Monday, November 26, 2007

Libraries contributed to Park City and Sandy

Hobbs & Olson has purchased two more sets of the Adopt-a-Library collections from the Foundation for Community Association Research. These libraries, along with the library donated to the main branch of the Salt Lake City Library, should be on the shelves of the Summit County Library at Kimball Junction in Park City, and at the Sandy Branch of the Salt Lake County Library (1300 East) in the next several weeks.

Wednesday, November 14, 2007

An Opportunity to Really Give

So, if you are wondering about how to make this Holiday Season special, how about taking a shot at improving the World in which we live?

The One Laptop per Child project will provide you with a durable laptop comuter for the recipient of your choice, and will contribute an identical laptop to a deserving recipient, for less than $400.00.

Of course, you can also contribute the laptop that you purchase to another deserving recipient, whom you may not know.

Please act promptly, if you are interested. This opportunity will end on November 26, 2007.

For more information on this amazing project, go to


Thursday, November 08, 2007

Another Case from Park City

On October 30, the Utah Supreme Court issued an opinion in the case of Berry v. Greater Park City Company, 2007 UT 87, which didn't deal directly with community associations; in fact, upon first blush, it would seem to have no relevance.

The Berry case dealt with a competitive skiercross race, promoted as the "King of the Wasatch." Mr. Berry, before participating in the race, signed a "Release of Liability and Indemnity Agreement." He was seriously injured in the race, and brought suit against several entities, including the ski resort and several sponsors. Before he could pursue his claims, he needed to challenge the enforceability of the release.

The court's analysis of the enforceability of the release is what makes the case of interest in the community association realm. Regular readers will recall that several weeks ago, I referenced a Georgia case in which the Georgia court upheld exculpatory language in an associations covenants. The new Utah case may shed some light on whether or not Utah courts will follow the Georgia court in enforcing similar provisions. And, it may assist drafters in making their language more likely to survive judicial scrutiny.

In Berry, the Court declined the plaintiff's request to rule pre-injury releases of negligence to be unenforceable based upon public policy. The Court did, however, reaffirm that "sound reasons exist for the law to treat pre-injury releases with greater suspicion than post-injury releases." The Court adopted the considerations of an old California case Tunkl v. Regents of the University of California, 383 P.2d 441 (Cal. 1963), as establishing the standards which a court should evaluate in considering the enforceability of these clauses. The factors of Tunkl, adopted by the Court, included:

“[1] [The transaction] concerns a business of a type generally thought suitable for public regulation. [2] The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. [3] The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. [4] As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. [5] In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. [6] Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents.”

Hawkins, 2001 UT 94, ¶ 9 n.3 (quoting Tunkl, 383 P.2d at 445-46).

Several of the factors in this analysis obviously argue against the enforceability of a pre-injury release of damages arising from negligence in performing construction services; on the other hand, the injuries arising from defective construction offer differ significantly from the injuries arising from negligent operation of a competitive or recreational activity. That is one of the underpinnings of the economic loss doctrine, and that is a discussion for another day.

Wednesday, October 31, 2007

"Litigation for Years to Come..."

Or at least so promises Comcast, in response to the new Federal Communications Commission Rule mentioned in this blog entry the other day. The new rule was adopted by the F.C.C. unanimously today.

Whether or not the rule does in fact reach the promised litigation levels, it does appear as though the rule will apply to condos, at least based upon the quotes from Verizon and Comcast, as reported by the Associated Press:

"The FCC decision will provide access to new competitive options for residents of these properties and encourages further deployment of broadband networks," Susanne Guyer, Verizon's senior vice president of federal regulatory affairs, said in a statement.

But Comcast said the change is a "blow" to consumers in apartment buildings and condos and could spur litigation for years to come.

"The net result is that many consumers are likely to wind up paying more for services if the FCC's interference in the competitive marketplace stands," Comcast spokeswoman Sena Fitzmaurice said in an e-mailed statement.

I'll look into the new rule, and provide some more information on this blog in the next day or two.

