Journal_11_05 by Echo

May 2011

A Journal for California Community Association Leaders

echo-ca.org

Exploring the Future ALSO INSIDE THIS ISSUE:

• Who’s the Client? • Reserve Funding During Economic Downturn • Landslides: Nuisance or Construction Defect

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

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Community Associations have placed their

trust in ANGIUS & TERRY LLP to solve their legal problems for over 30 years. Through the years ANGIUS & TERRY LLP has had a single mission: To provide our clients with exceptional service and superior legal representation all built on the solid bedrock of long term relationships. For results contact us today. 800.680.4001 www.angius-terry.com Walnut Creek â&#x20AC;˘ Sacramento Reno â&#x20AC;˘ Las Vegas

Exploring the Future 39th ECHO Annual Seminar See Page 42

C 6

2011 Annual Seminar Begins June 17 The 39th ECHO Annual Seminar is only a month away. Many exciting presentations and outstanding speakers are lined up for this year’s seminar. Register now for California’s largest CID conference.

Reserve Funding During Economic Downturn Boards are required to exercise prudent fiscal management of reserve funds. If reserve funds become dangerously low, there will be insufficient funds for projects, resulting in deferred maintenance and/or special assessments for those projects. This article discusses the importance of proper management of reserve funds.

Landslides: Nuisance or Construction Defect? Land, mud and rockslides are events that don’t occur regularly, but when long periods of rain soak hillsides that are unstable—either naturally or because they have not been graded properly—slides can cause tremendous damage. It is critical to identify the cause but also remedial measures. Don’t be slow about filing claims.

Departments 32 News from ECHO 33 Legislation at a Glimpse

34 Directory Updates 36 ECHO Bookstore 38 Events Calendar

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 Diane Rossi Secretary Dorothy Kopczynski Directors Paul Atkins John Garvic Robert Rosenberg Richard Tippett Steven Weil

Jerry L. Bowles David Levy Kurtis Shenefiel Wanden Treanor

Executive Director Oliver Burford Communications Coordinator Tyler Coffin Legislative Consultant Government Strategies, Inc. Design and Production George O’Hanlon

41 ECHO Marketplace

ECHO Mission Statement

41 Advertiser Index

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.

On the Cover May 2011 | ECHO Journal

40 ECHO Volunteers

39th Annual Seminar—page 6 4

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.

Who’s the Client? The question comes up concerning whom an attorney representing the association in a matter actually represents. The California Court of Appeal provided a clear answer. The client of a lawyer serving as legal counsel to an association is that entity and the relationship doesn’t extend to members. This article offers background to this answer.

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.

PRESENTING THE

ECHO Annual Seminar Sponsors

American Asphalt Angius & Terry American Management Bob Tedrick Construction Berding|Weil Common Interest Management Cool Pool ERTECH First Bank The G.B. Group Hughes Gill Cochrane Massingham & Associates Mutual of Omaha Petersen Dean Saarman Construction

May 2011 | ECHO Journal

2011 ECHO Annual Seminar Begins June 17 he 39th ECHO Annual Seminar is just around the corner—only a month away. Many exciting presentations and outstanding speakers are lined up for this year’s seminar. Community association board members and professional members have been ordering seminar tickets for the past month, but plenty of space remains. Send in your reservation now for California’s largest CID conference.

The 2011 Seminar and Trade Show will be an all-new, high-paced event, with many activities packed into a Saturday schedule. This year the event will use the main front lobby of the Santa Clara Convention Center for registration and the adjacent exhibition space. Morning and afternoon educational sessions, the full program book with handouts from all speakers, continental breakfast

ECHO Journal | May 2011

and an afternoon ice cream social are all included in the Seminar ticket price. Annual Seminar Plan and Special Events On-site registration begins at 12:00 noon on Friday, June 17, for those who are attending the CACM course on Ethics. Set-up of exhibits for Saturday’s Trade Show is also scheduled for Friday afternoon, from 3:00 p.m. to 6:00 p.m. Many of the exhibitors plan to celebrate the “Exploring the Future” theme of the seminar in their booths.

The HOA University series of seminar sessions is a must for all new or potential board members.

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May 2011 | ECHO Journal

The Friday Night Reception to honor exhibitors is open to all members and guests for a $40 fee. Light refreshments will be featured and cash bars will be available. A lively music group will provide entertainment for the reception. The ECHO Volunteer of the Year for 2011 will be announced and there will be a few other special presentations. The party will recognize our loyal exhibitors and sponsors for their major contributions to the Annual Seminar. Registration on Saturday will start at 7:30 a.m. and the Trade Show and refreshments will open at 8:00 a.m.; educational sessions will start at 9:00 a.m. and continue to 4:30 p.m. To give attendees maximum flexibility to allocate their time, the optional Saturday buffet luncheon adjacent to the Trade Show is again available for $40 to those who make advance reservations. Educational Program HOA University, ECHO’s training course for new directors, will be repeated this year. The basic responsibilities and duties of homeowner association board members will be explained by a full range of experts. This series of sessions is a “must” for all new or potential board members and also will provide an excellent review for any board members. Those who attend this entire track will receive a special certificate, recognizing their participation and completion of the program.

The 2011 Seminar also includes full-day tracks addressing legal and legislative topics, association financial and management, and building maintenance concerns. As usual there will be a status report and presentation on the legislative bills affecting common interest developments that are now moving through the California Legislature. The full program of educational presentations with speakers can be found on page 43 of this issue. Highlights of that program are shown in the table below. Full details of the annual seminar are available online at the ECHO web site: http://www.echoca.org/Annual_Seminar.php. Scholarship Program A limited number of scholarships to cover the cost of Annual Seminar tickets will be available again this year, thanks to the generosity of a number of member businesses and professionals. These scholarships will generally be offered to board members or owners who are first-time attendees at the Annual Seminar and who are residents of

smaller, poorly funded associations or associations with other sorts of serious operational problems. Preference will be given to representatives of ECHO member associations, but membership is not mandatory. Recipients are not required to be members of their association board. Anyone who wishes to be considered for a scholarship may apply, preferably in writing, to Oliver Burford, ECHO’s Executive Director, at the ECHO Office. Summary Don’t delay making reservations for current and future board members, committee members, and association members at your association. The 2011 Seminar is the place to get all the up-to-date information about operating your association efficiently and legally; every ECHO member association should participate. Complete the form on page 43 and send your orders to ECHO. You may also purchase tickets via a secure link on the ECHO website: www.echo-ca.org.

ECHO Annual Seminar Educational Program 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

Administration

Legal Considerations

Finances

Insurance

They Are At It Again in Sacramento: 2011 Legislative Update

Understanding Receiverships

Cyber Crime—Don’t Get Caught in an Electronic Net

There’s More Than Nonjudicial Foreclosure

The Three Pillars of Community Strength

All About Governing Documents

Beyond Privatopia: Why Private Government of Community Associations Isn’t Working and What Happens Next

Ask The Attorneys

Top Things That Drive You Crazy About Insurance

Remaking a 1960s Condo

Making Your CID Investment Safer Through Sound Reserve Practices

Special Session

ECHO Journal | May 2011

By James O. Devereaux, Esq.

