Focus Magazine - March/April 2015

Focus

March/April 2015

L.A.’s Premier Source of Information for Community Associations

Another Look at Fraud Proper Payment Procedures What Do Those Letters Mean?

Protecting Your HOA From Fraud

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2015 BOARD OF DIRECTORS Officers Katy Krupp, President Fenton, Grant, Mayfield, Kaneda & Litt, LLP, 949-435-3800 Lisa Tashjian, Esq., President Elect Beaumont Gitlin Tashjian, 866-788-9998 Michael Lewis, CCAM®, CMCA®, AMS®, PCAM®, Vice President Concept Seven, LLC, 310-622-7012 Joanne Peña, CMCA®, AMS®, PCAM®, Secretary Horizon Management Company, 310-543-1995 Meigan Everett, PCAM®, Treasurer Gold Coast Property Pros, 424-238-2333 Matt D. Ober, Esq., Past President Richardson Harman Ober, PC, 626-449-5577 DIRECTORS Greg Borzilleri PCW Contracting Services, 949-285-7802 Carol Brockhouse, 818-336-2892 Donald Campbell, CCAM®,CMCA®, AMS®, PCAM® Wilshire Regent HOA, 310-474-5563 Pamella De Armas SAX Insurance Agency, 310-740-4274 Linda Healey, CCAM®, PCAM® The Californian on Wilshire, 310-234-5905 Dick Pruess Castlegate HOA, 626-584-0000 Lynn Ruger Warner Club Villas HOA, 818-703-7090

CHAPTER EXECUTIVE DIRECTOR Joan Urbaniak, MBA, CMCA®

2015 COMMITTEE CHAIRS Awards Katy Krupp, Fenton, Grant, Mayfield, Kaneda & Litt, LLP COMMUNITY OUTREACH Meigan Everett, CMCA®, PCAM®, Gold Coast Property Pros EDUCATION Anda Bewhite, MBA, CCAM®, CMCA®, AMS®, PCAM®, All West Management FINANCE Jolen Zeroski, CMCA®, Union Bank HOA Services GOLF TOURNAMENT Teresa Agnew, Roseman & Associates, APC Ryan Dudasik, EmpireWorks Reconstruction & Painting LEGISLATIVE ACTION Lisa Tashjian, Esq., Beaumont Gitlin Tashjian MARKETPLACE Alan Denison, Stay Green Inc. MEDIATION SERVICES Matthew Grode, Esq., Gibbs, Giden, Locher, Turner, Senet & Wittbrodt, LLP PROGRAMS/LUNCHEONS Linda Healey, CCAM®, PCAM®, The Californian on Willshire Brian Moreno, Esq., SwedelsonGottlieb PUBLICATIONS Matthew Gardner, Esq., Richardson Harman Ober PC FOCUS Magazine Matthew Gardner, Esq., Richardson Harman Ober PC Jacklyn Wolf, Stonemark Construction Management Membership Directory Stephen S. Grane, Alante/MCS Insurance Services Web Site Lynne Collmann, CMCA®, AMS®, Savoy Community Association SATELLITE PROGRAMS Ruth Moffitt, CMCA®, AMS®, PCAM®, Valencia Management Group AAMC® Craig Phillips, CCAM®, CMCA®, AMS®, PCAM® International Tower Owners Assn.

SOCIAL Donald Campbell, CCAM®, CMCA®, AMS®, PCAM®, Wilshire Regent HOA Angel Fuerte, FRESHCO Painters Inc. WINE NIGHT Joanne Peña, CMCA®, AMS®, PCAM®, Horizon Management Company Jolen Zeroski, CMCA®, Union Bank HOA Services

CAI-Greater Los Angeles Chapter

Newsworthy 4 Another Look at Fraud 6 Fifty Ways to Lose Your Money 8 Proper Payment Procedures for Construction Projects 10 What Do Those Letters Mean?

12 CAI Professional Manager Code of Ethics 14 News From Sacramento 18 Takeaways From the Community Association Volunteer Leader Workshop 20 Are You Protecting Your Hoa With A Fidelity Bond?

22 The “F” Word: Fraud 24 Model Code of Ethics

Chapter update 2 Note from the Editor’s Desk 3 Message from the President

NOTEWORTHY 16 A Special PCAM® Get-Together 19 PCAM® PRIDE 27 Congratulations to the 2014 Recruiter Contest Grand Prize Winner 29 OF NOTE: Corrections to 2015 Membership Directory

FYI 31 32 32 32

On the Cover CAI-GLAC Membership News 2015 Upcoming Events Advertisers Index Advertising Information

This publication seeks to provide CAI-GLAC’s membership with information on community association issues. Authors are responsible for developing the logic of their expressed opinions and for the authenticity of all facts presented in articles. CAI-GLAC does not necessarily endorse or approve statements of fact or opinion made in these pages and assumes no responsibility for those statements. By submission of editorial content to CAI-GLAC, the author acknowledges and agrees to abide by the editorial and policy guidelines. Copyright © 2015.

All rights reserved. Reproduction in whole or in part without written permission is prohibited. CAI is a national, not-for-profit association created in 1973 to educate and represent America’s residential community association industry.

National Office Address: 6402 Arlington Blvd. #500, Falls Church, VA 22042 Tel: 888/224-4321 • Web Site: http://www.caionline.org

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2015 CAI-GLAC Super Sponsors Platinum

Fraud: Could It Happen to You?

H

ave you done all you possibly can to ensure that your association is protected from fraud? This issue is full of excellent advice from experienced professionals who share their applicable methods and strategies for proactive controls to guard against fraud.

Dirk Foster PCAM®, explains how the CAI’s manager certification process includes agreeing a commitment to adhere to an ethical code of conduct, which in turn, helps limit fraud. Susan Hayward reinforces the value of education for HOA board members in Takeaways From the Essentials of Community Leadership Workshop.

To help ensure that your association can recover if theft does occur, Steve Little explains why every association should have adequate fidelity bond from the Editor’s Desk coverage in place to cover their losses. Finally, Jasmine Fisher, Esq. offers a legal perspective on As Gary Porter, CPA, succinctly states: how to address the aftermath of fraud. the potential for fraud exists where there are weaknesses in financial Read these articles carefully, discuss processes. His article outlines the them with your board, manager and steps that associations and board experts, and implement any procedures members can take to build accounting our authors advise in order to controls into their procedures. Michael strengthen your risk management and Huffman, PCAM®, emphasizes the internal controls strategies. importance of establishing accounting Warm regards, methods that require checks & — Jacklyn Wolf, Editor balances. Stonemark’s article on proper payment procedures details accounting controls that protect your association during construction projects.

Note

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CAI-GLAC does not necessarily endorse or approve statements of fact or opinion made in these pages and assumes no responsibility for those statements. Authors are responsible for developing the logic of their expressed opinions and for the authenticity of all facts presented in articles.

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We thank our 2015 sponsors who have made a substantial contribution to ensure our continued success this year.

Contact the Chapter Office at 818-500-8636 to sponsor a program or an event.

CAI-Greater Los Angeles Chapter

Message

FROM THE President

T

9 Tips to Domestic Tranquility

his issue of our magazine FOCUSes on embezzlement and the fraud committed by HOA board members and community managers. When our forefathers suggested domestic tranquility, I am pretty sure they never envisioned a life full of schemes and virtual identity issues. Wasn’t their intention to create a steady, even-keeled country, free from the disturbances of our own people turning against one another? Gone are the days of complete trust. We are no longer completely safe from our

everyday lives. It is more important than ever to be proactive in our security measures and how we conduct business.

Why are we seeing a rise in fraud? Three main reasons: motivation, rationalization and opportunity. “If I only had a few more dollars I could pay off my current debts.” Or maybe it’s the theory, “I can borrow from the organization and return the funds at a future date.” We make it pretty easy on our personnel by giving them sufficient access to assets and information that allows him/her to believe that the fraud can be committed and successfully concealed.

What can we do? We must set the tone at the top. Boards of directors and management need to lead by example.

We must instill ethical behavior for fair

and honest business practices. Here are nine tips to consider: 1. Double Signatures & Authorizations (multiple layers of approval) 2. Require Backup Documentation 3. Never pre-sign checks 4. Separation of Duties (one individual should never be responsible for an entire financial transaction) 5. Conduct Background Checks 6. Fair Bidding Process (get multiple bids) 7. Fixed Asset Inventories (record serial numbers on computers, printers, etc) 8. Audits and Board Level Oversight 9. Encourage Whistleblowers (provide a means for anonymous communication) These simple measures can make a real difference in how We, The People, face our ever-evolving world! Enjoy this issue, and, as always, feel free to reach out to me at any time.

— Katy Krupp 2015 Chapter President

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The opportunity to commit fraud exists where there are weaknesses in financial processes— internal controls over financial transactions.

