CONNECT 2012 Issue 3

CAI-GRIE’s mission is: To make a positive contribution to the Common Interest Development Community through education and networking.

connect A Publication of the Greater Inland Empire Chapter of CAI

ISSUE THREE 2012

INSURANCE

Condo Unit Insurance Directors & Officers Coverage Who Needs It? A Vendor’s Perspective: Safety and Insurance Go Hand in Hand Purchasing Earthquake Coverage for Your Community One Size Does not Fit All A Look at Insurance Language in Vendor Contracts CLAC Interview with Skip Daum Delegate Selection Process How Does your Chapter Choose?

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connect Table of Contents A Publication of the Greater Inland Empire Chapter of CAI

www.cai-grie.org

OFFICERS Robert Riddick, CMCA.............................................................. President Sunnymead Ranch Planned Community Association Lana Hamadej, LSM, PCAM..............................................President-Elect Avalon Management Group, AAMC Kimberly Lilley, CMCA, CIRMS......................................... Vice-President Berg Insurance Agency, Inc. Linda Krebs ............................................................................... Secretary Flower Lighting & Electric Gina Roldan . ............................................................................ Treasurer Vista Paint Corporation Ken Carteron .................................................................... Past-President Seacoast Commerce Bank

BOARD DIRECTORS Weldon L. Brown . ...................................... Weldon L. Brown Company Linda Cooley.............................Rosetta Canyon Community Association Dana Mathey, CCAM.............................. Euclid Management Company Matt D. Ober, Esq., CCAL ........................Richardson Harman Ober, PC Tiffani Reynolds....................................... Rodent Pest Technologies, Inc.

Features 4 Directors & Officers Coverage: Who Needs It?

21 Delegate/Liaison Selection Processes

By Phil Hakopian

By Kimberly Lilley, CMCA, CIRMS

8 One Size Does Not Fit All

By James R. McCormick, Jr., Esq.

10 Earthquake Coverage for Your Community

23 History of CAI-CLAC Series Interview with Lobbyist Skip Daum

By Timothy Cline, CIRMS

14 The PCAM Case Study Came and We Were Ready

Alisa Toalson, CMCA, CCAM......Professional Community Management Gwen Wertz.......................................................... CommerceWest Bank Chapter Executive Director

17 A Vendor’s Perspective: Workplace Safety and Insurance, They Go Hand in Hand

By Tom Carrasco

DJ Conlon, CMCA Administrative assistant Christine Hilditch

18 Understanding Directors & Officers Liability Insurance

Publications Committee Tom Carrasco . ..Environmental-Concepts Landscape Management, Inc. Jacqueline Dao, Esq. ................................ Fiore Racobs & Powers A PLC

Departments 6 President’s Message

By Robert Riddick, CMCA

By Michael Berg, CIRMS

9 Editor’s Link

20 Condo Owners Need Their Own Insurance Coverage

By Betty Roth, CMCA, AMS, PCAM

Editor in Chief Betty Roth, CMCA, AMS, PCAM...Avalon Management Group, AAMC

26 HOA Homefront

By Kelly G. Richardson, Esq.

By Robert Riddick, CMCA

Shelly Risbrudt.............................................. Pilot Painting & Construction Kristie Rose, CMCA, AMS, PCAM, CCAM... Merit Property Management

25 Buck a Door or More Pledge Form

By Dennis M. Burke, Esq.

27 Monte Carlo Night Black & White Gala

Lana Hamadej, LSM, PCAM ...................... Avalon Management Group Jan Hickenbottom, PCAM, CCAM . ........................................ First Bank Kelly G. Richardson, Esq. ..........................Richardson Harman Ober, PC Mahendra Sami .................................................................... Union Bank Nancy I. Sidoruk, Esq. . ...........................Epsten Grinnell & Howell, APC Jasmine Termaine, Esq...................................... Beaumont Gitlin Tashjian Sheeba Yaqoot, Esq. ................................ Fiore Racobs & Powers A PLC DESIGN & PRODUCTION

The Greater Inland Empire Chapter of CAI hosts educational, business

Kristine Gaitan..................Rey Advertising & Design/The Creative Dept.

All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Connect or the Community Associations Institute–Greater Inland Empire 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.

Connect is an official quarterly publication of Greater Inland Empire Chapter of the Community Associations Institute (CAI–GRIE). The CAI–GRIE 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 the CAI–GRIE Chapter. Reproduction of articles or columns published permitted with the following acknowledgment: “Reprinted with permission from Connect Magazine, a publication of the Community Associations Institute of Greater Inland Empire Chapter.”

Copyright © 1998–2012 CAI-Greater Inland Empire Chapter.

Advertising, articles or correspondence should be sent to: CAI-GRIE Chapter 5029 La Mart, Suite A • Riverside, CA 92507-5978 (951) 784-8613 / fax (951) 848-9268

and social events that provide the Chapter’s Business Partners various opportunities to promote their companies’ products and services to Community Association owners and managers serving the Community Association Industry. It is expected that all participants in Chapter events — whether they be educational, business or social — will conduct themselves in a professional manner representative of their business or service organization so as not to detract from the experience of others seeking to benefit from their membership in the Chapter.

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By PHIL HAKOPIAN

Directors & Officers Coverage: Who Needs It? Boards should consult with agents who specialize in providing association coverage in the homeowners’ association industry and rely on the advice of experts to protect themselves as volunteers.

Happy Town HOA is a 20 year old community with just over 100 units and you have just been elected to the board. You have never served on a board but you are excited to help and you want the best for the community.

As a new board member, you decide to sit back and observe how the association operates but quickly find yourself in the middle of a serious situation.

You learn that one of the directors has their own agenda. They don’t like the way a neighbor has redone their landscape. That board member insists on sending letters telling the neighbor to restore the landscape to its original condition or risk being 4 | ISSUE THREE 2012 • Connect with grie

fined by the association. The CC&Rs don’t specify what needs to be in the front yard. They simply say that the landscape must be kept up and well manicured. The homeowner’s yard does have a neat appearance and other homeowners have remarked that they would like to do the same thing.

After a few months of sending the homeowner threatening letters, the board has the association’s attorney send a letter to the homeowner.

The homeowner decides to sue the association.

This is when insurance becomes critically important and where the scenario at Happy Town HOA becomes even worse. Prior to the notice of the claim, the board directed the manager to obtain bids for the association’s insurance package. Of course, one of the board members insisted that they obtain a bid from her personal agent who provides her auto and homeowner’s coverage because the agent would probably save them some money. At the next

meeting, the manager presents the bids, including one obtained from the board member’s personal agent.

