Boost Owner Turnout for Annual Meetings

“Attend my HOA’s annual meeting” doesn’t often turn up on an owners’ top 10 list of things to do.

Our association of some 1200 homes in Frisco faces the challenge so many HOAs do—how to entice owners to attend their yearly meetings where we must conduct neighborhood business—board elections, budget discussion, and other concerns.

In the past, we’ve tried building attendance by inviting local officials, such as the mayor and city council members, to appeal to a variety of neighborhood interests.   We’ve offered incentive drawings, awarding a lucky owner to have his assessments paid for half a year.  Giveaways of a tree or flowers donated by the landscaper --nice, but only 30-50 homeowners would show up.

Offer a convenient service to owners - what’s in it for me?  Scratch something off my To Do list!    We tried a new approach this year by tying it in with a drive to educate owners about new pool and fitness center rules and to reactivate all pool cards for the coming pool season.  To sweeten the deal, we discounted the fee owners pay to obtain extra pool cards, if they did so at the meeting.   Owners had to sign forms acknowledging they had read the new pool rules.  They could drop these off at the meeting, and reactivate their cards at the same time.

Try a change of venue -  We held the meeting at our local elementary school to handle what we expected to be a larger crowd.  An added benefit, the school offered better acoustics, AV equipment and meeting space than we have available in our clubhouse.  Plus, the mayor and assistant superintendent of schools attended as guests.

Volunteer Tables – We also had a chairperson from each committee present to educate owners about volunteering.

Special Project Boards – We had display boards set up that showed plans of all future major projects surrounding our community with timelines for completion.

When the Thursday evening of the meeting arrived, cars started filling the parking lot.  We were thrilled when 200 owners turned out for the meeting.  What brought them in?  Some were there to learn more about the assessment increase; others had children who would be attending the new elementary school and wanted to hear from the assistant superintendent. Hands down, the long queues at the pool card tables told us this was the right place, and the right time to get folks to turn in their forms and activate their pool cards.

Owners left feeling they had crossed off an important task on their To Do lists—get pool card activated, learned of volunteer opportunities, plus they learned more about their community and made new friends!!

Debbie Pasha is the Board President of Lone Star Ranch HOA in Frisco, TX.

CASE LAW UPDATE 2

By: Marc D. Markel and Brady E. Ortego
Roberts Markel Weinberg P.C.
Houston • Dallas • Austin • San Antonio • Sugar Land

A few recent judicial decisions relating to community associations have both solidified longstanding principles of covenant interpretation and changed the landscape of community associations.  The principles that are affirmed provide great case law for use in courts that may be reluctant to rule in favor of a community association.  With the rulings that have created change, community associations may be left with more questions than answers. 

Following is the second in a series CMA will post of Texas HOA case law summaries.  In rendering opinions to community associations, covenants and case law must be read together to formulate the best strategy for action.  With counsel, management, and directors working closely in this regard, challenges may be avoided and the resources of the community association are better protected.  Please consult your HOA’s attorney for legal matters pertaining specifically to your association.

Hollis v. Gallagher
2012 WL 3793288, Tex.App.-Austin, August 28, 2012

Hollis involved a subdivision of 45 lots with two streets with one side facing Lake Travis.  The covenants of the association required consent of the two initial developers to construct two story homes.  Both initial developers were deceased.  Hollis sued the Gallaghers for construction of a two story home absent approval.  Judge Gisela Triana-Doyal, of the 353rd District Court in Travis County, ruled in favor of the Gallaghers based on impossibility of performance due to the death of the developers.
 
In a memorandum opinion, the appellate court upheld Judge Triana-Doyal’s ruling.  Hollis argued that after the death of the initial developers, the covenants prohibited two story homes in perpetuity.  The intent of the covenant was to protect views and values on the non-lakeside lots; two story homes were inconsistent with this intent.  The Gallaghers argued to the appellate court that to enforce the covenant would amount to a complete ban on two story homes.  Additionally, the Gallaghers pointed out to the court that the covenants made no mention of view and/or protection of same.
 
The appellate court narrowed the issue to whether the Gallaghers conclusively established the affirmative defense of impossibility of performance as to the covenant related to developer approval of two story homes.

Depending on the circumstances that a particular community association is facing, impossibility of performance of a particular covenant could be either a positive or a negative for a community association.  By way of example, if the ratification of an amendment was dependent on an action that was impossible to perform, Hollis may be relied upon to effectuate said amendment. 

