ECHO Journal - November 2014

2015 ECHO Seminars p.6

How to Get a Great Reserve Study p.10

Contract Remedies

p.16

Artificial Turf: An Easy Way to Conserve Water

How to Improve Your Meeting Minutes

p.22

Serving Community Associations

p.28

Are You Getting your Maintenance Dollar’s Worth p.32

November 2014 echo-ca.org

How to Get a Great Reserve Study p. 10

ECHO 1960 The Alameda STE 195 San Jose, CA 95126 Change Service Requested

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news from ECHO

News From ECHO November 2014 This month, we unveil our Seminar Calendar for 2015, and there are some changes!

The Annual Seminar is moving back to the Santa Clara Convention Center, and will be held on June 20. After two successful years in San Jose, we were asked to come back to Santa Clara with a much better physical arrangement in the West corner of the Convention Center and once again, FREE parking! We’re putting together a great line-up of speakers on hot topics. Let me know if there is something in particular you’d like to hear about, and I’ll try to get one of our speakers to touch on that topic.

After two years at the Oakland Convention Center, we’ve decided to focus our East Bay Seminar in Concord at the Hilton Hotel. Bigger than a Regional Educational Seminar but smaller than ECHO Oakland, this is a “just right” seminar designed with you in mind. We will have our exclusive, Member only HOA University track, where you can get the fundamentals of board membership responsibilities all in one place, and a certificate of completion to share with your community. There will also be a separate track of hot topics for those who already know the basics and want to focus on specific issues. We’ll serve you lunch too. Save the Date, May 23.

Check out the list of six Regional Educational Seminars on page 6, and put those dates on your calendar. There’s nothing better than hearing in-person about critical issues, and getting to ask specific questions of industry experts. More information will follow closer to each event.

ECHO is dedicated to providing educational resources to Homeowner Association Board Members. We do this through our seminars, the ECHO Journal, a monthly Email Newsletter, proprietary publications, the updated Statute Book, and a website full of information and advice available 24/7 to answer your questions. If you haven’t visited the site, please do; it’s www.echo-ca.org. We have spent the last year loading the content you want in the size and format that works for online research.

Dive in.

We are always looking for ways to make your membership experience better.

I hope you’ll let us know what we can do to improve.

Best,

Brian Kidney Executive Director

November 2014 | ECHO Journal

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CONTENTS

32 10

28

22

16 4 echo-ca.org

10

How to Get a Great Reserve Study A “great” Reserve Study is the result of refinements year after year, so that it accurately reflects the current physical and financial state of the association, and provides accurate budget guidance to the Board and management.

16

Contract Remedies: Arbitration, Mediation and Litigation Regardless of the care exercised by associations in negotiating a construction contract, and despite the reputation, skill and integrity of the contractor, disagreements can arise. It is important for associations to anticipate such disputes at the time of contracting, and to make a considered election concerning the method by which the disputes will be resolved. These can include negotiation, mediation, arbitration and litigation.

22

Artificial Turf Given the drought in California, water restrictions and conservation efforts have triggered an interest in artificial lawns. From both the Association and homeowners’ point of view, this may be an easy way to conserve water.

28

How to Improve Your Meeting Minutes The minutes of a community association are always extremely important. An association is a business, and like any other business it protects its history, preserves and maintains the records and protects itself from possible liability.

32

Are You Getting Your Maintenance Dollar’s Worth?

We talk and talk about maintenance in broad terms: landscape maintenance, pool maintenance, lighting maintenance, roofs, gutter, paving, site cleaning and on and on. Here are a series of schedule-oriented checklists that set out specific maintenance tasks, and how often homeowner committee members (or the community manager) should check to be sure that the tasks are done.should be pleasing to the eye and work well within the surrounding exterior environment in which the building is located.

The ECHO Journal is published monthly by the Educational Community for Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service.

If legal advice or other expert assistance is required, the services of a competent professional should be sought.

Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy.

Copyright 2014 Educational Community for Homeowners. All rights reserved. Reproduction, except by written permission of ECHO is prohibited.

The ECHO membership list is never released to any outside individual or organization.

ECHO 1960 The Alameda, Suite 195 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org Office Hours Monday-Friday 9:00am to 5:00pm Board of Directors and Officers President David Hughes Vice President Karl Lofthouse Treasurer Diane Rossi Secretary Carly Melius

DEPARTMENTS

3

News from ECHO

6

2014 ECHO Educational Calendar

7

NEW at echo-ca.org

8

Marin Educational Seminar

Directors Jerry L. Bowles Stephanie Hayes Robert Rosenberg Brian Seifert Steven Weil

John Garvic David Levy Kurtis Shenefiel Wanden Treanor

Executive Director Brian Kidney

13

Santa Cruz Educational Seminar

Director of Marketing & Membership Carly Melius

36

ECHO Bookstore

39

Advertiser Index

Director of Communications Tyler Coffin

40

Legislation at a Glimpse

42

ECHO Event Calendar

43

ECHO Volunteers

Legislative Consultant Government Strategies, Inc. Design and Production Design Site ECHO Mission Statement Serving Community Associations

November 2014 | ECHO Journal

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2015 ECHO educational calendar

ECHO Announces 2015 Educational Seminars!

Rohnert Park

If you’ve ever wished that ECHO would hold a seminar closer to your association, chances are that we’ll be nearby during 2015. Don’t miss an opportunity to get the education you need with guidance from some of California’s top HOA attorneys and professionals. Take a look and mark your calendar. We can’t wait to see you there!

February 7

March 7

Marin Educational Seminar (See page 8)

Santa Cruz Educational Seminar (See page 13)

Embassy Suites San Rafael

Hotel Paradox, Santa Cruz

Concord

Santa Clara

Santa Cruz

Fresno Monterey

DATE

EVENT

LOCATION

February 7 March 7 March 21 May 2 May 23 June 19-20 October 10

Marin Educational Seminar Santa Cruz Educational Seminar Wine Country Educational Seminar Fresno Educational Seminar East Bay Educational Seminar ECHO Annual Seminar Monterey Educational Seminar

Embassy Suites San Rafael Hotel Paradox Santa Cruz DoubleTree Sonoma Wine Country Piccadilly Inn Shaw Concord Hilton Santa Clara Convention Center Embassy Monterey Bay Seaside

Register today!

6

Marin

echo-ca.org

Online: www.echo-ca.org;

By Phone: 408.297.3246

NEW

at echo-ca.org

New legislation, quick tips, and fresh insights — we’re adding new information to our website every day.

Log in to read the articles below.

Not sure how to access your free account?

Email ECHO at: newaccount@echo-ca.org.

Articles Resolving Flooring-Related Noise Complaints in HOAs Disputes over noises from upstairs units arise frequently in HOAs. Unfortunately, they are also some of the most difficult to resolve. Sensitivity to noise is subjective, and associations need to take proactive steps to that enable them to handle complaints fairly and quickly. HOAs that adopt clear flooring policies and conduct proper investigations can avoid litigation.

Educational Topic: Hardwood floors

What is Defamation?

In heated disputes between owners, we hear the word “defamation” a lot. It’s a serious charge, with real legal consequences. But defamation is more than unpleasant or insulting speech; defamatory statements are false and damage someone’s reputation. What is the real definition of defamation, and how can boards and owners protect themselves?

