We have strict accounting protocols in place that provide the highest level of security to your association funds. Learn more about fiscal responsibility at SCS.

Q & A With HOA Expert

Q & A with HOA Expert

Q: I am having trouble contacting the individual directors on the board of directors. The HOA president says there are “privacy issues” to giving out phone numbers or email addresses. I’ve asked our property manager and I get the same response. I thought that as a homeowner I have a right to directly contact my board members.

A: All members, including board members, have the right to privacy. Your board has hired a management company to handle business. The manager, in turn, contacts the board as needed when business matters exceed the manager’s authority. I suggest you contact the manager with your request. Either he will be able to help you or will ask the board president or board for direction. This is a reasonable process to protect board member privacy.

Q: Does an Architectural Review Committee (ARC) have the right to ignore published regulations relating to the installation of playground equipment on a residential lot? Our Rules and Regulations specifies that before an application is approved, the owners of adjacent properties must be notified.

A: If the ARC has a procedure to follow and it has not been followed, you have the right to appeal the matter to the board of directors. The requirement for neighbor input was put there for a reason and should be honored as long as it exists.

Q: Can owners and board members be prohibited from conferring with the HOA’s lawyer by the board president who is the appointed liaison?

A: Since conferring with an attorney triggers cost to the HOA, the board should have a strict policy concerning how and when it is done and who has authority to do so. This policy should be communicated to the attorney in writing so he knows who he authorized to deal with.

 

Used with permission from Richard Thompson of www.Regenesis.net. From Regenesis Aug. 2017 newsletter. 

Like A River

Like a River

Last night I went paddling and was reminded yet again why I love rivers so much. Wild or quiet, no river is ever the same from day to day, season to season.

Water transforms the world. To enter the water is to enter another universe. The river takes the solid world we walk around in every day and shape-shifts it into another reality, a fluid reality of change and flow.

Flowing water is time itself unfolding. There is no other place where it’s possible to experience so vividly how time moves into the future as on a river. It is not the inexorable march of seconds, each the same as the next, or the hands of a watch ticking away. On a river, time moves because the world flows, now accelerating and then slowing, eddying and swirling to push and tumble ahead, never the same but always downward and onward.

The river is a constant reminder that we are capable of continual evolution, that every shape is only temporary, that time is always moving, that the world is constantly creating itself anew.

Science suggests that all elements heavier than hydrogen and helium have been through the life of at least one star. The oxygen and iron in our blood, the carbon that is the backbone of our metabolism and life tissue, the potassium and sodium that allow us thought and action, they all have an ancient pedigree billions of years old, born of stellar explosions, of planets dying and being reborn, of life beginning and evolving.

Everything within us has gone through this most epic journey. And through it all, a true miracle, that somehow we are given self-awareness. Over time, everything with us flows like water. Our very being is as transient as the surface of a river.

The river speaks all this and much more. It speaks of time and the currents of the world, of shaping canyons and cutting through continents. Of this instant and eternity. “We are made of dust, and the light of a star.”

From an article by Doug Ammons.

Used with permission from Richard Thompson of www.Regenesis.net. From Regenesis Aug. 2017 newsletter. 

Hi Yo Silver!

Hi Yo Silver!

Being a person that wants to serve and protect your own interests, you get yourself elected to the board. At the first board meeting, the president gives you a pep talk about not giving instructions to contractors or discussing board issues with other members unless you preface comments with “the board policy/decision is…”. You bristle at this. Who does this guy think he is? This is America, Home of the Free and Land of the Lone Ranger. Why shouldn’t you be able to say what you want, when you want and to whoever you want?

As a director on the board, you wear two hats: one as an elected official and another as a member of the HOA. While you are clearly entitled to your personal opinion, you need to be careful how and when you express your opinion as a board member. Once elected to serve the interests of the HOA, you need to view things through corporate glasses. This can be difficult when the issues are contentious.

The homeowner association form of government is a representative democracy…a few are elected to represent the many. A fundamental concept of democracy is rule by the majority. Thus, decisions of the board do not require consensus, just that most agree. This may leave some directors in the minority opinion and in even direct opposition with the rest.

