-written contract but for the HOA board to also carefully look over all the details before signing the contract.

HOA Management Contract: What Should Be Included?

Signing the agreement in the contract. | hoa contractNow that you know the importance of an HOA agreement or a property management contract, it’s time to delve into the specific sections. Keep in mind that contracts will vary substantially, but these are some key points to look out for.

Terms of Service

 The HOA management contract should outline the terms of service. When does the contract take into effect and until when? This section should also include a termination policy applicable to both parties. One party may choose to terminate services if there is a valid reason. There will be some restrictions, though, such as a 30-day written notice.

Services, Duties, and Fees

Any basic HOA management contract will have a section outlining the services and duties to be performed by an HOA manager and how much the association has to pay the management company annually and/or monthly.

HOA agreements will have a base management fee that corresponds to a list of services. Make sure to ask how much the management company will be charging for additional services.

Some companies will have a higher management fee but will provide more comprehensive services. Be wary of companies that offer lower fees but have hidden charges. These may end up costing you more in the long run. As such, make sure to cover all bases when it comes to services and fees —before signing the contract.

Responsibilities of the Association

An HOA management company will not do everything for your association. In most cases, the HOA board will still retain some responsibilities. Clearly outline the board’s responsibilities in the HOA management contract. This will prevent any misunderstandings or confusion as to who really is in charge of a specific task.

Liability

Liability is also a basic part of the HOA management contract. This section can also be called the Hold Harmless Clause. This protects the management company against liability, as long as they acted in the best interests of the association.

For example, they will not be held liable if the contractor they hire causes damage to association property. However, this clause will not protect HOA management in cases where they were negligent or fraudulent.

The HOA board should also make sure there is a Reasonable Care Clause. This means HOA management should still perform due diligence when carrying out their responsibilities — like when hiring a third-party.

Litigation Expenses

The HOA management contract may also have a provision for litigation expenses. It states that the association will be responsible for legal expenses should HOA management become involved in a lawsuit. This assures HOA managers that they can do their duties without fear of getting sued.

Services Included in the HOA Management Contract

Management services will depend on the needs of your community as well as its resources. Nevertheless, here are some services that you can expect an HOA management company to perform.

Maintenance of Common Areas: HOA managers will regularly visit common areas, contract with vendors for maintenance and repairs of common areas, purchase parts/equipment needed for common areas, evaluable long-term maintenance needs, and recruit personnel.

 Accounting and Financial Management: An HOA manager’s responsibilities may include assisting the board with the annual budget, obtain a reserve study, collect HOA dues and assessments, monitor the association’s bank accounts and balances, send HOA invoices, send delinquency notices, prepare financial documents, prepare vendor payments, and so on.

Insurance: The board can delegate insurance tasks to their HOA manager including recommending insurance companies, preparing insurance bid proposals, placing appropriate insurance coverages, and processing insurance claims.

Administrative Services: HOA managers also handle day-to-day administrative tasks such as answering phone calls and emails, following up on homeowner complaints and requests, enforcing HOA rules, scheduling HOA board meetings, and so on.

Conflict Resolution: An HOA manager is also helpful when it comes to resolving conflicts, especially if it’s between board members, or between a board member and homeowner. Having expertise such as conflict resolution skills means they will able to deescalate conflicts and preventing lawsuits.

Having an HOA Management Contract Is Just Good Business

good hand, good job , man show thump up for agreement sign with success business concept. | hoa contractThey say that running a homeowners association is just like running a business. And so, if you want your HOA to be successful, you have to have good business practices — such as having an HOA management contract.

An HOA management company is supposed to make the board’s lives much easier. But if you don’t have a contract — or one that is not clear and fair—it will only lead to more problems for the association. Having a management contract means you’ll be able to cover all bases as well as protect the members of your community from costly mistakes and disappointments.

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9 Things You Should Know When Setting Up An HOA Budget

Planning an HOA budget can be difficult work, especially if you’ve never done it before. With so many things to consider, it’s easy to lose track of the details. Luckily, there are some things you can do to ensure smooth preparation.

HOA Budget Guidelines to Live By

Setting a yearly HOA budget is a crucial part of a homeowners association, but the laws about how the process should go are often poorly understood. This can lead to less-than-ideal practices, so we’re providing some best practices for your HOA board as it sets its budget this year.

