Property Management Tips

Castle Breckenridge Launches New Community Management Tool

Castle Breckenridge is proud of our commitment to “Better Management, Better Living.” This dedication has led us to provide innovative, state of the art and sustainable property management tools. Whether you are a homeowner, a member of a board of directors for a HOA or mobile home community or a CBM property manager, we think you will be as excited as we are to reap the benefits of our new one-stop online property management platform, “My Green Condo (MGCOne).”

MGCOne provides secure and dedicated portals with comprehensive features and functionalities that improve the experience for residents, board members, property managers, and management companies. for all. With MCGOne, Associations will have access to holistic technology and services that offer a number of exciting benefits, including: 

  • Continuity of operations according to the Association’s systems, process, procedures and records. 
  • A platform that retains all records regardless of changes in owners, tenants and/or board members.
  • Continuity in ownership and operations for the association.

Streamlines Communication Between Board of Directors and Residents

MCGOne equips the board of directors with a management dashboard that offers incredible tools and technology that streamline communication and allow for easy access to essential bills and documents. With just the click of a button, the board of directors can access online bill approvals, online collection of dues, online meetings, decision forums and a dedicated board email system.

This service platform also offers benefits to a property owner or tenant, imagine being able to use the online portal to:

  • Submit and monitor work requests and architectural change requests
  • Book a facility (tennis court or clubhouse)
  • Receive online statements 
  • Online surveys and discussion forums 
  • List your home for sale or rent

Improves the Efficiency of Managing Properties

The property manager can also use this virtual management tool, simplifying what can often be a complicated and draining job. My Green Condo allows property managers to:

  • Communicate efficiently with owners, tenants and the Board
  • Track pets, vehicles, parking spaces and pool passes online eliminating the need for time consuming back and forth  phone calls, voicemails and emails between owners and property management. 
  • Approve bills
  • Establish decision forums and surveys
  • Email, text and voice broadcast important or time-sensitive information to owners and  tenants
  • Conduct online meetings and conference calls
  • Manage the Architectural Request and Violation process online. 

This is just a small sampling of the features behind MGCOne and you will be among the first in the San Diego area to experience such a powerful management tool.

The service is now available to all of our communities. Please contact your property manager for registration or visit our website to login. Registration links are also being sent to those residents who have supplied CBM with their email address.

To learn more call, (619) 697-3191, to talk to your property manager.

Property Management Tips

FB Live Summary: Laws on Solar Panel Placement and Car Charging Stations with Joel Kriger

Summary from our Facebook Live conversation with Joel Kriger regarding recent changes in the law affecting solar panel placement and car charging stations

Solar Panel Placement

With 30% solar tax credit benefits to consumers currently in full force ending after 2019, and beginning to decrease in benefit thereafter, HOA’s have dealt with more and more individual owners wanting to add solar systems to their units.

There are three primary laws in California regarding installation of individual solar energy systems in a community association. The legislature has stipulated that in the case of multi-family attached units where there is a shared common area roof, an owner may also be able to install a solar energy system. An HOA cannot prevent owners from installing a solar system, however; they do have the power to control the installation when the roof is attached, common area shared, and rules are in place.

The most general rules are referenced by the following statutes of three Civil Codes on the reasonable restrictions that an HOA can allow regarding solar energy systems:

  1. Civil Code 714
  2. Civil Code 714.1
  3. Civil Code 4746

Civil Code 714

Under this law the HOA cannot have rules or CCR’s that effectively prohibit an owner from installing a solar system. It does allow the association to have a say regarding how the system is installed and the scope of installation. The HOA does not have control, however; it does require an owner to submit an application to install a system. This law allows an association to impose reasonable requirements regarding the financial and performance aspects of the installation. The cost of modification in complying with the HOA cannot exceed $1,000.00. The association can require painting, or manner of installation, but cannot increase cost more than $1,000.00, or decrease its efficiency by more than 10%. The HOA has 45 days to approve an application submitted by an owner. If the HOA fails to act within 45 days, the application is deemed approved.

Civil Code 714.1

Under this law the HOA can restrict the installation of a system on the common areas to those systems that are approved by the HOA. It can require the owner to submit and obtain approval similar to general architectural process approval by:

(a) owner submitting an application, and/or (b) architectural committee or board reviews the application, (c) examination of the location on the roof, wiring, parts that will be visible, painting to match the roof, etc (d) requires the owner to provide for maintenance, repair, and replacement of roof or building components where the association has the responsibility of maintaining the roof, (e) HOA can require the installer of the system to indemnify or reimburse the association for damage caused by installation. This provides the HOA assurance in the event of any possible common area damage or maintenance issue that may arise resulting from installation by the installation company.

