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JULY 2019

JULY 2019

FEATURING 8 PGA West II Residential Association 12 When it Comes to Reserve Funds, How Much is Enough? 16 Protect Community Roots & Make Property Values Grow 26 Do Your Lake Fish Need Air This Summer? 34 Are You Maximizing Your Community's Home Values?

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2019 QUORUM COMMITTEE MEMBERS

CONTENTS CAI-CV

EDUCATED BUSINESS PARTNER

CAI-CV

EDUCATED BUSINESS PARTNER

JENNIFER JAMES, ESQ., CHAIR Green Bryant & French, LLP RODNEY BISSELL, CO-CHAIR Bissell Design Studios, Inc. GEN WANGLER, ESQ., CCAL, BOARD LIAISON Fiore Racobs & Powers, A PLC KIMBERLY BURNETT DSI Security Services DIANE CARMONY Coachella Valley Water District

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SIERRA CARR, CMCA Trilogy La Quinta CAI-CV

EDUCATED BUSINESS PARTNER

DEA FRANCK, ESQ. Epsten Grinnell & Howell, APC LISA GLOGOW, CMCA, AMS, PCAM, CCAM® PowerStone Property Management

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BRUCE LATTA, CMCA Parc La Quinta MARNE LOGAN, CCAM The Management Trust Desert Division GLENN A. MILLER, CGCS Southwest Landscape & Maintenance, LLC GRACE PALUCK, CMCA The Management Trust Desert Division KUMAR S. RAJA, ESQ. Tinnelly Law Group MIKE REY Rey Insurance Services A FARMERS® Insurance Agency CAI-CV

26 16 8

34

FEATURES PGA West II Residential Association By Marne Logan, CCAM

12

When it Comes to Reserve Funds, How Much is Enough? By Roxi K. Bardwell, PCAM

16

Protect Community Roots & Make Property Values Grow By Sierra Carr, CMCA

26 Do Your Lake Fish Need Air This Summer?

By Patrick Simmsgeiger

34 Are You Maximizing Your Community's Home Values?

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The Benefits of FHA Certification for Condominium Developments By Mike Kirkland, MLO, CPA

Quorum July, 2019

EDUCATED BUSINESS PARTNER

SUSAN BROWNE ROSENBERG Desert Cities Indoor Air, LLC STEVEN SHUEY, PCAM Personalized Property Management JOSH WIDENMANN MRC Smart Technology Solutions A Xerox Company CREATIVE DIRECTOR & GRAPHIC DESIGNER

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EDUCATED BUSINESS PARTNER

RODNEY BISSELL Bissell Design Studios, Inc. rodney@bisselldesign.com (714) 293-3749

ARTICLE SUBMISSIONS OR ADVERTISING INFORMATION admin@cai-cv.org

SUBSCRIBER SERVICES

The Coachella Valley Quorum Magazine is a publication expressly prepared for association leaders, managers and related business professionals of the Community Associations Institute. Members are encouraged to submit articles for publishing consideration. All articles accepted for publication in Quorum are subject to editing and rewriting by the Quorum Committee. Quorum Magazine is printed at the CAI-CV Office on a Xerox Versant 180 Press. Discounted printing is now available to CAI members. Call Bissell Design Studios, Inc. at (714) 293-3749 or the CAI-CV office for more information, (760) 345-0559.


ADVERTISERS ACCOUNTANTS & BOOKKEEPERS BRABO & CARLSEN, LLP................................. 11

ASPHALT AMS PAVING...................................................... 3 ASPHALT MD'S................................................ 27 NPG ASPHALT.................................................. 39

20

ATTORNEYS FIORE RACOBS & POWERS, A PLC.................. 25 GREEN BRYANT & FRENCH, LLP...................... 27 GURALNICK & GILLILAND................................ 38

DESIGN BISSELL DESIGN STUDIOS, INC....................... 11

GATES & GARAGE DOORS AUTOMATION PRIDE........................................ 17

LANDSCAPING

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CONSERVE LANDCARE.................................... 39 PWLC II, INC. LANDCARE MANAGEMENT........ 11 WATER RITE - VINTAGE ASSOCIATES, INC........ 3 PRO LANDSCAPING INC................................... 37

CHAPTER NEWS

DEPARTMENTS

7 CAI-CV New & Renewing Members 29 Welcome Aboard

6 President’s Message 22 Maintenance

Alan Smith Pools By Susan Browne Rosenberg, CIH

33 Time Honored

Rob Winkle By Grace Paluck, CMCA, CamEx, CCAM

33 CAI-CV Educated Business Partners 40 2019 Corporate Sponsors

ASSOCIA DESERT RESORT MANAGEMENT....... 2

Maintenance and Maintenance Schedules By Lisa Glogow, CMCA, AMS, CCAM, PCAM and Marne Logan, CCAM

19 About CLAC

20 Lunch Program and Mini Trade Show

PEST CONTROL CARTWRIGHT TERMITE & PEST CONTROL, INC..................... 37 FRAZIER PEST CONTROL, INC........................... 3 POWERFUL PEST MANAGEMENT.................... 17

Tell Your Legislators to Vote No on SB 323 By CAI-CLAC

REALTORS PALM SPRINGS REGIONAL ASSOCIATION OF REALTORS.................................................. 25

28 Water Wise

CHAPTER EVENTS

MANAGEMENT COMPANY

CVWD: Analysis shows increasing groundwater levels in the Coachella Valley By the Coachella Valley Water District

36 HOA Law

Beyond the Balcony Bill By Christina Baine DeJardin, Esq.

Friday, June 14, 2019 Budgeting for a Different World

RESERVE STUDIES ADVANCED RESERVE SOLUTIONS, INC. ......... 39

ROOFING BRS ROOFING INC. ........................................... 3 ROOF ASSET MANAGEMENT........................... 39 SUNTECH ROOFING......................................... 17

30 CAI-CV Annual Bowling Tournament Heroes VS. Villains 40 Upcoming Chapter Events

WESTERN PACIFIC ROOFING........................... 11

SECURITY AMS CONNECT................................................ 38

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FROM THE CHAPTER

President’s Message Mike Traidman Mira Vista at Mission Hills HOA

CAI-CV’s board is working hard on a strategic plan this summer that will take the Chapter into the future. At our leadership meeting earlier this year, there was unanimous agreement that the name - Community Associations Institute - doesn’t convey our purpose to people outside of the industry. As part of the new strategic plan, you will start seeing the words BETTER HOA LIVING stated under our logo on all the Chapter’s marketing materials. I’ll continue to keep you posted as we complete the strategic plan. If you have suggestions for the board to consider, please email them to me at mtraidman@yahoo.com or call the CAI-CV office. I am also happy to report that we have general agreement among the California chapters to move forward with developing a voluntary certification program for community board members. CAI National currently offers professional designations to managers and business partners, but there are no designations for board members. Nevada and Illinois have initiated programs in their states, and we hope to build on their experience with a California program soon. I want to thank Business Partner Committee Chair Randy Mitchell (Conserve LandCare) and the rest of the committee for an outstanding Summer Sizzler event on Friday, June 7th. Prior to the Summer Sizzler, managers attended a MOTR program about how to deal with board and demographic changes. We are grateful for our talented teachers, Clint Atherton, PCAM (Outdoor Resorts Palm Springs), Renee Gumbel, PCAM (Associa Desert Resort Management), and Nena Rutherford-Milward, PCAM (Rancho La Quinta HOA). I also want to give a special thank you to John Beaman, CMCA, AMS, PCAM, LSM (The Management Trust) and Mark Dodge, CMCA, AMS (Associa Desert Resort Management) for presenting at our June 14th Educational Lunch Program & Mini Trade Show. They did a great job explaining the need for boards to manage their budgets, keeping in mind the impact of minimum wage increases and other foreseeable monetary pressures. Our annual Bowling Tournament on June 28th was a huge success and lots of fun. Thanks to Chair Rob Winkle (Roof Asset Management) and the Bowling Committee for another outstanding event. On Thursday, July 18th, CAI-CV will host the Annual Day at the Races. We have booked the sixth-floor IL PALIO restaurant again and will provide first-class bus transportation to and from the Del Mar Thoroughbred Club. This is a great time for networking and managers can earn three continuing education units (CEUs) while having a great time. I encourage you to sign up for this amazing day away from the desert heat. Seats are limited so sign up soon. We will be offering CAI’s California Common Interest Development (CID) Law Course on Friday, July 26th. This day-long course satisfies the State requirements for legal training for managers to call themselves “certified” in California. The CID Law Course is available to all CAI members interested in obtaining an in-depth review of the laws governing our industry. For more information, call the CAI-CV office. I want to end with a reminder for all our boards to include the Buck-A-Door program in your annual budget. Donating one dollar per home to CLAC helps CAI monitor and advocate on your behalf in Sacramento. Call the CAI-CV office for more information. I hope you all had a safe 4th of July.

