2014 California Community Association Financial Survey p.8
Managing Association Contractors and Service Providers p.16
10 Things Every Board Should Know About Architectural Controls p.24
Serving Community Associations
What’s In a Warranty
p.28
Use of Association Funds p.34
February 2015 echo-ca.org
Are You Underfunded? p. 8
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news from ECHO
News From ECHO February 2015 ECHO’s seminar season is revving up for 2015. And our first four seminars this year are FREE for ECHO HOA Members! Please join us. On February 7, our ECHO Marin Seminar features David Feingold, Esq., Wanden Treanor, Esq., and Glenn Youngling, Esq. considering the fundamental question of HOA Sustainability. Within that context they will discuss how the HOA model is changing, how to evolve and survive, being proactive, and how new legislation and case law affect your associations. On March 4, in conjunction with Levy Erlanger & Co., we will present our first (in my tenure) evening seminar in San Francisco. Michael Hughes, Esq., David Levy, CPA, and Steve Weil, Esq., will cover a host of legal and financial issues your association needs to know about. There will be light refreshments and a buffet, all free for HOA board members. See page 15 for details. On March 7, our ECHO Santa Cruz Seminar features: Diane Rossi, PCAM, and Nate Summer discussing appropriate roles for board members versus managers; Brian Seifert will talk about construction best practices; and Jeffrey Barnett, Esq., will update us on last year’s legislation and recent case law. See page 27 for details. On March 21, at our ECHO Wine Country Seminar you’ll hear from managers offering their best practice insights, a comprehensive presentation on what kind of insurance your association needs, and a legal update. See page 33 for details. We hope you’ll catch at least one of these educational seminars. They’re the best way to stay informed about changing dynamics in your community. On a very sad note, we observe the passing of ECHO’s longest serving and most beloved staff, Dorothy Kopczynski. She retired from ECHO in 2012, but continued to be very active in the HOA community. She will be greatly missed. Best,
Brian Kidney Executive Director
February 2015 | ECHO Journal
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CONTENTS
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2014 California Community Association Financial Survey This year’s survey finds community associations to have only 57% of the funds on hand they should have. This shows that the problem is not getting better—in 1993 that figure was 60%.
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Managing Association Contractors and Service Providers One of the biggest worries that a homeowners association board faces is ensuring that the contractors and service providers do an excellent job, communicate well with the board and are reliable in any situation.
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10 Things Every Board Should Know About Architectural Controls A concise compendium of Board Do’s and Don’ts in the area of architectural control. Do establish clear rules, and apply them consistently. Don’t panic if litigation ensues.
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What’s In a Warranty? There are several different types of Warranties and they don’t necessarily provide blanket coverage. Not all Warranties are the same but if you do your homework, warranties can be an extremely useful planning tool for your Homeowner Association.
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Use of Association Funds Every association faces the problem of raising and maintaining funds for the repair and replacement of major components, sometimes including the repair of construction defects. However, after funds are collected, through assessments or otherwise, the board is faced with the question of how these funds are to be spent.
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 2015 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 1960 The Alameda, Suite 195 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
DEPARTMENTS
Secretary Carly Melius
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News from ECHO
6
2015 ECHO Educational Calendar
7
NEW at echo-ca.org
Directors Jerry L. Bowles John Garvic Adam Haney Stephanie Hayes David Levy
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San Francisco Evening Seminar – Wednesday, March 4th.
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Santa Cruz Educational Seminar – Saturday, March 7th.
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Wine Country Educational Seminar – Saturday, March 21st.
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ECHO Bookstore
41
Advertiser Index
42
ECHO Event Calendar
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ECHO Volunteers
Robert Rosenberg Brian Seifert Wanden Treanor Steven Weil
Executive Director Brian Kidney Director of Marketing & Membership Carly Melius Director of Communications Tyler Coffin Legislative Consultant Mazzoni and Associates Design and Production Design Site ECHO Mission Statement Serving Community Associations
February 2015 | ECHO Journal
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2015 ECHO educational calendar
San Francisco
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March 4
March 7
March 21
San Francisco Evening Seminar (see page 15)
Santa Cruz Educational Seminar (see page 27)
Wine Country Educational Seminar (see page 33)
Fort Mason Conference Center, San Francisco
Hotel Paradox, Santa Cruz
DoubleTree Sonoma Wine Country Rohnert Park, CA
echo-ca.org
NEW
at echo-ca.org
Quick tips and fresh insights – explore a wealth of information on our website.
Articles Strategic Planning for HOA Board Members
Does your plan for a roof project start with getting a bid for work that should start tomorrow? Then you need to read this article. Boards that plan strategically – like major organizations – can reduce the financial burden on their homeowners and stress a lot less. Start thinking about long-term success right now! Educational Topic: Board Duties and Powers
Smoking in HOAs: Conflict, Restrictions, & Liability
Fewer people are smoking than ever before, but even one smoking dispute can be a major headache for associations. Boards have to deal with the personal conflict, potential health concerns, and property rights. Learn how to deal with a smoking complaint from every angle. Educational Topic: Smoking
Log in to read the articles below. Not sure how to access your free account? Email ECHO at: newaccount@echo-ca.org.
Q&A on Water Management
Water is on everyone’s mind these days. This article answers a few questions about critical water management issues like “How do I know if my irrigation system is working correctly?” and “I have budgeted money for irrigation upgrades, where should I begin?” Educational Topic: Maintenance
Facebook Join Our Facebook Community Want to see pictures from our last seminar? Comment on our legislative activity? We only put the latest news up on Facebook, and we’d love to hear from you. Share your experiences, read important and amusing HOA news, and connect with fellow HOA owners on ECHO’s Facebook page. facebook.com/echoorg
HOA Rental Restrictions Laws and Best Practices
When it comes to restricting rentals, the legal and financial climates are squeezing associations into a tough spot: increasingly, lenders want to see fewer rentals in associations, and California State Law wants to preserve the right to lease. What is the law, and what can associations do to meet the requirements of the State and major lenders? Educational Topic: Rent Restrictions
ECHO Journal Read the ECHO Journal on the ECHO website before it arrives at your door. We usually post the latest issue on or before the beginning of each month. Log in to browse the latest articles, or read from a huge library of past issues. Find in: echo-ca.org/journal
February 2015 | ECHO Journal
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echo-ca.org
2014
CALIFORNIA COMMUNITY
ASSOCIATION FINANCIAL SURVEY In 1996, Berding|Weil published “Latent Liabilities� a treatise which explored the long-term impact of underfunding of the reserve accounts of community associations.
By Tyler Berding, Esq. and David Levy, CPA
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ome of the data came from our clients, and some from Levy, Erlanger & Company. We predicted that most multi-family community associations were severely underfunded for long-term maintenance and repairs and we opined this issue could lead to serious deferral of maintenance obligations and ultimately a shortened service life for these projects.
