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JUNE 2021
Seven Lakes
Golf & Country Club FEATURES 4 14 18 24 28 29 33 34 37 40 44
Covid-19 Vaccines Interviews with Past CAI-CV Presidents Financial Success Requires a Plan Reserves and SB326 – The Balcony Bill CAI-CV Wins National Chapter Achievement Award CAI-CV Medallion Community Recognition – Sun City Palm Desert Thank You CAI-CV Chapter Angels Active Assailant Awareness The Legal Importance of Community Inspections Board Involvement with Property Inspections Transferring, Managing, and Protecting Association Funds in an Unsafe World
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2
Quorum June, 2021
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facebook.com/CAICV
@CAI-CV
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CAI-CV NEW & RENEWING MEMBERS NEW BUSINESS PARTNER THE SWIMMING SWAN LLC Melissa Swanson (858) 242-9974 melissa@theswimmingswan.com
RENEWING BUSINESS PARTNERS ARTISTIC MAINTENANCE, INC. Marlene Arredondo (949) 581-9817 marredondo@artisticmaintenance.com ASSOCIATION RESERVES- CA/INLAND EMPIRE Kevin Leonard (909) 906-1025 kleonard@reservestudy.com BARCODE AUTOMATION, INC. Ryan Waxberg (407) 327-2177 ryan@barcode-automation.com BEAUMONT TASHJIAN Tawnee Guerra (818) 884-9998 TGuerra@HOAattorneys.com CLINE AGENCY INSURANCE BROKERS Timothy Cline (800) 966-9566 Ext. 22 tim@clineagency.com DELPHI LAW GROUP, LLP James McCormick, Jr. (844) 433-5744 Ext. 707 jmccormick@delphillp.com DIVERSIFIED ASPHALT PRODUCTS, INC. Lou Moreno (714) 793-7783 loum@diversifiedasphalt.com DIVERSIFIED WATERSCAPES, INC. Maria Angel (949) 582-5414 m6a2@dwiwater.com EPSTEN, APC Tiffany Christian (858) 527-0111 tchristian@epsten.com GREEN BRYANT & FRENCH, LLP Ronald Green (760) 346-9310 rgreen@gbflawyers.com INSURANCE INCORPORATED Timothy Dean (877) 898-9333 Ext. 101 tdean@insuranceinc.com KIRKPATRICK LANDSCAPING SERVICES Steven Kirkpatrick (760) 347-6926 stevekls@msn.com NPG ASPHALT Kymberli Burke (760) 822-3258 kymberliburke@npgasphalt.com O'CONNELL LANDSCAPE MAINTENANCE Mario Mendoza (760) 984-9614 mendoza@oclm.com
OWENS, MOSKOWITZ AND ASSOCIATES, INC. John Kraul (949) 851-5020 Ext. 12 john@raocpa.com
Jennifer Zeivel (760) 346-1161 jzeivel@drminternet.com
RENEWING MANAGEMENT COMPANY MEMBERSHIP ASSOCIA DESERT RESORT MANAGEMENT Samuel Rodriguez (760) 346-1161 srodriguez@drminternet.com
KEYSTONE PACIFIC PROPERTY MANAGEMENT, LLC Christine Rodgers (949) 430-5803 crodgers@keystonepacific.com LAKES COUNTRY CLUB ASSOCIATION Teresa Falconer (760) 568-4321 Ext. 122 tfalconer@thelakescc.com Frank Melon (760) 902-2886 fmelon@thelakescc.com
HOA OFFICE, INC. Elbert Jarvis (571) 235-5420 jayj92260@gmail.com J & W MANAGEMENT CO. Jim McPherson (760) 568-0349 desertjaime@aol.com
OUTDOOR RESORT PALM SPRINGS OWNERS ASSOCIATION Kristine Aguilar (760) 328-3834 Ext. 243 kgonzalez@orps.com
PERSONALIZED PROPERTY MANAGEMENT CO. Richard Warfield (760) 325-9500 rwarfield@ppminternet.com
SUNRISE COUNTRY CLUB HOMEOWNERS ASSOCIATION Eric Charos (760) 328-6045 echaros@pga.com
NEW MANAGER MEMBERSHIPS
THE MANAGEMENT TRUST, DESERT DIVISION Cassie Gertz (760) 862-6337 Cassie.Gertz@Managementtrust.com Marne Logan (760) 340-1703 Ext. 6298 marne.logan@managementtrust.com
Armann Rohde (760) 200-2106 armann.rohde@scpdca.com Kirstie Thomas (760) 408-4819 kkliewer91@icloud.com ASSOCIA DESERT RESORT MANAGEMENT Alba Guerra Ramirez (760) 610-7752 aguerra@drminternet.com Kristen Rinetti (760) 346-1161 krinetti@drminternet.com
VIP MANAGEMENT Heather Farmer (760) 567-7901 heather@vip-mgmt.com
NEW VOLUNTEER LEADERS
RENEWING MANAGER MEMBERSHIPS ASSOCIA DESERT RESORT MANAGEMENT Vanessa Ayon (760) 345-4349 vanessa.ayon@associa.us Shelly Bricker (760) 346-1161 sbricker@drminternet.com Cari Burleigh (951) 767-1788 cburleigh@drminternet.com Jennifer Carroll (760) 346-1161 jcarroll@drminternet.com Christie Curtis (760) 285-2965 ccurtis@drminternet.com Lorie Dudeck-Thorpe (760) 574-7375 ldudeck-thorpe@drminternet.com Elizabeth Weber (760) 346-1161 eweber@drminternet.com Tera Willis (760) 346-1161 twillis@drminternet.com
DESERT ROSE RESIDENTS ASSOCIATION Georgina Beltran Angelica De La Cruz Khalil Ismail Roberta Larsen Bonita Quinn INDIAN CREEK VILLAS Randall Steele MILLENNIUM PALM DESERT-GENESIS Joe Martinez Stephen Nelson Chris Vasiliou RAMS HILL COMMUNITY ASSOCIATION Marie Downing SUN CITY SHADOW HILLS Johnny Goodrum John MacDonnell Moira MacLeod-Foster Carey Thompson THE ENCLAVE AT LAS COLINAS, INC. Emily Truman
VICTORIA FALLS HOMEOWNERS ASSOCIATION Steven Friscia Astrid Jastramski Frank Kurasz Michelle Norton Robert Palone Mike Piazza Jim Steinhoff Roz Urlsta
RENEWING VOLUNTEER LEADERS CANYON ESTATES HOMEOWNERS ASSOCIATION Curtis Barber Christopher Brodwell Daniel Coleman Pamela Gargiulo Patti Proudfit Maureen Roman James Sizemore Bob Zimmerman INDIAN CREEK VILLAS Peter Chryss Sandra Short INDIAN RIDGE HOMEOWNERS ASSOCIATION Ron Anderson George Bers Judith Friedman Steve Heiferman Dianne Knapp James Loeb Doug Lundal Joel Mark Dan Newell Michael Sacks Sharon Severson Jim Stubbs LAKE MIRAGE RACQUET CLUB HOMEOWNERS ASSOCIATION Walter Dandridge Nancy Miron David Teeter PGA WEST II RESIDENTIAL ASSOCIATION Al Adams Thomas Baak Hayden Bower Mark Johnson Nancy Justis Becky King Dick Logan Sherri Lusk Mark Marcus Bob McCowen Barbara Montavon Lynn Reich SUN CITY SHADOW HILLS Fera Mostow SUNRISE RACQUET CLUB OWNERS ASSOCIATION Jerry Cruz Jack Helscher Leslie Wheeler
TRILOGY AT LA QUINTA MAINTENANCE ASSOCIATION Cristina Budd Gigi Martin Brian Mooney Mark Reider Mike Weiner
ARE YOU ELIGIBLE TO BE VACCINATED?
COVID-19 VACCINES 4
Quorum June, March,2021 2021
https://covid19.ca.gov/vaccines/ DID YOU KNOW YOU CAN GET NOTIFIED WHEN IT’S YOUR TURN?
https://myturn.ca.gov/
CONTENTS
2021 QUORUM COMMITTEE MEMBERS JENNIFER JAMES, ESQ., CHAIR
CAI-CV
EDUCATED BUSINESS PARTNER
HOA Legal Services
RODNEY BISSELL, CO-CHAIR
CAI-CV
EDUCATED BUSINESS PARTNER
Bissell Design Studios, Inc.
MARILYN RAMOS, CO-CHAIR Guralnick & Gilliland, LLP
STEVEN SHUEY, PCAM BOARD LIAISON
Personalized Property Management
KIMBERLY BURNETT
CAI-CV
EDUCATED BUSINESS PARTNER
DSI Security Services
DIANE CARMONY
Coachella Valley Water District
SIERRA CARR, CMCA
10
FEATURES 4 10
By Marilyn Ramos
14
GRISELDA CORONA F.C. Landscape
The Gaffney Group, Inc.
JAY JARVIS, CMCA, CCAM, AMS HOA Office, Inc.
CHEYENNE LANDRY
Newman Certified Public Accountant, PC
BRUCE LATTA, CMCA Parc La Quinta HOA
18
GRACE PALUCK, CMCA
The Management Trust Desert Division
MIKE REY
CAI-CV
EDUCATED BUSINESS PARTNER
24 Reserves and SB326 – The Balcony Bill By Robert Browning, PCAM, RS and Ritchie Lipson, Esq.
28 CAI-CV Wins National Chapter Achievement Award 29 CAI-CV Medallion Community Recognition Sun City Palm Desert By Jay Jarvis, CMCA, CCAM
By Jamie Ridenhour
37 The Legal Importance of Community Inspections
CHRIS SIGLER, B.S.C.E, CDT
40
HOLLY SMITH, CMCA, AMS, PCAM Associa Desert Resort Management EDUCATED BUSINESS PARTNER
33 Thank You CAI-CV Chapter Angels 34 Active Assailant Awareness
Rey Insurance Services A FARMERS® Insurance Agency C.L. Sigler & Associates, Inc.
CAI-CV
Financial Success Requires a Plan By Keith L. Lavery, PCAM, CMCA, CCAM
GLENN A. MILLER, CGCS
Southwest Landscape & Maintenance, LLC
Interviews with Past CAI-CV Presidents Mike Traidman (CAI-CV President, 2019, 2020) Tad Black (CAI-CV President, 2015) By Mike Mastropietro
Associa Desert Resort Management
MEAGHAN GAFFNEY-HOWE
Covid-19 Vaccines Seven Lakes Golf & Country Club
GEN WANGLER, ESQ.
By Jennifer James, Esq.
Board Involvement with Property Inspections By Mark Dodge, CMCA, AMS
44
Transferring, Managing, and Protecting Association Funds in an Unsafe World By Robert Ward, Esq.
CREATIVE DIRECTOR & GRAPHIC DESIGNER RODNEY BISSELL Bissell Design Studios, Inc. rodney@bisselldesign.com (714) 293-3749
ARTICLE SUBMISSIONS OR ADVERTISING INFORMATION admin@cai-cv.org SUBSCRIBER SERVICES
The Coachella Valley Quorum Magazine is a publication expressly prepared for association leaders, managers and related business professionals of the Community Associations Institute. Members are encouraged to submit articles for publishing consideration. All articles accepted for publication in Quorum are subject to editing and rewriting by the Quorum Committee. Quorum Magazine is printed at the CAI-CV Office on a Xerox Versant 180 Press. Discounted printing is now available to CAI members. Call Bissell Design Studios, Inc. at (714) 293-3749 or the CAI-CV office for more information, (760) 345-0559.
EVENTS 12 CAI-CV Going Live in October – New Fall Dates 13 40th Anniversary Celebration & Wine Tasting 22 CAI-CV Membership Shredding Event Wednesday, August 25, 2021, 10:30 am to 1:30 pm
36 CAI-CV Educational Lunch Program & Virtual Mini Trade Show Friday, June 18, 2021 Via Zoom
42 CVWD Water Efficiency Course (FREE) June 15, 2021
43 Managers Go Wild April 29, 2021
48 CAI Board Leader Certificate Friday, November 5, 2021
60 Upcoming Events CAI-CV.org
facebook.com/CAICV
@CAI-CV
5
Do you need a little deliciousness in your life? The Quorum Committee is collecting recipes for upcoming issues. Send your favorites to RECIPES at ADMIN@CAI-CV.ORG.
CAI-CV
EDUCATED BUSINESS PARTNER
Choose Educated Business Partners Julie R. Balbini, Esq., Fiore Racobs & Powers, A PLC Micha Ballesteros, Cartwright Termite & Pest Control, Inc. Roxi K. Bardwell, Advanced Reserve Solutions, Inc. Rodney Bissell, Bissell Design Studios, Inc. Kimberly Burnett, DSI Security Services Linda Cardoza, Alliance Association Bank Will Cartwright, Cartwright Termite & Pest Control, Inc. Todd Chism, PatioShoppers Tiffany Christian, Epsten, APC Angel Christina, Delphi Law Group, LLP Lori Fahnestock, Powerful Pest Management Dea Franck, Esq., Epsten, APC Julie Frazier, Frazier Pest Control, Inc. Elaine Gower, The Naumann Law Firm, PC Michael Graves, SCT Reserve Consultants Amanda Gray, Harvest Landscape, Inc. Matthew Hills, Securitas Security Services USA, Inc. Tim Hoss, BEHR & KILZ Paints & Primers Jennifer James, Esq., HOA Legal Services Megan Kirkpatrick, Kirkpatrick Landscaping Services Jared Knight, Vista Paint Corporation Katy Krupp, Fenton Grant Mayfield Kaneda & Litt, LLP Matt Lawton, CIC, CIRMS, Prendiville Insurance Agency Larry Layton, Kirkpatrick Landscaping Services Alison LeBoeuf, Sherwin-Williams Mike Mastropietro, OCBS, Inc. Chris Meyer, Asphalt MD's Greg Morrow, Eagle Roofing Products Fran Mullahy, Conserve LandCare Matt Ober, Esq., Richardson Ober DeNichilo LLP Chet Oshiro, EmpireWorks Mallory Paproth, SCT Reserve Consultants Elisa Perez, Esq., Epsten, APC Jay Powell, Ben's Asphalt Dana Pride, Automation Pride Mike Rey, Rey Insurance Services Kelly Richardson, Esq., Richardson Ober DeNichilo LLP Brent Sherman, Animal Pest Management Services, Inc. Gen Wangler, ESQ., CCAL Liz Williams, AMS Paving Taylor Winkle, Roof Asset Management Bevan Worsham, AMS Paving Jolen Zeroski, CIT
Become an Educated Business Partner Call the CAI-CV office or go to www.cai-cv.org for more information. 6
Quorum June, 2021
CONTENTS
DEPARTMENTS 2021 COACHELLA VALLEY CHAPTER BOARD OF DIRECTORS
CAI-CV
EDUCATED BUSINESS PARTNER
MATT LAWTON, CIC, CIRMS PRESIDENT Prendiville Insurance Agency
CLINT ATHERTON, PCAM PRESIDENT-ELECT Sun City Palm Desert
MIKE TRAIDMAN PAST PRESIDENT
Mira Vista at Mission Hills HOA
CAI-CV
EDUCATED BUSINESS PARTNER
JULIE R. BALBINI, ESQ. SECRETARY
Fiore Racobs & Powers, A PLC
STEVEN SHUEY, PCAM TREASURER
Personalized Property Management CAI-CV
EDUCATED BUSINESS PARTNER
MICHA BALLESTEROS DIRECTOR
Cartwright Termite & Pest Control, Inc.
DAN FARRAR, CMCA, AMS DIRECTOR FirstService Residential
CAI-CV
EDUCATED BUSINESS PARTNER
JENNIFER JAMES, ESQ. DIRECTOR HOA Legal Services
LONI PETERSON, PCAM DIRECTOR
Associa Desert Resort Management
LOUISE STETTLER DIRECTOR
Palm Desert Greens Country Club HOA CAI-CV
EDUCATED BUSINESS PARTNER
MARGARET "GEN" WANGLER, ESQ. DIRECTOR CAI Coachella Valley Office 75410 Gerald Ford Drive, Suite 102 Palm Desert, CA 92211 Tel: (760) 341-0559 Fax: (760) 341-8443 Website: www.cai-cv.org CAL LOCKETT
Executive Director clockett@cai-cv.org The materials contained in this publication are designed to provide our members with timely and authoritative information; however, the CAI Coachella Valley Chapter is not engaging in the rendering of legal, accounting or other professional types of services. The Coachella Valley Chapter has not verified and/or endorsed the contents of these articles or advertising. Readers should not act on the information contained herein without seeking more specific professional advice from legal, accounting or other experts as required.
CAI-CV’S SPEAKEASY
INSURANCE 16 Beyond the Maintenance Matrix: Understanding the Difference Between Maintenance and Insurance Responsibility By Tina Neubauer, CMCA, CIRMS and Tiffany Smith-Nguyen, ESQ.
