Ask the Expert

Marjorie Jean Meyer, CMCA®, PCAM®
Vice President and National Director of Education and Certification
ASSOCIA

I live in North Carolina.

My HOA's board resigned last year without reason. The old board 'appointed' a new board without a vote. The new board has stated that they will not hold the responsibilities of the old board, and if there are any misappropriations or failure to meet fiduciary responsiblity that it should be addressed to the old board.

The 'appointed' board claims that seeing they were not in power they have no liabiilty.

My question is, can the 'appointed' board remove all liability from all previous boards mismanagement or neglect? Thanks.

- Steve

Anyone holding the position of director/board member of a community association and who was legally appointed or elected to that position is legally responsible for the actions of the board and the operations of the community association. If the current board acts inappropriately, each board member may be liable for his actions. If the previous board acted inappropriately, those board members also may be liable for their actions.

Sincerely,

Margey

Problem Homeowners

I live in ***** County Washington State. The Board Members of our HOA recently sued one of the home owners for continued non compliance of parking a huge tow truck in the neighborhood. It appears it is now a vendetta situation against the board. It is time for elections of the new board. The sued party has not paid this year assessements and have brought back the tow truck but parked it in an area not in the HOA. They sent out flyers asking that they be elected to board as President and the wife as treasure. Can they in this situation. They are getting everyone heated complaining of inconsistencies which the CCR's were followed at the advice of an attorney. Please help our next election is 10 days away. We are hoping since they are not in good standing that their vote won't count. Nor can they be elected.

- Debi

If your association's governing documents or state statutes define a member in good standing and eligible to vote and serve on the board as one who is current in his or her assessments and not in violation of the governing documents, then the owner you described could not vote or be elected to the board. You can review the state statutes by clicking on "Links and Resources", then scrolling down to "State websites". Better yet, since it sounds like there may be fireworks at the annual meeting pitting the tow truck owner and his supporters, if there are any, against the board and their supporters, the board should consider engaging the services of competent legal counsel to attend the meeting at which he or she would offer advice regarding appropriate behavior and procedures.

It seems to me that the current board needs to do a better job of communicating their actions to the membership. As long as the owners understand that the board's decision had a valid legal basis and the purpose of the lawsuit was to protect the property values and aesthetic appearance of the community, the owners should support them.

Sincerely,

Margey

Voting - No Response

We are attempting to amend our CC&Rs.  We need a 75% approval for the proposed amendments to pass.  The ballots were mailed.  We have had good communication with owners.  It still will be difficult to even have 75% of the ballots returned.  Is there any legal precedence to make an "Assumption" that an unreturned ballot can be assumed that it is a "Yes" vote?  Thank you.

- T.

If your governing documents don't provide for an assumed affirmative vote for nonresponses, check your state statutes by clicking on Links and Resources, then scrolling down to "State websites".

Unless there has been an appellate court case in your jurisdiction or a state statute that allows an association to consider a no-response as a "yes" vote, you'll need to achieve the 75% quorum mandated in your association's governing documents. Use the search function at associationtimes.com and enter "achieving quorum" in the key word field to view an article about creative ways to encourage membership participation.

Regards,

Margey

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While our reserve fund is developed by a reserve specialist and details what assets are within the study, some of our board members believe they can rob Peter to pay Paul to utilize monies within the Reserve Acct to purchase a new asset by utilizing the present Reserve Fund monies.

I do not believe this is a proper action because those funds that have been collected for identified assets and any transfer of funds from that account creates a negative cash position for the planned reserves.
What is you opinion please.

- Bill

I agree with your analysis. There's a difference between the replacement reserve fund and a capital improvement fund. Your association should be transferring money regularly to the replacement fund for the eventual replacement of the major physical components in the community for which the association is responsible. On the other hand, a capital improvement fund is intended for new assets such as a new pool, a new gazebo, new awnings, or similar major addition to the property. Once the asset is installed, a new line item should be created in the replacement fund budget so that funds begin to be allocated for its eventual replacement.

Your directors may be bypassing the mandate in your association's governing documents for a vote by the owners on expending funds for new assets. Check your association's governing documents and state statutes to confirm the requirements for spending reserve funds.

Sincerely,

Margey

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Our Community has a stock tank that was damned up and made into a Lake. There was a site survey many years ago that said we were not in a flood plain. These records can not be found. Now FEMA says we are in a flood plain. Do you know where I can obtain a copy of that survey? Who is responsible for paying for a new survey? Thanks.

- Connie

FEMA revises their flood maps on a regular basis. In fact, many associations that were previously not in the flood plain find themselves liable for unbudgeted and extraordinarily high insurance premiums as a result of the new flood maps FEMA issued.

If your association disagrees with FEMA's survey, the only way to fight it is to pay to have a second one performed by a credentialed surveyor.

Sincerely,

Margey

I need to know the cost of a resale packet for ****** condominium in Virginia Beach, VA. I called the local office and they weren't sure.

- Karen

"Ask the Expert" is a service that answers questions from readers around the nation regarding the operations of community associations. Please recontact your board of directors or manager for a specific answer to your query regarding the cost of preparing a resale certificate.

Sincerely,

Margey

I own a condo in a 70 unit association. My question (or problem) is this:

Although I have by far the biggest front lawn area of any unit - there was never any outside water access installed on my unit. There are however two (2) of them on the outside of the unit right next to mine. One in the back adjacent to their deck, and the other on the opposite side.

I have been told by that unit owner my using "their" water spout creates loud noises and they refuse to let me use it. What are my rights as both an owner and concerned for the integrity of our landscape? The other half of the equation is the next door neighbor who has the only 2 watering access points is also the association president. HELP Please.

