HOAleader.com - Tip of the Week - September 27, 2013
Published: Fri, 09/27/13
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Can You Let an HOA Owner's Debt Slide?
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In this week's tip, we discuss whether it's ever OK for
you to tell delinquent owners not to worry about paying
off their debt to your HOA.
Florida prohibits the practice. "When we say 'debt,'
what are we talking about?" asks Jed L. Frankel, a
partner at Eisinger, Brown, Lewis, Frankel & Chaiet
PAin Hollywood, Fla., who advises community associations.
"Assessments? Everybody has to pay them. One requirement
we have in Florida is that everybody has to pay their
share, whether it's based on percentages or some other
method. If you have a two-bedroom condo, you pay a little
more than the person with the one-bedroom or studio.
That's one of the golden rules we operate under."
However, North Carolina is like many other states.
Generally, there's nothing under the state's laws
prohibiting a board from forgiving owners' unpaid debts
to the association. But it's exceptionally rare.
"I have seen it," says Hunter, an attorney and partner
at HorackTalley in Charlotte, N.C., who represents
associations. "It's usually in self-managed associations
that don't get good guidance from a manager or attorney.
If they would have asked, they'd probably have been told
it's not a good idea."
The most important impediment is that an HOA board has
a fiduciary duty to the association's members to collect
assessments and use the funds to maintain the common
elements, says Hunter. If the board declines to collect
from some owners, the responsibility then falls
disproportionately on the other owners.
Fair enough. But let's take a hypothetical situation and
see if there's any wiggle room. Let's say you have a long-
time owner, somebody who's been involved in running and
volunteering on behalf of the association (but who's not a
board member, so there's no allegation the board's favoring
its own members) who loses a job or has a sudden illness,
throwing his finances into disarray for a while. Now the
owner's back on his feet but still owes, say, 12 months of
assessments. Is that enough of a hard-luck, couldn't-happen-
to-a-nicer person story to trigger our experts' sympathy?
Find out the answer in our new article:
http://www.hoaleader.com/members/899.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Stop This Audit? Know Who Can Order an HOA Audit
An HOAleader.com reader asks, "I'm on the board of 65-unit building that has
transitioned from sponsor-controlled board to majority-owners board.
It's important to note that the sponsor was also the property management
company (the management company was horrible; hardly performed the
necessary maintenance). We selected a new management company July 1, 2013,
and are extremely excited about the change. The previous management
company is having the financials audited as our fiscal year ended in June.
Sounds good, right? The current board (specifically, the treasurer and
subcommittee members--all CPAs) were to be a part of the selection process,
review proposals, engagement letters, etc. We then found out the
management company chose an auditor without our knowledge and the audit is
currently going on." Here we discuss who can and should authorize an audit
and when.
Click here to read full article:
http://www.hoaleader.com/members/Who-Can-Order-an-HOA-Audit.cfm
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California Court Reinforces Law Requiring HOAs to Give Dissidents Equal
Time
In this week's tip, we discuss a recent California appellate court ruling
that offers lessons for HOAs throughout the country.
Click here to read full article:
http://www.hoaleader.com/public/California-Court-Reinforces-Law-Requiring-HOAs-to-Give-Dissidents-Equal-Time.cfm
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California Court Interprets Broadly Law Requiring Equal Access to HOA
Board Opponents
In June, a California court held in Wittenberg v. Beachwalk Homeowners
Association that an HOA election can be invalidated if a board fails to
follow the state law requiring that it give its opponents equal access to
media, like websites and e-newsletters, and common areas. Here we explain
the California case and discuss what associations in other states should
take away from it.
Click here to read full article:
http://www.hoaleader.com/members/California-Court-Interprets-Broadly-Law-Requiring-Equal-Access-to-HOA-Board-Opponents.cfm
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When HOA Owners Speak Up, Respond Wisely
In this week's tip, we offer tips on when and how to respond to owners'
communications. Generally, boards aren't compelled to respond to owners'
every communication. "The board may not wish to require itself to respond to
every issue a home owner raises, and I don't think legally they are,"
Click here to read full article:
http://www.hoaleader.com/public/When-HOA-Owners-Speak-Up-Respond-Wisely.cfm
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Is Successful FHA Certification a Fiduciary Duty? Discussion Forum
Follow-up
An HOAleader.com reader asks a question with an interesting twist on FHA
certification for condos. After making it harder and harder for condo
associations to get FHA certification, the FHA recently tightened its
rules again. Our reader's question, however, isn't about the details of the
new FHA cert rules: "Our condo FHA project approval expired after 27 years.
The condo was established in 1984 and has no new construction.
Click here to read full article:
http://www.hoaleader.com/members/Is-Successful-FHA-Certification-a-Fiduciary-Duty-Discussion-Forum-Followup.cfm
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