Insight and Education for Community Associations Community Associations Institute / Central Arizona Chapter / www.cai-az.org
Enforcement:
Caught Between a Rock and a Hard Place
PLUS‌ President’s Message Myths and Misconceptions 2016 CAI CAC Event Calendar
Spring 2016
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on the cover
Spring 2016
Community Associations Institute / Central Arizona Chapter / www.cai-az.org
Features 12
Departments
16
Poodle Problems: My Dog is Not a Pet! By Lydia Peirce Linsmeier, Esq.
By Annie Colgrove, CMCA, AMS
The Nazi vs. the Blind Eye By Jerry Parsons, CMCA, AMS, PCAM
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There is a Method to the Madness: How to Choose the Best Method of Enforcement By Augustus H. Shaw IV, Esq.
18 Parking Enforcement in HOA Communities By Erika Jackson
19 Potential Fair Housing Implications in Enforcement Actions By Vicki Sears, AMS, PCAM
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Do I Really Have to Enforce My Governing Documents?
to Reducing Violation Notices
By Jeff Miles
From the Chapter Executive Director.... 5
New Members ..................................... 6 Welcome to the Central Arizona Chapter!
24 The Limits of Reason Samuel C. Richardson, Esq.
26 Let’s Be Reasonable By Dawn R. Engel, CMCA, AMS
28 Use Vague and
Ambiguous CC&Rs to Better Your Community
By Kelly Oetinger, Esq.
30 What is the End Game
CAI Events ...........................................8 2016 Night Golf at TopGolf March Priceless Legal Advice Luncheon
Myths & Misconceptions ................... 10 Congratulations Corner .....................34 Annual Sponsors ...............................36
2016 Annual Sponsors
Diamond Corner ................................38 Showcase of Top Sponsors
in Enforcement?
By Lori Grove, CMCA, AMS, PCAM
32 To Tow or Not
Calendar of Events ............................40
2016 CAI-CAC Event Calendar
To Tow???
By Brad Lundmark, CMCA
By Joshua M. Bolen, Esq.
22 A Proactive Approach
From the Chapter Board President .......4
Chapter Executive Director’s Letter
14 “Why do I have to paint my house when others’ look worse than mine?”
Enforcement: Caught Between a Rock and a Hard Place
C E N T R A L A R I ZO N A C H A P T E R
While efforts to ensure accuracy are exercised, the publisher assumes no liability for the information contained in either editorial or advertising content.
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Valhalla Community Magazines www.Valhalla360.com
For advertising and editorial information, please call Valhalla Community Magazines at (480) 634-1708.
Spring 2016
3
From the president
2016 Board of Directors
By Linda Van Gelder
During my career in the community management industry, I have encountered many obstacles and concerns that relate to the membership and board of directors of an association. One of the most popular topics of discussion pertaining to HOAs is enforcement. Our company is always asked: why do you send us these nasty letters? Why are you not more lenient? I emphasize the “you”, as most homeowners generally do not understand how associations function, and the role that management plays. The average homeowner believes that the management companies make the rules. The most important thing to be successful in enforcement is education. Homeowners need to be advised that the governing documents describe the covenants and what is prohibited within the community. The success of education comes from a grassroots effort. Being open to discussion and taking the time to educate over the phone and at meetings is extremely important to gain compliance and understanding of the governing documents.
The other aspect of enforcement that is very important is consistency. It is vital that the board and management create a schedule for enforcement and that it is consistently followed. Additionally, consistency while writing up noncompliance issues is necessary. If you see weeds at 5 out of 10 homes viewed, you must be sure to submit non-compliance letters to all 5 of those noted homes. If the board and management are not consistent when writing up violations, then it will create a difficult situation in the future. Homeowners will often say “I never have received a violation before for weeds, why am I all of a sudden receiving them now?” This situation can create nonconformity within the community which can be extremely difficult to remedy. Again, education and consistency are the two main components to enforcement. If these two points are considered, it will insure that the Association will be successful for many years to come. Linda Van Gelder ALPHA Community Management
From the Editor... It would be difficult to find an issue in community associations that is more divisive than enforcement (except, perhaps, an assessment increase!) The enforcement process is like a giant obstacle course with many different types of hazards and challenges. Some are obvious, like an uncooperative owner or an unreasonable board member. Others are less apparent, like vague governing documents or a potential fair housing issue.
Community Associations Institute Central Arizona Chapter
Chapter President Linda Van Gelder ALPHA Community Management 623-825-7777 • linda@alphacommunitymanagement.com Chapter President-Elect Mark Wade, CMCA, AMS, LSM, PCAM Leisure World Community Association 480-832-0003 • mwade@leisureworldarizona.com Chapter Vice-President Jenna Perkins, CMCA, PCAM CCMC 480-921-7500 • jperkins@ccmcnet.com Chapter Secretary Toni Rudolph First Citizens Bank 480-624-0949 • toni.rudolph@firstcitizens.com Chapter Treasurer Jeff Reynolds, CMCA, AMS Messina Homeowners Association 480-898-7218 • jjreynolds@gmail.com Chapter Directors Augustus Shaw IV, Esq., CCAL Shaw & Lines, LLC 480-456-1500 • ashaw@shawlines.com Josh Bolen, Esq. Carpenter Hazlewood, Delgado & Bolen, PLC 480-427-2800 • josh.bolen@carpenterhazlewood.com Suzanne White, CMCA, AMS Paramount 911 Restoration and Construction 480-550-0337 • suzanne@restorationarizona.com Martha Bails Sun City Grand 623-332-1542 • grandbails@cox.net CAI Central Arizona Staff Kayte Comes Executive Director 602-388-1159 • kayte@cai-az.org Chapter Office 11225 N. 28th Drive, Ste. B102 Phoenix, AZ 85029 Tel: 602-388-1159 • Fax: 602-388-1153 info@cai-az.org • www.cai-az.org Community Resource Committee
This Issue of Community Resource will help you navigate the enforcement minefield. We hope that the information and guidance provided assists you and your community in reaching the finish line – your prize is a well-preserved, harmonious community that the members are proud to call home!
Jessica Maceyko, Esq., on behalf of the CAI-CAC Magazine Committee
Jessica Maceyko, Esq. Vial Fotheringham LLP Lawyers Lydia Peirce Linsmeier, Esq. Carpenter Hazlewood Delgado & Bolen, PLC Audra Gambill, CIRMS Community Association Underwriters of America Jerry Parsons, CMCA, AMS, PCAM Sarah Sukta eUnify, Inc. Jacob Marshall, CMCA CCMC John Kaye Our House Financial Services, LLC Elaine Anghel, PCAM AAM Anne Whitson Goodman Law Offices
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From the Director
Chapter Executive Director’s Letter By Kayte Comes, Executive Director CAI – Central Arizona Chapter
The theme of this issue is “Enforcement”, which can mean a lot of things. To the Central Arizona Chapter, this means addressing any business or individual that “suitcases” during a Chapter event. As the executive director, this can be a very touchy subject and/or situation for all involved so I thought the best way to remind all Chapter members of the policy was to reiterate it in my executive director summary. Hopefully this will eliminate the need to “enforce” the policy at future events. CAI Central Arizona Chapter has a no tolerance policy regarding “suitcasing”, which describes the practice of business partners, management companies or individuals soliciting sales or sales leads in any of the Chapter events where a paid sponsorship is required to participate, (i.e. tradeshow, golf, luncheons, etc.). This includes any clothing or items that display a company logo. The tradeshow has booth exhibitors and luncheon sponsors. In this case, the luncheon sponsors are only allowed to attend the luncheon portion and are not allowed to enter the tradeshow floor at any time. Talking to clients or prospects in or in front of someone else’s booth is also a violation of the CAI policy and will not be tolerated. All parts of the exhibit must remain in the exhibitor’s assigned space. No exhibit will be allowed to infringe upon aisle space. The golf tournament has a similar requirement. You must either sponsor a portion of the event or have obtained a foursome in order to attend any portion of the event for the day. If you choose
to partner with another business, you must pay equal half of the total cost in order to participate in the event. Violators of these policies will be ejected from the event and charged the amount of a tradeshow booth, golf foursome, T-Box, casino night table, bowling lane, bingo night table or any other event the member or nonmember has chosen to attend without proper permission. The charge must be paid in full before they are able to participate in any future function of the Chapter. Kayte Comes Executive Director CAI-Central Arizona Chapter Spring 2016
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CAI MEMBERSHIP APPLICATION New Members
Welcome to the Central Arizona Chapter!
6402 Arlington Blvd., Ste 500 • Falls Church, VA 22042 Ph: 1-888-224-4321 • Fax: 1-703-970-9558 • Online: www.caionline.org/join MEMBERSHIP CONTACT: (where materials will be sent) Name: Title: Assoc./Company: Address: City/State/Zip:
The Central Arizona Chapter proudly presents and welcomes our new members from December 2015, January 2016 and February 2016.
