Common Assessment - Fall 2010

Common FALL 2010

The professional provider of education, advocacy and resources for Community Associations

Security, Your Community & Your Home SAFE & Secure page 6 Order and Protection page 12 What's in a Name? page 18

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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2010 Event Calendar All dates, times and locations subject to change. Please visit our website, www.cai-sd.org, for an updated calendar.

J a n u a ry

July

21-23 21-23

21

PMDP M-100 Course CA Law Seminar – Tucson, AZ

F e b r u ary

August

5 Trade Show DoubleTree Hotel Mission Valley Legal Update 2010 27 Essentials of Community Association Volunteer Leadership

18 Day at the Races Del Mar Race Track 27 Trade Show DoubleTree Hotel TBA

March

Septem ber

3 Morning Educational Program HOA Board Elections Can Be Fun!!

12 Billiards Tournament Jolt ‘n Joes La Mesa 26 CID Law Course Courtyard by Marriott

10 Morning Educational Program Dealing with Dysfunctional Boards 17 CAI San Diego Golf Classic Coronado Golf Club 22-23 PCAM Case Study 22-25 Large Scale Managers Workshop Reston, VA

April

Octo ber

12 Legislative Day in the Capitol Sacramento, CA 16 Educational Conference & Trade Show DoubleTree Hotel Topics TBA 28-May 1 CAI National Conference Las Vegas, NV

1 CID Law Course Courtyard by Marriott 8 Trade Show DoubleTree Hotel Mission Valley 9 Essentials of Community Association Volunteer Leadership 14-15 M-320 – High Rise Management 29 Statewide CAI Law Conference Irvine Marriott

M ay 7

21

Monte Carlo Night Kona Kai Resort Morning Educational Program Budgeting & Reserves

June

2

Morning Educational Program Getting the Most Out of Your CAI Membership Courtyard By Marriott

No vem ber 5 Morning Educational Program Almost Free Legal Advice Courtyard by Marriott

2 Trade Show Hollywood Esquires DoubleTree Hotel

18-19

24-26

3 Holiday Award Luncheon & Trade Show DoubleTree Hotel Mission Valley

CEO-MC Retreat Chicago, IL

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

PMDP M-203 Course

Dece mber

Contents Features

Departments

6 Safe & Secure

2 Chapter Event Calendar

4 President’s Message

Contributed by The San Diego Police Department

12 Order & Protection: Exploring Protective Mechanisms for HOAs Regarding Registered Sex Offenders

by Laurie S. Poole, Esq.

by Chris Hodge, PCAM

16 CLAC Donations Honor Roll 22 Renewing Members 34 Homeowners Corner

A Case Study: Review/Audit of Financial Statement and Other Board Actions

Chapter News

24 Monte Carlo Night

21 May 21 Morning Educational Program 40 April Trade Show and Conference

41 June Trade Show 42 What’s New in San Diego 44 Service Directory

by Sam Dolnick

38 New Members ack Cover B 2010 Marketing Plan Members

18 What’s in a Name?

by Kimberly Lilley, CMCA, CIRMS

by Pamela Hazard, CMCA

by Jennifer James,Esq.

26 Proactive Fraud Prevention

32 Complying with the New Federal Lead-Based Paint Rules

42 A First Class Board: It Is Closer Than You Think

By Any Ferrell, CCAM, AMS

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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pr e s i d e n t ’ s

mess age

We’re Coming into the Home Stretch

Common

EXECUTIVE COMMITTEE Chris hodge, pcam...................................... PRESIDENT Elite Community Management Cyndi Koester, PCAM........................ President Elect Mutual of Omaha Bank Louise stettler.....................................Vice President Epsten Grinnell & Howell, APC

Wow – can you believe we’re nearing the 4th quarter of 2010? Things are moving along very nicely for our chapter. We have had several programs and events that have been well attended and have received great reviews by our members.

Chris Hodge, PCAM is a Community Association Manager Member who has worked at Elite Community Management for the past 15 years. He holds the designation of PCAM through the Community Associations Institute.

Mr. Hodge is the 2010 President of the CAI San Diego Chapter.

He previously served on the Board of Directors for six years and was the Chapter President in 2002.

He has served on various committees and is also a director of the Baker/ Dolnick Education Foundation.

The next big social event will be the Golf Tournament to be held on September 17, 2010, at the Coronado Municipal Golf Course. The invitations have already been mailed. If you did not receive a registration form please contact the chapter office, or visit our website at www.cai-sd.org. Your sponsorship and involvement is important to the success of CAI-San Diego. I thank those of you who have sponsored the golf tournament this year.

We recently held our annual Day at the Races and it was a huge success. Look for pictures in our next issue of Common Assessment. Thank you to those who sponsored Day at the Races and to the committee for putting together another great event.

As we draw near the end of 2010, I would like to remind you that it is time to nominate your colleagues for our annual Chapter Awards. Our Awards Nomination committee has spent a great deal of time this year reviewing and revising the awards categories. I strongly urge you to pick up nomination forms at our next event, or download them off of the website, and nominate your peers.

Winners will be recognized, along with all chapter volunteers at our Annual Awards Luncheon and Trade Show on December 3rd. Don’t miss it!

tina rozycki, CMCA..................................... treasurer Curtis Management Marie Donovan............................................ secretary Homeowner DIRECTORS DAVE ABRAMS... Community Association Manager Member Jim Fraker, PCAM..... Professional Community Management Elizabeth French, Esq........... Green, Bryant & French, LLP Elaine Gower........................................................Homeowner Kimberly Lilley, CMCA, CIRMS....Berg Insurance Agency, Inc. JASON PAYNE..................................Payne Pest Management Rick Salpietra, ESQ......... Law Offices of Richard Salpietra Karina Tatum...................... SD Preferred Property Managers

CHAPTER Executive DIrector barbara ozenbaugh, CMP 619-299-1376 Managing editor barbara ozenbaugh, CMP 619-299-1376 New & Renewing Advertising sales Barbara Ozenbaugh, CMP 619-299-1376 design & production Kristine GAITAN Rey advertising & design / The Creative Dept.

760-746-8700 Magazine EDITORIAL committee CYNDI Koester, PCAM, CHAIR...... Mutual of Omaha Bank kimberly LILLEY, CIRMS................... Berg Insurance Agency jim danow, Esq.................Epsten Grinnell & Howell, APC Sam Dolnick......................................................Homeowner Any Ferrell.................................................... N.N. Jaeschke Lesley Finch....................................... Lindsay Management JEFF French, ESQ...................Green, Bryant & French, LLP Laurie Poole, ESQ........................ Peters & Freedman, LLP Barbara ozenbaugh, CMP...Chapter Executive Director tina rozycki......................................... Curtis Management LOUISE Stettler..................... Epsten Grinnell & Howell, APC KEVIN WEXLER................................................... Summit Security All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Common Assessment Magazine or the Community Associations Institute – San Diego Chapter.

Information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting or other professional services and should not be relied upon without the consultation of your accountant or attorney.

Common Assessment Magazine is the official quarterly publication of the San Diego Chapter of the Community Associations Institute. CAI San Diego Chapter encourages submission of news and articles subject to space limitation and editing. Signed letters to the editor are welcome. All articles submitted for publication become the property of CAI San Diego Chapter.

Reproduction of articles or columns published permitted with the following acknowledgement: “Reprinted with permission from Common Assessment Magazine, a publication of the Community Associations Institute San Diego Chapter.” © 2010 CAI - San Diego Chapter

Advertising & Correspondence should be sent to: Common Assessment Magazine CAI - San Diego Chapter 1081 Camino Del Rio South, Suite 207, San Diego, CA 92108 619-299-1376 / fax 619-299-1377 / www.cai-sd.org

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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Safe &

b

Contributed by the San Diego Police Department

urglary is most often a crime of opportunity. The following excerpt is from the City of San Diego Police Department and contains tips on preventing home burglaries, vandalism, and other property crimes by controlling access, providing visibility, and maintaining your property.

It also contains tips on protecting your home and property when you are away and providing information you might have on residential burglaries. And if you do become a victim, it includes tips to make sure the police find your home and to identify your property. Following these ideas can significantly enhance the security of your home and property.

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

& Secure

Controlling Access The following tips suggest how access to your home, apartment, or condo can be controlled by physical protection, deterrent measures, burglar alarms, and various security procedures.

Physical Protection Measures • Install single cylinder dead-bolt locks on all doors.

Bolts should have a minimum throw of 1 inch. Strike plates should have screws that are at least 3 inches long. Doors should be solid hardwood or metal clad.

Hinges should be located on the inside or have nonremovable pins. Special locks are needed on double and Dutch doors.

• Install locking devices on all sliding glass doors and windows.

• Install good locks on all doors that lead outside through garages or storage areas.

• Don’t rely on chain locks for security. They’re only good for privacy.

• Re-key or change all locks when moving into a new home.

• Install locks on gates, garages, sheds, etc.

• Go to a locksmith or hardware store for advice on locks.

• Reinforce the glass in windows on the lock sides of doors so a burglar cannot break them and reach in to open the door.

• Consider installing security bars on side, rear, or other windows that a burglar might break to enter your home. Bars must comply with Fire Code requirements for inside release to permit an occupant to escape in the event of a fire.

• Fence-in the yard.

• Install a good side-yard gate and keep it locked at all times. Side and back entries are the most common access points for burglars.

• Plant bushes with thorns or prickly leaves near windows and along fences.

• Trim trees so that limbs don’t provide access to roofs, second stories, etc.

Call the SDPD CRO in your area to arrange for a free home security survey. SDPD division addresses and phone numbers are listed under IN YOUR NEIGHBORHOOD on their website.

Continued on page 8

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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• Make sure you understand your service contract, all the points of protection and the equipment to be installed, the initial and monthly payments, and the warranty period.

• Inform your insurance company. You may qualify for a discount.

• The system should also have a fail-safe battery backup. Check the batteries periodically and replace them if necessary.

Security Procedures • Keep all doors and windows locked, even if you are just going out “for a minute.” If a window is left open a few inches for ventilation, pins or dowels should be inserted in the tracks to prevent someone from opening it more. safe & secure Continued from page 7

• Lock gates, garages, and sheds after they reduce false alarms, which are wasteful of police resources and

each use.

