May 2013
A Journal for California Community Association Leaders
echo-ca.org
Are Association Managers now required to have a General Contractor’s license?
Change Service Requested ECHO 1602 The Alameda STE 101 San Jose, CA 95126
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Join us at the
ECHO South Bay Educational Seminar Saturday, May 4, 2013 8:30 a.m.–12:30 p.m. Campbell Community Center Orchard City Banquet Hall 1 West Campbell Ave Campbell, CA 95008
Price: $59 Members $69 Non-Members Register online at www.echo-ca.org or fill out the form below.
Seminar Agenda Maintenance–New Twists to an Old Subject Robert P. Hall, Esq.
Your Governing Documents Stephanie Hayes, Esq.
Underfunding Reserves Derek Eckert, RS, PRA
Yes, reserve _____ spaces for the ECHO South Bay 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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May 2013 | ECHO Journal
The ECHO Journal is published monthly by the Executive Council of Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy.
Contents 10
Why AB 2237 Does Not Require California Community Association Managers to have a General Contractor’s License Are Community Association Property Managers now required to have a General Contractor’s license? Short answer: no, not unless they or their company offer to, or actually perform part of the building construction. But read on to make sure your situation fits.
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Changes at DFEH and Why It Matters While fair housing concerns have always been important, the changes at DFEH require extra diligence to avoid liability, particularly when an accommodation request is received and when rules, regulations and restrictions are being considered that directly or disproportionately affect families with children.
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
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Treasurer Diane Rossi Secretary Jennifer Allivato Directors Jerry L. Bowles Stephanie Hayes Robert Rosenberg Brian Seifert Steven Weil
John Garvic David Levy Kurtis Shenefiel Wanden Treanor
The Importance of a Professional Specification and Job Walk for a Repaint Due diligence and homework equal a job well done. Paint specifications offer a professional’s best recommendation and a comprehensive description for a particular job. A specification will provide the customer with a document that will instruct your bidders on materials and procedures for the specific job and it is a legal document so the material in the spec will need to be used as directed. Serving on the Board: It’s About Team Building and Leadership 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.
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Executive Director Brian Kidney
Departments Director of Marketing & Membership Jennifer Allivato
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Director of Communications Tyler Coffin
33 Calendar of Events
Legislative Consultant Government Strategies, Inc.
36 ECHO Volunteers
Design and Production George O’Hanlon
37 Advertiser Index
ECHO Mission Statement Serving Community Associations ECHO Journal | May 2013
News From ECHO
32 Business Member Updates 34 ECHO Bookstore 37 ECHO Marketplace
Required to have a General Contractor’s license? —page 10 5
News from ECHO Dear ECHO Members, I would like to thank all of you who attended or shared information about ECHO Oakland, our first seminar and trade show in the East Bay. Our educational sessions received glowing reviews from all attendees, and we met a number of board members who were completely new to ECHO. Those board members eagerly expressed their appreciation for ECHO’s board-focused HOA education. Thank you again for helping us to bring ECHO to new associations; these events would not be possible without your support of ECHO and the HOA community. In addition to our educational sessions, attendees at ECHO Oakland caught their first glimpse of the new ECHO website (see page 8). We are putting the finishing touches on what we believe will become the go-to tool for HOAs throughout California. I urge all of you to make sure that you sign up for an account here: http://www.echo-ca.org/email By signing up now, we can ensure your quick and seamless access to our new tools. Please share this information with your fellow board members and association owners: ECHO Membership is no longer just for the board—we’re extending online access to everyone in your association. We hope that by raising the overall level of education in your HOA we can make your job a little easier. If you missed ECHO Oakland, be sure to mark your calendar for some of our other upcoming events. Sign up for our South Bay Educational Seminar (May 4th) or our Fresno Seminar (May 18th) via the registration links on our home page. And don’t forget about our South Bay trade show, ECHO San Jose, coming on August 24th. For a complete list of our upcoming events, please see page 7. I am looking forward to interacting online with many of you in the coming months, and to hear from you about how ECHO can improve its services and help your community. Best,
Tyler Coffin Director of Communications
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May 2013 | ECHO Journal
2013 ECHO Educational Calendar Santa Rosa
Sacramento
San Rafael
ECHO Seminars Now there’s one near you.