Monday, October 29, 2007

F.C.C. Planning to Act on Exclusive Cable Contracts, at Least in Apartments

The New York Times is reporting that the Federal Communications Commission is about to adopt a rule that would prohibit exclusive cable carrier contracts in apartment buildings. The article, which is available here, is silent as to whether the regulation will alter the enforceability of these contracts in the community association context. A quick search at the F.C.C. web site shed no further information, but I'll look into that and update this posting as soon as I can find out more information.

Thursday, October 25, 2007

You Ought to Add This...

Or at least seriously consider adding this, or something similar, to your declaration. The language below was recently upheld by the Georgia Supreme Court, which upheld the provision in protecting an association from a lawsuit filed by an owner.

The Declaration provided, in pertinent part:

From the time that the common area, or any portion thereof, is opened and put into use for the enjoyment of parcel owners, owner [developer] shall be and remain wholly free and clear of any and all liability to, or claims by, all parcel owners, and all persons and entities, of whatever kind or character, whether sounding in contract or tort, deriving from the occurrence of any injury or damage to any person or property on, or in respect of the use and operation of, the common area or any of its improvements, fixtures, and facilities; inasmuch as the control, operation, management, use and enjoyment, of the common area shall be within, under, and subject to the Association – and not owner [developer]. In this respect, it shall be the affirmative duty and responsibility of each parcel owner, and user of the common area facilities to continuously inspect the same for any defects or perils or other unsafe conditions or circumstances, prior to and during such use or enjoyment thereof; and all users of, and visitors to, the common area and its improvements and facilities shall use, enjoy, and visit, the same at their own risk and peril.

The Association successfully defended against a number of challenges to the language, ultimately succeeding in obtaining a dismissal of the Unit Owner's personal injury suit.

Wednesday, October 17, 2007

Fine...Just Fine...

Inquiries have been flying in over the past few weeks about associations' rights and powers to fine their noncompliant residents. It thus seems appropriate to remind readers, therefore, that the right to impose liens associated with fines is limited by statute.

Utah Code Ann. 57-8-37 applies to condominium associations, and limits fines "for a continuing violation" to $500 per month. The legislation does not define what "a continuing violation" is.

Utah Code Ann. 57-8a-208 applies to other community associations, and does not contain any limitation upon the amount that can be fined.

Both statutes entitle the fined unit owner to have a hearing, if the fine is contested. The hearing rights vary, depending upon the type of association.

So, if you want to fine someone, I'd recommend that you consult competent counsel before you act.

Tuesday, October 09, 2007

Holding Their Breath While Holding the Bag.

Lenders who financed major condominium projects while the economy was stronger, and prior to the current mortgage crisis, are now reaching the point where their purchasers need to decide whether to complete their purchases, or walk from their (often significant) down payments.

The New York Times reports that one lender, Corus Bankshares, has 92 percent of its developers' accounts receivables in condominiums. The condominium construction boom is peaking this year, with completed condominiums up 45 percent from 2006. Meanwhile, sales have fallen 12 percent. In the last three months, sales in Vegas are down 46 percent.

Right now, I think I'd prefer to have my money on a table than on a down payment.

Here's a link to the article.

Thursday, October 04, 2007

Rudy Giuliani's Answer to the Perpetual Pet Problem

According to an article in the New York Times, Mayor Rudy Giuliani used to offer rather candid advice to his callers on his weekly radio show. When called about the problem of owners who refused to clean up after their dogs, the Mayor reportedly responded:

“I get angry about this all the time! When I was a private citizen I would go up to people and tell them they were slobs,” Mr. Giuliani recalled. “I would say: ‘Hey, you’re a real slob. And you’re disrespectful of the rights of other people. Clean up after your dog, damn it!’”

This is neither a political endorsement nor a criticism. I just thought you might find it interesting, and perhaps useful.

Perhaps a reader ought to present this question at the nest YouTube debate.

Wednesday, October 03, 2007

Landslides in LaJolla, California

The New York Times is featuring the dramatic photo above, taken in LaJolla California earlier today. The photo and the accompanying New York Times article are a reminder of the need for developers and homeowners to be mindful of the risks associated with hillside development. Sliding slopes are, after all, the issue that led to the Yazd v. Woodside Homes litigation.