Who’s the Client? he question sometimes comes up, usually from a homeowner or group of homeowners, concerning whom an attorney representing an association in a matter actually represents. Some years ago, the California Court of Appeal provided a clear answer. “Condominium associations may bring construction defect lawsuits against developers without fear of having to disclose privileged information to individual homeowners. Like closely held corporations and

May 2011 | ECHO Journal

private trusts, the client is the entity that retained the attorney to act on its behalf.” [Smith v. Laguna Sur Villas Community Association (2000) 79 Cal. App. 4th 639] That means the attorney’s client is the association—the incorporated or unincorporated entity—not the board of directors and not the association’s members either collectively or individually. In Laguna Sur Villas a group of homeowners, upset by what they thought was a

ECHO Journal | May 2011

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“runaway budget for expenditures” in an association’s construction defect lawsuit, demanded to see the work product and legal bills of the association’s attorneys in the lawsuit. The association declined to provide those materials on the basis of the attorneyclient privilege. A lawsuit ensued raising a number of issues including the right of the demanding homeowners to have access to information and documents that were subject to the attorney-client privilege. The trial court ruled in favor of the association on that question, holding that the privilege was held by the corporation. On appeal, the Court of Appeal agreed, stating: “The court correctly held [the association] was the holder of the attorney-client privilege and that individual homeowners could not demand the production of privileged documents, except as allowed by the [association’s] board.”

“In representing an organization, a lawyer shall conform his or her representation to the concept that the client is the organization itself.” —Rule 3-600 of California Rules of Professional Conduct As noted by the appellate court, corporations are “persons” under California law, have their own separate legal identity and enjoy the benefit of the attorney-client privilege. Under the California Evidence Code, a client is a person who consults a lawyer for the purpose of retaining the lawyer. The term “person” includes a corporation and may also include an unincorporated organization, when the organization rather than its individual members so consults with a lawyer. Rule 3-600 of the Rules of Professional Conduct of the State Bar of California, applicable to all California attorneys, provides, in part:

May 2011 | ECHO Journal

“In representing an organization, a [lawyer] shall conform his or her representation to the concept that the client is the organization itself.” Because the individual members of the Laguna Sur Villas Community Association did not consult with or retain the association’s lawyers, they were not clients of the law firm representing the association. The Court of Appeal rejected the argument of the homeowners that they were the “true clients” because the association was “faceless” and could act only in a representative capacity, and that they were the persons for whose benefit the lawsuit was brought and were paying for the attorneys’ legal services through their assessments. The court pointed out that the California Supreme Court had recently1 refused to create a so-called “fiduciary” exception to the attorney-client privilege. In the Wells Fargo Bank case the beneficiaries of a trust sought to obtain confidential communications between the trustee and legal counsel for the trust. They claimed that the trustees owed them independent duties to provide complete and accurate information regarding administration of the trust and to allow them to inspect books and documents. The Supreme Court rejected their claim and declined to allow the trustee’s legal responsibilities to trump the attorneyclient privilege. The Supreme Court stated: “Certainly a trustee can keep beneficiaries ‘reasonably informed’ [citation omitted] and provide ‘a report of information’ [citation omitted] without necessarily having to disclose privileged communications.” The court held that the attorneys represented only the trustees and not the trust beneficiaries. Like the Court of Appeal in Smith v. Laguna Sur, the Supreme Court in Wells Fargo Bank was not impressed with the argument that the trust beneficiaries were indirectly paying the attorneys’ legal fees because “[p]ayment of fees does not determine ownership of the attorney-client privilege.” These principles were reaffirmed in a 2004 appellate decision in La Jolla Cove Motel and Hotel Apartments, Inc. v. Superior Court where the Court of Appeal referred to Rule 3-600 of the Rules of Professional Conduct and said, “In representing a corporation, an attorney’s client is the corporate entity [emphasis in original], not the individual shareholders or directors, and the individual shareholders or directors

1 In Wells Fargo Bank v. Superior Court (2000) 22 Cal. 4th 201, 212.

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cannot presume that corporate counsel is protecting their interests.” An earlier 1991 Court of Appeal decision is to the same effect. In Skarbrevik v. Cohen, England & Whitfield [231 Cal. App. 3d 692 (1991)], the appellate court rejected the claim of a minority shareholder that a law firm representing the corporation in which he held stock owed him a duty of care. The court held that an attorney representing a corporation does not become a representative of its stockholders merely because the attorneys’ actions on behalf of the corporation also benefit the stockholders. Corporate counsel’s direct duty is to the client corporation, not to shareholders individually, even though legal advice rendered to the corporation may affect its shareholders.

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California case law is unequivocal. The client of a lawyer serving as legal counsel to a corporation or other entity is that entity itself and the attorneyclient relationship does not extend to the members or shareholders of the entity. California case law is unequivocal. The client of a lawyer serving as legal counsel to a corporation or other entity is that entity itself and the attorney-client relationship does not extend to the members or shareholders of the entity.

James O. Devereaux is a partner in the law firm of Berding|Weil. He has authored several Amicus Curiae (Friend of the Court) briefs on behalf of ECHO that were submitted to the California Supreme Court in important cases. He has been a frequent contributor to the ECHO Journal. 14

May 2011 | ECHO Journal

Nominating Committee Seeks Candidates for ECHO Board of Directors THE NOMINATING COMMITTEE for the ECHO Board of Directors is seeking expressions of interest from persons who are interested in being considered as candidates for positions on the ECHO Board of Directors. Four positions on the board will be up for election at the ECHO Annual Meeting that will be held in October. These positions are for three-year terms. Current directors whose terms expire in 2011 are Dianne Rossi, Robert Rosenberg, Richard Tippett and Kurtis Shenefiel. Board members are expected to attend all of approximately six threehour board meetings held each year, generally at the ECHO Office in San Jose. Each board member also serves on one or more committees that hold regular meetings throughout the year. These two activities involve a commitment of four to six hours per month plus travel time. In addition members are expected to attend the Annual Seminar, Annual Meeting and a twoday board retreat each November. Board members receive no reimbursement for these activities. Nominees will also be expected to have been recent active participants in ECHO activities and to have thorough familiarity with the organization and the CID industry. Persons interested in being considered for nomination should obtain and complete a nomination and qualifications form, available by request from the ECHO office. Every potential candidate, including incumbents, must submit a full form. All completed forms must be submitted to the ECHO office no later than July 15, 2011, to be considered by the nominating committee. Those requesting nomination may be requested to interview with the nominating committee. The committee will meet in late July to prepare recommendations for board consideration.