WHAT MANAGERS NEED TO KNOW 20 CAI Education – The Road to Professional Designations By Holly Smith, CMCA, AMS, PCAM
MARK YOUR CALENDAR 2020 & 2021 AWARDS COMBINED! FRIDAY, JANUARY 28, 2022
23
CHAPTER NEWS
HOA LAW
6 Educated Business Partners
30 Lurking in the Shadows: The Fair Debt Collection Practices Act
8 President’s Message
By Brian Gladous, Megan Pamula and Henry Guzman
46 Drafting Effective Vendor and Construction Contracts (Part 2) By Wayne S. Guralnick, Esq.
POOLS 50 Summer Pool Remodels By Mark Feldstein
MAINTENANCE 39 The Importance of Regular Exterior Building and Site Inspections By Chris Sigler, B.S.C.E., CDT
LANDSCAPING 42 Arborist Inspections By Warren Miller
9 List of Advertisers 9 Printed Quorums Now Available 9 New & Renewing Members 17 Time Honored Member Bobbie Gaffney, AMS, PCAM By Grace Paluck, CamEx, CCAM 23 2020 Chapter Awards Nomination Form 27 Join CAI-CV’s & DCHC’s Local Board Member Online Discussion 38 CAI-CV Launches New Career Center By CAI-CV’s Professional Managers Committee 49 Titanium Sponsor Spotlight Conserve LandCare
CLAC UPDATE 55 Election Bill Could Save HOAs Thousands - Recap on AB 502
56 Download CAI-CV’s APP 58 CAI-CV Membership Drive 59 Like CAI-CV on Facebook & Instagram
By Rhonda Drews, PCAM
57 Legislative Update By Jay Jarvis, CMCA, AMS
60 Corporate Sponsors
CAI-CV.org
facebook.com/CAICV
@CAI-CV
7
FROM THE CHAPTER
President’s Message Matthew Lawton, EBP, CIC, CIRMS Prendiville Insurance Agency Farmers Insurance Group
S
ummer is finally here and we can all look forward to a slower pace for the next few months. It appears things are also getting back to normal with more HOA and management company offices reopening. On June 15th, the Governor is expected to lift all or most of the remaining COVID restrictions and we hope to resume classes at the CAI-CV office starting in July. We have some very good news! I’m proud to let you know that CAI-CV has won another Chapter Achievement Award from CAI National for our Leadership Training Program implemented in 2020. Last year was the first time the Chapter competed for awards as a “Very Large” chapter (CAI’s highest category). It is nice to see us leading the way, even with the largest chapters in the country. We will receive this new award, along with the 10 awards received (as a “Large” chapter) in 2019, at CAI’s National Conference in Las Vegas. See page 28 for more information. If you haven’t done so already, go visit the CAI-CV Career Center. It is full of helpful information and a great place to post and search for jobs, or to obtain help keeping your resume up-to-date. This site is available to all CAI-CV members. You may access the site by clicking HERE (https://cai-cv.careerwebsite.com/) or by going to the CAI-CV website at www.cai-cv.org, and then clicking on the Resources tab, and then Career Center. Prendiville Insurance is once again the title sponsor of the membership drive. At the end of the year, CAI-CV will give away a $1,000 travel voucher to the person who signs up the most
8
Quorum June, 2021
members and you will be eligible for monthly awards from the Chapter and CAI National. You can read more about this program on page 58. On May 11th, we held an outstanding Board Member Workshop (BMW) on the topic of Emergency Preparedness. Thanks to two amazing presenters, Robyn Mack and John Westerholm (Sun City Palm Desert Emergency Preparedness Team). And, thanks to Monica Alvarado (Powerstone Property Management) for serving as the lead for this program. We had another fantastic Educational Program & Mini Trade Show on May 14th about landscape fundamentals. Thanks to our excellent speakers, Jesse Contraras and Richard Calquhoun (Sunshine Landscape), and Andy Belingheri (Jain Irrigation). Our thanks to Louise Stettler (Palm Desert Greens HOA) and Gloria Kirkwood (Palm Valley HOA) for serving as the leads for this program, and of course, thanks to our moderator, Julie Balbini, Esq. (Fiore Racobs & Powers A PLC). On May 18th, we held our second press event and ceremony to announce our newest Medallion Community, Sun City Palm Desert. Congratulations to Sun City! Thanks to Jay Jarvis, CMCA, AMS (HOA Office), Chair of the CAI-CV PR Committee, and Clint Atherton, PCAM, GM of Sun City Palm Desert for their help planning this event. Please see photos on page 29. You can learn more about the Medallion program by clicking HERE: (https://cdn.ymaws.com/ www.cai-cv.org/resource/resmgr/2021/ caicvmedallion2021_webform2.pdf).
We have a great lineup of education for our members in June. On Friday, June 4th, we will hold a Manager on the Run (MOTR) on management soft skills with guest speaker Cang Le, Esq. (Angius & Terry LLP) for managers and assistant managers. On Tuesday, June 8th, we will hold a Board Member Workshop (BMW) on IDR and Mediation with guest speakers Jennifer James, Esq. (HOA Legal Services) and Mark Dodge, CMCA, AMS (Associa Desert Resort Management). On Friday, June 18th, we will have our next Educational Lunch Program & Virtual Mini Trade show called ASSESSMENTS, RESERVES, AND LOANS, OH MY! Our guest speakers for this program are Lisa A. Tashjian, Esq. (Beaumont Tashjian), Jolen Zeroski, CMCA (CIT Bank), and Michael Graves, RS (SCT Reserve Consultants). We are looking forward to an excellent program. All our events in June will be virtual via Zoom. You can sign up for CAI-CV events and programs on the Chapter website at www.cai-cv.org or by clicking on the event on the back page of Quorum. If you haven’t made reservations for CAI’s National Conference & Exposition “Community Now” on August 18th21st in Las Vegas, you can register by clicking HERE: (https://www.caionline. org/Events/2021Conference/Pages/ Registration.aspx). Make sure to book your room soon. We are pleased to be working with Desert Arc to offer our members a shredding event on Wednesday, August 25th from 10:30 a.m. to 1:30 p.m. in the
ADVERTISERS ASPHALT
FIORE RACOBS & POWERS, A PLC.................................................... 41
CONSTRUCTION EMPIREWORKS RECONSTRUCTION................................................... 59 VANTAGE POINT CONSTRUCTION........................................................ 3
DESIGN BISSELL DESIGN STUDIOS, INC......................................................... 27
LANDSCAPING CONSERVE LANDCARE........................................................................ 3 PRO LANDSCAPING, INC.................................................................... 59 PWLCII, INC....................................................................................... 41
MANAGEMENT ASSOCIA DESERT RESORT MANAGEMENT......................................... 2
PEST CONTROL POWERFUL PEST MANAGEMENT...................................................... 59
POOLS GARDNER OUTDOOR AND POOL REMODELING............................. 6, 12
TAX AND AUDITING SERVICES NEWMAN CERTIFIED PUBLIC ACCOUNTANT, PC............................... 59
PRINTED Q
9900
ANNUAL $ SUBSCRIPTION
UORUMS
NOW AVAI You can now enjoy magazine quality paper copies of Quorum. The subscription price includes 12 monthly issues, January through December. The price will be prorated from the time you sign up until the end of the year. If you sign up in June, you will receive July through December for $57.75. This price includes postage within the U.S.
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MARCH 2021
MARCH 2021
Prendiville Insurance Agency Farmers Insurance Group Cell 760-774-2099 Email Matt@PrendivilleAgency.com
ATTORNEYS
MARCH 2021
Certified Insurance Counselor (CIC) Community Insurance and Risk Management Specialist (CIRMS) CAI Educated Business Partner (EBP)
AMS PAVING........................................................................................ 3 ASPHALT MD'S.................................................................................... 6
MARCH 2021
parking lot just in front of the CAI-CV office. Desert Arc is bringing their high-security mobile shredding truck. They will take papers, folders, CDs and computer hard drives. There is a minimal cost. See their ad on page 22. If you are like me and spent time during COVID cleaning out files, you won’t want to miss this opportunity. I want to remind you that our major fundraising and networking events begin in October. These include the Annual Bowling Tournament on October 1st, Oktoberfest (Spooktoberfest) on October 29th, our 40th Anniversary Wine Tasting on November 12th and our annual Golf Tournament on December 10th. We will also begin in-person Educational Lunch Programs & Mini Trade Shows at Palm Valley Country Club on October 22nd with CAI-CV’s Annual Legislative Update. See page 12 for more details. These event committees are all looking for more volunteers. As a reminder, you may join any CAI-CV committee by clicking HERE (https://cdn.ymaws.com/www.cai-cv.org/ resource/resmgr/2021/volunteer_form. pdf) for the committee volunteer form. Please join me in thanking our Chapter Angels. Many companies who donated all or some of their unused 2020 sponsorship dollars to the Chapter’s COVID relief fund are listed on page 33. Please reach out to these companies when you need their services and thank them for their generosity. We are hopeful that we will be seeing all of you in person soon!
$4.95
$4.95
MARCH 2021
MARCH 2021
FEATURES 9 10 13 18
COVID-19 Vaccines FEATU RES From the “Twits” to the “Eagles” THE CAI-CV SOFTBALL TEAM 9 COVID-1 CAI-CV Past Presidents’ Memories 9 Vaccines From CAI-CV Presidents10 From 1981 to“Twits” 2021 the to the CAI-CV Chapter Directory13 Covers From 1992 to 2021 “Eagles” THE CAI-CV Past Presiden SOFTBALL 18 CAI-CV LL TEAM ts’ Memories TEAM 21 Quorum Magazine Covers From 1983 ts to 2021 Presiden SOFTBA From 1981 20 THE CAI-CV to 2021 COVID-19 Vaccines “Eagles” 9 Director 23to the A Look Back in Time – Chapter Celebrating CAI-CV’s y Covers From 21 Quorum the “Twits” es 1992 to 2021 Memori 40th Anniversary with Wayne Guralnick, Esq. 10 From Magazin ts’ e Covers Past Presiden From 1983 2021 23 A Look Back and Palm Desert Councilman Sabby Jonathan, CPA 1981 to 13 CAI-CV to 2021 From in Time – Celebrating to 2021 Presidents 40th 1992 the CAI-CV’s 18 CAI-CV 24 PhotosFrom Through Years Anniversary with Wayne Guralnic and Palm Desert Directory Covers 1983 to 2021 k, Esq. 20 Chapter 40 What aFrom Difference Years Makes Councilman s 24 40Photos Magazine Covers Sabby Jonatha ting CAI-CV’ Through the 21 Quorum n, CPA – Celebra When Sponsors Become Years Esq. Angels Time 40 k, What in54
CAI-CV Turns 40
FEATU RES20
Back Guralnic Difference 23 A Look n,aCPA 40 Years Makes ary with Wayne Sabby54 Jonatha When Sponsor 40th Annivers Councilman s Become Angels and Palm Desert Years Through the 24 Photos 40 Years Makes a Difference Angels 40 What Sponsors Become 54 When
40 10, 2021! onns March CAI-CV Tur 2021! CAI-CV Tur on March 10, on March 10,ns 40 2021!
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9
FEATURE
Seven Lakes
Golf & Country Club By Marilyn Ramos
S
even Lakes Golf and Country Club (Seven Lakes) is a stunning 120-acre community located in south Palm Springs at 1 Desert Lakes Drive. Seven Lakes was built by Developer William Grant, and the 341 residences were constructed between 1964 and 1972. The mid-century modern architecture was designed by Richard Harrison and William Cody, and the residences are comprised of both single family homes and two-story condominiums. Seven Lakes was originally built on Native-American leased land, but in 2009, the Association membership purchased the lease and converted the property to fee simple land. The community provides breathtaking views over a Ted Robinson designed 18-hole executive golf course. Seven Lake’s amenities include a 24-hour attended gate, an 18-hole par 58 golf course that is 2712 yards long, a club house complete with restaurant and bar facilities, 15 community heated swimming pools/spas, 11 BBQs areas, full-size tennis court, and shuffleboard. Seven Lakes is a very low-density community with over 30 percent of the area (36 acres) retained as green space. More than 75 percent of the 341 residences have golf course or green space views. Large unenclosed patios give a sense of seamless indoor/outdoor living with beautiful open vistas. An interesting fact about Seven Lakes is that it was the first gated golf community built in Palm Springs. It drew golfers and Hollywood celebrities in its early years. Some of its more famous residents include Lucille DeMarest (a writer for The Danny Thomas Show), Elroy Schwartz (television writer), Johnny Revolta (golfer), Don Wilson (announcer/ actor most known for The Jack Benny Program), William Holden (actor), and Harry Gerstad "AN INTERESTING FACT ABOUT (cinematographer and film editor). SEVEN LAKES IS THAT IT WAS THE Another interesting fact is that Seven Lakes is where President “Ike” FIRST GATED GOLF COMMUNITY Eisenhower hit his only hole-in-one! BUILT IN PALM SPRINGS. " It was at the 13th hole. There are several floor plans in the community ranging from 1450 to over 2600 square feet. Each condominium has two assigned parking spaces, and the freestanding homes have one parking space. Over the years, some of the carports have been converted to garages. The homes are currently priced between $350,000.00 to almost $2,000,000.00. 10
Quorum June, 2021
FEATURE The $2 million dollar home is a one-of-a-kind at Seven Lakes and is currently for sale! It features four bedrooms, five-anda-half baths, two full kitchens in over 4,800 square feet of living space. Despite the lush “getaway” feel to Seven Lakes, you are still only a few minutes away from the Palm Springs International Airport, downtown Palm Springs and major grocery stores. Seven Lakes is self-managed with a staff led by on-site General Manager, Silas “Sy” Dreher, CCAM, and a nine member Board of Governors elected by the membership. The management of the community is enhanced by the work of several committees, including Finance, Landscape, Golf, Architecture, Security "SEVEN LAKES WORKS HARD and Clubhouse Activities. TO ENSURE THE PRESERVATION The community is currently convertOF ITS ORIGINAL MID-CENTURY ing approximately ten to fifteen thouDESIGN WHILE EMBRACING sand square feet per year to xeriscape NEW TECHNOLOGY AND IDEAS through grass removal and installing TO KEEP THE COMMUNITY low water usage desert plantings. FRESH AND MODERN." Xeriscaping reduces or eliminates the need for irrigation. Seven Lakes works hard to ensure the preservation of its original mid-century design while embracing new technology and ideas to keep the community fresh and modern. The base assessment at Seven Lakes is $823.00 per month. There is an additional reserve assessment of $115.00, and residents also pay $28.00 for trash, $135.00 for insurance, and $143.00 for social dues. Seven Lakes makes good use of the assessments and the proof is seen in a well-run and managed golf community that provides so many amenities and facilities, and beautiful professionally landscaped grounds. Seven Lakes is like no other community in the desert. It is pretty special to call this place home and its residents feel very lucky to live there. In fact, General Manager Sy shared that a new owner visited his office recently and said, “We love Seven Lakes. We could have purchased a home anywhere but chose Seven Lakes because purchasing a home here is like purchasing an original piece of art. The homes are not cookie cutter homes.” The Association is proud to partner with CAI-CV Business Partners including Pacific Western Bank, PWLCII Landscape, AMS Paving, and Community Legal Advisors, Inc. If you would like more information about Seven Lakes, you may go to their website at www.7lakescountryclub.com or call Sy at (760) 328-2695. Marilyn Ramos is a Paralegal for Guralnick & Gilliland, LLP. She can be reached at (760) 340-1515 or by email at MarilynR@gghoalaw.com.
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Remodeling pools and Backyards since 1969 Quality work at a fair price
In high school, Mike was caught digging a pool behind the football field… by hand!Today he remodels pools! Was there ever any doubt?
Lic #896061 C-53
CAI-CV IS GOING LIVE IN OCTOBER! MARK YOUR CALENDARS - NEW FALL DATES IN-PERSON EVENTS
NEW DATE
VENUE
BOWLING TOURNAMENT (JUNE 25TH)
OCTOBER 1, 2021
PALM SPRINGS LANES
OKTOBERFEST (ORIGINAL DATE)
OCTOBER 29, 2021
SUNSHINE LANDSCAPE
40TH ANNIVERSARY & WINE TASTING (APRIL 16)
NOVEMBER 12, 2021
SHIELDS DATE GARDEN
GOLF TOURNAMENT (APRIL 30)
DECEMBER 10, 2021
DESERT PRINCESS
2020 and 2021 AWARDS (MARCH 26TH)
JANUARY 28, 2022
OMNI LAS PALMAS
IN-PERSON PROGRAMS
NEW DATE
VENUE
LEGISLATIVE UPDATE
OCTOBER 22, 2021
PALM VALLEY
NOVEMBER PROGRAM
NOVEMBER 19, 2021
PALM VALLEY
DECEMBER PROGRAM
DECEMBER 17, 2021
PALM VALLEY
Attention Sponsors: Sponsorships will sell out fast. Please contact the CAI-CV office at (760) 341-0559 if you are interested in sponsoring these events. CLICK HERE FOR A COPY OF THE CAI-CV ADVERTISING & SPONSORSHIP PLAN
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W I N E TA S T I N G & A U C T I O N Help CAI-CV Celebrate Our 40th Anniversary Friday, November 12, 2021 5:00 p.m. to 8:00 p.m.
Shields Date Garden (In-Person Event) • Champagne Reception • Heavy Hors D'oeuvres • Silent & Live Auctions • 40th Anniversary Gift $45 Members | $65 Nonmembers
REGISTRATION – CLICK HERE SPONSORSHIPS AVAILABLE – CLICK HERE A portion of the proceeds from the 40th Anniversary & Wine Tasting event will go to support the California Legislative Action Committee (CLAC).
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SOCIATIONS
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CAI-CV 40th Anniversary Interviews with Past Presidents
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FEATURE
V R H OA LI
By Mike Mastropietro Q: What do you think were your and/or the Chapter's greatest MIKE TRAIDMAN (CAI-CV PRESIDENT, 2019, 2020) Mike Traidman is the President of Mira Vista at Mission Hills HOA. He is also CAI-CV’s Past President, and is a Director and serves on the Executive Committee for the CAI-CV Board. Mike is one of only two Chapter presidents who has served two terms. Mike is also on the CAI National Homeowner Leaders Council, where he represents community board members with the CAI National Board. Additionally, Mike is the President of the Desert City HOA Council, a group of 650 community board members in the Coachella Valley who have met for the past ten years.
Q: What are a couple of your major memories about the industry and CAI-CV from the years you were president?
A: The beginning of the pandemic was traumatic with our having to cancel so many live events. However, we were able to survive due to the Chapter’s growth and extraordinary participation during my first year as president. In 2019, the Chapter won ten CAI National Achievement Awards and grew to become one of CAI’s largest chapters. The momentum we built leading up to 2019 is what kept us going through the pandemic. I know our future is bright.
Q: What were some of the goals for the Chapter you might remember or some of the challenges you faced?
A: Our goal was to elevate the industry through education. Even during the pandemic, we were able to double our education, and more important, offer most classes for free to our members. We also pushed hard to make sure our business partners were able to survive by reinforcing the importance of keeping association projects on target. However, keeping the Chapter alive without revenue was tough.
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or most significant achievements?
A: Winning so many awards really was wonderful and shows the effectiveness of our committees. More important was that our awards were directly related to our strategic plan that was implemented by the board and passed on to the committees in the form of board goals. It really worked and CAI-CV provided leadership to many CAI chapters as a result.
Q: Have you stayed involved in the industry and CAI-CV? A: Yes, I am still on the board and very active with CAI National, and with the Desert City HOA Council. I am also chairing the Chapter’s Legislative Support Committee this year.
Q: What changes have you most noticed in the industry and CAI-CV, and what do you think about those changes?
A: I think the legislative changes impacting HOAs have made the need for education for homeowner leaders and managers critical. Most legislation is introduced needlessly because legislators don’t understand our industry. We need to focus on building relationships with our elected officials and helping them understand how HOAs work, and that the majority of homeowners value their associations.
Q: Have CAI-CV and the industry evolved to where you thought they would be today?