When it comes to being a minority position director, there are several approaches, one good and one bad. An HOA board needs diverse points of view to make good decisions. If few have an opinion, usually the loudest voice will prevail and effectively the board will run by a dictator. Dictators don’t work well within the democratic context. Having dissenting opinions expands the perspective and dissenters can often have a major impact on shaping key parts of the final decision. A Lone Ranger dissenter may not carry the day but can still impact the outcome.

On the other hand, a dissenter can choose to express opposition by churning the board’s decision through the HOA grist mill, spinning the facts and creating ill will. It compromises the ability of the board to do its job and causes bad feelings among neighbors. That’s bad for everyone.

That said, there are times when a board or board officer is acting irresponsibly or even criminally. Whistle blowing is certainly appropriate when there is self dealing going on. If the matter is irresponsibility or neglecting HOA business, a vigilant director can be effective by promoting candidates that are more suitable or encourage ineffective directors to step down. But bad mouthing the current regime to neighbors over the back fence is usually self-defeating. It makes the Long Ranger look small minded, he will be ostracized or minimized by the remaining directors and lose ability to impact decisions.

A Lone Ranger director can also compromise the HOA’s interests by interfering with day to day management. One of the most frustrating things a contractor goes through is trying to respond to many “chiefs”. In a professionally managed HOA, the manager is usually authorized to direct contractors. But when a Lone Ranger director steps in to micro-manage a project, the contractor will often try to respond to both the manager and Lone Ranger. But it takes more time and effort and reduces the chances of a successful outcome.

Tonto was the Lone Ranger’s sidekick and mentor. With his wise manner, he would balance the Ranger’s hero compulsivity. Between the two and creative thinking, they always figured out a way to save the day.

In the final analysis, while dissent is a fundamental part of the democratic process and can produce good outcomes, consistently being a Long Ranger erodes the ability for the board to work as a team. Tonto understood the concept of teamwork and often gave the Ranger a different point of view by providing additional information and options. Encourage opposing points of view but strive to forge an outcome that works for the majority. Hi yo Silver!

Used with permission from Richard Thompson of www.Regenesis.net. From Regenesis Aug. 2017 newsletter. 

Model Remodeling

Model Remodeling

Owning your own home is an American dream. In urban settings, homeowner associations have become a dominant form of new construction, often representing over two thirds of new homes. While HOA homeowners have many rights and privileges, they often concede certain freedoms usually enjoyed in more traditional home ownership. One particular area of concession involves remodeling.

To control uniformity, look and feel, many HOAs have material, color and design standards which must be adhered to. In common wall and multi- story HOAs, structural integrity demands that changes made in one unit do not undermine or compromise the remaining units. For these reasons, it is important for the homeowner association to keep the owners informed and reminded of material standards and remodeling guidelines to avoid inadvertent violations.

Here are a number of requirements and guidelines which can be included in a Remodeling Policy as appropriate:

1. For smaller projects (mostly aesthetic, no structural or utility work involved), submit to the board for written approval prior to commencement of work a description of the work to be performed, who will do it and the anticipated schedule.

2. For involved projects (includes structural, utility work) owner must submit architectural plans, copies of permits and contractor agreements to the board for written approval prior to commencing work. If warranted, the board may seek the review and approval of an architect or engineer with related costs to be paid by owner.

3. If view is a consideration in project, require disclosure of proposed structure height and whether removal of trees is contemplated for better view.

4. All power tool operation must be accomplished either in the unit or off property unless authorized by the board in writing and provided there is no unreasonable objection from the neighbors.

5. Contractors are permitted to work only from 9:00 a.m. to 5:00 p.m.

Monday through Saturdays. No work on Sundays.

6. All demolition and construction material shall be disposed of off property, not in HOA dumpsters.

7. Contractor shall clean up affected common area daily.

8. Owner will provide adequate parking for contractor. Contractor may not use guest parking or block fire lanes.

9. Common utility (electrical, water, gas, etc.) interruption must be approved and coordinated by the board.

10. If landscaping renovation is proposed and the HOA has landscape standards, a comprehensive plan should be submitted showing proposed changes.

