Self-Managed Liability

Jul 9, 2017 4 Views 0 Comments

QUESTION: My wife and I are the president and treasurer of our association. We have been holding these positions since 1988 because we own 13 of the 18 units.

We have not been providing the required annual documents to the other homeowners nor holding annual meetings. One of the owners is demanding we hire a management company. We have no budget for it because our expenses are greater than our income. Are we exposing ourselves to litigation?


RESPONSE: You and your wife may be doing a perfect job of managing the association but your violations of the Davis-Stirling Act expose you to potential litigation. Owners naturally become suspicious when someone has complete control for 29 years and fails to comply with the association's governing documents and applicable laws.

Management Company. Hiring a management company and following the law would reduce your exposure. Saying you can't afford a management company would likely not sway a judge. An increase in your HOA dues would easily pay for a management company. That company could then collect assessments, pay bills, and provide a monthly financial report. In addition, it would prepare your annual election materials and distribute your annual disclosure packages.

Tax Returns. If you have not already done so, you should also hire a CPA to file your association's tax returns and prepare an annual financial statement for distribution to the membership. You are also required to file statements of information with the Secretary of State--something your management company can handle for you. Failure to file tax returns or statements of information will result in suspension your association's corporate status.

New Blood. If any of your owners wants to serve as president and treasurer, you should let them do so. They may do a good job and relieve you of the burden. They may also discover they don't like it and hand it back to you and your wife.

Fiduciary Duties. If you are refusing to hire a management company because you own 13 of the 18 units and the expense will personally burden you and your wife, a court could conclude you were in breach of your fiduciary duties since you were acting in your own best interests rather than the association's.

Reserves. That also raises a question about reserves. If you are not properly funded, a court could also decide you purposely underfunded the account because of the personal expense it would cause you and your wife. You should consider stepping off the board for a period of time and allow others to make reserve decisions. If they keep the current funding policy in place, it reduces your exposure since they made that decision not you. If they decide to increase reserve funding, it may cost you more in dues but ultimately benefits everyone since it reduces the risk of one or more special assessments.

RECOMMENDATION: In addition to hiring a management company and stepping off the board for a few years, you should consider hiring a law firm to rewrite your CC&Rs. Given that your governing documents are from the 1980s, it's time to bring them current with all the new laws.

TARA HICKS JOINS
ADAMS STIRLING


I am pleased to announce that attorney Tara Hicks joined our Firm.

Real Property Law. Tara comes to us with a strong background in real estate law. She previously served as in-house counsel to a real estate firm where she was responsible for negotiating and drafting commercial contracts, resolving title disputes, addressing zoning issues, preparing real property agreements, and handling real estate legalities.

Litigation. Tara gained litigation experience with an firm where she prepared appellate briefs, drafted pleadings and motions, conducted discovery, and drafted settlement agreements.

Education. Tara has a BA in English with a minor in Spanish and was consistently on the Dean's List for academic achievement. She then earned her Juris Doctor degree from Southwestern Law School, externed with the Honorable Terry J. Hatter in U.S. District Court, Central District of California, and entered the practice of law.

Tara works out of our corporate office in Los Angeles serving as legal counsel to associations throughout California. We are happy to welcome Tara to the Firm. If your association needs legal counsel, contact us for a proposal.


 
To supplement my legal advice, it looks like I inadvertently started a medical advice column. This is our third week addressing phantom odors and sounds.

This will make my mother happy--she always wanted me to become a doctor. -Adrian


Phantom Odors #1. I am not sure if this is the culprit but someone, preferably a friend, could suggest that she tell her dentist and/or doctor that she smells tobacco smoke when there is none present. When teeth decay, they often produce a foul odor. Some people report smelling cigarette smoke. Sinus infections, nasal polyps, or frankly any ailment involving the olfactory nerve can produce foul odors of which many people don't realize that the odors they are detecting are being produced from their own body. -Sherry P.

Phantom Sounds #2. How about phantom sounds? A couple of times a week I hear a huffing puffing sound in the SW corner of my bedroom. It doesn't seem to be coming from the attic or from outside. No one is sleeping outside the slider. No small animal could make that much noise....Why don't I ask someone on the board to listen? Because it happens about 10:30 pm and they are all asleep. So I take out my hearing aids and go to sleep. When I wake up in the morning, it's gone. Any ideas? -Amy C.

RESPONSE: Check the Yellow Pages for "Ghostbusters." Or, call your local priest to expel whatever is in the SW corner of your bedroom.

Phantom Odors #3. I love your newsletter and read it every time it comes out. I am a board member in a mid-rise HOA that banned smoking several years ago. We still have one problem smoker. What can we do about a smoker who denies he is smoking? He seems to be smoking on his balcony hidden from view by a stand of bamboo so no one can see him. His upstairs neighbor reports her unit filling with smoke often. Do you know of any one (like the electrician who ran down the phantom noise) who can identify positively where cigarette smoke is coming from? What can the board do? I’m afraid this homeowner is going to get fed up and sue the HOA. -Marcy A.

RESPONSE: Yes, there are people who specialize in detecting and analyzing odors. I don't think you need them here. Based on the evidence you already have, your nicotine addict can be called to a hearing before the board. Smoke travels up and circumstantial evidence is enough for the board to sit down with your smoker and strongly suggest he switch to vaping. It allows him to get his nicotine fix without disrupting his neighbor's quiet enjoyment of her unit.


Phantom Odors #4. Phantom odors are not uncommon among women who have gone through menopause. No one seems to know why but in most cases it eventually goes away. I mention this because two of the complainants were characterized as "elderly" women--one over 60!! I have to tell you that I'm 78 and am not elderly yet. As always, an entertaining and informative column! -Nancy H.

RESPONSE: Thank goodness I didn't say "60" was elderly. My 84-year-old mother would have words with me.

