Journal_08_04 by Echo

April 2008

A Journal for Community Association Leaders

echo-ca.org

ALSO INSIDE THIS ISSUE:

• Solar-Reflective Coatings • Records Retention • Maintenance—A Team Effort

Change Service Requested ECHO 1602 The Alameda, Suite 101 San Jose, CA 95126

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We’re taking the hit together. With bank foreclosures and Association assessment collection losses approaching record highs, we at Angius & Terry Collections LLC (“ATC”) want to remind our Association clients that we continue to be your partner. We continue to offer our “No Fees X No Costs X No Risk!” Association assessment collection program - even in these tough times. Under this program, ATC looks to the delinquent homeowner with respect to payment of ATC’s collection fees and costs - not the Association. If ATC is unable to collect a delinquent assessment due to a bank foreclosure, or otherwise, there continues to be NO CHARGE to the Association for our fees and/or costs. In addition, we continue to assist our Association clients through Bankruptcy Monitoring and Small Claims Court handling procedures with the most efficient and cost effective services available. ®

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Contents Solar-Reflective Coatings on page 14

6 The Fine Points of Fining Almost all associations use fines to address violations of their governing documents. This article aids managers and boards to develop or revise a policy on monetary penalties (fines) and to apply that policy in the day-to-day management of the association.

14 Solar-Reflective Coatings Rising energy costs are driving the trend in solarreflective coatings for walls and roofs. This article shows how energy-efficient “green” paints and roof coatings can provide a high return on investment.

20 Records Retention Record retention is a difficult issue for most associations, often compounded by the lack of professional guidance as to what records need to be retained. CPA Walt Grady has prepared this common sense guide for determining what records to keep or destroy.

25 Open Meeting Act Learn how new civil codes effective January 1, 2008, affect how associations conduct their meetings.

30 Maintenance—A Team Effort One of the most daunting tasks for boards is maintaining the common property—a responsibility that the board may be sued for failing to perform properly. This article outlines a process to help develop an effective plan for maintaining a property.

Departments 28 Calendar of Events 31 Legislation at a Glimpse 34 ECHO Bookstore

38 ECHO Volunteers 38 About ECHO 41 ECHO Marketplace 41 Advertiser Index

On the Cover The Fine Points of Fining Page 6 4

April 2008 | ECHO Journal

The ECHO Journal is published monthly by the Executive Council of 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 person 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 2008 Executive Council of Homeowners, Inc. 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.

Executive Council of Homeowners, Inc. 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 9:00 a.m. to 5:00 p.m.

Board of Directors and Officers President David Hughes Vice President Karl Lofthouse Treasurer David Levy Secretary Dorothy Kopczynski Directors Paul Atkins Lori Burger Robert Rosenberg Richard Tippett Steven Weil

Jerry L. Bowles John Garvic Diane Rossi Wanden Treanor

Executive Director Oliver Burford Communications Coordinator Tyler Coffin Legislative Consultant Government Strategies, Inc. Design and Production George O’Hanlon ECHO Mission Statement The mission of ECHO is to advance the concept, interests and needs of homeowner associations through education and related services to board members, homeowner members, government officials and the professionals in the industry.

Hit the Jackpot at the ECHO 2008 Annual Seminar Join hundreds of other homeowners at the ECHO 2008 Annual Seminar and Tradeshow to learn how your association can become a winner in todayâ&#x20AC;&#x2122;s environment. See the inside back cover of this issue for more details about the seminar.

Mark June 21, 2008 on your calendar for the ECHO 2008 Annual Seminar and Tradeshow.

April 2008 | ECHO Journal

By Michael Hardy, Esq.

Fines—What Good Are They? A

lmost all associations use fines to some extent to address violations of their governing documents. Some associations use them quite extensively, others only rarely. Few boards have actually considered the place fines do or should play in the management of the association’s affairs. This article is intended to aid managers and boards in developing or revising a policy on monetary penalties (fines) and in applying that policy in the day-to-day management of the association. Monetary penalties serve two purposes. First and foremost, they allow a board to carry out its duty to enforce the governing documents. Without a system of monetary penalties, the only way to deal with owners who violate the governing documents (other than a polite warning letter) would be an expensive and time-consuming legal action (or arbitration/mediation if the owner agrees). The board has a fiduciary duty to enforce the governing documents and can be sued by a member of the association for failing to do so. The imposition of a fine on an owner who

has been found to have violated the governing documents fulfills the board’s enforcement duty. The second purpose is, of course, deterrence; i.e., to discourage future violations by the owner or by other owners in the development. The financial impact of a fine is usually not that significant for most owners, but the embarrassment of being fined by the association may prove to be an incentive against future violations. Of course, some violations occur because owners are not aware of the particular restriction or do not understand the scope of the restriction. Obviously, fines will have no effect on such violations, but if an association finds that a particular violation is being repeatedly violated for such a reason, the restriction needs to be re-written and/or the owners need to be educated about its existence and the penalty for violating it. First Things First There is no inherent authority vested in an association to impose fines on its members for violations of the governing documents. It can only do so if such authority is provided in the association’s governing documents. Most CC&Rs

ECHO Journal | April 2008

or bylaws do give the board such authority, either directly or through the power to adopt rules relating to the management of the development. If no such authority is given in an association’s governing documents, those documents will have to be amended to provide such authority before monetary penalties may be imposed on the association members. Just having the authority to impose fines is not enough. The authority must be exercised by the board through a schedule of monetary penalties properly adopted and distributed to the members. Civil Code Section 1363(g), part of the Davis-Stirling Common Interest Development Act, requires that such a schedule be distributed before any fines are imposed by an association. This document is considered an “Operating Rule” and must therefore be adopted in accordance with the provisions of Civil Code Sections 1357.1001357.150, which require (among other things) that a proposed rule be distributed to the members for comment at least thirty days before adoption. It is recommended (but not required) that the schedule of monetary penalties be included as part of a general enforcement policy adopted by the board. That policy should set out the steps to be followed in enforcing the governing documents, such as the use of courtesy warning letters for first violations and the use of alternate dispute resolution. A board may choose simply to adopt a schedule of monetary penalties, but an enforcement policy would provide guidance to the members and future boards as to the steps that will be followed for enforcement of the governing documents. This will help to assure fairness and consistency in enforcement, and it will avoid claims that an individual is being singled out for discipline while other member violations are ignored. How Much is Enough? Like all provisions of an association’s governing documents, fines must be “reasonable.” No statute or case law defines when the amount of a fine is, or is not, reasonable. Like all restrictions, a fine cannot be arbitrary or discriminatory and must be imposed in good faith with the best interests of the association as a whole in mind. That’s not very helpful for deciding how much the fines to be included in a schedule of monetary penalties should be. One factor is the economic status of the community comprising the association. A $50 fine in a condominium project comprised of 8

April 2008 | ECHO Journal

blue collar families may be sufficient, while the same fine in a community of $3 million single family detached residences may be essentially meaningless to the owners (but it may still accomplish some deterrence from the embarrassment factor discussed above). Another factor is the seriousness of the violation. Actions that create a safety hazard for other persons or involve actual or potential economic losses to the association (repair of common area damage, increased insurance premiums, etc.) justify a higher fine than actions that only have an aesthetic impact, e.g., improper window coverings. Although there are no statistical studies on this issue, it is likely that if an association imposes any fine totaling more than a few hundred dollars for a single violation, it will, if challenged in court, face an uphill battle in proving that the fine is reasonable. This does not mean that an association will never be permitted to impose a higher fine than $200 or $300 for a single violation; depending on the factors discussed above and the particular judge, it is possible that significantly higher fines may be allowed. However, if an association wants to minimize the possibility that a fine will be found to be unenforceable by a

court, it should limit fines to a few hundred dollars per violation at most. Some boards, in order to encourage owners to correct a continuing violation of the governing documents (such as improper win-