Marc D. Markel

Brady E. Ortego

For over thirty years Roberts Markel Weinberg PC has represented developers, builders, community associations, and non-profit corporations throughout the State of Texas. We have an established reputation as an industry leader in the field of community association law.

Our firm enjoys the distinction of being AV rated and being listed in the roster of Preeminent Law Firms by Martindale-Hubbell.

CASE LAW UPDATE

By: Marc D. Markel and Brady E. Ortego

A few recent judicial decisions relating to community associations have both solidified longstanding principles of covenant interpretation and changed the landscape of community associations. The principles that are affirmed provide great case law for use in courts that may be reluctant to rule in favor of a community association. With the rulings that have created change, community associations may be left with more questions than answers.

Following is the first in a series CMA will post of Texas HOA case law summaries. In rendering opinions to community associations, covenants and case law must be read together to formulate the best strategy for action. With counsel, management, and directors working closely in this regard, challenges may be avoided and the resources of the community association are better protected. Please consult your HOA's attorney for legal matters pertaining specifically to your association.

Candlewood Creek v. Gashaye

2012 WL 3135721, Tex.App.--Dallas, August 02, 2012
The association's covenants provided that the assessment obligation was secured by a lien. Additionally, the covenants secured attorneys fees, late fees and interest. The owner fell into arrears with the association and it filed a motion for summary judgment seeking $1,545 in assessments and late fees and $2,500 in attorneys' fees and expenses. The owner failed to file an adequate response. Judge Craig Smith, presiding over the 192nd District Court in Dallas County, declined to provide an order for foreclosure and awarded a mere $50.00 despite the owner's failure to file an adequate response. The association appealed the summary judgment as to the denial of the foreclosure remedy and award of attorney's fees.

The appellate court, in a memorandum opinion, noted that the covenants provided for payment of a monthly assessment, a foreclosure of the lien if the assessment was not paid, and recovery of attorney's fees for such action. The appellate court stated that "the trial court's award of $50 under these circumstances was so contrary to the overwhelming weight of the evidence that the award is clearly wrong and unjust." Further, the appellate court reaffirmed the notion that an association covenant is a contract between the parties, and Texas law permits the recovery of attorney fees on a breach of contract action.

Marc D. Markel

Brady E. Ortego

For over thirty years Roberts Markel Weinberg PC has represented developers, builders, community associations, and non-profit corporations throughout the State of Texas. We have an established reputation as an industry leader in the field of community association law.

Our firm enjoys the distinction of being AV rated and being listed in the roster of Preeminent Law Firms by Martindale-Hubbell.

Shorter HOA meetings can improve efficiency, lower costs

A recent article in the Chicago Tribune offered simple solutions to reduce HOA management fees.  Resolve to spend less time in board meetings.

HOAs that want to increase efficiency, lower costs and attract new, young members in the coming year should consider holding shorter meetings in a formal business space, such as a library or community room. "The largest variable in management fees is the number and time of meetings," says Michael Baum of Baum Property Services. "Reducing the number of meetings and scheduling daytime meetings will reduce your management fee and cause less wear and tear on everyone."

Read the article.

Changes in Voting Laws for Property Owners Associations in Texas

Voting Rights of owners in property owners associations to cast their votes in elections were significantly expanded by the recent Texas legislation. An educated Board of Directors not only makes a community manager's job easier, but leads to less legal liability, challenges, and reduces the likelihood of dissension amongst the owners.

No exclusions to voting rights

An owner is permitted to vote in elections and any other matter concerning the rights and responsibilities of the owner.  Owners that are delinquent in assessments and/or are in violation of the restrictive covenants are nonetheless statutorily allowed to cast their vote.  Any provisions in the association's dedicatory instruments that prohibit the right to vote are void.  While some Boards may be resistant to allowing derelict or non-compliant owners to vote based on the "fairness doctrine", community managers must be steadfast in continually educating the Board.  Simply put – it's the law in the State of Texas and not allowing the owner to vote will likely lead to costly and protracted legal battles.

In addition to removing all restrictions of limiting an owner's right to cast a vote, the new legislation also requires the association to provide owners notice of an election or vote at least 10 days before it occurs, regardless of any provision in the dedicatory instruments to the contrary.  This provision provides reasonable advance notice to owners so they may become involved in the voting process.

