CALIFORNIA ASSOCIATION
OF
HOMEOWNERS ASSOCIATIONS
INC.
ORGANIZATION RECONSTRUCTION PROJECT - 2023
SECTION I. INTRODUCTION
Doctors have their Medical Association, Dentists have their "California
Dental Association," Police Officers have their own association while
teachers belong to the "California Teachers Association." Virtually
every special interest group in the state has its own association. However,
there has never been a California Association for California's Condominium
and Townhome owners ---- UNTIL NOW!
Article I.CALIFORNIA'S HOMEOWNERS ASSOCIATIONS
In California, there are an estimated 55,000 community associations comprising
condominiums, townhomes and single family associations. They represent
an estimated 3,000,000 units and are occupied by an estimated 5,000,000
people. Annually, California community associations spend an estimated
six billion dollars and own an estimated 450 billion dollars in property
values. With such impressive numbers one would logically assume that a
local California organization exists to represent the special interests
of this vast population. This has not been the case. There has never been
an Association of Homeowners Associations exclusively to represent the
needs and interests of California's condominiums, townhomes and common
interest developments.
SAVING MONEY - SOLVING PROBLEMS
The California Association of Homeowners Associations Incorporated can
help Homeowners Associations in solving financial and other problems.
By joining together and utilizing the strength of our great numbers, community
associations can significantly reduce costs of major items; items such
as insurance, painting, roofing, slurry sealing and tree trimming, and
other large ticket items. Moreover, vendors such as contractors, plumbers
and electricians will offer discounts when providing services on a group
basis. Work provided is often better performed when the vendor is aware
the quality of service will be known to other homeowners. There are many
functions performed by vendors that are common to most Homeowners Associations
where group rates could result in substantial savings for Homeowners Associations.
INSURANCE
The cost of HOA insurance has recently dramatically increased. We can reduce
this cost, hopefully, when associations adopt appropriate policies on
an industry wide basis to manage their insurance coverage and work together
to mitigate claims and losses. At the same time, we will also convey a
message to primary insurance companies and reinsurance companies that
there is enormous strength, order and direction in the community association
industry that will affect future insurance rates and regulations at state
and federal levels.
Article I.HOME FOR THE DURATION
Problems affecting community associations, however, are not solely financial.
Often problems that have financial consequences originate with other matters.
For example, some associations may have financial problems because many
of their owners consider their residence in a condominium or townhome
as a temporary stay, the step between an apartment and a single family
home. Consequently, dues and reserves may be kept unreasonably low and
may explain the lack of owner interest in being involved or participating
in association decisions and business. Many owners may truly believe they
will only reside in their condominium for two or three years, so why not
defer the reserves and other problems to someone else. Many of these same
homeowners, however, often end up extending the intended short duration
to many years. Moreover, many community associations may not have developed
sound policies or practices for dealing with people problems, especially
difficult people or major expense items.
Article II.IMPOSED COSTS
There are also matters that can only be solved when an organization has
a sizable muscle to flex. Take one City in the southland for example.
About three years ago this City changed their water rates for condominiums
from residential to industrial. Consider what effect that has had on water
and sewer bills in this region. If it happened once, how long before other
cities will follow? Some cities are holding water deposits of condominiums
on file until the corporation changes ownership, which can never happen.
These, and other similar matters, will be challenged by the California
Association of Homeowners Associations Incorporated.
Article III.
PROPERTY TAXES
Consider your property taxes? Within a city consider the geographic size
of a condominium association of 100 units compared with the geographic
size of one hundred single family homes. The 100 homes are typically on
asphalt streets with curbs, parkways and landscaping, with sewer lines,
fire hydrants, telephone and power lines, streetlights, street sweeping,
police patrol and street maintenance. The 100 unit condo complex has none
of these public-funded amenities. If one asks the police to tow an abandoned
car, they will tell you they cannot for it is on private property. Both
the homes and the condos pay the same property taxes according to proposition
thirteen. Appropriate legislation resolving this matter alone may solve
the financial problems of many condominium and townhome associations.