Once a schedule of monetary penalties has been properly adopted, fines may be imposed for violations of the governing documents. dow coverings or construction of an unauthorized improvement) may wish to impose a fine for each day (or week or month) the violation remains uncorrected. Such per diem fines are not improper so long as they are

authorized in the associationâ&#x20AC;&#x2122;s schedule of monetary penalties. However, boards have to be mindful not only of the amount of each per diem fine but of the total of such fines. For instance, a fine of $5 per day for improper window covering may be reasonable, but if the board waits until such fines against an owner have accumulated for a year or more before attempting to collect them, a court may decide that a fine of more than $1800 for improper window covering is not reasonable. Steps for an Enforceable Fine Once a schedule of monetary penalties has been properly adopted, fines may be imposed for violations of the governing documents. The exact procedure followed by a particular association may vary somewhat from association to association, depending upon the associationâ&#x20AC;&#x2122;s enforcement policy, but the Davis-Stirling Act requires a hearing before the board or before an enforcement committee prior to imposition of the fine. The owner subject to the fine must be given at least ten days advance notice of the date Continued on page 11 ECHO Journal | April 2008

Fine Points of Fining Continued from page 9

and time of the hearing and the general nature of the alleged violation. At the hearing, the owner or the owner’s counsel must be allowed to speak to the board concerning the alleged violation and to provide documentation for the board or committee to consider. A written notice of the board’s decision on whether to impose the fine must be delivered to the owner within fifteen days after the board has made its decision. Some older governing documents provide for an “after the fact” hearing process under which the board imposes a fine and the affected owner then has a right to request a hearing if he or she wishes to contest it. This process does not comply with the requirements of the Davis-Stirling Act, and it should be abandoned. Any governing document that still calls for use of such a procedure should be amended. Failure to comply with both the requirements of the association’s enforcement policy and the requirements of the DavisStirling act will make any fine unenforceable. Thus if the association’s enforcement policy requires that a warning letter (or courtesy notice) be provided to an owner before a fine is imposed and such a letter or notice is not provided, such an omission can be used as a defense in any attempt to collect the fine in a legal proceeding. Collecting the Fine Okay, the board has diligently followed the requirements of the Davis-Stirling Act and its enforcement policy, held a hearing and imposed a fine, which the owner has failed to pay perhaps with a very definite statement about the board and what it can do with its fine. Now what? The simplest way to collect is an action in small claims court. It’s fast, inexpensive and doesn’t require an attorney. However, small claims court judges, who are often volunteer attorneys serving as temporary judges, have a reputation for being hostile towards homeowner associations; and, unlike an action in the superior court, there is no right to appeal a bad decision (the defendant in a small claims action has the right to appeal but not the plaintiff). The board will have to weigh these risks in considering a small claims court action, but it still may be the best way to go in many cases. Continued on page 13

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April 2008 | ECHO Journal

Fine Points of Fining Continued from page 11

An action could also be brought in the Superior Court. This process would involve filing a lawsuit and, if the owner contests the fine, eventually participating in a trial. The services of an attorney would be required for such an action, but if the association prevails the attorney’s fees and other costs could be recovered against the losing party (the judge would decide how much of the fees and costs could be recovered). Under the DavisStirling Act, the association would have to attempt mediation or arbitration before filing the lawsuit. One possible problem with such an action solely to collect a fine is Code of Civil Procedure Section 1033, which states that if an action which could have been brought in small claims court (which permits actions for monetary damages up to $5000) is brought in the Superior Court, the court may reduce or even eliminate any costs (including attorney’s fees) which could otherwise be recovered by the party instituting the action. However, if the association is also seeking injunctive relief to obtain a court order requiring an owner to correct a violation of the governing documents, this section would not apply, because such an action can only be brought in the Superior Court. One remedy that is not available to collect a fine is the lien and nonjudicial foreclosure process used for delinquent regular and special assessments. The Davis-Stirling Act expressly prohibits the use of such a procedure to collect fines.

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Be Reasonable, Have a Plan and Be Consistent The most desirable remedy for a violation of the governing documents is an amicable request to the owner to correct the violation (or not to repeat it). If this doesn’t work, then an association needs to have in place a schedule of reasonable monetary penalties and to diligently follow every step of its enforcement policy and the requirements of California law. It is also important that a board make a reasonable effort to identify all violations and to treat them in the same manner, so that a claim of “selective enforcement” cannot be asserted by the owner subject to the fine.

Michael Hardy is an attorney at the Walnut Creek office of Angius & Terry LLP. ECHO Journal | April 2008

Elastomeric wall coating on a Mill Valley residence

By Michael Biel

Solar-Reflective Coatings for Cool Roofs and Cool Walls

he history of solar-reflective exterior paints and coatings that use faderesistant, inorganic pigments is the starting place for understanding their fundamental importance and value for all types of architectural surfaces. Offered at competitive cost per unit with the same application requirements as standard paints and coatings, this article will show how this growing category of energy efficient, “green” paints and roof coatings now provides a high return on investment that will become the norm in the not too distant future. We also will reveal that they are a huge potential winner in the effort to reduce the acceleration of global warming. 14

April 2008 | ECHO Journal

Factory Coated Metal Roofs, German Engineering The first use of designed-in, energy efficient German pigments in American paints occurred in the 1970’s in collaborations between metal roofing manufacturers and makers of industrial coatings. These coatings contained infrared (IR), mixed metal oxide (MMO) pigments, were factory applied and expensive. Their chemistry was toxic solvent based, they were exceptionally durable, and they became the standard for commercial and industrial buildings. However, metallic pigments are very efficient in reflecting away the sun’s radiation (infrared spectrum) as compared to standard organic liquid tints. This trend was picked up by the high-end residential marketplace into the 1980’s and has

not changed for many years. The cost of the metal roof coating system known as Kynar™ was high, over $100 per gallon, which was justifiable for large-capital corporate and industrial jobs and for those with unlimited budgets because of the lifespan of 20 to 30 years before these coatings failed. Variations of the technology were taken up in military applications as well. Paints for Roofs in Australia’s Outback In Australia, there was a huge need for durable, efficient, cool coatings for metal and tile roofs that could be inexpensively field-applied to buildings in the torrid Outback, tropical Queensland and the rest of the vast Australian continent. Thirty years ago, the Australians went with the best acrylic

Elastomeric roof coating on the Heritage Building roof, San Rafael

latexes of the day and their own version of the German factory-ground pigments to develop water-based coatings that had the capability to provide the heat reflecting they needed. While these coatings were slightly more expensive than standard tinted paint formulas and could not be made at the local store, they were still much less expensive than the solvent-based roof coatings and their renewable 12- to 15-year life spans added to their cost-savings benefits with twice the lifespan of standard paints. They cooled the buildings dramatically by reflecting away the majority of the sun’s radiation (solar reflectance) and by emitting a very high percentage of the heat that did find its way into the underlying substrate materials (thermal emissivity).

