In this checklist, we delve into a variety of important issues impacting condominium, homeowners (HOA), and townhome community associations. By examining these pivotal areas, we hope to empower board members, community leaders, and property managers with the knowledge and tools to navigate the evolving landscape of effective association management.

To organize this checklist, we’ll use the acronym U.P.D.A.T.E. meaning:

  • U – Updates to laws impacting community associations
  • P – Property maintenance responsibilities
  • D – Declaration and rules
  • A – Assessment collection
  • T – Technology impacting associations (ex. virtual meetings, electric car charging, solar panels)
  • E – Elections and voting

 

U = Updates to Laws Impacting Community Associations

Laws impacting community associations vary significantly across different areas. Nevertheless. they generally include federal laws, state statutes, and local ordinances that govern how associations operate.

Federal laws include the Americans with Disabilities Act (ADA), Fair Housing Act (FHA), Fair Debt Collection Practices Act (FDCPA), Federal Communications Commissions (FCC), Freedom to Display the American Flag Act, and the Occupational Safety and Health Act (OSHA).

Many states and local municipalities have specific laws and ordinances governing the creation, operation, and management of condominium associations and HOAs. These statutes can outline everything from board elections, meeting notices, rental restrictions, and document requests.

Environmental regulations and laws concern environmental protection, restrictions on certain types of landscaping, the installation of solar panels, electric vehicle charging rights, and other green initiatives.

Staying up-to-date with the ever-evolving legal landscape impacting community associations is essential for maintaining compliance and safeguarding the association against potential legal challenges. By collaborating closely with the association’s attorney, boards can ensure they are not only adhering to current laws but are also proactively prepared for future legislative changes.

 

P = Property Maintenance Responsibilities

Board members have a responsibility to oversee the maintenance and upkeep of their community associations. They have a fiduciary duty to ensure that the property is maintained in a safe and habitable condition.

A poorly maintained condo or HOA can negatively impact the community’s reputation, potentially impacting property values and deterring investors, buyers, or tenants. By prioritizing maintenance, board members can help ensure that the property remains in good condition and continues to attract new owners.

An association can work with their attorney to complete a Maintenance Responsibility Chart – an overview of unit owner and association maintenance responsibilities. The chart is specific to the community, can resolve maintenance responsibility uncertainty, and may address items including pest control, fencing, balconies, landscaping/yard maintenance, and snow/ice removal.

A Maintenance Responsibility Chart typically contains two critical components:

  • Reviewing your association’s governing documents (bylaws, CC&Rs, declaration, articles of incorporation, rules, regulations, etc.)
  • Mapping maintenance responsibilities to the specific language in your association’s governing documents

Proper association maintenance can help prevent costly repairs/replacements, prioritize maintenance tasks, present cost savings, and reduce frustration.

 

D = Declaration and Rules Review

The associations governing documents include the Declaration of Covenants, Conditions and Restrictions (CC&Rs) and the Bylaws.

The CC&Rs specifies the rights and responsibilities of the association and its members. This includes assessment obligations, dispute resolution, insurance obligations, property use restrictions, rule enforcement, and more.

The bylaws define the associations day-to-day operations and can specify the number of board members, board member duties, the frequency of board elections, quorum requirements, and more.

How Often Should You Review Your Governing Documents?

It is generally recommended that the association’s governing documents are reviewed at least once every few years. Some factors that may prompt a review include:

  • Changes in laws and regulations: Laws and regulations related to community associations can change over time. As such, boards should review their governing documents periodically to ensure that they remain compliant with federal, state, and local laws.
  • Changes in the community: The needs and demographics of a community can change over time, which may necessitate changes to the governing documents. This can include the adoption of virtual meetings, electronic voting, electric car charging, short-term rentals, and more.
  • Board turnover: Changes in board membership can bring new perspectives and ideas, prompting a review of the governing documents.
  • Disputes or conflicts: If disputes or conflicts arise among community members or between the board and the community, a review of the governing documents may be necessary to clarify any ambiguities or resolve any issues.

Work with the association’s attorney to conduct a regular review to ensure the community’s governing documents remain up-to-date, compliant with current laws, and reflective of the community’s needs.

 

A = Assessment Collection Policy

Assessments are typically collected on a regular basis, (ex. monthly, quarterly) and are used to fund various expenses related to the community, including:

  • Maintenance and repairs: Assessments are used to cover the costs of maintaining common areas (ex. parking lots, lighting) and shared amenities (ex. landscaping, pool maintenance, gyms). This ensures that these areas are kept in good condition and available for use by members of the community.
  • Utilities: Assessments cover the costs of utilities, such as water and electricity, that are used in association common areas.
  • Insurance: Assessments pay for insurance that covers association property, liability, directors and officers (D&O), along with any additional coverage (ex. worker’s compensation, umbrella).
  • Administrative costs: Assessments may be used to cover the costs of overseeing the association including employees, mailings, and website maintenance.
  • Professional services: This can include property management, accounting, insurance agents, legal services, and more.