Article IV.LEGISLATIVE INFLUENCE
Homeowners Associations working together provide tremendous strength and
influence on a "State of California" level to enact legislation
that will benefit all condominium homeowners. We will strive to enact
legislation that will help standardize community living, define association
responsibilities from homeowner's responsibilities, and help professionalize
community living. We need legislation in many other areas such as: building
requirements, standards for preparing financial reports, yearend audits,
property taxes and reserve analysis.
There is a tremendous need for new legislation in other areas. Most homeowners
would agree that townhomes were intended for homeowners and apartments
intended for renters. It is common knowledge that renters commit an inordinate
percentage of violations of association rules and regulations. Where there
is not a vested interest in the property, there is not the commitment
to the value and enjoyment of the property. Even so more renters are occupying
the units of community associations. Condos and Townhomes especially are
being rented out in increasing numbers, which is having a negative effect
on the value of property and the quality of life for community dwellers.
Why not? Condos and Townhomes make great rental investments. Remember,
the owner is only responsible for his tenant while the tenant is inside
the unit. When on the outside, the homeowner's association becomes
responsible. The Association is also responsible for full maintenance
of the external portion of the unit while the absentee owner is only responsible
for the interior. This is also true of the association's insurance
policy. New legislation to correct this situation is being written by
the California Association of Homeowners Associations Inc.
Article V.ACCOUNTING AND FINANCIAL REPORTING
Financial planning and reporting are essential to the survival of any organization.
CPAs are available to offer boards and managers consultation on financial
matters, accounting functions, budget preparation and reserve analysis
and tax preparation. The California Association will provide guidelines
to Boards of Directors and Property Managers to standardize the accounting
and financial reporting of community associations.
Article VI.EDUCATION & TRAINING
The California Association provides education and training for Board Members,
Homeowners and Management Companies. Seminars will be held periodically
throughout the year to accommodate new board members on subjects of finance,
conducting meetings, parliamentary procedure, preparing essential records, etc.
Article VII.UPDATING DOCUMENTS
Why should each Homeowners Associations reinvent the wheel? It is common
knowledge that the CC&Rs, Bylaws and other association documents are
out of date. So why should each association hire an attorney to update
these documents at high costs? Could not a committee of attorneys bring
the best of all associations together, prepare one generic document on
computers and then attorneys could tailor a new document for each association
at a fraction of the cost?
Article VIII.WHAT IS OUR OBJECTIVE?
The objective of the "California Association of Homeowners Associations
Incorporated" is to provide current, comprehensive, professional
and accurate information to Homeowners Associations. We are organized
to strengthen the condominium investment of our members, establish distinguished
professional standards and codes of ethics dedicated to:
"Strength in Unity, and the Value and Enjoyment of Property," and provide a "Standard of Professionalism" for Homeowners Associations,
Boards of Directors and Management Companies.
SECTION II. CORPORATION STRUCTURE
Organization of the California Association of Homeowners Associations Inc.
Board of Directors
Advisory Council
Legal Counsel Financial Advisor
Executive Advisory Board
Property Managers Committee
BOARD OF DIRECTORS
President
Vice President
Secretary
Treasurer
Honorary Member
ADVISORY COUNCIL
Five (5) Member Boards of Directors
Legal Counsel - One (1)
Financial Advisor - One (1)
Executive Advisory Board - Board of Homeowners Seven (7)
Property Managers Committee–Board of Prop Managers (7) Owners
Powers and Duties of Board Members
President
The President shall be the chief executive officer of the Association.
The President shall preside at all meetings of both the Members and the
Board of Directors, and shall have all of the general powers and duties
which are usually vested in the office of President of an association,
including, but not limited to, the power to appoint committees from among
the Members to assist in the administration of the affairs of the Association.
The President, or his or her designated alternate, shall represent the
Association at all outside business meetings.
Vice President
The Vice President shall perform all of the duties of the President in
his or her absence and such other duties as may be required of the Vice
President from time to time, including, but not limited to, overseeing
the administration and management of the various committees from among
the Members.
Secretary
The Secretary shall keep the minutes of all meetings of the Members and
the Board of Directors. The Secretary shall have charge of such books
and papers as the Board of Directors may direct and shall, in general,
perform all the duties incident to the office of the Secretary. The Secretary
shall compile and keep up to date, with the books of the Association,
a complete list of Members and their last known addresses as shown on
the records of the Association. Such list shall be open to inspection
by Members and other persons lawfully entitled to inspect the same at
reasonable times during regular business hours.
