By Matthew Green, CAMICB Credentialing Director

The Community Association Managers International Certification Board’s (CAMICB) CMCA credentialing program has been awarded international accreditation by the ANSI National Accreditation Board (ANAB) as complying with standard ISO/IEC 17024, a conformity assessment for personnel certification bodies. ANAB establishes the specialized system for worldwide standardization, setting the requirements and the framework, at a global level, for the operation of certification bodies. ANAB accreditation to the ISO/IEC 17024 Standard supports the increasing technological and global specialization of skills and personnel. 

Said Chair of the CAMICB Board of Commissioners, Drew Mulhare, CMCA, LSM, PCAM, “Earning this ISO/IEC accreditation is critical because it shows the CMCA credential meets the global benchmark for certification programs and assures the CMCA credential is serving the field of community association management in a consistent, comparable, and reliable manner worldwide.” 

Added Thomas M. Skiba, CAE, Community Associations Institute’s (CAI) Chief Executive Officer, “As the demand for education in community association management has grown considerably outside of the United States, so too has the need for an internationally accredited credentialing program. Earning this prestigious accreditation means the CMCA credential has achieved the highest standard in professional certification and stands alone in the community association housing profession.”

The CMCA credentialing program ISO/IEC accreditation came as a result of a rigorous evaluation conducted by ANAB, that included a thorough analysis of test data, and detailed audits of CAMICB’s management systems, test development and psychometric procedures. 

Setting The Stage

Over the past 25 years, the CMCA credential has been a catalyst in establishing community association management as a discrete profession. The common interest community housing model exists around the world and there has been consistent interest in the CMCA credential, the educational pathways to achieve the credential and the continuing education requirement to maintain the credential. As the credential grew within the United States it became an important tool to building professionalism in the field outside of the Untied States.

CAMICB has strong support from a number of community association managers outside of the United States including Pepe Gutierrez and Michael Hurley. Pepe serves CAMICB as an active International Subject Matter Expert. He’s an internationally recognized proponent of the CMCA credential and advocate for professionalism in the field of community association management. Pepe, a professor at Burgos University in Spain and the founder of Megafincas Alicante management company, is a frequent speaker at international gatherings of community association managers and has written extensively on the issues common to community association management around the world. 

“Earning ISO accreditation puts the CMCA credentialing program in a league of its own,” said Pepe Gutierrez, CMCA. “It’s the only accredited certification for community association management professionals around the world and it represents a baseline of professionalism, no matter where a manager is working.” 

Michael Hurley has been a consistent force in helping CAMICB ensure all international partners are working for the betterment of our profession and industry. He continues to serve CAMICB as an International Subject Matter Expert. His perspective on the profession of community association management as it is practiced in Australia and elsewhere in the world has been invaluable in guiding our efforts to expand international delivery of the CMCA exam in a way that is responsive to all candidates, no matter where they are practicing. 

Added Michael Hurley, Director of the Australian-based Strata Title Management Pty Ltd., “Gaining ISO/IEC accreditation is particularly important as recognition of the value of the CMCA credential has grown around the world. CAMICB already delivers the CMCA exam in Dubai, UAE, Australia, Canada, Panama and elsewhere outside of the United States; it’s particularly exciting to see the next phase of this expansion.”

A Major Milestone: Dual Accreditation

The CMCA credentialing program was first accredited in 2010 through the US-based National Commission for Certifying Agencies (NCCA), representing third-party validation of compliance with the highest domestic standards in professional credentialing. It has since been reaccredited twice by NCCA, most recently in 2020. 

Achieving both NCCA and ISO/IEC 17024 accreditation places the CMCA credential in an elite cohort of professional certification programs and speaks to the importance the CAMICB Board of Commissioners places on conducting the CMCA program in full accordance with best practices in professional credentialing. “We take this responsibility to the profession seriously and are extremely proud of this achievement as we continue to establish the credential as a baseline for building the profession worldwide,” added Mulhare.

