HOA: Changing Homeowner Association Rules
Q: I just read your response to the question about the 20-unit homeowners association (HOA) that can’t get people to run for the board. I used to manage HOAs and have a few thoughts for your readers.
1. Before they do anything, they need to carefully read their HOA documents and see if they can reduce their number of board members on the board to three people. For a small HOA, that’s a much more manageable number! And they might be able to do it with a vote at an annual meeting.
2. I once read every line in a promissory note from Fannie Mae or Freddie Mac. It was not fun. But one of the clauses forbade the borrower from voting to dissolve the HOA. From the lender’s point of view, that’s part of the security for their loan.
3. I fully agree that they should hire an HOA management company and then let them do their job! Don’t butt in and interfere. Amateurs often skip stuff that’s required by law like managing reserves, doing reserve studies, etc. You can see the problems in Florida happening now because work was put off.
HOA Board: No One Wants To Serve
A: Thank you for some great suggestions. And, you’re right. We should have mentioned in our prior column that homeowners can’t dissolve an association without getting their lender’s consent. Dissolving an HOA is considered a major change to their arrangements with the association. Loan documents typically contain a provision that requires the borrowers (that would be each owner of an HOA who needs a loan to purchase their property) to get their lender’s approval to make changes to association documents.
Simply put, the current association documents provide an arrangement that allows lenders to foreclose on a condo, townhome, or other units in homeowners associations. That arrangement gives lenders certainty as to the rights they have and their ability to enforce their rights under their loan documents with borrowers. While a lender might not object to having a homeowner dissolve their homeowners association, they need to consent to the change so that they know how the change affects them. If you dissolve the HOA without getting every lenders’ approval, it could violate the terms of a mortgage, and keep future buyers from getting their loans approved.
HOA Rules Contain Alarming Language
We do agree with you that a smaller HOA can benefit from a smaller board. However, you still need homeowners willing to serve and work for the HOA. You can have five members share the responsibilities and have it work well. Three board members can also work. But in each instance, you still need people willing to help and do some of the heavy lifting that may be needed to live in an HOA.
Thanks for writing in.
HOA Won’t Pay Repair Bill
Q: I’m a board member of a condominium owners association (HOA). We have nine board members. We open our office to residents three hours a week and the residents can come in at that time to interact with us. They can ask questions, buy utility keys, phone books, parking passes, or make requests. Often, we have five board members helping out during these office hours. Are we in violation of our building rules if we don’t call an official meeting of the board? Having five board members together makes it a quorum and some residents are raising a red flag.
A: Our typical email is an owner complaining that their building can’t get enough people to serve on the HOA board. You have the opposite situation. Good for you!
We don’t think you should have any legal issues with what you are doing as long as you don’t discuss or make building policy at those office hours. There are legitimate ways to hold events without having it declared an official meeting. For example, parties. Everybody could attend, including board members, without having to call an official meeting of the board and notifying the unit owners of that meeting.
HOA Smoking Rules
Just be careful. Don’t discuss board matters. Stick to the matters that relate to the open hours of operation. If someone asks you for a clarification of a policy or makes a request better suited for a board meeting, tell them when the next meeting will occur and suggest they attend.
To our readers: We have been receiving a large number of questions about HOAs and the problems owners are having. You’ll find our most recent columns on HOAs here.
©2024 by Ilyce Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency. A1649
MY HOA is replacing the roof on our 12 story high rise building. We, like a dozen other owners on the top floor, have HVAC compressors on the roof that we are told will have to be moved by the roofing technicians while the new roof is installed and then repositioned/reconnected. However, the roofing technicians said when the HVAC compressors are reconnected, they may not work and thus will have to be replaced by the condo unit owners.
Is this fair? I have no problem with granting the roofing firm access to move my unit on the roof but while it is 12 years old, we have had it serviced religiously twice a year since we moved in and it works just fine. WHY is the HOA anticipating that the unit owners will have to pay for a new HVAC system if their old one cannot be made to work again once reinstalled?
Is there case law?
Barry,
Sounds like they’re anticipating the worst case scenario and don’t want you to be surprised if it comes to pass. While some HVAC compressors last longer than 12 years, experts say HVAC systems typically last 12 to 15 years. Moving them, however, can cause issues and it’s possible that they will not work when you get them back into place. (It’s also possible HVAC units might get switched and you’ll wind up with one that hasn’t had good care — but would you know the difference?)
I don’t know how fairness comes into play. If your building doesn’t replace the roof, you could have leaking into your apartment. Given that the condo is only responsible for common areas, a major leak from a faulty roof would be a nightmare, and not just for you. Water could come pouring down into your apartment, or travel several flights down causing all sorts of issues. The HOA needs to replace the roof. They’re giving you fair warning that your HVAC system might break. I’d make sure you have enough cash to cover the expense of a new system, should the worst come to pass.
But, here’s hoping it goes well and you get another year or two of service out of your unit.