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By Susan Oliver, CCAM

Reserve Funding During Economic Downturn housing tract, set amid tree lined streets in suburban Sacramento, faces huge financial problems: About 50 percent of its homeowners are not paying their association assessments, leaving neighbors with higher assessments and reduced services. Owners in default of assessments also fail to maintain their owner obligations as well, allowing lawns to brown and trash to accumulate in patios.

May 2011 | ECHO Journal

Itâ&#x20AC;&#x2122;s a scenario being repeated across the country. Delinquent assessments at community associations are a direct result of the mortgage crisis. Community associations are in financial trouble because of unpaid fees from struggling homeowners. Communities are scraping to pay for landscaping, maintenance, pools, recreation centers and other amenities.

To cope with unpaid fees, community leaders are becoming creative. Many are negotiating service contracts, cutting insurance coverage and aggressively attempting to collect delinquencies from members. Unfortunately, some communities are not contributing to their reserve funds as a result. Reserve Funds refers to money the associaContinued on page 18

ECHO Journal | May 2011

tion has set aside for future repair or replacement of major components that the association is obligated to maintain. Associations must visually inspect the common areas every three years and prepare a reserve study listing all major components, the remaining useful life of those components and the cost to repair or replace them. Boards are required to exercise prudent fiscal management of the associationâ&#x20AC;&#x2122;s reserve funds. Boards have a duty to fund reserves. If the reserve fund becomes dangerously low, it means that insufficient funds are accumulating for projects. This will result in deferred maintenance and/or special assessments for those projects. If the board has properly built up reserve funds, they will spend the money for the necessary maintenance obligation. Without adequate funds, projects will get delayed and major components will become neglected. Boards may be forced to increase assessments and/or impose special assessments to build reserves for subsequent required projects. Without adequate reserves, associations rely on special assessments. Since special assessments are unpopular, the tendency is to postpone major renovations. This deferral accelerates the deterioration process, detracts from curb appeal, and ultimately erodes home resale values. This lack of board action adds to the decline in housing prices and an increase in defaulting homeowners. A reserve funding plan with regular monthly contributions from each owner is fair and insures that major maintenance is done when needed. Boards that ignore their duties to fund reserves are in breach of their duties. Deferring maintenance to avoid spending money or raising assessments is harmful to the membership. It exposes the association to litigation and potential liability for damage caused by the repair deferrals of major component items. It may also expose directors to claims of gross negligence, breach of governing documents, breach of statute, and breach of fiduciary duties. Under those conditions, the association may not be able to protect the directors from personal liability. To lessen the impact of special assessments on members, some boards may choose to borrow funds from a bank to fund large projects. When applying for a loan, the associations must provide financial statements and disclose delinquencies. If an association has high delinquencies and/or failed to comply with statutory requirements for annual 18

May 2011 | ECHO Journal

financial statements, it is possible the association will not be approved for a loan. Associations with good cash flow and low delinquency rates are usually a good risk for lenders because of their ability and track record in collecting assessments. Therefore communities most in need due to poor assessment collection are sometimes the ones that cannot get the funding. Additionally some banks require that the association be managed by a professional common interest development manager. Self-managed associations may find it hard to get the help they need in this department. Boards may also borrow from their reserve account to meet short-term, cash-flow problems with operating expenses. With the increase in lost income due to delinquent assessments, many communities are falling short of funds to pay for daily operating expenses. When borrowing from reserve accounts for operating expenses, boards are required to give notice of their intent to borrow reserve funds by listing it on the agenda of a board meeting. There must be a notice including the reasons the reserve transfer is needed, options for repayment, and whether a special assessment may be considered. If the board authorizes the transfer, the board must record it in the board’s minutes, explaining the reasons for the transfer, and describing when and how the money will be repaid to the reserves. Without regular assessment increases or special assessments, the repayment of a reserve loan may become very difficult or impossible. Failure to fund the reserves per the reserve study preparer’s recommendations will lead to extra costs to the owners. Realtors and buyers are getting more wary of this under-funding problem. Buyers and lenders look closely at how reserve funds are handled by the association. Lack of reserves is a red flag for an inevitable special assessment. If purchasers are given the choice between an association with healthy reserves and one with little or none, it is an easy choice for new owners. They will choose the most solvent organization. Lenders usually will ask: “Have there been any special assessments in the last three years? Are there major maintenance or improvement projects anticipated in the next 12 months? Are there sufficient reserves to cover those expenses?” Multiple special assessments or low reserve funds are signs of poor planning. Purchasers feel it is unfair to purchase a unit from someone who had ECHO Journal | May 2011

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enjoyed artificially low association fees for years, only to have to cough up immediately a large special assessment when a major component item needs replacement. Regardless of the economy, repairs must be made to the common areas. Therefore boards cannot ignore their fiduciary responsibility. Many communities will need to face the repairs of reserve components with special assessments or community loans. Some communities will even need to address funding of daily operating expenses because of the loss of income. One thing is for sure—

communities across the nation will need to be aggressive with the budgeting and collection of assessments, become more aggressive when negotiating operating expenses and approve special assessments when necessary.

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May 2011 | ECHO Journal

By Tyler P. Berding, Esq.

Landslides Nuisance or Construction Defect? S I WRITE THIS, NORTHERN California is experiencing the second straight week of rain in an otherwise very wet year. Continuous rain soaks the ground and loosens unstable hillsides. Landslides can stay hidden for years until excessive moisture suddenly breaks them loose. Also, slides

can move very slowly, over long periods of time, gradually damaging the properties around them. In either case, earth movement can cause serious damage to buildings and other improvements on or adjacent to the unstable land. Mudslides, rockslides, and ECHO Journal | May 2011

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landslides are all versions of the same phenomenon—water plus gravity equals damage. We’ve seen slides gradually pull down the surrounding properties so slowly that trees growing on the hill have curved trunks. This is called soil creep and can last for years or decades. We’ve also represented clients whose homes were damaged in just a moment as a large landslide, hidden beneath the surface of the earth for centuries, comes down, bringing a large portion of the hillside with it. Property developers are required to obtain the advice of soil engineers when grading is done in a landslide-prone area, and most engineers are very good at detecting the presence of hidden slides. Aerial photo mapping, boring, or just reviewing the history of the area under development can do this. But regardless of the engineer or developer’s efforts, slides can still occur. Earth Movement as a Construction Defect If a slide occurs in a development after construction is complete and the homes are sold, the developer is liable for any damage caused for at least ten years from the completion of the project. Slides, subsidence, settle24

May 2011 | ECHO Journal

ment, and improper drainage are all considered construction defects. Arguments in those cases usually do not arise over who is liable—the developer and its contractors are usually “strictly” liable or negligent if a slide occurs on newly developed land. What the attorneys for each side usually debate is what is necessary to repair the damages and how much that will cost. Unless something suspends or “tolls” the statute of limitations, ten years is the usual outside limit for a claim against the builder of the homes and the subcontractors involved in the grading of the project. There are also shorter limitations on such claims, dating from when the event occurs that also come into play. Thus it is important to seek the advice of an attorney experienced in earth movement claims if a landslide damages your property.