All of the bids were comparable in price but a little less than the renewal. The board member urges the board to select the cheapest proposal and change to a new agent.

The manager advises against the change, but the board votes to make the change. Unfortunately, the coverage purchased did not comply with the Civil Code provision that requires communities of more than 100 units to carry at least $1,000,000 in Directors & Officers coverage. The policy purchased was only $500,000.

Six months later, and the board is deep in the midst of a lawsuit.

The manager contacts the prior insurance agent because the claim was originated six months earlier. The agent informs the manager that there is no coverage because at the time of cancellation, the carrier was not notified of a possible claim. At that time, the board had no knowledge

of a pending suit. The prior agent recommends that the manager contact the new agent who is the friend of the board member.

The new policy failed to include prior acts coverage or give the policy a retroactive date, leaving the association without coverage on the lawsuit filed by the homeowner regarding the front yard landscape.

To add to all of this, because the association board members failed to comply with Civil Code by obtaining at least $1,000,000 in coverage, the board members are not protected from being sued. How can this be?

The board had insurance.

As an agent, we see boards trying to cut corners wherever they can. Insurance should not be one of those areas. Boards should consult with agents who specialize in providing association coverage in the homeowners’ association industry and rely on the advice of experts to protect themselves as volunteers. In this scenario, what advice would have

kept the Happy Town HOA board out of trouble?

• Only request insurance proposals from qualified insurance specialists who specialize in providing coverage to homeowners associations. Do not rely on insurance agents who sell only personal lines such as auto, homeowners, health etc.

• Consider a professional who has the Community Insurance and Risk Management Specialist (CIRMS) designation awarded

by CAI. • If you are obtaining insurance quotes, be sure to compare all proposals with the current coverage and look for any gaps in coverage that might exist.

• Invite the insurance professional to a board meeting to assist you in comparing coverage.

• Always purchase Directors & Officers coverage with Prior Acts Coverage or a Retroactive Date.

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Directors & Officers Coverage

PRESIDENT’s MESSAGE Greetings once again, to all of our members and interested readers. As always, we’re hopeful that you will enjoy reading the articles – written by our members for our members – and especially for those community association volunteers who receive a copy of this issue.

Well, we’re now well into the third quarter of 2012, and looking back, even recently, it’s extremely gratifying to note that we have already accomplished one of our biggest goals for this year: making the leap from a mid-size Chapter Robert Riddick, CMCA membership-wise, to a large size Chapter. As a result of the hard work of our amazingly-inspired Membership committee and the untiring efforts of all the members of our Chapter, we have officially crossed into new territory since our last issue, by not only achieving but surpassing the 500-member mark. We’d like to extend a well-deserved Congratulations to each and every member who helped make that happen.

Also, in looking back for a moment, who can forget this year’s Monte Carlo Night that we celebrated at Pechanga in Temecula this past June? No one, I trust.

And, I have a feeling that Lana, as next year's President, will be hard-pressed to exceed the excitement and fun that was created this year, when it's her turn to pull it off in 2013.

And, speaking of “pulling it off,” since our last issue was delivered, our Public Relations committee has officially launched our Facebook page, with page hits and 'likes' continuing to accumulate. With a current membership of over 500 I'm wondering how long it will take before we have at least that many 'likes'?

On a different note, by the time you receive this issue we will have held our Annual Meeting, which is when we also hold our election to fill expiring terms on our board of directors. This year we were privileged to have a slate of eight qualified candidates vying for the four open positions, and by now you all know what the results are. When you see the newly-elected directors who will be joining the board, starting January 2013, please take a moment to introduce yourself to them, and let them know that you are ready to support them as they carry out their duties in helping to lead our Chapter.

And finally, check elsewhere in this issue for information regarding our other important and upcoming event that we were fortunate in being selected to host this year, namely the 2012 CAI Legal Forum: California Communities. This is an important event, and one that CAI National has created exclusively for, and as the name implies – those of us who live in, work for and provide services to communities here in California. You don’t want to miss this one, and it will be hosted at one of our favorite venues, Pechanga Resort and Casino.

Besides that, we all had a chance last month to go back in time to revisit "Woodstock" in sights and sounds, as our Bowling Committee entertained and hosted an evening of fun and competitive bowling at Norco’s Brunswick Classic Lanes. Nostalgic outfits, music that was channeled from back-in-the-day and members just enjoying themselves having a great time. Next up, the premiere fundraising event of the year, our CAI-GRIE 21st Annual Golf Tournament, scheduled for September 28, 2012 at a new venue – The Champions at The Retreat.

In closing, I just wanted to give a warm and appreciative "shout out" to DJ Conlon, our Executive Director, as well as Betty Roth (Avalon Management Group), and Sunnymead Ranch and their board members, for providing the setting for this year’s successfully conducted PCAM Case Study.

We still have one more quarter left, so look out CAI-GRIE, there’s still plenty to come. Stay tuned. Enjoy this issue of Connect, and thank you again to the entire membership for your continued support.

Warmest Regards, Robert Riddick, CMCA

6 | ISSUE THREE 2012 • Connect with grie

Continued from page 5

• Refer to Civil Code and the association’s governing documents to make sure that the association is purchasing no less than the required limits listed therein.

If your board is on notice of a potential claim, be certain to consult with your insurance professional to determine whether the carrier needs to be placed on notice to avoid a situation similar to that at Happy Town.

Bottom line is that every volunteer director who serves on a board needs to have the protection of a good Directors & Officers policy in place to protect them. If you serve on a board where your fellow board members do not wish to spend money on this coverage, resign. Do not leave yourself and your personal assets exposed where there is no coverage.

Finally, all boards should attend the CAI Essentials class. This course provides board members with a great overview of how boards should operate and, specifically concentrates on insurance coverage.

The class is invaluable in providing the board with tools needed to effectively perform their duties.

Please contact the chapter office for more information.

Phil Hakopian is the CEO of Cornerstone Commercial & Personal Insurance Services.

He has served on the CAIGRIE Board of Directors and the Golf and Business Partner Committees.

