The Three Pillars of Community Strength p.8
New Beginnings for Community Association Board Members p.16
What Homeowner Associations Can Teach Governments About Spending p.22
Serving Community Associations
That Roof Over Your Head p.26
The Two Biggest Mistakes Community Associations Make Involving.... p.34
March /April 2016 echo-ca.org
What are the Three Pillars of Community Strenth? p. 8
2016 ECHO educational calendar
2016 ECHO Educational Seminars If you’ve ever wished that ECHO would hold a seminar closer to your association, chances are that we’ll be nearby during 2016. Don’t miss an opportunity to get the education you need with guidance from some of California’s top HOA attorneys and professionals. Take a look and mark your calendar. We can’t wait to see you there!
March 19
April 16
Wine Country Educational Seminar (see page 15)
East Bay Regional Seminar (see page 6)
DoubleTree Sonoma Wine Country Rohnert Park, CA
Concord Hilton Concord, CA
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San Rafael
San Francisco
news from ECHO
News From ECHO March 2016 “With great power comes great responsibility.” Voltaire? Deadpool? Your HOA Board? Without a doubt, boards of homeowners associations wield great power. The very health of a community depends on actions taken by the association board: appropriate reserves; landscape and building maintenance; rule enforcement; communications with owners. But, as volunteers, do they/you know what responsibilities follow? That’s what ECHO is all about. We exist to help HOA boards know what is expected and how to get it done. In this issue of the ECHO Journal, we explore three pillars of community strength, ten tips for new board members, budgeting, roof maintenance, and insurance. A broad spectrum of concepts that, we hope, contribute to your better performing your duties as an HOA board member. We invite you to further your education by visiting our website: www. echo-ca.org. There you will find immediate answers to your pressing questions. You’ll also find resources to help make your community a place every resident can be proud of. We also invite you to attend one or more of our educational seminars. On March 19, we host our Wine Country Educational Seminar in Rohnert Park; see page 15 for details and registration. On April 16, we are hosting our East Bay Regional Seminar in Concord, which offers our HOA University track for new board members, as well as a series of informative topics and speakers, with lunch included; see pages 6 and 7 for details. Both seminars are FREE for ECHO HOA members. Please join us and bring your fellow board members. No matter how you get your information and advice, we hope you will invest some time and take seriously your fiduciary obligations as association board members. Please let us know how we can make your ECHO membership a better experience. Best,
Brian Kidney Executive Director
March/ April 2016 | ECHO Journal
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CONTENTS
26
8
34 16
22 4 echo-ca.org
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The Three Pillars of Community Strength The challenge for associations is to harness the good ripples and mitigate ripples that are negative. To do so, a community needs the following; 1) a strong foundation of governance keeping them on the path of community well-being, consisting of good governing documents, 2) a good fiscal policy and 3) a strategy for positive communication between the Board and the homeowners.
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New Beginnings for Community Association Board Members As a new board member, you’re in the exciting role of running a real business, wearing a lot of different hats, and making the key decisions necessary to guide your community into the future. While that responsibility may seem a little daunting at first, it can also be a lot of fun and a great way to meet other neighbors.
22
What Homeowner Associations Can Teach Governments About Spending People in government should take field trips to well-run homeowner associations. To experience fiscal responsibility first hand. To see how elected leaders in some homeowner associations — HOAs— are actually spending public money prudently and efficiently.
26
That Roof Over Your Head! For many community associations, having a roof overhead is the exact opposite of consolation. In fact, roofs can present some of the worst headaches and cause some of the largest expenses your association will ever face.
34
The Two Biggest Mistakes Community Assocations Make Involving.... The Directors & Officers Insurance policy (“D&O”) is a small part of an association’s insurance coverage and premium puzzle, but it is a critical piece. It is important because it protects the community members who agree to accept a very often no-win and often thankless volunteer job to manage the association.
The ECHO Journal is published monthly by the Educational Community for 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. Copyright 2016 Educational Community for Homeowners. 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 1960 The Alameda, Suite 195 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org Office Hours Monday-Friday 9:00am to 5:00pm BOARD OF DIRECTORS AND OFFICERS President David Hughes Vice President Karl Lofthouse Treasurer Diane Rossi
DEPARTMENTS
2
2016 ECHO Educational Calendar
3
News from ECHO
6
East Bay Regional Seminar — Saturday, April 16th.
15
Wine Country Educational Seminar — Saturday, March 19th.
21
ECHO Professional Directory
37
Legislation at a Glimpse
38
ECHO Bookstore
41
Advertiser Index
42
ECHO Event Calendar
43
ECHO Volunteers
Secretary Carly Melius Directors Jerry L. Bowles John Garvic Adam Haney Stephanie Hayes David Levy
Robert Rosenberg Jeffrey Saarman Brian Seifert Wanden Treanor Steven Weil
Executive Director Brian Kidney Director of Marketing & Membership Carly Melius Director of Communications Tyler Coffin Legislative Consultant Mazzoni and Associates Design and Production Design Site ECHO Mission Statement Serving Community Associations
March/ April 2016 | ECHO Journal
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FREE Attendance for ECHO HOA Members!
EAST BAY REGIONAL SEMINAR Saturday, April 16, 2016
A mini tradeshow with lots of HOA professionals
Learn how to conduct meetings and elections properly!
ECHO HOA Members: Register for FREE Today!
Join other HOA owners and ECHO members at the Concord Hilton for a new ECHO event. While similar in length to our convenient half-day seminars, the East Bay Seminar offers more in-depth instruction, more professional exhibitors, a buffet lunch, and a members-only board training course. Complete event details and online registration is available at our website: www.echo-ca.org/events Visit the ECHO website for complete event details: www.echo-ca.org/events
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Learn how to interpret your key financial documents
Bring your Insurance questions!!
YOUR REGISTRATION INCUDES: N • Continental Breakfast • Buffet lunch • In-depth instruction • Access to professional exhibitors • Members-only board training course; a certificate will be issued to those participating in all three sessions.
EVENT INFORMATION
AGENDA
LOCATION:
DEALING WITH DIFFICULT PEOPLE STEPHANIE HAYES, ESQ.
Concord Hilton 1970 Diamond Blvd., Concord, CA 94520
TIME: 8:00 am to 2:30 pm. Classes begin at 9am Buffet lunch served to all attendees at noon.
REGISTRATION & PARKING: ECHO HOA members: FREE Nonmembers and walk-ins: $50
Do you know what to do with a difficult board member, a dispute between neighbors which involves the association, or a critical need to make major unfunded repairs?
AFTER EL NINO –
Planning, Repair and Maintenace
JUDY ADAME, WILLIAM COUNTNER, DAVID HUGHES
Learn about essential contract terms, working with qualified professionals, specifications, bidding and selection of a contractor, and the role of the board, the manager, and others.
REVISING YOUR GOVERNING DOCUMENTS Parking is free with voucher.
MARION AARON, ESQ.
Return the form on this page, call the office or register online at www.echo-ca.org/events.
Are your governing documents the same ones the developer left with your association, or are they from the 1970’s? Much has happened that suggests a rewrite may be in order. Even if they are of more recent vintage, learn why you should consider an update.
See you there!!!
HOA UNIVERSITY (ECHO MEMBERS ONLY) FINANCIAL – DAVID LEVY, CPA
Yes, reserve ______spaces for the ECHO East Bay Seminar
Don’t know a balance sheet from a bank statement? Learn how to interpret your key financial documents, the laws that affect your finances, and how to set appropriate goals for financial stability.
Name:
INSURANCE – CHARLOTTE ALLEN – KEVIN CANTY, ESQ.
