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HaroldS
(Arizona)

Posts:904

12/30/2006 3:53 PM
I have read and re-read Cathy's post and fail to see any "high horse." She is right tho: if delinquencies have been allowed to go on for years, there is no other place to point fingers except to the board (past & present) - if not, whose fault is it then? Allowing them go on for years is just plain neglect of fiduciary duty by the board. "They are delinquent by their very nature." What the H E double L does that mean? So that exonerates the board? Harold

hoatalk

Posts:490

12/30/2006 6:56 PM
PedroC: We welcome you to this forum and you will find an amazing amount of experience and expertise here. The people answering you are giving you free advice and some of your comments seem very combative and unnecessary. Maybe you don't mean them that way, but as an example: "...It is just pompous..." "...Please get off that high horse and reserve your judgements..." I re-read Cathy's post and also fail see the 'high horse' you mention. It seems she was stating a fact, not opinion and I don't see it as a personal attack. Unless your state prevents foreclosure for non-payment of dues and prevents wage garnishment for judgment payments, then you have strong means to collect. You also mention 'verbal sparring' which is not the tone nor point of this forum. Our posting rules say, "Post any relevant topic you like, but please keep it clean, helpful, positive and friendly." See: http://www.hoatalk.com/PostingRules/tabid/71/Default.aspx There are many helpful and giving people here, but you will get more help by leaving out comments like the ones above. We thank you in advance for helping us keep this forum positive and helpful. HOATalk

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WilliamT
(Arizona)