• Store bicycles, mowers, ladders, etc. in a

Deterrent Measures

lead to fines and permit revocation.

locked garage or shed, or secure them

• Put Neighborhood Watch, alarm

(See Sections 33.3701-33.3723 of

to some stationary point.

company, and Operation ID stickers on

the San Diego Municipal Code for

entry doors and windows.

burglary alarm business and agent

• Consider having a dog that can scare

requirements and responsibilities,

• Don’t leave notes on your door when you are away from home.

• Don’t leave keys in mailboxes or

a stranger away by either barking or

alarm user permit requirements, etc.

planters, under doormats, or in other

looking fierce. Keep an outside dog in a

Call SDPD Permits and Licensing at

obvious hiding spots. Leave an extra key

fenced area and have a good lock on the

(619) 531-2250 about obtaining an

with a neighbor.

gate.

alarm permit.)

• Use fencing, gates, landscaping,

• Get alarm company references from

• Learn to recognize who belongs in your neighborhood, development,

pavement treatment, signs, etc. to define

friends or neighbors. Get at least three

or apartment, i.e., residents, workers,

clear boundaries between your property

estimates in writing. The SDPD does

guests, etc.

and adjoining properties.

not prefer or recommend companies, brands, or types of security systems.

Consider Installing a Monitored Home Alarm System

• Know who’s at your door before opening it. Check photo registration card before

• Make sure the alarm company has a

dealing with any solicitors, peddlers,

City Business Tax Certificate and is

interviewers, etc. These persons are

• Alarm systems usually include one or

licensed by the State of California. You

required to obtain a card from the

more of the following components:

can verify the latter by calling the State

SDPD and display it on the front of their

photocell or magnetic contacts on doors

of California Bureau of Security and

clothing. They are allowed to solicit only

and windows, heat or motion detectors

Investigative Services at (916) 322-4000 or

between 9:00 a.m. and 8:00 p.m. except

in interior spaces, glass break detectors,

going online at www.dca.ca.gov/bsis.

• Be suspicious of persons making

status of the system, and audible alarms.

the monitoring station is open 24/7

unsolicited offers of services.

All equipment should be Underwriters

and has backup power. The company’s

Laboratory (UL) certified.

customer service department should also

want any solicitor to ring your door bell,

be open 24/7.

knock on your door, or make any other

• Multiple sensors are preferred because 8

by appointment.

• If your system is monitored, make sure

keypads with a means of checking the

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

• Post a NO SOLICITING sign if you don’t

sound to attract your attention.

• Ask for photo identification before letting in anyone you don’t know.

Check out the identification with the company or agency if you are suspicious.

• Never let a stranger enter your home to use the telephone. Offer to make the call yourself in an emergency.

• Don’t give your name, phone

Keep a detailed, up-to-date record of your valuables.

Include type, model, serial number, proof of purchase and fair market value.

number, or whereabouts on your answering machine message. Never say you aren’t home. Just ask the them at home unless you have a security

week. While I was in there I unlatched

closet or a safe that is well hidden and

the back window to make my return a

chain with your vehicle keys when you

cannot be removed.

little easier.

use valet parking. Also, don’t leave

Here are some things burglars won’t

caller to leave a message.

• Don’t leave your home keys on a

• Those nice yard toys your kids leave out

your garage door opener where it is

tell you. They come from interviews with

make me wonder what type of gaming

easily accessible. Keep your vehicle

convicted burglars.

system they have.

registration, proof of insurance, and any

• Of course I look familiar, I was here just

other papers with your home address on them where a criminal is not likely to find them.

• Don’t give housekeepers, babysitters, or

last week cleaning your carpets, painting your shutters, or delivering your new TV. • Thanks for letting me use the bathroom

• I might leave a pizza flyer in your front door to see how long it takes you to remove it.

• If glass is part of your front entrance, Continued on page 10

when I was working in your yard last

others working in your home access to your home keys or alarm codes.

• Call the police on 911 if you are at home

driven by results & passionate about proaCtive improvements

and hear or see something suspicious.

Examples of suspicious activities are listed in the SDPD pamphlet on Reporting Crimes and Suspicious Activities. Don’t take direct action yourself. An officer will be dispatched to your address even if you cannot speak or hang up.

• Don’t go in or call out if you return home and suspect someone has broken into your home, e.g., if a window or screen is broken, a door is ajar, or a strange vehicle is parked in the driveway. Go to a neighbor’s home and call the police.

• Don’t discuss your assets or finances with strangers.

• Don’t keep large sums of money at

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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

9

Safe & Secure

doesn’t hear it again he’ll just go back to

Continued from page 9

what he was doing. It’s human nature.

don’t let your alarm company install the control pad where I can see if the alarm is set.

• If you don’t alarm your windows, install motion detectors in the rooms I might enter, including the master bedroom where you usually keep your jewelry and home safe.

• Don’t forget to lock your doors and turn on your alarm when you go out in bad weather. I work on those days too.

• I don’t understand why you would you

• I love looking in your windows. I’m looking for signs that you’re home and

and make climbing more difficult.

• Install a wide-angle peephole in your front door so you can look out without being seen yourself.

for flat screen TVs or gaming systems I’d like. I’ll drive or walk through your

Maintaining Your Property

neighborhood at night before you close

• Keep property in good condition and

the blinds just to pick my targets.

free of trash, litter, weeds, leaves, graffiti,

• A window open a little to let in a little

dismantled or inoperative vehicles, and

fresh air during the day is an invitation for me to come in. If you do that put

other things that indicate neglect in caring for your property.

something in the track that prevents

• Replace broken windows or screens.

someone from opening it wide enough

• Repair broken fences and gate locks.

to get through.

• Use screens, wired glass, or other protection for light fixtures and bulbs.

pay all that money for a fancy alarm system and leave your house without setting it.

• I always knock first. If you answer, I’ll

Set your burglar alarm and notify your alarm company that you will be away. Then if an alarm occurs the company will not call your home first to verify the alarm; it will notify the police directly.

ask for directions or offer to clean your windows. But don’t open the door or take me up on it. If you don’t answer I’ll try the door. Occasionally I hit the jackpot and walk right in.

• Do you really think I won’t look in your sock drawer? I always check dresser drawers, the bedside table, and the medicine cabinet. But I almost never go into kids’ rooms.

• I won’t have enough time to break into that safe where you keep your valuables.

But I’ll take it with me if it’s not bolted down.

• A loud TV or radio can be a better deterrent than the best alarm system.

If you don’t want to leave one on while you’re out of town, use a timer that turns it on when you usually watch or listen to it.

• Sometimes I carry a clipboard.

Sometimes I dress like a lawn guy. I do my best not to look like a burglar.

• The two things I hate most are loud dogs and nosy neighbors.

• I’ll break a window to get in even if it makes a little noise. If your neighbor hears a loud sound he’ll stop what he’s doing and wait to hear it again. If he 10

Providing Visibility • Leave outside lights on after dark or have outside lights controlled by a

• Remove loose rocks and other objects that could be used to vandalize your property.

motion detector. Make sure there are no or yard in which a person could hide.

Protecting Your Home and Property When You Are Away

Street lights are generally inadequate for

• Use timers on lights, radios, TVs, etc. to

dark areas around the house, garage,

illuminating your property.

• Check lights regularly and replace burnt out bulbs.

• Trim bushes to less than 3 feet to eliminate possible hiding places, especially near windows and sidewalks.

• Trim tree canopies to at least 8 feet to allow visibility into your property.

• Replace solid walls in front yards with open fencing to eliminate hiding places

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

make them go on and off during the day and night to make your home appear occupied.

• Stop mail and newspaper delivery, or have neighbor pick up anything left at the home.

• Keep grass watered and cut. Water and trim other landscaping.

• Ask the neighbors to watch your home and report any suspicious activities.

• Leave your itinerary with a neighbor so you can be contacted in an emergency.

• Disconnect your electric garage door opener and padlock the door, preferably on the inside.

• Visit your local SDPD Area Station to request vacation home checks when you’ll be out of town.

• Set your burglar alarm and notify your alarm company that you will be away.

Then if an alarm occurs when you are away the company will not call your home first to verify the alarm; it will notify the police directly. Also provide the alarm company with an up-to-date list of persons to contact about the alarm and the need to secure your home after a burglary.

Providing Information on Residential Burglaries If you have any information that might help solve a burglary and lead to the arrest of the burglar, call your local SDPD Area Station and ask to speak to the detective handling the case. Or you can call Crime Stoppers at its 24-hour hotline at (888) 580-8477 and provide information anonymously. The operator on this will take your information and give you a code number. If your information leads

PETERS ATTORNEYS AT LAW

&

FREEDMAN,L.L.P.

to an arrest you could earn a reward of up to $1,000. The operator will explain how you can use your code number to give additional information and how to collect your reward. You can also provide information by e-mailing from www. tipsubmit.com or by text messaging from a cell phone to CRIMES or 274637,

A full service law firm dedicated to representing community associations

Experience you can rely on...

People you can trust

with Tips409 at the beginning of the message. Crime Stoppers is a citizenoperated, non-profit organization that works in partnership with local, state, and federal law enforcement agencies to help

Encinitas Office

Desert Office

(760) 436-3441

(760) 773-4463

www.hoalaw.com

mail@hoalaw.com

solve serious crimes. It gives community members an opportunity to fight crime without “getting involved.”

Continues on page 39 C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

11

Order & Protection

Exploring Protective Mechanisms for Homeowners Associations Regarding Registered Sex Offenders

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

By Laurie S. Poole, Esq.

cross the nation, there is a heightened concern of sex offenders living in our communities. Here in San Diego, the issue is front and center, especially due to the recent tragic events regarding two North County teenagers. For homeowners associations, perhaps it is not surprising to now ask what methods, if any, can be taken to protect their communities.

Homeowners associations have taken various steps to address this issue.

Some California homeowners associations have included on their websites or in newsletters warnings of potential sex offenders in the neighborhood and have included links to the California Attorney General’s “Megan’s Law” website on their association websites.