Email Address: HOA or Firm: Address: City: State:
Zip:
Phone: Signature: Return to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Phone: 408-297-3246; Fax: 408-297-3517
HOA insurance is complicated and expensive. What policies do you really need? Should individual members purchase supplementary insurance? How comprehensive is your coverage? Bring your insurance questions.
LEGAL – ALEX NOLAND, ESQ. This session covers some of the toughest challenges for HOAs: governing the association responsibly while avoiding liability. Learn how to conduct meetings and elections properly, when to deal with disputes between neighbors, and so much more.
Complete all three sessions to earn an HOA University Certificate of Completion!
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THE 3 PILLARS OF COMMUNITY STRENGTH Capture the Good, Mitigate the Negative By Julie Adamen
T
he other day I was relating to a colleague the story of why, way back in the day, I wasn’t a member of the large-scale managers group, HOAPOA. It was all because a member of that group made a casual comment to the then-President indicating that I shouldn’t be eligible because although I did manage, on site, 1000+ units and a $5.4M budget, I worked for a management company (horrors!). With that simple comment, I was rendered politically ineligible to join. In response to this tale, my colleague said, “I wonder how many dumb decisions are made by just such a casual comment?” Yes, indeed, how many?
March/ April 2016 | ECHO Journal
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hich got me to thinking about Boards of Directors, and their decisionmaking process. How many decisions are affected by either a casual comment such as the one above, or are made formally without thinking about the long-term ripp le effect? My experience, and yours, says: Many, and not necessarily for the good. Yet, it is a reality of the business. The challenge for associations is to harness those good ripples and mitigate ripples that are negative. To do so, a community needs the following; 1) a strong foundation of governance keeping them on the path of community well-being, consisting of
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good governing documents, 2) a good fiscal policy and 3) a strategy for positive communication between the Board and the homeowners. They are what I call the Three Pillars of Community Strength. Not only must they have each of these Pillars in place, every Board must review, adjust where needed and maintain these “pillars” so communities will reap long-term benefits from good decisions and suffer as little damage as possible from bad ones.
PILLAR 1: Good Governing Documents
CC&Rs and By-Laws. CC&Rs and By-Laws provide the overall definition of the community and the basis for its government. You can have the most beautiful house on the block, but if your foundation is weak, the rest of the house will crumble. Associations live and die by the CC&Rs and By-Laws. For the layperson and the professional, even good sets of these documents can be confusing. Bad ones can make the Board and manager’s job a nightmare as they try to navigate the labyrinth of gobbledygook, some of which may be contradictory due to the “cut and paste” nature of their creation. So one of the most positive and effective things a Board can do is to have outdated and/or poorly written CC&Rs and By-Laws revamped to reflect the current - and future - needs to the community.[1] Yes it costs money, and it takes time (and sometimes many votes for approval by the membership), but Boards who undertake this effort find it well worth it, as they see
immediate, tangible results. Documents that reflect current law and community administration realities make the business of governing much easier without conflicting directives or those open to vastly different interpretations. Even more importantly, future Boards will reap vast benefits from the removal of voluminous, confusing, outdated developer-related verbiage or any other superfluous language, by making the framework of association responsibility as clear and concise as possible.
Rules & Regulations. Rules & Regulations provide the structure within which the community operates on a day-to-day basis and in a safe and sane manner. That is, if the following were never said by an early Board member: “Let’s not get too complicated with our Rules, because there’s only a few homes here. If there’s a problem, we’ll just knock on that person’s door, and discuss it neighbor-to-neighbor.”
March/ April 2016 | ECHO Journal
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Poor or non-existent Rules lead to innumerable problems, not the least of which is overt micromanagement: The Board becomes the judge and jury for every detail of community life, as actions that typically would be handled by the manager must be raised to the Board. Simple issues such as, Should we send a letter on Mr. Brown’s barking dog? Should that owner get two parking spaces? Should we foreclose on Mrs. Smith, but not on Dr. Roberts? This level of microadministration is very costly, immensely labor intensive and destructive. Here’s why:
• The sheer volume of work is exhausting for the Board • The manager lacks clear direction, putting him squarely in “no win” situations leading to manager turnover • Micro-administration will make the Board deeply unpopular as each decision rendered “for” one owner will be “against” another
•
There will be little-to-no corporate memory for decisions made, as they were not based on a formal rule, guideline or procedure
•
As time goes on the basis for decisions, even if well-thought out, will become fuzzy, allowing for all kinds of interpretations by subsequent regimes some of whom may have less common sense
• The community will have a very difficult time finding and keep ing volunteer Board members In short: A nasty mess that started way back when some early Board member made a casual statement mistakenly hoping to avoid too much structure. Updated, reasoned Rules & Regulations[2] will make the day-to-day lives of the Board and management much easier well in to the future by providing a means of rational
and equitable decision making that can be articulated to, and accepted by, the community.
Architectural Guidelines. The Guidelines execute the Design Review provisions that are in the CC&Rs, but they also must be written in such a way that allows reasonable interpretation of community aesthetics, as well as a common sense application. Some Boards and ACC’s (Architectural Control Committees) think (again) they don’t need too many “rules” or “guidelines” when it comes to architectural issues. They believe decisions can be made without the restraints of reasoned principles. That sounds good, except for these inevitable two occurrences: 1) The current ACC and its corporate memory is replaced by another group with no corporate memory, and 2) The ACC (and association) finds itself embroiled in a lawsuit due to inconsistent, arbitrary or lack of enforcement of architectural guidelines. Why do I say “inevitable? Typically, the Architectural Control Committee (ACC) has jurisdiction, through the CC&Rs and the guidelines, over the look and feel of the community’s common areas and limited common areas, from the color of patio furniture to the carpets in the common hallways to exterior finishes you name it. More so than Rules issues, architectural issues can become very personal to the owners affected, who look at that carpet (or paint, or patio furniture) every day of their lives and feel some connection to its aesthetics. In the best of times, members of the ACC can find themselves embroiled in controversy every time they make a decision based on published guidelines, let alone when they make them while flying by the seat of their pants. Just as important and many times far more visible than Rules and Regulations, well thought-out and well-written Architectural Guidelines provide communities with visible, long lasting effect. For the ACC to be a successful instrument for design review it must have a documented basis for its decisions, taking in to conformity and consistency with allowance for common sense. Adoption and execution of those Guidelines by the Board with
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ACC input will go a long way towards not only keeping the community harmonious, but in making the jobs of the volunteer committee members easier now and on down the road.
PILLAR 2: Fiscal Responsibility Reserves. “If we fund the reserves this year, we’ll have to raise assessments, and that will make us very unpopular. Let’s table it until next year.” [3] Reserves are the association’s savings account for repair and replacement of the common elements. And just like your own savings account, it’s very easy to justify not funding it. The big difference being, of course, that your savings account is yours. An association’s is - every members’. If Boards don’t budget to fund reserves, there will be hell to pay when
the roof fails or the pools require new plaster. It’s easy not to fund reserves (but not wise and possibly not legal) while the developer is still involved and/or the association is new. As time marches on the problems grows exponentially as the common areas age and the fixes become more urgent and expensive. Each subsequent Board elected is faced increasingly grim choices: 1) Do nothing like past Board members and hope and pray it doesn’t fall apart of their watch, 2) Get a loan and risk the ire of the populace, 3) Raise assessments and risk the ire of the populace, 4) Special assess and raise assessments and risk... Well you folks get it. Each choice is rife with political danger when things are going relatively smoothly, but the choices become even more restricted and the political danger more acute when the inevitable crisis occurs and that unlucky Board must act. Then - out come the torches and pitchforks as the masses react to the notice of a dues increase and a special assessment. All could have been avoided if earlier Boards had made the decision to not only 1) Contract for a realistic reserve study
(and updates as required), 2) Develop a plan to communicate, and expand support for, the needs and financial requirements of those studies to the community, and 3) Make the decision to fund properly documented reserves, and not kick the can down the road. Community associations are like families: When there is no money to pay the bills, unhappiness occurs. Sound financial planning makes for happy families and happy communities. Nowhere will the long-term ramification of a short-term decision be felt more keenly than by an association with underfunded reserves.
