ECHO Journal - June 2015

Your Keys to an Energy Efficient Future! p.10

Inspection of Records in a Homeowners Association p.18

The Association Death Spiral and How to Avoid It p.24

Dynamic Negotiations

p.28

Serving Community Associations

ECHO Santa Clara

Challenging Directors: Some Practical Tips for the Sensible Majority p.32

June 2015 echo-ca.org

43rd Annual Seminar & Trade Show p. 6

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

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news from ECHO

News From ECHO June 2015 Join us at the ECHO Santa Clara 43rd Annual Seminar, June 20.

Admission for ECHO HOA Members is half-off!

We have a dozen educational sessions including our popular HOA University all day track, a full day of Legal sessions, and Hot Topics you should hear about.

There will be over 100 professional exhibitors ready to answer all your product and service questions. And many offer great prizes and giveaways.

You’ll enjoy continental breakfast and a buffet lunch included with your registration.

There’s no better way to learn about your responsibilities as an HOA Board Member than attending the ECHO Annual Seminar.

The standard of excellence among our speakers is unsurpassed.

And the ability for you to interact with them, and our many exhibitors, will give you a personal experience you cannot get doing research on the Internet.

So spend the day with us, learn a lot, and have some fun!

Go to page 6 and 7 to learn more about the Annual Seminar; register online, with the form provided, or call the ECHO office at (408) 297-3246.

I’ll see you in Santa Clara.

Best,

Brian Kidney Executive Director

June 2015 | ECHO Journal

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CONTENTS 10 18

24 28

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32

10

Your Keys to an Energy Efficient Future!

The Keys can now serve as the poster child for all future energy savings projects undertaken by Common Interest Developments in California (and elsewhere for that matter!).

18

Inspection of Records in a Homeowners Association What are the inspection rights of members who want to review the records of the association? What are the limits on this inspection right? Who pays for the costs involved? What are the inspection rights of directors?

24

The Association Death Spiral and How To Avoid It Although the association is created to live in perpetuity, the community and physical property were not, absent significant amount of care. Therein lies the rub for all of us.

28

Dynamic Negotiations Dynamic negotiations is a way to accomplish resolution of difficult issues through a dynamic rather than static process which allows parties to focus on their concerns through discourse, and craft mutually-acceptable solutions that transcend competing interests.

32

Challenging Directors: Some Practical Tips for the Sensible Majority While directors who act badly are a tiny minority of those who volunteer to serve on an association’s board of directors, it’s also true every now and then a “bad apple” ends up on the board. The rest of the board – the majority of directors - is not powerless to deal with these problems.

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 2015 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

DEPARTMENTS

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News from ECHO

6

ECHO 43rd Annual Seminar & Tradeshow in Santa Clara – Saturday, June 20th

Vice President Karl Lofthouse Treasurer Diane Rossi Secretary Carly Melius Directors Jerry L. Bowles John Garvic Adam Haney Stephanie Hayes David Levy

Robert Rosenberg Brian Seifert Wanden Treanor Steven Weil

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2015 ECHO Educational Calendar

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NEW at echo-ca.org

17

ECHO Ambassadors

36

ECHO Bookstore

Executive Director Brian Kidney

39

Advertiser Index

40

ECHO Event Calendar

Director of Marketing & Membership Carly Melius

41

ECHO Volunteers

42

Legislation at a Glimpse

Director of Communications Tyler Coffin Legislative Consultant Mazzoni and Associates Design and Production Design Site ECHO Mission Statement Serving Community Associations

June 2015 | ECHO Journal

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Half Price for ECHO HOA Members!

ECHO ANNUAL SEMINAR 43rd Annual Seminar & Trade Show Saturday, June 20, 2015

The Annual Seminar is now half price for ECHO HOA Members! We’re returning to the Santa Clara Convention Center for our 43rd Annual Seminar. Take advantage of all the resources available to your HOA at the Annual Seminar: • 12 classes featuring top industry experts.

• Members-only HOA University & Certificate.

• Hundreds of fellow board members and HOA professionals.

• Up-to-the-minute information on new legislation and drought restrictions.

ECHO’s Annual Seminar is the only educational trade show designed for HOAs. Get your information straight from the source, and build a strong, healthy community.

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Visit the ECHO website or call ECHO for complete event details: Online www.echo-ca.org/events Phone 408.297.3246

Event Information

sessions

Location:

HOA UNIVERSITY

Santa Clara Convention Center 5001 Great America Pkwy Santa Clara, CA 95054

• 9:00-10:15

Finances

David Levy, CPA

• 10:45-12:00 Management David Zepponi

Time:

• 1:30-2:45

Insurance

John Allanson

8:00 am to 4:30 pm

• 3:15-4:30

Legal

Wanden Treanor, Esq.

food:

LEGAL

Continental breakfast in the morning, and a lunch buffet in the afternoon are included in admission.

• 9:00-10:15

Quicksand

Sandra Gottlieb, Esq.

Parking:

• 10:45-12:00 Construction Tyler Berding, JD, PhD.,

Claims Chad Thomas, Esq., Julia Hunting, Esq.

Plenty of free parking is available in the parking structure behind the Santa Clara Convention Center.

Lodging: The Santa Clara Convention Center is immediately connected to the Hyatt Regency Santa Clara. Special rates are available through the ECHO website, or by calling the Hyatt at (888) 421-1442.

Register: Members: $50, Nonmembers: $100 Registration includes lunch and access to all sessions.

Register online, or return the form on this page.

Yes, reserve ______spaces for the ECHO Annual Seminar 43rd Annual Seminar & Trade Show.

• 1:30-2:45

Directors & Members

Steve Weil, Esq.

• 3:15-4:30

Small Claims Zer Iyer, Esq.

Hot Topics • 9:00-10:15

Legislative Update

John Garvic, Esq. & Kerry Mazzoni

• 10:45-12:00 Energy Rebate! Ken Kosloff, Ricky Chu, John Neal

• 1:30-2:45 Collections

• 3:15-4:30

Terin Reeder, Stephanie Hayes, Esq., Matthew Harrington, Esq.

Fair Housing Amy Tinetti, Esq. & Issues Andrea O’Toole, Esq.