Educational Topic: Defamation

HOA Transfer Fees: Know the Law!

Management companies and boards often charge fees to provide certain documents to new buyers. While some fees are acceptable, others are not – and the law changes frequently. Learn who can charge fees, how much they can charge, and which documents must be made available.

Educational Topic: Transfer fees

Barking Dogs

Condominiums are often poor places for dogs. Close, cramped quarters can drive unhappy pets to sound off—to the growing frustration of nearby owners. But associations can’t legally prohibit dogs. This article explains when barking moves from annoyance to nuisance, and when associations should take action.

Educational Topic: Pets

Facebook Join Our Facebook Community Want to see pictures from our last seminar? Comment on our legislative activity? We only put the latest news up on Facebook, and we’d love to hear from you. Share your experiences, read important and amusing HOA news, and connect with fellow HOA owners on ECHO’s Facebook page. facebook.com/echoorg

ECHO Journal Read the ECHO Journal on the ECHO website before it arrives at your door. We usually post the latest issue on or before the beginning of each month. Log in to browse the latest articles, or read from a huge library of past issues.

Find in: echo-ca.org/journal

November 2014 | ECHO Journal

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New For 2015, FREE Attendance for ECHO HOA Members!

Join us at the Marin Educational Seminar Saturday, February 7th, 2015

/

8:30 AM to 12:30 PM

Register online at www.echo-ca.org or fill out the form below.

Yes, reserve ______spaces for the ECHO Marin Seminar Amount enclosed: $______(attach additional names)

HOA or Firm:

Embassy Suites San Rafael 101 McInnis Parkway San Rafael, CA 94903

Address:

Price

Name: Email Address:

City: State:

Zip:

Phone: Visa/Mastercard No. Exp. Date: Signature: Return with payment to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Phone: 408-297-3246; Fax: 408-297-3517

8

ADDRESS

echo-ca.org

FREE for ECHO HOA Members $50 Nonmembers speakerS

David Feingold, Esq., Wanden Treanor, Esq. and Glenn Youngling, Esq.

How Do You Join ECHO? Over 1,700 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www.echo-ca.org.

For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.

November 2014 | ECHO Journal

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10 echo-ca.org

How to Get a Great

Reserve Study

Everybody wants a great Reserve Study.

But, what does that mean?

By Sean Andersen, RS

November 2014 | ECHO Journal

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Let me suggest a list: • All the “right” components on your Reserve Component List (none missing that should be on the list, and none on the list that should be handled in the Operating Budget)

• Accurate estimates of Useful Life (UL) and Remaining Useful Life (RUL)

• Accurate estimates of Repair/Replacement costs ($)

• An accurate projection of the starting Reserve balance ($)

• A Funding Plan that allows for the timely repair & replacement of all the items on the Component List

If you’ve had a Reserve Study prepared by an independent, credentialed Reserve professional (a “RS” or Reserve Specialist), your Reserve Compo-

nent List should only need minor adjustments annually. Even so, review that Component List in light of the following National Reserve Study Standards 4-part test. Make sure that every component on the list is:

1 2 3 4

A common area maintenance responsibility With a limited Useful Life With a predictable Remaining Useful Life, and With a repair or replacement cost above a minimum threshold of significance

This will be your best way to make sure you are Reserving for all the “right” components.

Any recent Reserve projects which have been completed by the Association should be reflected in your Reserve Study.

Some associations maintain a “Reserve Projects” folder, where receipts and proposals are filed. This information helps ensure accurate estimates for Useful Life, Remaining Useful Life, and current Repair/Replacement costs. If a roof is replaced for $100,000 this year, the replacement costs in your current Reserve Study should reflect your actual costs. If your Reserve Specialist is not informed of this expense and updates your Reserve Study showing the roof as having one more year of Remaining Useful Life with an estimated replacement cost of $80,000, the study will not be an accurate snapshot of the community. Both the % Funded and recommended Monthly Reserve Contribution calculations will be affected by inaccurate component information.

Learning from the actual projects at your association is the best way to help improve the accuracy of your Useful Life, Remaining Useful Life, and Replacement Cost estimates.

Providing your Reserve Specialist with a list of the Associations’ vendors will allow for vital information to be passed on from vendors who have regular access to the Associations’ Reserve components. These vendors

provide valuable information concerning the condition of, and cost to replace specific components. An example would be a pool vendor who could provide information about a pool filter that, while not leaking and not rusting, is simply not functioning properly and needs to be replaced. The pool vendor could inform the Reserve Specialist that a different type of filter is needed and what the cost would be for replacement.

Another example would be an asphalt vendor who could provide information on the needs of the community, whether a sealcoat is all that is needed or a more substantial project like an overlay or rebuild of the streets and driveways.

12 echo-ca.org

New For 2015, FREE Attendance for ECHO HOA Members!

Santa Cruz Educational Seminar Saturday, March 7th, 2015 8:30 AM to 12:30 PM /

Yes, reserve ______spaces for the Santa Cruz Seminar.

Amount enclosed: $______(attach additional names) Name: Email Address: HOA or Firm:

SAVE THE DATE!

Visit echo-ca.org/events for the latest information and online registration.

ADDRESS

Address: City: State:

Zip:

Phone:

Hotel Paradox 611 Ocean Street Santa Cruz, CA 95060

Visa/Mastercard No. Exp. Date:

Price

Signature:

FREE for ECHO HOA Members $50 – Nonmembers

Return with payment to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Phone: 408-297-3246; Fax: 408-297-3517

November 2014 | ECHO Journal

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should be obtained in early summer and the process started in July or August. The best case schedule scenario is shown below:

July- August

Obtain bid for Reserve Study

Sepember- October

Reserve Study is completed

October-November Estimating your end-of year Reserve Balance requires the involvement of the Board and management. Management typically has the most recent bank statements, knowledge of any outstanding payments needed to be made from the Reserve Fund, and a realistic expectation of whether budgeted Reserve contributions will actually be made through the end of the year. It is that combination of actual balance, projected expenses, and projected income to the Reserve Fund that will ensure a realistic and accurate Fiscal

14 echo-ca.org

Year End Reserve balance. The accuracy of this computation is essential, as it will affect the % Funded calculation and possibly the recommended Monthly Reserve Contribution.

Timing is also an important factor in the Reserve Study process. Ideally, the recommended

Monthly Reserve Contribution should be reflected in the budget. The study should therefore be completed before the draft budget is completed. For communities with a December 31 Fiscal Year End, bids for preparation of the Reserve Study

Budget is approved

November

State Disclosures are sent out (as req’d)

This schedule allows the management and board to review the study and request possible revisions. The worst case scenario is that the association needs a Reserve Study and is frantically seeking bids in early November. That situation will lead to the Reserve Study being expensive, rushed,

and possibly too late to be utilized in the budgeting process.

Finally, what makes a great Funding Plan? National Reserve Study Standards require a Funding Plan be based on four principles:

that it provide adequate funds when needed that it provide budget stability from year to year that it fairly distribute the contributions among the owners, over the years, and that it be fiscally responsible.