PILLAR 3: Communication and Consensus Development “If communication from the association is more like a stick than a stroke,
March/ April 2016 | ECHO Journal
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then all the members are going to feel is that they are being beaten. A positive perception of the association will result in increased rules compliance, more timely assessment payments, a more educated and informed resident base and a more respectful attitude towards the Board and Management.” [4]- Mike Pierson Key ingredients for great communication: Consistency, relevance and a positive spin. We live in an instant information society. If you want an answer to just about anything, you can go online and find it straight away. Associations should be no different. When Boards make it a policy to communicate relevant information regularly and in a positive fashion via regularly published, well-written newsletters and updated websites, they are making a decision to bring the owners in to the process of administering the community. Good people want to be a part of something positive (and Board members don’t want to serve forever - just a thought). As decisions are made, contracts awarded, committees formed, requests for volunteers made and good works praised, the Board is promoting trust between themselves and the owners. Why? As Mike Pierson says: “Because members no longer feel used, uninformed, manipulated or abused, all symptoms of a community with little or no positive communications from the Board and management.”
Good communication is the foundation for consensus building. The community always has a need to know and a communication strategy with a big dollop of positive transparency fosters a community that understands and supports the Board. This policy of openness and communication will especially pay back dividends when a crisis envelopes the community by mitigating a sense that the Board acted wrongly or in secret.
The Wrap Up The overarching task of the Board of Directors is to provide careful direction for the maintenance and well-being of the structures and infrastructure of the community they serve (preserve, protect, maintain and enhance). An onerous task, indeed, yet many Boards view their participation as something strictly rooted in the present, i.e., their term of office. When Board members become wholly aware that every action or decision, and even the casual comment, can have a lasting effect on the community, it becomes readily apparent they must have a strong foundation of good governing documents, a responsible fiscal policy and relevant, positive communication for the development of consensus. Having these elements, or pillars, will go a long way towards shepherding good decisions in to action, and keeping bad decisions from taking on a life of their own, maybe for years. That foundation will also make the lives of the Board, the manager and communities, much better. Millions of Americans have served on a volunteer Board of Directors at least
some time in their lives. I have and do, many of you managers have done so, and of course, all of your past, present and future Board members, have, do and will serve. Sadly, at the end our experience as volunteers, many of us feel as if we contributed little, if anything to the organization for which we served. And that is an incorrect assumption. Each and every action and non-action has an effect. Sometimes subtle and sometimes profound, nowhere do the flaps of the Butterfly’s wings[5] have a more direct and effect than in the Board of Directors of any community association.
Footnotes: 1 This process should be undertaken by qualified industry counsel only. 2 Yes, Rules and Regulations are not written in stone. 3 Paraphrased quote said by hundreds of Board members. 4 Mike Pierson, Community Association Publishing Services, author of Taking Control: Time Management and Communication Tools for Community Association Management http://myhoa.com 5 In a chaotic system, the ability of miniscule changes in initial conditions (such as the flap of a butterfly’s wings) to have far-reaching, large-scale effects on the development of the system. www.answers.com Julie Adamen is president of Adamen Inc., a consulting and placement firm specializing in the community management industry. Julie can be reached via email at julie@adamen-inc.com or through her website www.adamen-inc.com.
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FREE Attendance for ECHO HOA Members!
Wine Country Educational Seminar Saturday, March 19th, 2016 8:30 AM to 12:30 PM /
AGENDA TOPICS
Financial Reporting James Ernst, CPA, MS-Tax
After El Nino— Planning, Repair and Maintenance
SPONSORS
William Countner, RS, ICC, Marc Dunia, David Hughes
Legal Update William Gillis, Esq.
Yes, reserve _____spaces for the ECHO Wine Country Seminar Amount enclosed: $______(attach additional names) Name: Email Address:
Hear from accountants, lawyers and contractors about your finance, legal and maintenance responsibilities.
HOA or Firm: Address:
ADDRESS
City:
DoubleTree Sonoma Wine Country, One Doubletree Drive, Rohnert Park, California, 94928, USA
State:
Zip:
Phone: Visa/Mastercard No. Exp. Date: Signature: Return with payment to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Phone: 408-297-3246; Fax: 408-297-3517
PRICE FREE for Pre-registered ECHO HOA Members $50 Nonmembers and Walk-ins. March/ April 2016 | ECHO Journal
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NEW BEGINNINGS FOR COMMUNITY ASSOCIATION BOARD MEMBERS Top 10 tips for success as a new HOA or community association board member. By Neal Back, CPA
March/ April 2016 | ECHO Journal
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elcome to the board! As a new board member, you’re in the exciting role of running a real business, wearing a lot of different hats, and making the key decisions necessary to guide your community into the future. While that responsibility may seem a little daunting at first, it can also be a lot of fun and a great way to meet other neighbors.
As a CPA, this is near and dear to my heart. Review the financial statements, asking for help from your board treasurer or property manager if needed, to ensure that budget, cash flow, and reserves are where they need to be. If the new board is not comfortable with the financials, consider scheduling an audit or other financial procedure to verify the community’s financial health.
In addition to my CPA role helping community associations with their tax preparation and financial audit-related needs, I also served on my own community board for eight years – including stints as treasurer and president. During that time, I learned many lessons about efficient and effective board management.
There’s a natural tendency to want to jump in and do everything all at once. Take your time and prioritize so you don’t get burned out. You’ve got plenty of time during your elected term.
Take your time, learn the ropes, and communicate! Whether you’ve just been elected, or you’re on a board about to take on some new members, here are 10 tips for quickly, productively, and successfully getting up to speed and operating as a new board member:
1
Read your covenants
The best way to quickly learn how your association works is to read your covenants, by-laws, and other governing documents. You’ll quickly find out the things you’re required to do, and where you have some flexibility. It’s also easier to communicate with neighbors when you know the facts.
2
Understand the financials
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Don’t bite off more than you can chew
Learn the business before you change it
Before you jump in and make a bunch of changes, take the time to understand why things are currently done the way they are. You may be surprised when you see the process and procedures from an insider’s perspective.
5
Interact with vendors before you change them
Sometimes vendor performance (good or bad) can be linked to a variety of external factors. Board or property manager interaction may impact performance, such as someone failing to give the vendor feedback about a specific issue. Draw your own conclusions before taking on the hassle of a vendor change.
6
Use all available resources
In addition to all of your neighbors lining up to give you free advice, there are a number of resources available to help you become a productive and effective board member. Call on prior board members and current committee chairs for ideas and opinions. CAI, along with several local law firms and property management companies, offer boot camps and other educational opportunities. Many are free or very low cost.
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Think long-term
While you’re deciding whether to recarpet the community room or send a delinquent neighbor to the collections attorney, don’t lose sight of the big picture. What’s your vision of your community and goals to get there? If you’re not sure, add that to your next board meeting agenda.
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Communicate
Transparency is critical to maintaining a positive relationship between the board and the community. Unless required by law (such as communicating about employee performance), keep your community informed about issues, opportunities, ideas, financial results, etc. A little hassle today is far better than a big fight (or lawsuit) later.
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Be patient
As a board member, you’ll most likely encounter challenges with neighbors,
vendors, and even other board members due to reasonable (sometimes unreasonable) differences of opinion. Take your time to work through issues, and remember that no party is ever 100% satisfied in a compromise.
