PPT SLIDE HANDOUT MASTERING NEW DEVELOPMENT TRANSITIONS … Sessions/New Development...

Mastering New Development Transitions

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PPT SLIDE HANDOUT

MASTERING NEW

DEVELOPMENT TRANSITIONS

THURSDAY CONCURRENT SESSION

1:45 – 3:00 PM

SPEAKERS

Northern California: Bruce Inman, Esq., Roy M. Helsing, CCAM Southern California: Corinne Crawford, CCAM, Dirk Petchul, Esq.

SPONSORED BY

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Mastering New Development Transitions

Roy Helsing, CCAM, The Helsing Group, Inc., ACMFBruce Inman, Esq., Inman Law Group, LLP

Additional Governing Documents

• Developer’s legal counsel typically creates/provides basic governingdocuments

• Articles of Incorporation

• Declaration/CC&Rs

• Condominium Plan, if applicable

• Bylaws

• Often, there are additional Governing Documents that are required ordesirable

Empowering Managers. Enriching Communities.

Potential Additional Governing Documents

• Collection Policy

• Required by Civil Code § 5310

• Collection Policy Statement must include:

• Policy on payment plans, imposing late charge & interest

• Notice of owners right to dispute delinquency

• Notice of owners right to IDR and ADR

• Annual Policy Statement


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• Fine Policy/Schedule

• Required if Association is to impose disciplinary fines

• Review other governing documents for limitations



• Fines must be reasonable

• What is a “reasonable?”

• Consider the nature of the violation

• Consider the specific Association



• Enforcement Policy

• Governing Document Enforcement Procedures

• Review other governing documents for requirements

• Should be flexible

• Do not require warning letter and right to cure in all cases or IDR beforeproceeding to ADR or Superior Court

• Homeowner violation report form?

• Notice of non-confidentiality?

• Disclose right to suspend privileges if authorized


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• Architectural Procedures

• Required by Civil Code § 4765

• Must meet requirements of:

• Civil Code § 4765

• Other Governing Documents

• Architectural Standards/Guidelines

• Review scope of architectural authority in governing documents

• Color, Style, ConfigurationEmpowering Managers. Enriching Communities.


• Election Rules

• Required by Civil Code 5105

• “Cookie Cutter” election rules are not sufficient

• Must integrate provisions/terms from

CC&Rs and/or Bylaws



• Includes provisions regarding:

• Nomination Procedures

• Inspectors of Election

• Association media

• Meeting space access

• Quorum


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• Internal Dispute Resolution (IDR) Policy

• Historically: Most relied upon the default provisions ofCivil Code § 5915

• Modernly: Custom IDR policies may be superior

• Address attorney attendance issues (advance notice?)

• Address non-responsive members



• General Rules & Regulations

• Find the rules enabling provisions in the CC&Rs and Bylaws

• They define the scope of the Associations rule-making authority

• Rules outside the scope of rule-making authority likelyunenforceable



• Other potential rules/policies

• Ethics policy

• Required ethics pledge?

• Damage/insurance/deductible policy

• Water damage and respective responsibility


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• Clubhouse/facility reservation policy

• Insurance requirements

• Reservation forms



• Other potential rules/policies (continued)

• Satellite dish policy (OTARD)

• Solar policy

• Artificial turf/drought tolerant

• Process server policy



• Other potential rules/policies (continued)

• Board meeting rules

• Drone policy

• Association email policy

• Reasonable accommodation policy

• Other?


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Shoe Box and Other Unique

Condominium Plans

• A Condominium Unit is a three-dimensional interest in property

• Civil Code § 4125 “Condominium Project”

• (b) A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof.


Shoe Box and Other Unique

Condominium Plans

• What does this area consist of?

• Air, earth, water, fixtures, etc.

• Where can the description be found?

• Final map, parcel map, condo plan


“Shoe Box” or “Site” Condominium

• Boundary of condominium unit is OUTSIDE of the dwelling and homeowner owns and maintains entire residence.

