September/October 2018
L.A.’s Premier Source of Information for Community Associations
Back to Basics
s n o i t a i c o s s A = A s d r a o B B = y t i n u m m o C = C SAVE THE DATE:
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The Business Judgment Rule & You Association Financial Records What Kind of Insurance Do We Need?
Community Associations Institute-Greater Los Angeles Chapter
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Saturday, November 3, 2018
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2018 BOARD OF DIRECTORS OFFICERS Greg Borzilleri, President PCW Contracting Services, 949-285-7802 Neda Nehouray, CMCA®, AMS®, President Elect HOA Organizers, Inc., 818-778-3331 Sascha Macias, CMCA®, AMS®, PCAM®, Vice President FirstService Residential, 310-574-7426 Teresa Agnew, Secretary Roseman Law, APC, 818-380-6700 Meigan Everett, PCAM®, Treasurer 424-265-0025 DIRECTORS Adrian Adams, Esq., PCAM® Adams Stirling PLC, 310-945-0280 Gary Burns Mulholland Heights HOA, 818-326-2000 Isaac Camacho Accurate Termite & Control, 310-837-6483 Donald Campbell, CMCA®, AMS®, PCAM® 310-408-8885 Peggy Daughtry Hermosa Surf Condominium, Inc., 310-798-9848 Angel Fuerte, FRESHCO Painters, Inc., 626-482-2698 Lisa Tashjian, Esq., Beaumont Tashjian, 866-788-9998
CHAPTER EXECUTIVE DIRECTOR Joan Urbaniak, MBA, CMCA®
2018 COMMITTEE CHAIRS BUSINESS PARTNER Gina Roldan, ProTec Building Services Michael Valenzuela, Vista Paint Corporation COMMUNITY OUTREACH Miranda Legaspi, MBA, Platinum Security, Inc. Angelique Madrigal, Ross Morgan & Company, Inc. AAMC EDUCATION Martha Perkins, CMCA®, Horizon Management Company AAMC Teressa Whitsitt, CMCA®, Ross Morgan & Company AAMC FINANCE Michael Lewis, CMCA®, AMS®, PCAM®, Concept Seven, LLC AAMC GOLF TOURNAMENT Ryan Dudasik, Whitestone Painters Julia Gomes, Accurate Termite & Pest Control HOA MARKETPLACE Alan Denison, Elements Landscape Management David San Filippo, Critter Busters, Inc. LEGISLATIVE SUPPORT Matthew Plaxton, Esq., Tinnelly Law Group
NEWSWORTHY 4 The Business Judgment Rule and You: How to Be an Ordinarily Prudent Person 10 Suspension of an Association’s Corporate Status May Have Significant Legal Consequences 11 Frequently Asked Questions About: Suspension of the Corporate Status of an Association 14 The ABCs of Board Meetings 16 A Manager’s Guide to the Open Meeting Act 20 What Kind of Insurance Do We Need? 22 News From Sacramento 24 Elevating Customer Service Through the Personal Touch 26 Association Financial Records: Review, Don’t Rubber-Stamp 28 It’s Not Just a Price... It’s a Process 29 Past Chapter Presidents Share Memories 31 Committee Corner
CHAPTER UPDATE 2 Note from the Editor’s Desk 3 Message from the President
NOTEWORTHY 13 CAI Legal Forum 2018
FYI
34 36 36 36
Membership News 2018 Upcoming Events Advertisers Index Advertising Information
MEDIATION SERVICES Steven A. Roseman, Esq., Roseman Law, APC PROGRAMS/LUNCHEONS Brian Moreno, Esq., CCAL, SwedelsonGottlieb Neda Nehouray, CMCA®, AMS®, HOA Organizers, Inc. PUBLICATIONS Matthew Gardner, Esq., Richardson Ober PC Focus Magazine Karen Kokowicz, CCAM®, CMCA®, PCAM® Coro Communty Management & Consulting Ramona Acosta, CMCA®, AMS®, PCAM® Tinnelly Law Group Membership Directory Stephen S. Grane, Alante/MCS Insurance Services SATELLITE PROGRAMS Ann Borowski-Bitter, CMCA®, Common Interest Services, Inc. James Beard, CMCA®, AMS®, PCAM®, Valencia Management Group AAMC® SOCIAL Alison Kronebusch, Reconstruction Experts, Inc. Erik Mendez, CMCA®, AMS®, PCAM®, ONIT Property Management, Inc. SOCIAL MEDIA Teresa Agnew, Roseman Law, APC Mike Perlof, Fenton Grant Mayfield Kaneda & Litt, LLP WINE NIGHT Katy Krupp, Fenton, Grant, Mayfield, Kaneda & Litt, LLP Jolen Zeroski, CMCA®, Union Bank HOA Services
CAI-Greater Los Angeles Chapter
Our thanks to the Focus Magazine Committee: Co-Chairs: Karen Kokowicz, CCAM®, CMCA® PCAM®, Coro Community Management & Consulting Ramona Acosta, CMCA® , AMS, PCAM®, Tinnelly Law Group Teresa Agnew, Roseman Law, APC Patricia Brum, Esq., Kulik Gottesman Siegel & Ware, LLP Sascha Macias, CMCA®, AMS®, PCAM®, FirstService Residential AAMC® Gina Roldan, ProTec Building Services 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 © 2018. 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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September/October 2018 | www.cai-glac.org 1
Associations, Boards, Community is as easy as ABC
W
ELL, AS ANYONE WHO MANAGES Common Interest Developments or “CIDs” can tell you, it really isn’t rocket science, but is also not as simple as a lot of board members may think or want it to be. After all, the boards of these CIDs are volunteers who for the most part need only be owners to serve on the board of directors.
NOTE
FROM THE EDITOR’S DESK
I am sure most have heard of the ever-evolving Davis-Stirling Common Interest Development Act… you know Civil Code §4000-6150, but do you follow them all? Or did you know that not only do CIDs need to comply with this body of laws, but parts of the Corporations Code, Business and Professions Code, Civil Codes §712 & §713 & §714, Civil Code §1940.20, Civil Code §2924.b, Code of Civil Procedure §729.035, Internal Revenue Code §528, IRS Revenue Ruling 70-604, Revenue & Tax Code §2188.5, §2188.6, §23701, §23701t. Have I made your head spin yet? No? Well there are few more: Vehicle Code §22658, §22658.1, §22853 & §22953, and don’t forget Fair Housing Laws.
We aren’t going to bombard you with all of the above, but we are going to highlight a few of the Basic issues we find communities routinely fail to remember. With this edition of Focus “Back to Basics,” we wanted to provide you with articles that give the reader a better understanding of the board’s minimum fiduciary duties and legal requirements when serving a community association. We highlight the importance of conducting open and transparent board meetings, regular review of the association’s financial statements, minimum insurance requirements, and the importance of filing tax returns, even though the association is a non-profit mutual benefit corporation. In this issue, Dr. Lori Baker-Schena also discusses the art of the Personal Touch. One of my basic management tools and advice to clients is to remember that you live in a “community” with “common interest.” Why not try a soft approach when dealing with your neighbors, managers, service providers, etc…? Bringing your focus Back to the Basics of community leadership can bring a sense of community back to your community association. Warm regards, Karen Kokowicz, CCAM®, CMCA® PCAM®, Editor Coro Community Management & Consulting
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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An Invitation to Submit Letters to the Editor We invite you to share your comments on an article published in Focus Magazine. Brief letters (max. 200 words) received within 3 months of the article’s publication will be considered. We will publish the best letters in the next issue. Please include the title of the article, the issue, your name, company or HOA and telephone number (for verification, not for publication). Please email letters to Chapter Office at glacletters@gmail.com.
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2018 CAI-GLAC Super Sponsors PLATINUM
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MESSAGE
FROM THE PRESIDENT SEE YOU LATER SUMMER...
A
S WE PUT THE DOG DAYS OF SUMMER (baseball reference for late July and August) behind us, we move into many people’s favorite part of the year: Fall… the time of back-to-school, changing leaves (in other places J) and the precursor to the Holiday season. This is by far the busiest time of year for many in our industry for a variety of reasons. Many Community Managers and Homeowner Volunteer Leaders are buried in budgets preparing for the next fiscal year. Business Partners are preparing associations for the upcoming Winter season, and Reserve Analysts are in a bunker somewhere buried under mountains of reserve studies for their clients (see you guys sometime around Groundhog Day). For our Chapter we are also extremely busy. We are well into our 2019 planning sessions. President Elect Neda Nehouray has completed her Board retreat and about to hold her strategic planning session outlining the Chapter’s vision for the incoming 2019 Committee Chairs. So, as I often like to do, I revisited the goals the Board laid out from the beginning of this year. Here are a few of them that I listed in my first President’s Message from the January/ February issue of Focus.
So, those are solid goals, and here is my evaluation of those goals. ll We reached our 1,000 member goal by the 7th month of the year — A+ ll Our member retention rate is climbing and entering the above 90% range — B+ ll We currently are offering more Educational opportunities than ever in locations throughout Los Angeles County, so more members can participate. However the Coaching to Credentials Program needs more manager mentors (anyone interested please contact the Chapter Office) — B ll Finally, our programs have been groundbreaking, and we have had some of the best speakers from not only inside but also outside of our industry present on some of the most timely and difficult subjects to cover — A Current GPA — 3.5 Although we are not in the 4.0 range yet, I think we are well on our way to reaching not just these goals but all the goals we laid out this time last year. I look forward to updating everyone on what we were fully able to accomplish in final issue of Focus for 2018 as we sprint to the finish. Yours in Service, Greg Borzilleri PCW Contracting Services 2018 Chapter President
ll Sustain our rate of growth to break the 1,000-member barrier ll Achieve a 95% membership retention rate ll Further the “Coaching to Credentials” mentoring program ll Continue to have the most relevant programs that provide high takehome value for our membership September/October 2018 | www.cai-glac.org 3
HOW TO BE AN ORDINARILY PRUDENT PERSON uuu By: Sandra L. Gottlieb, Esq., CCAL and
Joseph L. Gillman, Esq.
T
HE BOARD IS THE GOVERNING BODY for a homeowners association, and California law recognizes that boards are made up of regular people who are volunteering their time (i.e., working for free). For this reason, California law does not expect an association’s board members to make perfect decisions, and when a board makes a decision that is less than perfect, the law provides a safety net in the form of the Business Judgment Rule, which shields directors from liability if certain minimum standards are met. Imagine a homeowners association as a bus, the board of directors as the bus driver, and the homeowners as the passengers. The passengers may have their own ideas on where the bus should go, but ultimately it is the board’s responsibility to pick a destination and get the passengers there safely. If the homeowners do not like the direction the association is going or the way it is being run, they can install a new board through the electoral process or challenge the legality of a board’s decisions. If the owners do not challenge the board’s decisions, the bus will continue on the board’s selected path until the destination is reached. At one point or another, almost every board will face a challenging decision. When this happens, it is important to remember that doing nothing is not an option. An informed decision to take no action on a particular matter, after performing an investigation of the circumstances and soliciting the advice of association experts, is vastly different than ignoring an issue without investigation and hoping it will go away. From a legal standpoint, the decision to take no action would, at a minimum, be reflected in the board’s agenda and meeting minutes, which would include a board resolution to either take or not take action. This means there would be documented evidence that the board was actively engaged in managing the situation, as opposed to neglecting
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its duties to oversee the association’s affairs, which could result in legal or financial consequences. The law recognizes that volunteer directors will be faced with difficult decisions that cannot be ignored, so the law does not require perfect decision-making. Rather, a board is expected to make decisions in accordance with the Business Judgment Rule, which provides as follows: A director shall perform the duties of a director, including duties as a member of any committee of the board upon which the director may serve, in good faith, in a manner such director believes to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. (Corp. Code § 7231(a)). Where this standard is satisfied, a board and its directors will be shielded from legal liability. In the context of a homeowners association, the seminal case on this issue comes from a California Supreme Court decision in Lamden v. La Jolla Shores Clubdominium Homeowners Association ((1999) 21 Cal.4th 249). In Lamden, the court held that it would defer to a board’s authority and presumed expertise in discretionary decisions regarding the maintenance and repair of a common interest development, provided the board’s decisions were (1) based upon reasonable investigation, (2) made in good faith and with regard to the best interests of the association and its members, and (3) within the scope of the board’s authority as provided by the association’s governing documents and applicable law. Let’s delve a little more deeply into how a board can meet this standard. CONTINUED ON PAGE 6
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September/October 2018 | www.cai-glac.org 5
The Business Judgment Rule and You CONTINUED FROM PAGE 4
Board decisions are based upon reasonable investigation where that board investigates and evaluates the facts relevant to a situation before making a conscious decision to act (or not to act). The law allows directors to rely on information, opinions, reports and statements that are prepared by experts and consultants within the realm of their expertise (Corp. Code § 7231). So, when in doubt, a board should solicit the advice of the association’s experts and consultants (e.g. legal counsel, financial manager, reserve study provider, managing agent). A board acts in good faith and with regard to the best interests of the association and its members where that board’s decisions are intended to benefit the association as a whole. This means that a director’s decision should not be intended to benefit his or her own self-interests, adversely affect the association’s legal or financial interest, or benefit a particular group within the association at the expense of the entire community. These issues can appear under seemingly innocuous circumstances. For example, an association needs to repair the community’s driveways, but the cost is so high that it must do the work in phases, with certain driveways being repaired before others. A director’s driveway is repaired
during the first phase and another homeowner’s driveway is not. Was this decision made in good faith? Perhaps, depending on why the board selected that driveway for repair first (e.g., whether that driveway needed repair more urgently or was recommended for earlier repair by the association’s contractor). That said, if this were one of our clients, we would advise this particular director to recuse himself or herself from the vote on which driveway to repair first, to help protect the board’s decision against legal challenge and preserve the director’s protection under the Business Judgment Rule. Generally, a board’s duties and obligations require it to manage the association’s affairs. Oftentimes, an association’s governing documents provide specific limitations on the board’s authority. Further, California law requires directors to act in a manner consistent with that of an ordinarily prudent person in a similar position. This means acting with the level of ordinary cautiousness that another person, facing the same situation, would use to minimize risks that can reasonably be avoided or minimized as well as avoid injury to themselves or others. This generally entails a conservative approach to management, with benchmarks set at basic common sense, practical wisdom and informed judgment.