Phone: Fax: Email: Select your Chapter:
Central Arizona
Recruiter Name/Co. Name:
Homeowner/Board Members: Mr. Jerry Parsons
Parkway Place
Individual Community Managers: Ms. Mary Ash Mr. Jason Doll Mr. Gerald Hovet Ms. Tina Ellis Ms. Krystle Bello Ms. Shannon Ellerbusch Ms. Julia Bishop Mr. John Kemper Ms. Jamie Fitzpatrick-Uhrich
Greenfield Village RV Resort Leisure World Arizona Comm. Asso. Leisure World Arizona Asso. ALPHA Community Management CCMC CCMC FirstService Residential FirstService Residential McCormick Ranch Property Owners Asso.
TOTAL MEMBERSHIP DUES* Community Association Leaders & Homeowners q Individual Homeowner or Board Member $130 q 2 Member Board $225 q 3 Member Board $300 q 4 Member Board $390 q 5 Member Board $440 q 6 Member Board $495 q 7 Member Board $550 For 2-3 Board Member applications, please list the additional individuals who will receive materials. For applications exceeding three, please contact CAI Customer Care at 1-888-224-4321. Name: Address: City/State/Zip: Phone: Fax:
Management Companies:
Email:
Mr. John Hammersmith Mr. John Khayat
Address:
Hammersmith Management, Inc. Property Management Inc. Greater Phoenix
Business Partners: Mr. Bryce Rudd Mr. Jeff Brandonberg Ms. Kimberly King Mr. Scott Fitzgerald Ms. Lynn M. Krupnik Mr. Robert E. Dailey Ms. Rusty Gonzales Mr. Brad Aten Mr. Jody Case
Name: City/State/Zip: Phone: Fax:
Iron Works Fencing, LLC. Titan Restoration Two Kings Hospitality Outdoor Furniture Arizona’s Best Family Painting Krupnik & Speas, PLLC Pet Butler Arizona Reflecto Seal Leak Smart Zumar Industries, Inc.
Email: Individual Managers Management Companies Business Partners q Accountant q Attorney q Builder/Developer q Insurance q Lender/Banker q Reserve Study q Supplier/Landscaper, etc. Please Specify: q Technology Provider *Membership Dues above include $15 Advocacy Support Fee PAYMENT METHOD q Check Enclosed
q VISA
q MasterCard
$142 $430 $590
q AMEX
Account #: CENTR AL A R I ZO N A C H A P T E R
Is your membership current? Contact Kayte Comes at (602) 388-1159 or kayte@cai-az.org.
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Name: Signature: IMPORTANT TAX INFORMATION: Under the provisions of section 1070(a) of the Revenue Act passed by Congress in 12/87, please note the following. Contributions or gifts to CAI are not tax-deductible as charitable contributions for federal income tax purposes. However, they may be deductible as ordinary and necessary business expenses subject to restrictions imposed as a result of association lobbying activities. CAI estimates that the non-deductible portion of your dues is 17%. For specific guidelines concerning your particular tax situation, consult a tax professional. CAI’s Federal ID number is 23-7392984. $39 of annual membership dues is for your non-refundable subscription to Common Ground.
CAI – Central Arizona Chapter
Central Arizona of Chapter of CAI
BINGO BASH
AUGUST 12TH, 2016
Presents
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3:00-4:00PM REGISTRATION & DINNERPrizes! 4:00-6:30PM BINGO & PRIZES
Mark Your Calendar! Join us for Bingo, Fun, Food and Prizes! Door Prizes!
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50/50 Raffle!
2016 ANNUAL GOLF TOURNAMENT October 14, 2016
McCormick Ranch Golf Club 7505 E. McCormick Pkwy, Scottsdale, AZ 85258
For information, contact the Central Arizona Chapter of CAI office at 602.388.1159 or info@cai-az.org
Spring 2016
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CAI E v e n t s
2016 Night Golf at TopGolf Spring time in Arizona means Night Golf with CAI’s Central Arizona Chapter. CAI’s 2016 Night Golf event was held at a new venue – TopGolf in Scottsdale, AZ. Special thanks to our Presenting Sponsor Integrated Landscape Management for helping make this event “new” again! TopGolf is a driving range style venue where games are played from “bays”. Each bay accommodates up to 6 players playing a target game where points are awarded for hitting different targets. The golfer with the most points wins - and we had plenty of winners that night! Nearly 150 attendees packed 17 bays and everyone had a great time hitting balls off the second story tee boxes. There was also plenty of room for lounging in the bays and enjoying each other’s company. TopGolf served up a fantastic dinner sponsored by AlliedBarton, Gothic Landscape Management, First Citizens Bank and Interstate Restoration. This event was a hit and we are excited to bring it back next year, perhaps even bigger and better! Be sure to check out pictures from the event on our Facebook page as well as CAI’s new Instagram and Twitter accounts. Be sure to keep an eye out for updates on upcoming events!
March Priceless Legal Advice Luncheon This year the Priceless Legal Luncheon had a new format. After years of trying to find new ways for the membership to ask their important legal questions and have enough time to get them answered, we created a mini table top tradeshow.
Overall the luncheon was a huge success, with good food, positive networking time and all legal questions answered.
The luncheon had attorneys representing ten law firms. From matters ranging from construction defect to collections and general counsel, each had several attorneys from present to answer important community association questions.
Burdman & Shore Carpenter Hazlewood Delgado and Bolen, PC Chaix Law Goodman Law Kasdan LippSmith Turner and Weber Krupnik and Speas, PLLC Maxwell & Morgan, PC Shaw & Lines, LLC The Travis Law Firm Vial Fotheringham LLP
The luncheon had around 175 in attendance with a buffet lunch. In the time allotted, attendees were able to sit down have lunch and talk to a specific attorney and then be able to network with other business partners within the Chapter.
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A special thank you to the firms that participated:
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Myths & Misconceptions
Myths and Misconceptions By Lynn Krupnik, Esq., CCAL and Elaine Anghel, PCAM, AMS, CMCA
Myth: A “grandfathered in” infraction means that future homeowners may violate the same restriction without any recourse from the association (i.e. in-ground installation of a basketball hoop that is prohibited). The “my neighbor has it, so can I” approach. Fact: While there may be factors that existed during a past enforcement matter that required an association to grandfather the existence of a prohibited item pursuant to the CC&R’s (structure, etc.), it does not necessarily mean that any future repeat of the same infraction is allowable. There are a number of factors that need to be considered when evaluating future violations. These include: (1) how many violations of the same provision exist in the community? Is there one violation or 40? The more violations of the same provision that exist, the harder it may be to enforce going forward; (2) does the association’s CC&Rs have a “nonwaiver clause” (i.e. just because the association does not pursue a specific violation does not mean that the provision has been waived)? Arizona courts have found the nonwaiver clause to be enforceable, allowing the association to pursue a future owner with the same violation that was not pursued in the past. If the association has been lax in enforcement for a period of time, it is always good to inform owners that the association intends to be uniformly enforcing the governing documents going forward, so that owners are given fair warning of the association’s intent and the association is less likely to be seen as acting in a discriminatory manner when pursing the next violation.
?
time. This gives the owners advance notice prior to the association implementing enforcement/fine measures to gain compliance. Another option is to advise the owners that the association intends to start enforcing uniformly the provisions of the governing documents, and then take photos of all of the lots in their present condition so that the association has a starting point. Then, when an owner claims that a specific violation has been in place for a long time, the association can turn to the photo(s) of the lot to verify whether the violation existed prior to the time the association started its uniform enforcement. With all of the above said, if an association has not been enforcing its governing documents for a period of time and wishes to start doing so, it should contact its legal counsel to determine what legal issues may exist for the association to commence the process of enforcement and to provide guidance to help avoid potential pitfalls. Myth: An association can enforce just the violations it cares about. Fact: Any time an association picks and chooses which provisions of the association’s governing documents to enforce, it is likely to hear claims of discrimination or selective enforcement. If an association no longer believes that certain restrictions are relevant, it should seek to amend them rather than just not enforce them.
Myth: An association that hasn’t made the enforcement of their restrictions a priority in the past is now in a position to not be able to begin enforcing the restrictions as written. Fact: There are a variety of ways to begin enforcing the restrictions after not doing so for a period of time (assuming that there are not so many violations as to change the character of the community). One option is to to send out a carefully written piece of communication, along with a copy of the restrictions, to the membership and ask them to voluntarily come into compliance within a certain period of
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The information contained in these Myths & Misconceptions is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel. Elaine Anghel is the Vice President of On-Site Management at AAM, LLC and has been in the homeowner association industry since 1993. Lynn Krupnik is a partner with the law firm of Krupnik & Speas, PLLC. She has been representing community associations for over 18 years. Lynn is a member of the CAI College of Community Association Lawyers (“CCAL”) and speaks and writes often on topics that affect community associations.
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Poodle Problems: My Dog is Not a Pet! By Lydia Peirce Linsmeier, Esq.
