JAN2015

HOMEOWNER ASSOCIATION NEWSLETTER

Every yearbrings new lawsto CommonI n t e r e s tD eve l o p m e n t s ,and 2015 willwelcome in a fewlaws thatfortunately willnot have a dramatic impact.After 2014, in which we allsurvived the transition to thenewly revised Davis-Stirling Act,a quiet year is a welcome relief.

The laws which will takeeffect that will have thegreatest level of interest withHOA boards and owners involvedrought and water issues, solar,and IDR (Internal DisputeResolution).

Several new laws this yearpertain to the drought andwater restrictions, sinceCalifornia is considered to be ina state of emergency. Effective,January 1, 2015, Associationsare prohibited from imposing afine against an owner forreducing or eliminatingwatering of their vegetation orlawns. While lawn andvegetative growth may turnbrown, the landscaped areasstill need to be properly caredfor. Further, associationscannot prohibit the use ofdrought tolerant plants inowner’s private gardens andpatios. Finally, associations,cannot require an owner to keepa lawn if they wish to change tolow water landscaping.

2015 LEGISLATIVE UPDATEBY DAVE BROCK, PCAM

2015 Legislative Update: continuedon page 4.

HOA BOARD QUICK TUTORIALFollowing is a quick summary of

the important aspects of serving asBoard member of your HOA.

OPERATING AS A BOARDMEMBER1) Learn to think like a Boardmember: as a Board member youare a fiduciary, which requiresthinking and deciding issues onbehalf of what is best for the entireassociation. This may conflict withyour personal preferences at times,but operating this way is required.2) Volunteers - As a volunteer,you should only do what isrequired, and not act like you arethe “onsite manager” which entailsdaily involvement potentially. 3) Team work: as a Boardmember, you don’t carry theburden alone. Decisions should bemade in the context of the team(i.e. Board) and never less thanthat. Insist on a full and activeboard. 4) Board roles: every boardmember should have a specific jobto do, and be accountable to therest of the board. The role ofSecretary and Treasurer are clearas to their roles, however the otherpositions can fill a variety ofimportant tasks: maintenanceliaison, community relations,management liaison, 5) Decisions - make them ONLY atmeetings, not by email or casualconversation. Decide as much by“policy” as possible, so that youonly have to make the decisiononce, and your manager can carryout the policy.

MEETINGS1) Have them on a regular basis,same date, time and place andhave 4-10 a year, subject to yourby-laws. Meetings should not lastmore than 60-90 minutes. Thiswill encourage attendance.2) Preparation: every boardshould have material in advance ofthe meeting and review it, so thatthe meetings can be about briefdiscussion and a decision. Cometo meetings with an objectivemind, ready to consider all sidesof an issue prior to voting.3) Agenda and minutes: thisdoesn’t have to be complicated.The Secretary is responsible forpreparation and the Beven & Brockweb-site has templates for both.Minutes are to be brief, not anarrative. The Agenda must beposted in the common area fourdays prior to the meeting. Minutesto be available to owners 30 daysafter the meeting.4) Communicate the action listfrom the meeting to the manageras soon as possible after themeeting if the manager does notattend. 5) Open Forum - a portion ofevery open meeting where ownerscan address the Board for aspecified period (i.e. 3-5 minutes).It is required, and the Boarddoesn’t have to respond to theowner.6) Executive Session - a meetingwhere the board can meetprivately, however should not beover used, it is only for specified

HOA BOARD QUICK TUTORIAL:continued on page 2.

BEVEN & BROCK

purposes: contract negotiation,member disciplinary hearing, andlitigation. Do as much in the openas possible. FINANCIAL1) Review monthly financialspromptly. Most important items:owner delinquencies, and budgetcomparison report. Treasurershould lead the way in this, and theBeven & Brock web-site has atutorial.2) Be consistent with collections -treat every owner the same, even ifthey are on the Board.3) Reserves: engage aprofessional to obtain/update thestudy annually and complete therequired annual disclosures. 4) Follow the recommendationsof the reserve study, but if youchoose not to, at a minimum fundthe reserves at 10% of the budget.This is required by lenders.MAINTENANCE1) All vendors should have licenseand insurance (liability and workerscomp, if they have employees). AW-9 form is also required.2) Develop trusted vendorrelationships so that obtaining bidsfor routine jobs are not alwaysnecessary.3) Avoid using vendors whereBoard members have a conflict ofinterest. 4) For major work such as roofing,water intrusion or painting, utilizea consultant to avoid liability.5) For other work, the Board or aobjective and knowledgeableconsultant should prepare a job