Tuesday, October 02, 2007

It Depends Upon How You Phrase It

At last weekend's legal seminar, I reminded my audience that the Fair Housing Act's protections against familial status prohibit discrimination against families with children, and as a result have resulted in fines against associations who require children to wear diapers in the pool.

So, remember that if you require anyone to wear diapers in the pool, your rule must be age neutral. "Those requiring diapers must wear them in the pool" is OK; "Children must wear diapers in the pool" is not.

Sunday, September 30, 2007

Coming to a Library Near You...

In the next several weeks, the main branch of the Salt Lake City Library will be receving a collection of CAI publications, courtesy of Hobbs & Olson, L.C.

The books were purchased by the firm through the CAI Research Foundation's Adopt-a-Library program, through which participating libraries can receive an extensive collection of community association materials through a contribution from the sponsor.

Hobbs & Olson is also seeking to obtain a collection of books for the Summit County libary system. Keep watching this site for updates on that effort.

Friday, September 28, 2007

Beware of (Service) Dogs

Once again, I've had a unit owner approach an association board with an assertion that his otherwise prohibited dog is a "companion animal", and thus must be allowed to reside in the association, with its owner, despite the association's prohibition against dogs.

This request has a new twist, however; the dog is a "registered sevice dog", and has a certificate -- suitable for framing -- to show it.

The certificate was obtained from, a site that provides, upon payment of $51.45, "downloadable forms" that can be completed and returned for a certificate. I don't know what the forms require, because I wasn't willing to pay the money, but the existence of the site reaffirms my suspicion that "service animals" are becoming more popular, and associations need to be aware of their rights on this issue.

The site, like many similar sites, sets forth a summary of rights under the Americans with Disabilities Act (ADA). The owner in question, like many owners, assumes that these ADA rights apply to them. The owner is wrong. Those rights may allow him to take his companion dog to breakfast at Denny's, but they don't have any application to his breakfasts at home.

Unit owners and occupants do have certain rights respecting "service animals", but the rights of owners and tenants arise from the Fair Housing Act, and those rights differ from the rights under the ADA. Because this issue arises more and more often, I thought it would be helpful to provide a short summary on the topic.

The case law in this area is still developing, but it appears as though the courts will uphold an association's right, in the case of service animals (and particularly in the subclass of "companion animals"), to determine (1) the legitimacy and general nature of the disability, and (2) the animal's ability to assist with the disability.

I recently prepared a policy for a local association; this policy was adopted in tandem with their general policy regarding animals. The policy, which should be considered as an example only, is available

And They Won't Rent to Courtney Love, Either

"Refusing to rent to somebody, because they have tattoos may be unfair, but it's not necessarily discrimination under the Fair Housing Act, unless the tattoos are specific to the person's religion or national origin," said Sandy Tamez of the San Antonio Fair Housing Council.

At least that's the attitude in San Antonio, Texas, where an apartment complex called The Villas, precludes those with excessive body tattoos, and, apparently, too many piercings as well. Edward Frankel, one of the co-owners of The Villas and other apartment complexes, states that this rule also goes for people with "tattoos exposed on the neck, hands and wrists..." and also applies to people who have their eyebrow and/or tongue pierced, more than two nose rings or more than five earrings.

While perhaps not technically illegal, this is one of those practices which, at least in this author's opinion, might not be worth the risk of a lawsuit or bad national publicity. I also can see a disparate impact claim arising, because this probably could be shown to result in discrimination against the young, and military veterans.

Wednesday, September 26, 2007

From a Reader...

It came without a copyright. This is for educational purposes.

If there's a copyright violation, it's not my fault.

And Now for Something Completely Different...

A blog that I stumbled upon this morning was reflecting upon the woes of poor Google; it seems that everyone wants to sue them. The case of note was a case recently filed in Pennsylvania, by and individual who has realized that "when [his] social security number is turned upside down in its entierty (sic) it is a scrambled code that does spell the name Google."

The complaint, which is available (along with all of its related pleadings) in the court's file, is a hilarious read. Apparently, Google has caused significant damage to Mr. Jayne; he wants damages of $500,000,000.00, which he seeks in the form of a "first check of $250,000.00 and a second check in the amount that remains."