Civil Code 4746

This is the most recent law for attached multi-family dwellings where there is more than one unit under the same roof. This section of the law covers the responsibility of the individual owner adding the solar energy system on the roof in the section of their specific unit and that the HOA must allow a solar system to be added, if it has met HOA requirements.

Additional mandatory requirements for multi-family attached units under Civil Code 4746:

  • The owner that is applying to add a solar system must notify each owner of each unit in the building where the system will be installed.
  • The owner and any successive owners of the unit must maintain liability insurance and at all times the association must have evidence of insurance.

Optional features of Civil Code 4746 that an HOA board may or may not require:

  • How much roof space is the owner allowed and how much is to be allocated for the system. An additional requirement allows the board to make an informed decision about roof space if the board desires. The applicant would then have to obtain a solar site survey (rendering) showing placement of the system requiring a determination of equitable allocation of the usable space among all the owners that share the same roof, garage or carport. This survey would demonstrate how much space the owner is entitled to and the particulars and details regarding placement of the system regarding aesthetics, angle of the sun, etc.
  • Additionally, the HOA can require the owner and successive owners to be responsible for (a) cost of damage to the common area resulting from installation, maintenance, repair, removal, or replacement of the system, (b) owner must pay for cost of maintenance, repair, or replacement after a system has been removed to restore the common area roof.

Additional optional items:

  • In the event that the HOA plans on putting on a new roof at some point, must determine which party is responsible for the cost of removal of the system, and then restore the system back on the original unit space section of roof.
  • Disclosure to prospective future purchasers that the system was not installed by the developer or association and that the system is the owner’s responsibility.

Road Map

Because of the complexities the HOA board should adopt a set of rules and regulations and have a process in place that explains the endeavor of adding a system and all of the requirements that entails. There should be a form used making it clear to the owner that they have a 45 day approval time limit for approval and that a Certificate of Liability (evidence of proof of insurance) must be provide within 14 days of approval of the application process, and renewed each year thereafter.

Agreement Affecting Real Property

A $500.00 application fee is made to cover the legal expenses for preparing this document. This document is on recorded and on title against the property and it gives notice that the owner made an application to obtain approval for adding a solar system, puts future owners on notice that a system was put on by the prior owner, and states what the new owner’s responsibilities will be. Owner’s responsibilities include: Costs for damage of the common area or exclusive common area resulting from installation and maintenance, cost of repairing system, disclosure to future owners regarding all assumed responsibilities upon purchasing the property, and additional requirements regarding aesthetics and specifics assisting the HOA in maintaining common area standards and uniformity.

Car Charging Stations

Changes in 2019 regarding the laws for car charging stations in communities

With the advent of electric cars, the legislature has had to address this topic. HOA’s have requirements and rules they need to follow. Owners have broad rights with being able to install these charging stations. Rules are covered in Civil Code 4745.

Civil Code 4745

The HOA cannot have any rules or restrictions that effectively prohibits or unreasonably restricts the installation or use of an electrical vehicle charging station. HOA can impose reasonable restrictions on vehicle charging stations where reasonable restrictions can be imposed that do not significantly increase the cost or significantly decrease its efficiency or specified performance. The application for a car charging station is to be submitted to the association. The HOA has a 60 day turnaround time on processing. If the HOA fails to meet the 60 day processing deadline the application is automatically approved.

New Topic with regard to Civil Code 4745 – Exclusive area parking spaces

If an owner has an assigned parking space and wants to install a car charging station the following requirements are to be made:

  • Approval must be obtained from the HOA, submit per HOA architectural standards
  • Law requires a licensed contractor to install the car charging station
  • Within 14 days of approval the owner must provide a Certificate of Liability insurance
  • The owner has to pay for cost associated with installation and also pay for electricity usage

The owner and any successive owner are responsible for all of the following:

  • Cost of damage to charging station common area
  • Cost of installation, maintenance, repair, and removal of the system
  • Cost of maintenance and repair of charging station until it’s been removed from the common area
  • Owner has to pay for restoration of the common area if/when the station is removed
  • Owner pays the cost of electricity used by the charging station
  • Owner must disclose to prospective purchasers that there is the existence of a charging station in the space

There is a provision that if the HOA is going to install a charging station in a community open common area parking space (one not designated to a specific unit) it may be used by all members of the community. There can be a new space created for this use. More than likely a card system would be created whereby the HOA could monitor the electricity cost and the member would be charged for use.  Additional rules may be created by the HOA for car charging enforcement. 

