Hellmuth & Johnson attorney, Nancy Polomis, discusses various topics with HOALeader.com:
Fireworks: Can Your Condo/HOA Ban Them? Why Would You?
In Minnesota, where the wildfire risk isn’t like in the west, the approach is less restrictive. “In Minnesota, all of the fun fireworks are prohibited by law,” jokes Nancy T. Polomis, a partner at Hellmuth & Johnson PLLC in Edina, Minn., whose clients include local and national residential builders and developers and condos and HOAs throughout Minnesota. “The ones that are legal are those that stay on the ground, such as smoke bombs, or sparklers—none of the really fun fireworks.
“But fireworks haven’t been a huge issue here,” she adds. “I don’t recall any of my associations having any provisions in their rules, regulations, or declarations barring fireworks because that would typically be enforced at the city level.”
Enforcement can also be a challenge. “They’re typically set off when it’s dark, which makes identification of the people setting off the fireworks all the more difficult,” notes Polomis. “Also, it typically happens long after business hours.”
Some of Polomis’s communities actually do fireworks displays themselves. “I have a couple of communities that get a permit and engage professionals to do a community-wide celebration,” she says. “But those would definitely be the outliers.”
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Is It Necessary to Protect Your Condo/HOA from Institutional Investors?
“I don’t know that I have any huge companies buying blocks of units in a given association,” reports Nancy T. Polomis, a partner at Hellmuth & Johnson PLLC in Edina, Minn., whose clients include local and national residential builders and developers and condos and HOAs throughout Minnesota. “But we do have individual investors or mom-and-pop limited liability companies that may have five units, maybe 10 units, in a given community, enough so that they can really sway the vote.
“Unless you have limits in your community on how many properties overall that can be leased at any given time, you’re going to have a very difficult time restricting that,” she states. “Those restrictions would have to be in the declaration. You can’t adopt a rule saying that no more than 10 units in the community can be leased.”
Read full article here.
How to Remove a Condo/HOA Director When the President Doesn’t Support It
An HOAleader.com reader asks: “My HOA has a situation where a director engaged in a quid pro quo with a vendor in violation of Florida statute 720.3033(3). The director who did so admitted to it during a contentious board meeting, which was captured on camera.
Resolving this situation in Minnesota would require owners to step up. “In Minnesota, the closest you could come would be using the homeowners’ right to petition the board for a special meeting for any legal purpose,” says Nancy T. Polomis, a partner at Hellmuth & Johnson PLLC in Edina, Minn., whose clients include local and national residential builders and developers and condos and HOAs throughout Minnesota.
“In most cases, the secretary or president must call a special meeting,” she says. “If the president doesn’t do so, there’s a mechanism for a homeowner to call a special meeting and be reimbursed for that by the association. Typically, that requires a percentage of the membership to approve, usually 20 percent. It’s not hard to hit that goal, to be honest. But it would involve some legwork or, in the last year and a half, I’ve seen some epetitions.
“The owners just need to be clear on what they’re asking for,” adds Polomis. “If it’s removal of the director they want, be clear. If they want John Doe removed as a director and, if that’s successful, to immediately elect a new director, they should have someone willing to run because John Doe could run even if he’s removed from office.”
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Yea or Nay: “Discounting” Condo/HOA Assessments and Fees
An HOAleader.com reader asks: “Back in the 1980s, I ran for political office in New Jersey. I was fined by the state for failing to submit a financial disclosure form in a timely fashion. The fine was $50, but if I paid within 10 days, they cut it in half to $25. I couldn’t get to my checkbook fast enough. Could condo associations do something similar? (I won.)”
We’re not sure if our reader is asking if boards can offer discounts to homeowners who pay assessments or fines early. So we’re asking our experts about both.
This is generally not permitted or it’s generally not a good idea—take your pick.
“In Minnesota, the answer is no, you can’t give early-bird discounts on assessments,” reports Nancy T. Polomis, a partner at Hellmuth & Johnson PLLC in Edina, Minn., whose clients include local and national residential builders and developers and condos and HOAs throughout Minnesota. “Everybody has to pay the same, and boards have no authority to change that. Also, the budget is based on everybody paying a set amount.”
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Dos and Don’ts for Writing Your Condo/HOA Annual Report
Wait! You have to write an annual report?
As it happens, some states require condos/HOAs to provide an annual report to homeowners. But what to include? That’s the question we got from an HOAleader.com reader. Specifically, our reader asked for tips on what to include and not to include in an HOA annual report. Our experts walk us through what’s typically required and what to include and not.
The Minnesota Common Interest Ownership Act does require annual reports, and the statute is very specific about what to include, according to Nancy T. Polomis, a partner at Hellmuth & Johnson PLLC in Edina, Minn., whose clients include local and national residential builders and developers and condos and HOAs throughout Minnesota.
It’s 515B.3-106, if you’re inclined to look it up. “It states that the annual report must be prepared by the association and a copy provided to each owner at or prior to the annual meeting,” she says. “The report must contain, at a minimum, a number of things.” Those include:
- A statement of any capital expenditures of more than 2 percent of the current budget or $5,000, whichever is greater, approved for the current fiscal year or the next two fiscal years
- A statement of the condo’s/HOA’s total replacement reserves, the components of the community for which the reserves are set aside, and the amounts of the reserves the board has allocated for the replacement of each component
- Revenue and expense statements for the association’s latest fiscal year and an end-of-fiscal-year balance sheet
- A statement of the status of any pending litigation or judgments to which the association is a party
- A detailed description of the insurance coverage provided by the association, along with other insurance information
- A statement of the total past due assessments on all units for a specified period.
“That last requirement trips associations up,” says Polomis. “They should be providing a total past-due assessment amount. They shouldn’t be showing each individual account information.”
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Ethical and Transparent Condo/HOA Door-to-Door Vote Canvassing
An HOAleader.com reader asks: “Do you see any issues with having community volunteers (presumably selected by the board president) personally presenting ballots (knocking on doors) and collecting individual votes from homeowners on a very intense community issue?
“Historically, the HOA would always send ballots out through U.S. Postal Service, but not for this particular issue. These volunteers have been instructed to not leave ballots with homeowners (if not completed), and they’re not putting the completed ballots in envelopes unless the owner requests privacy. Volunteers have been provided with a list of ‘challenging’ homeowners as well. Are there any issues (legal or otherwise) with this approach?”
Nancy T. Polomis, a partner at Hellmuth & Johnson PLLC in Edina, Minn., whose clients include local and national residential builders and developers and condos and HOAs throughout Minnesota, says ballot collecting at owners’ homes isn’t permitted in her state. “In Minnesota, you can’t collect ballots door to door,” she says. “Owners either vote at a meeting or by mailed ballot. So if someone walked into a meeting with 40 ballots, those ballots wouldn’t be counted. That’s different than if they walked in with 40 proxies; in that case, they’d get 40 ballots to cast.”
Read full article here.