Community Spotlight Jack Ivey Ranch Homeowners Association€¦ · Diversified Waterscapes Inc....

Community Spotlight

Jack Ivey Ranch Homeowners Association

InsIde

How Well Do You Know Your Bank?

Earthquake - Loss Assessment Coverage

Looking Back Over the Election Process and The Inspectors of Elections

OctOber 2012

Coachella Valley Community Associations institute magazine

Platinum _______AMS Paving

Asphalt MD’s

Epsten Grinnell & Howell

Fiore Racobs & Powers

Nelson Paving & Sealing

O’Connell Landscape Maintenance

Pacific Western Bank

Peters & Freedman

Seacoast Commerce Bank

Securitas Security Services USA, Inc.

Sunshine Landscape

Verizon Enhanced Communities

Western Pacific Roofing

Gold ____________Ben’s Asphalt, Inc.

Conserve LandCare

Flood Response

LaBarre/Oksnee Insurance

Powerful Pest Management

Sign-A-Rama

Silver ___________Animal Pest Management Services

CTI of the Desert

Diversified Waterscapes Inc.

Mutual of Omaha Bank/CondoCerts

PWLC II, Inc.

Time Warner Cable

Universal Protection Service

Bronze _________Advanced Painting & Wood Repair

Artistic Maintenance

AWS Consultants, Inc.

MC Painting & Construction

Prendiville Insurance

Rey Insurance Services

Sky Security Services

Union Bank

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Quorum October, 2012

2012 COrPOrATE SPOnSOrS

2

&ATTORNEYS AT LAW

PETERS FREEDMAN, L.L.P.

A FULL SERVICE LAW FIRM Experience you can rely on People you can trust

encinitas offi ce desert offi ce 760 436 3441 760 773 4463

www.hoalaw.com • [email protected]

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your hoA CAn be Our next cOver

Community Spotlight

Jack Ivey Ranch

Homeowners Association

InsIde


Earthquake - Loss Assessment Coverage

Looking Back Over The Election Process

and The Inspectors of Election

Ambassador Committee

OctOber 2012

Coachella Valley Community Associations institute magazine

nO cOst tO yOu

EvErY COvEr HAS A STOrY.

TELL uS YOurS!MuST BE CAI-Cv MEMBEr

In gOOD STAnDIng

cOntact WEnDY at the caI-cv OffIce

(760) 341-0559 [email protected]

www.CoachellaValleyCAI.org 5Quorum October, 20124

cOmmunIty spOtlIght

10 Jack Ivey Ranch By Tony Brunner

features

20 How Well Do You Know Your Bank? By Ken Carteron

22 Earthquake Loss Assessment Coverage Are You Covered?

By Becky Hayes, CIRMS

26 Looking Back Over the Election Process and The Inspectors of Elections

By Sharron Badham, PCAM, CCAM and Gloria Kirkwood, CCAM

29 Records Retention Policy By Ann M. Sheehan, CPA

chapter news

33 Ambassador Committee

39 Have You Heard? By Wendy Van Messel

40 CAI-CV Chapter New & Renewing Members

41 Advertisers Index

chapter events

24 “Speed Meeting” Business Partner Mixer Best Practices – Old and New

By Dave Mourhess

39 California Legal Forum44 Schedule of Events

BOArD Of DIrECTOrS COACHELLA vALLEY CHAPTEr 2012

rOB WInKLE, PrESIDEnTWestern Pacific Roofing

nEnA ruTHErfOrD-MILWArD, CMCA, AMS PrESIDEnT - ELECT

Desert Resort Management

ArT COuLTEr, PAST PrESIDEnTPalm Valley Homeowners Association, Inc.

CHrISTInA BAInE DEJArDIn, ESq.Peters & Freedman, LLP

CYnDI KOESTEr, PCAMMutual of Omaha Bank/CondoCerts

gLOrIA KIrKWOOD, CCAMPalm Valley Homeowners Association, Inc.

grACE PALuCKThe Management Trust, Monarch Group Division

KrISTIn BErrYHILL-HOOD, CCAMMerit Property Management Inc.

MICHAEL WALKEr, CMCA, AMS, PCAMPGA West Residential Association

MIKE MASTrOPIETrOOrange Coast Building Services

PATrICIA SMITH, PCAMVeneto Homeowners Association

CAI Coachella Valley Office 41-905 Boardwalk Suite A-2

Palm Desert, CA 92211 Tel: (760) 341-0559 Fax: (760) 431-8443

Wendy Van Messel, Chapter Executive Director E-mail: [email protected]

Website: www.cai-cv.org

ArTICLE SuBMISSIOnS Or ADvErTISIng InfOrMATIOn

CAI-CV Chapter Executive Director, Wendy Van MesselE-mail: [email protected]

Editor: Terry Smith E-mail: [email protected]

The materials contained in this publication are designed to provide our members with accurate, timely and authoritative information with regard to the subject covered. However, the

CAI Coachella Valley Chapter is not engaging in the rendering of legal, accounting or other professional types of services. The CV Chapter has not verified and/or endorsed the contents of these

articles or advertising, nor do we have the facilities or the person-nel to do so. Readers should not act on the information contained

herein without seeking more specific professional advice from legal, accounting or other experts as required.

COnTEnTS

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24

26

29 33

cai MOrTgAgEMATTErS

departments

8 President’s Message9 From the Editor14 CAI National FHFA Weighs in on Use of Eminent

Domain for Mortgage Reductions By Staff Writer, CAI

15 Time Honored Member Sara Fenimore

By Pat Smith, CCAM, PCAM and Shelly Ruegsegger, CMCA

16 Coffee Talk By Phyllis Harkins, CMCA, CCAM

17 About CAI Membership Has Its Benefits

By Steven Shuey, PCAM, CCAM

18 About CLAC History of CAI-CLAC

Interview with Dick Fiore By Kimberly Lilley

30 Homeowners Association Law California Supreme Court

Upholds Construction Defect Arbitration Provision By Laurie S. Poole, Esq.

34 Water Wise Desert-friendly Landscaping is

Appealing and Saves Money By Dave Koller

36 Technology Today The Pros and Cons of

Community Bulk Contracts By Greg Gritters

38 Welcome Aboard Rudy’s Termite & Pest Control and

West Bound Electrical Contracting & Services By Jay Powell

CORRECTION: In the September Quorum, we neglected to recognize Kay Ladner as the photographer for the Day At The Races Event. Thanks so much for the great photos, Kay!

EDITOrIAL BOArD

EDITOr

TErrY SMITHCAI-CV Administrative Assistant

COMMITTEE MEMBErS

MArgArET “gEn” WAngLEr, ESq.Fiore Racobs & Powers

gInA rOLDAnVista Paint

grEg grITTErSVintage & Associates

JAY POWELLPWLC II, Inc.

KYM TAYLOrStaples Copy & Print

LAurIE S. POOLE, ESq.Peters & Freedman, LLP

LESLEE WILLIAMSDesert Resort Management

PAuLA TAPIAPacific Western Bank

PHYLLIS HArKInS, CMCA, CCAMPalm Desert Country Club Association

SHELLY ruEgSEggEr, CMCAPersonalized Property Management

STEvEn SHuEY, PCAM, CCAMPersonalized Property Management

SuE AnDErSOnUniversal Protection Service

TOnY BrunnEr Country Club Remodeler

CrEATIvE DIrECTOr & grAPHIC DESIgnEr

rODnEY BISSELLBissell Design Studios

SuBSCrIBEr SErvICESThe Coachella Valley

Quorum Newsmagazine is a publication expressly prepared

for our Association leaders, managers and other related professionals of the

Community Associations Institute. Authors are encouraged to submit articles for publishing consideration. All articles

accepted for publication in the Quorum are subject to editing and rewriting by the

Publications Committee.

14

1816

30 Cable TV

Service

34

38

36

WAYSTO CUT YOUR3

FALL WATER BILL

For more information,call Coachella Valley Water District

at (760) 398-2651or visit www.cvwd.org

Participate in CVWD’s Large Landscape Smart Controller Rebate Program

Adjust your irrigation controllers for the cooler fall temperatures

Convert your grass to Lush & Efficient Desert Landscaping

www.CoachellaValleyCAI.org

7

CO nTEnTS


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15

the mission of CAi is to provide the leadership for successful development

and operation of community associations

through information, research and education.

CAI-Cv MISSIOn STATEMEnT

Quorum October, 2012 www.CoachellaValleyCAI.org8 9

frOM THE EDITOrPrESIDEnT’S MESSAgE

This year has literally flown by. It’s hard to believe we are in October already! The kids are back in school, the new football season has started, yards and golf courses are being scalped, the weather has started to cool down and the part time residents are starting to make their way back. Hopefully everyone is gearing up for the season ahead.

I hope you had the chance to kick up your heels and learn some new dances at last month’s Country Western Round Up. A great job was done by the committee, lead by Carlos Contreras and Leslee Williams. Thanks to all our sponsors for helping to make this such a fun event. I would also like to say a special thank you to Sunshine Landscape for providing the facility and being such a gracious host.