scope, or specifications, such thatthe manager can obtaincomparable bids. 6) For emergencies, manager hasthe ability to approve workregardless of cost. Board mayspecify a liaison to discuss withmanager.7) Small jobs (routine) under$500.00, should be able to beapproved by manager withoutentire Board involvement. MANAGEMENT1) Your manager is highlyqualified, certified, and has manyyears of experience. Allow themto handle issues for the Board,without Board oversight betweenmeetings except as manager mayrequire to clarify an issue with asingle board member betweenmeetings. 2) The manager will provide amanagement report a few daysprior to the Board meetingupdating the board on all pendingissues, and informing the Board ofnew issues that have come upbetween meetings. The managershould not be expected to updateBoard members betweenmeetings, except for emergencysituations as determined by themanager. 3) The Board should advise themanager immediately after eachmeeting as to the action items thatrequire attention betweenmeetings. COMMUNITY 1) Find ways to engage theowners, such as a summer BBQ,community yard sales, or Holidayevents. This increases community

and helps to fight apathy which is abig problem in many associations.2) Welcome new owners andmake personal contact with them.3) Be reasonable and sensitive toowners in developing andenforcing rules. 4) Violations and rulesenforcement: allow the managerto guide you. Different issuesrequire different approaches forresolution. INSURANCE1) Invite your insurance agent to aBoard meeting once a year toreview the policy and confirm thatyou have appropriate coverages inplace. 2) It is advisable to carry Worker’sComp coverage, even though youdon’t have employees, since thedetermination of employees is verybroad and your understanding ofan employee may differ from thelegal definition.

Thank you for serving yourcommunity. Beven and Brock ishere as a resource for you and yourBoard.

HOA BOARD QUICK TUTORIAL:continued from page 1.

HOLD THE DATE!

Upcoming Seminar!

April 23, 2015 - 6:30 PM“BEING A REMARKABLE

LEADER”Reservations:

(626) 795-3282, ext. 886HOASeminars@bevenandbrock.com

JAN 2015

Certification of CID Managershas been a law now for over almost12 years. The intended purpose ofthe law is “DISCLSOURE”.Boards should know if themanagement company they arehiring (or has hired) has certifiedmanagers on their staff.Surprisingly, there is norequirement that CID managers becertified however the law requiresthat managers or managementcompanies disclose that they arecertified (or not) prior to entering acontract and annually thereafter.

Given the fact that for mostpeople, their home represents theirmost important financial asset, itwould make sense to not allowyour investment to be managed bya manager who is not certified.This is why the Californialegislature made this disclosure lawa reality in 2003.

Boards should find out if theproperty supervisors (ormanagers) are certified, andadditionally if the company isinsured. Boards should look forprofessional designations whenhiring a manager. Working with aCertified manager affords the bestprotection for associations asknowledgeable and certifiedmanagers help steer theirassociations through the maze ofregulatory compliance therebyreducing potential liability andmaking it easier for volunteerdirectors to meet their fiduciaryduties.

What does Certificationinvolve? To become a certifiedmanager the process takes abouttwo years or longer depending on

the designation, to complete therequired courses and receive theexperience necessary to becomeapproved. There are continuingeducational requirements as well,and re-certification must becompleted every three years.Certification indicates that amanager has achieved certainlevels of training in themanagement of common interestdevelopments.

On a practical level, a managerwho makes the investment of timeand money to become certified isclearly committed to this industryand has plans to stay in thisindustry for an extended period oftime. This isn’t a career that theyare trying out to see if it works.Managers who are in this industryfor the long term are the kind ofmanagers that you want to haveworking for you, and not someonewho has applied for a positionbecause of an economic downturnin another field.

Certified managers will workharder for their Association clientsas they value their reputation andthey don’t intend on changingcareers. A requirement ofCertification is membership in aindustry related trade organization,of which there are two: theCalifornia Association ofCommunity Managers (CACM) andthe Community AssociationsInstitute (CAI). CACM is aCalifornia specific organization andCAI is a national level organizationwith many chapters around thecountry. Both organizations have“codes of ethics” and “standardsof practice”.