Treasurer
The Treasurer shall directly, or through an appointed representative or
agent, receive and deposit in appropriate bank accounts all money of the
Association and shall disburse such money as directed by resolution of
the Board of Directors. The Treasurer shall also have the authority and
responsibility to keep proper books of account; cause an annual statement
of the Association’s books to be made at the completion of each
fiscal year; prepare an annual budget and a statement of income and expenditures
to be presented to the Members at the Annual Meeting, and deliver a copy
of each to the Members; present periodic statements of financial condition
to the Board; and perform all other duties assigned to the Treasurer by
the Board of Directors
SECTION III The duties, responsibilities and obligations of the Association
1. APPEARANCE:
Appearance is of extreme importance to the value and enjoyment of the property.
The entire property must be properly maintained and free of debris, leaves,
paper, etc. "Walking" the project on a regular basis is essential
to ascertain that maintenance contracts are being appropriately performed,
and deficiencies, non-conforming uses, maintenance needs and performance
of contractors are in compliance with the association's regulations
and State and City code.
2. MAINTENANCE AND REPAIRS:
Maintenance repairs and / or replacement of common area facilities or equipment
will have the approval of the Board and be in compliance with budget and
association regulations. Licensed and insured contractors, such as plumbers,
electricians and similar craftsmen will be used. Specific improvements
and repairs, authorized by the Association, will be completed within a
reasonable period of time.
3. MAINTENANCE CONTRACTS:
Specifications and bids for all major maintenance and improvement contracts
will be approved by the Board and entered into the official records of
the association prior to the commencement of any work or project.
4. LANDSCAPE MAINTENANCE:
The appearance and often value of property has a direct relationship to
the quality, condition and maintenance of the landscape. Properties that
appear well maintained and groomed often have higher values and generally
sell faster than properties that do not have the same appeal. Therefore,
a thorough evaluation of the landscape is prepared and presented to the
Board of Directors with specific suggestions for improvement and special
care is given to the landscape on a regular basis.
5. EMERGENCY SERVICES:
In resolving an emergency, Agent will promptly ascertain the extent of
the problem, possible damages which may result, and estimate of the costs
for repair or replacement. Where the total costs are estimated to be less
than $ 300.00, Agent will immediately take action to correct the problem.
If it appears that costs will exceed $300, Agent will attempt to contact
Association for authorization to expend Funds on behalf of Association.
At all times, Agent will take appropriate action as it deems necessary
to protect life and the property of the Association.
Non-emergency problems are to be communicated directly to the office of
Agent during normal business hours (9:00 A.M. to 5:00 P.M.). During non-business
hours emergencies should be communicated directly to the assigned property manager.
6. FINANCES, RECORDS AND REPORTS:
Detailed financial records will be maintained monthly in accordance with
appropriate accounting principles using the double entry system and on
a modified accrual basis.
Financial Reports will be prepared monthly and sent to the Association.
Said reports will include but not be limited to the following:
A. Balance Sheet" disclosing the finances of the property, (IE, assets,
liabilities, reserves, etc.)
B. "Income Statement" detailing, budget, revenues and expenditures
for the current month and year to date.
C. Bank accounts and "Trust Fund" accounts
D. Register of all issued checks
E. A schedule of dues or other income received by unit
F. A schedule of delinquent units.
7. TRUST ACCOUNT AND DEPOSITS:
All Association's funds received by Agent will be deposited frequently
into a "Trust" Account which will bear the name of the Association.
Collection of regular monthly dues, fees, or assessments will be made
by Agent by providing Homeowner with monthly statements and envelopes
preaddressed for return mail to Agent.
8. EXPENDITURE OF FUNDS:
At the request of Association, Agent will receive, review and prepare invoices
submitted for payment by the Association through issuance of checks drawn
on the association's checking account. Such invoices together with
the appropriate checks will be submitted to the Association (or other
person designated by the Association) for review, approval and signature.
Copies of all invoices will be provided to the Board or its committee(s)
on a monthly basis or as required. All checks drawn on Association's
checking account(s) will be signed by members of the Board of Directors.