October looks to be a busy month and begins on October 12th with our monthly breakfast. This month’s topic will be “Strategic Planning.” On October 19th, all eight California Chapters and CLAC will be hosting the CAI Legal Forum: California Communities for the third year in a row. The day-long event will be held at the beautiful Pechanga Resort and Casino in Temecula and will be filled with learning sessions led by government and industry experts.

October is also the beginning of the new 2013 Committees. Serving on a CAI-CV committee gives you the opportunity to work with fellow chapter members to benefit chapter events and ongoing needs such as Programs, Membership and Education. If you are interested in joining a committee, I encourage you to contact the chapter office.

I would also like to encourage you to plan on attending the Annual Volunteer Awards Dinner on Friday, November 2nd. The Awards Committee has worked hard to create a fun filled, elegant evening. It is important to recognize the amazing group of volunteers that generously donate their time, effort, and yes, money to support the Chapter.

“I have never in my life learned anything from any man who agreed with me.” Dudley Field Malone

President’s Messagerob Winkle, Western Pacific roofing Corporation CAI-Cv Chapter Board President

From the EditorTerry Smith, CAI-Cv Administrative Assistant

Here at the Coachella Valley Chapter, our new volunteer season starts in October. Our committees will be changing and soon, our Board of Directors will be changing too. Change is something that affects all of us. We sometimes embrace change and other times we fight it. Positive change does not come by sitting back and letting things roll over us, but instead, comes with a mindset that sees beyond the day into tomorrow and even the future. It takes a lot of courage to release the familiar and embrace the new. I challenge all of you to step out of your comfort zone and perhaps volunteer for an educational committee or social committee that you might not have this past year.

Some of you will be dealing with change within your own homeowners associations as boards hold annual elections. Sharron Badham and Gloria Kirkwood have authored an article on The Election Process and The Inspectors of Elections to help prepare for these elections and refresh us on the powers and duties of the Inspector of Elections. Ken Carteron provides food for thought with his article, How Well Do You Know Your Bank? Answer the questions in Becky Hayes’ article to determine if you need Earthquake Loss Assessment Coverage and don’t miss the article on Records Retention Policy to assist your association in preparing a policy to maintain your records.

Again this month, Coffee Talk asks our readers questions about the QUORUM and we so appreciate the candid responses. Remember, this is your magazine. So as always, comments and feedback are welcome.

With change comes progress. Let’s take the attitude of embracing change and finding the good in it. Working together as volunteers and staff for the good of the Chapter will make for a much happier community!

Homeowners Associations• • • Audits • • •

• • • Reviews • • •• • • Tax Returns • • •

• • • Compilations • • •• • • Special Projects • • •

(760)568-554443-585 Monterey Ave., Suite 4, Palm Desert, CA 92260


COMMunITY SPOTLIgHT COMMunITY SPOTLIgHT

Jack Ivey Ranch is situated on Varner Road in Thousand Palms. It is a “55 and over” gated

community laid out around a golf course, which occupies 45 acres of a total 130 acres of fee land. The location is within easy reach of the Home Depot, Costco, Super Wal-Mart and Sam’s Club shopping centers at Monterey Avenue and I-10. It is also close to the Cook Street corridor.

The land was originally part of a large cattle ranch, which once ran 10,000 head of cattle and hosted the biggest meat packing plant in the west-ern United States. In 1979 Jack Ivey, Sr. sold the land

to the original developer, who started the project and opened the William F. Bell designed golf course in 1981. Champagne Part-ners, part of the Lawrence Welk Group, subsequently purchased the development and completed it between 1988 - 1990.

The original 9-hole golf course has since been extended to regu-lation length and has an SCGA rating for 18 holes, repeating the nine. The course includes a driv-ing range, chipping and putting greens and an additional 10th hole, which is kept for backup in case one of the other holes is out of play. This is a semi-private course that is owned and man-aged by the homeowners. Aside from the usual ladies and men’s golf programs, Jack Ivey Ranch also participates in the Cactus Cats, a group of women golfers drawing members from the com-munities of Palm Desert Greens, Oasis Country Club, Date Palm Country Club, Portola Country Club and Tri Palms Estates.

Recreational facilities include a 9,500 square foot clubhouse, which houses the Ranch Room restaurant. There are four swimming pools (one Olympic size), two spas, a 600 square foot exercise room, and a tennis/pickle ball court.

The Jack Ivey Ranch Homeowners Association comprises 399 PUD lots laid out around the golf course fairways. The 2 to 3 bedroom homes range in size from 1,250 to 3,000 square feet and prices range from approximately $95,000 to $225,000.

Jack Ivey RanchBy Tony Brunner, Country Club Remodeler

Jack Ivey

Honesty, Integrity, Quality

amspaving.comServing all of Southern California Since 1981

760-327-0800License #415436

• Asphalt Repair, Patching & Crackfill

• Asphalt Removal & Replacement

• Grading and New Paving

• Overlays and Fabric Overlays

• All types of Slurry Seals, Pavement Coatings and Striping

Our Services:

Paving Companyin the Valley! #1


Homeowner association dues are a modest $217.00 per month.

A 5-member board of directors governs the asso-ciation with the assistance of very active commit-tees. These include the Architectural, Emergency Preparedness, Maintenance, Security & Pools committees that are found in most associations. However, there is also Phone Link, a committee making regular phone calls to check on the well being of residents living on their own. In addition there is the Community Council committee, a liai-son group monitoring the process of annexation of 1,000 palms by Cathedral City and the impact this may have on the Jack Ivey Ranch community.

Because this is a mature community, the Board is ever conscious of the need to keep all facilities in excellent shape. The in-house maintenance crew stays on top of the landscaping and operates a water and electricity conservation program. The Board has recently resurfaced all the streets in the community and also resurfaced the tennis court and adapted it for pickle ball play.

Assisting the Board in its efforts are CAI Busi-ness Partners AMS Paving, Time Warner Cable, and Law Office of Peggy Redmon, Esquire. Asso-ciation management is in-house. Association man-ager is Carol McLean, CCAM. Says Carol, “The resi-dents are proud of the history of Ivey Ranch. They will gladly tell you the story of Jack Ivey and his working cattle ranch. Homeowners call the ranch their Oasis in the Desert. They are very friendly and are apt to greet you with an “Ivey Ranch wave.”

The association sponsors dinner dances for each holiday, hold an annual garage sale, and a Pro Am golf tournament. Community spirit at the Ranch flows into local charities, including Toys for Tots and FIND, a food bank providing 80,000 meals per month to needy people in the Coachella Valley. Homeowners volunteer at the county library and Eisenhower Medical Center.

About 40% of Jack Ivey Ranch members are full time residents. All homeowners enjoy the low monthly assessments, the central location, its pri-vacy and the friendly atmosphere within the com-munity. Says Barbara Smith, Board President, “This is the best kept secret in the Valley.”

Tony Brunner is with Country Club Remodeler, a high quality, affordable remodeling contractor serving Coachella Valley homeowners.

You can reach him at (760) 772-4300 or at [email protected].

COMMunITY SPOTLIgHT

on August 8, the Federal Housing Finance Agency (FHFA) requested public comment on the use of

eminent domain authority by municipalities to seize mort-gage loans for purposes of offering homeowners a reduced mortgage balance. The County of San Bernardino, California and the City of Chicago, among other municipalities, have expressed interest in eminent domain as a means to reduce the number of residents whose mort-gage obligations exceed the current market value of their home.

Under the eminent domain proposal, municipalities would raise funds from investors to provide sufficient resources to condemn individual borrower mortgages. The plan would permit a municipality to condemn any lien secured by real property as long as the holder of the lien is provided just compensation.

Homeowners whose mortgage and other liens have been con-demned would then be offered a mortgage loan with a reduced balance, ensuring the owner is in a positive equity position. Municipali-ties believe reducing the amount of mortgage debt that homeowners carry will stabilize home values, reduce foreclosures, limit community blight, and provide a more stable base of property tax revenue.

In requesting comment on the proposed use of emi-nent domain to reduce homeowner mortgage balances, FHFA states the agency has “significant concerns with programs that could undermine and have a chilling effect on the extension of credit to borrowers seeking to become

homeowners and on investors that support the housing market.” FHFA also reveals that it may direct Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System, which collectively fund more than 60 percent of all mort-gages, to “avoid a risk to safe and sound operations and to avoid taxpayer expense.”

To read the FHFA announcement and the Federal Regis-ter notice requesting public com-ment, go to http://www.fhfa.gov/webfiles/24143/Eminentdomain-PR8812F.pdf.

As part of our ongoing Mortgage Matters program, CAI is working to protect homeowners in com-munity associations and to ensure access to fair and affordable mort-gage products for all current and potential community association residents. You can follow our work and share your thoughts at www.caimortgagematters.org. CAI will continue to monitor and participate in shaping changing federal hous-ing policies to ensure the perspec-tive of community associations is heard. This is one of the many

benefits of belonging to an organization that works for you on the local, state and federal level.

CAI articles are researched and written by a team of professionals with the CAI National Headquarters. CAI provides information and education to community associations and the professionals who support them. For additional information, visit them at www.caionline.org.