Phantom Noise #5. I cleared a problem of phantom noise that a friend claimed was some sort of police agency action. The complaint was that each day when she took her bath at 9:30 she heard a sound. It turns out her husband had been to a convention and set his alarm for 9:30 on a small notebook. The alarm was buried in a drawer under the recently deceased husband's underwear and socks. -Eric D.

*****

Cellphone. Another great newsletter which addressed an issue we have had in the past with our board president attending meetings by cellphone. I understand this is allowed, but to have the president do this, fully aware of the dates of board meetings, and then using a cellphone that the entire audience could not hear, doesn't seem right. Is this me being a curmudgeon? How does this fit in with the law? I truly would appreciate your thoughts on this. -Candiece M.

RESPONSE: Unless he had a legitimate reason for phoning in his attendance, it's in poor taste. If it was legit, the law requires that everyone be able to hear him. The next reader has a solution.


Conference Cellphone. In addition to the landline version of the conference phone, there is one for cell phones. We use this where I live because the location of the meetings has no landline. It works pretty well. It is Bluetooth based. -Kingsley M.

*****


Contact Info #1. Absolutely terrific…LOVED the Rolodex visual! Thanks for adding a fun spot that had me laughing out loud. -Marilyn B.

Contact Info #2. Loved the Rolodex definition! -Marcy

Contact Info #3. Funny about the Rolodex, as I was trying to purchase one at the local Staples and Office Max and failed to find one. Fortunately the sales clerk, at least, had heard of a Rolodex (he was not a millennial). I wanted one for my computer passwords. I guess I must seek out Amazon for help! -Suellen E.

Contact Info #4. I appreciate your idea of monthly reminders to owners via billing statements to update contact information. However the majority of our owners pay their dues via automatic deductions--a practice we encourage. The downside is that no billing statements are sent. Do you have any additional thought on this subject? BTW, I still maintain a Rolodex. -Nancy K.

RESPONSE: Another possibility is putting it in your newsletter (if you send them via snail mail or everyone has consented to receive them electronically). You can include a notice in one or more editions. Absent that, your HOA will need to incur the expense of mailing a separate notice.


Contact Info #5. Our association has used email as a preferential contact point with members, except for legal and financial documents. Our new management company refuses to use our already approved email addresses until they receive owner approval to do so. Unfortunately our membership is often slow to respond and after seven months we are still using snail mail. Can we assume that email is acceptable unless the owner opts out? -Sheila C.

RESPONSE: I wish that were the case. Unfortunately, before an association can electronically distribute documents and disclosures it must receive the recipient's written consent. (Civ. Code §4040(a)(2).) In the old days (2010) when the legislature added this to the law, not everyone had email. Legislators were worried that the elderly (anyone over 60) didn't have access to or didn't know how to use email. Now everyone, especially retirees, send and receive emails and text messages. Some even tweet. There is a 71-year-old in the White House who tweets on a regular basis. Children begin almost at birth--certainly before walking or talking. Someday, the legislature will make it into the 21st Century.
Adrian J. Adams, Esq.




Adrian J. Adams, Esq.
ADAMS | STIRLING PLC

Boards can contact us for friendly and professional HOA legal advice.

Fundraising in the Common Areas

Jul 8, 2018 0 Views 0 Comments


QUESTION: As we enter another election cycle, do you think the new law allowing politicians to use the common areas permits a candidate for public office to raise funds using our common areas?

ANSWER: It's a good question with no clear answer. SB 407 went into effect January 1 this year and no one knows yet the reach of the statute. It states that members or residents can invite "public officials, candidates for public office, or representatives of homeowner organizations to meet with members, residents, and their invitees or guests and speak on matters of public interest." (Civ. Code §4515(b)(2).)

Fundraising Free Speech? A recent US Supreme Court decision (McCutcheon vs. Federal Election Commission) held that donating to a political campaign is an exercise of free speech. Does that make fundraising a matter of public interest? Maybe. Clearly, a court will have final say (unless the legislature clarifies it by amending the statute).

Political Parties. In addition to the Republican and Democratic parties, there is a long list of other parties who could use your common areas to campaign. Following are some:

America First Party (paleoconservatism)
American Indep. Party (strict constitutionalism)
America's Party (Christian conservatism)
American Delta Party (social progressivism)
American Freedom Party (white nationalism)
American Populist Party (libertarianism)
American Solidarity Party (Christian democracy)
Black Riders Liberation Party (black nationalism)
Christian Liberty Party (dominionism)
Citizens Party of the U.S. (centrism)
Communist Party (communism)
Workers Party of America (communism)
Constitution Party (fiscal conservatism)
Freedom Socialist Party Trotskyism
Green Party (environmental socialism)
Humane Party (animal rights)
Independent American Party (paleoconservatism)
Justice Party (social democracy)
Legal Marijuana Now Party (marijuana legalization)
Libertarian Party (libertarianism)
Modern Whig Party (centrism)
National Socialist Movement (neo-Nazi socialist)
Natural Law Party (peace through meditation)
New Black Panther Party (black nationalism)
Objectivist Party (objectivism)
Party for Socialism and Liberation (communism)
Peace and Freedom Party (democratic socialism)
Prohibition Party (temperance)
Reform Party (electoral reform)
Socialist Action (Trotskyism)
Socialist Alternative (Trotskyism)
Socialist Equality Party (Trotskyism)
Socialist Party (socialism, anti-capitalist)
Traditionalist Worker Party (neo-Nazism)
U.S. Marijuana Party (marijuana legalization)
U.S. Pacifist Party (pacifism)
Unity Party of America (centrism)
Veterans Party of America (centrism)
Workers World Party (Communism)

If any of the above parties (and many more not listed) were invited by a resident to use your common areas to speak and raise money (free of charge and without insurance), they probably could.

