Presenters

2. Welcome!Oregon ChapterCOMMUNITYASSOCIATIONSINSTITUTEThe leading professional organization providing education, resources, and advocacy for community association living.

3. Presenters Chris Boccuzzo, CAMP, CMCA Community Manager Community Management, Inc. Mike Vial Attorney Vial Fotheringham LLP

4. Creative and Practical Rules Enforcement

5. Overview • Education: • Help the Board understand the interplay between Governing Documents, Applicable Law and what they can enforce from a practical perspective • Rulemaking: • Adopting Effective Rules and Regulations – both the substance of the rule and the practical considerations for adopting and implementing the rule • Common matters of Association business where rules are helpful vs. areas where the Board should stay out of rulemaking • Enforcement: • What do we do when members of our Association break the rules?

6. Education • Goal: Help the Board understand why Rules and Regulations are important, and what responsibilities the Association has relating to enforcement • Explain where Rules and Regulations fit into the broader framework of governing documents and applicable law • Understand Proper Procedures: • Imposition of fines after “notice and an opportunity to cure” • The mechanics of sending a rules violation notice • Cure periods • Rules Violation Hearings – what to do when a homeowner requests a hearing • Familiarity with mandatory provisions in governing documents • For example: “ARC applications deemed approved if no response from Board after 45 days” • “Practical Realities of Enforcement” – Just because you can legallydo it does not always mean you should practicallydo it! • Passing The Smell Test: “You can adopt that rule, but it’s going to be impossible to enforce from a practical perspective.”

7. More Education “How do we adopt these rules?” • Board Approval: It takes a majority of the Board voting in favor of the rule in an open meeting, if the meeting was properly noticed. ORS 100.405(4)(a), ORS 94.630(1)(a) • Hierarchy of Governing Documents: Rules can never conflict with other governing documents in the hierarchy; to the extent they do, they are null and void. • Purpose:Adopt new policies and procedures, interpret ambiguities in existing documents, and formalize existing policies. • Circulation: A rule becomes effective after it has been delivered or mailed to every member of the Association at their address in the records of the Association.

8. Tips to Avoid Document Conflicts • Look for key Articles in your CC&Rs such as: • Maintenance and Use • Lots and Homes • Use and Occupancy Restrictions • Rules of Conduct • Are you clarifying the rule, or rewriting the rule? • It’s OK to clarify ambiguous language or make it easier to understand • It’s NOT OK to alter the original meaning or purpose of the rule • Be careful of any rule that restricts the following: • Pets • Rental Restrictions • Smoking

9. “Are you for R.E.A.L.!? ” Adopting Smart Rules • Is it Reasonable? • Can this rule be enforced fairly and equitably? • Will residents understand the NEED for the rule? • Is it Enforceable? • What kind of “evidence” is needed for someone • to effectively file a complaint? • Is the rule written “too tightly” or “too loosely” to be enforced? • Is it Applicable? • Are you making a rule to be “preventive” or is this a real problem that’s happening right now? • Will this rule result in a measurable benefit to the community? • Is it Legal? • Does it conflict with your Governing Documents, State Statutes, Fair Housing, etc.? • Would this rule hold up in court? (HINT: Ask an attorney!)

10. Enforcement Fines • Applicable Statutes: • ORS 94.630(1)(n) • ORS 100.405(4)(k) • Would they be “Reasonable” in a court of law? • Must be pursuant to a “fine schedule” and must be delivered to each owner (i.e. Resolution) • Delineate between fines for “recurring” or “structural” violations vs. “one time” violations • Must give written notice to the offending owner with an opportunity to be heard

11. Identify the Nature of the Complaint • Can it be resolved on a “Peer to Peer” level? • Ask neighbors to work together in resolving disturbances • Consider adopting a Resolution that requires certain steps to be taken before HOA gets involved • Is a phone call appropriate? • Director or Officer violations • “In the moment” violations such as improperly parked vehicles, noise during business hours, unapproved alterations to units/lots, etc. • Is it a “Harassment” or “Criminal” situation? • Residents must call the police for enforcement items that are outside the HOA’s jurisdiction • Examples include: physical/verbal harassment, alleged drug activity, etc. • If two neighbors just don’t get along… Is mediation necessary?