Rationalization of fraudulent activity takes place where an individual thinks they are justified in taking money because they are underpaid or under-appreciated, or because it is for their family, or because it’s just temporary and they intend to pay it back.

Exposure to fraud, or risk of fraud, differs depending on type of organizations and processes used.

Another Look at Fraud  By Gary Porter, CPA During the course of my professional career I have been involved in the investigation of approximately 20 embezzlement situations (embezzlement being one form of fraud, the most common form in the community association industry). Most frauds are not discovered by auditors, but are found based on internal reviews or tips from employees. Discovery of fraud is NOT the primary goal of an audit; the audit is intended to determine the (relative) accuracy of the association’s financial statements. CPAs performing audits have an obligation to consider the possibility that fraud may exist in the performance of our procedures. After the Enron and other major audit failures, the AICPA established formalized, but limited, procedures that the auditor must perform.

At the core of any form of fraud are three underlying factors referred to as the “Fraud Triangle.” || Incentive to commit fraud || Opportunity to carry out the fraudulent act || Ability to rationalize fraud The incentive to commit fraud is normally caused by personal financial pressures that can’t be relieved by ordinary, legitimate means. Such pressures may be caused by divorce, health issues, bad investments, gambling, or addictions.

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1. Smaller, self-managed associations that depend on directors/members to process transactions have a high degree of risk because there is usually no one reviewing the transactions. You are completely dependent on the honesty of the member. Risk is reduced if an outside contractor performs some or all of the accounting functions.

2. Larger, self-managed associations that employ staff usually have the issue that no more than one or two people are involved in the accounting process, so there is little, if any, segregation of duties, which is one of the cornerstones of strong internal controls. Use of outside lockbox and payroll services helps reduce risk.

3. Associations that employ an outside management company enjoy an automatic protection against internal fraud risk. Most management companies have a sufficient number of staff in their employ that they can achieve an adequate segregation of duties.

In all instances, the association should carefully review financial statements and make sure that they have adequate insurance to mitigate losses. Consult with your HOA insurance specialist, as different kinds of insurance policies may be required depending on which of the three categories above that you fall into.

Weaknesses in internal financial controls cover a very wide range of activities, but there are a few generalizations that exist.

Money can be diverted from either the billing/cash receipts cycle or the purchase/cash disbursements cycle of financial transactions. “Tracks” that perpetrators often leave are “general journal entries” in the general ledger to cover up funds diverted. Example: Assessment payments received in the form of cash can be diverted, but a journal entry must be made to show the account as “paid.” Reviewing general ledger accounts for cash, assessments receivable, and accounts payable should normally not show any general journal entries, as all entries to these accounts should come from billing journals, cash receipts journals, purchase journals, or cash disbursement journals. General journal entries in these accounts are a red flag.

CAI-Greater Los Angeles Chapter

Using an outside bank lockbox system is one of the best ways to reduce risk on the billings/cash receipts cycle of transactions, as it eliminates the most common methods of diverting funds.

Establishing a fake vendor, often with a name virtually identical to the name of a legitimate vendor, is one method perpetrators use to divert funds from the purchases/cash disbursements cycle.

The basic steps that an association or board member can take to protect themselves are: 1. Never sign blank checks or checks payable to “cash.”

2. Control the blank check stock.

3. Require dual signatures on checks.

4. Demand and review monthly financial statements.

5. Review monthly bank statements and bank reconciliations.

6. Make sure you are familiar with all association vendors.

7. Segregate financial duties as much as possible amongst staff/members.

8. Use an outside collection service for delinquent assessments receivable.

9. Consider using a bank lockbox system for collecting assessments.

10. Consider using an outside payroll service.

11. Consider using a professional management company.

12. Maintain adequate D & O (Directors and Officers) and fidelity bond insurance.

13. Insist on an annual audit, which requires the auditor to document and understand your internal control system. Such procedures are not required in a review of financial statements.

CAI publishes a Tips for Protecting Your Association Finances brochure that covers these and other areas that you may consider. Download at www.cai-glac.org/details.php?id=173.

Gary Porter, CPA is a partner in the CPA firm Hinricher Douglas & Porter LLP, which serves association clients in California and Nevada. He has been working in the community association industry for more than 30 years and has performed thousands of association audits. He is the primary author of PPC’s “Guide to Homeowners Associations” and “Homeowners Association Tax Library,” which serve as the principal guides used by CPAs within the community association industry. Gary is a also a past national president of CAI. He can be reached at gporter@hdp-cpas.com.

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P

icture an accounting department in ANYTOWN USA. The time is the early eighties. A person sits at a desk opening mail. They receive a check and deposit it into the bank. They receive an invoice and issue payment to the supplier. They open a bank statement and reconcile it. They do all of this while thinking of the things they want in life, new car, good clothes, fun times.

Cue up the music from the Twilight Zone—because you have just entered the FRAUD ZONE. Fast forward to today and we can easily see what is wrong with the picture painted above: No controls for fraud prevention when one person does all three accounting activities.

association than they would if they received a check by mail.

Make sure that someone (Manager or Treasurer or both) other than the person who enters invoices into your system reviews the invoice before releasing payment.

When it comes time to reconcile the bank statements to the end-of-month reports, be sure that the person reconciling is not the same person who approved the checks for payment. Conduct spot audits on random transactions to confirm that the name and amount on the cleared check / payment matches with the original issuing data, especially for checks out-of-sequence.

If you have payroll for staff, use a payroll company as opposed to in-house processing. This allows better control of the process and more transparency in the reporting. Question any request to issue a separate payroll check due to “lost or misplaced” check. If doing payroll in-house, be sure that the person processing payroll does indeed take their annual vacation so someone else can see and possibly question the process.

Fifty Ways to Lose Your Money (Apologies to Paul Simon)



By Michael Huffman, CCAM®, CMCA®, AMS®, PCAM®

Fraud prevention starts with the basic premise that the person processing incoming funds is one of three in the accounting system—separate from the person issuing vendor payments and separate from the person reconciling the bank account.

Regarding vendor payments, before adding a vendor to the approved list for payment, basic fraud prevention is to: 1.

2.

3.

4.

Verify that the vendor exists Obtain a W-9 Check the contractor’s license at www.cslb.ca.gov online Compare the contract to the invoice and to the work performed —Nothing like a phantom vendor invoice scam to drain funds from the Association.

As to the Receivables side, be sure that the person processing incoming payments has proper authorization and uses proper protocol to ensure that payments to ABC HOA don’t get mixed up with payments to EFD HOA. If using electronic processes (Auto Debit of owner accounts), confirm that you have signed authorization from each owner.

If you are self-managed, then the Board has an enhanced duty to review the financial reports at least quarterly as required by the California Civil Code. This author recommends a monthly review.

There are many systems in use, but they all rely upon Trust and that the people involved are Ethical, properly trained and supervised in cash control processes.

Fraud prevention never ends. Even the best system must be checked and tested periodically.

Michael Huffman is the CEO of Management Professionals, Inc.an Accredited Association Management Company® (AAMC®) located in Torrance providing service to more than 135 associations. He can reached at michael@mpimail.net.

The above is especially true if you are paying the invoice electronically. Make sure that your outgoing data is protected so that the vendor cannot obtain more information about the

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CAI-Greater Los Angeles Chapter

WE REPRESENT COMMUNITY ASSOCIATIONS

Since 1987 we have limited our practice to providing a full range of legal services for • Condominiums • Planned Developments • Cooperatives • Homeowner Associations There is no substitute for experience!

Ventura County 805.650.7899

www.lawforhoas.com www.hoalawblog.com

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Los Angeles 310.207.2207 California 800.372.2207

San Francisco 415.762.1889

A higher level of engagement.

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Bring a higher level of engagement to your personal and professional network and meet face to face at the Annual Conference.

Register at www.caionline.org/conference.

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Proper Payment Procedures for

Construction Projects

Proper procedures for processing invoices for constructionrelated expenses involve more than just money. Your release

of funds is governed by contract and signifies an acceptance of work performed; it should represent your association’s best interests.

Fund control for a construction project requires that you familiarize yourself with the appropriate contract terms and conditions before you make any payments. Only then will you feel confident that the invoices you receive for payment are accurate, complete, and accompanied by the proper documentation. • By Jacklyn Wolf Contract Terms & Conditions.

Construction contracts are more than an agreement for scope of work to be performed and fees to be paid. A wellwritten and thorough construction contract will specify all matters related to the project, including payment procedures, legal terms, schedule, and retention. The risk management and fiduciary protections garnered by enlisting your association’s attorney or a professional construction manager for assistance with construction agreements cannot be underestimated. This is not the time to try to save money! For a major project, never simply sign a contractor’s proposal: many of the terms and conditions can and should be negotiated to provide clarity, define responsibility, assign risk and protect your association’s interests. A simple example of terms you can negotiate: a contractor’s requirement that his invoices be paid weekly. A complex issue that should be skillfully negotiated by a construction expert: the general conditions and management labor for

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It’s More Than a Matter of Money: It’s Good Risk Management your general contractor. This can run from a low of 7% of the project cost to as high as 15%. Once you’ve committed to these terms, you will be seeing and paying that percentage every time you write a check, and it will add up to a large part of the overall project expense.