Steven G. SeGal InSurance aGency, Inc. Over 33 years of experience specializing in: Condominium Associations • Planned Unit Developments • Hard to Place Associations Earthquake Coverage • High Rise Condominiums • Workers Compensation

Toll Free: 800-345-8866 • Toll Free Fax: 800-262-0973 Email: SSegal@farmersagent.com • www.farmersagent.com/ssegal

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One Size Does Not Fit All

BY JAMES R. McCORMICK, JR., ESQ.

ust like Cinderella’s glass slippers, contracts between associations and vendors are never onesize fits all. Many cash-strapped associations are not having legal counsel review their vendor contracts, in an attempt to save money. Such a tactic, while potentially saving a bit of money in the short term, can have far-reaching negative consequences.

Unfortunately, all too often, vendor contracts are drafted to protect the vendor. The best practice when dealing with contracts is to ask the association’s attorney to review and to insert and/or remove provisions that protect and/or harm the association. However, if this is not possible, the association should look – at minimum – for basic protections within the contract itself.

At minimum, the association should ensure that the contract contains termination language (i.e. if everything goes awry, can the association get out of the contract easily) and vendor insurance provisions (i.e. is the association adequately protected). Adding termination language and protection is usually fairly simple depending on how much notice can be agreed upon by the parties. Because there are so many different types of insurance, however, adding or modifying these insurance provisions is usually not as easy. For 8 | ISSUE THREE 2012 • Connect with grie

insurance issues, an association should consider the following: Completion Bonds. This type of “insurance” provides some assurance to the association that the contractor will complete the project or that funds will be available to do so if the contractor does not. The cost of these bonds should be borne by the contractor, but often the contractor will ask the association to carry the cost. If a contractor does not finish a project, the association can pursue the bond for the funds necessary to have the project completed.

Liability Insurance. If the vendor acts or fails to act and there is resulting injury, this insurance can provide protection for an association. These policies are important for contractors, security companies, and others who will be accessing the association’s property. Ensuring that these policies are carried by a contractor will prevent an association from having to submit a claim against their own liability insurance carrier if anyone or anything is injured.

Worker’s Compensation Insurance. If the vendor hired by the association has employees, the contract should require the vendor to maintain adequate worker’s compensation insurance. This insurance should be the primary source of recovery if one of their employees is injured at the association.

Vehicle Insurance. If a vendor will be driving a car or golf cart or anything in between as part of its duties at the association, the contract should require the vendor to maintain proper vehicle insurance.

Property Damage Insurance. This insurance is important to prevent the association’s insurance policy from being subject to a claim relating solely to the actions of a vendor.

Professional Liability Insurance. This insurance is typically carried by professionals providing services (as opposed to products or materials) to the association. This type of insurance is often referred to as D&O (Directors and Officers), E&O (Errors and Omissions) or malpractice insurance. Typically your management company, CPA and legal counsel carry this type of insurance.

Additional Insured. While not a type of insurance, if insurance is required within a contract the association should request that the association and perhaps others be named as “additional insured.” It makes it possible for the person or entity named as “additional insured” to make a first party claim on the policy – thereby adding protection for the association. Depending on the nature of the contract, the association, its managing agent, any construction supervisor or other party should be named as an additional insured.

Certificate of Insurance. A certificate of insurance is not a type of policy, but instead certifies what type of policy and coverage is in place. Associations should request copies of these certificates prior to any work taking place. Associations should also review these certificates to ensure that the insurance required in the contract is in place and that all entities required to be named as additional insured are so named. Further, language should be added indicating that the policy cannot be canceled or non-renewed without notice to the named additional insureds.

Policy Exclusions. In addition to what should be included, it is essential that insurance provisions contain a requirement that the coverage does not exclude claims arising from the type of project and/or insurance (e.g. multi-family residential dwellings).

Many commercial contractors have exclusions on their general liability policies that preclude claims submitted by homeowners associations.

Insurance Agent. Boards, managers and counsel are well served to always incorporate into their contract, due diligence by having an association’s insurance agent review and comment on whether the required coverage levels in the contract are appropriate for the scale and scope of the project, because one amount of coverage does not necessarily fit all projects.

This is only a limited discussion of the types of insurance protections that should be included in a vendor contract. For the best protection of the association, the safest bet is to have legal counsel review and revise the contract.

Editor’s LINK The warm sultry days of summer brought the GRIE Chapter’s annual bowling tournament.

It was a terrific event.

The Chapter also held Betty Roth CMCA, AMS, PCAM

several mini-trade show luncheons with great topics and information

during the summer as well. Please keep these in mind when you want to keep yourself current with what is happening in the chapter.

This issue presents a series of articles focusing on insurance for communities. We will have articles touching on earthquake insurance coverage; D&O claims and liability; a business partner’s perspective on insurance; insurance and condo units; insurance in contracts that includes recommendations and tips on how to best incorporate this important aspect that is typically overlooked and often treated as boilerplate. We also have included an interview with Skip Daum our advocate in Sacramento and an article on the delegate selection process as well as a legal perspective on claims.

We hope you will find the information in this issue of Connect useful and we appreciate your continued support of the GRIE-Chapter and CAI. The topic for our next issue is Legal WrapUp. We will be bringing you articles on the rewrite of the Davis Stirling Act; legislation; case wrap up; the voting process and a look back at this year’s chapter activities as well as a peek into the future to next year’s events.

We would like your input as well. The deadline for submitting articles for the next issue is November 1, 2012. It is very rewarding to have an article published and can also serve as CEUs in achieving your accreditations. If you are interested in submitting an article, our policy and guidelines are available on the chapter

James R. McCormick, Jr. is the managing partner of Peters & Freedman, L.L.P., specializing in representation of Homeowners Associations in Southern California. James can be reached at JMCCORMICK@HOALAW.COM or at 760.436.3441.

website or feel free to email me at manager@ mysunnymead.com and I will be happy to send you a copy.

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By TIMOTHY CLINE, CIRMS

Earthquake Coverage for Your Community

Navigating the Excess and Surplus Lines Market

Successfully shopping this marketplace means interviewing multiple brokers but selecting only one to represent you and your association.

For insurance carriers specializing in Master Policy coverage for condominium associations, the Northridge Earthquake (Magnitude 6.7, January 17, 1994) was a seminal event. Within months after the initial quake, direct-writing behemoths State Farm, Farmers and Allstate – considered “legacy carriers” because they were early providers of 10 | ISSUE THREE 2012 • Connect with grie

competitive insurance products for condominium associations – were struggling. The earthquake losses produced unprecedented payouts and the claims were seemingly unmanageable. While a condo master policy may represent a single policy and single premium for an insurance company executive, for the claims adjuster this same single policy

covering a 100-unit condominium association means dealing with the expectations of not just five board members, but an additional 95 impacted unit owners.