Castle Breckenridge Property Management Tips

Castle Breckenridge’s Community Promise

Our Customer Experience Promise

Our promise to you at Castle Breckenridge is Better Management • Better Living. What does that mean? It is all about making your management experience a better one that enhances living in one of our managed communities. It starts with who we bring on to our team to serve you, but it also extends to every touchpoint you have with our company.

Better Association Management

Association managers do a lot and are expected to balance a full plate of portfolios on a day to day basis. Better management doesn’t mean that we overload our property managers and expect them to be “yes” people. We deliver better management by offering several resources for our managed properties, their boards, and our community.

Community Resources

  • Video & Podcast Library
  • Monthly Facebook Live Stream
  • Monthly Lunch & Learns
  • Our Staff

We offer these resources as a way to empower our managed communities with the knowledge to make the best decisions for their residents and owners.

Video & Podcast Resource Library for HOA’s

We get that it isn’t always convenient to log in to Facebook in the middle of the day or look through our profile’s feed. That is why we have converted our Facebook Live Stream into episodes in our video library hosted on our website.

If accessing the videos is a problem, we have offered a written version of the episode for you to read when it makes sense for you.

For some of the episodes, there is an audio option for you to stream through an iTunes podcast.

Monthly Facebook Live Stream for HOA & Community Topics

Each month we invite an industry expert in topics that are related to bettering community and association management. The format is a presentation of a specific topic related to homeowner associations (HOAs), common-interest developments, and mobile home communities. The presentation is followed by a Q&A section where we allow our Facebook viewers to engage LIVE and ask their own questions.

Past Topics Include

  • Sustainability – Cool Shade Trees & Arboricultural Law
  • Sustainability – Smart Irrigation
  • Sustainability – Update on California’s Drought
  • Sustainability – Water Conservation
  • Legal – Requirements for HOA’s related to Solar Systems
  • Legal – Law Updates That Affect Common Interest Developments
  • Legal – Management Structures & Laws That Affect Manufactured Housing Ownership
  • Legal – Vendor Contracts
  • Legal – Short-Term Rental Restrictions

Monthly Lunch & Learns for HOA Board Members

Our monthly Lunch & Learns cover a full gamut of topics that are relevant to making sustainable business decisions for your community. We have partnered with the leaders in industries to offer our managed communities an opportunity to learn and take back practical solutions to implement at their property.

Our Aim

  • Maximize Budgets & Increase Property Value
  • Offer Cost Saving Solutions
  • Create Value for Community Members
  • Educate Community About Sustainable Practices

If you are interested in attending a Lunch & Learn seminar email us at and let us know what topics you are interested in learning about.

Our Staff

Our staff is the greatest resource we offer our managed communities. Our team is hardworking and knowledgeable in their fields. Their expertise works for the interest of their managed communities and helps to grow their efficiency.

The team at Castle Breckenridge has been growing. We have brought on some new team members to help our existing all-stars shine.

David Venegas

Our new RME comes to CBM with over 18 years of experience in the community and property management industry. He holds a General B contractors license.


  • Unit rehabs
  • Exterior capital projects

What does that mean for our managed properties? We can offer full-service maintenance for our properties.

Maintenance Services Offered

  • Fence repairs
  • Gutters
  • Stucco patching
  • Concrete
  • Fascia repair
  • Remodeling services
  • …and more!

Deborah Costello

Our Office Lead, Deborah, has more than 35 years of experience in customer service and operations in large corporations and in the construction industry. At CBM she is responsible for day-to-day operations running smoothly.

Why She Makes CBM Better

  • Coordinates with Association Managers and makes sure they have what they need
  • Coordinates all maintenance work orders with the RME
  • Tracks progress of maintenance jobs to keep responsible parties in the know.

Get to know more of our staff members on our team page. We are here for you to deliver our promise of Better Management • Better Living.


Property Management Tips

FB Live Summary: Restating HOA Governing Documents with Laurie Poole

Restating HOA Governing Documents

Effective CC&Rs and HOA bylaws are essential to running an efficient community, but when it comes to changing the governing documents to better serve an association and its members what is the better solution? Restating the governing documents or amending the existing ones?

Why Restate Governing Documents?

If the governing documents are more than 15-20 years old, the decision to restate governing documents may come down to being the most cost-effective. However, there are 3 main reasons an HOA should restate instead of amending their documents.