Invoice Verification. Reference the contract as you review an invoice to verify that work is in accordance with the payment terms in the contract as they may vary, even within the same project.

Sometimes submittals are by established schedule, such as bi-monthly or monthly.

Pre-negotiation to coordinate as many project participants into the same payment schedule is an efficient way to keep administrative costs down. When reviewing invoices on a time & materials basis, verify that the hourly rates are in accordance with contractuallyestablished rates (superintendents are paid at a different rate than laborers, for example), and that the number of hours invoiced matches the field-time tickets. Require and review back-up

CAI-Greater Los Angeles Chapter

documentation such as receipts for appropriateness; ensure that the amount invoiced matches that back-up, that mark-ups are appropriate, and that the overhead/profit is in accordance with the contract. When reviewing the invoices according to a percentage-complete basis, confirm that the amount invoiced is consistent with overall progress of the project so that you do not pay in advance of work actually completed. This can also be problematic towards the end of the project when final payments are requested by the contractor. Don’t run the risk of over-paying! Retaining an independent project manager to verify work in the field can be of great value in this regard. Most community managers do not have a construction background, nor should they accept the risk that could be incurred by making a decision outside their expertise. Never pay for incomplete work, or work that should be corrected.

In all cases, confirm that the work has been performed; verify the arithmetic, that the tasks have not been previously

invoiced, that the appropriate lien release is included, and that the proper amount of retention is withheld.

Retention. Retention is a percentage based on the project value, usually 10%, which is withheld from each payment.

Think of it as a kind of insurance. For large projects, retention is typically withheld from the general contractor, who may then withhold similar retention from subcontractors. On the other hand, construction material suppliers are not usually subject to retention by their contractor customers and insist on payment in full within 30 days of invoice. The contractor should be paid in full at the end of the project only when it is confirmed that all work, including punch list work, has been properly performed to contractual terms, that the contractor has paid all his subcontractors in full, and that all other terms of the contract have been fulfilled. This is normally formalized by receipt of an unconditional final lien release.

These guidelines can help you be confident that you will not pay for work that has not been properly performed, will not double- pay or pre-pay, and that your association will be protected from future liens against the property. For larger projects, consult your construction manager for professional advice.

Jacklyn Wolf, Business Development Manager for Stonemark Construction Management, has been actively involved in our Chapter since 2003, Chapter President in 2009 and current Co-editor of FOCUS Magazine. She can be reached at jacklyn@stonemarkcm.com.

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What Do Those Letters Mean?

The Importance of Community Manager Designations and Their Role in Curbing Fraud >>> By Dirk Foster, CCAM, CMCA, AMS, PCAM So you have a few letters behind your name…but what does that really mean? In general, it means that you hold some sort of recognized designation associated with a degree or advanced training. What it really means depends on what those letters, or more correctly what those who hold the associated designations, represent. Designations for advanced degrees like MD, J.D., PhD, and MBA identify someone that has achieved the highest level of education in a chosen field of study. These designations tend to command a certain level of respect because of the esteem with which we view higher learning. We see individuals that hold them as trusted experts, well versed even in subjects outside their fields because they thrive on learning. We also view them as having some level of integrity because they have distinguished themselves and generally hold high-level positions. But what about designations that are not associated with a degree, but are specific to an industry like those held by Community Managers through CAI? How are these designations viewed?

People associated with the industry, from homeowners to vendors, should view the designees holding them as both highly-trained in the industry and having the ethics required to do the job right. To understand what that has to do with curbing fraud, however, we need to take a closer look at ethics and the education specific to our industry.

People generally know right from wrong, yet can still choose incorrectly. This is because a person with morals knows the difference but only someone with ethics will make the right choice. Basically, morals are our personal standard of behavior that aid us in discerning the difference between right and wrong, and ethics are the principles or standard that governs our behavior. In general, we derive our ethics from the credence we give various external sources like laws, religious beliefs or codes. The fact of the matter is that, while plenty of people go through their daily lives without ever drawing a distinction between morals and ethics, as stakes get higher, acting ethically can become increasingly difficult for some, especially those without reinforced guidance. This is often referred to as applying situational ethics, but is meant as a slight against those who employ them. So what about achieving and maintaining a designation will make Boards believe you have integrity, the display of ethical behavior, before seeing you in action? The answer is that CAI training

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programs have long been known to be developed with best practices and ethical behavior in mind. In addition, the Professional Manager Code of Ethics sets the standard for Manager Members of CAI, and ethical decision making is reinforced in every aspect of our training.

It’s this constant exposure through training to what is right and wrong that shapes Managers to think ethically and has developed our culture of ethical behavior. Add to that the fact that maintaining a Community Manager designation takes more than just attending continuing education, but also requires that the Manager continuously act according to the Code of Ethics or face losing their designation permanently, and you start to get the picture of how designations lend to fraud prevention. So, Managers seeking and holding designations not only receive training that undoubtedly improves their job performance, but they also become indoctrinated to an ethical code that shapes their behavior and has consequences if they don’t uphold it; we are held accountable. Knowing this, you can understand why Association Boards that take their fiduciary responsibilities seriously seek out Managers that hold such designations.

Of course, there may be skeptics out there who know that just about every profession has recurring ethics training these days and don’t think anyone will view ours as any different. The fact is, however, that in October of 2001 when the Enron scandal broke and for what seemed like the first time ever, professional ethics were on everyone’s mind across the country. CAI (fundamentally focused on developing Managers to choose the hard right over the easy wrong when confronted with ethical dilemmas) already had a Professional Manager Code of Ethics and enforcement procedures in place for many years and was able to focus on normal operations while every company and trade organization doing business in the U.S. that didn’t have a written code, dove headlong into developing one.

If you plan to work and compete for positions of increased responsibility as a Community Manager, seeking specialized education and designations as you become more experienced is the best way to advance your career because Boards looking for ethical Managers to help lead their Communities will know that they can count on you.

Dirk Foster, CCAM, CMCA, AMS, PCAM is the general manager at Two Eleven Spalding Condominium Association in Beverly Hills. He can be reached at 211spalding@sbcglobal.net.

CAI-Greater Los Angeles Chapter

REPRESENTING HOMEOWNER ASSOCIATIONS THROUGHOUT SOUTHERN CALIFORNIA SINCE 1982:

We provide our clients with a full range of services including: • FINANCIAL MANAGEMENT • ADMINISTRATIVE MANAGEMENT • FULL SERVICE HOA MANAGEMENT As pioneers in HOA Management, we are constantly striving to provide the highest quality service to our clients while acting in the most professional and courteous manner; conducting our business with genuine care and regard for the communities we serve.

Being one of the biggest has not made us the best; being the best has made us one of the biggest!

CAI-Greater Los Angeles Chapter

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COMMUNITY ASSOCIATIONS INSTITUTE PROFESSIONAL MANAGER CODE OF ETHICS The Manager Shall: 1. Comply with current bylaws, standards and practices as may be established from time to time

by CAI subject to all federal, state and local laws, ordinances, and regulations in effect where the Manager practices.

2. Participate in continuing professional education through CAI and other industry related organizations.

3. A ct in the best interests of the client; refrain from making inaccurate or misleading representations or statements; not knowingly misrepresent facts to benefit the Manager.

4. U ndertake only those engagements that they can reasonably expect to perform with professional competence.

5. Exercise due care and perform planning and supervision as specified in the written management agreement, job description or duly adopted Board policies.

6. D isclose all relationships in writing to the client regarding any actual, potential or perceived conflict of interest between the Manager and other vendors. The Manager shall take all necessary steps to avoid any perception of favoritism or impropriety during the vendor selection process and negotiation of any contracts.

7. Provide written disclosure of any compensation, gratuity or other form of remuneration from individuals or companies who act or may act on behalf of the client.

8. Insure that homeowners receive timely notice as required by state statutes or legal documents and protect their right of appeal.

9. D isclose to the client the extent of fidelity or other contractually required insurance carried on behalf of the Manager and/or client and any subsequent changes in coverage, which occur during the Manager’s engagement if the amount is lower than the contract amount requires.

10. See that the funds held for the client by the Manager are in separate accounts, are not misappropriated, and are returned to the client at the end of the Manager’s engagement; Prepare and furnish to the client accurate and timely financial reports in accordance with the terms of the management agreement, job description or duly adopted Board policies.

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www.cai-glac.org | March/April 2015

CAI-Greater Los Angeles Chapter

11. Recognize the original records, files and books held by the Manager are the property of the client to be returned to the client at the end of the Manager’s engagement; maintain the duty of confidentiality to all current and former clients.