11. Establish specific standards (brand, model, color) for paint color, roofing material, storm doors, screen doors, awnings and other common add-ons.

Since the desire to remodel can happen anytime as the spirit moves the remodeler, the board needs to be proactive in keeping owners informed of expectations. Publish the Remodeling Policy on the HOA website and reference it in all newsletters and periodic email updates. Since remodeling will happen, make sure you do all possible to direct a model outcome.

Used with permission from Richard Thompson of www.Regenesis.net. From Regenesis Aug. 2017 newsletter. 

HOA Managers: A Rare Breed

HOA Managers: A Rare Breed

 

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.

HOA managers are called on to do everything that a rental property manager is supposed to do plus be an expert at diplomacy, mediation and human psychology. They are often called on to work a full day and then attend night meetings. It is demanding work and those that are good at it are a rare breed indeed.

HOA management companies typically work by contract for a monthly fee. But how is that amount computed? It generally is based on the estimated time it takes to accomplish the tasks outlined in the Management Agreement. There is often an extra hourly charge for tasks not deemed to be routine.

So what goes into the management fee? There are fixed costs like rent, phones, copier, insurance, computers and internet. Labor charges are based on the estimated time it will take to accomplish the prescribed work. Total fixed and labor costs plus profit margin equal the monthly management fee. It is common to divide this number by the total number of units/lots to derive the charge “per door”. Size matters. Smaller HOAs pay more and larger ones pay less per door.

Typically, an HOA management company will assign a manager, a bookkeeper, a maintenance supervisor and possibly an administrative assistant to the account. All will handle multiple HOAs. The average manager may handle 10-15 accounts.

The salary levels of the staff can have a major impact on the management fees. If an HOA wants experienced professionals, there is a price to pay. This is one of the most challenging forms of management there is and a jack-of-all-trades just won’t do. A qualified HOA manager attends seminars, has professional designations and credentials and focuses exclusively on HOA management. The HOA will benefit from this training and experience so expect to pay accordingly.

Managers spend a great deal of their time preparing for and following up on board meetings. For a typical board meeting, the manager gathers information and prepares a management report, reviews the financial statement, attaches relevant correspondence, puts board packets together and emails or mails them to individual directors.

Most board meetings are held on weekday evenings at the HOA so the manager is required to work after hours and travel, both of which costs the HOA money since it’s built into the contract. After the meeting, the manager usually has a laundry list to follow up on that occupies most the following week. A manager can easily spend many hours on board meeting related business.

What can you do to reduce management costs? Keep board meetings to two hours maximum and consider daytime meetings. Move the

board meeting to the management office and hold them during normal business hours. Reduce monthly to quarterly meetings. With an approved budget, proper policies in place and a management planning calendar, the manager should be able to handle most issues with only occasional input from the president. Letting the manager manage without micro-management from the board may be the single biggest cost saver.

Another cost saving involves manager administration of insurance claims and damage reconstruction. Insurance matters can take many hours of a manager’s time. If the management agreement specifically states that insurance claim work is an extra cost to the HOA, the management company can bill the insurance claim for the time it takes to administrate a claim and renovation work. A similar principle involves time spent on collections or legal action against an owner. This management time should be billed to the delinquent owner.

How about the manager providing sale disclosure statements to owners who are selling their homes and buyers’ lenders? The management company should bill owners and buyers separately and not have the homeowner association bear the cost.

These are but a few ways that management costs can be trimmed. Be sensitive to your manager’s time and don’t pile on unnecessary tasks that ultimately will raise the cost. While it’s important to get what you pay for it’s equally important to pay extra for extra services. The best approach is to forge a partnership with the management company and adjust as time and work loaddemands.

HOA managers are a breed apart and waiting to serve. Put them to work for your homeowner association and get back to living that carefree lifestyle advertised in the brochure.

Used with permission from Richard Thompson of www.Regenesis.net. From Regenesis Aug. 2017 newsletter. 

