ECHO Journal - August 2013 by Echo

Choosing a Vendor

p.10

How Simple Jobs Can Get Out of Control p.16

How Good Is Your Management Company p.24

The Painful Death of Volunteerism p.30

Serving Community Associations

August 2013 echo-ca.org

ECHO San Jose 41st Annual Seminar & Trade Show page 8

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CONTENTS

8 16 This image will be replaced once we come up wtih a new solution for page 42

42 4

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Choosing a Vendor How do you go about selecting the right vendor? Although California law does not require that associations use a formal bid process, the governing documents often do specify that a certain number of bids be obtained, especially for contracts over a monetary limit. For large jobs, whether or not required by the association documents, it is always a good practice to start with competitive bidding.

How Simple Jobs Can Get Out of Control As with any job, it is important to make certain the services to be provided are necessary, that they are done in a workmanlike manner and resolve the issue at hand. Ultimately, the responsibility for this oversight falls on the association through its board of directors.

How Good Is Your Management Company? How good is your association’s management company? Are you getting the service you are paying for? Is better service available at a better price? Should you make a change? How can you tell? Unfortunately, the process of evaluating alternative managers (as well as our own) can loom as such a daunting prospect for the typical volunteer board member that the status quo may remain in place even though satisfaction with the current manager is minimal.

The Painful Death of Volunteerism The death of volunteerism in a community can almost always be traced back to the Board of Directors. Not that the Board intentionally drives away volunteers, but often Boards, or the President of the Board, make(s) the mistake of treating volunteers like employees.

The ECHO Journal is published monthly by the Educational Community for Homeowners. The views of authors expressed in the articles herein do not necessarily reﬂect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy. Copyright 2013 Educational Community for Homeowners. All rights reserved. Reproduction, except by written permission of ECHO is prohibited. The ECHO membership list is never released to any outside individual or organization. ECHO 1602 The Alameda, Suite 101 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org Office Hours Monday-Friday 9:00am to 5:00pm BOARD OF DIRECTORS AND OFFICERS President David Hughes Vice President Karl Lofthouse Treasurer Diane Rossi Secretary Jennifer Allivato

DEPARTMENTS 6

News from ECHO

ECHO San Jose 42nd Annual Seminar and Tradeshow

ECHO Event Calendar

ECHO Volunteers

(This get’s replaced with something new) Advertiser Index

ECHO Bookstore

Legislation at a Glimpse

Directors Jerry L. Bowles Stephanie Hayes Robert Rosenberg Brian Seifert Steven Weil

John Garvic David Levy Kurtis Sheneﬁel Wanden Treanor

Executive Director Brian Kidney Director of Marketing & Membership Jennifer Allivato Director of Communications Tyler Coffin Legislative Consultant Government Strategies, Inc. Design and Production Design Site ECHO Mission Statement Serving Community Associations

August 2013 | ECHO Journal

news from ECHO

ECHO San Jose 41st Annual Seminar & Tradeshow Summer is officially here! Have you signed up for our ECHO San Jose 41st Annual Seminar & Trade Show yet? The Annual Seminar is moving downtown and will be held at the newly-renovated San Jose Convention Center on Saturday, August 24th. We have prepared a variety of educational sessions to meet your ever growing HOA needs. Join us and learn about: Board Member Essentials • Putting Unity Back in Community • Your Real Job: Managing Maintenance, Repair and Replacement. • The Ticking Time Bomb • Covering Your Assets Legal • New Davis-Stirling • Legislative Update • CID Horror Stories, and How to Successfully Deal With Them. Hot Topics • Practical Maintenance • Advice from an Architect and Contractor…Together • A Guide to Handling Investment Owners Win an Apple iPad and other prizes by participating in our passport program and take advantage of the opportunity to interact with over 125 Professional ECHO members exhibiting on our trade show ﬂoor. Each exhibitor is eager to share with you new and exciting ways to improve your communities. If you haven’t signed up for ECHO San Jose yet, please ﬁll out the registration form in the ECHO Journal on page …….or visit us at www.echo-ca.org and look for the event link on our home page. All of us at ECHO are thankful for your continuing support and we look forward to seeing many of you in August for ECHO San Jose! Wishing all the best to you and yours,

Jennifer Allivato Director of Marketing & Membership

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It’s finally here. Read. Watch. Learn. Visit www.echo-ca.org today.

ECHO’s new website is up and running. For those of you who provided your email address to ECHO, you should have received instructions on how to login and take advantage of our new system. If you have not provided your email address to ECHO, here’s how you gain access to our members-only information:

If you are the president of your association… You are the “primary contact” for your association and have permission to manage your association’s members and account information. If you choose, you can designate your manager to perform these tasks. You may also assign the primary contact role to another board member in your association. If you do not already have login information, please contact ECHO and provide your email address, name, and association name. Email: newaccount@echo-ca.org Call: 408.297.3246 x21

If you are NOT the president of your association… Your association president is automatically assigned the “Primary Contact” role. Contact your president and ask them to add your email address to your account along with a temporary password. If your association president is unavailable, contact ECHO and provide your email address, name, position within the association (board member, owner, etc.) and association name. Email: newaccount@echo-ca.org Call: 408.297.3246 x21

August 2013 | ECHO Journal

41st Annual Seminar & Trade Show Saturday, August 24, 2013

Weâ&#x20AC;&#x2122;re moving the Annual Seminar downtown! ECHO is thrilled to host its 41st Annual Seminar and Trade Show, ECHO San Jose, at the San Jose Convention center. The Convention Center boasts even easier access to educational sessions, food, and public transportation. We are packing our program with essential information for board members including legal, financial, and maintenance guidance from some of the top experts in the HOA field. ECHO San Jose is the perfect opportunity to grow your network of HOA contacts: meet new professionals on the trade show floor and enjoy lunch with fellow board members (included in the cost of your ticket). 8

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Visit the ECHO website for complete event details: www.echo-ca.org/events

EVENT INFORMATION

SESSIONS

LOCATION:

BOARD ESSENTIALS

San Jose Convention Center 150 W San Carlos St., San Jose, CA 95113

• 9:00 am - 10:10 am: Putting “Unity” Back in Community Wanden Treanor, Esq.

TIME:

• 10:40 am - 12:00 pm: Practical Maintenance Dick Tippett

8:00 am to 4:30 pm

FOOD: The lunch buffet and continental breakfast are included in the price of admission.

PARKING: Parking at the Convention Center is $20. However, parking is available for $7 in the Almaden/Woz Lot across the street, located at 401 Almaden Blvd. Public transportation options are also convenient and plentiful. Please see the ECHO website for more information.

LODGING: ECHO San Jose is immediately connected to the San Jose Hilton. Mention “ECHO Annual Seminar” to get the discounted room rate of $99. Reserve your room online through the ECHO website, or call the Hilton at (877) 901-6632.

• 1:20 pm - 2:40 pm: Your Real Job: Managing Maintenance, Repair and Replacement Rob Rosenberg, CCAM, and Lisa Esposito, CCAM • 3:20 pm - 4:30 pm: ECHO Website Essentials Brian Kidney, and Tyler Coffin

LEGAL • 9:00 am - 10:10 am: Rules Sandra Gottlieb, Esq. • 10:40 am - 12:00 pm: CID Horror Stories Michael Hughes, Esq. • 1:20 pm - 2:40 pm: Major Reconstruction Tyler Berding, JD, PhD • 3:20 pm - 4:30 pm: Legislative Update John Garvic, Esq., and Kerry Mazzoni

HOT TOPICS REGISTER Members: $99, Nonmembers: $129 Registration includes lunch and access to all sessions. Register online, or return the form on this page.

• 9:00 am - 10:10 am: Ticking Time Bomb Anton Bayer • 10:40 am - 12:00 pm: Architect and Contractor Issues Dan Danmeier, Steve Saarman, and Steve Weil, Esq.

Yes, reserve ______spaces for the ECHO San Jose 41st Annual Seminar & Trade Show.

