How to Run an HOA or Condo Association Meeting

How to smoothly and fairly run an HOA or COA board meetingHOA and condominium board members have a lot of power. A number of court cases have upheld their authority over a wide range of communal issues within condo or development communities and even compared them to a “quasi-governmental organization.” There’s a lot of power that comes along with that. The board of directors can have a great deal of influence on unit owners and tenants’ quality of life. In some circumstances, a homeowners association can even foreclose on a member’s home.

But with that power comes tremendous responsibility to exercise it correctly. A big part of exercising power correctly is how you and your fellow board members conduct yourselves when it comes to planning and conducting association meetings. This is not always an easy thing to do in practice.

People get emotional when it comes to their homes. But they are a lot more reasonable if they perceive that you are conducting board business fairly and transparently. Here are our suggestions on how to run a condo and association meeting in such a professional manner.

Commit to Transparency

Being transparent isn’t just limited to conducting an open meeting. A commitment to transparency also affects how you and your fellow board members conduct yourselves outside of meetings as well. You should not conduct HOA or condo association business outside of official board meetings, and you should announce and publicize every meeting in advance. Furthermore, the manner in which you advertise or announce meetings should be in accordance with procedures set forth in your community bylaws or another governing document accessible to all unit owners.

You must resist the urge to hold private meetings. If you see other members, don’t discuss board business or make any decisions binding on the association or its members. If you do make such a decision without a quorum of members present, or if you do so at a non-emergency meeting that was not properly announced or advertised to your community, you run the risk of getting sued and having the decision rendered null and void.

Have an Agenda

When you start your meeting, have an agenda and stick to it. This is important because it allows other board members and participants to come prepared to discuss the planned topics and items. It also allows other interested parties to send proposals, statements and other materials for the board’s consideration. If you try to run a meeting without an agenda, that means anything and everything could possibly come up. A board member who has to prepare for everything will wind up being truly prepared for nothing.

Furthermore, take no action on any items not on the agenda for that meeting. If the subject comes up, and it’s not an emergency, move to postpone action to a future meeting where the item is on the agenda – giving everyone a chance to prepare.

Having an agenda also allows you to budget time. Meetings of prepared individuals should move pretty fast. Two hours is about the maximum amount of time any official meeting should take. Schedule time for a quick break in the middle; when things get contentious, you’ll want that break!

Use Parliamentary Procedure

Don’t try to reinvent the wheel. Parliamentary procedure has been around for centuries because it works. You don’t have to be stiff or overly formal, but you do need to respect and reinforce the rules. The gold standard for parliamentary procedure is Robert’s Rules of Order. This should be your template for the conduct of any meeting.

We recommend adopting the parliamentary procedure rules in your first meeting and agreeing that any exceptions or alterations to the rules must be subject to a vote of board members. The rules should reset each year or term back to the most recent edition of the original Robert’s Rules. Why the reset? Because if you stray from the classic, you’ll eventually create a hybrid that new board members can’t recognize.

Security

Hopefully you won’t need security (smaller organizations typically don’t). But we all know tempers can flare at association meetings. If your association is very large, with a lot of people in attendance and/or you anticipate discussing a particularly contentious issue, it’s better to have security and not need it than the opposite.

Documentation

Documentation of attendance at board meetings and items discussed therein is vital. At a minimum, do the following:

  • Appoint a secretary who is specifically responsible for recording and documenting meetings, attendance and decisions.
  • Videotape them. With today’s technology this should be easy.
  • Use your own audio recorder. Trust me – when push comes to shove in court, you’ll want your own recording of the meeting that no one else can edit to sound more favorable to their side!
  • The secretary should maintain a sign-in sheet for all board members.
  • The board chairperson should ensure all members who are present sign in.
  • Appoint a timekeeper. Keep all topics within the time allotted unless the board chooses to grant additional time via rules of order or parliamentary procedure.

Encourage Participation

Give community members a reason to show up to association meetings. Offer free barbecue. Keep the kids occupied with some planned activities. Have a drawing. Bring in a guest speaker. Be creative and do whatever encourages maximum participation by the community members you are elected to serve.

The more community members you have showing up, the more they’ll be vested in the success of your board and the more legitimacy you’ll have when it’s time to make a tough decision.

Work With Property Managers

Your property manager or company needs your board to make timely and sound decisions. No manager can be effective with a board that ducks the hard questions and doesn’t authorize the things that the property management company needs to do in order to run the property effectively.

