PPHOA Board Meeting APRIL 2015

PPHOA Board Meeting Minutes

15 April 2015

Welcome to Doug Shumway, an attorney who specializes in working with HOA groups.

Specialize in HOA and condo law.  Deal with boards.  The only represent HOAs.  They don’t represent owners vs HOAs.  BYU law then clerking for Vial Fotheringham Company.  There are 1000s of HOAs in Utah and lots of new buildings.  Baby Boomers retire and maintenance free living.  He is connected to this line of work and specializes in document reviews, collecting fees, suits against builders, etc.  Very connected to new laws.  Developer lobby is strong, so this firm works to represent the HOAs. 

dcs@vf-law.com

801.355.9594

5^th South 4^th East SLC

Doug has looked at all our articles, etc.  He has some recommendations. 

Trends in liability in homeowners board.  There are laws that require updates.

INSURANCE PROVISION LAW

1.     Insurance provision in CC&R will have liability for common area.  The law changed to common area and includes personal homes.  The HOA can set a high deductible.  So if something happens to Norms home and says I want to make a claim.  We can come in and determine if the amount succeeds the deductible.  HO6 policy (for $3/month) will cover the deductible.

2.     The HOA now has to cover everything.  The problem is if a homeowner doesn’t have insurance and then leaves water faucet on and damages the next door. We can’t force that person to cover the damage, so the HOA needs to cover. 

3.     Legislature passed law that the HOA covers everything. 

4.     It’s obsolete to have additional insured.  But we want to discourage frivolous claims. 

5.     Deductable is more for $10,000-$25,000.  He recommends. 

To do:

1.     CC&R insurance provision—cover everything.  Law Utah 57-8a-403

2.     Update insurance for the whole area.  Have a VERY high deductible.

3.     Notify owners that they are encouraged to add H06 riders to their homeowners insurance to cover deductibles over claims. 

4.     Century West, Buckner, and Western insurance.  Local trades in Utah, so they keep up with Utah law.  He recommends a local law. 

NOTICE REQUIREMENT

1.     We can change the bylaw to update notifications by email or text.

2.     The law says folks have to opt out.

HOAs SUED FOR SELECTIVE ENFORCEMENT.

1.     Suing that 10 are breaking the rules and only 3 are punished.  If the owner is found to be selective enforced then if they HOA looses, they have to pay all the lawyers fees.  This can get really expensive really quickly. 

2.     General law to enforce the CC&Rs equally. 

3.     AMEND OUT things out that we don’t want to enforce.  Get rid of provisions. 

4.     Pet policies, trash cans, failure to upkeep, painting without permission.

5.     We have a clause in there that we can explain how previous boards haven’t done something, but we can start to. 

6.     1993 appellate court case.  The board decided to go one way.  The next board changed.  The court upheld the new board.  Board resolution—doesn’t have to be part of bylaws.  You’ve got to send notice out.  I like the idea of board resolutions. 

FROM NOW ON ALL BY-LAWS MUST BE RECORDED WITH THE COUNTY

To do it retroactively would be a problem, but moving ahead, we will want to do this. 

We need to record it against everyone’s unit. 

2014—NEW LAW IS TO RECORD IT ON THE HOA REGISTRY

We need to record ourselves on the HOA registry. 

If you don’t register or update registry, the lien is inactive. 

Google: Utah HOA registry. 

Continuing lien means that it is a notice of lien but to pay it off and call to see how much it is now. . .You only have to file it once and then.

Liens run with the house, even if someone goes into bankruptcy, the lien stays in place.  The new owner will therefore take on the lien. 

PARKING

If we are going to start violations, we need a schedule of fines.

The law says that the fine has to be commensurate to the violation.  We can set this up and start to fine people.  There is no cap and the assessment can go on the account then go forward

CONDO AND TOWNHOME

Difference between a condo and a townhome:  In a condo, you own part of everything—your interior and the exterior.  In townhouse, you own drywall in and then everything else and the lawn underneath.  There is legislation right now to try and unify the rules for condos. 

RENTAL RESTRICTION

This is a possibility.  We can have rules (as part of an amendment.  They have to make compliance in the rental contract.  If we do this, we can go after the tenant—we can fine the tenant and we can kick out the tenant.) 

There is a perception that renters don’t take as good care.  It doesn’t impact us as much because of condos.  FHA loans won’t certify if there is a percentage over. 