• 1:20 pm - 2:40 pm: Handling Investment Owners Ian Brown, CCAM

Amount enclosed: $__________ (attach additional names)

• 3:20 pm - 4:30 pm: Covering Your Assets Glenn Kennes, and Nico March

Name: Email Address: HOA or Firm: Address: City: State:

Zip:

Phone: Visa/Mastercard No. Exp. Date:

SPONSORS

Signature: Return with payment to: ECHO, 1602 The Alameda, Ste 101, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Telephone: 408-297-3246; Fax: 408-297-3517

August 2013 | ECHO Journal

he board has voted to move ahead on a project; now what?

Should you hire the second cousin of a member, who is starting a new construction business? Not a good idea? How do you go about selecting the right vendor?

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CHOOSING A

VENDOR B Y S H A R O N G L E N N P R AT T, E S Q

August 2013 | ECHO Journal

The Bidding Process

o start, the association’s governing documents must be consulted to determine whether competitive bidding is required. Although California law does not require that associations use a formal bid process, the governing documents often do specify that a certain number of bids be obtained, especially for contracts over a monetary limit. For large jobs, whether or not required by the association documents, it is always a good practice to start with competitive bidding. Although the “formation of contracts with third parties” is a subject for executive session, it is also wise to keep some transparency in your procedure, so that the membership will ultimately support your choice. Whether you are re-rooﬁng the entire community, or hiring a new landscaper, it is best to start with a spreadsheet format of the specs for your project. In comparing vendor prices, you want to compare apples to apples. For instance, if the board wants 5 acres of lawn mowed on a weekly basis, fruit trees trimmed at a certain time of the year, oak trees trimmed at a different time, a certain number of bulbs planted each fall, and daily watering and clean up without leaf blowers, the specs should say just that. Construction jobs may require the expertise of a construction manager or architect to develop the bid specs. Once the specs are distributed, the bidding contractors should be given a strict time deadline within which to bid. Remember that the lowest bidder is not necessarily the best choice. In fact, a particularly “low-ball” bid should heighten your radar for any reasons behind the price discrepancy. Asking those questions is an important part of your due diligence.

Competence

n addition to price, it is critical to ﬁnd out if the vendor has the proper credentials for the job. In California, a valid contractor’s license is required for any work (exceeding $500 in labor and materials) which falls under the classiﬁcations set by the California State License Board. The CSLB website should

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be checked not only for whether the license is required and active and issued in the proper name, but also for any disciplinary history. Hiring an unlicensed contractor for a job that requires licensing creates myriad risks including the high probability of a lack of insurance and bonding, no official records to check for complaints or discipline, no incentive for avoiding the loss of a license, and the fact that the vendor will automatically be considered your employee under Calif. Ins. Code § 2750.5, rather than an independent contractor. In one published case, Heiman v. WCAB (2007) 149 Cal. App. 4th 724, a $1000 gutter installation job became a million dollar liability when the vendor was electrocuted. In another

Whether you are re-roofing the entire community, or hiring a new landscaper, it is best to start with a spreadsheet format of the specs for your project. In comparing vendor prices, you want to compare apples to apples.

case, Sanders v. Cerda (2009) 175 Cal. App.4th 430, an association had to pay for work twice, because they had to pay the wages of the unpaid employees of the unlicensed contractor, although they had already paid the unlicensed contractor. Checking references is vital, and it should involve more than looking at a list. Committee or board members should make contact with the references, ﬁnd out if the work performed was similar, and whether the association is similar. Ask the hard questions about what problems came up, whether there were

change orders, and whether the job was completed on time. Sometimes checking the ﬁnancial soundness of the vendor is also necessary, especially for a construction job where deposits will be paid before work is performed. Financials and a bank reference can be requested, or a performance or payment bond (sometimes referred to as surety bond) obtained. A performance bond guarantees the satisfactory completion of a project/job. For example, a contractor causes a performance bond to be issued in favor of a client for whom the contractor is constructing a building or performing work. If the contractor fails to construct the building according to the speciﬁcations laid out by the contract or fails to perform the work as required, the client is guaranteed compensation for any monetary loss up to the amount of the performance bond. Performance bonds are commonly used where an owner wants to assure that the value of the work will not be lost in the case of an unfortunate event, such as the bankruptcy or insolvency of the contractor. A payment bond guarantees that the contractor will pay the labor and material costs which the contractor is obliged to pay. The payment bond avoids the problems accompanying a materials supplier or a subcontractor recording a mechanics lien on the property where the work is to be performed and/or the materials are to be used. The bond assures payment so that the owner of the property does not have to pay the lienholder the amount required by the recorded mechanics lien.

Independent Contractor or Employee?

s mentioned above, it is the law, rather than the label, that will determine whether a vendor is legally considered an independent contractor or an employee. An unlicensed contractor will be considered your employee. If you are creating an employment relationship, you must abide by wage/hour law as well as all other California employment statutes, provide worker’s compensation coverage and other necessary coverage, and

Remember that the lowest bidder is not necessarily the best choice. In fact, a particularly “low-ball” bid should heighten your radar for any reasons behind the price discrepancy. Asking those questions is an important part of your due diligence.

keep in mind that your association (or possibly the management company) will be vicariously liable for the acts of the employee. In choosing an independent contractor, make sure that worker’s compensation insurance is in place, as well as sufficient liability insurance.

the Written Contract

he job of choosing a vendor is not done until the written contract is negotiated and signed.

The X Factor

n addition to considering the price, the qualiﬁcations, the bonding and insurance, the contract language, and everything else mentioned above, do not discount the importance of other “X” factors that are less concrete. Is the person who is so charming in negotiating to get your business the same person who will be on site running the job? Will he or she be there to address problems that may arise? Are your phone calls promptly returned during the bidding and contract formation process? Does August 2013 | ECHO Journal

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If you are getting a “bad vibe” about a vendor during the bidding and contracting process, think twice about whether those little things that are bothering you now are warning flags of bigger problems to come.

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This well-known compact guide for the operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers. Order today from ECHO! Call 408-297-3246, fax at 408-297-3517 or visit us online at store.echo-ca.org

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the company have a long history in your community with a reputation that they will want to protect? Have you entrusted jobs to them in the past with a good outcome? Are they easy to work with in negotiating the contract? Do they promptly provide the necessary insurance documents, or do you have to chase after them for the additional insured endorsement? If you are getting a “bad vibe” about a vendor during the bidding and contracting process, think twice about whether those little things that are bothering you now are warning flags of bigger problems to come. Assuming that you have more than one vendor who meets all of the vital qualifications, and prices are within the same range, be sure to consider the “X” factors which you have noticed during the process. These can be invaluable in making the final choice. Sharon Glenn Pratt is the managing partner of Pratt & Associates in San Jose, California. She is a specialist in common interest development law and litigation, and has been practicing in the San Jose area for 25 years. She can be reached at 408-369-0800.

Monterey Educational Seminar Saturday, September 21, 2013 8:30 AM to 12:30 PM

ADDRESS Hilton Garden Inn 1000 Aguajito Rd. Monterey, CA 93940

PRICE: $59 $49 Members $69 $59 Nonmembers Prices go up after September 6!

AGENDA Weâ&#x20AC;&#x2122;re cooking up a great program for our first event in Monterey, and the last seminar for 2013! If you live on the coast and missed our Santa Cruz Educational Seminar, hereâ&#x20AC;&#x2122;s your last chance to find out the latest in HOA law and brush up on best practices before the new year. We hope you take advantage of this opportunity to meet fellow board members, and to build a strong HOA community. Watch our website for more speaker and topic announcements.

SPONSOR

August 2013 | ECHO Journal

OBS Lessons from the Field by John R. Schneider

Occasionally, the simplest undertaking can turn into an exasperating experience, especially when clear communication between parties involved has not been established. The dynamics of miscommunication often occurs during the maintenance and repair of a complex, and it is usually not recognized until a job begins to go wrong.