Other associations have taken more drastic measures. The Rancho Vista Homeowners Association in Palmdale, California, places pictures of sex offenders who live or have lived in the neighborhood on its website. The website includes a disclaimer that the association does not condone any violation of the law and the information is for “your family’s protection only.”

California Penal Code section 290 requires mandatory registration as a sex offender for persons convicted of offenses listed in that section. There are 169 sex offenses which require registration in California. In addition to the offenses listed in section 290, the court may order someone to register as a sex offender if the criminal offense committed was sexually motivated.

California’s “Megan’s Law” website identifies location and identity of the registered sex offender. California makes it a criminal offense to use sex offender registrant information on the Attorney General website for any purpose other than protecting a person at risk. Examples of prohibited uses include: insurance, loans, credit, employment, education, or housing.

Though all sex offenders have to register, certain offenses may qualify for exclusion from the Attorney General website. Approximately twenty-five percent of all registered sex offenders are excluded from public disclosure by law. Additionally, California courts have ruled that sex offender registration is unconstitutional for certain offenses (e.g., misdemeanor lewd conduct and indecent exposure).

Perhaps the most aggressive approach has been adopting amendments to the governing documents banning registered sex offenders from living within the association.

Continued on page 14

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

13

Protective Mechanisms

a service to prevent registered sex

to permit the reviewing court to reach a

Continued from page 13

offenders from living in neighborhoods.

decision. However, the appellate court’s

The Pines of Greenwood is believed to be the first association in Indiana to ban sex offenders. The association added the ban to the subdivision’s covenants, but it was not used to evict sex offenders living in the subdivision when the ban passed. The American Civil Liberties Union of Indiana stated that the ban was legal and the organization would not pursue a lawsuit to challenge the ban on substantive grounds.

In Cuyahoga County, Ohio, more than one hundred homeowners associations restrict sex offenders from moving into their communities. A developer in Lubbock, Texas marketed the community it was building to require that homeowners pass criminal background checks and no convicted sex offenders would be allowed.

The Cranberry Township Homeowners Association, near Pittsburgh, Pennsylvania, consulted with an attorney to help identify methods to keep sex offenders from living in the homeowner’s association.

To facilitate bans on registered sex offenders, at least one website advertises

The question raised by these

discussion of the owner’s objections to the

illustrations is whether these bans on

sex offender ban provides insight to the

registered sex offenders are legal. As

legal issues raised.

with much in the law, the answer is

First, the owner claimed that the sex

unclear. There is no published decision in

offender ban was an unlawful infringement

California that has addressed this issue.

on her right to alienate (i.e., sell or lease)

However, the New Jersey case of

her property. In rejecting this assertion, the

Mulligan v. Panther Valley Property

court noted that in New Jersey, there were

Owners Association, 766 A.2d 1186 (N.J.

only 80 Tier 3 registered sex offenders and

Super. Ct. App. Div. 2001) addressed

that the ban would apply to all members

issues regarding a ban on registered sex

of the association equally. This would

offenders. In that case, a homeowners

be a tougher argument to overcome in

association adopted an amendment to its

California as there is no similar “tier”

CC&Rs which provided that no individual

classification of sex offenders based on

registered as a “Tier 3” offender under

seriousness of the offense. According to

New Jersey state law could reside in the

the California Attorney General’s website,

association. In New Jersey, Tier 3 sex

there are 63,000 persons required to

offenders are deemed to have a high risk

register in California as sex offenders.

of re-offending. An owner challenged this,

These numbers could bolster an argument

and other amendments, adopted at the

that having a sex offender ban in

same time.

California is an unreasonable restraint on

The trial court upheld the amendment which banned the Tier 3 sex offenders and the owner appealed. The New Jersey

alienation, which California law does not allow.

The owner’s second argument was

Appellate Court declined to rule on the

that the ban compelled her to violate the

issue, claiming that the parties did not

law by seeking out Tier 3 sex offenders.

create a sufficient record in the trial court

Since there was nothing in the ban which

Homeowners associations that are considering adopting bans on registered sex offenders need to consider the possible liability, be aware of the likelihood of potential legal challenges that may ensue and consult with legal counsel.

14

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

required the owner to seek out Tier 3 sex offenders, this claim was also rejected.

However, the appellate court noted that the third claim, that the ban violated New Jersey public policy, may have merit.

The court raised concerns about the potential injury in making a large segment of New Jersey housing unavailable to sex offenders and that these actions may lead to “vigilantism and harassment.” Also, the court noted that if the homeowners association performed quasi-municipal functions, it could open the door to possible constitutional challenges. The concept of homeowners associations in California as being quasi-governmental has been raised in past decisions.

Due to the lack of information in the record, the appellate court ultimately reversed the portion of the trial court’s judgment upholding the validity of the sex offender ban. Yet it is important to note that the appellate court did not rule on the merits of the issue, so the question is still unanswered.

In California, an amendment to CC&Rs to ban registered sex offenders would likely be analyzed using the test established by the Supreme Court in Nahrstedt v. Lakeside Village

Professional. Capable. Friendly.

Condominium Association (1994) 8 Cal. 4th 361 and one of the prongs of the test is determining whether the restriction violates public policy. While associations could argue that these restrictive equitable servitudes are reasonably linked to the protection of the children in the homeowners association, as indicated in the New Jersey case, there are other legal concerns. Possible future challenges to a ban on registered sex offenders include:

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(a) Classifying homeowners associations as quasi-governmental organizations because they function as rule-making public entities. The restrictive covenants would be subjected to a full constitutional analysis, including first Continued on page 16 C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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Protective Mechanisms

SAN DIEGO 2010 CAI-CLAC HONOR ROLL

By Sam Dolnick, CAI-CLAC Delegate-at-Large

This is the second year that the CAI-CLAC Honor Roll is being presented. All individuals involved in common interest communities, whether they are associations, homeowners, professionals, managers or business partners who have contributed funds to CAI-CLAC in 2010 on behalf of common interest communities to assure that our voice is heard in the halls of the California legislature are to be congratulated.

CAI-CLAC monitors legislation regarding common interest developments (condominiums, planned developments, stock cooperatives and community apartment projects) that the legislators are asked to deliberate and vote upon each year.

Each issue of Common Assessment features the names of the contributors and those individuals responsible for obtaining the contribution.

ABSOLUTELY NO FUNDS are given to any political party or to any candidate.

All funds are used solely for issue oriented legislation affecting CIDs. However, our legislative advocate must be paid and items like stamps, stationery, phone calls, rent, maintenance of web site and other similar expenses must be paid.

Our congratulations and thanks to the following contributors from January 1 to June 30, 2010.

2010 Goal = $28,528 • Contributions to Date $21,486 Andalucia Townhomes HOA Lisa Isaacson AMS CCAM

Ocean Hills Summit HOA Mike Mazur

Anderson & Kriger, Joel Kriger

Ocean Terrace/Spinnaker Ridge Frank Lombard

Association Reserves San Diego LLC Matthew Swain Brookfield HOA, Jim Martin

O’Connell Landscape Main Eric Shephard

Continued from page 15

amendments and fourteenth amendment substantive due process violations of the sex offender’s rights; (b) Separately challenging these restrictive covenants as violating the fundamental public policy of California; and (c)Enforcing a sex offender ban could involve “state action” which could result in higher scrutiny of the action taken.

In addition to the legal questions arising from instituting a registered sex offender ban in the governing documents of a homeowner association, other practical questions also need to be answered. For example, are homeowners going to be required to obtain background checks on potential buyers before selling their homes? What happens if a family who resides in a neighborhood for years has a child that becomes a sex offender? What happens if a family takes in a foster child that is a sex offender? Will the family be fined or forced to abandon

Pacific Green Landscape Inc.

fostering? These questions are difficult

Pacific Western Bank, Ken Carteron

and have yet to be fully addressed in a

Clean Earth Restoration

Payne Pest Management, Willie Payne

legal context.

Victoria Cohen

Popular Association Banking

Community Association of Bernardo Height Becky Groenwold

Restoration Management Company

CAI San Diego Chapter Barbara Ozenbaugh CMP

Coronado Shores Condo Assn #6 Jim Liese CMCA AMS CCAM CMI Sam Dolnick Emergency Services Restoration Heather Flores Padron Fienberg Grant Mayfield Kaneda & Litt Genesee Highlands Richard Harman il Palio HOA Lisa Isaacson AMS CCAM Interiors by Design, Geri Musser La Jolla Soledad West HOA Lisa Isaacson AMS CCAM La Mesa Colony HOA, Alicia Lloyd Lake Park Condominium Assn Zelma Hall CMCA MC Painting, Lisa Isaacson AMS CCAM Nautilus General Contractors

Riviera Del Mar Arch. Comm. Corp.

Betty-Ray Wilson

In short, homeowners associations that are considering adopting bans on registered sex offenders need to consider

Rock Springs East COA, Dawn Walters

the possible liability, be aware of the

SBS Lun Services, Mitch Willet

likelihood of potential legal challenges

Seven Oaks Mgmt Corp #4, Gerie Vellios

that may ensue and consult with legal

The Missions @ Ivey Ranch, Connie Cain Vermont Villas Condo HOA, Dawn Walters Villa Marbelle HOA, Robert Donaldson Villa Trieste at Del Oro Hills MA

counsel.

Short of enacting a ban on registered sex offenders, there are other steps that a

Villa Trieste Master

homeowners association can undertake to

Village Park Townhome Corp #3

be proactive in dealing with potential sex

Wells Fargo Bank, Mark Durazo

offenders, such as providing information

West Park Owners Assn, S. Dale Hess

on the association’s website and informing

Westturf Landscape Mgmt

owners as to how they can obtain

Wild Rose Ranch CA

information about registered sex offenders

Woodbridge Estates HOA Lisa Isaacson AMS CCAM

in the community. Other actions involve forming “block watch” organizations where the captains of these organizations receive current and detailed information

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

on area sex offenders.