Though the Northridge quake was far weaker than the 8.0 earthquake projected for decades by California seismologists, the losses were nevertheless staggering. The thrust fault responsible for the Northridge event had not been discovered prior to the quake and computer catastrophe modeling for known fault lines (which had been developed only seven years earlier) severely understated the potential losses this size of event could produce.

As a result, both personal lines and commercial lines insurance carriers had far more exposure in certain zip codes than they realized as the earthquake event far exceeded their most conservative predictive models.

In the intervening 18 years, condo master policy carriers have painstakingly separated themselves from the headache and exposure of writing new condominium master policies with earthquake by stripping off the peril by endorsement, or removing the earthquake coverage entirely. Condominium association boards who wish to protect against the peril of earthquake may not just find the replacement coverage much more expensive, they must go outside of the traditional insurance markets and navigate a completely free-standing

and sometimes overwhelming “excess and surplus” (E&S) lines market to obtain the earthquake protection they desire.

In California, the commercial earthquake market consists of some 35 different insurance carriers who, depending on the type of risk and the size of the project, will offer partial or full limits of protection. While your agent/broker will be the point of contact to these markets, they access them by utilizing an intermediary, which is a specialist called an “E&S wholesaler.” With a single submission to the wholesaler, the agent/broker can access literally dozens of markets.

Ideally, a thorough effort should result in the board of directors receiving a “carrier-by-carrier” response (called a marketing report), which will provide the board with an overview of the markets approached and each carrier’s response to the submission. It should indicate if coverage is available, subject to what terms (deductibles,

scope of coverage, et al). If coverage is unavailable, it should indicate the reason for the declination (capacity, soils, et al).

Successfully shopping this marketplace means interviewing multiple brokers but selecting only one to represent you and your association. In fact, having more than one agent/broker represent you can cause undesirable results. Insurance carriers only release one quote per applicant and the pricing is identical regardless of which broker approaches the market. Any broker who attempts to access the same market after the first submission is received will be blocked. Too many submissions to the same carrier from multiple agents may alienate the carrier altogether.

Splitting the markets up between brokers can also produce unfavorable results – particularly if the project is so large that it requires multiple layers of coverage. One broker may have a primary layer (the first $5 million

in coverage, for example), but not a competitive excess layer ($5 million excess of $5 million primary). The second Broker may have an excellent excess layer, but nobody on his/her list that can provide primary coverage. For all these reasons, it behooves a board to find one agent/broker they like and trust and work only with them.

Most E&S insurance carriers are domiciled outside of California and therefore do business here on a “non-admitted” basis. Non-admitted does not mean unregulated but these carriers are not held to the same regulation and solvency standards as the admitted markets. They also have more flexibility in terms of rates and forms – which makes them a perfect fit for a peril as volatile as the earthquake peril. Your agent or broker should only be presenting quotes to you from insurance carriers who have been placed on the “list of eligible surplus line insurers” (LESLI) or “list Continued on page 12

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Earthquake Coverage...

Continued from page 11

of approved surplus line insurers” (LASLI) by the California Insurance Commissioner.

Insurance placements in the E&S marketplace are commonly subject to modeling reports, commissioned and paid for by the insurance carrier at the time of submission. These modeling reports provide the underwriter with valuable information – such as the distance to known fault lines, the type of soils, the project’s susceptibility to liquefaction and information as to how much earthquake exposure the carrier may have on the known fault line. This information, coupled with the year the project was built (which seismic codes might have guided construction) and the type of parking (a big factor after the tragic failure of the Northridge Meadows apartments), would provide the underwriter with the detailed information to determine whether the carrier can provide a quote and at what terms.

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Coverage from the E&S market may not be as broad as the protection you currently maintain. For example, stand-alone earthquake policies may extend only to the “bare walls,” are rarely written on a blanket basis, never contain “extended” or “extra” replacement cost provisions and may only cover some appurtenant structures, if any. As a result, special attention should be paid to a document called a Statement of Values (SOV) prepared on the association’s behalf. This statement may well determine how the coverage you purchased is attributed to each damaged building or structure at the time of loss. If the association has been with a traditional earthquake carrier for a long time and now finds themselves having to navigate the E&S market to obtain replacement coverage, your agent or broker should be willing to provide you with details of how the replacement coverage may differ from your previous earthquake program. Most

importantly, individual unit owners should be advised about coverages they should obtain to supplement the master policy. When written carefully, these earthquake policies, often purchased in conjunction with an individual unit owner policy (or HO6), can help protect the owner against a number of individual exposures – including protection against a special assessment the board may have to levy to cover the association’s earthquake deductible.

Tim Cline, CIRMS, is President of Timothy Cline Insurance Agency, Inc. of Santa Monica. Tim is a past president of both the Greater Los Angeles and Channel Islands Chapters of CAI, a former chair of the CAI National Insurance and Risk Manager Professionals Networking Committee and former President of the Los Angeles Chapter of the Independent Insurance Agent and Brokers Association (IIABA).

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By robert riddick, CMCA

The PCAM Case Study Came and We Were Ready The 2012 IE Class

Below: Dana Mathey, Jacqueline Bill and Liz Kemme

As I stirred myself awake that morning, I remember thinking that “it” was finally here. The "it" being the first day of the much-anticipated PCAM Case Study that was to take place over the next two days here at my association, Sunnymead Ranch PCA. I also remember that I was running behind schedule in getting myself over to the Clubhouse, where the classes were going to be held, and that as I ran out to the garage to jump in the car, I spilled most of my coffee-cup’s worth of caffeine on the floor. I knew I’d hear about that later from the wifey. But, no matter, because "it" was about to start, and I was as excited about that fact as any of the students who were arriving to participate in it. I was also a little anxious. Okay, so I was worried too.

Worried that in spite of all the work we had done to prepare for the Case Study, that "Murphy" would somehow 14 | ISSUE THREE 2012 • Connect with grie

rear his ugly head just when we least expected it. Hey, after all, this was the PCAM Case Study, Man! Why all the excitement on my part? Just a scant four months earlier we had received word from CAI National that our Chapter had been awarded the opportunity to be the host Chapter for this year’s PCAM Case Study. It was an honor not taken lightly, and one that our inexhaustible Executive Director, DJ Conlon, CMCA, had worked hard at preparing for, setting up and facilitating, in an effort to make sure that this PCAM Case Study turned out to be one of the best ever conducted on the West Coast. And, in fact, by the end of the Study, the consensus amongst those

involved was exactly that: the best ever! But, I digress.