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Problems can develop when requests for work are not properly defined, communicated, and supervised. Yet many associations and managers forget to take simple precautions to ensure repairs are properly defined and carried out.

August 2013 | ECHO Journal

s with any job, it is important to make certain the services to be provided are necessary, that they are done in a workmanlike manner and resolve the issue at hand. Ultimately, the responsibility for this oversight falls on the association through its board of directors. This article will illustrate the need for associations and managers to understand why the work needs to be clearly defined and understood. In my work with associations I have seen numerous examples of requests for repairs turn into frustrating experiences coupled with unnecessary work, time delays and escalating costs. The reasons jobs get out of control can always be traced back to assumptions being made by both the association and the vendor and the lack of proper review and oversight of the work being requested by the association. Recently, an association decided to replace the failing address lights located on the unit garages. The job was simple enough; it basically involved the removal and replacement of the address light fixtures and connection to the low voltage wiring. In fact, the job was assumed to be so simple that the bidding contractors never looked inside the garages to verify how the address lights were connected to the electrical system. In this complex, like most, the address lights are low voltage, meaning the wiring for the lights is connected to a 12 volt transformer (wired to a 110 volt circuit) and always on. These transformers supply power to two devices, the address lights and the front door bell. The management company obtained bids from several contractors without a detailed description of the work to be done, and the bid was awarded to a general contracting firm. The general contractor proudly asserted to the association that the new address lights would be an upgrade to the existing fixtures because they were larger and illuminated with four bulbs instead of the existing two bulb fixtures. The bid for replacing 96 address lights was approximately $8,500.00.

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It is important to make certain the services to be provided are necessary, that they are done in a workmanlike manner and resolve the issue at hand.

The job was scheduled and went smoothly until half of the units were completed. Surprisingly, complaints were reported to the association that the new address lights were ďŹ&#x201A;ickering, dimming and burning out. The contractor was contacted and asked to investigate and correct the problem. At ďŹ rst the contractor thought the address lights were defective and consulted with the manufacturer. He quickly found out the light ďŹ xtures were not defective; but they were being powered by an undersized transformer. The manufacturerâ&#x20AC;&#x2122;s installation instructions clearly required the ďŹ xture to be connected to a 16 volt transformer, not to a 12 volt transformer as existed. Since the contractor did not perform a site investigation prior to bidding the job and did not review the installation instructions, he was now faced with wiring a new junction box and a new 16 volt transformer in each garage. However, not knowing how to deal with this, the association allowed the contractor to take advantage of the situation. The contractor argued that installing a transformer was not in his original contract and, that in order to do so, would require a change order. He justiďŹ ed the cost of the change order by stating purchasing new transformers and gaining access to the electrical panels to turn off the power would greatly increase his

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August 2013 | ECHO Journal

costs in performing the job. The change order was for approximately $8,000.00, almost as much as the original estimate. The contractor would not continue the job until a change order was signed and full payment was made for the light ďŹ xtures. With the work only partially done, the association felt pressured to complete the job. Not wanting to change contractors, the association agreed to the change order but did not agree to reimburse additional monies before further work was performed by the contractor. At this point the job stopped, and the contractor refused to continue. Frustrated, the association requested that I review the installation with the contractor, work out a solution, and negotiate payment owed to have the work continue. Since the old transformers were still powering the front door bells, new 16 volt transformers needed to be installed. This could easily be accomplished by tapping off the existing 110 volt circuit supplying the 12 volt transformer. The contractor agreed to perform the work in

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always be traced back to assumptions being made.

this manner, and we negotiated that he would receive partial payment once all the new transformers were ordered and delivered to the job. As it turned out, the contractor never intended to install an additional electrical outlet for the 16 volt

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transformer. Instead, he decided to install a “plug in” transformer. The manufacturer offers a “plug in” 16 volt transformer as an option for home owners who do not want to hire an electrician to wire the transformer to an electrical circuit. By using the plug in type of transformer, the contractor reasoned he could minimize his losses by not having to access to the electrical panels and not having to tap into the electrical system. Unfortunately, he never communicated the change in job scope to the association. It wasn’t until the new transformers were being installed that owners began making numerous complaints that the address lights were still not working. I was asked to come back and check the new installation and discovered unit owners were either unplugging the new transformers to get access to the garage outlet, or because the transformers were falling out or being dislodged from the electrical outlet. When the association confronted the contractor about deviating from the agreed-upon scope of work, the contractor took the position that using a plug in transformer was appropriate, and it was not his fault that the transformers were being unplugged or dislodged.

The final cost to the association was almost twice the original bid, and the association was forced to deal with delays and inconvenience.

Yet, in reality it was his fault. Industry standards require essential devices such as address lights to be continuously on in order to assist emergency responders.

So how did this job eventually work out? Initially, the address light replacement was scheduled to take one to two weeks, but it ended up taking four months to complete. Instead of accessing each unit one time, it was necessary for the contractor to schedule access to all units three times over the course of the replacement. This created a logistical nightmare. The ﬁnal cost to the association was almost twice the original bid, and the association was forced to deal with the delays and inconvenience of working with this contractor and numerous complaints from the unit owners.

Now let’s look at what the association should have done to make this work.

FIRST,

the association did not have a clear understanding of what was involved in the replacement of the address lights, nor did they prepare a clear description of the work they were requesting. The association manager merely asked the contractors for a price to “replace the existing address lights.” It was assumed that the persons bidding the work would know what to do and that the job would be done correctly. Had the association understood what was involved in changing the address lights or had the description of work included language such as, “work to match existing installation” or “according to industry standards or manufacturer’s installation instructions,” they would have limited liability.

SECONDLY,

someone should have checked the licenses of the contractors bidding work. Doing so is as simple as making a phone call to the Contractors State License Board or going to their website. In this case, the contract was awarded to a general contractor who was technically not licensed to perform just electrical work (installing the address lights). Contractor License Law states that a general contractor can only do work involving more than two trades. Technically, this job should have been

August 2013 | ECHO Journal

Someone should have checked the licenses of the contractors bidding work. Doing so is as simple as making a phone call to the Contractors State License Board.

performed by a licensed electrical contractor and not a general contractor.

THIRDLY,

An electrical contractor would have known to check what type of power supply was needed for the new address lights before even bidding the job.

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the work was not walked or reviewed with the contractor prior to the start of the job. Reviewing the work to be performed on a site walk with the contractor and representative for the association is a good opportunity to generate a clear understanding of what needs to be done, and how work will be performed. A site walk should be performed on every job requestâ&#x20AC;&#x201D;large or small. Associations and managers can best protect themselves from unwanted surprises by consulting with a construction specialist, project manager or architect to review the work to be done on a complex and to create an appropriate description of the work along with general expectations of the association. This is often done in the form of a request for proposal (RFP). Spending a few hours with a construction professional prior to starting any job has the potential of substantial cost savings and reduction in avoidable delays during the repairs or maintenance to a complex. Associations and management companies should be developing relationships with

Whether the job is big or small, make sure you and the vendor understand what is to be done and what it will cost.

construction specialists, tax advisors, and attorneys when any work is being planned or funds are to be spent. These professionals can answer questions, review documents, anticipate problems and provide advice and assistance

necessary to make sure you are getting what you want and need. As simple as these steps sound, they work and can limit liability exposure for boards and associations. Whether the job is big or small, make sure you and the vendor understand what is to be done and what it will cost. It’s always easier to resolve questions and uncertainties before work begins. John R Schneider is a licensed general building contractor and certified code specialist. Since 1985, he has been president of All About Homes, Inc., an East Bay consulting company that specializes in the investigation of construction related deficiencies, the management of projects, and the facilitation of disputes between owners, associations, and vendors. Mr. Schneider is a member of the ECHO Maintenance Panel. Questions can be directed to Mr. Schneider at jrschneider@allabouthomes.com. © 2011, by John R. Schneider, all rights reserved.

