QUESTION: In the last six months, our board of directors has spent 50% of our reserves in addition to about $50,000 that was in the checking account. The board approved a major renovation of the lobby and hallways and paid for it over several months to avoid having to get approval of the homeowners to spend the money. The redecorating has changed our "Olde English Inn" decor to cheap-looking contemporary. What recourse do I have?
ANSWER: The board has the right to use reserve funds for the repair, replacement or improvement of the property. Your reserve study should disclose when major expenditures are anticipated. When a large portion of the reserves are being depleted, the board should have a plan for replenishing those reserve funds.
Prior to the work being done, the board had an obligation to show that the association could afford to do the remodeling without jeopardizing the overall financial stability. If there are no other major repairs, such as roofing, that will be needed in the near future, then the board may have acted properly.
I sense that you are more upset with the choice of decor than with the large expenditures. I have never heard of a major improvement that 100% of the owners supported. As an individual homeowner you have the right to be heard, but if the majority of the owners like the improvements, what can you do? Now that the work is completed, it seems unreasonable to expect that the association would spend even more funds to change it.
When you purchase in an association, you are automatically giving a tremendous amount of control to your board of directors. Most owners are glad to sit back and let the board make these major decisions for them.
President Says He's Not Read the CC&Rs
Q: I recently attended my association's board meeting and questioned a decision. When I quoted certain parts of the CC&Rs, the president's response was: "I've never read them, so I take other people's word for what the documents say." Doesn't the president have an obligation to read these governing documents?
A: Of course, every owner should read the CC&Rs and all of the governing documents. Certainly, the board has an obligation to read and understand them. If they cannot understand them, then they should consult an attorney. I assume that the president thought the response was a clever one. I feel that if board members haven't read the CC&Rs, then they should not be serving on the board.
Attorney on Board Makes CC&R Changes
Q: We currently have an attorney on our association board who is revising our CC&Rs. When I asked why this was being done, he stated that he is updating them according to the recent changes in the state law.
I believe that our documents (written in 1973) may need updating, but I would also like to know what the changes are and verify that they are legal and proper. The attorney who is making the changes says the owners will not be voting on this matter since the law mandates that these changes can be made without a vote of the membership. What advice can you give us?
A: It appears that your attorney/board member does not specialize in common interest development law, or perhaps you misunderstood his answer.
Some of the new legislation supersedes the association documents, in which case, changing your documents would not be necessary.
On the other hand, certain phrases such as "unless the association's declaration otherwise provides" appear in several sections of the law. This means that the law does not supersede the association's documents.
Changes in the wording of your association's CC&Rs must always be submitted to the owners for a vote. The procedure for amending is explained in your CC&Rs.
If the amendment procedure is not explained, then you must refer to California Civil Code, Section 1355(b), where it is spelled out in detail. If the proper procedure is not followed, the amendment is not valid and would not be accepted for recording by the county.
If your board wants to have the CC&Rs revised, I recommend that you engage another attorney who specializes in common interest development law to provide further legal advice after your attorney/board member makes his recommendations on changes in the wording.
Trees Are Obstructing Owner's Ocean View
Q: Four months ago, I bought a condominium with a beautiful view of the beach. Some trees are growing and obstructing my view. I have sent three letters to the board president but nothing has been done. What can I do?
A: You do not state whether the trees are on a neighbor's property or on association property. If it is a neighbor's property, perhaps the board has no power to act or perhaps they have requested that the trees be trimmed and the neighbor has not taken any action.