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The Community Counsel - Our Blog for Your Association

nowackhoward condominium lawyers

The name, condominium owner associations (COA), is often conflated with a homeowners association (HOA), when they actually have very different roles to play. Condominium lawyers discuss the intricacies involved with being a COA board member, and how to protect your organization from the unique risks posed to it.

While it’s always necessary to review your association’s bylaws, being aware of the shortlist of essential duties you must perform will help you avoid legal trouble down the line.

NowackHoward hoa attorney georgia

If you’re a Homeowner’s Association Board Member, understanding the intricacies of your responsibilities can feel overwhelming – especially so if you’ve just joined or have never served on an HOA board before. If you want to avoid the need for an hoa attorney in Georgia, take care to adhere to your roles and responsibilities as laid out by the state.

As we all know, mistakes happen. Understanding the top five common mistakes HOA board members make will help you avoid legal issues in the future and build a stable board for your condominium or neighborhood.

picIn August, the US Department of Housing and Urban Development (“HUD”) released new Federal Housing Administration (“FHA”) guidelines specifically for condominium units. Starting October 15, 2019, condominiums will be eligible for single unit approval for FHA-insured loans (“spot approval”). Before this relaxed approach, only 6.5% of condominium projects in the United States were eligible for FHA loans. By enacting this spot approval for FHA loans and making it easier to obtain FHA backed financing on condominium units, HUD will increase the number of eligible condominium buyers on the market.

What does this mean for condominium associations? Previously, HUD approved only entire condominium projects for FHA loans, not individual units. If a condominium project was not approved for FHA loans, then a potential buyer could not obtain FHA-backed financing on a unit in the project. The new law enables FHA loans to be available even if the condominium project in which the unit was located was not previously approved.

shutterstock_379140319Condominiums and townhomes within the city of Atlanta will see higher solid waste fees in their July 1st bills. This stems from the Atlanta City Council’s June 3, 2019 approval of an amendment to the solid waste fee schedule ordinance that changes the way that certain multi-family residential categories are billed.   Under the amended ordinance, multi-family dwellings such as condominiums and townhouses will be charged a $63.39 per dwelling unit annual fee, plus an additional charge based upon the development’s square footage of street frontage and type (i.e. commercial, mixed-use, residential). In contrast, single-family detached homes are charged $454 per year.

While the June 3rd ordinance amendment will increase rates for condominiums and townhomes, it does represent a significantly lower increase than that originally adopted by the Council in November 2018. The November 2018 increase would have raised solid waste fees to $400 per parcel, with each individual condominium or townhouse unit being considered a separate parcel.

shutterstock_190754174Have you had your pool rules reviewed by legal counsel?

With pool season underway, it is important to make sure that your community pool rules do not expose your association to liability.

The Fair Housing Act (FHA) prohibits housing providers from discriminating based on a protected class, including “familial status.” The purpose of the law is to protect every American’s fundamental right to fair housing, including families with children. That includes the use of amenities.

Community associations (including HOAs, POAAs and Condominiums) are subject to the FHA and must be careful not to run afoul of its protections. One of the most common ways that associations—and their board members and managers—find themselves in hot water under the FHA is by denying families with children equal use of the common areas through a rule or restriction, including pool rules that target children.

shutterstock_516771484For most of us, Spring is a time of renewal.   However, for community association boards of directors, Spring can be a hectic time of negotiating and implementing landscape contracts, making sure that the community pool is set to open on time, and handling the lawn maintenance violations that weren’t obvious during the winter, among many other tasks. With such a lengthy to-do list, board members can lose sight of the commitment to community that inspired them to volunteer in the first place.  

If that is happening to your board, a good means of harnessing the Spring spirit of renewal and reaffirming board members’ commitment to the association is for the board to vote to adopt and abide by the international Community Associations Institute’s Model Code of Ethics for Community Association Board Members. The link to this Model Code can be found here.

shutterstock_276537854With Super Bowl LIII right around the corner, now is a great time to plan for the impact on your community and to make a game plan.

Tens of thousands of fans, workers and volunteers will descend on Atlanta for the “Big Game” in just over two weeks, and most of those people need a place to stay and park. That will certainly pose challenges for many communities.