9 ĞƚĂŝůĞĚ ŽŶͲƐŝƚĞ ŝŶƐƉĞĐƚŝŽŶƐ͕ ŝŶǀĞŶƚŽƌŝĞƐ ĂŶĚ ĐŽŵƉŽŶĞŶƚ ĚĞƐĐƌŝƉƚŝŽŶƐ 9 DĞĞƚƐ Žƌ ĞǆĐĞĞĚƐ Ăůů ƌĞƋƵŝƌĞŵĞŶƚƐ ĂŶĚ ĚŝƐĐůŽƐƵƌĞƐ ŽĨ ĂůŝĨŽƌŶŝĂ ŝǀŝů ŽĚĞ ϭϯϲϱ 9 ϯϬ ǇĞĂƌ ĨƵŶĚŝŶŐ ŵŽĚĞů ƉƌŽũĞĐƚŝŽŶƐ 9 /ŶĐůƵĚĞƐ ĐŽůŽƌ ƉŚŽƚŽƐ ŽĨ ĐŽŵƉŽŶĞŶƚƐ 9 Ϯϭ ǇĞĂƌƐ ŽĨ ƌĞƐĞƌǀĞ ƐƚƵĚǇ ĞǆƉĞƌŝĞŶĐĞ

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HOW GOOD IS YOUR MANAGEMENT COMPANY? A Board Member’s (and Management Professor’s) Perspective by Stan Malos, J.D., Ph.D.

August 2013 | ECHO Journal

How good is your association’s management company? Are you getting the service you are paying for? Is better service available at a better price? Should you make a change? How can you tell?

hese questions probably concern board members more often than we’d care to admit. Unfortunately, the process of evaluating alternative managers (as well as our own) can loom as such a daunting prospect for the typical volunteer board member that the status quo may remain in place even though satisfaction with the current manager is minimal. Fortunately, ECHO provides a resource to guide the process that can help associations choose better new managers, as well as improve working relationships with current ones. Having just gone through the process, I strongly recommend that you evaluate your management company’s performance even if you are not currently contemplating a change! Our association recently selected a new company using ECHO’s “Board Member’s Guide For Management Interviews” (hereinafter “the Guide”). We found the Guide invaluable. The Guide contains a set of structured questions for systematically comparing management companies on dimensions including how meetings are conducted, how records are kept, how rules and regulations are enforced, how budgets and ﬁnances are handled, how maintenance is managed, how costs are assessed, and other important matters. How to apply these criteria in practice, however, is left up to you. I therefore wanted to share some practical suggestions from our

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experience that hopefully will make the process a bit less intimidating. Although some of these suggestions may seem obvious, you might be surprised at the differences you can detect among current and potential new managers by following these tips:

Survey your homeowners Under typical governing documents, the board of directors has sole discretion to choose management and will maintain primary contact with the management company. Nonetheless, homeowners can have excellent (and often eye-opening) information as to how management responds to work order requests, complaints, emergencies, and other matters within the scope of your management contract. While our new management company makes it a policy to “treat every homeowner as if he or she is a potential future board member,” we found a surprising level of dissatisfaction with our former company in terms of courtesy, professionalism, and responsiveness to homeowner requests. Many homeowners gratefully thanked us for seeking their input, and several told us they had given up even trying to contact the manager because they had been treated rudely or their calls were never returned.

Call around You would be amazed at what you can ﬁnd out just by making a phone call to a management company. Are you greeted promptly and courteously by a human being, or are you shunted immediately to an impersonal, confusing mechanical call-forwarding system that only a mind reader could decipher? Can several other people in the company office knowledgeably handle an inquiry if your manager is not in, or do you have to leave a message for a particular individual in a bursting or already full voice-mail box?

Solicit bids that address ECHO’s criteria in writing We found it extremely helpful and time-saving to ask for formal bids that explicitly address the comparison criteria set forth in the Guide. In addition to determining whether or not a company is even familiar with ECHO’s criteria (a bad sign if they’re not!), this practice allowed us to eliminate from consideration immediately companies that did not provide the full array of services we desired (e.g., those that out-sourced their ﬁnancial, accounting, or bookkeeping functions), and to narrow the focus of inquiry for personal interviews with ﬁnalists.

Visit the offices of your ﬁnalists Although professionalism (or lack thereof ) can manifest itself in many forms, a cluttered, disorganized office staffed by harried, overstressed personnel can mean that the company fails to select, train, or support its

Homeowners can have excellent (and often eye-opening) information as to how management responds to work order requests, complaints, emergencies, and other matters within the scope of your management contract.

employees well enough to fulﬁll effectively its management obligations. Even if you don’t have time to drop by during normal business hours, a weekend visit still can be telling. Are there stacks of unopened boxes of client documents strewn around the office? Although the ability to attract new clients may be a good sign, poorly managed growth can leave your association just one of many voices crying out for its management services. Be especially wary of overly slick marketing, which can suggest that a company pays greater attention to increasing its revenues than to upgrading the systems needed to deliver adequate customer service to a potentially overgrown client base.

Ask to see them handle a homeowner inquiry, complaint, or request Just having the company walk through their procedures for dealing with violation notices, delinquency collections, and other day-to-day management issues can show you a lot. How readily can management personnel answer routine (and not-so-routine) questions? Wouldn’t you rather know how the company operates now than

after their ineffective handling of such matters costs your association time, money, and aggravation?

Ask to see them demonstrate their computers and information systems We were extremely impressed with our new company’s state-of-the-art relational database system that allows anyone in their office handling a phone inquiry to access relevant information promptly by name, unit address, or other indices, and to update records such as tenant lists or work order progress on an ongoing, real-time basis. Particularly in the Silicon Valley region, where access and exposure to the latest technological tools are virtually a given, management companies should be expected to adopt these tools to optimize service delivery. A company that clings to outmoded computer or paper-based systems may be unwilling or unable to invest in the resources necessary to fulﬁll adequately its management obligations, relying instead on homeowner ignorance, apathy, inertia, or unwillingness to compare alternatives in order to hang on to its clients.

Ask for follow-up information and see how soon you get it Information pertaining to educational background, professional certiﬁcation, training and experience, current client lists, references, and resumes of key personnel can provide critical insights into whether a new company will be likely to provide the improved service you are looking for. Equally telling is the responsiveness and timeliness of their follow-through; if it takes forever to get what you need when they are trying to sell you on their services, doesn’t it seem unlikely they will do any better once you are already on board as a client?

Ask about the proposed level of on-site presence We were further impressed to find that our new company’s proposal included a minimum of four on-site inspections and walk-throughs of our association’s property per month! We were equally unimpressed to find that one of our finalists had not even bothered to visit our property before submitting their bid! Again, if a company’s commitment to hands-on management is lacking while they fish for your business, it can hardly be expected to improve after they “hook” you.

Ask about possible discounts to initial fee proposals Although a superior company may at ﬁrst appear to cost more than the August 2013 | ECHO Journal

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companyyou are now using, it may be able to offer sizable discounts on any number of items. For example, our new company was able to afford us a substantial saving because we use coupons for dues rather than monthly statements, a discount that brought their bid from slightly more than we had been paying to considerably less. They also offered favorable terms on expenses such as copying, mailing, and related costs that, although nominally minimal, can â&#x20AC;&#x153;nickel and dimeâ&#x20AC;? you for a fair amount.

Ask about transition planning Our new company was both willing and able to get a major head start on inputting our homeowner mailing list, governing documents, and related items into their database system in order to facilitate a smooth transition within the shortest possible time period. This greatly increased our overall transition comfort level--and without the extra start-up fees that some companies may charge.

It is literally impossible to overstate the importance of references, both in the initial stages of determining from whom you will seek bids and in choosing among finalists.

References, references, references! It is literally impossible to overstate the importance of references, both in the initial stages of determining from whom you will seek bids and in choosing among ﬁnalists. Ask your insurance professionals, attorneys, maintenance contractors, landscapers, and other service providers which companies they like to deal with. If a management company is slow getting these contractors information or documentation that they need to do their job for you, chances are the same will be true when you need something, thereby creating a doubly negative impact on your ability to run your association effectively. Above all, be sure to contact other associations currently managed by the companies you are evaluating! Is the company you are considering about to be replaced by dissatisﬁed clients? Shared experiences among homeowners and their board members can be the richest source of information for warning you of potentially disastrous managers, and for steering you toward one with whom you can work effectively now and for the foreseeable future.