Mike Traidman

Mike Traidman, Mira Vista at Mission Hills HOA

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CAI-CV NEW & RENEWING MEMBERS NEW NATIONAL CORPORATE MEMBER HOMEWISEDOCS.COM Andrea Moore (866) 925-5004 productdevelopment@homewisedocs.com

2019 COACHELLA VALLEY CHAPTER BOARD OF DIRECTORS

RENEWING BUSINESS PARTNERS

MIKE TRAIDMAN PRESIDENT Mira Vista at Mission Hills HOA MATT LAWTON, CIC, CIRMS PRESIDENT-ELECT Prendiville Insurance Agency

CAI-CV

EDUCATED BUSINESS PARTNER

MARGARET "GEN" WANGLER, ESQ., CCAL PAST-PRESIDENT Fiore Racobs & Powers, A PLC JOLEN ZEROSKI, CMCA TREASURER Union Bank

CAI-CV

EDUCATED BUSINESS PARTNER

DEA FRANCK, ESQ. SECRETARY Epsten Grinnell & Howell, APC

CAI-CV

EDUCATED BUSINESS PARTNER

CARDINAL AMBROSE, CMCA, AMS, PCAM DIRECTOR Associa Desert Resort Management MICHA BALLESTEROS DIRECTOR RHONDA DREWS, CMCA, AMS, PCAM DIRECTOR RealManage

CAI-CV

EDUCATED BUSINESS PARTNER

LONI PETERSON, CMCA, AMS, PCAM DIRECTOR Associa Desert Resort Management STEVEN SHUEY, PCAM DIRECTOR Personalized Property Management LOUISE STETTLER DIRECTOR Palm Valley Country Club HOA

CAI Coachella Valley Office 75410 Gerald Ford Drive, Suite 102 Palm Desert, CA 92211 Tel: (760) 341-0559 Fax: (760) 341-8443 Website: www.cai-cv.org CAL LOCKETT Executive Director clockett@cai-cv.org

The materials contained in this publication are designed to provide our members with timely and authoritative information; however, the CAI Coachella Valley Chapter is not engaging in the rendering of legal, accounting or other professional types of services. The Coachella Valley Chapter has not verified and/or endorsed the contents of these articles or advertising. Readers should not act on the information contained herein without seeking more specific professional advice from legal, accounting or other experts as required.

ADT SECURITY Chris Martin (714) 858-1344 cnmartin@adt.com BEAUMONT TASHJIAN Tawnee Guerra (818) 884-9998 TGuerra@HOAattorneys.com BRS ROOFING, INC. Tony Brasil (909) 884-8505 tony@brsroofing.com LLOYD PEST CONTROL Howard Jacobs (619) 668-1958 howard.jacobs@lloydpest.com S.B.S. LIEN SERVICES Jennifer Kennick (818) 991-4600 Jkennick@liencollections.com

RENEWING MANAGEMENT COMPANY MEMBERSHIPS ACTION PROPERTY MANAGEMENT, INC. Marianne Simek (949) 450-0202 msimek@actionlife.com AVAIL PROPERTY MANAGEMENT Iyad Khoury (760) 771-9546 iyad@availhoa.com

NEW MANAGER MEMBERSHIPS ALBERT MANAGEMENT INC. David Scott (760) 777-7621 dave.scott@albertmgt.com ASSOCIA DESERT RESORT MANAGEMENT Dianne Greenstein (760) 346-1161 dgreenstein@drminternet.com Sonia Millan (760) 393-5211 smillan@drminternet.com Estephany Vasquez (760)346-1161 evasquez@drminternet.com DESERT CITIES MANAGEMENT SERVICES Pamela Haasl (760) 834-8879 pamelahaasl@yahoo.com Paula Haasl (760) 834-8879 paulahaasl@yahoo.com OUTDOOR RESORT PALM SPRINGS OWNERS ASSOCIATION Kristine Aguilar (760) 328-3834 kaguilar@orps.com

RENEWING MANAGER MEMBERSHIPS ALBERT MANAGEMENT INC. Jeri Mupo (760) 772-7234 gm@irhoa.com

ASSOCIA DESERT RESORT MANAGEMENT Jamie Circle (760) 777-8807 Ext. 2 jcircle@drminternet.com Jayme Fakehany (760) 808-0821 jfakehany@drminternet.com Vanessa Landrum (714) 856-2733 vlandrum@drminternet.com Edan Lopez (760) 346-1161 mlopez@drminternet.com John Walters-Clark (818) 486-2463 jwalters-clark@drminternet.com AVAIL PROPERTY MANAGEMENT Debbie Lessard (760) 771-9546 deb@availhoa.com KEYSTONE PROPERTY MANAGEMENT Susan Larson (949) 430-5848 larsonsusan6@gmail.com PERSONALIZED PROPERTY MANAGEMENT CO. David Schuknecht (760) 524-8129 david@ppminternet.com PGA WEST II RESIDENTIAL ASSOCIATION Loni Peterson (951) 204-0334 lpeterson@drminternet.com SUN CITY PALM DESERT COMMUNITY ASSOCIATION Steven Campbell (760) 200-2224 steve.campbell@scpdca.com WHITESTAR MANAGEMENT Christopher Bremseth (760) 773-0123 chris@whitestarmgmt.com

NEW VOLUNTEER LEADERS Kathi Wineman CASA DORADO AT INDIAN WELLS ASSOCIATION Mark Harner MISSION LAKES COUNTRY CLUB Ray Andrzejewski MONTAGE AT MISSION HILLS HOMEOWNERS ASSOCIATION Tony Michaelis MORNINGSIDE COMMUNITY ASSOCIATION Harold Green Larry Nathangon George Rother PALM SPRINGS SUNDIAL HOMEOWNERS ASSOCIATION C. Bryan Cox Vincent Morgan Geoffrey Vokes PUERTA AZUL HOA Randy Diamond Christopher Valenti Ted Wood ST. AUGUSTINE OWNERS ASSOCIATION Jon Jahr

CAI-CV.org

VILLA PORTOFINO HOMEOWNERS ASSOCIATION Mary Ferro Sandra Nye Kathy Ann Peery Jennifer Ridewood

RENEWING VOLUNTEER LEADERS Natalie Woodard CASA DORADO AT INDIAN WELLS ASSOCIATION Tom Anderson Diane Bielen Leonard Buchan Ronald Henderson Tom Pridonoff Eric Steiner CATHEDRAL SPRINGS HOMEOWNERS ASSOCIATION Sam Hinds Ivan Thomson ESPLANADE Michael Etheridge Richard Huettner Robert Livon Bradley McGee Karen Webster FOXSTONE HOMEOWNERS ASSOCIATION Gloria Caruso Matthew Gutting Lester Novak Scott Styve Dillon Walker GENERATIONS – INDIO Lisa Corton Susan Irvings Sean La Rue Roberto Montes Christopher Thomas LA CANTERA HOMEOWNERS ASSOCIATION John Carney Timothy Coffey Robert Erickson Donald Frier Garith Helm MISSION LAKES COUNTRY CLUB Eddie Baxter Brian Wright MORNINGSIDE COMMUNITY ASSOCIATION Jack Buckingham Ronald Kolar Chris Norman Wayne Pollard Randy Zien PALAZZO SHADOW HILLS HOA Jay Kanner Arthur Kimball Rudy Ramirez Roy Schaefer Kimberly Thome PORTOLA COUNTRY CLUB Judy Brunett Bob Leo Ramona Linnell Marilynn Ushman SANDHURST COVE HOMEOWNERS ASSOCIATION Jarado Blue Leroy Kaiser Lydia Martinez Carol Pfannkuche Kevin Worland Silas Dreher

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FEATURE

PGA West II Residential Association By Marne Logan, CCAM

PGA West II Residential Association is a stunning master-planned country club community established in 1984 in La Quinta that is one of three communities in the PGA West Master Association. PGA West II has more than 2,200 acres of first-class resort living nestled against the Coral Mountains. The community includes lovely Mediterranean-styled homes and features world-class golf, tennis and fitness. The guard-gated entrance is located on Avenue 52 and Jefferson Street, close to Old Town La Quinta and only 30 minutes from Palm Springs. When you hear “PGA� you know

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outstanding golf is involved. Residents can join The Club at PGA West, a private club with an array of memberships to meet the needs of PGA West homeowners. Golf membership entitles residents to play any of the six blue-ribbon courses providing 109 holes of championship golf designed by five golf legends: Arnold

Palmer, Tom Weiskopf, Pete Dye, Greg Norman, and Jack Nicklaus. There are three expansive clubhouses, outstanding restaurants, a health and racquet club, as well as plenty of social activities to enjoy. Included in the community are beautifully landscaped common areas


FEATURE

surrounding 24 conveniently located pools and spas. Many of the lovely 637 homes were built by KLS Building Corporation and the entire community is now built out. Every home is situated on one of the golf courses. Of the 637 homes, 333 are single-family residences and 304 are condominiums. There are 17 floor plans with square footage ranging from 2101 to 4542 square feet. Most of the homes are 3 or 4 bedrooms and there are a few 2-bedroom condominiums. Prices range from $450,000 to $900,000, providing a variety of choices for home buyers. Like all of us, no one wants to stay home all of the time, so what else is nearby to tantalize your interests? Within 5 miles of the community is shopping in La Quinta and the beautiful shops in Old Town La Quinta. In Palm Desert there is El Paseo and the multitude of shops and places to dine there, CAI-CV.org