CONTINUED ON PAGE 8
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The Business Judgment Rule and You CONTINUED FROM PAGE 6
A board’s failure to abide by its obligations and duties can lead to a possible lawsuit under a breach of fiduciary duty claim. Some specific duties include the following: ●● The Duty of Knowledge – The board has a duty to enforce the association’s governing documents. This means each director should know the contents and requirements of those governing documents (e.g. CC&Rs, Bylaws, Articles of Incorporation, operating rules, and architectural guidelines). Additionally, the board should be aware of the information in the association’s business records, as this information is vital to discharging the obligation to manage the association’s daily affairs. ●● Duty of Financial Management – The board is responsible for managing the finances of the association, which includes levying and collecting homeowner assessment payments. This requirement is so important that statute requires a board to review the association’s financials no less than quarterly. ●● Duty of Maintenance – The board is responsible for the maintenance, repair and replacement of the association’s common area components, so the board should be aware of any actual or potential maintenance issues as well as the association’s plan in addressing any deferred maintenance items. The association’s reserve study is a helpful tool for identifying deferred maintenance items and the estimated cost for addressing these items. ●● Duty of Operation – The board is responsible for the operation and management of the common area facilities and amenities, such as pools and clubhouses.
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The board is also responsible for contracting and paying for services for the association (e.g. janitorial services, landscaping, utilities). ●● Duty of Enforcement – The board is responsible for enforcing the association’s governing documents, which includes the enforcement of use restrictions, delinquent assessment collection, and architectural restrictions. In all cases, enforcement must be reasonable, consistent, and uniform, subject to approved variances within the board’s authority. Although the Business Judgment Rule offers fairly robust protection for an association’s directors, it does have its limits. A recent example can be seen in the court’s ruling in the case of Palm Springs Villas v. Parth ((2016) 248 Cal.App4th 268). In Parth, a director unilaterally authorized multiple third-party actions that exceeded the scope of her authority. This director entered into various contracts, without ever consulting with her board, and signed almost two million dollars’ worth of promissory notes that were secured by the association’s assets, without consulting the association’s other homeowners. In each case, this director admitted that she never reviewed her association’s governing documents to see what these documents said with regard to her authority to enter into contracts or take out loans for the association. Foreseeably, the association sued this director under a breach of fiduciary duty claim. According to the court, the director’s failure to review her own governing documents and confirm the scope of her authority amounted to “willful ignorance” and created an issue of material fact as to whether the director acted with reasonable diligence entitling her to protection under the Business Judgment Rule. In addition to the Business Judgment Rule, Civil Code § 5800 provides that a volunteer director will not be held personally liable for any action that results in damages to the association or its members in excess of the association’s insurance
CAI-Greater Los Angeles Chapter
coverage if: (1) the association maintains directors and officers (“D&O”) liability insurance coverage in minimum amounts of $500,000 for an association with 100 or less separate interests or $1,000,000 for an association with more than 100 separate interests; and (2) the director’s act or omission was performed within the scope of the director’s duties, in good faith and was not willful, wanton or grossly negligent. As you can see, failing to act in good faith could expose a director to personal liability in any amount that exceeds the association’s D&O insurance coverage. In conclusion, a board of directors is legally obligated to manage its association, and “steer the bus” for the benefit of its members. At the same time, the law recognizes that a board is composed of volunteers and no board is perfect. Together, the Business Judgment Rule and Civil Code § 5800 form a critical safety net for directors and shields their decisions, as long as certain minimum standards, as briefly mentioned above, are met. Fasten your seat belt as you may be in for a bumpy ride! Sandra L. Gottlieb, Esq. CCAL is the managing partner and head of the transactional division of SwedelsonGottlieb, a law firm that exclusively represents community associations throughout California. She can be reached at slg@sghoalaw.com.
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Joseph Gillman, Esq. is a community association attorney at SwedelsonGottlieb. He can be reached at jlg@sghoalaw.com.
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September/October 2018 | www.cai-glac.org 9
Suspension of an Association’s Corporate Status May Have Significant Legal Consequences ¡¡¡By Steven J. Tinnelly, Esq.
A
ssociations which are corporations benefit from additional liability protections given to corporations under California law. Most associations are therefore incorporated as nonprofit mutual benefit corporations under the California Corporations Code. When an association is incorporated, retaining its corporate status requires the association to comply with various requirements of the State of California. Those requirements include, among others, the filing of tax returns and the filing of certain statements of information with the California Secretary of State (e.g., the “Statement by Domestic Nonprofit Corporation” and the “Statement by Common Interest Association” pursuant to Corporations Code section 2205). Failing to comply with these requirements may result in the association’s corporate status being suspended pursuant to Corporations Code section 2205. The consequences of such a suspension may have significant legal ramifications for the association, as the suspension strips the association of its ability to exercise its corporate “powers, rights and privileges” until its corporate status is revived. This means that a suspended association cannot prosecute or defend itself in a lawsuit. Timberline Inc. v. Jaisinghani (1997) 54 Cal.App.4th 1361, 1365. This will frustrate the association’s ability to enforce its governing documents through legal action, to collect delinquent assessments, etc. While the suspension is being cured, the association may miss an important date like the expiration of a statute of limitations for the filing of legal action. A suspended association also loses its ability to enforce its contractual rights or remedies until
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its corporate status is revived. If a suspended association is engaged in a contractual dispute with one of its vendors, the association will be unable to sue the vendor, or to defend itself from any lawsuit that the vendor may file against the association. To make matters worse, the vendor, upon demand, may be able to void the contract entirely. Rev. & Tax Code sections 23304.1, 23304.5. The same could be true with respect to an association’s policy of insurance (another type of contract). This would leave the association and its members with significant legal and financial exposure should a claim arise during a period of time for which the association has no insurance coverage. An attorney who knowingly engages in or otherwise assists a suspended association with litigation may be heavily sanctioned by the courts. Palm Valley Homeowners Association v. Design MTC (2001) 85.Cal.App.4th 553 (“Palm Valley”). The holding in the Palm Valley case suggests that an attorney is also disqualified from assisting a suspended association with “all other activities,” not only litigation. Palm Valley, at 561. For this reason, an attorney that represents a suspended association will decline to assist the association with pending legal matters until the association’s corporate status is revived. The same is generally true with a suspended association’s insurance-appointed defense counsel. The periodic filing requirements for an association which are necessary to retain its corporate status may seem insignificant when compared to other matters an association may face (e.g., repairing a failed roof). However, as indicated above, the legal and financial ramifications of failing to comply with these requirements are far from insignificant. An association that learns of its corporate status being suspended should take immediate action to correct the problem by contacting both the Secretary of State and the Franchise Tax Board to learn what filings need to be completed and/ or what delinquent tax amounts need to be paid. You may learn of the status of your incorporated association by viewing the “business search” area on the Secretary of State’s website at https:// businesssearch.sos.ca.gov/. Steven J. Tinnelly, Esq. is the Managing Shareholder of Tinnelly Law Group and president of Alterra Assessment Recovery. Steve can be reached at steve@tinnellylaw.com.
CAI-Greater Los Angeles Chapter
Frequently Asked Questions About: Suspension of the Corporate Status of an Association
Q A
uestion: How do I find out if the corporate status of my homeowners association (HOA) has been suspended? nswer: This information is available online at the California Secretary of State’s website—https://businesssearch.sos. ca.gov/. From there, select “corporation name” as the search type, enter the corporation’s name (or part of it, if you are not sure of the exact name and wish to obtain a list of potential matches), and then click “search.” You will then be shown a website containing information relating to the corporation, including its “status.” “Active” status means the corporation is in good standing and is authorized to carry out its business activities. “SOS/Suspended” status means that the corporate status has been suspended by the Secretary of State (SOS).
CAI-Greater Los Angeles Chapter
“FTB/Suspended” status means that the corporate status has been suspended by the Franchise Tax Board (FTB).
Q A
uestion: How do I find out more information about the suspension of the corporate status of my HOA? nswer: To obtain more details about why the HOA’s corporate status has been suspended, you may contact the California Secretary of State and/or the Franchise Tax Board. Secretary of State Email: Officers@ss.ca.gov Phone: (916) 657-5448 1500 11th Street, Sacramento, CA 95814 Franchise Tax Board Phone: (800) 852-5711 P. O. Box 942840, Sacramento, CA 94240-0000
Q A
uestion: How do I reinstate the corporate status of my homeowners association? nswer: What needs to be done to reinstate the HOA’s corporate status will vary depending on the reasons for the suspension. Below, are the details of two common situations: (1) failure to file the required information with the Secretary of State, and (2) failure to file tax returns. Failure to file the Statement of Information and/or Statement by Common Interest Development All HOAs must file biennially (every other year) with the CONTINUED ON PAGE 12
September/October 2018 | www.cai-glac.org 11
Frequently Asked Questions About: Suspension of the Corporate Status of an Association CONTINUED FROM PAGE 11
Secretary of State a Statement of Information and Statement by Common Interest Development—Form SI-100 and Form SI-CID, respectively. Failure to make these filings may result in suspension of the HOA’s corporate status. (Corp. Code §2205.) If the HOA’s corporate status was suspended solely for failure to file the Statement of Information and/or Statement by Common Interest Development, you may revive the corporation by filing the delinquent forms and paying any fees or penalties imposed. Note that the penalty ($50/form) is assessed and should be paid to the Franchise Tax Board, so the best practice is to call the FTB to determine what is owed and what documents they require for the revival—for example Form FTB 3557 BC “Application for Certificate of Revivor—Corporation,” and Form FTB 3500 “Exemption Application.” Once the status has been revived, the HOA will receive from the Secretary of State a “Notice of Revivor.”
pay its bills, perform the necessary repairs and maintenance work to the common areas (without entering into any new major contracts), conduct fire and other safety testing, hold board meetings, and even send out notices of violation. There are, however, three actions the HOA must avoid during the suspension period: (1) entering into new contracts, especially if they are major contracts (e.g. substantial amounts); (2) record liens or proceed with collection efforts against any member; and (3) file new lawsuits.