If a landslide damages your property, it is important to seek the advice of an attorney experienced in earth movement claims. Earth Movement as a Nuisance But there are other instances of damage caused by earth movement that are unaffected by the ten year statute of limitations. If a slide damages a neighbor’s property, the owner of the land where the slide originates can be liable to his neighbor for the damage, regardless of when the damaged property was built or sold, and regardless of whether any “negligence” is involved. The only limitation on claims of that sort date from the occurrence of the event. Unlike claims against a developer for new construction, there are no outside limits, but there are shorter periods dating from when the damage occurred that must be observed. Again, the advice of an attorney should be obtained to be sure that you don’t lose your right to make a claim against those responsible. A claim against the owner of property where the landslide originates can be for money damages, and also for injunctive relief—an order of the court requiring the neighbor to stop, or abate, the continuing ECHO Journal | May 2011

damage being caused by the slide. These are usually claims for what lawyers call “nuisance”—the invasion of your property by something that started on your neighbor’s land. The fact of the slide is not usually the issue—it’s pretty easy to tell when a landslide or earth subsidence is causing damage. The problem is who is at fault. Attorneys and experts in earth movement cases between neighbors argue about both liability and damages. Where did the landslide start—on the uphill, or the downhill neighbor’s property? What is necessary to repair the slide and any damage it caused? Experts Earth movement cases, whether against a builder or an adjacent landowner, require the services of experts—soil engineers or geologists who can provide opinions on the cause of the slide and the cost of repairing it. Damages in soil cases can be severe, and it is critical that the proper repair is identified and a claim for all possible damages is made.

Earth movement cases, whether against a builder or an adjacent landowner, require the services of experts.

Component Reserve Analysis and Construction Project Management

Pollard Unlimited, Inc. Professional Service – Competitively Priced

Roger Pollard, President Office: (209) 879-9113 FAX: (209) 879-9252 Email: pollardunlimited@comcast.net

May 2011 | ECHO Journal

Fire Alarm Systems Fire Sprinkler Systems Testing, Service, Design & Installation

Tele-Entry & Access Control Emergency Exit Lighting Automated Gates Fire-Rated & Rollup Doors For Information please call: 650 988-9508 or 888 988-9508 or e-mail info@statcomm.com Lic # 675521 Underwriters Lab #UUFX.S8915 Diamond Certified

One of the longest trials in our firm’s history was against a builder over eleven separate landslides in a new development. The difficult part of that case was that not all of those slides had openly caused damage; some were what are known as “ancient” slides, slides that have been hidden for thousands of years waiting for enough rain to break them loose. The threat of future damage is sometimes enough to force a developer to fix even those ancient, or latent slides, and that is what the jury awarded in our case.

Tyler Berding is the managing partner at Berding|Weil, a construction defect and homeowner association law firm. He is a former board member and the immediate past president of the ECHO board of directors.

Meet the Author and Attend His Presentation on Sound Reserve Practices at the ECHO Annual Seminar

How to make your investment safer Condos, townhomes, homeowner associations and other “shared expenses” housing is the wave of the future in the United States and around the world. But to make it a sustainable investment, new buyers, owners and volunteer 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. The new book, Condos, Townhomes, Home Owner Associations—How to Make Your Investment Safer, provides essential training and checklists for • Association Board Members • Owners in Associations • Prospective Buyers of Association Property The book answers vital questions that can help to keep your association from financial ruin:

• What overview training should board members have before beginning their service? • What critical financial and mechanical information should board members track each month? • What information should a buyer look for before buying in an association? The author provides lessons that help you to: • Protect property values • Gain peace of mind • Lessen the need for large, unexpected special assessments Patrick Hohman, author of the book and a 22-year association president, compiled these userfriendly, colorful lessons with the help of industry experts throughout the United States.

The paperback, Condos, Townhomes, Home Owner Associations—How to Make Your Investment Safer, is now available from ECHO for only $29 for members and $45 for nonmembers. Order today by calling (408) 297-3246 or order online at www.echo-ca.org.

By Richard Tippett

Are You Getting Your Maintenance Dollar’s Worth? e talk and talk about maintenance in broad terms: landscape maintenance, pool maintenance, lighting maintenance, roofs, gutter, paving, site cleaning and on and on. We never really get into the nitty-gritty details of what the maintenance tasks really are. We never talk in detail about maintenance schedules, or what should be included in each maintenance contractor’s scope of work. It is time to correct that oversight. Here are a series of schedule-oriented checklists that set out specific maintenance tasks, and how often homeowner committee members (or the community manager) should check to be sure that the tasks are

May 2011 | ECHO Journal

done. How frequently the tasks should be checked on also tells you how often your maintenance contractors should be doing the work. If you separate the tasks by type of work, you will have a basis for drawing up maintenance scopes of work for your association’s various maintenance contractors. Drawing up these scopes of work does two things: 1. It allows you to check that your present maintenance people are doing all that they should do for you. 2. It provides a basis for getting competitive bids for future maintenance contracts.

The Maintenance Inspection/Action Checklists are laid out with weekly, monthly, quarterly, semi-annual, annual and three, four and five year inspection/action items. They are easily edited or supplemented to tailor them specifically for your association’s facility. We hope you find them educational as well as useful. Weekly • Look for and correct any sprinkler system leaks. • Replace any broken sprinkler risers or heads. • Test and amend pool water quality.

• Test and amend spa water quality. • Clean the spa. • Check common area lighting and replace burned out lights. • Inspect and clean laundry rooms, including cleaning dryer filters. • Inspect lawn areas for mowing height, edging, over or under watering. • Clean common area walkways. • Clean common area garbage spaces and recycle spaces. • Clean the exercise room. Wipe machines and benches with disinfectant. Monthly • Inspect ground planting maintenance. • Check landscape watering and correct over or under watering. • Remove and replace all dead landscape plantings. • Clean pool filters. • Clean spa filters. • Clean common area garages. • Check for/remove abandoned vehicles. • Clean common area buildings such as the clubhouse or pool house. • Notify owners or tenants who are cluttering the common areas with personal property or debris to remove it. Quarterly • Replace dead, over-aged or out-of-season ground plantings. • Check and prune common area shrubs and hedges. • Service all oil-fired water heaters or hot air furnaces. • Treat common area/garbage areas for pests. • Re-bait all pest (termite) bait stations. • Check and renew any termite control stations. • Test all common area fire alarms. • Reset any slipped tiles in pools, spas and fountains. • Check irrigation system electrical controls and timers for proper operation. Semi-Annually • Clean all roofs and gutters. • Treat landscaping for pests/disease. • Inspect pool/spa lining for spalling, tile loss. • Inspect and service gas-fired hot water heaters. • Inspect common area hot water heaters for anode and cathode losses. • Inspect common area hot and cold water piping anodes and cathodes. • Check sidewalks for raising and shifting.