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FEATURE

as well as hiking and biking trails for the novice to seasoned athlete. General Manager Loni Peterson with Associa Desert Resort Management said PGA West II's board is forward thinking and they are working on numerous conservation projects to reduce energy and water usage. A new partnership with CAI-CV member O’Connell Landscape was formed to focus on water conservation. They are converting the common areas to Bowsmith emitters and implementing new irrigation schedules to keep the grounds green while avoiding runoff. 10

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Their next big maintenance project will be the painting of 123 condominiums. At the same time, they are adding new large address plates and new exterior light fixtures to some of the multi-unit buildings and transitioning the landscape around two pools to desertscape. These changes will have a very positive impact on the community both aesthetically and in terms of conservation. There are seven members on the PGA West II board with two standing committees for architectural review and landscape. There are also ad hoc committees working on special projects related to painting, lighting, pools and spas. They have a liaison representative on each of the Master Association sanctioned committees for compliance,

gates and patrols. Most of the vendors used by PGA West II are CAI business partners including Union Bank, Tinnelly Law Group, O’Connell Landscape Maintenance, Pro Landscaping, BRS Roofing, PrimeCo, Three Phase Electric, and Brabo & Carlsen, CPAs. Director and Secretary Lynn Reich said, “The PGA West II Residential board is committed to ensuring that the neighborhood continues to be a world-class location for its residents and guests. Plans are in place for long-term value retention and I’m proud to be a part of that implementation.” Loni added, “The board is fiscally responsible and is devoted to maintaining, protecting and enhancing their community. They are enjoying the education offered by CAI and have been attending board training and the lunch programs. They also voted to participate in CLAC’s Buck-A-Door program." For more information about PGA West II, contact General Manager Loni Peterson at (951) 204-0334 or by email at lpeterson@drminternet.com. You can visit the PGA West II website at www.pgawestIIresidentialhoa.com. Marne Logan, CCAM, is a community association manager for The Management Trust Desert Division. She can be reached at (760) 340-1703, or by email to marne.logan@managementtrust.com.


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FEATURE

When It Comes to Reserve Funds, How Much Is Enough? By Roxi K. Bardwell, PCAM

W

hen other states (not CA) passed laws that required “adequately funded”? As communities aged, replacement reserve funds to be “adequately funded,” those states reserve funds were not adequately funded, resulting in the turned to the Community Associations Institute (CAI) for assis- inevitable special assessments - which nobody appreciates, tance. Industry attorneys and directors and officers (D&O) least of all the board members forced to make those deciliability insurance carriers also needed this defined in order sions. Disgruntled homeowners wanted something done. to advise and defend their clients. CAI then turned to a group Their property values had declined. The new owner who of CAI Business Partner reserve specialists from across the just purchased had no idea a special assessment was coming country and asked them to define “adequately funded reserves.” and lawsuits were filed. Homeowners across various states Here is the definition this group of very experienced reserve complained to their elected officials resulting in a myriad specialist’s provided: of laws regulating HOAs. These com“Adequate Replacement Reserves “Adequate Replacement Reserves plaints also resulted in California is defined as a Replacement is defined as a Replacement Reserve passing laws requiring, among other Reserve Fund and a stable and Fund and a stable and equitable things, the Disclosure Form, answerequitable multi-year Funding multi-year Funding Plan that together ing questions such as whether or not Plan that together provide for provide for the timely execution of the a special assessment is anticipated, the timely execution of the association’s major repair and replacealong with the other documents to be ment expenses as defined by National mailed annually to all owner-members association’s major repair and Reserve Study Standards, without replacement expenses as defined informing them of the current status of reliance on additional supplemental their Reserve Funds, and the 30-year by National Reserve Study funding.” ** Funding Plan to add to and spend those Standards, without reliance on If you were expecting a simple additional supplemental funding.” funds. The intention of the stable and answer, like 75%, sorry. It’s just not equitable multi-year Funding Plan is to quite that simple. But, let’s break it down and try to simplify spread the funding of the cost of the repairs and replacement of it. This definition is making two key points: (1) have a Reserve reserve components evenly over the years, so each owner pays Fund (money in the bank) and a Funding Plan that is multi- their “fair share” annually. This avoids special assessments year, stable and equitable (keep making annual deposits, or large increases to “catch up” after not adequately funding equitably over time) that does not rely on special assessments reserves on an annual basis. or loans and (2) that together (the Fund and the Plan) provide In addition to legislative involvement, prospective buyers for the timely execution of the association’s major repair and and real estate agents have become more knowledgeable replacement expenses. about reserve funds. Some buyers have experienced or heard A simpler interpretation is: (1) have the Reserve Funds stories about special assessments. They are inquiring about available in the bank, funded fairly and equitably over time, the reserve funds and requesting a copy of latest reserve study. without special assessments or loans and (2) execute the Plan, In talking with realtors, the current percent funded does i.e. spend the Reserve Funds when the repair or replacement come up in discussion more and more, as does the financial is necessary or due. condition of the community. A Funding Plan is an association’s plan to provide income Percent funded is the measure of the reserve fund “health” to a reserve fund to offset anticipated expenditures from that expressed as a percentage at a given point in time, typically the fund. Let’s go back to the key wording in the definition about beginning of the fiscal year for which the reserve study was the Funding Plan – stable, equitable, and multi"A reserve fund that is 100% funded has accumulated the year. These words are significant as they may proportionately correct amount of money, to date, for the be at the root of the very question - how did we reserve components it maintains. While a current years’ get to the point where state legislatures passed percent funded is important, the plan is also important." laws requiring Replacement Reserve Funds be

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FEATURE prepared. This figure is the ratio of the actual reserve fund on hand to the fully funded balance. A reserve fund that is 100% funded has accumulated the proportionately correct amount of money, to date, for the reserve components it maintains. While a current years’ percent funded is important, the plan is also important. What the 30-year projections indicate the “level of service” the association intends to provide membership. It is a “road map” for the fiscal future that includes when underfunded associations will “catch up” or how properly funded associations will remain "California law does require fiscally “healthy,” and gives the the board to review the timetables for the repairs and replacereserve study annually. ments of the components. What the definition of “adequately funded” Since the reserve study above is trying to stress is that both is the primary planning of them together is what is relevant tool for reserve funding, to funding reserves adequately. And it makes sense to have remember, California law requires it updated annually." boards to review their reserve studies annually. Since the reserve study is their primary planning tool for reserve funding, it makes sense to have it updated annually. In most reserve studies, the Funding Plan projections are color coded based on the percent funded for each year. The colors are in green, yellow and red to indicate good, fair or poor. If red is indicated for several consecutive years this can be viewed as undesirable and likely signals the need for a special assessment or large increase to catch up. However, a plan in the red for a year or two, which then moves into yellow, then into the green, shortly thereafter, could indicate an acceptable plan. The goal is to get into the green, which is above 65%, and remain in the green, always heading toward 100%. It’s true, there are no requirements to be a certain percent funded, or 100% funded. "A primary duty of the board However, does anyone want the of directors is to the maintain California legislature to pass more the assets of the association laws dictating funding requirements which directly impacts the for California associations? property values of each member. A primary duty of a board of direcFor many homeowners, their tors is to maintain the assets of the home is their largest asset." association which directly impacts the property values of each member. For many homeowners, their home is their largest asset. A board that focuses on home values is acting in the financial best interest of its members. Responsible fiduciaries understand the need for long-range planning and preventative maintenance. A board that plans and budgets for preventative maintenance such as regular sealcoating, gate maintenance, and roof cleaning and inspections does save money over the long term. Wellmaintained assets typically reach or exceed their predicted useful life. Contrast this with spending funds on emergency

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FEATURE repairs and replacing assets that fail prematurely due to lack of maintenance. The latter has proven to be more costly over time. While paint and asphalt contribute to the “curb appeal” of the common areas, there are those components that cannot be seen like roofs, lake liners and equipment, such as gate operators. Many of these components can have their useful

percentage to drop. Do you see a problem with this thinking? Meanwhile, the property values are declining. In summary, a prudent Plan addresses the issues of longrange maintenance, repair and replacement of the common areas. There is a fine line between “not enough” and “too much” in the reserve funds. However, each member should contribute their proportionate amount of "Some boards keep the funds in the bank while the roofs are leaking, “depreciation” (or use) of the reserve the wood is rotting due to lack of paint and the cracks have become components. Through time, if each owner contributes their “fair share,” potholes in the asphalt. Why? They are proud of their 82% funded then the possibility of large increases and don’t want their percentage to drop. Do you see a problem or special assessments will be miniwith this thinking? Meanwhile, the property values are declining." mized. The reserve study should be lives extended with regular inspections and preventative updated annually, then reviewed to determine the amount maintenance. So, when budgeting, remember to include all needed to fund the reserves “adequately.” components and their preventative maintenance. One of the goals of having reserves adequately funded is to **Article by CAI Member Business Partner, Robert Nordlund, make it fair and equitable for all homeowners. But California PE, RS, Association Reserves, and the group of Reserve Spelaw does not have this requirement. There is no requirement cialists (RS) included, Mitch Frumkin, John Poehlmann, Ted in California that reserves even be funded. It did not seem fair Saldado, Peter Miller, Robert Browning. Other CAI reference and equitable to have those that just purchased get stuck with materials available at www.caionline.org include Best Practices -Reserve Studies/ Management and Reserve Funds: How & the special assessment for the new roofs, when those that had Why Community Associations Invest Assets. lived there for 25 years and just sold, did not contribute to the replacement of the roofs (or asphalt) they used for 25 years. Roxi K. Bardwell, PCAM, is an Educated Business If you are wondering why the definition would include Partner and Regional Vice President of Advanced execution of the Plan, i.e., spend the money, let me share a Reserve Solutions in Palm Desert. She can be common experience. Some boards keep the funds in the bank reached at (760) 295-1864 or by email at while the roofs are leaking, the wood is rotting due to lack of Rbardwell@arsinc.com. After serving in various management paint and the cracks have become potholes in the asphalt. roles for over 20 years, Ms. Bardwell has been doing Reserve Why? They are proud of their 82% funded and don’t want their Studies for the past 3 years and is in the process of obtaining her CAI Reserve Specialist (RS) designation.