FHFA Weighs in on Use of Eminent Domain for Mortgage Reductions

By Staff Writer, Community Associations Institute

The plan would permit a municipality

to condemn any lien secured by real property as long as the holder of the

lien is provided just compensation.

Sara moved to the Coachella Valley in 1986 from Cody, Wyoming and has always been very happy with that deci-sion. Now when she feels like being in the snow, she will drive to Idyllwild for the day! Sara recently completed the

CAI M-100 and M-203 Courses.Sara is an avid reader, but when not interested in a book

she likes to watch movies, lounge in the pool and spend time with her loved ones. The latest book on her Kindle is Prodigal Summer by Barbara Kingsolver and her IPOD is full of eclectic music. However, as Sara says, “Once a Parrot Head, always a Parrot Head” and consequently, the Jimmy Buffet songs are played the most often.

Sara has “two beautiful daughters” who live in the Coachella Valley and Oregon. She says “my sweetheart, Steve and I have two dogs that bring us so much pleasure on a daily basis.” Her father was her main mentor whose “wisdom, guidance and wonderful sense of humor go unmatched.”

Time Honored member

SArA fEnIMOrE

By Pat Smith, CCAM, PCAM, Veneto HOA and Shelly Ruegsegger, CMCA, Personalized Property Management

Sara has been a CAI-CV member since 1995. She was first introduced to CAI as a guest attending “fun”ctions in 1991 and over time, became more entrenched in the com-munity association business and activities. She enjoys attending the breakfast and lunch meetings, and enjoys meeting new members and also seeing longtime members she has known for the past 20 years.

Sara has been in the HOA industry on and off for over 20 years. She took a few years off to raise her daughters and also worked for business partners who serve commu-nity associations. Sara is presently the Assistant General Manager at Palm Desert Greens Association, under the direction of GM Roberta Reynolds. Palm Desert Greens is managed in-house and is gearing up to celebrate their 40th Anniversary in November.

Sara tells us “my first career was in the airline indus-try, which was physically challenging, thus causing a back injury. After leaving that career, I began working for Sunrise Company in the late 1980s and soon found myself working at Monterey Country Club Association. After that, it seems as though I blinked and the time has flown.”


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Satellite offi ces in Palm Desert, La Quinta & Indio

www.CoachellaValleyCAI.orgQuorum October, 201216 17

ABOuT CAI

By Phyllis Harkins, CMCA, CCAM Palm Desert Country Club HOA

Scan our qr code and send your question now!

Coffee Talk

Do you have one favorite section of the Quorum that you read first? If so, please list it.

The CLAC report and then the Social Events articles. I really like the quotes that Rob has put in the President’s Report. grace Paluck, CCAM, Executive Manager, The Manage-

ment Trust

Time Honored (tee hee-daughter Shelly and I write it!) Pat Smith, PCAM, CCAM, veneto Homeowners Association

My favorite section is the Member Profile. Dave Mourhess,

general Manager, rEvCO Solar Engineering, Inc.

Have You Heard and Chapter News. Kelly robertson,

CMCA, AMS, CCAM, general Manager, The Springs Community

Association

No, there really isn’t. I always like to see which community is being featured that month, but that doesn’t mean that I’ll read that article first. Then I flip through the pages check-ing out the pictures, the articles, and the ads, and then I will settle on an article to start with. I have to say though, there’s a lot of stuff there. It’s always interesting to skim through; there is variety, color and a good balance of topics, ads and fluff. You do a very nice job, especially consider-ing you’re all volunteers and publish every month. Sharron

Badham, PCAM, CCAM, general Manager, The Hideaway

Do you see the opportunity of being featured in the Quorum as a benefit to membership?Only if you are a business partner or a manager in a posi-tion of contracting with associations. However, I think it is very important to feature managers who have taken strides in the industry with furthering their education or major accomplishments on their respective properties, i.e. LEED certs for energy efficient properties, major water savings

enhancements, solar, other savings to show other asso-ciations what can be done to their properties or what the “professional” managers are capable of. Mary Walker, CCAM,

Association general Manager, rancho La quinta Homeowners

Association

I think there is, as it gives the membership information about that person that they may not have been aware of. Carol fulton, CIrMS, LaBarre/Oksnee Insurance

Yes—Jerry Cavoretto, CMCA, AMS, CCAM, Senior Community

Association Manager, Desert resort Management

I think it is nice for our members to be highlighted. Writing the Time Honored has really opened up our members as to their other interest over and above their occupation and CAI. I believe it also helps our Business Partners to have that exposure. Pat Smith, PCAM, CCAM, veneto Homeowners

Association

Having been featured in the magazine and having authored two articles, I find the exposure to be most beneficial. Dave

Mourhess, general Manager, rEvCO Solar Engineering, Inc.

Would you still read the Quorum if it was a digital-only magazine?Of course I would, but it wouldn’t be as much fun -- no new ink smell, nothing shiny and new arriving on my desk. But then again, I’d always have them with me on my phone, laptop or IPad and could look up business partners, board members, events and activities, etc. That would be a nice benefit. Sharron Badham, PCAM, CCAM, Association general

Manager, The Hideaway

Yes, but I like to save mine when there’s a really good article and use it to educate my boards. The articles would need to be printer friendly if they were online only. grace Paluck,

CCAM, Executive Manager, Management Trust

I don’t get as involved as I should with CAI due to time con-straints, but I would enjoy reading it online. Carley Cechin,

Private Works Manager, granite Construction Co.

SURVEY QUESTIONS FOR QUORUM READERS

Recently, the Quorum committee surveyed our committee members regarding our magazine and its direction for 2013. Rather than send out a lengthy list of survey questions to all CAI-CV members, we asked for replies from various managers, business partners and community volunteer leaders. Here are some of their replies.

Thanks to all who participated in this survey. Your comments are timely and appreciated.

NO (not a typing error) Jerry Cavoretto, CMCA, AMS,

CCAM, Senior Community Association Manager, Desert resort

Management

Probably. Pat Smith, PCAM, CCAM, veneto Homeowners

Association

Yes. Kelly robertson, CCMA, CMCA, AMS, general Manager,

The Springs Community Association

No, I probably would not, as I take the time on my lunch hour to read it and it is a diversion from work. I also have it sitting on a table in our reception area for others to read. Carol fulton, CIrMS, LaBarre/Oksnee Insurance

Have you used an advertiser as a result of their ad in the Quorum?I haven’t used an advertiser but have referred business to them. Dave Mourhess, general Manager, rEvCO Solar Engi-

neering, Inc.

Yes. Kelly robertson, CMCA, AMS, CCAM, general Manager,

The Springs Community Association

No, I have used them after meeting them through CAI events but not after just seeing an ad. grace Paluck CCAM,

Executive Manager, Management Trust

No, not of late (early years, yes). Mary Walker, CCAM,

Association general Manager, rancho La quinta Homeowners

Association

Yes, I always try to use a CAI member for my personal use. Carol fulton, CIrMS, LaBarre/Oksnee Insurance

Yes. Although honestly the first place I look for business partners is the directory. But yes, I pay close attention to the ads. For one thing they are more interesting and eye-catching than they used to be. And for another thing, I feel it’s a form of respect to spend some time reading the advertising of those businesses that do so much to sup-port our chapter. And who knows what you might learn. Sharron Badham, PCAM, CCAM, Association general Manager,

The Hideaway.

Business Partners, Board Members, Homeowners, Managers – do you have questions about community associations? Draft your questions and submit them to the Quorum and we’ll get the answers from industry professionals. Simply complete a survey form when attending one of the monthly CAI programs, or email questions to [email protected].

Any time we join an organization we do it in order to give of ourselves to the organization and we recognize the benefits the organization gives to us. In giving of ourselves, we want others to benefit from our contri-bution. If everyone does that, or at least a majority of the membership has that premise in mind, everyone benefits.

CAI members are a benevolent group. We have created resources for others to use and benefit from. Members from all over the country contribute by writing articles, sharing experiences, and preparing educational programs. These shared resources are available for any member to use.

Are you looking for a solution to a particular issue you are working on? There’s a resource for that! One of the benefits of membership in CAI is having access to a world of resources at the online website.

As a member of CAI you have access to the “mem-bers only” area of the website where educational resources are available. There is a section where members can obtain free articles that may be placed in the association’s newsletter. These articles are written in a perspective of educating the average homeowner and are very beneficial.

Research Foundation information is also available. The Foundation for Community Association Research provides research information that can help board members understand that what they are experiencing is happening around the country.

Finally, there is the bookstore. Authors from all areas within our industry are writing books on how to accomplish everything from pool or lawn mainte-nance to running a board or committee meeting or handling the finances.

If you have not taken the time to surf around the CAI website, you should do so at www.caionline.org. You will be amazed at the resources available to make your life (and your job) easier.

Steven Shuey is a certified professional community association manager and consultant with Personalized Property Management. He may be contacted at

[email protected]. You can follow him on Twitter (www.twitter.com/@IslandMgr).