3 Reasons to Restate
  • Bring documents up-to-date with current California law.
  • Remove obsolete provisions in governing documents.
  • Hindsight & experience.

Restating vs. Amending: What’s the Difference?

To restate or not to restate, that is the question. Which option is best for what and why should you choose one over the other? First, the board of an HOA needs to understand the difference between restating and an amendment to current documents.

What is an amendment?

An amendment is a change to the current documents to make a provision in the language of the CC&Rs and HOA bylaws.

Restating Governing Documents

When a board opts to restate the governing documents for their community it is because they are looking to replace existing documents even if everything operational remains the same. An HOA would choose this option is good if there is a new format, a new template to the governing documents, or to replace old language that does not serve the community.

Exploring Restatement

California Law & Governing Documents

California law, especially in the area of HOAs and common interest developments continue to change. Law can change drastically from one year to the next and if your community’s bylaws and CC&Rs are more than 30 years old, you may have too many provisions to your current documents that they begin to conflict with current law rendering them ineffective.

Davis-Stirling Common Interest Development Act does not require you to update governing documents if provisions conflict with the law because there is a hierarchy. By this hierarchy, California law will always take precedence and prevails over governing documents. If the association isn’t required to make these changes what is the benefit? Clarity. If there is a new or prospective homeowner that is reviewing the association’s governing documents, the homeowner is likely not to know which provisions are superseded by the law.

Removing Obsolete Provisions in Documents

In this case, the valuable real estate within your governing documents is being taken up by language that is no longer serving your community. Documents that are old contain language that may have been needed as part of the original development but is now obsolete to the members of your community. Restating lends you the opportunity to take out declarant language and provisions that do not need to be carried over into the new documents.

The Benefit of Hindsight & Experience

If you are at the stage of restating your governing documents, then you have had your CC&Rs and regulating documents around long enough to see the problems your community has that cannot be resolved with the current language. This is your opportunity to make the governing documents read the way you want or need them to read that is in line with your community’s current practices.

What’s The Process of Restating Governing Documents?

Two of the most important things to remember when considering restating your governing documents are:

  • It’s a process that takes time; don’t rush the process to meet a deadline.
  • Communities should not restate their own documents; hire a lawyer.
Why a lawyer should handle the restatement

Typically lawyers are reluctant to review restated governing documents that are written by the boards of the HOA because the language in them may not translate to members of the community effectively and the language may not be legally correct as written by the board. The advantage of having a lawyer take over the process include:

  • Lawyers know what the current laws are and how they affect HOAs
  • They can contribute their own experience from restating governing documents for other HOAs
  • They know how to use legal language to make new documents effective
What does a successful restatement involve?
  • The board taking the time to make the documents as effective for the community as possible.
  • Regular reviews of drafted restatements that involve meetings with both the board and the lawyer.
  • Draft sent out to community members before a vote to get input on restated documents from the homeowners.
  • Taking the time to educate the membership about clarifications within the document or outright changes to the language.
  • Keeping the community updated from the moment you decide to restate and giving progress updates throughout the process.

The success of a restatement depends on the involvement of the board or the committee that has been charged with the task. Taking those meetings with lawyers are vital to creating an effective restatement; a lawyer will learn the most about your community by sitting down with the board and management.

If you decide to restate your governing documents, it is important to keep in mind that this process does not happen overnight and when done right you can get another 15-20 years out of the newly restated documents.

Property Management Tips

A Case Study in Property Management Ethics

A recent change in ownership of two apartment communities within a master association, comprised of four PUDs and the two apartment communities, provoked a question from the potential buyer during escrow: “Where else besides the By-Laws might the Governing Documents give definition to proportional control of the master association?” Thinking this was an odd question, I forwarded the question to legal counsel for the master association.

Not thinking anything else of it (other than the natural question as to how much control the two apartment communities would have), I received a preliminary opinion from the attorney representing the master association: though the By-Laws were explicitly clear as to proportional control of the master association, a significant and costly error had been made as to the calculation of control, thus bringing up the related question as to how much the two apartment communities would pay in association dues.

My first dilemma

For twenty years the calculation of both total number of votes and the total number of “doors” to pay association dues had been calculated upon the number of “apartment doors” instead of the number of “lots” that the two apartment communities own and sit on. The difference between the two methods of calculation was 339 “doors”. My first ethical dilemma came when the attorney asked me if I wanted an opinion letter until further prompting from the new asset owner (the two apartment properties had already closed escrow by this time).