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DAY AT THE DEL MAR

RACES

THOROUGHBRED CLUB

SIXTH FLOOR il PALIO RESTAURANT PATIO

SAVE THE DATE THURSDAY JULY 18

PRICE $45.... Members & Guests $65.... Nonmembers

2019

• First-Class Buses • Exceptional Food & Cocktails • Manager Education (Receive 3 CEUs)

TITLE SPONSOR

SUNSHINE LANDSCAPE IL PALIO SPONSOR POWERFUL PEST MANAGEMENT

DEL MAR BUS SPONSORS AMS PAVING DUNN-EDWARDS PAINTS PACIFIC WESTERN BANK SECURITAS

TIME 10:00 a.m.-10:00 p.m.

• Live Betting & Professional Instruction • Del Mar Hat Contest • Door Prizes SNACK ATTACK SPONSORS ALLIED UNIVERSAL ASPHALT MD’S EMPIREWORKS GML, INC.

SEABISCUIT FOOD SPONSORS ADAMS STIRLING PLC ASSOCIA DESERT RESORT MANAGEMENT FIORE RACOBS & POWERS, A PLC HORT TECH LANDSCAPE MANAGEMENT PATIOSHOPPERS SEACOAST COMMERCE BANK

SCHOLARSHIP SPONSOR VANTAGE POINT CONSTRUCTION

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15


FEATURE

Protect Community Roots & Make Property Values Grow By Amanda Gray

T

he Coachel la Valley is prime real estate for potential buyers, but if a community’s curbside appearance isn’t under control boards could be missing out on attracting quality owners. A beautifully manicured HOA tends to be more appealing to homeowners and with proper enforcement of community guidelines, boards can maintain and boost property values. A community’s most valuable asset is common area landscape; it is the key to driving property values. How does your community measure up? Make sure to observe these landscaping best practices when evaluating your community’s curb appeal: ENTRANCES & FOCAL POINTS Entrances and focal point areas establish first impressions, but is the community leaving positive and lasting ones? Make sure these areas are: • Clean and free of debris • Fresh with seasonal color and varying textures • Clearly signed and properly lit • Appealing to the eye. Consider things from a driver’s perspective, how do things appear? Remember you only get one chance at a first impression. COMMON AREAS - Common areas are crucial to establishing the quality of life intended for owners and tend to be the biggest draw for prospective residents. These areas should be anything but common; they should be a bright spot in the community. Ask yourself these questions when sizing up the community: • Are there inviting places for people to congregate? • Are the common areas clean, attractive, and appealing?

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• Are pathways and trail areas free of debris and weeds? • Are the common area trash bins and doggie stations regularly maintained? TURF CARE- Seasonal maintenance of your community turf is critical to achieving that healthy, green look all year round. Here are some basic practices to follow: • Soil test to reveal any nutrient deficiencies • Regularly dethatch and overseed your turf to achieve ideal growth during hot and cool seasons • Evaluate irrigation systems for costly flaws and maximum coverage • Utilize results from the soil test to implement a fertility and aeration program to develop healthy and dense turf COMMUNITY BOUNDARIES - Don’t overlook the importance of keeping community boundaries clean and well-maintained. Shortcuts in areas that can’t be seen often introduce the following risks: • Overgrown and neglected areas result in a build-up of plant material weakening infrastructure such as walls or fencing • Excessive growth areas are a draw for pests and vermin, masks an array of irrigation issues, and provides great cover for the homeless and potential for crime to occur. ARBOR CARE - Trees are a community’s number one landscape asset. While they are hearty, they also need to be carefully watched and assessed to ensure they stay rooted in your community for years to come.


Unfortunately, tree maintenance is often postponed due to budgeting shortcuts without considering the long-term consequences. Be sure to work closely with an Arborist to develop a 3-year tree care plan and follow these important steps: • Assess tree health regularly checking for disease, pests, and other deficiencies. • Trim trees annually or bi-annually to avoid overgrowth or proximity growth towards powerlines. • Make sure tree wells are free of tree suckers, weeds, and trash. • Seek the expert help of a certified Arborist who will observe ISA standards when developing a maintenance plan for community trees. PLANNING & PARTNERSHIP - Cultivating strong relationships between the board, community management and the landscape business partner is paramount to creating a successful landscape maintenance program. Here are some recommendations to achieving a successful partnership: • Allow the landscaper to have a voice in the boardroom; they are the most qualified to speak to issues and/or answer questions and address concerns. • Assign ONE board contact to work with and provide direction to the landscaper. • Talk candidly about the board’s community goals and work with the community manager and landscaper to develop a plan to achieve them. • Trust the manager to work with the landscaper to ensure all specifications are met. These best practices will help boards develop landscape plans to successfully maintain and enhance property values. Make sure to observe these tips and take an active role protecting community roots and helping property values grow!

BILL FITZGERALD PRESIDENT SUNTECHROOF@GMAIL.COM SUNTECHROOFING.NET

CELL PHONE # 760.275.4749 42215 WASHINGTON ST, SUITE A #350 PALM DESERT, CA. 92211 OFFICE # 760.343.0091

CONTRACTORS LIC. #1010435

Amanda Gray has over 20 years of consultative sales and marketing experience. She leads the Sales & Marketing efforts for O’Connell Landscape Maintenance. She is an Educated Business partner and has been consulting with Common Interest Developments for eight years. O’Connell Landscape Maintenance is a family company specializing in beautifying HOA landscapes for over 48 years. For questions about your community or to receive a complimentary inspection contact Amanda at (949)322-1755 or email her at agray@oclm.com.

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ABOUT CLAC

CLAC UPDATE

Tell Your Legislators to Vote No on SB 323 By CAI-CLAC Public Relations Committee CAI-CV's Legislative Support Committee with Assemblyman Chad Mays

L

ast month, CLAC worked hard to educate the Assembly Housing and Community Development Committee about the dangerous impacts of S.B. 323. It was a close vote, but S.B. 323 passed and will be heard by the Assembly Judiciary Committee soon. It’s critical we continue to educate legislators about the troublesome impacts of S.B. 323. You can learn more and take action on our Legislative Session Hot Bills page at www.caiclac.com/ legislative-session-hot-bills.

HERE ARE FOUR MORE WAYS YOU CAN HELP:

1. You can send our updated letter on S.B. 323 to the Assembly Judiciary Committee here: www.caiclac.com/ current-campaigns.

2. Follow your Assembly Member on Facebook and Twitter to learn about community meetings. Several legislators hold local events and community coffee “meet ups” for residents to share their concerns. We encourage you to attend and share your concerns about S.B. 323.

3. Now’s the time to schedule a meeting with your Assembly Members in their district office and build a closer relationship in order to expand advocacy efforts on behalf of community associations. View our tips for a successful meeting here: www.caiclac.com/ meeting-with-your-legislator.

4. Get involved on our Facebook and

owners for less than one year, if a joint owner was on the board or a candidate, or if they were delinquent in regular assessments and if other conditions were met.

Twitter and LinkedIn channels. Like and share our posts to help us reach more people. You can also tag or direct message your Assembly Member with our posts asking them to Vote NO on S.B. 323. Many are on Twitter.

• It prohibits associations from ever suspending an owner’s right to vote. • It requires associations to post the requirements for running for the board at least 30 days before the nomination deadline; and to post the list of candidates, deadline for returning ballots, time and place of the annual meeting, all 30 days before ballots were mailed.

Thank you for helping us make an impact. If you have any questions, you can contact us at office@caiclac.com.

ABOUT SENATE BILL 323 (WIECKOWSKI): THREATENS PRIVACY IN HOMEOWNER ASSOCIATION ELECTIONS In 2018, the Community Associations Institute’s California Legislative Action Committee (CAI-CLAC) fought hard to win the Governor’s veto on a bill that would have threatened homeowners’ privacy and would have made other fundamental changes to the way associations conduct their elections. On February 15, Sen. Wieckowski (D – Fremont) re-introduced the bill vetoed by Governor Brown in September 2018.

