Comments on Task Force Webinar - 10/24/23

This Task Force has a massively difficult job! My comments are below:

Member Van Dorn talked about when homeowners can speak. My feeling is that the "HOA Story" part of the website is sufficient for homeowners to make their issues known. Based on what I heard in the Webinar, the most important issues are already known to the TF. If you open a TF meeting to homeowners, you will have a very long gripe session with few accomplishments. The question is "How do you notify homeowners about this web site?", in order to make their concerns known.

On the issue of dispute resolution, regardless of whether it is arbitration, binding arbitration, or whatever you want to name it, if the process has progressed to this point, it has already failed. If the legislature codifies how this should work, it will become a judicial quagmire. Laws should be written to ensure that the process SELDOM reaches this point. I have no useful ideas for you for things like parking fines, trash storage, etc.

Inadequate Reserves: My own HOA Board believes that their "Fiduciary Responsibility" is to constantly cut costs, consequently, our HOA is grossly underfunded (and the property shows it). The CCIOA already says that the Board's responsibility is to operate, maintain, repair, and replace the Common Elements, but it does not contain any compulsory language that requires the Board to actually do it. I would further codify the CCIOA to REQUIRE that the Board execute this responsibility under CCIOA or face some type of sanction. The chances of inadequate reserves would then be greatly reduced.

Homeowner Responsibility: As you recall, homeowner apathy was discussed. If I were King, I would codify that the HOA Board has the option of levying a fine to homeowners who do not vote in HOA processes. This fine should be a significant portion of the annual assessment but should be capped somehow. In my case, it might fund the entire shortfall in our reserves! But I am not King.

Reserve Studies: Member Brown talked about funding reserves and about the reserve study process. I believe that ANY logical method (straight line depreciation, etc.) will work for the reserve study as long as SOME method is used. Even if I have a process that is flawed looking out several years hence, if it is providing some funding for future needs, it should in most cases be sufficient. If you take the time to create a 5 year plan EVERY year, you will most likely catch any significant errors and have a chance to correct them. "Let's just let the roof go one more year" is doomed to failure. I would codify a requirement for the HOA Board to perform and distribute the results of a reserve study every year. Also, the Reserve Fund is not money spent. It is an asset of the HOA and a robust RF will help to increase property values.

Communication: I think this is the biggest problem between the homeowner and the HOA Board. If anything gets codified, it should be the required communications FROM AND TO the HOA Board. The Notice of Annual Meeting is not nearly enough.

My two cents,

Mike Lovette

719-330-8544