Governance of POAs

Posts on HOA Talk

2009 May 05
See History for brief descriptions of changes and updates. 

    This writer has made a number of posts on HOA Discussions on HOA Talk which provide additional information on Governance or Property Owners Associations.  Click on HOA Discussions to access the discussions as a non-registered reader.  More privileges are provided if you sign up as a registered user. 

    The continuation of this post provides search information for the HOA Discussion Topics on which I have posted. 

Don Nordeen
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• History:  Changes are usually identified in the text with the date which facilitates searching by date.  Edits are usually noted by add and delete changes. 
  • 2009 May 05 — Initial Post
• Links:  Posts on HOA Talk at [http://swagman.typepad.com/poa_governance/2009/05/posts-on-hoa-talk.html]
• Key Words:  • Accounting Principles;  • Attorney Issues;  • Case Law, Michigan & Other;  • Common Interest Development;  • Community Associations Institute;  • Fiduciary Duty;  • Governing Documents;  • Legislation, CID & POA;  • Legislation, CID & POA Model & Content;  • Legislative Issues & Proposals;  • Nonprofit Corporation Acts;  • POA Board of Directors Issues;  • POA Governance;  • POA Members' Rights;  • POA Problems;  • POA Resources;  • POAs, General;  • Private Government;  • Reference Materials & Papers;  abuse; access; access to records; accountable; accounting; accounting principles; accounting standard; ADR; advocacy; AICPA; AICPA Audit & Accounting Guide; AICPA Audit & Accounting Guide for Common Interest Reality Associations; alternate dispute resolution; alternative dispute resolution; amendment; annual meeting; architectural committee; architectural control committee; architectural review committee; attorney; attorney client privilege; attorney general; attorney obligation; audit; bill of rights; board of directors; breach of fiduciary duty; business judgment rule; bylaws; CAI; case law; CC&R; CC&Rs; CID; CID/POA; CIDs/POAs; CIRA; client; client attorney privilege; client attorney privilege; client lawyer privilege; closed meeting; closed session; collection; common interest community; common interest development; common interest homeowners coalition; Common Interest Realty Association; community association; condo; condo ombudsman; condominium; Condominium Act; condominium association; condominium ombudsman; conflict; conflict resolution; consolidated financial statement; constitution; corrective action; Covenant; Covenants Conditions and Restrictions; CPA; declarant; democracy; democratic; depreciation; developer; developer control; development; director; directors’ obligation; disclosure; dispute; dispute resolution; due process; dues; duties; duty; duty of care; duty of loyalty; duty of obedience; duty to act; easement; election; enforcement; enforcing; engagement; engagement letter; excessive; executive; FASB; fiduciaries; fiduciary; fiduciary duties; fiduciary duty; financial statement; fine; foreclosure; freedom of information; GAAP; generic CC&Rs; glossary; governance; Governance of Not-for-Profit Organizations; governing; governing documents; grievance; harass; harassment; HOA; HOA abuse; HOA ombudsman; home owners associations; Homeowner Bill of Rights; homeowners associations; improvement; land development; law; laws; lawsuit; lawyer; lawyer client privilege; legislation; Legislation, CID & POA; Legislation, CID & POA Model & Content; legislative; legislative issues & proposals; legislature; limitations; lodging; meeting; members' meeting; members' rights; model act; model bylaws; model CC&Rs; model covenants conditions and restrictions; negligence; nonprofit; nonprofit corporation; non-profit corporation; Nonprofit Corporation Act; Non-profit Corporation Act; nonprofit GAAP; notice; obligation; oligarchy; ombudsman; open meetings; organization as client; owners' rights; planned communities; planned communityplanned unit development; POA; POA Act; POA Board of Directors issues; POA governance; POA members' rights; POA problems; POAs, general; preservation; preservation fund; Private Government; private government; problem solving; problems; property owners association; property rights; proxies; proxy; proxy vote; proxy voting; public policy; PUD; quorum; reference materials & papers; regulation; rental; reserve; reserve fund; restrictive covenantcommunity association; home owners association; homeowners association; property owners association; resources; restriction; restrictive covenant; roles and responsibilities; rule; rules and regulations; special meeting; statement of rights; subdivision; transparency; trustee; unreasonable; vacation rental; vote; voting

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Proxies and Proxy Voting

2007 December 22
See History for brief descriptions of changes and updates. 

    This post discusses proxies and proxy voting.  Previously, the continuation is based on the reply I made on HOA Talk on Proxy Voting.  Your thoughts on what to add would be helpful.  Thanks.