Always Maintaining High Standards

Community managers from around the world report that the responsibilities of a professional manager for condominiums, homeowners associations, housing cooperatives and master-planned communities are comprised of the core competencies identified by the CAMICB Job Task Analysis, including governance, legal, budgeting and reserves, contracting, financial controls, risk management, facilities maintenance, meetings and human resources. Dawn M. Bauman, CAE, former Executive Director of CAMICB and CAI’s Senior Vice President for Government and Public Affairs said, “The ISO/IEC accreditation of the CMCA program provides assurances to homeowners, developers, regulators, and legislators that professional managers who have earned and maintained the CMCA credential have the comprehensive competency and ethical standards to serve their communities.”

Both NCCA and ISO accreditation require continued compliance with their respective standards. To maintain NCCA accreditation, the CMCA credentialing program must undergo a rigorous reaccreditation process every five years. Following the initial ISO/IEC accreditation, the CMCA credentialing program will be reexamined on an annual basis through an in-depth document review and on-site assessment of the program. 

To read more, go to: https://www.camicb.org/Pages/CMCA-Achieves-Dual-Accreditation.aspx

To learn more about the American National Standards Institute (ANSI), visit www.ansi.org.

By Kelly Richardson for The San Diego Union Tribune

After selecting the desired type of management services, how can one evaluate a manager’s qualifications?

California HOA managers are unregulated, with no required license or minimum education. Rental managers must have real estate broker licenses, but not HOA managers. There is a wide range of qualification and experience in the field, and industry credentials indicate experience and commitment.

Business and Professions Code 11502 defines a “Certified Common Interest Development Manager” as one taking 30 class hours in certain topics from a professional association of HOA managers. Section 11504 requires managers to annually disclose if they are “certified” and prohibits false claims of “certified” status. While certification is not mandatory, the disclosure is required.

Four organizations educate and credential California managers: Institute of Real Estate Management (IREM); California Association of Community Managers (CACM), Community Association Manager International Certification Board (CAMICB), and Community Associations Institute (CAI).

IREM is a national organization, with about 20,000 manager members, offering education and various property management credentials. Its managers are mostly non-residential but over 300 California managers hold the “Accredited Residential Manager (ARM)” credential. The ARM requires 45 class hours in either rental property management or CID management and passing a half-day examination. The ARM does not qualify for “Certified” status in California.

CACM is a California organization founded in 1991 by a group of veteran managers, and currently has 1717 manager members. 1,330 active managers hold its Certified Community Association Manager (“CCAM”) credential. The CCAM involves 36 class hours and qualifies managers as “Certified.” CACM has inaugurated a more advanced credential, the Masters of Community Association Management (“MCAM”), which involves 5 years minimum of CCAM status, an extensive written exam, a written case study analyzing an HOA and oral presentation, and 28 more class hours.

CAMICB administers the “Certified Manager of Community Associations (CMCA”)” credential. Originally affiliated with CAI when formed in 1995, the organization is now an independent credentialing body. Attaining the CMCA requires either two and a half days of instruction, five years’ experience, or the CCAM credential, and passing a 120-question exam. California currently has 1,267 CMCA managers.

The Community Associations Institute consists of 64chapters, including 8 in California. Founded in 1973, CAI trains managers in the United States, Canada, Australia, South Africa, and United Arab Emirates. CAI offers three credentials: “Association Management Specialist (AMS)”, “Professional Community Association Manager (PCAM)” and the “Large-Scale Manager (LSM)”. The AMS credential requires attaining the CMCA credential, two years’ experience, and two additional days of classes. Currently, 708 California managers hold this credential. Managers holding the AMS designation qualify as “Certified” in California after taking CAI’s 8-hour California law course.

The highest widely established general management credential is CAI’s PCAM designation. This requires five years’ experience, almost 100 total class hours, and preparation of a 100-200 page exhaustive case study of a large HOA. About 80%of applicants achieve the PCAM on their first attempt. 295 California managers currently hold this credential. Larger or higher profile properties may prefer PCAMs or those working toward it. The LSM credential requires a PCAM and additional education regarding large associations.

Ask about credentials, and make sure YOUR manager holds a credential (not just anyone in the office). Demonstrated achievement in professional education is helpful in evaluating prospective managers.

Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober DeNichilo LLP, a California law firm known for community association advice. Submit questions to Kelly@rodllp.com.

Privacy and Data Security is the body of law that addresses how an organization can collect, handle, and use personally identifiable information and how that information needs to be protected.