For many Arizona households, family often includes companion animals, from cats and dogs to llamas and tortoises. With an estimated 880,318 pets currently living in Maricopa County alone, boards and community managers spend a great deal of time and energy detangling pet problems. Very few issues raise as much passion as emotional support animals or ‘comfort pets’. The following basic tips will help boards and community managers to develop sensitive and compassionate solutions to animal accommodation requests that will benefit the entire community. 1. Know and understand the basic differences between the applicable statutes. • ADA – The Americans with Disabilities Act, 42 U.S.C. §126. The ADA is a federal law that is enforced by the Department of Justice. • AZDA – Arizonans with Disabilities Act, A.R.S. §41-1492 et seq. AZDA is a state law that is enforced by the Civil Rights Division, Office of the Arizona Attorney General. • FFHA – The Federal Fair Housing Act, and the Fair Housing Amendments Act of 1988, 42 U.S.C. §3601 et seq. The FFHA is a federal law that is enforced by the Department of Housing and Urban Development. • AFHA – Arizona Fair Housing Act, A.R.S. §41-1491. AFHA is a state law that is enforced by the Civil Rights Division, Office of the Arizona Attorney General. AFHA mirrors the FFHA, with minor differences. Associations have a duty to provide reasonable accommodations, and residents may make their request in plain English without using the term ‘reasonable accommodation’ or ‘fair housing’. If you are confused regarding a potential request for reasonable accommodation, the best practice is to consult with legal counsel. 2. Have a basic working knowledge of which statutes will apply to your association, and why. Pursuant to the ADA a service animal is a dog (or a miniature horse) that has been trained to perform specific task(s) on behalf of a disabled person. Service animals are permitted in places of public accommodation (e.g. golf course, restaurant, or equestrian facility). Pursuant to the FFHA, an assistance animal can be any species, and there is no training requirement. An animal is an assistance animal by virtue of the emotional and/or physical benefits of having the animal in the home. Residents may provide a letter from a medical provider to qualify their animal as an assistance 12
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animal. Be aware the terms “comfort pet” and “emotional support animal” usually will refer back to assistance animals in a fair housing context. In most cases, community associations in Arizona are regulated by the FFHA /AFHA, not the ADA. If you believe that your association is also regulated by the ADA because the association amenities include a place of “public accommodation” the best practice is to consult with legal counsel to navigate potentially complex compliance issues. 3. Use the correct legal terminology in the association’s governing documents. Even housing experts accidently mix up service and assistance animals! To avoid confusion, we recommend always using the correct terminology when drafting governing documents, especially rules and regulations regarding animals. Using an improper or confusing term could trigger an accidental violation. For example, if your rules state that the association will consider reasonable accommodations for service dogs only, that improper use of the terminology could cause an association to inadvertently discriminate against an assistance cat – or a service miniature horse. Most importantly – SERVICE AND ASSISTANCE ANIMALS ARE NOT PETS. 4. Take a step back – and a deep breath. Animal issues are passionate issues. Service and assistance animals are not licensed by the state or federal government, and they do not need to wear a vest. A small number of unscrupulous people do take advantage of these inclusive policies to claim their pet is a service or assistance animal. Fortunately, the majority of requests for an animal-related reasonable accommodation are related to a real resident need. From the first contact, treat every request for a reasonable accommodation with neutral respect. Animals can do amazing things, from detecting oncoming seizures to low blood sugar levels. Leaping to conclusions about the ‘real’ status of an animal could have devastating consequences for both the disabled resident and the association. You already know your association is a wonderful place to live. Following the basic tips above will help make certain disabled residents are also able to enjoy the lifestyle and amenities offered by your caring and inclusive neighborhood. Lydia Peirce Linsmeier, Esq. is a senior associate at Carpenter, Hazlewood, Delgado & Bolen, PLC and has developed a unique practice area that is sensitive to the role of service and companion animals in community association settings.
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“Why do I have to paint my house when others’ look worse than mine?” By Annie Colgrove, CMCA, AMS
Every community comes with its own challenges, and every owner has their own issues. Whether it is a 55+ Active Adult community, or a predominately younger family environment, there are reasons and/or excuses as to why certain rules are not followed. It is up to managers to make the decision of how to handle each situation. In a 55+ Active Adult community, likely up to 75% of residents are only here during the winter months. This can make it difficult to address certain issues during summer months. Residents are encouraged to solicit a caretaker for their property while at their summer homes, but that is not always the case. This may give the impression that the association is turning a blind eye, but there is a fine line that separates that from being realistic about a timeline to get important things accomplished. Whereas, in a more family oriented demographic, they have a different set of issues. Maybe they are struggling financially. Maybe they are dealing with an illness. Like the winter visitors, that doesn’t mean that they are excused from maintaining their property. It just means that we need to be sympathetic, to a certain extent, and take their personal situation into consideration. If several homes are in need of paint, it is nice to address them all at the same time. This helps to prevent the blind eye accusation, as well as giving the community an all over facelift. However, sometimes we as Community Managers need to “build community” by having flexibility with our residents and take their current situations into consideration. If someone has a hardship, we need to be sympathetic, but not naïve. If they are away for the summer, give them a realistic deadline. It doesn’t make it any less important; it just shows that homeowners associations are not the enemy. In other instances, if someone has weeds in their yard, a letter is sent asking that they remove them and maintain their landscaping. That does not mean that they are going to go right out and take care of them. A letter can be sent, but managers cannot hold their hand to make sure they do the work. Maybe three or four letters need to be sent to get their attention. Maybe even a letter from the association’s attorney. This can give the impression that we are turning a blind eye. Neighbors who also receive letters for their weeds may look at other properties and think they are being targeted. That simply is not the case. We can only do our best to treat everyone with fairness and respect. Managers will always have challenges and accusations that we are treating people unfairly. It is up to us to try to negate those claims and continue to build community and keep communities looking their best! Annie Colegrove, CMCA, AMS is the Community Manager at Apache Wells Homeowners Association, Inc., an Active Adult community located in Mesa, AZ. She is entering her 10th year in the industry and has spent most of her career working onsite for master planned communities. 14
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The Nazi vs. the Blind Eye By Jerry Parsons, CMCA, AMS, PCAM
Before I became a community manager, I spent over three years on the boards of two self-managed community associations, and am currently serving on the board of a third. I think this experience, combined with years as a manager enforcing the documents of many communities, gives me a unique perspective. I have even sent a violation letter to myself! Enforcement is an important board responsibility. Sometimes the documents provide fines to assist with enforcement, and sometimes they don’t. Fines make enforcement a little easier but also can make homeowners hostile. Many attorneys say “enforce or amend” in reference to enforcement of a community’s governing documents. The reason for the “enforce or amend” opinion is that if an association doesn’t enforce its governing documents, it can lose credibility with both its members and in future litigation concerning violations. Enforcement of the governing documents is an obligation that can sometimes seem more like an albatross around the board’s collective neck. It is not only different between self-managed and professionally managed communities, but is usually different between any two associations. It depends on the governing documents and the culture of the community in a selfmanaged community. In professionally managed communities, enforcement can also be affected by the community manager and by the management company when there is one. Board members and community managers both have to tread the ground between strict enforcement and zero enforcement. It is a mine field containing slippery slopes. If we enforce every little thing to the maximum or don’t enforce anything, we will end up with problems. The nazi in us says there is no excuse for breaking a rule and the anarchist in us says all should have the freedom to do as they wish. Almost every association has at least one nazi homeowner, one anarchist homeowner (and one who is just plain difficult, but that is a subject of another discussion). You don’t want to be either a nazi or blind-eyed board member, or have one on the board with you (but it might happen). Some of them can be educated and some of them appear incapable of education. Hopefully, the majority of the board will be reasonable and overcome them if they are not. Community managers don’t have the luxury of being either a nazi or an anarchist. They need to provide guidance to the board in the implementation of their enforcement policy and if they fit into one of the categories, they should consider a new career. Fortunately, very few of us are totally one way or the other. In general we try to be reasonable, but one person’s reasonableness is not always another’s, and lies somewhere else on the scale between the nazi and the anarchist. Knowledge of the documents and reasonableness are necessary to work through differences and should be teamed with consistent enforcement to keep harmony in the community. If a majority of the homeowners feel that a particular violation doesn’t make sense, consider amending your documents to change or eliminate it. Jerry Parsons is a semi-retired community manager.
At CCMC, we build community by bringing people together in the neighborhoods where they live and in the offices where we work. Simply put, we create experiences that connect people.
Smiles. Harmony. Joy.
Community Association Management 路 480路921路7500 路 www.CCMCnet.com Spring 2016
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There is a Method to the Madness: How to Choose the Best Method of Enforcement By Augustus H. Shaw IV, Esq., CCAL
One of the primary duties of a homeowner’s association (HOA) is to enforce the HOA’s rules, regulations and restrictions. An often asked question, however, is how should an HOA properly effectuate its ability to enforce? Generally, HOA rules, regulations and restrictions may be enforced through imposing monetary penalties or fines, seeking injunctive relief through the courts or, if allowed by the HOA’s CC&Rs, exercising self-help, which provides the HOA with the power to enter upon an owner’s property to remedy the violation.
The first step in determining which method of enforcement to implement is to determine which method is allowed under the HOA’s governing documents. For example, while the exercising of self-help is sometimes a viable enforcement option, some HOA governing documents may not authorize the HOA to exercise the self-help option or may require certain tasks be accomplished before self-help may be implemented.
The issue for many HOAs, however, is the determination of which method of enforcement to implement; i.e. when is it appropriate to seek injunctive relief versus simply imposing a fine. Is self-help appropriate in a particular circumstance?
