Question: Our homeowner association's governing documents include a provision that "No unsightly articles shall be permitted to remain on any home so as to be visible from any other portion of the development". The term "unsightly articles" seems to be something that could be broadly interpreted to anything visible from the street.

Answer: Usually, the governing documents are a bit more specific about things like this. If they aren't, the board should enact a policy that interprets what "unsightly articles" means. This interpretation does not need to provide an exhaustive list but it should give the owners the types of things that qualify. This policy should clarify 90% of the enforcement issues and the board can then focus only on the 10% of those issues that raise their "unsightly" heads.

As with all rules, the board should circulate the proposal to the members for a 30 day review and comment period before making a formal decision. That way, there is a presumptive buy-in.

Question: Our board is trying decide the proper way to handle an issue. At our recent annual meeting, a motion was made on something that was not on the agenda for the meeting. The president at the time allowed the motion to be made, seconded and voted upon. There was not even a sufficient number of owners there to constitute a quorum. The homeowners not present had no idea this was being voted on. Was this vote legal?

Answer: There are several issues to consider when voting at an annual meeting:

1. If there was not a legal quorum at the meeting, no business of any kind can be conducted and that includes election of directors.

2. Any motion to be voted upon at an annual meeting needs to be noticed to all members in advance of the meeting so that they have an opportunity to vote.

3. The president allowing the motion to be made does not make the matter acceptable or legal. Any member, whether they attended the meeting or not, can demand that this vote and any other business transacted at this meeting be nullified immediately. If the demand is not acknowledged by the board, an attorney letter may help. Neither the president or the board is above the requirements of governing documents.

Question: Our board requested a special assessment of $7,000 for roof repair and exterior painting. After failing to get the required vote, the board increased the monthly fees by 33%. Can it do that?

Answer: The answer depends on requirements of the governing documents. It is not uncommon for the governing documents to require a vote of the members to authorize a special assessment but not to approve the annual budget. The advantage of using a special assessment to pay for renovation is that it does not impact the regular HOA fees. But if the members fail to approve the special assessment, the board has little choice but to gather the funds by way of the HOA fees.

But there is another problem. Special assessments are triggered by the lack of reserve funds. HOAs that routinely get renovation money by way of special assessments fail to recognize that they are unfair to those that have to pay them and difficult to collect from those in financial straits. Since renovations can be predicted many years in advance, the funds to pay for them should be paid by all members in a monthly way (usual way for condominiums) along a 30 year time line (usual projection period) so that the money is there when needed. It sounds like your HOA lacks a reserve plan and fails to put money in reserves systematically so it leaves the board with the two alternatives you describe, neither of them appealing.

There are other compelling reasons to reserve. Underwriters of many condominium loans (FHA, Fannie Mae and Freddie Mac) require a current reserve study and proof that at least 10% of the annual budget is going into reserves. (The average condominium should be reserving 25-35% of the annual budget.) Those that fail to comply lose critical financing options.

Your homeowner association needs to break this boom or bust approach to major renovation projects. The board needs to order a reserve study from a qualified reserve study provider. Members of Association of Professional Reserve Analysts www.apra-usa.com carrying the Professional Reserve Analyst (PRA) credential demonstrates the experience and proficiency to provide what you need.

For more innovative homeowner association management strategies, see Regenesis.net

Published: June 3, 2010

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Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues. Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at .