Community Associations quite often have and maintain the names, addresses, and financial information of their residents and homeowners. Many criminal groups find this kind of information valuable for identity theft. Such groups often encrypt the data so the Community Association cannot access it to gain leverage and force an organization to pay a “ransom” for its return. Because of this and in reaction to how much sensitive information is held on everyday people in the broader economy, all fifty states have laws on the books that require most organizations to disclose when an unauthorized party has accessed the information. Community Associations—just like any other North Carolina organization—always must act reasonably when the organization makes decisions to do something with personal information or risk negligence lawsuits and class actions.

Unfortunately, North Carolina does not provide statutory guidance on how Community Associations can act reasonably with respect to residents’ personal data, but the federal government has provided frameworks that it recommends. The National Institute of Standards and Technology has published a Privacy Framework and a Cybersecurity Framework that, when followed, allow organizations to identify the data they have, protect that information, control and manage the data, govern the data with set rules within the organization, communicate the roles of each member of the organization, detect malicious or unauthorized activity, respond when an incident occurs, and recover from the incident.

There are a number of practical steps that organizations can take that can avoid or reduce the severity of common compliance pitfalls. The first is to review vendor contracts regularly—at least once a year—to make sure that they reflect an organization’s risk tolerance. Often, a trusted service provider or another vendor can have a breach that impacts the privacy and security of the data entrusted to a Community Association. Without contractual protections, the organization might incur significant costs remediating the problem with little legal recourse to have those costs covered by the party at fault.

Additionally, encrypting data, which is a mathematical process to transform data from readable text to nonsense and back again when a code (called a key) is used, can be an important tool in the compliance toolbox for Community Associations. Under North Carolina law—and the law of many other states—a breach only triggers reporting obligations when the information that was stolen was also unencrypted or when the encryption key was stolen with the data. This is not a silver bullet but, encryption is a practical technology that will be an important part of any compliance strategy.

Cyber insurance can also be an effective means of covering risk. However, insurance is not as simple as buying a policy and calling it a day. Insurers are increasingly raising premiums and lowering caps on organizations that do not take a proactive approach to mitigate privacy and security risks. So while insurance can act as a hedge against devastating effects, it should not be seen as a substitute for a compliance strategy.

We also recommend getting community input on the Community Association’s Privacy and Data Security efforts. Community Associations are necessarily accountable to their residents and homeowners, so understanding stakeholders’ risk tolerance can inform the leadership on how to move forward with a compliance strategy. The laws at issue obviously do not change based on the community’s sentiments, but discussing the matter at an annual meeting can be a good way to communicate what expectations the stakeholders in your community have of leadership.

Challenges and risks of liability and unmet stakeholder expectations are everywhere for Community Associations that do not take a proactive approach to the Privacy and Data Security of their residents’ and homeowners’ information. 

If you live in a community with a homeowners association, chances are good that you may be limited to just the Stars and Stripes.

By Debra Kamin For The New York Times

David Pendery’s rainbow pride flag had only been waving outside his house for a few days when a letter arrived ordering him to take it down.

Mr. Pendery, 44, a marketing executive, lives with his husband and their two children in Arapahoe County, Colo. When he hung up the flag at the end of August 2020, he hoped that the pennant would show solidarity for L.G.B.T.Q. families like his. What he didn’t anticipate was a drawn-out legal battle, one that took him all the way to Denver Federal District Court in early March.

There are more than 370,000 homeowners associations across the country, collectively representing more than half of all owner-occupied U.S. homes. Homeowners associations, which are created with the purpose of upholding property values, also dictate quotidian duties of homeownership: where to place trash bins, when to trim lawns, even which colors of paint are appropriate. But buried in their contracts are often limits on the size and style of flags that homeowners can fly. At a time when even the image of the American flag has become polarizing, these policies are leading to accusations of partisanship and violations of constitutional rights.

“HOAs get most of their powers from the contracts that they make their residents sign,” said Jeremy Rovinsky, a law professor and dean of National Paralegal College. “These allow the HOA to regulate expression that would otherwise be considered ‘free speech.’”

