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January/February 2020

​​​​​Times Are Changing

New technology, demographics, design trends, and more are forcing community associations to adapt—or adopt—rules. What needs to be on your radar now?​


​​​​​​​​​​​​​​​​By Pamela Babcock
​©2020​ Community Associations Institute​​​​

 

 

IN THE DOG-EAT-DOG WORLD of community association parking, could autonomous vehicles one day lead to unforeseen problems and force boards to adopt new rules governing their use? The idea may seem far-fetched, but not to Lisa A. Magill, an attorney with Kaye Bender Rembaum in Pompano Beach, Fla., and a fellow in CAI's College of Community Association Lawyers (CCAL).

She has even pondered this troubling scenario: Could someone “save" the best parking spot at the gym, café, or golf club by sending their car over several hours earlier and just walking to the event? In the not so distant future, perhaps so.

Rules and regulations are designed to maintain order and aesthetics, protect commonly owned resources, and provide certainty and safety to residents in a community association. Many are straightforward: Where your trashcan should go. How you can display flags. If you can put decorations in your yard.

But the complexity of running a community association has grown exponentially as new technology and housing trends have emerged. Today's boards have to be up to speed on a host of disparate issues that weren't even on the radar a few years ago.

Issues that could loom large go beyond autonomous cars. Community associations are beginning to struggle with whether to adopt rules or impose restrictions on technological innovations such as short-term rentals, doorbell cameras, drones, and electric vehicle charging stations.

Technology is evolving so rapidly that associations “need to be smart and nimble in accommodating change," says Marvin J. Nodiff, a retired attorney from St. Louis and a CCAL fellow. “The challenge will be to embrace new technology while protecting the interests of the community as a whole."

Demographic trends also will drive the agenda for many associations, particularly as baby boomers age and owners want to modify their homes to allow parents to stay, perhaps by building accessory dwelling units or so-called granny flats.

“These are big problems that community associations may or may not be equipped to deal with," adds attorney James Robert Caves III, a shareholder with Becker law firm in Fort Myers, Fla.

Meanwhile, old problems are new again, such as signs and lighting, thanks to the current political climate and home-decorating trends.

THE NEXT THING?

Association leaders should always be thinking of the innovations and changes that could impact the community. One of the biggest pitfalls is rushing to solve a new problem rather than evaluating emerging issues and determining the right rule for your community—or if one is needed at all.

“I think the real question is what's the next thing that's going to break the system. Airbnb and VRBO in the last 10 years have kind of broken the system," says Caves, of the short-term rental platforms. “When you throw on top of that these kinds of disruptive technologies that are being forced upon these communities, these are hard things for volunteer board members and community association managers, who are very qualified in what they do but are there to manage the building and to make sure that the grass gets cut and the assessments get collected."

Rules that may need updating could include those prohibiting commercial use of a property, since many residents work from home in today's economy, as well as rules declaring who, by familial relation, can live in a property.​​

Timothy P. Flanagan, a partner with Berding Weil law firm in San Diego, says the changes have been stressing out managers and boards, but the big problems might come later: “If you put a dozen rules in place for these new challenges, now you have to figure out who's going to be there to enforce them, and that makes additional headaches."

“The challenge will be to embrace new technology while protecting the interests of the community as a whole."

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DEVELOPING YOUR OWN APPROACH

Borrowing rules from another community is risky because issues can have different impacts depending on a community's demographics, density, age, and the type of housing.

“There is no one-size-fits-all approach," Nodiff warns. Associations should tailor a strategy that meets the characteristics of their community and owner needs.

In general, boards are empowered to create and amend rules without a membership vote unless governing documents require one, which is fairly uncommon, says Michael A. Inman, a partner with Inman & Strickler in Virginia Beach, Va., and a CCAL fellow. However, he recommends plenty of communication with owners about proposed rules changes. The board should share the changes with owners and allow them to comment before it votes on the changes.

When faced with complex issues, Nodiff recommends boards designate a task force of homeowners to own the project, quantify the scope, seek opinions, and gather objective data from sources such as CAI, universities, and stakeholders. They also should hold informational meetings with homeowners to discuss options, meet with local officials, and loop in the association attorney and manager early.

Such an approach combines top-down leadership with bottom-up deliberations, recognizes that homeowners are more likely to comply with rules that they've contributed to, and grooms future leaders, Nodiff says.

