Question: For many years, the board has not enforced architectural and design restrictions. Consequently, many unit owners have installed storm doors and/or changed the exterior light fixtures on their units. There is now little or no conformity regarding those additions or changes. Our recent reserve study shows that we are woefully underfunded, so conformity is the least of our worries!
Should the board ignore reserving for these items and move forward until we are financially solvent? Will the nonconformity affect property values? Is a little individuality such a bad thing in an HOA?
Answer: Yes, your board should reserve for these items for a number of reasons:
- The HOA is responsible for doing so since it affects the common elements.
- Nonconformity does reduce property values in common wall housing since the additions vary in quality and, frankly, some additions look awful (no accounting for taste).
- Individuality should be limited to the unit interior. That is what the governing documents allow and if adhered to, no one will object other than guests.
- The board has no authority to allow owner changes to the common area. Doing so does not legitimize the action, it only complicates enforcement for future boards and exposes the directors who approved such to personal legal liability for exceeding their authority.
Question: A homeowner at our HOA recently presented a written work order to the landscape maintenance company. The contractor performed the unauthorized task which also happened to be beyond the scope of their contract. Can the HOA be held responsible for payment of unauthorized work? Should the owners be held responsible for directives given to contractors who have been hired by the HOA?
Answer: The homeowner ordered the work, the homeowner pays the contractor's bill. If the work impacts the common area and is not in compliance, the board should have it corrected, if possible, and bill the homeowner. Advise the homeowner that no further communication should take place directly with the landscape contractor. The board should also inform the landscape contractor that the HOA will pay for no work unless it is approved in writing by an authorized HOA representative.
Question: I recently became a board member. Previous boards for over ten years have failed to plan and properly budget, so we have no reserves. The board decided to have a special assessment of $1000/unit to boost the balance in reserves. We are also in the process of having a reserve study done. We are already getting blowback from members on the special assessment. One member questions whether we need to continue operating the swimming pool since it is lightly used. Another suggests selling off the clubhouse to raise money. How should the board respond?
Answer: There are several issues here.
- Special Assessments. It's best to have the reserve study done first to determine how much money is needed and how soon. The board wouldn't want to have to do two special assessments close together.
- Closing the Pool. Operating a pool is one of an HOA's biggest expenses. If a majority of the owners no longer want to pay for it, it may be time to discuss other options. Of course, you need to read your governing documents to see what the process may be, if any, for discontinuing an amenity. Shutting down an amenity may require the consent of the mortgagees. If only a vote of the members is necessary, it may be possible.
- Selling the Property. This is a much more complicated issue that needs to involve an attorney. It may require 100 percent agreement of all the owners and their mortgagees.
Just because an owner comes up with a bright idea doesn't mean the board needs to spend time and money chasing down all the details. I would suggest you put these unit owners to work investigating the feasibility of their suggestions. First, a petition should be circulated to the members to see if there is significant support for closing the pool or selling the clubhouse. If a significant number are in favor, say at least 25 to 35 percent, it's reasonable to schedule a special meeting to discuss the topics. Be sure to discuss the process with the HOA's attorney to make sure it conforms with applicable state statutes and the governing documents.
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