Keep the relationship at arm’s length Finally, although smooth working relationships with managers are essential, it is best to maintain full board control over association operations, including the right to change management companies if that should become necessary. Be extremely cautious when it comes

to contract clauses (e.g., complicated termination provisions) or ﬁnancial practices (e.g., direct payment of management fees via bank fund transfers) that limit accountability or otherwise give a manager undue power over the association. We found ourselves greatly burdened by a confusing, ambiguous, and outdated termination notice provision (drafted by our former company) that delayed by almost 90 days our switch to the management company we wanted to work with; meanwhile, the former company continued to pay itself out of our funds through use of an ill-advised direct transfer authorization executed by a prior board. Expect most reputable companies to use some form of a standard industry contract approved by the California Association of Community Managers (CACM); check with CACM or your legal counsel before entering into an agreement about which you have doubts. Our attorneys also suggest having your insurance professional write a ﬁdelity bond that will cover you against the possibility that an employee of the management company improperly makes off with association funds.

Conclusion The time-honored adage, “Marry in haste, Repent at leisure,” remains as valid as ever--whether in reference to relationships with people or relationships with management companies. Although it can take a fair amount of time and effort to conduct the sort of thorough evaluation described above, doing so can be critical to establishing an effective working relationship with your current or a new management company. Failure to do so can allow managers to become

ECHO provides a resource to guide the process that can help associations choose better new managers, as well as improve working relationships with current ones.

complacent (e.g., “We don’t care; we don’t have to.”), while comparisons make managers aware that they remain in ongoing competition with other potentially superior service providers. The results can include improved, more accountable, more service-oriented, and more cost-effective management, as well as more satisﬁed homeowners and greater board member peace of mind. In fact, we have indeed audited our ongoing management relationship regularly from time to time, and did change companies a few years after this article was originally written by applying the principles discussed above, and have chosen to remain with our current company since then for almost 12 years notwithstanding interim comparisons and audits. That said, shouldn’t you consider evaluating your management company? Stan Malos is Professor of Management and Human Resources at San Jose State University, and serves as a Director of Judro Manor Homeowners Association, San Jose, CA, a member of ECHO. This article was originally written and published in the ECHO Journal in 1998, updated by the author. August 2013 | ECHO Journal

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The Painful Death of Volunteerism By Julie Adamen

any communities, if not most communities, suffer from a lack of volunteers. People are busier than ever, and their time is precious. After a full day’s work, it seems like

a real waste of that precious time to s pend it at a stuporous Board or Committee meeting. The result is that year after year, Boards discover they can’t ﬁnd anyone to take their place on the Board, or on one of their committees. The result: Communities end up being managed by a small group of the same folks for a very long time.

August 2013 | ECHO Journal

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etting aside the â&#x20AC;&#x153;busyâ&#x20AC;? factor â&#x20AC;&#x201C; why are we losing volunteers? Â Well, from where I sit as a Board member on my own association, and as a former manager and current consultant, the death of volunteerism in a community can almost always be traced back to the Board of Directors. Not that the Board intentionally drives away volunteers, but often Boards, or the President of the Board, make(s) the mistake of treating volunteers like employees. By that I mean handling the volunteers as if s/he is being remunerated in cash for their hours of work. Thus, the Board doesnâ&#x20AC;&#x2122;t put a lot of thought in to nurturing the volunteer, placing them in the right position, listening to their contribution, allowing them to take initiative or acknowledge their input.Â Bottom line: This just doesnâ&#x20AC;&#x2122;t work because volunteers receive their remuneration through satisfaction of participating in the process, not in a paycheck. In fact, itâ&#x20AC;&#x2122;s that lack of satisfaction, that frustration, that ends volunteerism, one by one, person by person. Â Letâ&#x20AC;&#x2122;s break that end down to the elements. Then letâ&#x20AC;&#x2122;s talk about how to ďŹ x it.

IGNORING VOLUNTEER INPUT If I had to name the number one killer of volunteerism, it would be Boards who ignore the input of their volunteers â&#x20AC;&#x201C; be they individual Board members or committee members. Now, in our business we all know that some committees are appointed just to keep the â&#x20AC;&#x153;squeaky wheelsâ&#x20AC;? busy (the â&#x20AC;&#x2DC;ad-hoc folks), but even their input must not be ignored. The reason I believe this happens is that many Board are under the false belief that acknowledging the input of volunteers means 1) The Board agrees with the input and 2) the idea must be implemented.

WRONG and WRONG AGAIN.

T SCAN QR CODE FOR MORE INFO

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he input of any volunteer â&#x20AC;&#x201C; Board member or committee member â&#x20AC;&#x201C; is just that: Input. That input does not have to be agreed with or followed, but it must be acknowledged. Â If itâ&#x20AC;&#x2122;s not, donâ&#x20AC;&#x2122;t be surprised when the volunteer refuses to take on another task, or take

it on and produce results reluctantly, or even resigns. By not acknowledging previous input, the Board sets the volunteer up for serious frustration, even anger. Worse yet, the Board sets itself up for future failure with that volunteer â&#x20AC;&#x201C; and maybe others. Who loses? The community.

MICROMANAGING Community managers know all about micromanagers, because weâ&#x20AC;&#x2122;ve all had one (or more!) with whom weâ&#x20AC;&#x2122;ve had to deal. Nothing is more miserable than working for a micromanager, except maybe being micromanaged as a volunteer. Boards or Board members, often at a loss on how to operate within the community association structure, will try to keep a hand in everything in an attempt to understand or keep track of whatâ&#x20AC;&#x2122;s going on. Unfortunately, this usually leads to the micromanager not really knowing whatâ&#x20AC;&#x2122;s going on at any one time because there is too much of which to keep track. Those charged with a particular discipline â&#x20AC;&#x201C; the landscape committee, for example â&#x20AC;&#x201C; donâ&#x20AC;&#x2122;t appreciate being undermined by a micromanaging Board President who calls the contractor to make sure the information the committee presented is â&#x20AC;&#x153;correct.â&#x20AC;? Now things start falling through the cracks â&#x20AC;&#x201C; because the committee takes on a â&#x20AC;&#x153;Why bother?â&#x20AC;? attitude, and rightly so. Focused on detail in a misguided attempt at control â&#x20AC;&#x201C; or a misguided attempt to feed an ego â&#x20AC;&#x201C; micromanagers will either stop volunteerism in its tracks every time or foster sabotage as revenge. Either way, the community at large is the loser.

Note to Boards: If you donâ&#x20AC;&#x2122;t trust your volunteer committee members, get new ones.

LACK OF (TIMELY) FOLLOW UP Like it or not, if you are on a Board of Directors, especially if you are the President, you are going to be the de facto leader of the community. This means fellow Board members, Committee members and homeowners

are going to phone or email you individually or as a group, looking for direction, absolution, leadership, or use you just as a sounding board (no pun intended). This also means when you take on one of these roles, you must, must, must answer email, return phone calls and make personal visits in a timely manner. Not doing so makes volunteers feel as if their input is worth little to nothing, and send homeowners over the edge. Get over it, follow up and get used to it. Who wins? The community.

APPOINTING PEOPLE TO POSITIONS THAT ILL-SUIT THEM

Technology Meets Personal Service Grayson Community Management provides personalized management for your association. Connecting homeowners and board members using today’s technology and yesterdays’ traditional care.

