HOAleader.com - Tip of the Week - June 30, 2017
Published: Fri, 06/30/17
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Hoping for an HOA Growth Spurt? Here’s What to Know
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In this week’s tip, we expand on the idea of expansion in response to a reader’s question.
An HOAleader.com reader writes that his HOA wants to add new units, and the reader has questions about financing the deal and charging the developer.
We think it’s first important to back up and ask: When can and should you expand, whether that’s by using your own property or even acquiring another HOA?
Let’s begin with the idea that you’ll need lots of advice if you attempt a growth move. “I’ve seen different expansions and changes at associations, and it’s definitely not a manager’s role to work on this,” says Bill Worrall, vice president of FirstService Residential in Hollywood, Fla., which manages 1,300 condominium and homeowner associations totaling 310,000 residential units.
“You need counsel,” adds Worrall. “You need an association attorney. But this is also really for a real estate attorney because it requires title work, deeds, and so on—these are all legal issues.”
Worrall says he’s seen multiple associations combine to streamline HOA governance. It’s also been done to mitigate tensions between various boards within associations. He hasn’t seen associations expand simply to add units.
Colorado would also require some form of owner consent. “It’s fairly common,” says Jeff B. Smith, an associate attorney who specializes in representing associations in covenant enforcement and litigation matters at Hindman Sanchez in Lakewood, Colo.
“I’m guessing this reader isn’t talking about using undeveloped land the association owns,” surmises Smith. “If it’s their own property they’d like to use, it’s simpler to amend the plat map, and it’s common area so the association has the ability to build on there. Then you’d annex those units in once they’re built.”
The challenge is getting owners’ consent to that process, which depending on your state law and governing documents can require all or a supermajority of owners to provide their consent.
“If you’re annexing a separate property or new condos, in Colorado, you’ll need to amend your declaration to do that,” says Smith. “Generally, to amend your declaration in Colorado, you’ll need a 67 percent vote of owners.
“If the property is going to be brought in and the allocated interests of owners will change, some associations may require 100 percent approval,” adds Smith. “You might also need mortgage companies of the current owners who have mortgages to approve, a requirement that will be specific to the governing documents.”
California’s different in some ways. Find out how, along with why your governing documents may shut this idea down without further discussion, in our new article: https://www.hoaleader.com/members/2568.cfm
Best regards,
Matt Humphrey
President
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Collect More, and Collect It More Easily:
Best Practices for Condo/HOA Debt Collection
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With Practical Tips for Condo and HOA Boards
Thursday, July 27, 2017
2:00 to 3:00 P.M. Eastern
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Recent articles posted at HOAleader.com:
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Collect More, and Collect It More Easily: Best Practices for Condo/HOA Debt Collection
Tired of seeing delinquent accounts on the financial statements of your condo or HOA? Frustrated because subpar finances mean long-planned projects are on hold indefinitely? Less than thrilled about continually explaining the situation to the homeowners in your association? Stop letting nonpaying owners control your condo or homeowners association! Join us on June 27 for an in-depth webinar led by two HOA debt-collection experts.
Click here to read full article:
https://www.hoaleader.com/products/best-practices-condo-hoa-debt-collection-a.cfm
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California Court: Yes, HOAs Can Deny a Records Request
Do you have evidence, or even a strong supposition, that a member's requesting your association records to use the information against your HOA in a dispute?
Click here to read full article:
https://www.hoaleader.com/members/California-Court-Yes-HOAs-Can-Deny-Records-Request.cfm
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Owners Use Proxies to Pass a Rule Banning the Use of Proxies in That Day's HOA Election
In this week's tip, we have to tell a reader some troubling news: The member vote held on the day of their election to ban proxy use in the election probably won't withstand the challenge it's facing.
Click here to read full article:
https://www.hoaleader.com/public/Owners-Use-Proxies-Pass-Rule-Banning-Use-Proxies-in-That-Days-HOA-Election.cfm
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Did These HOA Owners Totally Break the Rules?
An HOAleader.com reader writes, "At our last membership meeting, a resident made a motion to not allow proxies to be used in the election of the board members. The motion was seconded, and the attending members used their proxies to vote on it.
Click here to read full article:
https://www.hoaleader.com/members/Did-These-HOA-Owners-Totally-Break-Rules.cfm
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"Hire" Your Owners to be Your Next HOA Election Inspectors
When you hear the words "election inspectors," your first thought is probably: We can't afford that! "In California, especially in Los Angeles, there are many smaller associations with 10, 20, 30, or 40 units," says David C. Swedelson, the principal at Swedelson & Gottlieb, a law firm that represents associations in the Los Angeles area. "If they were required to bring in outside inspectors, it would be very expensive."
Click here to read full article:
https://www.hoaleader.com/members/Hire-Your-Owners-be-Your-Next-HOA-Election-Inspectors.cfm
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