• Fertilize lawns and ground plantings. • Check all solar panel piping and correct all leaks. • Ensure that all roof, balcony, walkway or wall leaks previously reported have been repaired. Annually • Check that all storm drains are clean and free flowing. • Check roofs and flashings for aging, maintenance needs. • Inspect all common area walkways and decks for rot, damage or other maintenance needs. • Mark common area trees for pruning or canopy thinning. • Inspect paint for blistering, peeling, chalking or caulking failure. • Inspect siding and trim for cracking, spalling, blistering, rot or delamination. • Inspect and service all common area air conditioners. • Inspect and service all common area electrical hot water heaters. • Winter: check lawn areas for drainage problems to be corrected in the spring. • Inspect/service all common area elevators. • Have all common area fire extinguishers inspected, tested if necessary and refilled. • Test all common area emergency lighting and replace dead or dying batteries. • Check paving for and repair any potholes, alligatoring, ruts, spalling, cracking or root damage. • Review all maintenance vendor contracts and make any needed changes. Every Three Years • Repair, reseal and restripe all roads and parking areas. Every Four Years • Paint or stain all wood siding, trim and walkways. Every Five Years • Recoat all waterproofed walkways, balconies, decks and foam roofs. • Have an arborist inspect all common area trees and make recommendations for action.

Dick Tippett is the principal at ERTECH, Inc., a firm that offers a complete menu of consulting and reconstruction management services for all types of buildings and properties. He is a member of ECHO’s Board of Directors and former Chair of both the Maintenance Resource and Central Coast Resource Panels. ECHO Journal | May 2011

By Sherry Harvey, PCAM

Serving on the Board Itâ&#x20AC;&#x2122;s About Team Building and Leadership hether you are a newly elected board member or one who has served for several years, you should come to the table with an open mind and a desire to build consensus. Being a board member means that you are part of a team of volunteers who have decided, for whatever reason, that they want to be a part of the decision-making process for their community.

May 2011 | ECHO Journal

You may offer a special talent or have specific expertise that can benefit the community. Serving on the board may help you gain experience that enhances your career goals or you simply have the time and want to help in any way you can. Maybe you were recruited by a neighbor, committee members or even your management company. What now? The most important reason to serve on the board,

in my opinion, is for the betterment of the community for you, your family and your neighbors. Key elements with which board members should familiarize themselves are the associationâ&#x20AC;&#x2122;s governing documents that define the Continued on page 35

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ECHO Journal | May 2011

News from ECHO

ECHO Annual Seminar Begins June 17 The 39th ECHO Annual Seminar is only a month away. Many exciting presentations and outstanding speakers are lined up for this year’s seminar. You don’t have to be a board member to attend this informative event. See more details at www.echo-ca.org. Then register now for California’s largest CID conference.

Who’s the Client? The question sometimes comes up, usually from a homeowner or group of homeowners, concerning whom an attorney representing the association in a matter actually represents. Some years ago, the California Court of Appeal provided a clear answer. “Condominium associations may bring construction defect lawsuits against developers without fear of having to disclose privileged 32

May 2011 | ECHO Journal

information to individual homeowners. Like closely held corporations and private trusts, the client is the entity that retained the attorney to act on its behalf.” [Smith v. Laguna Sur Villas Community Association (2000) 79 Cal. App. 4th 639] That means the attorney’s client is the association—the incorporated or unincorporated entity; not the board of directors and not the association’s members either collectively or individually. In Laguna Sur Villas a group of homeowners, upset by what they thought was a “runaway budget for expenditures” in an association’s construction defect lawsuit, demanded to see the work product and legal bills of the association’s attorneys in the lawsuit. The association declined to provide those materials on the basis of the attorney-client privilege. A lawsuit ensued, raising a number of issues including the right of the demanding homeowners to have access to information and documents that were subject to the attorney-client privilege. The trial court ruled in favor of the association on that question, holding that the privilege was held by the corporation. On appeal, the Court of Appeal agreed, stating: “The court correctly held [the association] was the holder of the attorney-client privilege and that individual homeowners could not demand the production of privileged documents, except as allowed by the [association’s] board.” California case law is unequivocal. The client of a lawyer serving as legal counsel to a corporation or other entity is that entity

itself and the attorney-client relationship does not extend to the members or shareholders of the entity.

Reserve Funding During Economic Downturn A housing tract, set amid tree lined streets in suburban Sacramento, faces huge financial problems: About 50 percent of its homeowners are not paying their association assessments, leaving neighbors with higher assessments and reduced services. It’s a scenario being repeated across the country. Delinquent assessments at community associations are a direct result of the mortgage crisis. Community associations are in financial trouble because of unpaid fees from struggling homeowners. Communities are scraping to pay for landscaping, maintenance, pools, recreation centers and other amenities. To cope with unpaid fees, community leaders are becoming creative. Many are negotiating service contracts, cutting insurance coverage and aggressively attempting to collect delinquencies from members. Unfortunately, some communities are not contributing to their reserve funds as a result. Reserve funds refers to money the association

has set aside for future repair or replacement of major components which the association is obligated to maintain. Boards are required to exercise prudent fiscal management of the association’s reserve funds. If the reserve fund becomes dangerously low, it means that insufficient funds are accumulating for projects. This will result in deferred maintenance and/or special assessments for those projects. If the board has properly built up reserve funds they will spend the money for the necessary maintenance obligation. Without adequate funds, projects will get delayed and major components will become neglected. Boards may be forced to increase assessments and/or impose special assessments to build reserves for required projects. Lack of board action adds to the decline in housing prices and an increase in defaulting homeowners. A reserve funding plan with regular monthly contributions from each owner is fair and insures that major maintenance is done when needed. Deferring maintenance to avoid spending money or raising assessments is harmful to the membership. It exposes the association to litigation and potential liability for damage caused by the repair deferrals of major component items. Regardless of the economy, repairs must be made to the common areas. Therefore boards cannot ignore their fiduciary responsibility. Many communities will need to face the repairs of reserve components with special assessments or loans.

Legislation at a Glimpse As of April 27, 2011 Bill No.

Author

Subject

Status

Position

Summary

AB 19

Fong

Submetering

Amended Support if 3/23. Amended In Assembly Housing. Hearing 4/27.

For new construction of multi-unit structures, requires the installation of water sub-meters.

AB 20

Halderman

Construction Defect Disclosure

In Assembly Judiciary.

Oppose

Requires that an attorney make certain written disclosures to a client in a potential construction defects action. Failure to disclose would constitute cause for professional discipline.

AB 579

Monning

Mobilehome Attorneys Fees

In Assembly Judiciary. Hearing cancelled.

Support

Would permit the award of attorney's fees to local governments in an action brought by the owner of a mobilehome park to challenge the validity of a local ordinance.

AB 771

Butler

Sale Disclosure In Assembly Oppose Documents Housing. Hearing 4/27.

Provides that the time frame and fee limitation for providing specified documents to an owner of a separate interest apply to an agent of the association.

