Homeowners Association

It's strange how "scandal" gets defined these days in Washington. At the moment, everyone is screaming about the "scandal" of the Internal Revenue Service scrutinizing conservative nonprofits before granting them tax-exempt status. Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years. The bottom line first: The IRS hasn't done nearly enough over the years to rein in the subversion of the tax law by political groups claiming a tax exemption that is not legally permitted for campaign activity.

Question: Even with an annual income of more than $2 million, our association is in a big mess. There's a several-million-dollar loan inclusive of our reserve account the association is paying off that has a variable interest rate currently at 6.85%. The association can't touch the reserves because the bank says it's garnisheed as collateral for the loan. The board says we have to pay this money back because the bank is holding our reserve account hostage. If it is borrowed and we can't touch this high-interest money, can the association just give it back?

QUESTION: Thank goodness for your new column. Now maybe I can get an answer to my question: What is the difference between a condo and a townhouse? I've asked many real estate agents and friends who own condos and what a mishmash of answers I have received. Please let me know the correct definition as we are interested in buying one or the other but not until we know for sure what we are getting into.

Question: There's an overall deterioration in our homeowners association, and we're ashamed of the deplorable eyesores throughout the complex. There are cracks in the concrete and plaster and peeling paint everywhere. All the trees need more soil as exposed roots are cause for liability. The stairs have ragged or missing safety strips; gates have ugly, dated signs; patio tables and pool furniture are filthy; and there are corroded and rotting wood trellises and dying foliage.

Question: There's an overall deterioration in our homeowners association, and we're ashamed of the deplorable eyesores throughout the complex. There are cracks in the concrete and plaster and peeling paint everywhere. All the trees need more soil as exposed roots are cause for liability. The stairs have ragged or missing safety strips; gates have ugly, dated signs; patio tables and pool furniture are filthy; and there are corroded and rotting wood trellises and dying foliage.

Question: There are five directors on our homeowners association board. If the vote on an item is two yes, two no and one abstention, what is the outcome: yes or no? Answer: Yes or no? Neither. The matter is unresolved because it did not receive a majority of votes. Tie votes prevent a board from taking any action on the motion. Glassman is an attorney specializing in corporate and business law. Vanitzian is an arbitrator and mediator. Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or email noexit@mindspring.com .

A Kentucky doctor accused of shooting and killing one person and seriously injured another during a homeowners association meeting in Louisville pleaded not guilty Saturday. Mahmoud Hindi awalked into the meeting at a local church late Thursday and stayed for a short while before he pulled out a gun and began shooting, police said. Hindi tried to leave but was stopped by two people in the room, Louisville Metro Police Lt. Barry Wilkerson said at a news conference Friday, which was posted online by the Courier-Journal.

Question: Our gated association has several swimming pools, tennis courts and lakes with boats. These amenities belong to the titleholders and are free of charge for owners, guests and renters because the fees are included in our monthly dues. For years, at least three times a week, one board director has been using the tennis courts for his personal gain, charging patrons for tennis lessons. Without association approval, he conducts classes of a dozen people per class and charges upward of $50 per hour for private lessons.

Question: My homeowners association's letterhead states we are "a non-common interest 55-plus senior community. " I obtained all the documents pertinent to our development from the Department of Real Estate as well as the county planning department's zoning descriptions and requirements. These documents make it clear that maintenance of common areas and facilities are incumbent on the association, which has a right to lien lot owners in default on assessment payments. Documents state that each lot "shall have a common area consisting of a 20-foot minimum setback along all adjoining boundary streets and a 15-foot side and rear setback along all non-street boundaries of the development.

A homeowners association expo and conference is scheduled from 2 to 8 p.m. Friday at Santa Cruz Hall in Seaside Park, 10 W. Harbor Blvd. Admission is free, but registration is recommended. For more information, call 658-1438 or respond via e-mail at www.cai-channelislands.org.