Membership Has its BenefitsBy Steven Shuey, PCAM, CCAM

Richard (Dick) Fiore is the Presi-dent, Founder and Managing Direc-tor of Fiore Racobs & Powers law firm, specializing in providing legal services to community associa-tions. Dick was the CLAC Chair from 1991-1994…

How did you first get involved with the California Legislative Action Committee?

In the early 1980s interest devel-oped in providing legislative advocacy for CAI’s members in California. This was due, in part, to the California Association of Realtors introducing a bill in the legislature that would have required all association property managers to be licensed as real estate brokers. CAI was strongly opposed, as the skill set for being a realtor and being a property or association manager were quite different, and CAI did not feel a real estate licensing requirement would ultimately serve its members. However, no organiza-tional structure existed to respond to that bill as a unified front. Informally, leaders of CAI in California went to Sacramento to oppose the bill, and were successful - the bill did not pass. In this process, it became apparent that while the legislators were aware of HOAs, it was usually from a negative perspective – the perceived problems and ills of community associations. In the mid 1980s, CAI leaders in Califor-nia decided to organize a group that could be more cohesive in respond-ing to legislation introduced in the

California legislature. They met in the San Fernando Valley to discuss the formation of an organization that ultimately became the CAI California Legislative Action Committee (CLAC). Its initial organizational structure remains largely in place today, with two delegates from each chapter and additional at-large delegates. Though not yet very active in CAI, I attended the organizational meeting, and later became a delegate.

California formed CAI’s first Leg-islative Action Committee. An initial role of the committee was to educate legislators about community asso-ciations – especially the benefits. We offered ourselves as a resource. We were not in a position at the time to propose legislation, but were able to have some input on pending legisla-tion. The delegates would go to Sac-ramento annually and walk the halls and talk to legislators. Term limits had not yet been enacted, so many of the legislators had been there for years (some on the all-important Housing Committee). CLAC began to make an impact with these once-a-year visits as well as communications with legisla-tors in the interim.

CAI National was originally not sure how to react or interact with CLAC. Initially, National gave CLAC an annual $3,000 stipend which was used to retain a firm in Sacramento to provide administrative services – organizing monthly telephonic meetings, preparing written agendas, arranging for a room for our meetings

in Sacramento, etc., which helped CLAC to become more organized.

What made this organization something that you considered valuable enough to spend your time and energy on?

As a lawyer interested in the legal process, I found that, of the various opportunities for involvement in CAI, legislation was the one that interested me the most, and the one where I felt I could make the most significant con-tribution. I also enjoyed working with other leaders in CAI – some of whom were members of CLAC and leaders in their Chapters.

My firm began the practice of com-munity association law in the 1970s. I found I really enjoyed being involved in an industry that included a variety of people from various occupations, not just lawyers. I liked the environ-ment and the industry. CAI was the only formal organization at the time promoting the growth of the commu-nity association industry as a whole, and I felt it was a good organization to participate in as it focused on educa-tion and programs designed to enable all its members to improve their own skills and better serve their clients.

What were your “dreams” for the organization at that point?

As CLAC’s Chair, I had an overall goal to “beef up” the finances and organizational structure of CLAC.

We prepared a position paper and presented it to CAI National in 1991, which proposed that each member of CAI in California contribute $15 per year to support CLAC and legislative action, and that if CLAC could receive $15 per member, then it would not need the $3,000 annual stipend from National. The proposal was approved by the Board of Trustees so we were able to develop additional funding for CLAC and its legislative activities in Sacramento.

Realizing that we needed a stron-ger administrative staff, as well as someone who could provide advocacy in Sacramento, we prepared an RFP and sent it to several administrative and advocacy firms in Sacramento. Skip Daum, CLAC’s current advocate, was one of those who received and responded to the request for proposal.

Many things in Skip’s initial proposal appealed to us: costs, avail-ability, and how interested and excited Skip was about CAI and CLAC on paper. I interviewed Skip in San Fran-cisco at a CAI law conference, and felt that he could provide the administra-tive services that CLAC needed as well as be an effective advocate for CLAC. Skip saw CLAC as a client that had the opportunity for long-term growth and purpose. He made us feel like we were not just another client.

Skip helped to provide input on pending legislation while CLAC com-mittee members were spread out over the state. He provided organization in

grassroots letter-writing and getting the word out to California’s CAI mem-bers. Skip also helped with market-ing CLAC to legislators by pointing out that HOAs represented 6 million homeowners… who vote!

Which of those dreams were easier to fulfill than others? Why?

Once we obtained approval of the $15 per member contribution from National to fund CLAC, and Skip Daum came on board, we were able to improve our finances, organiza-tion, marketing, and communication with legislators regarding community associations, and our goal of being an effective resource to legislators became much more of a reality. With-out membership funding and Skip’s support, those things would have been much harder to accomplish.

Which of those dreams were harder to fulfill than others? Why?

A challenge we had at the outset was getting CAI National to recognize the importance of legislative action at the state level. While National, through its Public Policy Committee and Board of Trustees, had adopted and published public policies, it really had no effective structure in place to pursue those policies at the state level. Today, legislative action at the state level is a cornerstone of what CAI offers its members across the country.

Another challenge early on was to convince each of the eight California CAI chapters to approve the $15 per member per year CLAC contribution, which National required before it would give its approval.

A challenge that will probably always exist is that it is harder to have the “ear” of legislators in Sacramento because CAI and CLAC do not contrib-ute to their campaigns. Early on, CLAC

provided information and educational material to legislators about home-owners associations, but it was not as easy to get them to turn to CLAC for counsel on pending legislation as it would have been if it had contributed to their campaigns. With the develop-ment of CLAC’s stature and presence in Sacramento over time, this has become less of a challenge in recent years.

How has the path diverged from your previous vision? Why do you think it changed course?

It hasn’t really diverged… it has merely expanded along the path I had pretty much envisioned. CLAC activi-ties that have been added in more recent years, like the educational programs for CAI members at the Leg-islative Day at the Capitol, are part of what we had hoped would come from CLAC’s growth and increasing impor-tance in CAI and in Sacramento.

What is the one main thing you think will help this organization move forward from where it is today, and continue to be a strong voice for homeowners, managers and business partners in the community association industry?

I think CLAC will benefit by work-ing together with other organizations as much as possible. Maintaining open communications is important to building partnerships that can make a difference in Sacramento.

Looking back and forward, I can truly say: CLAC is effective – it should continue to do what it is doing.

Kimberly Lilley is PR Chair for the California Legislative Action Committee and can be reached at

[email protected].

History of CAI-CLACInterview with Dick fiore

By Kimberly Lilley, California Legislative Action Committee

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Some time back, I attended a financial seminar where the

instructor asked her audience for a show of hands from those who had a checking account. Not surprisingly, every hand in the room went up. She continued by boldly direct-ing anyone who had a checkbook with them to take it out and pass it to the person on their right. Her unusual request was not well received; not even by those of us who don’t carry a checkbook. The instructor had successfully demon-strated her ambitious, but effective point.

The point she was try-ing to make, and the one that I would like to drive home, is that each person’s financial information is extremely confidential and none of us should feel comfortable giving this information out freely. If you were to get your hands on my checkbook and register you could find out my mortgage company’s name and how much I pay them monthly. How many credit card payments I make and to which provid-ers of service I make those checks payable. You could also see that I withdraw a sizable amount of cash on the first of each month for my children’s allowance and that I regrettably pay my gardener far more than his hedge trimming skills are worth. While this information may not seem very important to you, consider this: in addition to knowing how much my gas bill is, from the next blank check in the book, you could also collect other private information such as my name, address, phone number, bank name,

routing number, and what check number series I am in. With the simple parlor trick of rubbing a pencil on the signature line, you might even be able to make out my signature from the previous check.

When we establish a relationship with a bank, apply for a loan, or ask them to process our payments, we entrust our bank with our most confi-dential information. We do this with the understanding and trust that the bank will keep this material safe and secure. As customers, we need to ask

ourselves if our bank is doing all that it can to gain and support the trust we have given them. What security measures do they have in place to keep our valuable and private information protected?

Many of you would be shocked to find out just how easily lawbreakers are obtaining personal and private information of bank customers. In some finan-cial institutions, the people working in the lockbox area are typically new, poorly paid, poorly supervised, not well trained, and as such, are the most vulnerable to temptation. The latest and greatest attempt to rip off the unsuspecting public by our friend, the crimi-nal, is to pay these lockbox employees for copies of the checks customers have sent in for payment. The going rate is $50.00 per check, and now the underpaid clerk is making an addi-tional $1,250.00 per day for 25 check copies. Our felonious friend now has everything he needs to steal your money, including an original signature - with-out even having to use the parlor pencil trick.

This brings us back to my previous question: Is your bank doing all it can to gain and support your trust and confidence? If you are currently using a bank pro-

vided lockbox service, I recommend that you ask a few questions. How secure is the check processing room? Are there security cameras to monitor the opening of mail in the processing area? Do the security cameras also monitor the photocopier, and who has access to the photocopier?