By way of disclosure all but oneof the Beven & Brock AssociationManagers, and Principals of thefirm are Certified common interestdevelopment managers. Each ofthe following have met therequirements of the Business andProfessions code, section 11502.

The following managers arecertifications are current and arecertified by CACM, which islocated at 23461 So. Pointe Dr., Ste200, Laguna Hills, CA 92653.The phone number is (949) 916-2226.

All of the names listed belowhave been actively managingassociations prior to the datesindicated, but have been certifiedwith CACM from these dates untilnow. • C. Finley Beven, since 1994,

status is Emeritus • Vianna Boettcher, since 2006• Paul Cannings, since 2003• Roman Esparza, since 2009• Juanita Flores, since 2004• Laura Garbo, since 2003• Lori Lacher, since 2003• Sue Threadgill, since 2003.

The following managers arecertified with the CommunityAssociations Institute, located at6402 Arlington Blvd., Suite 500,Falls Church, VA 22042; Phone:(703) 970-9220 , and they arecurrent:• David Brock, PCAM

designation, since 1990.• Marilyn Howald, CMCA

designation through the

MANAGER CERTIFICATION: THE ANNUAL DISCLOSUREBY DAVE BROCK, PCAM

MANAGER CERTIFICATION: TheAnnual Disclosure: continued on

page 4.

BEVEN & BROCK

This Newsletter is circulated for general informational purposes as a public service and promotion by the Beven & Brock PropertyManagement Company. The contents are the opinions of the firm, or the authors, and not intended to constitute legal advice,and should not be relied upon for that purpose. If you have a legal issue related to a subject of this newsletter, you should consultthe California Civil Code and your attorney. The paid advertising in this newsletter is provided as a courtesy to our readers anddoes not constitute any endorsement by Beven & Brock. The advertisers provide their services to HOA’s and some may haveprovided services to Beven & Brock’s HOA clients in the past.

Advertise HereIf Your Company can provide excellent customer service and specializes in HOAscontact Roman Esparza at (626) 243-4158

roman@bevenandbrock.com

An association’s ability torestrict the installation of solarsystems has been limited. First,there cannot be a rule or languagein the governing documents thatprohibits or restricts theinstallation or use of a solar energysystem. Associations can onlyplace reasonable restrictions onsolar energy systems and thoserestrictions cannot significantlyincrease the cost of the system orsignificantly decrease its efficiency.The timeframe for an association toapprove the system has beenshortened to 45 days, from 60days. If it is not approved within45 days by the Board, it is deemedautomatically approved.Associations are advised to retainthe services of a solar consultant todeal with these types of requests.

Finally, the law has beenchanged regarding “InternalDispute Resolution” or IDR whichwill have a major impact on how

IDR is handled. IDR was a greatconcept, although not practicedoften, where one board member isdesignated to meet with an ownerprivately in an effort to workthrough an issue informally. Thisapproach was viewed as a way ofeconomically and efficientlyresolving issues by having aconversation. In theory itseemed like a great concept. Nowthe law has been changed suchthat either the association or theowner can have their attorneypresent at the IDR meeting. Inlight of this change, associationsare now being encouraged torevise their IDR rules to require thateither party must notify the otherin advance (i.e. 10 days) if they arebringing their attorney to themeeting.

If you have interest in knowingmore information about theselaws, or tracking future laws inprocess, you may go to these web-sites: “leginfo.legislature.ca.gov”,or www.CAIcalif.org.

2015 Legislative Update: continuedfrom page 1.

MANAGER CERTIFICATION: TheAnnual Disclosure: continued frompage 3.

National Board of Certification,since 1996.

• Erik Mendez, PCAM designation, since 2012.

Beven & Brock currently hasone manager who is not certified.Tricia Ford joined Beven & Brock inmid-2014 and has been managingassociations since 2003. Triciaearned the CMCA credential inSeptember of 2004, however itlapsed. Since managercertification is an internalrequirement of Beven & Brock, sheis in the process of re-obtainingcertification status.

The location of the manager'sprimary office is 99 S. Lake, Suite100, Pasadena, CA. 91101.

If your Association is managedby another firm and you have notreceived the annual disclosure,you may want to ask for it.