First and foremost, thank you for attending our recent HOA Law Seminar. It was great to see so many familiar faces and meet new Board members.
PLEASE LOOK FORWARD TO OUR UPCOMING HOA UNIVERSITY IN FEBRUARY – TO BE ANNOUNCED
Many Board members do not know the extent of the authority they have for “rule making.” There are a few rules that govern drafting rules, but for our purposes, I want you to be aware that a Board adopted rule cannot conflict with your Bylaws, CCRs, or State Statutes. Surprisingly, every Board still enjoys broad rule making authority. (Recent statutory additions even further strengthen what you can do by Rule.)
A RESOLUTION is merely the formal name of the legal document that contains the RULE.
I wanted to list a few of the “must have” Resolutions and briefly explain the purpose of each.
It is key to remember that whatever rules or policies your HOA adopts, they must be evenly and uniformly implemented against ALL members; precisely as adopted. No favoritism.
- Collection Resolution – Bottom line: You must have a policy that explains what the Board does when someone is delinquent, what the manager does and at what point in time a file is turned over to your attorney for collections. We recommend that an account be turned over between 60 and 90 days delinquency. A lien should be filed ASAP. We collect our fees from the debtor with the goal being the HOA collections 100% of what it is owed and the attorney is paid as well. You should never pay a percentage of the outstanding balance for HOA collections.
- Document Retention Resolution -Did you know that some HOA records must be kept forever others can be discarded when you choose? Why pass box after box from Board to Board when you don’t have to? Here is the problem, many Boards keep far too many records. Therefore, if an owner requests to review records, which is their right (and they will if they are unhappy about something) and you’ve kept them, you have to provide them. Why keep more documents than necessary? A document retention policy is based on statute and common sense. For example, you must keep minutes indefinitely per state law. However, you can keep enforcement letters for as long as you like. You want to keep enforcement/demand letters, however, for a time so you can prove that you are enforcing generally in the community – but why keep them beyond 1 or 2 years? This policy gives you a chart, which you largely can control the outcome of, to guide your document retention policy.
- Electronic Notice and Voting Resolution – You can now send out notices of meeting via your website, email and even text messages. Wouldn’t it be great to conduct voting on amendments and other matters electronically (email) as well? An electronic Notice and Voting Resolution solves this problem and provides a step-by-step process to implement electronic communication into your community.
- Enforcement Resolution – Believe it or not, the Board does not have to get involved in every single dispute (warning: this is a general statement and each situation should be evaluated by counsel). What if an upstairs neighbor in a condominium is making noise that only 1 other member can hear? How do you, as a Board, know whether this is a serious issue or whether it is just a personality dispute? Each HOA should have a policy that requires owners to take certain steps amongst themselves before the Board gets involved. That way, a significant number of issues may get resolved without having to involve the Board. Exceptions would be life, health and safety complaints but there is a way to “push back the point in time” the Board must get involved. This can be a welcomed relief for many Boards.
- Absentee Owner Resolution – Are you concerned about owners who are away from their home for periods of time? Are you concerned that, because no one is home, that the furnace may not be set at the right temperature leading to possible pipes breaking in the winter? An absentee owner resolution implements certain base-line controls to protect the home (usual a condominium or townhome unit connected to another unit) from issues that arise when no one is home to take care of areas (pipes, namely) that could have an impact on others without oversight.
- Fining Procedure Resolution – Utah’s laws regarding fines have changed. There are different rules for REPEAT violations and CONTINUING violations. The point to know for now is that is in either scenario you are now allowed to give notice just once and thereafter go directly to fines (some details and rules apply) should the behavior continue. Because these new rules won’t be in your CCRs, you need a resolution that allows you to send notice just once and then get right to fining should the situation come to it.
As mentioned, rule making is broad and quite “powerful.” Use this authority carefully. When exercised properly, however, your Association will function more smoothly, your burdens as a Board will be lightened and you will better discharge your duties to your membership.
I look forwarding to speaking with you all soon. Again, be looking forward to HOA University (“HOA UNI”) shortly.
Best, John Richards