S.B. 323 HAS THE FOLLOWING EFFECTS: S.B. 323 limits the right of an association’s membership to set qualifications for candidates. • It would prevent non-owners and some felons from running for the board, and would allow associations to disqualify candidates only if they have been

• It allows owners to review the signatures of all other owners on the outside mailing envelopes, and to copy voter lists, including parcel numbers. As a condition of casting a ballot, homeowners must give up their right to keep their signatures private. • It is supposed to increase homeowners’ participation in association elections. Instead, it will deter owners from voting by requiring them to sacrifice their privacy, and it will deter them from running for the board by imposing a deadline to run which is months before the election. CAI-CLAC will oppose this bill and will work hard to defeat it through the grass roots efforts that were successful in 2018.

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CAI-CV's Educational Lunch Program & Mini Trade Show Friday, June 14, 2019

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CHAPTER EVENTS

BUDGETING FOR A DIFFERENT WORLD How to Survive Another Year of Minimum Wage Increases How to Communicate Increased Costs to Boards and Homeowners Finding Other Income Sources Applying the "Spend-Now-toSave-Later" Principle

GUEST SPEAKERS JOHN BEAMAN, CMCA, AMS, PCAM, LSM Division Vice President of Resort Communities The Management Trust – Desert Division

MARK DODGE, CMCA, AMS Branch President and CEO Associa Desert Resort Management

THANKS TO OUR PROGRAM SPONSORS MEMBERSHIP SPONSOR Prendiville Insurance Agency

EXHIBITOR BOOTH SPONSORS Alliance Association Bank Animal Pest Management Services, Inc. BRS Roofing Inc. Conserve LandCare Diversified Asphalt Products Dunn-Edwards Corporation Gardner Outdoor and Pool Remodeling Horizon Lighting Inc. Mission Association Financial Management, Inc. Nissho of California Pacific Western Bank Prendiville Insurance Agency Securitas Security Services Sustainable Water Solutions United Paving Co. Vista Paint Corporation Western Pacific Roofing

PEN SPONSOR Pacific Western Bank

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21


MAINTENANCE

Maintenance and Maintenance Schedules By Lisa Glogow, CMCA, AMS, CCAM, PCAM and Marne Logan, CCAM

M

aintenance is a large part of the day-to-day operations in every community. The purpose of having a maintenance schedule is to establish consistent practices designed to improve the performance and safety of the association’s equipment and amenities while preserving property values. There are three types of maintenance to consider when creating a schedule: • Corrective Maintenance

Preventative Maintenance is the practice of regularly inspecting, cleaning and performing maintenance aimed at maximizing the life of components to ensure they won’t fail prematurely. Many component warranties require some form of preventive maintenance so make sure to identify all your warranted components and schedule them appropriately. Preventative Maintenance will enhance the lifecycle of most of the associations’ assets.

• Deferred Maintenance • Preventative Maintenance. Corrective Maintenance includes tasks to identify, isolate and fix components. For example, corrective maintenance would include repairing a component that is broken or not working properly. This can be costly to the HOA and may have been avoided if a maintenance plan or a maintenance schedule was followed. When building your maintenance schedule, it is important to review past corrective maintenance to ensure you properly maintain those components in the future. Deferred Maintenance is the practice of postponing maintenance in order to save costs or meet budget constraints. Failing to perform regular or routine maintenance typically increases HOA costs. For example, a malfunctioning HVAC system will result in a greater workload placed on HVAC units. As time progresses, the workload on other systems becomes unbearable and other HVAC units may malfunction as well. Deferred maintenance can also negatively impact sales in a community, reducing home values for everyone. When building your maintenance schedule, take time to identify any deferred maintenance and give those components priority until they are properly maintained.

"Deferred maintenance can also negatively impact sales in a community, reducing home values for everyone. When building your maintenance schedule, take time to identify any deferred maintenance and give those components priority until they are properly maintained."

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Sample of Components to Include for Preventative Maintenance • Roofs

• Pool decking, plaster, tile

• Gutters

• Trees

• Garages

• Irrigation systems

• Balconies • Drain boots

• Woodwork/trim/ fascia boards

• Windows

• Areas prone to pest intrusion

• Decks and walkways

• Areas where brush could cause fire hazards

• Pool gate locks and enclosures

• HVAC systems

• Wrought iron fencing

• Dryer vents

• Pathways

• Playground equipment

• Pool equipment

• Tennis courts


MAINTENANCE

Creating a maintenance plan or implementing a maintenance calendar will help organize the maintenance for each component. As components are added to a community or an upgrade is done, they can be added to the maintenance plan. The maintenance plan would typically include a list of all commonly owned components needing maintenance and a schedule of when the maintenance should be performed. A checklist can be utilized to make sure that the maintenance has been performed and regular inspections can also be recorded with the dates on the checklist. The maintenance schedule acts as a master plan that will work year-round.

A maintenance log can be used in conjunction with a maintenance plan. The maintenance log will contain product warranties, unit-by-unit history, documentation of vendors that have provided past repair services, dates of required maintenance to maintain the warranty and monthly inspections. The log can also help with setting and tracking action items for components that require maintenance and follow-up to ensure the corrections or repairs are completed. One of the best outcomes of having a maintenance schedule is that it helps you educate staff, owners and board members about the work you are doing to avoid costly unexpected

Color-Coded Sample Annual Calendar provided by Marne Logan, CCAM, The Management Trust ITEM

JAN

FEB

MAR

APR

MAY

JUN

CALL FOR CANDIDATES

JUL

AUG

SEP

OCT

NOV

X

PREPARE BALLOTS FOR ANNUAL MEETING

X

RESERVE SPACE FOR ANNUAL MEETING

X

PUBLICIZE ANNUAL MEETING GATHERING FERTILIZE TURF

X X

AERATE TURF

?

SPRING NEWSLETTER TO ALL

X

FINANCIAL REVIEW TAX PREP

X

?

CONTINUE TO PUBLICIZE THE ANNUAL MEETING

X

MAIL BALLOTS

X

REVIEW PALM TREE TRIMMING PROPOSALS & AWARD CONTRACTS

X

FINANCIAL REVIEW TO BE APPROVED BY BOARD FOR MAILING

X

ANNUAL MEETING

X

MEETING TO COUNT BALLOTS

X

ORGANIZATION MEETING TO ELECT OFFICERS OF THE BOARD AND APPOINT COMMITTEE CHAIRS

X

MAIL ANNUAL MEETING RESULTS TO OWNERS

X

PREPARE LIST OF TREES FOR TRIMMING SUMMER NEWSLETTER

DEC

X X

X

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MAINTENANCE ITEM MAIL FINANCIAL REVIEW TO OWNERS FINALIZE BOARD MEETING CALENDAR

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

DEC

X X

REVIEW COMMITTEE STRUCTURE IF NEEDED, CHARTERS

X

SEASON COLOR SELECTIONS

X

REVIEW PALM TREE PROPOSALS AND AWARD CONTRACT

X

UPDATE COSTS OF CONTRACTS IF NEEDED

X

UPDATE UTILITY COSTS

X

DRAFT FISCAL BUDGET

X

FINALIZE BUDGET

X

PUBLISH BUDGET BY NOV 30TH

X

REQUEST UPDATED HOMEOWNER INFORMATION

X

POOLS/SPAS DRAINED AND REFILLED IF NEEDED

?

POOL DECKS CLEANED

X

TURN OFF HEAT TO POOLS

X

TRIM PALMS

X

APPROVE FINANCIAL REVIEW CONTRACT ENGAGEMENT LETTER

X

X

TRIM REMAINING PALM TREES

X

NO BOARD MEETING?

X

NO BOARD MEETING?

X

SCHEDULE TREE TRIMMING FOR SEPT/OCT

X

OBTAIN QUOTES FOR NEXT YEAR FINANCIAL REVIEW (FOR JUNE MEETING) OBTAIN QUOTES FOR HOA INSURANCE REVIEW INSURANCE QUOTES AND APPROVE COVERAGE

X X X

OBTAIN QUOTES FOR RESERVE STUDY

X

APPROVE RESERVE STUDY CONTRACT AND INITIATE WORK

X

OBTAIN QUOTES FOR ANNUAL ROOF MAINTENANCE (OR GET AN ANNUAL MAINTENANCE CONTRACT IN PLACE)

X

PULL SUMMER COLOR AND PREP FOR FALL COLOR

X

SELECT FALL COLOR

X

TREE TRIMMING

X

APPROVE ANNUAL ROOF MAINTENANCE OR CONTRACT

X

BUDGET INFO FROM COMMITTEES IF APPLICABLE

X

OVERSEED GRASS

X

PLANT FALL COLOR

X

DRAIN POOLS & SPAS IF NEEDED

X

BEGIN TO HEAT POOL(S) OCT 1

X

NO BOARD MEETING ?? Quorum July, 2019

X

X

BOARD REVIEWS DRAFT BUDGET

24

NOV

?


"A maintenance schedule is a “road map” for owners and board members. It defines what is needed and who is responsible for taking care of each component in a community." repairs. Having a schedule will also allow you to easily manage workloads, adjust or update systems, and switch to energy efficient components like LED lighting and Energy-Star rated products. Keeping your maintenance schedule and logs updated is critical so make sure to plan for the time needed to keep accurate records. Your maintenance schedule will also be useful for your reserve study. However, it is important to remember that your reserve study is not a maintenance plan; it is a financial tool to use for budgeting purposes. A maintenance schedule is a “road map” for owners and board members. It defines what is needed and who is responsible for taking care of each component in a community. If you need help identifying proper maintenance for your association’s components, ask for help from CAI-CV’s business partners. They will gladly help you build a complete and accurate maintenance schedule. Having a detailed maintenance schedule will help associations meet their fiduciary duties and keep their communities thriving. Lisa Glogow, CMCA, AMS, PCAM, is the Director of Community Management for Powerstone Property Management. She can be reached at (760) 469-4315 or by email at lglogow@powerstonepm.com.