These principles ensure that the Funding Plan is not based on the expectation that future owners will carry more than their

fair share by burdening future owners with a special assessment for assets that deteriorated well before they became owners in the association. A great Funding Plan also does not recommend Reserve contributions that are too low to be sustainable, favoring current owners. Ideally, Reserve contributions should correlate to the current rate of deterioration of the Reserve assets – effectively offsetting their ongoing deterioration. In this way, current owners fairly pay for the deterioration of the common areas they are “using up” during the time they own a home at the association.

There should be an anticipation that the Reserve Contribution will increase annually. The desire not to increase dues is understandable, but should not be confused with the needs of the association.

Unfortunately, $300 a month is not worth what it was 15 years ago. If increases have not been made over that 15-year period, the association has been taking steps backward as the value of the dollar decreases. Further, historically low

interest rates earned on Reserve funds does not help to offset inflationary increases.

The above principles require the involvement of the experienced Reserve Study professional, the Association Board, and management. A “great” Reserve Study is the result of refinements year after year, so that it accurately reflects the current physical and financial state of the association, and provides accurate budget guidance to the Board and management.

Sean Anderson, RS, is President, Association Reserves – Orange County. Founded in 1986, Association Reserves is a recognized industry authority in preparing Reserve Studies for Association-governed communities. Sean can be reached at sandersen@reservestudy.com.

November 2014 | ECHO Journal

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16 echo-ca.org

By Jeffrey A. Barnett, Esq.

CONTRACT REMEDIES Arbitration, Mediation and Litigation Regardless of the care exercised by associations in negotiating a construction contract, and despite the reputation, skill and integrity of the contractor, disagreements can arise. Some of the factors that give rise to these disputes include the following: • In the bidding process, the contract price is driven down to a point where the work cannot be completed without change orders. Change orders are then disputed.

• There are inconsistencies between the plans and specifications, or other ambiguities that cause conflict between owner and contractor.

• Job delays occur, and a dispute arises concerning whether liquidated damages may be assessed.

• The contractor becomes insolvent, and mechanics liens are recorded against the property.

• Disputes arise over the timelines or amounts of payments.

November 2014 | ECHO Journal

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I

t is important for associations to anticipate such disputes at the time of contracting, and to make a considered election concerning the method by which the disputes will be resolved. These can include negotiation, mediation, arbitration and litigation.

Alternative Dispute Resolution

Negotiations, mediation and private arbitration are forms of alternative dispute resolution. Parties to a contract may obligate themselves to conduct alternative dispute resolution in the event of a claim of breach of contract because of the perceived advantages of the process. These include the following: • The proceedings are private—in contrast to litigation in the Superior Court

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where the pleadings are a matter of public record.

• Depending on the structure of the contract clause, the proceedings may be voluntary.

• Again, depending on the structure of the dispute resolution clause in the contract, the alternative dispute resolution process may be scaled to the magnitude of the dispute.

• The alternative dispute resolution process may be faster and less expensive than litigation.

• Alternative dispute resolution affords the opportunity for a resolution that is more flexible than litigation. Instead of “winner takes all,” a business solution can be reached that has advantages to both sides.

Negotiations For example, the construction contract may contain a clause requiring that, in the event of a dispute , the parties meet

and confer in good faith in an effort to resolve the issues. The following language is illustrative: Recognizing the time and expense associated with litigation, the parties agree that in the event of any dispute or controversy arising out of or in connection with this agreement, the parties shall first endeavor to resolve the controversy or dispute through good faith negotiations. In the event such negotiations are unsuccessful, the parties further agree as follows:...

The successful resolution of a construction dispute through negotiation requires careful preparation. The parties should develop a careful understanding of the facts, chronology of events, and pertinent contract clauses. For example, in a dispute concerning whether a roofing contractor is entitled to a change order for extra labor and materials because the job was larger than specified in the bid, each side must have good factual information concerning the actual dimensions of the roof and the difference from the contract specification. The

parties must also understand whether the contract provisions allow for a change order under these circumstances or, instead, whether the contract price was fixed based on the actual size of the project, which was available for inspection and measurement by the contractor before he bid.

Contract dispute negotiations benefit by the presence of not only legal counsel for each side, but representatives from the board and a responsible officer of the contractor with authority to settle. In addition, the construction manager and/ or project architect may be helpful in providing information and recommendations concerning the issues.

There are volumes written on the process of negotiation. Experience has shown that a mastery of the facts and honesty and integrity are the key factors in successful persuasion. A good negotiation is a process of mutual education, and from this platform of information, a better business judgment will be made by each side, recognizing the potential positive and negative consequences of resolving the claim or proceeding through another form of alternative dispute resolution.

California law encourages parties to be candid in their settlement negotiations.

An evidentiary privilege extends to offers of compromise made in the negotiation.

[Evidence Code Section 1152(a)].

Settlements consummated through a negotiation should be confirmed in writing immediately. An interim record can, and should, be made and signed by the parties, pending the completion of a formal settlement agreement. Needless to say, the settlement agreement should be specific and comprehensive.

It is often helpful to attach to the settlement agreement relevant documents. For example, the contractor and association may attach a change order to the settlement agreement, identifying it as one that will be issued; but the agreement may also state that there will be no other change orders on the project concerning the issue that has been resolved.

Mediation The parties to a construction contract may agree that, in the event of a dispute, they November 2014 | ECHO Journal

19

will submit their disagreement to mediation. Mediation is a settlement negotiation facilitated by a neutral third party. The mediation agreement may specify that if negotiations and/or mediation are unsuccessful, the dispute will then be resolved through binding arbitration. Alternatively, the agreement may provide that under those circumstances the parties are free to litigate their dispute in the Superior Court.

The mediator does not have the ability to decide the dispute between the parties.

Instead, the mediator exercises a unique skill set which enhances the prospect of a resolution of the dispute between the parties through a negotiation process.

In construction contract disputes, the mediation will typically be attended by representatives of the association and the contractor, as well as attorneys for both sides. The mediator often will meet with both sides jointly and then have the parties break out into separate areas where the mediator can meet privately (caucus) with each, to assist in the evaluation and resolution of the claim. The mediator generally has a neutral role in the mediation, but in some instances may provide his or her opinion concerning the valuation of

the claim. The parties also can agree in advance that if the mediation is not successful, the mediator will make a binding decision.

The mediation process can avoid emotional conflicts inherent in direct negotiations.

Mediation has been highly successful in the resolution of contract disputes. Some of the reasons that mediation is favored for this purpose are:

Mediations are faster and cheaper than litigation.

The parties have control over the outcome.

The business relationship between the parties can be preserved.

Mediation encompasses a solution that is focused on resolution, not designating blame.

Mediations are private and confidential. Evidence Code Sections 703.5, 1115 and 1152.

Mediations Mediations generally begin with a confidentiality agreement confirming the private and confidential nature of the process. If successful, the settlement agreement specifies that it is admissible in evidence, is enforceable in a court of law, and may be disclosed outside of mediation.

Although construction contracts requiring binding arbitration of disputes are enforceable under California law, it is presently unclear whether an agreement mandating mediation before litigation is enforceable. Since courts cannot compel parties to participate in mediation, there is no effective remedy if a party breaches this aspect of the construction contract, unless the court will stay or discuss a lawsuit pending mediation. However, a clause providing for the loss of attorney’s fees for failure to mediate may well be enforceable.