• For all practical purposes, a site condominium functions just like a traditional planned development.

• Managers must be mindful that homeowners hear the term “condominium” and assume the community association is responsible for maintenance, repair, replacement, and insurance for exterior components of the residence.


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FHA Guidelines –Definition of Site

Condominium

• Condominium project approval is not required for SiteCondominiums meeting all of the below definedrequirements:

• Single family detached dwellings

• Encumbered by a declaration of covenants or form ofownership


FHA Guidelines –Definition of Site

Condominium

• The unit consists of the entire structure

• Insurance and maintenance costs are the responsibilityof the unit owner

• Any common assessments collected will be foramenities outside of the footprint of the individual site

• Manufactured Housing & Modular Homes



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Row House Site Condominium

• “Townhome” style homes located inches apart which have the following characteristics:

• Separate roofing systems

• Separate architectural delineation

• Structurally independent dwellings

• Each residence separately insurable by homeowner – HO-3 type insurance policy not HO-6 insurance policy.




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Other Condominium Plan Anomalies

• Halfplex Condominiums

• Condominium plan splits dwelling structure into two condominium units.

• Similar to “site” condominiums with respect to maintenance and insurance – all the responsibility of the individual unit owner and not the condominium association



Budgets and Assessments

• BRE Regulation 2792.16(c) Provisions

• May cause monthly changes in the assessments (but not thebudget)

• May cause monthly recalculations of the reserve and operatingline items

• May be across all homes – or specific to individual homes.


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• Range of Assessments Procedures

• Monthly Assessment changes

• Recent BRE changes

• Assessments may vary over 100% month to month – howto deal with the Civil Code 20% cap increase

NOTE: Failure to properly implement can cause sales program to be shut down by BRE and could result in

damages claims to management – be careful!!!!



• BRE Budgets

• BRE Budget is not intended to be Association’s budget

• Changes from BRE Budget reflected in HOA Budget madeprior to first close of escrow

• If HOA Budget is greater than 20% or less than 10% from BREBudget developer needs to obtain a new public report.

• Reserve Worksheet is NOT a reserve study

BRE REGULATIONS DO NOT CONTROL THE ASSOCIATION – CIVIL CODE DOES



• Subsidy agreements

• Cash subsidy

• Maintenance subsidy

• Mixed subsidy

EXCHANGES BETWEEN THE DEVELOPER AND THE ASSOCIATION THAT ARE NOT APPROVED BY BRE AND PART OF THE PUBLIC REPORT PROCESS.THERE CAN BE NO CASH OR CASH EQUIVILENT EXCHANGES BETWEEN THE DEVELOPER AND THE ASSOCIATION THAT ARE NOT APPROVED BY BRE AND PART OF THE PUBLIC REPORT. PROCESS.


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• Releasing Bonds

• Assessment Bonds

• Subsidy Bonds

• Completion Bonds

Insist that the association have a copy of the bond before it is released.

Be careful about not releasing a bond for reasons that are not legitimate.


Election Issues & Challenges

• First Annual Meeting

• BRE regulations § 2792.17 dictate timing. 45 days after 51% of total units have closed but no later than 6 months

• The intent is to allow the declarant to retain control

• Manager should pay attention to the timing and closing of lots

• Consideration should also be given to allowing homeowners to participate and run for the board ASAP



• Classes of Membership

• Check governing documents for Class A, B or C

• Class A – always members, always 1 vote per lot

• Class B – Always declarant (or merchant builder) and always3 votes for each lot owned

• Class C – usually declarant and usually states appointmentrights for the majority of the Board

• There will be time limits on each of the classes of membership.


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• Conflicting wording can exist with the descriptions of the classes of membership.

• Class B v. Class C rights

• “At the initial election of directors, the declarant shall elect two declarant related directors using its Class B membership and the members shall elect the remaining one homeowner director…”

• “At the first election of directors, declarant shall have the right to appoint the majority of the board and at least 20% of the board shall be voted on by the Class A members only.”

