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JosephW
(Michigan)

Posts:787

09/05/2006 7:06 PM
A number of recent posts have discussed handling rules under various circumstance. Rather than respond to each post, I thought I'd give this a shot. Please feel free to comment, amend, alter, excoriate, or ignore any or all of them. Let me give you my slightly twisted "Rules on Rules" (not in any particular order): 1. Things change over time and so can rules. 2. Rules promulgated in the original documents were designed to assist the developer with sales and were probably boilerplate from some other attorney's documents to save legal costs (not always, but often). They were not carved into stone - they were faxed, copied or e-mailed. They can be created, altered or deleted. 3. Owners understand rules in general, they only have a problem if a rule happens to conflict with something they want to do. 4. Most owners would agree that they want rules for their community, as long as someone else enforces them. 5. Following 3 and 4, ask the owners about the rules. Do a survey. You'll find that they will be more willing to support enforcement if they feel they've had a hand in creating or correcting the rules. 6. The best rules allow for some flexibility or variation, but do not allow for extremes in any situation. 7. It's always better to tell people what they can do. Some people will actually elect to follow an example. If you try to tell them what they can't do, you will inevitably leave out something that will show up inside of a few months. 8. Visual examples of following the rules will do more good than threats about breaking them. (Periodic photos in the newlstter, mailings or web site, of an owner walking their dog on a leash, carrying the scoop and baggie will leave a better subliminal message than printing "Clean up after your dog"). It also says "Thank you" to that owner for following the rules. 9. At some point, you do need an attorney to look over the changes you're proposing to make, either in your CC&R's or your rules. Words have very specific meanings in law and using words incorrectly can potentially invalidate the change. It would be silly to go to all of the trouble of amending your docs, or drafting a rule, that gets tossed out in court because it's written incorrectly. 10. Go through your CC&R's and rules - take a highlighter and mark every time you see the words, "should" "may" "must", "shall", and "will". Now you know what you HAVE to do and what you must DECIDE. 11. Don't propose any rule that you wouldn't be willing to enforce against a neighbor. 12. A sitting board can enforce rules that prior boards ignored. However, it is a potential community divider that must be approaced with caution and well thought out communications. 13. Allowing a variance from an existing rule does not "set a bad precedent". Boards are allowed to make exceptions for a reasonable cause. However, every exception should be in writing, with the owner agreeing to restore the variation to its original state after a certain time, or upon moving, or if the conditions for the variance change. 14. The purpose of the first written notice of a rule vioaltions should allows be an attempt to gain the cooperation of the owner in correcting the behavior voluntarily. You can bring the hammer down after that. 15. As part of the correspondence a new owner receives (and they ALWAYS should receive something from the board and association), try to create a way to communicate the rules that doesn't read like a crime report. RULE - PUNISHMENT - FINE - COSTS sort of takes away from the "Welcome to our wonderful community". List the rules, use graphics to call attention to them (picture of a puppy by the pet rule), keep it simple and please, give them a contact to talk to if they have questions. 16. If you're association is large enough, separate the rules enforcement function from the board, so that the board can act as a truly impartial place to appeal. If you're not large enough, find some ways to put an impartial person(s) into the process (mediator, alternative dispute resolution, ombudsman) 17. A picture is worth a thousand words, especially in court. For violations, get a picture, insert it into the letter (it usually removes one argument). For architectural control, get front, side and rear photos of the home and lot as a base line. Take a new photo of any approved variation. 18. Rules involving human behavioral issues are the hardest to deal with. Most boards are not equipped to deal with them. Try to find a way to align these rules with local government ordinances and work with the local governement to try and get them to assist in enforcement. An examples might be to have your pet rule mirror the local animal control ordinance, so that an amimal running loose might be picked up by the authorities, removing the board from the middle of an emotional issue, and allowing any owner to call animal control direct, rather than you. 19. The more words in the rule, the more likely it will be unread, and or misinterpreted. Keep them as simple as possible. 20. If at any time you receive a request for a variation regarding one of the following: -"Comfort animal" - Handicap issue - Religious display - Anything to do with politics - Anything that could be shown on the local news as "patriotic" RUN---DO NOT WALK--to your attorney. Anything you do without legal counsel is guaranteed to screw something up, either immediately, or in the future. It will cost you more money to fix than to handle it right the first time. Anybody else have more? Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

