March 2013
A Journal for California Community Association Leaders
echo-ca.org
ECHO Oakland A New HOA Educational Opportunity in the East Bay
Join us at the ECHO Oakland Seminar and Trade Show April 5–6 See Details on Page 38
Change Service Requested ECHO 1602 The Alameda STE 101 San Jose, CA 95126
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Service Regions: Regions: entral Valley Valley Tri-Valley, Central Bay Area, TTriri-Valley, C RRedding, edding, and C opperopolis Copperopolis
Join us at the
ECHO Wine Country Educational Seminar Saturday, March 23, 2013 Fountaingrove Inn 101 Fountaingrove Parkway Santa Rosa, CA 95403 8:30 a.m.–1:30 p.m.
Save this date on your calendar! Price: $49 Members $59 Non-Members Register online at www.echo-ca.org or fill out the form on this page. Prices increase $10 after March 10.
Yes, reserve _____ spaces for the ECHO Wine Country Educational Seminar. Amount enclosed: $__________ (attach additional names) Name: Email Address: 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
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ECHO Journal | March 2013
Contents
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 professional should be sought.
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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.
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Copyright 2013 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.
ECHO 1602 The Alameda, Suite 101 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org
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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 Jennifer Allivato Directors Jerry L. Bowles Stephanie Hayes Robert Rosenberg Brian Seifert Steven Weil
26 John Garvic David Levy Kurtis Shenefiel Wanden Treanor
Executive Director Brian Kidney Director of Marketing & Membership Jennifer Allivato
Departments 6
Director of Communications Tyler Coffin
News From ECHO
32 Directory Updates 34 ECHO Bookstore
Legislative Consultant Government Strategies, Inc.
36 ECHO Volunteers 37 ECHO Marketplace
Design and Production George O’Hanlon ECHO Mission Statement Serving Community Associations ECHO Journal | March 2013
37 Advertiser Index 38 Calendar of Events ix—page 10 5
News from ECHO Dear ECHO Members, Spring is around the corner, and it’s time to spruce up, clean out and start planning for warm weather activities. It’s also the time when many Boards have elections. So, this month, we bring you advice on election rules, including write-in candidates, a word about your corporate status, and some help on watering issues. We are also beginning our Regional Educational Seminars and, for the first time, we are offering a full day seminar in Oakland on April 6. These are highlighted on the next few pages. We hope to see as many of you as possible because there will be the best professionals giving you their expert advice on topics critical to your communities. In addition, as part of our commitment to keep you up to date, we include a pull-out addendum to the 2012 Statute Book sent out to all members last year. The changes to State statutes are relatively few this year, so the vast majority of your 2012 Statute Book remains in force and unchanged. This concise collection of statute changes, effective at the beginning of this year, can be simply inserted into your 2012 Statute Book for continued easy reference. The addendum was prepared by Deon Stein, Esq. with our appreciation. If you need a new 2012 Statute Book, please let us know. As you are probably aware, the Davis-Stirling Act was completely rewritten, with new code section numbers and several new provisions that will go into effect in January of 2014. We will be compiling the “New Davis-Stirling” provisions, along with a handy conversion guide, and sending you a completely new 2014 Statute Book in early fall this year. We are also working on a new website that will have the same information about “New DavisStirling” and is being designed to provide answers to your homeowner community questions, on your timeframe, in the level of depth you want. Stay tuned for the website debut later this spring. Best,
Brian Kidney Executive Director
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ECHO Journal | March 2013
2013 ECHO Educational Calendar Santa Rosa
ECHO Seminars Now there’s one near you.
Sacramento
San Rafael
Walnut Creek Oakland San Francisco
San Jose
If you’ve ever wished that ECHO would hold a seminar closer to your association, chances are that we’ll be nearby during 2013. We are adding more seminars during more times of the year than ever before. Take a look and mark your calendar. We can’t wait to see you there!
Santa Cruz
Fresno Monterey
Locations and Dates of New ECHO Events Mar 2
Santa Cruz Educational Seminar
Hotel Paradox, Santa Cruz
Mar 23
Wine Country Educational Seminar
Fountain Grove Inn, Santa Rosa
Apr 5–6
ECHO Oakland Seminar/Trade Show Oakland Marriott City Center, Oakland
May 4
South Bay Educational Seminar
Orchard City Banquet Hall, Campbell
May 18
Fresno Educational Seminar
Park Inn by Radisson, Fresno
Jun 15
Walnut Creek Educational Seminar
Embassy Suites, Walnut Creek
Aug 23–24 ECHO San Jose Seminar/Trade Show San Jose Convention Center, San Jose Sep 7
Sacramento Educational Seminar
Le Rivage, Sacramento
Sep 21
Monterey Educational Seminar
Hilton Garden Inn, Monterey
ECHO Journal | March 2013
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Get More from Your ECHO Membership! Set up your account today. Sign up at http://www.echo-ca.org/email We are building a new website with tons of new information and features. These features are for members only, and that means you. In order to extend these services to you, you need to set up your new ECHO membership profile online. How Do I Sign Up? Option 1: Go to www.echo-ca.org/email. Fill out and submit the form. Done! Option 2: Email us. If you aren’t a fan of the online form, just send an email to info@echo-ca.org. Please include your • full name; • HOA name; • primary email address; • and whether you are a board member or homeowner. If you have any questions, please feel free to call us at (408)297-3246. What are the New Features? Your membership account will open up access to a continually growing library of HOA information and advice. For starters, your ECHO membership will allow you to connect with other associations and your own members, and 8
to easily manage your account. In 2013, look forward to: Online Video We’re working on dozens of videos about common legal questions and HOA best practices. All of our presenters are HOA industry experts who offer unique insight into common problems. Online ECHO Journal Can’t find that one issue of the Journal with that great article about pets? Don’t worry! All of our ECHO Journals will soon be accessible to ECHO members on our website. Search for your article, pull up the Journal, and flip through it.