Walnut Creek Oakland San Francisco
San Jose
Santa Cruz
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!
Fresno Monterey
Locations and Dates of New ECHO Events 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 | May 2013
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Our new website is almost here. Do you have access? Set up your account today. Sign up at http://www.echo-ca.org/email We are launching our new website this month. Are you ready? If you received this magazine, you are entitled to access to our new website: online articles, videos, new reference material, archived Journals, and a brand new online community.
But...
If you have not yet provided your email address through our web portal, please do so today: http://www.echo-ca.org/email You can also send an email to: newaccount@echo-ca.org. We can’t wait to show you what we have in store.
To get access, we MUST set up your account. To do that, we need your email address. Your email address will never be shared with any third party or professional member.
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May 2013 | ECHO Journal
Join us at the
ECHO Fresno Educational Seminar Saturday, May 18, 2013 New Location
8:30 a.m.–12:30 p.m. Park Inn by Radisson 3737 N Blackstone Ave Fresno, CA 93726 Price: $49 Members $59 Non-Members Register online at www.echo-ca.org or fill out the form below. Prices increases $10 after May 4.
Seminar Agenda Your Governing Documents Mike Hughes, Esq.
Financials David Levy, CPA
Yes, reserve _____ spaces for the ECHO Fresno 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
ECHO Journal | May 2013
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May 2013 | ECHO Journal
By Tyler Berding, Ph.D., J.D. and Julia Hunting, M.S., J.D.
WhyAB 2237does not require California Association Managers to have a General Contractor’s license. Unless… Question: “Are Community Association Property Managers now required to have a General Contractor’s license?” Tyler: “No, not unless they or their company offer to, or actually perform part of the building construction.”
ECHO Journal | May 2013
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he blogosphere has been burning up lately over a new law that some commentators say might require California community association managers to have a General Contractor’s license to perform their jobs. Since property managers can be said to “oversee� bids for construction projects it has been suggested that they might fall within the expanded definition of “consultant� which was added to the basic contractor’s licensing statute by Assembly Bill 2237.1 California Business and Professions Code Section 7026.1(b)(1) defines who must have a General Contractor’s “B� license as follows: “Any person, consultant to an owner-builder, firm, association, organization, partnership, business trust, corporation, or company, who or which undertakes, offers to undertake, purports to undertake, purports to have the capacity to undertake, or submits a bid to construct any building or home improvement project, or part thereof.� AB 2237 added subsection (2) which states that a “consultant� is someone who: (A) Provides or oversees a bid for a construction project; or (B) Arranges for and sets up work schedules for contractors and subcontractors and maintains oversight of a construction project.� Question: “These sound like tasks that a community manager might perform for their client associations during construction projects so why don’t they need to be licensed under the new law?� Answer: The new subsection modifies 7026.1(b)(1) by adding a further definition of what a “consultant�2 does but it does not remove or change the other qualifying language in that same section which defines a “contractor� as
1 AB 2237 is codified as California Business and Professions Code Section 7026.1 (b)(2). 2 The word “consultant� as used in the statute refers to and modifies the phrase, “consultant to an owner-builder� found in Section 7026.1(b)(1) May 2013 | ECHO Journal
someone offering to construct a building or part of a building. The Legislature did not create a new category of person who must be licensed—i.e. a “consultant” who does not actually perform the work. To require a license, a “consultant” (like the other categories of persons or entities who must be licensed) must still be someone “…who or which undertakes, offers to undertake, purports to undertake, purports to have the capacity to undertake, or submits a bid to construct any building or home improvement project, or part thereof.” A licensee cannot be either a “consultant” or someone who performs or proposes to perform work. Under this statute a “contractor” must still be both. AB2237 did not change that. This conclusion is supported by the legislative history of AB 2237. The text of the amendment was originally