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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Outline of Dispute Resolution Recommendations

2006 August 13
Last edit:  2008 Dec 27.  See History for brief descriptions of changes and updates. 

    This post provides an outline of dispute resolution recommendations for common interest developments (CIDs) and property owners associations (POAs).  The recommendations provide practical, effective, certain, timely and low-cost means of enforcement and dispute resolution for individual POA members. 

    This is work in progress.  It is being posted at this time for comment and suggestions.  Most of the background is well developed and shows the need for reform.  The concepts of Enforcement Considerations and Dispute Resolution Considerations are closely linked.  Various alternatives for reform for listed with a few notes regarding each.  Previously, the outline in this post was included in the post on Dispute Resolution Considerations. 

Don Nordeen
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• History: 
  • 2006 Aug 13 —Initial Post
    
  • 2006 Aug 17 —added alternative of ordinance to use the municipal court for dispute resolution concerning alleged violations of CC&Rs
  • 2006 Aug 26 —added information concerning pattern of litigation involving POAs
  • 2008 Sep 29 — internet links checked and updated
  • 2008 Dec 27 — addition recommendation for ombudsman office in Office of Attorney General and recommendation on allocation of total legal costs
    
• Links:  Outline of Dispute Resolution Recommendations at <http://swagman.typepad.com/poa_governance/2006/08/outline_of_disp.html>
  
• Key Words:  • Attorney Issues; • Common Interest Development; • Fiduciary Duty; • Governing Documents; • Legislation, CID & POA Model & Content; • Legislative Issues & Proposals; • Michigan; • POA Board of Directors Issues; • POA Governance; • POA Members' Rights; • Private Government; abuse; ADR; alternate dispute resolution; alternative dispute resolution; attorney; common interest community; common interest development; community association; complaint; democracy; democratic; dispute; dispute resolution; enforcement; governance; home owners association; homeowners association; Legislation, CID & POA Model & Content; legislative issues & proposals; ombudsman; planned communities; planned development; planned unit development; private government; problem solving; property owners association; public policy; statement of rights

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Email to UCIOA Chair

2006 August 09

    Maryland has recently enacted legislation setting up a Task Force on Common Ownership Communities to recommend legislation concerning common interest developments (CIDs) and property owners associations (POAs).  Maryland uses somewhat different terms.  The purpose of the enabling legislation states in part:

"FOR the purpose of creating a Task Force on Common Ownership Communities; ... requiring the Task Force to submit a certain report to the Governor and the General Assembly on or before a certain date; ... and generally relating to the Task Force on Common Ownership Communities."

In addition to scheduled hearings, a discussion forum — which includes the enabling legislation — has been established to allow broad participation. 

    The continuation of this post is an email to the "UCIOA Chair" — an individual included in the forum member list — concerning creating similar and additional means for individual owners and others to contribute to the activities to draft amendments to the Uniform Common Interest Ownership Act (UCIOA) being done under the auspices of National Conference of Commissioners on Uniform State Laws (NCCUSL). 

    I urge you to write to the UCIOA Chair at <nccusl@nccusl.org> (Please include the UCIOA in the Subject line of your email.) endorsing such opportunities for individual members to contribute.

Don Nordeen
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Letter to UCIOA Chairman — 2006 Jun 30

2006 June 30
See History for brief descriptions of changes and updates. 

    The continuation of this post is a letter to the Chairman of the Drafting Committee for the Uniform Common Interest Ownership Act (UCIOA) developed by the National Conference of Commissioners on Uniform State Laws (NCCUSL), often referred to as the Uniform Law Commissioners. 

    The drafting of amendments appears to have started in early 2005.  Some of the resource information for possible amendments is posted on the NCCUSL/UCIOA website, but most is only listed by title, and does not even include the name of the person and organization submitting the information.  Four drafts of successive proposed amendments are available at the website.   

    To date, almost all of the discussion and effort appears to be focused on the property law issues with very little on governance, constitutional rights, other rights, democratic principles.  My letter to the chairman was written with that perspective. 

    This letter is perhaps a milestone in my research on legislative issues concerning Common Interest Developments (CIDs) and Property Owners Associations (POAs).  An Outline of Legislation for Democratic Governance of CIDs/POAs has just been posted.  I now consider this work sufficiently developed for publication as work in progress, and solicit you suggestions for improvement.  Please add your comments. 