Q A
uestion: Are the actions taken by my HOA during the suspension period void and null? nswer: It depends on the “action.” Collection efforts leading to foreclosure are likely to be void and null because the law requires strict compliance with notice requirements. However, other decisions and actions taken during the suspension period are likely to be ratified (and thus valid) by the reinstatement of the HOA’s corporate status. See e.g. Bourhis v. Lord, 56 Cal. 4th 320, 328 (2013); Peacock Hill Assn. v. Peacock Lagoon Constr. Co., 8 Cal. 3d 369, 374 (1972). FAQs courtesy of Patricia Brum, Esq. of Kulik Gottesman Siegel & Ware, LLP.
Failure to file Tax Returns All HOAs, no matter what size, must prepare and file a tax return with the IRS at the end of each year. In addition, HOAs with nonmember income (e.g. interest in its assessments) above $100/year must also file a tax return with the FTB. Failure to make these filings may result in suspension of the HOA’s corporate status. The process of preparing and filing the delinquent tax returns will require the assistance of a qualified tax preparation professional, who will also be able to assist the HOA in reinstating its corporate status.
Q A
uestion: How long does it take to reinstate the corporate status of my HOA once it has been suspended? nswer: If the suspension was solely the result of failure to file the Statement of Information and/or Statement by Common Interest Development with the SOS, the process to revive the HOA’s corporate status will take approximately 90 days. If tax returns must be prepared, the process may take much longer.
Q A
uestion: What should my HOA do while it is attempting to reinstate its corporate status? nswer: Legally, the HOA is not authorized to conduct any business while its corporate status is suspended. However, it would be impractical (if not impossible) for your HOA to suspend all operations for 90 days or longer. Thus, the HOA should proceed with its daily operations with caution and, to the extent possible, delay all major decisions and actions until its corporate status has been revived. As a general rule, however, the HOA should continue to perform its functions to avoid further harm to its members. For example, the HOA should continue to collect assessments,
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17315 Studebaker Rd., Suite 213 Cerritos, California 90703 800.485.8056Fax 800.485.8057 www.ReserveStudiesInc.com
CAI-Greater Los Angeles Chapter
Oct. 18–19, 2018 | Temecula, CA
Legal
CAI
FORUM CALIFORNIA COMMUNITIES
A one-day event for California community managers, association board members and other homeowners from Community Associations Institute—the leader in HOA and condo education, advocacy, and professional development. For event details and registration, visit www.caionline.org/Events/CALaw or call CAI Member Services at (888) 224-4321 (M–F, 9 a.m.–6 p.m. ET).
Fast Facts LOCATION Pechanga Resort & Casino 45000 Pechanga Parkway • Temecula, CA 92592 (888) PECHANGA Please ask for the CAI Legal Forum group rate of $169 per night when reserving your room. Use room booking code 2002927. The group rate will be available until Sept. 17, 2018, or until the room block is sold out, whichever comes first. Reservations may be made online at https://reservations.travelclick. com/131333?groupID=2050577#/guestsandrooms.
EVENT SCHEDULE Thursday, Oct. 18–OPTIONAL PRE-FORUM SESSIONS 8:00 a.m.– 5:00 p.m. California Common-Interest Development (CID) Law Course 1:00 p.m. – 3:00 p.m. Business Partner Essentials 6:30 p.m. – 9:00 p.m. California Legislative Action Committee (CLAC) Benefit Fundraiser Friday, Oct. 19 8:00 – 8:30 a.m. Registration and Breakfast 8:30 – 9:15 a.m. Keynote Speaker 9:15 – 10:00 a.m. Trade Show 10:15 – 11:15 a.m. Concurrent Sessions 11:30 a.m. – 12:30 p.m. Concurrent Sessions 12:30 – 2:00 p.m. Luncheon and Trade Show 2:15 – 3:15 p.m. Concurrent Sessions 3:30 – 4:30 p.m. Concurrent Sessions
CAI-Greater Los Angeles Chapter
LEGAL FORUM TICKET PRICES Homeowner Leaders & Managers Early Bird (Postmarked By Sept. 30, 2018) Members: $135 per person Nonmembers: $175 per person For members only: If you are registering three or more individuals from the same company or association, the third and subsequent registrants may deduct $25 each. AFTER Sept. 30, 2018 Members: $155 per person Nonmembers: $195 per person For members only: If you are registering three or more individuals from the same company or association, the third and subsequent registrants may deduct $25 each.
Business Partners Early Bird (Postmarked By Sept. 30, 2018) Members: $275 per person Nonmembers: $315 per person AFTER Sept. 30, 2018 Members: $295 per person Nonmembers: $325 per person Visit www.caionline.org/Events/2018CALaw for information and pricing of pre-forum activities i.e. Business Partners Essentials, CID Law Course, CLAC Benefit.
September/October 2018 | www.cai-glac.org 13
The
of Board Meetings
By Erik Mendez, CMCA®, AMS®, PCAM® THE OPEN MEETING ACT IS DESIGNED TO ENSURE THAT HOMEOWNERS HAVE ACCESS TO DISCUSSIONS AND DECISIONS MADE BY THE BOARD OF DIRECTORS AS THEY RELATE TO THE ASSOCIATION. IT IS THE DUTY OF THE BOARD OF DIRECTORS TO GIVE ADEQUATE NOTICE FOR MEETINGS, TO GIVE MEMBERS THE OPPORTUNITY TO SPEAK PUBLICLY, AND TO CONDUCT BUSINESS IN OPEN SESSION, EXCEPT WHERE AN EXECUTIVE SESSION IS REQUIRED. THE MOST COMMON TYPES OF MEETINGS ARE: BOARD OF DIRECTORS MEETINGS, EXECUTIVE SESSION MEETINGS, EMERGENCY MEETINGS, COMMITTEE MEETINGS, AND SPECIAL MEETINGS. A BOARD OF DIRECTORS MEETING requires a four-day notice, unless otherwise stated in the governing documents. The notice must indicate the date, time, and location of the meeting and must contain an agenda. Notices must be made available using at least one of the following methods: 1. By mail or email (if the owner has consented to receiving electronic correspondence), 2. Included with a billing statement or similar, 3. Posting the notice in a prominent location that is accessible to all owners or 4. Broadcasting the notice on the association’s televised programming. Any member may attend the meeting and may speak publicly for a reasonable, pre-determined amount of time. Although members may voice any topic during open forum, the board of directors may only take action on items that are listed on the agenda, unless the topic is deemed an emergency that requires immediate attention. Action may also be taken on topics that are a continuation of a prior meeting agenda item from no more than 30-calendar days prior. The board of directors is required to make minutes available to members upon request within 30 days of the meeting. An EXECUTIVE SESSION MEETING requires a two-day notice, unless otherwise stated in the governing documents. The notice and agenda must be made available using the same criteria as the board of directors meeting. Topics for discussion during an Executive Session Meeting are limited to legal matters, contracts, personnel, member discipline, and delinquencies. Although Executive Session Meetings are solely for board members, any member subject
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to discussion may attend the portion of the meeting that pertains to them. An Executive Session Meeting often, but not always, follows a Board of Directors Meeting. Items discussed during an Executive Session Meeting are to be generally noted in the minutes of the following open Board of Directors Meeting. An EMERGENCY MEETING does not require a notice to the members. This type of meeting is to discuss unforeseen issues that require immediate action. An Emergency Meeting may be conducted electronically, providing all the directors consent to it in writing and the email record is included in the meeting minutes. A COMMITTEE MEETING (Seminar or Event) may consist of a majority of the directors, but is an exception to the Open Meeting Act, so long as no board of director business is discussed or conducted. The board of directors is not required to provide a notice, agenda, or minutes. However, once the board of directors begins to hear, discuss, or deliberate upon an item of business that is within the authority of the Board, it is conducting a Board of Directors Meeting, and notice must be provided. A SPECIAL MEETING requires a minimum of 10-day and a maximum of 90-day notice if petitioned by the members and must be set by the board of directors a minimum of 35 days and a maximum of 90 days from receipt of the petition. A meeting date must be provided by the board of directors within 20 days of receiving a petition. If the purpose of the meeting requires the use of secret ballots, a minimum of 30-days notice of the meeting is required to allow for balloting. A Special Meeting is typically called for when it relates to a lawful purpose, including, but not limited to, fiduciary duties, recalling directors, amendments to the governing documents, and approving assessments above the allowable percentage. The Open Meeting Act keeps the day-to-day operations and decision making on behalf of the sssociation transparent for all members of the community. Failure to comply with the Open Meeting Act may result in civil penalties and members seeking injunctive relief. For more details about the Open Meeting Act, please refer to Civil Code §4900-4955. Erik Mendez, CMCA®, AMS®, PCAM® is President of ONIT Property Management, Inc., a full-service management company serving Southern California. Erik can be reached at erik@ONITpropmgmt.com.
CAI-Greater Los Angeles Chapter
REPRESENTING COMMUNITY ASSOCIATIONS IN
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• Drafting and enforcement of Bylaws and CC&Rs • General litigation, including mediation and arbitration of disputes with owners • Construction defect litigation • Insurance bad faith litigation • Collection of delinquent assessments • Providing general business advice to homeowners associations.
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CAI-Greater Los Angeles Chapter
September/October 2018 | www.cai-glac.org 15
M
ajor challenges as a community manager are to maintain and retain knowledge of past and present laws and how to properly educate our boards so they can, in turn, become effective leaders of their associations. — But wouldn’t life be easier if we allowed boards of directors to approve expenditures without having a meeting or creating an agenda? Why complicate the process? After all, we all remember what we approved three years ago, right? Although this would help expedite the bidding process and initiate projects at the community, we must keep in mind that each director has a fiduciary duty. In maintaining that duty, they must make sure they also comply with all laws and regulations set forth.
The Open Meeting Act prohibits the board from taking any action outside of a board meeting. Civil Code §4910 - Board Action Outside of Meeting Prohibited What does this mean and how does this affect us considering today’s technology? Although technology allows us to communicate effectively, board business cannot be discussed via email or text—unless proper notice is provided to the community with an agenda of the items to be discussed.
As managers, we can strategize to foresee and delegate some decisionmaking to the president, the community manager, or to a committee with less than a majority of the board. We can put a system in place, such as voting in a board liaison and/or forming of While some directors may an Executive Committee. view the Open Meeting Act This would be documented as a nuisance or an added in the minutes along with layer of complication, it is a threshold for what they important to understand would be allowed to approve. what it is and why it was As always, any expenses or established. When we approvals given between understand the “what” and meetings should be openly “why” it helps us understand disclosed at the following the importance and “how” to Open Session Meeting by ensure compliance. having the board vote and ratify the action. Discussion So —WHAT is the Open uuu B y Alissa McMurrin, CMCA®, and of association issues by less Meeting Act? WHY was Marcia Coppola, CMCA®, AMS than a quorum of directors it established? WHY in an Executive Committee should I comply?—and HOW do we get past some of these is not a violation of the Open Meeting Act and does not require challenges and ensure compliance, while at the same a Meeting Notice. If the committee is composed of a majority time, accounting for daily issues that arise and require of directors, then notice must be given. At the Organizational immediate attention? Meeting after each Annual Meeting, you can consider adding The “Common Interest Development Open Meeting Act” an item to establish the Executive Committee. (“Open Meeting Act”) is found in the Civil Code, §4900 Civil Code §4920 - Notice of Board Meetings through § 4955. It is a piece of legislation that went into effect The Open Session Agenda / Notice of Meeting must be January 1, 2012 and is directly related to how HOA boards posted at least four(4) days prior to your meeting date, unless make decisions and hold meetings. The provisions of the Governing Documents state a longer period of notice is Open Meeting Act contain requirements that prohibit the required. The Agenda and Notice of Meeting can be distributed board from taking action on an “item of business” outside of a in the following manner: via U.S. Mail, electronic delivery (if board meeting. consented in writing), billing statements, newsletter, or posted A board meeting is defined as the gathering of a majority of in a prominent location in the common areas. the directors at the same time and place to “hear, discuss, Preparation is the key! If you send the Agenda to the board for or deliberate upon any item of business that is within the review, they can make adjustments and also make sure all items authority of the board.” The purpose of a board meeting is to of business they would like to discuss are on the agenda prior to review and approve contracts, estimates and make decisions posting. As managers, we can start this process one week prior to concerning the welfare of the community.