Online Reference Library We are building an unparalleled reference library for California HOA board members and homeowners. Whether you are looking for the current codes, new legislation, explanations of confusing laws, definitions, guides, etc.—we’ve got you covered. You’ll get instant access when we launch our new site. Members will enjoy a constantly renewed and updated resource of the best HOA information. Stay tuned for the unveiling of our new web site.
ECHO Journal | March 2013
Jot this event on your calendar!
ECHO Santa Cruz Educational Seminar Saturday, March 2, 2013 Hotel Paradox 611 Ocean Street Santa Cruz, CA 95060 8:30 a.m.–1:30 p.m.
Practical Management Speakers: Rob Rosenberg, CCAM and Lisa Esposito, CCAM
Protect Your Landscape Investment Speaker: Paul Schultz Yes, reserve _____ spaces for the ECHO Santa Cruz Educational Seminar.
The Downside of Keeping it Casual
Amount enclosed: $__________ (attach additional names) Name: Email Address:
Speakers: Sharon Pratt, Esq. and Rosalia Tapia, Esq.
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 Journal | March 2013
Price: $49 Members $59 Non-Members Register online at www.echo-ca.org or fill out the form on this page. 9
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ECHO Journal | March 2013
By Amy K. Tinetti
Every Association Needs Election Rules ven though the elections law (Civil Code sections 1363.03, 1363.04 and 1363.09) went into effect well over six years ago (July 2006), we still frequently come across associations without election rules in place. We often hear that some boards of directors re-
E
ECHO Journal | March 2013
sist investing in election rules because they do not want to spend the money. This is tragic, because election rules can be drafted quickly and inexpensively, by competent attorneys that specialize in common interest development law. The cost is particularly
But Why? minimal in comparison to the serious risks involved in conducting votes and elections in the absence of voting rules. Civil Code section 1363.03 requires that four types of member votes be conducted pursuant to election rules 11
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which describe a dual-envelope secret ballot system: (1) votes regarding assessment increases requiring member approval; (2) election or removal of directors; (3) amendment of the governing documents; and (4) the grant of exclusive use of common area to less than all members. There is Stuff about Elections in Our Bylaws Often, when we ask for an association’s election rules, we are instead given a copy of the association’s Bylaws. Yes, the Bylaws (and sometimes CC&Rs and/or Articles of Incorporation) do typically address elections, but those documents are not election rules. Civil Code section 1363.03(a) unambiguously states that “An association shall adopt rules, in accordance with the procedures described by Article 4 (commencing with Section 1357.100) of Chapter 2 [the rule change/adoption procedure], that do all of the following...� The statute then goes on to list the things that must be included in election rules. The specific requirements for election rules in section 1363.03 rarely are found in Bylaws (or CC&Rs or Articles). Civil Code section 1363.03 requires, on its face, that separate rules must be adopted pursuant to the procedure for adopting any “operating rules� (including at least 30 days’ notice to the owners, member comments and adoption at an open board meeting). We Have Been Conducting Our Elections in Compliance with the Law It is not legally sufficient to conduct elections pursuant to the dual-envelope, secret ballot system proscribed by Civil Code section 1363.03 without separate election rules. Civil Code section 1363.09 provides that a member of an association may bring a civil action for any violation of the elections law, and provides that “Upon a finding that the election procedures of this article or the adoption of an adherence to rules provided by Article 4 (commencing with Section 1357.100) of Chapter 2, were not followed, a court may void ECHO Journal | March 2013
any results of the election.” In other words, simply conducting a vote utilizing the dual-envelope, secret ballot procedure, without adopted and published election rules, violates the elections law, exposes the association to potential liability, and risks the nullification of any such vote or election. Unlike other laws (such as the “internal dispute resolution” law), Civil Code section 1363.03 does not have a “default” set of election rules to follow if an association fails to adopt rules. Failure to adopt election rules is itself a violation of the law, period.