12. R efrain from criticizing competitors or their business practices; Act in the best interests of their Employers; Maintain a professional relationship with our peers and industry related professionals.

13. Conduct themselves in a professional manner at all times when acting in the scope of their employment.

14. Not engage in any form of price fixing, anti-trust, or anti-competition.

15. N ot use the work products of colleagues or competing management firms that are considered proprietary without the expressed written permission of the author or the management firm.

Compliance with the Professional Manager Code of Ethics is further amplified in the Code Clarification Document provided by the Community Associations Institute.

CAI-Greater Los Angeles Chapter

March/April 2015 | www.cai-glac.org

13

news

AB 585 and AB 603 give homeowners a tax credit when installing artificial turf. These bills may have real traction in the legislature as taxpayers will like it.

from sacramento

AB 596 requires condominium sellers to disclose whether their association is “FHA Certified.”

AB 1335 is Assembly Speaker Atkins’ bill that would provide more affordable housing funding by imposing a $75 per document recordation fee.

By Skip Daum

CLAC Moment March 2015

AB 1448 would prohibit owners from installing clotheslines in an effort to conserve energy.

Here’s the latest from Sacramento:

2,418

bills have been introduced this session. Forty-three impact common interest developments. Here are some important ones:

Assembly Bill 349 expands the allowable use of artificial turf in associations. As its author maintains that she does not wish to tell association boards how to govern, the bill will undergo some amendments that we will help construct.

Senate Bill 336 would provide that policyholders shall enjoy a premium discount or credit of at least five percent on residential earthquake coverage policies purchased through the California Earthquake Authority.

We will discuss these bills at our April 12-13 “Legislative Days in the Capitol” event in Sacramento. Monday, April 13, will be our 23rd annual “lobby day” when homeowners and association professionals personally lobby their Assembly Members and Senators. Be sure to register online for this fun and important event at www.caiclac.com.

Skip Daum is our Legislative Advocate for CAI's California Legislative Action Committee and may be reached at caiclac@aol.com.

OUR THANKS TO 2015 CLAC CONTRIBUTORS January 1 – February 28

Goal: $24,645

28%

of goal as of 2/28/15

14

11767 Sunset Blvd. Assn.

20th Street HOA 2nd Street HOA 3rd Street, Inc. 4th Street HOA 446 San Vicente HOA 558 Evergreen Street HOA 7th Street HOA 826 2nd Street HOA 909 El Centro, Inc. 914 Lincoln Blvd. HOA Artesia HOA Avis HOA Berkeley Street HOA Berkeley Townhouse HOA Bodger Park Condo HOA Burbank Blvd. HOA California Ave HOA Casa De Valley View OA, Inc. Casa Loma Association, Inc. Chateau Goshen HOA

www.cai-glac.org | March/April 2015

Continental Court HOA Culver Centrale HOA El Centro, Inc. Florwood Estates HOA Forest Park Village HOA Galaxy HOA Gorham Park HOA Inc. Harbor Knolls HOA Heritage Townhomes OA Hermosa Surf Condos Hillcrest Meadows HOA Hillcrest Rolling Hills HOA Hopi HOA Idaho Villas HOA Idaho West Town Homes HOA Lawford HOA Oak Hill Condo HOA Oak Street HOA Ocean West COA Pacific Regency HOA Rancho-Glen HOA

Ridgeley Vista Chateau HOA S. Manhattan Place HOA Shoreham Villas HOA Silverview Townhomes HOA Inc. South Bay Estates HOA South Hermosa Townhomes HOA Inc. Textile Building OA The Vista Pacifica HOA V.I.P. Goshen Assn. Inc. Villa Cordoba HOA Villa Pacifica Condo HOA Vogue Condominiums Association, Inc. Westside Townhouses I HOA West Wind Townhomes HOA Whitsett Avenue HOA Wilshire Regent HOA Woodbury Maintenance Corp.

Yale St. HOA

CAI-Greater Los Angeles Chapter

What is CLAC? The California Legislative Action Committee (CLAC) is a volunteer committee of the Community Associations Institute (CAI) consisting of homeowners and professionals serving community associations. CAI is the largest advocacy organization in American

 Represents over nine million homeowners and property owners in more than 45,000 associations throughout California.  Comprises association homeowners, board members and the professional business partners that service them.  Is NOT a PAC (Political Action Committee) and makes no financial campaign contributions.

state lawmakers, and protecting the interests of

 Depends solely on the donations of the community associations, their boards of directors and those who serve HOA members.

those living in community associations in California.

CLAC’s Mission

About the Organization

To safeguard and improve the community association lifestyle and property values by advocating a reasonable balance between state statutory requirements and the ability and authority of individual homeowners to govern themselves through their community associations.

dedicated to monitoring legislation, education elected

 Is a non-profit, non-partisan committee composed of two Delegates and one Liaison from each of the eight CAI California chapters.

CAI-Greater Los Angeles Chapter

March/April 2015 | www.cai-glac.org

15

A Special PCAM

®

M

ore than 38 Professional Community Association Manager (PCAM®) designees, Chapter Board of Directors members, friends and event sponsors gathered at The City Club LA in downtown Los Angeles on February 13 to enjoy each other’s company and celebrate the achievement of new designees Anda Bewhite of All West Management and Donald Campbell of Wilshire Regent HOA. (See photo at left with designees and Katy Krupp, Chapter President.)

The PCAM® designation is the pinnacle of professional achievement for managers with advanced skills and experience. A PCAM candidate must: 1) pass the CMCA® examination; 2) pass all six 200-level courses; 3) have five years or more of direct community manager experience; 4) successfully complete a challenging case study analysis of a community association; 5) comply with the CAI Professional Manager Code of Ethics; and 6) participate in a minimum level of chapter service activities.

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www.cai-glac.org | March/April 2015

Chapter Members Holding the PCAM® Designation Ramona Acosta

Laurie Gral

Julius Nagy

Adrian Adams

Sharon Hanson

Tina Nakamura

Chris Albrecht

Lionel Harris

Dan Nakari

Margaret Allen

Linda Healey

Pete Ong, Jr.

Anda Bewhite

Elvin Hidalgo

Joanne Peña

Dave Brock

Diane Hilliard

Craig Phillips

Wendy Bucknum

Shanne Ho

Alexandria Pollock

Donald Campbell

Russell Hoffman

Allan Schein

Judy Campion

Michael Huffman

Robert Sides

Tami Chavin

Cyndi Koester

Marianne Simek

Lisa Dale

Karen Kokowicz

Diana Stiller

Richard Egan

Lorna Leviste

Gerry Suenram

Farrah Esquer

Michael Lewis

Michelle Underwood

Meigan Everett

Evelyn Lifton

Jill Van Zeebroeck

Steve Feistel

Gregg Lotane

Connie Vohden

Lynette Findlay

Ted Loveder

Tracy Wolin

Dirk Foster

Erik Mendez

Lori Ziegler

Mickel Graham

Ruth Moffitt

George Gral

Nancy Mohni

CAI-Greater Los Angeles Chapter

Get-Together

CAI-Greater Los Angeles Chapter

March/April 2015 | www.cai-glac.org

17

Takeaways From the Community Association Volunteer Leadership Workshop ♦♦♦ By Susan Hayward Like many other homeowners I volunteered to serve on my board of directors because I wanted to make a positive impact on my community and bring a fresh perspective. Once on the board, the realization came —now what? Questions began to pop into my head: What was my role? What decisions can I make? What is expected of me? And the list went on. I did spend some time researching answers, but when the association manager suggested that some of the board members attend the Community Association Volunteer Leadership Workshop, I readily agreed.

It was a day full of information, and I even found answers to things I didn’t realize I needed to know. Now that I had the information I was ready to dig in and get started. As a “newby,” I was eager to utilize everything I learned, but here are just a few lessons and how I applied them.

All roads lead back to the governing documents.

Each homeowners association has governing documents; ours include Covenants, Conditions and Restrictions (CC&Rs), Bylaws, Articles of Incorporation, Condominium Plan and Residential Rules. When I first bought my condominium I read through these briefly to see what I was responsible for as a homeowner and what I could and could not do. I didn’t really read much more than that. Associations must act in accordance with the terms and conditions contained in a set of governing documents. Applying this one was easy. I took the time to familiarize myself with each of these documents.

I have found that when questions come up, the answer often lies in these documents, and by knowing what is contained, I saved myself many headaches.

Communication is essential.

If the board of directors is not transparent and communicative on everyday issues with the association members, the members will not have confidence in them on bigger issues. One thing that I did was to re-establish the association’s newsletter that had been long forgotten. Each month there is an article on board meeting announcements/decisions and information on what we are investigating. Because the majority of our members don’t attend the board meetings, we were constantly being accused of secrecy, which was far from the truth.