A: It is getting tougher and tougher for HOA board leaders. They rely on our education more and more but the responsibility and personal risks of serving on an HOA board are increasing. If residents refuse to serve on their HOA boards, our communities will fail. We have a lot of work to do.
Q: Do you have any comments or suggestions to the current board and members, or to the industry?
A: Advocacy issues are important, and we need to get more people involved in educating and helping our legislators with the upcoming bills. I hope everyone involved with our industry will take the time to meet with their legislator to let them know that the HOA model works.
FEATURE
TAD BLACK (CAI-CV PRESIDENT, 2015) Tad Black is Regional Director of Field Services for Associa and Associa OnCall. He served on the CAI-CV board for six years and has been actively involved with Chapter committees. During his presidency, Tad helped the Chapter transition, introducing CAI-CV to a new financial system and targeted strategic planning. He also started Oktoberfest and Board Member Workshops (BMWs). Many of you know Tad because he emcees the Chapter Awards and other Chapter events, always willing to share his wit and humor.
Q: What are a couple of your major memories about the industry and CAI-CV from the year you were president?
A: I remember thinking what an honor it was to serve this chapter that had become such an integral part of both my professional and personal life. I recall not being sure I knew what I was doing but served with a great board, so I had confidence from their support and experience. Cal was still new as Executive Director, so we learned a lot, together, but we had seen some of his vision and I was excited about the opportunities that lay in front of us and could already start to see us differentiating CAI-CV from other chapters.
Q: What were some of the goals for the Chapter you might remember or some of the challenges you faced?
A: The Chapter was in a state of change, which I suppose it always is to some extent. I recall feeling like the opportunities to help keep the Chapter moving forward, given our great membership, leadership and need to keep things fresh was the goal of the entire board. We had utilized outside resources to evaluate our finances and procedures we needed to change, we were adding new events and educational opportunities, including adding more educational lunches during season, changing our sponsorship and marketing agreement, updating software and it always felt like we had a lot of balls in the air, which I think is the idea. I give credit to Cal Lockett, the office staff, and the board, but I do remember it being an exciting time for sure.
Q: What do you think were your and/or the Chapter's greatest or most significant achievements?
A: I wrote in my final Quorum President’s Message that the year flew by and I hadn’t felt like I accomplished nearly as much as I had hoped, but looking back, I feel good about the achievements we had. There were a few inaugural events that were implemented in 2015 including the first BMW (Board Member Workshop) event and series. We strategically scheduled that event to precede our second annual Corks-for-CLAC event, which was a big success and a lot of fun. Let’s be honest, offering a free wine tasting event for all attendees of the educational event likely boosted attendance! We also implemented an initiative in which we had a CAI-CV board member as a liaison on each committee, in order to ensure better continuity, communication and alignment of goals. That year also saw a software enhancement of “Your Membership,” an association management system that included an updated, more interactive CAI-CV website.
Q: What changes have you noticed most in the industry and CAI-CV, and what do you think about those changes?
A: With my most recent role at Associa the past few years, I have not been as intimately involved with CAI or the industry directly, but I have been impressed, especially in this last year with how the Chapter and industry have had to pivot and evolve with challenges from not only the pandemic but also the continued shifts in technology, legislative barriers and the industry as a whole. The Chapter and industry are not the same as they were ten, five, or even one year ago, and it is a testament to the people that support them to see how they have thrived.
Q: CAI-CV is always looking to increase diversity, both in the organization and in the industry. Any suggestions?
A: I would simply suggest that we look to our membership. This is something many of our member organizations have been successful in doing and there is no need to reinvent the wheel. It is imperative that we ask our constituents what they want, need, and what we should be doing differently. We sometimes get stuck in the rut of “that is how we have always done it”, which was something I resisted while I was on the board, even though it was not always the popular sentiment. As I said before, the Chapter and industry are different now and we need to be willing to evolve internally and externally. Mike Mastropietro is Director of Client Services for OCBS. He can be reached at (714) 453-6300 or by email to Mike.Mastropietro@ocbsonline.com.
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INSURANCE
Beyond the Maintenance Matrix: Understanding the Difference Between Maintenance and Insurance Responsibility By Tina Neubauer, CMCA, CIRMS and Tiffany Smith-Nguyen, ESQ.
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s. Jones, an owner at Golden Slumber Condominium Association had a pipe burst underneath the bathroom sink causing damage to the interior of the unit. The association’s manager tells Ms. Jones she cannot file a claim on the association’s insurance policy because any pipes that service her unit are her responsibility to maintain, as is the interior of the unit including any damage that the water caused. Is the manager correct? The question of maintenance and insurance responsibility comes up often when filing claims, and the issue is nearly always whether the association’s insurer will pay for some or all of the damages. Many managers and boards are under the impression that maintenance responsibilities and insurance responsibilities are the same. If maintenance responsibility for the component that failed or was damaged lies with the homeowner, then surely the responsibility to insure it also lies with the homeowner. Well, we are here to tell you, “not exactly.” "RESPONSIBILITY FOR MAINTENANCE OF A COMPONENT DOES NOT ALWAYS DETERMINE WHO IS RESPONSIBLE FOR INSURING THAT COMPONENT AND THE ASSOCIATION’S INSURANCE MAY COVER COMPONENTS THE ASSOCIATION IS NOT USUALLY RESPONSIBLE FOR." Insurance adjusters will sometimes receive the maintenance matrix from managers with instructions to deny a claim. Unfortunately, that is not exactly how it works and here is why. Maintenance responsibilities and the duty to insure often differ even under the same set of CC&Rs. To add to the confusion, actual insurance coverage may exceed an association’s duty to insure under the governing documents. In short, responsibility for maintenance of a component does not always determine who is responsible for insuring that component, and the association’s insurance may cover components the association is not usually responsible for. Let’s go back to the example. Ms. Jones is smart and has a personal unit owners policy referred to as an HO6. She files
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a claim with her carrier and waits to hear from her adjuster. The savvy adjuster knows the association insurance game and asks for the association’s governing documents. He pays close attention to the insurance section that specifies the insurance responsibility of the community. In his investigation he determines that the association must have a “walls-in” policy that includes coverage for the interior of the units, including the fixtures, as opposed to a “bare walls” policy where none of the interior components are covered. The savvy adjuster requests that Ms. Jones file a claim with the master policy. "Why?", you ask? Simple. While the duty to maintain the pipe is the responsibility of the unit owner, the ensuing damage is likely covered under the association’s policy because the CC&R’s require the association to insure the interior of the units. In this example, the Golden Slumber Condominium Association’s CC&Rs specified the association had the duty to carry a “walls-in” policy. Please note that not all CC&Rs are this specific and some are actually quite vague, focusing on policy limits and allowing the board to determine the type of policy. Many CC&Rs only set a minimum duty to insure, and in some cases, the policy purchased by the association may be more comprehensive than strictly required. Back to Ms. Jones. In this example, the manager’s assertion that responsibility for maintenance and repair or the burst
pipe belongs to Ms. Jones is correct. The association’s policy may not pay to repair the pipe. The onus for those repairs would be on Ms. Jones, but the ensuing damage would likely be covered by the association’s insurance policy (subject to the deductible), even though Ms. Jones is responsible for maintenance of the interior of her unit. "Why?", you may ask. Remember that in this case, the association has a “walls-in” policy that covers some aspects of the interior of a unit. But that is not fair! The interior of the unit is not the association’s responsibility, so why should the association’s insurance policy pay for it? This is a question association attorneys and insurance professionals sometimes get. Try to think of the association’s insurance policy as an asset the association acquires for the benefit of its members, in case of an unfortunate event. It belongs in part to each of the members. Since the members pay for the policy through their assessments, they should be entitled to receive the benefits of the policy. "TRY TO THINK OF THE ASSOCIATION’S INSURANCE POLICY AS AN ASSET THE ASSOCIATION ACQUIRES FOR THE BENEFIT OF THE ASSOCIATION AND ITS MEMBERS IN CASE OF AN UNFORTUNATE EVENT." This is not to say that an association is helpless in protecting its master insurance policy from minor or nuisance claims by members. Deductibles and clear protocols regarding who is responsible for payment of the deductible, and under what circumstances, can help ward against expensive premiums and nuisance or minor claims. Associations that are concerned about whether their insurance meets or exceeds their insurance responsibilities or that wish to establish clear deductible protocols are encouraged to have their policies and governing documents reviewed by qualified professionals. Communication is key. Be sure to communicate the basic information about your insurance policy, including any changes, to the association’s membership. Make the notification clear and concise so that all unit owners are aware of their insurance responsibility and can work with their individual agent or broker on selecting the appropriate insurance protection for their individual needs. Remember, the association’s maintenance responsibilities are not the same as the association’s duty to insure, and each association’s governing documents are unique. If you have any questions about responsibility or coverage, contact the association’s insurance broker or legal counsel. Tina Neubauer, CMCA, CIRMS, works for Roy Palacios Insurance Agency. She can be reached by email at Tinap@palinsur.com or by phone at (949) 582-0964. Tiffany Smith-Nguyen, ESQ., is an attorney with Delphi Law Group, LLP. She can be reached by email at tsmith-nguyen@delphillp.com or by phone at (844) 433-5744.
TIME HONORED MEMBER Bobbie Gaffney, AMS, PCAM By Grace Paluck, CamEx, CCAM
Bobbie Gaffney is the owner and president of The Gaffney Group, Inc. Bobbie moved to the Coachella Valley in 1986, which is the same year she got involved in the HOA management business. Bobbie Gaffney, She joined CAI-CV that AMS, PCAM same year in order to further her education and for networking opportunities. She has served on various committees including the Quorum Committee where she was the editor from 2006-2008. She also served on the board of directors in 1987. Bobbie began her career as a portfolio manager in 1986. Over the next 20 years, she managed onsite communities both as a direct employee of the association and through a management company. She started The Gaffney Group in 2007. Bobbie’s family includes her husband, Dan, who is retired from Cathedral City Police Department, daughters Maureen and Meaghan (who works with her). She has three grandchildren, Brady (12), Logan (10) and Betsy (4). She loves to spend her leisure time with her grandchildren and going antiquing. She loves to listen to soothing music such as Rod Stewart and Nora Jones. Her parents were her biggest motivators and strongest supporters. They encouraged her to reach for the stars and be the best that she could be. Bobbie's favorite sayings are, “Good things happen to those who wait.” And, “Everything happens for a reason.” I’m sure those are words that most of us can relate to. Grace Paluck is the Division Executive Vice President for The Management Trust. She can be reached at (760) 776-5100 or by email at grace.paluck@managementtrust.com. CAI-CV.org
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FEATURE
Financial Success Requires a Plan
By Keith L. Lavery, PCAM, CMCA, CCAM
(high risk tolerance) to 100% of estimated funds needed in each year (very low risk tolerance). From this data, with the assistance of your reserve professional, you will have the amount needed to set aside in the reserve fund for the current budget year; typically referred to as the annual reserve contribution.
OPERATING EXPENSES
T
he key to an association’s success is adopting a sound financial plan, and then consistently monitoring that plan. The plan will include the annual operating budget, reserve study, and regularly reviewed financial statements. These tools will help ensure the association has sufficient funding to maintain the association’s amenities and services, and to provide for the current and future repairs and replacement of association assets when needed.
RESERVES The reserve study is a long-term financial plan to help ensure the association has sufficient funds available to repair and complete major repairs to all the assets for which the association is responsible. For most associations, the reserve fund will be their largest financial asset, and correspondingly, the amount of the regular assessment committed to reserves each year will be one of the most significant budget line items. The reserve fund is intended to collect funds through assessments, to accumulate needed funding for repairs 18
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when they are needed. Assessments are collected regularly from owners during the lifetime of the asset while owners are members of the association. Think of it somewhat like a pay as you go. The association may not need to replace the roofs while you own the home, but when it is time to replace the roof, you have contributed your equitable share to that inevitable project. Therefore, it is best to begin working with your reserve study professional early in the budget process to establish a stable reserve contribution level to meet the association’s long-range plan and obligations. Review the reserve study for adequacy of assets included (some may need to be added, some may need to be removed), reasonableness of remaining useful lives, current fund balance, and projected fund balance over the life of the study. Pay particular attention to percent funded at least over the first 10 years of the study, as well as your minimum fund balance. The board should have an adopted policy of the minimum fund balance over the life of the study. This could be as low as zero
The second part of the budget process is for the board to thoughtfully consider the association's anticipated annual operating expenses that will be needed for the association to meet its obligations pursuant to the governing documents and statute requirements. These are mandatory expenses that the board must fund to meet the operating needs. The board should annually review all its contracts with vendors to ensure current "The board should annually review all its contracts with vendors to ensure current scope and costs are in line with needs and expectations, review insurance policies with your agent, assess preventative maintenance needs for the upcoming budget year." scope and costs are in line with needs and expectations, review insurance policies with your agent, and assess preventative maintenance needs for the upcoming budget year. In addition, the board must also review the discretionary items considered for the budget. These are items that enhance the service level within the community but are not mandatory. Some items to consider are: plant replacement policy, pool heating schedules, social activities, etc. These areas are where the board has the best ability to impact cost of operations and assessment levels.
FEATURE ASSESSMENTS & OTHER REVENUE The final budget component is revenue. This is the source of income by which the association will be able to fund all the items discussed previously. Typically, most of this income is from the regular monthly assessments collected from all owners. However, there are opportunities to collect other income (use fees) to offset the cost of operations. These may include clubhouse rental fees, rental registration fees, architectural processing fees, newsletter advertising. The key to considering these as part of your budget is: are they consistent reliable and collectible. Budgeting income
rates despite varying percentages of value, and others establish assessment rates based upon a different calculation entirely. Governing documents also determine the frequency in which assessments are owed, typically, monthly, quarterly, semi-annually, or annually. While assessment levels are certainly a concern for homeowners, the board ultimately owes a fiduciary duty to the association and its members to maintain the common areas, fund the reserves for
"While assessment levels are certainly a concern for homeowners, the board ultimately owes a fiduciary duty to the association and its members to maintain the common areas, fund the reserves for major repairs and replacement of association assets, insure the common areas in accordance with statutory and CC&R requirements, and enforce the governing documents." from sources other than assessments should be used conservatively. In most associations (particularly condominiums), there are three types of assessments that can be levied against the members to ensure proper funding. Regular assessments (often referred to by homeowners as "dues") are based upon the adopted budget each year, although each member's responsibility for the regular assessments can vary based upon the governing documents. For example, in many condominiums the regular assessment rate is premised upon each unit's assigned percentage of value. Alternatively, some governing documents establish equal assessment
major repairs and replacement of association assets, insure the common areas in accordance with statutory and CC&R requirements, and enforce the governing documents. Therefore, the board must adopt a budget and set regular assessments at a level to meet these requirements. Furthermore, California Civil Code stipulates boards have a duty to impose regular and special assessments sufficient to carry out their duties under the governing documents (Civil Code §5600(a)). Despite good budget planning, budget shortfalls or other unanticipated expenses are unavoidable at times. These can come from many sources
ranging from economic conditions to new regulations. These are the items that “emergency” and “special” assessments are intended. The other intended use of special assessments is for capital improvements and special enhancement projects. For special assessments, a vote of the membership will be needed, unless the amount is 5% or less of the total annual budget. These other assessments should be used sparingly for the intended uses, not to balance a budget in any one year, which would result in an ineffective annual budget over time.
FINANCIAL STATEMENTS A well-executed budget is only as good as how well it is used to monitor actual performance during the year. This includes both for the reserve fund and operations. A budget is intended to be used as a roadmap, not train tracks. There will be variances and necessary detours from time to time. So, identify these during the year as trends develop through the year-to-date performance and adjust as you go. This does not mean changing the budget except in the most extreme cases, but it does mean identifying significant positive and negative variances, so the board can actively determine how the positive variance will be used or applied to future budgets and negative variances will be dimished through cost controls or adjustments to discretionary expenses and projects. Finally, keeping the historical budget information as well as the year-end income statement compared to budget for each year on rolling five-year basis will provide wonderful perspective as you prepare each following budget. Use your prior experience with commentary to develop your budgeting skills. Keith L Lavery, PCAM®, CMCA®, CCAM® is the Executive Vice President and Chief Financial Officer for Associa Desert Resort Management. Keith can be reached at: (760) 346-1161 or by email to klavery@drminternet.com.
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WHAT MANAGERS NEED TO KNOW
CAI Education – The Road to Professional Designations Holly Smith, CMCA, AMS, PCAM
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he HOA industry is continually evolving, expanding, and improving, and its impact on the economy is enormous. However, we are part of a relatively new industry. So new, in fact, that people outside of the industry have no idea that professional management of HOAs is a job. Did any of us wake up one day and say, “I want to work with HOA’s.” Probably not. Many of us started in this industry without having a clue about HOA management. When I talk with managers, I’m always surprised by the variety of backgrounds and pathways they have followed to become a manager. While many managers have some education and skills when they enter
manager can obtain is CAI’s Professional Community Association Manager (PCAM) designation. Receiving a PCAM is a journey that takes a minimum of five years of industry experience before you can apply. The journey starts with CAI’s M100 classes and then you prepare for the exam to obtain your Certified Manager of Community Associations (CMCA®) designation that comes from the independent Community Association Managers International Certification Board (CAMICB). After obtaining your CMCA, you will want to take two M200 advanced management classes. After passing these classes and achieving two years
the HOA industry, there is a need for HOA education. Fortunately, CAI offers top tier education and professional designations to prove your standing in the industry. CAI also requires continuing education to ensure its designations are backed with current facts and industry best practices. CAI professional designations show clients that you take your job seriously and are committed to the betterment of the HOA industry and the HOA communities that you serve. The greatest achievement any
of experience, you are eligible to obtain your Association Management Specialist (AMS) designation. This is a simple application process and doesn’t require another test, other than the tests required to pass the M200 classes. From here you will find a list of things to accomplish prior to applying for the PCAM. The application is based on a point system. You earn points from completing the remaining M200 classes, and points are given for serving on a Chapter committee, and for attending
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local and national training opportunities. At CAI-CV, this would include events such as the monthly lunch programs and attending Manager on the Run (MOTR) programs. You can also attend forums and workshops that are facilitated by business partners if their education has been approved by CAMICB. At this stage, you will also collect points for volunteering with CAI-CV, from serving on a committee to writing an article. I want to emphasize the importance of volunteerism at the Chapter. Obtaining a PCAM also comes with a responsibility to give back to CAI. This is done by joining any number of committees that are available. Becoming a chair or a co-chair of a committee also provides you additional application points. Having an article published or being asked to teach at a CAI-CV class also provides you more points toward your PCAM. Once you have collected all your points, you can apply for the PCAM Case Study. You are now only steps away from achieving what a very small number of managers have achieved. CAI will assign you to a two-day Case Study where you will put your knowledge to work. At the Case Study, you will interview the board members and staff at a HOA that could be anywhere in the United States (managers are usually assigned to a Case Study in their state). After the interviews, you will be provided all the relevant association documents. You will also be given ten subdivided questions to answer at length. These answers end up much like a master’s dissertation. You are given 30 days to turn in your report. The paper is your way of showing the facilitators that you know CAI best
ABOUT CAI practices and can solve the problems that often occur with HOA management.