A Manager’s Guide to the Open Meeting Act
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CAI-Greater Los Angeles Chapter
the meeting to make sure we are in compliance. It is important to plan ahead so the meeting time can be maximized and there is adequate time to properly address all board business. There are a few exceptions wherein an item that is not posted on the agenda can be discussed and still voted on in the meeting:
●● Emergency Situation: Upon a determination made
by a majority of the board present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board and require immediate attention and possible action wherein it would have been impracticable to provide proper notice. ●● Item Requiring Immediate Action: Upon a determination made by the board (by a vote of twothirds of the directors present at the meeting – or – if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the directors present), that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was distributed. ●● Item Appearing on Prior Agenda: The item appeared on an agenda for a prior meeting of the board that occurred not more than 30 calendar days before the
CAI-Greater Los Angeles Chapter
date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken. Before discussing any items falling into one of the three categories above, the board is required to openly identify the items to the members in attendance at the meeting. This can be accomplished during approval of the agenda in the beginning of the meeting before any business is discussed. Civil Code §4923 - Emergency Board Meetings This code allows for Emergency Meetings to be held, under limited circumstances. It must be called by the President of the association or any two directors other than the president. In addition, there must be circumstances that could not have reasonably been foreseen and require immediate attention. In these cases, it is not necessary to post notice. Civil Code §4925 - Open Forum in Open Meetings The Open Forum is designed for homeowners to discuss concerns and other items that are not listed on the agenda. Any member is allowed to speak in an open meeting during this designated time. In order to make sure this time is not abused by homeowners and the focus does not shift from being a board meeting to a meeting of the members, it is recommended to limit each speaker’s time. CONTINUED ON PAGE 18
September/October 2018 | www.cai-glac.org 17
A Manager’s Guide to the Open Meeting Act CONTINUED FROM PAGE 17
As a manager, you can even consider adopting meeting rules and adding a specific time frame for which each homeowner is allowed to speak (i.e. three minutes). It should be posted on the agenda and sign-in sheet to remind all homeowners who participate that they must be in compliance with these rules and limitations and will be asked to leave if they become disruptive. In order to maintain order, this needs to be established in advance. Civil Code §4930 - Limitations on Meeting Content The board may not discuss or take action on any items unless the item is placed on the agenda. The only exceptions are listed above: Emergency Situation, Item requiring Action, and Item Appearing on Agenda. Civil Code §4935 - Executive Session Meetings Executive Session Agenda / Notices of Meeting need to be posted at least two(2) days prior to your meeting date. In the Executive Session, directors meet to discuss litigation, formation of contracts with third parties, member discipline, personnel matters, or to meet with a member. Civil Code §4950 - Meeting Minutes Meeting minutes must be available within thirty(30) days from the meeting date. Board decisions and plan of action need to be documented here.
As a manager, you can offer your services to take the minutes. By completing the minutes during the meeting and/or shortly after, you set yourself up for success. If the association opts out of having a management and/or professional minute taker, you can offer to train and provide proper formatting to assist the association. In all aspects of life, we know that change is inevitable, and we must evolve with change. Accept these changes as law (…because they are!) and plan how your homeowners association boards will operate accordingly. Conducting board business in meetings is important not only for legal compliance but also to preserve the trust of your neighbors. Otherwise, such decisions are arguably not corporate actions but are the actions of the directors personally—exposing directors to personal liability.
STEVEN G. SEGAL INSURANCE AGENCY, INC. Over 37 years of experience specializing in: Condominium Associations • Planned Unit Developments • Hard to Place Associations Earthquake Coverage • High Rise Condominiums • Workers Compensation
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CAI-Greater Los Angeles Chapter
Civil Code §4955 - Civil Action to Enforce Under this code, “a member of an Association may bring a civil action for declaratory or equitable relief for a violation of this article…within one year of the date the cause of action accrues.”
✔✔ DO list all topics of discussion on your Agenda; otherwise, the Board will not be able to make a decision on the action to be taken. ✔✔ DO conduct Emergency Meetings under limited circumstances ✔✔ DO take detailed Minutes of your Meetings ✔✔ DO form an Executive Committee, delegate authority, and establish a liaison or approval authority, in an effort to help manage the property between meetings. ✔✔ DO NOT hold email meetings or make decisions via email, as these are discoverable during litigation and also against the law. ✔✔ DO NOT take any action outside of a Board Meeting. Being the professionals that are hired to assist and manage communities, we need to provide directors with the tools to be successful, as we have the unique ability to educate and empower them. Communication is so important and knowledge is power!
Further, “a member who prevails in civil action to enforce the member’s rights…shall be entitled to reasonable attorney’s fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation”. There are always changes taking place with regards to laws, and it can be difficult to stay on top of it all while also trying to govern the association. With that being said, it is our responsibility—as effective community managers—to properly educate and encourage our board members so they can meet their fiduciary responsibilities and at the same time, run an effective organization. In summary, here are a few reminders: ✔✔ DO provide an Open Session Agenda / Notice of Meeting at least four(4) days prior to your meeting date, unless the Governing Documents state otherwise. ✔✔ DO provide an Executive Session Agenda / Notice of Meeting at least two(2) days prior to your meeting date, unless the Governing Documents state otherwise.
BECAUSE OF OF YOU YOU,, WE WE BECAUSE
ARE CHANGING CHANGING THE THE WORLD WORLD ARE
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O NE NE ROOF ROOF AT AT A A TIME TIME O
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THANK YOU!
Alissa McMurrin, CMCA®, and Marcia Coppola, CMCA®, AMS®, are portfolio managers at HOA Organizers, Inc., a fullservice management company serving the Greater Los Angeles area. They can be reached at alissa@hoaorganizers. com and marcia@hoaorganizers.com.
V
BE SURE BE SURE
BE SAFE BE SAFE
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BE SURE
BE SAFE
BE GOOD BE GOOD
2649 Campus Drive, Irvine, CA 92612 | antisroofing.com | 949.461.9222 | 2649 Campus Drive, Irvine, CA 92612 | antisroofing.com | 949.461.9222 |
CAI-Greater Los Angeles Chapter
September/October 2018 | www.cai-glac.org 19
BE SAF
BE GO
¡¡¡ By Ryan Gesell, CMCA®, CIRMS®
What Kind of Insurance Do We Need? Most governing documents require the board of directors to review their insurance coverage at least annually. For many, this involves a quick glance at the Disclosure Statement that was sent out with the budget. For some, it involves a thorough review of the proposed coverage prior to the renewal date and maybe a meeting with their broker. And then for others, this is the first they are hearing about a requirement to review their insurance, and they’re calling their real estate agent right now because HOA living is much more work than they thought it would be. That said, there’s no way those folks are reading this magazine. The question though, is what should a diligent board member or manager look for when reviewing the association’s insurance? I’ll make this short and quick, but remember, it’s not the size of the explanation that matters, it’s what you do with the information. Step 1. What do we need to insure? Believe it or not, just because your association has the term “Condominium” in its legal name, that doesn’t mean that your governing documents require the board to insure the structures themselves. Just because you share walls with your neighbor, doesn’t mean that the association has an insurable interest in the structures. And even if your home is free standing and doesn’t touch any other units, that doesn’t mean that the association isn’t actually required to insure the structures. It’s all very confusing. So… how do we know? Well, this might sound crazy… but you have to actually read the governing documents. Wait—what?? I know. But believe it or not, they were written for a reason, and they are packed with information. We recently took on an association of
20 www.cai-glac.org | September/October 2018
duplexes that had been insuring all of the structures within it. Their annual insurance premium had been hefty because they were insuring all of the buildings and the real property and improvements (cabinets, countertops, fixtures, appliances, etc.) located within the unit. As aging communities are wont to do, their pipes started failing. These costly water losses began to pile up, and their premiums skyrocketed as a result. A new board took over, and a new manager was hired, and miraculously, these folks read the governing documents. In doing so, they discovered, that the association actually had no insurable interest in any of the dwellings. They realized that if they insured their association per the governing documents, that they would put the responsibility of the repairs and future maintenance back on the owners themselves as originally intended, saving the association tons of money. Admittedly, most governing documents are confusing and vague, and we may feel that CC&Rs should stand for “Complicated, Convoluted, and Ridiculous.” But hopefully there’s some clarity somewhere in there about whose responsibility each of the community components are to insure. And, if in your review you find that the documents are vague, that’s a perfect opportunity for the board to reach out to their attorney about clarifying them and/or the possibility of adding a “Responsibility Matrix”. This beautiful little table illustrates clearly whose responsibility each component is to repair, replace, or maintain, and we highly recommend adding one. Step 2. What kind of Insurance do we need? First step again is checking the CC&Rs. While most governing documents are vague on the details of what to insure, they almost always state specifically which lines of coverage the association must maintain. These usually include Property, General Liability, Directors & Officers (“D&O”), CAI-Greater Los Angeles Chapter
Fidelity Bond, and Workers Compensation Coverage (to the extent required by law). Some CC&Rs may even require the association to maintain Earthquake or Flood coverage. In addition to the Governing Documents, however, there may be other insurance requirements the association needs to fulfill, in order for the owners to obtain loans or to comply with the Civil Code. Fannie Mae has specific insurance requirements. And as the largest purchaser of home loans in the country, most residential loans won’t fund unless their requirements are met. Furthermore, your CC&Rs most likely dictate that the board has an obligation to procure insurance as required by federal agencies that hold, insure, or guarantee mortgages within the property. This could mean maintaining a master Flood Policy, if your association is located in a Special Flood Hazard Zone. Fannie also has requirements about the amount of Fidelity Bond coverage that needs to be maintained. The nice thing about the Fannie Mae requirements, is that you don’t need to go hunting for them. If your association fails to meet one of their requirements, the lenders will definitely let you know about it.
There could also be contractual obligations that could be funded via the purchase of insurance. Any management contract worth its salt has wording that requires the association to indemnify the property management company. But not all D&O policies extend coverage to the property manager. Thus, if a claim were to arise, there would be no defense provided for the management company under the association’s D&O policy. But that obligation doesn’t just disappear. Instead, the association will have to pay the defense costs out-of-pocket. This could be particularly embarrassing and problematic if the manager was the one that procured the insurance. In summary, if you haven’t done so in a while, you should read through your CC&Rs. I know it’s tedious, but it needs to be done. And if they are vague, have your attorney review them and propose amendments or changes. At the end of the day, the board decides what insurance coverage they maintain. Nobody else. Get guidance from your attorneys, managers, and insurance professionals, but the buck stops with the board. As Ben Franklin said, “By failing to prepare, you are preparing to fail.”
In addition, the California Civil Code prescribes insurance limits that must be maintained on both the D&O (Civil Code §5800) and General Liability policies (Civil Code §5805) that must be met in order to protect both the board and the owners from personal liability.
Ryan Gesell, CMCA®, CIRMS™ is the Associate Vice President at Cline Agency Insurance Brokers, an insurance agency serving communities through the Western United States. He can be reached at ryan@clineagency.com.
Insuring Common Interest Developments Throughout The West
CAI-Greater Los Angeles Chapter
September/October 2018 | www.cai-glac.org 21
NEWS
FROM SACRAMENTO
SB 1265 Common Interest Developments – Elections ¡¡¡ By Russell Hoffman, CMCA®, AMS®, PCAM®
A
fter significant amendments to the balcony bill SB 721 that no longer includes language requiring CIDs to perform destructive testing on their balconies, we turn our attention to SB 1265 on Common Interest Development Elections. The passage of this piece of legislation would significantly impact the costs of elections, eliminate qualifications from the Election Rules, drag out the timeline 30 to 60 days, and create privacy concerns. Let’s explore the bill.