Amount enclosed: $__________ (attach additional names) Name:

EDUCATION

FOOD

NETWORKING

Email Address:

• 3 tracks, 12 topics • Professional instruction

• Huge buffet lunch • Prize-filled exhibit floor

• Over 300 HOA board members • 100 professional vendors

HOA or Firm: Address: City: State:

Zip:

Phone:

SPONSORS

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

June 2015 | ECHO Journal

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2015 ECHO educational calendar

San Francisco

June 19-20 ECHO Annual Seminar (see page 6) Santa Clara Convention Center Santa Clara, CA

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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 Who Is “A Member in Good Standing?”

Boards often like to use a member’s “standing” as a means of regulating behavior or rights. In some cases, where a member has severely delinquent dues or long-outstanding rules violations, the board may want to keep them from running in the next election. But how do you declare a member to be “not in good standing?”

Educational Topic: Board of Directors

3 Reasons Why Your HOA Can’t Declare Bankruptcy

When the money just isn’t there and creditors are looming, some HOAs may be tempted to look at bankruptcy protection as a way out. Unfortunately, declaring bankruptcy is nearly impossible in associations. Read this article to find out why.

Educational Topic: Banks

Executive Sessions in HOAs: Notice & Minutes Requirements

Most boards know that they can use executive sessions to discuss certain topics in private – away from the membership. But private meetings are a highly regulated opportunity and should be used with care, including close observation of notice and minutes requirements. Learn when notice is required, and how to document executive sessions in minutes.

Educational Topic: Executive Session

HOA Boards Can Use Email in an Emergency!

You hear it all the time: “don’t use email to make decisions!”

But don’t forget that there are exceptions. In an emergency, email is the fastest tool to gain clear consensus from the board about a course of action. Learn how you can use email properly before you encounter an emergency.

Educational Topic: Websites & Email

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

June 2015 | ECHO Journal

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YOUR KEYS TO AN ENERGY 10 echo-ca.org 10 echo-ca.org

EFFICIENT FUTURE!

By Ken Kosloff

June May 2015 2015 || ECHO ECHO Journal Journal

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A

lthough it’s common knowledge that communities in all parts of California are beginning to focus more attention on how to save energy and therefore keep their escalating operating costs in check, I still wasn’t quite prepared for the phone call I received from then interim General Manager who told me that The Key’s Condominium Owners Association in Walnut Creek was interested in undertaking a major energy retrofit project and was looking for a project manager to help spearhead the effort….and would we be interested?

The 43 year old Keys was one of the most iconic and well known communities in all of Northern California. To think that a community of this size (792 units) would have the insight and imagination to undertake a change of such magnitude was quite exciting and I wanted to learn more.

Although we had been previously involved in solar and led lighting upgrade projects around the area, and had been the Architect of Record for several solar design projects as well, the thought of having a chance to be a key player in such a large energy makeover was too good to pass up.

What made The Keys such a great candidate for energy upgrades was not only its aging infrastructure, but the sheer size of the community. Coincidently, the Bay Area Regional Energy Network (BayREN) had just initiated a new upgrade program for multi-family communities called the Bay Area Multifamily Building Enhancements Program (BAMBE), and the rebates available for undertaking an approved project (which met the goals of the program) were impressive.

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Prior to the rollout of the efficiency program, The Keys had the foresight to conduct a comprehensive ASHRAE Level II energy audit of the property. They wanted to use this information to scope short term cost savings opportunities, as well as future replacement reserve and capital improvement opportunities.

The Association for Energy Affordability (AEA) was hired to conduct the energy audit, and produced a thorough report providing cost and savings estimates for both high ROI measures and long term planning measures to control and reduce operating costs. Through the energy audit AEA discovered (58) energy efficiency and operations and maintenance measure opportunities, including over (100) unique lighting measure opportunities.

Fortunately, BayREN later selected AEA to be the technical assistance provider for the multifamily program. The goal of the program in general was for The Keys COA to save a minimum of 10% of their total site energy costs through implementation of a variety of upgrade options, which would qualify them for a rebate of $750 per unit. With this type of available incentive, and with the quantity of units and density of the property, it became obvious that a significant percentage of the total out of pocket costs could be covered by the rebate program.

Under the watchful eye of John Neal, who was the original auditor and the project manager with AEA assigned to The Keys, the original energy audit was updated to identify how much each energy efficiency measure would contribute towards the rebate program’s 10% savings goal. Using this information, and working with a project team consisting of Richard Avelar & Associates as a project manager, recently promoted General Manager Don Adams, the Board and their maintenance and facilities supervisor Tam Sugayan, and John Neal of AEA, we finalized a scope of work that met both the program goals and the Key’s goals. Then it was time for us to move forward with writing specifications that met the program efficiency requirements and generating RFP’s (Requests for Proposals) from qualified contractors, obtaining bids, and awarding the work. The final list of items to be upgraded included the following:

• Install time and temperature controls on domestic hot water recirculation pumps

• Install low flow fixtures in common areas

• Install ASTM rated pool covers • Replace all pool and spa filtration pumps with variable frequency drive (VFD) pumps, and reduce flow during unoccupied periods while maintaining required turnover • Replace north and central pool boilers with high efficiency condensing pool boilers • Replace all water feature pumps with premium efficiency variable frequency drive (VFD) pumps, and reduce flow for a minimum of 9 hours per day • Update HVAC controls to only condition laundry room facilities during occupied periods • Upgrade common area lighting in walkways, building exteriors, and

covered parking garages to LED (including bi-level dimming controls in many locations) • Replace vending machines with Energy Star rated high efficiency models • Develop and pilot a water efficiency program in residential units • Update window replacement specifications to reflect new Title 24 energy requirements It was decided that some of the items could best be done by in house staff (such as changing out bulbs, vending machines, and acquiring/installing new pool covers).

Other items such as new LED light fixtures, pool, spa, pond and stream pump and motor equipment upgrades, and new temp controls on existing boilers would have to be outsourced.