Often this is the result of a mismatch between the responsibility assigned to the management company and the authority that is actually delegated to them. The two need to be aligned. The board president should work closely with the property management company and ensure that the meeting packets that the manager prepares for the board are thorough, address all decisions the management company needs the board to address, and are distributed to board members well in advance of the meeting. The published agenda should align with the topics – and both should be published to the community.

How to Spot Real Estate Rental and Investment Scams

Real estate is famous for its phenomenal success stories. Unfortunately, real estate is also famous for its long heritage of charlatans, snake oil salesmen, scammers, fraudsters and criminals. Much has been written about the scams that target neophyte property investors and lure them into expensive “mentorship programs,” “No money down!” deals and the like.

This article will outline the scams commonly pulled on landlords and investors and discuss how you can prevent falling for one – and losing thousands of your hard-earned dollars in the process.

Rental Scams

The “Fake Agent” Scam

Real estate rental and investment scams and how to avoid themIn this scam, someone rents the property from you and then turns around and pretends to be the landlord himself. He’ll post an ad, show the property to several people, collect first and last months’ rent, deposit fees, credit check and application fees and anything else he can con out of people responding to the ad.

A scammer can pull this this dozens of times on the same unit – and when it’s time for the “renters” to move in, the fake landlord is long gone – leaving you with a line of unhappy people, headaches and potentially legal fees.

The antidote: Consider doing one or more of the following:

  1. Check out your tenants thoroughly. Verify their identities and do a background check. Then do a Google and Craigslist search on your address looking for listings you did not create. Go through listings in your neighborhood that include photos of your property. Tip: Set up a Google Alert with your property address on it. You’ll get an email when Google’s Internet-crawling bots detect any online activity with the text of your address. If you know the renter’s cell phone number, put a Google Alert on that, too.
  2. If you don’t live near your rental properties, hire a property manager to keep an eye on things for you. Benefits like these that property managers provide are worth their fees, and you also gain from their experience and access to background check resources that may not be cost-effective for an individual landlord.
  3. Change the locks after each tenant.
  4. Check references, and then double-check them. Did the tenant give you an employer’s phone number as a reference? Check out the employer and make sure it’s a bona fide business.

Investment Scams

Sure, it helps to have a mentor, and few hugely-successful real estate investors will tell you they haven’t learned things along the way from other people. But how can you tell the real professionals who genuinely enjoy mentoring and teaching from the scammers looking to exploit you to make a quick buck? Here are some common tactics employed by investment scammers that you should be wary of.

Beware of “Systems” or Secrets for Sale

Real estate is a fairly simple industry, so there are few real “systems” that actually work other than having a disciplined process for buying properties at a discount from their intrinsic value so you can profitably rent them or fix and flip them out. There are also very few real estate “secrets” that aren’t now common knowledge in the industry.

Creating a Sense of Scarcity

There’s always time. Don’t fall for the “act now – I only have slots for five team members in your area” ploy. That’s just a ruse to get you to skip your due diligence and sign a check.

Note that when you’re buying a property time is often of the essence. Many times the first to commit with earnest money gets the property and the race is on. However, this is not the case when it comes to investment programs, mentorships and the like.

Selling the Dream Rather Than Sharing Knowledge

Charlatans aren’t about selling knowledge. They may have a bit of it, but they will only share just enough knowledge to entice you to sign up for a more expensive program. Open their books and literature and you’ll find it’s awfully short on content, but awfully long on photos of the author posing in front of mansions, sports cars and jets. He’s selling you the dream, not the actual knowledge that will help you attain the dream.

Real estate has made many people very wealthy – but it has never been a get rich quick scheme. Get too greedy, you’ll leverage too much, and you’ll become bankrupt when the market turns against you.

“No Money Down” Deals

Real “no money down” deals are few and far between in the investment world. Sure, veterans can qualify for a zero down payment mortgage through the VA, but those can’t be used for purely investment properties (with the exception of duplexes, triplexes and quads). You have to commit to living in the property for at least a year, or have your spouse live there if you’re deployed or otherwise away, if you want to use a VA loan. You also normally have to occupy within 60 days of closing.

Don’t have anything to do with a real estate “guru” who suggests you use your VA eligibility for a property you don’t plan to live in, or to help obtain a property for another person. That’s fraud.

Unrealistic Guarantees

Real estate involves risk. If you want risk-free investing, stick to CDs, money markets and fixed annuities. Even treasury bonds, which are backed by the full faith and credit of the United States government, have big price swings and are therefore subject to risk.

