By Kerry Wallace, Goodman and Wallace, P.C.
There is little difference between a unicorn and the right of a Colorado Common Interest Community (“CIC”) to hold an “informal board meeting.” While most people have heard of them, they do not really exist. A legally cringeworthy response to whether minutes were taken at a Board meeting is: “But that was just an informal work session and not a Board meeting.” The Colorado Common Interest Ownership Act (“CCIOA”) requires all regular and special meetings of a CIC Board, including committees, to be open to attendance by Owners (see C.R.S. 38-33.3-308). Minutes documenting all such meetings must be maintained as an Association record. See C.R.S. 38-33.3-317 (1) (c) which requires a CIC to maintain, “Minutes of all meetings of its unit owners and executive board, a record of all actions taken by the unit owners or executive board without a meeting, and a record of all actions taken by any committee of the executive board.” Additionally, a CIC’s Bylaws will address Board meetings including how Board meetings are noticed and held. CCIOA requires the adoption of a policy regarding conduct of meetings. See C.R.S. 38-33.3-209.5. These requirements cannot be circumvented by calling a Board meeting “informal” or a “work session.”
When a CIC Board acts without a meeting pursuant to the CIC’s Bylaws or the Colorado Revised Not for Profit Corporation Act (“CRNPCA”)at C.R.S. 7-128-202, all written communications must be maintained by the CIC such as emails among, and the votes cast by, board members. See C.R.S. 38-33.3-317 (d). Board members should always use diligence and caution when communicating with fellow Board members or management regarding Board matters as those writings could be subject to record retention requirements. Often it is preferable to call a meeting versus permanent retention of email stream communications.
Even executive sessions require documentation. While a CIC Board may hold an executive session at which attendance may be restricted to the Board and persons requested by the Board, matters for discussion are limited and minutes indicating that an executive session was held, and the general subject matter of the session are a required to be maintained as a CIC record. See C.R.S. 38-33.3-308 (3-7). The only matters that may be discussed at an executive session are the following (Note: Section (5) was recently expanded by HB 22-1237):
In summary, every Board meeting must be called, noticed, and held in accordance with the CIC’s Bylaws and CCIOA. Per CCIOA, a CIC must have and maintain as an association record minutes for all Board meetings. Truncated minutes are even required for executive sessions. If a Board decides to act without a meeting, the requirements for action without a meeting found in the Bylaws, CCIOA, and the CRNCPA must be adhered to with written communications among Board members, including votes, being maintained as the “minutes.”
Do not get busted by a myth and treat all Board meetings the same with notice, agenda, and minutes.
Kerry H. Wallace grew up in Denver, Colorado and after leaving Colorado to attend the University of Notre Dame du Lac (BA 1987), she returned to Colorado for her law degree from the University of Colorado School of Law (JD 1991). Kerry is a Partner in the law firm Goodman and Wallace, P.C. located in Edwards – 15 miles west of Vail. A perfect location to enjoy favorite past times of skiing, hiking, and biking. Kerry’s practice focuses upon resort based common interest communities guiding communities through the ever-changing legal landscape. Her work has included the first reported case interpreting community record keeping and disclosure obligations under the Colorado Common Interest Ownership Act. Kerry served on the Eagle County Planning and Zoning Committee from 2003-2007, is a current Business Partner of CAI-RMC, and has been a speaker and panel member at numerous CAI Colorado - Rocky Mountain conferences. Kerry can be reached at 970-926-4447 or Kerry@goodmanwallace.com.
By Amalia "Mia" Gonzalez, 3.0 Management
As the growing residential real estate market in Colorado continues to support new housing projects across the State, developer to owner transitions are becoming more common. It is essential for Community Association Managers to familiarize themselves with the process and legal requirements for these transitions as it is a critical step every developing homeowners association must take.
The biggest tool a Community Association Manager should have in their toolbox during a transition is the Colorado Common Interest Ownership Act (CCIOA), as this document prevails over the Declaration. The next tool every manager should utilize is homeowner engagement. Without willing homeowners, there is no Board of Directors. In order to acquire homeowner engagement there needs to be consistent communication. Communication is key for any successful and smooth transition from declarant to owner control. The purpose is to educate the owners on the role that the Board of Directors plays for the association and the function of an association.
Preparation for the transition meetings should occur before the first unit is sold to ensure that the timeframe and requirements are met. CCIOA requires that associations sequentially be turned over to the owners as units are sold. Typically, three special meetings are anticipated during the declarant control transition. There could be more meetings (and possibly fewer meetings although fewer meetings are not recommended). Per Section 303 (6) and (7) of CCIOA:
Per Section 303(5)(a)(I) of CCIOA, the declarant control termination limits are as follows:
Within 60 days after the earliest of these three events occurs, the third meeting must commence, records must be turned over, and a transition audit performed.
