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Posts Tagged ‘Assessments’

An Evening of Learning: Collections & Bankruptcies

Pictured from Left to Right: Christine Dunn, CAI-OC; Sandra Gottlieb, SwedelsonGottlieb 
 

Sandra Gottlieb of SwedelsonGottlieb and Association Lien Services facilitated the May 30th course on Assessment Collection and Bankruptcies to an audience of community association volunteer leaders in Cardinal’s corporate office.  Sandra discussed the methods of collecting delinquent assessments including personal money judgments, judicial and non-judicial foreclosure.  She provided a thorough explanation of the benefits and disadvantages of each and the steps in each process.  Lastly, Sandra concluded with a discussion on bankruptcies beginning with the types of bankruptcies and definitions of bankruptcy terminology and the avenues an Association can follow to protect the Association’s interest and possibly collect delinquent assessments.

Christine Dunn from the Orange County Chapter of CAI was also present to discuss the benefits of CAI membership and upcoming events.  The evening ended with two raffle drawings for those in attendance.  Terry B. from Saratoga Condominium Association won a complimentary one-year membership to the Orange County Chapter of CAI and Nerisa M. of Heritage Walnut Condominium Association won a $50 gift card for a dinner and a movie.  The attendees enjoyed gourmet sandwiches, salad and dessert from Corner Bakery and Starbucks coffee.

Don’t miss our next education course on Financial Review to be held in our corporate office on Tuesday, July 31st.  Visit our website to view the full 2012 Course Schedule as well as the course descriptions and register early, as space is limited.

About Our Speaker:

 

Sandra L. Gottlieb is one of California’s leading community association attorneys and a founding partner of the law firm of SwedelsonGottlieb, which limits its practice to the representation of California homeowner associations, including condominiums, planned developments and cooperatives.

Sandra began her practice of law in 1978 and first represented unions as labor counsel, then worked for ABC as labor counsel representing management’s interest in union and employment matters. Thereafter, Sandra spent seven years working at 20th Century Fox, first as Director of Business Affairs in its telecommunications division, then as Vice President of Business Affairs in its licensing and merchandising division. Sandra began representing and providing legal counsel to community associations in the mid-eighties. Sandra has lived in two condominium associations, including a master and sub-association. Sandra’s extensive negotiating skill acquired in the early years of her practice has given her the ability to work with volunteer board members, associations’ managing agents and opposing counsel, and to provide sound counsel regarding Association operational issues.

Sandra and her partner David Swedelson formed their law firm in 1987, bringing together David’s extensive litigation experience with Sandra’s extensive transactional background. As the firm’s Managing Partner, she also leads the transactional team at SwedelsonGottlieb. Sandra’s experience in representingCalifornia community associations allows her not only to provide legal representation but also counsel on the many different matters and issues that impact California homeowner associations.

Sandra Gottlieb has long been a prominent name in the community association industry, having served as President of the board of directors of three chapters of the Community Associations Institute (CAI) in Los Angeles, Orange County and Channel Islands. On a national level, she represents the firm on the CAI National Faculty, the CAI National Attorneys Committee, and the CAI College of Community Association Lawyers (CCAL). In addition, Sandra serves on the Legal Advisory Committee for California Association of Community Managers (CACM), teaching community association managers the legal implications of their work, and she served as the immediate past Editor of CACM’s Law Journal and the designated attorney on its Professional Standards Committee. Additionally, CACM honored Sandra with its 2009 Vision Award for Lifetime Achievement. In 2010, the CAI-Orange County Chapter presented Sandra with the President’s Award and also honored her in 2011 with the Speaker of the Year award.

Visit the website of SwedelsonGottlieb at lawforhoas.com

 
 
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What is a Community or Homeowner’s Association and Who is in Charge of It?

  by Farrah Esquer, CCAM, CMCA, AMS, PCAM, President

A community or homeowner’s association is a common interest development comprised of a common area such as landscape areas, pool areas, and other recreational components that each homeowner or member shares an interest in.  Each member of the Association is required to pay assessments, which are used to maintain the common areas.  The Association is considered a non-profit mutual benefit corporation and may be either incorporated or unincorporated.

The Board of Directors consists of volunteers who are responsible for making the decisions for the Association.  In most cases, to serve as a Director an individual must own a home within the Association.  However, this can vary depending on the Director qualifications in the Association’s By-Laws.  The members of the Association elect Directors to the Board during the Association’s Annual Meeting.  The Directors then elect the Officers.

Directors have a fiduciary duty to make decisions in the best interest of the Association as a whole and to abide by and enforce the Association’s governing documents. They must also abide by the Davis-Stirling Common Interest Development Act and local, state, and national regulations.  In most cases, the Board of Directors will contract with a management company such as Cardinal or employ management staff to assist them in carrying out administrative duties, however the decision-making duties remain with the Directors.

The volunteer Directors typically meet on a monthly, bi-monthly, or quarterly basis, depending on the size and business of the Association.  The Association is required to post or distribute the agenda of each Board Meeting at least four days in advance so that the membership is aware of the discussion topics in advance.  Homeowners are encouraged to attend Board Meetings to be apprised of the condition and activities of the Association and are welcome to address the Board during the allotted time for the open forum that is held at each Board Meeting. Board Meeting Minutes are available to the membership upon request.

Volunteers from the community, whether serving on the Board or a Committee, are vital to the successful operation of the Association.  Membership input is also critical so that the Board can make informed decisions.

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Why do I need to pay assessments and what happens if I don’t?

By Farrah Esquer, CCAM, CMCA, AMS, PCAM, President

As a member of a homeowner’s association, also known as a common interest development or community association, you are bound by the Association’s governing documents to pay assessments.  Assessments are established by the Board of Directors to assist the corporation in meeting its budgetary needs.  The Association is required to maintain the common areas such as landscape and pools and fund administrative expenses to meet legal requirements for annual audits and a reserve studies.  Depending on the Association’s governing documents, the Association may also be required to maintain the exterior surfaces of the buildings, and shared plumbing lines.

As a non-profit mutual benefit corporation, the Association depends on assessments from homeowners to meet common needs.  Delay or non-payment of assessments can result in the Association not being able to make payments to their vendors, incurring late charges, and deferring maintenance.  Deferred maintenance can expose the Association and Directors to legal liability for not meeting fiduciary duties.

The Board of Directors must also enforce the Association’s Assessment Collection Policy.  Delinquent homeowners can incur additional fees ranging from late charges to interest fees to collection costs.  Associations may place a lien against a property and can ultimately foreclose on the property or pursue a personal money judgment against the delinquent homeowner.  It is important to be aware that a homeowner may not withhold assessment payments if they feel that the Association has not performed its maintenance duties or any other obligation.  Cardinal recommends that homeowners become familiar with the Association’s Assessment Collection Policy.

If a delinquency occurs, a homeowner may request that the Board of Directors consider a payment plan to resolve the delinquency.  Payment plan requests should be submitted in writing to Cardinal for review by the Board of Directors.

The operations of the Association are solely dependent on assessments paid by the homeowners, and non-payment can result in increased assessments, special assessments, or the inability of the Association to meet its obligations.

 

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