Posts:489

12/31/2006 8:56 AM
I’ve stopped responding to Pedro, so this is not a response to him. This post is for any concerned board members who may be experiencing some financial problems and want to know how to go about correcting them. Pedro’s board is a good example. Remember that a board has the fiduciary responsibility to operate the community business in the black. If it looks like it may go into the red, then action must be taken to prevent that happening, before it happens. If sufficient action is not taken then the board is not attending to its fiduciary duties, and the result is called “negligence”. That is a dirty word to those who are in fact negligent, but that is the word that is used to describe a board that has not performed its fiduciary duties properly. When an incumbent board, such as Pedro is on, is informed that they are negligent, they will invariably fight that notion by attacking the person who is telling it like it is. They do not want to hear the obvious. Instead of being introspective and admit that the board has been negligent, and proceed to seek proper legal and financial advice as to how to correct the situation, they want to place the blame (in Pedro’s case) solely on the delinquent accounts. The source of part of the problem does lie with the people who are not paying their dues. However, it is the board’s responsibility to collect those dues, and that is where the buck stops. If the board does not collect, (for whatever reason) then the board must be held responsible. However, if the dues are not being collected, and the operating funds are not sufficient, then the board must look to see if there are other problems associated with the handling of the funds. I would begin to closely examine every invoice to see where the money is being spent, and look for every way to reduce expenses. A lot of money can be wasted if a board is not keeping close tabs on where money is being spent. Many vendors will take advantage of HOA’s because they know that no one is checking closely enough. I’ve stopped responding to Pedro, so this is not a response to him. This post is for any concerned board members who may be experiencing some financial problems and want to know how to go about correcting them. Pedro’s board is a good example. Remember that a board has the fiduciary responsibility to operate the community business in the black. If it looks like it may go into the red, then action must be taken to prevent that happening, before it happens. If sufficient action is not taken then the board is not attending to its fiduciary duties, and the result is called “negligence”. That is a dirty word to those who are in fact negligent, but that is the word that is used to describe a board that has not performed its fiduciary duties properly. When an incumbent board, such as Pedro is on, is informed that they are negligent, they will invariably fight that notion by attacking the person who is telling it like it is. They do not want to hear the obvious. Instead of being introspective and admit that the board has been negligent, and proceed to seek proper legal and financial advice as to how to correct the situation, they want to place the blame (in Pedro’s case) solely on the delinquent accounts. The source of part of the problem does lie with the people who are not paying their dues. However, it is the board’s responsibility to collect those dues, and that is where the buck stops. If the board does not collect, (for whatever reason) then the board must be held responsible. However, if the dues are not being collected, and the operating funds are not sufficient, then the board must look to see if there are other problems associated with the handling of the funds. I would begin to closely examine every invoice to see where the money is being spent, and look for every way to reduce expenses. A lot of money can be wasted if a board is not keeping close tabs on where money is being spent. Many vendors will take advantage of HOA’s because they know that no one is checking closely enough. The board in question has not collected the dues, and is dipping into their reserves to cover operations, according to Pedro. That is illegal. Once money is placed into a reserve account it may not be removed to be used for operating expenses. Therefore, the board is negligent in its fiduciary duties. And that is not a judgment; that is a fact. Whatever actions the board has taken has apparently been reactionary, and too little, too late. That’s my opinion. To correct the situation may mean changing attorneys, but something has to be done in the legal and financial arena with a good accountant, a good attorney, and possibly a good MC. And good volunteers to examine all the invoices to look for ways to reduce expenses. But Pedro has come here looking for support for his strategy of placing blame for the financial condition solely on the delinquents, in an apparent attempt to draw attention away from the failure of the board to exercise their fiduciary duty. And when he is informed that it is the board’s failure to perform their duty that is the big problem, he begins an attack on the messengers. He was told that his strategy could cause a backlash, and in some opinions, it could cause an upset community to recall the entire board of directors. I don’t know what state they are in, nor do I know what their CC&R’s say about foreclosures, but it does look like whatever action the board has taken, if any, has been non-productive, and now they have caused themselves to be placed at a critical junction Apparently they have gotten into such a critical financial situation that they are now grasping at straws to try and pull themselves out, so they reject all reasoned advice from people who have the experience, and choose to bad mouth them. One example of where they are missing out is the refusal to hire a person to check ID at the pools. The pool apparently only needs one life guard, which they have. So all they should need is a minimum wage person, or a no cost community volunteer, to be the ID checker. Even in the worst case scenario if the ordinance requires an ID checker to be a life guard, it should be cost effective if it denies the delinquents access to the pool area. People denied access to the pool area will probably change their payment habits quickly. We have a Master HOA with a pool and clubhouse. ID’s are checked at the clubhouse door, and if a red flag pops up, the person is invited to go upstairs to check with the office to clear up the problem. In our sub community HOA, we take the lien route through our MC, and will foreclose if attempts are not made to bring the account up to date. We usually have around a 5% delinquency rate, but they almost never get over 60 days. When any board is experiencing financial problems it should first of all begin to look in house; to examine every expense and begin to make cuts. It must examine its own actions where failure has occurred, and seek professional legal and financial advice. If it is self managed, then it should consider hiring an MC in addition. A board that will not examine its internal operation thoroughly in order to correct the problems, but rather, attempts to publicize the delinquent members to the community, in my opinion, is only trying to take attention away from its own negligence, and should be recalled by the community. According to Pedro, the board in question has not collected the dues, and is dipping into their reserves to cover operations. That is illegal. Once money is placed into a reserve account it may not be removed to be used for operating expenses. Reserve funds may only be used for reserve expenditures. Therefore, the board is negligent in its fiduciary duties. And that is not a judgment; that is a fact. Whatever actions the board has taken has apparently been reactionary, and too little, too late. That’s my opinion. To correct the situation may mean changing attorneys, but something has to be done in the legal and financial arena with a good accountant, a good attorney, and possibly a good MC. And good volunteers to examine all the invoices to look for ways to reduce expenses. But Pedro has come here looking for support for his strategy of placing blame for the financial condition solely on the delinquents, in an apparent attempt to draw attention away from the failure of the board to exercise their fiduciary duty. And when he is informed that the big problem is the board’s failure to perform their duty he begins an attack on the messengers. He was told that his strategy could cause a backlash, and in some opinions, it could cause an upset community to recall the entire board of directors. I don’t know what state they are in, nor do I know what their CC&R’s say about foreclosures, but it does look like whatever action the board has taken, if any, has been non-productive, and now they have caused themselves to be placed at a critical junction Apparently they have gotten into such a critical financial situation that they are now grasping at straws to try and pull themselves out, so they reject all reasoned advice from people who have the experience, and choose to bad mouth them. One example of where they are missing out is the refusal to hire a person to check ID at the pools. The pool apparently only needs one life guard, which they have. So all they should need is a minimum wage person, or a no cost community volunteer, to be the ID checker. Even in the worst case scenario if the ordinance requires an ID checker to be a life guard, it should be cost effective if it denies the delinquents access to the pool area. People denied access to the pool area will probably change their payment habits quickly. We have a Master HOA with a pool and clubhouse. ID’s are checked at the clubhouse door, and if a red flag pops up, the person is invited to go upstairs to check with the office to clear up the problem. In our sub community HOA, we take the lien route through our MC, and will foreclose if attempts are not made to bring the account up to date. We usually have around a 5% delinquency rate, but they almost never get over 60 days. When any board is experiencing financial problems it should first of all begin to look in house; it should look to see what mistakes have been made; admit them and begin work to correct them; examine every expense and begin to make cuts. It must examine its own actions where failure has occurred, and seek professional legal and financial advice. If it is self managed, then it should consider hiring an MC in addition. It should invite all advice and open its eyes to examine every piece of advice, no matter how negative it may seem. If one is seeking only one answer, then it cannot proceed with an open mind. It should never attack any one for offering their constructive criticism, for it is the diverse opinions that help to shape a board. A board that will not examine its internal operation thoroughly in order to correct the problems, but rather, attempts to publicize the delinquent members to the community, in my opinion, is only trying to take attention away from its own negligence, and should be recalled by the community.