1. Know What the Budget Is For

Happy young family couple planning monthly budget | set hoa budgetThe first thing you must do is know what the budget is even for. This way, you can anticipate the right expenses. For instance, if you’re budgeting for a special project, you must draft pro forma budgets.

If you’re planning the annual HOA budget, you must take everything into account. The annual budget sets the tone for the entire year and determines how much to charge homeowners in assessments.

Some of the essential items you must include in your annual homeowners association budget are:

  • Utilities (like water, electricity, gas, and the like)
  • Insurance
  • Maintenance needs
  • Vendor services
  • HOA management fees
  • Reserve fund contributions

2. Look at Your Governing Documents

Your governing documents should include a description of how the HOA budget is to be adopted every year. Most of the time, the budget will be adopted by either the HOA board or by vote from homeowners. And, in some instances, you might need both, especially if you’re needing to adopt a budget that includes a big assessment or dues increase that will largely affect homeowners and would require their vote.

It’s important to check your governing documents first before you plan HOA budgets. By doing so, you can ensure you’re following the proper guidelines set forth by the association. Failure to abide by the governing documents can result in legal consequences for the board and the HOA.

3. Check Historical Data

When planning your budget, it’s always a good idea to look at past data. After all, this is how projections are made. Compare the actual expenses the association incurred the last 3 to 5 years. This way, you can get a rough grasp of what your upcoming year will have in store in terms of costs.

Keep in mind, though, that you shouldn’t just rely on past data for your projections. A lot of outside factors can influence your budget. For instance, an increase in wages can significantly change how much vendors charge for their services. Make sure to marry the past with anticipations of the future, as well.

4. Consider Your Reserve Studies

Staying up-to-date on reserve studies is also important for understanding what will be needed in terms of future replacements and repairs for the community. In fact, some state laws even require reserve studies on a regular basis.

A reserve study will let you know how much money is currently in the reserve fund versus the estimated life remaining and overall condition in certain elements on the property. This way, you better know what to expect.

Without a reserve study, you risk running out of money for future replacements or capital improvements. As a result, your HOA will have no choice but to raise assessments or charge special assessments, which no resident will want.

5. Determine Assessments

Setting yearly assessments is a big deal because it affects homeowners directly. After you’ve done everything necessary to develop your HOA budget for the coming year, it’s time to set those assessments in one of two ways: charging each homeowner equally or charging each owner based on the percentage of property their unit holds.

When you set HOA budgets, though, it’s important to keep in mind that not all homeowners might pay their dues on time or religiously. Some homeowners default on their payments. Make sure to account for delinquent homeowners when preparing your annual HOA budget.

6. Negotiate Contracts

Businessman putting a card with text Time to negotiate in the pocket | set hoa budgetVendor services are a big part of your annual HOA budget. For this reason, it’s best to assess your contracts and send out requests for proposals ahead of time. This will help you allocate funds with better accuracy.

Make sure you’re getting the best deal and don’t be afraid to negotiate with your current or new vendors. The first estimate doesn’t have to be accepted if you think changes should be made.

7. Share Money-Saving Tips

Giving owners ways to cut back in the new year will help everyone be more conscious. Send out emails or newsletters to the community with best practices for water usage, recycling, etc. This will not only cut down costs but can also be beneficial for the environment.

8. Ask for Help

It’s not a bad idea to ask for professional assistance when drafting your HOA budget, especially if your board has little experience in this field of management. Several HOA management companies offer their services on a full-time or remote basis. HOA managers have the necessary expertise and experience to handle budget preparation.

If you can’t afford professional services, you can always turn to the internet for aid. A simple search will turn up numerous HOA budget templates you can use as guides. There’s no shame in asking for help. In fact, doing so only means you care about the community.

9. Be Transparent

Lastly, communicate regularly. Homeowners trust their HOA board to make and use budgets with the utmost integrity. It’s also easier to get budgets passed if you’re open and honest, getting the community involved in understanding the numbers and taking responsibility for their part. Plus, you might be able to get input or ideas board members hadn’t thought about yet!

HOA Budgets Serve a Purpose

Many HOA boards shudder at the very mention of HOA budget preparation, but it doesn’t have to be that way. Armed with these tips, enough time, and a willing effort, you can set your budget without running into problems. Remember that an HOA exists to serve its community. Without budgets, there would be no assessments. And, without assessments, an HOA can’t fulfill its duties.