Be so bold as to ask for a visit to the facility. If you trust your banker to answer the above questions, it may not matter whether they can allow you to tour their process-ing facility. However, almost all of the industry banks will honor your request for a site tour. Some may even jump at the opportunity to show off their “state of the art” processing equipment. If they can not honor your request for a site tour, it may only mean that they use a ser-vice provider and it may be against the provider’s policy to allow visi-tors for security reasons. Also, some banks house their processing equip-ment in the same facility as their central processing environment and that may make a tour out of the ques-tion for those same security reasons.

As bank customers, our financial and personal information should undoubtedly remain private and securely protected at all times. We should be able to have confidence in our banks’ security precautions, but the truth is, that reliance can be dangerous. Protect your finances and your family’s future by taking the time to get to know your bank. You may be surprised at who has access to how many frappuccinos you have a month.

Ken Carteron is the Senior Vice President, HOA Banking Manager with Seacoast Commerce Bank,

specializing in HOA banking solutions for over 20 years. You can reach Ken at (760) 803-9541 or [email protected].

Protect your finances and your family’s future by taking the time to

get to know your bank.


By Ken Carteron, Seacoast Commerce Bank


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The primary form of federal disas-ter relief is the low-interest loan but, as a loan, it must be repaid and not all people qualify for the loan. FEMA grants for post-disaster emergency home repairs and temporary rent assistance are only available to indi-viduals and households who do not qualify for loans.

What about my personal property?

When you purchase an earthquake policy, Loss Assessment is only a por-tion of the coverage that is available.

Earthquake Loss Assessment Coverage

Are You Covered?By Becky Hayes, CIRMS, LaBarre/Oksnee Insurance Agency, Inc.

What is Loss Assessment Coverage?In condominium communities, the exterior

of buildings, certain building components and common areas are typically owned by all the condominium owners as a group. In the event of earthquake damage to such property, the association may, in accordance with its governing documents, impose an assessment against all members of the association to pay for exterior or structural repairs.

This coverage is unique to condominium owners, in that if damage from an earthquake occurs and the losses are not fully covered by the association’s master insurance policy, Loss Assessment coverage will help you pay for your share of certain assessments that the associa-tion may impose on all property owners in your condominium development.

What if my Association already has Earthquake Coverage?

Whether the association carries earthquake insurance for the buildings or not, the individ-ual condo owner has a risk of their own. In the event of a major earthquake, your association (with or without earthquake insurance) may be forced to special assess each unit owner to cover the deductible or to pay for the repairs if the Association does not carry earthquake insurance. Loss Assessment coverage will help you pay your share of certain assessments the association may impose.

It is important that you purchase an earthquake policy that covers you for any assessment that can be levied against you if there is earthquake dam-age to your community. This is true whether or not your unit was damaged. All unit owners will be assessed in com-mon even if the damage happened in another area of your community.

Won’t fEMA be there to help?The U.S. Department of Homeland

Security’s Federal Emergency Manage-ment Agency (FEMA) and the Gov-ernor’s Office of Emergency Services (OES) in California respond to, plan for, and help mitigate effects of disasters. Government disaster-relief programs are designed to help you get partly back on your feet but not to replace your home and everything you lose.

You may also purchase coverage for:Personal Property - This coverage would

protect your contents such as furniture, cloth-ing and other personal effects within your unit. An example that I like to give when explaining this coverage is, if you turn your condominium unit upside down and shake it, whatever falls free would be your personal property.

Loss of Use - If there is an earthquake that renders your unit uninhabitable, loss of use would provide for necessary living expenses (rental, hotel, dining out, etc.) while your unit is being rebuilt or repaired from the damages.

Real Property Coverage - Provides protec-tion for that portion of the unit which is not covered by the master policy.

It is important to discuss the amount of insurance that is being carried by the associa-tion with your board of directors so that you can make the best decision when inquiring about your insurance coverage. Consult with your insurance agent to ensure that all of the gaps are filled and you and your family are pro-tected. With all of the changes taking place on master insurance policies, it is very important to review your insurance policies with your agent annually.

Becky Hayes is a Community Insurance Risk Management Specialist (CIRMS) designated and licensed Agent with LaBarre/Oksnee

Insurance, servicing Community Associations. Becky can be reached at (760) 578-8831 or at [email protected].

Loss Assessment Coverage is one of the most confusing coverage’s provided by a Homeowners policy. It applies only to insureds that are part of a Homeowners Association.

It is important to discuss the amount of insurance that is being carried by the Association with your Board of Directors.

“Speed Meeting” Business Partner MixerBest Practices – Old and new

By Dave Mourhess, REVCO Solar Engineering, Inc.

www.CoachellaValleyCAI.org 2524

CHAPTEr EvEnTS


CHAPTEr EvEnTS

it was the usual hot and sticky August afternoon in Palm Desert but at Palm

Valley Country Club, site of the Business Partner Mixer, it was cool and comfortable.

If you missed our inaugural “Speed Meeting” event, you missed an engaging, educational, and fun time. Following our customary happy hour and networking, more than 75 CAI Managers and Business Partners were treated to a classy, unique and informative rotation of select, profes-sional CAI member speakers. The goal of our “Speed Meeting” event was to enhance the awareness, knowledge and interest of Business Partners and Managers about specific industries.

On a 10-minute presentation schedule, we listened to enlightening talks by Charissa Farley of Farley Interlocking Paving, Gary Flanders of Flanders Painting and Al Hollinger with Vintage Associates. Presentations were limited to discussions of “Best Practices – Old and New” -- basically a “do’s and don’ts” of quality assurance, product selection cri-teria, Business Partner evaluation, service economics, state of the industry, and many other notable topics. Charissa, Gary and Al did not tout their individual companies and did not present “infomericals” that could have been viewed as self-serving. This was a very refreshing format!

A Business Partner and Manager may be discussing the merits of a particular solution when another, unrelated topic might surface. If that unrelated topic is pavers, painting or trees, how great will it be to refer that conversation to Charissa, Gary or Al? Networking at its finest!

So, if you missed our cool, comfortable, innovative and informative “Speed Meet-ing” event, you will have to wait until the next one. See you then!

Dave Mouhess is General Manager of REVCO Solar Engineering, Inc. and a member of the CAI-CV Business Partner

Committee responsible for this event. Dave can be reached at (760) 321-2704 or at [email protected].


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it has now been six years since the HOA election procedures were

changed and redefined in California Civil Code 1363.03 Elections; Rules and Procedures. Although these procedures have made association elections more cumbersome and costly with the two envelope system, they have also pro-vided a benefit long wished for by many HOA residents, volunteers and manage-ment personnel: a truly secret balloting system.

On an annual basis, each com-munity manager should review the association’s documents with regard to elections; these documents include

the Election Rules, the Bylaws and the CC&Rs. If the Bylaws and CC&Rs are older than the Election Rules, the Elec-tion Rules may be the controlling docu-ment in the event of a conflict. Should there appear to be a conflict, contact-ing the association’s legal counsel for a final determination is the safest course of action. If no conflict appears, then the Election Rules would provide the procedure.

We all know how time can get away from us and the annual election of directors is a multi-month process which requires much advance prepa-ration. Using an annual calendar is

helpful for the community manager as well as the board of directors. An annual calendar not only reminds the manager of important items to review throughout the year, but more specifically, outlines the timeframe for appointing the nominating com-mittee (if required by the governing documents), sending out the member self-nomination letter and candidate interest letter to run for the board, along with a notice deadline, and later, the annual meeting notice, agenda, the candidate statements and ballot with a prescribed deadline for voting purposes, address, time and place for

the meeting. The agenda and previous annual meeting minutes may also be a part of the package, but are not necessarily required.

The association also needs to appoint an inspector of elections (IOE). Generally this is done at least 30 days in advance of the meeting, unless the election rules specify otherwise.

The inspector must be an independent third party who may be a member of the association but may not be a member of the board, or a candidate for the board, or related to either. The inspector may not be a person, business entity or person under contract to the association unless expressly authorized by the election rules. Therefore, if the elections rules so state, the manager, management company, legal counsel, auditor, etc. may act as the inspector of election. A member of the association may also serve as the inspector, subject to the limitations within the statute.

The powers and duties of the IOE are quite broad:

• Determine the number of membership entitled to vote and the voting power of each

• Determine the authenticity, validity and effect of proxies

• Receive the ballots and determine the location to which all ballots are to be returned

• With mailed ballots, the IOEs may verify the member’s information and signature on the outer envelope prior to the election

• Hear and determine all challenges and questions to the balloting or elec-tion (Note: some attorneys recommend the IOEs should not have contact with the members regarding the voting process.)