AB 805

Torres

Davis-Stirling Revision Part 1

In Assembly Housing. Hearing 4/6.

Support

This is the first of two bills from the California Law Revision Commission that restate and clarify the Davis-Stirling Act.

AB 806

Torres

Davis-Stirling Revision Part 2

In Assembly Housing. Hearing 4/6.

Support

This is the second of two bills from the California Law Revision Commission that restate and clarify the Davis-Stirling Act.

SB 209

Corbett

Electric Vehicle Charging Stations

Amended 3/22. Passed Senate Housing.

Support if Amended

Makes void and unenforceable any prohibition by an association that restricts the installation or use of an electric vehicle charging station. Requires homeowner to pay for all charges and damages associated with installation and maintenance.

SB 561

Corbett

Third Party Collections

In Senate Judiciary. Hearing 4/5.

Oppose

Would require any 3rd party acting to collect payments or assessments on behalf of an association to comply with the same requirements imposed on the association. Makes statement of legislative intent.

SB 563

Transportation & Housing Committee

Electronic Meetings

Amended 3/30. In Senate Housing. Hearing 4/5.

Support

Prohibits electronic meetings except for emergencies. Prohibits boards from taking action outside of a meeting. Requires boards to provide agendas of executive sessions. Requires boards to give notice two days before an executive session.

SB 759

Lieu

Artificial Turf

Amended 3/22. In Senate Housing.

Oppose

Voids provisions in governing documents that prohibit artificial turf. Allows associations to establish design and quality standards.

ECHO Journal | January 2011

Directory UPDATES Updates for listings in the ECHO Directory of Businesses and Professionals, now available online at www.echo-ca.org.

New Members Advanced Restoration 1170 N 15th St San Jose, CA 95112 Contact: Richard Schaper Tel: 408-298-4391 Fax: 408-298-4392 www.advancedrestor.com Email: richard@advancedrestor.com We are a fire and water damage restoration, mold remediation and removal contractor. 6 6(59,1* &20081,7,(6 7+528*+287 1257+(51 &$/,)251,$ 672&.721 +4 Â&#x2021; )5(0217 (59,1* &20081,7,(6 7+528*+287 1257+(51 &$/,)251,$ 672&.721 +4 Â&#x2021; )5(0217 PLE PLEASANTON Â&#x2021; &233(5232/,6 Â&#x2021; 02'(672 Â&#x2021; 6$17$ &/$5$ ASANTON Â&#x2021; &233(5232/,6 Â&#x2021; 02'(672 Â&#x2021; 6$17$ &/$5$

M & C Association Management Services provides community association management and developer services to Fremont, Pleasanton, Santa Clara, Stockton, Modesto, Copperopolis and the surrounding foothills. Since 1990, our sole focus has been to deliver performance that enriches communities and enhances the lives of the people we serve. M & C is proud to be an Accredited Association Management CompanyÂŽ (AAMCÂŽ), which is the Community Associations Instituteâ&#x20AC;&#x2122;s highest GHVLJQDWLRQ DZDUGHG WR PDQDJHPHQW Ă&#x20AC;UPV

3 3OHDVDQWRQ Â&#x2021; )UHPRQW Â&#x2021; 6DQWD &ODUD OHDVDQWRQ Â&#x2021; )UHPRQW Â&#x2021; 6DQWD &ODUD S Stockton tockton 209.644.4900 209.644.4900 Â&#x2021; Â&#x2021; 0RGHVWR Â&#x2021; &RSSHURSROLV 0RGHVWR Â&#x2021; &RSSHURSROLV For management proposal information, please visit www w.mccommunities.com or email inffo@mccommunities.com 34

May 2011 | ECHO Journal

Rayco Energy 3541 Investment Blvd., # 6 Hayward, CA 94545 Tel: 888-320-7566 Fax: 888-838-5523 Contact: Ricky Chu www.raycoenergy.com Email: ricky@raycomail.com Rayco Energy is a full-service construction company that specializes in solar energy installations, lighting retrofitting, energy auditing for HOAs and multi-family buildings. Willis Management Group, Inc. 7033 Village Parkway, # 212 Dublin, CA 94568 Contact: Chris Willis/Debra Berro Te 925-828-7150 Fax: 925-828-7195 www.willismg.com Email: cwillis@willismg.com

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

Serving on the Board Continued from page 30

Affirmative Management Services

board’s authority. If you have a management company, they hopefully will provide you with a Board Member Handbook that will describe your role as a board member, your fiduciary responsibility, specific board responsibilities from decision-making to administrative tasks, and how to conduct board meetings. Other vital information will include professional conduct at meetings, parliamentary procedure, the operating budget, and appropriate insurance coverage, as well as how to avoid personal liability.

Feeling ignored by your property manager? Need to get more things done? Recent management changes = Poor service? Want a more effective manager? Time for new management? HOA management is our only business

Board members should recognize they are part of a team and not take a confrontational position with fellow board members or their management company.

We’re experienced, knowledgeable & responsive Make this the year you start solving your HOA’s problems Contact us today for a proposal or to schedule an interview

We’re Here to Improve Your Quality of Life! Serving Santa Clara County Phone: (408) 244-0909

Email: info@thehoamanager.com On the web: www.thehoamanager.com

Armed with the above information, it’s important to come to all meetings prepared. Read the management report in advance of the meetings. If you have questions, ask them prior to the meeting so that your manager (if your association is professionally managed) can have ample time to find the answers. This will help the meeting time be more effective. There is nothing more frustrating to those attending the meeting than for fellow board members to come unprepared and want to discuss issues at great length. The management report and agenda should provide ample information so that decisions can be made in an effective and timely manner. Both volunteers and staff alike can suffer burnout from meetings that extend beyond two hours. Remember that the board meeting is a business meeting of the association. You are there to conduct the business and should come prepared just as you would at any other business meeting. Board members should recognize they are part of a team and not take a confrontational Continued on page 41 ECHO Journal | May 2011

n ditio E 1 e l 201vailab A

2008 ECHO Business & Professional Directory $20.00 Non-Member Price: $25.00

Condominium Bluebook 2011 Edition $18.00 Non-Member Price: $25.00

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

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 associations.

This well-known compact guide for operation of common interest develop ments 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.

To make it 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.

Robert’s Rules of Order $7.50 Non-Member Price: $12.50

The Board’s Dilemma $10.00 Non-Member Price: $15.00

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

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

Community Association Statute Book—2011 Edition $15.00 Non-Member Price: $25.00 Contains the 2010 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, Govern ment and Vehicle Codes important to associations.

New e Pric

Homeowners Associations— How-to Guide for Leadership New Member Price: $15.00 Non-Member Price: $25.00 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.

California Building Guidelines for Residential Construction $52.50 Non-Member Price: $60.00 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.

Be an HOA Survivor

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

Reserve Fund Essentials $18.00 Non-Member Price: $25.00 This book is an easy to read, musthave 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.