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Thank you!
Place your family first
Although your association is a business, don’t forget that you’re a volunteer. Learn when to say “no” to keep this role from cutting into family time.
Your fiduciary role as a board member Here’s one more thought. Even though you’re a volunteer, remember that
agreeing to serve on your community board means that you take on some level of accountability for the management of your community and its assets. This might be a good time to review your board’s directors and officers (D&O) insurance policy to ensure you’re covered if the board’s decisions are ever questioned.
Although many neighbors don’t always remember to thank you, you’re doing your community a great service by volunteering for the board. In order to maintain your enthusiasm, take some time to educate yourself on how the association works, and then temper your level of involvement so you’ve still got time for family, work, friends, and everything else in your busy schedule. And don’t forget to have fun. This is a great way to meet neighbors while you’re helping shape the future of your community. Enjoy it! Neal Bach, CPA, is a principal with Bach, James, Mansour and Company in Atlanta, Georgia.
How Do You Join ECHO? Over 1,700 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www.echo-ca.org. For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.
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ECHO Professional Directory
Need Expert Help? Check Out ECHO’s Directory All of our Professional ECHO Members specialize in services for HOAs. Choose from more than 250 companies in over 50 categories including: 73 MANAGEMENT COMPANIES 30 ATTORNEYS 21 ACCOUNTING FIRMS VISIT THE PROFESSIONAL DIRECTORY ON THE ECHO WEBSITE!
www.echo-ca.org
Accountants/CPAs Animal Control Services Arbitrators & Mediators Architects/Architectural review Asphalt Repair & Paving Assessment Collection Services
Attorneys Banking Services Community Association Consulting Concrete Products & Services Concrete Repair Construction Manage- ment Consultants Consulting Electrical Services Fencing Gates & Doors Financial Services Fire Alarms Fire Sprinklers General Contractors Gutters Insurance Services Janitorial & Cleaning Services
Landscape Design Services Landscape Maintenance Leak Detection Maintenance & Repairs Management Company Services Masonry Other Paint Manufacturer & Consultant Painting Contractors Pest Control Services Plumbing & Boiler Repairs Pool Maintenance & Services Pool Repair & Resurfacing Services
Power Washing & Steam Cleaning Reserve Study Firms Restoration & Remediation Services Retaining Walls Roofing Contractors Roofing Products Security Services & Systems Sprinkler Repair Towing & Parking Services Tree Services Utility Auditors Water Conservation Water Management & Services Waterproofing Window
March/ April 2016 | ECHO Journal
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What Homeowner Associations
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Can Teach Governments About
SPENDING By Harvey Radin March/ April 2016 | ECHO Journal
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P
eople in government should take field trips to well-run homeowner associations. To experience fiscal responsibility first hand. To see how elected leaders in some homeowner associations — HOAs — are actually spending public money prudently and efficiently.
Like governments, homeowner associations collect money to fund a host of community needs. Homeowners residing in HOAs pay dues to their association. This is similar in a way to government taxation. So, if there are roads in an HOA property that are not city-maintained streets, a portion of the money homeowners pay in dues may be set aside for the upkeep of these roads.
Governments use tax dollars for public parks maintenance. Homeowner associations have what’s known as common areas, landscaped parcels of HOA property that are often maintained by the homeowner association. Some HOAs assume responsibility for roof maintenance on homes, and painting maintenance. Some have recreational facilities that are maintained by the association -- swimming pools, tennis courts or maybe a golf course. These maintenance responsibilities vary among HOAs, depending on how they’re structured. Some of the maintenance is immediate and ongoing, keeping the lawns mowed, for example. Some of it, such as house painting and roof replacement, is longer term. The challenge for HOA leaders is to budget for every need. So there’s money available for weekly landscaping and swimming pool upkeep, as well as sufficient funding on hand to pay for new roofs or to repave HOA roads every
several years or decades. This takes planning.
So, homeowners elected to HOA boards, sometimes with counsel from others — a property manager, for example — have to keep their budgets in balance. And many HOAs are doing this quite well. There are well-run homeowner associations with leaders who take their role as stewards of their neighbors’ money very seriously. They diligently keep an eye on the purse strings. Governments are bigger than HOAs, of course, but when you come right down to it, financial management is financial management. Isn’t it? Especially when you’re managing everyone’s money like it’s your own money. That’s what stewardship should be all about. So, when you hear all the political rhetoric about fiscal responsibility, it’s good to know that some organizations are actually succeeding at it. Politicians should see how it’s being done. Harvey Radin retired from a career in corporate PR and crisis communication for multinational firms. He has served on homeowner association boards. His articles have been published in Business Insider, American Banker and regional newspapers.
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That Roof Over Your Head! By David Kuivanen, AIA
“Hey! At least I have a roof over my head!� How many times have you said that as consolation when your car breaks down, your kid flunks out of college, or all of your office equipment fails on the same day?
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For many community associations, however, having a roof overhead is the exact opposite of consolation. In fact, roofs can present some of the worst headaches and cause some of the largest expenses your association will ever face. This article will identify common problem areas with tile, asphalt shingle, and flat roofs, examine the causes of such problems, offer ways to mitigate problems with existing roofs, and arm you with important knowledge to avoid pitfalls when selecting a new roofing material, design, or construction method.
March/ April 2016 | ECHO Journal
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A
lthough problems in design and construction of a roof can manifest themselves in several ways, the most frequent indicator that something is wrong is a leak or staining of material below the roof. Many of the issues on the roof require inspection of the roof materials and adjacent conditions. Some roofing systems can be partially inspected from the ground, but actual access to the roof should be done by a qualified professional who is properly licensed, trained, equipped and insured, for both his and your Association’s protection. And, with the rainy season upon us, be cautious of “drive-by” inspectors offering a free inspection. These parties may not be licensed and insured contractors, and may not have your best interests at heart.
PART ONE – SLOPED ROOFS The causes of leaks differ with different types of roofs. In investigating the failure of sloped roofs, the most common locations for problems are anything that interrupts the main roof surface, including the valleys, hips and ridges, headwalls, penetrations, eaves, and rakes. These details, while similar for any sloped roof covering, have specific issues for different roofing materials.
CONCRETE AND CLAY TILE 28 echo-ca.org
Concrete or clay roof tile can be flat or curved in profile. For many roof details, curve-shaped roof tile will complicate the roofing flashing and details, requiring extra care and precaution. Roof valleys may be the most problematic of all roof details. These are what they sound like, the internal corners of the roof where two roof surfaces slope down and meet. The adjacent roof surfaces direct all their water drainage down into the valley, making the valley flashings critical. On tile roofs, there is always a metal valley flashing to direct water to the edge of the roof. The flashings must properly lap below any hip and ridge flashings above them, and down and over the roof eave below. Inspection of the valley will find any cut piece of loose tile that should be re-attached with roofing mastic to adjacent tile, and debris in the valley that should be removed. If there are leaks suspected at a valley, removal of the tile may be required to determine the cause. The valley metal must properly lap the adjacent roof underlayment paper, have an edge that is turned up to collect water, not have any nail penetrations from tile fastening (the reason you use mastic to fasten tile within the valley), and have proper laps between metal pieces and a full underlayment paper liner below the metal. Problems with these components may require replacement of the valley metal and re-setting the valley tile. Hips and ridges are the lines where a roof changes slope or direction, at the very top of the roof and the angled “ridges” or hips where the tile turns a corner. Hip and ridge tile leave gaps where they sit over the main slope, and where they change directions at intersections of the hip/ridge. The National Roofing Contractors Association (www. nrca.net) and most manufacturers of roof tile recommend that grout or other closure devices, such as flexible elastomeric or metal flashing, be used to seal these gaps. Even if tile roof hips and ridges were initially sealed with grout, leaks can occur as the grout ages and deteriorates. Over time grout can crack or come loose, especially if it was installed too thin or improperly mixed. If you see cracking grout or chunks of grout loose on the roof, replacing the material may prevent future water damage.