TALL TASK, SHORT PROBLEM

One of the most vexing problems facing not only cities and towns but many associations is whether to allow short-term rentals. Many contend the rising popularity of online platforms, such as Airbnb and VRBO, threatens to undermine the quality of residential communities and poses an existential threat, while others favor them because of the extra income they can generate.

In March 2019, faced with owners increasingly disturbed by the number of weekly rentals, Hilton Head Plantation Property Owners' Association in South Carolina passed a major covenant amendment to limit “short-term rentals" to six months or longer, according to General Manager T. Peter Kristian, CMCA, LSM, PCAM, a CAI past president.

Previously, its covenants had no restrictions on short-term rentals, although the board did try to rein in the practice with rules that excluded tenants with short-term leases from enjoying amenities, such as the pool, tennis courts, and clubhouses, and from registering for classes and community events. “These rules did not go far enough in the minds of many property owners," Kristian says.

The amendment required the approval of 67% of all owners subject to the community's covenants and followed two months of a grassroots push by the association and concerned owners that included email blasts, signs, and printed educational materials. A total of 69% of members voted in favor of the limit.

The association is amending its rules and regulations to “mesh" with the new covenant. It plans to phase in the new policy beginning in 2020 since many rental contracts were in place before the amendment was passed. “This was a major achievement for our community," Kristian says.

Nodiff recommends association leaders approach short-term rentals on two levels: first, by evaluating limits on the number of short-term rentals appropriate for their communities and, second, by working with local governments, which have greater authority and resources to adopt and enforce reasonable regulations.

Before adopting a rule limiting short-term rentals, it's important to note that monitoring isn't easy, which can make enforcement challenging.

Some owners are quite savvy about not geotagging their properties and use other techniques to mask the locations, says Jason Schoenholtz, CMCA, director of Trident Management in Miami Beach, Fla., which oversees about 35 associations.

“Originally, we were combating them, but they've gotten smarter," Schoenholtz says.

Because it would take hours of research to chase down owners, some associations are using companies that “scrape" the internet to find out where short-term rentals are. One association Trident manages contracted with STR Monitor, which uses an algorithm to monitor dozens of vacation rental websites for unlawful rentals.

UNDER SURVEILLANCE

Another hot topic is whether to allow or restrict the popular Ring video doorbells and similar devices, given privacy concerns.

“Audio and video capture is one of the most troubling issues confronting associations," says Magill.

Such devices allow the owner to listen via audio without notifying anyone, meaning “people may be listening to your conversations in the hallways or other areas," Magill says.

Can audio pick up someone yelling at their kids or spouse? Can cameras capture images of neighbors in their homes if they have no shades?

But Magill also says boards need to weigh whether it's appropriate to “functionally limit a homeowner's security or convenience" given the fact many like the devices because they can allow remote access for a school-age kid who forgets a key or help nab a “porch pirate" who has swiped an Amazon package off the porch.

Serrano El Dorado Owners' Association, with 4,200 mostly single-family homes in 17 villages in El Dorado Hills, Calif., allows and even encourages the video doorbells, says Kathryn Henricksen, CMCA, general manager.

Owners are invited to register their devices with the community so they can share footage if there's a burglary or other incident. After a hit-and-run involving two vehicles, surveillance footage from neighboring homes was sought to help nab the culprit.

UAVS AND EVS

When it comes to drones for recreational use, Federal Aviation Administration rules cover where and how drones may be flown but otherwise don't address privacy, trespass, or nuisances, “leaving these matters to local authorities," explains Nodiff. He says boards can protect privacy by adopting rules limiting the distance from buildings and hours of operation that drones may be flown.

Yet the unmanned aerial vehicle rule-making market may have cooled off, according to some. Caves says his firm saw a proliferation of boards wanting to adopt drone rules several years ago, but it was a false alarm. “We really haven't seen a huge uptick in people doing stuff with drones," he says. “It really was much to do about nothing."

But communities shouldn't get comfortable. Drones are getting cheaper by the day, which means more people will use them, and more innovations are coming to the market.

Magill points to remote drone package delivery. Down the road, rules prohibiting exterior changes may need rethinking to allow for platforms where the drones can land.

Meanwhile, electric vehicles are becoming more popular, but one of the biggest challenges is developing the infrastructure to support them, particularly in condominiums built years ago. Leaders should evaluate their governing documents and parking areas to determine where charging stations might be located, Nodiff says.