GeraldT1

Posts:0

09/06/2006 4:35 PM
Joe, Wonderful post, wonderful. Having written, and co-written many of our ARC standards for board ratification, and served previously as legal committee chair, I'm glad to say our rules and procedures concur with yours. We could add more visuals, and will hopefully do so in our monthly newsletter. I think you've covered everything, and I advocate rules for Board Members in Good Standing, and will kick off the following: Rules for Board Members to be in Good Standing: 1. Board members are to read and be quized on the entirety of their by-laws as a qualification for election. 2. Board members are to understand their obligation to comply with Federal, State, and Local laws and or oridinances, and seek methods with the community to revise the by-laws so as to comply. 3. Board members are to attend a minimum number of meetings, come prepaired, and be an active participant in discussions. 4. Board members are to be a liasion to a committee, and attend a minimum number of their committee meetings. 5. Board members are to provide copies of the existing rules to owners at every open meeting. 6. Board members are to understand the differences between Reserve Baseline Funding, Full Funding, Statutory Funding, and Threshold Funding as it helps to determine the methodology used in the Transition Capital Reserve Analysis and is the principal reflection of the Community Association's fiscal policy. GeraldT1 NNJ

JosephW
(Michigan)

Posts:787

09/06/2006 6:45 PM
Nice addition Gerald, that's what I was hoping for. How about 11 things you need to know that most board members probably don't know: 1. The minutes aren't really official until signed by the secretary. Just approving them doesn't make them official. 2. If your documents call for an annual or periodic "audit", that really means a full-blown, expensive audit. Only if your documents say "independent review" or are silent, can you use the lesser expensive, (and less demanding) compilation or review, instead. 3. A developer, or the people he appoints to the board during his control period, have the same level of fiduciary responsibility to the association as the owners who are elected after transition. Yet, few owners ever call them on this. They have to follow the documents, keep the books, document the expenses, enforce the rules, just like any other board. The association is a separate entity from the development company, and has different responsibilities. Don't let them get away with ignoring the association! 4. A capital repair and replacement reserve fund is not an annual contingency fund that allows you to keep the assessments a little lower. Cutting corners ruins the tires, suspension and alignment, so things don't run quite right after that. 5. An owner questioning a decision of the board is not necessarily: a) an idiot b) out to get you c) one of "them" d) overdue for a violations inspection Sometimes, they just want to know. 6. Your board meeting is not held in the Situation Room of the White House. It's not life or death. Let people in, keep it positive, then go home and get a good night's sleep. If you hold off drinking until after the meeting, instead of before or during, you're probably doing OK. 7. There are numerous ways to get people to correct rule violations. Promising or threatening fines and legal action has an afterlife that goes on and on. When was the last time you actually read the "first notice" letter. What would your reaction be if you got one? 8. On that subject, attorneys are genetically incapable of writing any type of correspondence that doesn't come across as "threatening". They should never write that first letter. 9. Every now and then, you're going to run into a manager who really doesn't have a clue. Learn to recognize. 10. Insurance is not meant to be used. Any claims submitted this year will not be covered next year, along with a premium increase. Your insurance agent is not an agent of the association in the legal sense. That means they aren't always looking out for your best interest. 11. The fact that your documents "indemnify" you as a board member doesn't mean you'll ever see any money, if you get sued. It means they're "supposed" to indemnify you. But a new board could decide to drag it out forever, leaving you to foot the costs of your own defense. Make sure you have the world's best Director's & Officers Liability policy, that will cover you long after you've left the board, and that you can live with any exclusions in the policy. If I think of any more, I'll post them later. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

GeraldT1

Posts:0

09/07/2006 8:51 AM
Joe, 30 people have viewed the post, where's their response!! You had me laughing, but #6 was real funny. There have been occassions..... These are a little more specific: 1. A resolution isn't official until signed by the president and attested by the secretary. Collecting higher maintenance fees based upon an unsigned, and unnattested resolution could result in reimbursement to the owners. (I kid you not, this has happened) 2. If your transition engineering firm has provided a written report that it seems all townhouses need attic fans, and that it seems there could be a violation of building code, but further determination is required because it was not included in the original scope of work, the board should take heed and expand the scope of work to cover not only themselves but those they serve. Transition engineering reports are usually written to guide board members and communities AWAY from lawsuits, not TOWARDS them. 3. Just because you're an attorney, and on the board, does not mean you should substitute your legal advise to the board or community, with that of indpendent legal councel. Especially if you're attorney practice is limited to real estate closings. 4. If your a board member holding two board positions, and town prosecutor, GUESS WHAT???, there's a conflict of interest. One mind is not better than two. 5. Learn to smile and let things roll off your back. 6. RUN, don't walk, when you as a board member are cc'd on a letter that binds the association, AFTER the letter was sent. 7. Truncate your communications, short and sweet, slow and steady win the race. 8. Never underestimate the collective stupidity of others, nor the effect a group decision can have upon the individual. 9. We all have something to teach, we all have something to learn. Even when people who don’t know each other come together, they can learn from each other. GeraldT1 NNJ