RobertR1
(South Carolina)

Posts:2525

12/31/2006 12:43 PM
All these postings are wonderful bits and pieces of good responsible statements, and I have no quarrel with any of them. But, speaking as I view all this, where do the home owners come in? Is it not the mandate of the Board to serve the voters, and the President to serve the Board. I can certainly see how things get out of hand and these problems keep cropping up all the time. Root cause in my opinion is two fold. The board fails in their responsibility, primarily because they lost the people. If one board can't get the people's support, they should resign. If the people do not actively support the Board, the Board should resign. What is the formula for a successful association, a smart responsive Board, and voter involvement. Some accomplish this, some do not, as I am well aware after sixteen years, and I consider myself to be part of the problem, even if I have done more than most. My side has still failed, I didn't pick who was on my side, but we are losing the game. The Board is losing the game because they can't get the job done. How do we expect to win the game if we are not on the same side. Our interests have to be the boards interest and the same for the board. I am sure most of these associations have numbers of members well qualifed to make up a board, but if they can't do the job, we need to get some different people. Odds are the right people are there, it becomes a job of putting the package together. Only one way I know how it will work, a " grass roots" effort, someone has got to start the tree growing. Just a suggestion: An open website either board supported or put up by homeowners, either way. Will it work? I believe, given a little time it will. We were aboslutely amazzed at the positive feedback we got from our site, not one single objection, all encouraging remarks, a few offers to get involved, some constructive requests about specific problems, lots of good stuff. I believe if we can get together a few people that care about their home they can do wonders.

DwightT
(Idaho)

Posts:483

12/31/2006 12:57 PM
Robert - would you care to provide the URL to your website? You could just add it to your HOATalk profile. I'm in the process of revamping our HOA website to provide our homeowners with more resources and communications options and I would love to look at some other successful websites.

RobertR1
(South Carolina)

Posts:2525

12/31/2006 4:18 PM
DwightT Url for Website www.villageofnewhaven.info. Just paste it in your browser. A work in progress and the folk that service the website do it because they care. They also maintain and change the site frequently. I mean they keep adding new stuff about the Island and local events in the area.

hoatalk

Posts:490

12/31/2006 5:57 PM
Posted By DwightT on 12/31/2006 12:57 PM I'm in the process of revamping our HOA website to provide our homeowners with more resources and communications options and I would love to look at some other successful websites. You may want to consider letting Community123.com, the builders of HOAtalk, revamp your website. Their current offer is to custom build your site and give you 2 months to try it, all free. After that, plans range from only $19.95 - $39.95/month. Their service gives you many advanced features that are very hard to get in do-it-yourself sites, like security levels, email announcements, surveys, forums, easy updates by multiple editors using only the web browser, etc. Plus, the design is based on HOA best practices. Here's some of their customer sites: www.CypressGreensHOA.com (Golf course community in CO) www.TheKuleana.org (Seaside condos in Hawaii) www.RanchoElMirador.org (Condos in Palm Springs, CA) www.StrawberryCOA.com (230 Condos in Colorado) www.PalmValleyHomeowners.com (1,300 homes in Arizona) Best Regards, HOATalk.com