2010 ECHO Annual Seminar Program

The Condo Owner’s Answer Book $15.00 Non-Member Price: $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.

This Program Book is suppor ted through a generous sponsorship from Management Solutions.

2010 ECHO Annual Seminar Program Book $35.00 Non-Member Price: $45.00 This 300+ page reference book contains the presentation outlines, text and handouts from the sessions at the 2010 ECHO Annual Seminar held on June 19, 2010. It also contains vital information for association directors, such as assessment collection policies, internal dispute policies, and much more.

Dispute Resolution in Homeowner Associations $20.00 Non-Member Price: $25.00 This publication has been completely revised to reflect new requirements resulting from passage of SB 137.

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

Bookstore Order Form Board Memberâ&#x20AC;&#x2122;s Guide for Contractor Interviews $20.00 Non-Member Price: $25.00

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

QUANTITY

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 9.25%) TOTAL AMOUNT

Yes! Place my order for the items above. Board Memberâ&#x20AC;&#x2122;s Guide for Management Interviews $20.00 Non-Member Price: $25.00 This guide for use by boards for conducting complete and effective interviews with prospective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.

q Check q Visa q MasterCard Credit Card Number Exp. Date

Signature

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

State

Zip

AMOUNT

ECHO Events Calendar

Important dates to save Thursday, May 5 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse 400 Yosemite Rd., San Rafael

Wednesday, June 8 South Bay Resource Panel 12:00 Noon Il Fornaio 302 S. Market St., San Jose

Monday, May 9 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant Oakland

Friday, June 10 East Bay Resource Panel 12:00 Noon Massimo Restaurant 1604 Locust St., Walnut Creek

Tuesday, May 10 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz

Wednesday, June 15 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park

Wednesday, May 18 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park Thursday, May 19 San Francisco Luncheon 11:45 a.m. to 2:00 p.m. St. Francis Yacht Club San Francisco Wednesday, June 1 Maintenance Resource Panel 12:00 Noon ECHO Office 1602 The Alameda, Ste. 101, San Jose

Tuesday, July 12 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz Wednesday, July 20 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park Thursday, July 21 San Francisco Luncheon 11:45 a.m. to 2:00 p.m. St. Francis Yacht Club San Francisco

Friday and Saturday June 17 & 18, 2011 ECHO Annual Seminar Santa Clara Convention Center Santa Clara

Wednesday, August 3 Maintenance Resource Panel 12:00 Noon ECHO Office 1602 The Alameda, Ste. 101, San Jose

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

Wednesday, August 10 South Bay Resource Panel 12:00 Noon Il Fornaio 302 S. Market St., San Jose

Monday, July 11 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant Oakland

Friday, August 12 East Bay Resource Panel 12:00 Noon Massimo Restaurant 1604 Locust St., Walnut Creek

Wednesday, August 17 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park Thursday, September 1 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse 400 Yosemite Rd., San Rafael Monday, September 12 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant Oakland Tuesday, September 13 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz Thursday, September 15 San Francisco Luncheon 11:45 a.m. to 2:00 p.m. St. Francis Yacht Club San Francisco Saturday, September 24 Central Coast Fall Seminar 8:00 a.m. to 1:00 p.m. Hilton Santa Cruz 6001 La Madrona Dr. Santa Cruz

Regularly Scheduled ECHO Resource Panel Meetings Resource Panel Maintenance North Bay East Bay Accountants Central Coast South Bay Wine Country Legal 38

May 2011 | ECHO Journal

Meeting First Wednesday, Even Months First Thursday, Odd Months Second Friday, Even Months Second Monday, Odd Months Second Tuesday, Odd Months Second Wednesday, Even Months Third Wednesday, Monthly Quarterly

Location Draeger Construction, San Jose Contempo Marin Clubhouse, San Rafael Massimo Restaurant, Walnut Creek Francesco’s Restaurant, Oakland Pasatiempo Inn, Santa Cruz Il Fornaio, San Jose Eugene Burger Management Co., Rohnert Park Varies

San Francisco Luncheon Thursday, May 19 11:45 a.m. to 2:00 p.m.

2011 in the State Capitol Sandra Bonato, Esq. Berding|Weil

Luncheon Price: $70 Non-Members: $80 Advance reservations are required for this event. Reservations after September 13 must add $15. Cell phone use is not permitted inside the St. Francis Yacht Club. Yes, reserve _____ spaces for the ECHO San Francisco Luncheon. Amount enclosed: $__________ (attach additional names) Name: 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

ECHO Honor Roll

About

ECHO Honors Volunteers Diane Kay 2010 Volunteer of the Year ECHO Resource Panels Accountant Panel Richard Schneider, CPA 707-576-7070 Central Coast Panel John Allanson 831-685-0101 East Bay Panel Beth Grimm, 925-746-7177 Mandy Newton, 415-225-9898 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Brian Seifert, 831-708-2916 North Bay Panel Diane Kay, CCAM, 415-846-7579 Stephany Charles, CCAM 415-458-3537 San Francisco Panel Jeff Saarman, 415-749-2700 South Bay Panel Toni Rodrigues, 408-848-8118 Kimberly Payne, 408-200-8730 Wine Country Panel Maria Birch, CCAM, 707-584-5123

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

May 2011 | ECHO Journal

SF Luncheon Speakers John Allanson Jeffrey Barnett, Esq. Tyler Berding, Esq. Ronald Block, PhD. Wendy Buller Doug Christison, PCAM, CCAM Karen Conlon, CCAM Rolf Crocker, CCAM Ross Feinberg, Esq. David Feingold, Esq. Tom Fier, Esq. Kevin Frederick, Esq. John Garvic, Esq. Beverly Gordon, CCAM Sandra Gottlieb, Esq. Beth Grimm, Esq. Brian Hebert, Esq. Roy Helsing Stephen Johnson, CFP Julia Lave Johnston Garth Leone Nico March Kerry Mazzoni Thomas Miller, Esq. Larry Pothast Larry Russell, Esq. Steve Saarman Jim Shepherd Nathaniel Sterling, Esq. Debra Warren, PCAM, CCAM Steven Weil, Esq. Mark Wleklinski, Esq. Glenn Youngling, Esq.

Seminar Speakers April 17, 2010 South Bay Spring Seminar Tyler Berding, Esq. Sandra Bonato, Esq. John Garvic, Esq. Robert P. Hall, Esq. Geri Kennedy, CCAM Jan A. Kopczynski, Esq.

Kurtis Shenefiel, PCAM, CCAM Richard Tippett September 25, 2010 Central Coast Fall Seminar John Allanson Beverlee Gordon Stephanie Hayes, Esq. Teresa Powell Brian Seifert Steve Weil, Esq October 23, 2010 Peninsula Fall Seminar Jeffrey A. Barnett, Esq. Tom Fier, Esq. Linnea Juarez, PCAM, CCAM Paul Windust, Esq.