If there is no grout below your hips and ridges, fear not (at least not right away), there may be a flexible flashing under the hip and ridge tile. This material, also installed during construction, serves the same protection function – to keep water from getting under the tile at the top edges. You can check under the ridge tile for this flexible flashing material that may be black or metalized, and should be installed shaped to the roof tile with an adhesive side down on the tile below. At the angled corners where hips and ridges meet, there is also the need for a grout closure or a flexible flashing to protect the roofing underlayment (paper) below the tile from direct water exposure. Checking that these points are closed and sealed is also part of a routine roofing inspection. If necessary, flashing materials or grout can be added during a roof “tune-up” repair. This can be done at any point in the life of a tile roof, as long as the building paper underneath the tile is undamaged and there has been no water exposure to the substrate. Rain can also enter at open headwalls, which occur at the base of a second (or third) story wall extending up above a roof surface. Inspect for a metal or flexible metalized flashing that covers the top of the tile and a counter-flashing that closes the base of the wall over the roof surface. If a stiff metal flashing is used, grout below the flashing, similar to that at the ridge, is required to close the gaps to the tile below to provide a weather-tight seal. Leaks may also occur where vent and plumbing pipes penetrate a tile roof. These penetrations are usually for kitchen and bathroom exhaust fans and plumbing air vents. Flashing around roof penetrations with curve-shaped roof tile the must be flexible and sealed to the tile. At flat tile, a simpler flashing can be used. Both flashings must lap over the tile below, and under the tile above the penetration. Also required at penetrations is a second flashing lapped into the paper underlayment below the tile. Inspection for this flashing may require tile removal. Flashings must also be sealed to the pipe or vent with a reinforced mastic or rubber seal. Over time, these materials will wear and deteriorate, and these should be inspected and maintained.
Some penetration flashings are supplied with an integral rubber collar to conform to the pipe, but this material can also deteriorate in the sun, and should be checked. Roof eaves occur at the bottom edge of the roof. Just when everything is almost over, and the water should be leaving the roof, there is one last hurdle to cross. If improperly built, eaves can collect water when they should be shedding it. Any water that does get under a tile surface and onto the paper underlayment below must have a way to shed off the roof at the tile eave rather than being held at the roof edge. Since the eave tile does not sit on another tile below it, the first course or row of tile must be raised at the eave edge to align it with the tile above. The method of raising this first row must ensure proper drainage. Some construction was done with a simple booster board at the edge, actually raised above the roof surface, to lift the tile. Often the underlayment was laid over this board without any support. Over time, the paper relaxes, and forms a gutter below the tile. Water standing in this gutter deteriorates the paper and can rot the roof sheathing. To find this condition, you usually must lift or remove the eave tile. Repair of this condition, absent any rotted framing or sheathing, may be as simple as installing a anti-ponding strip behind the booster. A simple triangular section of fill material, this goes beneath the underlayment, which may also require replacement due to damage. The tile can then be replaced. Specific tile products recommend other methods to ensure proper shedding including drained birdstop (an edge or booster metal that is scalloped to the shape of the curved tile to keep birds from nesting under it), anti-ponding metal booster strips, and custom edge metal. The manufacturer’s recommendations should always be consulted. Roof rakes are those roof edges at the sloped side of the roof, going from the eave up to the ridge. Typical tile rakes have the tile installed over the field tile and a booster/support board at the roof edge. There are fewer potential problems at the rakes, but inspections should check to be sure the tile is securely fastened and the underlayments turn
up and over the booster boards, or under the boards to or down over the edge of the roof sheathing.
ASPHALT SHINGLES For many of the details on a shingle roof, considerations and concerns are similar to those for tile roofs. At shingle roofs, however flashing details are simpler, without the dimensions of curved tile. Valleys on shingle roofs are simpler than those on tile roofs. Basically the same in plan, they also collect water from the adjacent roof surfaces. Shingles can be installed in a variety of ways at valleys, and inspection and maintenance of the valley depends on the methods used. With a metal valley flashing, visual concerns for shingles roofs are similar to those of tile: to ensure shingles are firmly attached, and to remove any debris in the valley that can deteriorate
the shingles or the metal. Unless the shingles are worn or missing, the metal is rusted or deteriorated, or leaks are suspected, there is usually no further concern. If leaks occur below the valleys and no cuts, holes or damages are visible, removal of the shingles and valley flashing may be required to determine the source. Water may be getting under the valley from above, or at a poor lap to adjacent underlayments or eave flashings. Conduct similar inspections at shingleonly valleys, to look for holes, damages or loose shingles. These valleys may have shingles interlaced across the valley, or one side may be cut in a single line. Again, if leaks are suspected and no obvious damage is found, removal of the shingles may be required. With both valley types, the shingles or metal flashing must extend under the shingles above and over the roof eave below. With or without metal, if shingles are not properly installed at the valley water can travel horizontally at the shingle laps March/ April 2016 | ECHO Journal
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to beyond the valley flashings. This may also require lifting or removal of the shingles to determine. Hips and ridges also occur on shingle roofs, although the flashings and any repairs differ. The most likely leak source at hips and ridges is worn shingles, open nail holes, or loose shingles. Holes can be covered with a roofing sealant or mastic, loose shingles can be fastened with mastic, while worn shingles should be replaced. The corner transitions between hips and ridges can wear faster than other areas, and should be noted during inspections. Headwall flashing is also similar, but with simpler shapes to counterflash the top course of shingles below the upper wall. The flat side of the flashing can be set in mastic over the shingles. Penetration flashings are also simpler, usually with only one flashing set to lap over the shingles below, and under those above. Flashings should not have exposed nails, any holes can be sealed or soldered, and the flashings should be set in mastic. The same concerns exist for the seal at the pipe or vent as for tile roofs – to ensure the flexible seal is intact and sound at the pipe. Eaves at shingle roofs are also simpler – there is no booster board, bird stop or raised edge. Typically an edge metal covers the roof edge, installed under the shingles and the underlayment paper. If there are damages or leaks at the eaves, checking the lap of the underlay-
ment and edge metal is a good first step. These are sometimes reverse-lapped which will direct water under the metal. The detail of the roof eave and edge metal must be properly transitioned to any gutters on the building, but that is another story. The detail at the rake is similar, except the rake metal does go under the underlayment paper.