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What Does It Mean for a Vote or Election to Be “Voided?” The elections law was written to encourage disgruntled members to sue for violations of the elections law and to recover damages, civil penalties and attorneys’ fees in the process. Moreover, the legislature has also given the courts the option to “void” results of an election. This carries huge risks for associations that many boards do not fully appreciate. A Board Elected Without Election Rules in Place Civil Code section 1363.09 provides that a member of an association may bring a civil action for a violation of the elections law (including the fact that an election was conducted without election rules in place) within “one year of the date the cause of action accrues.” If the cause of action “accrues” when a board is elected in violation of the law, and the election is subsequently voided, any action taken by the board in the interim may be invalidated. Considering the number of actions a board of directors takes in an average year (including collection and enforcement efforts, vendor contracts, etc.), the business of an association could be irreparably harmed if every action taken by a board was subsequently invalidated. ECHO Journal | March 2013
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Special Assessment Voted/Approved Without Election Rules in Place Similarly, a huge potential risk exists in voting on a special assessment without election rules in place. If, for example, a large special assessment was approved by a member vote (in the absence of election rules), an owner did not pay, and an association attempted to collect the assessment via lien and foreclosure or obtaining a court judgment, the owner could claim that the assessment was invalid because the vote (to approve the special assessment) was conducted without election rules. A judge could void the special assessment vote altogether. As a result, the board’s ability to collect a special assessment from owners (and subsequently pay vendors for the work that was the subject of the special assessment) would be severely compromised. Governing Documents Approved Without Election Rules in Place If governing documents are approved by member vote without election rules in place, that vote could be voided and the documents invalidated. The practical effect of such an action is unclear, especially if the prior vote was to approve CC&Rs and the approved CC&Rs were already recorded. We are aware of one small claims case in Santa Clara County in which a homeowner challenged a vote to approve governing documents. Although the association had adopted election rules in that case, the homeowner argued that the vote was conducted in violation of the rules. The small claims judge ruled in favor of the homeowner and ruled that the documents were “of no effect.” The practical effect of this small claims action is unclear because the CC&Rs had already been recorded, but the moral of the story is that it is very easy for homeowners to make these challenges in court. Small Claims or Superior Court? Civil Code section 1363.09 authorizes a member of an association to bring a “civil action” for declaratory or equitable relief for violations of the 14
ECHO Journal | March 2013
election law, to recover attorneys’ fees and court costs, and to recover a civil penalty of up to $500 for each violation of the law. The term “civil action” is not defined. Moreover, Civil Code section 1363.09(c) also specifically provides that a cause of action under section 1363.03 with respect to access to association resources, the receipt of a ballot by a member, or the counting, tabulation or reporting of or access to ballots may be brought in small claims if the amount of the demand does not exceed the jurisdiction of the court (that is, less than $10,000). OK, You’ve Convinced Us, But We Can Draft the Rules Ourselves Our firm has defended associations in election challenges where the board opted to draft (or have an individual director draft) election rules without legal counsel to save money. That decision resulted in each association spending far more in attorneys’ fees to defend the association and the rules themselves than it would have cost to simply hire an attorney to draft the rules on the association’s behalf. ECHO Journal | March 2013
Drafting election rules is not as simple as incorporating some language from the statute. Election rules must be drafted so that they comply with the law and must be tailored to work with the association’s other governing documents. Because all governing documents are different, election rules are also not “one size fits all.” Conclusion If you are a manager, make sure that every association you manage has election rules. If you are a board member, make sure your association has election rules. If election rules have not been adopted, the immediate preparation, distribution and adoption of election rules should be the association’s top priority before any type of membership vote subject to Civil Code section 1363.03 is conducted. Amy K. Tinetti, Esq. is a principal with the law firm of Hughes Gill Cochrane, P.C. located in Walnut Creek, California. This article is intended to provide general information and should not be relied upon as legal advice. Please contact your association attorney with specific questions and concerns. 15
By Deon R. Stein, Esq.
Write-in Candidates When are They Required? major legislative overhaul of how homeowners associations in California are required to conduct director elections (and other membership votes) occurred in 2006.1 At each election cycle since then, our clients have barraged us with a number of excellent
A
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questions for clarification on various aspects of the relevant law. One of the
It is an interesting question and it is not one we had any reason to give
questions we hear often deals with write-in candidates: “Is the secret ballot required to have spaces for write-in candidates?�
1 California Civil Code Section 1363.03 (which was enacted by Senate Bill 61 and then amended by Senate Bill 1560). All subsequent statutory references are to the California Civil Code. ECHO Journal | March 2013
much thought to before the enactment of Section 1363.03. With a few exceptions, prior to 2006 director elections occurred at an association’s annual membership meeting and a member would typically vote for whomever had been nominated at that meeting. Post-2006, however, the ECHO Journal | March 2013
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statute requires elections to be conducted very differently. Our first instinct when the above question was originally posed to us was to check Section 1363.03 for guidance. Unfortunately, beyond a brief mention in Section 1363.03(j) stating that the election rules adopted pursuant to Section 1363.03(a) “may permit write-in candidates for ballots,” there is no language to tell us when write-in candidates are required on director election secret ballots. At the very least, the statute contemplates write-in candidates as being an acceptable method of nomination. Not unexpectedly, however, it seems the legislature intended for us to do a bit more mental heavylifting to figure out when write-in candidates should be permitted or required.
“
Unfortunately... there is no language to tell us when write-in candidates are required on director election secret ballots.