Within 60 days after the owners have taken control of the association, the declarant must provide several required documents per CCIOA Section 303(9). A few worth mentioning are the governing documents (recorded declaration, articles of incorporation, bylaws, plots and maps, meeting minutes, etc.). Obtaining and understanding the governing documents will lay the foundation for the association’s operation and maintenance needs. All financial information is another element that is essential to the transition. This should occur when the owners have the majority control of the Board. It’s prudent to consider an owner board member serving as the board treasurer before the transfer of control to reduce owner concerns and reassure order for the association’s bookkeeping. A transition audit should also be performed, accounting for the association’s funds and financial statements from the date the association began receiving funds to the date when the declarant control period ended. It is highly recommended that this audit is performed by an experienced CPA.
Keep in mind that the best time to start the transition is six months prior to the official declarant to owner transition. Waiting until, during, or even after the transition, may make it more challenging to obtain important and necessary documents from the developer.
Once the owner controlled Board has taken over the association, the Board should consider the following:
In conclusion, the transition from developer to owner control is an important part of the life of an association. There is a lot to be done but ensuring the transition is smooth requires knowledge, preparation, and clear communication. Complying with legal requirements and working within the set timelines during the transition process will set the association up for success in the long run.
Amalia Gonzalez also known as Mia is the Community Association Manager of Developer Relations at 3.0 Management. Mia has been in the industry for 5+ years and has a passion for making communities a better place to live for owners.
By Elizabeth Caswell Dyer, Sopra Communities, Inc.
It’s tough to be a volunteer HOA board member in Colorado these days. Just last night, I was watching a PBS show called “The Trouble with HOAs”, and depending on who was being interviewed, the board was doing too much or caring too little. It’s no wonder that sometimes boards are accused of overstepping their duties and authorities, as most volunteers wish to be helpful and they may not know where to draw a line.
Here are some ways to avoid overstepping or abusing your power if you are a board member:
Reasonable Policies and Rules: It’s important to have a working knowledge of your governing documents, and to have any new policies, rules, or handbook reviewed by the association’s attorney to ensure they don’t conflict with your governing documents, statutes, or case law. It’s also prudent to take a step back when drafting anything new to ask whether the new policy or rule serves the entire community, builds community, or is geared towards solving one person or one group’s behavior that isn’t the majority? Also ask if the new rule or policy positively maintains or increases property values. Those are useful benchmarks to compare against when contemplating adding or removing anything in regards to the governing documents.
Selective Enforcement: The Golden Rule cannot be emphasized enough: treat others as you wish to be treated. There is a secondary Golden Rule for associations: treat everyone the same, or as close to the same as possible (as there will always be an exception to a rule). There is nothing inherently fair or equitable about living in an association. At the same time, consistent enforcement of reasonable rules and policies helps a community feel that their experience within the community is reasonable, fair, and equitable.
Conflicts of Interest: Associations in Colorado should have a Conflict of Interest Policy in effect. It is important for board members to be familiar with the document and to take it seriously. If there is even a whiff of a Board member making money via their inside knowledge of the Association, such as an upcoming foreclosure, can quickly destroy a community. Just don’t do it.
Misappropriation of Amenities: Unfortunately, there are not perks to the many hours of service required of board members. They should not have “first dibs” for reserving a clubhouse or pool, the best storage unit, or parking spot when it becomes available, etc. Actions such as these undermine the trust of the neighbors in the board, as these actions are self-serving over the fiduciary requirement to put the needs of the organization before one’s own interests.
Hold Regular Meetings with Posted Minutes: The healthiest communities share some basic traits: service on the board is not monopolized by a select few, and transparency. Having regularly scheduled board meetings with the minutes posted to a website or portal (with controlled access to it, of course), go a long way towards non-board members having organized access to the business of their community. This facilitates trust and for those who might be concerned about whether the board is conducting business appropriately, actions speak louder than words. A consistent practice of meetings and minutes is, to quote Martha Stewart, “a good thing”.
Emergency Management:Another way that Boards unknowingly overstep is when something goes wrong. At 2am, nobody wants to be the person telling their neighbor that dealing with the gushing water is not the association’s responsibility. A great way to proactively be ready for these unfortunate situations is to have the association’s attorney draft what is called a Maintenance & Insurance Chart. To create the document, the association’s attorney pours over the various sections of your governing documents, mostly the Declaration of Covenants, to define what the association must maintain, repair, or replace, and what is the responsibility of unit owners. This chart is beloved by insurance adjusters and it facilitates an easier claim for both owners and the associations. Not knowing where an association’s responsibility begins and ends can lead to board members getting into unit repairs and costing the association needlessly. It’s also important to keep in mind that whoever makes the call to a restoration company is effectively the one hiring them, so if you don’t have what is affectionately called an “M&I Chart”, be careful about making the calls yourself if you are a volunteer board member. It’s easier for the association, or the association’s insurance, to pick up all or part of a bill related to an emergency after the fact, versus an owner refusing to pay a bill because they did not technically hire the vendor.
At the end of the day, it’s important for board members to be familiar with their governing documents, and to have good expert partners to help guide you through the ever-changing world of leading the multimillion dollar corporation that is your Association. Your circle of care is key to your success, and this includes your management team, your insurance agent, your tax accountant, and your attorney.
Elizabeth Caswell Dyer is the CEO and founder of Sopra Communities, Inc., which is a local company dedicated to providing community management services in the Denver Central Business District and surrounding neighborhoods since 2010.