A few best practices for associations to follow when collecting assessments includes:

  • Developing a clear and transparent assessment policy: Have a written policy that outlines the assessment process, including how often assessments will be collected, how much they will be, and what they will be used for.
  • Enforcing collection policies consistently: Avoid bias and favoritism by ensuring that all members are held to the same standards by uniformly administering late fees.
  • Maintaining accurate financial records: This can build trust and transparency with the community and ensure that assessments are being used effectively.
  • Communicating regularly with members: This can help to prevent misunderstandings or confusion about the assessment process, payment options, assessment increases, special assessments, and any changes to assessment policies.
  • Providing multiple payment options: Options may include online payment, mailing in a check, to make it as easy as possible for members to pay their assessments.

Your association’s attorney can provide legal guidance by:

  • Drafting assessment policies: Creating clear and comprehensive assessment policies that comply with state and federal laws.
  • Reviewing and revising governing documents: This can ensure that the bylaws and CC&Rs align with state and federal laws regarding assessment collection.
  • Representing the association in disputes: This can include filing a lien or pursuing legal action against a delinquent member.

 

T = Technology Impacting Community Associations

In the ever-evolving landscape of modern living, technology and its rapid advancements play a pivotal role in shaping the dynamics of community associations. Technology influences everything from communication (ex. social media, newsletters), security (ex. smart doorbells), sustainability (ex. solar panels), to elections (ex. electronic voting software).

In this summary, we’ll highlight two ways technology is impacting community associations: virtual meetings and electric vehicles.

 

Virtual meetings: Virtual meetings have become an extremely popular and necessary topic of discussion within condominium, homeowner, and townhome community associations.

Virtual meetings can be hosted from several different software platforms including Go-To Meeting, Skype, and Zoom. Prior to scheduling the virtual meeting, consider the different software options available and choose the one that best fits your association’s needs. There are many apps that are offered at little to no cost that allow the flexibility for participants to attend from their computer or phone.

Because in-person board meetings are such familiar territory, breaking with tradition and holding a virtual meeting will require advance preparation. To effectively and efficiently address community business, meeting facilitators must be organized and participants should be aware of expectations.

For more information about using virtual meetings in your community association, please read the following KSN articles:

 

Electric vehicles and charging stations: Various reports indicate that the sale of electric vehicles continues to grow. As such, many electric vehicle owners find that it is more convenient to charge their vehicles at home. This can get complicated in a community association where residents share parking areas and the costs of supplying their association with electricity.

Board members and property managers may be approached with proposals to install a charging station. Some states have passed “Right to Charge” laws that prevent associations from blocking proposals for charging stations. Accordingly, the association’s governing documents cannot restrict charging stations or give board members the power to deny a proposal outright.

Associations in these states do, however, retain the power to evaluate charging station proposals and recommend changes before they are implemented. These laws generally require owner proposals to meet certain conditions and the requesting homeowner is expected to take responsibility for relevant costs (ex. installation, removal of their respective charging station).

Several best practices include:

  • Working with the association’s attorney draft/revise the governing documents to address electric vehicle rules and regulations
  • Determining your property’s electric capacity (ex. building codes, weather conditions)
  • Having a written proposal process in place to maintain consistent standards

For more information about electric vehicles in your community association, please read the following KSN article:

 

E = Elections and Voting

Board member elections and voting are crucial aspects of community association governance. Having a formal policy in place can resolve disputes that may arise during the election process. Providing ample notice of meetings and elections, as well as opportunities for questions and discussions, helps ensure member participation and support.

In this summary, we’ll highlight the role of association governing documents and electronic voting.

Understand the Governing Documents: The association’s governing documents typically outline the specific procedures for board member elections and voting. These documents will detail:

  • Eligibility requirements for candidates
  • Nomination procedures
  • Campaigning rules
  • Notice requirements
  • Quorum requirements
  • How and when elections are held
  • Voting rights and restrictions
  • Process for casting ballots
  • Voting methods (ex. in-person voting, mail-in ballots, electronic voting, proxy voting)
  • Voting record-keeping

Board members should be familiar with these procedures to ensure elections are conducted fairly and legally. Failure to comply with legal requirements can lead to disagreements, delays in filling vacant board positions, nullification of election results, and potential legal action against the association.

Electronic voting: This option can make the voting process more efficient, faster, and convenient for all members. Electronic voting software can increase participation, eliminate the need for manual counting of paper ballots, reduce the risk of errors, and increase the accuracy of voting results. It’s critical that board members work with the association’s attorney to ensure that the electronic voting process complies with the association’s governing documents and applicable laws.

 

Legal Resource

If your association has questions regarding any of these issues or other legal concerns, do not hesitate to call 855-537-0500 or visit www.ksnlaw.com.

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.

 

Please note the material contained in this article is for educational and informational purposes only and does not constitute legal advice. No attorney-client relationship is established by your review or receipt of the information contained in this article. You should not act on the information discussed in this article without first obtaining legal advice from an attorney duly licensed to practice law in your State. While KSN has made every effort to include up-to-date information in this article, the law can change quickly. Accordingly, please understand that information discussed in this article may not yet reflect the most recent legal developments. Material is not guaranteed to be correct, complete, or up to date. KSN reserves the right to revise or update the information and statements of law discussed in the article law at any time, without notice, and disclaims any liability for your use of information or statements of law discussed on the article, or the accessibility of the article generally. This article may be considered advertising in some jurisdictions under applicable law/s and/or ethical rules/regulations. © 2024 Kovitz Shifrin Nesbit, A Professional Corporation.