Luna Court Homeowners' Association Board of Directors Meeting July 26, 2012

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1 Luna Court Homeowners' Association Board of Directors Meeting July 26, 2012 In Attendance: Board members: Joe Grande, President; Paul Weber, Vice President; Betty Friedman, Member at Large, and Nick Parker, Property Manager. Homeowners: Olga Moore, #403; Grady and Linda Irvin, #306; Charlene A. Haba, #302; Steve Miller, #407; and Hannah Higgins, #410. Call to Order: Joe called the meeting to order at 6:58 PM. Approval of Minutes: Minutes from the May 24, 2012 meeting were approved as written. President's Report: (See other agenda subjects) Treasurer's Report: Treasurer Tony Viola did not attend the meeting. Joe said he hasn't heard whether Tony had opened up an account in a commercial bank for our excess reserve funds. Joe asked Nick to find another bank, so that between the two banks, our funds will be fully protected by the FDIC. Open 1 Per Nick, the annual audit is done. Joe had copies available, and will have a copy put on our website. Closed 2 Joe explained the reasons for the Reserve Study to the homeowners. The board stills needs to complete long range forecast of reserve expenses. Open Property Manager's Report: 1. #304, will be discussed in Executive Session. Open 2 Joe said that every month the financials show a number of small balances, which have been due over a long period of time. Kappes-Miller staff could track down the date and reason the payments are due, but this might be a questionable use of their time. After discussion, a motion was made by Betty and seconded by Paul that any old fees under $45 will be waived. Closed 3 Grady said that the tenant in #408 drove into a pipe and pipe protector in a garage, which cost $83.56 to repair. Nick said he will have ACS send the owner a letter. Open Rental Exemption/Good Faith Effort to Sell: In discussing #208, which is on rental cap exemption for financial hardship reasons, Joe asked homeowners in attendance what a hardship exemption is, and what a good faith effort to sell is. 1

2 After the May Board meeting, Joe had tasked Paul to get information on rentals and how our Declarations and CC&Rs handled rentals. After consulting with the Association Lawyer, (see attached ), Paul reported on four questions Joe asked: 1) What are hardships for gaining a hardship exemption to the rental cap? The person requesting the Hardship Exception must be a Resident Owner and they must suffer serious harm as a result of not being able to rent Examples of Hardship: (A) Owner needs to move into different housing for a temporary period but wants to be able to come back. (B) Temporary job location change (C) Care of a sick relative Examples of how an Owner sees a Hardship (A) Can no longer live in the unit (B) Cannot sell the unit for what they paid for it. (C) Cannot rent it out. (see lawyers regarding this) The Board has the ability to determine what the Hardship Exception is on a case by case situation with responsibility to each request. 2) How many units at any time can we have as hardship exemptions? (A) 50% (34 units) is the cap of non-owner occupants to qualify for Fannie Mae, Freddie Mac and FHA loans. (B) Taking in account our rental cap of 10 units. The Maximum number of Hardship Exceptions we could technically incur would be 24 units. 3) Beside hardship exemptions which do not count against the rental cap, renting to a family member also does not count against the rental cap. What are "family members", and how does one go about certifying they are renting to a family member? Does not need to be a Family Member but rather a Related Party (1.8.39) Related Party means a person who has been certified in a written document filed by a Unit Owner with the Association to be the spouse, parent, parent-in-law, sibling, sibling-in-law, parent s sibling, or lineal descendant or ancestor of the Owner or the lineal descendant or ancestor of any of the foregoing persons, the officer or director of any Owner which is a corporation, the trustee or beneficiary of any Owner which is a trust, or the partner of any Owner which is a partnership. Notwithstanding the foregoing to the contrary, a person who is the settler and trustee of a living trust that owns a Unit shall be deemed to 2