    (Added 2009 Jan 23) The continuation of this post has been added to Meetings, Information, Proxies and Voting 

Don Nordeen
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• History:  Changes are usually identified in the text with the date which facilitates searching by date.
  • 2009 Jan 23 — Continuation text moved to Meetings, Information, Proxies and Voting 
  • 2007 Dec 22 — Initial Post
• Links:  Proxies and Proxy Voting at [http://swagman.typepad.com/poa_governance/2007/12/proxies-and-pro.html]
• Key Words:  proxy;  proxy voting; annual meeting;  special meeting;  absentee ballot

Voting Requirements in the Michigan Nonprofit Corporation Act

2006 May 01
Last update:  2006 May 11.  See History for brief descriptions of changes and updates. 

    This post provides an analysis of the voting requirements in the Michigan Nonprofit Corporation Act (MNCA).  Voting requirements are specified in the Act for different situations.  However, the voting requirements for members are essentially the same for all of those situations.  Moreover, the Act specifies only very limited and specified deviations to be specified in the Articles of Incorporation or Bylaws, but the Act is silent with regard to mail ballots.  Mail ballots may be a surrogate for consents required for taking action without a meeting.  However, consents must be written and signed. 

    As a practical matter for a property owners association (homeowners association, community association, association of co-owners) in which participation at meetings and in votes is relatively small, only voting at a meeting in person or by proxy has a practical quorum or affirmative voting requirement.  The most practical of the alternate "voting provisions" effectively requires approval by the same number of members as would be required for a quorum of 100%. 

    The Michigan Nonprofit Corporation Act is part of the corporate world which allows voting only in person or by proxy at annual and special members' meetings. 

    The continuation of this post provides the supporting analysis. 

Don Nordeen
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P. S.  Please be advised that I am not an attorney.  This post is concerned only with organizing information available on the internet on this subject.  Any analyses or opinions expressed or inferred are those of a lay person and are not legal advice.
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• Key Words:  • Governing Documents;  • Legislation, CID & POA;  • Nonprofit Corporation Acts;  • POA Governance;  • POA Members' Rights;  association of co-owners;  association of owners;  common interest community;  common interest development;  community association;  Governance of Not-for-Profit Organizations;  governance;  governing documents;  home owners association;  home owners associations;  homeowners association;  Michigan;  Non-profit Corporation Act;  non-profit corporation;  Nonprofit Corporation Act;  nonprofit corporation;  property owners association;  property owners associations;  proxies;  proxy vote;  proxy voting;  proxy;  vote;  voting

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Nevada CIC Law and Ombudsman

2006 March 09
Last Update:  2009 May 02.  See History for brief descriptions of changes and updates. 

    Nevada is one of the states with many Common Interest Development (CIDs) governed by Property Owners Associations (POAs).  And the number is growing.  There has been substantial legislative activity since 1991, but the POA problems continue to grow. 

    The continuation of this post briefly describes the legislative history (from internet sources), and references a Nevada television report on continuing problems within POAs and the Nevada Law, and my comments on the Office of Ombudsman established in Nevada law. 

Don Nordeen
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• History: 
  • 2009 May 02 — Added another example of ineffectiveness of Nevada's Ombudsman concept. 
    
  • 2006 Jun 21 — added reference to definition of ombudsman
    
  • 2006 Jun 12 — added references to TV report and newspaper article on backlog of complaints from homeonwers
  • 2006 Mar 31 — added comments concerning the March Meeting of the Nevada Commission for Common Interest Communities
  • 2006 Mar 15 — added information on complaint and dispute resolution and CID/POA law
    
  • 2006 Mar 12 — added information on the Nevada CIC Act and the Office of Ombudsman and amended legislation creating the Commission for Common Interest Communities
  • 2006 Mar 09 — Initial Post
    
• Links:  Nevada CIC Law and Ombudsman at <http://swagman.typepad.com/poa_governance/2006/03/nevada_cic_law_.html>
  
• Key Words:  • Common Interest Development;  • Legislation, CID & POA;  • POA Governance;  • POA Members' Rights;  • POA Problems;  • Private Government;  alternate dispute resolution;  alternative dispute resolution;  common interest community;  common interest development;  governance;  Nevada;  ombudsman;  POA governance;  POA members' rights;  POA problems

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Thoughts on Problem Solving for CIDs/POAs

2006 January 01
Last edit:  2006 Apr 25.  See History for brief descriptions of changes and updates. 

    Several inquiries have been directed to this weblog concerning specific complaints, grievance and/or problems members are having within their common interest developments (CIDs) and/or property owners associations (POAs). 