February 2015 | ECHO Journal
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ubsequent financial surveys by Levy, Erlanger & Company, with our assistance, have shown this problem to be systemic—affecting most community associations. This year’s survey finds community associations to have only 57% of the funds on hand they should have. This shows that the problem is not getting better—in 1993 that figure was 60%.
Since “Latent Liabilities” was published, we have further documented this problem in “The Uncertain Future of Community Associations” and similar treatises. Community associations are slowly running out of cash. Borrowing from reserves for regular, and newly discovered maintenance issues has trended upward, and when the reserves run out, special assessments and borrowing from banks increase. The fundamental cause of this cash shortage is the inability or unwillingness of boards of directors to increase assessments sufficiently to keep up with inflation coupled with the discovery of needed repairs not anticipated by the reserve budget. Discovery of “hidden damage” have pushed many older associations to the financial edge. Too many older associations suffer from long-term deterioration which, when discovered, carries a price tag that greatly exceeds the resources of the membership. Dry rot in balconies, entry structures, roof underlayment, and wall framing, and deterioration of utilities like electrical lines and plumbing, is becoming more common and are rarely the subject of any reserve budget line item. We have documented this problem in another treatise: “The Perils of Hidden Damage” which describes how these problems lie undetected for years. All publications above can be found on our website: www.berding-weil.com. Boards of Directors in older associations cannot rely entirely on a reserve study to predict their future funding. By statute in California, as in many other states, reserve studies are required only for 10 echo-ca.org
those components which are visible and accessible—siding, roofs, streets, etc. The components hidden under the outer skin of a building are not included. This is where most dry rot, corrosion, and other structural deterioration can be found, but almost never computed as part of the study. More intrusive inspections are necessary but almost never done as part of a typical study. Years of underfunding of reserves coupled with the late discovery of previously hidden damage places a heavy financial burden on the owners of attached housing. This burden is heavy enough, sometimes, to question whether many have reached the end of their service lives—are they actually obsolete? Compare the resources and expenses of your community association to other, similar associations1, and investigate beyond the parameters of a typical reserve study— especially in older associations. Review the data in this survey and compare it to your own. Then ask yourself, are the components now in your reserve study the only areas of concern, or could there be others? If your reserves have less than 100% of the funding required by your reserve study and if your association was built over 20 years ago, it’s time to undertake a sober review of the association’s financial and physical condition. 1. Levy, Erlanger & Company, CPAs offers a comparison of your association’s income and expenses with up to five similar associ-
ations, based upon the parameters of size, age, geographic location and subdivision type (condominium v. planned unit development) for a modest fee. They can be contacted at info@ hoa-cpa.com for a cost estimate.
The 2014 Survey Background This survey, while not the first of a kind, is probably one of the largest and most recent. It includes data from over 1,500 Northern California community association financial statements. This is the product not only of many hours of work, but the cooperation of nearly two hundred management companies and self-managed associations, and the association of two leading California professional organizations: Berding|Weil, LLP., California’s largest construction and community association law firm, and Levy, Erlanger & Company, CPAs, community association accountants and consultants. The data has been taken from the 2013 and 2014 year-end balance sheets and income statements of 1,569 community associations representing 191,976 individual units. Comparative data was also taken from three prior surveys done by Levy, Erlanger & Company, CPAs in 1993, and with the assistance of Berding|Weil in 2006, 2008 and 2013.
The 2014 Survey Results Percent Funded
2014 Survey Replacement reserve cash $3,748 average per unit (1,529 surveyed associations) Replacement reserve obligation $6,576 average per unit (1,529 surveyed associations) Replacement Reserve Deficit $(2,828) average per unit 2014 Percent Funded 57%
Replacement reserve cash $1,708 average per unit (813 surveyed associations) Replacement reserve obligation $2,864 average per unit (813 surveyed associations) Replacement Reserve Deficit $(1,156) average per unit 1993 Percent Funded 60% In the roughly 20 years from 1993 to 2014, the percentage reserves are funded has declined by approximately 3% and the Replacement Reserve Deficit has more than doubled!
Assessments, replacement $71 (28%) (1,521 assns. reported data) 2014 Average Assessments * $258 monthly average per unit (based on 1,569 surveyed assns.) Expenses, administration $63 (22%) (1,566 assns. reported data) Expenses, maintenance $88 (30%) (1,561 assns. reported data) Expenses, utilities $54 (18%) (1,541 assns. reported data) Expenses, replacement $93 (30%) (1,414 assns. reported data)
Average Income and Expenses
2014 Survey 1993 Survey
$178 (72%) (1,565 assns. reported data)
Assessments, operations
2014 Average Total Expenses * $288 monthly average per unit (based on 1,569 surveyed assns.)
February 2015 | ECHO Journal
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Expenses, maintenance $59 (26%) (921 assns. reported data)
2014 Implied Monthly Deficit $30 monthly average per unit, or approximately 12% of revenues
Expenses, utilities $31 (15%) (921 assns. reported data) Expenses, replacement $47 (25%) (921 assns. reported data)
(PUPM) for those associations which report the specific income or expenses. Not all associations had or reported each line of income or expenses.
Comparison of 2014 and 1993 Survey Results (Per Unit per Month - PUPM)
Assessments, average 1993 Survey Assessments, operations $128 (80%) (875 assns. reported data) Assessments, replacement $33 (20%) (781 assns. reported data) 1993 Average Assessments * $161 monthly average per unit (based on 875 surveyed assns.) Expenses, administration $46 (20%) (921 assns. reported data)
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Expenses, other $10 (14%) (921 assns. reported data) 1993 Average Total Expenses * $193 monthly average per unit (based on 921 surveyed assns.) 1993 Implied Monthly Deficit $32 monthly average per unit, or approximately 20% of revenues * Totals may NOT equal the sum of positive values in the above detail line items because the detail line items only reflect the average per unit per month
2014: $258 1993: $161 Percent Increase: 60% Expenses Administration 2014: $63 22% 1993: $46 20% Percent Increase: 37% Maintenance 2014: $88 30% 1993: $59 26% Percent Increase: 49%
Utilities 2014: $54 18% 1993: $31 15% Percent Increase: 74% Replacement 2014: $93 30% 1993: $47 25% Percent Increase: 98% Total expenses, average * 2014: $288 1993: $193 Percent Increase: 49% Implied Monthly (Deficit) 2014: $(30) 1993: $(32) * Totals may NOT equal positive values in the above detail line items because the detail line items only reflect the average per unit per month (PUPM) for those associations which report the income or expenses. Not all associations
Component Reserve Analysis and Construction Project Management
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February 2015 | ECHO Journal
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had or reported each line of income or expenses. The annual increase in administrative expenses over the last 20 years has been approximately 2% per year, maintenance expenses 2-1/2% per year, utilities 3-1/2% per year, and replacement reserve expenses 5% per year. While monthly assessments have increased by approximately 3% per year since 1993, total expenses have increased by approximately 2-1/2% per year during the same period. While this last represents a positive trend, after 20 years the average association is still operating at a loss when reserve expenditures are included. These losses are cumulative and reflect the growing imbalance of the reserve account.
troubling to note that association obligations continue to outdistance income. This is due in part to the increasing demands on replacement reserves in aging California community associations.