”
After reviewing the statute, the next logical place to seek guidance to answer the question posed would be an association’s governing documents, and usually the bylaws.2 However, as most of our clients’ bylaws were written and adopted prior to 2006, any such older bylaws do not contain language taking the new election process into account. Consequently, very few of the pre-2006 bylaws expressly mention or authorize write-in candidates, as that was simply not a common method for members to become candidates at the time. Of course, if an association’s pre2006 bylaws do happen to mention write-in candidates, then the answer to the above question for that association should be much clearer. In such a case, the election rules that were drafted by that association pursuant to Section 1363.03(a) will (hopefully) be consis18
ECHO Journal | March 2013
tent with the bylaws (this article will not address what happens if such election rules contradict the bylaws on that point) and will indicate whether or not write-in candidates are allowed or required for that particular association. However, as noted above, the much more common situation is that an association’s bylaws do not mention writein candidates at all. If the bylaws are silent, how can the question of whether write-in candidates are required for a particular association’s director elections reliably be solved? Is it as simple as saying that write-in candidates must not be allowed if the bylaws are silent? Unfortunately, it is not that simple. It involves, as was hinted earlier, a bit of mental heavy-lifting. While it is true that most pre-2006 bylaws are silent on write-in candidates, most bylaws do specify other methods of nominating candidates for election to an association’s board. The methods of nomination in bylaws can certainly differ and Section 1363.03 does not require that certain nomination procedures in older bylaws be preferred or used over others.3 The question then is which of these varying nomination methods could be interpreted, in consideration of and in conjunction with Section 1363.03’s secret ballot requirements, to require or allow write-in candidates on the secret ballots? In the au-
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2 While write-in and other election/nomination provisions could certainly be found in other association governing documents (and not just an association’s bylaws), for purposes of this article and simplicity, we will refer only to an association’s bylaws. 3 However, Section 1363.03(a)(3) indicates that any nomination or election procedure that would disallow a member of the association from nominating himself or herself for election to the board of directors shall not be deemed reasonable. 4 The author cannot readily identify any other nomination procedure or mechanism that provides the functional equivalent of nominations from the floor or write-in candidates but he leaves it to his colleagues to determine if there are any other such procedures or mechanisms. ECHO Journal | March 2013
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thor’s opinion, the only method of nomination that could possibly be interpreted to require or allow write-in candidates on secret ballots is “nominations from the floor.”4 Our reasoning for this is that nominations from the floor accomplish the same objective and have nearly the same effect as write-in candidates. Writing in a candidate, as a method of nominating such candidate for election to the board, allows anyone to “throw their hat in the ring,” as well as anyone else’s hat, should they desire, irrespective of any other person who may have conducted a formal candidacy and campaign. Nominations from the floor have that same effect. However, unless the meeting where “nominations from the floor” are taken is held prior to the secret ballots being mailed out, it is simply not a useful method of nomination under Section 1363.03 (since candidates cannot be added to the ballots via nominations from the floor once the ballots have been mailed). With the above discussion in mind, we can answer the question of “Is the Association required to provide space on the secret ballot for write-in candidates?” with the famous lawyerly response of “It depends...” There are a few different scenarios that are possible and the following example situations should help explain those scenarios (please note that, in each case, the bylaws are assumed to be silent on the use of write-in candidates): 1. If the association’s bylaws do not allow or require nominations from the floor, then write-in candidates are not permitted in that association’s director elections unless the 5 The author recommends including an express requirement in the election rules to either (1) hold a meeting for nominations from the floor prior to mailing or delivering the ballots, or (2) ensure that write-in candidate spaces are provided for on the secret ballot if such a meeting is not held. This way, the likelihood that anyone conducting the election will overlook the issue becomes much smaller. ECHO Journal | March 2013
association’s election rules authorize or mandate write-in candidates. 2. If the association’s bylaws do allow or require nominations from the floor, and a meeting is held to accept nominations from the floor prior to the beginning of the balloting period in compliance with Section 1363.03 (so that the names of any candidates nominated from the floor are preprinted on the secret ballot), then secret ballot write-in candidates are not permitted unless the election rules authorize or mandate write-in candidates be allowed. 3. If the bylaws do allow or require nominations from the floor, and a meeting is not held to accept nominations from the floor prior to the beginning of the balloting period, then write-in candidates must be allowed.5 The above situations, where the bylaws are silent on write-in candidates, should adequately address whether or not write-in candidates are required for a particular association’s director election. Again, we leave it to our colleagues to point to other mechanisms (besides “nominations from the floor�) that may exist in an association’s bylaws that could produce the functional equivalent of write-in candidates. In practice, of course, nothing is ever a perfect match with example situations. Always check with your association’s legal counsel for guidance in determining whether or not write-in candidates are authorized or required for your director elections.
Deon Stein, Esq. is the owner of The Law Offices of Deon R. Stein in Sacramento. Mr. Stein has been advising homeowners associations throughout California for 23 years. He is a frequent contributor to the ECHO Journal and speaker at ECHO Seminars. ECHO Journal | March 2013
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ECHO Journal | March 2013
By Paul Schultz, CIC, CLIA, CLT-E
FAQs on Water Management Cagwin & Dorward’s Water Manager, Paul Schultz, shares customer’s frequently asked questions. You might just have some of the same questions yourself.