After receiving competitive bids, the Board selected Rayco Energy, ACI (Aquatic Consultants Inc.) and Enovative Group, Inc. for the following scopes of work:

Rayco Energy • Remove existing exterior common area lights in select locations and replace with LED fixtures • Remove existing interior clubhouse lights and replace with LED fixtures • Remove existing Exit Signs and install LED Exit Signs throughout the common area hallways/ stairwells • Remove existing stairwell lighting and replace with bi-level LED fixtures

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• Replace garage lighting with bi-level LED fixtures • Install new LED lighting fixtures per 2014 Title 24 Energy Standards

ACI • Replace central pool filtration pumps with VFD and reduce turnover during unoccupied periods • Replace central pool boiler with high efficiency condensing boiler • Replace north pool boiler with high efficiency condensing boiler • Replace 2 spa filtration pumps with VFD pumps and reduce turnover during unoccupied periods

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• Replace north and south pool filtration pumps with VFD pumps and reduce turnover during unoccupied periods • Replace water feature pumps with premium efficiency VFD pumps, and reduce flow for a minimum of 9 hours per day

As a result, we decided to have weekly project meetings in order to stay on track. We developed a Critical Path Method (CPM) schedule which gave all parties involved a visual timeline for performance and completion deadlines.

As the project manager, it was our job to ensure that the work was completed on time, within budget, and that The Keys did not lose their rebate opportunity.

• Install demand controls on domestic hot water recirculation pumps

“Developing a realistic project scope was very important in the initial planning phases because the project costs need to fit within the allocated budget AND satisfy the energy rebate requirements,” states Ricky Chu, owner of Rayco Energy.

In addition, many custom order LED fixtures have 6-12 week lead times which went in to the project planning process.

By the time the Board chose vendors and signed all of the construction contracts, it was already late October and we had a deadline for completing all of the work by mid-December 2014. The rebate check had to be approved and issued by the end of the calendar year in order to secure the funds. This didn’t leave us with much time for a project this size!

Although the job, in general, went smoothly, it was more a testament to the level of up front planning, the dedication and commitment of the contractors, the work completed by The Keys in house maintenance staff, and the timely decision making ability of the Board and General Manager Don Adams. A project of this magnitude doesn’t come to a successful completion unless all

Enovative

parties involved are pulling in the same direction – which is exactly what we had at The Keys. Even so, there were some challenges along the way that could have easily changed the outcome had we not collectively come up with options and creative solutions. One example was the lighting in the residential hallways.

The Association Board had originally envisioned changing the existing older lighting out for new LED bi-level lights in conjunction with a planned hallway remodeling project involving new carpet and paint as well. The BAMBE Program would allow the Association to take credit for the new hallway lighting toward the anticipated rebate, and as a result, this project became part of the overall scope of work to secure the rebate.

even though the hallway improvement project was put on hold, we were still able to make up the difference with additional lighting upgrades in common areas as well as additional unanticipated savings on new energy efficient pumps and motors for the ponds, streams and pool areas.

However, due to the fact that the hallway remodel also required removal of old asbestos material on the ceilings, a group of concerned homeowners surfaced and questioned the cost involved in the asbestos remediation as well as the inconvenience. The situation escalated with the result being that the ensuing discussions only served to delay the hallway project as a whole and thus jeopardized the timeline for total completion

The final tally showed that the cost to The Keys for the entire project was approximately $750,000, and they received close to $600,000 in rebates.

This turned out to be the largest energy rebate given to a Common Interest Development in the state of California and a landmark project to boot.

As the project progressed through construction AEA made continuous site visits to confirm that the project scope was still meeting the program goals and ensure the project would not jeopardize its reserved rebate. Finally, once all of the energy efficiency measures had been completed (we actually exceeded the 10% goal), the program sent The Keys a rebate check.

and rebate. With this in mind, it became obvious that we needed to switch directions and find other avenues, aside from the hallway lighting, where we could make up the energy savings we needed.

With the assistance of John Neal at AEA, we were fortunately able to identify other areas where the scope could be expanded to make up the difference. As a result,

Energy savings thus far for 2015 are still being evaluated, and the projected

June 2015 | ECHO Journal

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savings will continue to increase as The Keys implements further energy and water saving measures. In addition, as local utility company costs continue to increase at the rate of 5% annually, and water districts rates, as well, are increasing at approximately 9% annually (East Bay Municipal Water District is contemplating a 25% increase in water rates this year in response to current drought conditions). The far reaching measures initiated by The Keys will not only initially reduce but will stabilize future costs subject to the utility rate increases we’re seeing statewide. But this isn’t just about energy savings alone. Other ancillary benefits to the project include better quality lighting in the common areas, safer pedestrian environment during evening hours and reduced operating and maintenance costs due to longer lasting light bulbs, new fixtures, new equipment and properly operating (repaired) equipment.

The Keys amazing undertaking is important for many reasons. It shows what can be accomplished when a forward thinking and innovative Board of Directors combines with a dedicated and savvy general manager, a maintenance supervisor who knows the community and its infrastructure like the back of his hand, the right group of consultants, and contractors who are experienced and dedicated to quality and performance. Often times we talk about what it takes to make the right choices in our HOA world. We talk about how important quality and performance is only to have those ideals often give way to the cheapest and lowest bid. But without the talents and skills of all those involved, The Keys project would never have come to fruition.

As such, The Keys can now serve as the poster child for all future energy savings projects undertaken by Common Interest Developments in California (and elsewhere for that matter!). The future is indeed bright for The Keys COA as they continue their quest to set the bar in creating a sustainable energy environment for their Owners, keep monthly assessments low, and provide a much needed facelift for an older community which will in turn translate to additional community pride and increased property values. And shouldn’t that be what it’s all about??

Ken Kosloff is a Principal and Senior Construction Consultant with the Architectural firm of Richard Avelar & Associates and is a frequent contributor and speaker for ECHO. 16 echo-ca.org

By actively encouraging ECHO Membership and training among their clients, these management companies have demonstrated a commitment to independent board member education. Their work strengthens the communities they manage, and supports ECHO’s mission to serve community associations.

AMBASSADORS

Bay Area Rental and Management Company Community Management Services, Frontier Property Management Thelander Management Company

June 2015 | ECHO Journal

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Inspection of records in a homeowners association

By Tom Fier, Esq.

June 2015 | ECHO Journal

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he matter of inspection of records comes up in almost every homeowners association. Some of the most frequent questions are: “What are the inspection rights of members who want to review the records of the association? What are the limits on this inspection right? Who pays for the costs involved? What are the inspection rights of directors?”