RESERVE STUDY

It is required that we do the study.  Must be reviewed every 3 years.  Every 6 years you have to do a new reserve study. 

Continue to build a maintenance plan. 

There are professional reserve study specialists.  It will print out a report. 

Assesses how to fund the reserve to make sure that we can do this.

The board votes to fund or not fund—the owners have 45 days to accept or veto. 

The law doesn’t require you to fund everything, but if you don’t you run the risk of heavy assessments in the future. 

THE BUSINESS JUDGEMENT RULE

If we rely on experts, we are protected because we have done the best practice.  If we decide to do something in a “reasonable business practice.”  So reasonable is rely on other people. 

PROPERTY MANAGERS

Property managers to do all the accounting, the collections, the enforcement, etc. 

Make sure that you have 2 signers.  Embezzlement happens when property managers have sole control. 

They contract through lawn care and do walk throughs.  They have special vendors, etc.

Doug would only recommend good ones. 

DOUG SHUMWAYS’ SERVICE

For Fotheringham to redo all the documents would cost $2500-$4000—this is a flat fee (not to be exceeded.)  The whole point it to maintain or increase property values.  If we don’t want to do a complete redo, we could have a whole bunch of

Once you send a ballot out, you have 60 days to get it back.  You need 67% or 25 back in favor.  It’s a done deal.  They will even record it on the county. 

This company takes the risk for collection and collect the fees from homeowners as part of the service. 

Monthly free seminars.  Will also do training. 

Doug will send us a bid for working with us.  We will review this bid and make a decision next month about how to proceed. 

                                                                                                                                                           

Financials

1.     First, Here are the current balances in all of our accounts:

a.     Business Checking: $40,418.95. The balance in this account has decreased drastically from last months balance because of 2 major HOA expenditures:

                                               i.     Reimbursement for the repairing of the Tongs deck totaling $3300.00.

                                             ii.     Structural Repairs made to HOA units involving siding work totaling $7,230.67. 

b.     Capital Reserves (Money Market): $42,433.63. This new balance reflect the monthly transfer of $370.00.

c.     Savings: $25.18 - This account remains unchanged.

2.     I spoke with Trent and informed him that they are okay and back on payment schedule for their HOA dues.

3.     Lastly, I did not get in contact with the Christiansens, Pynes, or Ms Teria Walker about their arrears. I will do that in the coming week.

4.     Please let me know if there is anything you need, bills to be paid/checks to be written.

5.     Also, Megan you can come pick up your reimbursement check anytime.

6.     Questions: has a new contract been drafted and return to Otteson Boys Mowing?—DONE.  Will be filed with Daniel.  Megan has copy

Repairs

1.     What has Tony repaired? 

a.     Almost everthing.  Places still to look:

b.     Double check between Jones and Trousdale.

c.     There is a piece on the front of a chimney in the front units.

d.     DeeAnn will follow up on that. 

2.     Did the Gutter Guy repair Karen Thompson and Karen Grants gutters and clean downspouts?

a.     Ryan will follow up

3.     Bonneville Asphalt bid to repair the pot hole and crack repairs. (see attached)

a.     Bonneville says every 2 years for crack sealer and every 4 years do the full seal of the asphalt.

b.     We need to have regular maintenance.  We need to put this on a maintenance schedule.

c.     They are estimating  $7200

d.     We should get a second bid.  Ryan will call around and get a second bid. 

Replacing the mulberry tree.

1.     Darrington says $500.

2.     Norm will report on other bids next month. 

Garbage

Norm has called around about new garbage dumpsters do see if we can get a better deal.

We need to consider a bigger dumpster for the one end. 

Look at signs, too. 

Action item for next month.

Non-Owner Cars

1.     Green SUV (Ryan)—all taken care of.  Sort of. 

2.     Black SUV (DeeAnn)—done. 

Exterior Project

1.     Hiring a general contractor:  Ryan and Kelsey recommendations?

2.     Things that still need to be done:

a.     Remove old shutters

b.     Purchase and hang new shutters

c.     Clean/repaint white vent grates

d.     Repaint Mason and Walker doors

e.     Advise us on painting storm doors? 

3.     Still waiting on a bid.

a.     Ryan will get one bid.

b.     Megan and Kelsey will get another 1-2.