ECHO Journal | March 2013
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uestion: I received a letter from the water district that the water rates are increasing ...what can I do to keep my water costs down? nswer: Research has shown that an average of 20% of landscape water is wasted. To keep costs down, focus on reducing this water waste. Water waste can come in many forms, start by asking for a landscape irrigation audit from your local water district. It’s usually free and most, if not all, provide you a written report of their findings so you have a “game plan.” Many are providing water budgets (how much water your site should be using) and rebates for irrigation system upgrades. These actions will help support your efforts to reduce costs. uestion: How do I know if my irrigation system is working correctly? nswer: Walk the site and look for areas that seem overly wet, or dry, and gutters that always seem to have water in them. These can be signs of broken sprinklers, a buried pipe that is cracked, or water leaking through irrigation control valves. Look for plant stress and hot spots in the turf. If time permits, walk along with your landscape professional and have them turn on a few “representative stations” and observe coverage. Look for tilted or broken sprinkler heads. Does the pressure seem too weak? Does it seem too high; referred to as “fogging”? Watch for over spraying of water into streets, walkways, or on to walls. These issues
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should be corrected to help save money on water, and prevent greater repair costs to buildings and roadways. Also, while a station is on, time how long it takes until the water runs off the area it is intended to water. Then ask the landscaper how long that station is scheduled to run each time it comes on. Excessive run times can be a sign of a need for additional training of landscape personnel. uestion: What are the signs of an over watered landscape? nswer: There are several signs of over watering to look for, here are just a few. Look for soggy turf when you walk on it, algae in the planting beds and along street gutters, stunted tree growth, moss in cracks along the sidewalks, wash out of silt on to sidewalks, and pre-mature erosion of walkways and asphalt. While some of these are items that can be caused by other issues, most are due to improper irrigation controller programming, incorrect or poorly performing irrigation equipment, or poor irrigation design. Another sign to look for, but it is hard to find if you are not trained to do so, is to look for “poa annua” in your turf areas. It is a fine bladed weed that looks like grass. It has very shallow roots, so if it is still green during the summer heat, it is being watered daily to keep the top layer constantly wet. Real grass has deeper roots and can take advantage of water deeper in the soil that doesn’t dry up as quickly. Too frequent water leads to over saturated
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soils, quick run-off, and poor plant health conditions. uestion: I have budgeted money for irrigation upgrades, where should I begin? nswer: Begin with a water district audit, if available, and target the highest water use areas, such as turf. Also, learn about their available rebates. If you are considering upgrading the irrigation controllers to “Smart” type, make sure the installer AND the people who will be managing it are trained, otherwise the results could be disappointing. An untrained person will get frustrated when the landscape shows signs of significant stress and won’t know how to correct the underlying issues. The controller may be “Smart” but, the irrigation equipment in the ground may not be. Poor coverage becomes more obvious when the site is no longer being over watered. Signs of plant stress could lead an untrained landscaping crew to overriding the new
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controller’s weather based schedules, making it a very expensive standard controller. Check out the California Landscape Contractor’s Association’s, “Certified Water Manager” program to find a certified professional. A standard controller, “managed smart” can help offset costs for upgrading the irrigation system. uestion: What small scale upgrades can I do that don’t cost much and will give me immediate water and money savings? nswer: Where appropriate, upgrade pop-up sprinkler head nozzles to rotary nozzles. It has been shown to improve coverage by 10 to 20% and reduce water waste. Also, get pressure down, to avoid “fogging” so that sprinkler heads operate at manufacturer’s optimum performance levels, which is 30 psi for sprays and 45 psi for rotors. According to Rain Bird, “every 5 psi beyond this recommendation results in a water loss of 6–8%.” This can be done either at the valve, the head, or the beginning of the system. Also, consider use of bark mulch to reduce evaporation in planting beds. Select a mulch that can decompose into the soil over time, and you will also increase the water holding capacity of the soil, help nurture the soil food web, and improve root development. uestion: What sort of plants use less water? nswer: Plants can be classified as High, Medium, or Low water use. Annuals and turf are examples of High water use plants. Drought tolerant shrubs or Natives, which use about one third the amount of water, would be considered Low water use plants. There are books available to help identify plants by these main categories. The important thing to remember is that whatever you plan to plant; group your plants by similar watering, soil, and sunlight needs. Plants grouped this way constitute a, “Hydrozone.” The irrigation system should be designed to water each unique Hydrozone sepa-
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rately, so that you are not having balance watering High water use plants in full sun with drought tolerant plants in shade. Something will not survive! uestion: What does it mean to “split a meter”?
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nswer: Many older sites have only one water meter to track domestic and landscape water use. This makes it difficult to determine how much water is being used for the landscape, and nearly impossible to verify that it is being managed well and to a water budget. To “split a meter” means to have a separate meter, or a sub-meter, to track irrigation related water. It is typically located at the beginning of the irrigation system. It will also help with detecting irrigation mainline leaks underground that would otherwise go unnoticed until bills start spiking.
uestion: How do I know how much water I should be using on the landscape?