C e l e b r at i n g O u r 3 7 t h Y e a r

If an association is made aware of a registered sex offender in the neighborhood, steps should be taken to verify the accuracy of the information,

We know the

measure the threat and, if necessary,

difference

disclose the information in a written letter to the homeowners detailing steps they

between getting

can take and the legal limitations of the homeowners association. Due to the

the job done

risk of defamation and libel claims, such

and getting it

actions should only be undertaken after close consultation with the association’s

done right.

attorney. With any action taken in regard to registered sex offenders, associations

Full Service Community Management

need to be aware of the potential for harassment of individuals living in the community as a result of information received and promulgated. Obtaining guidance from legal counsel is essential.

800-227-6225

Laurie S. Poole has been an attorney with Peters & Freedman, LLP since 1993. Peters & Freedman has offices in Encinitas and Palm Desert. Ms. Poole can be reached at lpoole@hoalaw.com.

S a n D i e g o • C h u l a V i S ta • C a r l S b a D • m u r r i e ta

www.waltersmanagement.com

Walsh-HOA ad / Pub:CAI San Diego Common Assessment / Run Date: 5-1-10 / Size: 7.5 X 4.75/ 4C 0UBC8346COM_WalshHOA

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Ed and Ilona Walsh, Owners, Walsh Property Management

To put our HOA Banking expertise to work for you, visit us at HOAbankers.com or call us today.

Western Region: Jolen Zeroski, 800-669-8659 Jason Lee, 800-660-4053 Stephanie Shade, 800-660-4053

National Sales: Mickel Graham, PCAM 866-210-2333 Pamela Hazard, CMCA, Team Leader 800-669-8659

CoveragePlusSM deposit insurance is not connected with or guaranteed by the FDIC. CoveragePlusSM protects against the risk of bank insolvency and no other risk.

Restrictions apply. Ask your relationship manager for details.

HOAbankers.com

©2010 Union Bank, N.A.

49401_SDN.indd 1

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 04/1/10 10 12:17:50 17 PM

g

by kimberly lilley, CMCA, CIRMS

oing through your association’s paperwork you may have found reference to a fidelity bond. Or maybe it was crime coverage? Or fidelity insurance? Employee dishonesty? Is it so complicated that

they have to give it all of these different names?

Don’t let the nomenclature get you down. This coverage is in place to make the association whole again if someone decides that Jamaica looks lovely this time of year and the reserve account has just enough money in it to fund the trip. As we all know, maintaining an association without reserve funds is practically impossible. This type of coverage helps prevent a rather dramatic assessment to the members if that kind of theft were to occur.

Continued on page 20

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

Wh

hat’s In A Name?

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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What's in a Name?

backing an estimated 30% of loans) has

money from the association. Here are a

Continued from page 19

the higher requirement of three months

few suggestions:

of aggregate assessments for all units

• Require the signature of two board

The age-old question is: how much should we be insured for? When it

PLUS reserves. Between the governing

comes to insuring physical property like

documents and the Federal Government

a building, a building cost estimator is

regulations, be sure you meet the HIGHER

used, and it makes practical sense- you

requirement.

insure the building for how much it would

members on checks withdrawing money from the reserve accounts • Make sure checks are signed manually (not rubber-stamped)

If you think about it, it makes sense:

• Confirm supporting documentation for

cost in that city at that time to rebuild the

you want to be able to replace the

structure. (We don’t bother with real estate

reserves if they’re stolen. Also, sometimes

market value, because the damaged

it takes a few months for the treasurer to

structure is insured, not the location.) It is a

notice that something is wrong, so insuring

• Prohibit the writing of checks to “cash”

number that is directly linked to the item it

three months worth of assessments is a

• Also keep an eye out for checks that

is insuring.

good idea, too.

Fidelity/Crime/Employee Dishonesty

payment (invoices, etc.)

• Keep investments in the association’s name (not individual board members)

seem out of place. Perhaps payable

After determining how much you will

to a contractor you have never seen

insurance is also directly linked to what

need to insure, you will want to make

performing work on the association.

it is insuring. It is designed to replace

sure the appropriate people are covered

One of the more popular fraud tactics

money that is lost due to a dishonest act,

under the policy. Most policies will include

of late has been making payments to a

so the money becomes the direct link – the “property” that needs insuring. But

board members

company that doesn’t exist (for work that

automatically,

didn’t happen).

but some will

While these suggestions are an

not. With an

excellent way of making it more difficult

“employee

for a board member or manager to take

dishonesty”

money from the association, it does not

policy, some

deter them entirely. For example, take the

carriers do

two-signature requirement for removal

not consider

of money from the reserves. It is good

unpaid board

that at least two people are informed

members to be

that money is being removed from the

“employees.”

reserve account, but if someone is willing

Make sure that

to steal money from the association, it’s a

the definition of

good bet they are also willing to forge a

the insured includes your board members.

What about the manager of the

signature to achieve that end.

So, knowing that we live in a world

how to calculate the amount to insure

association? If they aren’t paid directly by

where 80% of money stolen from a

requires that you refer to your governing

the association, they may be considered

company is stolen by an employee, it

documents. In an association’s CC&Rs, the

to be contractors and not employees.

doesn’t matter what it is called – having

insurance section often includes a formula

Make sure that the language of the policy

a Fidelity/Crime/Employee Dishonesty

for what is required to be covered under

is expanded to include the managing

policy in place is an important part of

the Fidelity coverage. If, however, your

agent for the association. This takes an

protecting your association from loss.

documents are silent, you need to turn to

adjustment of the actual policy language,

the Federal Government regulations. Most

so getting confirmation of that expansion

government lending institutions require

in writing from your broker or agent is an

that associations with over 20 units carry

excellent way to be sure that it has been

Fidelity insurance. While FNMA (Fannie

done.

Mae) requires that an association carry AT

There are many safeguards that can be

LEAST three months worth of assessments

put in place to help reduce the possibility

in their fidelity coverage, the FHA (now

of a board member or manager stealing

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

Kimberly Lilley is the Director of Marketing for Berg Insurance Agency and can be contacted at Kimberly@BergInsurance.com or at www.BergInsurance.com.

Thank You to our May 21, 2010 Morning Educational Program Pay Less Now or Pay More Later!

What you should know about reserve studies & funding

Providing Community Associations with Insurance Solutions BERG INSURANCE AGENCY, INC.

23651 Birtcher Dr., Lake Forest, CA 92630 5055 Avenida Encinas, Suite 100, Carlsbad, CA 92008 800.989.7990 phone 949.586.9877 fax

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R e n e wi n g

m e mb e r s

Thank you to our chapter members that have renewed their CAI membership. We appreciate your continued support and participation in our chapter.

A-1 All American Roofing .......................1997 Action Property Management, Inc. .......2004 Advanced World Concepts, Inc............. 2009 Advantos Systems, Inc............................. 2001 Anderson & Kriger ...................................1984 Any Ferrell . ...............................................2008 Associated Professional Services ...........1984 Association Management Group, Inc. ..1994 AV Builder Corp .......................................2006 Aztec Paving, Inc. . ...................................1990 Barrier Reef COA .....................................2002 Bemus Landscape, Inc. ...........................2004 Bickler Law Offices APC . ........................2000 Blue Skies Landscape Maintenance ......2006 Bob Bartlett ..............................................2008 Bonny Bruner . ..........................................1999 Bruner & Rosi Management, Inc. . .........1999 California Sub-Meters .............................2008 Carefree San Carlos . ...............................1977 Carlsbad-Woodridge H.O.A. . ................1988 Centre City Property Management Company ....................2001 Charles J. Rajca CPA ...............................2009 CityFront Terrace HOA............................ 2003 Claudia Sitta .............................................2007 Coit Services, Inc. . ...................................2010 Colony Homes Mira Mesa ......................1998 Coral Tree Plaza .......................................2010 Country View Condo Assn . ....................1986 Dawn Braddy ............................................2010 Dee Dee Stephens ..................................2006 Dewayne Frost .........................................2009 Donna Baughman . ..................................2008 Donny Disbro ...........................................2009 Dunn-Edwards Corporation ...................2002 EasyTurf, Inc. . ...........................................2008 Ed Roth .....................................................1998 Elaine Zembrycki . ....................................2006 Elite Community Management ..............1991 Ellinor Murphy ..........................................2009 Emercon Construction Inc. .....................2009 Empire Community Painting ..................2008 Epsten Grinnell & Howell, APC . ............1986 ET Water Systems, LLC ...........................2006 First Bank Association Services ..............1993 Friars Village HOA ...................................2010 G4S Secure Solutions USA .....................2006 Gary Furstenfeld ......................................2009 Gloria Olsen .............................................1998 Grand Pacific Resort Management........ 2009 Greco Traficante Schulz & Brick............. 2009 Gregory V. Villard, CPA . ..........................1987 J & M Keystone, Inc. . ..............................2004 Jackie Couzens ........................................2008 James Walker ...........................................2009 Jeff Greene ...............................................2008 Jennifer Elmore ........................................2007 Jim Manning . ...........................................2007