As I arrived at the Clubhouse (site of the Study classes) I couldn’t help but notice that the weather was cloudy and cool, and in sharp contrast to the previous three or four days of unrelenting heat that hovered around the high 90s along with humidity approaching 70%. Today it was a comfortable 76% and the sun was well-hidden behind high clouds. Like I said, a sharp contrast, and more important, a comfortable weatherwise day for walking the property (a

significant part of the Study).

Upon entering the Clubhouse I noticed that the place looked great.

The tables were arranged so that four students were seated at each, and there was ample space to see the instructor, Ms. JoAnn Greenstein CMCA, AMS, PCAM once she started the Study.

The audio equipment was ready, the lighting inside just right, and the view outside the spacious windows looking out at our 32-acre lake (a sight I secretly thought they knew was one “to kill for”) was nothing short of spectacular for a morning view. Even the breakfast service we had arranged for the students was mouth watering and delicious. And yeah, I indulged in it too. Besides, I had just left most of my coffee on my garage floor.

In any case, by nine o’clock that morning every single one of the twenty-four students who had registered were seated, breakfast in front of them, and all were ready to

take on the Study. We were just as prepared and ready to do whatever was necessary to support the smooth route of the Study.

The morning progressed with each of the topic speakers making their presentations, and by mid-morning we were set for the tour of the association’s property. Again flawless, as we took the students by shuttle bus over the entire property, stopping at appropriate locations so that they could get a better sense of the land, the common areas, trees (we have over 3,000 trees that are part of our tree trimming program), our lake, our ground well, our green belts, our orange grove, and our homes and Clubhouse amenities. To say that they were impressed would be an understatement. They were.

Day one of the PCAM Case Study came to an end with the students geared up for their return the next day, but leaving also with a wealth of information they had gathered as

part of their fact-finding requirement.

By then I was already feeling pretty good about what they had all had an opportunity to look at, evaluate, and appraise as far as how our association was being run, thanks in no small part to the efforts of our on-site manager, Betty Roth, CMCA, AMS, PCAM, who made sure that anything the students needed in the way of associationrelated information was expeditiously provided to them.

Day two was almost a carbon copy, in terms of how smooth everything went, from the continuation of topicspeakers to the final review and wrapup of all the materials covered in the Study. All that was left was for JoAnn to give out the final instructions to the students on how to prepare and write their Case Study for submission, and then it was a ‘wrap’. The only other task left to do was gather everyone outside on our veranda overlooking the Continued on page 16

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PCAM Case Study

knew that they had just completed a grueling two days of intense classroom and exterior study, all geared towards each of them earning “the highest professional recognition available to managers who specialize in community association management’ the PCAM."And, from my observations, there was no doubt

Continued from page 15

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I remember looking out at the class and seeing the expressions on their faces as they instinctively

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whatsoever in my mind that each of them would soon be proudly wearing their PCAM pin.

As far as the experience I had, I can tell you that all of my fellow board members who participated in the Study felt that it was a privilege being a part of it. That in the end, I ultimately had nothing to worry about regarding how our association would fare under the extremely close scrutiny of the professionals in the class. We did just fine! On the other hand, when I finally went home after saying my goodbyes to the students and JoAnn, I was greeted by the wifey, who wasted no time in handing me the garden hose and a broom to now deal with removing the coffee stains my spill two days earlier had created. YIKES! I swear, if it ain’t one thing, it’s another…

The Community Association Institute (CAI) defines the term PCAM as follows: Professional Community Association Manager. The pinnacle of community association management. The PCAM designation is the highest professional recognition available nationwide to managers who specialize in community association management.

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A Vendor’s Perspective

Workplace Safety and Insurance, They Go Hand In Hand

BY TOM CARRASCO

A

s we quickly approach 2013, our insurance renewal take my medicine and become the leader I was supposed to date and the Presidential election, many of us who be. I am still here, our experience modification (Ex Mod) is manage a business and/or own a business have many very low, and our employees are safe. questions and concerns for the future. The words medical, One of my biggest concerns financially is the transition to dental, general liability, workers compensation, automobile, the Affordable Care Act otherwise known as “Obama Care.” and inland marine can be stressful and worrisome ones if we Politics aside, what will be the costs? “Bottom-line” it for let them. As a necessary thorn in our side, insurance is one of me. Will it be more or less than we are paying now? What the top items on the budget for a service oriented company. are our employee’s choices? Will the state of California add With strict safety procedures in place and some serious to the regulations or subtract from the federal regulations? negotiating, these costs can be kept at a manageable level I have asked our current insurance carriers, done extensive and most importantly your employees get home safe to their online research, and have even called my Grandfather who families every day. If not managed properly the financial and follows politics very closely. So far no one knows. How do personal losses can be tough. you budget for FY 2013 or FY 2014 without this important We have found that an outside safety consultant who is information? What I plan to do and what I recommend to all not “one of the guys” and is fair but firm, works well. We also of our business affiliate members is find a seminar (when one stress to our management team, whether they are a foreman is available) that explains all this and what it means to their or the President of the company, that safety is first. No one business. I will be the first to sign up for that seminar... is special or above the safety procedures we have in place.

Tom Carrasco is President & CEO of Environmental In fact, to prove this, I will tell you a story about my run-in Concepts, PCA #72805 QAL#108311, Arborist# with our safety consultant. When I was newly hired 7 years WE-8259A. ago, I showed up on a jobsite to do an inspection with my beautiful new Yukon SUV and my new title on my sleeve.

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By michael berg, cirms

Understanding M Directors & Officers Liability Insurance D&O POLICY

18 | ISSUE THREE 2012 • Connect with grie

any times the question is asked, “Is this covered by our Directors and Officers Liability policy?”

Most people can easily wrap their head around the concept of property insurance: if property is damaged by an event (peril), and that peril is covered in the policy, the insurance company will pay the cost to repair the property.

But liability insurance, specifically Directors and Officers liability, is a little more cryptic. The full title of the coverage is Directors and Officers Errors and Omissions. The protection here is not necessarily for a particular event, but for an allegation others make toward errors in the decision-making process of the board.

Directors and Officers (D&O) insurance is a professional liability policy.

Think malpractice insurance for an attorney. The coverage is used to protect the association when someone feels there was an error or omission by the board. For example, a common allegation is breach of fiduciary duty, wherein a board of directors allegedly failed to act in the best interest of the membership.