Written, signed ballots

Any vote cast in elections or vote by an owner must be in writing and signed by the owner.  The lone exception to this requirement is an uncontested race.  Having written and signed ballots from each voting owner will allow the association to accurately maintain its records and, if a recount of election votes is requested, provide competent records to the vote tabulator.  Community managers should prepare a ballot that includes each matter that is scheduled to be voted on at the meeting and verify that each ballot is signed by the voting owner.

Right to request a recount

Gone are the days where a Board simply denies the owner's request to inspect the ballots for the purpose of ensuring an accurate count. Owners now have a statutory right to request a recount of election votes.  A proper demand for a recount of an election vote must be (1) made within 15 days after the date of the election, and (2) delivered to the association's mailing address as listed on the latest management certificate or delivered in person to the managing agent or address designated for the return of ballots.  The requesting owner is required to pay, in advance, for the costs of performing the recount, unless the recount changes the election results.  The costs include the fees to hire a qualified non-member to conduct the recount.  By statute, the following persons are authorized to conduct the recount: (1) county judge; (2) county elections administrator; (3) justice of the peace; or (4) person agreed to by the parties.  The recount must be completed within 30 days after receipt of the owner's request and payment of costs.  In the interim, the Board may continue to act and the completion of the recount does not affect the Board's actions taken during the interim period. 

Property owners associations have officially entered the world of technology.  Given the limited resource of time, the Legislature enacted legislation expanding the methods for owners to cast votes via electronic ballots and absentee ballots, in addition to the traditional in-person or proxy ballots.  Any vote cast by absentee or electronic ballot are valid for quorum purposes only for items (votes) appearing on that ballot.  Electronic ballots include ballots given by e-mail, facsimile or posting on an approved Internet website.  Absentee ballots must allow include a statutory warning to the owners informing them that in the event there is an amendment to the proposed listed on the ballot, the owners vote will not be counted. 

The new voting laws are designed to give owners greater flexibility in casting or giving votes. An owner is more likely to participate and cast a vote when details of the vote are kept private and it can be accomplished from the owner's home, office or smartphone.  Greater participation increases the chances of establishing quorum, which in turn reduces expenses associated with reconvened meetings.

Community managers can provide Boards with information on service providers that offer on-line voting, including tabulating and reporting election results.  Whether the association is facing a contentious election or suffers from chronic lack of establishing quorum at meetings, the Board should work towards putting into place vote casting mechanisms that will enable greater owner participation.  When in doubt, let it count!

This article is not a substitute for legal advice and should not be construed as a legal opinion on the many aspects of the voting laws for property owners associations in Texas. 

Vinay B. Patel is an associate attorney at Henry Oddo Austin & Fletcher, P.C. He has the unique experience of both serving on HOA Boards and representing HOAs as general counsel.

Water Harvesting to Save Money

My Mom always said “Mark, you better save your money for a rainy day.” Moms are great with advice like that and mine was certainly no different. I probably should have turned down the volume on my Led Zeppelin 8 track and listened a little closer. However, given the ever-increasing cost of water, maybe what she should have told me was “You better save your rain for a sunny day”!

Findings in a 2011 report compiled by Circle of Blue show the nation’s largest cities saw water costs rise by an average of 9%, with rates expected to continue to climb. Some areas of the country, like Texas, hardest hit by recent drought conditions may see water prices escalate even faster. Water is truly becoming the new “gold” standard.

In his ValleyCrest Takes On water blog titled “We Have Plenty of Water”, Alan Harris makes the argument that we have all the water we will ever need. Mr. Harris writes, “We have had the same amount of water we have always had, about 326 million cubic miles and will continue to have the same amount of water as long as the earth and the atmosphere is in tact.” While this may be true, water may not always be where or when we need it and its scarcity or lack of available, efficient delivery systems can greatly increase the costs.

Another one of my Mom’s standards was “Don’t forget to do your homework!” Not bad advice back then and even better advice now. If I would have saved my money and done my homework there’s no telling where I would be today! Well, it’s never too late so I’ve cracked the books and done some research. I’m finding there is a “new” old way of saving water and money….water harvesting.

Rainwater harvesting can be traced back over 3000 years. In Jordan, King Mesha of Moab, commanded that all citizens dig cisterns for the collection of rainwater. Failing to comply with those water-saving guidelines probably resulted in more than a fine! In ancient Rome, atrium-fed rainwater collection cisterns were common place and are an important part of the region’s history. However, until recently, rainwater harvesting has been mostly forgotten or relegated to the small individual efforts of tree-huggers or hippies. They probably didn’t turn down the Led Zeppelin either!