Other advantages were that these reflective paints required no special procedures to apply, while being substantially more environmentally friendly and having low odor. This was in part because the IR reflecting, MMO inorganic pigments were low toxic by their nature, with low volatile organic compounds unlike the liquid organic-based standard paint tinting systems. The reflecting pigments technology became an intrinsic part of the structure of the paint instead of just being a mixture; think of how coffee does not settle but tea does. They also did not fade, another big plus, and these paints were breathable but waterproof when used on walls (think Gore-Tex™).

Not Just White Paint For Old Roofs There is the question why was there such concern over all this technology? Why didn’t those flat roofs just get coated white and buildings painted in white or light colors? End of the problem, right? Well, they did and do. If you’re a southern Californian, and/or know cities in the south states, they traditionally paint in light colors for aesthetics and temperature. Lighter colors do, after all, absorb less heat wavelengths translating to their being cooler regardless of what is being coated, for example, a white car versus a black car. It is true that white, elastomeric, flexible acrylic roof coatings will transform existing dark or aluminum coated “built-ups” and other flat roof types into “cool roofs” capable ECHO Journal | April 2008

Roof tiles sealed with Thermo-Seal 1000 on the Wild Horse Valley HOA roof, Novato

454 So. Airport Blvd. South San Francisco CA 94080

of reflecting the highest amount of total solar radiation (TSR). However, the need to be able to use cool top coat roof coatings in colors other than white, just as the need to paint walls in different colors, illustrates the real value for the range of IR-pigmented colored paints and coatings. There are several reasons why white alone can be inappropriate as a roof color: In the case of adjacent or neighboring buildings overlooking or sitting uphill from the building whose roof is to be cool white, top coated, the bright white could reflect adversely into their windows; Airline pilots can be negatively impacted by such reflections for the same reason at particular angles to the sun. There are ordinances in some communities now prohibiting such white top coats from being used near airports. There can also be requirements in many situations to be able to paint those curved, bowstring or low slope (not dead flat) roofs in something other than white. The word “something” here means other “cool colors,” ones that will be efficient relative to the sun’s heat, but not blind the adjacent tenants or those down the block. Beiges, cool grays and tans generally would be the option available in these cases. Likewise, if the roof is lowslope or bowstring and can be viewed from the street, there is an aesthetic and design decision to be made. Cool Paints for Tile and Low-Slope Roofs, Stucco, Concrete and Siding Today tile roof maintenance and renewal for both clay and concrete types can be done cost-effectively with a large range of efficient medium depth colors that will not only serve to completely waterproof and thermally seal

April 2008 | ECHO Journal

Concrete walls coated with Thermo-Seal 1500 at the Chestnut Street HOA, San Francisco

the tiles themselves, but also make them indefinitely renewable (re-coat again after 10 years). These state-of-the-art, cross-linking, water-borne MMO pigmented paints can be used on stucco walls, concrete, and various siding types. Using these paints can avert the need to replace tile roofs indefinitely and while they also greatly reduce wear to all socoated exterior walls. The full spectrum of solar reflective paints and coatings for roof and wall colors translates today into the ability to have cool beiges, tans, grays, reds, greens, blues, yellows, mauves, browns and terracotta. Only very vivid colors and stronger greens have limitations on how efficient the MMO pigment technology can make them. Total Solar Reflectance (TSR) will range usually from 34% to over 70% depending upon the color chosen. TSR for whites average over 80%. However, even the color black can now be had in a cool roof coating where solar panel arrays and other design factors can make such a black coating useful. A well-engineered “cool” black coating using this technology achieves a full 20 degrees cooler surface than any black roof repair material or traditional tar black coating and scores an amazing 32% TSR. Remember, the depth of the color will always determine just how efficient the IR coating can be expected to perform. However, unlike just painting those walls with a standard latex paint in a light color or a designer earth tone, as is becoming more popular, color for color, the solar-reflective, MMO pigmented paints will be 15 to 50 degrees cooler. That translates to immediate savings of electricity for air-conditioning bills and for many years into the future. At the

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April 2008 | ECHO Journal

Cool Roof Rebates, LEED Credits and Green-Seal Reflective wall coatings are the last area to be explored by the residential paint manufacturing industry, but the new LEED (Leadership in Energy and Environmental Design) and national Green-Seal standards will recognize them as a significant factor in total building energy efficiency. After all, wall surface areas will equal or exceed that of the roof surface square footage when the buildings are more than one story tall. This means that having the walls coated with solar-reflective paints will ensure added energy cost reductions for air conditioning and this will serve to increase the return on investment for any such paint job. LEED credits for both non-roof and cool roof coatings are available (see LEED Credit 7.1 and 7.2 respectively), which can qualify for energy tax credits, increased property values, and publicity benefits for buildings so coated. Depending

upon the zip code, public utilities like PG&E and SMUD are already giving residential rebates for Cool Roof Rating Council (CRRC) qualified “cool roof” top coats for both steep slope and low slope roof types. Big Benefits Exterior wall paint job life cycles can be increased by a minimum of 50% percent and as much as 100%. Combined with electrical cost savings of up to 22% (results for Los Angeles residence in U.S. D.O.E. Cool Wall Paints Study, 2007), in locales where air-conditioning is normally used, these solar-reflective paints just on the walls means large and measurable financial paybacks to those who utilize them for repaint and new construction projects. Further combine this with cool roof topcoats on the same building(s) and energy needs will be massively reduced with even larger environmental benefits. You can see the U.S. Dept. of Energy’s “Cool Roof Calculator” at:

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Carbon pollution reduction from cooling down roofs and walls in our city environments is a real way to reduce the “Urban Heat Island effect” caused by buildings Continued on page 37 ECHO Journal | April 2008

By Walt Grady, CPA

Records Retention R

ecords retention is a difficult issue for most associations. It is often compounded by the lack of professional guidance as to what records need to be retained. The association may have a closet full of records; but if they are disorganized and no one can find anything when needed, then it is time to review and organize the records. Record retention is especially important because of the frequent turnover of the board of directors. It is also futile if former board members are retaining association records, but no one knows about it. Each board needs to establish and follow a record retention policy. 20

April 2008 | ECHO Journal

What Records? All documents need to be considered. This includes legal, financial, insurance and maintenance records as well as general correspondence. Written documents, computer disks and tapes, equipment specification and instruction books and even pictures all need to addressed. Why Keep Records? There are legal requirements for keeping certain records such as board minutes and tax returns. Board minutes are permanent records and need to be retained indefinitely. Tax returns can be audited up to three years

from when they are filed. Because they are not filed until after the year is over, supporting documentation needs to be retained for four years. Other records need to be retained for their informational value. For example: for the last roof replacement, what were the specifications, the date of replacement, and the cost and warranty information? Maintenance history and repair records can help to determine when components should be replaced. Continued on page 23

Recommended Records Retention Periods Permanent Records Legal Records: • Board Minutes and Notices of Meetings • Executive Session Meeting Minutes • Membership Meeting Minutes and Notices of Meetings • Committee Meeting Minutes • Original Enabling Documents: • CC&Rs • Bylaws • Articles of Incorporation • Amended Enabling Documents • Legal Settlement Agreements • Client/Attorney Privileged Information file • Developer Disclosure Statements • Deeds • Title Insurance Policies Financial Records: • Annual Corporate Tax Returns • Letters granting tax exempt status • Issuance of tax ID number • Annual CPA-prepared Financial Statements • Annual general ledgers Maintenance/Facilities Records: • Blueprints • Building Drawings and details of Additions or Modifications • Major Component Listings, Specifications and Measurements Other Records: • Documents requesting Architectural Changes • Approvals and denials of Architectural Change Requests • Notice of violations of Architectural Controls