RECOMMENDATION: Boards should talk to legal counsel about how best to handle this situation should it be raised in their association. Following is another question about SB 407.

PASSED BY
SCALAWAGS


QUESTION: Hello - As I have tried to read all the newsletters that are sent out, I thank you on keeping the people abreast who want to be engaged. For this one item that was passed by scalawags, SB 407, how can it be overturned?

RESPONSE: For readers unfamiliar with scalawags, it's a legal term that does not get used enough. It means scamp, reprobate, someone who behaves badly, a lying no good rascal. It’s also spelled scaliwag and scallywag.

Public Interest.
Unfortunately, SB 407 is here to stay. Politicians want access to community associations so they can campaign for office. They gave themselves (and it seems everyone else in the world via the "public interest" provision) access to your common areas free of charge and without insurance. The poorly worded, expansive bill by Sen Wieckowski will likely remain as-is until litigation erupts over unintended consequences and the statute (maybe) gets tweaked.

HOA's RIGHT TO RESPOND TO
ACCUSATIONS


A recent unpublished case involves a homeowner, Robert Kulick, who published a newsletter accusing board members at Leisure Village in Ventura County of lying and cheating, the general manager of perjury, and the association's attorney of extortion and hate mongering.

He also claimed the board election was rigged and the association would be forced into bankruptcy.


Association Responded. At the board's request, the association's attorney prepared a letter responding to Kulick's newsletter denying that board members were cheats or liars or that the association's attorneys engaged in unlawful conduct. The letter described Kulick's newsletter as a reckless communication that contained unfounded, inaccurate and spiteful allegations. The association distributed its letter to its 2,100 members.

Litigation Ensued. Kulick sued the association claiming he had been defamed by the letter. When his lawsuit was dismissed on an anti-SLAPP motion, he appealed. The court of appeal upheld the trial court's ruling because the content of the association's letter was of public interest regarding a controversy initiated by Kulick when he published newsletters accusing directors, management and attorneys of misdeeds.

OBSERVATION. Homeowners who distribute scurrilous material should not be surprised when someone disputes their allegations and makes a few of their own. To read the case, see Kulick v. Leisure Village.

WEBSITE
CASE LAW UPDATE


In addition to laws passed each year by California's legislature, our courts of appeal and supreme court add "case law" by interpreting statutes.

We have approximately 300 cases on Davis-Stirling.com which are indexed alphabetically by name.

I am pleased to announce the addition of a new page to the website that organizes cases into categories and summarizes the relevant holding of each case. We hope you like it. If there are cases you think should be on our list, drop me a line.

A special thanks to attorneys Wayne Louvier and Aaron Schwarzkopf for assisting me on this project.

SANTA BARBARA
OFFICE OPENS


I am pleased to announce the opening of an ADAMS|STIRLING office in Santa Barbara.

Our office is located at 831 State Street, which is within walking distance of the historic Santa Barbara courthouse.

We represent a large number of clients in Ventura, Santa Barbara and points north. Our new office allows us to work more closely with our growing base of coastal clients.

HIRING. We are continuing to hire attorneys. To learn more, contact me.


AB 2912 #1. Why should any association insure their reserves plus three months of assessments? According to the Davis-Stirling Act associations are not supposed to assess more than the costs for which they are collected. Any association that has three months of assessments in their account(s) must be over-charging their members or not paying their bills. Sounds like legislation backed by insurance companies. -Tamara B.

RESPONSE: The reason for insuring your association's money is because it can be embezzled. I've worked with many associations over the years who have had their funds stolen--some in the millions. In most cases, they were able to recoup their loss through their insurance. Three months of assessments sets a minimum amount stolen by an embezzler. It does not have to be done all at once, it can be done over time.

Fidelity insurance is relatively cheap and not having it could result in a large special assessment to replace embezzled funds. Members get a little touchy when that happens. They start demanding resignations, threaten recalls, and sometimes threaten to sue directors who "allowed" the embezzlement to occur and negligently (or intentionally) failed to ensure the funds.

*****


Rental Prohibitions. I find your newsletter to be very informative and entertaining. Your June 17th newsletter item about grandfathered rules raised the following question in my mind: Does Civil Code 4740 apply to an amendment restricting only short-term rentals? -Mark B.

RESPONSE: It applies to rent prohibitions. I do not believe a requirement that rentals be at least 30 days is a prohibition. Rentals are still allowed, they just can't be less than 30 days. Such restrictions have have been deemed reasonable by the courts. (Mission Shores v. Pheil.)

*****


Far Away #1. I wanted to say how much I appreciated—and laughed at!—your response to Gregg G.’s outrageous diatribe likening HOAs to concentration camps: "You might cut back on coffee and consider moving to a cabin far away from civilization. Far, far away.” What a perfect response!

As you know far better than I do, not everyone who lives in an HOA is reasonable and rational, and because people can’t be reasoned out of anything they haven’t been reasoned into, your response didn’t try to do the impossible, but simply and calmly offered two very practical and helpful suggestions. Bravo! -Scribner M.

Far Away #2. I always try to read your informative newsletter promptly. Today’s was helpful until I reached the outrageous and vicious item by Gregg C. I have immense pity for his neighbors/owners who are exposed to him, as well as for the association’s board of directors. He must live a miserable life since he’s lost touch with reality. You probably gave all your readers a wake-up call! -Marilyn B.

WIECKOWSKI BILL NULLIFYING
OWNER RIGHTS ADVANCES


SB 1265 is the bill put forward by the Center for California Homeowner Association Law (CCHAL) and Sen. Wieckowski that strips homeowners of their right to adopt reasonable qualifications for board members. CCHAL and Sen. Wieckowski decided you should accept felons and delinquents on your boards as well as those suing your association and those in serious violation of the CC&Rs.