Conclusion
Next, look at the status of replacement reserve funding. Since operating expenses (insurance, water, management, etc.) must be paid, how is the monthly deficit funded? Funds which should go to reserves are increasingly subsidizing operating expenses: $2,828 per unit in 2014 versus $1,156 per unit in 1993. After adjusting for inflation, the accumulated replacement reserve account deficit increased approximately 22%, or about 1% per year. Similarly, the accumulated reserve liability increased from $2,864 per unit in 1993 to $6,576 per unit in 2014 – an increase of approximately 230% or about 4% per year before inflation!
When we look at the actual dollars being expended, the average common interest development has a continuing monthly deficit of $30 per unit in 2014 compared to approximately the same in 1993. It is
This trend, which we noted in 2006, 2008, and 2013 and in various articles and treatises over the past 20 years, continues eroding the ability of community associations to maintain their infrastructure. The average association has
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only about half of the funds it needs to have on hand for the known long-term repair of the buildings and nothing on hand for any unknown or unexpected repair. What is the long-term solution? Voluntary digging deeper into the pockets of aging owners who do not believe that they will still be here when the next roof goes on? Mandatory funding of reserves as required in some other states, such as Florida and Hawaii? The solution is more intense investigation of aging infrastructure coupled with a rational review of the true cost of ownership, and developing the political will to meet that cost with the additional dollars necessary to protect owner equity. That’s a lot to ask and it will fail often. But continued education of Boards of Directors and owners can make inroads. We hope that happens before it’s too late. Tyler Berding, JD, PhD, is one of the founding principals at Berding|Weil LLP, providing a wide variety of legal services to homeowners associations. David Levy, CPA, is a founding principal of Levy Erlanger & Co., an accounting firm in San Francisco serving homeowner associations.
New For 2015, FREE Attendance for HOA Members!
Join us at the San Francisco Evening Seminar Wednesday, March 4th, 2015 5:00 PM to 7:45 PM Light refreshments and buffet dinner provided. /
Register online at www.echo-ca.org or fill out the form below.
SPONSORS
SPEAKERS
Yes, reserve ______spaces for the ECHO SF Evening Seminar Name:
• Michael Hughes, Esq. • David Levy, CPA • Steve Weil, Esq.
Email Address:
Agenda
HOA or Firm:
• Getting the Most Out of Your Manager, Lawyer, and CPA. • What Not To Do If You Are On a Board of Directors. • Understanding Contracts. • How To Deal With Apathy in Owners and/Board Members. • Which San Francisco Taxes — Parking, Gross Receipts, Payroll, Business Registration, Might You Be Subject To? • Is Your Annual Budget Report California Law Compliant?
Address: City: State:
Zip:
Phone: Signature: Return to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Phone: 408-297-3246; Fax: 408-297-3517
ADDRESS Golden Gate Room, Fort Mason Conference Center 2 Marina Boulevard, San Francisco, CA 94123 February 2015 | ECHO Journal
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Managing Association and Service Providers 16 echo-ca.org 16 echo-ca.org
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ne of the biggest worries that a homeowners association board faces is ensuring that the contractors and service providers do an excellent job, communicate well with the board and are reliable in any situation.
This concern raises many questions: How do you plan a project? Which contractor/service provider should you use? When do you pay? and Managing your relationship with on-going contractors/service providers such as pool services, landscapers, etc.
Contractors By Carra S. Clampitt, CCAM February January 2015 | ECHO Journal
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he following paragraphs will discuss each of these questions and provide some tips for board members about dealing with contractors effectively.
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if painting, are you painting all the buildings at one time or in phases, does it include fences, trim work and doors? These are necessary factors in determining the size of the job. The more you know about the type of job you want, the better you will be in communicating this to your contractor/service provider.
B. Budgeting PLANNING PROJECTS
When the board of directors decides to proceed with a project, especially major projects such as reroofing, paving or painting, there are several factors that go in to the planning.
A. Scope What is the job; what does it entail? This may seem like an obvious question, but when you speak with your contractor/service provider, do you know how big or small a job it will be? For instance,
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How much money do you have? The scope of a job directly relates to the cost of that job. This can mean the difference between the slightly more expensive paint or the less costly one that is just a shade different from the color you wanted. However, much can change once you receive the actual bid and compare it with your reserves or operating budget. If this is an emergency or an unexpected job, do you have the funds available, and if not, what are your options? Can you look for a bank loan? Do you pass a special assessment? Do you borrow money from the reserves? Each option affects all of the homeowners. It is important to know which restrictions apply in relation
to this. How much authority does the board of directors have? Often, due to limited time to render a decision, board members will assume they are aware of their authority. In those situations in which you feel you may be making a “rushed decision,� be certain to verify your authority. It is always better to take the time to render an informed decision than to be sorry later.
C. Specifications What are specifications? Imagine yourself as a contractor being asked to build a home on a specified lot. You are told to build a one story home with three bedrooms with all the usual amenities. Make the roof shingles and paint the house blue with white trim. Could you confidently build this home? Do you think the owner will be happy with your job? Unless you have mental telepathy, most likely your vision of what the owner wants and the owner’s vision will be totally different. Remember, it is extremely important
for the board to know exactly want is wanted. Regardless or whether the job is painting, fencing, roofing or paving, know what you want and commit it to writing. What do you want? Sometimes, you will not know exactly what you need. If the job is roofing, what kind of material do you want used? Is it fire retardant? What is the warranty? Will it be aesthetically pleasing? These questions are just the tip of the iceberg. If you are unsure of your needs, consider hiring a professional to develop specifications. Having high quality specifications developed is a valuable tool for major jobs. Another option is to hire a professional just to answer your questions. Then, once you are confident with your knowledge, you can go about developing the specifications. If you choose to hire a professional for advice or developing specifications, follow the same guidelines as for hiring any contractor/ service provider. Contact Person. The board should appoint one or two persons to be available as a liaison. This will help when questions arise. The liaison person(s) should be easily accessible by telephone and thoroughly familiar with the project.