located in its own subdivision under Section 7026.1 and it applied to all “persons.” The legislature then relocated the amendment under subdivision (b) as 7026.1(b) (2). It also eliminated the amendment’s application to all “persons” and made it instead a modifier of the term “consultant” within subdivision (b). This change is noteworthy— before a “consultant” is deemed a “contractor” under subsections 7026.1(b) (1) and (2), it must first be either undertaking, offering to undertake, or submitting a bid to do the work. Consultants who merely provide or oversee a bid, or schedule or oversee a construction project without also building it or contracting directly with others to build it, aren’t “contractors” under 7026.1(b) and do not need to be licensed. The California Contractors State License Board was the sponsor of the bill and describes its purpose as follows: “‘AB 2237 is a valuable consumer protection measure and will place project responsibility where it belongs,’ said CSLB Registrar Steve Sands. ‘All too often, people who don’t have a state contractor license call themselves conECHO Journal | May 2013
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struction consultants and encourage property owners to take on a home improvement project as the ownerbuilder. The so-called consultant collects a fee and many times leaves the homeowners with all of the project responsibility and liability. Owner-builders that employ workers must be registered as an employer with the EDD (Employment Development Department) and must have protective measures in place for workers, including workers’ compensation insurance in the event of an onsite injury. The homeowner becomes responsible for all phases of a project and its integrity, including pulling project permits, requesting inspections, and making sure local and state building codes are met. The new law will clearly define when someone is a contractor and discourage unscrupulous individuals from working under a fraudulently obtained owner-builder permit.’”3 The scenario that CSLB addresses with AB 2237 is the case where a person tries to circumvent the license requirements by calling himself a consultant to an owner-builder, when in fact he or she is behaving like a contractor, i.e., he still submits a bid to perform certain work, and then provides the labor and materials in return for a 14
“fee.” The purpose of the statute is to make sure that the persons furnishing labor (i.e., employing workers or otherwise doing the actual work) have “protective measures” like proper insurance and performance bonds in place. AB 2237 intends to regulate those submitting bids and performing the actual work, rather than those who merely oversee or manage it. 3 Contractors State License Board, Press Release 12/31/2012. 4 The California Contractors State License Board (CSLB) has stated that community associations are considered exempt from the contractor’s license statute pursuant to California Business and Professions Code Section 7044 which exempts “owners” and their employees from all licensing requirements. The CSLB recognizes that a community association acts on behalf of the owners as to certain components of the project, is delegated certain maintenance and repair obligations that would normally fall to individual owners, and therefore is exempt. This exemption would include managers or executive directors who are true “employees,” working for wages or salary. As to them, the licensing statute does not apply even if they were performing in the role of a “contractor.” 5 It may have been the original intent of the legislature to require that construction managers be licensed. Language to this effect was found in the original version of the bill. But those provisions were expressly deleted when the last version was passed. May 2013 | ECHO Journal
If the Legislature intended to create a new category of licensed contractor—one who “oversees” construction, but does not perform or propose to perform a work of construction— something like the original version of the bill would have been adopted instead of the very narrow amendment that we have. So, unless the community manager or his or her company is performing, or offering to perform a work of construction, they do not need a contractor’s license.4 This same analysis applies to construction managers hired by community associations. They do not need to have a General Contractor’s license unless they propose to or undertake to do the actual work or some part of it.5
About the Authors: Tyler Berding, Ph.D., J.D. is a founding principal of the Berding|Weil law firm. Julia Hunting, M.S., J.D. is a licensed Professional and Structural Engineer and an attorney at Berding|Weil. ECHO Journal | May 2013
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May 2013 | ECHO Journal
By Jeffrey Barnettt, Esq.