Avoid anyone selling you a system that includes terms and phrases like these:

  1. “Risk-free”
  2. “Secrets”
  3. “Magic”
  4. “Judgment-proof”
  5. “Bullet-proof”
  6. “Get rich quick” (unless they’re warning you that you won’t)
  7. “Nevada corporations” (unless you’re doing business in Nevada)
  8. “Bearer bonds”
  9. “Advance fees” on mortgage loans

Generally, the old adage holds true: If something is too good to be true, it probably is. Be especially wary of deals that are too far below market price to be realistic, or with those who are too eager to sell at cheap prices. Not that great deals never happen – just be sure about what you’re getting into before you commit money.

How to Avoid LGBT Housing Discrimination Lawsuits

You’ve probably heard a lot recently about controversy surrounding discrimination against the LGBT community, and the right asserted by some vendors to refuse to cater same sex weddings.

The legal aspects of the subject are complex, as both state and federal laws come into play, but it is vital that property owners understand them.

Of course, the wisest course of action for rental property owners looking to avoid LGBT housing discrimination is to avoid taking any action that could be construed as discriminatory, period. If you mess up and inadvertently run afoul of laws and regulations that protect LGBT individuals or members of any other protected class, you may face significant fines and penalties.

Background to the Recent LGBT Discrimination Controversy

How to avoid LGBT housing discrimination lawsuitsThe aforementioned controversy arose because the State of Indiana passed a law modeled on the federal Religious Freedom Restoration Act, which President Clinton signed into law in 1993. The RFRA directed courts to consider as a possible defense the defendant’s claim that his or her religious liberties would be “substantially burdened” by complying with a law. It was intended to be a potential shield against lawsuits, but provides no specific shield against claims brought in private discrimination lawsuits.

The Indiana version of the RFRA, however, does explicitly allow religiously-observant individuals and closely-held businesses to use it as a defense against private lawsuits. The controversy began in earnest shortly after this law was passed when a woman interviewed by an Indianapolis television station said her family’s pizza restaurant would serve anyone, including gays and lesbians, but as a Christian business they would not want to cater a same-sex wedding.

How Federal and State Laws View LGBT Housing Discrimination

Let’s take a look at how federal and state laws view property owners who refuse to provide housing to LGBT individuals.

Federal Law

Under federal law, the Fair Housing Act prohibits you from discriminating against potential renters on the basis of race, color, religion, sex, national origin, disability or familial status. LGBT individuals are not specifically listed as protected classes under federal law.

However, there are still a number of ways you could be found guilty of discriminating against LGBT individuals under federal law. Here are three:

  • The Justice Department has announced that they will construe the term “sex” in federal law to include gender discrimination, including discrimination against transgendered individuals.
  • The Housing and Urban Development Secretary Shaun Donovan has publicly stated that “housing discrimination because of nonconformity with gender stereotypes – essentially gender identity discrimination – is sex discrimination under the Fair Housing Act.”
  • An adventurous federal district attorney could potentially assert the “familial discrimination” charge against you.

So while federal law does not explicitly prohibit discrimination against LGBT individuals, the current general legal climate allows for the expansion of LGBT rights, even over assertions of private property rights and religious objections.

State Law

Regardless of whether homosexual individuals are a protected class under federal law, they are specified as a protected class in a number of individual states. These states are California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont, Washington, and Wisconsin.

It is important to note that some states prohibit discrimination against gays and lesbians but do not specifically prohibit discrimination against transgender individuals. These states are New Hampshire, New York and Wisconsin.

In addition, the following major metropolitan cities (among many other cities) have banned discrimination based on sexual orientation within their city limits: Atlanta, Chicago, Detroit, Miami, New York, Pittsburgh, Seattle and St. Louis.

It is also possible that while your state is one of the 28 nationwide that does not have a specific prohibition against discriminating on the basis of sexual orientation or transgender status, your state housing enforcement agencies could possibly interpret prohibitions against sex or gender discrimination broadly to include gender identification and enforce such laws against you.

Religious Objections As a Defense Against Discrimination Lawsuits

The answer to this question comes down to whether your state has a version of the RFRA, and whether it applies to private lawsuits as well as state enforcement. It also depends, at this point, on the luck of the draw. Some courts have upheld the right to refuse to rent to unmarried couples (in North Dakota, for example), and some courts have prohibited discrimination on that basis (Alaska).

It would be unwise to push it, though, because of the current expansive mood of the U.S Department of Justice on the federal level, and because public opinion – and therefore the jury pool – is shifting in favor of having a broad interpretation of the rights of LGBT individuals. For the most part, courts are likely to find that property owners have no legal interest in what tenants do in their rented homes as long as they care for the property and are likely to pay rent as scheduled.

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