Appointing people to positions that ill-suit them. In business, we wouldn’t dream of hiring a plumber to replace the roof, or a podiatrist to perform a root canal. Yet many times Boards recruit and appoint people for volunteer positions (assuming here that there are volunteers to choose from) without taking in to account whether or not that person has the required skill or knowledge base, whether or not their personal attributes will be a hindrance or an asset, and whether or not that person can commit the time involved in the volunteer position. In other words, Boards will have a tendency to appoint any port in storm, without making sure that person is suited to that position. If a person lacks leadership skills, or dislikes dealing with the membership, being President of the Board probably isn’t the best place for him/her, but that doesn’t mean s/he shouldn’t be on the Board where they can make a valuable contribution. Congruently, if you have a skilled ﬁnancial analyst, you would appoint them Treasurer, taking advantage of the expertise they bring to the organization. Anytime it’s possible, Boards and their management staff should try to match the volunteer’s strengths with position best suited for them. It’s win-win: The volunteer feels needed and able to contribute to the greater good, isn’t frustrated and the community reaps the beneﬁts of a member’s unpaid expertise.

Contact GCM to discuss your management needs.

GRAYSON

COMMUNITY

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(888) 277-5580 graysoncm.com helpdesk@graysoncm.com

Offices in Santa Clara, San Mateo and San Francisco

Avoid the confusion of construction defects Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process. Order from ECHO! Call 408-297-3246 Fax 408-297-3517 store.echo-ca.org

Community Association Financial Serving Northern California since 1989

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UNPRODUCTIVE MEETINGS

ADOPT GOVERNING POLICIES

It is my experience that meetings can take on a life (death?) of their own for one of three reasons, or a combination of all:

All Boards should adopt a governing policy, or a method of standardized operation. For example, adopting Roberts Rules of Order prevents disorganized, long and unproductive meetings and gives Boards a tried and true platform on which they can hold effective meetings. Adopting further policies or methods of operation delineating responsibilities and accountability will keep the Board even more focused and organized.

A B C

We don’t have enough information at hand on which to make a decision, or We are afraid to make a decision, or We just like to pontiﬁcate

How many meetings have managers, Board members and committee members sat through with their eyes rolling back in their heads, waking up only to check their watch every ten minutes? ALL OF US. The problem is, some of us don’t know that we are the cause of those never-ending meetings because we don’t want to admit that we don’t know what we don’t know. Endless debate over meaningless minutia or non-agenda items doesn’t change that fact, so, get the facts you need prior to the meeting. This will help your Board or committee make timely decisions. In addition, all meetings, even committee meetings, should have an agenda. Speak only to those items on the agenda, those not on the agenda go under New Business at the next meeting. Period. Unproductive, long – and, well, stupid – meetings kill volunteerism. Unproductive, long and stupid NIGHT meetings kill it even faster.

THE FIX! The good news is, volunteerism can be saved, resurrected and thrive with a few simple operational tools the Board can adopt.

ADOPT A MISSION AND VISION STATEMENT Adopting a Mission Statement and a Vision Statement give the Board (and community) focus on where they want to go and how they will get there.

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Boards, or the President of the Board, make(s) the mistake of treating volunteers like employees.

ADOPT POLICIES GOVERNING COMMITTEE OPERATIONS All Boards should give their committees a standardized guideline on how the committee is expected to conduct itself in relation to committee meetings, and on to interact with management the Board and owners.

CONDUCT ANNUAL STRATEGIC PLANNING Board, along with their committees should conduct annual strategic planning sessions and set Goals and Objectives for the coming year. Sounds cumbersome, but it is surprising how many more goals are achieved once there is established yearly accountability and review. Annual Strategic Planning conducted by an impartial third party can save Boards and Committees hours of volunteer time over the course of a year by giving the entire volunteering

Why do we want volunteers for our communities? Not only because associations could not function without their volunteers, but because promoting and nurturing volunteerism encourages process participation, develops unity and community pride.

entity (and staff ) clear direction on which goals are important to achieve on behalf of the community.

ACKNOWLEDGEMENT: LONG AND LOUD AND PUBLIC At every turn, the Board must, must, must acknowledge its volunteers and their hours of hard work and service. In newsletters, in person, at meetings, on the website, it is the responsibility of the Board, and in particular incumbent upon the President, to “spin the halos” of each and every one of those valued team members who work for the common goal of the betterment of the community. This continual acknowledgment shows a ﬁrm commitment on the part of the Association to its volunteer staff, without whom any one left would be doing a lot more work. Acknowledge those volunteers long, loud and publicly.

WANT TO FOSTER NEW VOLUNTEERS? PROVIDE OUTSTANDING, POSITIVE COMMUNICATION WITH ALL OWNERS Most Board members are happy to serve their terms, but want to be able to turn the reins over to other qualiﬁed members when the time is right. Another way to foster volunteerism is to continually publish positive communication with the membership as a whole. This means a monthly newsletter that is more than “Don’t park here!” and “Pick up after your dog!” because Good News Means Good Morale! There are several

newsletter services out there that specialize in associations that can, for a very reasonable price, produce professional newsletters for your communities. Remember, where there is a communication vacuum, it will be ﬁlled with rumor and innuendo which grows exponentially at cocktail time. Continual positive communication from the association fosters volunteerism. People want to contribute to a positive, forward moving entity. Be and project that image – and they will come. Why do we want volunteers for our communities? Not only because associations could not function without

their volunteers, but because promoting and nurturing volunteerism encourages process participation, develops unity and community pride. Not to mention it provides cost-effective services to the community. Maybe most importantly, it is a doorway to new Board members. Boards of Directors must remember that volunteers are not employees, and cannot be treated as if they receive a paycheck for their hard work. Boards must realize that volunteers, while giving to the community should be receiving something in return: A feeling that they are a welcomed and appreciated part of the process. Indeed, that is the very essence and intent of a community association: To be governed by volunteers for the greater good of all. Julie Adamen is the President of Adamen Inc., a consulting and placement ﬁrm specializing in the community management industry. She can be reached through her website, www.adamen-inc.com or via email at Julie@adamen-inc.com.

Find the Answers to your Questions on Condo Ownership An excellent guide to understanding the rights and responsibilities of condo ownership and homeowner associations operation. The questionand-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.

Order from ECHO! Call 408-297-3246 Fax 408-297-3517 Online: store.echo-ca.org

August 2013 | ECHO Journal

directory updates

All current listings may be found in our Professionals Directory available online at www.echo-ca.org.

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Become an ECHO Professional Member and receive the benefits of membership. To learn more, visit our membership page at www.echo-ca.org

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ECHO event calendar

RESOURCE PANEL CALENDAR Wednesday, August 7 Maintenance Resource Panel 12:00 Noon ECHO Office, 1602 The Alameda, Suite 101, San Jose

Tuesday, September 10 Central Coast Resource Panel 12:00 Noon Michael’s On Main, 2591 S Main St., Soquel

Thursday, October 17 Legal Resource Panel 6:30 p.m. Porterhouse, 60 E 3rd Ave, San Mateo

Friday, August 9 East Bay Resource Panel 12:00 Noon Massimo Restaurant, 1603 Locust St., Walnut Creek

Wednesday, September 18 Wine Country Resource Panel 11:45 a.m. Serv-Pro, 373 Blodgett St., Cotati

Thursday, November 7 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse, 400 Yosemite Dr, San Rafael

Wednesday, August 14 South Bay Resource Panel 12:00 Noon Buca Di Beppo, 1875 S. Bascom Ave., Campbell

Wednesday, October 2 Maintenance Resource Panel 12:00 Noon ECHO Office, 1602 The Alameda, Suite 101, San Jose

Monday, November 11 Accountants Resource Panel 6:00 p.m. Scott’s Seafood, 2 Broadway Oakland

Wednesday, August 21 Wine Country Resource Panel 11:45 a.m. Serv-Pro, 373 Blodgett St., Cotati

Wednesday, October 9 South Bay Resource Panel 12:00 Noon Buca Di Beppo 1875 S. Bascom Ave., Campbell

Tuesday, November 12 Central Coast Resource Panel 12:00 Noon Michael’s On Main, 2591 S Main St., Soquel

Thursday, September 5 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse, 400 Yosemite Dr, San Rafael