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Pro-Tech Painting Co. . ............................1992 Joel Owens . .............................................2000 Quality Patio Furniture Repair................ 2010 John Alioto ...............................................2010 Rancho Carlsbad Owners Association.. 2000 John Woodruff, III ....................................2008 Reconstuction Experts, Inc..................... 2001 Joanne Diaz ..............................................2008 Reo Terrace HOA . ...................................1995 Joseph Perna . ..........................................2009 ResCom Services, Inc. .............................2004 Hauser Contract .......................................2006 Reserve Data Analysis California LLC . ..2005 Helen Yakely .............................................2006 Restoration Management Company .....2007 Howerton Management Services ..........2007 Richard Ball ...............................................1990 Hudson Management Services, Inc. . ....2009 Robert Fowler . .........................................2002 Hugh Kratz ................................................2000 Ronald Reff................................................2009 Karen Smith ..............................................2009 S.B.S. Lien Services ..................................2009 Keystone-Inland, Inc. ...............................1991 Saddleback Fence and Vinyl Products ..2008 KR Landscape Maintenance, Inc. ...........2007 Samantha Easton .....................................2007 La Mesa Townhouse, Inc. ........................2001 San Lorenza Homeowners Association. 2004 Law Offices of Richard Salpietra ............2001 Seascape Surf Management Corp ........1984 Leonard O’Reilly ......................................2005 Servpro of Centre City/Uptown .............2010 Little & Sons Property Management..... 2007 Sigvard Anderson ....................................1992 Liz Beiner ..................................................1999 Silldorf & Levine, LLP . .............................2004 M & M Business Enterprises . .................2003 Massie-Berman ........................................1994 Sheryl Sharp .............................................2007 Masters Hill Owners Association............ 2009 SmartStreet a Division of RBC Bank ......2004 Matthew Kaddatz . ...................................2008 Sonnenberg & Company, CPAs .............1982 MC Painting.............................................. 2008 Stacy Cabrera ...........................................2005 McCaffery Reserve Consulting............... 2005 Stratus Management ...............................2006 McMillin Lomas Master Association ......2004 Sullivan Construction Management ......2007 McMillin Lomas Verdes II (320)............... 2006 Summer Johnson .....................................2010 Menas Realty Company ..........................2009 Summit Property Management, Inc. .....1994 Meridian Residential Association . .........1995 Sunset Painting ........................................2002 Michael J. Ferrara, CPA . .........................1989 Sunstream .................................................2008 Mission Village Condo Assoc. . ..............1996 Steven Bennett ........................................2003 MSSR, Inc. .................................................2010 Sue Barnett ...............................................2006 Mulvaney, Kahan & Barry ........................1993 Susan Schwartz . .......................................1990 Mutual of Omaha/Condo Certs . ...........2004 Suzanne Dixon .........................................2007 Nancy Unfried ..........................................2006 Teresa Petro ..............................................2006 Newman Replacement Windows, Inc. ..2003 The Brickman Group ...............................2010 Nu Flow America .....................................2010 The Landing HOA.....................................1995 Oaks North Community Center . ...........2010 The Sullivan Law Firm, APLC ..................2010 Oaks North Villas Condominium Tina Baldwin .............................................1988 Association ..........................................1991 Trip Wilson Insurance Agency ................2006 O’Connell Landscape Maintenance ......1999 Union Bank ...............................................2008 Orange Coast Building Services, Inc. . ..1999 Uptown District Owners Association . ...2010 Pacific Backflow Company Inc................ 2009 Varsity Painting .........................................2009 Pacific Properties Service........................ 2006 Ventana HOA ...........................................2001 Pacifica Real Estate Services, Inc............ 2004 Village Park Townhome Corp. #3 . .........1999 Palm Terrace .............................................1998 Village Square HOA................................ 2001 Park Villas North Condominium Vista Del Verde Of Santee ......................1988 Association, Inc.................................... 2005 Wayne Hanson .........................................2006 Park West HOA ........................................2008 Wasserman & Kornheiser LLP ...............1990 Pat Baker . .................................................1998 Western Exterminator Company ...........2009 Patriot Painting, Inc. ................................2006 Western Towing....................................... 2000 Paul Davis Restoration & Remodeling ..2004 Western Tree Service . .............................1988 Paul Miller Company............................... 1990 Westturf Landscape Management ........2006 Payne Pest Management ........................2006 Wikkering Windsor View HOA............... 2008 Pennant Village HOA ..............................1996 Will Smyth................................................. 1981 Peter Ruggiero .........................................2008 William Haifley .........................................2006 Pilgrim Creek Estates HOA ....................2005 Porto Sienna Owners Association .........2008 Continued on page 22April • May • June ProTec Building Services .........................1995

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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Thank you to our 2010 Monte Carlo Night Sponsors HIGH ROLLER

ACE Anderson & Kriger LLP Pacific Western Bank Premier Roofing CA, Inc. Restoration Management Company Rodent Pest Technologies, Inc. Walters Management DISC JOCKEY Pro-Tech Painting R&D Pest Services, Inc. PHOTOGRAPHY Animal Pest Management Benchmark Landscape Del Mar Pacific General Contractors Epsten Grinnell & Howell, APC Green Valley Landscape Peters & Freedman LLP

KING Artistic Maintenance AV Builder Corp Berg Insurance Agency Gothic Grounds Management, Inc. Mt. Helix Pest & Termite Control, Inc. Mutual of Omaha/Condo Certs Nu Flow America, Inc. ProTec Building Services Reconstruction Experts, Inc Steven Smith Landscape, Inc. RAFFLE GRAND PRIZE Clean Earth Restoration Patio Guys ICE SCULPTURE Four Seasons Tree Care, Inc. COFFEE Association Reserves San Diego, LLC Law Office of Laura Kwiatkowski Merit Property Management Pacific Green Landscape, Inc. S.D. Preferred Property Management, Inc SCT Reserve Consultants, Inc. Servpro of Sorrento Valley DECORATIONS Black Mountain Plumbing Massie-Berman Popular Association Banking

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

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Proactive Fraud Prevention

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2

By pamela hazard, CMCA

008 was the beginning of a year of economic turmoil and financial crises that resulted in a housing collapse, mounting foreclosures, and pervasive liquidity constraints.

Deteriorating financial conditions – especially in the second half of the year – coupled with the emergence of new payments types and the growth of electronic payments, also opened up new opportunities for payment fraud.

There’s no time like the present to make sure your internal fraud control systems are in place and up to par.

That’s because historically, internal fraud losses mount during economic downturns and in the first few months of an economic recovery.

“People who before might not have ever entertained the idea of stealing from their company, now they are tempted,” says fraud prevention expert Mark Sullivan, managing director of Kroll Consulting Services. “And given that, companies need to be vigilant.”

The Association of Certified Fraud Examiners’ 2008 annual report estimates that U.S. organizations lose about 7 percent of their annual revenue to internal fraud.

About 90 percent of internal fraud occurs in a company’s check-writing function, according to the 2009 AFP Payment Fraud and Control Survey.

That survey also found a 30 percent increase in attempted fraud from 2007 to 2008, and a 38 percent increase in attempted fraud in the second half of 2008, as the economy worsened.

Fraud losses are typically in the thousands of dollars, not hundreds of dollars, for most companies.

Yet many companies have cut internal fraud controls – and the people who monitor the controls – as part of their own cost controls, Sullivan says.

Your bank should be able to offer you ways to be vigilant.

We advise companies to read their banking agreements to understand their liabilities in case of fraud. Then you should take steps such as segregating your check-signing and check-reconciling functions, reconciling your statements regularly, and reviewing your accounts online daily so you Continued on page 28

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

27

proactive fraud protection Continued from page 27

can quickly flag your bank to problem

procedure is a great way to catch internal fraud.

The 2009 AFP Payments Fraud and Control Survey stated “Nine out

Companies can take these controls

of ten organizations (91 percent) that

a step further, with the added protection

experienced attempted or actual

that comes from the bank reconciling

payments fraud in 2008 were victims

that allow companies to decide whether

check payee names from the customer’s

of check fraud. The percentage of

to approve checks presented for payment

issue file against the names on checks

organizations affected by payments fraud

to your bank that don’t reconcile with

presented for payment.

via other payment methods were:

transactions.

The best protection is from products

your payment records. Banks often call

The fees for the service vary by type,

• ACH debit (28 percent)

these products “Positive Pay” and “Payee

transaction and financial institution, but

• Consumer credit/debit cards (18 percent)

Positive Pay.”

generally range from $55 to $100 a month.

• Corporate/commercial cards (14 percent)

Here’s how these products work:

That’s a pretty low cost, when you consider

• ACH credits (seven percent)

Customers send their bank their

the potential savings.

• Wire transfers (six percent)

issue file, with a record of each check

For instance, these services recently

written that includes the account number,

stopped a large fraudulent check

ACH Fraud

serial number, dollar amount and issue

presented for payment and a large

• Seventeen percent of organizations that

date. As checks are presented to the

fraudulent wire transaction before each

were victims of ACH fraud during 2008

bank for payment, the bank reconciles

was paid. In each case, the customer had

experienced financial loss as a result.

the information on the check against

the extra security service and the bank

the information in the issue file – and

was able to flag the transactions and stop

loss as a result of ACH fraud generally

holds any discrepancies for customers to

them.

admitted they did not follow best

approve or reject.

Flagging checks that have been altered or written outside the normal issue

However, as if there weren’t already

• Organizations that suffered a financial

practices and/or neglected to execute

enough threat… along comes electronic

their own business banking plan

fraud.

expeditiously as they should have. Fiftyfive percent of organizations did not make use of blocks or ACH debit filters, and 36 percent did not use ACH positive pay.

Business-to-Business Card Payments Fraud • Seventy-eight percent of organizations that experienced fraud via the use of an organization’s own corporate/commercial card indicates that the fraud was perpetrated by an external party.

• Seventy percent of such organizations report that the fraud was committed by an unknown external party.

• Eleven percent of such organizations indicate that the fraud was committed

Proud recipient of the SDCAA 2009 Mark of Excellence Award

by a third party, such as a vendor, professional services provider or business trading partner.

• Forty-four percent of organizations subject to corporate/commercial card

License No. PPO 15264

fraud during 2008 suffered actual financial losses resulting from the fraud.

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

We Have the Answers To Your Legal Questions — When You Need Them.