Moreover, if the HOA desires to seek injunctive relief, the HOA should review its governing documents to determine whether attorney’s fees and court costs may be recouped from the owner in non-compliance.
Determining the proper enforcement method not only aids in gaining compliance, but also could save the HOA from the cost and expense of litigation. When selecting a method of enforcement, HOAs would be wise to consider three fundamental principles of enforcement, said principles being:
Determining what enforcement method may be used is an important first step in the enforcement process.
1. What enforcement method is allowed by the HOA’s governing documents; 2. Which contemplated method of enforcement is likely to gain compliance; and 3. Which method of enforcement is reasonable under the circumstances? 16
What enforcement action is allowed by the HOA’s governing documents?
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Which contemplated method of enforcement is likely to gain compliance? It is important to ensure that the method of enforcement will achieve the goal of compliance. For example, let’s say that an owner is operating a pig farm on their property, which is a violation of several of the HOAs restrictions. Let’s further say that the fine for this violation is $50 per month. Finally, let’s say that the owner makes $500 per month from the sale of pigs.
In this example, it would be more profitable for the owner to pay the $50 fine than to lose $500 per month in pig-selling income. Thus, the owner may simply pay the fine and keep on operating the pig farm. While the fine is being paid, the violation is not being remedied. Instead of a $50 fine, maybe seeking injunctive relief would be a more appropriate means of gaining compliance. Therefore, prior to implementing an enforcement method, it is important to consider whether the enforcement method to be implemented will ultimately lead to compliance. Which method of enforcement is reasonable under the circumstances? Finally, it is important that the “penalty fit the crime” when it comes to enforcement. Determining which method of enforcement is reasonable will not only aid in gaining compliance, but could also save the HOA from potential liability. For example, is it reasonable to impose a $500 per day fine for a trashcan violation? Likely not. Is it reasonable to file an injunction lawsuit over a minor weed violation? Probably not. Would the implementation of self-help be reasonable to cure a “green pool” violation located at a house that has been abandoned for six months? If the HOA’s governing documents allow it, sure. Ensuring that the method of enforcement is reasonable is a key component to effectively enforcing HOA rules, regulations and restrictions. Keeping in mind the above three main principles of enforcement will help your HOA safely navigate the complexity involved with enforcement of rules, regulations and restrictions.
Augustus H. Shaw IV, Esq., CCAL, is the Founding Partner of Shaw & Lines, LLC. Augustus is a member of the prestigious CAI College of Community Association Lawyers and sits on the CAI Central Arizona Chapter Board of Directors and Legislative Action Committee.
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17
Parking Enforcement in HOA Communities By Erika Jackson
Parking enforcement benefits the entire community. Removal of abandoned and/or inoperable vehicles helps with the overall aesthetics and security of the community. Onsite security and/or the presence of a towing company can also reduce crime, such as vandalism and theft, within the community. Enforcement starts with understanding what can be done legally and deciding what is just the right amount of enforcement for the community. Parking enforcement by the HOA must start with the governing documents. The documents dictate what is allowed in terms of enforcement. Every HOA has their own documents (CC&R’s) drawn to cater to the needs of their specific community. The CC&R’s must be consistent with applicable Arizona statutes and local ordinances/codes. In general, the HOA board will determine the parking needs for residents and guests while contracting with a towing provider to ensure that the property signage is adequate and that violators are towed legally and charged appropriately. Notifying residents prior to enforcing a policy change, scheduled maintenance or enforcing current policies is important as well. If parking has never been enforced before but has been a written rule, or if the board voted in a policy change, sending a notice to all residents advising of the change and enforcement start date will help minimize any issues.
clearly run as an all cash business? What is their involvement in the community and with charitable organizations? These are all questions that should be considered while engaging with any vendor. Nobody likes to be towed, yet proper prior preparation can minimize the number of regrets later. As an example, the rules need to be specified within the CC&R’s in order to properly enforce street or common area parking. If the CC&R’s state there is no on street parking at any time and any violations of this rule will result the vehicle being towed at the owner’s expense, then the towing company may enforce this legally as long as proper paperwork is set in place between the HOA and the towing company and signs are properly posted throughout the community.
Parking enforcement benefits the entire community.
Once residents have been provided with all the relevant information, they will know what they are allowed or not allowed to do. Once proper notification has been made, it’s then up to the residents to abide by the rules and also explain the rules to their guests. Teamwork is important. HOAs are encouraged to contract with a towing vendor they feel comfortable working with, one with whom they can build a strong business relationship. Not all towing contractors are created equal. It is recommended that you research towing companies prior to committing your community to a contract. Check their BBB rating. Are they a BBB accredited business? Do they respond to their complaints? What is their relationship with law enforcement? Are they a contractor tower with multiple agencies? Consider any association memberships, the cleanliness of their trucks, and the professionalism of their staff. Do they have uniformed drivers? Do they have audited financials or is it 18
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What about inoperable vehicles such as those missing tires, those up on jack stands, those with flat tires or abandoned vehicles that have been present so long that cobwebs are present? They are not simply an eye sore but can also create an unsafe community. Prospective buyers or renters evaluate the entire picture when choosing where to live. The visible presence of inoperable vehicles may indicated that the community is not properly maintained and that the community does not enforce the CC&R’s. A towing company is a service provider in that they provide a service to the community, just as a landscaper or painter does. All service providers do their part to enhance the appearance and quality of the community. Always ask what they offer in terms of services just as you would any service provider and invite them to provide additional specific information to the board during an upcoming community meeting. Erika Jackson is the Private Property Impound Service manager with All City Towing.
Potential Fair Housing Implications in Enforcement Actions By Vicki Sears, AMS, PCAM
Community association enforcement actions tend to be a conflicting topic for many homeowners, and are often viewed as one of the most contentious issues they may face while living in a Homeowners Association (HOA). Additionally, the board of directors is faced with enforcing the association’s governing documents, while also being mindful of the Fair Housing Act (FHA), which makes it unlawful for housing providers to discriminate based on race, color, disability, religion, sex, familial status and national origin. Although associations are subject to the FHA, few boards are familiar enough to distinguish the multitude of ways they could be exposing the association to claims of discrimination. Under the FHA, an HOA may not legally refuse to make the reasonable accommodations necessary for homeowners to fully enjoy and utilize their homes. A common mistake a board makes is failing to offer reasonable accommodations for homeowners with special needs or disabilities and basing their enforcement actions solely off the language of the governing documents, rather than exploring the extenuating circumstances that may lead to an alternate decision. It is important to render enforcement decisions on a case by case basis, making reasonable accommodations for homeowners when necessary. For example, if a board denies a homeowner’s request to expand the width of their driveway to accommodate their wheelchair due merely to the fact that the governing documents state that residents’ driveways cannot exceed 10 feet wide, they would be in violation of the FHA. Another example includes service animals. If an owner requires the assistance of a service animal, an HOA would be obligated to grant a waiver from its “no pets” policy. Refusal to make such an accommodation (one that is reasonable and necessary to afford a disabled owner the full enjoyment and use of his/her home) is deemed to be discriminatory under the FHA. Knowing how to recognize these implications, delegate reasonable enforcement measures and avoid an FHA violation altogether can save an association from costly lawsuits or other severe penalties. The best way for a community to avoid penalties for non-compliance with the FHA is to lean on the expertise of a professional community association management company and trusted legal professional. Vicki Sears is the Vice President of Customer Service at Associated Asset Management (AAM). She holds the PCAM®.
Spring 2016
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Do I Really Have to Enforce My Governing Documents? By Joshua M. Bolen, Esq.