FOR THOSE OF YOU WHO ARE CONSIDERING YOUR PCAM DESIGNATION, HERE ARE A FEW TIPS:
1. Stay organized! Download and prepare the Case Study information as it comes to you. You can print everything and place it in a traditional notebook or use a digital workbook like OneNote and achieve the same organization digitally.
2. Gather all your CAI resources such as
6. Take notes during the class and interviews. If you are taking the Case Study online, the class and interviews are recorded so you can review them and make sure your notes are exhaustive.
your previous M200 workbooks, CAI best practice books and classroom documents into one location. If it has been a few years since you took a class, ask your colleagues or the CAI-CV office for a more recent copy. Most of CAI’s publications can be found online at the CAI Research Library. https://www.caionline.org/ LpearningCenter/ResLib/Pages/ default.aspx
7. Take time off! Be realistic with
3. The Case Study requires you to
8. Start writing your paper right away.
reach out to professional advisors for critical information. Long before you take the Case Study, gather your business partner resources. You can let them know that you are taking the PCAM Case Study and that you may have need to reach out to them for their expertise. You will most likely need assistance from an attorney, reserve analyst, insurance broker, and financial accountant or auditor.
4. Before you start writing, ask someone you trust if they will read and help you edit your paper. A second pair of eyes is a must. Be sure to let your helper know your expectations and deadlines.
5. If the Case Study is online, review the property video multiple times. The first viewing is to take it all in. During the second viewing, take notes. Then, watch it again just prior to writing your report.
the time you will need to do this paper. Trying to accomplish this at night after a long day, or on the weekends may not be practical. Also, uninterrupted time is a must. This is not one of those instances where procrastination works. While each instructor has their own format and rules for how the content is presented, there are no guidelines on what the content of the paper should contain. However, since your paper is written to advise the association and their manager about ways to improve their community, you must cite your professional advisors, as well as noting the data found in your CAI resources. You will include as much technical data as needed to get your point across. You will also include exhibits and those take time. Plan your time carefully. The PCAM designation is CAI’s highest credential for a reason. What an accomplishment to achieve this honor that is recognized internationally. Choosing to add the PCAM acronym after your name tells the world that you
are a true professional, backed by CAI’s best practices for HOA management. I hope every manager will seek a PCAM. Together, we can elevate the HOA industry. Even after the PCAM, CAI offers a variety of advanced courses and continuing education. These educational opportunities are another useful building block in our professional lives. The associations you manage will be grateful for your expertise and professionalism. The HOA industry is recession proof and can provide a lifelong financially secure and rewarding career. If you have questions or would like a PCAM manager to help you with your professional journey, please contact the CAI-CV office or join the Professional Managers Committee. Any PCAM manager will be happy to help mentor and support you on your journey. You might even qualify for a scholarship. For further information on educational opportunities or CAI-CV's scholarship program go to: (https:// www.caionline.org/LearningCenter/ Education-for-Managers/Pages/default. aspx) or call the CAI-CV office. Holly Smith, CMCA, AMS, PCAM, has over 20 years of property management experience within Southern California. Holly works for Associa Desert Resort Management. She serves on the Quorum Committee. She can be reached at (760) 346-9918 or hsmith@drminternet.com.
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CAI-CV MEMBERSHIP SHREDDING EVENT Wednesday, August 25, 2021 10:30 am to 1:30 pm
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Celebrating CAI's 40th Anniversary Year in partnership with Desert Arc PARKING LOT OF CAI COACHELLA VALLEY CHAPTER OFFICE
75410 Gerald Ford Drive #102 in Palm Desert 22
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CHAPTER NEWS
ATTENTION CAI-CV MEMBERS PLEASE SEND US YOUR AWARD NOMINATIONS
2020 CHAPTER AWARD NOMINATION FORM Awards & Monte Carlo Night
Friday, January 28, 2022, 5:30 PM (Reservations available at CAI-CV.ORG) Omni Rancho Las Palmas Resort & Spa, Rancho Mirage On Friday, January 28th, 2022, CAI-CV will host the 2020 and 2021 Chapter awards ceremony. We are collecting 2020 nominations now and will collect 2021 nominations in December. Each year, CAI-CV recognizes members who have provided outstanding service to the chapter and industry. Please send us your nominations to be considered for the ten Chapter awards. Due to COVID, many committees planned their events and programs, and then had to replan them multiple times, and some events were eventually canceled. Help us to recognize the volunteers who went above and beyond during the pandemic. Award recipients will be selected by a committee of the CAI-CV Board, committee leadership and the chapter CED. Nomination forms must be turned in to the CAI-CV office by 5:00 p.m. on Friday, July 30, 2021 to be considered. They may be mailed to CAI-CV, 75410 Gerald Ford Drive, Suite 102, Palm Desert, CA 92211, or scanned and emailed to admin@cai-cv.org. 1) Lifetime Achievement Award A CAI-CV member who has provided outstanding volunteer service to the chapter for multiple years. This member will have contributed substantially to the chapter’s efforts to reach its vision and goals in the Coachella Valley.
2) Distinguished Service Award A CAI-CV member who has gone above and beyond to help the chapter meet its goals and objectives for 2020.
CAI-CV’S SPEAKEASY
MARK YOUR CALENDAR 2020 & 2021 AWARDS COMBINED! FRIDAY, JANUARY 28, 2022
4) Operations Committee of the Year A CAI-CV operational committee that has achieved a high level of success, reaching their committee goals and helping the chapter reach its vision. Choose from the: CLAC Legislative Support Committee Communications Committee Education Committee Homeowner Leader Committee Membership Committee Professional Managers Committee Programs Committee Public Relations Committee Quorum Committee Volunteer Committee
3) Special Event Committee of the Year A CAI-CV event committee that has achieved a high 5) Community Association Onsite level of success, reaching their committee goals and Manager of the Year helping the chapter realize its vision. A CAI-CV onsite manager member who has worked to promote professionalism in the CID industry Choose from: through their volunteer work with CAI. This award Awards Committee is for managers who are dedicated to serving only Bowling Committee one community, regardless of their work location. Golf Committee Oktoberfest Committee Wine Committee
THIS FORM IS ALSO AVAILABLE ONLINE AT WWW.CAI-CV.ORG.
6) Community Association Portfolio Manager of the Year A CAI-CV portfolio manager member who has worked to promote professionalism in the CID industry through their volunteer work with CAI. This award is for managers who serve more than one community.
7) Community Association HOA of the Year A CAI-CV community association member that exemplifies excellence in common interest development (CID) operations, education and service to its homeowners and has participated in CAI’s educational programs and fundraising efforts for CLAC.
8) Homeowner Leader of the Year A CAI-CV homeowner leader member who promotes community association board level education and professionalism within the HOA industry and who has helped CAI-CV reach its goals and vision.
9) Business Partner of the Year A CAI-CV business partner member (company) that has provided time and resources to help the chapter reach its goals and objectives in 2020. Please see list of Chapter Angels in the June Quorum, page 33.
10) Educated Business Partner of the Year A CAI-CV Educated Business Partner member (individual) who has provided time and resources to help the chapter reach its goals and objectives in 2020. Please see list of Chapter Angels in the June Quorum, page 33.
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FEATURE
Reserves and SB326 – The Balcony Bill By Robert W. Browning, PCAM, RS and Ritchie Lipson, Esq. HISTORY: The Governor signed SB326 August 30, 2019 and it became law January 1, 2000. The bill was introduced as a response to the Berkeley balcony collapse at Library Gardens Apartments on June 16, 2015, when thirteen students fell forty feet from a failed fifth-floor balcony, killing six and injuring seven. The cause of collapse was determined by the California Contractors State License Board to be “Dry rot along the top of the joists which suggests long-term moisture saturation… of Oriented Strand Board (OSB) in direct contact with the joists. Additional locations of water damage and dry rot were found on the wall OSB sheathing and the face of the doubled deck joists along the deck edge to wall interface by severely rotted structural support joists.” The load of the 13 students was found to be “well within the design limits of the balcony structure.”
WHAT COMMUNITIES ARE AFFECTED AND WHAT INSPECTIONS ARE REQUIRED The bill adds Section 5551 and 5986 to the California Civil Code and amends Section 6150 and applies to buildings with three or more multifamily units which contain “exterior elevated elements.” The bill only applies to condominiums with three or more multifamily dwelling units. This excludes commercial and industrial condominiums. The inspections are “of the load-bearing components and associated waterproofing elements of exterior elevated elements.” The bill defines load-bearing components as “components that extend beyond the exterior walls of the building to deliver structural loads from the exterior elevated
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element to the building.” The term “Balcony Bill” has been used since the legislation was introduced, but the definition of exterior elevated elements (EEE’s) includes “decks, balconies, stairways, walkways, and their railings that have a walking surface that is elevated more than 6 feet above ground level, and are designed for human occupancy or use, and that are supported in whole or in substantial part by wood or woodbased products.” A more appropriate name may be “Civil Code Section 5551,” or the “Exterior Elevated Elements” bill.
WHO IS QUALIFIED TO COMPLETE THE INSPECTIONS? Inspections can be completed by any of the following:
(1) Licensed architect. (2) Licensed structural engineer. WHAT IS THE SCOPE AND PURPOSE OF THE INSPECTIONS? The purpose of the inspection is to “determine whether the exterior elevated elements are in a generally safe condition and performing in accordance with applicable standards.” The inspector shall perform a visual inspection in a “statically significant” random sample of locations to provide 95 percent confidence the sample results are reflective of the whole project's condition. A visual inspection is defined as “the least intrusive method necessary to inspect load-bearing components, including visual observation only or visual observation in conjunction
FEATURE with, for example, the use of moisture meters, borescopes, or infrared technology.” However, if the inspector observes conditions that indicate water intrusion further inspection is required, and the inspector “shall exercise their best professional judgment in determining the necessity, scope, and breadth of any further inspection.”
WHAT TYPE OF REPORTING IS REQUIRED? A written report stamped by the inspector and incorporated into the reserve study of the association must be maintained for two inspection cycles in the association records and is required to contain the following information:
(1) Identification of the load-bearing components and associated waterproofing system.
(2) The current physical condition of the load-bearing components and associated waterproofing system, including whether the condition presents an immediate threat to the health and safety of the residents.
(3) The expected future performance and remaining useful life of the load-bearing components and associated waterproofing system.
HOW ARE RESERVE STUDIES IMPACTED? The bill requires that the findings of the report be “incorporated into the study required by Section 5550.” There are no details on exactly what is mandated, but since the inspection report must include a statement of the remaining useful life of the load-bearing components and waterproofing systems, it would follow that the reserve specialist will need to amend the reserve report reflecting any changes to the useful life of the elements inspected and included in the report. Depending on the financial position of the association’s reserves this could create an underfunded situation where immediate repairs are not required but the useful life of the components is less than originally planned for the reserve study. To ensure there is time to incorporate repairs based on the nine-year inspection cost into the reserve study, the inspection should be scheduled approximately 6—18 months prior to the start of the year, in which the study is being prepared. Reserves can also be impacted because of ancillary costs related to the EEE’s. For example, additional destructive testing and remediation, as well as emergency repairs may be needed due to the inspection.
(4) Recommendations for any necessary repair or replacement of the load-bearing components and associated waterproofing system. If, after inspection of any exterior elevated element, the inspector advises that the exterior elevated element poses an immediate threat to the safety of the occupants, the inspector shall provide a copy of the inspection report to the association immediately upon completion of the report, and to the local code enforcement agency within 15 days of completion of the report.
WHAT TYPE OF REPAIRS MUST BE COMPLETED? After receipt of the report the association shall take “preventive measures immediately” including preventing occupant access to the exterior elevated element until repairs have been inspected and approved by the local enforcement agency. The new law further provides that the continued and ongoing maintenance and repair of the load-bearing components and associated waterproofing systems in a safe, functional, and sanitary condition shall be the responsibility of the association as required by the association’s governing documents.
WHEN ARE THE INSPECTIONS REQUIRED? The initial inspections must be completed by 1/1/2025 and every nine years thereafter. For buildings permitted after 1/1/2020 the first inspection must be completed within 6 years of the certificate of occupancy.
"TO ENSURE THERE IS TIME TO INCORPORATE REPAIRS BASED ON THE NINE-YEAR INSPECTION COST INTO THE RESERVE STUDY, THE INSPECTION SHOULD BE SCHEDULED APPROXIMATELY 6—18 MONTHS PRIOR TO THE START OF THE YEAR, IN WHICH THE STUDY IS BEING PREPARED." CAI-CV.org
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FEATURE WHAT HASN’T CHANGED IN THE RESERVE STUDY? The bill, as discussed, requires inspections beyond the scope that typically occurs during the reserve study inspection. The reserve study inspection is visual, and only includes accessible areas. However, it is important to remember that an association that falls under the bill, should have been collecting funds for these elevated elements, prior to the implementation of the legislation. This is an important point for boards to understand. The requirement in the bill for a statistically significant sampling of EEE’s is new, and associations have not always planned for this level of inspection. Finally, the inspection is a valid use of reserve funds since it is directly related to the long-term maintenance of the exterior elevated elements.
DUTY TO INSPECT In a string of recent court decisions around the country, courts have held that association’s and their boards have a duty to inspect, and bring appropriate claims for the defects, and that this duty arises from the basic maintenance obligation in the CC&R’s. This is consistent with well-established law in California. Although California appellate courts have not directly dealt with the issue of a board ignoring construction defects, it has been well established for 35 years that the board owes a fiduciary duty to HOA members, since the case of Raven’s Cove Townhomes, Inc. v Knuppe Development Co. Raven’s Cove was a construction defect case, where the HOA also sued former board members who were employees of the builder. The 1981 appellate court held that the former board members had breached their fiduciary duty to the HOA by failing to set aside operating or reserve funds.
"THE BIGGEST CONCERN A BOARD SHOULD CONSIDER IS THE POTENTIAL LACK OF COVERAGE FOR HOMEOWNER CLAIMS FOR BREACH OF FIDUCIARY DUTY FOR FAILURE TO INVESTIGATE AND BRING CONSTRUCTION DEFECT CLAIMS." In California, an association owes a fiduciary duty to HOA members to maintain the common area in a safe manner, and to make a reasonable inquiry regarding maintenance issues and to enforce the CC&Rs and other governing documents. This duty, and its fiduciary nature, has been reiterated by several California courts. It is very likely that a California trial or appellate court would extend the rule first announced in Raven’s Cove and find a breach of fiduciary duty by a board 26
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that does not conduct inspections that would have uncovered construction defects or does not pursue the builder to fund repairs. In addition, there are now four distinct requirements that exist to mandate regular inspections of the common area: (1) many CC&R’s require annual inspections of the common area by a 3rd party independent inspector, (2) the Davis-Stirling Act requires an inspection of major building components at least every three years as part of the reserve study, (3) SB326; and (4) SB800 require associations follow maintenance requirements from the builder and product manufacturer. The biggest concern a board should consider is the potential lack of coverage for homeowner claims for breach of fiduciary duty for failure to investigate and bring construction defect claims. Most director and officers insurance policies have specific exclusions for any such claims that arise from or pertain to construction defects.
IMPORTANT CONSIDERATIONS AND RECOMMENDATIONS FOR MANAGERS AND BOARDS:
(1) There is a significant risk to waiting as the statute permits local governments or enforcement agencies to enact an ordinance or other rule imposing requirements greater than the statute.
(2) Inspect early a. to reduce and mitigate damage b. avoid the last-minute rush that will occur near the deadline
c. allows time to bring SB800 claims for defects discovered
(3) In many cases, compliance with the bill may not be clear. The association should seek the advice of their legal counsel, in addition to the architect, engineer and reserve analyst, to determine compliance with the requirements of the bill. Robert W. Browning, PCAM, RS, NV RSS #5 is the owner of the Browning Reserve Group (BRG). BRG has been providing reserve studies since 1999. Mr. Browning has been a member of CAI’s national Board of Trustees, Chair of the California LAC, President of the CAI-CNC chapter twice, and President of CAI's Foundation for Community Association Research. Ritchie Lipson, Esq., is Director of Client Relations for Kasdan Turner Thomson Booth, LLP. The past 21 years, Lipson has worked with commercial investors, municipalities, school districts, homeowner associations and residential property owners, to assist in the fair resolution of their claims for defective construction.
Join the On-line Discussion Among Local HOA Board Members in the Coachella Valley TO ENROLL, SEND AN EMAIL TO: CAICV-HOALeadersForum+subscribe@groups.io or CLICK HERE
LEARN HOW OTHER HOA BOARDS FUNCTION. ASK THE CAI-CV/DCHC COMMUNITY!
1
You will receive a confirmation email. Once you respond, you will be part of the discussion. To comment on any posting, just type “reply” in your email. To start a topic of discussion, send your request to the email blow. CAICV-HOALeadersForum@groups.io
Examples of Topics Discussed • • • • • • •
Electronic Board Meetings Mailbox Clusters Elections Tree Inoculations & Pruning Exterior Elevation Inspections Ring Doorbell Cameras Gate Code Policies
• • • • • •
Political Signs Architectural Requests Lawsuits vs Association Irrigation Timers Video Cameras Mileage Reimbursement for Volunteers
The on-line board members’ discussion group is a service of CAI-CV and Desert Cities HOA Council.
CREATIVE | BRAND | STRATEGY WORKING WITH YOU TO CREATE EFFECTIVE DESIGN SOLUTIONS
Proud to be a part of the award winning CAI-CV team!