    The continuation of this post contans "Thoughts on Problem Solving for CIDs/POAs" based on my replies and other information.  The "Thoughts" are offered for whatever assistance they might provide.  Your ideas on improvement in the problem solving are needed, and will be considered and added. 

Don Nordeen
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• History:  Changes are usually identified in the text with the date which facilitates searching by date.
  • 2006 Jan 01 — Initial Post
  • 2006 Feb 19 — added discussion about the importance of a "gang of 20"
  • 2006 Mar 11 — added discussion on the Montgomery County, Maryland, Commission on Common Interest Communities
  • 2006 Apr 25 — added discussion about the unique aspects of interpretation of restrictive covenants
• Links:  Thoughts on Problem Solving for CIDs/POAs at <http://swagman.typepad.com/poa_governance/2006/01/thoughts_on_pro.html>
• Key Words:  KeyWords

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Legislative Activity — CID & POA

2005 December 8
Last update: 2005 Dec 22. See History for brief descriptions of changes and updates. 

    This post provides internet links to articles on legislation concerning common interest developments (CIDs) and property owners associations (POAs).  This list is not complete, but provides links to articles that come to my attention.  Most of the new legislation concerns amendments to existing law in response to complaints from POA members. 

    The continuation provides those links in "bullet format" together with a one-or two-sentence summary for a quick read. 

    Please provide links to other articles concerning new legislation on CIDs and POAs.  Thanks. 

Don Nordeen
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• History: 
  • 2005 Dec 08 — Initial Post
    
  • 2005 Dec 22 — added information re state laws providing access to records
    
• Links:  Legislative Activity — CID & POA at <http://swagman.typepad.com/poa_governance/2005/12/legislative_act.html>
  
• Key Words:  KeyWords

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Definitions for Common Interest Developments

2005 November 27
See History for brief descriptions of changes and updates. 

    The content in this post was previously included as part of Definitions/Glossary.  However, expansion of the subject matter with more discussion has been added to meet other needs.  Accordingly, a separate post has been created for definitions of common interest developments (CIDs), which is the continuation of this post. 

Don Nordeen
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• History: 
  • 2005 Nov 27 — Initial Post
• Links:  Definitions for Common Interest Developments at <http://swagman.typepad.com/poa_governance/2005/11/definitions_for.html>
• Key Words:  KeyWords

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Legislation on CIDs and POAs

2005 November 19
See History for brief descriptions of changes and updates. 

    There is much evidence that improvements in legislation concerning common interest developments (CIDs) and property owners associations (POAs) can and should be improved in all states and in the Uniform Common Interest Ownership Act (UCIOA).  Generic or common problems have been identified that can be traced to the existing governance model for POAs — which I call the "Developer's Model for Governance".  This obviously occurs since the initial governing documents are written by the developers or jointly with their attorneys.  Accordingly, those governing documents reflect the developer's interests. 

    Many have advocated more democracy in POAs, but a clear description of how to accomplish this in CIDs with their associated POAs has not evolved.  It is likely not possible to amend the "Developer's Model" to address the generic issues.  Thinking "outside the box" with a "Democratic Model" for governance is required — a "clean sheet of paper."

    The continuation of this post describes some of the principal references based on an extensive internet literature search of the governance issues.  Some of the elements of a "Democratic Model" are clearly indicated in that literature search. 

    I would appreciate your comments, additions and suggestions.  Thanks. 

Don Nordeen
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• History: 
  • 2005 Nov 19 — Initial Post
• Links:  Legislation on CIDs and POAs at <http://swagman.typepad.com/poa_governance/2005/11/legislation_on_.html>
• Key Words:  KeyWords

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Michigan POAs & Legislation

2005 September 15
Last update:  2009 Jan 19.  See History for brief descriptions of changes and updates. 

    Work in progress.  When completed, this post will contain  information about Michigan POAs, and links to the various Michigan laws that apply to POAs