The following clause is illustrative of contract terms that require mediation before litigation:

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Let us review your coverage and CC&R’s to make sure you are insured correctly. We love to meet with boards to discuss your current coverage and your needs and wants. Let us construct a protection program built specifically for your HOA.

GET Ins. 1-888-878-0441 www.hoacoverage.com License #0440348

20 echo-ca.org

Recognizing the expense and time associated with litigation, the parties mutually agree that in the event of any dispute or controversy arising out of or connected with this agreement, the parties will participate in mediation to be conducted

by John Jones, Mediator Extraordinaire.

The parties further agree that, in the event either party files suit prior to submitting the dispute to mediation as provided herein, the Superior Court may issue an order staying or dismissing the proceeding until mediation has been completed. If a party fails to participate in good faith in mediation as required by this paragraph, such party shall not be entitled to recover attorney’s fees or costs in any subsequent litigation related to the dispute or controversy.

Contractual Arbitration

The parties to a construction contract can agree that disputes will be resolved through an arbitration process. That process may be binding or non-binding.

It may involve one or more than one arbitrator. It may refer to the rules of an arbitration service, such as the Construction Industry Rules of the American Arbitration Association or the Comprehensive Arbitration Rules and Procedures of JAMS.

Contractual arbitration shares many of the advantages of mediation. These include: Potentially faster results than through Superior Court litigation.

Potentially less costly dispute resolution than in Superior Court.

Privacy.

Control in the selection of a decision maker or decision makers who may have more specialized knowledge of the industry.

Although arbitration of construction disputes is often successful from the perspective of both sides, there are distinct disadvantages to the process.

These include the fact that some arbitrations have proven to be slower and more expensive than traditional litigation.

Also, arbitrators are not obligated to follow the law, and instead may make a decision based upon their own sense of justice and fair play. Even if the arbitrator makes a clear mistake, it is difficult or impossible to set aside an arbitration award,. There generally is no right to discovery, so preparation for the hearing is limited. In general, third parties who did not sign the agreement are not bound by it. Therefore, a dispute involving a third party, such as a subcontractor or a design professional, is difficult to resolve in an arbitration between the homeowners association and general contractor only.

The Association may be required to file suit against certain parties in Superior Court while arbitrating the controversy with the general contractor. Finally, there

is anecdotal information that arbitrators tend to make compromise decisions, rather than issue a decisive award in favor of a party who is entitled to it.

The limited grounds to vacate or correct an arbitrator’s award include exceeding the arbitrator’s power, fraud, failure of the arbitrator to disclose matters indicating possible bias, actual bias, evident partiality, failure to determine necessary issues, and prejudicial refusal to continue the arbitration or hear evidence.

Therefore, the inclusion of a mandatory arbitration clause in a construction contract should be made only after careful consideration of these consequences. .

Many lawyers routinely advise against binding arbitration clauses. They reason that when a dispute arises, the parties can always mutually agree to binding arbitration. At that time they will know the scope and character of the controversy, so an intelligent decision can be made regarding whether or not to waive the right to discovery, the right to a jury trial, the right to appeal, and other important legal rights. If binding arbitration is included in the contract, in contrast, those rights are all be waived regardless of the size and importance of the dispute.

Litigation If negotiation, mediation and arbitration do no resolve the construction dispute because they were ineffective or unused, the issues must be resolved through litigation in the Superior Court. The Small Claims Court jurisdiction is limited to $5,000.

If the association is the plaintiff, the claims will generally be for breach of contract, breach of express and implied warranty and negligence. The association also will assert the right to recover attorney’s fees, if that right exists in the contract.

Broadly speaking, the litigation process has three parts: the pleading stage, discovery, and trial The pleading stage establishes the claims and defenses of all parties to the lawsuit. Discovery permits the parties to review all documentary and other evidence related to the issues in the lawsuit. Trial may be by the court or else submitted to a jury for determinations of liability and damage.

Expert witnesses are often engaged by the parties to testify at trial in addition to the percipient witnesses. Pre-trial and post-trial motions are made to seek procedural or substantive advantages.

An appeal from the judgment is possible.

Conclusion The expense and delay of litigation make alternative dispute resolution proceedings such as negotiations, mediation and arbitration potentially attractive options.

The benefits of these substitute procedures should be carefully considered during the preparation of the construction contract and when disagreements arise during construction projects.

Jeffrey A. Barnett is an association attorney with legal offices in San Jose. He is a past member of ECHO’s board of directors and serves on the Legislative Committee.

November 2014 | ECHO Journal

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Artificial

An easy way to co

Turf

By Tom Fier

nserve water!

November 2014 | ECHO Journal

23

G

iven the drought in California, water restrictions and conservation efforts (mandatory and/or voluntary) have triggered an interest in artificial lawns.

From both the Association and homeowners’ point of view, this may be an easy way to conserve water. On July 21, 2014, the California legislature amended Civil Code section 4735 to prohibit associations from penalizing members who conserve water by watering their lawns less often.

Over the years, artificial turf has gone from looking like green Velcro to pretty realistic.

This article will focus on items to consider. This is a new area and will require flexibility and creativity to adapt to a changing environment.

and maintains landscaping for homeowners, it may be difficult to allow individual homeowners to use artificial turf on their property.

3. Consider Indemnity Agreements This would entail the homeowner indemnifying or holding harmless the Association from possible claims from other homeowners (more on this below).

4. Check with Local Government Check to ensure that the local governmental agency does not restrict artificial turf and whether a permit is required.

5. Local Rebates The local governmental water agency may have a “cash for grass” program that offers rebates when you remove grass.

6. Cost 1. Read your CC&R’s It is possible that anything artificial in landscaping is prohibited. Also, some associations require that a certain consistency in appearance be maintained and a brown or artificial lawn could result in a fine. Some associations allow artificial grass but require that a certain percentage of the yard remain organic material, such as plant material, planter beds, bushes, flowers, etc.

2. Review your Landscaping/ Architectural Application It is possible that it may need to be changed. If the Association installs 24 echo-ca.org

An association planning to install artificial turf in the common area should consider the value to the association. Even with the current drought, the cost of installation versus the water savings may take years to recover. The Board must carefully consider a cost/benefit analysis. Water savings may outweigh the financial cost.

Factors to consider (which may become part of new guidelines addressing artificial turf):

I. Preliminary Considerations A. Requirements of the application process. How soon can this be approved? It is important to think this through ahead of time

and provide specific requirements, so that homeowners will not be delayed in obtaining approval.

B. Will you allow DIY (Do It Yourself) projects or require the use of licensed contractors?

C. Will there be different requirements for areas that are visible to the public vs. those hidden from view?

D. Will there be different requirements for sport/athletic fields vs. homeowner yards?

II. Preparation for Installation A. Should a requirement be made that any area visible to the public retain a minimum percentage of overall square footage as organic plant material, such as flowers, bushes, shrubs, etc.? Should the minimum percentage required be on the border or allowed in the interior of the turf?

B. What happens when artificial turf meets a neighbor’s natural turf? Should there be a required separation/ barrier of landscape or a planter? How big should the separation be (4”)?

C. Will you require professional installation? Artificial turf installation is more complex than sod or natural turf installation. Typically, an area must be excavated to a four inch depth and filled with compacted road bed material. The artificial turf is then anchored to the prepared site using special fasteners.