PART TWO – LOW-SLOPE ROOFS Low-slope roofs, often called “flat roofs” present their own set of problems leading to leaks. Typically these include insufficient roof slope and lack of drainage, poor details at perimeter walls, lack of proper coping, and incorrect penetrations or utilities supports. A characteristic of low-slope roofs is that leaking in one location can travel across the roof deck, below the membrane, to appear in another. That can make diagnosis of flat roof problems difficult. No “flat roof ” should be truly flat. The International Building Code (IBC) and California Building Code (CBC) requires roof systems to be sloped a minimum of one-quarter inch for every foot to provide positive drainage. This is a minimum however. Best practice may call for one-half inch slope per foot. With a greater main roof slope, cricket slopes that direct water to individual roof drains
can more easily have adequate slope to drain the water. These crickets, which look like very low half-pyramids, slope at a right angle to the main roof. The valley created between the cricket and main slope may have, at most, half of the slope of the main roof, thus can come close to the quarter inch per foot standard if the main roof slopes at one-half inch per foot. At low slopes, drainage may not be immediate; most manufacturer warranties require low-slope roofs to be free of ponding water 48 hours after a rainfall. There are some single-ply membrane manufacturers that will allow ponding for a longer period, however remember ponding will attract additional dirt, reducing the energy saving of the roof membrane. If insufficient slope is a problem with an existing low-slope roof, can the slope be enhanced? Yes. If only a small area is affected with local ponding, the gravel on a built-up roof can be scraped back to allow the addition of a bit of asphalt to build up that area of the roof. However, if fundamental slope problems are present, this method of correction would only serve to move the roof’s low spot from one location to another, and standing water will still be a problem. That won’t work on the single-membrane roofs, and you will have to do a larger-area repair. The solution for a large slope problem can be either to increase the slope of the roof to the existing drains, or to add new drains and re-slope the roof to those points. The biggest challenge with adding new drains is the need to access existing piping, or install new piping inside the building walls in order carry the water from the new drains. In recent years, a multitude of new roofing systems have been introduced to the market. In years past, roofs were typically “tar and gravel”. Not actually “tar”, construction of built-up roof systems saturates layers of building felt paper with asphalt to form a waterproof membrane. Since most waterproofing asphalt materials easily deteriorate in the sun, stones or gravel then cover this system to keep the sunlight off the membrane. Some built-up roofs use a granulated cap sheet, an asphalt/felt layer with a top surface coated with
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very small granules to provide similar sunlight protection. Built-up roofs remain very common, but new membrane systems are becoming more popular due to construction efficiency, restrictions on hot asphalt installation, and new energy regulations requiring cool roofing to reduce solar gain and reflect more heat away from the building. These new membranes are usually single-sheet materials made of different petrochemical and rubber compounds. The most common membranes are Thermoplastic Polyolefin (TPO) and Ethylene propylene diene monomer rubber (EPDM). TPO and EPDM roof membranes can be fully adhered (adhesive), mechanically fastened, or ballasted with weight, similar to built-up roofs, although ballasted systems are not as common. TPO membranes have good strength in the seams used to join the sheet materials, and are more resistant to ultraviolet damage. Most “cool roofs” are white TPO. Many EPDM rubber membranes have a felt back that increases the strength of the material and reduces
Clearly, proper roof design, construction, repair, and maintenance are essential, no matter what type or style of roof your community association has. Consulting with specialists in these areas is an expense that will pay for itself many times over.
shrinkage. There are many other sheet and liquid-applied membrane materials, each of which will have similar detail and design concerns, which will vary by material and manufacturer. Most of these materials are single-sheet membranes. Thus, the detailing and craftsmanship on installation is crucial – there is less margin for error with these membranes that have little redundancy. Seams must be made water-tight, and manufacturers often provide pre-fabri-
cated corners, intersections, penetration flashings, and other specialized details. If your current roof is a built-up membrane, you may consider replacement with a newer membrane to reduce future maintenance costs and comply with energy regulations. Installation of a new membrane system will require re-work of the roofing details, and may require input from a design professional to coordinate the change. Keep in mind that installing a “white roof ” to reduce
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solar heat gain does require routine maintenance to clean the membrane. It has been shown that a dirty membrane cuts the energy savings of the material quickly. Water from a low-slope roof drains from the roof through self-contained roof drains, through-wall scuppers, or over an open edge at the building wall. When draining over the edge, care must be taken not to build-up the edge of the roof where added layers of edge metal flashing are installed. This build-up can create ponding at the edge if there is inadequate slope on the roof overall. Where ponding at the edge occurs, it is possible to add asphalt and gravel to spread out the pond area, allowing it to dry faster. Where water doesn’t drain over the roof edge (because a parapet wall surrounds the roof, for example) the Building Code requires both a roof drain and an overflow drain at every low point of the roof. The area of the roof sloping to the drain is used to calculate the size of the drains and piping. The overflow is required if the main drains become plugged, to prevent excessive water build-up on the roof which could cause collapse. Scuppers, or openings through the surrounding wall, can be used in lieu of both drains. The Code requires that scuppers used for overflow be three times the required size of the roof drain and have a drain inlet located a maximum of two inches above the adjacent low roof point. Incidentally, an overflow drain should never tie directly into a building’s plumbing but the discharge should instead be visible to the building occupants. People should be able to see that their overflow drains are carrying water off the roof, because this occurrence is a clear warning that the normal drain is clogged and that at least two inches of standing water has collected on the roof. Some roofing materials used in flat roofs are too brittle to make the 90-degree turn up a parapet wall from the roof deck. Cant strips are beveled strips (wood or fiber board angled at 45 degrees) placed in the angle between the roof and an adjacent wall to avoid a sharp bend in the roofing material. The use of such strips helps prevent brittle roofing materials from splitting or tearing, which would allow 32 echo-ca.org
water to seep into the structure. Some newer sheet membranes are rated for hard corners, and don’t need the cant strip. Lack of proper coping (the cap of a wall, set to shed water) is another problem often associated with flat roofs. A properly sloped sheet metal coping at the top of parapet walls will reduce the potential for water intrusion and will eliminate most staining from top-of-wall run-off. Stucco-capped parapet walls require a higher level of care in design and construction. Because stucco doesn’t prevent water intrusion, the top of the wall should be waterproofed as if it were a roof. If the tops of your parapet walls have a stucco finish without a metal cap, pay close attention to these areas for possible leaks. As with sloped roofs, low-slope roofs require specific details at pipe and vent penetrations, skylights, mechanical equipment supports, and other utility items. Each roof system has it’s own unique requirements for these details and specialized flashings are usually required. The National Roofing Contractors Association (NRCA) has published numerous reference details for roofing systems, and each manufacturer has its own recommendations. In general, flashings for penetrations must be compatible with the roof system and be properly
sealed and lapped into the roofing assembly. At mechanical platforms and perimeter walls, details typically call for the roof membrane to turn up the vertical surface eight inches, with a proper counterflashing detailed as required for the wall finish, mechanical curb or platform above. If a flat roof sags, this will likely lead to ponding of water. What causes a roof to sag? Perhaps improper design didn’t account for all of the load the roof must support. Perhaps improper construction increased the span of the framing (wood beams were placed too far apart) or decreased the size of the framing members (the beams that were used weren’t thick enough). Perhaps the homeowner has applied more load (typically equipment, people or furniture) than the roof/ deck was originally planned to accommodate. Or, perhaps water intrusion and ponding has gradually caused wood rot that in turn has led to structural weakening. Correcting the problem of a sagging roof requires fairly major construction because the framing beneath the roof must be exposed; preventing the possibility of future sagging in a yet-to-be-installed roof is fairly simple. One typical solution is to add full-depth blocking between framing members. Doing so will help spread out concentrated loads to adjacent framing members; however, this technique does not help for uniform loads (force which is evenly distributed over a relatively large area). Another correction for a sagging roof is to install additional framing members in order to reduce the amount of load to each member, and yet another is to provide additional points of support beneath the roof to reduce the span. Clearly, proper roof design, construction, repair, and maintenance are essential, no matter what type or style of roof your community association has. Consulting with specialists in these areas is an expense that will pay for itself many times over. David Kuivanen, AIA, is an independent architect and ECHO member, offering architectural and forensic consulting services, specializing in site investigations, destructive testing, repair recommendations and litigation services since 1980. He can be reached at 818.571.7711, or Dpkuivanen@dpkarch.com. March/ April 2016 | ECHO Journal
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The Two Biggest Mistakes
Community Associations Make Involving... Joel Meskin, Esq., CIRMS, CCAL
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T
he Directors & Officers Insurance policy (“D&O”) is a small part of an association’s insurance coverage and premium puzzle, but it is a critical piece. It is important because it protects the community members who agree to accept a very often no-win and often thankless volunteer job to manage the association. Contrary to the other pieces of the insurance puzzle, D&O coverage can differ significantly from insurer to insurer. There are currently two significant mistakes associations make in regards to D&O policies.
