Amendments to Bylaws: Owner Management

Summary

At present, the Gayle is managed by the owners of four units who volunteer their time, with the lion’s share of the burden falling on the President. The current Board of Directors considers it an unfair burden upon these four units, and has decided there are only two options available: signing a contract for professional management which will increase monthly HOA dues by approximately $75/month for studios and $125/month for one-bedrooms; or amending the bylaws to obligate all owners either to contribute their time and effort to help manage their homes, or to make an additional monthly financial contribution to provide the Board funds to hire additional help.

The Board would prefer the second option: getting everyone involved. Each year, every Apartment owner not serving on the Board of Directors will volunteer for (or be assigned) at least one building management task that should require five to ten hours of work during the course of the year. If the Apartment owner does not complete the task, s/he will be required to pay management fees as a special assessment in the next fiscal year. If an Apartment owner does not wish to assume responsibility for at least one building management task, s/he may request to pay management fees in the current year.

Management fees must be equivalent to what an Apartment owner would pay if the Gayle had a professional manager.

NEW Article XI: Owner Management

1. If a Manager is not appointed pursuant to Section 14 of the Declarations and Article IV of the Bylaws, the building will be an Owner-Managed Building and all Apartment owners will be obligated to assist with the ongoing management of the building, either via labor or financial contribution. Pursuant to Section 14 of the Declarations, the Chairman will act as Manager, and will supervise, via the organizational structure he deems appropriate, the activities of all Apartment owners in managing the building.
2. Task Definition. Prior to the Annual Meeting, and ideally by the 15th of March, the Board of Directors must define a set of clear, discrete, routine and easily executable tasks such that the number of tasks exceeds the minimum number of tasks required for each Apartment owner to meet their obligation. Each task should reasonably require no more than five to ten hours of work during a calendar year. Each task must have a concise, unambiguous definition of success or completion. This set of tasks must be sent to the ownership ten business days prior to the Annual Meeting.
3. Task Assignment. Prior to the annual meeting, the Board of Directors shall establish the number of tasks that each Apartment owner must complete to meet his obligation. At the annual meeting and after the election of a new Board of Directors and Officers, each Apartment owner not serving on the Board may either volunteer for, or—if they have provided a proxy—be assigned task(s) for which they are responsible during the coming calendar year. An apartment owner may also propose new tasks, although the Board of Directors and Officers is under no obligation to accept those tasks. If an Apartment owner is not present at the annual meeting and either does not volunteer for task(s) prior to the Annual meeting nor provide a proxy for the annual meeting nor request the Board of Directors to assign him task(s), the Apartment owner shall pay management fees for that year.
4. Task Oversight. The Chairman may choose to oversee tasks in any manner he sees fit, including establishing committees, appointing another Officer or Director or Apartment owner to oversee the activities of the Apartment owners.
5. Task Completion. At a special meeting of the Board of Directors in March, the Officers and any committee chairs will document, in writing, the actions taken by each Apartment owner to complete his tasks and whether these actions meet the task’s definition of success or completion. In case of doubt, the Board must make a determination based on the spirit, not the letter, of the task and success metric. Any apartment owner that makes no effort to complete their task will be required to pay management fees for the subsequent year. Any Apartment owner that makes an effort to meet the task’s definition of success or completion but fails to meet that definition will be required to pay 50% of established management fees for the subsequent year, unless the Board votes unanimously to exempt that Apartment owner.
6. Management Fees. Management fees are intended to represent the cost of hiring a professional management firm to handle all of the Association’s management tasks.
   1. The Board of Directors will establish management fees by estimating the market value of the labor provided by the Board of Directors and Apartment owners. Every ten years—with the next ten-year anniversary falling in 2020—the Board of Directors must solicit bids from not less than two management companies for full-service management. The market value of labor will be the lowest reasonable bid less the cost of any monthly services for which the Association already pays vendors, contractors, employees or other personnel, and for which the management company would otherwise provide if hired.
   2. Management fees will be set as a percentage of HOA dues, not a fixed dollar amount. In mathematical terms, the percentage management fee percentage will equal: [(Lowest Bid)-(Existing Service Fees)] / (Total HOA Dues).
   3. The management fee will not be less than 33% of HOA dues and will be collected as a special assessment.
   4. The dollar amount of management fees will be set one month after the Annual Meeting, informally communicated no later than 30 July, formally assessed no later than 31 October, with full payment due on 1 January. If the Board fails to serve Notice of the special assessment by 31 October, the Apartment owner is not responsible for paying any management fees. If an Apartment owner is selling his unit, the Board may serve notice of the special assessment to the Apartment owner at any time. If the Board fails to serve notice of the special assessment before an Apartment owner receives an offer on his Apartment, the Apartment owner is not responsible for paying any management fees. Management fees will not be pro-rated if an Apartment owner sells his unit.
   5. If at any time during the fiscal year, the Board of Directors hires a professional management company, the Association must refund an Apartment owner any management fees collected from him for that fiscal year.
7. Use of Management Fees. The Board of Directors may use funds collected as management fees for the following purposes:
   1. As part of the reserve fund
   2. To hire vendors, contractors, employees or other personnel.
   3. To compensate the officers pursuant to Article III, Paragraph 4.
8. Exemptions. Apartment owners may be exempted from assisting in the management of the building for the following reasons:
   1. If the Board fails to define a set of tasks that exceeds the number of Apartment owners.
   2. If the Apartment owner elects to pay a monthly management fee in addition to their HOA dues.
   3. If the Apartment owner served on the Board of Directors the prior year.
9. If 51% of Apartment owners not paying Management Fees vote to exempt an Apartment owner.
   1. If the Apartment owner submits to the Chairman written documentation of severe challenges to his participation due to health, financial or other serious reasons, and the Board of Directors votes to exempt the Apartment owner based on said hurdles.

Article II: Board of Directors

1. Election of Board.
2. Vacancy.
3. Annual Meeting.
4. Removal.
5. Compensation. Directors shall receive no compensation for their services unless compensation is expressly provided for in resolutions duly adopted by the Apartment owners, or unless they receive compensation as Officers pursuant to Article III, Paragraph 4.

Article III: Officers

1. Election.
   1. A Chairman
   2. A Vice Chairman
   3. A Secretary
   4. A Treasurer
   5. …
2. Term.
3. Vacancies.
4. Compensation. The officers shall receive no compensation for their services, unless compensation is expressly provided for in a resolution duly adopted by the association except under the following conditions:
   1. A resolution duly adopted by the association expressly provides for compensation.
   2. The association collected Management fees at the beginning of the current fiscal year. In this case, if a majority of eligible Apartment owners vote to provide compensation for the Board of Directors out of Management fees, the President may receive up to 25% of Management fees collected, and the Secretary and Treasurer may each receive up to 12.5% of Management fees collected. Owners required to pay Management fees at the beginning of the current fiscal year, or at the beginning of the next fiscal year, are not eligible to vote on compensation for the Board of Directors.