D. Will you require a weed barrier or a root barrier?

E. Will you require homeowners to protect existing trees and shrubs against root damage?

F. How will existing trees and shrubs receive water after artificial turf is installed?

G. Will you require a certain type of infill? Infill is used on top of the artificial turf after it has been laid in place, seamed, and the edges are trimmed. Infill fills the voids between rows of blades and helps distribute the weight across the installed surfaces, holding them in place, helping to reduce creeping, buckling, and/or separation.

H. Will you require periodic maintenance (artificial turf requires that it be cleaned and the pile raked/ fluffed periodically)?

I. Will artificial turf be used in common areas such as swimming pools?

Artificial turf surfaces can be very hot in areas with high temperatures.

If there is significant foot traffic, artificial turf may be too hot or even burn feet.

III. Installation Specifications A. BLADE MATERIAL. Consider/ require polyethylene. This is a synthetic yarn fiber made from olefins; it is soft and resilient. It dries very fast, is resistant to stains, mold, mildew, and UV rays. Consider how much lead, if any, is in the fibers/ blades. Standards for lead in artificial turf can be found at Get-The-LeadOut.org. The most natural looking artificial turf includes an interwoven thatch material that creates the appearance of natural grass.

B. BLADE HEIGHT. Suggested heights are from 1 5/8� to 2 1/4�.

C. BACKING MATERIAL. Backing material must be polypropylene and polyurethane.

November 2014 | ECHO Journal

25

D. INFILL MATERIAL. Infill material must be certified to be non-toxic.

Care must be taken to ensure that infill materials do not migrate into drainage systems. All materials submitted for approval must be accompanied by test documentation that declares that the materials are disposable under normal conditions at any U.S. landfill station and that they will not contaminate water supplies.

E. GROUND PREPARATION. The current ground cover must be dug out to a depth of 3-4�. This may include digging out roots from neighboring trees. Notify adjacent homeowners of the possibility that this digging may injure their tree(s).

(This is where the indemnity agreement to the association becomes useful. What if a neighbor sues the artificial turf homeowner and the association for killing his/her tree?

(Use an indemnity agreement to avoid being dragged into a lawsuit.)

F. DRAINAGE. Make sure there is enough material beneath the turf to provide adequate drainage. The backing material must be porous and permeable. Should you require a standard for drainage, i.e. 4� per hour?

Amazon customers gave it a five-star rating

G. SURFACES. Surfaces must appear seamless and edges must appear natural. Steps must be taken to minimize glare to surrounding properties.

H. CONTRACTOR. The contractor must be licensed and should provide a warranty for labor and materials.

2014 Condominium Bluebook A Complete Guide to Condominium Living

CONCLUSION:

Member Price: $17.00 Non-Member Price: $25.00 This well-known compact guide for operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers.

26 echo-ca.org

Order today from ECHO!

Call 408-297-3246, fax at 408-297-3517 or visit us online at store.echo-ca.org

Think this through carefully. This drought may end, but another one is sure to come. Your landscaper may also provide helpful information.

Tom Fier is a regular contributor for ECHO and has his law practice in San Mateo, California. Steve Terwilliger serves on the Board of Directors of The Whalers Island Homeowners Association in Foster City, CA.

November 2014 | ECHO Journal

27

28

echo-ca.org

How to Improve Your

Meeting Minutes

By Colletta Ellsworth-Wicker, PCAM

November 2014 | ECHO Journal

29

T

he minutes of a community association are always extremely important.

An association is a business, and like any other business it protects its history, preserves and maintains the records and protects itself from possible liability. The secretary needs to be well organized, and committed to the association’s future.

First, keeping in mind that meeting minutes serve as the official records of the meeting and can be entered as evidence in a court of law, they need to be concise and unbiased; they need to contain only facts. Since minutes are admissible as evidence, having the minutes reviewed by an attorney will decrease the likelihood of any legal repercussions resulting from the

Component Reserve Analysis and Construction Project Management

Pollard Unlimited, Inc

Professional Service – Competitively Priced

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30 echo-ca.org

inaccurate recording of actions by a board or subcommittee.

Second, while conducting association business, issues may crop up that require the board of directors to adjourn to a closed “executive” session. When the necessity for an executive session arises, a member of the board must make a motion and state the reason for going into closed session and insure that the reason is recorded in the minutes by the secretary. Closed sessions are most often used to safeguard identities when the board discusses sensitive or confidential issues; state statutes dictate for what reasons a board may discuss issues in private, with the presence of owners. Any action taken by the board in executive session must be recorded after returning to open session. While minutes can be taken in closed session, most legal counsel will recommend that the discussion occur in a closed session but the vote, and record of such, be entered into the regular board meeting minutes. To protect the confidentially of the association member or issue, the board could assign a case number much like the current judicial system does, so that the owner’s name and address is not disclosed.

Third, the minutes should state the exact wording of the motions and the name of the person making the motion.

It is important to stick to recording these facts and avoid adding discussion or opinion.

Fourth, when a motion is made in a meeting of the board of directors to implement an action, it is important to record the specific person or committee to which the action is assigned, and from where in the budget the project will be funded. This assists the manager in the preparation of an action list of assigned tasks to be disseminated after the meeting to the board of directors. This list will serve as a record of all actions to be completed and the individual or committee responsible for completing the actions.

In addition, the action list will aid in the accountability of individuals assigned tasked actions and will keep anyone from performing actions not authorized by the board. Further, including the budget impact as part of the motion insures that the project will be funded appropriately and helps eliminate coding errors on the financial statement.

Lastly, the board should establish an

administrative resolution that dictates a standard format for all meeting minutes.

Using a standard format to record minutes simplifies the task of taking minutes at every meeting. The first paragraph of the form should state the type of meeting, the complete date and location, the name of the presiding officer, that a quorum was attained, and a record of the members present and those absent. Included in minutes should be the next meeting date, acceptance of the treasurer’s report, management report, committee reports, incomplete business and the time of adjournment. This section should always be signed by the secretary of the board or committee and attested by another board member, usually the president or the presiding officer of the Committee.

In summary, the following recommendations will enhance the quality of the minutes recorded.

1. Keeping the published minutes concise and to the point will eliminate any emotion that may be misconstrued by the reader.

2. Assigning case numbers will ensure that issues of a confidential nature stay private.

3. Stating the exact wording of the motion spells out the board or committee member’s intent; likewise, recording the name of the persons making the motion will ensure that the person making the motion is an elected or appointed officer of the corporation.

4. Documenting the accountability of an action assigned and how it will be funded proves that the directive came from a source empowered to do so, avoids conflict in duties, and defines where financial responsibility is assigned.

5. The development of an administrative resolution on the format of meeting minutes aids in preserving the history of the association and ensures that the content is concise and comprehensive enough to legally protect the association from potential litigation.

Colletta Ellsworth-Wicker is vice resident at the Community Group in Newport News, VA. This article was originally published in the March 2008 issue of Association Times, published by Associa, a national association management firm.

Congratulate Carly Melius

Carly Melius is ECHO’s new Director of Marketing and Membership. Carly has worked her way up through the ranks of ECHO starting as a part-time Office Assistant and more recently Office Manager organizing everything in the ECHO office.

happy and healthy communities. We give you the information and resources to ensure your meetings are productive, your budgets and reserves are adequate, your service providers are qualified, your neighbors are happy, and your association flourishes.