In Mr. Pendery’s case, his community is overseen not by a traditional homeowners association, but a metropolitan district, which is a government entity with a democratically elected board. That district maintains a home improvement reference guide, which states that preapproval is required for nearly all flags. Only military pennants and the U.S. flag are exempt.

Flag restrictions for private homes can be as varied as U.S. housing stock. Some stipulate the size of permissible flags; others allow holiday signs and sports banners, but little else.

They also vary by state. California prevents homeowners associations from restricting flags except in matters of public health or safety; in Arizona and Texas, restrictions on political signs are lifted in the months immediately preceding an election and for a handful of days following.

In this past election cycle, flags were unfurled with a new urgency. “I think I saw more flags used as political symbols than at any other time in my life,” said Michael Green, a flag researcher and designer. He started his own company, Flags for Good, in the lead-up to the 2020 election.

The 2005 federal Freedom to Fly the American Flag Act makes it illegal for any homeowners association or property management company to restrict a resident from flying the American flag, although many associations do place limits on the size and height of the Stars and Stripes. But when it comes to other pennants, a homeowner’s right to free speech is often irrelevant if they live in a community with a homeowners association.

The First Amendment prohibits the government from infringing on a citizen’s right to free speech, but homeowners associations aren’t government entities. Their ability to censor expression is much broader. “For a constitutional violation to occur, you need a state actor,” Mr. Rovinsky said. “Yes, you do have freedom of speech, but while the government can’t infringe on that, your HOA can say you can’t put up a Black Lives Matter sign.”

Residents who have challenged HOAs have had more success arguing violations on the Fair Housing Act or the Civil Rights Act, which both prevent discrimination based on race, religion or gender. “A court would want to look for discriminatory intent,” Mr. Rovinsky said.

Mr. Pendery was told he would need to apply for approval in order to fly his flag, which he chose not to do. Instead, he filed an open-records request to see if there were irregularities in how and when his district enforced its flag guidelines. He read through 500 pages of emails from district committee members, then reached out to the American Civil Liberties Union of Colorado, who sued the district on his behalf.

“I believe it was selective enforcement,” Mr. Pendery said. “My flag was clearly so egregious that within 48 hours of me putting it up, I had a letter about it. I didn’t see that sort of expeditious action being taken against their other guidelines.”

The A.C.L.U. of Colorado won an injunction on March 4, and the district is now hammering out new language that removes the requirement that residents submit flags for approval before flying them. “I put my flag back up the same day,” Mr. Pendery said. The incident, he said, was a lesson for his children, ages 2 and 8.

“We made this case because it’s important to stand up for what you believe in, and what’s right,” he said. “The biggest thing I want them to know is that there are people who have been marginalized or taken advantage of, and you need to stand up for the little guy. You need to stand up for your family.”

Mr. Pendery’s case was just one of about 50 complaints about flag restrictions that the A.C.L.U. of Colorado has heard of this year. “It’s snowballed since last fall,” said Mark Silverstein, A.C.L.U. of Colorado’s legal director. The vast majority of complaints, he said, are centered around flags with social justice messages or political symbols associated with Democratic and left-wing causes.

“Some HOAs may have tolerated or declined to enforce rules when the signs or flags were not viewed as controversial,” Mr. Silverstein said. But when residents complain, he said, they are more likely to issue a citation. “And in some quarters, these social justice signs are perceived as having a more controversial edge to them, and that has resulted in people nudging HOAs to enforce their rules.”

When it comes to homeowners’ free speech, courts often disagree about the classification of homeowner associations. While some states view them as purely private organizations, other states, like California, see them as an extension of the government. “Several court decisions in California have considered HOAs to be quasi-governmental entities,” said Patricia Brum, a Los Angeles-based attorney with the law offices of Snell & Wilmer. “So in that context, the HOAs in California are more restricted when it comes to the application of free speech.”

The fact that Mr. Pendery’s community is overseen not by a traditional HOA but a metropolitan district with a democratically elected board likely gave him a significant edge in his legal case.

Kara and Ben Wilkoff, who live with their three children in an community run by a homeowners association in Littleton, Colo., also reached out to the A.C.L.U. of Colorado for help with a flag issue. Ms. Wilkoff, 40, and Mr. Wilkoff, 38, hung a Black Lives Matter flag outside of their home last August. Four months later, their homeowners association ordered them to take it down and submit a formal approval request.