With the increasing popularity of Airbnb, VRBO and other home-sharing platforms, many homeowners will be looking to cash-in on the fandom. Thus, we recommend reviewing your governing documents to confirm the scope of any leasing restrictions, the association’s enforcement powers and the due process requirements. It’s also a good time to speak with your general counsel about short-term rentals and other leasing issues. Remember, our retainer includes complimentary telephone consultations with Board members and community managers concerning association operations and governance issues.

Parking is also going to be in high demand in Atlanta in the days leading up to February 3, 2019. Thus, we also recommend reviewing any parking restrictions in your governing documents and discussing parking enforcement—including towing and booting—with your general counsel. Check-in with your attorney and have a conversation about what is permitted and how to handle violations.

new-year-resolution_pic_1-15-19ver-2 It’s not too late to make a New Year’s resolution. After all, most people have already broken theirs, so being a few days behind is no big deal!

Here are a few goals to consider for your community in 2019:

Meet with your general counsel.NowackHoward’s retainer includes a complimentary meeting with the Board of Directors. It’s a great opportunity to review roles and responsibilities and to discuss your objectives for the New Year.

Tackle delinquencies.Now is a great time to review your homeowners’ accounts and formulate a game plan to address delinquencies. Our collections team can help prioritize collections and tailor an approach for every budget.

Review your governing documents.A periodic review of your Declaration, Bylaws and Rules and Regulations is a great way to re-familiarize yourself with your community’s controlling authority and to see what needs updating. In particular, many of our clients have passed leasing amendments lately to better address Airbnb, VRBO and short-term leasing.

Establish committees.  As the saying goes, “it takes a village,” so draft volunteers to help you research new vendors, plan your pool season and complete big projects.  Getting your neighbors involved is a great way to save time, gain valuable insight and build community spirit. 

Good luck and Happy New Year!

dando_11-13-18Most community association Board of Directors understand the importance of maintaining Directors and Officers insurance (“D&O insurance”) to protect the Association, Board members, and those who assist the Board, such as property managers and committee members. D&O insurance provides coverage for claims for “wrongful acts” committed or alleged to be committed by a Board member or someone else insured under the policy. Unfortunately, what many Directors do not understand is that to preserve coverage under a D&O policy, the policy requires that an insured under the policy provide the D&O insurer with timely notice of any threats of lawsuit that it receives that may be covered under the policy. Otherwise, the D&O insurer may deny coverage of the claim.

In the case of Taylor v. State Farm Fire & Casualty Company, decided by the Georgia Court of Appeals in September 2018, a former Association committee member of the Regency Oaks Neighborhood Association, Inc. (the “Association”), Regina Taylor, learned the importance of timely reporting claims the hard way.   In this case, Taylor sued the Association after leaving her committee member position with the Association, and the Association brought counter-claims against her.   In January 2015, after filing her lawsuit against the Association, Taylor sent a copy of her lawsuit to the Association’s D&O insurance carrier, State Farm, to notify it of her claims against the Association.   State Farm appointed defense counsel to defend the Association against Taylor’s claims.

However, Taylor did not notify State Farm of the Association’s counter-suit against her and ask that it cover the Association’s claims against her under the policy until over a year later, in July 2016.   Even though Taylor was potentially insured under the D&O policy since she was a former Association committee member, State Farm denied coverage of her claim.

roleoftreasurer_6-6-18Last, but certainly not least in our blog series exploring the roles of Association officers, we discuss the role of the Treasurer.   Like the Association Secretary, the Treasurer may delegate many of the tasks for which he or she is responsible to the association’s managing agent; however, the Treasurer is ultimately responsible for ensuring that all of these tasks are performed properly. In light of this responsibility, the Treasurer should be familiar with the critical areas of financial responsibility.

If an association employs a professional management company, the Treasurer should receive a package of financial material before each board meeting. That financial package should include a balance sheet, statement of income, bank reconciliations, schedule of accounts payable, cash receipt and disbursements activity, homeowner delinquency report, and general ledger or journal entry activity. If self-managed, the Treasurer may personally prepare these items or may use the assistance of a bookkeeper to do so. The Treasurer should give a presentation of the association’s financial position at each board meeting.