Before ECHO Carly worked at the Northwest YMCA where she was an Administrative Assistant. She has also done Assistant work for Santa Clara County Social Services Agency.

For our professional members, Carly will engage you to identify how we can better serve the ecosystem, and involve you in our programs so your can more easily reach and better serve HOAs. With over 1,300 HOA members and 400 professional members, we can facilitate better understanding and best practice sharing through our website, magazine, and seminars.

On a personal note Carly is a total CrossFit fanatic and has recently been in a competition where she placed in the top 10. She also loves dancing and going to the movies with her friends.

Carly’s goal is to make ECHO membership a valuable tool in assisting HOA board members to perform your duties and make your HOAs

Carly is here to help, so please reach out to her.

She can be reached at cmelius@echo-ca.org, or at (408) 297-3246, extension 2.

We congratulate Carly, and we welcome your involvement with us.

November 2014 | ECHO Journal

31

Are You Getting Your Maintenance Dollar’s Worth?

By Richard Tippett

32 echo-ca.org

November 2014 | ECHO Journal

33

W

e talk and talk about maintenance in broad terms: landscape maintenance, pool maintenance, lighting maintenance, roofs, gutter, paving, site cleaning and on and on. We never really get into the nittygritty details of what the maintenance tasks really are. We never talk in detail about maintenance schedules, or what should be included in each maintenance contractor’s scope of work.

It is time to correct that oversight.

Here are a series of schedule-oriented checklists that set out specific maintenance tasks, and how often homeowner committee members (or the community manager) should check to be sure that the tasks are done. How frequently the tasks should be checked on also tells you how often your maintenance contractors should be doing the work.

If you separate the tasks by type of work, you will have a basis for drawing up maintenance scopes of work for your association’s various maintenance contractors.

Drawing up these scopes of work does two things: 1.

It allows you to check that your present maintenance people are doing all that they should do for you.

and three, four and five year inspection/ action items. They are easily edited or supplemented to tailor them specifically for your association’s facility.

We hope you find them educational as well as useful.

Weekly

q

34 echo-ca.org

Check landscape watering and correct over or under watering.

q

Remove and replace all dead landscape plantings.

q

Clean pool filters.

q

Clean spa filters.

q

Clean common area garages.

q

Replace any broken sprinkler risers or heads.

q

Check for/remove abandoned vehicles.

q

Test and amend pool water quality.

q

Clean common area buildings such as the clubhouse or pool house.

q

Test and amend spa water quality.

q

q Clean the spa.

q

Check common area lighting and replace burned out lights.

Notify owners or tenants who are cluttering the common areas with personal property or debris to remove same.

q

Inspect and clean laundry rooms, including cleaning dryer filters.

q

Inspect lawn areas for mowing height, edging, over or under watering.

q q q

2. It provides a basis for getting competitive bids for future maintenance contracts.

The Maintenance Inspection/Action Checklists are laid out with weekly, monthly, quarterly, semi-annual, annual

Look for and correct any sprinkler system leaks.

q

q

Quarterly

q

Replace dead, over-aged or out-of-season ground plantings.

q

Check and prune common area shrubs and hedges.

q

Service all oil-fired water heaters or hot air furnaces.

q Clean the exercise room. Wipe machines and benches with disinfectant.

Treat common area/garbage areas for pests.

q

Re-bait all pest (termite) bait stations.

Monthly

q

Check and renew any termite control stations.

q

Test all common area fire alarms.

Clean common area walkways.

Clean common area garbage spaces and recycle spaces.

Inspect ground planting maintenance.

q

Reset any slipped tiles in pools, spas and fountains.

q

Check roofs and flashings for ageing, maintenance needs.

q

Check irrigation system electrical controls and timers for proper operation.

q

Inspect all common area walkways and decks for rot, damage or other maintenance needs.

q

Mark common area trees for pruning or canopy thinning.

q

Inspect paint for blistering, peeling, chalking or caulking failure.

q

Inspect siding and trim for cracking, spalling, blistering, rot or delamination.

q

Inspect and service all common area air conditioners.

q

Inspect and service all common area electrical hot water heaters.

q

Winter: check lawn areas for drainage problems to be corrected in the spring.

q

Inspect/service all common area elevators.

q

Have all common area fire extinguishers inspected, tested if necessary and refilled.

Semi-Annually

q

Clean all roofs and gutters.

q

Treat landscaping for pests/ disease.

q

Inspect pool/spa lining for spalling, tile loss.

q

Inspect and service gas-fired hot water heaters.

q

Inspect common area hot water heaters for anode and cathode losses.

q

q q

Inspect common area hot and cold water piping anodes and cathodes.

Check sidewalks for raising and shifting.

Fertilize lawns and ground plantings.

q

Check all solar panel piping and correct all leaks.

q

Ensure that all roof, balcony, walkway or wall leaks previously reported have been repaired.

Annually

q

Check that all storm drains are clean and free flowing.

q

q

q

Test all common area emergency lighting and replace dead or dying batteries.

Check paving for and repair any potholes, alligatoring, ruts, spalling, cracking or root damage.

Review all maintenance vendor contracts and make any needed changes.

Every Three Years

q

Repair, reseal and restripe all roads and parking areas.

Every Four Years

q

Paint or stain all wood siding, trim and walkways.

Every Five Years

q

Recoat all waterproofed walkways, balconies, decks and foam roofs.

q

Have an arborist inspect all common area trees and make recommendations for action.

Dick Tippett is the principal at ERTECH, Inc., a firm that offers a complete menu of consulting / reconstruction management services for all types of buildings and properties. He is a former member of ECHO’s Board of Directors and former Chair of both the Maintenance Resource and Central Coast Resource Panels.

November 2014 | ECHO Journal

35

BOOKSTORE The ECHO Bookstore is your source for publications providing essential information for HOA Board Member service obligations. Order online at echo-ca.org or fill out form on the facing page.

W NETION I ED

Robert’s Rules of Order Member Price: Non-Member Price:

$7.50 $12.50

A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.

Condos, Townhomes and Homeowner Associations Member Price: Non-Member Price:

$29.00 $45.00

To make these a sustainable investment, new buyers, owners and board members need to understand “best practices basics” of how this form of housing works and have more realistic expectations of this form of “carefree, maintenance free” living.

Community Association Statute Book—2014 Edition Member Price: Non-Member Price:

$15.00 $25.00

Contains the current version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from other codes important to associations.

Home and Condo Defects Member Price: Non-Member Price:

$12.95 $17.95

Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process.

36 echo-ca.org

2014 Condominium Greenbook Member Price: Non-Member Price:

$17.00 $25.00

This companion to the Condominium Bluebook is an in-depth guide to all aspects of association finances, including accounting methods, financial statements, reserves, audits, taxes, investments and much more.

Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances.

Questions & Answers About Community Associations Member Price: Non-Member Price:

$18.00 $25.00

For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs.

Board Member Handbook Member Price: Non-Member Price:

$15.00 $25.00

This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues.

Revised and updated in June 2012.

Reserve Fund Essentials Member Price: Non-Member Price:

$18.00 $25.00

This book is an easy to read, must-have guide for anyone who wants a clear, thorough explanation of reserve studies and their indispensable role in effective HOA planning. The author gives tips to help board members mold their reserve study into a useful financial tool.