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RonaldW
(South Carolina)

Posts:900

01/01/2007 6:07 AM
Posted By DwightT on 12/31/2006 12:57 PM .......... You could just add it to your HOATalk profile. I'm in the process of revamping our HOA website to provide our homeowners with more resources and communications options and I would love to look at some other successful websites. I don't know if you've looked at mine. It's in my profile. Suggestions are welcome.

Ron SC

RonaldW
(South Carolina)

Posts:900

01/01/2007 6:22 AM
Posted By RobertR1 on 12/31/2006 12:43 PM ......... If one board can't get the people's support, they should resign. If the people do not actively support the Board, the Board should resign. .......... I think there are many HOAs where the majority of the "members" really don't care about the HOA and wish it would just go away. In a community of single family detached homes, the HOA (ours is one) is really only providing the services that the local governments used to provide such as maintaining and mowing the easements, perhaps providing street lighting, signs, etc. The other "service" provided by the HOA is enforcing the CC&Rs and at least some of the members would rather that that stop. One nearby HOA has only the president on the board, they can't get anyone to run for the board or enough people at the meeting to elect anyone. For the election where I was elected, there were five candidates for four positions. If we resign, there would be no one to see that the taxes are paid, that the grounds are maintained, and that the CC&Rs are enforced.

Ron SC

RobertR1
(South Carolina)

Posts:2525

01/01/2007 7:27 AM
RonaldW, Couldn't agree more Ronald and I also agree about homeowners not caring, but suspect it may be a lot of, "why should I care, what's in it for me?" But don't you agree that there are successful Regimes. What sets them apart? None of us pick our neighbors, they are just a mish mash of people that would benefit if they had a well run Association. What's the secret? Will it work all the time? If the Board was running a business for profit, could they continue to operate a loser? They would look for a way to be profitable. How do businesses change their profile? They advertize in one form or another. They communicate. How many associations have a Communications Chair? Which is more important, is it a landscaping committee or a Communication committee? I suspect it is the latter. That has to be where you start to rebuild. If the owners can't see the product the board should be selling, it has to be sold in a different manner. Am I good at communicating? I doubt it, but I can see where it HAS to be done. My neighbors started a little 1 hour social time in our Community room. It is just bring a drink if desired and sit around and chat. We mentioned this on the Web site. We received several comments about owners desiring to attend this non-event so they could get more involved. I don't know how much our society's change into something away from a true communitiy is effecting all this. We need to get the neighhood back and functioning.

RonaldW
(South Carolina)

Posts:900

01/02/2007 8:38 AM
Posted By RobertR1 on 01/01/2007 7:27 AM How many associations have a Communications Chair? Which is more important, is it a landscaping committee or a Communication committee? I suspect it is the latter. Let me tell you about communications. Our city is playing with the garbage/trash pickup dates until they get it right. A while back, they sent two men in a truck to every home in our community to hang a tag on the doorknob announcing the new pickup day. The next week I observed my neighbor putting her garbage out on the wrong day (she's a casual friend as well as a neighbor). I asked her if she had seen the notice on her doorknob. She stated that she had seen it but "I didn't bother to read it" ! We have others putting out garbage, trimmings, etc. on the weekends, parking boats, trailers, etc. in violation of the CC&Rs. Their response "I thought they stopped enforcing that". We mailed every owner a copy of the condensed version of the CC&Rs last month with the newsletter just so nobody could say they never got one. Result - about the same level of violations. Other that grabbing them by the neck and violently shaking them (just kidding), how do you get their attention to communicate with them?

Ron SC

GlenL
(Ohio)

Posts:1470

01/02/2007 9:30 AM
Site them and warn the next violation will result in a fine, (if allowed in your State or by CC&R's) then follow through.