12. Handling Complaints – The Process • Get it in writing!!! • Written complaint should include: • Date, time, and location • Alleged offending unit/lot • Description of alleged violation • Do not accept complaints in person or via phone • Establish the Violation • Find the applicable rule (CC&Rs, House Rules, etc) • Make a clear determination as to what “corrective action” is needed • Provide Notice of the Violation • Include an “opportunity to cure” and/or an “opportunity to be heard” • Use the word “alleged” regardless of the violation and/or evidence received

13. Board Hearings • Hearing must be conducted in “Open Session” • Quorum of Directors must be present • Organized in a professional manner • Any interested owner, including the offending owner, should have the opportunity to speak and present evidence (witnesses, documentation, etc.) • Any formal action(s) must be recorded into the meeting minutes • What if the owner brings his or her attorney? • Remember: “Notice and an Opportunity to be Heard” • Also Remember: This is not a trial! The Board’s goal is to act in the best interests of the community at large.

14. Self-Help • Governing Documents: “Right of entry” to “abate violations” • Broken Water Pipes • Leaky Washing Machine Hose • “Fire, Flood or Blood” • Unless it is a true emergency situation, the Association should seek a court order granting it authority to take protective action

15. Termination of Utility, Recreational and Facility Services • Statutes: • ORS 94.630(1)(m) • ORS 100.405(4)(L) • Most commonly used against owners who fail to pay assessments, but can be used to enforce rules • Must first adopt rules regarding termination (similar to schedule of fines) • Consult an Attorney

16. Legal Action • Board has a duty to ensure compliance with CC&Rs, Bylaws, Rules and Regulations • Remedy of last resort after attempts at informal remedies, written notice, fines, etc. • Injunctive Relief, Money Damages or some combination • Prevailing Party Attorney Fees: • ORS 94.630(1)(n); ORS 97.719 • ORS 100.405(4)(k); ORS 100.470

17. Mandatory Dispute Resolution • Mandatory means Mandatory! • ORS 94.630(4) • ORS 100.405(11) • Before an owner or association may initiate a lawsuit, the initiating party must offer to use a dispute resolution program available within the county. • Exception: “Irreparable Harm” • Non-initiating party (defendant) has 10 days to accept the offer • If dispute resolution is not completed within 30 days, the initiating party (plaintiff) may commence litigation.

18. Witnesses Eye-witness to the violation Credible Willing to testify Contemporaneous logs and notes Photographs, video and other physical evidence Authenticity Date, time, location “Samples” Enforcement Issues in Court

19. Scenario #1 – The “Noxious Odor” • Chris is an owner in the Lazy Days Townhome Association. He has a valid medical marijuana grow license. • He smokes marijuana for his glaucoma and legally sells a small amount to other licensed users. • Chris’ neighbor, Vick, is a police officer in the City of Portland’s Special Narcotics Unit. Vick complains of loud music and plumes of marijuana smoke floating up from Chris’ patio directly into Vick’s bedroom window. There is also a “funky” smell coming from some plants in Chris’ home. • What are the Board’s enforcement options?

20. Scenario #2 – The “At Home Business” • Susan, a renter at the Happy Hills Condominium, is suspected of operating an unlicensed massage parlor out of her unit. • Many individuals have been observed coming and going from Susan’s unit at all hours of the day and night. Residents have also complained that visitor parking is frequently abused as a result. • Fred, the Board Secretary, found one of Susan’s alleged business advertisements online. He has even gone so far as to suggest that the Board use Association funds to conduct an “undercover” investigation. • What are the Board’s enforcement options?

21. Scenario #3 – The “Violent Person” • Steve is an owner at Country Club Heights HOA. His parents bought the unit for him so he would have a place to stay after his release from prison. • Because of his prior history, Steve’s presence is a cause for concern among many members of the Association. As a result, several residents keep him under constant surveillance, including the Board Chairperson. • Steve has been accused of exhibiting violent and harassing behavior towards other owners and vendors due to a purported mental illness. He has threatened violence against some owners because he (correctly) believes that they are harassing him. • The Board has already fined him on several occasions due to homeowner complaints. His parents promptly pay the fines on his behalf. • What are the Board’s enforcement options?

22. PartingThoughts • Most Important Guidelines for Rules Enforcement in your Association: • Fairness • Uniformity • Consistency • Proper Notice • Read and be familiar with your governing documents • Don’t wait! Per Jason’s “Jiffy Lube” Rule: • If you wait longer than 3 months or $3,000 in fines to take legal action, you damage the Association’s ability to win a rules enforcement lawsuit.