• Count and tabulate all ballots and/or appoint additional independent third parties to assist in verifying member signatures and counting and/or tabulating votes

• Determine when the polls are to close consistent with the governing documents

• Determine the tabulated results of the election or balloting

• Report the result of the election or balloting to the board of directors within 10 days of the date of the polls closed to ensure that the Board can publicize the results to the homeowners within the 15 day time period of the election date

• Retain ballots at a location designated by the IOEs until the period allowed for challenging the election has expired pursuant to Corpora-tions Code Section 7527, and successors statutes

• Make the ballots available for inspection and review by an association member or his or her authorized representative if there is a recount or other challenge to the election process

• Perform such other acts as may be necessary to conduct the election of balloting in fairness to all members and in accordance with all rules of the Association

• If there are three IOEs, after the matter is discussed by all three IOEs, the decision of a majority of the IOEs shall be the formal decision of the IOEs

• And read, understand, apply and enforce the Association’s current Elec-tion Rules

Looking Back Over The Election Process and The

Inspectors of Elections

So with all of those duties and pow-ers, who should serve as the inspec-tor of elections? That question has a different answer for each association. If the manager and board expect there to be contention in the election or for there to be a very close vote, it may be better received in the community to engage an independent inspector to receive and tabulate the ballots. That way, no one can cry foul or argue that the ballots were tampered with in any way. But this can be a costly proposition. So for those associations in which there are the same number of candidates running for the number of seats open and in which there is little controversy, having the management company or volunteer homeowners handle the inspector duties is not too onerous and is generally well accepted by the community as a sound and cost saving decision.

With the two envelope secret ballot system, proxies became unnecessary because all owners were given the opportunity to cast a secret ballot vote in person or by mail, thus eliminating the need for a proxy. However, proxies remained legal within the statute.

Seasoned managers may recall the days when candidates’ names would be placed directly on the proxy, the proxy would be voted and signed and given to a proxy-holder, eliminating the opportunity for the member to vote. Now, however, for any proxy for an association election, a homeowner must be given an opportunity to direct the proxy-holder how to vote on a separate page of the proxy that can be detached and given to the proxy-holder to retain. Again, the proxy-holder then casts the members vote by secret ballot. So why on earth would a member use a proxy? Just our two cents!

Annual elections, more then any other management activity, other then perhaps the budgeting process, requires all of the organizational

By Sharron Badham, PCAM, CCAM and Gloria Kirkwood, CCAM, Desert Resort Management, an Associa Company


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skills of the community manager. It requires the organi-zation of records over time, of the board of directors, the nominating committee, and the governing documents, which must all be pulled together in a timely manner, and for many associations, this can be during the busiest time of year. Anything a community manager can do to bring those documents together on an on-going basis will serve the association well and the community manager’s sanity!

Regarding the safe-keeping of the governing docu-ments, Bylaws and Election Rules, it is important for all Associations to maintain a document file with the most up-to-date set of governing documents to insure that the elec-tion procedure follows the requirements of the documents

currently enforced. Over time, with changes in board of directors, management and/or managers, it is always wise to check with the association’s legal counsel to confirm that you have the current governing documents, as well as legal opinions that may have a bearing on the election process. When you have a 90 item action list, and as we noted earlier, “time has a way of getting away from us,” you’ll be glad you did this upfront, rather then on the tail end!

Sharron Badham is the Association General Manager for The Hideaway Owners Association in La Quinta with over 400 custom homes, homesites and villas, managed by Desert Resort Management,

an Associa Company. You can reach her at (760) 393-5211 or at [email protected].

Gloria Kirkwood is the Association General Manager for Palm Valley Homeowners Association in Palm Desert with 1274 condo units, managed by Desert Resort Management, an Associa Company.

You can reach her at (760) 772-2092 or at [email protected].

have you ever watched an episode of “Hoarders” on the A&E Network? This documentary show spotlights

individuals who are more than just your ordinary pack rats. Hoarders compulsively obtain and keep belongings. They have immense difficulty throwing anything away and their homes become so cluttered that they are uninhabitable. Does this remind you of your association’s office, storage room or basement? Does your association keep every piece of paper because you think you might need it in the future? If your answers are “Yes,” you might need a records retention policy.

Remember the Enron and Arthur Anderson debacle over records that were shredded, even while Enron was under investigation by Congress, the Securities and Exchange Commission and the Department of Justice? The Sarbanes-Oxley Act was enacted in 2002 as a reaction to the number of major corporate and accounting scandals, including Enron. The Sarbanes-Oxley Act applies to publicly traded companies, except for two provisions of the act, which apply to all entities because they are amendments to the federal criminal code. The law makes it a crime to alter, cover up, falsify or destroy any document, or persuade someone else to do so, to prevent its use in an official pro-ceeding such as a federal investigation or bankruptcy pro-ceeding. The law also makes it a crime to punish whistle-blowers in any manner.

So, if your association wants to avoid being a hoarder or breaking federal criminal laws, you should develop a writ-ten records retention policy. A reasonable records policy can help to protect the association from claims that docu-ments were intentionally destroyed in anticipation of legal proceedings. Plus, the records retention policy gives clear, guidance to management, employees and the board.

We all know how time can get away from us. using an annual calendar is helpful for the community manager as well as the Board of Directors.

By Ann M. Sheehan, CPA

The policy should address the following:• What records should be maintained?

• How long these records should be maintained?

• Will the records be maintained electronically or will hard, paper copies be kept?

• If the records are maintained electronically, where will backup copies be maintained?

• Where will the records be maintained?

• When and how should the records be destroyed?

• Input on the policy should be obtained from the asso-ciation’s management, attorney and auditor. A reten-tion schedule should include the following:

• Permanently: Audit reports, federal and state income tax returns, property tax returns, minute books, deeds and other property records, budgets;

• Seven Years: Bank statements, deposit tickets, canceled checks, general ledgers, cash receipts, cash disburse-ment journals, payroll records;

• Three to Five Years: Contracts – no longer active, insur-ance policies – no longer active; vendor invoices;

• Three Years: Bank reconciliations.

The association should include other, nonfinancial docu-ments in the policy, such as current governing documents, correspondence regarding legal matters, architectural applications and any decisions made by the association, newsletters, notices or letters to the members, reserve stud-ies and election records. Advice on how long to maintain these documents should be obtained from the association’s attorney.

With ever-increasing advances in technology, more and more information can be easily stored in an electronic format. In addition, equipment to scan documents into electronic format is becoming less expensive and is very easy to use. The association should carefully consider what documents will be maintained in an electronic format. For example, the association might want to keep all “per-manent” documents in hard, paper copies, with backups in electronic format. The association should also keep a backup copy of the electronic version of the documents in a separate location.

Once your association’s record retention policy is up and running, then you can rest assured that the producers of A&E Network’s “Hoarders” won’t be knocking at your door.

Anne M. Sheehan is a principal with Goldklang Group CPAs PC and has been with the firm since 1991. She is actively involved in the audits of many of the largest and most complex common-interest realty associations in the Washington metro area.

Records Retention Policy

This article was reprinted with permission from the QUORUM, a publication of CAI, Washington Metropolitan Chapter.


HOMEOWnErS ASSOCIATIOn LAW HOMEOWnErS ASSOCIATIOn LAW

the California Supreme Court recently ruled in Pinnacle

Museum Tower Association v. Pinnacle Market Development (US), LLC, that mandatory arbitration provisions for construction defect actions that are contained in the original developer written declarations of covenants, conditions and restrictions (CC&Rs) are binding and enforceable upon home-owners associations.

The factsPinnacle Market Development (US),

LLC, (Pinnacle) drafted and recorded CC&Rs that contained a number of easements, restrictions and covenants described as “enforceable equitable servitudes” for a mixed use (residen-tial and commercial) condominium project in San Diego. The CC&Rs provided for the creation of Pinnacle Museum Tower Association (HOA) to serve as the owners association for the project. The CC&Rs were recorded before any unit was purchased and

before the HOA was formed. Article XVIII of the CC&Rs pro-

vided that by accepting a deed for any portion of the project property, the HOA and each owner agreed to waive their constitutional right to jury trial and have any construction dispute involving Pinnacle resolved exclu-sively through binding arbitration in accordance with the Federal Arbitra-tion Act (FAA) and California Arbitra-tion Act (CAA). The CC&Rs further provided that no amendment could be made to the arbitration provision without Pinnacle’s written consent.

The HOA filed a construction defect action against Pinnacle. Pin-nacle filed a motion to compel arbitra-tion, based on Article XVIII. The trial court (Superior Court) determined the FAA was applicable and that the arbitration clause was an agreement to arbitrate between Pinnacle and the HOA. However, the Superior Court found that the arbitration provision

was “unconscionable,” invalidated the agreement and denied Pinnacle’s motion to compel arbitration.

Pinnacle appealed to the Court of Appeal (Appellate Court) which affirmed the Superior Court’s ruling. The Appellate Court also determined the FAA was applicable, but concluded that the arbitration clause in the CC&Rs did not constitute an agree-ment sufficient to waive the HOA’s constitutional right to jury trial for construction defect claims. The basis for this finding was because Pinnacle was the only party to the CC&Rs at the time the document was written and, therefore, the HOA could not have agreed to arbitrate or waive its consti-tutional right to a jury trial.

Pinnacle then filed a petition for review with the California Supreme Court (Supreme Court). The Califor-nia Supreme Court reviewed the mat-ter to determine the following:

(1) Is the arbitration clause in the CC&Rs binding on the HOA?

(2) If the arbitration clause is bind-ing, must the clause be invali-dated as unconscionable?