Due to rising costs and water shortages, there is a new buzz towards the age-old practice of water harvesting. In a recent report by the Natural Resources Defense Council eight cities were studied for the potential economic impact of water harvesting. It is estimated the residents of these cities could save over 90 million dollars each year by adopting simple rain collection techniques. The study also finds that rain collection is not just applicable in residential settings; it can also be used on a commercial basis. Businesses can harvest rainfall from rooftops and parking surfaces with the potential of satisfying 21% to 75% of their annual water needs.

Many states are also getting into the act by providing resources for those individuals and businesses interested in water harvesting. For example, The Texas Water Development Board has created a Rainwater Harvesting Manual which outlines many methods of collection, formulas to estimate system sizing, available rebates and a wealth of other information.

When it comes to water harvesting, the need is now, resources are readily available and cost-saving benefits are measurable. Rainwater harvesting has evolved. What’s that Mom?…..Everything old is new again? Moms are always right! Not to worry, I’m finally saving my money, doing my homework and only occasionally running with scissors in my hand!

Mark Hopkins is National Sales Operations/Texas Regional Sales Leader of ValleyCrest LandscapeCompanies, Calabasas, California.

Drip Irrigation Strategy for Surviving Drought

By Matt Alexander & Pablo Ruiz

Texas has been suffering from one of the most significant droughts on record.  Like most HOAs in the metroplex, ours has been subject to the North Texas Municipal Water District’s (NTMWD) restrictions on outdoor watering. Last fall, we were placed under Stage 3 which equated to a one (1) day per week of outside water restriction. In addition, we and the city of McKinney were told by NTMWD that we would likely go into Stage 4 water restrictions beginning in June of 2012.

The Stonebridge Ranch Landscape and Grounds Committee is responsible for the oversight of our flower beds, parkways, medians and open space areas such as those planted at our Village entrances.  As they planned for the spring color planting, the Committee studied many watering options with our consultants and Landscape maintenance professionals to determine how we might sustain our plant life through this coming summer and the current Stage 3 watering restrictions or Stage 4 (no outdoor watering), if imposed.

Our landscape vendor advised them that our traditional selection of flowers for our “color beds” would not be appropriate under Stage 3 watering restrictions. This type of plant material must be watered more than once per week.  Furthermore, since we could not water them appropriately, they would not warranty or replace them if they died.  The Committee explored a number of alternatives for short-term solutions. 

In the meantime, we have received a significant amount of rain this winter and NTMWD informed us that Stage 4 watering restrictions will not be imposed. The level of Lake Lavon has almost returned to normal We will remain in Stage 3 throughout 2012, in part because of obstacles to supplementing our principal Lake Lavon water source. 

Knowing these facts, the Landscape and Grounds committee recommended that we supplement drought tolerant and flowering plants for the traditional flowers at the Primary entrances to our community and that we not plant flowers at the Village Entrances for this spring and summer.  The Board concurred that it’s prudent to defer some color plantings temporarily in order to achieve a long term goal to sustain the beauty and appearance of our common areas for years to come. 

Currently about twenty (20) percent of our color beds in Stonebridge Ranch are on drip irrigation. They are easy to spot during the summer as they are the ones that continue to thrive throughout the late summer.  The board studied costs and obtained bids for installing drip irrigation in all of our common area planting beds.  

What we discovered is that the savings from deferring planting for one season is substantial ($60,000).   Redirecting the funds from the deferred planting provided the Board an opportunity to convert all color beds to a drip irrigation system. By making this investment now, we expect to see savings in our overall water and plant maintenance expense. This decision will pay dividend for years to come as drip irrigation is a superior watering and conservation system.  It is not subject to Stage 3 or Stage 4 restrictions.

This temporary “color hiatus”will be alleviated in the fall when our new and improved color beds return for our daily enjoyment.  The Association’s landscape vendor has already started the retro-fitting of the village color beds. The timeline to complete the project is eight weeks.

Matt Alexander has lived in the Gallery since 2007. He is the Chairman of the Stonebridge Ranch HOA Landscape and Grounds Committee. 

Pablo Ruiz has served on the Board of Directors for 10 years.