Changes at DFEH Why it Matters to You T
he acronym “DFEH” is becoming increasingly known to homeowner’s associations, and in a most unhappy way. The California Department of Fair Employment and Housing (DFEH) has broad authority to enforce California’s fair housing laws. A letter of inquiry or complaint from the Department may herald the beginning of an expensive legal problem for the association, its board of directors and the management company, all of whom may be identified as actual or potential respondents. The insurance carried by the association and the board may or may not provide a defense to these parties in the proceedings that follow. Even if the insurance carrier does pay for counsel for defense purposes, a complaint by DFEH may well trigger a duty of disclosure on the part of the as-
ECHO Journal | May 2013
sociation, and if DFEH is successful in prosecuting a civil complaint, the actual damages, penalties, punitive damages and attorney’s fees that may be assessed against the association, board and management company may not be covered by insurance. Complaints You Might See Fair housing complaints are filed with DFEH by owners and tenants on a variety of grounds. These include: The California Unruh Civil Rights Act. The Act prohibits discrimination on the basis of sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation. The Federal Fair Housing Act of 1988 (42 U.S.C. Section 3601 and following) which bars discriminatory 17
housing practices. These include discrimination by the denial of a dwelling to a person because of race, color, religion, sex, familial status or national origin. It further prohibits discrimination on these bases in the provision of services or facilities in connection with a dwelling. Discrimination is defined to include a refusal to make reasonable accommodations in rules, policies, practices or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling. (42 U.S.C. Section 3604) The statute further prohibits discrimination by refusing to allow a handicapped person, at that person’s expense, to make reasonable modifications of existing premises necessary to afford full enjoyment of the premises. The New Regulations On October 7, 2011 new regulations became effective to guide DFEH procedures. See California Administration Code, Sections 10035–10066. Certain changes made by regulations which facilitate the DFEH administrative process include the following: Complaints of discrimination may be filed electronically, in which event they do not need to be signed despite the fact that complaints are required to be verified. See Sections 10035(a) and 10035(a)(10)–(11). The latter subsection states that electronically filed complaints are deemed to be signed under penalty of perjury. Complaints may be filed on the DFEH website. Section 10035(c). Although by statute complaints must be filed within one year from the date upon which the alleged unlawful practice occurred, the regulation creates a limited exception when the complainant cannot sign a complaint before the statute of limitations runs, in which case the Department will file an unsigned complaint and date-stamp it received before the statute of limitations runs and subsequently receive a signature on the unsigned complaint. Section 10035(c). 18
May 2013 | ECHO Journal
It is apparent that these changes could substantially increase DFEH complaints against associations, boards and managers. Statutory Reform Last year the California Legislature adopted Senate Bill 1038 which made further changes to DFEH in an effort to modernize its operations. Beyond administrative reshuffling, the law allows DFEH to file cases in the Superior Court of California (Gov. Cod. Section 12981(a)) against parties alleged to have violated the fair housing laws, but requires mandatory dispute resolution (Gov. Cod. Sections 12965(a) and 12981(a)), free of charge to the parties, before litigating. The statute authorizes DFEH to obtain reasonable attorney’s fees and costs, including expert witness fees (Gov. Cod. Section 12989.2), if it is the successful party in the litigation. Attorney’s fees awarded to DFEH in litigation will be placed in a special fund to support the operations of the Department in addition to its funding through the Legislature. New regulations will be adopted to implement the changes in DFEH resulting from Senate Bill 1038. Traps to Avoid DFEH issued most housing accusations in the calendar year 2011 based on disability and familial status. Directors must be attentive at all times to policies and actions that may run afoul of federal and state law that prohibits discrimination on these grounds. Accommodations As noted, federal and California law require associations to provide “reasonable accommodations” to the disabled to allow the resident to have full use and enjoyment of the property. Disability is defined as a physical or mental impairment that limits a major life activity. The definition includes not only persons with a present impairment, but those who have a record of such, or who are regarded as having such an impairment that may become a future disability, although not presently disabling. See Government Code Sections ECHO Journal | May 2013
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12926 and 12926.1. These definitions are broadly construed. Major life activities include physical, mental and social activities, as well as working. Chronic or episodic conditions are covered as disabilities. A few examples of physical and mental disabilities recognized by DFEH include heart disease, multiple sclerosis, HIV-AIDS, cerebral palsy, post-traumatic stress disorder and clinical depression. In general, the law requires an accommodation when it imposes no fundamental alteration to the nature of the program or undue financial or administrative burdens. For example, if a mobility impaired resident has a van with a wheelchair lift that cannot operate in the garage due to physical constraints, it would be a reasonable request for that resident to be granted an accommodation for parking in a nearby common area parking space despite restrictions or rules that would otherwise prohibit granting such a permit. A