Question: My homeowner association board acts with impunity because, the members say, they "can. " The reason the board gave me for its untenable actions was that "a person serving on an HOA board cannot be sued. " Is that so? Answer: There is no law in California that prevents an association's board of directors, the association or even its employees and vendors from being sued in any court. Whether or not such lawsuits are justified is decided by the court. The board cannot act with impunity merely because members believe they "can," and efforts to do so usually result in the board's removal or a lawsuit.

Question: I recently was elected to the board of directors of my homeowners association. I was surprised to learn that rather than conducting board meetings with an agenda and homeowner attendance and calling executive sessions, the board regularly makes decisions via email — not an Internet conference, but simply emails. The manager initiates emails to all board directors with an issue or question and requests a majority decision. As soon as she obtains one, she acts on it. It's unclear whether all directors even read all the emails.

Question: What happens if no one runs for the board and we can't get anyone to serve? Does the state take over? Who if anyone puts us in receivership? How do those actions affect all of us titleholders? Answer: Although common interest developments are state-created entities in law, the state has no interest in taking over their operations. There is no state agency that would initiate a "takeover" of a privately owned common interest development with a homeowners association. When there are no directors to serve on the board, there may be two alternatives.

Question: I own a town home in an association that has a couple of hundred unit owners. We have a current liability of more than $1.3 million but only $180,000 in the actual reserve account. At the last meeting, the board handed out an article stating that associations are not required to have reserve accounts. Board members used this as proof that we did not need to fund the association's existing reserve account or have a reserve. Our CC&Rs, however, state that we must have a reserve account.

A Kentucky doctor accused of shooting and killing one person and seriously injured another during a homeowners association meeting in Louisville pleaded not guilty Saturday. Mahmoud Hindi awalked into the meeting at a local church late Thursday and stayed for a short while before he pulled out a gun and began shooting, police said. Hindi tried to leave but was stopped by two people in the room, Louisville Metro Police Lt. Barry Wilkerson said at a news conference Friday, which was posted online by the Courier-Journal.

Question: My homeowners association has contracted with the same attorney firm on retainer for more than 25 years. The attorney also receives 40% of any money collected from dues and fines, and the association is demanding more in settlements to recoup its attorney expenses. In response to questions of this practice at a board meeting, the president said that "we have no choice in this economy due to the high number of delinquencies but to use the attorney's services, and all HOAs are doing this now. " Many of my longtime neighbors are walking away from their homes because they can't meet these higher re-payment demands by the board.

A four-year dispute over tall trees and blocked ocean views has escalated into a mini-war in an affluent neighborhood here after 200 eucalyptus trees were abruptly cut down this week by the local homeowners association. Sheriff's deputies responded Tuesday and Wednesday to reports of unrest in the 151-home Potomac Landing community, where tree crews say they were threatened with a shotgun, shoves were exchanged, and members of the Potomac Landing Homeowners Assn.

When you move into a homeowners association--be it a condominium, a townhome or a master-planned community--you must agree to abide by rules and regulations that restrict both what your property can look like and what you can do there. It is these regulations--formally known as "covenants, conditions and restrictions" (CC&Rs)--that have been the most controversial aspect of the homeowners association boom.

Question: There are five directors on our homeowners association board. If the vote on an item is two yes, two no and one abstention, what is the outcome: yes or no? Answer: Yes or no? Neither. The matter is unresolved because it did not receive a majority of votes. Tie votes prevent a board from taking any action on the motion. Glassman is an attorney specializing in corporate and business law. Vanitzian is an arbitrator and mediator. Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or email noexit@mindspring.com .

WASHINGTON — Thousands of condominium owners and buyers around the country could soon be in line for some welcome news on mortgage financing: Though officials are mum on specifics, the Federal Housing Administration is readying changes to its controversial condominium rules that have rendered large numbers of units ineligible for the agency's low-down-payment insured mortgages. The revisions could remove at least some of the obstacles that have dissuaded condominium homeowner association boards from seeking FHA approval or recertification of their buildings for FHA loans in the last 18 months.