Since condominiums are more complex due to how ownership and use of common areas may be split, boards should review governing documents, plats, and plans to determine whether parking spaces are common elements, assigned, unassigned, or limited common elements.

“If common elements, does the board have authority to designate a space for exclusive use by a particular unit to install a station and allow the unit owner to park a vehicle there?" Nodiff asks.

Other issues that need to be spelled out is who pays for the installation, electricity costs, maintenance, repair, and insurance. What if the owner moves or no longer needs the station? Does the right to use it transfer to the new owner, who may not have an electric vehicle, or should it be assumable by another current owner who has an electric vehicle?

Another scenario might be to have several stations in a common element parking area and a schedule for electric vehicle owners to use them, paying by credit card, Nodiff suggests.

SIGNS OF THE TIMES

While many communities ban signs promoting political candidates, the current political climate has caused signage to become more prolific and broader in scope. You've seen them. Hate Has No Home Here. Stop the Drilling. No Wind Turbines! No Border Wall, and more.

Because there's often friction between owners who think a sign prohibition infringes on free speech and others who think they create disharmony, boards should only propose a rule if there has been “some conduct which gives cause for concern," Inman says. If there's no apparent need for a rule, “there is no need to create controversy," he adds.

“Rules that permit political signs must be crafted carefully," Inman says. In addition to being clear and reasonable, they should include—at the least—a definition of what's “political," what constitutes a “sign," standards for size, and guidelines for how long they can be displayed.

LIGHTING THE WAY

Given the rising popularity of so-called “Edison" lights and other café lighting outdoors, a growing number of boards are trying to decide whether to allow the latest design trend and, if so, spell out where they can go.

Serrano El Dorado has always had a “dark sky" policy that stressed lighting be low and not shine outside an owner's lot since the community is in the Sierra Foothills and many homes have sloping backyards. “Stargazing is very rich here," explains Henricksen.

Three years ago, the board put parameters in place by adopting guidelines to ensure that the lights weren't put on eaves and resemble holiday lights but instead have the appearance of “European café lighting," Henricksen says.

Among other things, lights can be hung across an open rear patio, private courtyard, or beneath a rear shade structure. They can't be strung along a wall or attached to poles, fencing, or trees. Bulbs must be clear or frosted and no bigger than 4-inches in length.

The association's design review department and design review committee worked together to develop the policy. Under California law, Serrano was required to publish the rule 28 days in advance to allow member input. Today, Henricksen estimates about a third of Serrano's owners have café lighting.

Meanwhile, Serrano is girding for another potential rule change that's anything but novel—whether to allow owners to place planters on either side of their garage doors. Management is creating guidelines, and the board is expected to vote in December.

“It may sound like a simple move to decide if owners can have cobalt planters in front of their neutral-paint-palette homes," says Henricksen. “But there's a lot of uniformity built into the developer's vision here, so it's a very big step."

Pamela Babcock is a writer and editor in the New York City area. ​

Ground Rules

DEVELOPERS OFTEN LEAVE many associations with “inappropriate and unenforced rules," says Michael A. Inman, a partner with Inman & Strickler in Virginia Beach, Va., and a fellow in CAI's College of Community Association Lawyers (CCAL). One of the first things a new board should do after transitioning from developer control is review existing rules and consult their attorney about any needed changes, Inman says. When it comes to adopting new rules, he offers these tips:

■ Have the draft rule reviewed by legal counsel for clarity and enforceability.

■ See if any federal, state, or local statutes or ordinances provide adequate regulation that might make the rule unnecessary.

■ Make sure there's no conflict between the rule and association's governing documents, or any federal, state, or local law. There are instances when an association may be able to impose a stricter rule than federal, state, or local laws.

■ Give adequate notice of the adoption of the rule and owners enough time to make any physical changes needed to comply.

■ Communicate and engage with residents throughout the process.

Gary M. Daddario, an attorney with Marcus Errico Emmer and Brooks in Merrimack, N.H., and a CCAL fellow, adds that new or existing rules need to:

■ Apply to everyone. A rule that says men aren't allowed to park in the front parking lot would be considered discriminatory from a legal perspective.

■ Be evenly applied. When anybody violates the rule, regardless of who it is, enforcement should be the same. “If it's not, you may have a rule that isn't discriminatory on its face but could, in a lawsuit, be deemed by the court to be discriminatory as enforced," Daddario warns. —P.B. ​

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