By Colorado Legislative Action Committee
The 2023 Colorado legislative session is fast approaching, and the CAI Colorado Legislative Action Committee (LAC) team is already preparing to ensure that we are working with our membership to protect the interests of community associations in our state. To that end, the LAC has engaged a new lobbying team. Taylor Hickerson with Policy Matters Colorado will be our primary point of contact. She and her team have already hit the ground running.
One of the main priorities with the upcoming legislative session is to propose a cleanup bill for HB22-1137, the Homeowners' Association Board Accountability And Transparency bill. As you know, HB22-1137 added numerous burdens to community associations regarding collections, foreclosures, and covenant enforcement. We hope to beneficially modify certain sections of the bill that do more harm than good to Colorado communities and the owners within them and to have the legislature clarify other portions of the bill that passed with vague and confusing language.
We're looking for sponsors in the Senate and the House that would support working with the LAC to move toward the priorities we've heard from you, our members — the voices who matter the most. This includes, but is not limited to, the following: removing or modifying the certified mail requirements; addressing the necessity of posting notices; removing the distinction between public safety/health violations and those that are not deemed as such; and addressing the maximum cap on fines at $500 in a manner that is logical, practical, and equitable.
We expect the cleanup bill to need a significant amount of support from our membership. We will need managers and homeowner leaders at the ready to testify about the impacts that HB22-1137 has had on their communities. These impacts may include increased expenses, owner complaints, and process issues. We also will need testimony about how the proposed changes will impact communities while still providing protections for owners.
The LAC also is engaging with a coalition of aligned organizations and stakeholders to build support for these and other initiatives while advocating for healthy, responsible communities. We anticipate that having additional support and a unified voice will substantially increase the likelihood of success on issues of vital importance for the future of Colorado communities.
As the legislative session ramps up, we will continue to provide updates to our membership. Make sure to follow along on our Facebook page (www.facebook.com/CAICLAC) for ongoing updates throughout the session and particularly, after we have results from the November 8, 2022 election this week. As always, feel free to contact Danaly Howe, the LAC chair, at any time with any questions. She can be reached at danalyclac@ccgcolorado.com or 970-484-0101 x101.
By David Bradley, FRONTSTEPS
Public websites are a mainstay for community associations. Yet just because websites are common does not mean they are effective. This article examines some of the ways a community website can deliver value for an association and shares tips for unlocking that value otherwise known as the return on investment (ROI)
HOA boards often receive an enormous volume of mail from their residents, frequently about the same topics. How do I submit a work order? Where are the minutes from the last board meeting? When does the pool open for the season? It can be a challenge to keep up with the volume, and yet any delays in responding can cause frustration by residents who feel ‘ignored’ or not like a priority.
Some of this information can and should be posted directly to the community’s website, for easy, anytime access. More sensitive information may be reserved for the secure resident portal. Yet even that secure information can be mentioned on the public website with instructions for signing into the portal to see it if desired.
According to a recent study, 8 in 10 community association managers (CAMs) reported that the volume of homeowner questions increased in 2022 Those CAMs also shared that homeowner communications are the most time-consuming part of their job. A well designed, easy to find, and informational website can take a significant amount of that burden off the board members and CAMs
Most associations have a method of paying assessments online and this is often the fastest and most convenient payment option available. However, the online payment method must be readily available for it to get used. One shortcut is to put the online payments link in a prominent place on your public website. Another important tip is to offer multiple means of completing an online payment. Some residents will prefer to pay a one-time assessment and will want the minimum steps to complete that task. Others prefer to schedule recurring payments, so they no longer have to worry about a check arriving on time. In most cases that can be done through their secure homeowner portal or mobile app, and instructions for accessing both should be readily available from your public website.
Which brings us to the final, and perhaps most important, function of a public website. The website plays an important role covering the most common questions and giving a range of visitors (vendors, guests, potential future owners, etc.) basic information to help them plan a trip or provide a service to the community. It is also a common jumping off point for residents, particularly new residents just getting things set up, such as their approach to paying assessments.
However, just as important is recognizing what a website should not do for your community. A website is not well equipped to serve as the primary communication vehicle between the board and homeowners, particularly for time-sensitive matters such as common area repairs, weather closures, and community events. It is generally not an appropriate place for storing and sharing sensitive community documents,. Those tasks, and others like them, are tailor-made for a homeowner portal and mobile app. Your website should not seem like a substitute for a secure online portal because residents who stay at the surface might be caught off guard by road closures, miss out on neighborhood barbeques, and otherwise feel left out from the advantages of community living.
Instead, the two experiences complement one another, with the public website serving as an entry point for anyone related to the community and the portal a deeper, richer experience for the residents living there day to day.
Websites can deliver significant benefits. Getting the most value from yours starts by understanding the most important roles that website should play, as well as by recognizing their limits.
David Bradley oversees the product strategy for FRONTSTEPS’ widely used HOA management suite, including FRONTSTEPS Caliber, Community, Payments, and Dwelling. FRONTSTEPS is the most complete, connected, and homeowner-friendly software on the market, running everything from a community’s front gates to its back office in one cloud. Learn more at frontsteps.com.