Retain For Four Years Legal Records: • Membership Meeting Ballots, Proxies and Check-in Sheets Financial Records: • Bank Statements and Canceled Checks

• • • • • • •

Paid Bills Payroll Tax Returns Time Cards Monthly General Ledgers Accounts Receivable Listings Deposit slips Dues billing and collection documents

Correspondence: • “Serious” Correspondence • Newsletters Other Records: • Insurance Claims History

Retain Till Superseded Superseded documents marked by an asterisk(*) should then be transferred to the “Retain For Four Years” category. Legal Records: • Contracts:* • Management • Vendor Services • Loan Documents* • Listing of Rules* • Interpretations of Rules under specific circumstances* • Nonarchitectural Enforcement Matters* (Example: Parking violations—discard when owner sells unit) Maintenance/Facilities Records: • Warranties and Guarantees* • Funding Studies* • Equipment Specifications • Complete details of last replacement of all major components Other Records: • Original Insurance Policies* • Employment Contracts* • Personnel Files*

Retain For One Year • Meeting Agendas • Monthly Financial Statements • “Light” Correspondence, especially if the situation has now been resolved or action completed

Records Retention Continued from page 20

Still other records need to be retained because of possible future board or legal actions; examples are a history of repeated rules violation by a resident that may lead to future board action, or a history of water intrusion problems that may lead to a construction defects legal action. Architectural control records are particularly important. The board needs to be able to identify each architectural change that has ever been approved and, conversely, each change that has been denied; and it should maintain a history of violation notices.

so that they can be kept in order. Keep a separate listing of the contents of each box. It is much easier to look through a ten page listing and find a reference to a box number than it is to sort through ten boxes. Annual Chores At the end of the fiscal year, gather up the current year records. Always take the time to index the boxes prior to adding them to the storage site. At the same time, review the stored record listing sheets for records that have expired and destroy them. Make nota-

tions on the listing that the records were destroyed and the date destroyed. A Final Word Use common sense in determining what records to keep or destroy. If in doubt, contact a professional—attorney, CPA, association manager, insurance agent, banker or reserve specialist.

Walt Grady is a CPA in Alameda, CA. He is a member of ECHO and a past chair of the ECHO Accountants Resource Panel.

Too Many Records Often too many records are retained. Each board member does not have to keep a copy of minutes of meetings as long as the original is properly filed and is available. Detailed monthly financial statements do not have to be retained once annual financial statements have been issued by the CPA. One copy of anything is enough! Organization There is no right or wrong method of organization. I recommend separating the records by category: • Legal records • Financial records • Maintenance/facilities records • Correspondence • Other Within each category, records should be grouped into: • Permanent records • Retain for four years • Retain till superseded (Often superseded records in turn should be retained for four years.) • Retain for one year Where Should Records Be Kept Records should be stored together in a safe, dry area, preferably in a storage closet on site or with the management company. Permanent records such as board minutes should be kept in a fireproof cabinet. It is not uncommon for the management company to retain most of the permanent records and the current records. How Should Records Be Kept Records should be stored in uniform size record storage boxes. If records are to be destroyed after a certain date, write on the box the destruction date. Number the boxes

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Major Repairs at Your Association ECHO 2008 South Bay Spring Seminar Saturday, April 19, 2008 8:00 a.m. to 1:00 p.m. Campbell CA Community Center 1 West Campbell Ave, Campbell Seminar Agenda 8:00 Registration and Sponsor Tables 8:45 Welcome & Introductions 9:00 Identifying the Need for Repairs: Reserve Studies and Special Investigations 9:30 Funding the Project: Special Assessments and Loans 10:00 Starting the Process: Bidding and Contract Issues 10:30 Break 10:50 Construction Issuesâ&#x20AC;&#x201D;Inter-Disciplinary Panel: Communications, Payment Control, Mechanics Liens, Change Orders, Phasing, Supervision, Relocation 11:50 Construction Issues: The Contractorâ&#x20AC;&#x2122;s Perspective 12:20 Questions and Answers 12:50 Drawings for Sponsor Prizes 1:00 Adjourn Yes, reserve _____ spaces for the ECHO South Bay Spring Seminar. Amount enclosed: $__________ (attach additional names) Name:

Registration Cost: $40

HOA or Firm: Address: City:

State:

Zip:

Phone: Visa/Mastercard No.

Exp. Date:

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

By Tom Fier, Esq.

Open Meeting Act C

ivil Code Section 1363.05, as amended, went into effect January 1, 2008. This article summarizes the newly amended section. Attendance at Meetings Any member of the association may attend meetings of the board except when the board adjourns to executive session. What is executive session? It is one at which the board considers litigation, matters relating to the formation of contracts with third parties, member discipline, personal matters or, upon a member’s request, to discuss a member’s payment of assessments. If requested by a member, the board shall meet to discuss a fine, penalty, or other form of disciple in executive session. Minutes of Executive Session Matters discussed in executive session shall be generally noted in the minutes of the next meeting. Examples: • A discussion was held concerning the management contract. • A violation of the CC&Rs by a member was discussed.

Minutes Draft minutes, a summary of minutes, minutes proposed for adoption, minutes, other than of an executive session, shall be available to members within 30 days of the meeting. Upon request and reimbursement of the costs, the minutes, proposed minutes or summary minutes shall be distributed to any member making the request. Right to Obtain Copies of Minutes Members shall be notified in writing at the time the pro forma budget is distributed (not less than 30 days nor more than 90 days before the beginning of the fiscal year), or at any general mailing to the membership, of their right to obtain copies of minutes of meetings of the board. This written notice shall state how, where and the cost to obtain these minutes. NEW! Notice of Meetings Unless the time and place is fixed by the bylaws, or unless the bylaws provide for a longer period of notice, members shall be given notice of the time and place, except for an emergency meeting, at least

four days prior to the meeting. Notice shall be by 1) posting in a prominent place or places within the common area and by mail to any owner who has requested notification of board meetings by mail; 2) by mail or delivery to each unit; or 3) by newsletter or similar means of communication. The notice shall contain the agenda for the meeting. NEW! Emergency Meetings An emergency meeting is defined as circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board and which of necessity make it impracticable to provide notice. An emergency meeting may be called by the president or any two other members of the governing body. Speaking at Meetings Any member may speak at a board or member meeting, except at executive session. The board shall set reasonable time limits. NEW! Board to Discuss Agenda Items Only Board members can only discuss or take action on items placed on Continued on page 27 ECHO Journal | April 2008

April 2008 | ECHO Journal

Open Meeting Act Continued from page 25

the agenda; i.e., including in the notice that was posted and distributed. However, a resident who is not a member of the board may speak on issues not on the agenda. Notwithstanding the above, a member of the board or agent of the board may do the following: 1. Briefly respond to statements or questions by a member who is not on the board; 2. Ask a question for clarification, make a brief announcement, or make a brief report on his/her activities. Items Not on the Agenda The board may take action under the following conditions for items not on the agenda: 1. Upon determination by a majority of the board present at the meeting that an emergency exists. An emergency exists if there are circumstances that could not have been reasonably foreseen, that require immediate attention, that require immediate attention and make it impracticable to provide notice. 2. Upon a determination made by the board by a two-thirds vote of board members preset at the meeting, or if less than twothirds of board members present, by a unanimous vote of board members present that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed. 3. A previous item appeared on an agenda that was posted and distributed that occurred not more than 30 days before action is taken and, at the prior meeting, action on the item was continued. 4. Before discussion anytime of an item not on the agenda, it shall be openly identified to the numbers in attendance. Recommendation This new law forces boards to plan and to inform members of its agenda. Do not risk violation of the law; only take action on items on the agenda (except in emergencies).