MONTHLY

the Palm Springs ®

JULY/AUG 2018

Marne Logan, CCAM, is a community association manager for The Management Trust Desert Division. She can be reached at 760-340-1703, or by email to marne. logan@managementtrust.com.

IN THIS ISSUE Issues Mobilization Grant 3 What You Need to Know About Logos and Trademarks Page 5 July/Aug Calendar Page 6 You’re Even More Vital to New-Home Buyers Page 14 PSRAR Affiliate Network News Page 16

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FEATURE

Do Your Lake Fish Need Air This Summer? By Patrick Simmsgeiger

D

issolved oxygen is one of the most vital components of any aquatic ecosystem and is largely defined by the water temperature at the time. As temperature increases, dissolved oxygen in the water decreases. In a small lake for instance, the water at the surface is going to be the warmest water in the lake so it will also have the least amount of oxygen. At the bottom is the coldest water and accordingly where the highest amount of available oxygen is found. This difference in oxygen content is due to the solubility of water, which increases as temperature decreases, allowing more oxygen to be dissolved.

During the summer, surface water is at its hottest; so fish will move to deeper sections of the water to have access to higher levels of oxygen. In a well-balanced environment fish can make this move without harm, staying deeper until temperatures start to cool off and oxygen levels return to a more favorable distribution. Unfortunately, this balance can be easily disrupted, and the consequences can be severe for aquatic organisms. One of the most commonly seen problems in water systems 26

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during the summer are algae blooms. Many algae species react quickly to high temperatures and will begin to bloom in huge numbers if they have sufficient nutrients to do so. Algae is also photosynthetic, meaning during the day oxygen is produced, just like terrestrial plants. However, at night algae does not photosynthesize, but instead pulls oxygen from the water. If a bloom is large enough, this oxygen requirement can be much more than the water can actually provide. In this case, not only do other aquatic organisms die-off, but so does all of the algae. Another major factor that affects oxygen levels is organic matter decomposition. Organic matter can be things like leaf clippings, dead algae, or even bird droppings. Whatever it is, when it gets in the water it all sinks to the bottom and decomposes. Decomposit ion a lso uses up a large amount of oxygen and can make life for aquatic organisms even more challenging when the weather is hot and oxygen levels are already low. If there is too much of any process that has high ox ygen requirements, creatures like fish can end up in a situation where there is simply nowhere to breathe. In the summer when the surface water is already low in oxygen, and excesses of algae or organic decomposition are taking the oxygen from the bottom, fish die-offs are unfortunately a common occurrence. Fish and other aquatic organisms need available oxygen, and this can only be maintained year-round through healthy circulation, keeping waste out of the water, and monitoring algae. Freshwater systems can support incredible ecosystems, but they need balance, and sometimes it can take just one bad


day for a beautiful ecosystem to collapse. One of the best long-term ways to lower the chances of those bad days is by introducing aeration. There are multiple ways to introduce oxygen into water, but two of the most common are diffusers and fountains. Diffusers are one of the most beneficial additions to ponds and lakes because they are great at oxygenating water. Diffusers are so good for aeration because they push up oxygen-rich water from the bottom and force it to mix with the lower oxygen water at the surface. By doing this, oxygen gets more evenly dispersed throughout the system, making the water much more livable for many aquatic organisms year-round. Fountains are another great addition because they are not only aesthetically pleasing, but they also help aerate water in their own way. Fountains are not dedicated aerators like diffusers since they mostly just pull water from the upper few feet of water, but they can still help. While they likely won’t affect oxygen content in a deeper system, in shallower bodies of water like ponds, fountains can make a serious difference in the introduction of oxygen to water. There are many different factors affecting dissolved oxygen in water, and there are many ways to maintain and increase it. Proper aeration is generally an effective way to address this problem, but it does require some thought. Before installation it is best to be familiar with the physical aspects of the water and surrounding landscape and also to have a knowledge of the water quality. Having this knowledge makes it easier to choose the approach that most effectively addresses ecological issues, cuts down on labor time, and saves money. Patrick Simmsgeiger is a Certified Lake Manager (CLM) with over 40 years of experience. He is President of DWI, a lake management company based out of Southern California and can be reached at 949-582-5414 or by email at dwicontact@dwiwater.com.

A FULL SERVICE LAW FIRM

Providing Practical Approaches in: CC&R Interpretation, Drafting and Enforcement Opinion Letters Contract Drafting and Negotiation Civil Litigation Assessment Recovery 75100 Mediterranean Palm Desert, California 92211

www.gbflawyers.com

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27


WATER WISE

CVWD: Analysis shows increasing groundwater levels in the Coachella Valley By the Coachella Valley Water District

"Successful groundwater replenishment programs along with continued efforts to conserve, reduce water waste and to connect customers to the nonpotable water system for irrigation purposes resulted in the positive trends observed in groundwater storage in both subbasins during the past 10 years."

A

n annual analysis of groundwater levels shows significant increases over the past 10 years throughout most of the Coachella Valley. The two annual reports for the 2017-18 water year, one on the Indio Subbasin and the other on the Mission Creek Subbasin, which make up most of the valley’s aquifer, were submitted before the State’s April 1 deadline. Successful groundwater replenishment programs along with continued efforts to conserve, reduce water waste and to connect customers to the nonpotable water system for irrigation purposes resulted in the positive trends observed in groundwater storage in both subbasins during the past 10 years. The Indio Subbasin is located under the cities of Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Indian Wells, La Quinta, Indio, and Coachella, and the unincorporated communities of Thousand Palms, Thermal, Bermuda Dunes, Oasis, and Mecca. The Indio Subbasin report shows that over the past ten years there were significant increases in groundwater levels in most of the subbasin in the range of 2-50 feet. These gains highlight

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the progress towards long-term sustainable management of the subbasin. The Mission Creek Subbasin is located under Desert Hot Springs and the unincorporated area of Indio Hills. This subbasin also shows that over the past 10 years there were significant increases in groundwater levels in most of the subbasin of up to 28.5 feet. The subbasin shows positive trends since 2005 for future sustainability. There were localized portions of decreased water levels in the range of 2-8 feet in the mid-valley area of the Indio Subbasin. This area will soon benefit from the Coachella Valley Water District’s (CVWD) Palm Desert Replenishment Facility. Phase one of the project is operational and phase two planning is underway. CVWD is also continuing efforts to connect more golf courses to nonpotable water such as recycled or Colorado River water instead of groundwater. The Annual Reports were submitted to the California Department of Water Resources to comply with the reporting requirements of the Sustainable Groundwater Management Act. To read the full reports, visit cvwd.org/sgma.


Welcome Aboard Alan Smith Pools By Susan Browne Rosenberg, CIH

Welcome Aboard Alan Smith Pools! Alan Smith Pools was founded in 1981 by Alan and Teresa Smith. They operate in the Coachella Valley, Orange County and the Inland Empire. They’re one of only a handful of Southern California pool contractors that has been in business over 40 years. The company specializes Robin Kostka in meeting the needs of HOAs, apartment owners, high schools, swim schools and municipal pools. According to Robin Kostka, Commercial Sales Associate, “We do what we say, when we say, and for what we say, with only the highest quality. Our staff owns a project from start to finish. We are fully licensed and insured. We provide only professional people, workmanship, and equipment on all projects. We are so confident in the quality of our work that we offer a 10-year warranty; the best in the industry. We are a financially strong organization with a solid infrastructure. We believe in the personal touch so someone is available to answer the phone at our offices at least 12 hours a day, five days a week. In addition, we attempt to make your life less complicated by having one primary point of contact, although you will have both office and cell phone numbers of the key staff you would be working with.” Alan Smith Pools is a leader in innovative new material research and development. Alan Smith is an active participant in on-going industry sponsored material research as well and currently serves on the National Pool Industry Research Center’s Advisory Board of Directors. They offer the latest in material technology including pebble, quartz, and polished finishes with top grade inorganic pigments. These materials and professional craftsmanship will insure the most beautiful and durable surface finishes for pools, spas, and fountains available today. While they offer white plaster material, they highly recommend that customers take advantage of the durability of white quartz for their properties. Quartz will help get the maximum value for investments in swimming pools and spas. Alan Smith Pools also offers decking and deck overlay services. While replacing existing decks with some of the new and innovative stone and cementitious materials that are available today is desirable, this is not always appropriate from a cost-effective and budgetary standpoint. In situations where budget concerns are primary, one of the many beautiful and durable deck overlay options is appropriate. They can also help with the upgrading or replacing of existing pool equipment. There are equipment solutions available today that allow for accurate and cost-effective automated control

of pool/spa water chemistry. With quality service support and these new technological advances in automation, Alan Smith Pools can help enhance the life of your property assets. Alan Smith Pools also provides property evaluations. Their experienced and trained staff of professionals will visit a commercial property site and evaluate the pool surface condition, deck condition, and pool equipment condition and report back on current health code and building code requirements. This evaluation can help determine when a community should plan to look at resurfacing, replacing or upgrading their assets. Commercial clients have found this service to be extremely helpful for long term planning and budgeting. In 1989, after seeing a need for the pool plastering industry to adopt standards, Alan Smith, CEO and Co-owner, became one of the founding members of the National Plasterers Council. He is still an active member to this day and has served as president in past years. He was an integral part of getting The National Pool Industry Research Center funded and built. Alan is highly involved in many facets of the industry and sits on the board for The California Pool and Spa Association. He is also an associate member of several organizations including Independent Pool and Spa Service Association, the United Pool Association, and the Interlocking Concrete Paver Institute. Alan’s compassion, understanding, fairness, and giving heart have earned the loyalty of his employees, many of which have worked at Alan Smith Pools for over 10 years. He enjoys fishing, boating, and volunteering his time to Northrise University.