By Damien Bielli, Vial Fotheringham, LLP
Audio and Video Security Systems within Associations
It is estimated that most people are caught on camera at least 70 times every day. This may include your homeowners’ association (“HOA”) or your neighbor’s home security cameras. Can owners within an association install cameras? What should an HOA consider before installing cameras?
Association Camera Systems
Generally, there is no requirement that an HOA install security cameras on the common area as an HOA is not the ultimate guarantor of safety for a community. HOAs must, however, exercise ordinary care if they do decide to install audio or video surveillance equipment.
If a community’s governing documents do not require the HOA to provide security, the HOA, by installing cameras, may be creating a duty to the members or implying a guarantee of safety where none otherwise exist. While security measures are a good idea in principle, an HOA must be careful not to unintentionally increase its liability for third party criminal acts by creating an expectation of security through the installation of cameras.
If the Association does wish to install cameras with audio and/or video capabilities, then the intent of this equipment must be made explicitly clear to the membership. If it is not the intent of the Association to provide security, then it should be communicated plainly to residents that it is not providing that service. This should be done by way of written policies setting out the limited purpose of the surveillance equipment, as well as posting signs around the community that the equipment is not monitored for security purposes. This is necessary so residents and guests do not believe security is enhanced by the use of cameras. This, however, is not a guarantee that the HOA will be insulated from liability should an incident occur.
HOAs must also be cognizant of local and state laws regarding audio and visual recording. Colorado privacy laws prohibit anyone from visually recording another without consent in situations where the person has a reasonable expectation of privacy. Areas that create an expectation of privacy such as bathrooms, locker rooms, and conference rooms should not have audio/visual surveillance equipment. Colorado is a one-party consent state which means someone can record their own conversations without telling others. However, it is illegal to record a private conversation to which the person recording is not a participant. If audio and video equipment is located in public areas there is generally an exception to this rule. You should seek legal advice prior to the placement of audio and video recording devices in your community.
Resident Camera Installation
Residents who wish to install audio/video surveillance equipment will be subject to the community’s governing documents. This is especially true in condominium and townhome communities where exterior maintenance obligations usually rest with the HOA and a general prohibition to exterior modification is found. In these communities, clear rules should be enacted on the location, size, and placement of these devices, if permitted. The same is true for single family communities. HOAs must look to the authority granted within the governing documents for regulation of size, placement and location of these devices. Once again, clear rules and regulation should be adopted governing the exterior placement of security cameras, if permitted. As always, if the Board has any questions, they should contact legal counsel.
As a partner in Vial Fotheringham LLP, Damien has unique background in Homeowners’ Association Law, trial advocacy, insurance defense, professional liability, coverage disputes, labor law, employment law, construction, commercial litigation, and contracts.
By Carol Shenk, Sagewater
As pipes begin to fail in condo and co-op communities, water damage and related hazards can become more frequent and severe. And as incidences increase, so do community association insurance costs and risk.
For example, to recoup the costs of repair, community associations and their community managers will file insurance claims and eventually see their premiums go up. They can even lose coverage altogether if they don’t move early to implement proper remedies.
If the pipes in your community are failing, you can reduce annual insurance bills and save money in other ways by moving early to replace your piping system.
A Leak Is More Than a Leak
Consider this all-to-common scenario:
A unit owner sees paint bubbling and water running down the wall from her bathroom ceiling. Maintenance discovers a pinhole leak behind the bathroom sink in the unit above that’s been slowly misting water into the wall cavity. They shut off water to the building and hire a plumber, drywaller, and painter to replace the damaged pipe, repair the walls in both units, and replace the upstairs sink.
What does this all add up to?
Clearly, a leak is more than what you might expect.
The Ongoing Challenges of Aging Pipe
Unfortunately, the story doesn’t end here. In this scenario, the leak has occurred in an older building, which means it’s just one of many. On average, piping systems usually start failing at around 30 years old1 and often need to be replaced within the next 20 years—sometimes sooner.
As the number of incidents and damages to unit owners’ personal property multiply, the board decides to file for eligible losses in addition to pulling from maintenance and reserve budgets. After repeated claims, the insurance company informs the community that it will face increased premiums and deductibles when the policy renews.
The board discusses its options, one of which is to replace the piping system. The board obtains a rough estimate and decides a re-pipe is too expensive; it chooses to pay the increased insurance costs.
The board’s decision might mean:
And It Continues
Less than two years after the board decides to delay pipe replacement, “it” happens: The worst-case scenario. A massive leak from a larger diameter pipe floods an elevator shaft. Repairs cost the community more than $200,000, the elevator is down for almost two months, and the insurance company notifies the board that they will lose their coverage when their policy term runs out.
Finding a new carrier with affordable rates will be nearly impossible since insurance carriers won’t issue a new policy without seeing loss run sheets that reveal the leak history. In fact, it’s not uncommon for deductibles to rise to $25,000 per unit or even $50,000 per unit when there’s a history of repeated leaks.
Worse still, the board must now raise condo fees even higher than if they had proceeded to replace the piping earlier.
How to Avoid High Insurance Costs for Pipe Problems
What can you do to avoid these issues? Get proactive.