The short answer is – yes. Associations must enforce their governing documents as written. Arizona law, under a case called, Johnson v. Pointe Community Association, holds that an association has an affirmative duty to enforce the express terms of its governing documents (i.e. CC&Rs, Bylaws, Rules, Guidelines, etc.). The law does not provide any exceptions to this legal obligation. Therefore, an association really only has two choices: amend the governing documents or enforce them as written. An association that chooses not to enforce its governing documents exposes the association and its board of directors to two distinct forms of risk. First, another owner in the community may file a lawsuit against the association and allege that the board has failed to enforce the governing documents. This type of lawsuit could include a personal claim against an individual member of the board for the board’s breach of duty to the association. In layman’s terms, an owner most likely purchased his or her home in the community with a reasonable expectation regarding the governance and look of the community. These expectations are set forth in the governing documents (i.e. no street parking, no purple houses, no weeds, etc.). If a board chooses not to enforce or abide by the governing documents, a claim can be made that the board has failed in this simple legal requirement: follow the documents and uphold an owner’s expectations. Second, if the board chooses not to enforce the governing documents now, the association may lose its ability to enforce certain terms of the governing documents in the future, either in individual cases or even in a broader sense. Failure to consistently enforce the governing documents exposes an association to an owner’s equitable defenses such as abandonment, waiver, estoppel, selective enforcement, discrimination, and laches. These defenses are all somewhat different; nevertheless, all of these defenses can severely restrict an association’s claim against an owner for violating the governing documents. BUT HOW FAR MUST I GO??? In Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003), the Arizona Court of Appeals addressed two issues: (1) the amount of deference given to an association in interpreting its own documents; and (2) the association’s obligation to enforce affirmative use restrictions
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in its governing documents. Because these are two very complex issues addressed by the Court of Appeals, we will only focus on the second issue regarding enforcement of affirmative use restrictions, and save the deference issue for another day. In Johnson v. Pointe, the neighboring property owners, the Johnsons, brought an action against the association alleging that the association failed to enforce its use restrictions against their neighbor, the Boyles. The association, the Johnsons, and the Boyles met at various times prior to litigation in an attempt to resolve various architectural issues on the Boyles’ lot. Despite the meetings, the Johnsons brought a claim against the association when the association failed to require the Boyles to obtain prior approval for the change in texture of their stucco on the back of their home. The Johnsons asserted that such an approval is required by the governing documents, as Section 3.9 of the CC&Rs provides, “No structures, improvements,... changes...alterations, repairs, painting...or other work which in any way affects or alters the exterior appearance of any Residence or Improvements thereon shall be initiated without the prior written approval of the Architectural Committee.” The association contested this allegation by arguing that this provision also gives the architectural committee the sole power to approve or disapprove all modifications. Specifically, “[t]he Architectural Committee has the right to refuse to approve or disapprove any plans or specifications....which are not suitable or desirable, in its sole opinion, for aesthetic or other reasons.” Therefore, the Association argued that the Boyles did not need to submit an architectural application because the Association believed that the change in the stucco texture was within its guidelines. The Court of Appeals agreed with the Johnsons. The court held that the Johnsons were not trying to prevent the architectural committee from approving the stucco change, but sought only to have the Association require the Boyles to submit an architectural application and obtain approval from the architectural committee. Because the association did not require the Boyles to submit an application for approval, the association violated its documents, as the governing documents placed an affirmative obligation on the owners to obtain the written approval of the architectural committee. Simply put, when your association has an affirmative obligation (i.e., “must” or “shall” language), the association has no choice but to enforce the provision has written.
BUT WHAT IF THE BOARD HAS DISCRETION UNDER THE GOVERNING DOCUMENTS? Please understand that not all provisions are affirmative obligations placed upon the association; some provisions grant an association (i.e., board of directors) discretionary authority (i.e., “may” or “can” language). So what happens when the association’s governing documents grant an association discretion; can the association do whatever it wants, or is there a standard that the association must abide by? In Tierra Ranchos Homeowners Association v. Kitchukov, 216 Ariz. 195, 165 P.3d 173, (App. 2007), the Court of Appeals of Arizona confronted this issue. In this case, the association, Tierra Ranchos, filed a complaint against homeowners, the Kitchukovs, seeking injunctive relief regarding the location of an unapproved detached garage. Tierra Ranchos’ governing documents, like so many other associations’ governing documents, required the Kitchukovs to submit plans to, and obtain approval from, its architectural committee prior to performing construction on a lot. Tierra Ranchos’ CC&Rs provided the architectural committee with broad discretion to approve or disapprove any proposed modifications. Specifically, “The Architectural Committee may disapprove plans and specification for any Construction or Modification if the Architectural Committee determines, in its sole and absolute discretion, that the proposed Construction or Modification violates any provision of this Declaration or the Design Guidelines.” In accordance with these provisions, the Kitchukovs submitted plans to the architectural committee to construct a guest house and a detached garage on their property with an 82 feet setback from the north boundary of the lot and a 5 feet setback from the west boundary of the lot. These plans were approved. Shortly thereafter, the Kitchukovs modified the plans for the garage to change the north boundary setback to a 5 to 15 feet setback. They did not resubmit these plans to the architectural committee for approval prior to commencing construction. After commencing construction, the association informed the Kitchukovs that they needed to submit the modified plans for the garage. The Kitchukovs resubmitted the plans, but the plans were denied because they did not comply with an alleged 25-foot minimum setback requirement for the north boundary. Despite the denial, the Kitchukovs resumed construction. As a result, Tierra Ranchos filed a lawsuit to force the Kitchukovs to comply with the architectural committee’s decision and stop construction on the garage. The Kitchukovs filed a counterclaim against Tierra Ranchos. The Kitchukovs requested a court order stating that the architectural committee’s decision to deny their modified garage plans was arbitrary, and that the garage could remain on the property. Ultimately, the trial court found in favor of the Kitchukovs. The association next filed an appeal. In reviewing the lawsuit, the Court of Appeals focused on the appropriate standard to apply when reviewing a discretionary decision made by an association, such as Tierra Ranchos. In the end, the Court
of Appeals adopted the Restatement (Third) of Property: Servitudes (citing Scott Carpenter’s book “Community Association Law in Arizona”), approach and held that associations have a duty to “treat members fairly” and a duty to “act reasonably in the exercise of its discretionary powers including rulemaking, enforcement, and design-control powers.” Under the above approach, a member that challenges an action within the association’s discretion (e.g. denying construction of a garage that does not meet setback requirements) bears the burden of establishing that the association acted in an unreasonable manner. To apply this standard to the Kitchukov garage, the Court of Appeals first needed to determine if Tierra Ranchos had breached its duty to act reasonably in the exercise of its discretionary design-control powers by denying the Kitchukovs’ garage The difficult part of the issue of reasonableness is the questions of fact in Arizona (i.e. there is a need for a trial or stipulation to the facts). After reviewing the facts of this case, the Court of Appeals concluded that a fact finder, be it jury or judge, could conclude that the Architectural Committee’s decision to deny the Kitchukovs’ garage was in fact reasonable. Therefore, the Court of Appeals vacated the trial court’s original judgment in favor of the Kitchukovs. The case was sent back down to the trial court so the fact finder could examine the facts of the case and determine if the association’s decision to deny the garage was reasonable in the circumstances. The take away points from this case are: (1) when an association acts within its discretionary authority, it must act in a reasonable manner; and (2) when an association commits a specific act within its discretionary authority, be it rulemaking, architectural review or enforcement, the burden is on the homeowner/member to prove that the association acted unreasonably. WHAT CAN THE BOARD DO? With this all of this in mind, we understand that budget, resource and time constraints are all obstacles to enforcement. However, the law does not recognize these obstacles as a free pass to avoid enforcing the governing documents. Even in these challenging times, we have found that associations that are aggressive and consistent with enforcement are actually expending fewer funds and having to address less appeals and complaints. Being consistent creates deterrence for other owner’s violations and raises the overall outlook of the community. Owners that witness violations within a community are more likely to ignore their obligations under the governing documents, and simply choose to mimic the violations they witness. Stopping violations before problems spread among other owners is the key. Therefore, we encourage boards to adopt efficient and aggressive, yet reasonable, enforcement policies. Joshua M. Bolen, Esq. is responsible for overseeing all litigation at Carpenter Hazlewood Delgado & Bolen, PLC. . Josh has served with CAI as its 2013 Chapter President, 2012 President-Elect, 2014 Treasurer, 2015 and 2016 Director at Large, and also serves as the 2015 and 2016 Co-Chair of the LAC.
Spring 2016
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A Proactive Approach to Reducing Violation Notices By Jeff Miles
There’s no shortage of discussion on the web about rules violations in homeowner and condo associations. Just search “HOAs” and you get endless links to articles, blogs, forums and rants about heavy-handed associations. And, as an association manager, you have the unfortunate task of sending violation notices and managing enforcement. Not fun at all. The fact is most residents don’t consciously violate the rules. They have either forgotten them, or more commonly, are simply not aware of them. Furthermore, as renters become more prevalent in association communities, relying on the owners to relay the rules is even more problematic. Anecdotal surveys of managers reveal “I didn’t know” is the number one resident response to a violation notice. Unfortunately, this not knowing can cause hard feelings by the residents and more importantly, a time drain for managers to spot, process and track violations. Instead of these negatives, wouldn’t make more sense to take a proactive approach to educate and remind owners and renters about the rules? The idea is simple. Pick the most common violations and create friendly content that explains the rule in a simple, straightforward way. Then, do periodic mass broadcasts to the residents on a consistent basis. Topics can range from ARC procedures and watering restrictions to reminders on maintenance and car parking issues. So, what do you need to accomplish this? If your community has a website or email blast, you can post it or send it there. However, now in the age of email overload and forgotten websites, a community mobile app with text notifications is a better choice – and is fast becoming the platform of choice for community associations. Let’s face it, a message right in your hand is hard to ignore. We have our heads buried in our mobile device a large majority of our day. So here are some suggestions for the best technology features to look for in a communications app: A good system can push information over multiple channel formats, such as mobile app, text, email, mobile notifications and automatic website updates. The resident can choose how to receive the information for maximum exposure. An effective system also provides for a one touch system, where a single action or touch pushes to all multiple 22
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formats. This is a great time saver for you. Systems which allow content to automatically be pushed out – monthly, quarterly, yearly, seasonally – are the best choice. By creating the content once, you never have to touch it again after it’s scheduled, unless you need to modify the reminder or stop it. A helpful system allows reminders to stay visible and sortable, like in a community feed where residents can scroll down to see previous posts. This gives new owners and renters a resource to review past reminders. A system that allows some messages to be included or excluded from renters’ view is a must. There are messages that are targeted to owners only, like a budget or board meeting. Renters need to get the reminders like the rest of the residents; however, association business should stay only in the owner’s view. Archiving of past content for re-use is a very helpful feature if a new round of reminders is needed. This saves time spent recreating original content. Also, a system that allows photos to be uploaded is crucial. Images can help give a visual to the reminder, or provide a light-hearted tone to your content, if a humorous photo is included. Of course, a great system always comes with support for both the technology and the content creation. In the end, stopping violations before they start is a win for everyone. The resident wins, because reminders are how we live today. You win, because reducing the number of violation reduces your workload. And, most importantly, the community wins because it keeps looking great! Jeff Miles is President and CEO of Nabr Network, a Texas-based software company focused on using technology for better community association communication.