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nswer: You will need a, “water budget” to know the right amount of water for your landscape. It is created by measuring a site’s irrigated landscape square footage, by High, Medium, and Low water plant types. Then, this information is adjusted by regional plant climate information, referred to as, “Evapotranspiration” to determine how much water typically leaves plants for your area over a certain time period. This is the water that will need to be replaced by the site’s irrigation system. A hot climate area with a lot of high water plants will use more water than coastal sites with low water use plants. And, even more if the irrigation coverage is poor. Some water districts provide water budgets and may set billing based on it. If no budget is provided, check out http://clca.us/water/hire-certified-water-manager.html for assistance with this and much more.
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Paul Schultz, CIC, CLIA, CLT-E is a CLCA Certified Water Manager and Irrigation Resource Manager with Cagwin & Dorward. ECHO Journal | March 2013
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By Tom Fier, Esq.
How to Revive Your Corporate Status If your homeowners association is a corporation, has it been suspended and you don’t know why? Or, do you know why, but don’t know where to start to revive it? This article will help you.
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OUR FOCUS IS ON YOU! You might think that a big company would not be able to provide you with the personal service that you are looking for. In reality, you can expect better, more responsive – and yes, more service from us. We haven’t forgotten our small company values. We grew because we kept our promise to provide the best service to our clients. Learn more at www.massingham.com. Serving Clients from Offices in: Campbell | Concord | Hayward | Roseville | Signal Hill Tel: (800) 863-6277 | Web: www.massingham.com
Most homeowner association powers, rights and privileges can be suspended or forfeited in California by 1) the Secretary of State for failure to file the required Statement of Information and Statement by Common Interest Development Association; and/or 2) the Franchise Tax Board for failure to file a tax return and/or failure to pay taxes, penalties or interest, even if nothing is due. What to Do 1. Check the status of the HOA (corporation) by going to the California Secretary of State’s web site (www.sos.ca.gov) and clicking on “Business Entities”, then look for “Online Services” (on the left) and click on “Business Search”. Follow the instructions for “Search Type”. If your HOA is in suspended status, go on to No. 2 below. 2. File (in person, by mail, or online) the required Statement of Information (Form SI-100) and Statement by Common Interest Development 30
Association (Form SI-CID) (see samples). Both of these two forms must be filed biennially (every two years).
3. Contact the Franchise Tax Board (FTB) for “revivor” requirements. You must contact the FTB and complete an Application for Certificate of Revivor (Form FTB 3557) and ECHO Journal | March 2013
submit the application with a proposed relief letter to the FTB. 4. If you do not know what has been filed or not filed, you may request a Business Entities Records Order Form (BE-IRC) from the Secretary of State, pay the required fee and request copies of documents submitted to the Secretary of State. This will give you a start. Suspended Status The HOA will remain suspended until both the Secretary of State and the Franchise Tax Board revivor requirements are met. Once all requirements are met, the FTB will issue a “Certificate of Revivor.” Usually, a HOA is suspended for failure to file the two statements; however, if the Business Entities Records Order Form comes back indicating that tax returns have not been filed, you need to immediately contact your accountant and/or tax preparer. Important Consequences 1. Your HOA must be current and active with the Secretary of State before the HOA can sue anyone in California (Cadle Co. v. World Wide Hospitality Furniture, Inc. (2006) 12 Cal.App.4th 504). If your HOA is not, any person who attempts to exercise the powers, rights and privileges of a suspended corporation may be criminally punished by a $250.00 to $1,000.00 fine and/or up to one year in prison [Ca. Rev. & Tax §19719 (a),(b)]. 2. Loss of corporate name, during the suspension, another corporation may use your name. 3. Loss of right to sue or defend lawsuits. 4. Loss of right to engage in real estate transactions. IMPORTMANT: Keep your corporate status current. File all forms and tax returns in a timely manner! Tom Fier is an attorney at law with a homeowner association practice in San Mateo, CA. He is the past chair of the ECHO Legal Resource Panel. ECHO Journal | March 2013
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Directory UPDATES Updates for listings in the ECHO Directory of Businesses and Professionals, available online at www.echo-ca.org.
New Members Fresh Cleaning Services 1640 Peach St. Concord, CA 94518 Contact: Ismael Cortes Tel: (925) 768.5283 Cypress Construction Services, Inc. 223 River St. Suite B Santa Cruz, CA 95060 Contact: Michael Downey Tel: (831) 458.2630 Fax: (831) 458.2629
Find the Answers to your Questions on Condo Ownership
Bob Tedrick Construction Inc. Quality and Service Exterior Envelope Repair Servicing the Entire Bay Area
SERVICE An excellent guide to understanding the rights and responsibilities of condo ownership and homeowner associations operation. 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. Order from ECHO! Call 408-297-3246 Fax 408-297-3517 store.echo-ca.org
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Should you need construction help with: Common Development Properties, Single Family Homes, High Rise Building Facilities and Maintenance, CID Repair and Maintenance, Litigation Support, Water Testing, Destructive and Non-destructive Testing utilizing Thermo-Imaging. Give us a call. Estimates always free.