The hearing before the Assembly Housing Committee on June 20 did not go well. The bill passed on a party line vote. It then went to the Assembly Judiciary Committee on July 3 where it again passed on a party line vote. It will be eligible for a vote on the Assembly floor when the legislature returns from summer recess in August.

Adrian J. Adams, Esq.

Boards should contact us for friendly, professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

Train Wreck Update

Jun 17, 2018 0 Views 0 Comments

SB 1265 is set to be heard by the Assembly Housing Committee this Wednesday, June 20 in the State Capitol building at 9:00 a.m. in Room 126. If you can attend and voice opposition to the bill, please do so.

Emails opposing Wieckowski's legislation were forwarded to the committee. Following are a few from this week. -Adrian

Train Wreck #1. Thank you very much for the information you presented. I originally voted for the bill, but I see now that I was wrong. I am opposing SB 1265. I own several properties in HOA communities and am a member of and have served on many boards over the past 40 years. Thank you. -Delores L.

Train Wreck #2. Calling out Sen. Wieckowski as being associated with CCHAL (Center for California Homeowner Association Law) is right on. He was also behind SB 407. Unfortunately, he was just re-elected to State Senate District 10. We can probably expect more ill-conceived bills. -Paul C.

RESPONSE: For those who don't remember, SB 407 was last year's bill allowing politicians of every stripe, both elected and un-elected, to take over common areas (free of charge and without insurance) to speak and hold rallies.

Train Wreck #3. Your article last week said litigants should not serve on the board. I sued my association 5 years ago and won because they failed to repair a water leak. Does that mean I can never serve on the board? That does not seem fair. -Pat M.

RESPONSE: You can serve on the board. You would make a good director based on your experience. Someone who is in active litigation against the association should not simultaneously be on the board. The conflict of interest creates too many complications. It is better for the person to be off the board until the litigation has concluded. As soon as the litigation is over, the person would be eligible to serve on the board. This common sense provision is prohibited by the CCHAL/Wieckowski bill.

Train Wreck #4. I read a newsletter from the Center for California Homeowner Association Law (CCHAL) and thought SB 1265 seemed good. After reading your newsletter I've changed my mind. It made me wonder about the latest CCHAL newsletter I received regarding AB 2912. CCHAL's 'NO' position seems sensible but I thought their 'YES' on SB 1265 seemed sensible too. What do you have to say about AB 2912? -Janice S.


RESPONSE: I asked Nathan McGuire, Vice-Chair of the California Legislative Action Committee, for his analysis of Assembly Bill 2912. Following is his response:

"Many owners have expressed frustration with the constant stream of bad legislation coming out of Sacramento in the last decade. This is in large part because those drafting and sponsoring legislation don’t understand community associations or are biased against them.

For the most part, groups like CAI’s California Legislative Action Committee (CLAC) have been playing defense, working to defeat bad legislation or make it less bad. As a proactive measure, CLAC sponsored Assembly Bill 2912, which seeks to protect association finances.

Unfortunately, homeowner associations are occasionally targets of fraud or embezzlement. Boards can take steps to prevent fraud, but not all boards have the guidance to implement sufficient measures.

Introduced by Assemblymember Jacqui Irwin, the bill would require associations to implement simple measures to prevent fraud with clear guidelines on the handling of association funds.

Most of the requirements are already standard practices for many associations. If passed, the bill would:

  • Require fidelity bond insurance in an amount not less than current reserves, plus three months of assessments;
  • Require monthly review of financial statements rather than quarterly; and
  • Prohibit electronic transfers of funds without board approval.

Boards are not required to meet monthly to review financials. They can designate a board member or board members to review the financials monthly and ratify the financials at their next meeting.

Support. We support AB 2912. Protecting association finances is of critical importance. The bill has passed out of the Assembly and is making its way through the Senate. The next stop is the Senate Judiciary Committee. For more information, check out CLAC’s recently renovated website." -Nathan McGuire, California Legislative Action Committee

NOTE: I agree with Nathan's recommendation. Safeguarding association finances makes sense. I have not seen CCHAL's opposition to the bill but I'm not surprised. They seem to be on the wrong side of most issues. -Adrian Adams

DEALING WITH
PROBLEM BOARDS


Problem Boards. I don't think last week's question about problem boards was fully answered. -Ann R.

RESPONSE: Having worked with boards for over 30 years, There are five types of boards. They almost always fall into one of the following categories:

1. Bad Boards
2. Dysfunctional Boards
3. Marginal Boards
4. Good Boards
5. Exceptional Boards

Bad Boards. Fortunately, truly bad boards are few in number. They tend to be self-serving and driven by personal agendas. It has been my experience they don't follow legal advice and I eventually withdraw from representation (a polite way of saying I fire them). Once their path of destruction is visible to everyone, they usually get sued or thrown out of office, or both. A good board is then elected to clean up the mess.

Dysfunctional Boards. Dysfunctional boards consist of directors who are at each other's throats. Nothing gets done because they are too busy fighting each other. There are strong personalities on differing sides of every issue and they are unyielding in their opinions. Sometimes they hate each other and engage in personal attacks. Each side develops a following and splits the community. Feelings run deep and it takes years to recover from the strife. Fortunately, dysfunctional boards are also few in number.

Marginal Boards. There are a fair number of marginal boards. Their directors serve because no one else will. They put in their time and try to avoid difficult decisions. They minimize rule enforcement and avoid spending money. They rationalize that doing nothing keeps dues down. Many owners get frustrated with such boards but not enough to volunteer their own time to serve on the board. It's not until some crisis hits that more qualified volunteers step up.

Good Boards. Most boards are good boards. They volunteer their time, address community issues, and generally make good decisions. They enforce the rules, repair the common areas, and fund the reserves. However, they can be slow to act and sometimes make mistakes. Even so, they care about the membership and their intentions are good.

