Written by Richard Thompson
Question: Our board received a certified letter from an owner demanding a copy of all board meeting minutes for the past five years to be sent to him within 10 days. This request represents a significant investment in time and effort. Are we obligated to comply with this request?
Answer: What you describe is a common tactic to gain control. The logic goes something like this: All owners have a right to most HOA information and records. So, an owner that is unhappy for some reason initiates a series of demands with the message that “I want it now or else!”
While it’s true that members are entitled to most information, the board is not obligated to provide it at no cost. Charge a reasonable cost for requested records in advance. When a price is put on the demands, they usually go away. Or better, post rules, policies, governing documents, budgets, financial statements, minutes and newsletters on an HOA website so all members can self-help.
Question: We have members who would like to volunteer to do minor repair work on such things as our clubhouse, trails and pool. The board is concerned about the liability factor.
Answer: As long as the work is not precarious (ladder work, on the roof, etc.) there is nothing wrong with allowing volunteers to do certain task. In fact, the board should encourage volunteerism and find outlets for those that are so inclined.
Question: Our governing documents prohibit homeowners from having above ground pools in their yard. The board has decided that kiddie pools are included in this prohibition stating that the HOA could be sued if a child drowns. Is this correct?
Answer: The governing document prohibition on above ground pools likely has to do with curb appeal and not safety. As long as the wading pools are not visible from the street or an attractive nuisance to area children, the HOA should allow them. Since the pools are on private property, the HOA cannot insure against events that happen there.
Question: The board has announced that collection and rule violation hearings will be held in public. Is this advisable?
Answer: All collection and rule violation issues should have an established process which includes notifying violators in writing, stating the specific details, the correction needed, the penalties for failure to comply and the right of appeal. If an appeal is requested, a private hearing should be held at a convenient time and place where the board and accused can discuss the issue.
It is not appropriate to hold public meetings since the accused may not be guilty or there may be extenuating circumstances. The board should never engage in public humiliation of its members. Besides a legal challenge from an offended owner that could embroil the HOA in a lawsuit, it just makes practical sense when neighbors are governing neighbors.
Question: Our HOA has only one bank account for both operating and reserve funds. This frequently gives the board the impression that there is more spendable cash then there really is. If we run short, money that was intended for reserves gets tapped.
Answer: Operating and reserve funds should be kept in separate bank accounts for exactly the reason you point out. States like Oregon require it. Reserve funds are intended for specific major renovation scheduled to take place in the future, some times funds aren’t protected from operating budget shortfalls, the money won’t be there in the future when it’s needed and the HOA will be forced into unfair and unpopular special assessments.
Question: I read somewhere that the cost of a reserve study should be paid for out of reserve funds rather than the Operating Budget.
Answer: It depends. It’s reasonable to pay for the initial reserve study with reserve funds. Afterwards, some states require annual reserve study updates. Whether mandated by state law or not, it makes good sense to update the reserve study annually to keep it accurate, just like the Operating Budget. So the cost of an annual update should be included in the Operating Budget. If the reserve study is only being updated every few years, it makes sense to plan for it in the reserve study.