Tuesday, September 25, 2007

Coming to a Kiosk Near You

I just received an interesting press release from Athomenet, a national provider of website and related services for community associations.

The press release announces a YouTube hyperlink; the video shows a new Kiosk in a swanky Georgia community; residents of the community can reserve their tennis courts through a kiosk. The video is worth checking out; the press release is available here.

Monday, September 24, 2007

NIMBY in Holladay

It appears that certain residents of Holladay Utah are concerned that the renovation of the Cottonwood Mall will cause some disruption, and perhaps the loss of a buffer zone that they have had from the mall.

The Salt Lake Tribune reports that neighbors of the mixed-use development, planned for the 68 acres which currently contain the Cottonwood Mall, are afraid they will lose a historical buffer zone. Both sides purport to be working towards a deal, but it looks like this might just turn into a nasty legal dispute.

The article can be found here.

Friday, September 14, 2007

An Hour of Free (and Exciting) (?) Video

Many years ago, I presented a one hour course for the Utah State Bar Annual Meeting. The session, entitled "Community Association Law: What You Don't Know May Hurt You", was videotaped by the Utah State Bar, and is available for online continuing legal education.

Lawyers who want to watch this and get CLE credit have to pay, but you can watch it here for free. The material is a bit dated, and I was quite a bit younger than, but not much has changed other than my time in a 10K.

As always, you cannot rely on the information contained in this video, and you are reminded to seek competent legal advice for your own legal questions.

Wednesday, September 12, 2007

Win an Ipod Nano!

As announced previously, the Utah Chapter of the Community Associations Institute is having a trade show at the end of the month.

One reason to attend, of course, is the high caliber of speakers and presenters at the show; another, and maybe even better reason, is the possibility of winning a new generation Ipod Nano with video.

Hobbs & Olson and will be providing a brand new, engraved Ipod Nano, which will be pre-loaded with the "What You Don't Know Might Hurt You" video. And, if and when we begin our podcasting from this blog, you'll have a place to save those podcasts.

Music on your Nano? You won't want to waste it on music!

Tuesday, September 11, 2007

Family Values

I just had an inquiry, which I repeatedly get, regarding whether or not (and how) an association can limit the number of residents in a unit. My response, as usual, was qualified: it depends on where you are, and how much risk (of litigation) you can bear.

The Federal Fair Housing Act prohibits discrimination based upon "familial status"; "familial status" is defined as:

"one or more individuals (who have not attained the age of 18 years) being domiciled with--
(1) a parent or another person having legal custody of such individual or individuals; or
(2) the designee of such parent or other person having such custody, with the written permission of such parent or other person."

With this definition in mind, I think that it's risky, at best, to try to restrict the number of blood-related individuals residing in a unit. I do think, however, that associations can safely adopt definitions from their municipalities, and restrict occupancy based on those criteria.

FYI, Salt Lake City's ordinance restricts occupancy in it zoning by defining a family as follows:

"Family" means:
A. One or more persons related by blood, marriage, adoption, or legal guardianship, including foster children, living together as a single housekeeping unit in a dwelling unit; or
B. A group of not more than three (3) persons not related by blood, marriage, adoption, or legal guardianship living together as a single housekeeping unit in a dwelling unit; or
C. Two (2) unrelated persons and their children living together as a single housekeeping unit in a dwelling unit.
The term "family" shall not be construed to mean a club, group home, transitional victim home, substance abuse home, transitional home, a lodge or a fraternity/sorority house.

And Summit County defines a family to include:

10-11-1.108 Family: A single individual, doing his/her own cooking and living upon the premises as a separate housekeeping unit, or a collective body of persons doing their own cooking and living together upon the premises as a separate housekeeping unit in a domestic relationship based upon birth, marriage or other domestic bond as distinguished from a group occupying a boarding house, lodging house, club, fraternity or hotel.

The ordinances of other Utah governmental entities can be found on the links at

Tuesday, September 04, 2007

So, What is a View Worth, Anyway?