■■ Costs would be increased as you would need to: ¡¡ Amend your Election Rules to delete qualifications. ¡¡ Amend your Bylaws if you wish to prohibit a person from serving on the board who was convicted of a financial felony in the last twenty years, is in arrears on their regular assessments, or is a joint owner of a separate interest where another joint owner is an incumbent board director or nominee. Please note that California law prohibits a convicted felon from running for state office. ¡¡ Prohibit an association from using a current vendor as the Inspector of Elections. So, if you do not have a volunteer Inspector, you will need to hire an Election firm or some other person. ¡¡ Require a copy of the Election Rules to be posted on a website or mailed to homeowners. Hope you all have websites. ¡¡ Require a list of all owners eligible to vote be provided to the members by name and parcel number (yes, you will have to obtain all parcel numbers) The state does not do this for general elections, why force a CID to this? ¡¡ Require a list of all candidates be provided to the members at least thirty days before the ballots are mailed. ¡¡ If challenged in court, any error would require a court to void the election, unless the association can prove a mistake was unintentional and did not affect the outcome of the election. ■■ Election timeline — This could run 120 to 180 days or longer ¡¡ Election Rules must be adopted 90 days before an election ¡¡ Appointment of Inspector of Elections
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¡¡ Candidate Statement forms—With procedure and deadline to submit nominations ¡¡ If a candidate is to be disqualified for failure to pay regular assessments or interest, they can dispute the debt, which will stop the election process, or prohibit their disqualification until resolved. ¡¡ List of Candidates —30 days before ballots are mailed ¡¡ List of all voters by name and parcel number —No timeframe specified ¡¡ Meeting Notice & Ballots ¡¡ Annual Meeting ¡¡ Adjourned Annual Meeting – if necessary ¡¡ Lawsuit ■■ Privacy Concerns: ¡¡ As amended, all election material would be considered Association Records. Outer envelopes with signatures, however, would not be allowed to be copied as currently amended. ¡¡ As previously mentioned, a list of eligible voters by name and parcel number would have to be provided to all members. ■■ Other Concerns: ¡¡ As amended, the meeting at which the ballots are counted must be held on the “common area of association property”, and only if no common area exists, at a location within a reasonable distance from the property. If you live in a community with only common area slopes, is that where you have to hold the meeting? The bottom line is that this bill does nothing that will improve the process; it only adds costs, eliminates privacy rights, and allows felons to serve on your board. If you have not already done so, let your representatives in the State Assembly know your views on this poorly-thought-out bill, and watch for CLAC’s Call to Action.
SB – 1128 Common Interest Developments – Governance This bill which contains provisions for handling elections if there are no more candidates than there are seats available, has also been amended and contains additional provisions that would: ■■ Allow the Bylaws to be amended to disqualify a member if that person has been a member of the association for less than one year. ■■ Prohibit disqualification of a member for failure to be current in payment of assessments if the nominee pays under protest, or has entered into a payment plan. Russell Hoffman CMCA®, AMS®, PCAM® is the President and CEO of Valencia Management Group in Santa Clarita CA and may be reached at RHoffman@ValenciaMgmt.com.
CAI-Greater Los Angeles Chapter
OUR THANKS TO CAI-CLAC 2018 CONTRIBUTORS January 1 – July 31
GOAL: $24,321
84%
of goal
as of 07/31/18 $20,260
100 Marina Shores HOA 101 Ocean Condominium HOA 118 Wadsworth Ave. HOA 446 San Vicente HOA 515 San Vicente HOA 909 El Centro, Inc. 914 Lincoln Blvd. HOA 948 20th Street HOA 1030 3rd Street, Inc. 1242 Berkeley Street HOA 1715 California Ave HOA 1835 7th Street HOA 2017 Ketch to Jib Townhouses HOA, Inc. 2050 Artesia HOA 2641 4th Street HOA 4424 Whitsett Avenue HOA 4820 Bellflower HOA 11767 Sunset Blvd. Association 15206 Burbank Blvd. HOA Adams Stirling PLC Armour Lane Condominium Avis HOA Avocado Glen HOA Beaumont Tashjian Berding & Weil, LLP Berg Insurance Agency Beven & Brock Bodger Park Condominiums HOA Bougainvillea Townhomes HOA Budlong Villas HOA, Inc.
Cardiff Court HOA, Inc. Casa de Suenos CA Casa De Valley View OA, Inc. Catalina Plaza HOA Cedar Glen HOA Centinela Townhomes II HOA Chateau Delgany Estates COA, Inc. Common Interest Services, Inc. Condominium Administration Co., Inc. Culver Centrale HOA Culver City Gardens (Lincoln Archways) Design Villas HOA Eight on Twenty HOA El Segundo Peppertree HOA Fenton Grant Mayfield Kaneda & Litt, LLP FirstService Residential AAMC® Florwood Estates HOA Gateway Village HOA Gorham Park HOA Hermosa surf Condos, Inc. Hillcrest Meadows HOA, Inc. Hillcrest Rolling Hills HOA, Inc. Hopi HOA Idaho Villas HOA Irena Vista OA Kasdan LippSmith Weber Turner, LLP Kelton Arms COA
Kester Villas HOA La Pointe MA Lawford HOA (Hayvenhurst CA) Longfellow Village OA Main at the Beach HOA Management Professionals, Inc. AAMC® Marina Village HOA McKenzie Rhody, LLP Mira Verde HOA Monterey Pines HOA Oakbridge HOA Oak Hill Condominium HOA Ocean West HOA Pacific Colony HOA Pacific View Condominiums HOA Park Crest HOA PCW Contracting Services Polynesian OA Rancho Glen HOA Roseman Law, APC Ross Morgan & Company, Inc. AAMC® Roxbury Park HOA S. Manhattan Place HOA SAX Insurance Agency Seascape-Redondo HOA, Inc. Silver Spur Court HOA SK Management, LLC South Bay Estates HOA South Hermosa Townhomes HOA
Spencer Estates HOA Sunset Boulevard Association SwedelsonGottlieb Textile Building OA The 555 Evergreen Street HOA The 3219 Colorado Assoc. The Angels Landing Group 7 Fountains The Collection at Downtown Burbank POA The Vista Pacifica HOA Villa Cordoba HOA Villa Cynthia HOA VIP Goshen Association Virgil Courts HOA Valencia Management Group AAMC® Vogue Condominium Association Villa Medici HOA W.C. Services Company West Wind Townhomes HOA Westchester Playa Del Sol HOA Westside Townhouses HOA Wilshire Selby Towers East CA, Inc. Windsor Estates COA Wolf, Rifkin, Shapiro, Schulman & Rabkin LLP Woodbury Maintenance Corp. Yale St. HOA
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 AMERICA DEDICATED TO MONITORING LEGISLATION, EDUCATING ELECTED STATE LAWMAKERS, AND PROTECTING THE INTERESTS OF THOSE LIVING IN COMMUNITY ASSOCIATIONS IN CALIFORNIA.
ABOUT THE ORGANIZATION Is a non-profit, non-partisan committee composed of two Delegates and one Liaison from each of the eight CAI California chapters. R epresents over 13 million homeowners and property owners in more than 50,000 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.
Turning Common Interests Into Common Ground
General Legal Counsel Governing Document Amendments Legal Opinions Contracts Dispute Resolution Civil Litigation Enforcement Insurance Coverage/ Bad Faith Construction
Depends solely on the donations of the community associations, their boards of directors and those who serve HOA members.
Assessment Collections
CLAC’S MISSION
866.788.9998 HOAattorneys.com
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.
CAI-Greater Los Angeles Chapter
September/October 2018 | www.cai-glac.org 23
Elevating Customer Service Through the Personal Touch By Dr. Lori Baker-Schena, MBA, EdD but surely, digital “assistants” are literally replacing Slowly humans everywhere we turn. Remember when clerks scanned and bagged your groceries for you? Now you can scan and pay for your own groceries without talking to another human being. Remember when you checked your bag at the airport with an airline employee? Now many airlines are requiring that you not only check in your own bags, but TAG them as well. And again, you don’t have to talk to another human being. What about checking in for a hotel stay? Computerized kiosks are assigning hotel guests their room, taking their charge card information and printing out their keys. While these digital advances are designed to increase efficiency, productivity and profitability, the benefits come at a great sacrifice: the loss of the personal touch in customer service. In the association management industry, the success of management companies and business partners alike rests on their ability to deliver excellence in customer service. If your customer service is poor, you can bet you won’t be staying in business long. I propose that the personal touch is the best way to deliver this customer service. In an era when more and more services are computerized, your company can stand out by bringing humanity back to your customer service efforts. And it doesn’t cost a thing.
YOU CAN’T AFFORD POOR CUSTOMER SERVICE A great blog post by Gregory Ciotti* opened my eyes to the hidden dangers of poor customer service. There are four major consequences of delivering poor customer service. Poor customer service: ●● Increases sensitivity to price—It is more difficult to increase your management fees annually if you are delivering poor customer service. The pushback will be greater because the perceived value is lower. Spot-on customer service is something your Boards will pay extra for—and it will distinguish you in the marketplace. ●● Decreases the tolerance for mistakes and “second chances”—Every company makes mistakes—no one is immune. However, if you deliver poor customer service, the tolerance for these mistakes is lower than if your customer service is stellar on a regular basis. ●● Is communicated quickly and widely, from social media platforms to word-of-mouth—News of poor customer service spreads like wildfire. Earning a reputation for poor customer service can be the death knell for a company in this day and age. *https://www.helpscout.net/blog/bad-customer-service/
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●● Drives clients away—In the crowded association management industry market, where competition is often fierce, poor customer service will prompt Boards to look elsewhere. Mistakes may be tolerated—customer service not so much.
THE VALUE OF THE PERSONAL TOUCH Incorporating a corporate culture that focuses on providing the “personal touch” to clients can move your company forward in numerous ways: ●● Using the personal touch by taking a proactive approach to customer relations can cut down on complaints and excessive phone calls from homeowners and Board members. Don’t wait for things to go wrong. Reach out when things are right. ●● The personal touch leaves a good impression that leads to client retention, the tendency for clients to forgive small mistakes and the ability to raise rates. ●● This approach serves as a marketable asset for your organization, helping you differentiate your company in the marketplace.
FIVE PRACTICAL ACTION STEPS YOU CAN TAKE RIGHT NOW TO ENHANCE CUSTOMER SERVICE The following are five practical action steps you can take to start incorporating the personal touch into your customer service efforts: 1. Create truly meaningful relationships with your Boards: Managers can personally check in weekly or biweekly with their presidents, alternating emails and phone calls, to provide updates, follow-up and/or see what they need. CEOs can take Boards out to dinner at least once a year to check in and see if they are satisfied with the service they are receiving. CAI-Greater Los Angeles Chapter
2. Communicate empathy and understanding with each interaction: Listen actively and attentively. Use compassionate words to show you care. Make people feel like they matter. Call your customer by name. 3. Write emails that convey the personal touch: Use a friendly, warm tone and remove anger. Call the person by his or her name. Customize the email and add a personal note if possible. 4. Respond to emails/calls in a timely manner: Being responsive demonstrates respect. Timely responses take the edge off anger. A quick response allows you to shape the narrative of the customer complaint. Even if you can’t respond right away, let them know you received the inquiry.
CREATE A CULTURE OF CUSTOMER SERVICE Take action now to start incorporating the personal touch into your business. Brainstorm with your staff to discover new methods you can elevate the way you interact with your customers—and each other. Remember that the personal touch will not cost you a penny—and can add incredible value to your organization. And let’s face it, the world could always use a little more kindness. It starts with you, and your approach to customer service. Dr. Lori Baker-Schena, MBA, EdD, is a leadership consultant and professional speaker who works with individuals, small businesses and large corporations to strengthen their management and team-building skills. Her goal is to help clients achieve high levels of excellence, productivity and profitability through organizational excellence. Lori was the guest speaker at our July 18 Educational Luncheon.
5. Bring the personal touch into your company: Treat employees with dignity and respect. Conduct annual reviews and give productive feedback. Develop an incentive program that encourages teamwork and relationship building. Provide educational pathways and opportunities for growth.
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September/October 2018 | www.cai-glac.org 25
Association Fi nancial Records: Review, Don’t Rubber-Stamp ■ ■ ■ By Sean D. Allen, Esq.
ASSOCIATION BOARDS OF DIRECTORS ARE FIDUCIARIES. THIS IS A FANCY LEGAL WAY OF SAYING THEY ARE ENTRUSTED WITH THE MONEY AND PROPERTY OF OTHERS, AND THEREFORE THEY OWE THOSE PERSONS A DUTY TO ACT IN THEIR BEST INTERESTS. THIS IS THE HIGHEST STANDARD OF DUTY IMPOSED BY LAW. IT SHOULD GO WITHOUT SAYING THEN THAT ONE OF THE MOST IMPORTANT ROLES AND RESPONSIBILITIES OF AN ASSOCIATION’S BOARD OF DIRECTORS IS TO PROTECT AND PROPERLY MANAGE THE ASSOCIATION’S MONEY.