• Other variations



• Record dates

• Refer to the governing documents for language on recorddates.

• Abide by Bylaws or set record date in advance

• Election Rules can be adopted

• Established at a board meeting prior to the first annualmeeting



• Declarant votes or appointments

• Annexation of phasing

• Is it enough for someone to be a member or do assessments have to have commenced?


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• Goals of Annual Meeting

• Smooth start of the transition from builder to owners

• Pass down good governance practices

• Create good communication between owners and builder



• Introduce management company

• Create a sense of community


Non CID Associations

• What is the difference between an “Association” and a common interest development??

• Common interest development – created whenever a separate interest coupled with an interest in the common area or membership in an association is conveyed

• Association – a non-profit mutual benefit corporation or unincorporated organization created to manage something. In this case, manage property which may include maintenance and/or restrictions


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• Standard Subdivisions – Owner has ownership of a particular lot but no additional ownership of any property

• Easement Rights

• Is there an association?

• CC&R’s and/or maintenance agreement are easier to enforce

• What if there is not an association?

• Alternate ways to enforce the CC&Rs



• Challenges

• Incorporated or unincorporated

• Bank accounts

• Insurance

• Does Davis-Stirling apply?

• Corporate code compliance

• Civil code?

• Lien RightsEmpowering Managers. Enriching Communities.

Modern Governmental Intervention

• “Know what’s in it before you bid it!!”

• Governmental and other compliance issues

• Community gardens

• Water treatment requirements

• Local government reporting requirements

• Requirements to provide local transportation


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Next Up


Time Event Location

3:00 - 3:30 pm Break

3:30 - 4:45 pmLender Certifications Do’s & Don’ts

Salon A-C

3:30 - 4:45 pm Large Scale Governance Salon D-E

3:30 - 4:45 pmHigh Rise Community Engagement

Salon F-H

3:30 - 4:45 pmThe Dawn of the Smart Community

Junior Ballroom (second floor)

SPC440 New Development Community Management

SPECIALIZATION

This two-day course is directed to senior community managers. It provides an understanding of working relationships and processes employed in creating and transitioning developer controlled CIDs to owner involved associations. Course content focuses on Bureau of Real Estate (BRE) documents and regulations, start-up operations prior to the first close of escrow, phasing schedules, ongoing operations and trends in new developments.

The course provides valuable tips on working effectively with developers, establishing service provider requirements and onboarding homeowners to establish an efficiently operating homeowners association.

LEARNING OUTCOMES

Describe the role of the manager when working with developer communities

Describe the role of the Bureau of Real Estate (BRE) and its regulations for new CID subdivisions

Identify and explain documents pertaining to subdivided lands

Know the required start-up operations prior to the first close of escrow

Set and manage expectations with the builder team, sales team and new homeowners

Explain the process and best practices for turnover of common amenities

Identify actions to take when/if the developer doesn’t complete the new development

Explain the ongoing operations after developer control

Establish positive relations between the developer and community members

Describe the California’s Right to Repair Act and the Construction Defect Litigation process

Identify trends in new community development

WHO SHOULD TAKE THIS COURSE?

Experienced CCAMs who want to earn the New Development Community Management Specialty Certificate

Coordinators for builder community management services

Managers of newly built communities

Management company executives who supervise others involved with new development services

Experienced community managers who want to expand their skills and career opportunities

PREREQUISITES

None. At least two years as a CCAM is recommended.

CONTINUING EDUCATION UNITS (CEUS)

14

COURSE LENGTH

16 hours

COURSE FEEMember $459 Non-Member $599 (includes lunch both days)

SCHEDULEEast Bay

March 9-108:30 AM – 5:30 PM

PPT SLIDE HANDOUT MASTERING NEW DEVELOPMENT TRANSITIONS … Sessions/New Development...

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Transcript of PPT SLIDE HANDOUT MASTERING NEW DEVELOPMENT TRANSITIONS … Sessions/New Development...