If a member of an association feels the board made a decision that adversely affected him/ her, a claim against the association D&O policy is likely. Because almost every policy requires the carrier to defend the suit at the outset (a duty to defend), the cost of attorney’s fees are picked up by the carrier. The duty to defend language in most D&O policies actually requires the carrier to take control of the claim defense process, which is why the carrier will assign counsel in the vast majority of claims. Most carriers will issue a reservation of rights letter at the outset of the claim process. This means that the carrier will investigate

and/or defend the insured, while still reserving the right to deny coverage in the future if the claim is ultimately not a covered allegation.

Like any insurance policy, there are specifically excluded allegations. Because of the nature of the policy, the exclusions are relatively minimal. Claims for bodily injury or property damage are excluded, as are claims for known wrongful acts.

Most policies do not exclude, or will endorse (add) coverage for, employment practices (wrongful termination), failure to maintain adequate insurance, discrimination and defense costs for breach of contract. Review your policy, and consult your insurance professional and legal counsel for information about your specific coverage.

Once the defense is established, the investigation into the allegation will reveal 1) if the allegation is specifically excluded and 2) if there was indeed an error or omission. If excluded, the carrier will issue the denial, and the insured must provide for its own defense. If not excluded, then the investigation will continue into the actual alleged error or omission.

The discussion of the actual activity on the claim from this point to the payment of a judgment or a settlement far exceeds this article. Suffice it to say, the best protection for the board is to operate and make decisions within the Business Judgment Rule: 1) Act in good faith 2) Act with the care another person in a similar position would exercise (i.e. be prudent) 3) Act in the best interest of the association Keeping this simple rule in mind, and understanding the limitations of your specific policy, will help ensure that defense of allegations will be provided by the D&O insurance carrier.

Michael Berg, CIRMS, is a Farmers Insurance Agent and maintains his CIRMS (Community Insurance and Risk Management Specialist) designation from Community Association Institute (CAI). The Berg Insurance Agency specializes in the needs of California community associations, and Mr. Berg serves on the Publications Committee and Education Committee, as well as the Board of Directors for the Orange County, California CAI Chapter.

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By DENNIS M. BURKE, ESQ.

Condo Owners Need Their Own Insurance Coverage I don't need to separately insure my condo because the association has it covered, right?

WRONG.

T

he master policy obtained by a condominium association will not provide complete coverage for the unit owner. Some perils might be covered, but chances are, the unit owner will be very disappointed to learn the master policy does not fully cover some of the most common mishaps that involve condominiums, such as sewer backups and water leaks.

The insurance requirements as between the unit owners and the association can be different from one condominium project to another.

Each unit owner should review the applicable CC&Rs to determine what particular requirements apply. For instance, some CC&Rs will require the unit owner to obtain an insurance policy (often referred to as an HO-6 or sometimes as a "walls in" policy).

CC&Rs for another project might merely recommend the unit owner obtain an owner’s policy for owner upgrades.

In addition to checking the CC&Rs, each unit owner should also consult with his or her insurance agent regarding potential insurance options and coverages. As part of that consultation, the owner may wish to discuss the following scenarios: 20 | ISSUE THREE 2012 • Connect with grie

(1) Payment of the master policy deductible where the loss occurred as a result of the unit owner’s negligence or originated from an area or component for which the unit owner is responsible. For example, if a fire occurs in just one unit, even if the fire is covered under the Association’s master policy, the unit owner would most likely still be responsible for paying the deductible, which can be as high as $5,000.00, $10,000.00 or more. The unit owner would want his or her own unit owner’s policy to cover that deductible. Or, if a water supply flex line running between the angle stop and toilet bursts, some of the resulting damage might be covered under the Association’s master policy, but the unit owner would likely be responsible for the

deductible and possibly the cost to repair damage to the unit’s floor and wall coverings, fixtures and contents.

If the unit owner has the appropriate owner’s policy, those costs could be covered by the policy.

(2) Payment of an Association special assessment to cover liability or repair costs not covered by the Association’s master policy. (This coverage is often referred to as Loss Assessment coverage.)

(3) Damage to the unit’s contents and fixtures from a sewer backup.

(4) Coverage for unit upgrades (custom cabinets and countertops, carpets, wall paper, paneling). These items may not be covered under the master policy.

(5) Liability coverage. Liability coverage is usually provided by a homeowner’s policy. Confirm your policy included liability coverage and ask the agent about the types of claims your policy covers. You don’t want to find out after your dog bites someone that you have no coverage for the dog bite claim.

These scenarios are just a few examples where a unit owner would want to have his or her own insurance coverage. That it is why it is important for unit owners to consult with their insurance agents and obtain the appropriate coverage.

Dennis M. Burke is a Senior Shareholder at Fiore, Racobs & Powers APLC, representing community associations throughout Southern California. Dennis works in the Firm’s Inland Empire office in Riverside, CA.

Delegate/Liaison Selection Processes How does your chapter choose?

by Kimberly Lilley, CMCA, CIRMS

T

he California Legislative Action Committee (CLAC), the body that oversees the advocacy that happens on behalf of community associations in California, is made up of (in most part) Delegates from each of the eight (8) California chapters. These Delegates are tasked with communicating the needs of their chapter to the main body of CLAC so that decisions made about how to advocate take ALL members into account. Delegates are also responsible for bringing information back to their chapters about the progress in Sacramento, helping with grass roots efforts that are needed to support our work in Sacramento, and building a good support system within their chapter.

Duties can range from serving on a bill sub-committee and hammering out the actual language of a bill, to discussing and establishing positions (support, oppose, etc.) on other bills, as well as heading up grass-roots efforts to meet with legislators locally in their district to support the impact we are having in Sacramento.

While not required by CAI National, California opted to create the position of Liaison to help the Delegates in the communication process. You will often see Liaisons presenting the “CLAC Moment” at your chapter’s breakfast or luncheon to communicate the benefits of advocating in Sacramento on behalf of community associations with the chapter membership, or maybe attending a chapter board meeting to give an update to the board on what bills we are currently tracking. While non-voting members of CLAC, Liaisons are very important in keeping the flow of information consistent, improving the value of our entire organization.

So how does one get involved in these noble pursuits? It’s a little bit different in every chapter, so here are some of the highlights:

What kinds of members are chosen to serve as Delegates/Liaison?

When it comes to type of membership (manager, business partner or homeowner), each chapter varies in what it looks for.

Some chapters intentionally try to “spread the wealth” and not have their representatives always come from the same membership category. It can often be difficult to find a homeowner member who is willing and able to serve, but our current CLAC Chair, Dick Pruess, is a homeowner member, so it IS possible.