• Community Association Law

• • • •

– General Counsel

– Inspector of Elections Real Estate Disputes Insurance Disputes Construction Law Personal Injury Law

www.salpietra.com

• Just one out of six organizations that

and/or the organization does not issue a

accepted corporate/commercial cards

sufficient number of checks (17 percent).

from its business-to-business partners

Organizations can develop and/

858.756.2233

• Sixty percent of organizations have separate bank accounts for checks and ACH payments

suffered a financial loss resulting from

or modify internal business processes

The use of checks for payments

fraud using such cards.

to mitigate potential payments fraud

is declining. According to The 2007

risks. Among the processes considered

Federal Reserve Payments Study (www.

important include:

frbservices.org/files/communications/

• Stopped providing payment instructions

pdf/research/2007_payments_study.pdf),

Fraud Control Organizations turn to a number of fraud control services provided by their banks, including: • Positive pay/reverse positive pay (82 percent) • ACH debit blocks (71 percent)

by phone or fax (86 percent) • Increased use of electronic payments for

more than two-thirds of all U.S. noncash payments were made electronically

business-to-consumer and business-to-

during 2007. The number of checks used

business transactions (82 percent)

for payment fell by 7 billion between

• Reduced the number of bank accounts

2003 and 2006. Although the volume of

• ACH debit filters (55 percent)

(82 percent)

checks is declining, checks are still the

• Payee positive pay (50 percent)

Organizations also use separate

most widely used payment instrument

• “Post no checks” restriction on

accounts for different payment methods

for businesses. The 2007 AFP Electronic

depository accounts (34 percent)

as a fraud control technique. For example,

Payments Survey found that 74 percent

Organizations may opt out of

• Seventy-five percent of organizations

of business-to-business payments

particular fraud control services for a number of reasons: their management is confident that the organizations’ internal

maintain separate accounts for different

were made by checks. But checks also

payment methods and types

continue to be the preferred target for

• Seventy-one percent have separate

processes are adequate (47 percent),

accounts for disbursement and

the service is too expensive (20 percent),

collections

criminals committing payments fraud.

Nine out of ten organizations (91 percent) Continued on page 30

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

29

However, large organizations with annual revenues over $1 billion – which are more likely to make/use electronic payments – are also more likely to have experienced an increase in fraud from ACH debits and wire transfers. Fraud from accepting consumer credit/debit card payments was more likely to occur in small organizations (with annual revenues under $1 billion) than in large organizations.

There’s no better time than now for your company to redouble its efforts to proactive Fraud Protection Continued from page 29

that experienced attempted or actual

universal incidence of attempted or actual

identify and stop internal and external

check fraud of greater than 90 percent.

fraud. Ask your banker for help to ensure

The growth in check fraud has far

that you have the right in-house controls

payments fraud in 2008 were victims of

outpaced the growth in electronic

in place, and that your bank has the right

check fraud. This percentage is slightly

payments fraud. Of the organizations that

programs working to protect you.

lower than that reported for 2007 (94

experienced an increased number of fraud

percent).

attempts during 2008, 82 percent report

Among organizations that experienced

more check fraud while only 18 percent

an increased incidence of payments fraud

report more consumer credit/debit card

in 2008 compared to 2007, 82 percent

fraud and just 14 percent more ACH fraud.

Pamela Hazard, CMCA is a Vice President/Team Leader for Union Bank’s HOA Banking Services, in California, Oregon, and Washington. Pamela can be reached at Pamela.Hazard@unionbank.com or (800) 669-8659.

indicate that check fraud increased over the past year. Eighteen percent

fraud control tips

report higher levels of consumer credit/ debit card fraud and 14 percent report

Limit the number of signers on your company checking account.

increased fraud involving ACH debits.

Electronic payments can offer organizations more fraud control. Survey respondents indicate that organizations were much less likely to be subject to fraud from electronic payments than from checks. Among organizations that were victims of attempted or actual payments fraud in 2008, 28 percent report ACH debit fraud in 2008, up slightly from 26 percent in last year’s survey. The prevalence of fraud involving consumer credit/debit cards increased eight percentage points to 18 percent.

The incidence of fraud via other payment methods was relatively unchanged

Segregate your finance tasks by assigning different workers to issuing checks, reviewing payment discrepancies and approving payments.

Protect your check paper stock by using online-image storage for canceled checks, rather than having paper copies returned to your office.

Watch your employees for signs of stress in their lives that may tempt them to commit fraud. Signs include getting collector calls at work, discord at home, loss of a spouse’s job, loss of a car or other major possession.

Watch for employees who repeatedly decline to take vacation time – they might be wary of exposing a fraud scheme to their substitute.

Test your payment systems routinely. For example, run a report that shows you the day and time of day that checks are written against your company accounts, then compare those to the regular work hours of your accounts payable staff. Investigate any discrepancies for potential fraud.

Familiarize yourself with your bank’s depositor’s contract and with liability for fraud under the Uniform Commercial Code.

from the previous year: 14 percent of organizations report corporate card fraud, seven percent report ACH credit fraud, and six percent report wire transfer fraud.

The frequency of electronic payment fraud contrasts significantly with the nearly 30

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

Use a shredder to destroy outdated financial data.

Have your employees bonded when appropriate.

Use account blockers and filters to reject specific transactions.

Reconcile your online accounts daily.

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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

31

Complying with the New Federal Lead-Based Paint Rules

By Jennifer L. James, Esq

O

n April 22, 2008, the Environmental Protection

Who Must Comply?

Agency (EPA) issued a rule requiring the use of

In general, anyone who is paid to perform work that

lead-safe practices and other actions aimed at

disturbs paint in housing and child-occupied facilities built

preventing lead poisoning (the “Rule”). Under

before 1978 must comply. This may include, but is not

the Rule, beginning April 22, 2010, paid contractors performing

limited to: contractors, home renovation companies, window

renovation, repair and painting projects that disturb lead-

replacement contractors as well as painters, plumbers,

based paint in homes, child care facilities, and schools built

carpenters, electricians, maintenance workers, and landlords

before 1978 must be certified and must follow specific work

who perform repairs and renovations themselves. Note: This

practices to prevent lead contamination.

Rule does not apply to homeowners painting or renovating their own home.

Scope of the Rule The new regulation applies to all renovations performed for compensation in target housing (pre-1978) and child-occupied facilities, with the following exceptions:

Certification Requirements: • Certification includes an eight-hour training course from an EPA-approved training provider.

• Housing built in 1978 or later

• Lead-Safe practices

• Housing for elderly or disabled persons, unless children under

• Contractors must use lead-safe work practices and follow

age 6 reside there

three (3) simple procedures:

• Zero-bedroom dwellings (studio apartments, dormitories, etc.)

• Contain the work area

• Housing or components declared lead-free by a certified

• Minimize dust

inspector or risk assessor • Minor repair and maintenance activities

• Clean up thoroughly Contractors who perform renovation, repairs, and painting jobs are required to:

Minor Repair Minor repair and maintenance activities are excluded from the Rule. Minor repairs and maintenance activities are activities including minor heating, ventilation or air conditioning work, electrical work, and plumbing, that disrupt 6 square feet or less of painted surface per room for interior activities or 20 square feet or less of painted surface for exterior activities. Note: window replacement and demolition of painted surface areas are always subject to the Rule.

32

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

• Provide you with a copy of EPA’s lead hazard information pamphlet • Provide you with a copy of the Contractor’s state lead training certificate • Explain what lead-safe methods will be used to perform the job • Ask you to share the results of any previously conducted lead tests

• Provide you with references from at least three recent jobs, if any, involving homes

Rebuilding Communities

built before 1978 • Keep records to demonstrate that the

n

Contractor has been trained in lead-safe

n n

work practices

n n

Lead Test Kits

Reconstruction Renovations Repairs Maintenance New Construction

The EPA is currently evaluating the effectiveness of lead test kits but currently advises that these kits should not be considered reliable. Rather, the EPA advises you to hire a qualified professional to perform an evaluation. Trained professionals use a range of methods to check for lead, including visual inspection of paint condition and location, a portable

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tests of paint samples, and surface dust tests. You may contact the National Lead Information Center (NLIC) for a list of professionals in your area.

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858.792.1500

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How Does This Affect Community Associations?

If the association is responsible for exterior maintenance, as is the case in condominium developments and some planned developments, it will need to comply with this Rule. Additionally, if the association acquires title to a unit or lot which it intends to rent, then the association must comply with the Rule as applied to that unit or lot. (The association may acquire title to a lot or unit through foreclosure of a lien for delinquent assessments if the property reverts back to the association at its foreclosure sale by default.) Community association managers are not required to be certified, however, they should confirm that all contactors hired to do any renovations subject to this Rule are certified.

Jennifer James, Esq. is an attorney with Epsten Grinnell & Howell, APC.

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

33

Hom e o w n er s ’

c o r n er

A Case Study:

Review/Audit of Financial Statements and Other Board Actions Readers of this column are encouraged to send their opinions on the above and suggestions for future columns to samdolnick@juno.com or by phone, 619-6974854. Sam Dolnick has served as president of his association, is a former homeowner representative of the San Diego Chapter Board of Directors, former homeowner trustee of CAI National, and former director of the CAI Foundation for Community Association Research. He is currently homeowners’ delegate on the California Legislative Action Committee, and president of the Baker/ Dolnick Education Foundation.

Guest articles are always welcome!

C

ommon Assessment’s Summer

that the directors they elect, and in turn, the

2009 issue contained a

management employed is really functioning

Homeowners’ Corner article

on behalf of the homeowners. Now, for the

“Review or Audit of Financial Statements: Which One Protects the Association

details.

Item 1: The association’s governing

Best.” This article, in prior issues,

documents state: “An external audit by a

detailed differences between the two,

certified public accountant shall be required

provided information from state statutes,

with respect to such financial statements

the associations’ declaration, and the

for each fiscal year.” The word “shall”

Professional Standards of the American

mandates that an audit be performed.

Institute of Certified Public Accountants.

Previous articles discussed the fiduciary

Item 2: Civil Code §1365 states: “Unless

responsibilities of the board of directors

the governing documents impose more

with the need to pay attention to the

stringent standards, the association shall

association’s governing documents and

prepare and distribute to all of its members

state statues.

the following documents… (c) A review of

Recently, a common interest homeowner, who takes time to read the

the financial statements…”

Please note that the association’s

materials that the association sends,

governing documents impose more

presented information and documentation

stringent standards than a review; the

that provides an excellent case study to

they also call for an external audit to be

what extent the association’s president,

conducted.

board of directors, management firm, and certified public accountant (CPA) actually

firm sent to the association for the 2007

During the course of this article you will be

fiscal year states: “Enclosed is a copy of

asked whether or not the four entities are

the certified audit presenting the financial

fulfilling this duty to the association.

position of the association…” It further

The purpose of this case study is not

34

Item 3: A letter from the management

fulfilled their fiduciary responsibilities.

states “I suggest that you review the report

to name names; the purpose is to bring to

contents, keeping in mind that the audit

homeowners’ attention the requirement

is based…” And again: “Retain this audit

to be vigilant, to be familiar with their

report with your permanent ownership

governing documents and to make sure

records…” Please note that the word audit

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

is used four times in the management letter.