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FEATURE
CAI-CV Wins National Chapter Achievement Award CAI-CV will receive eleven awards at the CAI National Conference on August 20th in Las Vegas
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ACHIEVEMENT AWARD
ACHIEVEMENT AWARD
ACHIEVEMENT AWARD
Member Services Homeowner Leader Education & Membership Initiative
Chapter Management & Development Strategic Planning Initiative
Leadership Business Partner Mentoring Project
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ACHIEVEMENT AWARD
ACHIEVEMENT AWARD
Public Affairs Buck-A-Door Grassroots Initiative
Member Services Community Association Board Recruitment
C A I N AT I O N A L A C H I E V E M E N T A N D E X C E L L E N C E AWA R D S
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EXCELLENCE AWARD
EXCELLENCE AWARD
EXCELLENCE AWARD
Public Affairs
Membership
Chapter Management & Development
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EXCELLENCE AWARD
EXCELLENCE AWARD
ACHIEVEMENT AWARD
Member Services
Leadership
Chapter Management & Development
CAI National announced last week that CAI-CV has won one of five Achievement Awards given to Very Large Chapters for its Leadership Training Initiative in the Chapter Management and Development category. This award for 2020 will be presented along with the ten awards won by CAI-CV for its programs in 2019. Please join us at the CAI 28
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CAI National will be celebrating your accomplishments on stage at the 2021 Annual Conference in Las Vegas.
National Conference General Session on Friday, August 20th at 11:00am. 2020 was CAI-CV’s first year competing as a Very Large Chapter. Congratulations to the CAI-CV Board and all our members and volunteers who work tirelessly to keep our programs top-tier. CAI-CV continues to show national leadership even competing against CAI’s largest chapters!
FEATURE
CAI-CV Medallion Community Recognition CAI-CV Recognizes Sun City HOA as a Medallion Community
Left to right: Greg Rodriguez, Jo Mochulski, Sue Rogoff, Randy Dugger, Clint Atherton, Sandy Kubal, Jim Roberts, Matt Lawton
Palm Desert, CA, May 17, 2021 – The Community Associations Institute Coachella Valley Chapter (CAI-CV) announced that Sun City Homeowners Association (HOA) has become a CAI-CV Medallion Community. Medallion Communities adhere to CAI’s best practices and are among the finest HOAs in the Valley to call home. Sun City Palm Desert was recognized at a public ceremony on Tuesday, May 18, 2021, at Sun City’s Mountain Vista Clubhouse. At the ceremony, Sun City HOA Vice President, Randy Dugger, and General Manager Clint Atherton, PCAM, were presented with the Medallion Community signage recognizing them as a best practice community. CAI-CV President Matt Lawton, CIC, CIRMS, from Prendiville Insurance Agency made the presentations. In addition, County Supervisor Manuel Perez’s office presented a certificate acknowledging the achievement. Upon hearing of this recognition, General Manager Clint Atherton said, “At Sun City we are always trying to improve and differentiate our community. Our outstanding HOA board of directors and other volunteer leaders work diligently to learn CAI best practices to keep our community aesthetically beautiful while being second to none in terms of our operational practices. We are honored to be one of the first to be recognized as a CAI-CV Medallion Community.” The Coachella Valley has more than 800 HOAs, and nearly 80 percent of Valley residents reside in an HOA. CAI-CV started its Medallion Community program earlier this year to recognize Coachella Valley HOAs that pursue best practices in community management, legal, financial, and building community spirit. HOAs that are interested in becoming Medallion Communities must complete a comprehensive application, which is reviewed by a team of HOA experts. Only HOAs that can show that they have adopted CAI’s best practices qualify for Medallion Program recognition. E.J. (Jay) Jarvis II, CMCA, CCAM is a community manager with HOA Office, Inc., Past President of the Lafayette Village Homeowners Association, and Past President and On-site manager of Portola Palms Homeowners Association. Jay can be reached at jay@HOAOffice.net.
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HOA LAW
Lurking in the Shadows: The Fair Debt Collection Practices Act By Brian Gladous, Megan Pamula and Henry Guzman
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ny law firm, management company, or person, or entity who, that regularly engages in debt collection, is subject to the federal Fair Debt Collection Practices Act in addition to the California Rosenthal Fair Debt Collection Practices Act. Both the federal and California fair debt statutes are designed to ensure consumer debts are collected in a fair, non-threatening, and equitable manner. Because the law is constantly evolving, what constitutes a violation may be something you didn’t even know about. Consider this: Your management contract requires the preparation and mailing of billing statements to the owners. You generate your first billing statements for a new client, reflecting each owner’s assessment obligations. A word to the wise, to avoid adopting any errors in interest calculations or otherwise, always recalculate the balance due for yourself. Do not rely on the work product of others. Interest may not be added to a monetary penalty imposed on a member for a violation of the governing documents. We have seen associations impose interest on all outstanding debts; this is not legal.
accounts show the delinquent balance and include, at the bottom of the billing statement, the following message: “Your account is at least 15 days past due. Please pay the balance in full immediately to prevent the addition of late charges and interest to your account. If your account is not brought current, an assessment lien may be recorded against your property, and your account will be turned over to a collection agency.”
“Your account is at least 15 days past due. Please pay the balance in full immediately to prevent the addition of late charges and interest to your account. If your account is not brought current, an assessment lien may be recorded against your property, and your account will be turned over to a collection agency.” While most of the owners in this example are current in the payment of their assessment obligations, several owners are at least thirty (30) days delinquent. As a result, the monthly billing statements for these delinquent 30
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When some of the delinquent owners do not bring their accounts current or respond, a late letter and pre-lien notice are sent to them, and then an assessment lien is recorded against their unit (in compliance with the statutory timeline).
A few days later, a written response is received from one of the delinquent owners, claiming that the association is not entitled to recover late charges nor interest on the delinquent amounts. Adding insult to injury, the owner contends that management’s fees for work performed to collect their delinquent assessments are uncollectable because you have violated the Federal Fair Debt Collection Practices Act (the “Act”). Oh no! How, you wonder, have you violated the Act?! And if you have violated the Act (you did not intend to), how can the matter be resolved? In this scenario, the manager should comply with the Act on the “first communication” on a debt. The form of communication isn’t confined to a demand letter; a monthly billing statement reflecting the delinquent balance could be considered a first communication. Pursuant to Civil Code Section 1812.700, the “first communication” (that is addressed to a California address) must
HOA LAW include a notice that explains allowable collections practices and where the debtor can get more information about their rights as expressly prescribed by the statute. Did you notice we said “California address” above? If you did, great job! You have an eye for details. What that means is, if the debtor lives in another state, you may need to comply with that state’s debt collection laws as well. And all communications to the owner must state: “We are attempting to collect a debt. Any information obtained will be used for that purpose.” Unless that first communication already contains the following information, a written notice must be sent to the delinquent owner in the form of a notice within five (5) days of the first communication containing: (1) the amount of the debt; (2) the association’s name; (3) a statement that the debt will be presumed valid unless the owner disputes it within thirty (30) days of receipt of the notice; and (4) a statement that if the owner notifies the manager within the thirty (30)-day period that the owner disputes all or any portion of the debt, the manager will verify the debt and mail a copy of the verification to the owner. Furthermore, suppose a language other than English is principally used by a third-party debt collector in the initial oral contact with the debtor. In that case, the above notice shall be provided to the debtor in that language within five (5) working days. This means that anyone at the management company who takes a call from the debtor should notify the accounting department immediately if that call was conducted in a language other than English. Practically speaking, we advise clients to only speak in English for debt collection calls. If any other language is used, all documents, including collection policies, statutory demands and all correspondence, etc., must be provided to the debtor in all fourteen (14) languages required by
"So if you practice any debt collection make sure that you have consulted with your legal counsel, so you are not missing any steps."
the State. This is an expensive task to complete. Therefore, it is likely that a manager who inherits a delinquent account would be subject to the Act when first communicating with the delinquent owner. Now, if this sounds like a lot to you, let me tell you, we are just getting started. There are more requirements, including specific disclosures required to be distributed thirty (30) to ninety (90) days before the end of the fiscal year, specific language that must be included in a pre-lien letter, and specific requirements for voting on recording a lien (in open session, by tract map identification not owner name) and foreclosing on a debt (decision to be made in executive session). There are so many
requirements that we cannot include all of them here. So, if you practice any debt collection make sure that you have consulted with your legal counsel, so you are not missing any steps. Non-compliance with any of the debt collection laws can be costly. Suppose a manager is found liable (in violation of the Act). In that case, a court could award the owner an amount equal to the sum of any actual damage sustained by the owner due to non-compliance with the Act and any additional damages that the court may allow, up to $1,000. Although that amount might not seem very significant, it could be in the case of a class action initiated by a group of homeowners, for example, the court may award actual damage sustained by each plaintiff (homeowner) in the
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HOA LAW
class action, plus an amount for all other class members, not to exceed the lesser of $500,000 or 1% of the net worth of the debt collector, at the court’s discretion. Furthermore, the court maintains the power to award reasonable attorneys’ fees. There is nothing reasonable about class action legal fees, not by any stretch of the imagination. In determining whether there has been a violation under the Act, the court can consider, among other factors, the frequency and persistence of non-compliance by the debt collector, the nature of such non-compliance, and the extent
An owner claiming that there has been a violation of the Act is limited by a one-year period from the violation date to file a lawsuit in a state or U.S. district court having jurisdiction over the case. How, in the above scenario, could the manager be liable? The manager would be liable because the monthly billing statement and the demand letter did not include the “first communication” language required by the Act. No one wants a court to decide if a homeowner suffered actual damages due to the manager’s action or inaction. To avoid liability, comply. The cost of including
"Handling the situation promptly and advising the board that the manager will resolve the matter without involving the association should go a long way in preserving and, hopefully, enhancing the relationship with the association."
to which such non-compliance was intentional. In a class-action lawsuit, the court would consider the above factors in addition to the resources or financial condition of the debt collector and the number of persons adversely affected. The trend in federal and California state courts has been lenient on delinquent debtors and hard on debt collectors. 32
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the required statements (compliance) under the Act is minimal compared to the consequence of inadvertent non-compliance with the Act. A manager should not rush to settle a claim, especially if the claim is without merit. However, if the manager’s legal counsel recommends a settlement, a settlement can usually be reached by
waiving any management fees related to the collection of the delinquent assessments. (The association need not waive any late charges and interest resulting from a violation of the Act assuming both are due and owing.) The settlement should be documented in the form of a settlement and release agreement. Handling the situation promptly and advising the board that the manager will resolve the matter without involving the association should go a long way in preserving and, hopefully, enhancing the relationship with the association. Don’t let the Fair Debt Collection Practices Act sneak up on you. Compliance with the Act from the “get-go” is a lot more cost-effective than defending a lawsuit initiated by a disgruntled owner claiming non-compliance. Oh wait, did we mention that you now have to have a license to engage in any debt collection work? Effective January 1, 2022, the Debt Collection Licensing Act (the DCLA) requires all debt collectors to obtain a license. Since the DCLA requires any party collecting a debt on behalf of themselves or another to obtain a license, managing agents and associations will be required to obtain a license. While there is no grace period to operate without a license, the DCLA has put out a statement that all parties that apply before January 1, 2022, will be permitted to operate until their application has been approved or denied. Once obtained, the license number will be required on all communications from the debt collector. The Department of Financial Protection has yet to release the application to obtain licensing, so look for it this fall. Updates will be provided here when they are available: https://dfpi.ca.gov/debt-collectors/ Brian Gladous, Megan Pamula and Henry Guzman work for Association Lien Services (ALS). They can be reached at (800) 825-5510 or by email to info@alslien.com.
FEATURE
Thank you
CAI-CV CHAPTER ANGELS COVID has had a significant impact on the Chapter’s ability to have fundraising and networking events. The following companies have donated all or a portion of their unused 2020 sponsorships to the Chapter. CAI-CV’s Board of Directors honors these business partners that see the value of supporting the Chapter’s educational programs. Many more companies are considering donating unused sponsorships so this list will continue to grow each month! Please thank them and call on them when you have a need for their services.
Alan Smith Pool Plastering AMS Paving, Inc. Asphalt MD's BPR Inc. BRS Roofing Inc. C. L. Sigler & Associates, Inc. CIT Conserve LandCare Delphi Law Group, LLP DSI Security Services Eagle Roofing Products EmpireWorks Reconstruction and Painting Fiore Racobs & Powers, A PLC Flood Response Frazier Pest Control, Inc. Gardner Outdoor and Pool Remodeling GrandManor
Green Bryant & French, LLP Horizon Lighting Inc. LaBarre/Oksnee Insurance Agency, Inc. NPG Asphalt Pacific Western Bank Patrol Masters, Inc. Precision Pool Tile Cleaning Pro Landscaping, Inc. Rey Insurance Services, Inc. Roof Asset Management Seacoast Commerce Bank Securitas Security Services Sherwin-Williams Paint Company Superior Roofing The Management Trust The Naumann Law Firm, PC Vantage Point Construction, Inc. Vista Paint Corporation Western Pacific Roofing
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FEATURE
Active Assailant Awareness What we can all do to mitigate the threat of an active assailant. By Jamie Ridenhour
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e hear news reports about active assailant incidents all too often lately. Sadly, the incidents seem to be on the rise again after subsiding during 2020. Prior to that, 2019 was a very bad year with an average of one incident every week. The statistics are frightening and it can feel like the nature of these occurrences means there is little we can do to stop them. There are, however, some very important steps we can take to mitigate the risk of injury or worse from an active assailant incident. Mitigation measures can occur before, during, and after an incident occurs. Understanding indicators that active assailants often display can potentially mitigate an incident before it happens. Knowing these techniques and options can help keep you safe during an incident. Equally important is understanding how to react post-incident to assist first responders.
BEFORE AN INCIDENT Intervention Intervention plays a key role in stopping many tragedies before they occur. Greater public awareness and a 34
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willingness to alert authorities has had a positive impact on stopping attacks from occurring. Greater public awareness of some of the traits that many attackers share can make a significant difference in our ability to mitigate attacks. Grievances Active assailant perpetrators often feel that they have been personally wronged. This can come from perceived slights in the personal, sociological, romantic, work related, or other realms. Oftentimes, there can also be a malice felt by the assailant against groups because of their gender, sexual orientation, ethnicity, race, socioeconomic, or religious affiliations or identity. Unfortunately, the Internet and social media have served to amplify these perceptions. Confirmation for virtually any viewpoint can be found online today and it has been shown that many assailants become steeped in the rhetoric and ideology of fringe groups that are easy to access online. Stressors Stressors are another factor that a large percentage of active assailants
have in common. We all face some type of stress in our daily lives, but for some, stressors are more significant. The FBI found (FBI report) (https://www.fbi. gov/file-repository/pre-attack-behaviors-of-active-shooters-in-us-2000-2013. pdf/view) found that active shooters typically experienced an average of 3.6 separate stressors in the year before they attacked. It is important to learn to recognize some of the stressors that have been noted in assailants: • Mental health issues • Financial strain • Workplace conflict • Conflicts with friends, peers or parents • Marital conflicts • Drug and alcohol abuse • Physical injury • Sexual stress or frustration Concerning Behaviors Seventy-seven percent or more of active assailants spend a week or more planning their attack according to the FBI report. During that time, they will often exhibit some common concerning
FEATURE behaviors. The people most likely to notice these behaviors are those who know the potential assailant best, including family and friends. Even when it is recognized, however, it often goes unreported, and those same people may end up being the victims. Some of the behaviors attackers have in common include: • Interpersonal conflicts • Leakage (discussing the idea of a violent act) • Decline in quality of thinking • Suicidal ideation • Poor work or school performance • Threats, confrontations, and aggression • Idolizing criminals • New or escalating fascination with violence and/or weapons • New or intense involvement in fringe idea groups or movements • Open dialog about hate or violence against groups or demographics One of the most important behaviors to be aware of is that of leakage. This term refers to the potential assailant's tendency to discuss the idea of a violent act or ideation of violence, something that would typically be avoided in normal conversations. The fact that the idea is present enough in the person’s mind for it to come up in conversation is an important signal that should not be missed. If a person is talking about these things, there is ideation, and ideation can become action. Social media and online access to fringe groups again plays a part when it comes to ideation. Radical online groups make reinforcement of ideas and hostile discourse easier than ever to come by. The words of anonymous
members of fringe groups can often be the drivers behind violent action. Particular note should be made when the leakage involves the mention of these types of groups. The FBI notes that, “there is no single warning sign, checklist, or algorithm,” to identify a potential attacker. Instead, it is a combination of behaviors that are outside the norm, both for the individual and for society in general that can serve as concerning signals that should possibly be reported. As we have heard on many occasions, “if you see something, say something.”
DURING AN INCIDENT Figure Out, Run Out, Hide Out, Call Out, Keep Out, Spread Out and Take Out are seven easily remembered actions that could keep you from becoming a victim. Figure Out A consistent awareness is perhaps the best tool to help survive an active shooter situation. By being aware of our surroundings and environment, we not only are able to spot a potential danger earlier, but we will be better able to make
a quick decision on a course of action when the danger occurs. Don’t allow your brain to make the comfortable response of, “this can’t be happening.” We are hardwired to make sense of situations by fitting them into our normal set of experiences, and this can be a waste of valuable time in an emergency situation. Be prepared to quickly determine what action gives you the best chance
to survive. In many active assailant incidents, the casualties occur within the first 90 seconds. Being mindful of surroundings and prepared to make a decision may give you the chance to escape the danger. In addition, if you are the first to move, people will follow you as an example. Run Out This is probably the easiest to remember. When confronted with an active shooter, often the best alternative is to simply run. Freezing in place is one of the biggest mistakes people make in this type of situation and it unfortunately makes a person an easy target. Leave your belongings behind and run to a safer location. If possible, look for routes that provide some concealment from view or protective cover. In an emergency situation there are no restrictions; run through an emergency entrance or employees only door, and even break windows or glass doors. Hide Out If you can’t escape completely, find a place to shelter. Look for places that provide concealment from view as well as protective cover. Try to keep your movement options open so that you can escape if an opportunity presents itself. Call Out When you have some degree of safety, call 911 as soon as possible. Never assume that someone else has called or that you don’t have any information that hasn’t already been given. The location and number of shooters and descriptions of the shooter and the weapon type can be very important to the police when they respond. Also, report any injured persons that you are aware of. If possible, keep the line open to provide more information.