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good discussion of the reasonable accommodation duty can be found in the joint statement of the Department of Housing and Urban Development and the Department of Justice dated May 17, 2004 at www.hud.gov/offices/fheo/ library/huddojstatement.pdf. The Department of Housing and Urban Development and Department of Justice have issued a similar joint statement concerning the obligation of housing providers to grant reasonable modifications for the disabled. Safety Rules Restrictions and rules based on safety concerns often trigger complaints to DFEH. Boards are naturally concerned about potential lawsuits when children skateboard on sidewalks, play in the streets, climb trees and use recreational facilities unsupervised. However, limiting the privileges and facilities associated with the dwelling because of familial status is a violation of federal and state law. Therefore a prima facia (on its face) case is established when rules treat children, and thus families with children, differently and less favorably than adults-only households. Such rules are illegal unless the association, board and management can articulate a legitimate justification for their existence. See United States vs.Badgett, 97 F. 2nd 1176 (1992). In defending a rule on safety grounds, the association must show that it has a compelling business necessity supporting it, and that it is the least restrictive means used to obtain that end. See Fair Housing Council vs. Ayres, 85 F. Supp. 315, 318-19 (1994). Rules that contain absolute prohibitions against children under eighteen, such as those prohibiting use of recreational facilities and playing in streets in the common areas, are vulnerable to the challenge that they are not the least restrictive means to achieve the ends. Plaza Mobile Estates vs. Oloff, 273 F. Supp. 2nd 1084 (2003). As the court noted in Plaza Mobile Estates, age restrictions concerning use of common area ECHO Journal | May 2013
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facilities can be arbitrary and do not constitute the least restrictive means of remediating the health and safety concern. The court in that case went on to note that requiring adult supervision likewise can be arbitrary, specifically stating that prohibiting all children from walking around the park without adult supervision is overly broad regardless of the safety concern and stating that “there is nothing magical about the age of eighteen or fourteen years old if defendants’ concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with use of rules. Moreover, rather than being connected with such ages, bicycle and pool safety would be better served with a proficiency requirement.” The extensive case law in this area requires careful attention on the part of boards and their legal counsel in drafting cc&rs and implementing rules.
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Conclusion In conclusion, the new regulations may increase complaints against associations, boards and managers. The new statutory mediation procedure will provide an opportunity to settle fair housing cases on an expeditious basis. However, the power of DFEH to file civil suits if the mediation is unsuccessful creates new leverage on the part of the State of California against homeowners’ associations. While fair housing concerns have always been important, the changes at DFEH require extra diligence to avoid liability, particularly when an accommodation request is receive and when rules, regulations and restrictions are being considered that directly or disproportionately affect families with children.
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Jeffrey Barnett is an association attorney with legal offices in San Jose. He is a past member of ECHO’s Board of Directors and a current member the Legal Resource Panel, the Legislative Committee and several regional resource panels. May 2013 | ECHO Journal
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May 2013 | ECHO Journal
F
or my third new car purchase, I really did my due diligence. I subscribed to Consumer Reports and read all of the pertinent information, reviewed Edmunds.com and Kelly Blue Book for further information before going on
test drives and finally making my decision. It was an informed decision rather than an emotional one and it’s been my favorite car to date. Think of a typical purchase of any home electronic item such as a flat screen TV–
By Ann Thomas
The Importance of a Professional Specification and Job Walk for a Repaint
ECHO Journal | May 2013
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there are many choices, similar items by different brands on the market but unless you take time to do the research on the different features and benefits available to you, you may just ‘get what you pay for’. How does this apply to professional specifications? Due diligence and home work equals a job well done. Some of the industry paint manufacturers offer complimentary services including specification writing for Homeowner Associations. Paint specifications offer a professional’s best recommendation and a comprehensive description for a particular job. A specification will provide you, the customer, with a document that will instruct your bidders on materials and procedures for the specific job. And it is a legal document so the material in the specification will need to be used as directed. In this case, we will discuss a repaint specification and job walk to explain its importance before you acquire paint bids from painting contractors. By taking advantage of a professional specification you will benefit by receiving comparable bids. Paint Manufacturer Specification A paint manufacturer specification provides detailed information about preparation for specific substrates, application, color, clean up, etc., and specifies what products will be used on the repaint: so all contractors will be bidding on the same value line product. Lines can range from Specialty to Ultra Premium. The chosen value line will make a difference in the performance and longevity of the repaint. The specification writer, manager and/or board members should identify the following items before a specification is prepared: • Problem areas and/or concerns (e.g., dry rot, chalking, cracking, efflorescence, etc.) • Any wood or wrought iron repair/replacement. Wood replacement requires all six sides of primer before replacing and caulking in certain areas. May 2013 | ECHO Journal
• Color changes. There could be an additional cost to the painting bid if the color is significantly lighter or darker. • Exclusions—what substrates should not be painted? • Any line items or specific bidding instructions. Request a Paint Specification The paint specification is written by a professional paint manufacture representative who not only provides a scope of work, but also details the preparation needed for the specific substrates. This document indicates the specific primers for all wood, ferrous and non-ferrous metal, as well as concrete and/or stucco surfaces. It also indicates the best topcoat gloss level for the surfaces, as well as specifying the proper paint to meet or exceed the longevity recommended by the reserve study.