- Bill

If the outdoor faucet, or hose bib, is designated a common element, then all owners should have access to it. However, if it creates a hardship for the resident living in the unit to which the hose bib is attached, common courtesy would dictate that owners use it during reasonable daytime hours.

Sincerely,

Margey

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I recently served as the Secretary on the Board of Directors for our HOA. We have formed a Committee to revise our By-Laws and Restrictions which haven't been updated for twenty odd years. I went to the Courthouse to get a copy of the original By-Laws and found out they had never been filed or recorded (the restrictions were). If they have never been filed or recorded, are they legally binding?

- Linda

In most jurisdictions, a community association's Bylaws do not need to be recorded in order to valid. Unless your association is located in one of the few states that requires all documents regarding a community association's operations, such as rules and regulations, resolutions and, yes, Bylaws, your Bylaws are legally binding.

Sincerely,

Margey

Our HOA is rewriting our Covenants for our housing subdivision. We wish to include a statement following, "The current annual maintenance costs shall be determined at the yearly meeting of the PTHOA." to indicate what percentage the annual fees may be increased by. The majority that I have seen say 5%, but I am not certain that this pertains to West Virginia. What can we indicate for the annual increase? We discussed following the federal annual cost of living increase. I do not know where to look further. Thank you for any help you can provide.

- W.

I URGE you not to include a maximum percentage increase in your amended Covenants! Too many community associations are facing severe financial difficulties because they cannot increase their assessments to an amount needed to adequately fund operating and reserve accounts. Just in the past few years, insurance premiums have increased more than 300% in some areas of the country, while the price of utilities and anything constructed with oil, such as asphalt roofs and pavement, have skyrocketed.

Don't hamstring your board by preventing them from having the funds necessary to adequately operate your association, then blame them because the community is inadequately maintained because of lack of capital. If you're concerned about misusing your association's money, create a Budget and Finance Committee to assist your board members in making appropriate decisions regarding expenditure of funds.

Sincerely,

Margey

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I am a member of a small condo association in NC (24 units) and we are having problems finding volunteers to serve on the Executive Committee (Board).

I spoke with an expert in FL who told me that in FL the court will appoint a trustee or fiduciary to run represent the owners association in lieu of an Executive Committee. I'm not sure if that can be done here in NC as I've had difficulty finding info. in that regard online. Have you run into this type of situation before and what is your advice?

Thank you very much in advance for your consideration.

- Joe

I'm not familiar with North Carolina law so cannot advise you with regard to hiring a trustee to manage your community association. A less expensive alternative, however, may be to hire a management company to implement board policies. If time constraints are the issue in finding volunteers to serve on the board, a management company may be the answer. The homeowners, through the board, still have the ultimate decision-making authority to run the community the way they want it run, while the board may spend only an hour or so a month establishing policy while the management company addresses the day-to-day operations.

Your association's governing documents may not allow the board to relinquish responsibility for the operations of your community. If the board still thinks a trustee is the best alternative, I would encourage them to first consult with an attorney well versed in North Carolina community association law.

Sincerely,

Margey

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I live in a condo open to everyone - not an senior nor an adult community. Our pool has always been open to everyone. The Board ruled suddenly last week (no meeting, no notice) to allow only children over the age of 5 in the swimming pool. Is this a civil rights violation based on age? Can a Board restrict access based on age (race? religion? etc?) Thank you!!

- Jan

The Fair Housing Act prohibits discriminating against children, including limiting access to community association swimming pools. For more information regarding the Act select "Links and Resources" and then click on "Fair Housing Laws" under "Active Adult Communities".

Sincerely,

Margey

One of our homeowners put in an architectural request to build a deck extension 3 years ago. It was approved, but the homeowner did not extend his deck until this year. The deck built is not the deck that was approved. It extends two feet further toward the lake and this extension blocks his neighbor's view. No notification was given to the Board until the deck was completed. The Board has given the owner two chances to change the deck, but no suggestions submitted change the layout to give back the neighbor's view. What shall the Board do next?

- Joy

Your board should contact legal counsel to determine the next step to take, which may be mediation, arbitration, or litigation. Homeowners must comply explicitly with the deed restriction variance approved by the board and cannot alter the modification without going back to the board for additional approval.

Sincerely,

Margey

In 1994 my Association made a rule restricting the height of patio trees to 8ft. At the time my patio had a 20ft. shade tree. I was asked to consent to it's removal but I refused. The Association claimed the right to remove the tree and charge me for doing so; however it was never done.

Now thirteen years later, a new board has voted to remove the tree at my expense. They have chosen my tree and one other from among many patio trees that exceed 8ft. Some of them have been planted since 1994.

Shouldn't my tree be considered grandfathered and isn't this discrimination?

- Barbara

If you consider why the board has passed a rule limiting patio trees to 8', the directors' decision should make more sense. It sounds like the governing documents require the association to maintain the exterior surfaces of each unit, including the foundation and patio walls. Tree roots can wreak havoc on foundations, causing them to crack, raise or sink. Tree branches can destroy siding and damage roof shingles and gutters.

I agree that the board should require all owners to remove patio trees that exceed 8' in height and prohibit owners from planting trees that will eventually exceed 8'. Perhaps they are selecting only those trees that are already damaging common elements; why not simply ask them what their plans are for the other too-large trees?

Unless you sign a legally-binding document agreeing to replace any limited common element or common element damaged by your tree, either let the board remove it or do it yourself and replace it with a shrub more suitable for the confined space of your patio.

Margey

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