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FEATURE Keep Out If hiding out is your only option, try to pick a place that can be secured with a lock or by barricading the door. Turn off the lights and stay quiet. Remember that an assailant will typically fire on immediately visible victims. Simply making yourself difficult to get to may save your life. Spread Out Especially if you cannot get to a secure room, urge people to spread out. Spreading out will cause the shooter to hesitate when looking for victims and may provide greater opportunities for escape. Take Out While we don’t want to encourage unnecessary risk, a simple weapon such as a stick, chair or heavy object may be enough to deter or even stop a perpetrator. The only power they have is in their gun and the only place they can shoot is where it’s pointed. Knocking that gun aside or forcing it to point upwards may be all that’s needed to diffuse the lethality of the immediate situation. Even screaming, kicking, and grabbing are better than standing still. After an Incident Police will be the initial first responders on the scene. While they are concerned about victims, their priority is to terminate the threat and make sure the area is safe. Do not hinder the police or get in their way by panicking. It’s best to stay in place and keep your hands empty and visible to officers. Obey any commands that they give. Remember, even though they are trained personnel, they are still under a lot of stress in an active assailant situation. Medical personnel will be next on the scene. Try to give them as much information as you can about victims that need help. Assist them in any other efforts, such as accounting for employees or providing direction to where other people may be. Help and comfort other victims as you are able. Be Prepared and Aware The chances of being faced with an active assailant situation are thankfully slim, but still too high. Being prepared and aware can significantly mitigate loss in these circumstances. Take time to review the information above and pass it along to family and coworkers. Consider how to apply it to workplaces or other situations where you are regularly. It may just be the bit of information that saves a life. Jamie Ridenhour is the National Training & Compliance Manager for DSI Security Service. DSI’s local representative is Kimberly Burnett, Business Development Manager. Kimberly may be reached at (909) 238-3827 or by email to kburnett@ dsisecurity.com. 36
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CAI-CV Educational Lunch Program & VIRTUAL Mini Trade Show Via Zoom
Friday, June 18, 2021 11:30 a.m. – 1:00 p.m. CLICK HERE to Register LUNCHEON TOPIC:
ASSESSMENTS, RESERVES, AND LOANS, OH MY! GUEST SPEAKERS Lisa A. Tashjian, Esq. Jolen Zeroski, CMCA Beaumont Tashjian
CIT Bank
Michael Grave, RS SCT Reserve Consultants
• Special Assessments • Borrowing from Reserves • Loans for the above
PLEASE THANK AND SUPPORT OUR JUNE PROGRAM SPONSORS CIT C.L. Sigler & Associates, Inc. Conserve LandCare Seacoast Commerce Bank
PLEASE THANK AND SUPPORT OUR MAY PROGRAM SPONSORS AMS Paving C.L. Sigler & Associates, Inc. Conserve LandCare Seacoast Commerce Bank
GET THE ZOOM LINK BY REGISTERING AT WWW.CAI-CV.ORG. MANAGERS WILL RECEIVE ONE CEU Cost: FREE (760) 341-0559
FEATURE
The Legal Importance of Community Inspections By Jennifer James, Esq.
IMPORTANCE OF INSPECTIONS Regular inspections serve as a useful tool to associations in components that the association is obligated to repair, replace, managing risk. Thorough inspections of the community can restore, or maintain as part of a study of the reserve account greatly reduce or even prevent the cost of repairs and lawsuits. requirements of the community, if the current replacement Inspecting the community for any security or maintenance value of the major components is equal to or greater than onerelated issues will increase safety for the residents and help half of the gross budget of the association, excluding the assoto protect property values. Associations can save money by ciation’s reserve account for that period. Also, as of January catching deterioration of common area amenities early before 1, 2020, associations with a building that have three or more the damage gets worse. Most importantly, directors have units must inspect elevated load-bearing structures which a fiduciary duty, which requires are supported substantially by directors to exercise due care and wood (Civil Code Section 5551(i)). "INSPECTING THE COMMUNITY undivided loyalty for the interests Associations must complete their of the corporation (Frances T. v. first inspection before January 1, FOR ANY SECURITY OR Village Green, 42 Cal3d 490 (1986)). 2025. Thereafter, elevated strucMAINTENANCE RELATED ISSUES tures must be inspected at least INSPECTION CHECKLIST WILL INCREASE SAFETY FOR once every 9 years. (Civil Code Creating and using inspection Section 5551(b)(1)). THE RESIDENTS AND HELP TO checklists can be a useful tool in In addition to the Civil Code PROTECT PROPERTY VALUES." ensuring all items are inspected inspection requirements, the thoroughly. List all common areas association’s bylaws or CC&Rs and elements and include the items to inspect in each. For may set forth inspection requirements. It is also prudent to example, be sure to observe and inspect the condition of check with your insurance carrier to see what is recommended sidewalks, driveways, parking lots, roadways, and walking regarding what to inspect and how often. paths. A broken sprinkler head could flood a walkway and cause a slip and fall, potentially costing the association a DOCUMENTATION considerable amount of money. Walking surfaces should In order to protect the association, the board should docube inspected to ensure an even surface and that nothing is ment all inspections and follow up actions taken to rectify any impeding the pathway, like a tree branch. issues. This documentation could help defend the association in the event of a lawsuit.
INSPECTION REQUIREMENTS
The California Civil Code sets forth inspection requirements that the board must follow. California Civil Code Section 5550 obligates the board to cause a reasonably competent and diligent visual inspection of the accessible areas of the major
Jennifer James, Esq. has been providing legal services to common interest communities for more than 15 years. Ms. James can be reached at (760) 565-5889 or Jennifer@JenniferJamesLaw.com.
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CHAPTER NEWS
CAI-CV Launches New Career Center By CAI-CV’s Professional Managers Committee
T
he Professional Managers Committee launched the new CAI-CV Career Center on April 1st. The career center is free to all CAI-CV members. Members can access the site at www.cai-cv.org and then by tapping on the RESOURCES button, and then on CAREER CENTER, or CLICK HERE.
HERE ARE A FEW OF THE FEATURES: FOR EMPLOYERS Job Postings • Employers can pay a modest fee and easily post job opportunities online. • Personalized Search and Recommendations • Get increased engagement and job views by recommending opportunities to job seekers based on their prior searches. • Candidate Screening and Management • Provides employers with functionality to attract, screen and manage applicants online.
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FOR JOB SEEKERS Job Search • Allows job seekers to easily search and apply for jobs from their mobile devices. • Email Job Matching • Automatically sends jobs of interest to relevant job seekers immediately via email when new jobs are posted. • Job Search Tools The site includes tools for building a resume, career advancement tools, career coaching, and tools for interviewing. The new career center also offers great articles and other content including resume writing tips, interview techniques, job search ideas, and tips on networking. It even offers free resume critiquing. And, if you need additional help, use the career center to connect with certified career coaches who can help you with job search strategies, interview tips and help with your resume. Take some time to go online and check out our new career center! If you have questions or need assistance, call the CAI-CV office at 760-341-0559.
MAINTENANCE
The Importance of Regular Exterior Building and Site Inspections By Chris Sigler, B.S.C.E., CDT
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ne of the most important and valuable tools that association managers and board members can deploy is the use of regular inspections of the building exteriors. A cursory walk and visual inspection can uncover obvious signs of metal corrosion, peeling or blotchy paint, cracks, decayed wood and the like. Exterior, cursory visual inspections should include observation of the following components and/or signs of distress: 4. Decayed wood 1. Stucco cracks
2. Faded/blotchy paint 3. Cracked sidewalks/driveways
5. Corroded metal 6. Peeling coatings
If any of the above are noted during the inspection, repairs can be generated by management, or a plan can be developed for more wide-scale or complicated repairs. However, there are some inspections that should be done by trained professionals to keep the community’s facilities and structures safe and in good working order. As a result of recent California legislation, many associations now have required inspections that must be done by licensed professionals.
WHICH INSPECTIONS REQUIRE PROFESSIONAL ADVISORS? The following types of inspections should, and in some cases, MUST be done by a professional advisor: • Building Envelope Inspections – for structural balconies, stairs, waterproofing, roofing, etc. – should be done by an engineer, architect, or a licensed professional. Examples: Roofing, asphalt, balconies/decks, stairs and handrails, exterior cladding, windows, and more.
• Specialty System Inspections – for fire protection, mechanical, electrical, pools, etc. – should be done by an expert or consultant for the specific specialty needing attention and/or inspection. Examples: Heating and air conditioning, electrical, elevators, pool and spa, fire protection/sprinkler systems. Associations are nearly always better off hiring a professional advisor to inspect serious problems found during management and board inspections before taking action to fix the problem. Additionally, boards are encouraged to include the advice and advisor’s contact information in their board minutes. Relying on professional advisors transfers risk from the association to the professional. Equally important is that representatives from the board and the community manager accompany professional advisors during the inspection. Not only is this an educational opportunity, participating in the inspection provides firsthand knowledge about the condition of your community. Chris Sigler is President of C.L. Sigler & Associates, Inc. Chris can be reached at (408) 210-8003 or by email to www.siglercm.com.
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FEATURE
Board Involvement with Property Inspections By Mark Dodge, CMCA, AMS
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hen participating in inspecAnother challenge for boards to While I do agree with the need for tions, boards should keep in overcome is avoiding personal bias. board members to participate in routine mind the broader community plan, both Bias can occur when the board falls property inspections, I would recomshort-term and long-term. The greatest into the habit of having only one board mend the volunteer board member’s challenge regarding board participation member attending, and therefore con- effort be targeted. Inspections requiring in inspections is guarding against the trolling, the inspections. Often, due to board member participation should not tendency for these inspections to be board member absenteeism here in the be frequent. Perhaps alternating months focused solely on the condition of the Valley, we see the same board member or even a quarterly effort is appropriate. landscape. Both board members and being the principal point of contact for I would not recommend board members managers over time can become blind to property inspections for many years at a be present on the more frequent monthly serious problems like street deterioration, time. When that occurs, that individual’s landscape inspection walks. Let your aging lighting infrastructure, manager manage the vendors. building conditions such as dry Board members need to focus on "ASSIGNING MULTIPLE rot, and even the age of the landformulating policy and a longBOARD MEMBERS, OR AT scape material itself, while the term investment strategy. Each A MINIMUM, DIFFERENT focus of these inspections is on of these less frequent board scrutinizing the abilities of the property inspections should INDIVIDUAL DIRECTORS, TO landscape maintenance provider. target specific assets or groups ATTEND INSPECTIONS IS Many boards become so engaged of assets. It makes good sense to in landscape maintenance they involve as many board members CRITICALLY IMPORTANT TO THE lose focus of the long-term plan as possible with this process to COMMUNITY." for their communities, concenavoid the problem of bias. These trating only on the quick fixes walks should periodically be taste and inclinations can usurp board required and not the bigger picture. To designated to review landscape and preference and policy. Assigning mulhelp keep the board focused on a lonirrigation systems, however, there are tiple board members, or at a minimum, ger-term plan, we suggest creating an other important assets needing dedidifferent individual directors at differing annual inspection matrix for all the comcated inspections. Schedule dedicated times of the year, to attend inspections munity’s assets, and for all the required inspections for your pool areas, decks, as they are geographically available is inspections to occur on an annual basis lighting, and buildings each year. Create critically important to the community. in alignment with distribution of the an inspection matrix and place these This practice will serve to introduce community’s reserve study. board level inspections on the associadditional perspectives and insights into ation’s annual calendar to be sure they community decision making. are completed.
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"MOST IMPORTANT, ALL THE DATA GATHERED DURING THESE INSPECTIONS, WHETHER CONDUCTED BY THE BOARD OR AN OUTSIDE PARTY, SHOULD FEED INTO THE RESERVE STUDY AND BE INTEGRATED WITH THE ANNUAL RESERVE STUDY UPDATES." Another thought as well. The board member’s work does not end with the inspection. Remember your primary goal is to protect and grow property values. To accomplish this end, most critical is keeping physical assets relevant and modern. If lighting, paint, or landscape are in desperate need of replacement, spend additional time to evaluate the color and style changes to be considered to keep the property marketable and aligned with current real estate trends and tastes. There are some inspections where it makes sense to have a vendor directly involved with the board and management. For example, regular roof cleaning and inspections can save associations thousands of dollars a year in unnecessary maintenance costs. Have an outside professional consultant clean and inspect the physical condition of your roof assets periodically and give a written report to the board. Most important, all the data gathered during these inspections, whether conducted by the board or an outside party, should feed into the reserve study and be integrated with the annual reserve study updates. Hence, for a typical December 31st fiscal year end, your annual reserve study cycle ends in September, and the annual inspection cycle for community assets should begin anew in October. There is no more critical role for a board member than to participate in the annual property evaluation done for your reserve study. Your reserve study is your long-term investment plan for your community. It should include all your hopes, dreams, and future investment plans. Allow your reserve analyst to play their role and to independently assess your assets and plan, but the result of that spending and savings plan is one you should own and understand. A reserve study in most cases serves as a community’s strategic plan, and a good plan can only be accomplished with productive and focused board participation. Mark Dodge is the Branch President and CEO of Associa Desert Resort Management. Mark can be reached at (760) 346-1161 or by email to mdodge@drminternet.com.
PWLC II, INC LANDCARE MANAGEMENT
PWLC II, INC. has been providing quality landscape and golf course maintenane for our clients in Southern California since 1977. Our Palm Springs office employs more than 100 landscape professionals. PWLC specializes in "High End Landscape and Golf Course Maintenance Services". In addition to our maintenance services, PWLC II, INC has a Commercial Tree Division and a Landscape Enhancement Division. We are fully licensed and insured with a $2 Million Liability Insurance. PWLC II, INC licenses include a C27 Landscape Contractors License, California Pest Control License and a "Certified Arborist" on staff. For more information please contact us at (760) 323-9341 or email conniea@pwlc2.com
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LANDSCAPING
Arborist Inspections By Warren Miller
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he importance of an arborist inspection for homeowners associations cannot be overstated. Arborists can help HOA boards monitor plant life in outside living areas of residents, common areas, community buildings and structures. Arborists also provide recommendations for pruning that can often be missed or help advise against or remedy pruning that is done in such a haphazard manner that can harm plant material. Essentially, regular arborist inspections serve as a safety precaution and potential hazard prevention, often even hazard intervention. Professional pruning consultations and contracts are highly recommended to preserve the energy of a tree and keep the esthetic beauty of trees and shrubs intact. We highly encourage board members and community managers be present and involved at the time of inspection because it serves as an educational experience. Inspections can provide hands-on learning about the various states of plant life conditions in your community and builds awareness of rising issues before they get out of control. You will also learn what to look for to identify problems, and when to call a professional. All-in-all it provides an opportunity to become proactive with our properties rather than reactive. At minimum, annual inspections are recommended and encouraged. Atop everything – HOA managers and boards need to maintain and understand proper pruning practices, implement mindful watering schedules, and finally, adopt uniform irrigation distribution – these practices encourage a healthy plant life and maintain the beauty we all desire in and around our homes. Warren Miller is an ISA Certified Arborist, Licensed Landscape Contractor, and Certified Irrigation Auditor with Desert Arborist Services specializing in the diagnosis and treatment of desert plant life and has been servicing the Coachella Valley for 28 years. You can reach Warren at (760) 322-2234 or by email to arbortech_services@yahoo.com .
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CVWD Hosting Free Online Water Efficiency Course on June 15th Coachella Valley Water District (CVWD) will host a free online landscape water efficiency training this June. The Qualified Water Efficient Landscaper (QWEL) is a highly rated certification course recognized by U.S. EPA WaterSense. It is recommended for landscape contractors and irrigation technicians, landscape architects and designers and others interested in landscape water conservation. The course provides education on water-saving sustainable landscaping principles, soils, plant water needs, irrigation system troubleshooting and audits, controller programming and more. Irrigation expert Lori Palmquist will lead the instruction. The two week-course features live online instruction from 2 p.m. to 4 p.m. four days per week beginning Tuesday June 15. The QWEL exam is offered the week of June 28. The course requires access to the web-based Zoom application. There is a minimal exam fee. Space is limited for the course. Questions can be directed to the California Water Efficiency Partnership (CalWEP), which was selected to implement the training in the Coachella Valley, at (916) 552-5885 or QWEL@calwep.org. For more information or to register, visit www.qwel.net/
EVENTS
April 29,2021
Managers Go Wild!
CA I-CV’s Professional Managers Committee hosted an event called “Managers Go Wild” on April 29th at Wildest Restaurant & Bar in Palm Desert. Our thanks to the sponsors who immediately responded with their generosity, Asphalt MD's, Farley Interlocking Paving, Powerful Pest Management, Prendiville Insurance Agency, and Sherwin-Williams Paint Company. A special thanks to Wildest owner, Charissa Farley, (Farley Interlocking Pavingstones) who went beyond our “wildest” expectations to provide a safe and enjoyable evening. Thanks too to the Professional Managers Committee, especially Chair Lori Albert, CMCA (Albert Management), Co-Chair Rhonda Drews, PCAM (RealManage) and Monica Alvarado (Powerstone Property Management), for their diligent work to make this event a success. Proceeds from the event helped fund CAI-CV’s Carol A. Fulton Scholarship Fund that provides financial assistance to managers taking CAI’s professional development courses.
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FEATURE
Transferring, Managing, and Protecting Association Funds in an Unsafe World By Robert Ward, Esq.
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ommon interest development boards are obligated to manage Association’s assets. Protecting those assets, and monitoring their transfer, is part of that obligation. Monetary “transfers” are defined as the movement of funds from one place to another. Back before the internet took over our lives, they included those friendly transactions done in person at a bank, as well as wire and telephone transfers. Association boards were usually required to approve any transfer of funds, including those by checks.
EVOLVING MONETARY TRANSFERS Then, the wonderful world of online banking became a reality. In 2019, the rules for approval of transfers changed when the California legislature passed a bill requiring no transfers from the account of “greater than ten thousand dollars ($10,000) or 5 percent of an association’s total combined reserve and operating account deposits (whichever is lower)” to be authorized without written approval from the board of the association. (Civ. Code §5380(b)(6).)
Code §4085 defines "board" as the board of directors of the association. Accordingly, approval authority cannot be properly be delegated to the managing agent. It can, however, be delegated to an "executive committee" composed entirely of directors. Any act or decision by a majority of the directors on the executive committee is deemed an act of the board. (Corp. Code 7212.)
THE RULES FOR DEPOSITING HOA FUNDS MAY BE CHANGING AGAIN SOON – AB 1101. Presently, a managing agent, at the written request of the board of directors, must deposit funds that the manager receives on behalf of the association into a “bank, savings association, or credit union in the same state” if specified requirements are met. However, this year, Assemblyperson Jacqui Irwin (D – Thousand Oaks) has introduced new legislation, AB 1101, which would clarify insurance obligations and offer some added protection. The bill would amend Civil Code Section 5380 to require these institutions to be insured by the FDIC, National Credit Union Administration Insurance Fund, or the Securities Investor Protection Corporation. It would also amend Civil Code Sections 5380 and 5502 to remove the 5% total deposit figure that has often caused confusion.