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SELECTING CONTRACTORS/ SERVICE PROVIDERS
A. What type of contractor/service provider do you need? Once you have decided what the job entails and what the final product should be, this step should be easier. One suggestion is to be certain the contractor/service provider specializes in the type of work you want done. While the price may be lower, a painter who builds fences as a sideline is probably not going to provide you with the end product that ABC Fencing Company could provide. February 2015 | ECHO Journal
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B. Licensing and Insurance Coverage If the type of contractor/service provider you are hiring is in a licensed industry, be certain to verify the license is in good standing. (A photocopy is helpful.) Or you can check the status of a license by calling the California Contractors State License Board at 1-800-321-CSLB. Never allow anyone to begin a job on the property until you have verified that he or she has liability insurance and workman’s compensation (if applicable). Ask your contractor/service provider for the following:
1. Name of insurance agent 2. Telephone number and address 3. Copy of Certificate of Insurance Once you have the above information, call the agent and verify that the policy is valid and in effect. If workman’s compensation is applicable, the contractor/ service provider should call his or her insurance agents and have them send a certificate naming the association as “Additionally Insured.” Being named as Additionally Insured should also be required on the contractors/service provider’s liability coverage.
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You might also ask your prospective contractors/service providers if they are a member of any professional organizations. While anyone can join an organization, if they are a member of a nationally recognized one, chances are there is a code of ethics that applies.
C. References
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Order today from ECHO!
Call 408-297-3246, fax at 408-297-3517 or visit us online at store.echo-ca.org
If you have never used a contractor/ service provider before, feel confident in your right to ask for references. If the contractor/service provider does not want to give you any, reconsider asking them for a bid and/or hiring them. Following are some questions you might ask when calling for a reference. Remember, these are just suggestions:
1. Did the contractor/service provider keep to the schedule and the contract terms? 2. Are references pleased with the work and the way it was completed? 3. Did the contractor/service provider listen when a concern was raised and promptly and satisfactorily address the concern? 4. Material Suppliers. Were subcontractors paid timely? Did they have any contractors liens placed?
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FUNDING CONTROL OF PROJECTS
A. Payment Schedule Never pay for a job in full until it is completed. Before committing to a contractor/service provider, make sure you agree on payment terms. It may be 25 percent up front and balance when completed or full payment when completed. Be certain the payment terms are in writing. If there are any mechanic liens placed, be certain to obtain full conditional or unconditional lien releases.
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BIDS
A. How many bids should you obtain? The board should decide how many bids are required for any job. Three bids is customary; however, depending on the amount of time available, you may want to ask for more—or fewer. February 2015 | ECHO Journal
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B. What do you give bidders and what should they provide in their bid? Make sure when obtaining bids that you give identical information to all prospective contractors/service providers, If you have written specifications, make sure all bidders receive and understand them. This will help greatly when the time comes to decide which bid to accept. When received, a bid should contain the name of the contractor/service provider, address, telephone number, and license number if applicable. There should be a complete description of the job and the materials that will be used You may also want the contractor/service provider to provide the name of the company that will be supplying materials; if you do want this information included, then be sure to ask for it in your bidders’ package. The starting and ending date for the job should be included. If a specific day has not been agreed upon, the estimated time to complete the job should be listed.
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The total cost of the job as well as an agreed upon payment schedule should also be in the bid.
C. Which bid should be accepted? When bids arrive they may be close in range or very far apart- The important thing to do before accepting any bid is to discuss each bid in detail with the contractor/service provider and make sure you understand any variations in price. Sometimes a higher price may be worth it, if the materials are of higher quality, the work is more extensive, or the workmanship will be better.
D. Is a verbal bid acceptable? All bids should be in writing and signed by the appropriate parties. In the case of a disagreement, a “he said/she said� situation can arise, making a resolution very difficult to reach. To avoid this dilemma, make it a policy that all bids be in writing. This will save you unnecessary headaches and worries.
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REGULAR CONTRACTORS/ SERVICE PROVIDERS
A. Maintaining a good working relationship When you have regular contractors/ service providers for jobs such as landscaping or pool maintenance, it is important to establish a good working relationship. The better communication you establish with them, the better they will feel about talking with you about any concerns. Talk with your contractors/ service providers regularly and be sure they understand what is expected in the monthly maintenance. Make sure they understand how your accounts payable is handled; let them know if they need to send in an invoice and whether they get paid monthly or bimonthly?
B. What if you are unhappy with your contractor/service provider? Before terminating a relationship, you may want to take steps to try and correct the problem. Maybe there is a misunderstanding or the contractor/ service provider is not exactly sure what you need. Try the following steps:
1. Arrange a meeting with your contractor/service provider. 2. Discuss frankly, but tactfully, your problem or concern. 3. Ask for suggestions about how to rectify the situation. 4. Try to agree to a time frame for the problem to be addressed.
C. You have tried everything, but it is not working out. Sometimes no matter how hard you try, a contractor/service provider may not work out for you. While this can be an
uncomfortable situation for all parties involved, there are a few things to remember when terminating a contract:
1. If you terminate the contract verbally, always send a confirmation letter, showing the exact day of the termination and the contractor/service provider’s last day of work. 2. Arrange to have any keys, paperwork etc., returned to you before the last payment is made. 3. If terminating the relationship earlier than the specified time frame on the contract is agreed upon by both sides, make sure this agreement is included in your written correspondence. Terminating a contract and relationship can be a highly emotional situation. No matter what happens, try not to lose your temper and get angry. This will only worsen the situation. Try to keep the situation on a business level. This will help to rectify any problems and lessen the stress that can occur.
CONCLUSION
Managing contractors and service providers may seem like a heavy burden. However, if these relationships are handled correctly, you will benefit in several ways. One benefit is the amount of knowledge you can glean from your contractor/service provider’s experience. Another benefit is establishing a good, long term working relationship with your regular contractor/service providers. Eventually you will find you have an excellent contractor/service provider for each different type of job. You will also know which contractors/service providers you were not satisfied with. This “service provider knowledge” will be very helpful when you have a limited time in which to have work completed and do not have the time to arrange for specifications, bids etc. Knowing you can call a particular contractor or service provider and get a job done that will be completed correctly and promptly, at a reasonable rate, is one of the best feelings that a group of board members can have. The board of directors should always try and work together as a unit. If everyone is in agreement, it will be easier to overcome obstacles when they arise. Carra Clampitt, CCAM, is Vice President / District Manager for Eugene Burger Management Corporation, Rohnert Park, CA. She is a frequent speaker at ECHO events.
February 2015 | ECHO Journal
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10 Things Every Board Should Know About By Shelly L. Coleman, Esq.
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Architectural Controls
February 2015 | ECHO Journal
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The CC&Rs provide the board with general powers to preserve and protect the association common area. They also specifically define the scope of the board’s control.
a. The description of common areas (and restricted common areas) will depend on whether the project is a condominium or a planned development. b. Rule of thumb: If it is not a separate interest, it is subject to architectural control. (1) The Davis-Stirling Act articulates exceptions to this rule, which include impairment of structural integrity, etc.
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ing written submissions or other documentation.