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Surprisingly, this seems to be one area where many boards cut corners or attempt to over-delegate their financial oversight obligations. Not only is this bad business, but it too often results in fraud and embezzlement, and it could very well create some real liability issues. Boards can’t simply rely on the reports prepared by management and rubber-stamp their approval. Instead, an actual, thoughtful review of the association’s financial records is required, and the frequency of those mandatory reviews might soon be increased if our legislature has its way. First, let’s take a look at what is currently required. Civil Code Section 5305 sets out the basic requirement that a review of the financial statements of the association must be prepared in accordance with generally-accepted accounting principles (GAAP) by a licensed CPA for any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars ($75,000). A copy of this annual review of the financial statements must then be distributed to each of the association’s members within one-hundred twenty (120) days after the close of the fiscal year, by individual delivery. The association’s governing documents can impose more stringent standards, such as requiring a more in-depth audit of the financial statements rather than a review, but if the documents are silent on the matter then the above rules apply.
CAI-Greater Los Angeles Chapter
In addition to the mandatory annual review by a CPA, Civil Code Section 5500 requires that the board itself must conduct regular reviews of the association’s operating accounts, the association’s reserve accounts, the current year’s actual reserve revenues and expenses as compared to the current year’s budget, the latest bank account statements, and an income and expense statement for the association’s operating and reserve accounts. Each of the above reviews must be conducted no less than quarterly, but the association’s governing documents can again impose more stringent standards.
current form, would amend Civil Code Section 5500 to require that boards review the association’s financial records on a monthly basis, rather than quarterly. The bill would also require monthly reviews of the check registers, monthly general ledgers, and delinquent assessment receivable reports. Fortunately, it would also authorize these requirements to be met when an individual member of the board reviews the documents and statements outside of a board meeting, so long as the review is ratified at the next board meeting and the ratification is reflected in the minutes of that meeting.
Even though managers are generally allowed to prepare association budgets and financial reports under Corporations Code 7210, it is the board who is ultimately responsible for reviewing and approving all of the records and expenditures. When the board fails to meet its obligations and a misuse of association funds results, it is a breach of the board’s fiduciary duties. Thus, not only is the association damaged by the board’s malfeasance, but the individual board members themselves could potentially be exposed to personal liability.
Other aspects of AB 2912 would require the association to maintain fidelity bond coverage, and would prohibit electronic transfers of funds into and out of the association’s accounts without prior approval from the board.
Although Civil Code 5500 only requires the board to conduct quarterly reviews of the association’s financial records, more frequent reviews are recommended, and may soon be required. As of the writing of this article, Assembly Bill 2912 (Irwin) is currently in committee in the California State Legislature, and it looks as though it might soon pass into law. AB 2912, in its
All of this, taken together, creates a roadmap for the board to meet one of its most basic and important fiduciary obligations: the protection of the association’s money. Cutting corners here is not recommended. Sean D. Allen, Esq., is a partner with Roseman Law, APC, a full-service law firm serving common interest developments throughout California. He is also the head of the firm’s HOA department. Sean can be reached at allen@rosemanlawcorp.com.
Coaching to Credentials
Manager Mentor Program Would you like to be able to talk to another manager about their educational path and experience—get their advice about next steps? CAI-GLAC is proud to offer the Coaching to Credentials Manager Mentor Program as a resource to our community manager members. Our goal is to encourage you to achieve CAI designations—ultimately the PCAM® designation. Through the program, an experienced professional manager is paired with a manager newer to the industry or one looking simply for guidance. The scope and duration of the mentoring relationship is determined between the mentor and the protégé.
CAI-Greater Los Angeles Chapter
A Mentor can: ll Help to identify your specific goals. ll Provide career guidance. ll Provide vision and insight. ll Offer support and advice about CAI courses. ll Explain the value of credentials. ll Motivate you to progress to the next level of professionalism. For additional information about the CAI-GLAC Manager Mentor Program, please contact the Chapter Office at 818-500-8636.
September/October 2018 | www.cai-glac.org 27
It’s Not Just a Price… It’s a Process ¡¡¡ By Greg Borzilleri
W
hy is one of the biggest problems many managers and boards run into is getting quality proposals and estimates? When asking for multiple bids on projects, bids come back totally different from what you envisioned, or they are loaded with potential pitfalls and change orders. Unfortunately, in most cases the issues that arise during the bidding process are self-inflicted and one hundred percent preventable. There are several repetitive mistakes contractors see when we are being asked to submit estimates/proposals for associations. First and foremost, know what you want to accomplish. You would be surprised how many times this important piece of the puzzle is being left open to interpretation. There are several boxes that should be checked before you even begin to reach out for an RFP (request for proposal). If you are unsure about the finished result you desire, how is anyone else going to be able to give you what you’re looking for? Many issues go back to lack of information or lack of time to properly gather information.
If you are reaching out to several contractors and simply ask them to replace the rotted wood and paint your association, the likelihood your bids are going to be apples-to-apples are slim. Why? That is a pretty simple request isn’t it? When in fact it really isn’t. That request just became subjective to each contractor bidding the work. What type of paint are they going to use? When they go to inspect the property are they going to do a visual inspection from the ground or are they using ladders and climbing on roof and decks and possibly performing a probe inspection (poking all components)? Just in the materials and method of inspection each contractor chooses you now have separate scopes, risks for change orders and thus prices not just upfront but overall. For large-scale projects such as reconstruction, component replacement throughout, highly-technical specialty projects like podium deck replacements, or structural concrete repairs, don’t assume your community manager is an expert. Yes, we know how talented and hardworking these people are, but when it comes to these styles of projects you need to involve the professionals from the start. Hiring a third-party construction manager, architect or engineer to develop the scope of work and oversee the bidding process can be extremely beneficial and save the association costs over the duration of the project. Many times, for these styles of projects you will eventually need to have a design professional in some capacity before you can pull permits to perform the work. Whether you are hiring a professional to take the lead or taking on the bid process yourself, the best thing anyone can do is create a solid bid package. This package should include a project description, a scope of work and detailed project specifications. The more complete the initial bid package is, the greater the likelihood your bid process and project is going to be successful. YOUR PROJECT DESCRIPTION: This should be a simple statement that tells your bidders the basic information about your project. For example, “The Happy Homeowners Association is a condominium community located in Los Angeles, California. The community consists of thirty-two (32) two-story buildings with eight (8) units per building. The community was constructed in 1952.” This simple statement just gave the contractor vital information that is going to tell them how to proceed based on the physical attributes, age, insurance coverage necessary and location of the project before they even arrive onsite.
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THE SCOPE OF WORK: This gives the contractor a finite accounting of what they are fixing or replacing. For example, “The contractor shall furnish all required labor, supervision and materials to perform deck maintenance to ninety (90) balcony decks throughout the Association totaling five thousand four hundred (5,400) square feet.” The more precise you are with the quantification of the project, the better your results. PROJECT SPECIFICATIONS: This by far is the most neglected portion of a bid package. This tells the contractor the technical standards of the job like the quality of the materials to be used, specific products being specified, the method of which the project is to be executed and the level of insurance required. Each item in the project specification can greatly affect the overall project costs. Some of the items in the specifications consist of…
¡ MATERIALS: Just like cars there are different levels of performance
for different needs and budgets. Although materials can carry better warranties they can also be more labor intensive, or their maintenance requirements can drive up costs over the long run. There is a right product for each job, but each product has a definite effect on costs. ¡ METHOD OF APPLICATION: Brush and roller or sprayed? Can we use an excavator and dump trucks or are we using shovels and wheel barrows? These can be an easy examples of how labor costs can increase based on the specifications. ¡ TECHNICAL STANDARD: Typically, this is a manufacturer’s specification of the material(s) being used because it pertains to thickness, time frame or application. Each can have a bearing on the material or labor cost. ¡ PERMITS: Is the cost for permits covered in the contractor’s costs, or is this going to be a reimbursable expense paid to the contractor from the association? ¡ INSURANCE: Is your contractor covered to work in associations? Is $1,000,000 or $2,000,000 in coverage acceptable for the risk of the project? If you want additional coverage, what is the cost of that coverage? ¡ EXECUTION: If you are doing the work in a single “move-in,” the cost is potentially going to be more cost-effective than to have it performed in three (3) phases over two years. ¡ FACILITIES: Is the contractor using the association’s water, power and restrooms, or are they bringing in power, water and portable toilets? As you hopefully can tell, there is a ton of items that can affect your project’s success. Most of it is found in the details before a single shovel hits the ground. If you take the time to cross your T’s and dot your I’s and give your contractors enough time to do the same, you will have consistent success with your construction projects. The biggest problem will no longer be one of yours. Greg Borzilleri is the Sales Manager for PCW Contracting Services, a company that provides both General Construction and Specialty Contracting Services. He can be reached at gregborz@pcwservices.com.