Tom Fier is an attorney at law with a homeowner association practice in San Mateo, CA. He is a member and past chairperson of the ECHO Legal Resource Panel. ECHO Journal | April 2008

Calendar of Events

Don’t Forget These Important Dates Wednesday; April 2 Maintenance Resource Panel 12:00 Noon ECHO Office 1602 The Alameda, Ste. 101, San Jose Friday, April 4 East Bay Resource Panel 9:30 a.m. Angius & Terry 1900 N. California Blvd., Suite 950, Walnut Creek Saturday, April 5 San Francisco Spring Seminar 8:00 a.m. to 1:00 p.m. The Firehouse, Fort Mason Center San Francisco Wednesday, April 16 Wine Country Resource Panel 11:45 a.m. Eugene Burger Management Co. 6600 Hunter Drive, Rohnert Park Saturday, April 19 South Bay Spring Seminar 8:00 a.m. to 1:00 p.m. Campbell Community Center 1 W Campbell Ave., Campbell

Wednesday, April 23 Legal Resource Panel 6:00 p.m. Call Mark Wleklinski 925-691-1191

Wednesday, May 14 South Bay Resource Panel 12:00 Noon Il Fornaio 302 Market St., San Jose

Thursday, May 1 North Bay Resource Panel 9:30 a.m. Contempo Marin Clubhouse 400 Yosemite Rd., San Rafael

Saturday, May 17 Marin Seminar 8:00 a.m. to 1:00 p.m. Embassy Suites 101 McInnis Pkwy., San Rafael

Friday, May 2 East Bay Resource Panel 9:30 a.m. Angius & Terry 1900 N. California Blvd., Suite 950, Walnut Creek

Wednesday, May 21 Wine Country Resource Panel 11:45 a.m. Eugene Burger Management Co. 6600 Hunter Dr., Rohnert Park

Monday, May 12 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant, Oakland

Thursday, May 22 San Francisco Luncheon 11:45 a.m. to 2:00 p.m. St. Francis Yacht Club San Francisco

Tuesday, May 13 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz

Saturday, June 21 2008 ECHO Annual Seminar Santa Clara Convention Center Santa Clara

Regularly Scheduled Resource Panel Meetings Resource Panel Maintenance North Bay East Bay Accountants Central Coast South Bay Wine Country Legal 28

April 2008 | ECHO Journal

Meeting

Location

First Wednesday, Even Months First Thursday, Odd Months First Friday, Monthly Second Monday, Odd Months Second Tuesday, Odd Months Second Wednesday, Odd Months Third Wednesday, Monthly March, May, August, October

ECHO Office, San Jose Contempo Marin Clubhouse, San Rafael Angius & Terry, Walnut Creek Francesco’s Restaurant, Oakland Pasatiempo Inn, Santa Cruz Il Fornaio Restaurant, San Jose Eugene Burger Management Co., Rohnert Park Varies

Directory

UPDATES Updates for listings in the 2008 ECHO Directory of Businesses and Professionals.

Listing Additions Accolade Painting 661 Mary Evelyn Drive San Jose, CA 95123 Contact: Tom Alessi Tel: 408-225-1700 Email: accoladepaints@aol.com Accolade Painting is a full-service painting contractor dedicated to providing property managers and homeowners associations with the highest quality painting services that consistently exceed clientsâ&#x20AC;&#x2122; expectation for quality. CF Management P.O. Box 151 San Jose, CA 95103 Contact: Christopher Flood Tel: 408-416-3181 Email: chris@cfloodmanagement.com Tree Management Experts 3109 Sacramento Street San Francisco, CA 94111 Contact: Roy C. Leggitt, III Tel: 415-921-3610 Fax: 415-921-7711 Email: RCL3@mindspring.com We develop custom tree inventories and management plans for HOAs. Our affordable software and manuals are easy to use. Management plans prioritize work based on tree risks and infrastructure conflicts.

ECHO Journal | April 2008

Maintenance By Frank Arms

Maintenance—A Team Effort M

any articles have been written over the past few years regarding different aspects of maintenance—maintenance programs, how to, where to, who to and who pays. Only this past month we saw two articles in the Journal discussing some of these aspects of maintenance. There is a reason behind this prolific outpouring of knowledge on this topic. One of the most daunting tasks for associations and boards is maintaining the common property. It is a fiduciary responsibility; and, lacking good judgement and appropriate advice, the board may be sued for failing to perform this function properly. Let’s start at the beginning. Think about forming a maintenance committee made up of perhaps one board member and two or three owners similar to your landscape committee. You have a reserve study. Using this as a guide, let’s take a walk. It’s spring, and before the planting really gets going, take a look around your association. Many of the items that require maintenance can be seen from the ground. Take notes on what you see and question any items that appear to need attention. This committee can be the core of your maintenance team. You may want to include your reserve analyst as a team member. How long has it been since he/she actually did a site investigation? Is it time for an update of your study? You may want to include an expert on your team, one who has the qualifications to put together and manage a maintenance program. Select an expert who understands the components and construction of the building systems, can make an

April 2008 | ECHO Journal

analysis of the conditions of your community and knows construction and maintenance costs. A qualified construction manager (CM) can act as the team leader for you. One of the primary functions of a CM is to act as facilitator and provide team leadership and communication. He or she understands the various building systems, life expectancy and replacement cost of such items as deck waterproofing, roofing systems, gutters and downspouts, paint, wood siding and trim, fencing, gates, drainage and pavements. Many associations have more sophisticated elements such as elevators, heating and air conditioning systems, boiler plants, alarm systems, smoke and fire suppression systems and the like. As the team’s expert, he or she can help in developing a plan for maintenance, planned upgrading and replacement of these critical systems. Working together with your reserve analyst and the maintenance committee, you can develop a plan that will outline the time frames for performing maintenance, repairing, replacing or upgrading all the components for which the association is responsible. This plan should include target dates for accomplishing these items, the anticipated costs of the work and a guide for managing the plan. Together with your reserve analyst and the committee, the reserve budget can be structured to accomplish the goals of the plan. The next challenge is to manage the plan. Whether your association is small or large, whether it is in the city or in the “burbs,” whether luxury or

Continued on page 32

2008 Legislation at a Glimpse As of March 24, 2008 Bill No.

Author

Subject

Status

Position

Summary

AB 567

Saldana

Common Interest Development Bureau

Senate Trans. & Housing

Oppose Unless Amended

This bill would, until January 1, 2014, establish in the Department of Consumer Affairs the Common Interest Development Bureau. The Bureau would, among other things, provide board member education and training resources, investigate and impose fines for Davis-Stirling Act violations, and compel associations to disclose those violations.

AB 952

Mullin

BMR Owner Assessment Restrictions

Senate Inactive File

Oppose

Would prohibit the board of directors from imposing a special assessment or an increase in the regular assessment greater than 20% unless separately approved by owners of low- or moderate-income units in accordance with specified procedural requirements. Requires board to provide those owners with a one year, interest free payment plan. It is unlikely that this bill will be revived.