I thought that it was only right to get the opinion letter, as it would be unfair to deny both the previous asset owner and the new asset owner such important information.

It was suggested that I get a “second opinion” to confirm the first legal opinion I received. Given the enormous gravity of this error, I sought a second opinion and was informed that the first opinion was essentially correct.

Having received the second opinion, I suggested an emergency meeting of the Board of Directors as the escrow had already closed by the time I had both opinions.

My second dilemma

The Vice-President and Treasurer of the Board of Directors worked for the asset management company that represented the previous owner that had been paying association dues for the previous seventeen years! I was concerned about corporate liability to the association and personal liability to the Vice-President and Treasurer once this information was disclosed.

I told this board officer my concerns and suggested that we devise a strategy for the timely release of the information. However, I was also concerned about my company’s liability, as it had provided pro forma budgets each year for seventeen years, and the liability of the asset manager, as she and her superior had approved these incorrect budgets for so long. This overlapping relationship between the board member and her relationship to the old asset owner further complicated the decision to, not only disclose the information but also imply an immediate correction to the proper association dues based upon the legal opinions to the new asset manager/owner of the two apartment communities.

The Solution

With permission from the Board of Directors, I wrote the new asset management company and disclosed that their association dues had to be adjusted from 444 “doors” to six “lots”, thus deeply affecting this year’s calendar budget for 2017. The new asset manager actually called me to confirm what I wrote in the letter as it seemed to be a mistake to her upon the first reading!

Being that there is real jeopardy to the master association and our company, I placed the insurance broker for the master insurance policy on notice of a potential claim which may involve both the association itself and my company.

The Board of Directors has been kept abreast of all transactions to date, even though this indirectly empowers the potential claimant of potential conflicts, which may support their position that they have a claim for overcharged association dues against the master association. This seems counter-intuitive, but fair to the damaged previous owner to the tune of nearly 1.8 million dollars. To be fair, the opinion letter also highlighted corrective measures and a defense for the master association which has now been disclosed to all parties involved. Again, somewhat unorthodox, but seemingly fair.

Furthermore, it was necessary to immediately lower the services rendered to the master association for landscaping, irrigation, management fees, and the reserve allocation. It will also be necessary to raise the association dues the maximum allowed under the civil code over the next two calendar years to restore essential services and funding of the reserves. This is workable for these properties given that most of the budget is for landscaping and irrigation and the master association is currently over 100% funded.

In working through all these issues and potential conflicts, at each step I asked myself these four questions (taken from The Rotary “Four – Way Test”): is it the truth?; is it fair to all concerned?; is it beneficial to all concerned?; and does it build better relationships?

An Overview

In response to the first question, I had asked for two opinion letters to consensually validate the truth and determined that the truth/facts did or did not support the current method for calculating voting control and association dues. The disclosure, in spite of conflicting relationships, brought transparency and fairness to all concerned in spite of potential litigation to both the association and my property management firm. The information and recalculation of dues and control were both answered fairly and truthfully and should better serve all 1040 members of this association in the long run. This will likely make for better relationships over time as the newly re-apportioned control of the master association, not only better represents all the owners within it, but also gives better financial control moving forward after the association dues are adjusted over the next eighteen months.

Is it perfect? No, I do not think so. Ethics are not always clear in the present moment. However, striving for the right answer and allowing others to share in the process hopefully brings fairness to all in the long run! I remain confident that all of this will work itself out in a reasonable manner over time.


-by John T. Kalas, President, CACM

Property Management Tips

The Benefits of Community Newsletters for HOAs

Communication is essential for the harmony of a successful community. One of the best tools for communication between the board and homeowners is a community newsletter because it is an effective way to keep homeowners informed who are unable to participate in monthly meetings. Organizing and creating a community newsletter may seem like a daunting task, but after the initial organization is laid out, the benefits definitely outweigh the time spent. When utilized correctly, newsletters can bring your community together and create a sense of unity, confusion about rules and scheduling, and more.

Organizing a Communications Committee

The first step to establish a community newsletter is to define a communications committee within your HOA. It’s best to have a committee, or multiple people responsible for the newsletter so this task doesn’t fall upon one person. This can be as easy as sending out an email to the community asking for help. Most of the time, people want to be involved in their community and are waiting for something to interest them.