RonaldW
(South Carolina)

Posts:900

01/02/2007 9:57 AM
Posted By GlenL on 01/02/2007 9:30 AM Site them and warn the next violation will result in a fine, (if allowed in your State or by CC&R's) then follow through. We visit and talk to them or leave them a note if they're not home. Next violation is a letter and so on. It shouldn't be necessary, they are adults. Not just adults, but adults with enough intelligence and education to purchase a relatively expensive (for SC anyway) home. All but one would be expected to have English as their first language and we haven't had any trouble with the other one. Remember the one that picked the city trash collection notice off her front doorknob but diddn't bother to actually read it.

Ron SC

BrianB
(California)

Posts:1748

01/02/2007 11:42 AM
you can lead a horse to water, but they frown on you holding their heads under for long periods of time... or my favorites: You can lead a horse to knowledge, but you can't make him think. Never try and teach a pig to sing: it wastes your time and annoys the pig.

CathyG
(Arizona)

Posts:10

01/02/2007 12:13 PM
There is not a high horse involved. I have been on a board for almost 4 years now, I inherited one of the biggest messes you could believe. It was common to have up to 20 delinquents at a time (and we only have 54 units)- ranging anywhere from a minor amount to several months of nonpayment. Since firing our management company and becoming semi-self managed we have 1 or 2 delinquencies that are for late or lack of payment and the others are late fees not paid. A big jump from where we were. It is a lot of work that is involved. You and your board alone can decide what you need to do to collect from your deadbeats. We choose to file a lien when they reached $1,000 after we notified them with our intent to file the lien. We found that most people do not want anything to do with the lien process at all and correct the situation. Anytime someone came into a meeting hot and heavy over the process we decided to take, we had nothing but our paper trail and the CC & R's to back us up, and we refused to discuss it in front of homeowners that were not board members. They had no fight after they realized we were not playing around with them, and when the realized that we were not sitting around talking about it all through the meeting. Everyone that has responded to you (that I've read) has recommended that you not publish the info --reguardless of how well you protect the information. Just remember that in today's day and age --there is no information that is 100% protected and I wouldn't want to be responsible as the advocate for the HOA for any information about any of the HO's getting into the wrong hands. Besides who's to say that someone that has the proper passwords you are talking about won't spread the information around? Too risky! Sorry if I came off as attacking -- it was not intended. But you really are looking at a hornet's nest ahead of you and everyone is trying their best to warn you.

SueannG
(Maryland)

Posts:1

01/02/2007 1:46 PM
You can lead a horse to knowledge, but you can't make him think. Hi Brian and all.....being a horse person you can lead a horse to knowledge and chances are he'll out think you!!! Not on my high horse!!!! Wow quite a discussion about non payment. We are a small HOA in Aberdeen Maryland. Only 47 homes in a water front community. When our new board took over last Sept we had 14 delinquent households. Our treasurer spoke to each homeowner and went through the bill with them. She then created a billing system that was much easier to follow...we now have only 2 delinquent members. For us it was simply a matter of communicating with the homeowner and giving them a chance to speak. I am the president of our HOA and the one thing that I heard so often before taking office was "Whats going on?" We created a newsletter and set up a web page. We have an e-mail address that people can utilize for complaints. I made it a point to personally contact the homeowners that we were told were "Pains" by the out going board. I asked them what we could do to better understand their needs and wants. Some of those "Pains" are now very active and supportive. So I guess a little dose of kindness worked for us. We are now struggling with how to raise the HOA dues.

BrianB
(California)

Posts:1748

01/02/2007 2:28 PM
Sueann, i will admit that horses are both the dumbest and smartest animals you can encounter... or maybe they can just play dumb really well, when they want to. I know the last thing you will ever do in a saddle is underestimate the intelligence of your horse. You do that, and you will be viewing the world from the ground, behind a horse (that is snickering, i swear). Of course, if you think a horse is smart, hang around a mule. They make horses look like remedial learners. Those beasts are even better at being dumb when it suits them than horses, and smarter than their handlers at all times.