    More letters to the UCIOA Drafting Committee are needed to clearly express the view that it is the purchasers/owners/members who provide all the money to fund the CID Industry (developers, attorneys, builders, other real estate interests, insurance, mortgage, accountants, reserve specialists, association managers, maintenance companies, repair companies, etc.), and that the members' interests must be represented in the drafting of amendments to UCIOA. 

Don Nordeen
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• History: 
  • 2006 Jun 30 — Initial Post
• Links:  Letter to UCIOA Chairman — 2006 Jun 30 at <http://swagman.typepad.com/poa_governance/2006/06/letter_to_ucioa.html>
  
• Key Words:  KeyWords

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Outline of Legislation for Democratic Governance of CIDs/POAs

2006 June 29
Last update:  2008 Dec 27.  See History for brief descriptions of changes and updates. 

Work in Progress — Posted at this time for use and comment.

• 2006 Jul 21 — Description of legislation for governance at maturity is nearly complete.  Remaining work should only concern refinements. 

    Every common interest development and property owners association may have different governing documents.  However, a pattern of content has evolved for many reasons.  A general analysis of the many factors and aspects for current practice is presented in outline form in Outline & Analysis, CID & POA Issues.  The outline provides links to other posts at this weblog and on the internet to provide more depth supporting the analyses.  The analyses of the various aspects of the governance of most common interest developments (CIDs) and property owners associations (POAs) provide: what works well; what does not work well; what problems exist; and what problems can potentially exist — in short, what is working well and should be preserved, and what is not working well and should be discarded or improved. 

    While reactive improvements can be made by detail amendments to the appropriate legislation or governing document, the resulting patchwork may create additional problems.  A general proactive approach requires a "clean sheet of paper" and "out-of-the-box" thinking — a synthesis to create something new that moves the governance definition to a new, higher level. 

    The continuation of this post is an outline of a Democratic Model for Governance of CIDs and POAs as a broad-based, proactive approach. 

Don Nordeen
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• History: 
  • 2006 Jun 29 — Initial Post
    
  • 2006 Jul 08 — added brief description and outline of the phases in  a CID from inception to maturity
  • 2006 Jul 21 — added outline elements:  overview of legislation, difficulty of including a social contract in the CC&Rs, additional  description of enforcement and dispute resolution
  • 2006 Jul 30 — added and integrated section on superordinate (transcendent  principles for private government, also expanded material on liens, foreclosures, fines and other charges
  • 2006 Nov 27 — added reference and link to Statement of Rights 
  • 2008 Dec 23 — added discussion on interfaces with constitutions and laws
  • 2008 Dec 27 — revised minimum requirements for amendment of CC&Rs
    
• Links:  Outline of Legislation for Democratic Governance of CIDs/POAs at <http://swagman.typepad.com/poa_governance/2006/06/outline_of_legi_1.html>
  
• Key Words:  KeyWords

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Democratic Model for Governance of CID/POA

2005 December 09
Last update: 2006 Jul 04. See History for brief descriptions of changes and updates. 

    Work in Progress. 

    For many reasons, the various state laws and governing documents for common interest developments (CIDs) and property owners associations (POAs) are based on what I call the "Developer's Model for Governance".  The various state laws appear to have been influenced by the common interest development and community associations industry without much influence from individual property association members who likely would be advocates of members' rights and application of democratic principles. 

    Amendments to the various state laws are now occurring in many states.  These amendments add democratic principles and make changes toward municipal law.  The "Democratic Model" develops a governance model beginning with democratic principles.   

    The continuation of this post describes the broad aspects of a Democratic Model.

Don Nordeen
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• History: 
  • 2005 Dec 09 — Initial Post
    
  • 2006 Jan 10 — added discussion about a way of organizing and thinking about governance of POAs and Cids
    
  • 2006 Jan 11 — specific list of democratic principles added
  • 2006 May 20 — added more information on legislators being advocates for individual POA members
    
  • 2006 Jun 12 — list of democratic principles edited
    
  • 2006 Jul 04 — added language from Arizona constitution re fundamental democratic principle
• Links:  Democratic Model for Governance of CID/POA at <http://swagman.typepad.com/poa_governance/2005/12/democratic_mode.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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Proposed Amendments to UCIOA

2005 September 30

    The Uniform Law Commissioners, formally the National Conference of Commissioners on Uniform State Laws (NCCUSL), drafted an existing model law for POAs called Uniform Common Interest Ownership Act (UCIOA) in the mid 1990s.  They have recently undertaken a project to draft amendments to the UCIOA.  Incorporation of governance provisions for POAs is one of the areas under consideration. 