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Spring 2016
23
The Limits of Reason Samuel C. Richardson, Esq.
Homeowners associations increasingly find themselves the subject of lawsuits for failure to accommodate disabled members of their communities in the enforcement of their rules and regulations. For example, in one association, the architectural guidelines require a certain width for driveways, but one member wants to expand the width of her driveway in order to allow for wheelchair access to her vehicle. Must the association allow the expansion? In another association, a unit owner suffers from a mental disorder that produces extreme anxiety and paranoia, to the point that when a leak breaks out in his unit, he refuses to allow the repairmen to fix the leak. Must the association permit the leak to continue in order to avoid a discrimination claim? Thankfully, the law requires that accommodations be extended to disabled community members, but only to the extent that such accommodations are reasonable. Any accommodations that impose an undue financial burden on an association are not reasonable. The limits of reason are contained in the Fair Housing Act (“FHA”)1 and its associated administrative regulations. The FHA primarily prohibits discrimination in the realm of buying, selling, and renting property.2 However, it also applies to community and condominium associations in order to protect certain classes of individuals from becoming targets of discrimination. In particular, it is unlawful to discriminate against anyone on the basis of race, color, religion, sex, familial status, national origin, or handicap.3 Congress has vested enforcement powers in an administrative agency, unoriginally named the Fair Housing Administration.4 The Fair Housing Administration, under the Department of Housing and Urban Development (“HUD”) has produced regulations that govern the issuance of reasonable accommodations, stating, “It shall be unlawful for any person to refuse to make a reasonable accommodation in rules, policies, practices, or services, when such accommodations may be necessary to afford a handicapped [i.e., disabled] person equal opportunity to use and enjoy a dwelling unit, including public and common use areas.”5 Let’s go back to our examples. The first request is a reasonable accommodation. The unit owner wants to expand her driveway to allow for wheelchair access, and is going to pay for the expansion herself. She has not requested any financial assistance from the association directly, other than to allow an exception to the architectural guidelines so she can use and enjoy her dwelling unit. If she does not get the expansion, she will not be able to access her vehicle without significant aid. In this situation, the FHA and associated regulations clearly require the association to allow the driveway expansion. 24
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On the other hand, in the second example, the unit owner’s requested accommodation requires the association to let a leak persist in order to alleviate the owner’s anxiety. Water leaks cause myriad problems in a condominium, resulting in significant expense to the association and surrounding units. According to recent cases, “there is no ‘obligation to do everything humanly possible to accommodate a disabled person; cost (to the defendant) and benefit (to the plaintiff) merit consideration as well.”6 “[A] necessary accommodation will typically be considered reasonable ‘when it imposes no undue financial or administrative hardships on the defendant . . . and when it does not undermine the basic purpose of the [challenged] requirement.’”7 In this example, allowing the leak to persist will result in an undue financial burden to the association, and provide little benefit to the unit owner whose unit will also be damaged by the leak. As result, the association is justified in denying an accommodation on the grounds that it is unreasonable. When the association refuses to grant the accommodation, the unit owner claims discrimination. Now what? HUD encourages opening a discussion with the unit owner to come up with alternative solutions. But if such a dialogue fails to produce adequate solutions, and the unit owner decides to sue, the association should immediately tender the claim to its insurance. The FHA provides every incentive for a plaintiff to sue, but offers little protection to defendant associations who have legitimate interests to protect. The lesson here is, when it comes to the FHA, be reasonable. Allow accommodations that make sense financially and administratively. If there is little sacrifice on the part of the association, then the accommodation must be granted. On the other hand, there is a limit to reason. If the association finds itself having to expend every resource and invest every man hour to accommodate the homeowner, then make sure the association has good insurance coverage. And hire a good attorney! Samuel C. Richardson, Esq. is an associate with Maxwell & Morgan, PC and has been a community/condominium association attorney for 3 years. He is a graduate of Valparaiso University School of Law and Arizona State University. 42 U.S.C. §§ 3601 et seq. 42 U.S.C. § 3604. 3 Id. 4 42 U.S.C. § 3610. 5 24 C.F.R. § 100.204(a). 6 Prindable v. Association of Apartment Owners of 2987 Kalakaua, 304 F. Supp. 2d 1245, 1255 (D. Hawaii 2003) (quoting Bronk v. Ineichen, 54 F.3d 425, 429 (7th Cir. 1995)). 7 Prindable, 304 F. Supp. 2d at 1257 (quoting Hubbard v. Samson Mgmt. Corp., 994 F. Supp. 187, 189 (S.D.N.Y. 1998)). 1
2
Spring 2016
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Let’s Be Reasonable By Dawn R. Engel, CMCA, AMS
Every community manager, compliance manager and board member knows the rule – uniformly enforce according to the declaration, guidelines and rules! Scenario #1: There is a home in a community somewhere in the USA that has a dirt lot for a front yard with weeds “up to there”, a broken down Chevy in the driveway, and shutters falling off the house. Community professionals know how to handle this one. Send a non-compliance notice, then another with fines and another [with fines] continuing as needed as a measure to garner compliance according to the community’s governing documents and the letter of the law. No brainer, right? Then one day – the clouds break, bluebirds are singing and unicorns are skipping through the streets because this homeowner has removed the waist-high weeds, hauled the broken Chevy off the driveway, repaired the broken shutters and has installed a beautiful landscape. Scenario #2: A couple of communities away from the one in Scenario #1: Monday morning an architectural committee member is frantically calling the community manager about a violation - “Can you believe this home was repainted over the weekend without a submittal for approval?” The community manager promptly schedules an immediate inspection of this home, fearing the worst – apple green exterior paint with cherry red trim. The community manager pulls up to the house. The unicorn is skipping down the street. The home does not appear to be painted an exact approved color scheme for the community, yet it does not detract aesthetically from other homes in the neighborhood. Homeowner #1: Submits an appeal acknowledging noncompliance and years of fines, fees and costs to the HOA. 26
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Homeowner #1 submits an appeal requesting leniency and waiver of costs. Homeowner #2: Architectural committee denies the architectural review form. Owner submits an appeal, requesting to keep the current scheme. Owner is suffering health issues and re-painting at this time would be financially burdensome. Board Meeting: The board reviews both appeals: • Homeowner #1 received fines and fees for years of noncompliance. • Homeowner #2 painted the home without prior approval and did not paint according to the approved color scheme. The board collectively knows that uniform enforcement of the governing documents is expected. However, the board is split on the vote. Half the board wants to collect the total balance due for fine and fees from Homeowner #1 and the other half wants to waive “soft costs” especially since the home is now in compliance. The board is also split on the vote for Homeowner #2. The house does not follow the approved paint scheme; however it does not detract away from the neighboring homes or the community aesthetic. Half the board would like to enforce the approved color scheme and force Homeowner #2 to repaint; the other half of the board feels the current color scheme does not impose a monetary hardship on the neighboring homes by reducing equity in property. Thoughts for the board: Think like a judge, weigh all costs and be reasonable. For example, do the current paint colors of Home #2 really detract from the overall aesthetic
of the neighboring properties and the community? Is the reasonable to insist that Homeowner #2 repaint an entire house to comply with a paint standard that is nearly identical to the neighboring properties? Is the board enforcing the spirit of the restriction, or the letter of the restriction?
Your community is waiting to hear from you. Speak up.
The board may want to consider options that are reasonable for all parties. A reasonable option for Homeowner #1 might be that the association agrees that the owner pays all the hard costs including legal fees within 30 days and the home must remain in compliance for 6 months. Upon receipt of the initial payment, the association will waive the soft costs with the exception that the home must remain in compliance for 6 months or the fines will be re-instated on the account. A reasonable option for Homeowner #2 could be that the association will not ‘officially’ approve the new exterior paint. The paint scheme may remain for now, but the home must be painted according to the association’s approved color palette upon either a transfer of the property or the next time exterior painting is necessary. Board members should consider weighing all costs, monetary and non-monetary; consider the effects the current aesthetic of the property will have on neighboring homes and the community; and practice being reasonable in every case. After all deliberations and considerations, the board reaches a consensus, the clouds break, bluebirds are singing and that unicorn is skipping through the streets.
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Want Dawn R. Engel, CMCA, AMS is the Education Director and Community Association Manager for Planned Development Services. 8 ”Joint Statement of The Department of Housing and Urban Development and the Department of Justice: Reasonable Accommodations Under the Fair Housing Act”, www.hud.gov/offices/fheo/library/ huddojstatement.pdf, at 7 (May 17, 2004).