Creating Newsletter Content

Creating the content for the newsletter might seem difficult at first, but the most important piece of advice to keep in mind is to start small.  Coming up with ideas for your newsletter can be as simple as reaching out to your community to discover what kind of information people want to hear about.
Generally, newsletters remind owners of important dates such as annual meetings or social events, upcoming projects (such as asphalt or pool resurfacing), community rule reminders, solicitation for Board of Committee volunteers, etc. The topics to each newsletter are unique to each individual community. However, it’s important to keep the newsletter focused on the community and to include content that benefits community members directly.
The length of the newsletter only needs to be 1-2 pages to be most effective. A good rule of them to follow is that if your newsletter is sent out monthly, it should be one page long. If you plan on sending your newsletter out bi-monthly, it’s okay to make it two pages.

Measuring Your Newsletter’s Success

The success of the newsletter will be driven from learning more about what engages your community members. Overall, it’s a great way to increase communication and the relationship between the board and your community and spread awareness, etc. Ask for feedback from time to time from community members to see if their needs are being met by your newsletter and what suggestions they may have to improve it.

-by Ashley Cypert

Property Management Tips

FB Live Summary : Mobile Home Ownership Structure & Laws with Sue Loftin

Takeaways from our Facebook Live conversation regarding Mobile Home Management & Ownership Structures and Applicable Laws with Sue Loftin of The Loftin Firm, P.C.

3 Types of Mobile Home Ownership Structure:

  1. Rental Mobile Home Parks/Investor-Owned
    • Investors own mobile home park and they rent the space to individuals who own the mobile home
  2. Third-Party Non-Profit
    • Misunderstanding: Non-profit buys the park and communicated that it will benefit everyone, but this is not always the case
    • They can and do raise the rent
    • The non-profit may say that mobile home renters can rent-to-own but again, this is not always true
    • The Takeaway: Work with an experienced management company, make sure the non-profit is transparent about their plan for the park. This model can be very beneficial to low-income mobile home parks if the structure is executed properly with an expert mobile home management company. 
  3. Resident-owned
    • Common interest subdivision
    • Standard Co-Op: membership, no stock ownership
    • Limited Housing Equity Co-op: residents set up 501c3 and can take tax-deductible donations and grants
    • Corporate Ownership: residents form a corporation and buy the park
There are a variety of laws that mobile home property managers and mobile home residents/owners should be aware of, especially when changing ownership structures.

Davis-Stirling Act

  • Applies to: Common interest subdivision, Standard co-op, Limited housing equity

Non-profit mutual benefit corporate law

  • This is the law under which mobile home communities form HOAs. This is important because it augments the Davis-Stirling Act with what you can/can’t do with your park.

Coastal Act

Title 25

  • Always applies- no matter what the ownership structure is. 


Highlighted questions from FB Live:

“How should a mobile home community prepare for financing or refinancing?”

  • Collect a history of defaults on loans by residents
  • Organize relevant documents
  • Hire an experienced mobile home management company before applying for a loan

*Corporate owned parks are more challenging to refinance


“How do you decide which ownership is best for your park?”

  • Hire someone to do a feasibility study
  • Consider Location
  • Survey residents 
  • Consider the age of homes 


Main takeaway: hire an experience mobile home management company that is updated on new and amended legislation, and can help your community make the best, informed decisions regarding your HOA and management.


Property Management Tips

HOA Board of Directors Do’s and Don’ts

Do’s and Don’ts for Board Members

According to Building Owners and Managers Association (BOMA), 90% of new communities built in California in the last 10 years were incorporated into a Condominium or Planned Unit Development. The 1970 CAI Statistical Review indicates there were only 10,000 HOA communities in U.S. but by 2015 that number ballooned to 388,000. In the years to come, more Common Interest Development (CID) communities are expected to be built in California and nationwide.

CIDs attract homeowners for a number of reasons – recreational facilities, well-maintained common grounds, and architectural-standards enforcement are among the few reasons that help retain and increase the property values overtime. The Board of Directors, consisting of volunteer homeowners, is responsible for setting the policies and overseeing the operation and maintenance of the association. If you are planning to buy into or already live in a CID, you should consider becoming involved with your community.

There are a couple of things that potential and current Board members should keep in mind when serving on the association board. The Board, as a group, is empowered to make decisions on behalf of the association. With this power comes great responsibility, meaning that the Board has a duty to enforce the governing documents and community regulations. The Board is not only responsible for the oversight of the day-to-day operations, but also entrusted to interview and select the vendors to perform maintenance and repair of the common areas. The Board must review monthly financial statements, prepare the operating budget and update the reserve study on an annual basis. According to the Open Meeting Act, the Board may not take action outside of the properly announced meeting, and all business decisions must be disclosed to the association membership in the minutes. The Board members are strictly prohibited from conducting any business outside of the meeting or without quorum present, with an exception of when a health or safety related emergency occurs. In these cases, the situation should be addressed in a timely manner. Last, but not least, it is imperative for Board members to refrain from discussing any business matters between the meetings, and always keep information confidential.