TRANSFERS "THE BOARD CAN ACTUALLY APPROVE ALL BUDGETED UTILITY TRANSFERS AT THE BEGINNING OF EACH YEAR, FOR THE ENTIRE YEAR." Generally, if there are routine budgeted transfers on a recurring basis requiring approval (e.g., tax payments, water and electricity bills, contributions to reserves, etc.), boards can approve those transfers in advance. The board can actually approve all budgeted utility transfers at the beginning of each year, for the entire year. When it comes to reserve transfers, the same solution can be used for monthly transfers into reserves that exceed $10,000. Boards can approve a resolution or motion in the minutes giving written approval to the management company to make such transfers into the reserves. The manager’s authority to perform these transfers is limited by law. The language in Civil Code §5380(b)(6) and §5502 expressly states prior written "board" approval. Civil 44
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AB 1101, as currently proposed, would prohibit transfers of $5,000 or greater for associations with 50 or less units without prior written board approval. Thus, if the bill passes, transfers of ten thousand dollars ($10,000) or greater for associations with 51 or more units, and transfers of five thousand dollars ($5,000) or greater for associations with 50 or less units would not be authorized from the account without prior written approval from the board.
INSURANCE REQUIREMENTS Presently, Civ. Code Sec. 5806 requires a community association to maintain fidelity bond coverage for its directors, officers, and employees, and requires the fidelity bond coverage to also include computer fraud and funds transfer fraud. If the association uses a managing agent or management company, coverage for dishonest acts by that person or entity and its employees must also be included.
FEATURE AB 1101 would amend Civil Code Section 5806 to specifically require the association to maintain crime insurance, employee dishonesty coverage, and fidelity bond coverage, or their equivalent, for the association and the association’s managing agent or company and would require the protection against computer and funds transfer fraud to be in an equal amount.
BEST PRACTICES - INTERNAL CONTROLS ON MANAGING FUNDS To help ensure proper handling of money, it’s good practice to designate one person to deposit assessments and other revenue and another to approve invoices and write checks. Ideally, a third person would receive and reconcile the monthly bank statements and prepare financial reports to the board of directors. A single bank statement should be sent to the management company. If self-managed, this information should go to the treasurer or bookkeeper for the Association. A duplicate should be sent to a board member who does not have authority to sign checks or make any transfers or withdrawals. Most banks offer statements via e-mail, which makes it easy to forward them on to additional board members – if not the full board – as well as the bookkeeper and management company.
"MOST BANKS OFFER STATEMENTS VIA E-MAIL, WHICH MAKES IT EASY TO FORWARD THEM ON TO ADDITIONAL BOARD MEMBERS – IF NOT THE FULL BOARD – AS WELL AS THE BOOKKEEPER AND MANAGEMENT COMPANY." The Association’s funds should be held in bank accounts that are in the name of the Association. Even if the management company is the signer, there must not be any commingling of Association’s funds with management’s or other Associations. This practice not only ensures that your funds are mixed with those of others it makes it possible to reconcile the Association’s income and expenses via their individual bank account activity.
AVOIDING THEFT When handling Association funds, the use of Generally Acceptable Accounting Practices, or “GAAP,” is essential to safeguarding funds. GAAP help to protect Association funds through separation of accounting duties, so that separate people pay the bills, collect income, and reconcile bank statements. Communities that don’t have the luxury of a professional managing agent may have a difficult time meeting this practice.
Always ensure that limited access to online accounts is provided, and access should be restricted to specific, known IP addresses. As well, it should go without saying that passwords should be changed often and never stored in an easily accessible place. Random password generators will help prevent hackers or spyware from an easy score. Without these safeguards, thefts are more likely to happen, and the Association’s fiscal obligations are better handled by an accounting firm or other professional suited to this activity. The Association’s funds should be reconciled monthly, through the delivery of a comprehensive financial statement. The statement should include a balance sheet, income and expense statement, check register, detailed general ledger, and invoices. In general, more management personnel and board members that are involved in the handling of funds, reporting, and review provides needed transparency, reduces the possibility of collusion, and increases the opportunities for an observant board member or manager to catch theft early.
FIDELITY INSURANCE Fidelity insurance protects Association funds from theft, fraud, wire transfer problems, etc. The minimum value of the coverage retained should be defined within the governing documents. If the documents are silent on this, the recommended minimum is 3 times the association’s monthly income plus reserves for condominiums or townhomes, or one time the annual income plus reserves for homeowner associations. No matter the trustworthiness of the board of directors, these members can change at any time after an election or recall, and a less trustworthy person could be elected. It is important not to delay in establishing the proper level of fidelity coverage to protect the Association from future issues. For example, fidelity coverage will protect the Association from monetary theft from a management employee, or if the management company’s coverage is not sufficient or lapses. It will also protect the Association if a board member were to falsify invoices or inappropriately divert association assets to themselves or others. As rare as these occurrences are, they do happen from time to time, and better safe than sorry! D. Robert Ward is an Attorney at Law at Adams Stirling, PLC. He concentrates primarily on representing common interest development boards as general counsel in the Southern California area. For over 22 years, he has advised homeowner association boards on general legal matters, including governing document amendments, rules and policy updates, and handling/mediating community association disputes. Rob can be reached at (619) 374-7710 or by email to attorney@adamsstirling.com.
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HOA LAW
Drafting Effective Vendor and Construction Contracts By Wayne S. Guralnick, Esq. (2 OF 7-PART SERIES continued) CLICK HERE to see the May issue for part one (on page 44) of Drafting Effective Vendor and Construction Contracts
CONTINUED FROM MAY QUORUM, PAGE 44
4. Confirming Independent Contractor Status It is important that the association confirm that the vendor is acting as an independent contractor and is not deemed to be a partner, joint venture agent, associate or employee of the association. Additionally, a provision should indicate that all personnel of the vendor are employees of the vendor, that the vendor will exercise complete control over its employees, and that it will pay all wages and applicable taxes, holding the association harmless from any such payroll taxes.
5. Loss of Risk of Materials and Equipment An important provision should be included as to who assumes liability for fire, theft, accident, or any other damage or loss that may occur to the vendor's supplies, materials, equipment, or any other personal property or belongings of the vendor's employees while located within the subdivision. Generally, it is in the association’s
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This provision should also require the contractor to properly repair such damage at the contractor’s sole cost or pay the association the cost to repair such damage.
best interest to require the vendor/ contractor to assume all liability for all damage or loss to its equipment or any other personal property, and assume liability for any supplies or materials until they are affixed or a part of a residential unit and/or any portion of the common area.
6. Damage to Association and/or Homeowner Property During the Performance of the Work It is important to clarify that the vendor shall be responsible for any damage caused during the course of the work performed under the contract to any property of the association, to any of its members, or their respective improvements within the subdivision. This provision should also require the contractor to properly repair such damage at the contractor’s sole cost or pay the association the cost to repair such damage. Additionally, the association may have a right of offset against any
compensation paid to the vendor for any repairs not properly remedied by the contractor.
7. Vendor/Contractor Personnel Standards This provision should require the following: • The vendor/contractor’s personnel are all properly trained or otherwise qualified to perform their assigned tasks. • The vendor/contractor has an English-speaking foreperson on-site at all times, and that all personnel should be neat and conduct their work in a professional manner with minimal disturbance to the association and its members. • If any of the vendor’s personnel are not satisfactory to the association, the contract should require that the vendor has an obligation to replace such personnel immediately.
HOA LAW • The vendor uses reasonable care to manage and control its operations and not to employ any persons or use any labor which would cause any labor complaints, troubles, disputes, or controversies within the subdivision; or which would likely interfere with the quiet enjoyment of any association’s members’ use of their residential unit. • We also recommend that a copy of the association’s rules and regulations be attached to the contract. The contract should require that the vendor/ contractor complies with these rules and regulations. • All debris and trash be removed from the subdivision and the work site is kept in a neat and clean fashion at all times. • All vendor/contractor’s maintenance vehicles shall be marked with the company’s name and/or logo to identify the personnel working on the job. • Prescribed hours of performance of work, i.e., precluding work on weekends and/or before 7:00 a.m. and after 6:00 p.m.
indicated in the Scope of Work or Specifications. Any representation made by the vendor or contractor should also be set forth here, such as any recommendations which have been included within the specifications, as well as a representation that the vendor/ contractor has reviewed, approved, and agrees with the specifications. If there is any manufacturer’s material or product being used, the agreement should at a minimum indicate that the contractor has contacted the manufacturer, and the manufacturer concurs in the specifications and scope of work related to its product. However, for larger contracts involving extended manufacturer warranties (e.g. such as roofing) we recommend the contract contain a signature block for execution by the materials manufacturer(s) (see Section 29 for sample signature block verbiage).
We also include within this provision the definition of “completion.” For example, on a roofing contract, “completion” is defined to mean that a leakproof and water-tight roof system has been applied to the roof and transitional portions of the roof areas of the units identified in the contract and that said roofing area has been inspected, approved and signed-off by: (1) the construction manager; (2) the manufacturer that the product has been installed in accordance with manufacturer’s specifications; and (3) the association and the local governmental agency. This definition is important, because payment to the vendor/contractor (particularly retention monies) is normally based upon completion, which must be complied with in order for payment to be made.
"If there is any manufacturer’s material or product being used, the agreement should at a minimum indicate that the contractor has contacted the manufacturer, and the manufacturer concurs in the specifications and scope of work related to its product. "
8. Performance of the Services/ Work by the Vendor/Contractor This contract provision should set forth that the vendor/contractor agrees to perform the work in accordance with the Exhibit A Specifications or Scope of Work, and to complete the work in a workman-like and substantial manner, furnishing such labor, materials, tools and equipment as may be required to facilitate same. This would also be an appropriate place to identify, if necessary, the specific location where the work is to be performed or more specifically describe any additional details that are NOT CAI-CV.org
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HOA LAW 9. Extra Work, Changes and Deletions No matter how diligently the parties attempt to reduce to writing all of the potential issues involving the performance of work by the vendor/contractor, field conditions may require modification to the contract and/or approval of extra work. Thus, it is imperative that all contracts contain provisions as to what constitutes “extra work,” requirements for its approval, and how this work is to be compensated. A typical contract provision could be: The parties hereto further covenant and agree that the Pricing Schedule for the extras, identified in Exhibit ___, is fair and reasonable. If the parties are unable to agree on any extras, Contractor will nevertheless perform the work as modified and the amount to be charged or credited shall be determined by negotiation. If the parties are unable to agree on the amount to be charged or credited, the controversy shall be submitted to arbitration in accordance with Paragraph___ of this Agreement. As the extra work progresses, if any, payments for extra work will be made concurrently with progress payments made under the Payment Schedule described in Exhibit and Paragraph of this Agreement. More to come! Drafting Effective Vendor and Construction Contracts part three will be published in the upcoming July issue of Quorum Magazine. Mr. Guralnick received his undergraduate degree from Villanova University and his law degree from Pepperdine University. He has been a faculty member of the California Association of Community Managers (CACM) for over 15 years. Mr. Guralnick has also been a long standing member of CACM’s Legislative Committee. He is past president of the Coachella Valley Chapter of the Community Associations Institute (CAI). He is a member of the American, California, Riverside County and Desert Bar Associations. Mr. Guralnick is a frequent lecturer at numerous national conventions for CAI and throughout the State for CACM and other industry trade organizations. Mr. Guralnick has also provided a Legislative and Case Law Update for Southern California Community Associations since 1985. Mr. Guralnick also acts as a mediator particularly for Community Association disputes. He is qualified as an expert on the fiduciary duties of boards of directors as well as other litigation involving community association matters.
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CAI BOARD LEADER CERTIFICATE NOW Offered online, or in-person at the CAI-CV office on
Friday, November 5, 2021
“I had no idea what I didn't know about the world of HOAs until I went to this training. It was so thorough. I hope all community board members will take this amazing course and read the materials to receive their CAI certificate and recognition.” – Lisa J. Olson, Mountain Villas HOA The CAI Board Leader Certificate is designed to provide a foundation for effective community association board leadership. Whether you are an experienced board member or just thinking about getting involved, this certificate will help you become a more informed and effective leader.
To Earn the CAI Board Leader Certificate: 1) Complete the CAI Board Leader Certificate Course (also known as the Board Leader Development Workshop). This course is offered in two formats: classroom instruction through CAI chapters (offered at CAI-CV on 11/5/2021 at the CAI-CV office (CLICKING HERE), or an online, self-study course (available now by CLICKING HERE). 2) Acknowledge that you have read and understand three key documents (available at www.caionline.org): 1) Model Code of Ethics for Community Association Board Members 2) Community Association Governance Guidelines 3) Rights and Responsibilities for Better Communities
Recognition Community leaders who complete the CAI Board Leader Certificate Course will receive a certificate of completion and recognition on the CAI website.
2021 TITANIUM SPONSOR SPOTLIGHT
C
elebrating our ten years of service, Conserve LandCare has been a proud sponsor and member of CAI since 2011. Through our membership, we have met new clients, business partners, and friends. Your support has made the last ten years in business in the Coachella Valley possible. We are sincerely grateful and appreciative and look forward to serving you for the next ten years and beyond. Conserve LandCare is a full-service landscape management company located in the Coachella Valley. We provide comprehensive landscape services for community managers, homeowner associations, commercial property owners, developers, and public agencies throughout the Coachella Valley, Riverside, San Bernardino, and San Diego Counties. Conserve LandCare continues to grow with the 2019 partnership with Sperber Landscape Companies, and in 2020 Conserve LandCare acquired HortTech Landscape Management to combine resources and continue our mutual goals of remaining the Coachella Valley’s premier landscape provider. Our staff consists of over 400 full-time employees with diverse experience, including account managers, certified arborists, certified irrigation auditors and technicians, graduate horticulturists, licensed agricultural pest control advisers, qualified pesticide applicators,
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landscape designers, and resource conservation specialists. Service leadership is our number one goal and the key to our reputation.
OUR SERVICES: We specialize in landscape maintenance, landscape construction and installation, irrigation and water conservation, landscape design, enhancements, and professional tree care services in the Coachella Valley. The California Landscape Contractors Association has recognized Conserve LandCare for outstanding landscape maintenance and landscape installation for HOAs, commercial, public works, and medical properties. Our team enjoys participating in various CAI events, committees and supporting the local Coachella Valley Chapter of professionals. The Conserve LandCare team would be happy to have an opportunity to serve you when you are ready to enhance your outdoor landscape spaces. I invite you to contact Fran Mullahy, Business Development Manager, at 760.427-5087 or fmullahy@conservelandcare.com for a proposal to meet your specific landscape needs. 72265 Manufacturing Road Thousand Palms, CA 92276 760.343.1433 www.conservelandcare.com
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POOLS
Summer Pool Remodels By Mark Feldstein
M
any Valley associations that cater to snowbirds and retirees use the hot summer months to make repairs to common area facilities, including pool areas. Knowing when to remodel a pool and what to repair can cause boards and managers frustration. Pools are among the most important amenities for most associations in the Coachella Valley. Here are some tips that will help you have a relaxing summer.
Q: When is the best time to remodel? A: The BEST time is when you need or want to remodel. Unfortunately, that might not be the best time for the remodeler’s schedule. Licensed, meaning legal, insured and bonded, remodeling companies may have a backlog from 4 to 6 weeks. Have realistic expectations. If a remodeler can get started immediately, you may want to consider looking elsewhere – that is probably a sign of a company that is not busy for a good reason. If you can schedule during a slower time of the year that will also help to reduce impact to tenants and their guests, if this is a commercial property or to your or your family, if this is a residential pool or spa.
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Aside from scheduling to start sooner, scheduling during the off-season will probably also help to get the job done more quickly. That means summer may be the best time in the Valley. Make sure to schedule early!
Q: What are the signs that I need a remodel?
A: The answer to this question is usually obvious – when the pool or spa looks like it is falling apart. However, by then, it is usually later than a remodel should have begun. Not too late, of course, but risky. A pool that is allowed to deteriorate can be suddenly shut down during a routine Health Department inspection. When that happens, the pool is unavailable for even longer than expected since most reputable remodelers won’t be able to start a new job immediately, especially in the busy winter months season. It is much better to be proactive and schedule a remodel at the early signs that deterioration has begun; plaster is showing signs of degradation, visible rust spots bleeding through the plaster, etched and rough surface which is not only unsightly and uncomfortable for swimmers but also a cause of
reoccurring algae growth since the algae has something to latch onto. Cracking, lifting decks which is a trip and fall hazard liability waiting to happen. Also, loose tile, tile falling off, spalling, which is delamination of the pool finish. Cracks in steps – another safety hazard. Remember, a deteriorating pool or spa does not get better on its own.
Q. What is rebound and why wasn’t it part of the original contract?
A: Rebound is soft gunite discovered once a pool or spa finish is chipped off in preparation for a replaster. During the original pool build, gunite was shot under high pressure to form the shell of a pool, and some material, mostly sand, bounces off the wall. That sandy material is called rebound. Since rebound is mostly sand instead of the sand/cement mix required to achieve proper pool shell strength, it is a weak mixture. This should be discarded, but some builders use the material to form steps or benches to save cost. They then coat the steps or benches with a thin layer of gunite. Over the years, this shell will fall apart making it impossible to replaster.
POOLS Once found after chipping, the rebound must be replaced, however, typically, there is no way to know if the rebound exists until the finish is removed. That is why a contractor can’t quote rebound repair until the pool is chipped and the existence and extent of the rebound can be determined.
Q: How long does it typically take to get permits?
A: There are potentially two entities that require permits – environmental health and the city. In addition to that complication, there are two Health Departments in the Coachella Valley. Also, not all cities require permits, and they may have different rules. Length of time to get a permit approved can depend on to which office the permit application is being submitted. Currently, Health Departments are taking about one week to approve IF the submission was done correctly, and no corrections are needed. Scale drawings, proper scope of work following permit guidelines, a permit application and fee are required. The fee varies because it depends on scope of work including the number of bodies of water within the same enclosure. Work approval requires on-site inspections that will need a remodeler representative on-site in case there are questions that need explanations. Be sure your remodeler will provide this service. If they leave the inspection coordination to you, there may be delays since you might not be able to answer all construction-related questions.
spa are properly maintained. Since commercial pools and spa are, typically, used much more than in a residential property, the best investment for long term is not plaster. Currently, Commercial White Quartz, Classico Pebble Fina and Arctic White Pebble Sheen by PebbleTec are all approved by Health Department and most, if not all, cities in the Coachella Valley. Gardner is also working to get WetEdge Luna Quartz Polar White, which is a quartz-based finish, approved. Gardner has been responsible in getting all finishes approved. Although these finishes will require a bigger budget upfront, due to their expected longevity from 15 to 25 years as opposed to plaster of 5 to 8 years, they
into the shape of the eventual shell and tied together with wire. Then the pool shell is formed with gunite or shotcrete, concrete products. In the perfect situation, the cementitious material forms perfect coverage of between 6" to 12" thick, depending on where in the pool. The rebar and wire is buried in the middle of the poured shell; not too close to the surface and not too close to the dirt underneath. If the coverage is not adequate, then the rebar and wire may be too close to the surface and begin to rust from coming into contact with pool water. Very few pool surfaces are 100% waterproof and, therefore, permit slow seepage outside the shell. This is not a problem if the rebar is properly positioned in the shotcrete or gunite.
