Monthly Archives: May 2015

6 Remodeling Projects That Can Add to Your Resale Value

By Patti Stern, PJ & Company Staging and Interior Decorating Home remodeling has become more popular than ever to attract buyers, thanks to an improving economy, strong job growth, higher disposable income, more home sales, low interest rates, and a more competitive housing market. Home owners looking to sell their home this year may want […]

Runoff Election

QUESTION: In the event of a runoff between a sitting director and a non-director, is the latter required to attend the board meeting at which ballots of the runoff election are counted? If the outside director wins the election when does his term start?

ANSWER: Unless your bylaws require that a candidate be present when the results are announced (which I’ve never seen), he does not need to be present. If he wins, his term starts immediately unless your bylaws state otherwise.

ELECTIONS IN
SMALL ASSOCIATIONS

QUESTION: We are a small 6-unit condominium project. Each owner is a board member. Can we waive the secret ballot requirements for assessments and modifications to the governing documents?

ANSWER: The Davis-Stirling election requirements are particularly burdensome on small associations. There have been discussions in Sacramento about exempting small HOAs but, to date, that has not happened.

Informal Elections. Some small associations have taken matters in their own hands and unilaterally dispensed with the voting requirements. They get together each year in the living room of one of their units and, by consensus, declare all the owners elected to their respective seats. They do the same thing for assessments and amendments, i.e., decide such matters via voice votes. If someone wants secret ballots, they circulate slips of paper, write down their votes, fold the slips and pass them to the Secretary (or a spouse) to tally the results.

RECOMMENDATION: I can’t recommend the practice since it violates the Act. I’m simply reporting how some associations handle the problem.

EXECUTIVE MINUTES

QUESTION: Can a member appointed by the board act as recording secretary in executive session meetings?

ANSWER: There is nothing that would legally prohibit it. But as a practical matter, it would be more prudent to hire someone who does not live in the development. They would be less likely to gossip about what happens in executive session.

FEEDBACK

Escrow Documents #1. Our association posts its governing documents on its website. This is available publicly to Realtors or anyone else who wishes to view or download a copy. If requested, printed copies are provided by the manager for a fee based on costs. Since the documents are posted, Realtors seem satisfied with downloading. -Gordon C.

Escrow Documents #2. Escrow document charges are a scam! Our property manager created a very simple website. All governing documents (CC&Rs, amendments, condo plan, articles of incorporation, bylaws, rules and operating policies) are accessible online. When a property is listed, we give access to the listing agent and leave the responsibility of downloading and transmitting the documents to the agent and new buyer. There is absolutely no reason in this day and age for there to be a charge for this. If the lender wants another document filled out about occupancy, litigation and other stuff, our manager does this for $125. -Mike G

Escrow Documents #3. My management company averages 260 disclosure document requests a month asking for almost 1,200 documents. It takes time and money to process those requests. Using a third party allows us to reduce the cost about 25% from what it would otherwise cost to replace documents homeowners have misplaced. The average sales commission on a $750,000 home is $45,000 but realtors complain because the management company charges a few hundred dollars for the effort it takes to accommodate their request because they don’t “trust” the seller. If I were a homeowner and my realtor asked me to pay for something I already had and could provide for free, I would suggest they take it out of their commission. -Roy H.

Escrow #4. I noticed the feedback for escrow documents and wanted to chime in with my experience. Not only was I charged for email pdf copies (around $150-175) I was informed a printed physical copy was another $100!!! They didn’t even have copies of the prior full year of board meeting minutes! I contacted the property manager who kept insisting the 3rd party company had it all so I went back and had to complain twice to the 3rd party company because the property manager kept throwing it back at them. With this 3rd party BS everyone points the fingers at everyone else. That disconnection is a huge liability and disappointment considering what these “professional property management” companies charge. -Margot B.

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Trustees #1. I agree 100% with your response on trustees. The real problem is when, for example, the home is in the name of a spouse or a trust for the spouse and the other spouse wants to run for the board. He is clearly not an owner and most covenants only allow for an owner to run for the board. Our association amended its bylaws to alleviate this problem, however, no one thinks about this issue until it happens. -Paul M.

Trustees #2. In my trust where I am currently listed as sole trustee, I have my partner listed as successor trustee. In addition, I have a provision in the trust that states he is part owner (I list the percentage) of the condo unit that is recorded in the name of the trust. The HOA’s attorney stated that only I can act for the trust per the public documents. He said the association does not recognize ownership interests that are not part of the public record. Is that legal?

RESPONSE: The HOA has a smart attorney. I agree with him.

Trustee #3. It’s ironic that some people who are very vocal lack the legal knowledge in the specific area they are griping about. I always respond by asking them where they obtained their law degree. -John A.

Trustees #4. “Trustees are owners and have the right to vote and serve on the board.” How about a trustee who has a parent living in the unit but had an attorney write a letter stating the trustee authorizes the parent to vote for the trustee? Since the parent is not the owner of record, is this legal? -Phyllis J.

RESPONSE: Since the parent is not an owner, any attempt at proxy voting by the parent is void. By statute, a member can give their proxy only to another member. (Civ. Code §5130(a)(1).)


Adrian Adams, Esq.
Adams Kessler PLC

“Much More Than Just a Law Firm!” We’re friendly lawyers–boards and managers can contact us at (800) 464-2817 or info@adamskessler.com.

REALTORS® Expect Prices to Increase at a Slightly Faster Pace in Next 12 Months

REALTORS® who responded to the April 2015 survey expected prices to increase at a slightly faster pace in the next 12 months compared to the expectation a month ago, according to the April 2015 REALTORS® Confidence Index Survey. The median expected price growth in the next 12 months is 3.9 percent (3.5 percent in March […]

Latest GDP Growth (First Quarter 2015)

An abysmal first quarter as GDP shrank 0.7 percent.  Because a large portion of the decline was attributed to a one-off adjustment, GDP should move to positive growth from the second quarter.  The job gains will continue and reach over 2 million this year and thereby support real estate activity.  Still, the negative first quarter […]

Number of People Claiming Unemployment Insurance Falls to Its Lowest Since 2000

The number of people claiming unemployment insurance has fallen to its lowest level since 2000.  Over the past 4 weeks that ended May 23, 2015, the average number of unemployment claims totaled 271,500, the lowest level since April 2000 (Chart 1). The number of claims filed has trended below 300,000 for the past 12 weeks, […]

Spring Brings Renewal to Housing Finance

In the 6th Survey of Mortgage Originators, several important trends are highlighted that took shape in the 1st quarter of 2015 and bode well for the second half of 2015.  In addition, a number of policy issues loom on the horizon and were examined in the survey.  Lenders discussed their expectations for implementation of new […]

In What States Did Properties Sell Quickly in Feb-April 2015?

In the monthly REALTORS® Confidence Index Survey, NAR asks REALTORS® “For the last house that you closed in the past month, how long was it on the market from listing time to the time the seller accepted the buyer’s offer?”. The map below shows the median days on market of respondents about their sales from […]

Latest New Home Sales (April 2015)

New home sales surged in April and they are selling quickly.  The only problem is we are not yet building enough to fully satisfy the demand. Specifically, new home sales rose 26 percent from one year ago in April to 517,000 annualized pace – which would be the third highest monthly activity in eight years.  […]

How Does Your Garden Grow…When You Are In A Rental?

As summer creeps steadily toward us, grocery store shelves begin to fill with delicious, locally grown produce and fresh flowers. While it is generally understood that growing your own food is healthy and saves money, it is harder to do when you are in a rental and don’t have access to a traditional garden spot. […]

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