The New York Times has another interesting article on the values placed by New Yorkers on their views. It will be interesting to see the values and marketing of the City Creek and other high rise condominiums that are on their way to downtown Salt Lake City.

Value of a View

Friday, August 31, 2007

The Salt Lake Tribune's Coverage on Energy Saving Condominiums

Condos take energy savings to new level
By Paul Beebe
The Salt Lake Tribune
Article Last Updated: 08/30/2007 11:44:01 PM MDT

Condominiums, which stand in what was once a patch of ground where three drug houses once cast a pall of fear over a West Temple neighborhood has been brought back to life by a Salt Lake City company that builds super-efficient dwellings.
Earlier this week, the Blue Conservancy took the wraps off of the Rowhaus Condominiums - two buildings containing 24 condominiums that look like East Coast row houses but take energy efficiency to new heights.
"We're trying to provide comfortable living spaces that have a long life span and utilize energy-efficient design and building techniques," Mark Wisniewski, principal officer of the conservancy and a freelance anesthesiologist, said earlier this week.
The condos at 1130 S. West Temple St. are separated by foot-thick insulated concrete partition walls that virtually stop sounds from traveling between units. The same material was used recently to construct sound-proof walls at movie theaters in West Jordan and Ogden, Wisniewski said.
Floors withstand ground temperature fluctuations, cutting heating costs. White membranes covering the roofs reflect summer solar energy away from the building. Gas-heat and air-conditioning units are mounted on the roof to minimize interior noise.
Each unit is priced around $300,000, which buys 2,000 square feet of living space - there is virtually no wasted area in the building, Wisniewski said. Each condo also comes with a 500-square-foot garage and a yard with sprinklers for gardens or xeriscaping.
Perhaps best of all, pets are allowed.
The neighborhood around 1100 South and West Temple used to be a high-crime area. That began to change 15 months ago after the drug houses were burned down by the Salt Lake Fire Department and construction began on the Rowhaus project. Over time, as some of the condos were sold, children returned to a park across the street that police say was notorious for drug-related crime.
"The Rowhaus project not only turned a former crime scene into a much-needed training experience, but also served as a catalyst in turning the neighborhood around," Salt Lake Police Chief Chris Burbank said.
"Where we used to get four or five calls per day to investigate criminal activity at the park, we now see a true community gathering place where people can walk safely," the chief said.
The conservancy has constructed 12 energy-efficient houses in Virginia, Montana and Salt Lake over the past decade. The Rowhaus project is the group's biggest effort, Wisniewski said.
So far, nine condos have been sold. Buyers include a University of Utah professor, a retired couple, a young family with one child, and two professional couples without children.
"They appeal to a wide range of people," Wisniewski said.
Another two units are for sale, and the rest will come onto the market at a rate of about two a month. Babs DeLay, owner of Urban Utah Homes and Estates, is the agent.
"There are certainly other projects that utilize sustainable design elements. But Rowhaus is an outstanding project in terms of energy-efficient design and efficient use of electricity and other resources," said Patrick Thronson, a spokesman for Salt Lake Mayor Rocky Anderson.

Thursday, August 30, 2007

You Think Your Association Has Problem Owners?

A New York cooperative isn't unique among community associations in having to pursue collection against one of its tenants, Courtney Love, but the amount being pursued is a bit higher than I'm used to. Her $18,000 lien wasn't paid, so attorneys decided to pursue another $5,611.10.

Because she still didn't pay, the association, as of the last reporting, had filed a lien for $122,594.35.

Oh yeah, and then there are those other issues, also published by the Smoking Gun, which resulted in a threatened lawsuit.

Tuesday, August 28, 2007

KSL Reports....

Local Neighborhood Cleans Up and Goes Green
August 28th, 2007 @ 6:20pm
Jed Boal Reporting

A new condo development in Salt Lake City is serving as a unique catalyst to help revitalize a neighborhood. These "green" townhomes help solve several community troubles.

The Rowhaus Condominiums on West Temple strike a new look for an area in transition.

Just a five minute walk from a TRAX station and Franklin Covey Field makes the location attractive, but it did not used to be.