AB 1892

Smyth

Solar Energy Equipment Restrictions

Amended. Oppose Assm Housing Hearing April 2

This bill would render void and unenforceable any restriction in the governing documents of an association that effectively prohibits or restricts the installation or use of a solar energy system.

AB 1921

Saldana

Statutory Revision of CID Law

Assembly Housing Hearing April 2

Watch

This bill would renumber, consolidate, make minor changes to, and remove discrepancies in those sections of California law that govern common interest developments. If passed, the bill would replace the existing Davis-Stirling Act.

AB 2180

Lieu

Solar Equipment Approvals

Assembly Local Gov. Hearing April 2

Oppose Unless Amended

This bill would compel associations to provide written approval or denial of an application to install a solar energy system. The approval or denial must be given within 45 days of the receipt of the application, or the application is deemed approved, unless the delay is the result of a reasonable request for additional information.

AB 2259

Mullin

Rental Restrictions

Assembly Housing Hearing April 2

Oppose Unless Amended

This bill would prevent common interest developments from imposing rental or lease restrictions upon an owner, unless that owner consents in writing to the impairment of that right at the time of purchase.

AB 2806

Karnette

Board Member Education

Assembly Housing Hearing April 16

Oppose

This bill would require every member of a board of directors serving at least 12 consecutive months to disclose whether or not they have completed a course dealing with the laws that govern common interest developments. Only courses costing $25 or less would be approved by the Department of Real Estate. Associations may not reimburse directors more than $25 for the course, or more than $100 for travel expenses.

AB 2846

Feuer

Dispute Resolution Procedures

Assembly Housing Hearing April 30

Oppose Unless Amended

This bill would permit homeowners who are involved in a dispute over assessments with their association to request alternative dispute resolution or to pay under protest and commence an action in small claims court, provided the amount of the dispute does not exceed the courtâ&#x20AC;&#x2122;s jurisdiction.

SB 127

Kuehl

CID Sale Disclosure Deadlines

Assembly Third Reading

Support

This bill would impose disclosure deadlines for the seller of a unit in a common interest development. Unless the parties agree otherwise in writing, it would require that all disclosures be made no later than 20 calendar days after the execution of a purchase agreement or the opening of escrow, whichever is later. An association must continue to provide documents to the seller within 10 days. The bill affects both mobile home and CID owners.

SB 1511

Ducheny

Super Liens

Senate Judiciary Hearing April 8

Support

Affecting only mortgages initiated on or after January 1, 2009, this bill would require any entity that causes a judicial or non-judicial sale of a separate interest to pay up to six months of delinquent assessments to the association, provided certain conditions are met.

ECHO Journal | April 2008

Maintenance Continued from page 30

more modest, it deserves the best in expert advice available. This is where the CM can play the pivotal role. Guiding the association through the planning, bidding, contracting and oversight of these services is beyond most manager’s expertise or responsibilities. The skills and experience offered by the CM relieve the board and the manager of much responsibility and places the program with an experienced, licensed, insured and knowledgeable organization.

The skills and experience offered by the CM relieve the board and the manager of much responsibility... Continuing with our team approach, we now go into the action stage. Working with the plan, the CM, with the direction from the board and the other team members, assembles the documents for repair or reconstruction of the immediate (“hot”) items in your association that need attention. Let’s take the example of decks that are starting to show signs of surface deterioration. Some residents are complaining about leaks around their sliding doors or in the ceilings below. This issue tops the list of “hot items.” Using the reserve study as the basis for the determination of funding, and the plan as the basis for implementation, the CM has plans and specifications drawn up and advertises the project for bid. The plan may call for the reconstruction of a percentage of the decks in a multi-year program. In this case, the CM may get bids based on this multi-year approach. Part of this plan may be to obtain a longterm maintenance and warranty agreement with the contractor or applicator that will assure the association that this particular element is going to be inspected and main32

April 2008 | ECHO Journal

tained on a regular basis. There may be specific instructions built into the program making the owners responsible for the proper care of the balcony, once the repairs are complete. Once the bids are in and a contractor selected, a contract is signed and the work begins. The CM will now manage every aspect of the construction program including quality control, administration of the schedule, payments to the contractor and notification and liaison with the residents. Upon completion of the particular phase of work undertaken, the CM will document all the areas of completed work and ensure that the maintenance and warranty plan is started. There may be a reason to bond or insure these programs. Each circumstance is unique and cost may be one of the determining factors. Determining the criticality of the element and the likelihood that it would be difficult (or not) to replace the agreement if the contractor fails, for whatever reason, to implement the agreement, are some of the factors to consider. You may also want to underwrite the warranty by having the supplier of the materials (in the case of our deck example) and/or the certified applicator cosign the warranty. This improves the chances for the agreement to be maintained.

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Finally, make the agreement for maintenance and warranty automatically renewable. The board would then have to vote not to renew it rather than vote to renew it every year. This renewal should be unilateral with the association and the contractor paid after the maintenance and inspection has been completed satisfactorily. Let the CM review the work. This can be accomplished for a very small yearly fee and you have used the advice of an expert to make that judgement. Ask the reserve analyst to build the program into your reserve study. This makes funding palatable for the owners each year the budget comes up for approval. You now have an ongoing plan for every component of the property and because the plan is being implemented, there is little room for surprises as all the components are maintained to last a lifetime.

Frank Arms is the principal at F. L. Arms & Associates, a construction management firm and member of ECHO. He is a member and past chair of the Maintenance Resource Panel and participates in several other ECHO resource panels.

Detailed on-site inspections, inventories and asset descriptions • Spreadsheet report format now available on request 30-year threshold and components models • 16 years of reserve study experience • Call today for a free proposal ECHO Journal | April 2008

Books and DVDs from ECHO

Homeowners Association and You $13.00 2008 ECHO Business & Professional Directory $20.00

Condominium Bluebook $18.00 2008 Edition

This directory lists all business and professional members of ECHO as of December 2007. Current addresses, telephone and fax numbers, email addresses, and a short description are included. This directory is an invaluable tool for locating service providers that work with homeowner association.

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.

Homeowners Associations— How-to Guide for Leadership $35.00 This well-known guide and reference is written for officers and directors of homeowner associations who want to learn how to manage and operate the affairs of their associations effectively.

Questions & Answers About Community Associations $18.00 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.

This is a valuable guide to all aspects of community association living designed as a practical problem solving guide. Written by two long-time association residents, it provides an insightful overview of community living from the viewpoint of experienced owners in readable language. Recently revised and expanded.

Robert’s Rules of Order $7.50

The Uncertain Future of Community Associations $10.00

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.

For 30 years, attorney Tyler Berding has had a unique vantage point in observing new, aging and “evolving” community associations confront the issues they face. The basic premise is: without clarity, wisdom and “tough love,” community associations are doomed to failure.

Home and Condo Defects— A Consumer Guide to Faulty Construction $10.00

The Condo Owner’s Answer Book

This guide is prepared by attorneys Tom Miller and Rachel Miller for anyone having problems with faulty construction on a home or condominium. It explains the various technical aspects of determining who is at fault and who to go after to rectify the situation.

Community Association Statute Book—2008 Edition $10.00 This edition contains the 2008 version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments, and selected provisions from the Civil, Corporations, Government and Vehicle Codes important to community associations.