Don Nordeen
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• History: 
  • 2009 Jan 19 — added link to the Land Sales Act
  • 2007 Dec 05 — added internet link to References on Michigan
  • 2006 May 07 — added discussion and links to Michigan laws and regulations concerning CIDs and POAs
  • 2005 Sep 15 — Initial Post
• Links:  Michigan POAs & Legislation at [http://swagman.typepad.com/poa_governance/2005/09/michigan_poas_l.html]
• Key Words:  Michigan, legislation, Condominium Act, Land Division Act, Land Sales Act, Nonprofit Corporation Act, Planned Unit Development, Summer Resort and Parks Association Act

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POA Legislation at Crossroads

2005 September 14
Last update:  2006 May 29.  See History for brief descriptions of changes and updates.  

Work in Progress (posted for interest and comments)

    This post attempts to define some of the history of POAs and why that history has led to a number of problems with many similarities across the states.  Many of these problems are inherent in the way in which property owners associations have been authorized under the various state laws, and further defined in governing documents that have been drafted by real estate developer.  (added 2006 May 29)  Still others are related to the economic interests of the developers and the assumptions in drafting the initial governing documents and in the various state laws. 

    This history is very pervasive, and has resulted in many people thinking that what has existed in history is the only way for the laws to be.  Moreover, trying to address problems and improve the law is very difficult if one believe that the way of the history is the only way.  Thinking "outside the box" is required. 

    Developers, attorneys, accountants, banks, insurance companies, and others involved in community associations all have their lobbies.  The rank-and-file property owners must depend upon the elected legislators to be their advocates.   

Don Nordeen
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• History: 
  • 2005 Sep 14 — Initial Post
  • 2006 May 20 — added more information on legislators being advocates for individual POA members
  • 2006 May 29 — major revision
• Links:  POA Legislation at Crossroads at [http://swagman.typepad.com/poa_governance/2005/09/poa_legislation.html]
• Key Words:  KeyWords

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POA Legislation by State

2005 August 18
Last update:  2006 May 07.  See History for brief descriptions of changes and updates. 

    The continuation of this post provides internet links to various websites, which in turn provide internet links to existing POA law.  If you are aware of any other resources, please add a comment providing the internet link.  Also, if you are aware of any paper that analyzes the content of the various POA laws for common and different provisions, please add a comment providing the internet link.

    Specific references are being added for states with the most comprehensive and best POA laws, in my view.  Supporting references for these POA laws are included.  More will be added.  Work in progress.  Your comments and suggestions are welcome. 

    This post will be updated periodically as new information becomes available.  The date of the update(s) will be noted in this introduction, and the updated information will be added in italics. 

Don Nordeen
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• History: 
  • 2005 Aug 18— Initial Post
  • 2005 Sep 28 — update
  • 2005 Dec 06 — added information on the Uniform Common Interest Ownership Act (UCIOA) approved in 1994
  • 2005 Dec 11 — added information on omissions concerning members rights and enforcement and dispute resolution
  • 2006 May 07 — added reference to specific information for several states
• Links:  POA Legislation by State at [http://swagman.typepad.com/poa_governance/2005/08/poa_legislation.html]
• Key Words:  KeyWords

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Washington HOA Bill

2005 August 01
Last update:  2009 Apr 29.  See History for brief descriptions of changes and updates.
Some additional information on status is contained in the comments. 

New Information — 2009 Apr 29

    Mr. David M Friscia has kindly provided some new information which now precedes the original continuation of this post.  My reading of Mr. Friscia's notes suggests that individual members should look carefully at SB 6054, and write to their legislators if they don't agree. 
 

Original Post

    The continuation of this post is a bill introduced in the Legislature of the State of Washington to amend the state's homeowner association law.  Almost all of the provisions restrict the powers of the board of directors.  Provisions include

• clearer definition of fiduciary duty
• elimination of authority to amend certain governing documents
• requirement for members to ratify the budget
• removal of directors by a majority vote of members with quorum
• specific requirements for boards concerning special members' meetings, and open meetings with restrictions on executive sessions. 

    These provisions are part of including democratic principles in POA legislation. 

Don Nordeen
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• History: 
  • 2009 Apr 29 — updated to include 2009 bill information
  • 2008 Jun 30 — added request for a reader to update the status in a comment.  
  • 2005 Aug 01 — Initial post. 
    
• Links:  Washington HOA Bill.  [http://swagman.typepad.com/poa_governance/2005/08/washington_hoa_.html]
• Key Words:  Legislation, CID & POA;  abuse;  access;  access to records;  accountable;  closed meeting;  closed session;  fiduciary duty;  governing documents;  members' meeting;  open meetings;  POA Act;  POA Board of Directors Issues;  POA Governance  

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