Katkendall11,

Borrowing money from your reserve account to pay operating expenses without paying that money back in the next fiscal year would be a breach of your fiduciary duty to the association. You took money from the homeowner to pay for future long-term maintenance on your capital assets and as such those monies can only be legitimately used for that purpose. Because you failed to properly develop an operating budget does not give you any freedom to ignore that fiscal duty. Depending how exactly you organization is classified under IRS code could also cause you significant tax issues and consequences if you co-mingle operating and reserve accounts.

If you have a shortfall in your operating budget, you can do two things legitimately. Establish a supplemental assessment that will raise the necessary funds to satisfy your shortfall based on unexpected operating expenses. This simply changes the monthly assessment for the rest of the year for all homeowners. Other than the restriction in your declaration on increases in annual assessments or in state law for that subject than you can do this without homeowner approval. The second thing that you can do is borrow from your reserve account this year and pay it back next year by adjusting your assessment next year to pay of that short term loan.

All of this is simple common sense and if your community manager actually had any, and any rudimentary knowledge of the state and tax law, you could have gotten that advice from them which is what you pay them for. I’ll gladly provide you the true answer to any question relative to your community free of charge.

One last point you actually had no authority to discuss and take this action in a closed board meeting and in doing so directly violated the open meeting laws for these communities. The law is clear you can discuss only five topics in closed sessions and can never take any action in any closed session. Closed sessions are allowed to enable the board to “consider” confidential subject matter but all actions by the board must be taken in open session and allow homeowner comment prior to a vote by the board. The law is also very clear in the policy statement that established that if the board has any doubt about whether an issue can be addressed in open or executive session you as a board, and the community manager must address that issue in open session.

This statute is in place to ensure transparency in the business of the community and is the only way to ensure trust in the board and to ensure that the board is working in the best interest of the community as a whole. No matter what you do someone won’t like it, but that is simple human nature. Your job is not to make everyone happy but rather to act in the best interest of the community as a whole. To do that you need to be able to get some input from engaged homeowners and hear both sides of the matter than make your decision from there. This builds better and stronger communities with less adversarial issue and more harmony.
Ignoring the transparency of the open meeting laws just build a lack of trust in the board and a dysfunctional community.

Dennis

Oh, goodness, Dennis….we are a hot mess over here! Thank you for your clarity and for confirming what I and my neighbor believed to be correct about the law. It is sad that there is so much willingness, on the part of those who are supposed to be helping us and protecting our assets, to refuse to stand up for what is so blatantly right, to refuse to educate themselves, or to blatantly mistreat the residents of the community! I thank you, again, for all you do!

Out of additional curiosity, would there be any reason to believe that an internal policy of a management company or a branch of said company would supersede AZ Statute; ie, could they hold homeowners to a more stringent requirement than what the law stipulates? And if so, could they apply that stipulation suddenly, without letting owners know, and/or in an inconsistent fashion?

Rhonda,

You are absolutely correct request for association records need only be provided by written request. That can be a simple as an e-mail. There is no requirement for certified mail in ARS 33-1805. This community manager should try to actually read the law before they try to quote it. But then again there is no requirement in community manager training that community managers actually know how to read. Just because he/she claims to have been told this by the attorney is totally irrelevant because attorneys will say anything that you are willing to pay for them to say. But then again, I cannot believe that any attorney said something to easy to prove wrong. It is one thing to interpret the law wrong but a totally different thing to make it up.

Dennis

Janet,

There are no homeowner friendly CC&R’s. They are written by declarants/developers to protect their interest and the interest of the association they created to succeed them. While there are things that communities can do to be more homeowner friendly you would have to be able to overcome all the efforts of the boards that will be focused on preventing you from doing so. Each set of CC&R’s is different and unique to your community. While they follow a general approach, what is in them is based on the direction provided by the declarant and the animosity of the attorney that wrote them. You can either send me an electronic copy of your CC&R’s or your proposed changes and I’ll gladly look them over and provide you with suggestions. Send them to the e-mail above.
Dennis

Suzanne,

Get a contractor to look at the balcony and make an assessment of its safety and then report the association to the city code enforcement officer and ask that an inspector be sent out to evaluate the balcony. They have the power to fine the association for violations of the building safety codes. If none of this works, this is your balcony and if you want to use it then get it fixed and send the association the bill. If they refuse to pay then take them to small claims court along with a copy of the CC&R’s and provide them all the written correspondence that you have provided the board over the years along with the clear provisions of the CC&R’s that show their responsibility for the maintenance of the limited common area, and you will win that case. You have to make sure that your CC&R’s do not have a provision in them that states that you are responsible to maintain the limited common area assigned to you.

Dennis

Joseph,

The ACC requires that the association file their report annually, but not based on any specific date. You need a report for 2022, and 2023 etc. The election of board members is also an annual requirement unless the bylaws specify a date or month for the election to be conducted. The minutes of the preceding years members meeting are typically approved at the subsequent members meeting. The minutes become a record of the association once approved. Draft minutes are not official records and association have refused in the past to provide copies of those draft minutes based on that fact. This is total BS and I will be introducing legislation this coming session that will make the providing draft minutes to anyone requesting them mandatory.
I caution you on filing any action against the board based on suspicion of wrongdoing. The burden of proof lies with you in either venue. The ADRE process can only deal with violations of actual provisions of either state statute for your respective community type or the governing documents. A very narrow authority, especially with the vagueness in both statute and governing documents. Superior court allows consideration on the full breath of the law and all legal precedence. With any litigation the only winners are the lawyers, right or wrong they get paid, the homeowners win or lose always pay for the cost of the litigation. The association never loses because the homeowners pay for everything, and the board members are protected from personal liability. Litigation needs to be the last resort, not the first.

Dennis

I assume that you are actually a condominium and not an HOA because you believe that a roof issue is the associations problem. If that is correct your unit begins at the paint on the wall and everything inside of that tru to the roof and exterior walls is the responsibility of the association. The rodent infestation is their responsibility to address with both extermination and prevention from any further infestation. Your governing documents will President define the boundaries of your unit and the common property. Point that out to your association board and demand that they do their job.
Dennis

Good suggestions. Thanks for getting back to me so quickly.

Janet,

The municipality can enforce code requirements and the association can enforce requirements within the community documents. Municipal leash laws applied to municipal public property and cannot be applied to private property. If your streets are private streets the city cannot enforce their leach laws on the association’s property. That does not stop any community member from proposing a revision to the community documents to revise any mandatory leach provision in those documents. I will say that that will be a very hard row to howe, because it only takes one bad dog to turn the entire community against allowing free reign for well trained and controlled pets.

I will also say that the association has enforcement discretion to allow exceptions to the general rules for well trained and controlled pets, whether they will use that ability is up to them. My advice is asking nice and you may be surprised.

Dennis

Great news!!! Thank you!!