If a particularly controversial issue is addressed, the individual votes each board member may be noted.
a. These requirements, which generally address applications for architectural approval and for hold harmless, agreements, should also be reviewed periodically.
b. Professional opinions help to insulate the board from liability in the face of a challenge late.
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The board can modify existing guidelines and procedures to make its job easier. a. Amend CC&Rs to clarify guidelines and formal requirements and to provide for arbitration or mediation in the event of a dispute. b. Consider a policy prohibiting certain modifications altogether, particularly those involving the common area.
Formal policies or guidelines should be clearly stated and consistently followed.
c. Periodically disseminate a copy of the guidelines so that members remain informed as to what is required.
a. If not found in the CC&Rs or Operating Rules, they may not exist.
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b. They should be reviewed periodically by counsel for validity, enforceability and conflicts with federal, state, and local law. c. If specific procedures exist, follow them to the letter! Important rights can be lost to the association by something as simple as a one-day delay in taking action. d. Standards for architectural control should provide for objectivity in interpretation.
3
“Informal” guidelines can cause problems down the road, so be wary of relying on any unwritten rules.
a. Policies or programs followed in the past, if successful, should be formalized now. If not successful, consider the enactment of new policies. b. The non-waiver provision helps you avoid being “trapped.”
4
Special attention is in order for those provisions requir-
Use of committees to assist the board is okay, so long as decision making is not delegated. a. The scope of the committee’s responsibilities should be well defined and its members should be cautioned to avoid representing that the board will take a particular position.
7
When possible, the board should seek the advice of professionals for technical or legal interpretation of difficult issues.
a. Formal opinions on which the board intends to rely should be in writing. b. Involving a third party often serves to diffuse tension and ill will.
8
Consider different ways to protect the board and the association before action is taken, particularly in the face of a difficult request. a. Document decisions in the minutes.
9
It is important to consider carefully the alternatives that exist if the board’s decision is defied or ignored. a. Legal action instituted by the association may be costly but worth it. b. Control the conflict. Keep the issues narrowly defined. The nonwaiver provision can help here. c. Private mediation is always an option in an attempt to avoid a lawsuit.
10
Don’t panic if the board’s decision is legally challenged. a. Notify the association’s insurance carrier. This may help defray legal expenses. b. Compromise may or may not be important. Consider how to build in protection when resolving the problem. Remember, the board can be sued by other members for failing to enforce the CC&Rs! c. California Civil Code §5975 allows for the recovery of reasonable attorney’s fees and costs by the prevailing party in an action to enforce the CC&Rs. This can deter individual homeowners from raising frivolous claims. It should also encourage a board to make careful decisions. d. Resolve the conflict quickly and efficiently. Private mediation or arbitration can often provide a good result more quickly and at lesser expense than extensive negotiations or a new formal lawsuit. from raising frivolous claims. It should also encourage a board to make careful decisions.
Shelley L. Coleman, is an association attorney who formerly practiced in San Francisco.
New For 2015, FREE Attendance for ECHO HOA Members!
Santa Cruz Educational Seminar Saturday, March 7th, 2015 8:30 AM to 12:30 PM /
SPEAKERS • Diane Rossi, PCAM • Nate Summer • Brian Seifert • Jeffrey Barnett, Esq.
Yes, reserve ______spaces for the Santa Cruz Seminar. Amount enclosed: $______(attach additional names) Name: Email Address: HOA or Firm:
TOPICS • Manager Versus Board Member Roles. • Construction Best Practices. • 2014 legislation and Case Law Update.
SAVE THE DATE!
Visit echo-ca.org/events for the latest information and online registration. ADDRESS
Address: City: State:
Zip:
Phone:
Hotel Paradox 611 Ocean Street Santa Cruz, CA 95060
Visa/Mastercard No. Exp. Date:
Price
Signature:
FREE for Pre-registered ECHO HOA Members $50 – Nonmembers and Walk-ins
Return with payment to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Phone: 408-297-3246; Fax: 408-297-3517
February 2015 | ECHO Journal
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echo-ca.org
WHAT’S IN A WARRANTY? Using Warranties to support your HOA’s Plan for the Future. By Regan Brown
February 2015 | ECHO Journal
29
? T
here are several different types of Warranties and they don’t necessarily provide blanket coverage. Not all Warranties are the same but if you do your homework, warranties can be an extremely useful planning tool for your Homeowner Association. Careful and strategic planning of installed systems or products whether new and/or used can allow you to actualize the life expectancy of the product or system permitting the warranty coverage to remain intact. All Warranties have specific criteria, duration and responsible parties. Once you understand how warranties work, we can then demonstrate their effectiveness in long term planning.
30 echo-ca.org
The following are some examples of the most common warranty coverage.
1. Product warranty 2. Manufacturer’s warranty 3. Purchased extended warranty 4. Labor warranty First is the product warranty, you receive a part or product that either arrives or once opened is faulty or broken and the supplier replaces it immediately at no cost. Typically there is undisputable evidence of damage or failure and that it never performed for its intended use. The damage, defect or product failure is usually obvious and visible.
1. Example: You purchase a lamp and upon delivery or opening the box, the stand is cracked and broken in half. 2. A product failure can also be determined to be faulty even if it not easily visible but can be demonstrated. Example: You order a window that visibly looks intact and functional, but very quickly demonstrates a failure. When water is applied it leaks at the seal, glazing, frame etc.
a. This type of product failure may or may not have a time frame requirement. b. They type of product failure must demonstrate it was not an installation issue.
Next is the manufacturer’s warranty, this is the continued version of the product warranty, but involves a very specific set of requirements to satisfy the warranty. These are referred to as “Manufacturer’s Specifications.” This is more typical of installed “systems” but can also include individual products as well. Also, be aware that Manufacturer’s warranties go back to the date they ship, not when your installation begins.
1. Example: A roof product may require “certified annual inspections and maintenance” to ensure that there are no external causes for problems not related to the product. This is Proof of on-going maintenance using correct support products such as sealants etc. These requirements are obligatory to satisfy the manufacturer warranty. 2. Original Owner Only Warranty: This is often a condition made by the manufacturer where the warranty only exists for the original purchaser. An example would be a homeowner that purchases “lifetime guaranteed”
windows, but it is only valid for the original homeowner. If the house is sold, the warranty ends there.
Next is the extended warranty. This is where the manufacturer may additionally offer “Add On” options; these usually are offered for an additional fee. They are also frequently marketed as a periodic maintenance upgrade.
1. Example: When purchasing a new washing machine, you are offered an extended warranty for at additional cost. 2. Example: When referencing building systems, it is usually the maintenance “Add-On” to an installed system. A deck coating system offers a 5 year warranty which includes all of the standard Manufacturers’ specification requirements. But if you buy the extended 10 year warranty then at 5 years, a “Re-coat” is applied. The Re-coat is cheaper than a complete new deck coating system. Thus, you get an additional 5 years for half the cost. Lastly, is a Labor or installation warranty where the “Contractor or Service Provider” gives a guaranteed time frame any fault related to their installation. The terms of this type warranty are
included within their original contract for service. It typically includes a time frame, and any specific limited liability related to the product.