Exceptional Boards. Exceptional boards are not the norm. Being on top of everything all the time, consistently communicating with members, responding quickly to complaints and never making mistakes is not sustainable. I've worked with many such boards over the years but the demands on their time and constant criticism from a minority of perpetually unhappy owners eventually wears them down.

All five categories have their detractors. Unhappiness with bad, dysfunctional and marginal boards is fully justified.
If members have such boards, they should do something about it. See ten steps for dealing with bad boards.

Complaints about good and exceptional boards is most often from owners who don't like rules. They go ballistic when the board enforces rules against them. Too often they engage in whisper campaigns against directors and threaten lawsuits. They run up the association's legal bills and bully people until they get what they want. They complain endlessly about their "bad" board while directors struggle to bring the scofflaw into line.

COMMENT:
Complaining seems to be part of the human condition. When someone says they have a bad board, I dig a little deeper to see which category the board falls into and then respond accordingly.

Concentration Camp HOAs. As I read newsletters from Adams Stirling, it is clear to me that your firm is hell-bent on making HOAs pretty much like concentration camps. Deny all possible rights of members and give absolute power to a small group of volunteers who can behave in any manner they see fit without accountability or repercussions.

If A&S were honest, they would admit that HOAs are established by corrupt politicians in their own corrupt image, basically their bastard step-children. Give all the power to a small group of people so they can rule the masses. To even suggest that they are "angels" is complete stupidity. -Gregg G.

RESPONSE: You might cut back on coffee and consider moving to a cabin far away from civilization. Far, far away.

DISCRIMINATION LAWSUIT
DISCLOSURES


I received a number of questions about the lawsuit over large dogs on elevators I reported last week. Readers asked about litigation disclosures. Here is one of them:

QUESTION. Regarding informing members of the details of a lawsuit, I assume you mean that members have a right to know what the issues are but not specific legal advice given to the board or anything falling under attorney-client privilege. -Shelly D.


RESPONSE: You're right, attorneys and boards can talk to members about the litigation but not about legal advice given or received. Members are naturally curious about ongoing litigation, and boards can and should inform them about the case. Members often push for details but directors should stick to what's a matter of public record, i.e., in papers filed with the court. Directors should not talk about litigation strategy or settlement strategy. Such things have a way of getting back to the other side.

NANCY SIDORUK


Following are a few of the many emails we received about Nancy joining the firm.

Congratulations #1. Wow!!! That’s wonderful news!! Nancy is WONDERFUL!!! -Jeremy W.

Congratulations #2. Congrats on Nancy joining your team. She's so good! Please give her my best. -Skip. D.

Congratulations #3. Wow! -Rosy A.

Congratulations #4. Nancy is my favorite attorney! She is easy to work with and extremely knowledgeable. Congratulations! -Linda L.

*****


HIRING. We are still looking for experienced litigation and HOA attorneys for Riverside, Palm Desert and San Francisco's South Bay. If you are interested, contact me. -Adrian

*****


Grandfathered Rules? I have a bet with another homeowner. He states that if you bought your home prior to revisions to the CC&Rs or rules that you are grandfathered under the old rules. New or changed rules that affect your separate interest do not apply. -David J.

RESPONSE: If you said new rules apply to everyone, you win the bet. In a unanimous decision in Villa de Las Palmas v. Terifaj the California Supreme Court ruled that CC&R amendments apply to all owners, regardless of when they purchased their units. Rules, like CC&R amendments, apply to everyone unless the board grandfathers existing conditions. The exception is rent prohibitions. Civil Code §4740 exempts owners from rent prohibitions unless the prohibition was in effect prior to the date the owner bought into the development.

Adrian J. Adams, Esq.

Boards should contact us for friendly, professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

Large Dogs & Reasonable Accommodation

Jun 9, 2018 0 Views 0 Comments

Sometimes a demand for reasonable accommodation is unreasonable.

Large Dogs. Holly Geraci owned a penthouse in a Chicago highrise. She claimed to have a fear of large dogs because she was attacked by a German shepherd as a child and suffered post traumatic stress disorder (PTSD).

Lawsuit Filed. Residents in the highrise had large dogs that accompanied them on the elevators. Geraci demanded the association provide her with an elevator that prohibited large dogs. When the board declined her request, she sued in federal court.
At trial, the jury did not believe Geraci's fear of large dogs met the definition of disability and found for the association.

Geraci Appealed. On appeal, Geraci objected to testimony by the association's psychiatrist that contradicted her doctor's diagnosis of PTSD. She also claimed that publishing litigation updates to the membership and holding an open forum about the lawsuit was retaliatory and designed to cause her emotional distress and embarrassment.

Association's Rights. The federal court of appeals disagreed on both points. Geraci had the burden of proving she was handicapped and the association had the right to defend itself by disproving her alleged mental impairment.

In addition, the board had the right to tell members about the litigation. No federal law prevents members from knowing why their association is bearing legal costs. It should be expected that members would want to know the details of the lawsuit. The court noted that sending litigation updates and holding open forums to update members on litigation are reasonable measures.

OBSERVATION: Force all other residents to keep their dogs off the elevators? Sue the association and demand the board not tell members? Object to the association defending itself in court? The case injects some common sense into growing demands related to claims of disability. Read Geraci v. Union Square Condominium Assn.

CHECKS AND
BALANCES


QUESTION: I'm curious about the Davis-Stirling Act. Why are there few, if any provisions with penalties when a board does not comply? Seems as if there are no checks and balances.

ANSWER: Good question and given the current political discourse, it allows for a brief reminder on our government’s system of checks and balances.