Other chapters look at which kind of member would be most adept at writing and analyzing bill language, so many business partner attorneys serve on the California Legislative Action Committee. Some chapters want to be sure that the day-to-day practices of HOAs are truly represented, so active manager members are recruited to help keep everything “real.”

Do the Delegates/Liaisons need to have any special skills?

As stated above, some chapters like to provide representatives who can write and analyze bill language, but mostly a passion for this industry and a working knowledge of how it functions are the best skills for a Delegate. For a Liaison, there are some additional qualities that will help them be successful in their position. Since the Liaison is usually responsible for presenting the “CLAC Moment,” a monthly update from our lobbyist in Sacramento, having good presentations skills definitely helps them do their job.

Being able to attend all of the functions that need the CLAC Update presented is also important for a Liaison. Finally, good communication skills in general are helpful for both Delegates and Liaisons, since their main job is to facilitate the flow of information from the chapter up to Sacramento and then back to the chapter again.

Continued on page 22

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Delegate/Liaison Selection Process Continued from page 21

Who Chooses?

This question raised another set of varied responses from each of the eight California chapters. Five of the eight chapters have some sort of Legislative Support Committee that helps to support the Delegates and Liaison locally in their chapter. They help with fundraising, local legislator visits, grass-roots efforts and often give some sort of recommendation on who should be the next Delegate or Liaison to the decision-maker (usually the chapter board). In the Greater Inland Empire Chapter, first choice for the Delegate and Liaison positions come from within the Legislative Support Committee – that way they know that the person being nominated is active and aware of the issues currently facing our industry.

ALL of the chapters require that Delegates and Liaisons be current members of CAI.

22 | ISSUE THREE 2012 • Connect with grie

In most chapters it is the board of directors that makes the final choice about who is to become Delegate or Liaison for the chapter, but often there are recommendations submitted that they consider. San Diego’s Legislative Support Committee sends a recommendation to their board of directors. The president-elect also chooses the chair of the Legislative Support Committee (who is one of the Delegates), so between the committee and the president-elect recommendations, the board has a lot of information to help with the decision they need to make. In the Coachella Valley, the president-elect sends their recommendation to the board for their consideration as well.

In most of these cases, when the board is considering their prospects, they take a look at whether or not the candidate is able to attend the monthly teleconferences, get to Sacramento for Legislative Day at the Capitol in April, and attend the annual planning session in October.

So if getting involved in the legislative future of our industry is something that you are passionate about, contact your chapter to find out if there is a Legislative Support Committee you can participate in. If a chapter doesn’t currently have one, they are working on getting one, and maybe you can help! If you are already involved on a Legislative Support Committee and being a Delegate or Liaison appeals to you, let them know!

Ask to be considered for the position next year. The Delegate terms are two-year periods, so each year one of the terms is up for renewal. Advocacy is (along with education) one of the main reason that CAI exists! Your contribution could help us make the difference in our state’s legislative action committee’s success!

Kimberly Lilley is PR Chair for the California Legislative Action Committee and can be reached at Kimberly@BergInsurance.com.

History of CAI-CLAC Series Interview with Lobbyist Skip Daum

incredulous when their perfectly logical opinion isn’t heeded or agreed to by a legislator or staff member. That’s where I step in to ease the pain and explain political realities. Consider that fewer than 3,600 persons (120 legislators, 2,000 staff, 1,400 lobbyists) work under the capitol I was invited to meet Dick Fiore, Esq., dome on a daily basis while drafting new laws, Chairman of CAI-CLAC, early in 1993. amending bills, securing authors and votes for Apparently, inquiries had been made in the bills, writing analyses, testifying and supporting legislature seeking qualified advocates. Our or opposing more than 4,700 bills every conversation intrigued me … CLAC needed session… and that these ideas become words in expertise and energy in the legislative arena law books that govern 38,000,000 Californians and I believed that I could help it become and businesses. Can you see how unbelievable more effective in the law-making process. I things happen? CLAC needed to play that game was certainly impressed by the number of Skip Daum has been serving and stop being naive about the political realities.

CAI’s California Legislative Action constituents that CLAC served … 9,000,000.

Committee as its Lead Advocate Thirdly, motivation: No organization in the for 18 years and can be reached at lobbying game survives on its past achievements.

What was one of the things that caiclac@aol.com.

It may be known for them, but it also needs made you want to interview for to maintain a strong presence in the capitol the position of advocate? What did you see as hallways, hearing rooms and legislators’ offices. The very first bill I our strengths? was asked to pass was AB 1545 which required delinquent assessments Frankly, I was intrigued by the invitation since I hadn’t to be paid by lenders upon sale… the famed 6 month panacea for all solicited it; in fact, at the time I didn’t know what an HOA or CID HOA fiscal dilemmas. That bill in that first year, and its outcome, was was. I quickly learned that CLAC is comprised of well-intentioned a hallmark for me and CLAC. You can only imagine the vociferous individuals who serve one quarter of California’s population who are opposition to the bill, yet we persevered and ultimately maneuvered it HOA homeowners like me… and they wished to improve the statutory to Governor Wilson’s desk for his signature; it was a true David and framework by which their communities were being governed. CLAC’s Goliath story… CLAC vs. the lending industry, including Freddie strength lay in its great potential to make a difference. I welcomed the Mac. But, alas, Wilson vetoed it. Our exuberance near the finish line challenge. was dashed.

But, as we shared our deep disappointment, CLAC got its first What were some of the challenges at the lesson in political defeat, one that we have rarely repeated, since we beginning with CAI-CLAC? remained determined to fight another day. And we have, passing or Three stand out. amending several bills into law since then that benefit our communities.

Firstly, organization: CLAC’s structure was, and remains, Optimism is a force multiplier. volunteer-driven. However, their roles and duties needed to be defined

When were you first contacted regarding the California Legislative Action Committee, and what was your first impression of the organization?

and a more functional schematic or business approach was needed whereby administrative details, communication systems, lobbying procedures, budgets and timelines would mesh and goals would be accomplished. Hence, we worked together to devise a system that continues to rely on the volunteers for opinions and effort, and on the advocate for expertise in the lawmaking process … as a TEAM. A close partnership evolved and as a result CLAC’s policies have been implemented, its structural and legislative goals have been achieved and its “presence” in the Capitol is renowned.

Secondly, education: The legislative and political processes are mystifying for most people. So many times people are aghast and

How did you overcome some of the challenges that came up in the early days? Who pitched in with you to help handle these situations?