Friday, October 11 East Bay Resource Panel 12:00 Noon Massimo Restaurant, 1603 Locust St., Walnut Creek

Wednesday, November 20 Wine Country Resource Panel 11:45 a.m. Serv-Pro, 373 Blodgett St., Cotati

Monday, September 9 Accountants Resource Panel 6:00 p.m. Scott’s Seafood, 2 Broadway Oakland

Wednesday, October 16 Wine Country Resource Panel 11:45 a.m. Serv-Pro, 373 Blodgett St., Cotati

REGULARLY SCHEDULED RESOURCE PANEL MEETINGS PANEL

MEETING

LOCATION

Maintenance

First Wednesday, Even Months

ECHO Office, San Jose

North Bay

First Thursday, Odd Months

Contempo Marin Clubhouse, San Rafael

East Bay

Second Friday, Even Months

Massimo Restaurant, Walnut Creek

Accountants

Second Monday, Odd months

Scott’s Seafood Restaurant, Oakland

Central Coast

Second Tuesday, Odd months

Michael’s On Main, Soquel

South Bay

Second Wednesday, Even Months

Buca Di Beppo, Campbell

Wine Country

Third Wednesday, Monthly

Serv-Pro, Cotati

Legal

Quarterly

Varies

August 2013 | ECHO Journal

ECHO honor roll

ECHO HONORS VOLUNTEERS ECHO Resource Panels

Regional Seminar Speakers

Deon Stein, Esq. Wanden Treanor, Esq.

Accountant Panel Marco Lara, CPA 650-632-4211

Marin David Feingold, Esq. Wanden Treanor, Esq. Glenn Youngling, Esq.

Hot Topics Tyler Berding, Esq. Alan Crandal Stephanie Hayes, Esq. David Kuivanen John Schneider

Central Coast Panel John Allanson 831-685-0101 East Bay Panel Beth Grimm, Esq. 925-746-7177 Cindy Wall, 925-830-4580 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Brian Seifert 831-708-2916 North Bay Panel Diane Kay, CCAM 415-846-7579 Stephany Charles, CCAM 415-458-3537 South Bay Panel George Engurasoff 408-295-7767 Wine Country Panel Pam Marsh 415-686-9342 Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.

San Francisco Steve Weil, Esq. Santa Cruz Lisa Esposito, CCAM Sharon Pratt, Esq. Rob Rosenberg, CCAM Paul Schultz Rosalia Tapia, Esq. Wine Country Carra Clampitt Bill Gillis, Esq. David Hughes Ken Kosloff Tom O’Neill Steve Weil, Esq. South Bay Derek Eckert Stephanie Hayes, Esq. Robert P. Hall Jr., Esq. Fresno Geri Kennedy David Levy, CPA Michael J. Hughes, Esq. Walnut Creek Stephanie Hayes, Esq. Lisa Esposito, CCAM Rob Rosenberg, CCAM Beth Grimm, Esq. ECHO Oakland Speakers April 6, 2013 Board Essentials Ian Brown Derek Eckert Geri Kennedy Ken Kosloff David Levy, CPA Steve Weil, Esq. Legal Jeffrey Barnett, Esq. Kevin Canty Sandra Gottlieb, Esq. Julie Mouser

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Recent Contributing Authors March 2013 Tom Fier, Esq. Paul Schultz, CIC, CLIA, CLT-E Deon R. Stein, Esq. Amy K. Tinetti, Esq. April 2013 Robert Aune Stephany Charles, CCAM Beth Grimm, Esq. Diane Kay, CCAM Hannah Skiles May 2013 Tyler Berding, PhD, Esq. Julia Hunting, Esq. Jeffrey Barnett, Esq. Ann Thomas Sherry Harvey, PCAM June 2013 Brian Kidney ECHO Maintenance Resource Panel Sandra Gottlieb, Esq. Alexander Noland, Esq. Tracy Neal, Esq. Stephanie Hayes, Esq. Richard Tippett Tyler Berding, JD, PhD David Levy, CPA July 2013 Anton Bayer, CFP Beth Grimm, Esq. Dave Phelps, ASLA, ISA Judy O’Shaughnessy Michael Petite

Sacramento Educational Seminar Saturday, September 7, 2013 8:30 AM to 12:30 PM

ADDRESS

AGENDA

Westin Hotel 4800 Riverside Blvd. Sacramento, CA 95822

Deon Stein, Esq. Adam Haney, CPA William Erlanger, CPA Ian Brown, CCAM

PRICE:

Join us at our first-ever Sacramento Seminar and get expert legal guidance, financial tips, and more. The Sacramento Educational Seminar is the perfect opportunity to meet fellow board members, strengthen your community, and reduce your associationâ&#x20AC;&#x2122;s liability. Watch our website and the ECHO Journal for more speaker and topic announcements.

$59 $49 Members $69 $59 Nonmembers Prices go up after August 23!

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2013 ECHO educational calendar

ECHO Seminars Now there’s one near you. Santa Rosa

Only three Educational Seminars remain for 2013, including our signature Annual Seminar and Trade Show: ECHO San Jose. Don’t miss an opportunity to get the education you need with guidance from some of California’s top HOA attorneys and professionals.

Sacramento

Marin Walnut Creek Oakland San Francisco

San Jose

Aug. 24

Sep. 7

ECHO San Jose Annual nual Semina Seminarr show and Tradeshow

Sacramento Educational Seminar (see page 39)

(see page e 8)

Campbell Santa Cruz

Fresno

San Jose e er, San Jose Convention Center,

Sep. 21 Monterey Educational Seminar (see page 15)

Westin Hotel, Sacramento

Monterey

Hilton Garden Inn, Monterey

August 2013 | ECHO Journal

he Nominating Committee for the ECHO Board of Directors is seeking expressions of interest from persons who are interested in serving on the ECHO Board of Directors. Four positions on the board will be up for election at the ECHO Annual Meeting that will be held in November. These positions are for three-year terms. Current directors whose terms expire in 2013 are John Garvic, David Levy, Karl Lofthouse and Wanden Treanor. Board members are expected to attend four three-hour board meetings held each year, generally at the ECHO office in San Jose. Each board member also serves on one or more committees that hold regular meetings

echo-ca.org

throughout the year. In addition board members are expected to attend the Annual Meeting and a two-day board retreat each November. Board members receive no reimbursement for these activities. Nominees must also be members of ECHO, either through their homeowners association or business and have thorough familiarity with the organization and the CID industry. Persons interested in being considered for nomination should obtain and complete a nomination and qualiďŹ cations form, available by request from the ECHO office. Every potential candidate, including incumbents, must submit a full form. All completed forms must be submitted to the ECHO office no later than July 24, 2013, to be considered by the nominating committee. Those requesting nomination may be requested to interview with the nominating committee. The committee will meet in late July to prepare recommendations for board consideration.

advertiser index

about ECHO

Ace Property Management ........................ 28 www.acepm.net

R.E. Broocker Co. ........................................ 28 www.rebroockerco.com

WHAT IS ECHO?

American Management Services .............. 21 www.amspcam.com

RealManage ................................................ 20 www.realmanage.com

Serving Homeowners to Build Strong Community Associations

Angius & Terry .............................................. 3 www.angius-terry.com

Rebello’s Towing ......................................... 40 www.rebellos.net

Applied Reserve Analysis .......................... 23 www.ara-llc.com

Saarman Construction ............................... 13 www.saarman.com

A.S.A.P Collection Services ....................... 23 www.asapcollect.com

Steve Tingley Painting, Inc. ....................... 47 www.tingleypainting.com

Berding|Weil .............................................. 48 www.berding-weil.com

The Educational Community for Homeowners (ECHO) is a nonproﬁt membership corporation dedicated to assisting California homeowner associations. ECHO provides help to homeowner associations on many fronts: ﬁnances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, online education, a monthly full-color magazine and discounted publications.

Cityscape Property Mgmt .......................... 13 www.cityscapeHOA.com

Who Should Join ECHO?