The CAI-CV contacts for Alan Smith Pools are Kevin Kostka, Robin Kostka and Kellen Sivcovich. Kevin can be reached at 714-628-9494 or Kevin@alansmithpools.com. Their office and showroom are located at 227 W. Carleton, Orange, CA 92867. Visit their website at www.alansmithpools.com. Susan Browne Rosenberg, CIH, CIEC, CHMM, and CAI EBP, is president and co-owner of Desert Cities Indoor Air, LLC in Palm Desert, CA. Her company assists HOAs in assessing the extent of water damage and mold contamination. She can be reached at (760) 902-2545 or sbriaq@gmail.com. CAI-CV.org

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CHAPTER EVENTS

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CHAPTER EVENTS

THANKS TO OUR SPONSORS Grand Prize Sponsor

Title Sponsor

Lane Sponsors ALBERT MANAGEMENT, INC. ALLIED UNIVERSAL AMS PAVING ASPHALT MD'S ASSOCIA DESERT RESORT MANAGEMENT BRS ROOFING CARTWRIGHT TERMITE & PEST CONTROL, INC. CONSERVE LANDCARE EMPIREWORKS FLOOD RESPONSE FRAZIER PEST CONTROL, INC. HORIZON LIGHTING NPG ASPHALT O'CONNELL LANDSCAPE X2 PACIFIC WESTERN BANK PRO LANDSCAPING, INC. ROOF ASSET MANAGEMENT X4 S.B.S. LIEN SERVICES SCT RESERVE CONSULTANTS SUNSHINE LANDSCAPE X2 VANTAGE POINT CONSTRUCTION WESTERN PACIFIC ROOFING X2

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Cartwright Termite & Pest Control, inc.

DIVERSIFIED ASPHALT PRODUCTS

Greeting Sponsor

WristBand Sponsor

Strike Sponsors

Dessert Sponsor

DSI SECURITY SERVICES

EPSTEN GRINNELL & HOWELL, APC VISTA PAINT CORPORATION

Bar Sponsors

M.C. BUILDERS, INC.

O’CONNELL LANDSCAPE

Popcorn Sponsors

ASSOCIA DESERT RESORT MANAGEMENT BEHR AND KILZ PAINTS AND PRIMERS ASSOCIA ONCALL FIORE RACOBS & POWERS, A PLC GREEN BRYANT & FRENCH, LLP Scholarship PACIFIC WESTERN BANK Sponsor EAGLE ROOFING PRODUCTS Food Sponsor BRABO & CARLSEN, LLP CLAC Sponsor BRS ROOFING FIRSTSERVICE RESIDENTIAL DUNN-EDWARDS PAINT

Lane Assignment Sponsors

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CAI-CV Hero Charity ANIMAL SAMARITANS Animal Samaritans is a non-profit animal welfare organization committed to saving the lives of healthy and treatable animals, offering low-cost spay and neuter; low-cost vaccinations; microchipping; shelter and care; and adoptions to lifelong homes.

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EDUCATED BUSINESS PARTNER

Choose Educated Business Partners Micha Ballesteros, Flood Response Rodney Bissell, Bissell Design Studios, Inc. Susan Browne Rosenberg, CIH, Desert Cities Indoor Air, LLC Kimberly Burnett, DSI Security Services Linda Cardoza, Alliance Association Bank Will Cartwright, Cartwright Termite & Pest Control, Inc. Rick Cech, Roof Asset Management Todd Chism, PatioShoppers Tiffany Christian, Epsten Grinnell & Howell, APC Adam Eves, EmpireWorks Lori Fahnestock, Powerful Pest Management Dea Franck, Esq., Epsten Grinnell & Howell, APC Julie Frazier, Frazier Pest Control, Inc. Elaine Gower, Naumann Law Firm, PC Michael Graves, SCT Reserve Consultants Amanda Gray, O'Connell Landscape Maintenance Matthew Hills, Securitas Security Services USA, Inc. Tim Hoss, BEHR & KILZ Paints & Primers Jennifer James, Esq., Green Bryant & French, LLP Megan Kirkpatrick, Kirkpatrick Landscaping Services Jared Knight, Vista Paint Corporation Katy Krupp, Fenton Grant Mayfield Kaneda & Litt, LLP Matt Lawton, CIC, Prendiville Insurance Agency Larry Layton, Kirkpatrick Landscaping Services Alison LeBoeuf, Sherwin-Williams Mike Mastropietro, OCBS, Inc. Chris Meyer, Asphalt MD's Greg Morrow, Eagle Roofing Products Fran Mullahy, Vintage Associates Mike Murrell, Farmers Insurance - Mike Murrell Agency Matt Ober, Esq., Richardson Ober, PC Chet Oshiro, EmpireWorks Mallory Paproth, SCT Reserve Consultants Elisa Perez, Esq., Epsten Grinnell & Howell, APC Jay Powell, Ben's Asphalt Dana Pride, Automation Pride Kelly Richardson, Esq., Richardson Ober, PC Brent Sherman, Animal Pest Management Services, Inc. Brittany Smith, Vantage Point Construction, Inc. Kymberli Taylor-Burke, NPG Asphalt Liz Williams, AMS Paving Taylor Winkle, Roof Asset Management Bevan Worsham, AMS Paving Jolen Zeroski, Union Bank Homeowners Association Services

Time Honored Rob Winkle Roof Asset Management By Grace Paluck, CMCA, CamEx, CCAM Rob Winkle is the CEO of Roof Asset Management, Inc. Roof Asset Management does re-roofing, water-proofing and roof maintenance. Rob has been roofing in the Coachella Valley for 37 years and has been a member of Coachella Valley Chapter of CAI for over 30 years. He has served on the board of directors for the Chapter, including as president, and many committees (including Awards, Monte Carlo, Bowling and Golf). Rob joined CAI because it is a great opportunity to interact with members of the industry. Over the past 30+ years, he has developed many great friendships with CAI members. Rob has served on the Board of Directors of the Western States Roofing Contractors Association for 14 years and is currently serving as their Senior Vice President. Rob has four sisters and two brothers and credits his brother, Richard, for getting him into the roofing business. His brother Ron is his identical twin, best friend and business partner. He loves spending time with his family, which includes his wife, Ronda, son Taylor and his step-daughter Breanna. Anyone who knows Rob knows about his love for the game of golf. He also has a very eclectic taste in music including country, 60’s, 70’s and 80’s music and even some current music. Rob considers his mentor, Sig Hall III, as one of the best men he’s ever known because he always did what was right no matter how hard that may have been at times. In other words, “A life well lived.” His own core beliefs are, “The most important things in life are family and friends. Help all those that you can. Surround yourself with good people and always try to do the right thing.” His favorite saying is, “Just another day in paradise.” Grace Paluck is the Division Executive Vice President for The Management Trust. She can be reached at (760) 776-5100 or by email at grace.paluck@managementtrust.com.

Become an Educated Business Partner Call the CAI-CV office or go to www.cai-cv.org for more information.

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FEATURE

Are You Maximizing Your Community's Home Values? The Benefits of FHA Certification for Condominium Developments By Mike Kirkland, MLO, CPA

C

ommunity association boards have a fiduciary duty to preserve and enhance property values in their associations. This may include taking steps to make homes financially attractive to potential buyers. There is a myriad of ways to finance and refinance condominiums including a long list of conventional mortgage options. Perhaps less familiar are programs initiated by the U.S. Department of Housing and Urban Development (HUD), U.S. Department of Veterans Affairs (VA), and other targeted programs that all have unique attributes that are attractive to home buyers. HUD’s Federal Housing Administration (FHA) programs provide some desirable features for potential buyers or those looking to refinance but require the community to obtain FHA approval and become certified. Some of the useful benefits of FHA approval include a federal guarantee, reduced

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Quorum July, 2019

down-payment options and the only government insured Home Equity Conversion Mortgage (HECM) program allowing qualified condominium unit owners to obtain a reverse mortgage. Unfortunately, very few condominium developments in the Coachella

complexes, only 18 are presently approved for FHA transactions. We see a mix of circumstances that include communities that once had FHA certification but have let it expire, communities that applied and were rejected, and many communities that have never applied.