9. TRANSFER OF FUNDS:
Agent will confer with the Association for an approved procedure under
which Agent will transfer funds from the checking account to other accounts
(such as savings) as prescribed by law.
10. BUDGET PREPARATION:
Upon request and at no additional cost, prior to the end of the fiscal
year, Agent will provide the Association with a proposed budget for the
ensuing fiscal year. Or, if so requested, assist the Association in the
preparation of said budget. The budget will represent a projection of
cash receipts and expenditures estimated for the ensuing year and will
be based on:
A. Analysis of revenues, expenditures and budget performance during the
current year.
B. Review of the maintenance projects scheduled to be completed in the
ensuing year and their projected costs.
C. Analysis of required recurring and non-recurring services and all projected costs.
D. Analysis of the current and projected financial status of the Association.
E. Estimated effects of inflation on specific projects.
F. Reserve Analysis.
11. ADMINISTRATIVE SERVICES
Agent will assist the Association in developing and/or improving its communications
with homeowners.
Agent may, from time to time, provide written informational materials for
distribution to homeowners by the Association, such as rules, regulations,
and special announcements.
12. INSURANCE:
Agent will assist the Association in providing insurance for the Association
and will obtain bids from qualified Insurance Brokers in the procurement
of same for presentation to the Association.
13. MISCELLANEOUS SERVICES:
Agent will maintain appropriate files for Financial Documents, Legal Matters,
Rules and Regulations, Minutes of Meetings and other data provided by
or accruing to the Association. Additional clerical services requested
by the Association will be provided at a pre negotiated rate.
Article I. Property Managers Committee
To function as a counter part to the
“Executive Advisory Board,” the California Association of Homeowners Associations, Inc. has organized a "Property Managers Committee” also to receive, assess and provide valuable information and recommendations
to the Board of Directors and to the organization.
The members of the “Property Managers Committee”, herein after referred to as "Managers Committee," will
be appointed by the Board of Directors and will serve for a term of one
year or until they are replaced or are no longer eligible. They may be
reappointed for additional terms.
The Property Managers Committee will not receive compensation for their
services but will be reimbursed for travel and lodging expenses if necessary.
The Property Managers Committee will in no way be liable or responsible
for their participation on this board.
To be eligible to serve on the Property Managers Committee, a representative
must be the owner of a property management company specializing in Community
Associations. Property management companies will be selected from the
region in which they conduct business or based on the city where their
main office is head quartered.
The State of California has been divided into twenty five (25) divisions;
each division will be represented by one (1) member of the property Managers
Committee.
Managers interested in serving on the Property Managers Committee may indicate
their interest by sending an E-mail or by submitting a letter indicating
the same and requesting consideration for a position on the committee
to this office. In addition to your name, telephone number and address,
please indicate the name of your company and address of your company and
the number of associations you manage. You will be contacted within a few days.
SECTION III.
MANAGING COMMON INTEREST
DEVELOPMENTS IN THE 21 CENTURY
In recent years and months, we have experienced major changes in the world
we live that have affected many, if not all, aspects of our lives and
the conditions in which we live. Improved technology has changed the way
in which we now perform many of our daily work tasks. We have observed
major improvements to state freeways and streets that has made commuting
easier. Movies and TV with their enhanced dramatics and special effects
have become more entertaining. The most profound of these improvements
however has been the evolutions and proliferation made in communications.
Computer technology with all its advancements and refinements, in many
respects, have been the main source of the changes and transitions we
have experienced and enjoyed. Faster, improved, friendlier and less expensive
computers have indeed made a significant and permanent impact on our business
and the business community. The computer and the massive, advanced features
of the internet=s world wide web have forever changed the business world
by providing massive quantities of current and usable information readily
and literally at our fingertips. Indeed the wise and progressive businessperson
has long ago grasped the value of these ingenious tools and integrated
them into their business activities.
The new technology is obviously more adaptable to certain businesses and
professions than to others. And, what’s more, some business and
persons are more inclined to use this new technology than others. As for
the Real Estate Management industry, the applications and ramifications
are extensive and invaluable and have become common place. While certain
aspects of the management process by nature cannot or will not change,
many of the process, techniques and methodologies utilized by this industry
in prior times are gone or will soon be gone forever.