These questions, as well as other questions dealing with the inspection rights within an association, are addressed in this article.

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I. MEMBER INSPECTION RIGHTS 1. What can be inspected by a member?

Section 1363(f ) of the Davis-Stirling Act (Civil Code §§1350-1376) requires that association members be given access to association records in accordance with the Corporations Code.

Records must be maintained in written form [Corporations Code §8320(b)]. A request to inspect is not complied with unless and until the corporation at its expense makes the records available in written from (i.e. computer records must be printed out, as well as e-mail messages and tape recorded messages must be transcribed).

2. Who can inspect?

The requesting person or an agent or

attorney. The law only allows one person to inspect and there can be no limitation on inspection rights (Corporations Code §8313).

3. Who should pay for the copies?

The right to inspect also includes the right to make copies and extracts (Corporations Code §8311). Who pays for the copies is a matter of association policy, but if a charge is to be made, it should be reasonable. If the association is managed, the charge for copying should not exceed what the management company charges the association.

4. Can the association or management company charge an inspection fee?

The law prohibits any limitation on a member’s rights. Therefore an inspection fee should not be charged because it could be viewed as an attempt to limit this inspection right.

5. What records are required to be kept?

invoices and checks?

The association is required to keep records, which include, but are not limited to, all governing documents; adequate and correct books and records of account; minutes of the proceedings of its members, board and committees; and members’ names, addresses, and classes of membership.

A member does not have a right to inspect these documents? They are backup information used to form the association’s books and records. If an audit has been performed and the results were distributed to members, this would be a duplication of work already done. A director, however, could obtain access to this information.

6. What constitutes adequate and correct books and records of account?

8. What are the restrictions on a member’s right to inspect?

”Books” is defined in Webster’s as a business record or register. “Record” is defined as an account in written or other permanent form. The custom and practice of the association should be given weight in this situation.

7. What if a member demands to see all

demanding member does not reasonably and in good faith believe will benefit the corporation. If the association feels that the membership list will be misused, it can refuse the demand or sue to restrain the misuse. If a member fraudulently or maliciously violates the law regarding use of the membership list, he or she may be held liable for any damages suffered by the association, may be required to forfeit or repay any profit derived from the violation, and may be liable for punitive damages, and reasonable costs and expenses, including attorney fees.

The purpose for inspection must be reasonably related to a member’s interest. The demand for inspection must be in writing and request a reasonable time (Corporations Code §8333).

II. DIRECTOR’S INSPECTION RIGHTS

A membership list can be obtained, but it cannot be used to solicit money, sold to or purchased by anyone, or property for a commercial purpose; for sale to any person; or for any purpose which the

A director’s inspection rights are absolute (Corporations Code §8334). Not only can a director inspect and copy all books, records and documents, but a director can inspect the physical properties of

the association. The law does not require a written demand and no statement regarding the director’s purpose need be presented. A director has fiduciary duties that he or she must perform in good faith and with the best interest of the association in mind.

The only limitation on these broad inspection rights is that this right must be balanced against the constitutional rights of members.

In the case of Chantiles v. Lake Forest II (1995) Cal.App.4th 914, 45 Cal.Rptr.2d 1, a director wanted to inspect the proxy ballots of an election. The court denied this request and said a board member’s request must be balanced with a member’s reasonable expectation of privacy in his/her ballots.

Can a director’s right of inspection be limited?

If it is believed that the director is seeking information for an improper purpose, then the demand can be denied.

If the situation winds up in court, then the court has the power to balance the

competing demands and limit the inspection.

Consider several example situations: What if a committee investigating embezzlement by a board member has developed working papers and the board member being investigated demands to see these papers before the committee issues the final report? Should a director be given access to documents if a disclosure is contrary to the board’s fiduciary duty to the corporation?

What if a board member demands to see the bids for a painting contract, before the bids are closed, because his brotherin-law is bidding on the job? Should a director be given access to documents if a conflict of interest exists?

In these situations, a denial might be appropriate. Alternatively, the association might condition the right to inspect on adherence to certain ground rules, i.e. non-disclosure of the contents of the inspection to others.

III. LEGAL REQUIREMENTS There is a legal requirement that proper records be kept. Directors and officers of an association can be found guilty of a misdemeanor if they act in any of the following ways:

1. Knowingly make or publish any material false report or statement about the financial condition of the corporation;

CHECKLIST OF FREQUENTLY REQUESTED DOCUMENTS DOCUMENTS

MEMBER

Audits

Yes

x

Bank Statements

No

Yes

x

x

Ballots

x

x

Checks

x

x

x

x

Financial Statements

Invoices/Bills

x

x

x

x

Litigation Documents

x

Management Company Books and Records Membership List Minutes

(limited)

x

x x x

x

x x

Preliminary List of Construction Defects Proxy Ballots Reserve Studies

(but not for a commercial purpose)

No

x

Contracts

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DIRECTOR

x

x

x x

x x

2. Willfully or fraudulently exaggerate the financial conditions of the corporation; 3. Act with the intent to defraud, destroy, alter, mutilate or falsify any of the corporation’s documents.

If board members deliberately manipulate the books to keep assessments artificially low or withhold a reserve study that shows the association to be underfunded, the board could be potentially criminally liable.

IV. RELATED RIGHTS 1. Disclosures-Construction Defects A preliminary list of defects must be provided to each member of the association (Civil Code §1375); this list can then be passed on to prospective buyers.

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2. Minutes of Board meetings Must be made available within 30 days of the meeting. When requested by a member, the minutes or a summary must be provided (Civil Code §1363.05). At the time the association distributes its annual budget, members must be advised, in writing, of the right to obtain copies of minutes of the Board of Directors meeting (Civil Code §1363).

V. CONCLUSION

2015 Condominium Bluebook A Complete Guide to Condominium Living

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.

Order today from ECHO!

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

Inspection rights are different for members and for directors. Directors have a broader right than members. A checklist of frequently requested documents is shown in the accompanying table.

When members or directors ask to inspect association records, the best policy is to be open and honest; but if any improper motive is suspected, be cautious. For special situations, consult with your association attorney.

Tom Fier is the principal at the Law Offices of Tom Fier, San Mateo, CA. He is a member of the ECHO Legal Resource Panel.