MISTAKE #1 The first mistake is price over coverage. Boards have a fiduciary obligation to manage the association. This obligation includes the procurement of insurance that is in the best financial interest of the association. Accordingly, the first item of business is to obtain the best coverage for the association, because the best coverage will respond to the most claims thereby costing the association less at the end of the day. The existence of coverage at the time of a claim is the most important part of the insurance purchase equation. The average D&O policy is probably about $1,000 for a $1 million limit with a $1,000 deductible. Notwithstanding this incredibly low price, one of the biggest problems we find is that the main focus in the purchase transaction is price as opposed to coverage. It is always easy to sell price. What boards must understand is that the point of sale price is only a small part of the equation. An association may save $50, $100 or 36 echo-ca.org
is no short cut –do your homework. The best place to start is with a professional that specializes in associations. If the professional does not have adequate experience, find one who does. Many associations rely on their managers and many are extremely experienced. However, do not assume they are experienced. Ask your manager how many D&O policies they have reviewed, how many D&O claims they have been involved with, or ask them to explain to you what is or is not covered in various D&O policies. If you are satisfied, great, still call the agent.
MISTAKE #2 even $500 on a policy, but if there is an uncovered claim, those purported savings will be dwarfed. The defense of a single uncovered D&O claim can cost the association thousands or tens of thousands of dollars. Moreover, if an association has to fund a lawsuit itself, it may not be able to defend it vigorously and may have to settle notwithstanding the fact that they did nothing wrong. Where will reimbursement come for those uncovered costs and settlement; it will come from the association. Three cheers for the special assessment.
During the past year, I have reviewed thousands of claims. Very often, I review claims as part of an application when an association comes to us because a claim was not covered by its existing policy. Do you know what is covered by your policy? Many policies do not cover: defense of breach of contract, defense of failure to maintain or obtain insurance, discrimination claims, non-monetary claims, emotional distress damages, defamation, wrongful eviction, invasion of right of privacy, challenges to elections, or challenges to architectural review committee decisions. Some policies may not cover past directors, community managers, developers on the board, volunteers, or actions between individual board members. Remember, three cheers for the special assessment. How does the association know what the best coverage is? There
The second biggest mistake that associations make with D&O policies is the untimely reporting of a claim. D&O policies are normally claims made and reported policies. In brief, the policy provides defense and indemnity for a “wrongful act” (the board’s alleged mistake) for a “claim” (demand that the board do or not do something about the mistake) made during the policy period and reported to the insurer during the policy period. This policy is different than most associations or their attorneys are familiar. As a result, many claims that would ordinarily be covered are denied because they are not reported in a timely fashion. Accordingly, it is imperative to understand in each policy how “wrongful act” and “claim” are defined and what the reporting obligation is. Insurers and courts have no mercy for and have upheld stringently the reporting requirements of these policies. Fortunately, these two mistakes are very preventable as long as the associations and their managers do the necessary homework. It is always better to be educated than surprised. Joel Meskin, Esq., CIRMS, CCAL is the V.P. of Community Association Insurance & Risk Management at McGowan Program Administrators
legislation at a glimpse
The 2016 Legislative Session is just getting underway, and the final deadline for introducing new legislation is February 19th. See what’s already been introduced and review some of the important new laws for 2016. Check the ECHO website for the latest updates.
2016 New & Returning Legislation Bill Information
Summary
AB 1335
Fees on Recorded Documents
Oppose
In order to fund affordable housing, this bill would impose a $75 fee whenever a document is recorded in California. Associations record numerous documents, including governing documents and liens. ECHO believes that recorded documents are not the appropriate instrument to fund affordable housing.
Author: Atkins Status: In Assembly
AB 1720
Attorneys at Board Meetings
Watch
This bill would require the board to permit an attorney who represents a member to attend board meetings, and would require written notice to be given.
Author: Wagner Status: Introduced
SB 918
Assessment Delinquency; Notice
Watch
This bill would state the intent of the Legislature to enact legislation to address issues relating to notice to unit owners in common interest developments who are delinquent in the payment of association assessments.
Author: Vidak Status: Introduced
2015 Approved Legislation Bill Information
Summary
AB 596
FHA & VA Approval Disclosure Effective July 1, 2016. This bill requires a common interest development to disclose its status as a Federal Housing Administration (FHA)-approved condominium project and as a federal Department of Veterans Affairs (VA) approved condominium project. This information is publicly available online: VA - https://vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch FHA - https://entp.hud.gov/idapp/html/condlook.cfm We recommend that associations identify their FHA and VA statuses, prepare the new disclosure, and confirm with management that the new disclosure will be added to the Annual Budget Report.
AB 786
Recycled Water and Drought Fines Associations are no longer permitted to fine homeowners for failing to water their landscaping during a declared state of emergency due to drought. An exemption exists that allows fines in associations that use recycled water for all irrigation. However, this situation is unusual. Associations should update their rules to reflect the current law.
AB 1448
Clotheslines as Solar Energy Systems This bill originally identified clotheslines as a “solar energy system” and prohibited associations from restricting or prohibiting the installation and use of clotheslines. The author worked with ECHO to address safety and oversight concerns, and amended the bill to allow associations to place reasonable restrictions on the use of clotheslines and drying racks. We recommend that associations review those permitted restrictions and incorporate them into their rules. You can find more information about AB 1448 on the ECHO website.
What Do You Think? Read more about HOA legislation on our website or visit our Facebook page and join the discussion. On the web: echo-ca.org/hoa-advocacy, On Facebook: facebook.com/echoorg March/ April 2016 | ECHO Journal
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BOOKSTORE The ECHO Bookstore is your source for publications providing essential information for HOA Board Member service obligations. Order online at echo-ca.org or fill out form on the facing page.
NEW ON TI I D E
Robert’s Rules of Order Member Price: $7.50 Non-Member Price: $12.50 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.
2016 Condominium Greenbook Member Price: Non-Member Price:
$17.00 $25.00
This companion to the Condominium Bluebook 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.
Reserve Fund Essentials Member Price: Non-Member Price:
$18.00 $25.00
This book is an easy to read, must-have 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.
The Condo Owner’s Answer Book Member Price: Non-Member Price:
$15.00 $20.00
An excellent guide to understanding the rights and responsibilities of condo ownership and operation of homeowner associations. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.
Construction Defect Claims Member Price: Non-Member Price:
$19.95 $25.00
New buildings can conceal extensive faults. It’s a board’s worst nightmare—rainstorms damage buildings and bring owner complaints. Is legal action necessary? With this new book, you’ll learn about the resolution process for construction problems, and how to handle complex claims.
Home and Condo Defects Member Price: Non-Member Price:
$12.95 $17.95
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.
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Condominium Bluebook 2016 Edition Member Price: $17.00 Non-Member Price: $19.95 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 frequentlyasked questions about associations, along with succinct answers.
ciation o s s A unity Book Comm Statute dition 2014 E
Publications to answer your questions about common interest developments Order Online at www.echo-ca.org
Bookstore Order Form TITLE
Board Member Handbook Member Price: Non-Member Price:
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This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues. Revised and updated in June 2012.
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This publication has been completely revised to reflect new requirements resulting from passage of SB 137.
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directory updates
All current listings may be found in our Professionals Directory available online at www.echo-ca.org.
