DPK,

I’ll gladly do a seminar for your community for free. Including an excel spreadsheet that I developed. for my own community. There are many professional reserve study companies that will try and sell you on their product and services. They develop pretty reports with grafts and charts and calculations for percent funded evaluation but all of that is really smoke and mirrors and is only as good as the initial assumptions. Depending on the complexity of your common property this could run you thousands of dollars, but if not truly understood by the board will be useless in one year or less. The only true issue with a reserve study is first to understand and determine your true needs and then to make sure that when each individual item needs to be performed there is enought money in the reserve fund to pay for that expense. Percent funded is a trully useless term but used by every reserve study company, the only true consideration is just in time funding for each and every item in your plan.
Dennis

Suzy,
While the association will have all of that information they cannot release the phone number and e-mail address of any resident without their prior permission. the owners name and mailing address is a public record and you can request that from the association.
Dennis

Does this mean that our board, with the majority of members in one facet or another of the real-estate industry, have and can use their inside track on everything from condo unit conditions, and repair history to availability and upcoming sales?

Thanks for the reply Dennis.

I’m going to make it simple. If we need 200 votes to meet quorum and only receive 170. The board President would say something like ” Since we didn’t meet quorum, we can’t hold the annual meeting” and closes out the annual meeting. This is the way it has been done in the past.

Before he closes it out, I can simply state this is a violation of ARS 33-1804 section B and then the board will have to take some sort of action to meet quorum so that the annual meeting takes place.

But let’s just say, I quote the statute, they blow it off and still close out the meeting? Then what? Game Over?

Regarding the Management Company, yes they answer to the board and the board answers to the community. If I’m understanding you correctly, the board can have a meeting WITHOUT the management company present but it would still have to be open to the public of which I’m sure the management company would show up as being part of the public. I’m assuming there’s no way around this if it got to that point.

Fred,

The law requires that an annual meeting of the members be held. It does not state called. If the required quorum is not achieved the meeting is not held and must be reconvened as many times as required to hold the meeting. The board can call meeting after meeting or change the quorum requirements to something more reasonable. The annual meeting is where the board positions are filled. While a quorum of the board can fill a vacancy in the board for the remainder of that term, they have no authority to elect or appoint a board member to a new term. This statute is often ignored as there are many communities in this state that have never held elections at all based on high quorum requirements. These quorum requirements can in most cases be changed by the board, but they don’t want to because they believe that they can extend their terms without needing elections. The statute for a planned community is ARS 33-1804 section B.

The association board runs the community not the management company the board can do whatever it wants with or without the community manager. The community manager works for the board and not the other way around. The board can hire and fire any contractor at will and often with or without cause. You would have to look at the current contract between the association and the management company for the termination provisions within that contract. Typically it requires 30 days notice.

Dennis

Todd,
You are absolutely correct, but the law allows any association to choose between the three different types of annual financial assessment unless the governing documents dictate otherwise. Audit, Review or Compilation. Just remember if your CC&R’s or Bylaws say the word “audit” relative to annual financial assessment they are then required to do audits alone. Many older CC&R’s used the term in a general sense and not specifically intending for the detailed and expensive financial assessment of an “Audit”. But the way the law is structured irrespective of that possible intent, if it says audit the association must do an audit annually until such time that they process an amendment to the CC&R’s to utilize a different form of financial assessment.

Dennis

In my experience:

1) HOA management companies provide a list of vendors that are registered with the Community Associations Institute (CAI) for the board of directors to choose from.

2) HOA management companies recommend compilations over any other audit type

3) Compilations are very basic and do not show cash flow through the accounts.

4) Compilations depend on information that is given to them from the management company, so asking the auditor questions will most likely get redirected back to the management company.

I suspect your ‘audit’ was actually a compilation.

I have been trying to get our HOA to do anything other than a compilation financial review for years (early post on here) for the same GAAP-related issue(s) you mentioned.

https://hoa.tascs.net

Dennis, your reply in this matter is most helpful. Can you recommend a method of review – direct access, PDF scans, paper printouts-that is most likely to result in approval of the request to review specific transactions such as tax-exempt reimbursements to Board members for meals and entertainment? The management company here stated they only provide paper copies, and that the paper copies cannot be certified as true and complete duplicates of the original. They are requiring 30 cents per page of non-certified paper. I don’t like the idea of printed paper circulating and favor seeing files electronically through a secure portal. Would this method be reasonable to request?

Beautiful, Dennis. We knew we were interpreting 33-1804 correctly but our President is pretty slippery and we needed the assurances you have just provided!

Thank you, Dennis
To clarify, we are not technically a gated community. We have one gate to reduce through traffic but the other end of that street is not gated. And while the majority of the courthomes are clustered in one geographical location, there are some smattered elsewhere.
Official notice of the meeting was sent out at 12:02 a.m. on the day of the meeting. When questioned, our President claimed ample notice had been provided at the previous Workshops and that the reminder notice sent out was “more of a courtesy” so that members didn’t have to search back through emails to find the Zoom information. He also falsely claimed the meeting information was on the community calendar accessible via the Management Company’s website. So much seems improper by my eye test.
As far as added expense, there will be! And it will all fall on the Courthome owners who never asked for a sub-association.