"VERY FEW POOL SURFACES ARE 100% WATERPROOF AND, THEREFORE, PERMIT SLOW SEEPAGE OUTSIDE THE SHELL. THIS IS NOT A PROBLEM IF THE REBAR IS PROPERLY POSITIONED IN THE SHOTCRETE OR GUNITE." are a better investment in the long run. Unfortunately, in terms of aesthetics, colored finishes are not approved for commercial properties since the Health Departments requires white finishes that contrast well against other materials in pools such as breakline tile, trim tile and waterline tile. The purpose is to make those materials highly visible for safety concerns.
Q: What is the cause of rust spots and how are they fixed?
Unfortunately, pools are not always built to produce the perfect result. The only way to properly repair a rust spot is to chip into the pool shell around the rust spot, bend the rebar or remove and/ or wire into its proper place, spray with Rustoleum or similar product to prevent further rusting and patch. Unfortunately, finding one rust spot does not mean that other spots won’t appear a month or year later. There is no way to tell if other areas are slowly rusting except from what is currently viasible with surface staining.
Q: Besides white plaster, are there any
A: Rust stains (or spots, as it is
Q: How does the new law going into
other finish choices approved by the Health Department and what are the pros and cons?
commonly called in the industry) are caused by metal inside the pool shell being too near the surface of a pool. To understand this, you must first understand how a pool in constructed. After the hole is excavated, a form of the pool shell must be made from rebar and wire for pool shell strength. The rebar is bent
effect July 19th, 2021 about pumps affect me?
A: Yes, there are other several options these days. Depending on budget, it is recommended to consider other available finishes due to increased expected longevity if the pool or
A: Most single and double speed pumps
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POOLS "WHEN SPLITTING A SPA DRAIN, EITHER TWO DRAINS ON THE FLOOR OF THE SPA IF THEY ARE THE MINIMUM OF 3’ APART OR ONE ON THE FLOOR AND ONE ON THE WALL, THE RISK OF GETTING STUCK IS VIRTUALLY ELIMINATED."
consumers and expensive to run. The secondary purpose of the new law is to standardize pump ratings, something which the industry has not had. This is not all bad news. Since, when it comes time to replace existing pumps during a remodel or when a pump breaks down and replaced with either very low HP single speed pumps or a variable speed pump, the cost of running the new pumps will be much less. (Your installation company will be able to assess which pumps are required by the water feature.) Therefore, even though the initial investment will be higher, the ROI (Return On Investment) to pay for the pump is typically less than 2 years. It is a MUCH better long-term investment. Running a variable speed pump typically costs 90% less than a single speed pump if set to run correctly.
Q: Do I need split drains in the pool and spa?
A: Yes, both in the pool and in the spa. This is required by the Health Department. Split equalizer lines for skimmers are not required. While only some cities require residential pool owners to split the main drains in either the pool or spa, all cities require commercial pools to split all drains. The risk of injury by not splitting a main drain is very real, especially in a spa. A single drain system can be dangerous to children as well as adults. While a pump is running, a person can be sucked to the drain and held in place to drown or, if seated on the drain, can be disemboweled. 52
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This is much less likely in a pool, since the drains are deeper under water, but it is still possible. When splitting a spa drain, either two drains on the floor of the spa if they are the minimum of 3’ apart or one on the floor and one on the wall, the risk of getting stuck is virtually eliminated. If a person were to get too close to the cover and momentarily be “stuck”, the other drain would simply take over, releasing the person.
Q: Is there anything grandfathered by the Health Department when I remodel?
A: You can thank Dave Cole of Gardner Outdoor and Pool Remodeling that the two Health Departments in Coachella Valley now agree on this very issue. Prior to Dave filing to have the two departments standardize what is grandfathered and what is not, the answer to this question was dependent on which inspector happened to inspect the pool. The rules they decided are: • If the remodeling company is not touching the deck or waterline tile, depth markers do not need to be changed or added. • Diving tiles and metric measurements are also not required if not changing the tile or coping on the pool. Generally, whatever is existing is accepted if not remodeling that area. This does not include handicap lifts, which are required of all commercial pools and spa.
Q: Is there anything I can do to stop my cantilever deck from cracking?
A: There are things you can do, some more successful than others. Let’s first define our terms. A cantilever deck is a single pour deck that extends over the pool or spa wall to the edge of the water. Expansion joints vs. control joints. Control joints are typically in concrete flatwork that helps control where the concrete will crack. Control joints should typically be at most 8’ apart. Flatwork concrete cracks due to temperature changes, earth movement, soil settlings and normal expansion and contraction of concrete thermal variation. Expansion joints are the joints between coping and the deck which is non-existent in a cantilever deck. The expansion joint is a critical feature in the pool industry because it helps reduce deck cracking and damage to the coping and waterline tile. That is why cantilever decks are no longer preferable. An expansion joint is a full 1/2-inch joint. The joint will get the sealant called Mastic to prevent water intrusion. In an existing cantilever deck, control joints can be cut into the deck to relieve pressure and reduce cracking. These will give a little leeway for earth movement and allowing the deck to move without hitting a barrier such as another deck. If decks are cracking due to plant or tree roots, a root barrier can be put in place. Another method to reduce surface tension is to cut an expansion joint behind the pool bond beam (wall) to create coping. This, in essence, turns a single-pour cantilever deck into a double-pour cantilever deck. You still have
POOLS that consistent look of material and color with the coping and deck, but it will no longer be a continuous deck to the edge of the water. Mastic is then installed in the joint giving the deck a cushion during earth movements, expansion and contraction and, thereby, reduces chances of cracking. Be aware that creating a double-pour deck out of a cantilever deck is a tough solution for free-form pools since it is challenging to cut into a cement deck on a radius and get a smooth appearance. Control joints can also be cut into a deck along existing cracks. While this may not be ideal in terms of aesthetics, it will handle future cracking the best since those are already known as the stress points. To create a pattern, control joints can be cut strategically into existing cracks and in non-cracked areas to create a more symmetrical or pleasing random pattern.
Many remodeling companies have struggled with this issue and have tried alternatives to save the existing light, such as placing the light in a waterfilled bucket on top of the coping. The problem has been shown that this then becomes a trip hazard and potentially more expensive than simply replacing the light, not to mention the possible bodily harm which may occur. When remodeling, it is usually, a relatively smaller investment to replace the lights and not risk a more expensive solution of additional trips, draining and filling the pool since the lights cannot be tested until they are back in water. This may also be a great time to convert from high-energy using lights such as incandescent to LED and save costs.
Q: Why do pool remodelers always
Acid washing an existing pool surface is usually performed to remove or lessen stains. This is a less expensive alternative to replastering. The problem is that Muriatic Acid can dramatically shorten the life of plaster finishes, if not destroy them. It does not, however, cause more than minimal harm to a quartz or aggregate finish, such as Pebble Tec or Sheen.
recommend replacing pool and spa lights, even if they are in working order prior to start of work?
A: Pool and spa lights, once installed, are not designed to be out of water. The gaskets crack and the light will probably no longer function once the pool is refilled with water. That is why we always recommend replacing lights. Although a gasket can be replaced most remodelers will not do this because there is no way of knowing how long the light may last even after this repair and the remodeler cannot warranty.
"WHEN REMODELING, IT IS USUALLY, A RELATIVELY SMALLER INVESTMENT TO REPLACE THE LIGHTS AND NOT RISK A MORE EXPENSIVE SOLUTION OF ADDITIONAL TRIPS, DRAINING AND FILLING THE POOL SINCE THE LIGHTS CANNOT BE TESTED UNTIL THEY ARE BACK IN WATER."
Q: May I acid wash the pool or spa to clean stains?
A: That depends on the type of finish.
Acid washing is a necessary step during the application of a new aggregate finish. It is used to clean the surface haze or cement residue off a newly plastered pool. This is the final step prior to filling the pool with water.
"ACID WASHING IS A NECESSARY STEP DURING THE APPLICATION OF A NEW AGGREGATE FINISH. IT IS USED TO CLEAN THE SURFACE HAZE OR CEMENT RESIDUE OFF A NEWLY PLASTERED POOL."
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POOLS
Q: Can I use any type of tile in a pool? A: No. Ceramic tile, which is usually used in kitchens, bathrooms and other interior applications, will slowly disintegrate in a pool due to the water chemistry. Natural stone, manufactured stone and porcelain tiles are used in pools. Porcelain tiles are fired during manufacturing at a much higher heat and longer than ceramic and, therefore are denser and can withstand the constant contact with pool chemicals. Most colors and patterns used on steps and breakline are approved by health as long as they create a clear contrast with the finish. There are very few restrictions in terms of waterline colors.
Q: How long does replastering a pool take?
A: The first step in replastering a pool is preparing the existing surface. This can be done several ways; chipping, high-pressure washing or bond coating the existing finish.
alternative to chipping ONLY when the existing finish is not delaminating from the pool shell. The pool finish must be in good shape and is being given a new finish for reasons such as excessive staining that can no longer be removed, rather than because it is chipping or spalling. Bond coating is applied to the existing surface material in preparation for the application of a new finish. Pool finishes can’t be applied directly on old finishes because they will not get the adhesion required to prevent delaminating. The cost is not different between chipping and bond coating since one method requires more manpower and dump fees while the other requires more material expense and extra trips. The decision as to which method is used is typically left in the hands of the contractor since the warranty does not change.
Q: How long does remodeling a pool take?
A: The answer to this question depends, of course, on the scope of work being performed.
"THE OPTIMAL LEVEL FOR A POOL LIGHT IS 18" BELOW THE WATER SURFACE." Chipping is exactly what it sounds like; a crew will use jackhammers and other equipment to chip away the existing pool finish, place in buckets or wheelbarrows, fill up a dump truck and take to a dump site. High-pressure washing removes the old finish creating a slurry which must be hauled away. Bond coating a pool is a viable
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Once work begins, if tile is being saved, and an average size pool, draining will take approximately one day. Preparing the pool can take one day. If saving tile and no other work is being performed, plaster will also take one day. The final step is either a required 3-day initial water treatment performed by the remodeler or a Pool Service Professional to clean the filter, brush the pool interior
surface and add and balance the chemicals. This is then followed by about 3 weeks of pool brushing. If aggregate finish was applied, the initial water treatment will be delayed by 1 to 2 days for an acid wash step. The entire process can take about 1-1/2 weeks. If new tile is being installed, about 2 weeks. This can vary, however, due to the size of the pool.
Q: Why won’t pool remodelers warranty how a pool looks at night?
A: Pool finishes are applied by hand trowels. This will leave some uneven marks on the finish regardless of the experience and application care of the trowelers. Also, the workers must be able to safely walk in a pool while applying the finish and not leave footprints. To achieve better traction, plasterers wear specially made shoes with, essentially, nails on the bottom. Both factors will cause a slight unevenness in the application. It is the nature of the product and how it is necessarily applied. Usually, during daylight hours, this is not very unnoticeable, if at all. However, at night, pool lights shining across the pool floor or walls may highlight minor imperfections, making them even more noticeable that the imperfection actually warrants. For example, even the tiniest pebble on a sidewalk will cast a big shadow under the right lighting conditions. This is especially true in pools or spas if the lights are installed too close to the bottom of the pool surface. This is why it is sometimes recommended to raise pool lights nearer to the surface if they were installed too deep. The optimal level for a pool light is 18" below the water surface.
CLAC UPDATE
"ANOTHER POINT TO REMEMBER IS TO NEVER, NO MATTER WHAT, STOP THE WATER FILLING A POOL AT ANY POINT EXCEPT WHEN THE LEVEL HAS REACHED HALFWAY UP THE TILE LINE."
Q: How soon must a pool or spa be filled after
Election Bill Could Save HOAs Thousands Recap on AB 502 By Rhonda Drews, PCAM
the new pool finish is applied?
A: A newly finished pool and spa must typically be filled within 24 hours unless the pool finish requires an acid wash as part of the process. In that case, the pool water will be started in 48 hours post-plastering. If a pool or spa fills too slowly, this can cause what is known in the industry as crazing; small hairline cracks. Crazing can also be caused by hot weather, wind or other factors and appear despite filling the pool quickly. Pools will have some crazing – nature of the process. Slow filling can be caused by a very large pool, low water pressure or the partially clogged provided hose all of which can result in crazing. The pool owner may have to provide a secondary source of water. Another point to remember is to never, no matter what, stop the water filling a pool at any point except when the level has reached halfway up the tile line. If the water is stopped and started, this may leave a large and noticeable ring around the pool finish which cannot be removed by any means, even acid washing. Most contracts will clearly state this potential issue and that this mistake will void warranties. Also, most contracts will explain that crazing is normal and not a result of application deficiency. Mark Feldstein is CFO and Marketing Director for Gardner Outdoor and Pool Remodeling. Mark can be reached at 619-593-8880 or by email to markf@gardnerremodel.com. For sales and remodel scheduling, contact Dave Cole at (925) 997-2859.
T
he California Assembly is considering legislation that could have a positive impact on HOA budgets. Existing law provides for director nominees to be considered elected by acclamation if the number of director nominees is not more than the number of vacancies to be elected, the association includes 6,000 or more units, the association provides individual notice of the election at least 30 days before the close of the nominations, and the association permits all candidates to run if nominated, except as specified. AB 502 would delete the requirement in the acclamation procedures that the association include 6,000 or more units. This would essentially allow most HOAs to approve new board members without the expense of an election if the number of candidates is the same as the number of openings. An association would have to have held a regular election for the directors in the last 3 years. The bill would revise the notice procedures to require the association to provide individual notice of the election and procedures for nominating candidates at least 90 days before the deadline for submitting nominations and a reminder notice at least 30 days before the deadline for submitting nominations. It would specify that these procedures apply notwithstanding any contrary provision. If you have questions about AB 502, you can get regular updates by going online to: https://leginfo.legislature.ca.gov/ faces/billTextClient.xhtml?bill_id=202120220AB502 or go to the CLAC website at www.caiclac.com. Rhonda Drews, PCAM, is Regional Vice President with RealManage here in the Coachella Valley. In January 2020 Rhonda was awarded the Distinguished Service Award from CAI-CV. Rhonda may be contacted at rhonda.drews@realmanage.com.
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CLAC UPDATE
Legislative Update By Jay Jarvis, CMCA, AMS
CAI-CLAC has had a good month with many of their priority bills moving out of policy committees. Much of that success is owed to CAI members and supporters who answered CLAC’s call to action and participated in legislative hearings by calling in to testify.
HERE IS WHAT HAPPENED: AB 502 (Davies) passed the Assembly Housing Committee on a unanimous bipartisan vote. AB 1101 (Irwin) passed the Assembly Housing and Judiciary Committees with bipartisan support. SB 391 (Min) passed out of the Senate with more than 30 votes.
HERE ARE SOME OF THE BILLS CLAC IS TRACKING, INCLUDING THE INDUSTRY POSITION SB 10 (Wiener) – OPPOSE This bill would authorize a city or county to pass an ordinance to zone any parcel for up to 10 units of residential density, if the parcel is located in a transit-rich area, jobs rich area or an urban infill. The bill also voids any language in a Community Association’s governing documents that restricts or prohibits an individual from any such development after an ordinance is adopted. SB 9 (Atkins) – OPPOSE UNLESS AMENDED CAI-CLAC was opposed to this bill unless it was amended. A call to action was announced to contact our Senators. Thank you to all our owners, managers and business partners responded to the call to action. SB 9 (Atkins) passed 5/26/2021 with bipartisan support. The author specifically stated the bill does not impact CID’s and does not override their governing documents.
SB 391 (Min) – SUPPORT This bill will allow for common interest developments throughout California to conduct meetings via teleconference during a state of emergency. Governor Newsom issued Executive Order N-25-20, authorizing a local legislative body or state body to hold public meetings via teleconference or otherwise electronically during the COVID-19 pandemic. No such authority was extended to community associations, which are required to provide a physical location for board and member meetings under Davis- Stirling Act. SB 391 addresses this issue by allowing associations to conduct meetings via teleconference during a state of emergency and provide clear guidance to all associations during these uncertain times and in the future. AB 502 (Davies) – SUPPORT This bill will allow election by acclamation for all associations when the number of candidates is equal to or less than the number of open board seats. AB 1101 (Irwin) – SUPPORT This is a CLAC-sponsored bill to clean up issued with our financial security bill (AB 2912). AB 1101 provides clarity on existing financial requirements and provides protection to homeowners of HOAs from fraudulent activities by those entrusted with managing the finances of HOAs. E.J. (Jay) Jarvis II, CMCA, CCAM is a community manager with HOA Office, Inc., Past President of the Lafayette Village Homeowners Association, and Past President and On-site manager of Portola Palms Homeowners Association. Jay can be reached at jay@HOAOffice.net. CAI-CV.org
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CHAPTER NEWS
CAI-CV Membership Drive Sponsored by Prendiville Insurance Agency Start recruiting and win cash prizes from CAI-CV and CAI National! Once again, Prendiville Insurance Agency is the title sponsor of the CAI-CV Membership Drive. You can win a $1,000 GRAND PRIZE Travel Voucher to go anywhere you want or turn it in for cash. The $1,000 prize will go to the member who brings in the most recruits during the year. The grand prize will be awarded at the Awards Ceremony on Friday, January 28, 2022. Additionally, each month, the Chapter will hold a random drawing of all recruiters. The winner will receive a $50 Visa gift card, and they will receive a $25 gift card for their new member. Each month, recruiters will also be enrolled in CAI National’s membership drive where they will be eligible for an additional $100 or $200 prize based on the number of their recruits. They will also be eligible for CAI National’s coveted Recruiter of the Year Award. This year, if we bring in 50 new members, CAI National will give the Chapter a $20,000 grant!
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