Recently, some HOA management companies have been classifying their managers as independent contractors in an attempt to avoid paying payroll taxes and Workers’ Compensation Insurance. This is unlawful and a huge problem. See: HOAs – Say Goodbye to Independent Contractors. If your management company is participating in this scam, you need to check with your insurance broker and HOA attorney immediately to determine how this will effect your HOA. Coast Management of California is in full compliance with the law.

In order for boards to be in compliance with the Davis-Stirling Act and in order to preserve the right to increase assessments up to 20% per annum without a vote of the membership, they must distribute their 2024 budget on time. See: Budget Required and Timeline for HOA Budget.

The bylaws of common interest developments in California set forth the requirements for holding the election of directors. In most cases, associations are required to hold elections for board members once each year at a specified time.

In accordance with the California Corporations Code, if a board fails to hold an election for 60 days after the designated time, or for a period of 15 months after its last election, the Superior Court of the county may summarily order the election to take place upon application of any member of the homeowner association.

Members should consult with legal counsel if it becomes necessary to force an election.

Failure to hold timely elections is one of the most common reasons boards are recalled. See: Most Common Reasons Board Members are Recalled.

We have discovered that a few large HOA management companies are requiring vendors and contractors to pay them cash if they want to provide services to the homeowner associations they manage. In short, no payment no work. Boards are cautioned to determine whether their management company is demanding cash from contractors and vendors servicing your HOA. Likewise, when you interview a management company, you need to inquire whether they insist on payola. Our company never accepts any form of payment from vendors and/or contractors. All we want is quality work and good service for a fair price. Note that many vendors and contractors are extremely reluctant to say anything to HOA clients for fear of losing business.

All California homeowner associations are required to file annual tax returns. Failure to file tax returns will result in the HOA being suspended, which is a serious problem. See: Has Your HOA Been Suspended? and Why Homeowner Associations Get into Trouble.

Our company recently paid a substantial referral fee to a homeowner who referred an HOA management client to us. We were glad to write the check and appreciate the referral. Our business has been based on referrals over more than 35 years. See: Earn a Referral Fee.

The policy of HOAs regarding delinquencies, liens, and collections must conform to an association’s CC&Rs. Following is a sample policy that conforms to most HOA CC&Rs: Homeowner Association Delinquency, Lien, and Collection Policy.

It is highly recommended that HOA board members authorize their property manager to take certain actions well in advance of the winter season. The cost will be less during the dry season and the chances of property damage will be reduced. Following is a checklist: (1) Roofs should be inspected for needed repairs; (2) Roof gutters and drains should be cleaned and inspected for needed repairs; (3) Decks for which the association is responsible, should be inspected for needed repairs; (4) Sump pumps should be tested after the area around them is cleared of debris; (5) Drainage lines in the common areas should be cleared so they will be able to carry the maximum amount of water; (6) Slopes should be protected with additional plant material or sand bags, if needed; and (7) Sand bags and tarps should be acquired from the local hardware store or fire department, for emergency use, before supplies become scarce. The cost of preventive maintenance performed now could save your HOA members substantial dollars later. Remember, once the rain starts, roofing companies will be swamped with calls. This is when prices increase.

A suspended homeowner association means trouble. Suspension of an association’s corporate status is very serious. See: Has Your HOA Been Suspended?

With interest rates rising and home values declining, an increased percentage of home loan applications are being declined. If you are considering a real estate acquisition or refinance, see: Why Do Mortgage Lenders Reject Home Loan Applications?