Tuesday, July 23, 2024

HOA Homefront: Avoid these HOA myths

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There are HOA myths that are harmful. Here are some of the most common ones.

Governing documents are boilerplate. Most HOA homebuyers read their purchase contract but ignore the CC&Rs, bylaws, and rules. Those documents are binding whether or not they are reviewed, so avoid surprises and read them.

It’s my balcony. Condominium association balconies are usually an exclusive use common area. Owners have the exclusive right to use it, but the HOA still controls how it is used and maintained because exclusive use areas are still common area, and therefore under association jurisdiction.

I can withhold assessment payments if I disagree with the HOA. Members cannot withhold assessment payments because of other claims against the HOA. Withholding assessments will cause late fees, collection costs, and attorney fees and increase the problem. The better approach is to follow Civil Code 5658 and pay the disputed amount and then file a small claims court claim seeking a refund.

Better to ask forgiveness than permission. Many homeowners feel they acquire leverage by making changes to their property without first asking the HOA for permission. Since architectural conformity and structural safety are major HOA concerns, this often creates legal controversies and avoidable conflict. Be a good neighbor, and seek permission first.

If it’s inside my home, the HOA has no say.  Most (but not all) condominiums are defined by a subdivision map or condominium plan describing the unit as “airspace”.  This means the member often owns the carpet on their floor and the paint on their walls, while everything underneath is common area requiring HOA permission to alter. Before opening a new doorway, check the condominium plan and CC&Rs to see if HOA permission is needed.

I can look at any HOA records. Members have rights to view many informative HOA records, including certain financial records (Civil Code 5200), annual disclosures (Civil 5300 and 5310), transfer disclosure documents (Civil Code 4525) and draft and final board minutes (Civil Code 4950). However, documents not listed by these statutes may be unavailable to member inspection.

The manager works for me. Managers (and all other association service providers) work for the association. Individual members do not direct association vendors – the board does that, normally through management.

Discussions regarding the appointment of officers and board or committee vacancies are “personnel” decisions. While personnel decisions are reserved for closed board discussion under Civil Code 4935, volunteers are not “personnel”. Only persons receiving paychecks from the HOA are employees and therefore “personnel”.

The president is the boss. The board, not the president, is the decider in associations. HOA presidents have much less power than for-profit corporate presidents.  Healthy associations understand this and govern with boards led (not controlled) by their presidents.

Good boards don’t increase assessments. Boards must budget for reasonably anticipated expenses. The goal is not a zero increase, but an accurate budget. Budgets should track reality, and the reality is that expenses rise over time. Boards that “hold the line” often skimp on maintenance and fail to deposit money into the reserve fund.

The state can take over if we need help. Court-ordered receivers appointed to run the HOA will cost vastly more than managers. Instead of giving up, improve your governance. Consider taking classes from a CAI chapter or pursuing CAI’s online governance training.

Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association advice. Submit column questions to kelly@roattorneys.com.

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