HOAleader.com - Tips of the Week - July 31, 2020
Published: Fri, 07/31/20
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COVID-19: Some Condos/HOAs Are Having Elections; Here's How
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We're checking in with our experts to find out how their clients are approaching that difficult question of annual meetings—really elections—as states shift their stay-at-home orders, starting with a Midwest state.
Missouri: Missouri was not quite open for business post-COVID-19 when we spoke with Todd J. Billy, an attorney at The Community Association Lawyers in St. Louis, who is licensed in Missouri and Illinois and has more than 1,000 active condo and HOA clients. That meant boards were still working through challenges related to annual meetings.
"In Missouri, we have the benefit of a statute that allows nonprofits the flexibility to proceed with the primary purpose of the meetings, which is the election, without having the meeting," explains Billy. "Some associations have postponed their annual meeting. When associations have gone forward with an election, they've done it by mail."
They're doing elections by mail through the benefit of another statute, which allows electronically signed documents to be valid. "Every state except Illinois have some version of an esignature statute, typically a version of the Uniform Electronic Transactions Act," he says. "Others are stuck with the federal esignature act. But all require that if you're doing something involving esignatures, you can't make the use of esignatures compulsory."
Billy has seen some associations using those esignature laws to do online voting, but mainly his clients have been using paper ballots. "I'm not aware of anyone going fully online with their election," he notes. "Some have gotten darned close to what that would look like, but primarily it's been paper ballots."
There's another twist to having an annual meeting to conduct an election. "We're seeing right now even fewer owners wanting to volunteer to serve on the board," Billy reports. "In most instances now, there's not a huge number of owners looking to get elected. In the vast majority of elections I've touched, the ballot listed only the current board member plus a space for a write-in candidate."
Billy's takeaway: "If the country was able to hold an election during wars, we can do it during a pandemic," he says. "As of now, it's been unsafe to do elections in person, so we've had to find those alternatives. And when we do that, we just need to be clear what the rules are."
Read updates from experts in many other states are reporting when it comes to annual meetings in our new article:
https://www.hoaleader.com/members/4163.cfm
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Condo/HOA Boards Listen Up: What Not to Do To Make the 6 O'Clock News
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We're pleased to bring you the latest installment of: This is why some people love to hate their condo board.
A Canadian condo was in the news for a $30 per day occupancy fee for visitors imposed on a family whose adult daughter returned home to shelter in place during the pandemic.
But first we start with an interesting twist on this case. Since we first read the CBC report in late May, there's been an update. According to the article, a second letter (after the first, which was apparently a notice of violation) was sent to the family "deferring the fee" to June. The update adds: "…meaning nobody was charged this spring. While the charged [sic] was passed by the condo board, it has never been levied," according to the condo's management company.
Interesting and utterly predictable development.
But let's back up and provide the necessary context. A couple in a Mississauga condo have an adult daughter who lives in densely populated Queens, N.Y., according to CBC. When the pandemic hit, the daughter traveled to Canada to live with her parents.
The condo, however, passed a $30 per day "occupancy fee" for any guest staying longer than two weeks due to an "increase of water consumption" because of a "substantial increase of long term visitors." It's not clear whether the rule and fee were passed before or after the daughter's arrival. But the condo association sent the parents a letter demanding about $1,000 for the occupancy fee and $536.75 in legal fees, reported CBC.
Cue the parents' utterly predictable outrage.
Also cue their utterly predictable turn to the media to vent their outrage.
"My mentor had a 'six o'clock rule,'" warns Todd J. Billy, an attorney at The Community Association Lawyers in St. Louis, who is licensed in Missouri and Illinois and has more than 1,000 active condo and HOA clients. "If you think a move you're about to take might get on the six o'clock news, then don't do it."
The validity of such an "occupancy fee" is debatable in many areas, according to our experts.
"In California, this move by this condo association wouldn't be legal," reports Alex Noland, CCAL, founder of Noland Law in San Francisco, which represents about 100 community associations throughout California. "Rules have to be reasonable and not arbitrary. When you charge a fee, it has to approximate the costs you incur.
"In this case, what's the extra cost the association is incurring—water?" he asks. "How did this board get to $30 a day—that's $900 a month in supposedly extra water usage. And if you're going to charge a fee based on water consumption, should that be in the recorded covenants to explain it? I think that's challengeable as unenforceable, at least in California.
"Also, what if the daughter had been away at college and had just returned?" adds Noland. "Would the fee be assessed then? This seems too arbitrary to me. To me, this is either a shakedown for extra money or an effort make it too expensive for owners to have guests. Either reason is inappropriate."
COVID-19 adds a unique twist to this case. Find out why, and how this rule would be so easy for owners to beat in an enforcement hearing, in our new article:
https://www.hoaleader.com/members/4165.cfm
Best regards,
Matt Humphrey
President
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