If Men Were Angels. The idea of checks and balances is to ensure that no one branch of government becomes too powerful. As James Madison wrote in the Federalist Papers No. 51 arguing for the adoption of the system in the Constitution, “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”

While some disputes in homeowner associations seem like arguments over how many angels can dance on the head of a pin, the law does provide checks on potential abuses by boards of homeowner associations. (And if only angels served on boards, there would be no need for checks on abuses or HOA attorneys for that matter).

Accountability. Although a system of checks and balances does not perfectly square in the homeowner association context as there are not separate branches of governance within such communities, the idea of political accountability built into the system is embedded in homeowner associations.

For example, the Davis-Stirling Act requires election rules that, among other things, allows members access to common area to advocate points of view not endorsed by the board and access to association media under certain circumstances. (Civ. Code §5105.)

There is also the Open Meeting Act under the Davis-Stirling Act (Civ. Code §49004955) for procedures on how boards are to conduct their meetings with the intent of transparency and accountability.

Under California’s Corporations Code (§7110 et seq.), there are provisions on director qualifications (now under assault by CCHAL and Sen. Wieckowski--see below), removing unqualified directors, conflicts of interest, among others checks on a board’s conduct. There is also a board’s fiduciary duty to act in the best interest of the members. And, of course, boards can be recalled.


So while some believe “power tends to corrupt, and absolute power corrupts absolutely,” rest assured the ideals of the Founding Fathers can be found in the laws that govern homeowner association boards.

Thank you to partner Cang Le, head of our firm's litigation department, for answering this question.

NANCY I. SIDORUK
JOINS ADAMS|STIRLING


I am pleased to announce that senior attorney Nancy Sidoruk; joined our firm.

Nancy is a seasoned community association attorney who serves as general counsel to residential, mixed-use, and commercial common interest developments.

Nancy is actively involved in educating association managers and volunteer leaders, and addressing community association legislative issues. She served as President of the Community Associations Institute's Inland Empire chapter; was a delegate to the California Legislative Action Committee and served on its Executive Committee. Known for her focus on education, Nancy is a frequent author and speaker and recipient of many industry awards.

Nancy earned her Bachelor of Arts in Political Science from UC Berkeley, earned a Masters in Business Administration from the University of Redlands, and a Juris Doctorate from the University of La Verne College of Law where she was law review editor-in-chief, moot court finalist and served a judicial externship with the California Court of Appeal.

We are pleased to have such a talented and experienced attorney join our firm. If your association needs legal services, contact us for a proposal.

HIRING LAWYERS
IN NORTHERN CALIFORNIA


We are looking for experienced HOA attorneys for clients in the South Bay.

Candidates should have at least five years' experience working with community associations.

We offer growth opportunities and excellent benefits. If you are interested, contact me at 800-464-2817 or by email. -Adrian Adams


I received ~600 emails opposing SB 1265 and 4 in favor. Below are a few from readers who disagreed with me or had questions. -Adrian

Train Wreck #1. Your article about SB 1265 is in error. You said it lets felons on the board. I read the bill and it specifically excludes felons from serving on the board. -M.B.

RESPONSE: If you take a closer look at the bill and my article, you will notice I referenced sex offender felons and the bill talks about financial felons.

People Behind the Bill. The bill is sponsored by the Center for California Homeowner Association Law (CCHAL), an organization in Sacramento that seems particularly hostile to community associations. Over the years, they sponsored a lot of harmful legislation and this is another piece.

How to Sue HOAs. In addition to bad legislation, CCHAL holds classes teaching lawyers and homeowners how to sue associations. I attended one because I had a hard time believing an organization would promote litigation over reconciliation. Unfortunately, they really are teaching people how to sue associations. For some reason, Sen. Wieckowski has associated himself with this group.


Negating Rights. The bill put forward by CCHAL and Sen. Wieckowski strips consumers (homeowners) of their right to adopt reasonable qualifications for board members. In their original bill, they forced homeowners to accept all felons as board members.

Partial Retreat. Their ill-conceived bill was so reckless that CCHAL and Sen. Wieckowski were forced to revise it. They made a partial retreat by amending the bill so homeowners could exclude financial felons. You, as consumers, would still be required to accept all other felons, including those who commit violent and/or sexual crimes. Thus, if directors discover a felon pedophile was elected to the board, they could not vacate the seat. Once elected, that director would then have access to the association's records.

Destructive Bill. It is perplexing that CCHAL and Sen. Wieckowski think they have the right to impose their will on 9 million consumers, stripping them of their right to exclude felons and delinquents from serving on homeowner boards.


Legal Analysis. Curt Sproul, well respected co-author of Advising California Common Interest Communities published by the Continuing Education of the Bar (CEB), did an excellent analysis of the flawed legislation which he sent to the Assembly Housing Committee. His letter urging opposition to SB 1265 is worth a read.

Train Wreck #2. I think there is misinformation in your newsletter that should be corrected. You state “For some unfathomable reason, Sen. Wiechowski believes owners not in good standing should serve on association boards of directors.” I’ve read and re-read SB1265 and it certainly appears to specifically exclude members who have not paid their assessments. -Bruce U.

RESPONSE: CCHAL and Sen. Wieckowski made a concession on assessments but only as to regular assessments. An owner can refuse to pay special assessments, be in violation of architectural standards, have multiple unpaid fines, be suing the association, and still be on the board if CCHAL has its way.


With low turnout and cumulative voting, a problem owner's friends can put him on the board. Someone who is in violation of the CC&Rs, refusing to pay a special assessment and suing the association creates significant legal challenges for the association. Such individuals have major conflicts of interest. Putting them on the board is not in the membership's best interest.

Train Wreck #3. Your newsletter mentioned privacy issues. What do director qualifications have to do with privacy? -Nancy L.