Item 4: Here is a quote from the CPAs Accountant’s Report. “I have reviewed the accompanying balance sheet of xxxxxxxxxx Association as of December 31, 2007… A review consists principally of inquiries of association personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit ... the objective of which is the expression of an opinion regarding the financial statements taken as a whole.

Accordingly, I do not express such an opinion.” The accountant’s reports for fiscal years ending in December 31, 2006, and December 31, 2008 contain the same wording as shown in the prior sentence.

A review was conducted although the CC&Rs mandates an audit.

Note the difference in wording between Items 3 and 4. The Accountant’s Report (Item 4) states a review of the December 31, 2007 was conducted and is “substantially less in scope than an audit.”

The management firm’s letter (Item 3) to owners repeats in four different places that an audit was conducted.

Question: It is obvious both

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the management firm and board misinterpreted the facts? Did the four entities: president, board of directors, management, and CPA adhere to the governing documents and state code to fulfill their fiduciary duties in examination of the financial statements?

This case study will now examine

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other areas in this same association. The board of directors is composed of an odd number of board members with the board president being the dominant individual.

Item 5: The governing documents state that “a regular meeting of the

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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

35

ssl_CAI_0210:Layout 1

1/19/10

10:23 AM

Page 1

Case study

Improving more than just your property.

Continued from page 35

board.” It also states “At the annual meeting, Members shall elect a board of directors…” Although the annual meeting is mandatory, no annual meeting has been

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held for at least two years. Therefore, elections could not be properly held.

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Item 6: Corporations Code §7510 (b) states: “A regular meeting of members shall be held on a date and time and with the frequency stated in or fixed in accordance with the bylaws, but in any event in each year in which directors are to be elected at that meeting for the purpose

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of conducting such election…”

Question: Did the board of directors fulfill its fiduciary duties requiring them to hold an annual membership meeting and elect a board in accordance with the governing documents?

Lic No. 456160

Item 7: A conflict of interest appears to be involved between the president of the board and the principal of the management firm. It appears the management’s office is owned by the president of the association.

Question: Because of the relationship between president of the board and management does a conflict of interest exist?

Item 8: Federal and state income taxes were not filed, or paid, for three years: 2005, 2006, and 2007 resulting in the board having to pay penalties and interest in addition to the taxes. The three year delinquent tax years were prepared in 2008 for filing.

Question: Did the president and the other board members really examine the monthly financial statements, presented to them by the management firm, as required by state statutes and governing documents? Did the board ever ask if 36

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

income tax forms for the state and federal

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Item 9: Some owners have complained that their units are sustaining water damage from overflowing laundry

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machines that have been installed in units above them in violation of the governing documents. It appears that some owners were given privileges by the directors and management that other owners were not given. The governing documents preclude any laundry machines as the drainage system, as originally installed, was not large enough to carry the extra load.

The document states: “There shall be no interference with the established drainage

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drainage is defined as the drainage which

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by the board.” Upon close of first escrow there were no laundry machines in any units.

Question: Is the board of directors and management really paying attention

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to the contents of the governing documents?

Committed to

Item 10: The corporate status of the association was, and currently is as of this writing, [March 2010] suspended

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for failure of management or board of directors to file the biennial statement and payment of fees to the Secretary of State.

Three statues in the California Codes, which makes it mandatory to file, (Civil Code 1363.6 Required Filing of Biennial Statement, Corp. Code 5008.6 Failure to File biennial Corporate Statement, and Corp. Code 8210 Filing Biennial Statement) were ignored. By losing its corporate status, management and the directors are placing all unit owners in

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Continued on page 46

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37

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38

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

Safe & secure Continued from page 11

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Making Sure the Police Can Find Your Home

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• Make sure your street address number is

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clearly visible from the street and is well lighted at night so the police and other

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emergency personnel can locate your home easily. Numbers should be at least 4 inches high must be used on individual dwellings and duplexes, and 12 inches high on multiple-unit residential buildings.

• Make sure your unit number (in a

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• Provide the police with an entry code if you live in a gated community.

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Identifying Your Property • Etch your driver’s license number on any valuables that might be stolen.

• Photograph valuables that cannot be etched.

• Keep a detailed, up-to-date record of your valuables. Include type, model, serial number, proof of purchase and fair market value.

For structural changes or modifications, as a homeowner, make sure that this falls within the guidelines of the association. As a board, consider implementing policies to provide homeowners the ability to implement these changes within the established guidelines.

This article is reprinted with permission from the City of San Diego Police Department, www.sandiego.gov/ police/prevention/homesec.shtml C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

39

Thank you to our April 16th Trade Show and Conference sponsors Keynote Speaker Sponsor

Breakout #1 Restoration Management Company Peters & Freedman, LLP Pacific Green Landscape, Inc. Epsten Grinnell & Howell, APC Breakout #2 PrimeCo Painting Restoration Management Company

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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

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Mt. Helix Pest & Termite Control, Inc. C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

41

A First-Class Board It is Closer Than You Think

By Any Ferrell, CCAM, AMS

G

reat board members are created, not born, with the innate knowledge of association agendas and

RESPECT Respect should be at the forefront of all business dealings

responsibilities. Some would argue that good board

with the board. Respect is essential when working with

members are hard to find, yet with the right support

homeowners, vendors, other board members and the overall

and training, interested homeowners can easily fill this role and

general public. Great board members know that respecting

succeed. Attributes of great board members include the ability

privacy and treating all business partners, as well as each other

to find balance in their roles, contribute to their communities and

with respect will create a professional environment where almost

lead effectively. Community managers need to provide the right

anything can be accomplished.

tools and information to encourage and create an environment

Respect also involves trust. board members are entrusted

where a member of the community can succeed as a board

with a great deal of information, ranging from violations to

member.

delinquencies, and it is the board members’ duty to discourage

There are key success factors that are attributed to becoming a great board member including respect, knowledge, effective leadership and education. Managers can provide support so

and not engage in any gossip relating to their business dealings while serving on the board.

Every board member also has a fiduciary responsibility to

that members can develop these skills needed to effectively run

the members of the association in which they serve. A fiduciary

communities.

duty requires the highest standard of care of either equity or law.

42

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

Every board member has been entrusted

must seek and consider information and

demonstrate leadership know that they

to handle the business affairs of the

expertise from outside professionals.

will ultimately save money and accomplish

association with the highest standard of

These professionals help guide board

their project.

care. To this end, every board member

members by arming them with information

must take their fiduciary role seriously and

to make educated decisions. By seeking

maintain trust to the community members

information from the appropriate industry

they serve.

professional, a board can often times help

to board member training. The role of

prevent a lawsuit.

the board member encompasses many

KNOWLEDGE Knowledge is power! As noted earlier, a board member is a fiduciary, one in

EDUCATION Education is important as a foundation

functions and right information should be

EFFECTIVE LEADERSHIP Effective leadership is essential to

available to enhance and expand their experience while on the board.

which has been entrusted the “highest

running a successful company. The same

standard of care.” In order for a board

principles apply to running an association.

common interest industry are a wealth

member to make the appropriate decision

Effective leadership is essential in

of information. Trade organizations, such

for the rest of the community, regardless

every community. Leaders understand

as CAI, offer opportunities from training

of the community’s size, it is vital that

key factors in running the day-to-day

classes, printed information (books/

each board member know as much

operations of their organizations including:

magazines) to online resources. Both

Trade organizations focused on the

information as possible to make informed

Avoiding Micromanagement:

new and current board members are

decisions. When taking on a role as board

Leaders set policy and entrust that

encouraged to attend the Essentials

member, one should be aware that there

management will handle the details.

of Community Association Volunteer

Getting All of the Information:

Leadership course given by CAI. See their

their attendance at board meetings.

Leaders collect all information before

website, www.cai-sd.org, for course dates

This commitment involves reading the

coming to a conclusion. Effective

and locations.

pertinent information prior to a board

leadership does not involve jumping to

meeting, studying and understanding

conclusions.

is a time commitment necessary beyond

financial statements and asking the

Business Partners can also provide good information in their respective fields

Forward Planning: Leaders will not

ranging from the landscape company,

only focus on current issues, but will look

legal counsel to the management

beyond for trends in order to avoid pitfalls.

representative. Business Partners are key

a manager has the opportunity to provide

Leaders consider information and input

partners in running the community and

the tools and pertinent information

from those they serve to enhance their

can provide training, information and

to help the board member succeed.

organization/community for the future.

resources for specific projects or tasks

questions about unfamiliar items.

When a new member joins the board,

Before the first board meeting, the

Understanding the Financial Picture:

facing the board.

manager should take the time to meet

Leaders understand the financial picture

with the new member and provide the

of their organization. Similarly, board

can exist with the right support. It’s a

vital information so that the new board

members must understand the finances

matter of providing the necessary tools,

member is equipped to tackle their new

of the community (income, expenses,

information and resources in order to turn

role. Essential tools and resources critical

delinquencies, etc). Board members are

an interested homeowner into a great

for a new board member should include:

responsible for the maintenance and

board member.

past 12-months of minutes, copies of

repair of long-term assets and must

all contracts, copies of all governing

consider these assets when planning and

documents and summary of projects and

budgeting. Board leaders spend money

recent events.

wisely, engaging the appropriate experts

It is also important to note that board

such as construction managers, attorneys

members deal with a variety of subjects

and other experts when dealing with

and trades. As most people are not

large projects. By engaging the right

experts in every field, board members

professionals early, board members who

In conclusion, great board members

Any J. Ferrell, CCAM, AMS is an Executive Vice President at N.N. Jaeschke, Inc., an Associa® Company.

