Revising your Rules and Regs? Keep it Simple!

Often associations review their rules when they want to make some change or addition, but it is best to review all the rules at least every 5 years because a few things do change periodically in the make-up and needs of every community.  So here are some guidelines for your review that might prove useful to you:

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What to do when the Board wants (or needs) to upgrade the condo exterior

     Consider the situation where the Board of Directors has decided that they want to upgrade the appearance of an aging townhouse style condominium and they are talking about requiring all the unit owners to replace certain areas of vinyl siding with Hardiplank or similar high grade exterior product which is a much more expensive material. They are also going to require solid wood decorative shutters on some of the windows. The plan is to get bids, enter into a contract, and assess the owners because the association doesn’t have any money in reserve for this project. Some owners consider these improvements to be upgrades and say that the Board shouldn’t be able to require the owners to pay for upgrades as opposed to replacements.   This article can also apply to some degree to townhouse communities which are not condos but where the association has the responsibility to maintain the exteriors of dwelling units and common facilities.

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FHA Project Approval - Essential for nearly all condominium communities

 

Since the virtual collapse of secondary market financing options for the purchase and refinance of condominium units occurred several years ago, it is more important than ever for Condominium projects to obtain certification from the Federal Housing Administration (FHA), the Veterans Administration (VA) and Fannie Mae.   FHA and VA currently account for an overwhelming majority of the available financing options for condominium units in today’s market. 

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Satellite Dishes: The Law Remains The Same

With the federally mandated switch from analog to digital signals the interest in satellite dishes has increased. A brief refresher on the Rules is in order. OTARD, the acronym for Over the Air Reception Devices prohibits community associations from enacting restrictions that unreasonably impair the installation, maintenance, or use of antennas used to receive video programming.

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Foreclosing On An "Underwater" Unit

In these times of declining real estate values, more and more homes are "underwater," meaning that more is owed to the holder of the first deed of trust than the property is worth.  Sometimes owners simply stop paying the mortgage walk away from the property as a consequence and the holder of the first deed of trust forecloses.  However, what happens if an owner keeps paying their mortgage but stops paying his assessments.  What is an Association to do?

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Holiday Decorations

Q. I know that you have addressed this issue in the past, but I have a new twist for you. We have several homeowners that have installed their holiday decorations and are now asking permission to keep them up beyond the first of the year as they have family who will be returning from military or government service overseas after January 1. Do you have any suggestions for the policy we need to adopt?

A.  This has always been one of those no?win situations. Regardless of how the Board of Directors for your Association resolves this issue, some residents will disagree with the decision. That said, we will try and address the broader issue of decorations as well as your specific question. There are several steps the board should take in developing a reasonable and enforceable policy.

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Before You Buy

Q. I am getting ready to retire and I am considering buying a condominium unit and have looked at several older complexes and some that are brand new. Are there any tips you can give me on what to look at before I make a decision?

A. When looking at the new complexes, the primary document you will want to review is the public offering statement and all of its attachments. State law requires that condominium developers keep the public offering statement current and give you a copy when you sign a contract to purchase. You will then have ten (10) days to review the documents and make a final decision.

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Guidelines and Standards for Service on the Board of Directors

Q: I am just beginning my second year as a condo association board member. I served on an HOA board several years ago when I lived in a large planned development. I now see that people run for the board for varying reasons...some of them not the correct ones. I believe a lot of people really think you should run for the board in order to achieve your own personal agenda. Others want to serve their community, but don't have any idea what they are doing or how a board functions. Some of these people are "take charge" type people who end up getting elected president. That can really be a problem. Can you give some guidelines and standards for service on the board of directors?

A: This is a good observation on your part and we can affirm that you have identified a couple of reasons some boards have trouble functioning most effectively.

Board members who act inappropriately alienate other board members and other association members which leads to a negative attitude on the part of the homeowners toward the board. So it is important to take steps to encourage constructive behavior. Of course, education is the key for most people who are new to service on the board of an organization. There are many ways to obtain this education and it is not expensive. Hopefully, your community is a member of the Community Associations Institute. This is an organization established primarily to educate and be a resource for those involved in community association governance. The organization has a local chapter that sponsors numerous educational events throughout the year. The local chapter's executive director can be contacted at 558-8128 and the chapter's website is www.sevacai.org.

The first place to look for standards is state law. Most community associations are nonstock corporations under Virginia law. The statutes governing such corporations impose certain standards of conduct on board members including: (1) "a director shall discharge his duties as a director in accordance with his good faith judgment of the best interests of the corporation", and (2) he shall rely on reports, opinions and data supplied by third party experts, unless he has a good reason not to do so, and (3) a director is not liable for action taken if he performs his duties in compliance with the state law.

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