JosephW
(Michigan)

Posts:787

09/07/2006 10:06 AM
Well, maybe we can continue to post thoughts, humorous or otherwise. Here's 10 rules for helping a divided association: 1) Good communications with facts trump bad rumors every time 2) If you know you're heading into a general meeting that is going to be contentious, consider hiring a retired or semi-retired judge to chair the meeting. It's amazing how civil people become when someone who knows how to run a coutroom presides. Well worth the cost. 3) The more you close your board meetings, the less your resident's will trust you. 4) Stop publishing budgets as spreadsheets. Provide explanations for line items so the owners can see what goes into making up that total. It removes a lot of questions and doubts. A single owner doesn't pay $40,000 for lawn cutting, they probably pay about $8 per cutting each, which is very reasonable. 5) Putting roadblocks in the way of owners examining association records creates raging paranoia, for both parties. Make it easy, simple and cheap. 6) There are 4 ways to communicate: verbally - talk to your residents; visually - good curb appeal raises people's spirits about their community; written - regular newsletters and/or letters from the board about what's going on; electronically - e-mail and web sites are continuing to increase in use. Use them all to improve the chances that the message will get through. 7) You have one chance with new owners to make them feel good about their move into to your association, or bad about it. Make their first communication from you a welcome package, not a violation notice. 8) Use surveys regularly to get feedback on how the residents feel about the association and the job the board is doing. 9) Small, personal meetings about problems can go a long way in preventing large, contentious meetings about the same problems. 10) Get out and walk around your association now an then. Let the owners talk to you about their problems, issues and concerns (see #9). Don't make it an ARC violations inspection, just a stroll through your community. How many of the resident's do you actually know? Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

JamesC
(Maryland)

Posts:128

09/07/2006 2:11 PM
JosephW and RogerB Are you two MC employees? I see that you both put a lot of legal wrangle in the forums. Some others do as well. It is very beneficial to read the postings on this forum. Since the topic at hand is addressing rules, I am reminded how our BOD meetings have the atmosphere of everyone being clueless. I have only been on the board since May, of this year but, was perplexed when the president told me he should read up on our rules and regulations. (I have read and re-read them several times) He told me he does not have acopy because he did not receive them when he moved in, and was not going to pay the $250.00 fee needed to purchase them now. How can someone be the board president and "NOT" have a copy of the regs? Question: Can one of you explain the priority ladder concerning CC&R's, Bylaws, Rules and Regulations, and Guidelines?. My understanding is the CC&R's supercedes are the others. Then By-Laws. The Rules and Regulations are the tool used by the BOD to enforce the Guidelines. Guidelines being the least important. If this is not correct please list the priorities. Thanks" Jim

JosephW
(Michigan)

Posts:787

09/07/2006 2:27 PM
You've got it right, with State, then Federal law above them. I'm not a management company employee, I run the Community Associations Network site off to the right. Joe

Joseph West Official HOATalk.com Sponsor Community Associations Network, LLC www.CommunityAssociations.net *See legal notice below (end of page) or go to www.hoatalk.com/legal

GeraldT1

Posts:0

09/07/2006 4:10 PM
JamesC, I am not an MC employee, but here to provide input from years of experience living and volunteering in both a startup hoa/coa development, and in an established coa community in northern new jersey. In addition I am here to learn and I concur with you, it is very beneficial to read the postings on this forum. As for legal wrangle, I have just recently taken off my "wetsuit" from being accustomed to swimming with "sharks". Meaning, there are several lawyers in my community that have made many of us accustomed to speaking their language to refut their illogical and unneighborly communications. Sorry if it prevails in my postings. Best of success!! GeraldT1 NNJ

RogerB
(Colorado)

Posts:3725

09/07/2006 7:38 PM
James, The decending heirarchy of controlling documents is Federal, State, County, City, then subdivions Plat, Declaration, By-laws, and finally Rules and Regulations. Guidelines and policies and procedures can be incorporated into Rules&Regs or they can be resolutions or simply approved motions duly recorded in the minutes. I am co-owner of DARCO management company. I have previously served on several Boards in three states. The legal wrangle comes from working with attorneys in the corporate world. Attorneys were used to provide information prior to making my decisions. Ultimately I was held responsible not the attorneys. Just as the association Board is ultimately responsible for their decisions. Many attorneys are too aware of legal repercussions so it is often very difficult to get a legal opinion from them. I don't have that problem

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

JamesC
(Maryland)

Posts:128

09/08/2006 5:39 AM
Roger: Your reply is exactly what I was looking for. Not sucking up, because I usually read all the postings by the other responders but, when I see your postings I always scan to read yours first. You use a lot of legal terms and seem to be on top of most concerns of those using this forum. Thanks again Jim

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