“
A specification will provide you, the customer, with a document that will instruct your bidders on materials and procedures for the specific job. And it is a legal document so the material in the specification will need to be used as directed.
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Please note, Product Information (PI) sheets and Material Safety Data Sheets (MSDS) are available on all paint products to explain the technical make up of the product as well as any special instructions. Just like televisions, paints are definitely not all the same! Keep in mind 75–80% of the paint bid is attributed to labor; 20–25% is material (paint, caulking, etc.). This ECHO Journal | May 2013
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Avoid the confusion of construction defects Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process. Order from ECHO! Call 408-297-3246 Fax 408-297-3517 store.echo-ca.org
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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
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EMAIL david@hoa-cpa.com EMAIL bill@hoa-cpa.com
means it is better for the HOA to use Ultra Premium quality products on their repaints for the longevity of the project. Premium paint can provide additional longevity because the paint film will last longer and hold up better on the elements protecting your surfaces.
“
A job walk will further identify problematic substrates, address issues and will provide contractors with the same information in order to correctly bid the job.
”
Professional Job Walk The next step to obtain comparable bids is conducting a professional job walk where the specification writer and all bidding contractors meet at the May 2013 | ECHO Journal
property to review the specification and walk the property together. This will further identify problematic substrates, address issues and will provide contractors with the same information in order to correctly bid the job. This will provide you, as the Board or manager, confidence that bidders are bidding to equal standards because they are all on site at the same time and questions are addressed and answered together. RFP vs. Paint Specification What is an RFP (Request for Proposal)? Community managers write RFPs as a general request for proposal. This can be as simple as giving the address of the property and asking for repaint bids without any additional detail. This means that one contractor may give a bid using a one coat value line product from a ‘big box store’ whereas another contractor may be supplying a bid that reflects a two coat, top of the line paint from a paint manufacturer. In other words, it is not an equal bid comparison. If you have a choice between an RFP and a paint manufacturer’s specification, choose the manufacturer’s specification. Manufacturers are the paint experts and will choose quality products that are best suited for your community. In my experience, managers that use the professional specification writing services (and job walks) appreciate the streamlined procedure when requesting bids.
Ann Thomas is a Representative for the Property Services Division for Dunn-Edwards Paints. She is a member of the ECHO Maintenance Resource Panel. Ann can be reached at ann.thomas@dunnedwards.com for any questions about this article. ECHO Journal | May 2013
Amazon customers gave it a five-star rating
2013 Now Edition Avail able
2013 Condominium Bluebook A Complete Guide to Condominium Living Member Price: $17.00 Non-Member Price: $25.00
This well-known compact guide for the operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers. Order today from ECHO! Call 408-297-3246, fax at 408-297-3517 or visit us online at store.echo-ca.org
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By Sherry Harvey, PCAM
Serving on
the Board It’s About Team Building and Leadership W
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. 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 en30
hances 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 Continued on page 37 May 2013 | ECHO Journal
ECHO Journal | May 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 Up Capital Management, Inc. 5905 Granite Dr. #150 Granite Bay, CA 95746 Contact: Anton Bayer Tel: (408) 406.1683 Fax: (916) 797.1024
Find the Answers to your Questions on Condo Ownership
Empire Construction & Painting 1901 Olivera Road Suite A Concord, CA 94520 Contact: James Fisher Tel: (888) 278.8200 Fax: (408) 521.9797
An excellent guide to understanding the rights and responsibilities of condo ownership and homeowner associations operation. The questionand-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.
Become an ECHO Business and Professional Member and receive the many benefits of membership.