RobertR1
(South Carolina)

Posts:2525

01/02/2007 4:39 PM
A general reply. You have a delinquent home owner, or ten. Let's take ten. Let's say half owe 500 and half 1000. I think that is $7,500. You file a lien, within a day or so that lien is registered and published and the names are listed with amounts, Attorney for the regime and someone authorized signs and certifies the claim for the Regime. All that information is public, there is a claim registered against each owner and the owner can't sell the property without the claim attached. Now, it spite of all that you are saying it is dangerous to let the people to who/whom the money is owed, the names of those in arrears to the Regime.(The people)The board members are duly elected by the Regime except any serving an unexpired term, who is appointed by the board, so in effect the Board might not be an elected Board, so I imagine it can not be considered as an elected board at any time. Is it the election that makes those members on the Board special because they have to know the names? If so how can an unelected Board member be privy to this information and is he legally responsible to speak for the board? Suppose I, as a valid member of this association that happens to be incorporated, wants to know those names. I suspect that in the end I would get the names and some satisfaction from the board for not giving me the names, and probably that information would be public also. How come?

BrianB
(California)

Posts:1748

01/02/2007 5:04 PM
Robert touches on a point: Sometimes, this information is public knowledge. Once a lien is filed, it is. Before that, it may or may not be. Also, at all times, this information is business knowledge. I would liken it to being a shareholder of a company, say a grocery store. as an owner of the store, i believe i have a right to know who wrote us bad checks, who stole money from the store, and which people aren't paying for the groceries they take. Where i see the difference is "pushing" the information versus allowing it to be "pulled". If you publish and send out bad check writers, owners who owe money, are late in dues, etc., you are pushing the info. If you simply have the information, and if someone wants to examine the books, that's letting them pull the information. Pulling information is fine with me... any owner who wants to see the books is welcome to. What i see from most advisors here is that Pushing the info, while legal, may well leave a bad taste in the neighborhood, and do as much or more harm than good.

hoatalk

Posts:490

01/02/2007 6:04 PM
I did a quick Google search and Brian's point is relevant to the Fair Debt Collection Practices Act. Have a look at a summary here: http://www.chamberofcommerce.com/Public/index.cfm?objectid=CA5BAEEA-1422-74FF-329949F4AB06A117 Assuming this website is correct, it says: "... your rights under the Fair Debt Collection Practices Act. What debts are covered? Personal, family, and household debts are covered under the Act. " "What types of debt collection practices are prohibited? ...debt collectors may not: publish a list of consumers who refuse to pay their debts (except to a credit bureau);" This is why Boards must be very careful and get competent legal advice when dealing with collections. There is a labyrinth of laws and they favor, guess who? ... the debtor, not the collector. The Fair Debt Collection Practices Act is a federal law and of course the states have their own additions. This is a good reason to turn collections over to a good collection company, management company or attorney.

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BradP
(Kansas)

Posts:1742

01/02/2007 8:30 PM
Robert: There is a huge difference in the two. Filing a lien is a process that is a legal means to collect a debt if you follow the correct steps. Publishing those who don't pay dues on a website isn't. It can't be stressed enough to anyone on here to get competent counsel and listen to them. When you can have such a huge impact on someone's life as foreclosing on their home you need to follow the letter of the law.

BrianB
(California)

Posts:1748

01/02/2007 9:08 PM
Wait, i had a relevant point? On January 2nd? Dang... that was my one point for the whole year, and i blew it early. I was going to save that, and treasure it.. maybe use it in september, or around Thanksgiving. And now it's gone. Shoot.

HaroldS
(Arizona)

Posts:904

01/03/2007 11:53 AM
Roger, the Fair Debt Collection Practices Act came about because of the outrageous collection practices of some debt collectors. They brought this Act upon themselves. But of course it now affects everyone in debt collection. Nevertheless, it is here to stay and has teeth. An HOA should be assured that an attorney or debt collector they hire adheres to this law. If violated, debtors can contact their state attorney general or the Federal Trade Commission and they can sue for damages. Be assured career deadbeats know this law backward & forward. I'm not sure why any HOA would go this route when they have absolutely legal means to lien and foreclose. Harold

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