California Building Performance Guidelines for Residential Construction $52.50 This easy-to-read manual is an excellent tool to understand a new home. It contains chapters covering more than 300 conditions that have been sources of disputes between homeowners and builders, offers homeowner maintenance tips, and defines the standards to which a residence should be built.

CID Leadership Two-Disc DVD set $15.00

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.

$30.00

Board—An orientation for new board members and a refresher for current members. Meetings—How to conduct effective meetings that stay focused and achieve results. Reserves—How adequately-funded reserves prevent problems in associations. Insurance—Considers insurance to protect multi-million dollar community assets.

Dispute Resolution in Homeowner Associations $20.00 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 Now Order Online at echo-ca.org

Bookstore Order Form

Board Memberâ&#x20AC;&#x2122;s Guide for Contractor Interviews $20.00 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.

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

QUANTITY

SUBTOTAL CALIFORNIA SALES TAX (Add 8.25%) TOTAL AMOUNT

Board Memberâ&#x20AC;&#x2122;s Guide for Management Interviews $20.00 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. q Check q Visa q Mastercard Credit Card Number Exp. Date

Signature

Name (please print) Association (or company) Address City Daytime Telephone

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AMOUNT

Learn how todayâ&#x20AC;&#x2122;s laws affect your homeowner association Reserve now to hear ECHOâ&#x20AC;&#x2122;s San Rafael association attorneys bring you another interesting program and legal update. Wanden Treanor, David Feingold and Glenn Youngling are planning sessions that review important association matters. Included is a session that gives you the opportunity to ask these experts questions you want answered. And there is a summary of CID bills before the Legislature this year.

Watch for the seminar program in the May ECHO Journal. Register today so you do not miss this seminar.

Yes, reserve _____ spaces for the Marin Spring Seminar. Amount enclosed: $__________ (attach additional names) Name: ______________________________________________________ HOA or Firm: ________________________________________________ Address: ____________________________________________________

Marin Spring Seminar Saturday, May 17 8:00 a.m. to 1:00 p.m. Embassy Suites 101 McGinnis Ave., San Rafael Registration Cost: $40

City: __________________________ State: _____ Zip: ____________ Phone: ______________________________________________________ Visa/Mastercard No. _____________________ Exp. Date: ________ Signature: ___________________________________________________ Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Return with payment to: ECHO, 1602 The Alameda, STE 101, San Jose, CA 95126 Telephone: 408-297-3246; Fax: 408-297-3517

Solar-Reflective Coatings Continued from page 19

absorbing the sun’s radiation, then re-radiating that heat after the sun goes down. This “hidden” environmental benefit is one that we must all hope we’ll be able to notice. Lawrence Berkeley Labs has quantified that 663 grams of carbon dioxide is the environmental “cost” for every kilowatt hour (KWh) of electricity produced by conventional power plants. The average California house in turn uses 3,000 to 4,000 KWh per year for electricity for cooling from these plants. That equals approximately 2,650 lbs of carbon dioxide emitted to produce that power per Los Angeles household. Therefore, every reduction in that energy demand does not just please California’s Governor Schwarzenegger; it also has a direct bearing on how much atmospheric, heat-inducing pollution is prevented. When cool paint and cool roof coatings can by themselves make an 8% to 60% factored per household reduction in this electricity used, it’s easy to see why this is a true example of the technical phase, “It’s a no brainer!” Endnote CA Title 24 energy-efficiency design regulations that govern the entire building “envelope” for new construction, remodeling and roofing, are already in place for commercial properties. By October 2008, this is expected to become law for residential properties including HOAs. Solar reflective cool wall and cool roof coatings will most certainly be useful, if not imperative, parts of any comprehensive construction plan thereafter, where proper cost-benefit analysis takes into account increased coating lifespan and monetary savings on air-conditioning as a function of reflective roof coating and paint job longevity. © 2008 Michael Biel. All rights reserved. No reproduction without prior permission from the author.

Michael Biel is the founder of The Ultimate Coatings Company. He has been associated with the trade of both residential and commercial painting for 22 years. He was a high-end house painter/restorer for a majority of that time and was sales consultant, estimator and trainer to a wellknown northern California painting contractor. ECHO Journal | April 2008

Honor Roll

About

ECHO Honors Volunteers 2007 Volunteer of the Year Jeffrey Barnett ECHO Resource Panels Accountant Panel William Erlanger, CPA, 415-981-9350 Central Coast Panel Jim Harmon, 831-425-3622 East Bay Panel Scott Burke, 408-536-0420 Legal Panel Mark Wleklinski, Esq., 925-691-1191 Maintenance Panel Mike Muilenburg, 408-996-3897 North Bay Panel Diane Kay, CCAM, 415-846-7579 Stephany Charles, CCAM 415-458-3537 San Francisco Panel Jeff Saarman, 415-749-2700 South Bay Panel Geri Kennedy, CCAM, 650-348-2691 ext. 1006 Kimberly Payne, 408-200-8470 Wine Country Panel Ron Hamann, 707-584-4788

Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry L. Bowles Joelyn Carr-Fingerle, CPA John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.

April 2008 | ECHO Journal

2007 Annual Seminar Speakers Adrian Adams, Esq. John Allanson Dan Angius, Esq. Frank Arms Jeffrey Barnett, Esq. Tyler Berding, Esq. Sandra Bonato, Esq. Timothy Cline Karen Conlon, CCAM Burt Dean Bill Erlanger, CPA Tom Fier, Esq. John Gachina Michael Gartzke, CPA John Garvic, Esq. Beth Grimm, Esq. Geri Kennedy, CCAM Karl Lofthouse Kerry Mazzoni Hermann Novak Dan Rottinghaus, Esq. Steven Weil, Esq.

SF Luncheon Speakers John Allanson Tyler P. Berding, Esq. Ronald Block, PhD. Doug Christison Karen Conlon, CCAM Rolf Crocker Ross Feinberg, Esq. David Feingold, Esq. Tom Fier, Esq. Kevin Frederick, Esq. John Garvic, Esq. Beth Grimm, Esq. Brian Hebert, Esq. Roy Helsing Julia Lave Johnston Garth Leone Nico March

Larry Russell, Esq. Steve Saarman Nathaniel Sterling, Esq. Debra Warren Steven Weil, Esq. Mark Wleklinski, Esq. Glenn Youngling, Esq.

Recent ECHO Journal Contributing Authors November 2007 Adrian Adams, Esq. Tyler P. Berding, Esq. Justin Bettner, P.E. Tom Fier, Esq. Michael Gartzke, CPA Beth A. Grimm, Esq. December 2007 Daniel E. Angius, Esq. Jeffrey A. Barnett, Esq. Tyler P. Berding, Esq. Michael Biel Larry Mesplé January 2008 Business-Professional Directory February 2008 Jeffrey A. Goldberg, Esq. Sandra L. Gottlieb, Esq. Stephen Marcus, Esq. Ann Rankin, Esq. David C. Swedelson, Esq. Dick Tippett March 2008 Jeffrey A. Barnett, Esq. Tyler P. Berding, Esq. Carole Murphy, PCAM Dick Tippett

ECHO

What is ECHO? ECHO (Executive Council of Homeowners) is a California non-profit corporation dedicated to assisting community associations. ECHO is an owners’ organization. Founded in San Jose in 1972 with a nucleus of five owner associations, ECHO membership is now 1,525 association members representing over 150,000 homes and 325 business and professional members.