Consider our example above, where the re-pipe project was estimated to cost $2 million. The community would have paid ~$14,000 per month to pay off a loan that was financed over 15 years at a little over 3% annual interest. That means $168,000 per year, which is far less than the $200,000 it cost for the one leak that ruined the elevator. In addition, the re-pipe would have netted further savings from reduced insurance rates and deductibles, and lower maintenance costs and water bills.
The Benefits of Proactive Pipe Replacement Are Clear
The calculations above don’t even factor in the full benefits that come with a new piping system like a new plumbing warranty, improvements to building functionality and life safety, and code upgrades. You’ll also avoid liability issues that can arise when you defer maintenance. Plus, you’ll enjoy happier residents, fewer maintenance calls, and less stress.
Aging pipes are inevitable, but severe condo fee increases, and insurance risk don’t have to be. Stay proactive with your building’s piping systems. You’ll realize significant monetary savings, a safer, happier community, and overall peace of mind.
Estimated Useful Life Tables:
https://www.fanniemae.com/content/guide_form/4099f.pdf
https://www.hud.gov/sites/documents/EUL_FOR_CNA_E_TOOL.PDF
Carol Shenk heads up SageWater’s Regional Account Executive team building SageWater’s brand from the ground up. You will find her at local trade shows, networking with members from various multi-family industry associations and educating clients on the value of a re-pipe.
By Clint Larson, 303TECH
We all have tendencies and preferences. It may be a favorite restaurant, sports team, or financial institution. Did you ever think those preferences can be used against you?
We are part of a highly connected society. From our smart phones, computers, emails, and websites, we can communicate with almost anyone, at any time, from almost anywhere.
Bad Actors use this highly connected society against us, in every way. Instead of scaring you into submission, or being the doomsday predictor, lets take a different approach. We hear on a regular basis about someone’s account being hacked or compromised. There are studies, statistics and stories that can scare even the most hardened person you know. We have fallen victim to this or know someone that has. From a simple email account compromise to business identity theft, from losing a few emails to losing millions of dollars. We all know the dangers and there is no way to stop it. So how can we recognize it before it becomes a problem? With the simple curiosity of a child.
Most of you were a child once, or have had, or know a small child and the wonder they have with the world around them. It does not matter if they are watching a caterpillar crawl up a branch or watching a campfire in the woods. These small children are amazed and fascinated by the world they are a part of.
We too need this same curiosity when dealing with the digital world we are a part of. We need to learn that the fire is hot and will burn before we burn ourselves or others. We need to be able to identify what is real and what is not.
When my children were younger, I would ask them to help with the chores around the house. If it was something that I had never asked them to do before, they would sometimes ask me “Why.” With a simple question they were getting clarification and gaining a greater understanding of what was really needed. We need to have this same curiosity and understanding, especially in the digital world of today.
Bad Actors can change the caller ID shown on your phone, they can send millions of text messages about package deliveries or charges to your bank account. They can call you about some issue that needs your immediate attention. They can create emails and websites to look like the real thing.
These bad actors know where you bank, what websites you shop at, and even what shipping companies deliver you packages. So how do you know what is real and what is not? With the simple curiosity of a child and asking one simple question, Why?
These Bad Actors are utilizing your human response of fight or flight to get you to respond to the text, click the link, open the attachment, or call them on the phone. They have the ability to compromise legitimate business’s email accounts and then just sit and wait. You may be interacting with the real person, then the next email is from the Bad Actor. Still coming from the real person’s email account, but now they are asking to change banking information or need a copy of sensitive information. Ask yourself the all-important question, Why?
When an email comes in from anyone and they are asking you to do something, take a moment and ask yourself, “Why?”
Fear, misinformation, and timing are what the Bad Actors are attempting to exploit. The fear of punishments, fines, and even getting law enforcement involved, are all tactics used against us.
We can all remember 3 questions to ask about emails.
You don’t need to get burned to know that the fire is hot. A simple “Why” can save you and those around you from being subjected to the Bad Actors wanting to hurt you.
Clint Larson, Managing Partner, 303TECH, Serving management companies, communities, and boards for more than 20 years. Clint@303tech.com www.303tech.com
By Arthur Beisner, Rowcal
The landscape of business management and service delivery is shifting increasingly towards reliance on technology. Technology in business once meant large, complex, and costly machines. Still, today businesses are leveraging computing technology to bring efficiencies to processes while automating away a lot of paper that used to be pushed. The cost of development and deployment of computer programs and software has become such that even small businesses can afford to utilize this technology to their advantage.
The community association industry is no exception—recent advancements in automation and cloud-based management computing have begun changing the way HOA management has been done for decades. Community associations and management companies have started relying on technology, from primary payment processing web portals all the way to advanced, complex, and sometimes proprietary management platforms that automate everything from account management to work order tracking, and all in between.
In this article, we will evaluate some of the benefits and some of the pitfalls of deploying technology as a solution in Homeowners Association Management.