Snipers & Terrorists

Snipers & Terrorists

Out of the blue, an irate homeowner launches a smear campaign aimed directly at the board. It’s relentless and focused. The motivation may be some personal grievance, hatred of a board policy, disagreement on how the board does business in general or loathing for the whole HOA concept. Rather than seeking redress in an orderly and open way, however, often it takes the form of poison pen letters, back alley rumor mills or a terrorist-like assault at a board meeting.

Board meeting terrorism is designed to hold the board hostage to relentless rants and demands. This form of HOA terrorism is designed to directly challenge board authority and to disrupt the orderly process. As with any terrorist attack, the board’s initial reaction is usually disbelief. But, the cold reality of the assault soon becomes clear and the need to act urgent.

How should the board deal with this kind of attack? When presented a list of demands, should the items be discussed point by point? Should they be recorded in the minutes? What should be done?

Rule #1: Never negotiate with terrorists. The board is not obligated to discuss anything off the agenda. And it’s unreasonable to expect informed answers to firing line questions. The response should be, “Thanks for making your points. We’ll review them and give you a response in writing or consider them at the next board meeting.”

Rule #2: Don’t record a list of demands.

Minutes are intended to discuss in broad terms the business accomplished by the board. Specific motions should have enough detail to describe them and the outcome of the vote. It is not a forum for soap boxing, editorializing or where items are entered into “evidence”. It’s enough

for the minutes to state, “Mr. Sniper asked that the board consider issues relating to (general description).”

Rule #3: Control the Owner Forum. To encourage owner input, an Owner Forum before the meeting should give each speaker owner up to, say, 5 minutes to speak, so the board can get on with its business. Letting someone hold the board hostage should never be allowed and it’s up to the president to control such actions. An abusive person should not be allowed to continue for any length of time.

Rule #4: When attacked, respond quickly and firmly. When the attack becomes apparent, it’s the president’s job to interrupt and, if necessary, ask the attacker to leave the meeting. If the attacker refuses to comply, the president should adjourn the meeting and advise that such conduct will not be allowed at future meetings.

HOA terrorist attacks are designed to fan the flames of emotion and to promote rash response. The board needs to walk the high road and refuse to “dance”. While this isn’t easy when the attack is intense, the directors outnumber the attacker and with a unified response, should be able to defeat the challenge and even help point the terrorist toward a better way.

Used with permission from Richard Thompson of www.Regenesis.net. From Regenesis Aug. 2017 newsletter.

Misconceptions Of Community Associations

Misconceptions of Community Associations

“Community association” is a generic term that encompasses many names used around the world to describe common-interest housing. A few examples include:

  • Common-interest community (CIC) is used by the National Conference of Commissioners on Uniform State Laws.
  • Common-interest realty association (CIRA) is the term preferred by the American Institute of Certified Public Accountants.
  • Common-interest development (CID) is used by the California Department of Real Estate.
  • Condominium association refers to units like apartments, townhouses or other private units that are part of a single structure or group of structures.
  • Homeowners association (HOA) is often synonymous with “common-interest community” and usually describes a community of single-family homes.
  • Property owners association (POA) can refer to a residential community or a group of offices or other non-residential property.
  • “Strata title” is a term used in Australia, New Zealand, and British Columbia that describes individually owning part of a property, such as an apartment, and sharing ownership in the property’s common or public areas.
  • In France and some parts of Quebec, condominiums are called “copropriété divisée” (divided co-property).
  • The traditional term in Spanish-speaking countries for a common-interest community is “propiedad horizontal.”
  • Condominio” is the term used in Italy.

Regardless of the name, most community associations in the U.S. are incorporated and subject to state statutes that govern nonprofit corporations. Remember, membership in an association is not voluntary; you become a member when you purchased a home in the Carolina community.

Expected Upkeep Enforced By The Community Association Management Firm

Expected Upkeep Enforced by the Community Association Management Firm

The staff or volunteers you see occasionally walking around your community with clipboards or tablets, are the association’s covenants enforcement officers. They’re inspecting the property to ensure that everything is working properly, that conditions are safe and that nothing is reducing property values or your quality of life in your Carolina community.

