HOAleader.com - Tip of the Week - December 16, 2011
Published: Thu, 12/15/11
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Hiring HOA Vendors: Is a Delinquent Owner's Employer Off Limits?
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This week's tip will help you determine whether you should
raise red flags about hiring a company at which a delinquent
owner works.
An HOAleader.com reader asks: "One of our residents moved
out of his house, but it's still in his name, and he owes
$2,000 in back dues plus attorneys' fees. This person
submitted a bid to do the snow removal. Some board members
decided that since he is only the vice president of the
snow removal company, they hired the company to perform our
snow removal. Three people voted against the hiring, and
four people voted to hire the company. I say this is 100
percent wrong, but I need something to support my feelings
about this hiring."
Our experts have a mixed response to our reader's situation.
This situation doesn't raise as many red flags as other
potential conflicts do for Nancy Polomis, a partner at
Hellmuth & Johnson PLLC in Edina, Minn., who advises
associations.
"The snow removal company and the vice president are two
different legal entities," explains Polomis. "If this is
the best snow removal vendor, simply because the vice
president personally owes the HOA money shouldn't be a
necessary reason to reject that vendor, and it may provide
an opportunity to get those assessments paid. If board
members met with a salesperson for that snow-removal
company, they might never know the home owner works for
that company. This guy's at least being on the up and up by
disclosing it.
"In addition, if the company doesn't get that work, is it
less likely the home owner will pay those back dues because
he won't have income?" asks Polomis. "You may want to
strike a deal, saying, 'Bob, we're willing to work with
your company. But we have to get assurances that we're
going to get unpaid assessments paid.' The owner may or
may not have authority to strike such a deal if it benefits
him personally. But now you know where he works.
"The analysis would be the same if the home owner were also
the company owner, and there might be a better chance of
getting him to say, 'I'll give you a better deal,'" Polomis
notes. "As the company's owner, he has the authority to do
that. He can say, 'We'll do the first month for $200, and
you can credit my account X dollars.' When it's a company,
it depends on how much authority the home owner has to take
money out of the company's pocket for his personal benefit."
Our other experts recognize that the owner is only the snow
removal company's vice president, not its owner. But the
hiring still makes them uncomfortable. Find out why in our
new article: http://www.hoaleader.com/members/659.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOAs: HUD's Keeping an Eye on You
In this week's tip, we give you fair warning that the U.S.
Department of Housing and Urban Development is actively
pursuing HOAs for fair housing violations.
Click here to read full article:
< http://www.hoaleader.com/public/658.cfm >
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Is HUD Stepping Up Fair Housing Enforcement Against HOAs?
On Oct. 18, 2011, the U.S. Department of Housing and Urban
Development (HUD) announced it was charging a Philadelphia
condominium association with violating the Fair Housing Act for
refusing to revise its "no pets" policy as a reasonable
accommodation for condominium residents with disabilities who
required assistance animals.
Click here to read full article:
< http://www.hoaleader.com/members/657.cfm >
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What Happens When a HOA Owner Dies?
On a very sad note, home owner associations sometimes have to
deal with the aftermath of the death of an owner. If an owner
dies, leaving his unit empty until its fate is resolved through
the legal process, what happens if the former owner's successors
or executor fail to pay HOA dues? How can you handle that problem
with respect? Here are some answers.
Click here to read full article:
< http://www.hoaleader.com/members/656.cfm >
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What Type of Meeting Is Your HOA Having--and Why Does It Matter?
Sounds crazy, but you need to be precise about the type of HOA
meeting you call. For example, the Arizona legislature has
defined three types of meetings: member meetings, board meetings,
and committee meetings.
Click here to read full article:
< http://www.hoaleader.com/members/655.cfm >
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Do You Need to Adopt a HOA Board Ethics Policy?
Some homeowner associations are passing ethics policies that
boards must follow. Do they make a difference in board behavior?
Click here to read full article:
< http://www.hoaleader.com/members/654.cfm >
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