Benefits
Automation
Gone are the days of the carbon copy ticketing system—well, for the most part. Payments processed virtually are becoming almost a rule. Today's systems allow community associations to automate virtually all workflows that used to require forms, stamps, signatures, and a spool of red tape. For example, certain technologies facilitate the entire Architectural Control process via a web portal that speeds communication and houses required documentation. Maintenance requests can be submitted, dispatched, updated, and even invoiced, all from the palm of our hands today. This automation can result in improved service delivery and reduced costs.
Transparency & Accountability
When technology is used to automate processes, a welcoming side effect is caused, especially for an industry plagued with mistrust. Timestamps, approvals, and automatic report generation are among many other features that level the playing field for community association boards and management service providers. With proper use of technology, board volunteers can gain insights into their community's finances, projects, operations, and management. And, with cloud-based storage services, board members and homeowners can access association documents with just a few clicks. The result is a tangible improvement in transparency and accountability.
Savings
All of this translates into savings for associations. Of course, there is a cost to using software or computerized systems, just as with any other tool. But tools are only used because they increase productivity. The efficiencies gained from reduced labor and associated costs, the improved transparency and quality controls, and the insights gained from powerful analytics will all ultimately save associations money—not to mention reduced paper costs, storage costs, and mailing costs. The right technology can be powerful in saving both time and money.
Pitfalls
Service Quality
We've all turned purple while helplessly cycling through phone landing systems. While we all probably agree that, in theory, those systems are designed to improve efficiency, sometimes all we want is to speak to a real human being who can help solve a problem. One of the significant pitfalls of relying on technology is that often service quality can waver as the human element is lost. Not every issue can be resolved with a few clicks and some pre-coded workflow logic. Some issues require problem-solving, empathy, negotiation, or simple human acknowledgment. These are actions that no software, artificial intelligence, or computer program can perform. It's vitally essential that technology be understood and used as a supplement to, and not a replacement of, dedication and commitment to exceptional customer service.
User Challenges
In our industry, our work involves an extremely personal subject: people's homes. While business speeds ahead with technological advancements, not everyone is ready to use an app or the internet for everything. The goal of HOA management providers is to provide both effective management and quality service to homeowners. Forcing homeowners to access solutions to their needs exclusively via a channel outside their ability or comfort zone is self-defeating. An app or a portal may be the solution for most homeowners, but additional solutions should be available to those that need them.
Expectations
The opposite side of ensuring service quality is setting service expectations. As technology speeds up the pace of transacting business, caution should be taken that proper expectations are always set considering technology's benefits. Just because a computer program can change a maintenance request from pending to dispatched within 0.00294 seconds doesn't mean that it should be the expectation of the end-user or customer. Even basic technology, like email, can fundamentally skew professional expectations, and some people can become accustomed to immediate access to management for non-emergency matters. While technology can seriously improve service delivery, it also creates a false sense of efficiency when considered in a vacuum by an end user. Research, planning, transacting, collaborating, and executing can all still be time-consuming and labor-intensive, even when facilitated with high-speed computer programs.
In summary, technology has provided incredible advancements and innovation in the community association industry. Leveraging technology for HOA management has been positive for all stakeholders involved. But it's crucial to deploy this technology with an understanding of its limitations and pitfalls.
RowCal is an HOA Management Company that delivers full-service management and maintenance solutions by empowering Community Managers who are supported by a team of subject matter experts. At RowCal, state-of-the-art technology improves the experience for homeowners, board members, and community managers alike through efficiency, transparency, and accountability.
Arthur Beisner began his career in the HOA industry by managing a high-rise condominium building in Miami Beach, Florida and has been with RowCal in Colorado since December 2020.
By Melissa M Garcia, Altitude Community Law
When I was a little girl, one of my favorite cartoons was The Jetsons. I loved watching all that awesome technology like the flying cars, Elroy’s cool jetpack, and Astro’s treadmill. The Jetsons seemed to be a great predictor of technology today. Maybe we’re still a few decades from jet packing to school, but what about Rosie the robot (Roomba anyone)? Or George calling Mr. Spacely on his watch (aka the smartwatch)? Or Jane’s futuristic food making machine (did you know that NASA can now 3D print pizzas in space)?
One particular Jetsons-predicted technology is the subject of this article: the virtual meeting. Three years ago, the thought of conducting an annual HOA meeting entirely online would have been unthinkable. Today it is mainstream.
So why did virtual meetings become the norm? The pandemic of course. In 2020, social distancing requirements were in place on both state and local levels, with the number of attendees restricted for indoor events. The fear of contracting an easily contracted disease also forced us indoors. And yet, business had to be conducted. So, face to face meetings were forced to go virtual.
Two years later, not only have we become quite proficient in using Zoom, Microsoft Teams, and other virtual meeting apps, but we’ve come the realize the benefits of conducting virtual meetings. To name a few:
(Other indirect benefits? No need for makeup. Heck, no need for pants. And that oh so lovely MUTE button.)
But we must also acknowledge some of the cons of conducting a virtual meeting, such as:
Even with such cons, most likely virtual meetings are here to stay. So, we need to make sure we meet both the legal and practical requirements of holding a virtual meeting, which are different depending on whether one is conducting a virtual Owner or Board meeting.