1. Example: You contract with a service provider to replace a window. Once installed, when water is applied to the window it leaks. The Contractor must now determine why the window is leaking. Is it the product itself that’s faulty (see above), or if they installed it incorrectly. If the Contractor determines they installed it incorrectly, they simply repair the installation at no cost to the consumer. If the Contractor determines it is the product, then they must determine if it is still inside the warranty period and contact the supplier or manufacturer for warranty activation. So now understanding the various types of warranties, how does this relate to a dynamic cost savings to an HOA? Currently, HOA’s typically use either their Reserve Studies or a more pro-active association also has an on-going preventative maintenance plan. But here is how you can strategically use both by ensuring your Reserve Study considers the cost savings of a warranty.
1. Example: Your board is planning for an upcoming deck coating project according to your reserve
study. The proposed deck coating system is offering a 5 year warranty with an additional option to add on 5 years at a reduced cost for a maintenance coat to be applied at five years. You can create a cost savings for the HOA which will vary depending on the number of decks in your Association. Here is a strategic savings example: a. The original cost of the deck coating: $2,500.00 per deck b. The add-on maintenance coat at year 5: $800.00 per deck c. Regular inspections and possible repair & maintenance: $400.00 per deck Total Project includes 10 year warranty: $3,700.00 per deck Or A traditional Deck “don’t fix it until it’s broken” program. a. The original cost of the deck coating: $2,500.00 per deck b. At 5 years apply another new system: $2,500.00 per deck Total Project includes 10 year warranty: $5000.00 per deck So the HOA would have a savings of $1,300.00 for the same warranty period. By putting the regular inspections and repair and maintenance and employ whenever a new system is installed the HOA renews their reserve study. February 2015 | ECHO Journal
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with generic products which theoretically equivalent according to the spec sheets, but perhaps more likely to fail the day after the warranty expires. Substitution can be interpreted as “bait and switch”, so most vendors are scared of getting called on this. Very few will hold their position if you press the matter. So how can you protect yourself from scam warranties? Here are the conditions I try to meet and questions I want answered when reading a warranty:
1. Read the fine print! me the truth about the problem? Well, the manufacturer will decline warranty responsibility if the Contractor cannot demon strate it’s the manufacturer’s responsibility. They may even challenge the Contractor findings and notify the Homeowner that the Contractor is responsible.
Voiding Warranties
1. Question: What if the failure is identified after the “Labor Warranty” expires? The Contractor can “choose” to honor the Labor/ installation warranty, or decline it. It usually depends on individual circumstances surrounding the failure. 2. Question: How can you trust that the Contractor is telling 32 echo-ca.org
Problems that can terminate warranties can be related to the viability of the company offering the warranty. If the service provider goes out of business, then the warranty is voided with no further recourse available to the client. In other words, “A warranty is only as good as the company behind it and if that company is gone, so is the warranty”. Other issues that can void warranties are not meeting the manufacturer’s specification for maintenance and also watch for the equally deadly “We do not guarantee compatibility”. This gotcha on a component vendor’s ad means you may not be able to return a product simply because it doesn’t match up with your existing system. Another red flag: “Only warranted in supported environments”. This may mean they won’t honor a warranty on a system that is not specifically supported or made by their company, or it may mean they’ll insist on installing the product themselves. Another dangerous phrase is “We reserve the right to substitute equivalent items”. This means that instead of getting the same high-quality name-brand products you originally requested; you may end up
2. Who is backing the warranty? 3. What does the warranty cover? 4. How long does the coverage last? 5. Is the company backing the warranty financially stable? 6. Should I get an extended warranty? A warranty is not an extended warranty. – If the product performs as advertised, it won’t need an extended warranty. 7. One absolute show-stopper is the phrase “All sales are final”. This means you have no options if a part doesn’t work. Avoid any company with this policy. 8. Only buy from reputable suppliers. Avoid the Flea market mentality. So take the extra time to review the fine print and know what is offered as warranty coverage. While they may truly be offering a lifetime guarantee, it may not include all the components or is limited and restrictive. Decide what is important to you when purchasing a product or service and consider your financial resources and what’s your expectation from it. All of these will steps and considerations will steer you to the best decision for you. Regan Brown is President, GB Group Contractors and Consultants, providing services throughout Northern California and Nevada.
New For 2015, FREE Attendance for ECHO HOA Members!
Wine Country Educational Seminar Saturday, March 21st, 2015 8:30 AM to 12:30 PM /
SPONSORS
Yes, reserve _____spaces for the ECHO Wine Country Seminar Amount enclosed: $______(attach additional names) Name: Email Address: HOA or Firm:
TOPICS
Management Best Practices, Insurance Necessities, Legal Update. ADDRESS
Address: City: State:
Zip:
Phone:
DoubleTree, Sonoma Wine Country One DoubleTree Drive, Rohnert Park, CA 94928
Visa/Mastercard No. Exp. Date:
Price
Signature:
FREE for Pre-registered ECHO HOA Members $50 – Nonmembers and Walk-ins
Return with payment to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Phone: 408-297-3246; Fax: 408-297-3517
February 2015 | ECHO Journal
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USE OF ASSOCIATION FUNDS by Robert E. Aune, Esq.
What Can the Association Do With That Money in the Reserve Account or Recovered Through Construction Defect Litigation?
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February 2015 | ECHO Journal
35
E
very association faces the problem of raising and maintaining funds for the repair and replacement of major components, sometimes including the repair of construction defects. However, after funds are collected, through assessments or otherwise, the board is faced with the question of how these funds are to be spent. What restrictions are there on the expenditure of such funds? Where are these restrictions found? How does the board go about determining how to spend the money? These and related issues will be discussed below.
Use of Reserve Funds Once funds are designated as reserve funds, their use is severely restricted. Civil Code §§ 5510 (b) and 5515 provide that reserve funds can only be used for:
1. The repair, restoration, replacement, or maintenance of major components which the association is obligated to repair, etc., and for which the reserve fund was established; 2. Litigation involving repair, etc., of the above-described major components; or 3. A temporary transfer of reserve funds to the operating account to meet short-term cash-flow requirements or other expenses, provided that the board minutes reflect the reasons for the transfer and when and how the money is to be repaid to the reserve fund, and (with some
exceptions) that the funds are restored to the reserve account within one year. In every case where reserve funds are to be expended, the board should specifically consider these restrictions. It is also suggested that the minutes of the meeting where the expenditure is authorized reflect all of the reasons that permit the expenditure. If there is any question as to whether the proposed use of reserve funds is allowed, an opinion of counsel should be considered. For example, the statute requires that the repair or replacement of major components be to those “for which the reserve fund was established” [Civil Code §5510 (b))]. Although beyond the scope of this article, the issue of whether this requirement is met can create a problem. For example, can these funds be used in the repair of structural components, for which reserve funding is generally not established?
