Ask the HOA Expert: Amendment Proposals, Late Fees, Window ReplacementsWritten By: Richard Thompson
Question: How many members does it take to propose a governing document amendment?
Answer: There is usually no minimum number required to propose an amendment. Any member in good standing can propose an amendment. That said, the Board is not required to ensure a proposed amendment is in proper form, legal, etc. The member proposing an amendment should provide to the Board in writing:
The specific amendment language.
The reason the amendment is necessary and background.
An opinion letter from a knowledgeable attorney that confirms the amendment complies with the governing documents, state and federal law.
Willingness to pay for extraordinary costs associated with the amendment process research, attorney opinions, mailings, etc..
These requirements are reasonable and will limit the number of amendment proposals to those that are seriously supported. Although it is not required, including the names of other members that agree with the amendment as evidenced by their signatures on the a petition will help expedite the procedure. The greater the support, the sooner it will be dealt with.
Question: Our bylaws state that our dues are past due after the 5th and carry a 2 percent late fee. The late fee is a pittance and many of our members are habitually late. What can be done to increase the penalty?
Answer: Besides amending the bylaws to increase the late fee which takes an appropriate vote of the members, the Board should adopt a comprehensive Collection Policy which includes a provision for turning over all accounts delinquent for more than 60 days to an attorney for collection, filing of lien, etc. These additional collection costs can be added to the outstanding balance and are usually an incentive for most folks to pay their bills. The Board could also enact an "administrative fee" of, say, 15-25 to cover the cost of time and supplies it takes to get a late notice out.
Another collection tactic is an Acceleration Clause which is triggered if payments are late for, say, 60 days. In this case, homeowner fees for the remaining part of the year are accelerated called due.
This tactic is, of course, more effective when invoked early in the year.
So there are a number of alternatives the Board can use to enforce timely payments. Of course, any additional collection penalties and procedures proposed by the Board should be reviewed by a knowledgeable HOA attorney in your state prior to enactment. A sample Collection Policy is available at Regenesis.net in the Policy Samples section.
Question: Our condominium is undergoing a total siding replacement this summer. The building is 30 years old and has single pane windows. Many believe we should replace the windows as well but replacement is an owners responsibility. Can the HOA force the issue?
Answer: If window replacement is an owners responsibility, the HOA cannot force an owner to participate in a window replacement project. However, it is very likely that getting all the windows replaced at the same time will reduce the cost by up to 50 percent due to bulk buying and having the siding removed for the installation.
Buying this many windows at once qualifies the HOA for factory direct pricing and with the HOA contracting the installation, the cost will drop dramatically over the best price any owner could ever hope to get. Installing new windows now also ensures that the new siding is not altered or damaged by future window replacements.
Noise reduction and utility savings of thermapane windows always justifies spending the money. Your window distributor can provide you with savings and pay back calculations. Energy efficient windows will also increase the unit market values due to enhanced curb appeal and livability. Between reduced energy costs and increased market value, this one is a no brainer.
The Board simply should make its case and assume all owners will fall in line. If you only get a majority, it is still possible to amend your governing documents to make window replacement an HOA responsibility. Then, the HOA could move forward with the project even over the protests of a minority, or move ahead for those that agree and require future installations by owners to comply with the same standard. Finally, siding replacement time is also a good time to consider exterior lights and door replacement.
Question: One of our homeowners runs a landscaping company and wants to bid our work. He isnt licensed or insured. Comment?
Answer: The HOA should only hire contractors that are licensed, bonded and insured. It is usually a bad idea to hire homeowners even when they are properly licensed. If it doesnt work out, you not only would have to fire a contractor, you will alienate a neighbor. Plus, there is an unavoidable conflict of interest in this kind of arrangement.
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