Meet your responsibility Board members have a fiduciary duty to fellow homeowners.

This means that you have been placed in a position of trust.

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The owners trust you with their homes and money. In order to carry out your fiduciary duty you need to take off your homeowner hat and put on your business hat. All of your decisions have to be for the good of the community.

I always go back to these three basic components: 1. Duty of Care. To make informed decisions, I read and became familiar with the governing documents (all roads lead to these). I attend each board meeting and read my board packet prior to the meeting so that I always go prepared to discuss and make informed decisions—and decisions based on the governing documents.

2. Duty of Loyalty. Decisions should be in the interest of the association as a whole. I always ask myself: “Is this something that the community wants or needs?” If it is not for the good of the community, I look for other options.

3. Duty to Act Within the Scope of Authority. There are laws and the governing documents (don’t forget, all roads lead back to these) that grant the board authority.

I became familiar with these laws and documents and don’t go beyond that authority.

Listen to the Experts I am a volunteer with a full-time job. As much as I try to stay informed and learn, I can’t know everything. That is where the experts come in. Whether it is your vendors, association managers, or attorneys, they are the experts in their field and you should listen to them. In general, I look to our association manager for advice because she is experienced and will tell it like it is. I appreciate that and always listen to what she has to say, trusting that she will keep us on the straight and narrow.

I would be lying if I said it was easy or that I have enjoyed every minute of my time on the board. I can say, however, that I would not have missed this opportunity for anything. I have grown as a person and learned quite a bit. I still have more experience to gain, but I know I will continue to improve as long as I stick to what I have learned, stay open for new ideas and always listen to the experts.

Susan Hayward in the board president of The Collections at Downtown Burbank Homeowners Association. She can be reached at shayward621@gmail.com.

CAI-Greater Los Angeles Chapter

T h e Ess e ntials o f

community association volunteer leadership

Community Association Homeowners And Board Members!

CAI’s educational workshop, The Essentials of Community Association Volunteer Leadership, provides the perfect opportunity for board members and homeowners living in community associations to learn essential, relevant, and timely information that an help you lead your communities to harmony and prosperity.

Course Topics Include: ● Maintenance

● Rules

● Finance

● Reserve Funds

● Meetings

You’ll leave the eight-hour Saturday workshop with new ideas, solutions to problems, handouts for future reference, and the knowledge that there are resources and people to help you with your leadership responsibilities.

2015 Dates Visit www.cai-glac.org for details and registration

April 11 – Downtown LA July 18 – Marina del Rey September 26 – Marina del Rey November 7 – Marina del Rey

Approved by the Department of Real Estate as a proper use of association funds.

PCAM® PRIDE We are very proud of two managers who have recently earned the Professional Community Association Manager (PCAM®) designation after successfully completing CAI’s Professional Management Development program.

Anda Bewhite, CCAM®, CMCA®, AMS®, PCAM® Coming from a background of apartment and commercial building management, Anda Bewhite has more than six years of community association experience. She is currently a portfolio manager at All West Management, a full service management company located in Culver City where she manages more than 340 units at 17 properties. Anda is Chair of the CAIGLAC Education Committee, which is responsible for developing educational programs for managers and HOA board members.

She holds an AA degree from West Los Angeles College, a BS degree from Pepperdine University’s Graziadio School of Business and Management, an MBA degree from Woodbury University and a California Real Sales License from the Bureau of Real Estate.

In addition to recently achieving the PCAM® designation from the Community Associations Institute (CAI), Anda holds the professional designations of Association Management Specialist (AMS®) from CAI and the Certified Community Association Manager (CCAM®) from the California Association of Community Managers, as well as the Certified Manager of Community Associations (CMCA®) certification.

Donald Campbell, CCAM®, CMCA®, AMS®, PCAM® Don has worked in the community management industry as an on-site general manager for six years. Entering our industry was a career path change for him and through the help of CAI-GLAC and CACM, Don received not only the career path he was expecting, but a great new outlook on long-lasting friendships, an outstanding education and a career worth nurturing.

He started in the South Bay at a 399-unit gated community with the guidance of some very talented managers and a CEO or two. Due to those early experiences, he knew this was the industry that he loved, so he proceeded to follow the educational track that has led him to the professional designations of Association Management Specialist (AMS®) from CAI and the Certified Community Association Manager (CCAM®) from the California Association of Community Managers, as well as the Certified Manager of Community Associations (CMCA®) certification, and ultimately the PCAM® designation that he most recently achieved.

Don now manages a 23-story high rise on the Wilshire Corridor, serves on the CAI-GLAC Board of Directors and is Co-chair of the CAI-GLAC Social Committee. In his free time Don enjoys spending time with his family and friends, golfing and when time and weather permit, he enjoys a little range time.

The Professional Community Association Manager (PCAM®) designation is the pinnacle of professional achievement for managers with advanced-level skills and experience. To earn the PCAM® designation, managers must have five years of community association management experience and complete more than 100 hours of coursework, including a challenging case study analysis of a community association. In addition, PCAM designees must fulfill continuing education and service requirements and adhere to a code of ethics.

CAI-Greater Los Angeles Chapter

March/April 2015 | www.cai-glac.org

19

A

n HOA board of directors recently informed me that they needed to switch management companies. Upon inquiring further, they said that they had to make the change because the management company had allegedly been stealing money from the HOA. Of course, they also wanted to file a claim against their fidelity bond due to the theft.

Are You Protecting Your HOA With a Fidelity Bond?

➤➤➤By Steve Little

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Although the claim is still under investigation, it is suspected that the management company would prepare two invoices/bills for the same vendor.

They would have one invoice approved by the Board immediately when due and use it to pay the actual vendor; the second invoice would be for the same amount, and they would have the Board approve it at a later time. Because the invoice amount was the same as the previous invoice, the management company would tell the Board that they had seen the invoice before but it hadn’t

been approved and now they needed Board approval. They would then use the money from the second approved invoice to take additional money from the HOA that was not part of their management company contract. This allowed them to make the accounting look right to the Board, because it seemed that all money being paid out was being paid to vendors on approved invoices. Many vendors, such as insurance companies, will bill the same amounts month-in and month-out, so

an “extra” bill may not seem out of the ordinary to a Board.

Sadly, we hear stories like these too frequently. We even hear of stories of smaller associations that feel there is no need for a fidelity bond because, since “everyone knows each other in the HOA,” the assumption is made that theft would never take place.

Currently, there is no Civil Code statute that obligates associations to have a fidelity bond in place. Fannie Mae and Freddy Mac have actually been the

CAI-Greater Los Angeles Chapter

force to compel associations to have adequate fidelity bond coverage. They require that an association have a bond large enough to cover the amount of money in the reserve account plus three months worth of uncollected dues. However, any association should always check their CC&Rs to make sure there isn’t a requirement in place that exceeds the Fannie Mae guideline. If the CC&Rs do not provide any direction on the amount of the fidelity bond, at a minimum the Board should always make sure they carry the Fannie Mae-stipulated amount for coverage. This will keep a Board from having to make a hurried decision on increasing a bond because a lender will not finalize a sale due to an insufficient fidelity bond. Keep in mind though that this minimum requirement does not guarantee that the association would be made whole in the event of a theft. Thefts that take place over long periods of time can easily surpass this minimum amount.

CAI-Greater Los Angeles Chapter

When an association looks to purchase a fidelity bond, it should purchase one that has a “designated agent rider” or “managing agent rider.” This rider will ensure that not only are the members of the Board covered by the fidelity bond, but also the management company.

This is important because, although most management companies carry their own bond, their bond covers them for dishonest acts of their employees.

This means that the management company can be made whole if their employees steal from their company.

This does not necessarily mean that the association they manage would be covered. Additionally, if the principals of the association are the ones who steal from the association, the management company bond most likely would not cover for dishonest acts of the principals.

Another issue with a bond carried by the management company is that there is no way for the association to determine if that coverage is in force at all times, nor can the association

determine how many other associations that particular bond is supposed to be covering and if the amount of the bond is adequate for all associations managed by the management company. Lastly, it may take civil litigation for the coverage bond of the management company to be collected; whereas that would not be necessary if the association had a fidelity bond with coverage that extended to the management company.

Every association should have an adequate fidelity bond in place. Most master policies do not automatically include this coverage. The cost to increase the amount of the fidelity bond or add a fidelity bond to your current coverage is relatively inexpensive. Make sure you are sufficiently covered, and review the amount of your fidelity bond on an annual basis.

Steve Little is the president of Steve Little Insurance Agency, Inc. a full-service agency serving HOAs throughout Southern California. He can be reached at steve@stevelittleinsurance.com.

March/April 2015 | www.cai-glac.org

21

T

his article will discuss the “F” word… fraud (with a helping of embezzlement too). While community associations need not worry about a zombie apocalypse in the aftermath of discovering embezzlement, they should be prepared for a long, potentially bumpy path forward.