In prior years, however, the property manager was intended to be all things
to all people. Each property manager was expected to have a contemporary,
working knowledge of finance, accounting, parliamentary procedure, construction,
landscape, real estate, state and city laws and codes and a variety of
other qualities and information and be prepared to provide the homeowner
or Board of Directors with answers to questions upon request. With no
place to turn for formal instruction, the property manager in most cases
gained his / her knowledge on the job. Functioning in this environment
was, for many property managers, a challenge. For others impossible.
Evolving from this chaos are new and improved methods of managing homeowners
associations and other common interest developments. The year 2000 and
the twenty first century have indeed been greeted with sophisticated property
management programs and techniques designed and implemented with one main
objective, to increase the value and enjoyment of property. The internet=s
incredible ability to provide massive quantities of information to Boards
of Directors, homeowners and property managers has made this objective
a present day reality.
The following overview sets forth in detail the technicalities of managing
homeowners associations and common interest developments in the year 2022
and in the 21 century.
I. STRUCTURING NEW MANAGEMENT FUNCTIONS
To ensure that all aspects of the association are professionally managed,
the various management functions are divided into four (4) categories.
1. Professional Management
2. Middle Management
3. Maintenance Management
4. Landscape Management
Each category is distinctive and well defined.
1. Professional Management
The function of Professional Management is to provide competent, credible
and effective management services at the highest level. These services
include administrative services, financial services and coordination of
all management functions and services at levels.
A. Administrative Services
Administrative services include liaison between the Board of Directors
and the management company. The management company is expected to provide
direction and offer suggestions and recommendations to the board. Administrative
services include procurement of contracts and agreements for services
such as landscape, pools and maintenance as well as taxes and reserve study.
B. Financial Services
Financial services include billing and collection of association dues,
payment of association bills and preparation of monthly and annual financial
reports. Financial services also include collection of dues in arrears
and preparation of annual Budget Pro Forma.
C. Coordination of Management Functions
A function of the management company at the administrative level is also
designed to provide a buffer between the Board of Directors and the homeowners;
and to provide liaison between professional management and middle management.
2. Middle Management
Assigned to the homeowners association is an agent that represents the
management company and attends the meetings of the association. The middle
management representative is the contact person for the homeowners and
contractors. The middle management representative also receives calls
and requests for service from the homeowners.
Perhaps the weakest link in the property management chain of command is
with the property manager assigned to the respective association. The
relatively easy entry into the industry and high turnover of property
managers has contributed to a mediocre level of property managers. The
recent introduction of legislation by the state legislature will help
improve this problem, still there is a need to improve the qualifications
and skills of the middle management level administrators. Therefore, middle
management is intended to gathering information and pass it on to the
professional administrative level.
3. Building Maintenance Management
The Building Maintenance Management function is limited is to be performed
under the direction of a licensed general contractor to assure that buildings
are properly maintained.
Property managers are seldom qualified or knowledgeable about the maintenance
of buildings and real property. Yet the value of property is greatly affected
by the condition and appearance of the property. Therefore, this function
should be performed by persons skilled and qualified to identify a building’s
maintenance problems and make appropriate recommendations to correct the
problem. Problems such as roof leaks, fence repairs and lighting require
specialized areas of expertise. When the maintenance problem is properly
diagnosed and appropriate repairs performed, the property will be correctly
maintained and the costs mitigated. Well maintained properties typically
have a greater value than properties not well maintained. Moreover, the
CC& Sr mandate the Board of Directors to keep the property maintained.
4. Landscape Management
Landscape Maintenance like building maintenance is a specialized field
that requires unique education, training and expertise. It is apparent
that the beauty of property is significantly affected by the beauty and
condition of the landscape. Landscape management requires a working knowledge
of plants, trees, shrubs, flowers, fertilizer, trimming, planting soil
conditions, soil erosion, lawns and irrigation, valves and timers. When
studying an association=s financial report it is apparent that landscape
is one of the most expensive line items.
It is essential that a landscape specialist be available to identify landscape
problems and recommend the appropriate solution. It is certain that qualified
landscape management can save associations significant amounts of money.
II. EDUCATION, TRAINING AND LICENSING
SECTION IV. CODE OF ETHICS