"Some of the useful benefits of FHA approval include a federal guarantee, reduced down-payment options and the only government insured Home Equity Conversion Mortgage (HECM) program allowing qualified condominium unit owners to obtain a reverse mortgage." Valley have FHA approval. This situation has resulted in the inability of sellers, buyers or those wishing to refinance from taking advantage of the FHA benefits. The magnitude of the problem is grave and impacts home values throughout the Valley. Of the estimated 500 Coachella Valley associations that govern condominium

Roughly 20 percent of those seeking new homes or to refinance would prefer FHA products over conventional options and if your community is interested in attracting first-time home buyers or retirees, FHA certification would make your community even more attractive. When it comes to selling a condominium

that has FHA approval, you can expect more offers and faster sales. Homes in FHA approved complexes take less time on the market and generate higher sales prices due to increased competition and demand. This means higher property values for everyone. There are also very positive attributes associated with refinancing homes in FHA approved communities. These include less stringent credit requirements and higher loan to value ratios that are particularly attractive to retirees and first-time home buyers. A not her benef it of having FHA certification is that homeowners can take advantage of a Home Equity Conversion Mortgage (HECM), the FHA’s reverse mortgage program. A HECM loan enables the homeowner to withdraw equity in their home. This is obviously very attractive to seniors. Here in the Valley, we see many baby boomers wanting to change


FEATURE

their present living conditions to prepare for retirement. Many live in homes that are less than optimal. Weather, distance to family, availability of health facilities, and distance to recreation are just a few motivators driving seniors to relocate. Retirees may have limited access to new mortgage financing. To qualify for a traditional loan, the applicant must have an income stream sufficient to demonstrate repayment of the debt. Most seniors are retired and no longer have the cash flow to qualify for traditional financing. This is where the HECM or reverse mortgage has an advantage. Potential buyers may be able to use a reverse mortgage to acquire a home or use their equity to stay in their present home. The HECM may be the most significant FHA benefit for our aging population because senior citizens are selling their homes in other areas and moving to the Coachella

Valley in record numbers. Clearly, with only 18 of our associations presently approved by the FHA, a significant number of potential buyers are forced to go elsewhere to purchase homes. Obviously, this has a negative impact on home values, especially in uncertified

are also organizations that offer certification services for $1,000 or less. If a board is interested in taking on the approval process themselves, the Palm Springs Regional Association of Realtors (PSRAR) offers free classes. The cost of gaining and maintaining FHA cer-

"Clearly, with only 18 of our associations presently approved by the FHA, a significant number of potential buyers are forced to go elsewhere to purchase homes. Obviously, this has a negative impact on home values, especially in uncertified communities." communities. Fortunately, FHA certification is becoming simpler and less expensive. HUD is expected to release new rules soon that could speed up the approval process. The cost of gaining FHA approval has seen a drastic reduction since 2010. Many HOA law firms will oversee certification for $2,500 to $5,000. There

tification should be in every condominium association’s budget. In addition to the financial benefits that come with FHA certification, boards can consider this additional benefit - certification is a signal that the board cares about the community and is working to make it thrive. Applying for and maintaining CAI-CV.org

FHA approval truly stabilizes and increases property values for residents. Don’t miss this easily achievable opportunity to enhance your condominium community. For more information concerning FHA eligibility, go to: w w w.hud.go/sites/ documents/11-22MLGUIDE. PDF. For a schedule of condominium developments that are FHA approved go to: w w w.https:/entp.hud.gov/ idapp/html/condolook.cfm Mike Kirkland is a mortgage loan originator (MLO) and retired CPA who specializes in reverse mortgages in the Coachella Valley and Inland Empire. He is associated with Home Financing, Inc., a mortgage broker located in Laguna Hills. Mike can be reached at (909) 273-5556 or by email at jmkirkland1@gmail.com.

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HOA LAW

Beyond the Balcony Bill Christina Baine DeJardin, Esq.

I

n 2015, six people were killed and seven were injured when a fourth story balcony collapsed in Berkeley, California. It is believed the balcony sheared off of the wall of the apartment building as a result of severe decay and dry rot. The apartment building was ten years old at the time of the accident. In the wake of this tragedy, several new bills were introduced in Sacramento to prevent this from happening again. One of these bills was Senate Bill 721 (“SB 721”), which was introduced in 2018 by Senator Jerry Hill. The bill would have imposed stringent new inspection and repair requirements for wood or wood-based “exterior elevated elements,” including balconies, decks, porches, stairways, walkways, and entry structures. Due to hard work by CAI’s local legislative arm, the California Legislative Action Committee (“CLAC”), and with the help of a key CAI supporter in the legislature, the portion of the bill relating to common interest developments was removed before it was signed into law by Governor Brown. However, the author of the bill, Senator Jerry Hill (D-San Mateo) maintained that he would introduce a bill again in 2019 that would subject common interest developments to similar inspection and repair requirements. Rather than waiting for the bill to be packaged by individuals who are not intimately familiar with how associations operate, CLAC decided it would partner with Senator Hill to draft a common-sense law that was not overly burdensome on associations and that dovetailed with existing reserve study requirements. This new bill is SB 326. To give you a sense of how different these bills are, here is a chart that compares SB 721 with SB 326.

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SB 721

SB 326

Applies to exterior elevated elements on a condominium building, whether or not the HOA maintains and repairs them.

Applies to exterior elevated elements for which the HOA has maintenance or repair responsibility.

HOAs required to perform first inspection by January 1, 2024 and then every six years thereafter.

HOAs required to perform first inspection by January 1, 2025, and then every nine years thereafter in coordination with the reserve study inspection.

Most HOAs required to inspect at least 15% of each type of exterior elevated element.

HOAs required to inspect a statistically significant sample of exterior elevated elements. This definition ensures that a sufficient (but not excessive) number of units is inspected to provide confidence that the sample is reflective of the whole.

Inspector must visually inspect the interior of the load bearing components. This meant opening up the elevated elements to visually inspect the interior. The HOA would then have to close it back up when the inspection was complete. This could have meant thousands of dollars per component. This could have crippled HOAs.

Requires a reasonably competent and diligent visual inspection of the elevated elements. This does not require opening up the component to inspect the interior. However, the inspector can conduct a further inspection of load-bearing components if it appears that the waterproofing system is compromised.

Report provided to HOA within 45 days of the inspection.

No timeframe for providing report to HOA.

If the report reveals that immediate repairs are needed, advises that any element poses an immediate threat to the safety of the occupants or that the occupants must be denied access or that emergency repairs are necessary, it must be provided to the local enforcement agency within 15 days of completion of the report.

If the inspector advises that an element poses an immediate threat to the safety of the occupants, inspector must provide a copy of the report to the HOA immediately and to the local enforcement agency within 15 days of completion.

If the inspector finds that an exterior elevated element poses an immediate threat to the safety of the occupants or that occupants must be prevented from accessing the element, or emergency repairs are necessary, the HOA must take preventive measures immediately.

No similar language or timeframe.

If corrective work is needed but does not constitute an immediate threat to the safety of the occupants, the HOA would be required to apply for a permit within 120 days of receipt of the inspection report and make the repairs within 180 days of approval of the permit unless the local enforcement agency granted an extension.

No similar language or timeframe.

No similar limitation on applicability of law.

Law only applies to buildings containing three or more multifamily dwelling units.


This comparison only touches on the differences between the two bills. SB 721 included several cumbersome requirements for the inspections and the reports themselves, which would have undoubtedly increased costs for associations. SB 326 is intended to integrate into the existing framework for reserve study inspections. It dramatically decreases the cost and burden that SB 721 would have imposed on associations while still achieving Senator Hill’s goal of protecting the welfare of the homeowners. SB 326 also gives us something more. It reverses the recent decision in the disastrous Branches Neighborhood Corporation v. CalAtlantic Group, Inc. case. In this case, the CC&Rs for Branches Neighborhood Corporation (“Association”) contained language requiring the board to obtain the vote of 51% of the membership before filing a construction defect claim. The board, instead, filed the claim in arbitration and subsequently obtained approval (“ratification”) by the homeowners. CalAtlantic Group, Inc., filed a motion for summary judgment asserting that the claim must be dismissed due to the Association’s failure to obtain prior membership approval. The arbitrator found that the ratification was insufficient and granted the motion. On appeal by the Association, the Court of Appeal affirmed the dismissal of the claim. The takeaway from the case was that these CC&R prerequisites were enforceable and associations would have to strictly comply with them before pursuing a claim against the developer. SB 326 would invalidate prerequisites or limitations in the governing documents that create an obstacle for a board in pursuing any claim, civil action, arbitration, prelitigation process or other legal proceeding against a declarant, developer or builder. Specifically, any requirement in the governing documents requiring prior membership consent or approval would be void. SB 326 has passed out of the Senate and is now in Committee in the Assembly. It is important to note that SB 326 may be amended after the date of this publication. You can track the bill’s progress and find out if any new amendments are made by using the “Quick Bill Search” at leginfo. legislature.ca.gov.

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Christina Baine DeJardin, Esq. is a partner with the law firm Delphi Law Group, LLP. She can be reached at (884) 4DELPHI or by email at cdejardin@delphillp.com. CAI-CV.org

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