VIRTUAL MEETINGS FOR OWNERS
Authority to Hold a Virtual Owner Meeting
Currently, neither the Colorado Common Interest Ownership Act (“CCIOA”) nor the Colorado Revised Nonprofit Corporation Act (“Nonprofit Act”) expressly authorize a “virtual” meeting. But that’s just because the law hasn’t caught up with technology, at least in terms of terminology. For Owner meetings, C.R.S §7-127-108 of the Nonprofit Act provides:
Unless otherwise provided in the bylaws, any or all of the members may participate in an annual, regular, or special meeting of the members by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting may hear each other during the meeting.
In the above provision, the method of communication (whether in-person, telephonically, or virtually) is not as important as that all participants must be able to hear each other during the meeting.
With respect to a virtual meeting, everyone can hear each other if they have audio on their computer or mobile device. So, conducting a virtual Owners meeting should be allowed under the Nonprofit Act, as virtual platforms allow everyone to hear each another.
But if a participant uses the chat box vs. speaking out loud, you are not able to “hear” their commentary. If you enable the chat box feature, then simply have someone read the question or comment aloud. As far as allowing the chat box to be used at all is a different question, as it often leads to sidebar conversations, distracting commentary that is off topic, and other problems. It would be better to disable the chat box feature until certain portions of the meeting when Owner comments are appropriate, instead of throughout the meeting.
Finally, keep in mind that the Nonprofit Act defers to the Bylaws. If your Bylaws require all meetings to be conducted in person, or limit or prohibit certain types of communication methods for meetings, then you must follow such provisions. Better yet, amend them out so you can take advantage of the more flexible approach under the Nonprofit Act.
Notice of a Virtual Owners Meeting
There is no difference between legal notice for a virtual meeting vs. an in-person meeting. You need to meet the same requirements regarding timeframe for notice (notice but be sent no less than 10 no more than 50 days prior to the meeting), and delivery of notice (snail mail or hand-delivery, physical posting in the community if practicable and feasible, and email notice if you have the ability and if the Owner has requested email notice and given you their email address).
As far as what must be included on the notice itself, CCIOA provides: “The notice shall state the time and place of the meeting and the items on the agenda.” So, what is considered the “place” of a virtual meeting?
Some have argued that the place is the internet, and the address is the link provided for the meeting. Others include the management company or other host’s address as the place of the meeting, but make it clear that only virtual attendance is permitted. Again, while the law has not caught up with today’s terminology for virtual meetings, which do not have a physical address, the spirit of the statute is clear that if participants can hear one another, they should be able to meet.
Check-in at Virtual Owner Meetings/Submission of Proxies
While both in-person and virtual meetings have the same check-in process, virtual meetings tend to have more problems. Check-in at a physical meeting is relatively easy, as you’re sitting at a table verifying names and addresses against a list, and you’re physically exchanging proxies for ballots.
Checking in attendees at a virtual meeting could take a lot longer given its own unique problems. For example, attendees may have signed into the meeting using a mobile device that has a different name or no name at all, so verification is not as easy. Or someone could log on at the last minute with numerous proxies that must now be reviewed by the check-in person.
To prevent the above and other problems from happening, the Association should send out instructions well in advance of the meeting, and again as a reminder on the day of the meeting. You should provide for an earlier check-in time than normally used for in-person meetings, in case of technological problems. The instructions should provide the registration and link, user/password, clear instructions on how to log-in, and that attendees must sign in with their actual names (“my iPad” is not sufficient). You should keep individual participants in the lobby until their check-in is complete and their names displayed correctly.
In addition, your notice should ask for proxies to be submitted as early as possible to avoid delays at check-in time, even if the law allows proxies to be submitted up to the meeting time itself. Note that the law does not require hard copies of the proxies be presented. The attendee could email you the proxy, upload it to the chat box, take a picture and text it to you, or otherwise deliver it to you, as long as you can read the pertinent information.
Also, keep in mind that C.R.S. §38-33.3-317(1)(n) requires you to keep “ballots, proxies, and other records related to voting by unit owners for one year after the election, action, or vote to which they relate.” This applies to proxies submitted for all meetings, including virtual ones.
You might want to provide an email address and/or call-in number in case people have problems logging in. However, an attendee’s inability to log on or understand the technological aspects of the meeting does not prevent you from holding the meeting. It is the owner’s responsibility to become familiar with the virtual meeting app ahead of time; it is not your responsibility to ensure they are technologically proficient or that their computers or mobile devices are correctly set up.
Voting at Owner Meetings
The Association should review its Bylaws for voting procedures, as there may be a particular voting method that must be used. For the most part, however, Bylaws do not prescribe a specific method of voting, and you’re allowed to vote however you wish, including a show of hands, rollcall, vote via the chat box, use of polling, or other voting tools that might be allowed with the particular platform.
The one exception is the use of secret ballots. C.R.S. §38-33.3-310(1)(b) requires secret ballots to be used under two circumstances: (i) during contested elections (i.e., more people are running than positions open), and (ii) at the request of 20% of owners who are present in person or by proxy at the meeting.
