Wednesday, December 30, 2015

What happens when common sense overrules Covenants and Design Standards?

As community association managers, we are contracted to inspect properties on a frequent basis, adhering to the language in the covenants that bind that association and issue violations in situations that breach those covenants. There are times when something might be ever so slightly outside of these guidelines and as such, falls into a “gray” area." The question becomes "Where do you draw the line with things of this nature?"

When something straddling that line arises, we typically first consult the board for their take. We try (and also advise the board) to look at the big picture and all of the possible outcomes. What consequences may arise if we decide to pursue this violation and take it as far as filing a lawsuit?

Remember that governing documents are v
ery general and broad and require particular rules and regulations created by the board of directors to narrow them down. Also, these covenants and rules have to be followed consistently. If not, you have a selective enforcement issue where an owner could argue that you are picking on him and not on his neighbor: This could get really ugly in court!

We have witnessed certain cases where the association loses because they either didn’t have every fact straight or they were being too harsh on the homeowner. Recently here in Georgia, an owner decided to place a large American flag in his yard and was told by the association that it did not conform to the covenants and therefore had to be removed. This caused a huge uproar with the community and ended up on the local news. Adding fuel to the fire: The owner was a disabled vet showing his patriotism, and the ‘Federal Freedom to Display the Flag Act’ of 2005 allows everyone to display his flag in front of his home.

Something else to consider is that “times change”. Most governing documents were written 10, 15 or even 30 years ago. Some things that were standard practice then might not be so today. For example, some covenants might require a particular kind of material to be used on all homes - and now research shows that the material is deemed not as sturdy(or maybe even hazardous to your health). In a case like this, it’s not in the board’s best interest to push for continued use of this material.

The bottom line is that sometimes you have to pick your battles. Choose carefully when deciding to push an issue that may end up getting the association into hot water. When in doubt, consult with legal counsel. An attorney experienced in HOA laws will be able to decipher your documents and give you the best legal advice, based on what they see happening elsewhere. Having an attorney back you up provides the best ground to stand on when defending against attacks.

Tuesday, December 22, 2015

Going Cheap

New Board members may question the selection of vendors used for various projects in the community, looking for ways to cut costs.  Such inquiries can create friction with the more seasoned Board members, who feel their own judgment is being called into question. Its best to tackle this topic in the very first Board meeting:  Initially address any mistrust that otherwise could linger and poison otherwise productive meetings throughout the year. 

Here are questions to discuss with your new Board members, helping them consider different aspects of vendor selection.

Why not use a handyman to do basic electrical work around the property?  If damage should occur, days or months after the work is done, the Board can be held responsible for using an unlicensed and under-insured worker.  Also, it only takes a phone call from an upset resident to bring in a county inspector.  If the work is not to code, fines and penalties will rack up along with the demand to redo the work.  Also, if someone is injured in a dark area (because of improper electrical work) the Association may be the one funding a claim settlement, without the benefit of insurance.

Why not just force the handyman to obtain the property insurance and do work that doesn’t require a license?  Proper insurance coverage can be expensive, one of the reasons why handyman can do the work so cheaply.  All too often, false proof of insurance documents are provided, or the contractor cancels coverage immediately after being awarded a job, before any claims arise.

Why not have our manager, who is locked in at a fixed rate, go around and do basic maintenance (such as replacing light bulbs)?  This takes the manager away from overseeing critical issues, and also upsets homeowners unable to reach the manager quickly in certain situations.  Don’t under utilize your manager.

Why not have my fully-qualified friends or relatives do the work?  Besides a perceived conflict of interest for personal gain, you expose yourself to homeowner criticism if problems crop up.  It also creates opportunities for things to become ‘personal’, clouding your judgment and undue issues with your actions.

Why not have volunteers handle some of the duties?  The proper liability and workers compensation insurance needs to be in place, as waivers are not worth the paper they are written on.  Parts purchased down the street may not be commercial-grade, resulting in early wear-and-tear.  The volunteer may unknowingly be skipping crucial maintenance steps or fail to fully consider possible system failures.

Retaining the right person includes more than just price.  You are hiring for specialized knowledge, for proper safety, for efficiency, and for insulation against claims.  You get more than you paid for by not cutting contract corners.