BOARD MEMBERS AS CC&R EXPERTS?

FREE RIDERS

QUESTION: While checking your website on suspension of common area privileges, I was shocked when I read, "If there are multiple owners of a unit/lot, the suspension of rights/privileges for one owner suspends the rights/privileges of all residents of that unit/lot. The suspension also extends to renters." With all due respect, an HOA is not a military organization where group discipline is used to demand compliance with an order.

ANSWER: If the owner of a unit is delinquent and his privileges are suspended, the people residing in his unit are also suspended, whether family members, guests or tenants. Otherwise, the suspension is meaningless. If residents were not included in the suspension, they would continue to enjoy the association's amenities without paying for them. Giving people a free ride at others' expense is a poor business practice we reserve for our federal government.

BOARD MEMBERS AS
CC&R EXPERTS?

QUESTION: As a board member, am I expected to be an expert on our CC&Rs? I wish I were but, for example, when a homeowner asks who is responsible for repairing damage caused by a water leak in a common wall, I don't feel qualified to give a definitive answer.

ANSWER: I know that some homeowners expect every board member to read and understand every line of their CC&Rs. That is an unrealistic expectation. Volunteer directors are not experts and can get themselves in trouble if they try to be. As a practical matter, boards should have a general understanding of how things work but should defer to an HOA attorney to interpret their CC&Rs.

Maintenance Chart. When it comes to maintenance duties, boards should have legal counsel prepare a maintenance chart that lays out all common maintenance issues and who is responsible for each--the association or owners. That requires a thorough review of your governing documents in conjunction with the Davis-Stirling Act and applicable case law. The chart is then published to the membership. Making everyone aware of their respective duties can minimize or avoid expensive litigation.

RECORDING MOTIONS
 IN MINUTES

QUESTION: Is there an established doctrine that the individual making a motion and the individual seconding the motion be identified by name in the minutes? I have seen this done by a professional minutes taker, however, my colleague disagrees. What is the accepted rule?

ANSWER: There is no law that requires the name of the person making the motion and the one seconding the motion. While some associations do, many associations simply state that a motion was made and seconded. Over the years, I have seen both practices and both are acceptable. Even though boards of directors are not required to use parliamentary procedures for their board meetings, Robert's Rules of Order serve as a useful guideline for taking minutes. According to Robert's Rules,

The name of the maker of a main motion should be entered in the minutes, but the name of the seconder should not be entered unless ordered by the assembly. (Robert's Rules, 11th ed. p. 470.)

For those associations that can afford it, a professional minute taker provides greater consistency and a quicker turn-around for minutes.

BOYFRIEND
CONFLICT OF INTEREST

QUESTION: We have a board member whose live-in boyfriend is a licensed contractor. She gives him copies of the bids we get on various projects so he can submit a lower bid. Is this legal or ethical? Can board relatives even bid on projects?

ANSWER: It is clearly inappropriate for your ethically-challenged director to provide insider information to her boyfriend.

Problems. It is not illegal for a director's relative to bid on projects ifdone properly but doing so is fraught with peril. Most boards wisely disallow the practice because of the inherent problems when directors benefit from contracts awarded to themselves or relatives.

Censure. Your self-serving director should resign from the board if she wants her boyfriend to bid on HOA projects. If she refuses to resign and continues to leak information, she can be censured by the board and an executive committee created to review bids. In addition, your board should adopt an ethics policy.

UNDERFUNDED HOAs

As boards everywhere already know, the recession has created significant funding problems for their HOA budgets. That has led to deferred maintenance and underfunded reserves.

The problem is serious enough that California's Department of Real Estate issued a "Consumer Warning."

SANTA MONICA BANS
SMOKING

In addition to San Rafael's no smoking ordinance I reported on last week, the city of Santa Monica banned smoking for new tenants of apartments and condos. The ordinance was approved on October 2 and included language giving neighbors the right to take smokers to court if they violate the ban.

Last week I asked if any condominium associations had banned smoking inside units. At least three have done so:

No Smoking #1. Our association prohibits smoking in all areas with the exception of a single location on the roof deck. Because we have a passive ventilation system that is constantly introducing fresh air into the units, smoking inside the units would quickly cause cigarette smoke to propagate between units and is therefore prohibited. In addition to our CC&R restriction, we have a separate smoking restriction policy. -Brian H., San Francisco

No Smoking #2. We amended our documents in 2010 to become a non-smoking facility both within individual units and in the common area. We made an exception for two older residents to continue smoking on their balconies only. These two have now passed away, so we are a smoke-free complex. -Angela D., Los Gatos

No Smoking #3. We successfully amended our CC&Rs to ban smoking throughout our seniors 112-unit condo (including inside units). -Steve R., Torrance

Adrian J. Adams, Esq. Adams Kessler PLC