 

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The Truth about HOAs: Involved Homeowners are Happier Homeowners

Article Link: http://blog.associaonline.com/the-truth-about-hoas-involved-homeowners-are-happier-homeowners

MYTH: HOMEOWNERS DON’T NEED TO ATTEND COMMUNITY ASSOCIATION BOARD MEETINGS.

Board members are community leaders. They volunteer their time to make decisions on the well-being and financial health of their association. Every homeowner has a right to know what’s going on in the community and the board should embrace that.

FACT: HOMEOWNERS CAN AND SHOULD ATTEND REGULAR BOARD MEETINGS TO KNOW WHAT’S GOING ON IN THEIR COMMUNITY.

However, it’s important for homeowners to understand the structure of board meetings and only participate at the designated time on the agenda. This usually happens once the board has conducted their board tasks and is referred to as a homeowner’s forum.

Transparency is key to neighborhood harmony. For boards, this is your chance to shine and show the amazing work you are doing for the community. Post the meeting minutes on a bulletin board or on the association website. This will allow all owners to quickly see what is being discussed. Make sure all topics of discussion are covered in the minutes, not just the ones that pass. (Download this meeting minutes template for your next board meeting!) Some projects take time to develop and some owners might have expertise in an area the board does not. Posting the projects the Board is considering might increase the chances for future Board members to step up and take a leadership role.

At a minimum send out a community newsletter or mailing twice a year. This should consist of seasonal information, neighborhood reminders, insurance information, budget updates, and include a letter from the board or the board president. Let the homeowners know what you are working on and what projects are up in the regular maintenance calendar. Informed homeowners rarely complain about receiving too much information about what’s going on in their Community. But, uninformed homeowners that are left out of the loop can create neighborhood discord if it seems like decisions are being made in secret that only benefit a few homes.

Finally, make the annual meeting an event worth attending. Talk about your accomplishments as a board since the last annual meeting. Brag about replacing the roofs on schedule without having to special assess because there are adequate reserves. Talk about your future goals and projects. Let the homeowners know next summer is the planned sealcoating of driveways to extend the life of the asphalt and save you all money in the long run. Express that you understand what a pain and a disruption these projects can be, but focus on the reason behind them. Thank the homeowners for electing you and let them know what an honor it is to serve by showing your passion for your community.

The difference between a happy and well-run community and a dysfunctional and bickering community is YOU! Be a positive contributor, educate yourself, enforce the governing documents fairly, set a realistic budget and be open and honest with everyone. Most importantly, lead by example. As a board member, it should go without saying that you should know and follow all association rules. The results will speak for themselves.

 

Thank you to our Corporate Partner Associa, Inc. for providing this educational article.  Associa is North America’s largest community management firm.  To access Associa’s free tips to help you bond with your fellow board members, click here.

The Truth about HOAs: Low Assessments Can Come at a High Price

Article Link: http://blog.associaonline.com/the-truth-about-hoas-low-assessments-can-come-at-a-high-price

MYTH: IT’S BEST TO LIVE IN AN ASSOCIATION WITH THE LOWEST ASSESSMENTS.

Another area of effective governance includes setting realistic budgets and funding the reserves. While no one likes

making the unpopular decision of raising the assessments, as a board member you are elected to make the tough decisions to promote, maintain, and enhance the community. The last thing anyone wants is a dreaded special assessment. These can be avoided through proper planning.

As your community ages you need to set realistic repairs and maintenance budgets to take care of the little things as they break down. By doing proactive maintenance such as caulking and roof inspections you will be able to catch problems when they are small before they turn into water damage inside a home. If this area is neglected it leads to deferred maintenance and more costly repairs.

FACT: THE ASSOCIATION THAT BUDGETS PROPERLY WILL AVOID COSTLY AND MORALE-KILLING SPECIAL ASSESSMENTS.

For major components you need to set proper reserves. The best thing to do is get a professional reserve study. These companies specialize in forecasting the cost of repairs and estimated life spans of the reserve items. By getting this study and funding appropriately to the recommendations of the study you will have the best chance of having the necessary funds available when major replacements or repairs are needed.

 

Thank you to our Corporate Partner Associa, Inc. for providing this educational article.  Associa is North America’s largest community management firm.  To access Associa’s free tips to help you bond with your fellow board members, click here.