Order from ECHO! Call 408-297-3246 Fax 408-297-3517 Online: store.echo-ca.org
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To learn more, visit our membership page at www.echo-ca.org
May 2013 | ECHO Journal
ECHO Events Calendar
Important resource meetings... 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 Michael’s on Main, Soquel Wednesday, May 15 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. Rohnert Park Wednesday, June 5 Maintenance Resource Panel 12:00 Noon ECHO Office, San Jose Tuesday, June 9 Central Coast Resource Panel 12:00 Noon Michael’s on Main, Soquel Wednesday, June 12 South Bay Resource Panel 12:00 Noon Buca Di Beppo Campbell
Friday, June 14 East Bay Resource Panel 12:00 Noon Massimo Restaurant, Walnut Creek Wednesday, June 19 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. Rohnert Park Monday, July 8 Accountants Resource Panel 6:00 p.m. Scott’s Seafood, Oakland Tuesday, July 9 Central Coast Resource Panel 12:00 Noon Michael’s on Main, Soquel Wednesday, July 17 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. Rohnert Park Wednesday, June 17 Legal Resource Panel Porterhouse, San Mateo
Friday, August 9 East Bay Resource Panel 12:00 Noon Massimo Restaurant, Walnut Creek Wednesday, August 14 South Bay Resource Panel 12:00 Noon Buca Di Beppo, Campbell Thursday, September 5 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse Monday, September 9 Accountants Resource Panel 6:00 p.m. Scott’s Seafood, Oakland Tuesday, September 10 Central Coast Resource Panel 12:00 Noon Michael’s on Main, Soquel Wednesday, September 18 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. Rohnert Park
Wednesday, July 7 Maintenance Resource Panel 12:00 Noon ECHO Office, San Jose
Regularly Scheduled ECHO Resource Panel Meetings Resource Panel Maintenance North Bay East Bay Accountants Central Coast South Bay Wine Country Legal
ECHO Journal | May 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: $15.00 Non-Member Price: $25.00 This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues. Revised and updated in June 2012.
May 2013 | ECHO Journal
Dispute Resolution in Homeowner Associations . Member Price: $15.00 Non-Member Price: $25.00 This publication has been completely revised to reflect new requirements resulting from passage of SB 137.
Publications to answer your questions about common interest developments Order Online at store.echo-ca.org
Bookstore Order Form Board Member’s Guide for Contractor Interviews $15.00 Non-Member Price: $25.00
Executive Council of Homeowners 1602 The Alameda, Suite 101, San Jose, CA 95126 Phone: 408-297-3246 Fax: 408-297-3517 TITLE
QUANTITY
AMOUNT
This report is a guide for directors and managers to use for interviews with prospective service contractors. Questions to find out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.
SUBTOTAL CALIFORNIA SALES TAX (Add 8.625%) TOTAL AMOUNT
Yes! Place my order for the items above. Board Member’s Guide for Management Interviews . Member Price: $15.00 Non-Member Price: $25.00 This guide for use by boards for conducting complete and effective interviews with prospective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.
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 | May 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
Fresno
Marco Lara, CPA 650-632-4211
Mike Hughes David Levy, CPA
Central Coast Panel
Marin
John Allanson 831-685-0101
David F. Feingold, Esq. Wanden P. Treanor, Esq. Glenn H. Youngling, Esq.
East Bay Panel
Beth Grimm, Esq., 925-746-7177 Cindy Wall, 925-830-4580
Peninsula
Legal Panel
Sacramento
Mark Wleklinski, Esq. 925-280-1191
Adam Haney Deon Stein, Esq.
Maintenance Panel
San Francisco
Brian Seifert, 831-708-2916
Steve Weil, Esq.
North Bay Panel
Santa Cruz
Diane Kay, CCAM, 415-846-7579 Stephany Charles, CCAM 415-458-3537
Lisa Esposito, CCAM Sharon Pratt, Esq. Rob Rosenberg, CCAM Paul Schultz Rosalia Tapia, Esq.
San Francisco Panel
Sandra Bonato, Esq. Omar Hindiyeh Wanden P. Treanor, Esq.
Jeff Saarman, 415-749-2700
South Bay
South Bay Panel
Bob Hall Stephanie Hayes, Esq.
George Engurasoff, 408-295-7767 Wine Country Panel
Pam Marsh, 415-686-9342
Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.
36
Walnut Creek
Beth Grimm, Esq. Stephanie Hayes, Esq. Wine Country
Carra Clampitt Bill Gillis, Esq. David Hughes Ken Kosloff Tom O’Neill Steve Weil, Esq.