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

43

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jwilcox@a-khoa.com

www.a-khoa.com

Epsten Grinnell & Howell, APC

Jon Epsten, Esq.................... 858-527-0111

fax 858-527-1531

jepsten@epsten.com

www.epsten.com

Feinberg Grant Mayfield Kaneda & Litt

Katy Krupp........................... 949-554-0700

fax 949-554-0707

kkrupp@feinberggrant.com

www.feinberggrant.com

Greco Traficante Schulz & Brick, APC

Peter Schulz......................... 619-234-3660

fax 619-234-0626

pjs@gtlaw.com

www.gtlaw.cc

Peters & Freedman, LLP

David M. Peters................... 760-436-3441

fax 760-436-3442

www.hoalaw.com

Law Offices of Richard Salpietra

Rick Salpietra........................ 858-756-2233

fax 858-759-9938

rsalpietra@salpietra.com

www.salpietra.com

44

John Kiss.............................. 619-296-7232

fax 619-296-7011

summitpropmgt@yahoo.com

Walters Management Company

Joe Farinelli.......................... 858-495-0900

fax 858-495-0909

jfarinelli@waltersmanagement.com

www.waltersmanagement.com

Curtis Management Company

Patrick S. Campbell, CCAM ............................................ 858-587-9844

fax 858-587-9972

pcampbell@curtismanagement.com

www.curtismanagement.com

Consulting Curtis Management Company

Patrick S. Campbell, CCAM ............................................ 858-587-9844

fax 858-587-9972

pcampbell@curtismanagement.com

www.curtismanagement.com

Emergency Restoration Services Clean Earth Restorations Rachel Roberts..................... 619-284-4239

fax 619-284-4279

rachel@cleanearthrestorations.com

www.cleanearthrestorations.com

Financial Services Mutual of Omaha Bank / CondoCerts

Cyndi Koester...................... 949-235-8498

fax 888-493-1973

ckoester@cabanc.com

www.cabanc.com

First Bank

Jan Hickenbottom................ 800-848-6771

fax 949-477-0255

Jan.hickenbottom@fbol.com

www.FirstBankHOA.com

Pacific Western Bank

Ken Carteron........................ 760-432-1335

fax 760-432-1339

kcarteron@pwbonline.com

www.pwbonline.com

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

Financial Services cont'd.

Union Bank

Michelle Hill......................... 951-281-1402

michelle.hill@unionbank.com

www.HOABankers.com

Popular Association Banking

Larry Hooper........................ 714-864-5171

fax 714-864-5190

lhooper@bpop.com

www.bpop.com

General Contractors Del Mar Pacific

Julie Villelli............................ 858-792-1500

fax 858-792-0076

www.delmarpacific.com

Insurance Berg Insurance Agency

Kimberly Lilley, CMCA, CIRMS ............................................ 800-989-7990

fax 949-586-9877

kimberly@berginsurance.com

www.berginsurance.com

Landscape Maintenance and/or Construction KR Landscape Maintenance, Inc.

Shaunmarie Daly.................. 760-295-9720

fax 760-295-9730

sdaly@krlandscapeinc.com

www.krlandscapeinc.com

LaBahn’s Landscaping

Michael Salsberry................. 619-579-9151

fax 619-461-0814

msalsberry@labahns.com

www.labahns.com

New Way Landscape and Tree Services, Inc.

Arthur Raybold.................... 858-505-8300

fax 858-505-8305

araybold@newwaypro.com

www.newwaypro.com

Pacific Green Landscape, Inc.

Stephanie Lundstrom........... 619-390-9962

fax 619-390-0865

stephanie@pacificgreenlandscape.com

www.pacificgreenlandscape.com

Steven Smith Landscape

Gigi Golden-Smith............... 760-745-9916

fax 760-745-1982

ggolden@stevensmithlandscape.com

www.stevensmithlandscape.com

Westturf Landscape

Heather Collins.................... 760-650-3120

fax 760-650-3125

heather@westturf.com

www.westturf.com

Outdoor Furniture Patio Guys

Laura Terpack....................... 800-310-4897

fax 760-599-4660

commercial@patioguys.net

www.patioguys.net

Tree Service New Way Landscape and Tree Services, Inc.

Water Submetering California Sub-Meters

Arthur Raybold.................... 858-505-8300

fax 858-505-8305

araybold@newwaypro.com

www.newwaypro.com

Danielle Poanessa................ 858-571-8999

fax 858-571-4470

danielle@calsubmeter.com

www.calsubmeter.com

Painting Contractors Pro-Tech Painting

Chris Cena........................... 858-527-0200

fax 858-527-0220

chris@pro-techpainting.com

www.pro-techpainting.com Serving San Diego County for over 25 yearS

Pest Control Payne Pest Management

Willie Payne......................... 858-277-2228

fax 858-277-2212

wpayne@paynepestmgmt.com

www.paynepestmgmt.com

Expert Care for a Beautiful, Trouble-Free Landscape.

Reserve Studies Association Reserves San Diego LLC

Matthew Swain, RS............. 619-567-5239

fax 619-568-3564

mswain@reservestudy.com

www.reservestudy.com

760.295.9720 www.krlandscapeinc.com

• Professional Landscape Maintenance Service for Community Associations • State of the Art Water Budgeting and Management • We Make It Easy for You, You Deserve It License #427886

Sonnenberg & Company

Leonard Sonnenberg............ 858-457-5252

fax 858-457-2211

lens@sonnenbergcpas.com

www.sonnenbergcpas.com

Roofing Premier Roofing

Bill Capito............................. 619-667-4565

fax 619-667-1281

billc@premierroofingca.com

www.premierroofingca.com

Security Services Bald Eagle Security

Dmitriy Todorov................... 619-230-0022

fax 619-230-6610

dmitriyt@baldeaglesecurity.com

www.baldeaglesecurity.com

Towing Western Towing

Kathy Tighe.......................... 619-297-8697

fax 619-296-2822

denisetb@westerntowing.com

www.westerntowing.com

C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0

45

Case study w ha t ’ s n e w i n Sa n D i e g o ?

Continued from page 37

Question: Is management and board of

DESIGNATED

Tina Palacios has earned her Community Insurance Risk Management Specialist (CIRMS) designation in recognition of her high level of Insurance expertise and competency servicing the common interest development industry. Tina Palacios is one of the youngest Insurance professionals to earn this distinction. Congratulations, Tina!

ADDITIONS

RSI Roofing of San Diego is pleased to announce the hiring of John Sawaya as the new Operations Manager. John comes to RSI with thirty-one years of experience, with six of those years served as the Operations Manager at another local roofing contractor.

Before that, John was the General Manager at Aztec Roofing for twentytwo years. John was born and raised in San Diego, currently residing in El Cajon with his wife and five kids. “We are excited to have John join the RSI

team where he will bring substantial expertise in a role that is vital to the companies operating procedures and overall growth,” says David Susi, President.

Berg Insurance Agency is pleased to announce the newest addition to their team: Marianne Pick, Commercial Sales and Marketing Representative.

With more than two decades of sales and management experience, Marianne has developed a keen awareness of how to meet a community manager’s needs. In 2003, she entered into the Homeowners Association marketplace, where her sales ability and organizational skills enabled her to build excellent relationships with Community Managers.

directors, by being so neglectful, fulfilling their fiduciary responsibilities to the condominium unit owners?

The items in this case study appear to be extreme. It appears from the documentation, that management, the president and board of directors are not aware of their fiduciary responsibilities; they are not aware of what their governing documents contain; they are not aware of the state statutes; they rely upon the board president and management to run the association without any oversight.

Again, to repeat, the purpose of presenting this case study of an actual common interest association is to alert all homeowners to be vigilant, to read the documents, especially financial, presented by the board and management. The money being spent that homeowners pay in regular, special and emergency assessments must be monitored by the homeowners themselves.

SEPTEmber 22-23 CALL the chapter office for more information 619-299-1376

46

F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e

Golf Classic Sponsors

September 17, 2010 • Coronado Municipal Golf Course Eagle

Par

Putting Contest

Animal Pest Management

Pacific Western Bank

AV Builder Bald Eagle Security Services

Driving Range

Clean Earth Restorations

Sullivan Construction Management

Del Mar Pacific

Birdie

Emercon Construction Inc.

Lunch

Epsten Grinnell & Howell APC

Emergency Services Restoration

Peters & Freedman LLP

Mt. Helix Pest & Termite Control, Inc.

Law Offices of Richard Salpietra

Popular Assocation Banking

Mutual of Omaha/Condo Certs

Master Plumbing & Leak Detection

PrimeCo Painting, Inc.

Reconstruction Experts

MC Painting

Restoration Management Company

RSI Roofing

Pacific Green Landscape, Inc.

The Brickman Group

Payne Pest Management

Drink Bucks

US Bank

Premier Roofing CA, Inc.

Restoration Management Company

Western Towing

Hole in One Landsystems

Pro-Tech Painting S.B.S. Lien Services

Water

Service Master by Rapid Response

Aztec Paving, Inc. California Sub-Meters Rodent Pest Control Summit Security

If your company is interested in becoming a sponsor for this or any other event please call the chapter office at 619-299-1376.

1081 Camino del Rio South Suite 207 San Diego, CA 92108

2010

CAI-SAN DIEGO Marketing Plan MeMbers

Platinum

Gold animal Pest manaGement Bald eaGle security del mar Pacific General contractors mutual of omaha Bank/condocerts Pacific Western Bank Peters & freedman, llP PoPular association BankinG Premier roofinG of california, inc.

Pro-tech PaintinG co. restoration manaGement comPany

Bronze Anderson & Kriger Artistic MAintenAnce AssociAtion reserves sAn diego, LLc Av BuiLder Berg insurAnce Agency cLeAn eArth restorAtions eMercon construction FeinBerg grAnt MAyFieLd KAnedA & Litt, LLP interiors: By design LABAhn’s LAndscAPing LAndsysteMs, inc.

LAw oFFices oF richArd sALPietrA MAster PLuMBing & LeAK detection Mt. heLix Pest And terMite controL new wAy LAndscAPe & tree service o’conneLL LAndscAPe PAciFic green LAndscAPe PAtio guys reconstruction exPerts rodent Pest technoLogies sBs Lien services serviceMAster By rAPid resPonse sKy security services us BAnK westturF LAndscAPe MAnAgeMent