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. If your company wants to reach decision makers at over 1,525 homeowner associations, you can become an associate member and join 325 other firms serving this important membership.

What are the Benefits of ECHO Membership? • Subscription to monthly magazine for every board member • Yearly copy of the Association Statute Book for every board member • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento

ECHO Membership Dues HOA Size 2 to 25 units 26 to 50 units 51 to 100 units 101 to 150 units 151 to 200 units 201 or more units Business/Professional

Rate $120 $165 $240 $315 $390 $495 $425

ECHO Journal Subscription Rates Members $50 Non-members/Homeowners $75 $125 Businesses & Professionals

How Do You Join ECHO? Over 1,800 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for membership, call ECHO at 408-297-3246 or visit the ECHO web site (echo-ca.org) to obtain an application form and for more information.

ECHO Journal | April 2008

ECHO Marketplace

Advertiser Index

The place to find business and professionals for your association Access Association Services . . . . . . . .26 Advance Construction Technology . . .18 Affirmative Management . . . . . . . . . .27 All Seasons Roofing . . . . . . . . . . . . . .13 Alpha Restoration and Waterproofing 16 American Management Services . . . .18 Angius & Terry . . . . . . . . . . . . . . . . . . .3 Applied Reserve Analysis . . . . . . . . . .33 AquaTek Plumbing . . . . . . . . . . . . . .13 A.S.A.P. Collection Services . . . . . . . .29 Association Reserves . . . . . . . . . . . . .32 Bank of Alameda . . . . . . . . . . . . . . . .33 Bayridge Group . . . . . . . . . . . . . . . . .19 Berding & Weil . . . . . . . . . . . . . . . . . .44

Your Ad Can Be Here You read this, didn’t you? Thousands of officers and directors of homeowner association boards also read the ads each month in the ECHO Marketplace.

Cal Bay Builders . . . . . . . . . . . . . . . . .27 California Sub-Meters . . . . . . . . . . . .39 Collins Management . . . . . . . . . . . . . .8 Community Association Banc . . . . . . .27 Community Management Services . . .29 Compass Management . . . . . . . . . . .33 Cool Pool Service . . . . . . . . . . . . . . . .32 Cornerstone Community Mgmnt . . . .16 Corum Painting . . . . . . . . . . . . . . . . . .2 County Bank . . . . . . . . . . . . . . . . . . .22 Draeger . . . . . . . . . . . . . . . . . . . . . . .17 Ekim Painting . . . . . . . . . . . . . . . . . . .26 ERTECH . . . . . . . . . . . . . . . . . . . . . . .26 First Bank Association Bank Services . .41 Flores Painting . . . . . . . . . . . . . . . . . .32 Helsing Group . . . . . . . . . . . . . . . . . .19 Hill & Company. . . . . . . . . . . . . . . . . .40 M&C Association Services . . . . . . . . .39 M. L. Nielsen Construction . . . . . . . . .37 Massingham and Associates . . . . . . .10 Pelican Management Group . . . . . . .29 PML Management Corp. . . . . . . . . . .17 Pollard Unlimited . . . . . . . . . . . . . . . .11 Pratt & Associates . . . . . . . . . . . . . . .19 Professional Gutter Service . . . . . . . . . .9 R. E. Broocker Co. . . . . . . . . . . . . . . .11 Rebello’s Towing Service . . . . . . . . . .12 REMI Company . . . . . . . . . . . . . . . . .37 Saarman Construction . . . . . . . . . . . . .8 Statcomm . . . . . . . . . . . . . . . . . . . . .11 Steve Tingley Painting . . . . . . . . . . . .12 Steve’s Painting Services . . . . . . . . . . . .9 Wells Fargo . . . . . . . . . . . . . . . . . . . .23

ECHO Journal | April 2008

Hit the Jackpot at the 2008 ECHO Annual Seminar Saturday, June 21, 2008 Santa Clara Convention Center Santa Clara, California

Saturday, June 21, 2008

The 2008 CACM Course

8:00 a.m.– 4:30 p.m. Santa Clara Convention Center Santa Clara, California

Assessment Collection and Bankruptcy

125 Booths in Trade Show, Hundreds of Prizes, New CACM Course, Buffet Luncheon, Ice Cream Social and more!

Join the Friday Night Gala! Annual Seminar Reception Friday, June 20, 5:00–7:30 p.m. Food, Music, Socializing, Prizes Cost: $40—See Registration Form

Friday, June 20, 2008 Course Fee: $109

the Federal Fair Debt Collection Practices Act (3 hours CEU credit). For reservations, call the ECHO Office.

Special Hotel Rates

You will leave with a better understanding of the assessment collection process and the remedies that may be used to compel payment and assessments. In order to give you collection tools you can use right away, the complexities of bankruptcy law will be explained, as will judicial and non-judicial foreclosure and requirements of

Don’t miss out on the special room rate of $105 single or double at the Hyatt Regency adjacent to the Santa Clara Convention Center. Reserve your hotel room now. Call the Hyatt Regency at 800-2331234 and mention the Executive Council of Homeowners. The special rate is available until May 30.

Educational Program Session Tracks

Saturday Morning 9:00 to 10:10

Saturday Morning 10:50 to 12:00

Saturday Afternoon 1:30 to 2:40

Saturday Afternoon 3:20 to 4:30

HOA UNIVERSITY Rooms 209 and 210

ADMINISTRATION Karen Conlon

LEGAL Tom Fier

FINANCIAL

INSURANCE Tim Cline

LEGAL Rooms 203 and 204

Legislative Update John Garvic Kerry Mazzoni

Amending Governing Documents Steve Weil

New Voting Law Redux Sandra Bonato

Management of Member Discipline Adrian Adams

MANAGEMENT & FINANCIAL Ballroom H

Establishing a Good Banking Relationship Geri Kennedy Karl Lofthouse

Association Finances Status Michael Gartzke Tyler Berding

Update on Earthquake Insurance John Allanson Beth Grimm

New Towing Requirements Burt Dean

MAINTENANCE Ballroom G

Updating Landscapes at Your Association John Gachina

Making Major Contracts Jeff Barnett Frank Arms

Handling Defects in Recent Construction Dan Angius Dan Rottinghaus

The Art of Communication Hermann Novak

Bill Erlanger

R E GIS T R AT ION FOR M

June 21, 2008 Do not miss this great educational opportunity. Reserve this date on your calendar.

Yes! Please reserve my space at the 2008 ECHO Annual Seminar. Name ___________________________________________________________________ Association/Organization ___________________________________________________ Address _________________________________________________________________ City __________________________________________ State _____ Zip____________ Daytime Phone ___________________________________________________________ Names of Additional Attendees: 1. _________________________________________ 2. ________________________________________ Please reserve tickets for: No. Amount Seminar Only (members) $75 ___________ $___________ Seminar Only (non-members) $90 ___________ $___________ Seminar Buffet Lunch $40 ___________ $___________ Friday Reception $40 ___________ $___________ TOTAL $___________ VISA/MasterCard No. ______________________________________________________ Expiration Date ___________________________________________________________ Cardholder’s Signature_____________________________________________________

Reserve Now Tickets are non-refundable Order will not be processed without full payment Return with payment to: ECHO 1602 The Alameda, Ste. 101 San Jose, CA 95126 Tel: 408-297-3246 Fax: 408-297-3517