Dealers sold drugs out of three homes and in the park across the street. "We had received dozens of calls for help in this area, calls coming into our drug hotline, saying, ‘There are drugs going in and out of this house.' These three homes were the site of six search warrants by the police department alone, Salt Lake City Police Chief Chris Burbank said.

The developer bulldozed the drug houses 15 months ago. Now new homeowners are moving in, and these three level townhomes are energy efficient, too. "This is the kind of project that is definitely a trendsetter as people become more concerned about cost efficiencies, about doing things in an environmentally sustainable fashion," Salt Lake City Mayor Rocky Anderson said.

Blue Conservancy Developers used a different type of wall insulation; foam blocks pumped with concrete. "It's a reclaimed product, has a long lifespan. It's very quiet separation, you don't have to hear your neighbors, and provides superior energy savings for cooling and heating," explained Mark Wisniewski, builder and developer.

That savings can up to $100 a month, and the wall is solid in an earthquake.

The homes include Energy Star appliances, tinted windows, 2,000 square feet of space and prices are starting at $300,000.

Twenty-four units are built, 18 are ready to go and nine have been sold. Who are the buyers? So far it's retirees, young professionals and a university professor.

"When people have vested interests in their neighborhoods, we have a great partnership that forms, and we can keep out the bad elements," Burbank said.

Salt Lake City Green includes environmental programs that help conserve resources, reduce pollution and combat global climate change.

CAI Utah Chapter Trade Show

2007 Tradeshow: Legal Issues in Community Associations

Come join us for food, prizes and of course, top-notch educational programs.

Held at:
Salt Lake Community College
Miller Campus
9750 South 300 West
Sandy, UT

8:00am: Exhibitor Set-Up
Registration & Meet the Exhibitors
9:15am-9:45am: CAI and Rights & Responsibilities
9:45am-10:30am: Exhibit Hall
10:30am-11:30am: Legal Panel
11:30am-1:00pm: Volunteer Awards, Grand Prize Giveaway, Vendor Raffles

Registration Information
Pre-Register by September 21st and Save!
Early Registration Fee: $20
After September 21st:
Registration Fee: $25

Register at

Friday, August 24, 2007

South Salt Lake Doesn't Want Renters, Either.

The Salt Lake Tribune is reporting that the City of Salt Lake is jumping onto the anti-rental bandwagon:

Rentals: All units will now pay fees

By Cathy McKitrick
The Salt Lake Tribune
Article Last Updated: 08/24/2007 01:05:44 AM MDT

SOUTH SALT LAKE - Landlords of single-family homes and duplexes now will be expected to obtain business licenses through the city.
In January, the City Council passed an ordinance to require the new licenses and associated fees for rentals with three units or more. Wednesday night, council members extended the law to apply to one- and two-unit rentals as well.
The program also requires that landlords evict tenants who engage in criminal activity, said City Attorney David Carlson.
In this older urban area directly south of Salt Lake City, 62 percent of its 23,000 residents rent rather than own. A study identified an estimated 1,156 units that fall in this category - at $24 each, those units would net the city $27,744 in revenue.
However, the new law is aimed more at reducing crime than filling the city's coffers.
"We're not doing this to get money," said Council Chairman Casey Fitts. "We're doing it to clean up a problem."
Carlson expects enforcement to be largely complaint-driven.
"We don't expect 100 percent compliance," said Councilman John Weaver. "This is an added tool for our staff to make headway on something citizens have deemed a priority. We can assess its effectiveness in the future."
At least one council member, Mike Rutter, is a landlord. He said he plans to comply.
"I applaud what's being done - even though it will cost me a little more money. It's important," Rutter said.

Thursday, August 23, 2007

To Incorporate, or Not to Incorporate

I attended and audited the M203 course today, and during breaks talked to two different community managers, each of whom had recently spoken to two different lawyers, and both of whom were led to believe that the incorporation of associations had become undesirable, in light of the Park West v. Deppe case.

I hope to get those two lawyers to confirm or deny these understandings, (and perhaps to start a lively e-dialogue on the subject), but for now, I assure you that I continue to recommend the incorporation of community associations.