Ms. Wilkoff, a TV producer, said that she chose to raise the Black Lives Matter flag after the deaths of Black Americans at the hands of police, including Breonna Taylor, Elijah McClain and George Floyd. It was a sign of solidarity, but also a way for Ms. Wilkoff, who has a Black father and a white mother, to connect with her own identity.

Paul Whelan, 74, an automotive technician in Waterside, Penn., was devastated by the election of President Joe Biden in November and decided that same month to take down the American flag in front of his home. In its place, Mr. Whelan, a veteran of the U.S. Marine Corps, raised the Gadsden flag, the yellow banner with a coiled rattlesnake and the words “Don’t Tread On Me.” The flag, which has been used by both the U.S. Marine Corps and the U.S. Navy, dates back to the American Revolution but was also among the far-right symbols seen during the January 6 insurrection at the U.S. Capitol.

He soon received an email from his homeowner’s association telling him the flag was not in compliance with the homeowner association’s flag rules, and he would have to take it down.

“The Gadsden flag was one of our country’s first flags. There’s nothing wrong with it. Yes, the Tea Party and Trump supporters have carried it, but that doesn’t make it bad,” he said. “This is cancel culture.”

Mr. Whelan said he chose not to challenge the homeowners association’s ruling so as to spare his wife, who is currently undergoing treatment for aggressive breast cancer, any additional stress. “I love a good fight, but she doesn’t need any more aggravation in her life,” he said.

For now, the flagpole in front of his home stands empty.

Mr. Silverstein, of the A.C.L.U., says that while it’s difficult to anticipate whether or not the uptick in homeowner complaints might change federal laws against flag restrictions, he believes there is a possibility that in Colorado, Mr. Pendery’s case could lead to a battle at the state level.

“Flags have always been communication tools,” said Mr. Green, the flag researcher. “They are the way we identify certain groups and how we define our tribes. It’s just fabric on a stick, but it’s a powerful thing.”

By Sandy Denton, CMCA, LSM, PCAM, Chair of the CAMICB Board of Commissioners

Like many organizations, CAMICB is grateful to have the tireless support of a strong cadre of volunteers who offer their valuable time, services and expertise to support and bolster the work of our organization and small, yet incredibly effective, Staff headquartered in Northern Virginia. 

As I take a moment to reflect during this year’s Volunteer Appreciation Week, I’d like to first thank and acknowledge my fellow colleagues on the CAMICB Board of Commissioners, the majority of whom have full time jobs, as well as other professional and personal commitments, yet they find the time and energy to passionately serve our community of CMCAs in a multitude of ways.

Volunteering comes in many different forms and from CMCAs in and outside of the United States, for example:

• The Exam Development Committee, comprised of subject matter experts, work diligently year-round to maintain, update and validate the CMCA exam in accordance with best practices in the credentialing industry. As a result, the CMCA credential is the only international certification for managers that is accredited by the US-based National Commission for Certifying Agencies (NCCA) and the globally recognized ANSI National Accreditation Board (ANAB), underscoring the strength and integrity of the CMCA credential.

• Members of the CMCA Professional Conduct and Enforcement Committee ensure CMCAs are in accordance with the CMCA standards of professional conduct which govern their professional activities. A violation of these Standards may be grounds for administrative action and possible revocation of the CMCA credential.  

• The CAMICB Continuing Education Review Committee reviews and approves coursework for CMCA recertification continuing education credit. This occurs on an ongoing basis and is integral to making sure credentialed managers remain up to date with frequently changing laws, issues, and technologies thereby ensuring credentialed managers offer the most up to date service to their communities.

I’m proud to have witnessed community association management evolve into a competitive and growing profession. This took time and a commitment to our field and couldn’t have occurred without your support and contributions. I sincerely thank each and every one of you. Further, despite the ongoing COVID-19 pandemic, your commitment to our work never wavered and for that I am grateful.

BY KELLY G. RICHARDSON For the San Diego Union Tribune

Determining which type of management services is best for the HOA is a very important HOA board decision. Even the smallest associations need some form of professional management.