According to the 2013 Marquet Report on Embezzlement, “2013 was a gangbuster year for embezzlement in the United States, exceeding even last year’s previous record pace…”

Generally speaking, fraud is a false representation of a matter of fact. The misrepresentation can be by words or concealment of something that should have been disclosed. In context with community associations, it is most often done for the purpose of financial gain (by a director or manager) and is an element of an embezzlement claim. Embezzlement is the theft of assets by a person in a position of trust or responsibility over those assets.

Because “employee” theft constitutes an association’s largest exposure to crime, every community association should have a fidelity bond. “Employee” covers associations with actual employees and those managed by an outside party. A fidelity bond provides coverage should someone misappropriate association funds. These low-cost policies are separate from the directors and officers and commercial general liability policies. Depending on an association’s specific needs, a fidelity bond should cover directors, officers, employees, outside managers and bookkeepers. Some, but not all, CC&Rs require an association to maintain a fidelity bond. However, many boards are unaware of the requirement. If a community association has a fidelity bond and has experienced embezzlement, they are more likely to recover some of the sums taken. This will not restore the members’ shaken trust, but it can help make an association financially whole.

At the risk of stating the obvious, there are often warning signs that embezzlement is occurring. According to the 2011 Marquet Report on Embezzlement, the average length of an embezzlement scheme is 4.7 years. The following redflags may evidence financial wrongdoing by those trusted to watch community’s assets: (i) working on the books afterhours, (ii) creating confusing, late, or inaccurate financial reports, (iii) providing defensive responses when being questioned about financial matters, (iv) living a lifestyle that exceeds their income, (v) gambling and/or substance abuse issues, and (vi) sudden life change such as a death or divorce.

If a board has concerns regarding association finances, it has a duty to conduct a reasonable investigation into the issue.

This does not mean the board must proceed with a widescale forensic investigation, rather that they must undertake a reasonable investigation. If it becomes apparent that a more sophisticated audit is required, the board should proceed with one at the appropriate time.

When a board concludes that theft has occurred, the board should take steps to terminate the person or company. If it is an employee, the board should endeavor to obtain a severance

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The “F” Word:

Fraud ■■■ By Jasmine M. Fisher, Esq.

agreement to protect against potential claims being filed.

In such an instance, the board may need to give up its right to file a lawsuit. Depending on the scope and scale of the unaccounted for funds, it may be possible to obtain voluntary restitution. If a director is engaging in wrongdoing and the bylaws permit, the board should remove the individual after a hearing. Because most bylaws do not permit such removal, these boards should document their findings and request that the director resign.

Next, after the board concludes that association funds are missing, the board should notify the membership. The board should take care in what it discloses to avoid potential defamation claims by the embezzler. Boards should work closely with legal counsel and other qualified financial experts to assist them through the meeting. While one may assume the CAI-Greater Los Angeles Chapter

members become angry with the embezzler, this is not always the case. Remember, most embezzlement is perpetrated by a trusted individual with long and deep ties to the community.

The following are potential membership responses following a disclosure of misappropriated funds: (i) current and prior boards may face lawsuits from owners for breach of fiduciary duties and other claims, (ii) the current board may face a recall, and (iii) community members may become hostile towards the board.

The state has limited resources and will only bring charges on the most egregious of thefts. Even still, the board should report its findings to the appropriate district attorney so it can demonstrate to its members that no stone was left unturned.

After completion of the above steps, the board should adopt a resolution so it becomes part of the corporation’s record on why it did or did not take further action. This may help to insulate the board from adverse claims by angry owners.

Because “employee” theft

Once the big “F” bomb is known to Vigilance will help avoid constitutes an association’s the community, the board must then embezzlement from ever happening. consider how to recover the money, Should your community be the largest exposure to crime, if at all. Hopefully the association will victim of theft, members and have a fidelity bond in place and the boards are reminded that you are all every community association community is made whole. If not, neighbors and must live together. the board may file a lawsuit against Taking anger and frustration out should have a fidelity bond. the individual who misappropriated on boards who may have inherited the association’s funds. A drawback a mess but did not cause it will only to this option is that it costs money to pursue a lawsuit. make the community more uncomfortable. The only way Furthermore, the board will need to consider the embezzler’s through the issue is together. ability to repay the funds. It is not recommended for a board to Jasmine M. Fisher is a senior associate at Adams spend good money to go after bad.

Kessler PLC who has been practicing for over 10 Next, while virtually all communities who have been the victim of embezzlement will assume that criminal charges will be brought, in our experience this rarely, if ever, happens.

years and specializes in representing community associations as their general counsel. Jasmine can be reached at jfisher@adamskessler.com.

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CAI-Greater Los Angeles Chapter

March/April 2015 | www.cai-glac.org

23

MODEL CODE OF ETHICS CAI developed the Model Code of Ethics for Community Association Board Members to encourage the thoughtful consideration of ethical standards for community leaders. The model code is not meant to address every potential ethical dilemma but is offered as a basic framework that can be modified and adopted by any common-interest community.

Model Code of Ethics for Community Association Board Members Board members should: 1. Strive at all times to serve the best interests of the association as a whole regardless of their personal interests.

2. U se sound judgment to make the best possible business decisions for the association, taking into consideration all available information, circumstances and resources.

3. Act within the boundaries of their authority as defined by law and the governing documents of the association.

4. Provide opportunities for residents to comment on decisions facing the association.

5. Perform their duties without bias for or against any individual or group of owners or non-owner residents.

6. Disclose personal or professional relationships with any company or individual who has or is seeking to have a business relationship with the association.

7. Conduct open, fair and well-publicized elections.

8. Always speak with one voice, supporting all duly adopted board decisions—even if the board member was in the minority regarding actions that may not have obtained unanimous consent.

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CAI-Greater Los Angeles Chapter

Community Associations Institute | www.caionline.org

Board members should not: 1. Reveal confidential information provided by contractors or share information with those bidding for association contracts unless specifically authorized by the board.

2. Make unauthorized promises to a contractor or bidder.

3. Advocate or support any action or activity that violates a law or regulatory requirement.

4. Use their positions or decision-making authority for personal gain or to seek advantage over another owner or non-owner resident.

5. Spend unauthorized association funds for their own personal use or benefit.

6. Accept any gifts—directly or indirectly—from owners, residents, contractors or suppliers.

7. Misrepresent known facts in any issue involving association business.

8. Divulge personal information about any association owner, resident or employee that was obtained in the performance of board duties.

9. Make personal attacks on colleagues, staff or residents.

10. Harass, threaten or attempt through any means to control or instill fear in any board member, owner, resident, employee or contractor.

11. Reveal to any owner, resident or other third party the discussions, decisions and comments made at any meeting of the board properly closed or held in executive session.

Excerpt from “Good to Great,” published by Community Associations Institute The full publication is available at www.caionline.org under Free Downloads. ad-(W7.5xH4.75).pdf 1 11/7/2014 9:28:55 AM

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March/April 2015 | www.cai-glac.org

25

Julie Adamen Entertains Members at CAI Luncheon More than 160 members and guests enjoyed Julie Adamen’s “The Art of Getting Things Done” presentation at our February 25 Educational Luncheon. Julie has been in the common interest development industry since 1987. In 1997 she formed Adamen Inc., a consulting and employment firm specializing in the community management industry.

Julie is a nationally known author, speaker and trainer in community management. She is also the publisher of The HOA Manager NewsLine, an industry newsletter featuring forward-looking articles and job opportunities with a monthly circulation of over 6,000+.

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www.cai-glac.org | March/April 2015

CAI-Greater Los Angeles Chapter

Congratulations to the 2014 Recruiter Contest Grand Prize Winner

Diane Hilliard, CCAM®, CMCA®, AMS®, PCAM® Ross Morgan & Company, Inc., AAMC Diane Hilliard accrued the most membership points during 2014, as outlined in THE GREAT ESCAPE Recruiter Contest Rules. She has won a Vacation Getaway Package worth $1,000.

Our sincere thanks to all members who recruited at least one new member during 2014 and helped our chapter grow.