June 2015 | ECHO Journal

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June 2015 | ECHO Journal

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T

he place that associations go to die. Seems contrary to what all general counsel attorneys will tell you. They will tell you that associations have been created to live in perpetuity.

Although the association is created to live in perpetuity, the community and physical property were not, absent significant amount of care. Therein lies the rub for all of us.

At a certain point, many associations face a significant choice. Do I continue to ignore the worsening conditions on my property or fight to save it?

Now, I never believe that it’s too late, however often I find that associations stuck in the death spiral do believe it’s too late. The feeling of hopelessness starts to overcome not only the association, but the community in general.

The death spiral is simply the condition where the needs of the community vastly out strip the capacity of the association.

This is usually looked at through the monetary lens of the association and community, but can been looked at as the indifferent approach of the community and their failure to participate.

Community (resident) engagement is the greatest deterrent to the death spiral.

Whether it’s fighting crime issues in your neighborhood, or structures that need significant work, community engagement can help smooth an otherwise bumpy road. The majority of the time this is viewed through the monetary lens is because the non-engaged community fights the monetary costs that it takes to stop the cycle.

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It is usually at this point when an association feels like it is just too much to do, and the homeowners cannot really afford to do anything.

If the association allows this helpless mentality to foster the condition, the spiral effect worsens. For example, studies have shown that the more trash you have, the more trash you will get .1 If the association shows they will not take care of the community, do you expect the community to take care of the association?

Once you are in this spiral, it takes a significant amount of additional resources to reverse directions.

It normally starts with the association standing up for their community to address problems which have lingered for years. Communication with the homeowners and residents is an important part of reengaging the community and turning their attitude around for the better. If an association has been neglecting their reserve funding and maintenance responsibilities for years, it usually will take years to undo the neglect. Part of the communication and community buy in is getting them to understand the deficit and the cost to repair the damage.

The most successful communities start with one board member or homeowner who has made it their mission to get things turned around.

They garner enough support to then put together a group of professionals (reserve preparer, community manager, contractor, construction manager, etc…) that they can team with to help the association return to a properly functioning community. The costs can be scary, but the team of professionals will help budget and plan out how the objectives are going to be achieved. Open and forthright communication with the community is paramount to win support for the overall plan.

Special assessment discussions are always a good gauge of community support for the various projects.

Most associations are much more successful with creating a plan that can be achieved in three to five years, assuming that the physical plant can survive that long, than with trying to get it all done in one year with a large special assessment. Bank loans are also a great option, but in most cases the association is asked to pass a large assessment to support the payments and you can lose momentum.

I also highly recommend spending a decent portion of the reserve funds on high impact and highly visible projects to help with community reengagement.

After people see that the association can and will spend money, you typically see a fraction of homeowners come to the board with the “what about me projects?”

An initial reaction to the list is to reject these sort of requests out right, but that would not be the best course of action In the end, some of the projects that you may choose to spend funds on, may not be the highest priority for the association’s physical plant, but it may be the higher priority for the homeowners.

It takes a dedicated and concerned homeowner to start the change within their community.

Although they may never get the “hero’s welcome” they so deserve, hopefully the reward of coming home to a “new” community is worth it.

1. Information supported by http://www.litteringiswrongtoo.org Alex Guy is an Estimator/Business Development Manager with Advance Construction Technology, Inc. a full service roofing and construction firm.

Rob Rosenberg is president of Advance Construction Technology, Inc., and a member of the ECHO Board of Directors.

Nominating Committee Seeks Candidates for ECHO Board of Directors

T

he Nominating Committee for the ECHO Board of Directors is seeking expressions of interest from persons who are interested in serving on the ECHO Board of Directors. Four positions on the board will be up for election at the ECHO Annual Meeting that will be held in November. These positions are for three-year terms. Current directors whose terms expire in 2015 are Jerry Bowles, Stephanie Hayes, David Hughes, and Steve Weil.

Board members are expected to attend four three-hour board meetings held each year, generally at the ECHO office in San Jose. Each board member also serves on one or more committees that hold regular meetings

throughout the year. In addition board members are expected to attend the Annual Meeting and a two-day board retreat each November. Board members receive no reimbursement for these activities. Nominees must also be members of ECHO, either through their homeowners association or business and have thorough familiarity with the organization and the CID industry.

Persons interested in being considered for nomination should obtain and complete a nomination and qualifications form, available by request from the ECHO office.

Every potential candidate, including incumbents, must submit a full form. All completed forms must be submitted to the ECHO office no later than July 24, 2015 , to be considered by the nominating committee. Those requesting nomination may be requested to interview with the nominating committee. The committee will meet in late July to prepare recommendations for board consideration.

June 2015 | ECHO Journal

27

DYNAMIC NEGOTIATIONS

By David Larsen, Esq. 28 echo-ca.org

June May 2015 | ECHO Journal

29

D

ynamic negotiations is a way to accomplish resolution of difficult issues through a dynamic rather than static process which allows parties to focus on their concerns through discourse, and craft mutually-acceptable solutions that transcend competing interests. Some of what follows may be intuitively obvious; it is also the product of extensive research.

In order to begin the process, it is important to listen to the other party. Listening involves more than hearing words. You must empathize with the other party and acquire a real understanding of his or her underlying interests. The other party may be reluctant to explain his or her interests, or may not even be sure what they are. A good listener is able to draw the other party out. Steve Covey, the author of “Seven Habits of Highly Successful People,” suggests that parties adopt the practice of restating what the other said, to their satisfaction, before

Thinking Outside the Box The process of attempting to identify and address a variety of interests is a dynamic process which allows solutions to evolve through discourse. Adopting a position, and rigidly defending it, is static by comparison. The process of “thinking outside the box” in order to find creative solutions to difficult

Of the various approaches suggested by authors of books dealing with dispute resolution, the following concepts are of special importance: 1. understanding underlying interests; 2. thinking outside the box; 3. using objective yardsticks.

Understanding Underlying Interests It is tempting to react to a dispute by adopting a position and taking a stance in support of that position. For example, your homeowner’s association may decide it does not want development next door. Towards that end, it may circulate petitions and appear before the city council in protest. In one instance a group appeared before a city council with signs and tee-shirts saying “What don’t you understand about the word ‘No’?”