All new Board members are encouraged to attend an orientation-training course, which may be offered by the association’s legal counsel, or professional organizations such as California Association of Community Managers (CACM) or CAI. Most importantly, Board members should exercise good judgment and prudency when voting on business decisions. Individual Board members should recuse themselves when the matter of personal conflict, actual or perceived, is in question. Following the above guidelines will protect the volunteer homeowners from personal liability and guarantee the protection of the D&O insurance coverage at all times.

Each homeowner should volunteer to serve on the association Board at least for one term, in order to gain the insight and understanding of the inner workings of the community. Serving on the Board of Directors can be a challenging task, and may require a considerable time commitment, but it also provides an opportunity for neighbors to get to know each other, and work together to make their community a better place to live!


-by Vlady Dmytrenko
Property Management Tips

FB Live Summary: Vendor Contracts with Joel Kriger

Vendor Contracts: How HOA’s Can Protect Themselves

 Summary from our Facebook Live conversation with Joel Kriger

The easiest way that HOA’s can protect themselves from the issues with vendor contracts is to start by examining the contract during its formation. Before entering into a contract with a vendor, whether it is for a one-time project or a long-term service, boards should make sure the following points are covered:


  1. License – HOA boards should verify that the contractor is licensed with the state licensing board.
  2. Insurance – HOA boards should make sure the contractor is fully insured and that their insurance coverage does not contain a multi-family or condo exclusion. Insurance should include workers’ compensation if there is more than one contractor on site and liability insurance for injury or fire. HOA is held responsible for damage or injury if contractor does not hold proper insurance.
  3. Governing Documents – HOA boards should consult their CC&R’s and other governing documents to make sure that contracts do not violate any limitations. Often, limitations include limits of one year and a dollar amount threshold before needing board approval. Check the governing documents for a description of what is considered capital improvements as these expenses often need board approval.
  4. Legal Review – Always have legal counsel review all contracts, regardless of size, with attention to particular contract clauses.


Contract Clauses for Review


Parties – The contract should never name any of the board members as a party. Instead you HOA boards should use the HOA corporate name as the contracting party. This protects the directors from being named in any litigation that might result from a breach in contract.


Scope of Work – The scope of work must be clearly defined and outlined. Any ambiguity or incomplete description of the project gives rise to disagreements and makes it difficult to hold the vendor accountable for his work. This also saves the HOA from costly change orders to the contract.


Payment Schedule – Define the payment schedule. Generally, payments should be phased so that contractors are paid as work is completed. Lump sums are not advisable because up front payment exposes the HOA to risk or loss if the contractor does not complete work. Normally a percentage is paid up front so the contractor can purchase materials and begin work. A percentage, usually 10%, is retained by the association at the conclusion until work is completed and everything is signed off/inspected.


Insurance – Define the types of insurance and minimum limits the vendor must carry and whether the association is named as additionally insured on their policy.


Indemnity Provision – HOA is not liable if the vendor get sued due to some act of negligence or omission by the vendor/contractor.


Completion Date – If performance dates and times are important, they should be put in the contract. Additionally, it may be good practice to place penalties on vendor if not done on due date.


Permits and Licenses – Vendors must be licensed and pull permits whenever appropriate and provide the association with copies of both. Contracts should clearly outline who will be responsible for the cost of permits. If the cost of permits are not included in the cost given by the vendor the association will be responsible for the cost.


Warranties – This should be a two step process as labor warranties and manufacturer warranties are in play. If the vendor promises to stand behind his/her work, be sure to put it in the contract. For manufacturer warranties make sure you get work signed off by the manufacturer as properly installed so that the warranty becomes valid.


Mechanics Liens Releases – Mechanics lien release provisions should protect the association in the event the vendor fails to pay his subcontractors or material suppliers. The mechanics liens release will allow you to know that the subcontractor has been taken care of.


Termination – A termination clause is a good point to include as they allow the HOA to terminate the agreement if the job being performed is not satisfactory. Although, these will release you from the agreement monies for work already completed should be paid.


Evergreen – These contracts are lifetime agreements; evergreen contracts automatically renew if notice is not given to the vendor of the association’s intentions to not renew the agreement. Be careful with these clauses; if they are in your contract, make sure the duration for the automatic renewal is not more than a year maximum.