Christine Vanderbeck-Alfieri, CCAM® Carol Brockhouse Dave Brock, PCAM® Jim Bucks, CMCA® Don Campbell, CCAM®, CMCA®, AMS®, PCAM® Meigan Everett, PCAM® Brian Fleming Linda Healey, CCAM®, PCAM® Ariel Hess, CCAM®, CMCA®, AMS® Shanne Ho, CCAM®, PCAM® Russell Hoffman, CMCA®, AMS®, PCAM® Michael Huffman, CCAM®, CMCA®, AMS®, PCAM® Eduardo James Karen Kokowicz, CCAM®, CMCA®, PCAM® Katy Krupp Sascha Macias, CMCA®, AMS® Pauline MacLean Al Masters, CCAM® David Mayemura, CMCA® Alba Monroy

What We Can Do For You:

Julius Nagy, CCAM®, CMCA®, AMS®, PCAM® Tina Nakamura, CMCA®, AMS®, PCAM® Dan Nakari, CCAM®, CMCA®, AMS®, PCAM® Neda Nehouray, CMCA®, AMS® Martha Olvera, CMCA® Pete Ong, Jr. , CMCA®, AMS®, PCAM® Joanne Pena, CMCA®, AMS®, PCAM® Paul Policarpio Alexandria Pollock, CCAM®, CMCA®, AMS®, PCAM® Diane Rossiter, CMCA®, AMS® Stephanie Sanders Lillian Schneider Carol Stein, CMCA® Gerry Suenram, PCAM® Carol Tolchin Michelle Underwood, CCAM®, CMCA®, AMS®, PCAM® Brad Watson, CCAM®, CMCA®, AMS®, PCAM® Les Weinberg, MBA, RS® Ida Worth, CMCA®, AMS®

We congratulate NEDA NEHOURAY, CMCA®, AMS® of HOA Organizers, Inc., Winner of the Recruiter Raffle.

She will receive an Evening Out on the Town ($500 value).

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March/April 2015 | www.cai-glac.org

27

Mitigating Water Damage

LOS ANGELES

ORANGE COUNTY

INLAND EMPIRE KERN COUNTY CENTRAL COAST

More than 100 community association board members, community managers and business partners gathered in Long Beach to learn how to deal with the dangers of water leaks. What are the first steps? When does a Board get involved? How do you determine responsibility?

What if it goes legal? Our thanks to Russell Higgins, Esq. (Adams Kessler PLC), Craig Phillips, CCAM®, CMCA®, AMS®, PCAM® (International Tower Owners Association) and John Temoyan (Har-Bro Emergency Service & Restoration) for an excellent presentation.

A FULL SERVICE COMMUNITY ASSOCIATION LAW FIRM General Legal Counsel Governing Document Amendments Enforcement Legal Opinions Contracts Dispute Resolution

Civil Litigation Enforcement Insurance Bad Faith Construction

pick the right tools for your next project.

With community association lending expertise like ours, you’ll get the job done right.

take that to the bank.

Assessment Collections Judicial Foreclosure

Lisa Ann Rea VP/Regional Account Executive 805-907-8452 Toll Free 866-800-4656, ext. 7500 lisa.rea@mutualofomahabank.com

Turning Common Interests Into Common Ground 866.788.9998 www.bgtlawyers.com

28

mutualofomahabank.com Jeffrey A. Beaumont, Esq.

www.cai-glac.org | March/April 2015

AFN46039_0913

Member FDIC Equal Housing Lender

EQUAL HOUSING

LENDER

CAI-Greater Los Angeles Chapter

OF NOTE Corrections

to 2015 Membership Directory

Our sincerest apologies for these errors.

Page 38 Fidelity Management Services, Inc. Correct phone: 818-407-6620 Correct fax: 818-407-6631 Page 46 Tandem Property Management, a division of Lyons Management, Inc. Current managers: Suzie Wilson, MFC Suzie@LyonsPM.com Martin Wilson, MBA, CCAM® Martin@LyonsPM.com Reva Carley Reva@LyonsPM.com Dan Magier Dan@LyonsPM.com David Martinez David@LyonsPM.com Melissa Rinck, MBA Billing@LyonsPM.com Kent Wentzel Kent@LyonsPM.com Page 52 Eduardo James Correct phone: 562-433-7791 Correct fax: 562-434-5212 Page 53 Evelyn Lifton Correct email address: evatthebrentwood@gmail.com Page 67

David E. Lazarus, CPA – New Address 12100 Wilshire Blvd., Suite 550 Los Angeles, CA 90025

Page 88 Tinnelly Law Group Steven J. Tinnelly, Esq./Ramona Acosta, CMCA®, AMS®, PCAM® 633 W. Fifth Street, 26th & 28th Floor, Los Angeles, CA 90071 Phone: 213-805-7285 Fax: 949-588-5993 steve@tinnellylaw.com ramona@tinnellylaw.com Page 186 The Centurion Group’s ad is on page 189.

CAI-Greater Los Angeles Chapter

March/April 2015 | www.cai-glac.org

29

welcome

New CAI-glac Members! as of February 28, 2015

BUSINESS PROFESSIONALS RECRUITER Archon Protection, Inc. CAI National Broadband Planning CAI National California HOA Collection Services Jean-Paul Vines CELCO Construction Services, Inc. Brad Watson, CMCA®, AMS® Citiguard Inc. CAI National Domine-Adams, LLP CAI National Grosslight Insurance Julius Nagy, CCAM®, CMCA®, AMS®, PCAM® Iger Wankel Bonkowski, LLP CAI National MMC-HR Gregg Lotane, CCAM®, PCAM® Slade Industrial Landscape, Inc. CAI National Southern California Edison CAI National COMMUNITY ASSOCIATIONS Doran Gardens HOA Erik Mendez, CMCA®, AMS®, PCAM® COMMUNITY MANAGEMENT COMPANIES Infinity Property Services Lordon Management Company

COMMUNITY MANAGERS Laura Aguilar Beven & Brock

Erik Mendez CMCA®, AMS®, PCAM®

Vivian Meyers

CAI National

Allan Schein, CCAM®, CMCA®, AMS®, PCAM® Shanne Ho, Accell Property Management, AAMC CCAM®, CMCA®, AMS®, PCAM® Eric Teves Action Property Management, Inc.

Denise Iger, Esq.

Vanessa Torroba HOA Organizers, Inc.

Neda Nehouray, CMCA®, AMS®

COMMUNITY ASSOCIATION LEADERS Candy Peak

Barry Ross, Esq.

Mahendra Sami Jose Glez

HI-TECH Painting and Water Proofing

1-800-750-8423

High - Rise

Commercial

H.O.A.

Condominium Exterior

Commercial Exterior

H.O.A. Exterior

Apartment Exterior

Commercial Exterior

H.O.A. Exterior

Commercial Exterior

Commercial Exterior

H.O.A. Exterior

1-800-750-8423 Lic. # B, C-33 866801

www.hitechpainting.com

Tennis Court

Condominium Exterior

30

www.cai-glac.org | March/April 2015

Commercial Exterior

Shopping Mall

ES FR TI E M E AT E

Experience the D

CAI-Greater Los Angeles Chapter

Our Thanks to Renewing Members!

As of February 28, 2015

BUSINESS PROFESSIONALS A-One Construction Alliance Association Bank Allied Trustee Services Animal & Insect Pest Management, Inc. Associations Insurance Agency, Inc. AT&T Connected Communities Athens Services Behr Paint Corporation BELFOR Property Restoration California Safety Agency CBI-Collins Builders, Inc. Centurion Group CertaPro Painters Ltd. CiraConnect Colarossi Painting, Construction & Raingutters Critter Busters, Inc. Debra Sheppard & Associates, APLC Design Build Associates Elliot Katzovitz Insurance Agency, Inc. EmpireWorks Reconstruction and Painting GetDocsNow.com Kasdan Weber Turner LLP Levitt Group Architects McGuireWoods, LLP MeterNet Sub-Metering & Billing Solutions Milstein Adelman, LLP Mink Condominium Management & Consulting Mutual of Omaha Bank/CondoCerts NPG-Nelson Paving OCBS, Inc. Pacific Utility Audit, Inc. Pacific Vista Landscape Services, Inc. Performance Elevator Contractors, Inc. Professional Services Construction, Inc. R.W. Stein Painting, Inc. Rodent Pest Technologies, Inc. Roseman & Associates, APC SmokeFree Apartment House Registry Steve Little State Farm Insurance Steven G. Segal Insurance Agency, Inc. Stonemark Construction Management SwedelsonGottlieb Timothy Cline Insurance Agency, Inc. TruGreen LandCare West Coast Maintenance, Inc. COMMUNITY ASSOCIATIONS 20th Street Harbor View Villas HOA Castlegate HOA International Tower Owners Association Rancho Glenbrook HOA Rockpointe HOA Sandside Villas HOA Westmont North HOA