The problem with this approach is that one party wins and one party loses.

30 echo-ca.org

going onto the next point. According to Covey, this simple exercise can have dramatic results.

Roger Fisher and William Ury, the authors of “Getting to Yes,” emphasize that parties must understand each other’s interests rather than their positions. For example, the developer in our hypothetical who wishes to develop adjacent property will have a much better chance of going through the permitting process unopposed, if he listens to the homeowners long enough to learn what their real concerns are (e.g. traffic, noise and congestion) so that he can address those concerns through appropriate mitigation measures. Similarly, if the homeowners take the time to find out that the developer has certain rights concerning the use of his property, they will begin identifying the interests that they want addressed, rather than continue to take the position that all development should be opposed.

By listening to each other’s interests, the parties are in a better position to begin developing solutions that all of the parties can embrace.

problems is an important ingredient in crafting win-win solutions. “Thinking outside the box” is the ability to look beyond the commonly assumed boundaries in order to come up with a solution no one else has thought of. How does one do that?

One approach to thinking outside the box is to list as many solutions to the problem as possible, no matter how impractical. This “brainstorming” allows the process of evolving solutions to begin. For example, the homeowners’ noise, traffic and congestion concerns in our hypothetical dispute, could be greatly alleviated, if the developer agreed not to build on the two-thirds of his property closest to the homeowners.

While this idea seems unlikely to be acceptable to the developer, it is listed with a variety of others. Fast-forward several frames, and we may discover that as this discourse continues, it turns out that the developer, city and neighbors agree, that the developer will construct a golf course on the two-thirds of the property closest to the neighbors, in exchange for being allowed to cluster

a higher number of units on the remaining one-third of his property. By thinking outside the box, and considering even unlikely solutions during the brainstorming phase, parties may be able to craft creative mutually-acceptable solutions that can embrace.

Using Objective Yardsticks During the honing or refining of possible solutions, it is easy to personalize matters when people do not agree.

You may feel the other party is being too conservative, and she may feel you are not taking important interests into account. The danger is that you may become locked into positions at the very time when it is most important that solutions continue to evolve. One way in which to avoid this is to use objective yardsticks in evaluating possible solutions.

For example, the planning staff in our hypothetical land use dispute may take exception to a clustered project and may feel that your suggestions are threatening his professional role. While it may be easier to simply argue the matter, a better approach would be to show planning staff that clustering houses on one part of the acreage in order to allow a golf course on the balance, is a commonly accepted practice else-where.

By basing your suggestions on accepted planning concepts, you are inviting planning staff to accept or refute them on the same basis.

In our hypothetical, the city may have been willing to meet with the homeowners to discuss their concerns for awhile.

But at some point, if the homeowners had continued to maintain their position against all development, rather than beginning to discuss their interests, (e.g. noise, traffic and congestion), the city staff and city council would likely have abandoned them. But by allowing solutions to evolve through discourse, and by evaluating possible solutions based on objective criteria, the parties can continue to meet and make progress.

Summary The concepts of understanding underlying interests; thinking outside the box; and using objective yardsticks have been used in a variety of local government disputes we have handled on behalf of our clients. If intuitively obvious, they are also the product of extensive research and may be especially well suited for local government disputes because local elected officials recognize that to be re-elected they must be responsive to their constituents, and city staff recognizes that they are required to implement the decisions the elected officials make. Whether the dispute deals with land development, leases, fees, trail alignments, public nuisances or a host of other issues, the concepts outlined above can improve your chances of accomplishing a successful outcome.

Dave Larsen is a sole proprietor practicing as The Law Offices of David J. Larsen. His general practice emphasizes real estate, estate planning and municipal law. Dave can be reached at 925.331.8124.

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June 2015 | ECHO Journal

31

Challenging Directors: Some Practical Tips for 32 echo-ca.org

By Steven S. Weil, Esq.

the Sensible Majority June 2015 | ECHO Journal

33

W

hile directors who act badly are a tiny minority of those who volunteer to serve on an association’s board of directors, it’s also true every now and then a “bad apple” ends up on the board. They might be abusive to residents and contractors, might mistreat people based on their race, color or religion; they might disrupt meetings, speak out of turn, reveal executive session confidences or personal information about delinquent owners or purport to speak to vendors or residents on behalf of the Association without the authority to do so.

The rest of the board – the majority of directors – is not powerless to deal with these problems. Here are some options and considerations that will apply to some of the challenges wild directors pose:

The personal touch A private “chat” with a friendly director (or perhaps two but not more) behind closed doors can sometimes achieve positive results with a director who has acted badly.

Lay off the emails Emails are a blessing and a curse. In the context of directors who are abusive or not respective, emails can engender liability, worsen relationships, and foster misunderstandings and worse.

34 echo-ca.org

Director should be even more cautious using email than would otherwise be the case when one director is unpredictable or might use the emails in ways not intended nor beneficial for the community.

No indemnification Directors who act in good faith are typically going to be protected from claims provided they act in “good faith,” such protection coming from their right to be indemnified by the Association and/or its insurer. However, harassment based on someone’s race, religion or other protected classifications can easily be characterized as not “in good faith” creating significant personal exposure for the director who is the target of such claims.

Many directors assume they are fully protected and advising them they are not might help engender better behavior.

Strip the director of “officer” authority In most associations, directors also serve as officers: President, Vice-President, Secretary or Treasurer. Generally, the board strips someone of their officer position.

This is a way of punishing bad behavior and also limits that removed officer’s mantle of authority as an officer.

Declare the director’s position “vacant” Generally, only the members can remove a director from serving on the board. A vote to do so can be initiated by 5% of the members or a majority of the board and one or more officers (check the bylaws). But, if a director no longer meets the qualifications for serving, the board can declare their position vacant. Sometimes, those qualifications include being a member “in good standing” and that can mean not being in violation of the CC&Rs. If the CC&Rs ban “nuisance” behavior and the director’s harassment of residents rises to that level, a majority of the board might, in effect, be able to remove the director from the board. This procedure should not be undertaken without careful consideration and the advice of counsel.

Consider initiating a recall

Again, the decision to recall a director usually rests with the members but if a recall vote is initiated, directors can bring to the Association’s attention the concerns about the difficult director.