CAI-Greater Los Angeles Chapter
HAPPY
45th ANNIVERSARY Past Chapter Presidents Share Memories HOW TIMES HAVE CHANGED In the July/August issue, Kelly Richardson and Chuck Fenton shared their memories of their presidencies. As Kelly has recounted, the Chapter went through a very tumultuous period in the early 2000’s. Fortunately, under the leadership of Dick Pruess (2003) and Kelly Richardson (2004) we were able to hold things together, even during brief periods when we didn’t have an Executive Director or office staff. I remember a couple of board meetings where board members printed, folded and stamped event flyers for mailing! With my prior background in retail, my job during those meetings was to process credit card payments for event sponsorships and attendance. I was honored when Dick and Kelly asked me to serve as President of the Chapter in 2005, but also a bit intimidated because of the turmoil we were going through. Fortunately, in April 2005, Joan Urbaniak came on board as our Executive Director full time. While 2005 was still a difficult time for the Chapter financially, Joan was able to quickly get us back on track, and we finished the year with money in the bank. She was also instrumental in re-building member confidence, which led to increased sponsorships and greater attendance at events; a win-win proposition. In my view, 2005 was the year the Chapter embarked on the “road to recovery.” I served again as President of the Chapter in 2017, under very different circumstances. By this time, the Chapter was in very healthy shape financially, events were not only well-attended but often sold-out, and our membership was growing steadily. My goals were simple: to encourage more of our members to become involved in committee work, and to continue to grow our membership. While preparing for our strategic planning session in late 2016, I realized that even though our committee rosters were long, there were really only a small number of our members actively involved in committee work, and the majority of those members were serving on two, three or even four committees! Without those tireless and dedicated individuals, where would we be? I challenged our committee chairs to seek new members, people who were not already involved. Our Community Outreach Committee accepted the challenge and has since more than doubled its membership, which has generated more energy and new ideas. As for our overall membership growth, by mid-2017 our membership had reached 900 for the first time and at year-end we had 912 members. This year, Greg Borzilleri is leading the “Race to 1,000”! CAI-Greater Los Angeles Chapter
I am grateful to have had the opportunity to serve the Chapter as a board member for twelve of the last fifteen years, and as President twice. My involvement in CAI has been an integral part of my career and has provided me not only with great educational opportunities, it has enriched my life. I treasure the relationships I have developed through my involvement at the committee and board level. If you have not become involved at the committee level yet, please consider doing so. Committee service is a prerequisite to obtaining the PCAM® designation and to becoming a Chapter board member. I encourage you to be part of our Chapter’s future! 2005 & 2017 Chapter President Joanne Peña, CMCA®, AMS®, PCAM® Horizon Management Company AAMC
BETTER TOGETHER Wow, has it really been six years?! It feels like it was just yesterday I was beginning my term as the Chapter’s 2012 President, and what a great honor it was to lead the Chapter. The theme for the year was “Better Together.” Looking back, together we have come a long way. The Chapter has grown from 700 members in 2012 to now celebrating the accomplishment of reaching over 1,000 members. That same year the Chapter more than doubled its office space when it moved from its Eagle Rock location with a 600 sq. ft. office to a 1,500 sq. ft. office in Glendale where the Chapter office remains. We also had some fun and memorable events with our friends and colleagues. In the summer, we held a “Viva Las Vegas”themed Golf Tournament at Woodland Hills Country Club. Then we hosted “Hot August Nights – Wine Night” in the Garden of the Rosenthal Malibu Wine Tasting Room to support and raise awareness for the California Legislative Action Committee, which I continue to serve. As we know, the Chapter endeavors to educate its members by providing interesting, current and relevant information. Among the many educational programs offered in 2012, the Chapter held a luncheon, “Get Your Game On” with keynote speaker, Jim Fox, TV Color commentator for the L.A. Kings. Another luncheon was a “mock trial”—where the panelists demonstrated recurring issues that arise in common interest developments with examples of how best to handle such CONTINUED ON PAGE 30
September/October 2018 | www.cai-glac.org 29
Past Chapter Presidents Share Memories CONTINUED FROM PAGE 29
situations. The Chapter also held a special Managers Workshop with details about Electric Vehicle Charging Stations. Later that year, in October, was the last time the Marketplace was held at Skirball where the Chapter had over 80 vendors exhibiting their products and services. The following year the Chapter changed to offer three regional Marketplaces to better serve its Los Angeles County members. Today the Chapter continues to offer regional Marketplaces in the South Bay, San Fernando Valley and San Gabriel Valley. And last but not least, we ended the year with the “Monster Ball Casino Night” at Park Plaza Hotel. It is with fond memories and reflection on the Chapter’s continued successes that I am proud to have served as President and continue to be a member as we reach the milestone achievement of surpassing 1,000 members. We continue to be “Better Together.” 2012 Chapter President Jeffrey A. Beaumont, Esq., CCAL Beaumont Tashjian
our outreach to non-members and to volunteer leaders with a new mail and email campaign spearheaded by Joan Urbaniak. We increased our communication with, and support of, our committee chairs, and committee members. We also began the search for new and more professional office space to allow Joan and her assistant to have a better working environment and give the Chapter the space to host meetings. Over the course of my tenure on the Board, it was exciting to get to know and work with a variety of professionals who volunteered their time to serve the Chapter, and to get to know them better as we worked side-by-side to solve problems and plan for the future of the Chapter. Over the course of my two terms, we saw the Chapter able to pay off its bank loan, no longer have to dig into our general fund to pay the balance of our CLAC contribution each year, double attendance at monthly educational luncheons, and increase our membership by a few hundred new members. Serving on the Board was a truly rewarding experience. We all owe a debt of gratitude to those who have kept up the momentum and continued to pursue growth and improvement. Serving on the Board allowed me to develop a much better understanding of the many ways in which the Chapter makes an impact on the Common Interest Development community. Thank you for the opportunity! 2011 Chapter President Matthew Davidson CCAM-HR Action Property Management
REFLECTIONS I am glad to have been asked to write this article because it allowed me an opportunity to reflect back on my six (6) years on the Chapter’s Board with fondness. I was first elected to the Board of Directors in 2007, which was an exciting time of growth thanks to the hard work of past boards of directors. The Chapter was regaining its financial stability, paying off a loan incurred as a result of past financial struggles, and had strong leadership in place. Our membership was loyal, and growing, but the Board was focused on increasing membership growth and further enhancing our offerings to attract and retain members. As a member and Chair, variously, of the Chapter’s Programs Committee, I had been involved in the Chapter for a couple of years and I was familiar with how the Chapter operated, but joining the Board opened my eyes to other aspects of the organization. By 2011, we had paid off our loan, moved all educational programs to the Skirball Cultural Center due to steady growth in attendance, and had launched a new and much improved website the year before. In 2011 we focused on thanking and recognizing our volunteers who all worked (and still do!) tirelessly to keep the Chapter growing and vibrant. We committed to leveraging our new website to make it easier for members to interact with the Chapter, increase sponsorship value, and communicate with non-members. We added the quick-check system allowing luncheon attendees to have their tickets scanned at entry to speed up the process and allow more time to mingle, and we increased
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2018 CAI-GLAC
Referral Rewards PROGRAM Membership is Everywhere! Help CAI find new members and win! It’s easy! Can’t quite close the deal?
LET CAI-GLAC HELP YOU RECRUIT! Just send the Chapter thecontact names Just send the Chapter Office theOffice names and and contact information for anyone you information for anyone you think would benefit from CAI membership. think would benefit from CAI membership. ToTo send in your please complete andcomplete return send in referrals, your referrals, please the form, or email Andrea at andrea@cai-glac.org. and return the form, or email Andrea at
andrea@cai-glac.org.
IfIfyour joins,you your recruit recruit joins, you goTreasure to the can can go the Treasure Chest andChest select and a gift select a gift from from our bounty. our bounty.
www.cai-glac.org CAI-Greater Los Angeles Chapter
COMMITTEE
SOCIAL MEDIA COMMITTEE MEMBERS:
CORNER
Teresa Agnew, Co-chair Roseman Law, APC Mike Perlof, Co-chair Fenton Grant Mayfield Kaneda & Litt, LLP Sean Abbott Tivoli Cove HOA Kathryn Bartol, CMCA®, AMS® Pardee Homes Lindsay Biren ASR Property Restoration Meigan Everett, PCAM® Roby Garcia Servpro of Burbank, Chatsworth/ Stevenson Ranch, Crescenta Valley/ East Glendale Sheilah Turner, AVP Pacific Premier HOA & Property Banking
Social Media Committee ¡¡¡ By Teresa Agnew, Committee Co-chair
T
weet, like, post, hashtag are words that are part of our daily vocabulary. Social media has changed the way we communicate personally and professionally. Three years ago, the Chapter’s board of directors realized this was one more way to communicate with our members, both current and potential. Alas the Social Media Committee was formed! It started with one member, Lindsay Biren, who worked with our Executive Director to create the Chapter’s Facebook page. The following year, the Committee grew
CAI-Greater Los Angeles Chapter
and added a co-chair, Teresa Agnew and a core group of four who organized social media campaigns, posts and content for the Chapter’s Facebook, Twitter, Instagram and LinkedIn pages. Their hard work, creativity and team effort was recognized, and they were awarded “Committee of the Year” for 2017. They wasted no time and hit the ground running in 2018. With a “Committee of the Year” under its belt, and under the leadership of co-chairs, Mike Perlof and Teresa, it seemed that attracting talent was no longer a
challenge. The committee continued to grow and so did its ability to develop and nurture content for the Chapter and its social media outlets. Posting nearly every week in 2018 with creative and relevant content that concerns nearly every homeowner in Los Angeles, with an especially keen eye on those living in community associations. The committee looks forward to being a positive and relevant voice for the future, serving the best interest of community associations and all of the Los Angelans within them. Follow the Chapter on all our of social media platforms, and don’t forget to use the hashtag #caiglac.
September/October 2018 | www.cai-glac.org 31
COMMITTEE CORNER
CAI-GLAC Education Committee, The Committee for Managers ¡¡¡ Martha Perkins, CMCA, Committee Co-chair
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s community managers we spend our lives educating other people. We educate the homeowners on the CC&Rs. We educate our boards on the latest legislation being passed. Yet, just like an auto mechanic with his car; we often place our own education on the back burner. The Education Committee is devoted to helping managers reach their fullest potential by providing additional educational resources for managers and community leaders. Founded 10 years ago, the Education Committee strives to make higher learning the core of our chapter. This committee’s focus is on the education of managers and community leaders. “Breakfast on the Boulevard” originated with the Education Committee to provide an in-depth look at topics from a manager’s perspective. “Coaching to Credentials” was created by the Education Committee to help new managers get on the education path towards their PCAM® by pairing the individual with a seasoned manager. One of the biggest accomplishments of the Education Committee is the establishment of the PCAM® Scholarship Program, which helps reimburse managers for educational courses towards their PCAM®. The “Breakfast on the Boulevard” workshop was recently renamed “Managers Only Workshop”. The workshop is free to attend and usually
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comprises a mixture of high-rise managers, onsite managers, and portfolio managers. The goal of the Managers Only Workshop is to provide detail training on a topic that may not appeal to all CAI members. Past topics have included electric vehicle charging stations and human resources. In October, we will be discussing preparations needed for a major earthquake. Due to the intimate environment of about 25 managers, the workshops are interactive with managers learning from the experiences of the speaker and their peers. “Coaching to Credentials” is the mentor program for managers wanting to obtain their PCAM®. It pairs a PCAM®-certified manager with someone who is starting their educational journey. The mentor can suggest helpful tips, be a study partner, and provide encouragement for the apprentice. The relationships developed in the mentorship program have sometimes become lifelong bonds. The Education Committee is currently looking for PCAMs to pair with some fresh faces of the Greater Los Angeles Chapter. If you are interested in being a mentor, please reach out to the GLAC office. Five years ago, the Education Committee developed the “PCAM® Scholarship Program.” The program currently reimburses 50% of the registration fee for onsite 200-level courses for qualified candidates.
www.cai-glac.org | September/October 2018
EDUCATION COMMITTEE MEMBERS: Martha Perkins, CMCA, Co-chair Horizon Management Company AAMC Teresa Whittsitt, CMCA, Co-Chair Ross Morgan & Company, Inc. AAMC Adrian Adams, Esq. PCAM® Adams Stirling PLC Breanne Atha, CMCA® Common Interest Services, Inc. Marc Binenfeld Metropolitan Property Services, LLC Helen Cook, CMCA®, AMS® HOA Organizers, Inc. To qualify an applicant must meet the following criteria: ●● Complete an application form ●● Be a member of the Community Associations Institute ●● Certified CMCA ●● Be working as a community manager for one year ●● Currently employed as a community association manager ●● Attended 2 of the CAI-GLAC educational luncheons in the last 12 months In the upcoming year, the Education Committee is devoted to creating more learning opportunities by creating additional workshops geared towards community leaders. The biggest expansion for 2019 is the PCAM® Scholarship Program. The education committee understands the growing trend of online training. In 2019 we will be offering a 25% reimbursement to qualified members for online courses level in the 200-level series. The qualifications will remain the same, but you will now have more opportunities to utilize this great benefit from the CAI-GLAC Chapter. “Education is the foundation upon which we build our future.” —Christine Gregoire
CAI-Greater Los Angeles Chapter
BUSINESS PARTNER COMMITTEE MEMBERS:
Business Partner Committee ¡¡¡ By Gina Roldan, Business Partner Committee Co-chair
It was a very nice location and the atmosphere was inviting and relaxing. For it being our first one of the year, it worked out very well.
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his year the Business Partner Committee is responsible for hosting some regional happy hours, Tricks of the Trade, and our annual Holiday Happy Hour. So far we have had two happy hours, and one Tricks of the Trade, and have been excited with attendance and camaraderie. The Greater Los Angeles Chapter is a very social group. A couple of years ago, chapter members expressed interest in simply getting together on a Friday at a chosen location. They wanted to get to know each other better at an event with less structure and without time constraints. At our happy hours, everyone buys their own beverages and food. It is a perfect opportunity for business partners to invite managers to join them. Attendance usually ranges from 25-35. We held the first one last year at Golden Road Brewery in Glendale. This year has been a busy and fun year for the Business Partners Committee. In February, we had our first happy hour in Torrance at the Local Kitchen.
On June 1 we had our second happy hour at Buffalo Wild Wings in Sherman Oaks. Even though it was June, the weather wasn’t too hot. We sat around and enjoyed each other’s company with appetizers and some adult beverages to unwind from our work week. Tricks of the Trade is an orientation for our new business partner members, whether a new rep for one of our member companies, or a member company new to our industry. We offer this as a benefit of membership in order to help business partners learn the sales and promotion techniques that work best in our industry. It is also an opportunity for them to get to know each other and see if there are synergies that can be developed.
Gina Roldan, Co-chair ProTec Building Services Michael Valenzuela, Co-chair Vista Paint Corporation Brian Berce Brian Berce Insurance Agency, Inc. Barry Cooper Rose Paving Company, Inc. Jamilla Davis-Varellas Dunn-Edwards Paints Matt Gibas PCW Contracting Services Ray Moody City National Bank Kim Province The Miller Law Firm Jonathan Reeves CBCI Construction, Inc. 6-01-18 Happy Hour
Holiday Happy is a tradition started several years ago in our chapter. Held in late November or early December, it is a chance for our members to get into the holiday spirit before the season becomes too hectic. We are diligently working on nailing down a new location for the Holiday Happy Hour on November 30, so be on the lookout for location and theme.