3 be the Owner of the Unit for all purposes under the Declaration. The only consequence of a Tenant being a Related Party is that the owner does not have to get a tenant screening report on that person. Related Parties are still subject to the Rental Ceiling and are still required to have a lease with the owner that has been approved by the Board. The owner is required to certify in writing that the applicant is a Related Party. That means certifying under penalty of perjury under the laws of the State of Washington that a particular described relationship exists. 4) What can the board do should a homeowner rent their unit and not get board approval? If an owner rents a unit without the approval of the Board, the Association can fine the owner, after notice and an opportunity for a hearing, and can sue the owner and tenant for damages, and an injunction requiring the tenant to move out and prohibiting the owner from renting again without Board approval. Move Ins/Outs Update: 1 Possible asphalt damage by Unit 101's move-out was examined. It was caused by a leaky hydraulic hose. Our driveway sealing is OK, and there will be no bill from the asphalt company. Closed move-in: Joe said he made the command decision to give the new owner a MEDCO key, since a key was not left by the previous owner. Joe wondered if we could go back to the former owner and collect a $65 fee for not leaving a key. Nick said this was not an option. Grady said there's a precedent, and that new owners commonly have to pay for a MEDCO key. Joe said he will send Nick a check for unit 403's key. Closed move-in. Grady said there was no problem with this move. Closed Damage to unit 106 from plant intrusion: A vine grew into this unit through a windowsill that, per Grady, was not nailed down during original construction. Association funds paid for the repair, and nearby plants have been trimmed. Closed Maintenance & Parking Commmittee Report: Grady's report is attached. Waste Management is on strike. Grady and Joe discussed our options during the strike, and how to advise our cleaning staff. Closed Landscaping: 1 Joe said meetings are set for 8 AM on Wednesday, August 1 for a walkaround with our landscaper, Don Heath, and arborist, Sean Dugan, to help us develop a 5 yr. plan. A second meeting on the same day will start at 6:30 PM in the courtyard, where Lisa Pfeiffer will present her plan for the Courtyard project. Open 2 Grady said he'd met with Don Heath about possible membrane and courtyard leaks, and assumed Don would pass their findings on to Dana Waterproofing. 3

4 Joe said he will a follow-up. Open 3 Joe said our landscaper has treated two Japanese maple trees for a virus, and dead trees have been removed. Closed Old Business: 1 Fitness room and Penthouse deck guardrails have been painted by Grady. They are now fixed and set to go. Closed 2 House Rules: Joe gave Board members and homeowners copies of the updated Rules, and asked them to review and edit the proposed changes. The Rules committee will meet at 7 PM on Thursday, August 16. Open 3 New homeowner, Olga Moore, #403, said she's worried about the next tenant in #502, due to noise from the current tenants. Grady said this has been an ongoing problem. Nick said he will send a warning letter to the owners of #502. Open 4 Office files: Joe will be giving a couple of boxes to Nick for shredding. Closed 5. Garage lights: Schneider Electric is trying to work out a rebate from the City of Seattle, which requires pre-approval. Joe explained to homeowners that we will replace the outside and P2 garage lights first. The Board agreed to set the end of September as a "drop-dead" date, after which we will continue the project without waiting for rebate information. Grady said we would maybe not save an exorbitant amount of money if we received a rebate. Open 6 DoorKing System modernization: It's up and operational. Joe said a front door problem on July 4 was fixed on July 5. Steve Miller said it's never worked better. Grady asked Nick to pass on to Bulgur our opinion that it was a very good installation. Closed New Business: 1 Limited Common Element Door Handles: Joe said the CC&R's require that our hallways retain a uniform look, which means that door hardware should be polished brass. He asked what we should do about the three units not in compliance. After discussion, Joe said we would "grandfather in" the three non-conforming units, but if their hardware, or any other door hardware is changed out in the future, the new hardware facing the hall will need to be polished brass. Joe will mention this in the next Luna News. In addition, Joe asked Nick to send a letter to these homeowners informing them of their error and that when they change out the lock sets again, they will have to comply with the polished finish of the original hardware. Closed 2 Contracts: Comcast: Board members discussed Comcast's proposal, which outlined additional service options. No clear preference emerged. Joe said he does not want to increase what the Association is paying now, so "thanks, but no thanks". Closed 4

5 3. Janitorial: We currently have Condominium Cleaning Specialists. Grady said there's a green book in the Janitor's Room that lists the tasks our janitors are presently required to do. Joe said he would scan this record and send it to Nick, Board members, and any other interested parties, to look for areas where the janitors might need to improve. Open 4. Pressure washing: Joe and Grady presented a list of specifications. Grady said this is a good outline, but we never have the same person performing the job. Nick said he will meet with a couple of companies, and see if we can get a contract. Open Bylaws: Nick was unable to locate a record of the amended bylaws mentioned in Fred Doehring's letter of February 7, 2008, which said the amendments had been approved. Joe said the minutes do not mention whether the amendmets actually passed. Steve Miller said he has documents showing the amendmets passed, and will give them to Paul. Joe asked if, as a corporation, our Bylaws should be registered with the State of WA. Nick said yes, and Joe said we should do it. Open Homeowner's Forum: 1. Steve Miller said he'd noticed some work in the courtyard with the pavers, and asked what that was. Joe said some new countertops were being sawn in the area. Steve said he was curious about the pavers: were there new spacers? Grady said he would take a look. 2. Charlene Haba suggested a reminder be put in our newsletter asking residents to close the front gate that opens onto the ramp. She also suggested a wastebasket be placed in the elevator area, but others explained that there's no one to empty it. 3. Olga Moore said someone threw coffee off a deck, which then landed on a car's windshield. Joe said he would put a reminder in the Luna News. Executive Session: 1. At 8:40 the Board moved to adjourn the meeting to Executive Session, and discussed the delinquent HOA dues from #304 and the owner's counter offer in our foreclosure effort, and Tony Viola's request to resign as Board Treasurer. 2 At 9:06 Joe announced the resumption of the regular session, and members unanimously agreed to: 3(A) Reject the request from the homeowner of unit 304 for a negotiated settlement of her personal debt for past due assessments. (B) Accept Tony Viola's resignation. (C) Appoint Paul as Treasurer, with the position of Vice-President being vacant. The meeting was adjourned at 9:08 PM. B. Friedman, Member at Large 5