See 42 U.S.C. § 3613(c) (providing relief in the form of actual and punitive damages, as well as attorney fees and costs to successful plaintiffs, while offering no commensurate relief for successful defendants, even if the lawsuit is frivolous.)
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Spring 2016
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Use Vague and Ambiguous CC&Rs to Better Your Community By Kelly Oetinger, Esq.
The enforcement of the use restrictions contained in the declaration is always a hot button issue that can create conflict within the association. This can be exacerbated by poorly drafted, vague, and ambiguous provisions in the declaration. At first glance, vague provisions in the declaration are extremely frustrating for both the board and the owners. The board may have trouble enforcing provisions that do not spell out exactly what constitutes a violation. The owners will not know exactly what they need to do to comply. Consider a provision that states that “no animal may be kept on a lot except that a reasonable number of generally recognized house or yard pets may be kept on a lot.” That is not very clear. What is a reasonable number? What is a house or yard pet? That provision does not provide much guidance for the owners. It also leaves a lot of room for conflict; an owner may argue that chickens are a yard pet and seven is a reasonable number. The owner may fight the board’s decision that seven chickens is a violation of that provision. Most association’s governing documents provide that the board may adopt rules and regulations. Vague and ambiguous declaration provisions are often a blessing in disguise when drafting rules and regulations. Poorly drafted, vague, and ambiguous provisions in the declaration leave plenty of room for interpretation by the board. The board can draft new rules clarifying vague or ambiguous provisions in the declaration. Well drafted rules allow for clear cut enforcement. In the example above, the board could take advantage of the vague provision to define both “reasonable number” and “house or yard pet” and create a rule that clearly states the exact number and types of animals that are permitted on the lots. Another benefit of having this rulemaking flexibility is that the board has the ability to amend the rules without a vote of the members as the needs of the community evolve. A rule that was enacted in 1985 may no longer be a good fit for a community in 2016. Consider the “house or yard pet” provision above. In 1985 there was no dispute that chickens are not a “house or yard pet”, but in 2016 the keeping of a reasonable number of chickens as house or yard pets has almost become commonplace. If “chickens” were specifically restricted in the declaration, the board would be required to enforce that provision over the objections of the community. The poorly drafted declaration gives the board room to maneuver with the changing times. 28
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Declarations that are more precisely drafted do not allow for this rulemaking flexibility, and often leave the association stuck with outdated provisions that no longer make sense. To make the changes that could otherwise be made by a majority of the board, an amendment to the declaration is required. The proposed change must be passed by the members pursuant to the declaration’s amendment provision. In most cases, the approval of sixty-seven to seventy-five percent of the members is required for passage of an amendment. Amendments are both extremely difficult and expensive to pass, especially in communities in which the members are not actively involved. Boards may also use this rulemaking flexibility as a way to ward off litigation on controversial topics that are not clearly defined in the declaration. If the board is divided on an issue, it is likely the community is also divided. Boards should try their best to make a decision that coincides with the interests of the community. One of the most effective tools in this regard is to send out a survey. For example, consider a community where the declaration prohibits street parking, “unless there is not enough room in the driveway…” and the board understandably does not aggressively enforce against street parking. The results of the survey indicate that a significant percentage of the membership expresses an interest in more aggressive enforcement of the “no parking” provision. The board can show the results to the violators. The results legitimize the board’s enforcement actions. If challenged, a judge or a jury would consider the survey results in evaluating whether the board acted reasonably in enforcing the declaration. While vague and ambiguous provisions may be problematic, they can provide a very useful tool for the board when dealing with enforcement matters. The board may clarify and explain any ambiguous provision by adopting a rule that provides clear direction to the members, thereby eliminating any question of what is or is not a violation. The board may also amend the rules as the community’s needs evolve. Kelly Oetinger, Esq. is an associate attorney with Brown | Olcott, PLLC (“PB&J”). PB&J represents hundreds of planned communities and condominiums throughout Arizona.
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What is the End Game in Enforcement? By Lori Grove, CMCA, AMS, PCAM
What is the end game in enforcement? The immediate answer that comes to mind is to obtain compliance with the association’s CC&Rs and rules and regulations, but that’s only part of the story. The true end game is all about maintaining and enhancing a community’s property values so that people want to buy within your community. If we put the proper care into developing the rules and regulations by making sure they are firmly grounded in the CC&Rs, they benefit the community, and are easily understood, then we are well on the way to achieving the end goal. The worst way for any owner to become aware of a rule is to receive a violation letter, as this typically fosters a defensive and negative response. We want to have a high level of compliance without having to send out too many violation letters. They key to this is communication. Simply having well thought out rules is ineffective if they are not communicated to the membership. In a perfect world, all owners would review the CC&Rs and other HOA documents word by word, but we all know that doesn’t happen! In the interest of establishing a positive relationship between the HOA and its members, we need to take the extra step to educate the membership about the rules before they run afoul of them. This should be done by periodically mailing a full copy to the membership, posting them on the website (if you have one), including them in a welcome letter to new owners, and publishing explanatory articles in your newsletter. If a common issue is seen throughout the community, such as a number of homes needing to be painted, it would be appropriate to send a general notice to the membership reminding them of the need to paint, explaining the architectural approval process, including a blank 30
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architectural application, and giving them deadlines to submit their applications and have their home painted prior to any citations being issued. Of course, we will always have to deal with the minority who, for whatever reason, do not share the vision. For those individuals, the method to achieve the end game becomes less proactive and more reactive. Enforcement should be quick, consistent and applied equally to all owners in line with an enforcement policy adopted by the board and communicated to the membership. Whatever method is used to obtain compliance, there should be some flexibility allowing the person in authority to negotiate. For instance, agreeing to waive a fine if the owners brings the property into compliance by an agreed upon date, or waiving the fine if the item is corrected and no further violations are cited for a set time period. It’s not about collecting the money for a fine that has been levied; it’s about correcting the issue and keeping the property in compliance moving forward. Curb appeal is an integral part of “maintaining and enhancing” a community’s property values, and consistent enforcement is a key factor. The manner in which enforcement takes place is an intangible aspect of the curb appeal formula. It’s an aspect that should not be overlooked. Enforcement can be a polarizing part of HOA living, but it can also be a positive if done with respect.
Lori Grove, CMCA, AMS, PCAM is the Corporate VP for Total Property Management with 27 years of experience in this industry, and has been practicing in the Valley for over 10 years
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To Tow or Not To Tow??? By Brad Lundmark, CMCA
If you have ever managed a community with private streets, a private parking lot or garage, or a condominium complex, you have probably had to deal with the option of towing vehicles in one fashion or another. Towing someone’s vehicle may sound like a reasonable solution to the resident that can’t get out of their garage due to it being blocked by someone’s vehicle, the resident who’s assigned parking spot is occupied illegally by someone else’s vehicle, or the board member who is just tired of seeing someone breaking the rules. However, there are some specific steps that a community manager must take before towing someone’s vehicle. To start with, the community manager must review the association’s governing documents to see if towing is addressed. If the governing documents do address towing, what are the specific steps that must be followed in order to notify the vehicle owner of the potential tow and what timeframes must be followed? If the governing documents are silent regarding towing or if they allow it, you should always check for local city, county, or state restrictions on towing. A good resource for this is a reputable towing company that works with homeowner associations on a regular basis. The most common requirement that I have run into is that vehicle towing signs must be posted in the areas where there is potential for towing. These must be posted before it is necessary to tow someone’s vehicle. I would recommend meeting with the towing company representative on-site so they can give you their professional recommendation specific to your community. If your association does not have a towing policy in place, you should discuss the towing option with your association’s board of directors. The board of directors should sign a resolution providing the community manager with specific direction with regards to towing, i.e. notice, time period after notice, towing company who is authorized to tow, and who has authorization to have a vehicle towed. In order to reduce liability for the management company, a board member should have final authorization to direct the manager to tow a vehicle. Most people place a very high value on their vehicle either as a prized possession, a necessity for getting them to work, or transportation for emergencies and running errands. No matter what, no one is ever going to thank you for towing 32
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their vehicle or think it was a reasonable action on the manager’s part. Given the high stress towing can cause and the intense emotional reaction it will elicit from the vehicle’s owner, I would recommend the following actions be taken before you tow. (1) Place a towing violation sticker on the vehicle’s window in a spot that will not impair the driver’s ability to operate the vehicle in a safe manner and take a picture of the vehicle with the sticker attached. (2) Wait at least 24 hours to see if the owner moves the vehicle. During this 24 hour waiting period, send out an email blast notifying the residents that the vehicle is in jeopardy of being towed. (3) If the vehicle is not moved, take another picture of the vehicle after the initial 24 hours for documentation. If the vehicle is a moving van or truck, call the company and notify them the vehicle is going to be towed. They will almost always contact the responsible party and have the vehicle moved. (4) If you are going to tow the vehicle, take pictures of the entire vehicle for any visible damage. This will reduce the potential for the vehicle owner to claim the vehicle was damaged during the tow. My recommendation is not to tow someone’s vehicle unless it is absolutely necessary, your association board authorized the towing, and you have taken every alternative option available to avoid towing the vehicle.
Brad W. Lundmark, CMCA is the on-site Community Manager for Sun City Festival Community Association, managed by AAM LLC. Brad has been a Community Manager for over 10 years.