In short, they’re making sure policies and rules are being followed—from pet behavior, parking and unkempt lawns to improper exterior modifications and more. They field complaints from fellow homeowners and, if necessary, remind you (or your neighbor) when a rule has been overlooked.

The officers report their findings to the Carolina Home Association board with photos and detailed notes. Most violations are easily resolved without board action. If not, the next step is a hearing before the board—we want to hear your side of the story. Those who continue to ignore rules may be fined, or worse. The most serious cases may end up in court, though we try very hard never to get to that point.

The association’s covenants enforcement officers perform a vital function; please treat them with courtesy and respect. If you have any questions about the rules, the officers should be able to explain them. The association manager and board members also are happy to listen and respond to your concerns.

When you purchased your home in our common-interest community in the Carolinas, you became contractually bound to abide by the covenants that protect the association. Please review them and ensure you are in compliance. You can find them on our website.

Precautions You Can Take Against Lighting As A Homeowner

Precautions You Can Take Against Lighting As A Homeowner

Warm weather usually means fun in Carolina sun, but summer heat also can bring severe weather. Threatening thunderstorms often loom large on summer afternoons so it’s important to be prepared for downpours and accompanying lightning, which can strike outdoors or indoors. Consider the following suggestions when planning both outdoor and indoor events this summer to reduce the risk of a lightning strike.

  • Watch the weather. Pay attention to your local weather forecast before participating in outdoor activities. If there’s a chance of thunderstorms, consider rescheduling or moving events indoors. If that’s not possible, have an emergency plan in place in case a severe storm rolls in and designate a sufficient nearby structure as an emergency shelter.
  • Stay inside. If severe thunderstorms are imminent, go indoors and wait until they pass. Safe, enclosed shelters include homes, schools, offices, shopping malls and vehicles with hard tops and closed windows. Open structures and spaces do not provide adequate protection.
  • Duck and crouch. If you’re caught outside during a severe storm, it’s important to crouch low on the ground, tuck your head and cover your ears to help protect yourself from harm. Do not lie down; lightning strikes can produce extremely strong electrical currents that run along the top of the ground, and laying horizontally increases electrocution risk.
  • Turn off faucets. During a thunderstorm, lightning can sometimes be conducted through the plumbing. Avoid any type of contact with running water, including bathing, showering, and washing your hands, dishes, or clothes.
  • Turn off electronics. All electrical appliances—televisions, computers, laptops, gaming systems, stoves, and more—that are plugged into an electrical outlet could carry a current from a lightning strike. Surge protectors will reduce the risk of damaging electronics.

Stay away from windows. Not only is lightning a threat, but high winds and hail create flying debris that could be harmful during a thunderstorm. Close all windows and doors and keep away from them.

Our Association Management Group Practices Fair Debt Collection  

Our Association Management Group Practices Fair Debt Collection  

Our association makes every effort to work with homeowners in the Carolinas who are having problems paying their assessments. But sometimes people get behind on their payments. We want our homeowners to know that the association adheres to the Fair Debt Collections Practices Act (FDCPA), and we do not harass homeowners for unpaid assessments.

Carolina Community associations are required to collect assessments, which many state and federal courts consider to be debts. The FDCPA requires those who collect debts from individuals—like homeowners in a community association—to refrain from tactics that might be considered invasive. The FDCPA prohibits the association from:

  • Harassing you
  • Threatening you with violence or harm
  • Publishing names of owners who are delinquent or refuse to pay
  • Annoying you with repeated phone calls
  • Making false statements about you
  • Misrepresenting the amount you owe
  • Depositing your post-dated check early
  • Threatening to take legal action against you when we don’t really mean it
  • Providing your personal information to anyone else without your permission

The FDCPA also requires the association to notify you in writing about your delinquent assessments. This correspondence must state that it is an attempt to collect a debt, include the amount of the debt and the association’s name, and it must state that you have 30 days to dispute the debt in writing. If an association violates any of these stipulations, it could be liable to the homeowner for damages, attorneys’ fees and court costs.

For more information about the Fair Debt Collection Practices Act practices in the Carolinas visit the Federal Trade Commission’s Consumer Information page at www.consumer.ftc.gov/articles/0149-debt-collection.