Wednesday, August 22, 2007

A Good Summary of the Utah Nonprofit Act

One of the initial recommendations that I make to all associations is that they register themselves as nonprofit corporations. There are lots of reasons for that recommendation, that I've mentioned before (and will undoubtedly mention again).

In the interim, I just ran across this great summary of the Utah Revised Nonprofit Corporation Act, prepared by Bruce Olson, Esq. With thanks to Bruce (and he's not the Olson of Hobbs & Olson), here it is:

Nonprofit Act Summary

Sunday, August 19, 2007

The Twin Rivers Case

Many of you will be familiar with the case of Committee for a Better Twin Rivers v. Twin Rivers Homeowner’s Association.

For those of you who are not, a brief background:

Twin Rivers was a huge planned community in New Jersey, and at least one resident thought the community was unduly restrictive. So, keeping with the American Way, he sued. His lawsuit led to an intermediate appellate opinion, in which it appeared as though the Courts of New Jersey may have been required to assure that associtions were providing consitutional-level rights to their residents.

Needless to say, the case created quite an uproar in the community association business.

Anyway, several weeks ago, the case was reversed by New Jersey's highest court. There has been lots of commentary since.

Friday, August 17, 2007

CAI Releases New Governance Guidelines

The Community Associations Institute (CAI)'s Center for Community Association Volunteers (CCAV) developed the Community Association Governance Guidelines (PDF)—12 principles that can help homeowner volunteer leaders build better communities.

ANNUAL MEETINGS. Conduct at least one membership meeting annually, providing at least two weeks notice to homeowners and more than two weeks if specified in the governing documents or dictated by state statute.

ASSESSMENTS. Collect assessments and other fees from homeowners in a timely and equitable manner and in accordance with state statutes and board-approved procedures.

COMMUNICATION. Provide at least one form of regular communication with residents, and use it to report substantive actions taken by the board.

CONFLICTS OF INTEREST. Disclose all personal and financial conflicts of interest before assuming a board position and, once on the board, before participating in any board decisions.

ELECTIONS. Hold fair and open elections in strict conformance with governing documents, giving all candidates an equal opportunity to express their views and permitting each candidate to have a representative observe the vote-counting process.

FINANCIAL TRANSPARENCY. Share critical information and rationale with residents about budgets, reserve funding, special assessments and other issues that could impact their financial obligations to the association. Give members an opportunity— before final decisions are made—to ask questions of a representative who is fully familiar with these financial issues.

FORECLOSURE. Initiate lien and foreclosure proceedings only as a last step in a well-defined debtcollection procedure—and only after other, less-disruptive measures have failed to resolve a serious delinquency issue in a specified period of time.

GOVERNANCE AND THE LAW. Govern and manage the community in accordance with all applicable laws and regulations. Conduct reviews of governing documents to ensure legal compliance and to determine whether amendments are necessary.

GRIEVANCES AND APPEALS. Allow residents to bring grievances before the board or a boardappointed committee, and follow well-publicized procedures that give residents the opportunity to correct violations before imposing fines or other sanctions.

RECORDS. Allow homeowners reasonable access to appropriate community records, including annual budgets and board meeting minutes.

RESERVE FUNDING. Account for anticipated long-term expenditures as part of the annual budget development process, commissioning a reserve study when professional expertise is warranted.

RULES. Enforce all rules, including architectural guidelines, uniformly, but only after seeking compliance on a voluntary basis. Distribute proposals for new rules and guidelines to all homeowners and nonowner residents. Advise them when the board will consider new rules and encourage input. Once adopted, new rules and effective dates should be distributed to every owner and resident.

Note: Laws governing community and condominium associations vary considerably from state to state. In addition to understanding and adhering to these laws, community
association leaders need to be aware of legislative and regulatory issues that could affect their associations. You can do that by joining CAI and supporting your state’s
Legislative Action Committee.

The Community Association Governance Guidelines are offered by CAI’s Center for Community Association Volunteers (CCAV) to help board members and other community leaders create and sustain more effective, harmonious communities. This initiative supports CAI’s mission of making community associations better—even preferred—places to call home.

Thursday, August 16, 2007

Are Your Records in Order?