New Members Coating and Foam Solutions 21677 Crystal Lake Dr. Sonora, CA 95370 Contact: Aubin Trojak Tel: (209) 289.8880 HOA Accounting Professionals, LLC 5424 Sunol Blvd. Suite 10 Pleasanton, CA 94566 Contact: Carol Dickson Tel: (925) 475.4277
CAM Construction and Painting P.O. Box 1135 Vacaville, CA 95696 Contact: Cesar Mendez Tel: (707) 446.2226 The Bridgeport Company 2303 Camino Ramon Suite 201 San Ramon, CA 94583 Contact: William Bavelas Tel: (925) 824-2888
Become an ECHO Professional Member and receive the benefits of membership. To learn more, visit our membership page at www.echo-ca.org
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advertiser index
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Ace Property Management..................14 www.acepm.net Applied Reserve Analysis....................32 www.appliedreserveanalysis.com Benjamin Moore Paint & Company...30 www.benjaminmoore.com Berding Weil..........................Back Cover www.berding-weil.com Community Management Services....31 www.communitymanagement.com Cornerstone Community Management.........................................12 www.cornerstonemgt.biz Eugene Burger Management..............10 www.ebmc.com Forster Construction Management.....33 www.forstermanagement.com
Hughes Gill Cochrane, P.C....................33 www.hughes-gill.com Levy, Erlanger & Company..................19 www.hoa-cpa.com Malarkey...............................................25 www.malarkeyroofing.com PML Management Corporation..........20 www.pmlmanagement.com R.E. Broocker Co...................................32 www.rebroockerco.com Rebello’s Towing..................................13 www.rebellos.net Union Bank...........................................11 www.HOAbankers.com White & MacDonald, LLP....................29 www.wm-llp.com
WHAT IS ECHO? Serving Homeowners to Build Strong Community Associations The Educational Community for 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, online education, 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.
Benefits of Association Membership • Subscription to monthly magazine • Access to members-only online education • Updates to the Association Statute Book • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento
ECHO Membership Dues
Office 1960 The Alameda, Suite 195 San Jose, CA 95126-2308
Association Membership HOA 2 to 25 units...........................$130 HOA 26 to 50 units.........................$180 HOA 51 to 100 units.......................$275 HOA 101 to 150 units.....................$375 HOA 151 to 200 units.....................$450 HOA 201 or more units..................$575 Professional Membership.................$500 Association Management Membership.......................................$500 Individual Membership.......................$75 Journal Subscription............................$30
How Do You Join ECHO? Over 1,700 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www. echo-ca.org. For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website. August 2013 || ECHO ECHO Journal Journal February 2014 March/ April 2016
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ECHO event calendar
RESOURCE PANEL CALENDAR ECHO Resource Panels meet during lunch on weekdays to enable managers, professionals and board members to hear about important topics presented by experts in the industry, and share experiences and issues. The meetings are open to all ECHO members, and those interested in learning about ECHO, offered in a casual atmosphere where the cost of attendance is the price of your lunch. The sessions last about an hour and a half. Check-in with the ECHO Panel Secretary for details and to register.
Please join us: DATE
PANEL LOGISTICS
PANEL SECRETARY
TOPIC
Feb. 10, 11:45 a.m.
East Bay Resource Panel Massimo Restaurant 1603 Locust St., Walnut Creek
Cindy Wall, PCAM 925-830-4580
TBD
Feb. 12, 11:45 a.m.
South Bay Resource Panel Flames Eatery 88 S. 4th Street, San Jose
Geri Kennedy 408-398-4227
TBD
March 3, 11:45 a.m.
North Bay Resource Panel Contempo Marin Clubhouse 400 Yosemite Dr., San Rafael
Denise Wolford, CCAM 415-458-3537
TBD
March 8, 11:45 a.m.
Central Coast Resource Panel Michael’s on Main 2591 S Main St., Soquel
Ann Thomas 800-537-4098 ext.7530
TBD
March 17, 11:45 a.m.
Wine Country Resource Panel Serv-Pro 377 Blodgett St., Cotati
Pam Marsh 415-686-9342
Water Issues
April 8, 11:45 a.m.
East Bay Resource Panel Massimo Restaurant 1603 Locust St., Walnut Creek
Cindy Wall, PCAM 925-830-4580
TBD
April 13, 11:45 a.m.
South Bay Resource Panel Flames Eatery 88 S. 4th Street, San Jose
Geri Kennedy 408-398-4227
Fraud
REGULARLY SCHEDULED RESOURCE PANEL MEETINGS PANEL
MEETING
LOCATION
Maintenance
First Wednesday, Even Months
ECHO Office, San Jose
North Bay
First Thursday, Odd Months
Contempo Marin Clubhouse, San Rafael
East Bay
Second Friday, Even Months
Massimo Restaurant, Walnut Creek
Accountants
Second Monday, Odd months
Scott’s Seafood Restaurant, Oakland
Central Coast
Second Tuesday, Odd months
Michael’s On Main, Soquel
South Bay
Second Wednesday, Even Months
Flames Eatery, San Jose
Wine Country
Third Thursday, Odd months
Serv-Pro, Cotati
Legal
Quarterly
Varies
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ECHO honor roll
ECHO HONORS VOLUNTEERS Resource Panel Chairs
Seminar Speakers
Recent Contributing Authors
Accountant Panel Adam Haney, CPA 888-786-6000 x317
East Bay John Gill, Esq. Beth Grimm, Esq. David Levy, CPA Andrea O’Toole, Esq. Alex Noland, Esq. Ann Rankin, Esq. David Stompe Mark Wleklinski, Esq.
June 2015 Ken Kosloff Tom Fier, Esq. Alex Guy and Rob Rosenberg David Larsen, Esq. Steven S. Weil, Esq.
Central Coast Panel John Allanson 831-685-0101 East Bay Panel Cindy Wall, PCAM, CCAM 925-830-4580 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Judy O’Shaughnessy 408-839-6926 North Bay Panel Diane Kay, CCAM 415-846-7579 Stephany Charles, CCAM 415-458-3537 South Bay Panel Susan Hoffman, PCAM 510-683-8614 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 Roy Helsing Geri Kennedy, CCAM Wanden Treanor, Esq.
Annual Seminar John Allanson Tyler Berding, JD, PhD Ricky Chu John Garvic, Esq. Sandra Gottlieb, Esq. Matthew Harrington, Esq. Stephanie Hayes, Esq. Julia Hunting, Esq. Zer Iyer, Esq. Ken Kosloff David Levy, CPA Kerry Mazzoni John Neal Andrea O’Toole, Esq. Terin Reeder Amy Tinetti, Esq. Chad Thomas, Esq. Wanden Treanor, Esq. Steven Weil, Esq. David Zepponi
July 2015 Jeffrey A. Barnett, Esq. Kurtis Shenefiel, PCAM, CCAM Tom Fier, Esq. Bob Gourley Tyler P. Berding, J.D., Ph.D. Ann Thomas August 2015 Tyler P. Berding, Ph.D., J.D. Chris Sigler, B.S.C.E., C.D.T. Charlotte Allen Julie Adamen Robert Booty September 2015 Charlotte Allen Brenda L. LeClair, CMCA Debra J. Oppenheimer, Esq. Steve Castle, CMCA, PCAM John Schneider October 2015 Karl Lofthouse Susan Green Thomas J. Connelly Adrian Adams, Esq. Julie M. Mouser, Esq. Nov/Dec 2015 Beth A. Grimm, Attorney Karl lofthouse James H. Ernst, CPA, MS-Tax Tim Polk Julie Mouser, Esq. Jan/Feb 2016 Beth A. Grimm, Attorney Matt Haulk, Esq. Larry J. Pothast, PCAM, CCAM David J. Larsen, Esq. Jeffrey A. Barnett, Esq.
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