The Truth about HOAs:Don’t Blame Governing Documents,Blame Inconsistent Enforcement

Article URL: http://blog.associaonline.com/the-truth-about-hoas-dont-blame-governing-documents-blame-inconsistent-enforcement

This is part one of a three-part series debunking common myths about living in community associations. Click here to read part two.

MYTH: ENFORCING YOUR COMMUNITY ASSOCIATION’S GOVERNING DOCUMENTS LEADS TO UNHAPPY HOMEOWNERS.

Most people believe that enforcing the Rules and Regulations and other restrictions in the Declaration leads to unhappy homeowners. It feels right, because no one likes to get a letter saying “You are in violation of a neighborhood covenant.” However, in my experience I find the exact opposite to be true. If an Association does NOT enforce the written R&Rs, it leads to far more unhappy homeowners than the few that get upset upon receiving a reminder letter.

For example, a very common rule in HOAs is to store your trash cans in the garage. Everyone forgets once in a while and they may get a reminder letter. We’ve received actual communications where owners apologize for violating the rule and thank us for pointing it out. These homeowners understand the value of the rule in keeping the neighborhood looking great, which leads to higher property values. They also know that the rules are being consistently enforced and can be assured that all the other rules are getting the same treatment.

Now imagine that instead of consistent and fair enforcement, the community checks for trash can violations only once a year, then sends out a bunch of violation letters, and doesn’t follow up until next year. Most homeowners upon receiving the letter will comply and follow the rules. But, when they see their neighbor across the street leave their trash cans out ALL YEAR and never receive a second letter, they’re going to think, “Why do I have to follow the rules and they don’t?” And they’d be right! Why indeed.

This experience can lead homeowners to wonder what else isn’t being done in the community and pretty soon you have a dysfunctional HOA.

This is just one example utilizing a simple trash can rule. Imagine all of the other R&Rs that a community association is responsible for enforcing and it’s easy to see how quickly and how widespread homeowner morale can plummet.

FACT: CONSISTENT AND FAIR ENFORCEMENT OF THE GOVERNING DOCUMENTS LEADS TO HAPPIER HOMEOWNERS.

Consistent enforcement takes fortitude. The homeowners who do receive letters might be upset in the moment and they may take it out on the Board or the Community Manager. However, once the reason for enforcement is explained most homeowners understand that the rules are in place for the greater good of the entire community. But, even if that homeowner just can’t stand following Association rules, as a board member, you can’t let the violations go unenforced because that is not in the best interest of the community as a whole. Many people specifically look for communities that have certain rules in place and they will have a legitimate reason to be upset if they are not being consistently and fairly enforced.

 

Thank you to our Corporate Partner Associa, Inc. for providing this educational article.  Associa is North America’s largest community management firm.  To access Associa’s free tips to help you bond with your fellow board members, click here.

How To Handle Squatters In Your HOA

Squatters in your HOA can be a huge issue waiting to happen. Squatters in homeowners association communities shouldn’t stay there. But when they do show up, it can be a complicated matter involving homeowner’s rights against squatters, versus squatter’s rights. It’s best to prevent squatters in an HOA if you can manage that. And when they do come up, let’s look at how to get rid of squatters in foreclosed homes, as well.

Squatters in Your HOA: A Preventable Problem

Homelessness is a serious problem throughout the country. Thus, homeowners associations are faced with the reality that squatters are a potential issue that can come up. So despite the HOA’s best efforts, squatters in homeowners associations can come up in various ways. They can even be people you know who just found themselves in a tight situation with their foreclosure. Other times, there could be just some people looking for a place to crash, at no cost to them.

If these squatters are merely taking up space they are not meant to, then the problem might seem to stop there. In condominium associations, for example, squatting cases don’t rank high in the list of their concerns. Other managed communities, however, are not so fortunate.

Some people are just determined – or desperate, to occupy homes, so you may sometimes hear about concerning reports of break-ins. Some squatters would just drop by for a night or two. Other, more brazen ones may even resort to changing the locks. Some of the more unscrupulous ones could even start renting out the suites in a home, too.

Squatters can be a potential problem in any community—even those that are managed well and kept up regularly. You might not be sure what to do if it happens to you, so there are some things you can do—and look out for—to prepare for squatters if they occur.