Association Reserves ................................. 33 www.reservestudy.com Benjamin Moore Paint & Company .......... 28 www.benjaminmoore.com

Collins Management .................................. 36 www.collins-mgmt.com Community Association Financial ........... 33 www.HOAsManagement.com Compass Management .............................. 23 www.gocompass.com Condominium Financial Management .... 32 www.condoﬁnancial.com

If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the beneﬁts designated for homeowner associations.

Benefits of Association Membership

Ekim Painting ............................................. 18 www.ekimpainting.com

• Subscription to monthly magazine • Access to members-only online education • Updates to the Association Statute Book • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento

Eugene Burger Management Co. .............. 22 www.ebmc.com

ECHO Membership Dues

Cool Pool Service ........................................ 14 Cornerstone Community Management.... 18 www.cornerstonemgt.biz

M&C Association Management Services ... 2 www.mccommunities.com

Association Membership 2 to 25 units ...................................$120 26 to 50 units .................................$165 51 to 100 units ...............................$240 101 to 150 units .............................$315 151 to 200 units .............................$390 201 or more units ..........................$495 Professional Membership ................$425 Association Management Membership.......................................$425 Individual Membership ....................$100

The Manor Association .............................. 34 www.themanorassn.com

How Do You Join ECHO?

First Bank .................................................... 19 www.ﬁrstbankHOA.com Grayson Community Management........... 33 www.graysoncommunitymgmt.com Haney Accountants, Inc ............................ 36 www.haneyinc.com Helsing Group, The..................................... 23 www.helsing.com

Max M. Ranjbar .......................................... 14 www.ranjbarcpa.com Mutual of Omaha Bank ............................. 20 www.mutualofomahabank.com PML Management ...................................... 19 www.pmlmanagement.com Pollard Unlimited ....................................... 20

Over 1,700 members beneﬁt each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www. echo-ca.org. For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.

August 2013 | ECHO Journal

Beyond Privatopia Non-Member Price:

$20.00 $25.00

The rise of residential private governance may be the most extensive and dramatic privatization of public life in U.S. history. In Beyond Privatopia, attorney and political science scholar Evan McKenzie explores emerging trends in private governments and competing schools of thought on how to operate them, from state oversight to laissez-faire libertarianism.

Condominium Bluebook 2013 Edition $17.00 Non-Member Price: $25.00 This well-known compact guide for operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers.

Condos, Townhomes and Homeowner Associations Member Price: $29.00 Non-Member Price: $45.00

Community Association Statute Book—2012 Edition Member Price: $15.00 Non-Member Price: $25.00

To make these a sustainable investment, new buyers, owners and board members need to understand “best practices basics” of how this form of housing works and have more realistic expectations of this form of “carefree, maintenance free” living.

Contains the current version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from other codes important to associations.

The Board’s Dilemma Non-Member Price:

2012 Community Association Treasurer’s Handbook Member Price: $29.00 Non-Member Price: $35.00

W NETION I ED

Home and Condo Defects Member Price: $12.95 Non-Member Price: $17.95 Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished constructiondefect attorneys, is an essential tool for board members who need to understand the legal process.

Questions & Answers About Community Associations Member Price: $18.00 Non-Member Price: $25.00 For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can ﬁnd answers to almost any question about CIDs.

echo-ca.org

Robert’s Rules of Order Non-Member Price:

$7.50 $12.50

$10.00 $15.00

A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.

In this essay, attorney Tyler Berding confronts the growing ﬁnancial problems for community associations. Mr. Berding addresses board members who are struggling to balance their duty to protect both individual owners and the corporation, and gives answers to associations trying to avoid a funding crisis.

Reserve Fund Essentials Member Price: $18.00 Non-Member Price: $25.00

The Condo Owner’s Answer Book Non-Member Price:

This book is an easy to read, must-have guide for anyone who wants a clear, thorough explanation of reserve studies and their indispensable role in effective HOA planning. The author gives tips to help board members mold their reserve study into a useful ﬁnancial tool.

An excellent guide to understanding the rights and responsibilities of condo ownership and operation of homeowner associations. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.

$15.00 $20.00

The Handbook is an in-depth guide to all aspects of association finances, including accounting methods, financial statements, reserves, audits, taxes, investments and much more. Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances.

Board Member Handbook Member Price: $15.00 Non-Member Price: $25.00 This publication is the essential guidebook for HOA Board members, dealing with governance, ﬁnances, insurance and maintenance issues. Revised and updated in June 2012.

Dispute Resolution in Homeowner Associations Member Price: $15.00 Non-Member Price: $25.00 This publication has been completely revised to reﬂect new requirements resulting from passage of SB 137.

Publications to answer your questions about common interest developments Order Online at store.echo-ca.org

Bookstore Order Form Board Member’s Guide for Contractor Interviews $15.00 Non-Member Price: $25.00

Executive Council of Homeowners 1602 The Alameda, Suite 101, San Jose, CA 95126 Phone: 408-297-3246 Fax: 408-297-3517

TITLE

QUANTITY

AMOUNT

This report is a guide for directors and managers to use for interviews with prospective service contractors. Questions to ﬁnd out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.

SUBTOTAL CALIFORNIA SALES TAX (Add 8.625%) TOTAL AMOUNT

Board Member’s Guide for Management Interviews Member Price: $15.00 Non-Member Price: $25.00 This guide for use by boards for conducting complete and effective interviews with prospective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.

Yes! Place my order for the items above. Check

Visa

MasterCard

Credit Card Number Exp. Date

Signature

Name (please print) Association (or company) Email Address City

State

Zip

Daytime Telephone

August 2013 | ECHO Journal

legislation at a glimpse

Hot Bills Bill No

Author

Subject

Status

Position

Summary

AB 968

Gordon

Elections in Small Associations

This Assembly bill has Support stalled in the Senate Transportation & Housing Committee.

This bill seeks to establish alternative election procedures for associations of 15 units or less, if approved by a majority of the members. The new procedures would allow qualifying associations to conduct votes in simplified fashion, by nominating candidates and casting ballots at the election meeting.

AB 637

Torres

Maintenance Responsibilities

This bill is now a two-year bill, and will be reintroduced under a new number in 2014.

Support

This ECHO-sponsored bill establishes that the owner of each separate interest is responsible for maintaining the exclusive use common area appurtenant to the separate interest unless otherwise provided for in the governing documents. ECHO is continuing to work to educate legislators on the importance of this clarification. As the bill is now on a two-year track, ECHOâ&#x20AC;&#x2122;s text has been removed from AB 637. Our language will be reintroduced in a new bill in 2014.

Other Legislation

Bill No

Author

Subject

Status

Position

Summary

SB 745

Committee on Transportation & Housing

Housing Omnibus Bill

This bill has passed the Assembly Appropriations Committee to the Consent Calendar.

Watch

â&#x20AC;&#x153;Omnibusâ&#x20AC;? legislation is intended to clean up errors in existing codes, and proceeds absent any objections. This bill contains language that cleans up the rewritten Davis-Stirling act, among other provisions. ECHO is watching these changes closely to ensure that no substantive changes are introduced.

AB 126

Hall

Time-Share Mailing Lists

This bill not yet been set for hearing, and is dead for 2013.

Watch

This bill requires a time-share association to maintain a complete list of the names and postal addresses of all owners of time-share interests in the time-share plan and to update the list at least every 12 months.

AB 746

Levine

Smoking Prohibition

This bill failed in committee and is dead for 2013. The bill was granted reconsideration and may appear again in 2014.

Watch

This bill prohibits the smoking of cigarettes or other tobacco products in all areas of multifamily dwellings. It provides an exception for designated smoking areas.

AB 1360

Torres

Electronic Voting

This bill passed the Assembly with bipartisan support and is now in the Senate Judiciary Committee.

Support

This bill authorizes an association to conduct elections or other membership balloting by electronic voting. It also requires an association to provide each member with an opportunity to indicate that he or she will be voting electronically and to provide a member who did not indicate so with a paper ballot.

echo-ca.org