Info Bytes 08.11.22

DON'T.  FIGHT.  THE.  FED.

• Short-term interest rates continue to rise as medium and long-term rates remain inverted.  What does this mean for CICs that only purchase principal-guaranteed securities? 

  • Avoid 1yr+ investments for now due to interest rate risk
  • Purchase 3, 6 and 9 month brokered CDs and Treasury Bills
  • The Fed's EOY overnight target rate is estimated at 3.5%

Brokered CD and T-Bill Yields as of August 9, 2022

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City of Seattle [TAKE ACTION!]

• The Independent Contractor Protections (ICP) ordinance takes effect September 1, 2022 and impacts active contracts that began prior to the effective date.

Learning from Updated Statutes

• Colorado passed HB22-1137 in June 2022 (effective date August 09, 2022) that contains multiple provisions limiting the authority of common interest communities.

  • Certain statutory updates prohibiting foreclosing liens for unpaid fines simply brings Colorado in line with other states.
  • Additional prohibitions are some of the most progressive in the US.  For example, the total amount of fines for any violation that does not threaten public safety or health is limited to $500.
  • Another provision clarifies the ability to pursue claims up to $7,500 in Small Claims Court.
    • If you have a dispute with your association, you might want to read What to Do: When Things go Askew

• Check out this summary of HB22-1137 from IAC

Action Without A Meeting / Email Voting

• A recent thread (paywall) highlights a tendency in some communities to govern via email instead of casting votes during open meetings.

• Many states' nonprofit corporation statutes allow decision-making without a meeting so long as all directors consent in writing (“unanimous consent”).

  • Statutes often defer to an organization's bylaws.  This PA court decision ( M4 Holdings v. Lake Harmony Owners' Ass'n ) (also read this blog article ) invalidated email consent due to organization-specific bylaws verbiage requiring  decisions be reached in a setting “similar” to a conference telephone, i.e. simultaneous contemporaneous communications.
  • Utah statutes (16-6a-813(2)) allow a majority of directors to consent via email, but also allow any director to demand an action not be taken without a meeting.

• A CIC attorney (member of CCAL) recently reacted publicly to the pushback from recalcitrant directors and Boards related to conducting business during open meetings as opposed to via email and/or without members present:

  • It's not that hard to comply if you plan a little bit.

• Attorneys often caution against "meeting by email" as a practice to reach a substantial quantity of and/or material decisions.

• Whether in person, via phone or web meeting, open meetings allow for simultaneous contemporaneous communication where everyone can hear and speak “together” and make for a more transparent and accountable experience.  They also allow members (homeowners) to express their views via public comment.