Reader Questions - Homeowner Manager, Board Eligibility and Severance

Dear Kelly,

Is it a conflict of interest to have a homeowner be the manager? As the President of a small HOA I was asked this question. I believe it would be a conflict. Can you shed some light on this?

D.M., Riverside

Dear D.M.,

When a homeowner becomes an association vendor, that dual relationship can create problems. When that vendor is also the association manager, that risk increases. How does one run the association’s day to day business without considering their interests as a homeowner? And how do you negotiate compensation with that neighbor? When the neighbor begins to perform unsatisfactorily, who is going to fire that neighbor?
When associations do business with an owner, there will be some who question whether the owner/manager is being fair to the association, or favoring their own building over others. And, no matter how little the member is charging the association, it will always be too much to some.

Bluntly, hiring one of your neighbors as a manager is a bad idea for both the neighbor and the association. Spend the money to hire an experienced and credentialed association manager. It is worth the cost.

Best,
Kelly

Dear Mr. Richardson,

A director has been on the board for years and he is not on the deed for their home in the association. His wife is. He is trying to put through a vote to replace me with himself and his wife. What can I do?

Thank you,

V.T., Santa Rosa

Dear V.T.,

Board eligibility is normally stated in the bylaws. If a director is required to be an owner of record (not all bylaws require this), then a recorded deed must show the director as owner. Some bylaws do not require directors to be owners. Others do not require ownership “of record” but only ownership, so sometimes an owner will claim membership rights based upon a copy of an unrecorded deed from their spouse.

Unless there is a board vacancy created by resignation, the members fill board seats. If the spouse is eligible to serve as a director, and the members elect her, so be it. If you are eligible, and are currently serving as a director, only a quorum of the members can remove or replace you.

Best regards,
Kelly

Kelly,

I have [multiple] homes in a community and all of the homes are rented. I have one tenant that does not use the facilities. I have been told that I cannot use the facilities since I am not a resident but I pay dues on three homes and the one tenant relinquished their right for the use of the facilities. Is there anything I can do? This does not seem fair.

Respectfully, 

A.N., Corona

Dear A.N.,

What you are referring to is “severance” of common area use rights from the ownership rights in the residence. Associations typically do not allow such severance, and require that the right to occupy the residence not be separated from the right to use common area. The right of associations to prohibit this severance was upheld in the 1995 appellate case of Liebler v. Point Loma Tennis Club. It is fair, because tenants normally need to use common area to access their home in the association.

Thanks,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.