CAI-Greater Los Angeles Chapter

COMMUNITY MANAGEMENT COMPANIES Associa-PCM Concept Seven, LLC, AAMC Encore Enterprises, Inc. FirstService Residential HOA Organizers, Inc. J & N Realty, Inc. Manhattan Management Corporation National Property Management Group, Inc. Ontrack Asset Management Pacific Real Estate & Management, Inc. Prellis Property Management Property Management Professionals, LLC Property Resources Management Safeguard Equities, Inc. Valencia Management Group, AAMC COMMUNITY MANAGERS Hasmik Akopyan Ross Morgan & Company, Inc., AAMC James Beard, AMS® Valencia Management Group, AAMC Susan Bedrossian Aberdeen Management Company, AAMC Bea Blessley, CMCA® Jenkins Properties Management Company, Inc. Don Campbell, CCAM®, CMCA®, AMS®, PCAM® Wilshire Regent HOA Paul Cannings, CCAM®, CMCA® Beven & Brock Danielle Marie Carbajal, CCAM®, CMCA®, AMS® Prellis Property Management Robin Choppe Choppe Property Management Katherine Clancey, CMCA®, AMS® Valencia Management Group, AAMC Jennifer Cleveland Gold Coast Property Pros Vicki Egan Seco Canyon HOA Sharon Hanson, CMCA®, AMS®, PCAM® Cove Community Association Elvin Hidalgo, CCAM®, CMCA®, AMS®, PCAM® Century Park Place HOA Noreen Husain, CCAM® Seabreeze Management Company, Inc., AAMC Sandra Levinson, CMCA®, AMS®, PCAM® The Colony At Westwood HOA Rhonda Lieberman CT Prop Management, LLC

Gregg Lotane, CCAM®, PCAM® The Wilshire Angelique Madrigal Ross Morgan & Company, Inc., AAMC Victor Mariscal The Californian on Wilshire Laurent Melin Evo HOA Ruth Moffitt, CMCA®, AMS®, PCAM® Valencia Management Group, AAMC Scott Moore, CMCA® Valencia Management Group, AAMC Fernando Morales Sea Colony HOA II Robert Morando The Californian on Wilshire HOA Jesse Moreno Marina Pacifica HOA Shedrick Nance, Sr. Pillar Properties Peggy O’Donoghue, CMCA®, AMS® Valencia Management Group, AAMC

Ivonne Perez, CMCA® Ross Morgan & Company, Inc., AAMC Richard Perry, CMCA®, AMS® National Property Management Group, Inc. Bonnie Sharp Stoeppelman, CCAM® Sharp HOA Management Stephanie Tomerlin Ross Morgan & Company, Inc., AAMC Jeanne Waal, CMCA® Massingham & Associates Miguel Zamora Ross Morgan & Company, Inc., AAMC COMMUNITY ASSOCIATION LEADERS Joseph Fabricatore Allan Feltman Lawrence Jay Kraines Larry Leonard Howard Pancirer Lillian Schneider Suzanne Siltamaki Phillip Watkins Eleanor Yavarone

March/April 2015 | www.cai-glac.org

31

2015 CALENDAR OF EVENTS APRIL 02 Westside Homeowners Association Marketplace – 5:30 p.m.

DoubleTree by Hilton Torrance-South Bay, 21333 Hawthorne Blvd., Torrance, CA 90503

09 San Gabriel Valley Educational Program for HOA Boards – 6:00 p.m.

Pasadena Senior Center, 85 E. Holly Street, Pasadena

11 Essentials of Community Leadership Workshop – 8:15 a.m.

Bunker Hill Tower Condo Owners Assn., 800 W. 1st Street, Los Angeles, CA 90012

12-13 Legislative Day at the Capitol Hyatt Regency, Sacramento

17 Chapter Board of Directors Meeting – 8:30 a.m.

Chapter Office, Glendale

18 Ponies, Prizes & Play – 11:30 a.m.

Santa Anita Park, Arcadia, CA

Advertisers Index 27 Association Reserves, Inc.

32 Poindexter & Company, CPAs

28 Beaumont Gitlin Tashjian

26 Popular Association Banking

24 CBCI Construction, Inc.

29 Preferred Commercial Painting, Inc.

5 Farmers Insurance Group – Steven G. Segal Insurance Agency, Inc. 26 Ferris Painting, Inc. 30 Hi-Tech Painting and Water Proofing 25 Law Offices of Michael A. Hearn

15 R.W. Stein Painting, Inc. 11 Ross Morgan & Company, Inc. 29 Reserve Studies Inc. 9 Sandra Macdonald Insurance 13 Select Painting &Construction 7 SwedelsonGottlieb

28 Mutual of Omaha Bank/ CondoCerts

23 Union Bank HOA Services

21 NPG-Nelson Paving

31 Witkin & Neal, Inc.

27 Pacific Utility Audit

21 Westside Luncheon Program for HOA Boards and Managers – 11:30 a.m.

DoubleTree by Hilton Westside, 6161 W. Centinela Blvd., Culver City

29-1 CAI National Conference Caesar’s Palace, Las Vegas, NV

MAY 05 Managers Only Breakfast Workshop – 9:00 a.m.

The Wilshire Condominiums, 10580 Wilshire Blvd., Los Angeles

13 SF Valley Luncheon Program for HOA Boards and Managers – 11:30 a.m.

Warner Center Marriott, 21850 Oxnard Street, Woodland Hills, CA 91367

18 Annual Golf Tournament – 8:30 a.m.

Advertising Information Dimensions & Rates:

Artwork must not exceed the exact dimensions of that size ad.

For more information, call the Chapter office: 818-500-8636.

Ad Size

Ad Dimensions

Members

Non-Members

⅛ page

3½" wide x 2" high (Horizontal)

$200

$400

¼ page

3½" wide x 4¾" high (Vertical)

$300

$600

½ page

7½" wide x 4¾" high (Horizontal)

$425

$850

Full Page

7½" wide x 9.75" high (Vertical)

$800

$1,400

TPD at Valencia, Valencia

29 Chapter Board of Directors Meeting – 8:30 a.m.

Chapter Office, Glendale

JUNE 02 Westside Evening Educational Program – 7:00 p.m.

Regatta Seaside HOA, 13699 Marina Pointe Drive, Marina del Rey

04 San Fernando Valley Homeowners Association Marketplace – 5:30 p.m.

Payment: Rates are subject to change without notice. By credit card, check or cash.

Minimum three-insertion contract. Rates subject to change without notice.

Advertising Sales: Please contact the Chapter office for advertising specifications and deadline information at: 818-500-8636.

Woodland Hills Hilton

17 South Bay Luncheon Program for HOA Boards and Managers – 11:30 a.m.

DoubleTree by Hilton Torrance-South Bay, 21333 Hawthorne Blvd., Torrance, CA 90503

19 Chapter Board of Directors Meeting – 8:30 a.m.

Chapter Office, Glendale

JULY 15 South Bay Luncheon Program for HOA Boards and Managers – 11:30 a.m.

DoubleTree by Hilton Torrance-South Bay, 21333 Hawthorne Blvd., Torrance, CA 90503

17 Chapter Board of Directors Meeting – 8:30 a.m.

Chapter Office, Glendale

18 Essentials of Community Leadership Workshop – 8:15 a.m.

Regatta Seaside HOA, 13600 Marina Pointe Drive, Marina del Rey, CA 90292

29 Valencia Educational Breakfast for HOA Boards and Managers – 8:30 a.m.

Bridgeport HOA Clubhouse, Valencia

32

www.cai-glac.org | March/April 2015

CAI-Greater Los Angeles Chapter

THE GREAT ESCAPE Three Contests… Three Prizes

CAI-GLAC’s 2015 Membership Recruiter Contests

Whether it’s a chance to win a weekend away or an evening out, you can win BIG by sharing the benefits of CAI membership with colleagues and friends during 2015!

GRAND PRIZE 3-Day, 2-Night Vacation Package ($1,000 Value) Member with the highest number of points as of December 31, 2015 will be awarded the Grand Prize.

(Minimum 20 pts. needed to qualify.)

Los Angeles Events

RECRUITER RAFFLE Evening Out On The Town ($500 Value) All 2015 recruiters (except the Grand Prize winner) who have achieved a minimum of 10 points will go into a raffle drawing held in January 2016 (when all the 2015 results are in).

RECRUITER-OF-THE-MONTH $50 Gift Certificate

RULES

The member who has recruited the most new memberships in the previous month will be recognized at the next luncheon and awarded a $50 gift certificate.

The following rules apply to the campaign: Each time you recruit a new member, you receive points toward your membership recruitment total. Points will accrue from January 1 through December 31, 2015. The more members you recruit, the more you’ll increase eligibility for the Grand Prize. Points are based on the following membership categories: One (1) point for each business partner member recruited in a category already existing in the 2015 Membership Directory.

Two (2) points for a business partner in a sector of business not yet represented in the Chapter.

Two (2) points for an individual HOA board member or community manager.

Three (3) points for recruiting a management company.

•T o receive recruiter credit, you must be listed as the CAI member responsible for recruitment on the printed application form submitted, or be identified through CAI National membership reports.

• Completed applications and membership dues for qualified applicants must be received at CAI between January 1, 2015 and December 31, 2015 to be counted toward the Grand Prize.

• In the case of a tie, a random drawing will determine the Grand Prize winner.

Current Sponsors AMERICAN TECHNOLOGIES, INC.

INFINITY PROPERTY SERVICES

CAI-GLAC

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PAID

130 N. Brand Blvd., Ste. 305 Glendale, CA 91203

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