Escalator – The association’s payments to the vendor automatically increase in a given time, usually annually. The increase in payments may be predetermined or may be linked to the CPI.


Alternative Dispute Resolution – An ADR provision is often included in contracts so as to keep litigation costs to a minimum and to speed resolution of any disputes.


Attorney’s Fees – Without an attorney’s fee provision, typically each side bears their own fees and costs.


RECOMMENDATION: Boards of HOAs should have the association’s legal counsel review all contracts before they are signed by the board. Contact us for assistance in preparing and enforcing contracts.

Property Management Tips

FB Live Summary: Legislation & Hot Topics with Jon Epsten

Hot Topics with Jon Epsten

Some legislation concerning Associations have changed in the state of California; as an association manager it is important to stay up-to-date and understand the current legislation affecting the properties you manage. Jon Epsten shared what the hot topics are surrounding new laws and took time to discuss what they mean for Associations.


Maintenance and Repair of Exclusive Use Common Areas

New legislation tries to define where the obligation and responsibility lies to maintain and repair exclusive use common areas in a common interest development. In some cases your community CC&Rs can help define the responsibilities. If the CC&R says that homeowners are responsible for maintenance, then the Association may become obligated to take on any repairs to exclusive use common areas. Association managers should carefully review their CC&Rs so that the responsibilities are properly distributed and guidelines are clearly defined.


Pesticide Use

SB 328 outlines new regulations for Associations and the use of pesticides on the property. The new regulations state that unless the application of pesticides is done by a licensed pest control company, the association is obligated to meet a set of requirements to notify homeowners. Those requirements include:

  • Anyone impacted by that application should be notified of:
    • Pest or pests to be controlled
    • Name and brand of pesticide
    • Approximate date, time and frequency of application


  • Notice must be given at least 48 hours before application


Some instances of application, such as a landscaper using products to get rid of snails can cause an association to give required notice of its pesticide use. An association is better off getting out of the business of pest control and avoid issues by hiring a licensed pest control company and leaving it to them to handle any regulation requirements.


Annual Disclosures

A new statute requires managers to solicit information thirty (30) days prior to annual disclosures from the homeowners. If owner does not respond, property address is deemed as the contact address for CC&R violations, rules and regulation notices, notice of delinquent assessments, and any billing.


Gated Communities

Any common interest development with a fully staffed gate should become aware of the changes to access. As the regulation stood before the change, anyone with a driver’s license and a sheriff or marshal badge or a registered private investigator/process server can gain access to community as long as they offered the aforementioned. What is new this year is the added access to anyone that can provide a driver’s license and is employed by office of the Attorney General, City Attorney, District Attorney, or public defender


Transient Occupancy

Current FHA restrictions prohibit renting inside an HOA community to anyone for less than thirty days. Some contest the validity and legality of these restrictions, but Associations that want to get ahead of this issue should amend their CC&Rs to include transient occupancy restrictions; CC&Rs always prevail in matters of restriction validity because they are the rules that the homeowner agreed to in order to be a community member.


Associations that choose to participate or allow transient occupancy risk:

  • Losing non-profit status
  • Becoming subject to ADA requirements as community has been opened up to public accommodations
  • Consideration as a condominium hotel
  • CC&R and nuisance violations


Association managers that want to get ahead of this issue should:

  • Monitor the Airbnb site or sites similar to it
  • Investigate if someone is paying transient tax to the city


Insurance Certifications (Proof of Insurance)

Insurance certificates provided by contractors as proof of insurance and to name an association as additionally insured under their policy had provided ease of mind in the past, but now that piece of paper is not worth much to an association manager today. Insurance certificates shouldn’t be taken at face value because there are many caveats to contractor insurance.

  • Insurance companies are not required to notify the Association of a cancelled or non-renewed policy.
  • They do not outline the details of what the coverage is for an association
  • No waiver of subrogation for workmans comp
  • Many have condominium exclusions that policyholder may be unaware of


Some ways that an association manager can confirm or verify that the insurance information is up-to-date and adequate for work on an HOA property are:

  • Send insurance certificate or policy to your own insurance agent for review
  • Obtain a letter from the contractor’s insurance broker verifying the coverage outlined in the policy.


Association managers who are unclear on new laws or regulations should always consult with their legal counsel to understand how they will affect their properties. Building a relationship with your lawyer is a good practice to avoid violations and to better manage your HOAs.

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