State Manual Helps Owners Assns.

QUESTION: In a recent article you referred to a budget manual for condominium associations that is published by the California Department of Real Estate.

What is the name of the publication and how can I obtain a copy?

ANSWER: The name of the publication is “Operating Cost Manual for Homeowners Associations.” You can obtain a copy by sending a check for $4.60, made out to Department of Real Estate, to: DRE, 107 South Broadway, Room 7111, Los Angeles, Calif. 90012. The DRE is unable to accept phone requests for their publications.

The manual has specific information and helpful formulas for the preparation of both the operating budget and the reserve budget for an association. Bear in mind that some of the estimates in the manual are minimum amounts. I would advise you to compare the manual’s estimates with your actual accounting history in formulating a budget for your own association.

Delinquent Member of Board Should Lose Vote

Q: I am an owner in a homeowners association. I am wondering about my right to request a list of the owners in our association who are not paying their monthly assessment.

Through an overheard conversation, I became aware that one of our board members is delinquent and, therefore, is voting against collecting assessments from other delinquent owners.

I resent board members who establish a budget for the whole association and then fail to live up to their own financial obligation as an owner. If a director can’t manage his or her personal finances, I don’t feel that he or she should be in a position to manage corporate finances.

Our association’s legal documents state that delinquent owners’ voting rights are suspended but nothing is said about a delinquent board member’s right to remain on the board.

How can I follow up on the information that I heard? Do I have a right to see a list of delinquent owners?

A: You have a right to review the financial records of the association because your homeowners association is a nonprofit, mutual benefit organization.

You also have a right to expect that your board of directors is upholding the governing documents and enforcing the delinquency procedures that are established for the association. A board that ignores this basic fiduciary responsibility should be challenged by the association members.

The association’s written policy for handling delinquencies is supposed to be distributed annually to all of the owners. If the board fails to establish and uphold the policy, the entire board can be held liable, not just the delinquent board member.

Board members are entitled to human error now and then. Perhaps the late payment was a brief oversight. If it is a delinquency that lasts more than 30 days, I would question the board member’s right to vote and participate in board meetings. According to your legal documents, voting rights for the delinquent member are suspended. Board members are not allowed any special favors or leniency.

Canceled Check Is Only Receipt Needed

Q: Our condominium association consists of only 10 members. As the treasurer, I am responsible for collecting the monthly assessment from each owner. I have always written my initials and the date that I received the payment on the reverse side of each check.

Is the association legally required to give the homeowners a receipt for payment of the monthly assessment?

A: I am not aware of any legal requirement regarding receipts. Most associations do not issue receipts for assessment payments. In most cases, the payment is mailed to the treasurer or management company and then the canceled check is usually considered to be the owner’s receipt.

You should never accept cash for the assessment payments. As a volunteer treasurer, you do not want the added responsibility of accepting cash payments.