We Support The CIA.
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C o n g r at u l at i o n s Corner
AMS Designations McCormick Ranch Property Owners Association Ms. Jaime Fitzpatrick-Uhrich Mrs. Jennifer Tweedie Arizona Community Management Services, LLC Ms. Natasha Bell DMB Associates Inc Ms. Lindsay Herring Sun Lakes HOA #1, Inc. Mrs. Kelly Haynes CMCA Designations Superstition Springs CMA Ms. Candice LeBrun Associated Asset Management Mr. Brad Lundmark
as a homeowner. As a fringe benefit, the friendships gained from volunteering at special events are tremendous. I have attended most local meetings and have served on the nominating committee in 2010. I also served my HOA as a Board & Committee Member (2008-2010) and President (2009-2010). My prior professional life included being the Human Resource Director of a major asphalt company in Ohio for over 25 years. Other positions were Safety and EEO Officer, and Sales for the company. I was an Ohio Highway Patrol officer for 12 years involved in accident investigation, traffic law enforcement, inspections, and education of groups regarding highway safety. I served 14 years as City Council Member for Urbana, Ohio, participating on many committees related to city and business issues. Drafting regulations and assigning budgetary dollars were primary duties, as well as mentoring newly elected Council Members. Accounting procedures, business law and practices
CCMC Ms. Nicole Careaga
were my courses of study while attending Southwest Business College Cincinnati, Ohio. While a Highway Patrol Officer, I had frequent training, investigative and safety seminars.
LSM Designations CCMC Ms. Lisa Lundskow
As a community member, I have served on many committees for the betterment of our area, plus have continued my involvement in various fraternal organizations.
PCAM Designations Total Property Management Ms. Lori Grove
MEMBER OF MERIT
FirstService Residential Mrs. Julia Holland PMG Services Ms. Kathryn Parlette
Member has contributed extraordinary service and time to the growth of the Chapter. This award may be given to a manager or a business partner who displays integrity, reliability and the ability to interface with managers, business partners, homeowners and other industry professionals. Toni Rudolph – First Citizens Bank
The Dobson Association Mr. David Jones
Actively involved in CAI, Toni has co-chaired the Membership Committee for the past several years, and has enjoyed watching the membership grow. Banking is her second nature and she brings a wealth of knowledge from being in the industry for 30 + years.
Associated Asset Management Ms. Diana Ebertshauser CCMC Mrs. Jenna Perkins Recreation Centers of Sun City West Mrs. Cindy Knowlton
Volunteer of the Year Awards for 2015 HALL OF FAME Recognizes an individual who has significantly contributed to the overall success of CAI, its vision, goals and objectives. Who has promoted the growth of our industry, helped to educate others and is a constant champion for CAI.
Toni has been involved in the Valley with non-profit organizations for decades: Special Olympics, American Diabetes Association, The Wellcare Foundation, Father of The Year, Association for Financial Professionals and Women in Banking, to name a few. She has held several board positions including Secretary, Treasurer and Vice-President of several of them. Giving back to the community where she lives and works is important to her.
CE NT R A L A R I ZO NA CHA P T E R
Milan Carnes – Apache Wells HOA Being an active member of CAI is important to me as a homeowner because it keeps me informed of changes homeowners associations will face, and their effects on my lifestyle. It also keeps me current as to my rights and obligations 34
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Interested in getting more involved with the chapter? All of our committees welcome new members. Contact Kayte Comes at 602-388-1159 or kayte@cai-az.org.
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Annual Sponsors
CAI - Central Arizona Chapter
2016 Annual Sponsor
DIAMOND SPONSORS Carpenter Hazlewood Delgado & Bolen, PC. DLC Resources Maxwell & Morgan, PC SealMaster Arizona copper SPONSORS Vial Fotheringham LLP Lawyers GOLD SPONSORS Brown| Olcott, PLLC. Community Association Underwriters of America, Inc. Desert Classic Landscaping Metro Phoenix Bank PPG Paints Shaw and Lines, LLC Sherwin Williams SILVER SPONSORS Agave Environmental Contracting Alliance Association Bank BlueStar Landscape Burns Pest Elimination Butler Hansen, PC Caretaker Landscape & Tree Management Catalyst Computer Technologies CertaPro Painters Dynamite Paving & Sealcoat Goodwill Commercial Maintenance Gothic Landscape The Groundskeeper Integrated Landscape Management LLC Kasdan LippSmith Weber Turner LLP LetterStream, Inc. Mutual of Omaha Bank Paramount Roofing Republic Services
Vial Fotheringham Your full-service, multi-state ďŹ rm HERE TO STAY and ready to advocate for community associations
VISIT: HOAadvice.com
BRONZE SPONSORS All Rock Property Services dba ARS Builders Allied Barton Security Services CLC Enterprise Painting Ginsburg & Dwaileebe CPAs, LLP Holbrook Asphalt Co. The Travis Law Firm Ruby SPONSORS CCMC City Property Management Company FirstService Residential HOAMCO Sapphire sponsors ALPHA Community Management Brown Community Management Metro Property Services Planned Development Services Total Property Management 36
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Diamond Corner
Diamond Corner The CAI Central Arizona Chapter wants to thank our Diamond Sponsors, whose contributions assist us in preserving, protecting, and enhancing the industry. Our Diamond Sponsors contribute at the top level to our organization and are recognized in each issue by providing helpful information to our members. Carpenter, Hazlewood, Delgado & Bolen, PLC “At Carpenter Hazlewood we understand that enforcement is difficult. It can be expensive and time consuming, there are limited tools available for community associations to address violations, and most of the time these issues involve a lot of emotion on both sides of the issue. Therefore, your law firm needs to be a solution, not an additional burden. At Carpenter Hazelwood, we strive to provide unique solutions, aggressive, yet effective representation, and litigation experience that will make your community’s enforcement issues less difficult without breaking the bank.” DLC Resources “As landscapers, it’s our job to make common area landscapes look clean and polished. For many communities, common areas serve as an example for how Community Management would like resident yards to look. Enforcing resident landscape requirements becomes much more challenging when common areas aren’t kept up to the same or even higher standards. A consistently cared-for and polished common area landscape will set the right tone for homeowners and provide a consistent example of how resident yards should look.” Maxwell & Morgan, PC “One of the primary duties of a community association board is to preserve and enhance property values. Enforcement of the association’s restrictions is an important part of fulfilling this duty. Having a reasonable and flexible fine and enforcement policy, as well as educating residents on the importance of enforcement, can go a long way toward achieving the goal of enforcement while still building community.” SealMaster Arizona “Timely and effective communication is critical and enforcement measures minimized when residents understand the issue, are provided input and buy-in to the solution. Seal coating is an essential to protect and beautify your asphalt assets, but seal coating is a disruption for your residents, visitors and vendors. Make sure that you select a well-qualified contractor, the scope of work is well planned, street closures and traffic restriction notifications are posted and proper traffic controls are used. These measures, when properly communicated, will result in a seal coating experience that is completed on time, on budget, safer and with minimum disruption to your residents.”
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Call 480.634.1708 to advertise. Spring 2016
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Calendar of Events
2016 CAI-CAC Event Calendar
april 29
CAI – Central Arizona Chapter Tradeshow Location: West World, Scottsdale Presenting Sponsor: Leak Smart
MAy 4-7
CAI – Annual Conference & Exposition Location: Rosen Shingle Creek, Orlando, FL
Management at a Higher Standard! • Full Service Management
4
Best Practice Series – Asphalt, Roofing, and Engineering Location: CAI Classroom
12
PCAM Panel Discussion (Lunch) Location: FirstService Residential Classroom Sponsor: Titan Restoration of AZ
JUNE 1
Best Practice Series – Paint, Pools and Playgrounds Location: CAI Classroom
2
New Member Breakfast Club Meeting – 9 AM Location: Sherwin-Williams District Office Sponsor: Sherwin-Williams
9-10
PMDP Course M-204 Phoenix, AZ Location: Hilton Phoenix Airport 2435 S. 47th St., Phoenix
14
CAI – Central Arizona Educational Lunch – 2016 Legislative Update Location: Hilton Phoenix Airport 2435 S. 47th St., Phoenix
JULY 12
CAI – Central Arizona Educational Lunch – Drones and HOA Communities Professional Speaker: Paul Grucza, CMCA, AMS, PCAM, CWD Group, Inc. Location: Hilton Phoenix Airport 2435 S. 47th St., Phoenix
• Always Live Answering • Board Education • High Ethical Standards • Certified Managers • Flexibility in our Management Approach • Accounting Procedures Designed for Your Community
(623) 825-7777
august 12
Bingo Bash Location: Elks Lodge #335 14424 32nd St. Phoenix
For more information, visit the chapter website at www.cai-az.org or call the office at 602-388-1159. Items in red are CAI National events.
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ALPHA Community Management
www.caicommunityresource.com
Fax: (623) 561-6408 • linda@aphacommunitymanagement.com 18301 N. 79th Avenue Suite H194, Glendale, AZ 85308
www.alphacommunitymanagement.com
AAB_Innov_CAI-SOCO_Ostwinkle_QtrPg_012016.pdf 1 1/20/2016 10:11:40 PM
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