Helping condo boards through the legal maze – Adobe Reader Format (3.19 MB)

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MARIA ZATE
NEWS-PRESS STAFF WRITER

A boom in condominiums has taken over the South Coast, particularly
in Santa Barbara, where single-family homes
are being rapidly replaced by new, multifamily structures
that allow for more households on the area’s expensive plots of land.
Of the 192 building permits for new housing issued in Santa Barbara
last year, single-family homes comprised only 19 of
the total. The remainder of the new units were in mixed-use projects
and multifamily housing, with condos making up the majority,
according to the city’s Community Development department. And many
more condos are in the pipeline across the South Coast.
Despite the promise of low-maintenance living — including never
having to do yard work and sharing the expense of having a swimming
pool — owning a condo typically involves following a number of
complex regulations mandated by California laws.
Those buying a condo for the first time often purchase their units
unaware of the long list of legal requirements involved with
properties that are part of a community development with multiple
owners. Once the developer sells the final unit in a new condo
project, the management is turned over to the owners, who typically
have to fend for themselves.
“New owners usually don’t know what to do. And there’s no local
or state government agency that they can turn to for help,” said
Michael Gartzke, a local accountant and founder of the South Coast
Homeowners Association, www.southcoasthoa.org.
The nonprofit public interest group based in Goleta provides valuable
information and resources to condo associations on the South Coast.
Formed in 1988, South Coast HOA will likely attract more interest and
members these days as the number of condo developments multiplies.
Condos and other community-interest developments on
the South Coast range in size from two units to nearly
1,000 homes, such as in Hope Ranch.
While larger condo developments with 30 or more units can usually
afford to hire a professional property management company, smaller
properties with 10 units or less may struggle to pay for outside
assistance. Most of the new condos being built or proposed these days
are part of developments with fewer than 10 units.
About half of the 600 or so condo associations on the South Coast use
an outside management company or financial firm to handle some of
their duties, Mr. Gartzke said. But management companies typically
charge a minimum fee of several hundred dollars a month.
That leaves half that are “self-managed.” Volunteer board members
do the work required to stay in legal compliance, as well as handle
the finances and property management.
Back in 1980, when Mr. Gartzke bought his first home in a Goleta
condo development called Meadow Tree, there were few resources
available to help local condo associations. Because Mr. Gartzke was
an accountant, he was tapped to become treasurer of his self-managed
association, where he served for five years.
“The thing that frustrated me was not having resources for issues
related to condo associations, such as where to go for information
and how to meet board members of other condo associations,” he said.
Although the national group Community Association Institute was
around at the time to provide resources for condo associations, the
closest chapter was in Ventura. Mr. Gartzke and three others,
including local attorney Jim Smith and property manager Sandra Foehl,
decided to start a similar group on the South Coast, and the South
Coast Homeowners Association was born.
An estimated 3,000 area homeowners volunteer to serve as directors on
their condo association boards. Usually, the only criteria to become
a board member is ownership of a unit on the property.
“It’s a challenge dealing with people and their homes. The
emotional level runs really high,” said Mr. Gartzke. “Yet board
members have to apply ever-burgeoning laws that only continue to get
more complex.”
Regardless of whether they have two units or several hundred, all
condo associations must meet several basic requirements: they must
conduct association business at meetings publicized in advance; hold
an annual meeting to elect a board of directors; develop an annual
budget to set assessments; and disclose future major maintenance
costs for the common areas and how these costs will be funded. Also,
regulatory filings are required with California’s secretary of state
and Franchise Tax Board.
The South Coast Homeowners Association has members representing 142
condo associations countywide, or roughly one out of five in the region.
The organization holds meetings each quarter and membership dues run
about $60 a year. On April 22, the group will hold a one-day seminar,
called “HOA 101″ to educate board members on the fundamentals of
condo association operations.
Given the large number of new condo developments in the works, “I
don’t think our work here is going away anytime soon,” Mr. Gartzke
said.

e-mail: mzate@newspress.com