Of course, the targeted director can be expected to reply and the campaign could get ugly. Lots of rules are in play here including a ban on use of association funds for campaigning. Still, it is an option but not one to act on lightly.

Form a “Committee of the Board”: These are special committees – think of them as “sub-boards” – whose members must be directors but only those chosen by the majority of the board to serve.

A Committee of the Board (sometimes called an Executive Committee) can deal with almost any subject consistent with the Committee’s charter. Typically, this kind of Committee might handle big construction projects, important contract negotiations or governing document amendments. The “difficult” director can be excluded from this kind of Committee and, while he or she could attend Committee meetings, would have no “vote” on decisions made.

Notification to residents, owners and contractors The board can send a notice (or include a newsletter article) to residents, owners and contractors that confirm that only designated persons (typically the President and the manager) have the right to speak for and on behalf of the Association. This can minimize damage or risks arising out of crazy, mean or discriminatory statements improperly made by those directors speaking without proper authority. officer’s mantle of authority as an officer.

Immediately repudiate unauthorized statements If a board learns that the difficult director has harassed residents or made improper demands on management or contractors, those statements should be immediately repudiated (especially if they involve statements based on race, ethnicity, etc. or purport to bind the Association to unauthorized expenses).

Censure?

It is tempting to “censure” a director but “shaming” a person is not usually a good way of motivating behavior. Still, if a board chooses to censure, it is probably better to do so in executive session, giving the director a chance to address the concerns.

If the goal is to advise owners of the censure (which is not necessarily wise), a way to do so is to summarize the executive session censure vote in minutes of the next open meeting. This should be done very carefully to minimize defamation type claims.

Nuisance?

Most CC&Rs prohibit conduct, which unreasonably interferes with enjoyment of private property and common area.

The “nuisance” ban applies to directors as much as anyone else and improper harassment (especially based on the supposed director’s authority as a board member) can trigger fines or other penalties, depending on the governing documents.

Get an outside (attorney?) opinion: When the politics are bad, directors may not take kindly to “advice” from their fellow directors. In that case, getting a third party opinion – from the manager or, even better, counsel, may help minimize the embarrassment that might result from pointing out incorrect behavior or interpretations of the board’s rights or duties. Such an outside opinion, from

counsel or otherwise, must be respectful of the director’s views but firm on the concept of majority governance.

A board comprised of members with different points of view can strengthen a community. Disagreements over policy are not bad. What is bad are out of control directors who do not respect authority or who choose to actively undermine decisions made by a board majority or who treat residents or contractors badly. The suggestions above are not “cut and paste.” These cases are typically very delicate and involve questions of ego, intelligence, courtesy, confidentiality and other considerations.

Before the board majority “takes on” a difficult director, they should consider the larger goals of the membership and how best to achieve those goals in the least divisive way possible.

Steve Weil is one of the founding principals at Berding|Weil LLP in Walnut Creek. He has practiced community association law since 1984 and has dealt with virtually every kind of challenge facing directors, managers and community association members. He is a member of the ECHO board of directors.

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.

June 2015 | 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.

Construction Defect Claims Member Price: Non-Member Price:

$19.95 $25.00

New buildings can conceal extensive faults.

It’s a board’s worst nightmare—rainstorms damage buildings and bring owner complaints. Is legal action necessary? With this new book, you’ll learn about the resolution process for construction problems, and how to handle complex claims.

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

2015 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.

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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.

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June 2015 | ECHO Journal

37

directory updates

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

New Members Monthli 124 23rd Street San Francisco, CA 94421 Contact: Alex Burton Tel: (415) 637.3911

R.E. Roofing & Construction, Inc. 941 S. McGlincy Lane Campbell, CA 95008 Contact: Miles Proctor Tel: (408) 626.9320

Farmers Insurance | Ritchey Insurance Agency 3037 Hopyard Road Suite R Pleasanton, CA 94588 Contact: Deborah Ritchey Tel: (925) 474.3470

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..................23 www.acepm.net

Focus Business Bank...........................15 www.focusbusinessbank.com

WHAT IS ECHO?

ACT: Advanced Construction Technology............................................21 www.advconsttech.com

GET Insurance......................................23 www.hoacoverage.com

Serving Homeowners to Build Strong Community Associations

Mutual of Omaha Bank.......................16 www.mutualofomahabank.com

Associa Northern California M & C Association Management Services...........................2 www.mccommunities.com

PML Management Corporation..........16 www.pmlmanagement.com R.E. Broocker Co...................................13 www.rebroockerco.com

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.

Berding | Weil.........................Back Cover www.berding-weil.com

Steve Tingley Painting, Inc..................31 www.tingleypainting.com

Who Should Join ECHO?

Eugene Burger Management Co.........14 www.ebmc.com

Union Bank...........................................20 www.HOAbankers.com

American Management Services........13 www.acepm.net Applied Reserve Analysis....................22 www.AppliedReserveAnalysis.com

Neighborhood Association Management.........................................21 www.neighborhoodam.com

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

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

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.................$500 Association Management Membership.......................................$500 Individual Membership.......................$75 Journal Subscription............................$30

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.

August 2013 ||| ECHO ECHOJournal Journal February 2014 ECHO Journal June 2015

39 39

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

June 10, 11:45 a.m.

South Bay Resource Panel Flames Eatery 88 S. 4th Street, San Jose

Geri Kennedy 408-398-4227

Management Perspective on Vendors

June 17, 11:45 a.m.

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

Pam Marsh 415-686-9342

Marketable Properties

July 9, 11:45 a.m.

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

Denise Wolford 415-458-3537

Water Intrusion

July 10, 11:45 a.m.

East Bay Resource Panel Massimo Restaurant 1603 Locust St., Walnut Creek

Cindy Wall, PCAM 925-830-4580

Energy Efficiency

July 14, 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

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

Flames Eatery, San Jose

Wine Country

Third Wednesday, Monthly

Serv-Pro, Cotati

Legal

Quarterly

Varies

40 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.