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
2021 Las Positas Ct. Suite 151 Livermore, CA 94551 Phone: 925-454-0358 â—? Fax: 925-271-0210 E-mail: info@btcquality.com
www.btcquality.com ECHO Journal | March 2013
ECHO Events Calendar
Important resource meetings... Thursday, March 7 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse, San Rafael Tuesday, March 12 Central Coast Resource Panel 12:00 Noon Michael’s on Main, Soquel Wednesday, March 20 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. Rohnert Park Wednesday, April 3 Maintenance Resource Panel 12:00 Noon ECHO Office, San Jose Wednesday, April 10 South Bay Resource Panel 12:00 Noon Buca Di Beppo, Campbell Friday, April 12 East Bay Resource Panel 12:00 Noon Massimo Restaurant, Walnut Creek
Wednesday, April 17 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co., Rohnert Park Wednesday, April 17 Legal Resource Panel 6:30 p.m. Porterhouse, San Mateo Thursday, May 2 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse, San Rafael Monday, May 13 Accountants Resource Panel 6:00 p.m. Scott’s Seafood, Oakland Tuesday, May 14 Central Coast Resource Panel 12:00 Noon Wednesday, May 15 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. Rohnert Park
Regularly Scheduled ECHO Resource Panel Meetings Resource Panel Maintenance North Bay East Bay Accountants Central Coast South Bay Wine Country Legal
ECHO Journal | March 2013
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 ECHO Office, San Jose Contempo Marin Clubhouse, San Rafael Massimo Restaurant, Walnut Creek Scott’s Seafood Restaurant, Oakland Michael’s on Main, Soquel Buca Di Beppo, Campbell Eugene Burger Management Co., Rohnert Park Varies
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Beyond Privatopia $20.00 Non-Member Price: $25.00 The rise of residential private governance may be the most extensive and dramatic privatization of public life in U.S. history. In Beyond Privatopia, attorney and political science scholar Evan McKenzie explores emerging trends in private governments and competing schools of thought on how to operate them, from state oversight to laissez-faire libertarianism.
Condominium Bluebook 2013 Edition $17.00 Non-Member Price: $25.00
Condos, Townhomes and Homeowner Associations Member Price: $29.00 Non-Member Price: $45.00
Community Association Statute Book—2012 Edition Member Price: $15.00 Non-Member Price: $25.00
To make these a sustainable investment, new buyers, owners and board members need to understand “best practices basics” of how this form of housing works and have more realistic expectations of this form of “carefree, maintenance free” living.
Contains the current version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from other codes important to associations.
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.
2012 Community Association Treasurer’s Handbook Member Price: $29.00 Non-Member Price: $35.00
Reserve Fund Essentials Member Price: $18.00 Non-Member Price: $25.00
The Condo Owner’s Answer Book $15.00 Non-Member Price: $20.00
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.
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 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.
Netwion Edi
Home and Condo Defects Member Price: $12.95 Non-Member Price: $17.95 Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished constructiondefect attorneys, is an essential tool for board members who need to understand the legal process.
Questions & Answers About Community Associations . Member Price: $18.00 Non-Member Price: $25.00 For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs.
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The Handbook is an in-depth guide to all aspects of association finances, including accounting methods, financial statements, reserves, audits, taxes, investments and much more. Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances.
Board Member Handbook Member Price: $20.00 Non-Member Price: $25.00 This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues. Revised and updated in June 2012.
ECHO Journal | March 2013
Dispute Resolution in Homeowner Associations . Member Price: $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 Order Online at store.echo-ca.org
Bookstore Order Form Board Member’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
AMOUNT
This report is a guide for directors and managers to use for interviews with prospective service contractors. Questions to find out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.
SUBTOTAL CALIFORNIA SALES TAX (Add 8.625%) TOTAL AMOUNT
Yes! Place my order for the items above. Board Member’s Guide for Management Interviews . Member Price: $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) Email Address City
State
Zip
Daytime Telephone ECHO Journal | March 2013
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About
ECHO Honor Roll
ECHO Honors Volunteers
ECHO What is ECHO? Serving Homeowners to Build Strong Community Associations
ECHO Resource Panels
Regional Seminar Speakers
Accountant Panel
Central Coast
Marco Lara, CPA 650-632-4211
John Allanson Sharon Glenn Pratt, Esq. Wanden P. Treanor, Esq. Glenn H. Youngling, Esq.
Central Coast Panel
John Allanson 831-685-0101 East Bay Panel
Beth Grimm, Esq., 925-746-7177 Mandi 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
George Engurasoff, 408-295-7767 Wine Country Panel
Maria Birch, CCAM, 707-584-5123
Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.
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Marin
David F. Feingold, Esq. Wanden P. Treanor, Esq. Glenn H. Youngling, Esq. Peninsula
Sandra Bonato, Esq. Omar Hindiyeh Wanden P. Treanor, Esq. South Bay
Sandra Bonato, Esq. Stephanie Hayes, Esq. Rick Coats & Sandra Long Alan Crandall Larry Russell, Esq. Wine Country
Kirk Denebeim David Hughes Roger Doncaster Mark Dunia Bill Mann Barbara Zimmerman, Esq. Bill Gillis, Esq.
Annual Seminar Speakers June 23, 2012 ECHO Annual Seminar
Dawn Anderson, AIA Jeffrey Barnett, Esq. Brad Barroso Tyler Berding, Esq. Sandra Bonato, Esq. Wendy Buller Ian Brown Jeff Draeger Tom Fier, Esq. Kevin Frederick, Esq. John Garvic, Esq. Vic Giacalone Sandra Gottlieb, Esq.