6 Hardship Exceptions Rental Units This is where Hardship Exception is first mentioned The Association may grant a hardship exception as provided in Sub-Paragraph notwithstanding the fact that it would temporarily cause the number of non-owner occupied Units to exceed the Rental Ceiling until the next Rental vacancy occurs Hardship Exception Where, on written application from a resident Owner, the Board determines that a hardship exists whereby that Owner would suffer serious harm by virtue of the limitation on renting contained in Paragraph or Sub-Paragraph , and where the Board further determines that a variance from the policies contained therein is fairly in keeping with the purpose of this Section to limit Investor ownership of Units and would not detrimentally affect the other Owners or the approval of the Condominium for secondary mortgage market financing, lender approval or VA or FHA approval, the Board may, in its discretion, grant an owner a waiver of the Rental Ceiling for a temporary period not to exceed six (6) months In the discretion of the Board this hardship exception may be extended on written application of an Owner for one (I) Minimum Period of Owner Occupancy Required. It is the intent of the Owners that the Units shall hereafter be acquired for occupancy by their Owners and occupied consistent therewith In order to discourage the acquisition of Units in the Condominium for investment or rental purposes, no Owner shall be permitted to rent or lease his or her Unit during the two (2) year period after he or she shall have acquired title thereto except as provided in Paragraph If a person or persons acquires Unit through inheritance, that person or persons shall be deemed to have owned and occupied that Unit during the period which their decedent owned and occupied the Unit. Paragraph the Rental would not cause the aggregate number of all non-owner occupied Units to exceed the Rental Ceiling specified in , below Rental Ceiling Set. Except as provided in Paragraph , the maximum number of non-owner occupied Units in the Condominium at any one time shall not exceed Ten (10) (referred to in the Declaration as the "Rental Ceiling"). Questions regarding Hardship Exceptions 1) What are hardships for gaining a hardship exemption to the rental cap? 6

7 The person requesting the Hardship Exception must be a Resident Owner and they must suffer serious harm as a result of not being able to rent Examples of Hardship: Owner needs to move into different housing for a temporary period but wants to be able to come back. Example: Temporary job location change Care of a sick relative Examples of how an Owner sees a Hardship Can no longer live in the unit Cannot sell the unit for what they paid for it. Cannot rent it out. (see lawyers regarding this)** The Board has the ability to determine what the Hardship Exception is on a case by case situation with responsibility to each request. 2) How many units at any time can we have as hardship exemptions? 50% (34 units) is the cap of non-owner occupants to qualify for Fannie Mae, Freddie Mac and FHA loans. Taking in account our rental cap of 10 units. The Maximum number of Hardship Exceptions we could technically incur would be 24 units. 3) Beside hardship exemptions which do not count against the rental cap, renting to a family member also does not count against the rental cap. What are "family members", and how does one go about certifying they are renting to a family member? Does not need to be a Family Member but rather a Related Party (1.8.39) Related Party means a person who has been certified in a written document filed by a Unit Owner with the Association to be the spouse, parent, parent-in-law, sibling, sibling-in-law, parent s sibling, or lineal descendant or ancestor of the Owner or the lineal descendant or ancestor of any of the foregoing persons, the officer or director of any Owner which is a corporation, the trustee or beneficiary of any Owner which is a trust, or the partner of any Owner which is a partnership. Notwithstanding the foregoing to the contrary, a person who is the settler and trustee of a living trust that owns a Unit shall be deemed to be the Owner of the Unit for all purposes under the Declaration. 7

8 The only consequence of a Tenant being a Related Party is that the owner does not have to get a tenant screening report on that person. Related Parties are still subject to the Rental Ceiling and are still required to have a lease with the owner that has been approved by the Board. The owner is required to certify in writing that the applicant is a Related Party. That means certifying under penalty of perjury under the laws of the State of Washington that a particular described relationship exists. 4) What can the board do should a homeowner rent their unit and not get board approval? If an owner rents a unit without the approval of the Board, the Association can fine the owner, after notice and an opportunity for a hearing, and can sue the owner and tenant for damages, and an injunction requiring the tenant to move out and prohibiting the owner from renting again without Board approval. 8

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