2-23-18 Happy Hour
CAI-Greater Los Angeles Chapter
September/October 2018 | www.cai-glac.org 33
WELCOME
NEW CAI-GLAC MEMBERS! AS OF JUNE 15, 2018
BUSINESS PROFESSIONALS CID Consortium, LLC Fenn Termite & Pest Control Landsystems/Terracare TOPS Software, LLC
RECRUITER CAI National CAI National Joanne Peña, CMCA®, AMS®, PCAM® CAI National
COMMUNITY ASSOCIATIONS Mulholland Heights HOA Ports of Call HOA
Crystal Valencia Jennifer Flores PMP Management AAMC Matthew Wells Sascha Macias, CMCA®, AMS®, PCAM® FirstService Residential Lori Yarborough, CCAM® CAI National Stonecastle Community Management, Inc.
Gary Burns Lillian Rivlin
COMMUNITY ASSOCIATION LEADERS Surinya Tritipeskul Matute
COMMUNITY MANAGERS Gloria Chavez Valley HOA Management, Inc. Justine Delmonico PMP Management LLC Erin Jones, CCAM® Empire West HOA Linda Lee PMP Management AAMC. Mariesa Montiel SF Valley Management, Inc.
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CAI National
Nancy Yamaoka Jennifer Flores CAI National Keila Miramontez, AMS® William Reimbold, MBA®, CMCA®, AMS®
www.cai-glac.org | September/October 2018
CAI-Greater Los Angeles Chapter
OUR THANKS TO RENEWING MEMBERS! AS OF JULY 31, 2018
BUSINESS PROFESSIONALS Accurate Termite & Pest Control ADT Community Association Program All Valley Washer Service Antis Roofing & Waterproofing, Inc. Association Dues Assurance Corporation BPR, Inc. California Sub-Meters Data Systems Services Diversified Asphalt Products, Inc. Elements Landscape Management Fireplace Solutions The Chimney Sweeper Jon Wayne Construction & Consulting, Inc. La Rocque Better Roofs, Inc. Liftech Elevator Services, Inc. McGowan Program Administrators Mission Association Financial Management, Inc. Newman & Associates, Inc. CPA Oakridge Landscape, Inc. Out-Fit Payne Pest Management, Inc. Performance Elevator Contractors, Inc. Pilot Painting & Construction, inc. Preferred Commercial Paintings, Inc. S.B.S. Lien Services Sandra Macdonald Insurance SKY Painting Smokefree Apartment House Registry The Sherwin-Williams Paint Company U.S. Bank Van Dijk & Associates, Inc. COMMUNITY ASSOCIATIONS Bridgeport Community Association Century Woods COA Del Prado HOA Old Orchard I HOA The Colony at Westwood HOA Tierra Verde V HOA Vista Ladera Estates HOA COMMUNITY MANAGEMENT COMPANIES Action Property Management, Inc. Associa-PCM Cardinal Property Management AAMC CoastManagement.net CT Prop Management, Inc. Jenkins Properties Management, Inc. Metropolitan Property Services, LLC ProActive Professional Management Scott Management Company SF Valley Management, Inc. Valley Association Management, Inc.
CAI-Greater Los Angeles Chapter
COMMUNITY MANAGERS Breanne Ackerman FirstService Residential Alicia Aitken Jerson Barcelon, CCAM®, CMCA® Regatta Seaside HOA Brian Barr, CCAM® Action Property Management, Inc. Kathryn Bartol, CMCA®, AMS® Pardee Homes Omar Bayter Village Northridge HOA Leonardo Beard, CMCA®, AMS® Vanessa Benitez HOA Masters Bianca Berredo, CMCA®, AMS® Ross Morgan & Company, Inc. AAMC Michael Black Marina West Management Walter Branch, CMCA®, AMS® Torrance-Windemere HOA Cynthia Brown David Bucks Valley Association Management, Inc. Laurene Cail Marina City Club HOA Brandon Clark Prado HOA Mikaela Collerd, CMCA®, AMS® PMP Management AAMC Monica Cooper Ross Morgan & Company, Inc. AAMC Gilda Curry, CMCA® Scott Management Company Traci De Rago, CMCA® Lyndsie Dellefield, CMCA®, AMS® PMP Management AAMC Roman Esparza, CCAM® Beven & Brock Carrie Field The Colony at Westwood HOA Brian Fleming Wilshire Regent HOA Jennifer Flores PMP Management AAMC Janet Garcia Ocean Terrace HOA Norma Gonzalez, CMCA® Valencia Management Group AAMC Sharon Hanson, CMCA®, AMS®, PCAM®
Wendy Heffernan, CMCA®, AMS® Belcaro Garden Society William Johnson Tradewinds 53433 HOA Brittany Joseph Seabreeze Management Company AAMC Michelle Kalin Del Prado HOA Barbara Kelley, CMCA® Diane Kennedy, CMCA®, AMS® Kennedy Real Estate Management John Ko, CMCA®, AMS® Janes Management Donyelle La-Key, AMS®, PCAM® Horizon Management Company AAMC Uther Lai, CMCA®, AMS® Pro/Service Realty & Management Gregg Landis Bel Air Glen HOA Erica Llanos, CMCA® Ross Morgan & Company, Inc. AAMC Marc Loge, CMCA®, AMS® Scott Long, CMCA® Cordova Park Villas HOA Debra McGary, AMS® Horizon Management Company AAMC Leonard McKinley Valencia Management Group AAMC Matthew Meadors, CMCA® HOA Organizers, Inc. Keila Miramontez, AMS® PMP Management AAMC Ruth Moffitt, CMCA®, AMS®, PCAM® Valencia Management Group AAMC Peggy O’Donoghue, CMCA®, AMS®, PCAM® Valencia Management Group AAMC Vicki Olson, CMCA®, AMS® PMP Management AAMC Martha Olvera, CMCA® Horizon Management Company AAMC Danny Padilla, CMCA® Cardinal Management Group Susy Parrott, CMCA® Paolos Verdes Bay Club Condominium Nelly Penalonzo Manhattan Village HOA Yami Perez ICON Realty Services, Inc.
Nicole Peterson, CMCA®, AMS® Valencia Management Group AAMC Christopher Pettis, CCAM-HR® Wilshire House Robert Plach, CMCA®, AMS® Valencia Management Group AAMC Darcella Reeves Briarwood HOA #2, Inc. Adrian Rivas The Churchill Condominiums Vickie Sellman, AMS® Sky Community Association Robert Sides, CCAM®, AMS®, PCAM® Regatta Seaside HOA Michelle Underwood, CCAM®, CMCA®, AMS®, PCAM® Cabrini Villas HOA Jill Van Zeebroeck, PCAM® Malibu Management Service, LLC Tracy Vees Horizon Management Company AAMC Teressa Whitsitt, CMCA® Ross Morgan & Company, Inc. AAMC Cari Williams, CMCA® Ross Morgan & Company, Inc. AAMC Ida Worth, CMCA®, AMS® Ross Morgan & Company, Inc. AAMC Lori Ziegler, PCAM® Century Woods COA Reina Zuckerman, CMCA®, AMS® Ross Morgan & Company, Inc. AAMC COMMUNITY ASSOCIATION LEADERS Peter Goldberg Albert Nichols Helene O’Cain Lisa Roye Janice Yates
September/October 2018 | www.cai-glac.org 35
ADVERTISERS INDEX 7 Association Reserves, Inc.
12 Reserve Studies Inc.
2018 CALENDAR OF EVENTS
23 Beaumont Tashjian
17 R.W. Stein Painting, Inc.
21 Cline Agency Insurance Brokers
11 Sandra Macdonald Insurance
34 Ferris Painting, Inc.
18 Steven G. Segal Insurance Agency, Inc.
9 Mutual of Omaha Bank/ CondoCerts
7 Select Painting & Construction
6 SwedelsonGottlieb
25 Pacific Utility Audit
Essentials of Community Leadership Workshop – 8:15 a.m.
34 Witkin & Neal, Inc. 36 Poindexter & Company, CPAs 15 Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP 7 Popular Association Banking
SummerWind HOA, 2800 Plaza Del Amo, Torrance, CA 90503
25 Precision Painting
SEPTEMBER 15
PHOTO BY PATRICK HENDRY UNSPLASH
9/19 Antis Roofing & Waterproofing 5 Ross Morgan & Company, Inc.
22 Chapter Board of Directors Meeting & Strategic Planning – 8:30 a.m. Location TBD
26 Downtown Luncheon Program for HOA Boards and Managers & Annual Meeting – 11:30 a.m. Millennium Biltmore Hotel, 506 S. Grand Ave., Los Angeles, 90071
OCTOBER 02 San Gabriel Valley Educational Program for HOA Boards – 5:30 p.m. Pasadena Senior Center, 85 E. Holly Street, Pasadena, CA 91103
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
24 Valencia Educational Breakfast for HOA Boards and Managers – 8:30 a.m.
½ page
7½" wide x 4¾" high (Horizontal)
$425
$850
Hyatt Regency Valencia, 24500 Town Center Drive, Valencia, CA 91355
Full Page
7½" wide x 9.75" high (Vertical)
$800
$1,400
02 South Bay Educational Program for HOA Boards – 6:30 p.m. DoubleTree by Hilton, South Bay, 21333 Hawthorne Blvd., Torrance, CA 90503
10 Managers Only Breakfast – 8:00 a.m. Blair House, 10490 Wilshire Blvd., Los Angeles, CA 90024
19 CAI State Legal Forum Pechanga Hotel & Casino, Temecula, CA
26 Chapter Board of Directors Meeting – 8:30 a.m. Chapter Office, Glendale
NOVEMBER 03 Casino Night – 6:00 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.
Sofitel Hotel, 8555 Beverly Blvd., Los Angeles, CA 90048
10 Essentials of Community Leadership Workshop – 8:15 a.m. SummerWind HOA, 2800 Plaza Del Amo, Torrance, CA 90503
14 Skirball Luncheon Program for HOA Boards and Managers – 11:30 a.m. Skirball Cultural Center, 2701 N. Sepulveda Blvd., Los Angeles 90049
16 Chapter Board of Directors Meeting – 8:30 a.m. Chapter Office, Glendale
30 Holiday Happy Hour – 4:00 p.m. Location TBD
DECEMBER 05 San Gabriel Valley Homeowners Association Marketplace – 6:00 p.m. Pasadena Hilton, 168 S. Los Robles Ave., Pasadena, CA 9110
07 Spark of Love Toy Drive Delivery – 5:30 a.m. Location YTD
14 Chapter Board of Directors Meeting – 8:30 a.m. Chapter Office, Glendale
Events subject to change, see website for possible updates.
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www.cai-glac.org | September/October 2018
CAI-Greater Los Angeles Chapter
SPONSORS
FRESHCO Painters, Inc. • ProTec Building Services • Reconstruction Experts, Inc. • Tinnelly Law Group The Miller Law Firm • Union Bank HOA Services • Vista Paint Corporation
CAI-GLAC
PRSRT STD U.S. POSTAGE
PAID
130 N. Brand Blvd., Ste. 305 Glendale, CA 91203
SAN BERNARDINO, CA PERMIT #1
Change Service Requested
Online Learning for Community Association Boards and Managers! Have you just been elected to your board of directors or are contemplating running for a board seat? You can now access our Community Leadership Series online by subject. Learn the basics that you need to govern your community association more effectively and efficiently — anywhere at your own pace and time. From the time you register online, you will have two weeks to view the class. If you are unable to finish it in one sitting, you can log back in anytime within the two-week period through your account in the Members Only area. Classes are available to CAI-GLAC members and non-members. $25 for chapter members • $35 for non-members
Modules Online Fiduciary Duties and Responsibilities Steven A. Roseman, Esq., Roseman & Associates, APC Rules and Regulations: Adoption & Enforcement Kelly G. Richardson, Esq. CCAL, Richardson Harman Ober, PC Reserve Studies Les Weinberg, RS, MBA, Reserve Studies Inc. Insurance Issues for Common Interest Developments Kimberly Lilley, CMCA®, CIRMS™ , Berg Insurance Agency, Inc
Learn more and register now at www.cai-glac.org.