Arbitration Clause Is Binding On The HOA

The Supreme Court recognized that there is a policy in both federal and California law favoring arbitration as a speedy and relatively inexpensive means of dispute resolution. However, a cardinal principle is that binding arbitration is a matter of consent, not coercion. In order to determine whether the parties agreed to arbitra-tion, courts will examine state con-tract laws while favoring the federal policy that supports arbitration.

Under California law, arbitra-tion agreements must be in writing. However, a signed agreement is not necessary and a party’s acceptance can be implied. Arbitration provisions

may also be binding even if a party to the contract did not actually read the clause.

Utilizing these principals, the Supreme Court analyzed whether the binding arbitration provisions in Article XVIII constituted an agree-ment to arbitrate. Relying on other cases that recognized there can be delegated authority to consent to mandatory arbitration provisions, the Supreme Court rejected the Appellate Court’s reasoning that the HOA was not bound by the arbitration clause because Pinnacle was the only party at the time the arbitration provision was written.

The Supreme Court reasoned that since the individual owners within an association are legally deemed to have consented to the provisions of the CC&Rs under the Davis-Stirling Com-mon Interest Development Act (Act), then the members have the right to expect the association, in representing

their collective interests, to abide by the covenants in the CC&Rs, includ-ing binding arbitration of construction defect disputes, stating:

Indeed, we perceive no legitimate reason to frustrate the expecta-tions of purchasers who choose to buy into a development where binding arbitration is the desig-nated process for resolving such claims.

Several law firms who represent homeowners associations (but not the HOA) submitted briefs to the Supreme Court arguing against overturning the Appellate Court’s decision. One such assertion was that Civil Code Section 1353(a) limits a developer’s authority to only include in the CC&Rs provisions commonly understood to be equitable servitudes (i.e., restrictions relating to the use or maintenance of the prop-erty). The Supreme Court rejected this claim, noting that Civil Code Section 1353(c) specifies that a declaration

California Supreme Court Upholds

Construction Defect Arbitration Provision:

By Laurie S. Poole, Esq., Peters & Freedman, L.L.P.

Pinnacle Museum Tower Association v. Pinnacle Market Development (uS), LLC

74-040 Highway 111, Suite L200Palm Desert, California 92260www.ConserveLandCare.com

760-343-1433Lic. # 958748

Technologically Advanced Water Management

Practices

Environmentally Friendly Landscape Management

Programs

Water EfficientLandscape Conversions

Design & Installation

Water Audits & Cost Effective Solutions For Tiered Water Rates

www.CoachellaValleyCAI.org 35Quorum September, 201234

WATEr WISE

Patio Furniture Doctors Inc.“REFINISHING SPECIALISTS”

We can create a new look with your existingpatio furniture for about 1/2 the cost of new!

We are your only locally owned and operated state of the artrefinishing factory in the Coachella Valley for over 25 years.

Please call me any time for your free on-site furnitureassessment. I am always in your neighborhood.

Owner/Operator Bill Richardson

BEST PRICES, QUALITY & SERVICEWe can meet or beat any professionally written quote.

(760) 328-8999

Desert-friendly Landscaping is A p p e a l i n g a n d S a v e s M o n e y By Dave Koller, Coachella Valley Water District

g u i d a n c e y o u n e e d t o c r e a t e y o u r o w n d e s e r t - f r i e n d l y h o m e l a n d s c a p e s . F o r m o r e i n f o r m a t i o n o n t h e w o r k s h o p , s e e t h e b o x b e l o w . A l t h o u g h t h e r e i s n o c o s t , s e a t i n g i s l i m i t e d . R e g i s t e r a t t h e d i s t r i c t ’ s w e b s i t e a t w w w . c v w d . o r g o r c a l l ( 7 6 0 ) 3 9 8 - 2 6 5 1 .

Dave Koller is the Conserva-tion Coordinator for Coachella Valley Water District. He has a master’s degree in horticulture, is a certified arborist and landscape irrigation auditor. You can contact him at [email protected] or (760) 398-2651.

W a t e r W i s e L a n d s c a p e W o r k s h o p f o r H o m e g a r d e n e r sW h e n : November 7th, 6:0 0 7:30 p.m.

W h e r e : CVWD’s Palm Desert A d m i n i s t r a t i o n B u i l d i n g , 7 5 5 1 5 H o v l e y L a n e E a s t

F o r m o r e i n f o r m a t i o n o r t o r e g i s t e r

f o r t h e w o r k s h o p , v i s i t t h e d i s t r i c t ’ s w e b s i t e a t w w w . c v w d . o r g o r c a l l ( 7 6 0 ) 3 9 8 - 2 6 5 1 .

By Wendy Van Messel, CAI-CV

Have You Heard?October 2012

Mutual of Omaha Bank is proud to announce that Cyndi Koester, PCAM has been promoted to Vice President of the Southern California Region for Com-munity Association Banking Division. Congratulations Cyndi for providing almost 8 years of excellence service to your clients.

Big CONGRATULATIONS go to Nena Rutherford-Milward with Desert Resort Management for becoming CAI-CV’s newest PCAM. As the Chapter’s 17th PCAM, Nena joins a distinguished group of managers whose hard work and dedi-cation to the management profession are to be admired and respected. Way to go Nena!

October is renewal month for the CAI-CV Chapter. Get more involved by serving on a committee, sponsoring events, becoming a Corporate Sponsor or attending educational classes and social events. The 2013 Marketing Plan and Events Calendar will be available this month, as well as Volunteer Interest Forms, which are now being accepted for 2013 committee service. For more information, check your weekly e-blasts or contact the chapter office at (760) 341-0559 or [email protected].

Wendy Van Messel is the Chapter Executive Director for the CAI Coachella Valley chapter. If you have an item for

Have You Heard, you can reach Wendy at [email protected]. The office number is (760) 341-0559.

ruDY’S TErMITE AnD PEST COnTrOL

WEST BOunD ELECTrICAL COnTrACTIng & SErvICES

Rudy’s Termite and Pest Control was founded in 1991 by Rudy Garza and the Garza family. They have pioneered and standardized treatment methods used here in the Coachella Valley for over 20 years. With Rudy’s guidance, the company has grown to become a full service termite, pest control and special services business, offering both private resi-dences and the business community quality pest maintenance and management solutions. At Rudy’s, they know how important it is to live in a pest-free environment. They inspect your home, offer advice about any pest problems, provide you with a written proposal with options, perform an initial treatment to rid your home of existing pests, and design a maintenance program for your home, business or an entire homeowners association. Rudy’s techni-cians are cell dispatched to provide the quickest response time possible. Rudy’s utilizes proven state of the art techniques. Rudy says, “Our diversity allows us to provide you with the best solution to your pest control needs.” He went on to say, “In today’s economy, good old fashion customer service is paramount, therefore, our intention is not just to provide good service, but outstanding service.”

Whether you have ants, termites, rodents, cockroaches, or crickets, Rudy’s can take care of the problem quickly and efficiently. Rudy’s also has a very impressive and informative website located at www.rudyspest.com.

You can reach Rudy’s Termite and Pest Control’s friendly staff at (760) 705-8944.

West Bound Electrical Contracting & Services has been serving the Coachella Valley since 2000. Their office is in the heart of the valley at 47-170 Highway 111, Suite 3, in Palm Desert. When I walked through their door I was immediately greeted by their young, friendly staff. I was introduced to Jeff Bowman who is the contractor and owner. Jeff told me, “We insure that each and every client receives impec-cable customer service with the highest degree of professionalism.”

West Bound ECS provides service to the commer-cial and residential sector and specializes in home-owners association work. They also work with tenant improvements, new construction and remodels. Other services that might be of particular interest to our association mangers include: HOA lighting (low voltage and line voltage), parking lot lighting, security lighting and correcting code violations. West Bound ECS works closely with many manage-ment companies here in the Coachella Valley and has established ongoing working relationships with these companies. West Bound ECS understands the urgency of each service call and responds quickly, with many service calls handled the same day. General Manager, Adrienne Kindel says, “We strive to be the Coachella Valley’s first choice in electrical contracting service.”

West Bound ECS is proud to be a part of the Coachella Valley and has given back to the commu-nity by working with Desert Friends of the Devel-opmentally Disabled (DFDD), The Center for Spiri-tual Living, and The Palm Springs Unified School District. If you would like more information about West Bound ECS, you can reach Jeff Bowman at (760) 776-8314, or visit them on the web at www.westboundecs.com.

California Forum to Focus on Community

Association IssuesDiverse legal issues affecting the governance and manage-

ment of homeowner and condominium associations in Califor-nia will be the focus of a day-long legal forum on October 19th in Temecula.

CAI Legal Forum: California Communities will provide essential legal information and perspective on rules enforce-ment, dispute resolution, reasonable accommodations, HUD approvals and recertifications, governing documents, social media and much more. More than 60 million Americans, including at least 10 million Californians, make their homes in homeowner and condominium associations, cooperatives and other planned communities.

The forum will be held at the Pechanga Resort & Casino at 45000 Pechanga Parkway. Registration opens at 8 a.m., with concurrent sessions beginning at 9 a.m.

Last year’s forum in Long Beach was attended by hundreds of community managers and association homeowners, includ-ing board members and other community leaders.