    The continuation of this post is an email to the Uniform Law Commissioners on their work to draft amendments to the Uniform Common Interest Ownership Act (UCIOA).

Don Nordeen
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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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Update of Model POA Act (UCIOA)

2005 September 10
Last update:  2008 Sep 26.  See History for brief descriptions of changes and updates. 

    In an internet search on other subjects, I discovered that the Uniform Law Commissioners have a project to update the Uniform Common Interest Ownership Act.  The formal title for the Uniform Law Commissioners is The National Conference of Commissioners on Uniform State Laws (NCCUSL). 

    The Uniform Law Commissioners have developed at least two model acts concerning POAs (they use the term "common interest owners"). 

• Uniform Planned Community Act, issued in 1980
• Uniform Common Interest Ownership Act (UCIOA) issued in 1994

Both of these appear to be based on real estate development aspects and the transition from developer controlled to POA control including the transfer of common property.  Neither significantly addresses the governance of the POA after control has been transferred to the POA. 

    The Uniform Law Commissioners now have a "Drafting Committee to Prepare Amendments to Uniform Common Interest Ownership Act."  The committee now has draft documents on relevant reference materials and proposed amendments, all dated 2005 Feb 24.  My cursory review suggests that the proposed amendments extend what I call the "Developer's Model for POAs" (board controls almost everything with few members' rights).  Some groups have provided documents concerning the members' rights issues, but they don't appear to be integrated into the proposed amendments. 

    The continuation of this post provides additional information and comments on the model laws developed by the Uniform Law Commissioners.  Your emails to the Commissioners are needed to bring the members' rights issues into consideration.   You can contact this committee at:  nccusl@nccusl.org.  Please include the name of the committee in the Subject line of your email.

    (added 2008 Sep 26)  Further monitoring of the activities indicates that the Drafting Committee appears to be responsive only to organizations within the Common Interest Development Industry.  This is indicated by the reference materials they have posted at the UCIOA website.  I have written to both the chair of the committee and its reporter and have not received any response, nor were the communications included in the committee's reference materials. 

Don Nordeen
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• History: 
  • 2005 Sep 10 — Initial Post
  • 2005 Dec 04 — added information on the Uniform Common Interest Ownership Act (1994)
  • 2006 Jan 06 — added Selected Transcript of 2005 July 27 Meeting of the Drafting Committee on Amendments
  • 2006 Mar 04 — added more information on the Uniform Common Interest Ownership Act (1994), and the role of the drafting committee
  • 2006 Apr 28 — reference CLRC memo on common interest model laws and related discussion added
  • 2006 Jun 19 — Information added on Maryland's Common Ownership Community Task Force established by the legislature.
  • 2006 Nov 01 — reference to Florida Report on CID/POA law added
  • 2008 Sep 26 — added paragraph to introduction concerning the limited receptivity of the writing committee
• Links:  Update of Model POA Act (UCIOA) at [http://swagman.typepad.com/poa_governance/2005/09/update_of_model.html]
• Key Words:  KeyWords

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POAs and Members' Rights

2005 July 29
Last edit:  2007 Mar 03.  See History for brief descriptions of changes and updates. 

    The governing documents of a property owners association are the "constitution" and legislation for a property owners association.  Too much is taken for granted that the governing documents drafted by a developer will preserve rights, and that the board will never act contrary to members' interests.

    The continuation of this post discusses the POA issues further and desribes a California case in which the California Supreme Court ruled that owners voluntarily agreed to give up certain constitution rights when they purchased property in a community governed by a POA.  Don't take your rights for granted. 

    Please provide your thoughts on this important issue.
   
Don Nordeen
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• History: 
  • 2005 Jul 29 — Initial Post
  • 2005 Sep 28 — revised and edited
  • 2006 Jul 02 — added reference to possible violation of state constitutions by POA laws
  • 2007 Mar 03 — added internet link to paper by Justice Arabian
• Links:  POAs and Members' Rights at [http://swagman.typepad.com/poa_governance/2005/08/poas_and_member.htm]
• Key Words:  KeyWords

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