What is a “manager”? Managers oversee the association’s day to day operations, advising and informing the board and following its policies and instructions regarding association property and funds. A manager may be an unpaid volunteer or may be paid. The paid manager may be an association employee, a consultant, or an employee of an outside company. California requires no license to manage HOAs.

Volunteer management. Many associations use volunteers for their management functions. The motivation for volunteer management is primarily to save cost. In volunteer management, volunteers place themselves in the role of an unpaid manager, with all of the risks and no reward. Volunteer-managed associations often find it difficult to find board candidates, since directors work so much harder when they are also managers.

Financial management. This involves collecting assessments, paying bills, and preparing monthly and annual financial reports, disclosures, and budgets. A financial manager typically does not visit the property. Management companies often prefer financial management because it is more predictable and less prone to the extra work of managing the property. Some accountants also offer financial management services. Associations struggling with the cost of full association management may wish to consider at least financial management.

Property management. Property management involves responsibility for keeping up the condition of the buildings and grounds and may include routine inspections for architectural violations, maintenance items, and repair needs. The plumbing leak on a Sunday afternoon and the broken window on Tuesday evening are all part of the routine for a property manager. Property management, when coupled with financial management, is called “full management.” Some associations choose to hire one company for financial management and another for property management services. Full management services normally cost significantly more than “financial-only” management.

Off-site/On-site. Most associations are managed by persons working at a location at a management firm office. Some companies provide managers working at the association property, at a greater cost. However, on-site managers typically a higher level of service, which can offset the greater cost.

Portfolio vs. General Manager. Portfolio managers simultaneously work for multiple associations, while general managers work for just one. Most associations cannot afford general managers. An important question to the portfolio manager is “how many other associations will you handle along with ours?” A lower management fee can result from a company overloading its managers. For some HOAs, cost is the only concern, but level of service, experience, and management credentials should also be considered. Ask questions and make sure your association understands what it is receiving. HOAs normally get what they pay for.

In-house management. Larger associations may choose to hire their manager and staff as direct employees. This gives the association more control of its management at less cost than the rates charged by a management firm for the staff it provides. The drawback is the opposite side of the coin – the association takes on the responsibility of finding, screening, and supervising the manager and dealing with personnel issues.

Choose the management style best serving the community’s interests and needs, rather than automatically selecting the cheapest.

Kelly G. Richardson is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober DeNichilo LLP, a California law firm known for community association advice. Send questions to Kelly@RODllp.com. Past columns – www.HOAHomefront.com.

Arizona Business Magazine

Supporting the need to preserve water and protect private property rights, today Governor Doug Ducey signed into law HB2131. The bill was sponsored by Rep. John Kavanagh – Fountain Hills, after he was contacted by valley resident Sherry Lund. The need for such a law was recognized when Ms. Lund and her son Bradford Lund, who lives next door were served with a lawsuit by their HOA after installing artificial grass to reduce their water consumption. Ms. Lund and her son were being assessed a fine of $250 a day each for everyday they failed to remove the artificial turf and replace it with natural grass.

On the signing of the bill into law, Ms. Lund said, “We should all thank Gov. Ducey and Rep. Kavanagh for using common sense in the passage of this bill into law. Arizona is facing a serious drought, and every responsible citizen should be looking to see what we can do to decrease our use of water.  It never occurred to me that anyone would be so shortsighted as to infringe on personal property rights and demand water guzzling grass over a high-quality artificial turf. This law fixes that problem.”

The effort to provide protection for water conservation and private property rights in HB2131 received bipartisan support in the legislature and from community management organizations, property rights advocates, and water conservation groups.

Since the early 1990s, the use of synthetic grass in the more arid western states of the United States has moved beyond athletic fields to residential and commercial landscaping. New water saving programs, as of 2019, which grant rebates for turf removal, do not accept artificial turf as replacement and require a minimum of plants.

The use of artificial grass for convenience sometimes faces opposition: Legislation frequently seeks to preserve natural gardens and fully water permeable surfaces, therefore restricting the use of hardscape and plantless areas, including artificial turf. In several locations in different countries, homeowners have been fined or forced to remove artificial turf or had to defend themselves in courts. Many of these restrictions can be found in local bylaws and ordinances, and are not always applied in a consistent manner.