Annual Seminar Speakers April 6, 2013 ECHO Oakland
Board Essentials Ian Brown Derek Eckert
Geri Kennedy Ken Kosloff David Levy, CPA Steve Weil, Esq. Legal Jeffrey Barnett, Esq. Kevin Canty Sandra Gottlieb, Esq. Julie Mouser Deon Stein, Esq. Wanden Treanor, Esq.
The Executive Council of Homeowners (ECHO) is a nonprofit membership corporation dedicated to assisting California homeowner associations. ECHO provides help to homeowner associations on many fronts: finances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, a monthly full-color magazine and discounted publications.
Who Should Join ECHO?
Hot Topics Tyler Berding, Esq. Alan Crandal Stephanie Hayes, Esq. David Kuivanen John Schneider
Recent Contributing Authors
If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations.
Benefits of ECHO Membership • Subscription to monthly magazine • Updates to the Association Statute Book
January 2013
• Frequent educational seminars
James H. Ernst, CPA, MSTax, CCAM Dave Phelps, ASLA, ISA Sharon Glenn Pratt Robert Rosenberg Patricia A. Wendleton
• Special prices for CID publications
February 2013
Oliver Diaz Lisa Esposito, CCAM Betty Jones, Esq. Robert Rosenberg, CCAM Steven S. Weil, Esq. Glenn H. Younging, Esq. March 2013 Tom Fier, Esq. Paul Schultz, CIC, CLIA, CLT-E Deon R. Stein, Esq. Amy K. Tinetti, Esq. April 2013 Robert Aune Stephany Charles, CCAM Beth Grimm, Esq. Diane Kay, CCAM Hannah Skiles
• 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. May 2013 | ECHO Journal
Serving on the Board Continued from page 30 are the association’s governing documents that define the 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. 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 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 con-
ECHO Journal | May 2013
cise 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.
Advertiser Index Ace Property Management . . . . . . .12 American Management Services . . .15 Angius & Terry . . . . . . . . . . . . . . . . .3 Applied Reserve Analysis . . . . . . . .15 A.S.A.P. Collection Services . . . . . .12 Benjamin Moore Paint Co. . . . . . . . .27 Berding | Weil . . . . . . . . . . . . . . . . .40 Cityscape Property Management . . .13 Collins Management . . . . . . . . . . . .22 Community Association Mgmt. . . . .27 Community Management Services . .32 Compass Management . . . . . . . . . .21 Cool Pool Service . . . . . . . . . . . . . .21 Cornerstone Community Mgmt. . . . .18 Ekim Painting . . . . . . . . . . . . . . . . .19 Eugene Burger Management Co. . . .14 First Bank Association Bank Srvcs . .19 Flores Painting . . . . . . . . . . . . . . . .18 Focus Business Bank . . . . . . . . . . .15 Helsing Group, The . . . . . . . . . . . . .26 Levy, Erlanger & Company . . . . . . . . . . M&C Association Mgmt. Services . . .2 Massingham and Associates . . . . . .28 Max Ranjbar CPA . . . . . . . . . . . . . .21 Medallion Landscape . . . . . . . . . . .22 Mutual of Omaha Bank . . . . . . . . . .12 Pollard Unlimited . . . . . . . . . . . . . .20 R. E. Broocker Co. . . . . . . . . . . . . .29 Rebello’s Towing Service . . . . . . . . .23 REMI Company . . . . . . . . . . . . . . . .20 Saarman Construction . . . . . . . . . .13 Silicon Valley Civil & Construction Engineers . . . . . . . . . . . . . . . .27 Steve Tingley Painting . . . . . . . . . . .39
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.
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. 37
Join us at the
ECHO Walnut Creek Educational Seminar Saturday, June 15, 2013 New Location
8:30 a.m.–12:30 p.m. Embassy Suites 1345 Treat Boulevard Walnut Creek, CA 94597
Seminar Agenda Your Governing Documents Stephanie Hayes, Esq.
Board Consensus and Trust Building
Price: $49 Members $59 Non-Members Register online at www.echo-ca.org or fill out the form below. Prices increases $10 after June 1.
Beth Grimm, Esq.
Your Real Job: Managing Maintenance, Repair and Replacement Rob Rosenberg and Lisa Esposito
Yes, reserve _____ spaces for the ECHO Walnut Creek 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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May 2013 | ECHO Journal