November 2014 Sean Andersen, RS Jeffrey A. Barnett, Esq. Tom Fier Colletta Ellsworth-Wicker, PCAM Richard Tippett

Central Coast Panel John Allanson 831-685-0101 East Bay Panel 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 Diane Rossi, PCAM Nora Brink, CCAM Brian Seifert Jeffrey Barnett, Esq. Wine Country Carra Clampitt, CCAM Jeffrey Farnsworth, CCAM Christi Spina Barrett Schaefer, Esq. 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 John Garvic, Esq. Kerry Mazzoni

December 2014 Sandra M. Bonato, Esq. Tom Fier Sara McLean Paul Schultz January 2015 Tyler Coffin Sara Montecino Stephanie J. Hayes, Esq. Steven S. Weil, Esq. February 2015 Tyler Berding, Esq. David Levy, CPA Carra S. Clampitt, CCAM Shelly L. Coleman, Esq. Regan Brown Robert E. Aune, Esq. March 2015 Paul P. Terry, Jr., Esq. Patricia Wendleton David Swedelson, Esq. Robert M. Nordlund, PE, RS Bob Gourley April 2015 Julie Adamen Thomas Connelly Robert Rosenberg Rosalia Burgueño Tapia, Esq. Burt Dean May 2015 John Allanson Sharon Glenn Pratt, Esq. Tom Del Conte Helen Loorya, PCAM, CCAM, CMCA Hanh Pham, Esq.

June 2015 | ECHO Journal

41

legislation at a glimpse

Catch up on 2015 Legislative Session!

The bills below represent the ECHO Legislative Committee’s review of the 2500 bills introduced in Sacramento this year. The list – and the impact of each bill – will change as authors amend the language in their bills. We anticipate major changes in the months ahead.

For the most up-to-date information, visit the HOA Advocacy section at the ECHO website: www.echo-ca.org/hoa-advocacy

Current Legislation Bill Information

Summary

AB 349

Turf & Synthetic Grass

Oppose

Amended 4/30. This bill would further narrow the ability of an HOA to restrict low water-using landscaping. It would void any provision of the governing documents or HOA guidelines that prohibit the use of “artificial turf or any other synthetic surface that resembles grass. ECHO believes that the Legislature should evaluate the safety of artificial turf (see SB 47) before considering this bill.

Author: Gonzalez Status: In Assembly Housing & Community Development

AB 587

Mobilehomes: Nonpayment or Late Payments

Support

Amended 4/30. Current law prohibits the State from issuing a new title to a mobilehome buyer when of any outstanding charges or liens exist as a result of the previous owner’s failure to pay certain fees and penalties, including the vehicle license fee. This bill would waive those fees and allow for the title transfer.

Author: Chau Status: In Assembly Appropriations

AB 596

FHA Approval Disclosure

Oppose Unless Amended

Amended 5/5. This bill would require a common interest development to disclose its status as a Federal Housing Administration (FHA)-approved condominium project. This information is publicly available online, making this obligation is unnecessary. It also creates a potential liability for associations. ECHO favors an amended disclosure that would inform recipients that the information is available directly from the FHA.

Author: Daly Status: In Assembly Housing & Community Development

AB 1152

Limiting Construction Defect Lawsuits

Oppose

Now a two-year bill. This bill narrows the options for associations seeking recovery for construction defects. Recent case law allowed associations to recoup damages through sources and methods not outlined in Section 896 of the Civil Code. This bill would establish Section 896 as the sole remedy for construction defect claims.

Author: Frazier Status: In Assembly Judiciary

AB 1335

Fees on Recorded Documents

Oppose

Amended 4/30. In order to fund affordable housing, this bill would impose a $75 fee whenever a document is recorded in California. Associations record numerous documents, including governing documents and liens. ECHO believes that recorded documents are not the appropriate instrument to fund affordable housing.

Author: Atkins Status: In Assembly Appropriations

42 echo-ca.org

legislation at a glimpse

Current Legislation (continued) Bill Information

Summary

AB 1448

Clotheslines as Solar Energy Systems

Neutral

Amended 5/6. This bill originally identified clotheslines as a “solar energy system” and prohibited associations from restricting or prohibiting the installation and use of clotheslines. The author worked with ECHO to address safety and oversight concerns, and amended the bill to allow associations to place reasonable restrictions on the use of clotheslines and drying racks.

Author: Lopez Status: In Assembly Housing & Community Development

SB 47

Synthetic Turf Study

Support

This bill would require and fund a study to analyze the environmental and health impacts of synthetic turf. ECHO believes that the Legislature should establish the safety of these artificial turf products before requiring HOAs to permit them (see AB 349).

Author: Hill Status: In Assembly Appropriations Suspense File

SB 244

Mobilehomes: Injunctions

Support

This bill would extend, indefinitely, the right of a mobilehome park to petition the court to enjoin a continuing or recurring violation of a reasonable rule or regulation of the park.

Author: Vidak Status: Consent Calendar.

In Assembly.

SB 290

Substituted Service of Process

Support Status: In Senate Judiciary

Now a two-year bill. In a foreclosure proceeding, associations are required to provide certain notices by personal service. When an owner is unavailable, this bill would allow the association to serve the owner by “substituted service,” a less restrictive process.

SB 328

Notice of Pesticide Use by Landlords

Oppose Unless Amended Status: In Senate Judiciary

Amended 5/4. This bill would require that a landlord or the landlord’s authorized agent provide a current tenant with notice about the use of pesticides at the dwelling unit. ECHO supports an amendment clarifying that an association, its officers, directors, agents or representatives would not be considered an “authorized agent” of a landlord.

SB 419

Sale Signs in Mobilehomes

Watch

Amended 4/27. This bill would permit the use of yard-arm style “for sale” signs in mobilehome parks, some of which are common interest developments.

Author: Vidak

Author: Hueso

Author: McGuire Status: In Senate Judiciary

SB 477

Mobilehomes: Property Tax Postponement

Support Status: In Senate Appropriations

Amended 4/29. This bill would allow qualified individuals and owners of mobile or floating homes, some of which are common interest developments, to seek postponement of ad valorem taxes.

This option is already available to owners of real property.

SB 655

Mold & Substandard Housing

Watch

This bill specifies that visible or otherwise demonstrable mold growth, excepting mold caused by inadequate housekeeping practices or ventilation, is a “substandard condition” and could cause a building in which such a condition is found to be deemed substandard.

Author: Leyva

Author: Mitchell Status: On Senate Floor

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

June 2015 | ECHO Journal

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