The Condo Owner’s Answer Book Member Price: Non-Member Price:

$15.00 $20.00

An excellent guide to understanding the rights and responsibilities of condo ownership and operation of homeowner associations. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.

ciation o s s A unity Book Comm Statute dition 2014 E

Dispute Resolution in Homeowner Associations Member Price: Non-Member Price:

$15.00 $25.00

This publication has been completely revised to reflect new requirements resulting from passage of SB 137.

Publications to answer your questions about common interest developments Order Online at www.echo-ca.org

Bookstore Order Form Board Member’s Guide for Contractor Interviews Member Price: Non-Member Price:

EDUCATIONAL COMMUNITY FOR HOMEOWNERS 1960 THE ALAMEDA, STE 195, SAN JOSE, CA 95126 PHONE: 408-297-3246, FAX: 408-297-3517

TITLE

QUANTITY AMOUNT

$15.00 $25.00

This report is a guide for directors and managers to use for interviews with prospective service contractors.

Questions to find out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.

SUBTOTAL CALIFORNIA SALES TAX (Add 8.625%) TOTAL AMOUNT

Yes! Place my order for the items above.

Check

Board Member’s Guide for Management Interviews Member Price: Non-Member Price:

$15.00 $25.00

This guide for use by boards for conducting complete and effective interviews with prosp ective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.

Visa

MasterCard

Credit Card Number Exp. Date

Signature

Name (please print) Association (or company) Email Address City

State

Zip

Daytime Telephone

November 2014 | ECHO Journal

37

directory updates

All current listings may be found in our Professionals Directory available online at www.echo-ca.org.

New Members AWT Construction, Inc. 77 Solano Square, Suite 300 Benicia, CA 94510 Contact: James Kint Tel: (707) 746.7500

Prima Verde Landscaping 405 El Camino Real #445 Menlo Park, CA 94025 Contact: Linda Mirelez-Huca Tel: (650) 219.0792

Become an ECHO Professional Member and receive the benefits of membership.

To learn more, visit our membership page at www.echo-ca.org

38 echo-ca.org

advertiser index

about ECHO

ACE Property Management.................21 www.acepm.net American Management Services..........9 www.amspcam.com

Flores Painting & Drywall......................9 GET Insurance......................................20 www.hoacoverage.com

Applied Reserve Analysis......................9 www.appliedreserveanalysis.com

M & C Association Management Services...........................2 www.mccommunities.com

A.S.A.P Collection Services.................26 www.asapcollect.com

Mutual of Omaha Bank.......................14 www.mutualofomahabank.com

Association Reserves...........................20 www.reservestudy.com

Neighborhood Association Management.........................................14 www.neighborhoodam.com

Benjamin Moore Paint & Company...27 www.benjaminmoore.com Berding|Weil .........................Back Cover www.berding-weil.com Collins Management............................26 www.collins-mgmt.com Compass Management Group............19 www.gocompass.com Cornerstone Community Management.........................................12 www.cornerstonemgt.biz Ekim Painting.......................................25 www.ekimpainting.com

Professional Gutter Service.................19 www.guttercleaning.com PML Management................................25 www.pmlmanagement.com Pollard Unlimited.................................30 www.pollardunlimited@comcast.net R.E. Broocker Co...................................27 www.rebroockerco.com Rebello’s Towing..................................15 www.rebellos.net Union Bank...........................................18 www.HOAbankers.com

Eugene Burger Management..............27 www.ebmc.com

WHAT IS ECHO? Serving Homeowners to Build Strong Community Associations The Educational Community for Homeowners (ECHO) is a nonprofit membership corporation dedicated to assisting California homeowner associations. ECHO provides help to homeowner associations on many fronts: finances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, online education, a monthly full-color magazine and discounted publications.

Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations.

Benefits of Association Membership • Subscription to monthly magazine • Access to members-only online education • Updates to the Association Statute Book • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento

ECHO Membership Dues Association Membership HOA 2 to 25 units...........................$130 HOA 26 to 50 units.........................$180 HOA 51 to 100 units.......................$275 HOA 101 to 150 units.....................$375 HOA 151 to 200 units.....................$450 HOA 201 or more units..................$575 Professional Membership.................$499 Association Management Membership.......................................$499 Individual Membership.......................$75

How Do You Join ECHO?

Office 1960 The Alameda, Suite 195 San Jose, CA 95126-2308

Over 1,700 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www. echo-ca.org.

For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.

August2014 2013 ||| ECHO ECHOJournal Journal February 2014 ECHO Journal November

39 39

legislation at a glimpse

GET READY FOR NEW LAWS IN 2015.

The legislative session is over, and we now know which bills will become law in January. The list below gives a brief description of each bill and its final status, and we’ll publish a detailed explanation of how these bills affect your HOA in an upcoming ECHO Journal.

And you can always find the most current HOA Advocacy information on ECHO’s website: www.echo-ca.org/hoa-advocacy

Current Legislation Bill Information

Summary

AB 968

Common Area Maintenance

Support Status: Signed by Governor.

ECHO is sponsoring legislation to clarify who maintains and repairs “exclusive use common area” in associations. Current law is ambiguous about responsibility for repair and replacement, which has caused terrible building practices and unnecessary litigation. Beginning January 2017, this bill will clarify that the association is responsible for repair and replacement of “exclusive use common area” unless the association’s declaration provides otherwise.

AB 1360

Electronic Voting

Support Status: Failed passage.

This bill authorizes an association to conduct elections or other membership balloting by electronic voting. It also requires an association to provide each member with an opportunity to indicate that he or she will be voting electronically and to provide a member who did not indicate so with a paper ballot. The bill also sets forth minimum requirements of an electronic voting system for an association’s election.

AB 1738

Attorneys at Dispute Resolution

Oppose Status: Signed by Governor.

This bill would require that association dispute resolution procedures, including internal dispute resolution (IDR), permit both the association and members to include their attorney (or another person) to participate in the proceeding. Advance notice is not required. Agreements reached in Dispute Resolution proceedings would be judicially enforceable. Statements made during this process would be admissible in future legal proceedings.

AB 2100

Drought and Under-Watering Fines

Support

This bill would prohibit an association from imposing a fine or assessment against a member for reducing or eliminating watering of vegetation or lawns during a declared emergency due to drought. Associations may require that landscaping be safe and otherwise maintained. The bill would take effect immediately.

Author: Gordon

Author: Torres

Author: Chau

Author: Campos Status: Signed by Governor.

What Do You Think? Read more about HOA legislation on our website or visit our Facebook page and join the discussion. On the web: echo-ca.org/hoa-advocacy, On Facebook: facebook.com/echoorg

40 echo-ca.org

legislation at a glimpse

Current Legislation Bill Information

Summary

AB 2104

Water Efficient Landscapes

Neutral

Provides that a provision of the governing documents or of the architectural or landscaping guidelines or policies shall be void and unenforceable if it prohibits low water-using plants as group or as a replacement of existing turf, or if they have the effect of restricting compliance with local water conservation measures.

Author: Gonzalez Status: Signed by Governor.

AB 2188

Solar Energy Permits

Oppose Status: Signed by Governor.

This bill would expedite permits for solar panel installations. This bill would require boards to decide on applications for solar panel installations within 45 days and to notify the applicant in writing.