HOW NYC CO-OPS/CONDOS SAVE ENERGY

Co-op and Condo Boards Can Lead the Charge on Electric Cars

A co-op shareholder in Woodside, Queens, is facing a dilemma. He has sole access to a dedicated garage, and he wants to buy an electric car. However, the co-op board will not give him permission to install an electric car charger, even though Con Edison has agreed to connect the charger to the grid. Can a condo or co-op board refuse such a request?

The answers are, respectively, no and yes, says the Ask Real Estate column in The New York Times. Because of changes made to state property laws in 2019, a condo board cannot impose unreasonable restrictions on the installation or use of charging stations on an owner’s property or deeded space. Co-op boards, however, are not subject to the rule, and most co-op buildings were obviously not designed with electric vehicles in mind.

“You’re dealing with buildings that could be from 1910 — they were using horses when that building went up,” says Mitchell Karasik, director of business development at En-Power Group, a mechanical-engineering firm that is in the process of installing around 2,000 charging stations in 200 residential and commercial buildings around the city. “The infrastructure upgrades that are needed can often be significant.”

But older buildings can — and are — installing charging stations. Mr. Karasik says he’s noticed a sharp uptick in interest from buildings over the past year. That shareholder at the Woodside co-op is not going to be able to force his board to do this, but he might persuade it to think differently. Charging stations could increase property values — any buyer who already owns an electric vehicle, or wants to, will not want to purchase an apartment in your co-op. The key is to get the co-op board to view charging stations as an investment, not an expense.

Because electric cars are coming. In September, New York State passed a law banning the sale of combustion engines for cars and light trucks by 2035. Co-op and condo boards need to prepare for the inevitable changes ahead — by leading the way on installing charging stations.

“I know 2035 is a long time from now, but the state is going electric,” says Leni Morrison Cummins, a member at the law firm Cozen O’Connor. “It’s happening, it’s just a matter of when.”

Hudson Yards, Manhattan

Habitat Magazine

YeIn March, we reported that numerous state legislators want to exclude Gov. Kathy Hochul‘s proposed overhaul of the 421-a tax break from the upcoming state budget. Instead, they want time to debate the merits of the governor’s overhaul of the controversial tax break that was intended to increase the stock of affordable housing. Some say it should be scrapped altogether. Today The New York Times reports that developers have reaped billions in tax breaks under 421-a, but many developments feature “affordable” units that are priced beyond the reach of average New Yorkers.

The Times reports: “In buildings with condos, the tax break extends to individual (unit-)owners, an exemption available in some of the most prominent residential projects in Manhattan, including 35 Hudson Yards, a luxury condo tower. Whoever buys the full-floor penthouse on the 90th floor, currently for sale for $49.5 million, would pay just $27,500 in annual property taxes because of a 421-a exemption that lasts 20 years. Without the tax break, the yearly property taxes would be $342,000.”

First introduced in the 1970s, the tax break for builders of multifamily housing was meant to promote new residential construction when New York City was facing a fiscal crisis and few developers were building anything. After the economy rebounded, the subsidy remained and started to evolve, slowly adding various affordability requirements to qualify for the tax break.

Among the opponents of the 421-a tax break — and Hochul’s proposed modifications of it — is city Comptroller Brad Lander, who has issued a report stating that the tax break costs the city nearly $1.8 billion in lost tax revenue yearly, while it has failed to produce enough affordable units to stem the city’s housing crisis. Instead of modifying the 421-a break, which is due to expire in June, Lander has urged the state Legislature to set a Dec. 31 deadline to overhaul the city’s antiquated and unfair system of levying property taxes.

Another example cited in the Times report is Jackson Park in Long Island City, Queens, a 1,871-unit luxury development in three towers where penthouses rent for $8,500 a month. The developer, Tishman Speyer, legally navigated loopholes in the tax exemption to win an annual reduction of $21 million that nearly eliminates the development’s property tax bill. Since it was built before a provision of 421-a expired, Tishman Speyer was able to include zero below-market units. Meanwhile, co-op and condo boards fret that their soaring property taxes are threatening their buildings’ viability.

Critics say too many apartments marketed as “affordable” are only within reach to families making well over $100,000 a year — far higher than the city’s median household income — and that loopholes in the program’s different versions have allowed some rental and condominium buildings to not include any low-cost units.