Here are the best tips for handling squatters in an HOA:

Prevent Squatters in Your HOA By Keeping Track of Ownerships

Homeless beggar man sitting outdoors in city asking for money donation | squatters rightsPreventing squatters in your HOA starts with being able to identify them early on. That means the HOA board should make it a priority to know everyone living in their community.

Thus, it goes beyond just simple security – it becomes a problem of access control.

It’s the responsibility of the HOA board and the HOA manager to have an accurate record of residents. And not just for the purpose of fee collection, either. Associations need to be able to account for who is occupying which property at all times.

Many HOAs have provisions in their governing documents designed just for that. So every time the ownership of the home changes, the HOA needs to be notified of that. Most HOAs would also require notice for tenant occupants, as well.

To prevent squatters in your HOA community, don’t hesitate to compel sellers to notify the association. After that, it’s mostly a matter of keeping accurate records. Also, it’s important to verify those records to make sure they reflect the actual occupancy status of a home or unit, as well.

When a squatter happens, the homeowner usually isn’t aware of it. As an HOA board, you can help by keeping track of who owns what properties in your community. This helps you know whether each property should be occupied.

Stay in Regular Touch with Residents

Communicate clearly with the owners and residents in your community so you can keep track of how everyone is managing their homes. By staying in touch with everyone regularly, you can get familiar with who should generally be there and who might be squatting in a home.

Encourage residents to keep an eye out for unfamiliar people, as well. Outsiders squatting in the empty properties within your community can turn into a security issue. So remind your residents that it’s in everyone’s best interest to make sure everyone in the neighborhood belongs there.

Be Mindful of Unoccupied Homes

Squatters are more likely to take advantage of properties that obviously look like no one lives there. In fact, there are many cases where homeowners are unaware that someone’s already squatting in their property. Help your owners avoid squatting situations by being mindful of piled up mail or newspaper or neglected upkeep.

Encourage members to get to know one other so neighbors can help watch out for each other’s properties.

Squatter Rights and Eviction

homeless teenager wearing hoodie, feeling cold, indifference and poverty | squatters rightsUnfortunately, your HOA will probably not have the right to evict someone—even if they are squatting. Sometimes, it’s a tenant who is properly paying rent to the homeowner.

If the homeowner neglects the HOA rules and does not register the lease with the association, that’s not on the tenant in many cases.  What the association can do is to get that lease on their records, and have that tenant be registered with the HOA.

In case you find a person who is a true squatter, the HOA board will still need to work things out with the owner or law enforcement. For foreclosed homes, it’s the bank who is the homeowner. In this case, the HOA can start by notifying the bank or the homeowner in writing. The squatter also needs to be notified in writing, as well.

If you find someone is a squatter in your community, remember there’s not much you can do as an HOA. You’ll have to let the owner of the property know in writing and also contact the police so they can help handle it.

There’s no need to complicate matters by directly confronting the squatter. Besides, there’s no telling how an individual will react if someone comes knocking on the door to evict them. So in most cases, getting someone physically evicted is a matter best left to the police.

Also, keep in mind that if squatters become a nuisance, then the HOA does have a few options on how to deal with them authoritatively.

Squatters in Your HOA: Start with Prevention

Preventing squatters in your HOA is much easier than trying to evict them. An HOA management company can also help you handle issues like squatters by contacting the appropriate people. They can also assist in preventing the situation from happening in the first place. Good record keeping will save you a lot of headaches later on.

 

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Managing HOA Politics The Smart Way As A Board Member

It’s hard to manage HOA politics when you don’t know where to start. Whether you’re a homeowner intent on running for a board position or a board member on your first day on the job, here are the things you should know about HOA daily politics.

Understanding Day-to-Day HOA Politics

In many ways, a homeowners association is much like a small country or state. It has a board of directors managing it and a set of governing documents dictating what these directors can and can’t do. In most associations, the HOA board consists of four core roles: the President, the Vice President, the Secretary, and the Treasurer. The first step in managing HOA politics is understanding these four roles and what their duties are.