Beth Grimm, Esq. Allan Henderson David Kuivanen David Levy, CPA Helen Loorya Richard Lowenthal Kerry Mazzoni Mike Muilenburg Andrea O’Toole, Esq. Ann Rankin, Esq. Larry Russell, Esq. John Schneider Brian Seifert Jim Shepherd Dean Shibler Richard Tippett Steven Weil, Esq.
The Executive Council of Homeowners (ECHO) is a nonprofit membership corporation dedicated to assisting California homeowners associations. ECHO provides help to homeowners associations on many fronts: finances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, a monthly full-color magazine and discounted publications.
Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations.
Recent Contributing Authors
Benefits of ECHO Membership
November 2012
• Updates to the Association Statute Book
Tom Fier, Esq. Beth A. Grimm, Esq. Matt J. Malone Mike Muilenburg December 2012
Tyler P. Berding, J.D., PhD. John Ceragioli, PRA Burt Dean Beth A. Grimm, Esq. Janis Lee, CCAM, CMCA Randolph M. Paul January 2013
James H. Ernst, CPA, MSTax, CCAM Dave Phelps, ASLA, ISA Sharon Glenn Pratt Robert Rosenberg Patricia A. Wendleton February 2013
Oliver Diaz Lisa Esposito, CCAM Betty Jones, Esq. Robert Rosenberg, CCAM Steven S. Weil, Esq. Glenn H. Younging, Esq.
ECHO Journal | March 2013
• Subscription to monthly magazine
• Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento
ECHO Membership Dues HOA Size Rate 2 to 25 units
$120
26 to 50 units
$165
51 to 100 units
$240
101 to 150 units
$315
151 to 200 units
$390
201 or more units
$495
Business/Professional
$425
ECHO Journal Subscription Rates Members
$50
Non-members/Homeowners
$75
Businesses & Professionals
$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.
ECHO Marketplace
Advertiser Index
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A collection of “Condo Q&A” published in the Los Angeles Times Questions & Answers About Community Associations By Jan Hickenbottom
Ace Property Management . . . . . . .12 American Management Services . . .22 Angius & Terry . . . . . . . . . . . . . . . . .2 A.S.A.P. Collection Services . . . . . .13 Association Reserves . . . . . . . . . . .31 Bay Community Management . . . . .31 Berding | Weil . . . . . . . . . . . . . . . . .44 BTC Bob Tedrick Construction . . . . .32 Cityscape Property Management . . .24 Collins Management . . . . . . . . . . . .14 Community Management Services . .32 Compass Management . . . . . . . . . .19 Cool Pool Service . . . . . . . . . . . . . .14 Cornerstone Community Mgmt. . . . .18 Ekim Painting . . . . . . . . . . . . . . . . .31 Eugene Burger Management Co. . . .25 First Bank Association Bank Srvcs . .19 Flores Painting . . . . . . . . . . . . . . . .18 Helsing Group, The . . . . . . . . . . . . .12 M&C Association Mgmt. Services . .39 Massingham and Associates . . . . . .28 Mutual of Omaha Bank . . . . . . . . . .12 PGS . . . . . . . . . . . . . . . . . . . . . . .14 PML Management Corp. . . . . . . . . .29 Pollard Unlimited . . . . . . . . . . . . . .30 R. E. Broocker Co. . . . . . . . . . . . . .29 Rebello’s Towing Service . . . . . . . . .23 RealManage . . . . . . . . . . . . . . . . . .24 REMI Company . . . . . . . . . . . . . . . .30 Saarman Construction . . . . . . . . . .13 Statcomm . . . . . . . . . . . . . . . . . . .30
Member Price: $18.00 Non-Member Price: $25.00 For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs. Order today from ECHO!
Call 408-297-3246, fax at 408-297-3517 or order online at store.echo-ca.org
ECHO Journal | March 2013
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ECHO Journal | March 2013
ECHO Oakland Seminar and Trade Show
A New HOA Educational Opportunity in the East Bay Saturday, April 6, 2013 Oakland Marriott Hotel We are excited to host our firstever seminar and trade show in the East Bay—ECHO Oakland! If you’ve ever attended our Santa Clara event, you know how valuable this experience can be for your association. ECHO Oakland will feature three tracks of educational topics. We will offer our updated Board Essentials course in addition to expert advice from across the HOA community. Meet hundreds of HOA professionals on the trade show floor, and be a part of the camaraderie and excitement of our first ever Oakland event.
What’s New? This year, lunch is included in the cost of your registration. Enjoy a buffet lunch on the trade show floor with your neighbors and colleagues. Where is ECHO Oakland? ECHO Oakland is at the Oakland Convention Center. Lodging is available for a special rate at the adjoining Oakland Marriott Hotel. Please visit the ECHO Oakland website for directions and room reservations. Members: $89 Nonmembers: $119 Registration includes lunch and validated parking. Prices increase $10 after March 10.
BTC
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Bob Tedrick Construction Inc. Quality and Service 925-454-0360
How Do I Register? You may register online, by fax or mail, or by contacting the ECHO office. Please visit the event website for complete event information including speakers, topics, and venue information. www.echo-ca.org/ echo-oakland-2013