Use of Funds Recovered Through Construction Defect Litigation Duty to Use Funds to Correct Specific Defects Must the association use the funds recovered in construction defect litigation to correct the specific defects for which the money was paid? Although there is no statutory requirement that funds recovered through construction defect litigation be used to correct specific defects, association boards and members often believe that such funds cannot be used for any other purpose. However, in many cases it will not necessarily be in the best interests of the association to use all of these funds to correct construction defects Before deciding how funds recovered are to be spent, the board should con- sider numerous factors. For example:
1. What was the net amount of the recovery after payment of attorneys fees and costs? 2. What is the total estimated cost of repairs? 3. What critical defects exist, e.g. structural, fire and safety, that will probably require immediate repair? 4. What effect will repair and/or replacement have on reserves, and how does this relate to the amount of reserve funds currently held? 5. Are there items of deferred maintenance of major components which are more significant than some of the construction defects? Only after a thorough review of the situation, with the assistance of the association manager, attorney, construction defect experts, and perhaps others, can the board make informed decisions as to how the money recovered should be utilized, and thereby discharge its fiduciary duty to do that which is in the best interests of the association. This analysis may well result in a decision to use part of the money for immediate repairs of construction defects, part of the money for specified future repairs, part of the money for other deferred maintenance, part of the money to repay reserves, and part of the money to increase reserves. And in making these decisions the board should carefully document its reasons in the event there are any questions later.
Expenditures to Avoid As suggested above, the board has discretion to use funds recovered through construction defect litigation for several different purposes. However, the board of directors should absolutely avoid using these funds for operating and routine maintenance expenses in
order, for example, to avoid raising regular assessments. Although perhaps politically popular, this would appear in almost every case to be a violation of the fiduciary duties of the board members, subjecting them to criticism and possible liability.
Potential Liability of the Association and Board Members Failure to Expend Association Funds Appropriately
liability. [Corp. Code §§7231(c); 7231.5] Note that the business judgment rule requires “reasonable inquiry” in making decisions. And the Corporations Code specifically authorizes board members to rely upon the opinions of “counsel, independent accountants” and other experts. [Corp. [Code §7231(b)] Therefore, in order to comply with the requirements of the business judgment rule, discharge its fiduciary duties and protect itself from liability, the board should utilize these experts, including the professional association manager. Moreover, the minutes of the meetings where such decisions are made should reflect the fact that these opinions were sought and are being considered in making the decisions.
CONCLUSION Duty of the Board of Directors - As discussed above, there are specific statutory restrictions on the use of “reserve funds.” [Civil Code §§ 5510; 5515] There also may be other restrictions on the use of association funds in the association governing documents. The failure of the board to adhere to these restrictions will expose the association and the board members to potential liability. Therefore, before any significant expenditure of funds, the board should carefully review the governing documents and the relevant statutes and consider obtaining an opinion of the association attorney as to the appropriateness of the expenditure.
Some of the most important duties of the board are reserve funding and the maintenance/repair of major components. However, because of political pressure to keep assessments low, a failure to take
the advice of experts, and other factors, boards too often fail to use reserve and other funds appropriately. This can and does result in extensive deferred maintenance, insufficient reserves, repeated special assessments, lowered property values, potential liability and disgruntled members. To prevent these problems, the board should first be willing to take the political heat of increasing dues, if necessary, to maintain reserves at a reasonable level. In addition, boards should be extremely careful when expending funds, particularly reserve funds, to be sure that legal restrictions are adhered to. With regard to funds recovered through construction defect litigation, the board should carefully review the situation with the assistance of experts to be sure that the funds are used in the best interests of the association. And virtually never should these funds be used for operations or routine maintenance. Robert Aune is the founder of Aune & Associates in San Francisco. He represents numerous homeowner associations in the Bay Area.
In addition to the above restrictions, the board members have a fiduciary duty to the association and its members to act in good faith and in the best interests of the association. [Corp. Code §7231] To satisfy this duty, the board members must act in accordance with what is commonly termed the “business judgment rule.” This rule, contained in the Corporations Code (it is assumed that the association is a corporation), requires that the duties of the director be performed: 1) in good faith; 2) in a manner the director believes to be in the best interests of the association; and 3) with such care, including reasonable inquiry as an ordinarily prudent person in a like position would use under similar circumstances. [Corp. Code §7231.5(a)] And this rule, if adhered to, protects volunteer directors from February 2015 | ECHO Journal
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BOOKSTORE The ECHO Bookstore is your source for publications providing essential information for HOA Board Member service obligations. Order online at echo-ca.org or fill out form on the facing page. W NETION I ED
Robert’s Rules of Order Member Price: Non-Member Price:
$7.50 $12.50
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.
Condos, Townhomes and Homeowner Associations Member Price: Non-Member Price:
$29.00 $45.00
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.
Community Association Statute Book—2014 Edition Member Price: Non-Member Price:
$15.00 $25.00
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.
Home and Condo Defects Member Price: Non-Member Price:
$12.95 $17.95
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.
38 echo-ca.org
2014 Condominium Greenbook Member Price: Non-Member Price:
$17.00 $25.00
This companion to the Condominium Bluebook 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.
Questions & Answers About Community Associations Member Price: Non-Member Price:
$18.00 $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.
Board Member Handbook Member Price: Non-Member Price:
$15.00 $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.
Reserve Fund Essentials Member Price: Non-Member Price:
$18.00 $25.00
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.
The Condo Owner’s Answer Book Member Price: Non-Member Price:
$15.00 $20.00
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.
ciation o s s A unity Book Comm Statute dition 2014 E
Dispute Resolution in Homeowner Associations Member Price: Non-Member Price:
$15.00 $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 www.echo-ca.org
Bookstore Order Form Board Member’s Guide for Contractor Interviews Member Price: Non-Member Price:
EDUCATIONAL COMMUNITY FOR HOMEOWNERS 1960 THE ALAMEDA, STE 195, SAN JOSE, CA 95126 PHONE: 408-297-3246, FAX: 408-297-3517
TITLE
QUANTITY AMOUNT
$15.00 $25.00
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
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Board Member’s Guide for Management Interviews Member Price: Non-Member Price:
$15.00 $25.00
This guide for use by boards for conducting complete and effective interviews with prosp ective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.
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Name (please print) Association (or company) Email Address City
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February 2015 | ECHO Journal
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directory updates
All current listings may be found in our Professionals Directory available online at www.echo-ca.org.