  • President. The President leads the board and the community in all matters. They run meetings, execute contracts, and is the main point of contact for the HOA management company.
  • Vice President. The Vice President assumes the role of President when the latter is, for any reason, unavailable. As such, the Vice President must know how to handle the responsibilities of the President.
  • Secretary. The Secretary fulfills many responsibilities, including setting meeting agendas (with the President), recording meeting minutes, and sending notices to homeowners. In addition, the Secretary maintains the association’s records and co-signs important documents with the President.
  • Treasurer. The Treasurer is in charge of all things financial. They oversee HOA finances, prepare budgets, and lead finance committees.

Of course, not all homeowners associations are made equal. Therefore, one association’s board members may have specific duties that differ from another’s. One thing that doesn’t change, though, is the board’s duty to the community. As an HOA board member, you have to fulfill your fiduciary duties and prioritize the community’s best interest. You must enforce rules consistently and without bias, and you must ensure property values are well-maintained.

Dealing With Conflicts in the Community

conflict resolution | hoa daily politicsConflict resolution is a normal part of your job as an HOA board member. You encounter conflicts almost on a daily basis. Whether that conflict exists within the HOA board itself or outside of it, you must know how to deal with conflict when it arises.

The first thing you must do is acknowledge the other person’s opinions. Give them a chance to explain their side and let them know you hear them. Then, apologize. This doesn’t necessarily mean you’re in the wrong. Sometimes, even just apologizing for the misunderstanding can do wonders to repair the damage. After that, let them know that you and your fellow board members will discuss the matter at the earliest.

When looking for a solution, make sure to consider long-term effects. Go with the solution that works for all parties without sacrificing the community’s interests. When in doubt, check your governing documents and your HOA lawyer. Then, as the cherry on top, notify the other party that you’ve reached a decision. Thank them for bringing the issue to your attention.

What About Board Members Leaving?

Generally speaking, board members leave the HOA board in one of two ways: because they want to and because others want them to. If you want to resign from your position, for whatever reason, these are the steps you should take:

  • Write an official notice of resignation and include the date of effectivity.
  • Send the notice of your resignation to community members.
  • Help the HOA with the transition process by training your replacement.

On the other hand, some board members might be doing more harm than good, leading to homeowners (and even fellow board members) to want to remove them. If you want to remove a board member from their position, check your state laws and governing documents for the proper procedures. You can usually find these provisions in your HOA bylaws.

Generally, though, the process begins with drafting a petition to hold a special meeting with the purpose of removing the board member in question. Don’t forget to send a notice to the board member you wish to remove, informing them of the meeting and its purpose. Allow the board member to defend themselves before holding a vote at the special meeting.

Additional Tips for Managing HOA Politics

management | hoa daily politicsAs soon as you’ve been elected or appointed to an HOA board member position, you can expect to get involved in some HOA politics. The unfortunate reality is that, while you’ll have residents that agree with and respect your choices, you also have those in the community who aren’t afraid to voice their disagreement.

And that just comes with the territory. But, there are some techniques you can use to make sure you’re effectively filling your role for the best of the community and addressing needs or disapproval the right way. Here are some of the best ways to manage these politics while serving on your HOA board:

1. Be Specific About Goals

A board without goals can’t possibly know which direction it wants to go. Decide on exactly what you’d like to get done this year, and how you plan to do it. Make a plan that is specific and detailed before sharing it with your community.

2. Keep Everyone in the Loop

Communication is a foundational tool for HOA success. Make sure to communicate with your residents frequently and soon after a decision is made. Offer updates as much as you can, preferably on your HOA’s website or member board.

3. Encourage Feedback

Often, members just want to know their voices are being heard. Ask for feedback often and encourage volunteer members to help in the process of any changes being made. In nothing else, feedback lets your board know it’s doing its job well.

4. Have Public Meetings

We all know getting members to show up to board meetings is hard but invite them anyway. Send out meeting dates far in advance, and send reminders. Include minutes and financial reports in your HOA newsletters and website so everyone has the information they want available. Work with your HOA manager to encourage more participation.

5. Focus on What’s Best for the Community

Even if certain decisions are not completely in line with what you think, remember that the whole community’s best interests are the priority. Even if you have to enforce rules that are different than what you’d choose, remember your role for those in the community.

Politics Doesn’t Have to Be Complicated

It’s important to know the ins and outs of day-to-day politics within an association, especially if you’re a board member. After all, knowledge plays a key role in determining how successful your community is. Although HOA politics can be difficult to comprehend at a glance, there’s really nothing to it if you take the time to understand it.

 

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