Owner’s Board Challenge Was 2 Months Late

QUESTION: Our condominium association’s board of directors tried to enforce a rule by filing a lawsuit against one of the condominium owners. The owner filed a cross complaint against the board because, in his opinion, the board had illegally controlled the election last year. His suit claims that the board has no authority because they were not elected properly. The attorneys for both sides are running up the bills and nothing is being accomplished.

Can the owner file a complaint about an election that took place 11 months ago? What can be done to resolve this matter?

ANSWER: I am not an attorney, but I am aware of the California Corporations Code 7527 which states the following:

“An action challenging the validity of any election, appointment or removal of a director or directors must be commenced within nine months after the election, appointment or removal. If no such action is commenced, in the absence of fraud, any election, appointment or removal of a director is conclusively presumed valid nine months thereafter.”

Your association attorney should be able to advise the association about the applicability of this law to your current problems.

Cheapest Management Not Always a Bargain

Q: Our 45-unit condominium association has a contract with a property management firm for collection of the monthly assessments, paying the bills and providing a monthly financial statement. The board of directors was satisfied with the management company but one of the homeowners came to us with a proposal from another company. Since the bid from the competition was $200 a month less, the board finally decided to change companies about six months ago.

As treasurer, I deal with the management company almost as much as the president of the board. The new company has been less than adequate, even though I have spoken to the owner many times. It was three months before we got the first financial statement. Then the gas company notified me that our service was going to be shut off because the bill had not been paid.

The owner of the management company has a glib excuse for every complaint. He took care of the immediate problem but I feel certain that this same thing could occur at any time.

Should we change management companies again?

A: It sounds as if you have communicated your concerns to the management company. If I were you, I would check the contract to see if you can cancel it without a penalty or claim from the management company. You should write a letter to the company stating the reasons that they have failed to perform satisfactorily.

Associations should not jump from one management company to another without trying to resolve the problems. In this case, communication with the owner of the company is not eliminating the problem, so you should recommend to the other board members that the association go back to the previous company that was providing satisfactory service.

The transition to a new company is not always smooth, but since you are going back to a company that is familiar with your association, the change should not cause a problem. In my opinion, you should cancel the contract as soon as possible before the new company completely messes up your records.

The board of directors should see that timely bill payment procedure is a requirement in the management contract. If a utility company has to shut off service, it will often require a large deposit before service is restored.

Your problem shows that the low bid is not always the best way to go. Boards should always check references before changing management companies. Every management company works with accounting firms that audit the association clients’ financial records. Some accountants will be very careful of saying anything critical about the management company but carefully worded questions may reveal a management company’s practice of paying late or incurring penalties.

Let City Enforce Occupancy Limits

Q: One of the houses in our homeowner association has about 12 occupants. The association’s declaration of covenants, conditions and restrictions (CC&Rs;) does not have any limitation on the number of occupants. Can the association enforce city ordinances regarding occupancy limits if there are no restrictions in the CC&Rs;?

A: If this is an ordinance in the city where you live, the association does not have to get involved. Any resident has the right to inquire about the city’s occupancy limitations and file a complaint with the city’s code enforcement division if a violation exists. If an infraction is outside the association’s scope of authority, then it is better that an individual take on the responsibility of filing a complaint.

If a city or county code violation is also a violation of the CC&Rs; or association rules, such as parking violations or animal control issues, the board of directors should ask for city or county enforcement, besides enforcing the association’s legal documents. Working closely with local government will strengthen the association’s control.

Seminar Set on Disputes

The Greater Los Angeles chapter of Community Assns. Institute is presenting a seminar called “Resolving Association Disputes” on Wednesday. Attorney Nancy Loncke and Phillipa Murthy from Common Ground Mediation Service will be the featured speakers. Call the chapter office at (213) 285-8286. Advance reservations are required.