RESPONSE: In addition to giving felons, delinquents and scofflaws access to association records as board members, CCHAL and Sen. Wieckowski decided to amend section 5200 of the Civil Code to include email addresses in membership lists. If you ask the association to email notices to you, your email address gets added to the membership list, which is then accessible by all your neighbors.

An email blast from a homeowner to the membership means your email address can make its way to unexpected places and into the hands of people who are not members of the association. Giving out your email address should be your decision, not Sen. Wieckowski's.


RECOMMENDATION: The bill is a train wreck. There is nothing redeeming in it. CCHAL and Sen. Wieckowski are taking away your rights as homeowners. As consumers, you currently have the right to set reasonable standards for who serves on your homeowner board. They are taking that away from you.

If this bill passes, CCHAL and Sen. Wieckowski will be forcing you to allow felons, delinquents, litigants, and members not in good standing into positions of authority over you and giving them access to homeowner records. This bill needs to be defeated.

Anyone who has not yet sent an email opposing this dreadful legislation should do so now. Talk to your friends and neighbors and get them to send emails as well.

Please email Chairman David Chiu urging his Committee to "Vote No" on SB 1265. Send your emails to: [email protected]. Our office will print and deliver them to the committee.

*****


Book Clubs. Regarding your Bible study ban story, the legislature passed SB 407 last year which allows political gatherings. Does it apply to Bible studies? -Mike S.

ANSWER: Maybe. The relevant provision in the bill (now Civ. Code §4515), states that associations "may not prohibit a member or resident... [from] peacefully assembling... for purposes relating to common interest development living..."

Bible studies are generally peaceful and usually focus on how one should live. Will a court interpret this to fall under "common interest development living"? I don't know. What is clear, though, is prohibiting a book club because it focuses on religious text is discriminatory in violation of the Unruh Act and FEHA.

Adrian J. Adams, Esq.

Boards should contact us for friendly, professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

SB 1265 Train Wreck

Jun 3, 2018 0 Views 0 Comments

QUESTION: I read SB 1265. What prompted such a complex bill? HOAs as "quasi-governmental entities?" Retaining signed envelopes of voter ballots? Seems like overkill to me. Our association has had annual elections without difficulty, mishaps or problems. It is hard enough to get people to run for the board without telling them they will be operating in a "quasi-governmental" atmosphere. What do you think of the bill?

ANSWER: The bill is a train wreck. It voids director qualifications adopted by associations. That means a felon sex offender who is suing his association to stop foreclosure of his unit can be elected to the board of directors to serve alongside his spouse and adult son on a five-director board.

This overreaching piece of legislation was authored by Sen. Bob Wieckowski (Freemont) and affects every association in the state.
For some unfathomable reason, Sen. Wiechowski believes owners not in good standing should serve on association boards of directors.

Identity Theft. In addition to voiding director qualifications, the bill allows members to inspect and copy signed envelopes. Members concerned about identity theft now have to be concerned about their signatures being copied and posted on the internet. It also unnecessarily exposes members to breaches of their privacy.

RECOMMENDATION: This bill is awful. SB 1265 will be heard in the Assembly Housing and Community Development Committee most likely on Wednesday, June 13. Please send a letter or email to Chairman David Chiu urging his Committee to oppose the bill. You can send your emails to [email protected]. Our office will bundle and deliver them to the Committee.
 
MY SECONDARY ADDRESS:
@EMAIL ME?

QUESTION: I’m an owner who lives part of the year in Europe. I requested my HOA mail all notices to my secondary address, my email. The board told me they aren’t bound to send notices and disclosures via email. Isn’t my HOA obligated to mail notices to my designated secondary address, even if it’s an email?

ANSWER: You are correct. Civil Code §4040(b) requires an association, upon request from a member, to provide notices to the “secondary address identified in the request.” The Civil Code does not specify what type of address must be provided, so it stands to reason an owner can designate an email address in lieu of a physical address.

Email Notice is Allowed. Civil Code §4040 is clear if any part of the Davis-Stirling Act requires individual notice, an association can accomplish delivery by mail (U.S. or overnight) or by email, fax, or other electronic means so long as the owner consented in writing to receive the notice through the particular method. If a request to use an email as a secondary address is in writing, it is valid for individual notices to be sent.

Types of Notices. Associations are obligated to provide owners the following records, including by email: annual budget report, the annual policy statement, notices of regular and special assessments, and notices of foreclosure. Not all notices must be sent via individual delivery. Associations can deliver the following types of records through general delivery (which can include posting a physical copy of it at a designated location in the association): board meeting notices, rule changes, election and vote tabulation results, and use of reserve funds.

RECOMMENDATION: Civil Code §4045 permits owners to request all general notices also be delivered to them by individual delivery. Submit your request in writing to designate your email as your secondary address (make sure it complies with all the requirements) and also request individual delivery of all general notices so you can continue to be kept abreast while you’re abroad.

Thank you to partner Jasmine Hale in our Los Angeles office for this article.

ASSOCIATION BANS
BIBLE STUDY
 
Several years ago a reader asked about banning Bible studies in the clubhouse. I responded it would be discriminatory and the restriction would likely be struck down if challenged.
 
Clubhouse Activities. Last week, a 55+ homeowners association settled a lawsuit over this issue. The association had allowed members to reserve rooms at its 8,000 square-foot clubhouse for activities such as book clubs, card games, Bible studies, arts & crafts, etc. They had over 30 clubs and interest groups using their common area facilities.
 
Atheist Objects. An atheist objected to Bible studies in the clubhouse and threatened to sue the association. In response, the board banned all religious or faith-based groups from using the common areas.
 
Litigation Erupts. Affected members contacted the Pacific Justice Institute, a nonprofit legal organization that defends religious freedoms and civil liberties. They sued the association for violation of the Unruh Civil Rights Act and the Fair Employment and Housing Act for denying access to the common areas on the basis of religion. In addition to injunctive relief, members sought punitive damages against the association and its directors.
 