Recent ECHO Journal Contributing Authors February 2011 Jeffrey A. Barnett, Esq. Burt Dean Christine E. Evans, PCAM Teresa Powell Brian Seifert March 2011 Julie Adamen Sandra M. Bonato, Esq. Gene Ebertowski Karl T. Lofthouse Loura K. Sanchez, Esq. April 2011 Beth A. Grimm, Esq. Steven Saarman John R. Schneider Steven S. Weil, Esq.

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 1,450 homeowner associations, you can become an associate member and join 350 other firms serving this important membership.

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 Non-members/Homeowners Businesses & Professionals

$50 $75 $125

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 408-2973246 or visit the ECHO web site (www.echo-ca.org) to obtain an application form and for more information.

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Serving on the Board Continued from page 35

position with fellow board members or their management company. No one should have to work or conduct business in a hostile environment. Realize at times you will not always agree, but take the position that even disagreement can bring compromise and consensus. Be concise with your opinion and thoughts and then be sure to listen to others. Always be respectful of your fellow board members and staff, as well as the homeowners. The tone of the board can set the tone of the community. So, if you want to have a healthy, vibrant and successful community, you should reflect that image as a board member. It is also important to understand the role of your management company, if applicable. They serve as your agent, not your employee. They act on behalf of the board and facilitate the decisions of the board. Remember that they are professionals and should be treated as such. It can be detrimental to a board and its community to consistently be at odds with their management company. They are there to offer their best expertise based on their experience, training and education to ensure

that the board members do not compromise their fiduciary responsibility. A board should trust and rely on their management company’s vast experience and unlimited resources. If your board has lost trust in the management company, have a frank discussion with the company’s CEO regarding whatever problems exist. Perhaps a different manager can restore your trust, eliminating the need to start all over with a new company. If you recognize that, as a board member, you are part of a team of volunteers, committees, and management experts, you will be rewarded when you use those resources to make decisions that are based on sound business judgment. This, in turn, will inspire others to serve and build a team of future leaders who will want to emulate your leadership. By doing so, you will find serving on the board is not a burdensome chore, but a rewarding experience that you will value.

Ace Property Management . . . . . . . .15 Affirmative Management . . . . . . . . .35 American Management Services . . . .8 Angius & Terry . . . . . . . . . . . . . . . . .3 A.S.A.P. Collection Services . . . . . . .20 Association Reserves . . . . . . . . . . .24 Berding | Weil . . . . . . . . . . . . . . . . .44 Collins Management . . . . . . . . . . . .15 Common Interest Mgmnt Services . . .9 Community Management Services . .12 Compass Management . . . . . . . . . .13 Cool Pool Service . . . . . . . . . . . . . .18 Cornerstone Community Mgmnt . . . .18 Draeger . . . . . . . . . . . . . . . . . . . . .13 Ekim Painting . . . . . . . . . . . . . . . . .25 First Bank Association Bank Srvcs . .35 Flores Painting . . . . . . . . . . . . . . . .34 Focus Business Bank . . . . . . . . . . . .8 Gachina Landscaping . . . . . . . . . . .29 Hill & Company . . . . . . . . . . . . . . . .25 M & C Association Services . . . . . . .34 M. L. Nielsen Construction . . . . . . .26 Massingham and Associates . . . . . .24 Mutual of Omaha Bank . . . . . . . . . .14 Oliver Management . . . . . . . . . . . . .24 Pelican Management Group . . . . . . .18 PML Management Corp. . . . . . . . . .14 Pollard Unlimited . . . . . . . . . . . . . .26 R. E. Broocker Co. . . . . . . . . . . . . .15 Rebello’s Towing Service . . . . . . . . .31 REMI Company . . . . . . . . . . . . . . . .19 Saarman Construction . . . . . . . . . .20 Scuba Pool Repair . . . . . . . . . . . . .12 Statcomm . . . . . . . . . . . . . . . . . . .26 Steve’s Painting Services . . . . . . . .19 Steve Tingley Painting . . . . . . . . . . . .2 Trex . . . . . . . . . . . . . . . . . . . . . . .21 Varsity Painting . . . . . . . . . . . . . . . .31

Sherry Harvey is a Community Manager at Community Management Corporation in Chantilly, VA. This article has been previously published in Association Times, the monthly publication of Associa Corp. ECHO Journal | May 2011

Saturday, June 18, 2011 8:00 a.m.–4:30 p.m. Santa Clara Convention Center Santa Clara, California Visit 125 exhibits in the 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 17, 5:00–7:30 p.m. for food, music and socializing. Cost: $40 —See the Registration Form.

Special Hotel Rates Don’t miss out on the special room rate of $89 single or double at the Hyatt Regency adjacent to the Santa Clara Convention Center. Call the Hyatt Regency at (800) 233-1234 and mention the Executive Council of Homeowners. The special rate is available until June 3rd.

CACM Course Ethics for Community Managers Friday, June 17, 2011 2:00 p.m. Integrity is the number one quality that employers and clients value. During this interactive course, you will have the opportunity to explore a variety of scenarios calling into play the need to understand the official rules of conduct for community managers. The course will review CACM’s Code of Professional Ethics and Standards of Practice for all CACM manager

members and will discuss ethics complaints, disciplinary action and the appeals procedure. This Ethics course is required for all managers seeking initial CCAM certification, and it is also required for recertification every three years. This course provides four hours of DRE credit for individuals who possess a real estate license. Course Fee CACM Members $99 CACM Non-Members $130

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 203–204

Administration Lisa Esposito, CCAM

Legal Considerations Deon Stein, Esq.

Finances Linnea Juarez, PCAM, CCAM

Insurance Timothy Cline

LEGAL Rooms 209–210

They Are At It Again in Sacramento: 2011 Legislative Update John Garvic, Esq. Kerry Mazzoni

Understanding Receiverships Wanden Treanor, Esq.

Cyber Crime— Don’t Get Caught in an Electronic Net Alan Crandall

There’s More Than Nonjudicial Foreclosure Beverlee Gordon Jeffrey Cereghino, Esq.

MANAGEMENT & FINANCIAL Ballroom G

The Three Pillars of Community Strength Julie Adamen

All About Governing Documents Bradley Epstein, Esq.

Beyond Privatopia: Why Private Government of Community Associations Isn’t Working and What Happens Next Evan McKenzie, Esq. Tyler Berding, Esq.

Ask The Attorneys Jeffrey Barnett, Esq. Sandra Gottlieb, Esq. Steven Weil, Esq.

FACILITIES MANAGEMENT Ballroom H

Top Things That Drive You Crazy About Insurance John Allanson Sandra Bonato, Esq.

Remaking a 1960s Condo Steven Saarman Brian Smith

Making Your CID Investment Safer Through Sound Reserve Practices Patrick Holman Jacquie Berry

Special Session

Exploring the Future ECHO Annual Seminar and Trade Show

REGISTRATION FORM Yes! Please reserve my space at the 2011 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 ___________________________________________________________ Cardholderâ&#x20AC;&#x2122;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