Hosted by the eight California chapters of Community Asso-ciations Institute (CAI) and CAI’s California Legislative Action Committee, the event will feature two distinct learning tracks, one for community managers and the other for homeowner volunteer leaders. Sessions are led by government and industry experts, including association management professionals and members of CAI’s College of Community Association Lawyers.

The eight hosting CAI chapters are Bay Area and Central California, California North, Channel Islands, Coachella Valley, Greater Inland Empire, Greater Los Angeles, Orange County and San Diego.

The keynote speaker will be Charles Marshall, a nationally syndicated humor columnist who will share the tools of suc-cess, using inspirational stories of real-life underdogs who have overcome obstacles.

To learn more or register, visit www.caionline.org/events/CALaw.

By Jay Powell, PWLC II, Inc.Welcome AboArd

Jay Powell is the Director of Sales and Marketing for PWLC II, Inc., a land care management company located in Palm Springs. You can reach Jay at (760) 323-9341 or by email at [email protected].

39Quorum September, 201238 www.CoachellaValleyCAI.org

CHAPTEr nEWS

accOuntants & bOOKKeepers

Allen & ASSoCiAteS .............................................................. 21

brAbo & CArlSen, llp ........................................................... 35

SCott CorporAtion ............................................................... 8

asphalt

AmS pAVing .............................................................................. 13

ben’S ASphAlt ......................................................................... 33

nelSon pAVing & SeAling ................................................... 43

attOrneys

epSten grinnell & howell ................................................ 33

Fiore rACobS & powerS ...................................................... 15

green bryAnt & FrenCh, llp................................................ 6

gurAlniCK & gillilAnD, llp ................................................ 42

lAw oFFiCe oF peggy reDmon .......................................... 35

peterS & FreeDmAn, llp ........................................................ 3

banKs

pACiFiC weStern bAnK ......................................................... 28

SeACoASt CommerCe bAnK................................................ 37

cOncrete

grAnite ConStruCtion CompAny ..................................... 8

electrIc & water

CoAChellA VAlley wAter DiStriCt .................................... 6

Insurance

lAbArre/oKSnee inSurAnCe .............................................. 42

timothy Cline inSurAnCe .................................................. 35

laKe management

DiVerSiFieD wAterSCApeS .................................................... 42

landscapIng

ConSerVe lAnDCAre ............................................................ 31

high teCh irrigAtion, inC. ................................................. 35

KirKpAtriCK lAnDSCAping SerViCeS, inC. .......................... 9

o'Connell lAnDSCApe mAintenAnCe ............................ 42

SunShine lAnDSCApe ........................................................... 37

management cOmpanIes

ASSoCiA/DeSert reSort mAnAgement ........................... 21

DeSert mAnAgement ........................................................... 15

pest management

powerFul peSt mAnAgement ............................................. 4

OutdOOr furnIture

pAtio Furniture DoCtorS, inC. ........................................ 35

pOOl plasterIng

the leAK DeteCtorS ............................................................... 2

pOOl decK resurfacIng

Cti oF the DeSert .................................................................. 28

rOOfIng

reliAble rooFing.................................................................. 35

weStern pACiFiC rooFing .................................................... 4

securIty

AllieD bArton .......................................................................... 2

SeCuritAS SeCurity SerViCeS uSA, inC. .............................. 3

CAI-CV Chapter New & Renewing Membersnew manager membershIp

alderwOOd resOrt management

Miss Sarah Fleming (909)866-6531 (413) [email protected]

desert hOrIzOns Owners assOcIatIOn

Ms. Maryann Hoss (760)340-5501 [email protected]

desert prIncess hOa

Mr. Khaldun A. Butler (760)322-1907 [email protected]

desert resOrt management

Mr. Joseph Gibbs (760)346-1161 [email protected]

palm valley hOmeOwners assOcIatIOn, Inc.

Mrs. Jacqueline Wright (760)772-2092 [email protected]

new busIness partners

Orange cOunty pest cOntrOl, Inc.

Mr. Tom Meany (949)586-8700 [email protected]

waste management

Ms. Sandra Pursley (661)203-7451 [email protected]

CHAPTEr nEWS ADvErTISEr InDEx

new vOlunteer leaders

palm desert cOuntry club hOmeOwners assOcIatIOn

Mr. James Olsen (760)345-2331 [email protected]

renewIng busIness partner

bOyd & assOcIates

Ms. Amanda Gray

martIn sweepIng/pressure washIng

Mr. Curtis Oldenkamp

sKy securIty servIces

Ms. Leah McCormick

renewIng manager membershIp

Mr. Gerald S. Carlin, Esq.

IndIan rIdge hOmeOwners assOcIatIOn

Ms. Patricia Dykstra, CMCA, AMS

palm desert tennIs club Owners assOcIatIOn

Mr. Ken Kuperstein

the reserve cOmmunIty assOcIatIOn

Mr. Jim Butzbach Ms. Pam Jacobson

wIlsOn JOhnsOn cOmmercIal real estate, Inc.

Ms. Michelle Marston

ADvErTISIng InfOrMATIOnCAI-CV Chapter Executive Director,

Wendy Van MesselE-mail: [email protected]

Phone: (760) 341-0559

renewIng vOlunteer leader

JacK Ivey ranch hOmeOwners assOcIatIOn

Ms. Barbara Smith Ms. Dee Ingram Mr. John Lotz

OaK hIlls estates Owners assOcIatIOn

Ms. Deborah Davidson Ms. Diane Stuart Mr. Doug Carlson Ms. Janine Darkens Ms. Mary Park Mr. Robert E. Schaefer

palm canyOn vIlla’s

Mr. Ray Hungerford Mr. David J. Meyer

Quorum September, 2012 www.CoachellaValleyCAI.org40 41

contact: Janalee Arthur, Sales/Customer Servicecell: (760) 285-3158 email: [email protected]

contact: Casey gnadt, Area manager phone: (800) 339-1106 email: [email protected]

fInd us OnlIne: www.oclm.com or scan our qr code with your smart phone to fi nd more about us now.

• Irrigation audits performed by an IA Certifi ed Landscape Irrigation Auditor

• Tree Trimming with supervision by a ISA Certifi ed Arborist

• Computerized Irrigation Management• Digital Photo and Landscape Enhancements• free 24hr emergency response• Client Education Programs

MAInTAInIng THE BEAuTY AnD funCTIOn Of THE urBAn LAnDSCAPE

ON STAFF

ON STAFF

company

an

fax: (949) 589-6083 | 43549 wheel road, indio, CA 92201

GURALNICK & GILLILAND, LLPATTORNEYS AT LAW

Member of CAI and CACM

Legal Services for Community Associations

• GeneralCounsel

• AssessmentLienandForeclosure •NoCostCollections •FeesPaidbyDelinquentHomeowner •DetailedMonthlyStatusReports •TitleReportsatNoChargetoAssociation

• ConstructionDefect/Reconstruction •MoldClaims/Litigation •RealEstateDispute/Litigation

Phone:(760)340-1515FAX:(760)568-3053

Quorum September, 2012 www.CoachellaValleyCAI.org42 43

nO

ve

mb

er

Oc

tOb

er October breaKfast program

tOpIc: Strategic Planning when: October 12th, Registration 7:30 a.m. where: Palm Valley Country Club, Palm Desert

statewide legal forum when: October 19th where: Pechanga Resort and Casino, Temecula, CA

CAi - CV upComing events

annual volunteer awards dinner when: November 2nd, 5:30 p.m. where: Indian Wells Country Club, Indian Wells

november legislative update & mini-trade show when: November 9th, Registration 11:00 a.m. where: Palm Valley Country Club, Palm Desert

c a l i f o r n i a c o m m u n i t i e s

c a l i f o r n i a c o m m u n i t i e s

ForumLegalcai

ForumLegalcai

Oct. 19, 2012 | Temecula, CA

Oct. 19, 2012 | Temecula, CA

a one-day event for california community managers, association board members and other homeowners from community associations institute—the leader in HOa education, advocacy and professional development.

Critical updates on important legal requirements that impact how you work.

Essential information on key legal developments that impact where you live.

for event details and registration, visit www.caionline.org/events/calaw or call cai member services at (888) 224-4321 (m–f, 9–6:30 et).

a one-day event for california community managers, association board members and other homeowners from community associations institute—the leader in HOa education, advocacy and professional development.

Critical updates on important legal requirements that impact how you work.

Essential information on key legal developments that impact where you live.

for event details and registration, visit www.caionline.org/events/calaw or call cai member services at (888) 224-4321 (m–f, 9–6:30 et).

Hosted by CAI’s California Chapters and CAI’s California Legislative Action Committee

Hosted by CAI’s California Chapters and CAI’s California Legislative Action Committee

Join CAI! There are many benefits to being a part of our chapter, including

the monthly Quorum magazine. Call (760) 341-0559 today.

41-905 Boardwalk, A-2Palm Desert, CA 92211

PrESOrT STDu.S. POSTAgE

PAIDSAn BErnArDInO, CA

PErMIT # 3387

Community Spotlight Jack Ivey Ranch Homeowners Association€¦ · Diversified Waterscapes Inc....

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