State Law Rules ‘in Spite of ‘ Association CC

QUESTION: This question is in reference to your column “State Law Overrules CC&Rs; on Assessment Cap,” which appeared Feb. 2. The wording of the law is: “Notwithstanding more restrictive limitations placed on the board by the governing documents, the board of directors may not impose a regular assessment that is more than 20% greater than the regular assessment for the association’s preceding fiscal year. . . .”

The wording is very possibly not as explicit as many people believe. Perhaps the word notwithstanding awkwardly serves the purpose of acknowledging the right of the CC&Rs; to be more restrictive.

ANSWER: The word notwithstanding means “in spite of.” Permit me to use it in a sentence. “Notwithstanding the threatening clouds, Robert packed a picnic lunch and started off into the woods.” Many people are confused by this word but those who drafted the law understand its meaning and purpose.

Although I am not an attorney, I am familiar with many who represent community associations as the primary focus of their law practice. In fact, several of the attorneys who participated in the drafting of the original version and the subsequent amendments to the law are regular readers of this column. I’m sure they would quickly give me a friendly call if I were to stray from accuracy when responding to legal questions. I have spoken with several of them about the reasons that the Legislature felt the law was needed.

It is my understanding that during the early 1980s when the inflation rate was high, associations that had 5% or even 10% assessment increase limitations in their documents were unable to keep up with the cost of living increases. At the same time, associations were faced with huge increases in their insurance costs.

There were many associations that were unable to adequately fund their reserves for future replacement because of these limitations. Some associations were faced with financial instability or even bankruptcy because their budgets were so inadequate that there was no way to catch up and establish a realistic financial plan.

In my opinion, the law is a good one, though I have heard a few people suggest that it may be unconstitutional. Of course, there may be someone who will file suit to challenge the law, but I am not aware of any legal cases so far that have made it through the appellate court to establish California case law.

If there are any attorneys who wish to respond, I welcome their comments.

Proxy Format Perils Secrecy of Ballot

Q: The proxy form that is used for our homeowner association’s annual election has three options. I can mark it for quorum purposes only, or my proxy holders can receive my ballot for voting, or I can show on my proxy how I would like the votes to be cast.

Our bylaws state that the election of directors “shall be by written secret ballot.” If I show on my proxy how I want my votes to be cast, this is not a secret ballot. I must return my proxy to the management company, then it will be forwarded to the election committee. The election committee will give it to the inspectors of election for tallying at the annual meeting. Many individuals will know how I voted. How does this comply with the secret ballot requirement in our bylaws?

A: Your proxy can be used to indicate the way that you want your votes cast. Strictly speaking, it is not a ballot and will obviously not be secret since other people will be inspecting the signed proxies and tallying them or distributing them to the designated proxy holders.

If you are unable to attend the meeting, you could enclose your proxy in an extra sealed envelope inside the mailing envelope for additional privacy. You could request that it be opened only by an inspector of election.

Individuals who feel strongly about a secret ballot should plan on attending the meeting and voting in person. That is the only way you can feel certain that no one else will know how you voted.

Landscape Chairman Needs Powers Pruned

Q: Our homeowner association has a landscape committee that oversees the maintenance of the grounds. The chairman of this committee has taken more and more control so that she is now giving instructions to the landscape crew and ordering new plants and work to be done. The board recently approved an expenditure that she did not recommend so she canceled the order.

How should the board deal with this situation?

A: The committee should have some written objectives regarding the purpose of the committee and the committee’s role in relationship to the board of directors.

The board members and committee members should understand the following: Committees assist and often make recommendations to the board but final decisions and authority rest with the elected directors.

In general, committees are appointed by the board and they serve for a specific purpose. It is reasonable to appoint committee members for a specific term. Then if they are inactive or uncooperative, they should not be reinstated when their term expires.

In this case, the board president or another board member should meet with the landscape committee chairman to discuss her powers and responsibilities. Be aware that if she is hurt by an insensitive attitude, the association may lose its volunteer. On the other hand, if the board allows this person to continue to override its decisions, the board members are setting themselves up for lack of control or more conflicts in the future.

Written objectives can usually prevent this kind of problem that you are experiencing. The committee members will then know what is expected of them and power struggles are less likely to occur.