HOAleader.com - Tip of the Week - November 22, 2013
Published: Fri, 11/22/13
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Don't Get Soaked by a Risky HOA Water-Use Policy
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In this week's tip, we discuss whether a board should divvy up
costs for water use based on the number of residents in units and
can demand on-the-spot inspections to be sure owners with washers
are paying the association's required washer tariff.
On the general question of how to get owners to pay a fair amount
for association-covered utilities, our experts universally say
it's unwise to worry about that except in extreme circumstances.
Is fussing over precise utility use for each owner getting into
the weeds? "It depends," says Bob Diamond, a partner at the law
firm Reed Smith in Falls Church, Va., who helped write the
Washington, D.C., condo act in 1976 and worked on the Uniform
Condo Act, which 24 states have adopted. "I could give you an
example of a commercial project with a dentist. Today dentists
don't use a lot of water. But historically, they had huge water
bills. So if you had a user like that, who uses a lot of water,
sure, you can have some differential. The best way to handle it
is to submeter the water. But if everybody's using the same plus
or minus a few bucks, you shouldn't worry about it."
That's also the exception cited by Randy Opotowsky, a partner at
The Steeg Law Firm in New Orleans, who represents 15-20
associations at any given time. "We had a mixed-use condo with a
restaurant on the ground floor and residential units above," he
explains. "The water was mastermetered and paid by the
association's common assessment. The board was challenged by
owners who said the restaurant was using inordinate amounts of
water. After litigation caused the units to be submetered, we
determined the restaurant was using more than residential owners,
and we ended up coming up with formula for payment. But that's
unusual. Where there are washers in units or units with five
people in them or just a couple, I've never seen associations
get into fighting that issue. That's mainly because it's a
slippery slope when you say, 'You're using more than the next
owner.'"
On the broader question of whether our reader's proposed
solutions are legal, our experts' antennae were tripped. It all
comes out in the wash in our new article:
http://www.hoaleader.com/members/919.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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How to Police Utility Use When Your HOA Is Paying the Bill
In response to a reader's question, we discuss the challenges an HOA's water
policy creates and ask whether it's necessary or unwise. We also address
whether any fair housing issues, or other state or federal laws, are
implicated by using number of residents as a basis to assess water costs.
Click here to read full article:
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Know When to Say No to Your HOA Manager
In this week's tip, we answer a reader's question, and in the process address
whether an HOA manager is protecting or harming its client.
Click here to read full article:
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Is This HOA Management Company Going Too Far?
An HOAleader.com reader asks, "I'm president of an HOA with 64 units. Many
years ago, several of our members planted flowers in the common areas and
would like to continue to do so. However, since we hired a property
management company, the company insists they sign a waiver to hold the HOA
harmless in case of injury while planting. The members are insulted and
refuse to sign them saying they'd never sue themselves. Now there's
constant bickering about flowers and rules. Any advice?" Here our experts
discuss whether such a benign activity requires signed waivers, and if not,
how you determine when a volunteer activity should require signed waivers.
Click here to read full article:
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"Let's Go Raid the Reserve Fund!" Is This Your HOA's Financial Plan?
In this week's tip, we discuss whether an HOA that made a "temporary
transfer" of reserve funds for litigation did anything wrong.
Click here to read full article:
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Off-the-Book Reserve Use: What Are the Limits on Employing Your HOA's
Reserve Funds?
One HOA reported in a blog post that it made a "temporary transfer" of reserve
funds for litigation. Is that permissible? What other unusual uses are
permissible? Also, how do you know when your condo or homeowners
association must repay its reserve funds for an expense? Are there time
limits on how quickly it must be repaid? Here we answer those questions.
Click here to read full article:
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