New Members Sevpro of Petaluma & Rohnert Park 373 Blodgett St. Cotati, CA 94931 Contact: Joshua Wikoff Tel: (707) 588.8226
Insight Community Management Solutions, Inc. P.O Box 2700 Granite Bay, CA 95746 Contact: Judith Nixon Tel: (916) 342.5320
Become an ECHO Professional Member and receive the benefits of membership. To learn more, visit our membership page at www.echo-ca.org
40 echo-ca.org
advertiser index
about ECHO
American Management Services........21 www.acepm.net
Eugene Burger Management Co.........12 www.ebmc.com
Angius & Terry......................................13 www.angius-terry.com
Flores Painting & Drywall....................19 Email: FPDinc@sbcglobal.net
Associa Northern California M & C Association Management Services...........................2 www.mccommunities.com
Focus Business Bank www.focusbusinessbank.com............11
Benjamin Moore Paint & Company...21 www.benjaminmoore.com Collins Management............................32 www.collins-mgmt.com Community Management Services....22 www.communitymanagement.com Compass Management Group............19 www.gocompass.com Cornerstone Community Management.........................................37 www.cornerstonemgt.biz
Mutual of Omaha Bank.......................20 www.mutualofomahabank.com Neighborhood Association Management.........................................32 www.neighborhoodam.com Pollard Unlimited.................................13 www.pollardunlimited@comcast.net R.E. Broocker Co...................................13 www.rebroockerco.com Rebello’s Towing..................................14 www.rebellos.net Union Bank...........................................18 www.HOAbankers.com
WHAT IS ECHO? Serving Homeowners to Build Strong Community Associations 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.
Who Should Join ECHO? 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 • 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
ECHO Membership Dues
Office 1960 The Alameda, Suite 195 San Jose, CA 95126-2308
Association Membership HOA 2 to 25 units...........................$130 HOA 26 to 50 units.........................$180 HOA 51 to 100 units.......................$275 HOA 101 to 150 units.....................$375 HOA 151 to 200 units.....................$450 HOA 201 or more units..................$575 Professional Membership.................$500 Association Management Membership.......................................$500 Individual Membership.......................$75
How Do You Join ECHO? 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.
August2015 2013 ||| ECHO ECHOJournal Journal February 2014 ECHO Journal February
41 41
ECHO event calendar
RESOURCE PANEL CALENDAR ECHO Resource Panels meet during lunch on weekdays to enable managers, professionals and board members to hear about important topics presented by experts in the industry, and share experiences and issues. The meetings are open to all ECHO members, and those interested in learning about ECHO, offered in a casual atmosphere where the cost of attendance is the price of your lunch. The sessions last about an hour and a half. Check-in with the ECHO Panel Secretary for details and to register.
Please join us: DATE
PANEL LOGISTICS
PANEL SECRETARY
TOPIC
Feb. 11, 11:45 a.m.
South Bay Resource Panel Buca Di Beppo 1875 S. Bascom Ave, Campbell
Rosalia Tapia, Esq. 408-369-0800, ext. 205
TBD
Feb. 13, 11:45 a.m.
East Bay Resource Panel Massimo Restaurant 1603 Locust St., Walnut Creek
Cindy Wall, PCAM 925-830-4580
TBD
Feb. 18, 11:45 a.m.
Wine Country Resource Panel Serv-Pro 377 Blodgett St., Cotati
Pam Marsh 415-686-9342
Drought
March 5, 11:45 a.m.
North Bay Resource Panel Contempo Marin Clubhouse 400 Yosemite Dr., San Rafael
Denise Wolford 415-458-3537
Insurance Claims
March 10, 11:45 a.m.
Central Coast Resource Panel Michael’s on Main 2591 S Main St., Soquel
Ann Thomas 800-537-4098 ext.7530
Overview of
Wine Country Resource Panel Serv-Pro 377 Blodgett St., Cotati
Pam Marsh 415-686-9342
Dispute Resolution
March 18, 11:45 a.m.
NFPA 25 & 72
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
42 echo-ca.org
ECHO honor roll
ECHO HONORS VOLUNTEERS Resource Panels
Seminar Speakers
Recent Contributing Authors
Accountant Panel Adam Haney, CPA 888-786-6000 x317
Marin David Feingold, Esq. Wanden Treanor, Esq. Glenn Youngling, Esq.
July 2014 Ken Kosloff, CSI, CCI Tim Polk Marilyn Lincoln Jeffrey S. Farnsworth, CCAM Paul W. Windust, Esq.
Central Coast Panel John Allanson 831-685-0101 East Bay Panel Beth Grimm, Esq. 925-746-7177 Cindy Wall, PCAM, CCAM 925-830-4580 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Judy O’Shaughnessy 408-839-6926 North Bay Panel Diane Kay, CCAM 415-846-7579 Stephany Charles, CCAM 415-458-3537 South Bay Panel Susan Hoffman, PCAM 510-683-8614 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.
Santa Cruz John Allanson Jeffrey Barnett, Esq. Diane Rossi, PCAM Ron Duncan Toby Goddard Piret Harmon South Bay Sharon Pratt, Esq. Rosalia Tapia, Esq. Matthew Harrington, Esq. Terin Reeder Robert P. Hall, Jr., Esq. Stephanie Hayes, Esq. Wine Country Carra Clampitt Bill Gillis, Esq. Steve Lieurance, CCAM Jim MacMillan Michael Cantarutti Paul Schultz, CLCA. San Jose John Allanson Ian Brown, CCAM David Levy, CPA Alex Noland, Esq. Jerry Bowles Bruce Stanton, Esq. Ricky Chu Dave Rosenblatt, CCAM Judy O’Shaughnessy David Kuivanen, AIA Diane Rossi, PCAM Brian Seifert Aaron Majors Dave Langridge Kelly Moss, CCAM Paul Schultz Sandra Gottlieb, Esq. Steven Weil, Esq. Stephanie Hayes, Esq. Bob Burton, CCAM Tyler Berding, JD, PhD Chris Sigler Regan Brown
August 2014 Bob Gourley Tyler P. Berding, JD, PhD Brian Seifert Steven Saarman Kenneth T. Carlisle September 2014 Matt J. Malone, Esq. Ann Rankin, Esq. Susan Oliver Samuel Anderson Bob Gourley Judy O’Shaughnessy Michael Petite October 2014 Tyler Berding, JD, PhD. David C. Swedelson, Esq. Christine Kehoe Thomas Connelly Elizabeth Lanham November 2014 Sean Andersen, RS Jeffrey A. Barnett, Esq. Tom Fier Colletta Ellsworth-Wicker, PCAM Richard Tippett December 2014 Sandra M. Bonato, Esq. Tom Fier Sara McLean Paul Schultz January 2015 Tyler Coffin Sara Montecino Stephanie J. Hayes, Esq. Steven S. Weil, Esq.
February 2015 | ECHO Journal
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