AB 2430

HOA Transfer Fees and Disclosures

Watch

This bill would require that a seller provide a prospective purchaser with certain current documents that the seller possesses free of charge. It would also require that the seller be responsible for compensating an association, person, or entity for providing documents under these provisions.

Author: Muratsuchi

Author: Maienschein Status: Signed by Governor.

AB 2561

Backyard Agriculture

Oppose Status: Signed by Governor.

This bill would require associations to permit personal agriculture in a unit owner’s private backyard, subject to reasonable restrictions. Homeowners associations would not be permitted to restrict the use of pesticides.

AB 2565

Electric Vehicle Stations

Support

Subject to certain conditions, this bill would compel a lessor in a common interest development to permit a lessee to install an electric vehicle charging station, provided the lessee agrees in writing to various requirements related to costs, insurance, and potential damages.

Author: Bradford

Author: Muratsuchi Status: Signed by Governor.

SB 391

Fees on Recorded Documents

Oppose

In order to fund affordable housing, this bill would impose a $75 fee on each document to be recorded in California.

Author: DeSaulnier Status: Failed passage.

SB 992

Drought and Under-Watering Fines

Support

This bill would prohibit an association from imposing a fine for reducing or eliminating watering of vegetation during a declared state of emergency due to drought.

Author: Nielsen Status: Signed by Governor.

SB 1026

Foreclosure Action Notice

Watch

This bill would permit an association to serve an owner or owner’s representative with notice of a foreclosure action to collect delinquent assessments by posting a copy of the notice on the owner’s separate interest in a manner most likely to give actual notice to the party to be served and mailing a copy of the notice, as specified.

Author: Vidak Status: Amended 4/28. In Senate Judiciary. Hearing cancelled.

November 2014 | ECHO Journal

41

ECHO event calendar

RESOURCE PANEL CALENDAR ECHO Resource Panels meet during lunch on weekdays to enable managers, professionals and board members to hear about important topics presented by experts in the industry, and share experiences and issues. The meetings are open to all ECHO members, and those interested in learning about ECHO, offered in a casual atmosphere where the cost of attendance is the price of your lunch. The sessions last about an hour and a half. Check-in with the ECHO Panel Secretary for details and to register.

Please join us: DATE

PANEL LOGISTICS

PANEL SECRETARY

TOPIC

Nov. 6, 11:45 a.m.

North Bay Resource Panel Contempo Marin Clubhouse 400 Yosemite Dr., San Rafael

Denise Wolford 415-458-3537

Water Intrusion

Nov. 11, 11:45 a.m.

Central Coast Resource Panel Michael’s on Main 2591 S Main St., Soquel

Ann Thomas 800-537-4098 ext.7530

TBD

Nov. 19, 11:45 a.m.

Wine Country Resource Panel Serv-Pro 377 Blodgett St., Cotati

Pam Marsh 415-686-9342

Law Update

Jan. 8, 11:45 a.m.

North Bay Resource Panel Contempo Marin Clubhouse 400 Yosemite Dr., San Rafael

Denise Wolford 415-458-3537

TBD

Jan. 13, 11:45 a.m.

Central Coast Resource Panel Michael’s on Main 2591 S Main St., Soquel

Ann Thomas 800-537-4098 ext.7530

TBD

Jan. 21, 11:45 a.m.

Wine Country Resource Panel Serv-Pro 377 Blodgett St., Cotati

Pam Marsh 415-686-9342

Design Build Bid

REGULARLY SCHEDULED RESOURCE PANEL MEETINGS Panel

MEETING

location

Maintenance

First Wednesday, Even Months

ECHO Office, San Jose

North Bay

First Thursday, Odd Months

Contempo Marin Clubhouse, San Rafael

East Bay

Second Friday, Even Months

Massimo Restaurant, Walnut Creek

Accountants

Second Monday, Odd months

Scott’s Seafood Restaurant, Oakland

Central Coast

Second Tuesday, Odd months

Michael’s On Main, Soquel

South Bay

Second Wednesday, Even Months

Buca Di Beppo, Campbell

Wine Country

Third Wednesday, Monthly

Serv-Pro, Cotati

Legal

Quarterly

Varies

42 echo-ca.org

ECHO honor roll

ECHO HONORS VOLUNTEERS Resource Panels

Seminar Speakers

Recent Contributing Authors

Accountant Panel Adam Haney, CPA 888-786-6000 x317

Marin David Feingold, Esq. Wanden Treanor, Esq. Glenn Youngling, Esq.

April 2014 Thomas Connelly Burt Dean Walt Grady, CPA Andrea L. O’Toole, Esq. Emily K. Clark, Esq. Michael Hardy, Esq.

Central Coast Panel John Allanson 831-685-0101 East Bay Panel Beth Grimm, Esq. 925-746-7177 Cindy Wall, PCAM, CCAM 925-830-4580 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Judy O’Shaughnessy 408-839-6926 North Bay Panel Diane Kay, CCAM 415-846-7579 Stephany Charles, CCAM 415-458-3537 South Bay Panel Susan Hoffman, PCAM 510-683-8614 Wine Country Panel Pam Marsh 415-686-9342 Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.

Santa Cruz John Allanson Jeffrey Barnett, Esq. Diane Rossi, PCAM Ron Duncan Toby Goddard Piret Harmon South Bay Sharon Pratt, Esq. Rosalia Tapia, Esq. Matthew Harrington, Esq. Terin Reeder Robert P. Hall, Jr., Esq. Stephanie Hayes, Esq. Wine Country Carra Clampitt Bill Gillis, Esq. Steve Lieurance, CCAM Jim MacMillan Michael Cantarutti Paul Schultz, CLCA. San Jose John Allanson Ian Brown, CCAM David Levy, CPA Alex Noland, Esq. Jerry Bowles Bruce Stanton, Esq. Ricky Chu Dave Rosenblatt, CCAM Judy O’Shaughnessy David Kuivanen, AIA Diane Rossi, PCAM Brian Seifert Aaron Majors Dave Langridge Kelly Moss, CCAM Paul Schultz Sandra Gottlieb, Esq. Steven Weil, Esq. Stephanie Hayes, Esq. Bob Burton, CCAM Tyler Berding, JD, PhD Chris Sigler Regan Brown

May 2014 Scott Sommerfeld Pat Wendleton, Esq. Sharon Glenn Pratt, Esq. Glenn H. Youngling, Esq. Ken Bade, PCAM June 2014 Steven S. Weil, Esq. David Kuivanen, AIA Beth Grimm, Esq. Robert Hall, Esq. Barrett R.P. Schaefer, Esq. July 2014 Ken Kosloff, CSI, CCI Tim Polk Marilyn Lincoln Jeffrey S. Farnsworth, CCAM Paul W. Windust, Esq. August 2014 Bob Gourley Tyler P. Berding, JD, PhD Brian Seifert Steven Saarman Kenneth T. Carlisle September 2014 Matt J. Malone, Esq. Ann Rankin, Esq. Susan Oliver Samuel Anderson Bob Gourley Judy O’Shaughnessy Michael Petite October 2014 Tyler Berding, JD, PhD. David C. Swedelson, Esq. Christine Kehoe Thomas Connelly Elizabeth Lanham

November 2014 | ECHO Journal

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