16-6a-1601. Corporate records.
(1) A nonprofit corporation shall keep as permanent records:

(a) minutes of all meetings of its members and board of directors;

(b) a record of all actions taken by the members or board of directors without a meeting;

(c) a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the nonprofit corporation; and

(d) a record of all waivers of notices of meetings of members and of the board of directors or any committee of the board of directors.

(2) A nonprofit corporation shall maintain appropriate accounting records.

(3) A nonprofit corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the name and address of all members:

(a) in alphabetical order, by class; and

(b) showing the number of votes each member is entitled to vote.

(4) A nonprofit corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

(5) A nonprofit corporation shall keep a copy of each of the following records at its principal office:

(a) its articles of incorporation;

(b) its bylaws;

(c) resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members;

(d) the minutes of all members' meetings for a period of three years;

(e) records of all action taken by members without a meeting, for a period of three years;

(f) all written communications to members generally as members for a period of three years;

(g) a list of the names and business or home addresses of its current directors and officers;

(h) a copy of its most recent annual report delivered to the division under Section 16-6a-1607; and

(i) all financial statements prepared for periods ending during the last three years that a member could have requested under Section 16-6a-1606.

Enacted by Chapter 300, 2000 General Session


57-8-17. Records of receipts and expenditures -- Availability for examination.
The manager or management committee shall keep detailed, accurate records in chronological order, of the receipts and expenditures affecting the common areas and facilities, specifying and itemizing the maintenance and repair expenses of the common areas and facilities and any other expenses incurred. Records and the vouchers authorizing the payments involved shall be available for examination by the unit owners at convenient hours of weekdays.

Enacted by Chapter 111, 1963 General Session

Sunday, August 12, 2007

The Proposed Legislation

As I embark upon my commentary of the pending (and presumably to be proposed) Utah legislation, it seems appropriate to make it available.

So, here you go:

Unused Utah Statutes

Section 2: Creation, Alteration and Amendment

Section 3

Section 3, Revised

Saturday, August 11, 2007

Got Equity?

The New York Times is noting a trend for those who may have acquired equity in light of recent price increases:

Get A Divorce

The author of this blog does not endorse all suggestions referenced herein.

Tuesday, August 07, 2007

And Now, a New Project

My weekly case review obviously didn't fare too well, as my last post was well over a half of a year ago.

How time flies...

Meanwhile, The Legislative Action Committee of the Utah Chapter of the Community Associations Institute is reviewing and drafting a proposed comprehensive revision to the Utah statutes dealing with Common Interest Associations, and they plan (at least last I heard -- I think they also are pretty busy), to propose legislation in early 2008.

During the course of an HOA meeting today, I realized I need to get caught up with what they are proposing, and I thus plan (hope?) to take on the draft a bit at a time, and while in the process, to update this blog with my thoughts. Then I'll invite others with whom I deal (and you, if you are reading this), to join in the conversation.

Please do jump in; I'll see your postings, and it just might motivate me to do a better job of keeping up on this blog.

Monday, January 01, 2007

New Case for the New Year

Park West Condominium Ass'n v. Deppe, 2006 UT App. 507

On the eve of the Winter Solstice, the Utah Court of Appeals shined some further light upon the conflicts between the Utah Condominium Act and the Utah Nonprofit Corporations Act. While the impact of the case is somewhat limited by subsequent amendments to the Utah Revised Nonprofit Corporations Act, it serves as an important reminder of the need for care in the meeting and voting process.

The case involved the voting upon, and apparent passage of, a special assessment. The sellers and purchasers of a condominium both refused to pay a special assessment of $32,965; the association sued. The appelate court found that the assessment had not validly passed, because the association received only a majority of votes in favor of the special assessment, whereas the statutes in place at the time required unanamity in the case of mail-in ballots. (Since the meeting in question, the non-profit act has been amended; unanimity of mail-in ballots is no longer required. See Utah Code Ann. 16-6a-707 and 709.)

The Park West case left a few unanswered questions; what is to happen with those who did pay the assessments on the assumption that they were valid, and how is the association to deal with the dilemna presented by this decision? Undoubtedly, this opinion is only the beginning of a long series of challenges for the association.