Paula Crespo, a senior planner with the Pratt Center for Community Development, which has criticized the program, said she considers the tax break program “a missed opportunity to require something back from the developer for these decades of tax exemptions.”

Hochul’s proposed tweaks to 421-a have won the backing of Mayor Eric Adams and the Real Estate Board of New York.

By Steve Lash for Maryland’s Daily Record

A North Bethesda homeowners association’s board composed entirely of townhouse owners must defend its decision to raise landscaping assessment fees on apartment dwellers against a claim the board members were self-interested, Maryland’s second-highest court ruled Thursday.

In its reported decision, the Court of Special Appeals said the Cherington Condominium Association will have to show in an administrative proceeding that it was “fair and reasonable” for the board to charge apartment residents for groundskeeping that would seemingly benefit townhouse owners more than above-ground apartment residents.

The controversial assessment was levied against the both the association’s 87 townhouses and the 12 “garden style” apartment units, according to court papers.

The Court of Special Appeals decision was a victory for apartment dweller Heather Kenney in her ongoing challenge to the assessment.

In its 3-0 ruling, the court applied to the association’s board the “interested director” rule that judges generally apply to corporate boards embroiled in conflict of interest allegations.

The rule, as annunciated by Maryland’s top court 114 years ago, holds that a conflicted board can defend a controversial decision by showing it was “just and proper, and that no advantage was taken of the stockholders.” The 1908 Court of Appeals decision, Francis v. Brigham Hopkins Co., involved directors voting for their own salaries.

As in Francis, the homeowners association’s board consisted of “interested directors” in that they stood to gain from the landscaping assessment by having those not represented on the board – apartment owners – pay a share, the Court of Special Appeals said.

The appellate court rejected the association’s argument that the board’s decision was protected by the “business judgment rule,” which shields corporate governing bodies from liability for decisions made within their authority. The association cited its bylaws, which enable the board to maintain the landscaping “of the community grounds as well as the readily accessible yards of the townhouse units.”

But the Court of Special Appeals said the business judgment rule does not apply when the directors are shown to have had a personal interest in their decision.

“The business judgment rule creates a presumption that directors are acting in accordance with their fiduciary duties of care and loyalty,” Judge Andrea M. Leahy wrote for the court, citing Maryland corporate law. “The interested director transaction rule operates as a brake on that presumption when conflicted director transactions are present, requiring that either the conflicts be disclosed and approved, or the transactions implicating those conflicts be shown to be fair and reasonable to the corporation.”

The appellate court sent the case back to the Commission on Common Ownership Communities for Montgomery County to determine if the landscaping contract and related assessment was fair and reasonable.

The association’s attorney, J. Bradford McCullough, expressed concern with the court’s decision and stated via email Friday that he and his client are “weighing our options” and have not decided whether to seek review by the Court of Appeals.

“I fear that the opinion could encourage litigation that challenges community associations’ budgeting decisions,” added McCullough, of Lerch, Early & Brewer Chtd. in Bethesda.

Kenney’s attorney, Matthew D. Skipper, did not immediately return a telephone message Friday seeking comment on the decision. Skipper is with Skipper Law LLC in Crofton.

The case began in January 2019 when Kenney filed an administrative complaint with the commission, alleging the landscaping assessment violated the bylaws by requiring non-townhouse owners to pay. The commission dismissed the complaint, agreeing with the association that the assessment was authorized.

On appeal, however, the Montgomery County Circuit Court held that the board members were self-interested and remanded the case to the commission for further factfinding regarding the fairness and reasonableness of the assessment.

The Court of Special Appeals agreed.

“To be clear, our opinion does not make or mandate a finding that the board acted improperly,” Leahy wrote. “Ms. Kenney made a sufficient showing that the board has a conflict of interest under the interested director transaction rule, but on remand to the CCOC, the association may satisfy the interested director transaction rule by presenting evidence that the … assessment was fair and reasonable to the association and its members.”

Leahy was joined in the opinion by Judges Terrence M.R. Zic and J. Frederick Sharer, a retired jurist sitting by special assignment.

The Court of Special Appeals issued its decision in Cherington Condominium v. Heather Kenney, No. 157, September Term 2021.