So how does one conduct a secret ballot vote during a virtual meeting? At an in-person meeting you would simply use ballots that have no identifying marks of the person casting the ballot. But for a virtual meeting, you must preserve the secrecy and: (i) show that the attendee voted (for themselves and any proxies they held), (ii) without showing how they voted. Most regularly used virtual platforms cannot meet both foregoing requirements. So, unless you have the technology ready for such vote, which should be secured well in advance of the meeting, you cannot conduct the vote.
And what if you don’t know that a secret ballot is needed until the time for the actual vote? For example, nominations from the floor could cause a previously uncontested election to turn into a contested one, thereby requiring secret ballots. Again, unless you have the technology to conduct a secret ballot election, you cannot hold the vote. Instead, you should announce that no election can occur due to the election being contested and the ability to conduct a secret ballot vote, and that a separate vote will take place sometime after the meeting (whether at a later in-person meeting or by mail). However, you may still want to hold a “meet the candidates” session and record it. That way, if you are conducting a separate vote by mail, you can link to this session.
Unruly, Disruptive Owners at Virtual Owner Meetings
Unfortunately, disruptive and unruly attendees can occur at any meeting, virtual and otherwise. To combat this, the Board should already have in adopted a conduct of meetings policy pursuant to C.R.S.§38-33.3-209.5(1)(b). This policy sets forth the ground rules for the meeting. The rules could include, for example, only speaking when recognized by the chair, timeframe for speaking, only one person speaking at a time, no profanity, personal attacks, or shouting, etc.
The conduct of meetings policy is very important during a virtual meeting, as it is easier to interrupt, talk over one another, and sometimes get verbally abusive when you can hide behind the black box. If you believe a meeting is going to be heated, we recommend reading the ground rules at the beginning of the meeting, as a reminder to participants.
And yes, it is ok to mute the person who continuously interrupts. And yes, it is ok to kick the unruly participant out of the meeting and prevent them from rejoining the meeting. Be sure you have given them ample opportunity to comply with the rules and notate their name and disruptive behavior in the minutes, before removing them from the meeting. And, if you still need to vote on something, you may want to move them into the virtual lobby instead of removing them from the meeting entirely. Once you are ready to vote on an agenda item, allow them back into the meeting to allow them to vote.
VIRTUAL MEETINGS FOR BOARDS
Authority to Hold a Virtual Board Meeting
The Nonprofit Act language for holding a Board meeting is similar to that for Owner meetings. C.R.S §7-128-201 provides:
Unless otherwise provided in the bylaws, the board of directors may permit any director to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may hear each other during the meeting.
So again, if all directors can hear each other at the same time, they can conduct the meeting virtually.
Notice of a Virtual Board Meeting
The same notice that is required for in-person Board meetings is required for virtual meetings. Check your Bylaws for specific requirements, but typically no notice is required for Board meetings if the Board has already adopted a schedule for the year (e.g. the 1st Monday of the month).
However, if the schedule provides for in-person meetings, and you are switching to a Board meeting conducted entirely virtually, then obviously you must provide notice of such change to the directors. The Nonprofit Act provides for a minimum of least 2 days’ notice to directors if the Bylaws do not specify otherwise. Additionally, the law is much for flexible in providing notice to directors for Board meetings, in that neither mail or hand-delivery is required.
Currently the law does not require notice of Board meetings to be sent to Owners; however, C.R.S. §7-128-203(3) requires the Board to make agendas (to the extent created) available for Owner examination so they can determine whether they want to attend the meeting, whether it’s being conducted virtually or in-person. The same statute requires the Association to inform the Owners, at least annually, of the method by which such agendas will be made available.
Attendance of Owners at Virtual Board Meetings
C.R.S. §38-33.3-308(2) provides that all Board meetings to be open to Owners or their designated representatives, other than when in executive session. This applies whether the meeting is conducted in person or virtually. Therefore, should an Owner wish to attend a virtual Board meeting, you will need to provide them the link and the same instructions previously discussed with the Owner meetings (other than with respect to proxies), so you can verify their right to attend the Board meeting.
The Board has the right to mute all Owner participants at a Board meeting until the appropriate time. An Owner’s presence at a Board meeting is to observe only, not to vote, and to participate in a very limited manner. C.R.S. §38-33.3-308(2.5) requires the Board, prior to voting on any issue under discussion, to permit those Owners present to speak on the issue. Again, this applies to both in-person and virtual meetings. At its discretion, the Board may also allow an Owner forum during the Board meeting. However, other than with respect to the foregoing situations, Owners may be muted during the meeting.
Virtual Executive Sessions
Although Owners are permitted to attend Board meetings, the Board meeting may hold an executive session (i.e., closed session) to discuss information that falls within the categories of C.R.S. §38-33.3-308(4). Accordingly, if any Owners are attending a virtual Board meeting, the Board may move them into the virtual lobby while the Board meets in executive session, and then bring them back into the meeting once the executive session is complete.
The difficulty with virtual executive sessions is that you don’t know whether they are being conducted confidentially. You might have a rogue board member who is allowing a non-Board member to sit in on the discussion, outside of the viewing screen. Given this problem, it would be better for executive sessions to be held in person.
TECHNOLOGY TIPS
Last but not least, here are some general technology tips for your virtual Board or Owner meetings:
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