Wow. A great example is that there was no internet when we started working together. Handwritten amendments were faxed to CLAC Chairman Ron Severaid, Esq. at midnight only to have them faxed back at 2:30 in the morning with pages of scribbled edits.

This was more than a challenge in workload and patience; it was a demonstration of our working as teammates toward CLAC’s goal. No Continued on page 24

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History of CAI-CLAC Series Continued from page 23

matter our time or temperament, it had to be written correctly before the world knew about it. Our team swelled with pride when we presented our case in committee and secured the necessary votes.

PS: That same respectful and productive relationship exists today; CLAC’s topic subcommittee members always help me. It’s just expedited thanks to the internet… “drive-thru-writing” is what I call it.

Over the years, have you seen CAI-CLAC’s challenges change? Or have they remained relatively consistent?

CLAC will forever face the challenge of a legislature that is not very endearing to homeowners associations. This has been created by negative press and frequently, as

we have seen, escalates into a legislative “fix” that some elected solon introduces despite the fact that its prompting was a completely anomalous, anecdotal incident and not representative of what occurs in 47,000 HOAs. Nonetheless, we must deal with it.

Accordingly, I recommended a couple of years ago that CLAC launch a “Visible Vanguard” in various media to promote a better image of HOAs. This challenge continues today.

What about our strengths? Are they consistent, or have they shifted?

I don’t think they’ve shifted. And here, I must give a “shout out” to our CAI Chapter Leaders and Execs! They have consistently provided a stage for CLAC at monthly events. This is a mutually beneficial relationship that must remain strong.

I also greatly appreciate the effort our CLAC Delegates and Liaisons put toward CLAC as a committee of National, but also in furtherance of our particular State lobbying goals. I rely on the opinion of the CLAC members who sit on our various topic subcommittees and on the extraordinary time people like our current Chairman Dick Pruess puts in. He has spent years working as our representative to the CA Law Revision Commission on the rewrite of the DavisStirling Act. Since my assistant Kerri Ostrom and I were asked to organize a Legislative Day in the Capitol event 19 years ago, it has become our main event. Held across the street from the Capitol for legislative briefings, educational sessions and our Delegate meeting, as well as in the Capitol for one-on-one time with attendees’ own senators and assembly members, it is a galvanizing event for all. Sponsors are so very much appreciated!

What are the two things that you can tell members of our organization, from your extensive history as our advocate that would help most in supporting our cause and making us more effective?

1. Promote the positive benefits of community associations to your own politicians. All politics is local. If you get ‘em there, I’ll close the deal in Sacramento.

2. Widen the reach of CLAC’s mission across the web. Be that HOAs’ preeminent Visible Vanguard lobbying force now, before the enemies seize the high ground and usurp your position.

24 | ISSUE THREE 2012 • Connect with grie

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HOA Homefront Reader Questions | Homeowner Education

By Kelly G. Richardson, Esq.

Dear Mr. Richardson, Q. We are new to HOA and would like to attend a class on how HOAs work.

Thank you for your column, P.G., Hermosa Beach Dear P.G.: There are many sources to learn more about how California common interest developments (the legal term for “HOA”) should operate.

The only source of HOA member education nationwide is the Community Associations Institute. Formed over 30 years ago, CAI now has 59 Chapters in the U.S. and a few in other countries. California has eight chapters. In the areas served by this column, those chapters are the Greater Los Angeles Chapter (www.cai-glac.org); the Orange County Regional Chapter (www.caioc.org); Channel Islands Chapter (Ventura and Santa Barbara Counties, www.caichannelislands.org) and the Greater Inland Empire Chapter (Riverside and San Bernardino counties, www.cai-grie.org).

The Orange County Chapter periodically provides a homeowner educational course Community Leadership Training Program (“CLTP”) consisting of five sessions, each two and one half hours long.

The Channel Islands, Greater Inland Empire and Los Angeles Chapters offer a seven hour class, called “Essentials of Community Leadership”, typically offered on Saturdays.

All four Chapters periodically offer CAI’s “California Basic Board Education Course,” a three hour survey course of foundational issues pertinent to board service. On the other hand, if you are interested in a deeper exploration of the law regarding HOAs, you may want to take CAI’s California Law Course for Common Interest Development Managers, an 8-hour course accredited by the Department of Real Estate. All California Chapters of CAI offer that course from time to time.

26 | ISSUE THREE 2012 • Connect with grie

Contact your local Chapter to find out when these courses are next being offered.

If you are unable to travel to any of the local Chapter classes, CAI’s National website offers the 3-hour “California: What Board Members Need to Know” seminar on line in a “webinar” format. Available on-demand, the webinar includes a PowerPoint presentation and course reference materials. Find it at www.caionline.org, in the education section, under “on-demand webinars.”

There is a more basic seminar, “The Fundamentals of Community Leadership,” also found on the National CAI website. On the other hand, if you do not have time to sit through a web seminar, you may want to download and read “An Introduction to Community Association Living,” a free 54-page pamphlet.

The California Association of Realtors® has a publication available to its members which provides an orientation of the basic legal aspects of California HOA living. It is called “Common Interest Developments Basic Information Guide” - your Realtor® can get you a copy at no cost.

On October 19, 2012, CAI presents its Third Annual California Law Forum, a day-long legal seminar event for homeowners and managers. This year’s event is at the Pechanga Resort & Casino Conference Center in Temecula.

Many of the better management companies offer client seminars.

So, there are many sources for the homeowner or Director who wants to learn more about proper HOA governance.

The vast majority of legal disputes between homeowners and their associations result not from bad people, but people not understanding basic concepts about California CID living. Education solves that.

P.G., if more homeowners took the time to learn about their rights and responsibilities to their community, there would be far less regrettable disputes that we attorneys would have to handle – and that would be a good thing.

Thanks, Kelly

Kelly G. Richardson is Managing Partner of Richardson Harman Ober PC, a law firm known for community association advice.

Direct questions to KRichardson@RHOpc.com. Past columns at www.HOAHomefront.com. All rights reserved® 2012.

Monte Carlo Night

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Don’t miss the largest CAI legal event of the year specifically for California Communities!

The CAI Legal Forum offers two education programs—one for community managers and one for board members and other homeowner leaders. Sessions are presented by expert panels, including government officials, seasoned management professionals and members of the prestigious College of Community Association Lawyers, a professional organization that represents the very best attorneys in the industry.

Anyone who lives in, works for or provides services to a California community association will leave the event more informed, more engaged and better able to contribute to a successful community.