Settlement. The association sought to have the complaint dismissed or at least dismiss punitive damages. The judge refused and trial was scheduled for this month. The parties went into mediation and the association agreed to a number of concessions, including giving faith-based groups equal access to common area facilities.
 
RECOMMENDATION: Associations cannot engage in discrimination and expect a successful outcome. State and federal laws are quite clear in their prohibition of discrimination. Boards should have legal counsel review their policies to ensure they are non-discriminatory. In addition, boards should adopt an anti-harassment policy.


Stickers #1. Twenty years ago the local chamber of commerce was looking for a way to ban window flyers as they created a lot of trash in parking lots. The solution was ADA. The ordinance (Los Angeles) bans putting anything on the front or rear window of a vehicle as it may obstruct the view of the driver and disabled person may not be able to remove them. It does permit such items to be put on the side windows. I think this would apply to those stickers. -James S.

Stickers #2. It can be very dangerous if the sticker is stuck to the center of the front windshield and blocks the view of the driver. Several years ago, the owner of a stickered car windshield, wanted to file a lawsuit against the HOA for blocking his ability to drive his car in a safe manner. He had no way to get the sticker off the glass and thus could not drive his car safely. It caused financial loss. He wanted money to pay for his taxi and time lost. The HOA now puts stickers in the lower left hand corner of both the windshield and driver's side door window. Also don’t damage car paint....What would you do..... pay or not? - Nancy S. Love your newsletters.

RESPONSE: If an association were negligent in how it applied the sticker and damaged an owner's car, I have a good idea how a court would rule. I recommend against putting stickers on the front or rear windshields. They should be put on the driver's side door window--or better yet, driver's side rear door window.

Stickers #3. Stickers on car windows. An automobile is private property just as your residence. I would consider a sticker placed on my window vandalism. Can you slap a sticker on the front door of a house if they have a violation? No, you send them a notice. Same should hold true if a car is parked in violation. Thank you. -Gary S.

RESPONSE: Cars are treated differently than houses. Houses aren't illegally parked in fire lanes, block other cars. block fire hydrants, and aren't subject to towing like cars. Stickers seem to be an effective deterrent for bad behavior.

*****


Proof of Ownership. Since a property deed need not be recorded, to be valid, we amended our CC&Rs to require deeds be recorded in order to be used as ownership proof, and we barred those fun family sized "land contracts" that some use to skirt the rules. -Laurence A.

RESPONSE:
Whenever we restate documents, we routinely include a provision that deeds must be recorded to establish membership in the association. It makes it easier to verify qualifications for election to the board as well as other issues.

Adrian J. Adams, Esq.

Boards should contact us for friendly, professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

Managers at Meetings

May 20, 2018 0 Views 0 Comments

QUESTION: Our manager attends our executive session meetings. We have a new board member who is challenging the legality of the manager's attendance. It appears to me that Davis-Stirling is silent on this issue. Are we doing anything improper? 

ANSWER: It is common (and legal) for managers to attend executive session meetings.

Executive Session. Executive sessions are private board meetings involving matters of a sensitive nature. They include legal issues, formation of contracts, disciplinary hearings, personnel issues, payment plans, and foreclosure decisions.

Who May Attend. Because of their confidential nature, members do not have a right to attend executive sessions, except for their own disciplinary hearings. However, that does not mean the meetings are limited to directors only. Boards can invite others to attend, as may be appropriate.

For example, a project manager may be invited to discuss the formation of contracts with potential contractors for an upcoming construction project. Managers are commonly invited to attend to take minutes and participate in the discussions. Managers often have valuable insight and historical knowledge to help the board make prudent decisions. Moreover, they are frequently tasked with carrying out decisions made in executive session.

Exceptions. It would be appropriate for the board to exclude a manager from participating in discussions of the manager’s performance or contract renewal.

RECOMMENDATION: Boards should utilize management effectively. Oftentimes, this means including managers in more meetings, not less. If the cost is sensible and the association benefits from the manager’s presence, including the manager in executive sessions is a good decision.

Thank you to attorney Nate McGuire for answering this question.

PROOF
OF OWNERSHIP

QUESTION: Can a member ask board members to show proof of ownership?

ANSWER: You can ask. However, sitting directors are not required to provide proof.

Records Requests. Members are entitled to inspect certain association records. If a record is not on the list of records subject to review, there is no right to inspect it. A director’s proof of ownership (i.e., property deed) is not on the list. Even if a record is subject to inspection, the request would need to be to the association for its records, not to directors for their records. However, a quick trip to the county recorder’s office should yield the proof you seek.

Director Qualifications. Most associations’ governing documents require a person to be an owner to serve on the board. Qualifications should be confirmed during the nomination process before ballots are mailed. Sometimes confirmation is difficult or circumstances change and a director’s lack of qualification comes to light later.

Politics. While a director is not required to provide proof of ownership, political pressure may do the trick. Or not. A certain POTUS declining to turnover taxes comes to mind.

RECOMMENDATION: If you believe a director is not qualified, you can ask the board to make a determination. If it turns out a director is not qualified, the board may declare vacant the seat of any director who ceases to meet qualifications that were in effect at the beginning of that director's term of office.

Thank you to attorney Nate McGuire for answering this question.

HIRING LAWYERS


We are looking for experienced HOA attorneys for our Palm Desert and for Riverside offices.

Candidates should have at least five years' experience working with community associations.

We offer growth opportunities and excellent benefits. If you are interested, contact me at 800-464-2817 or by email. -Adrian Adams

Kudos #1. So glad you and the newsletter were resurrected--you were both missed! -Trudy M.

Kudos #2. I am certain I join ALL of your readers in rejoicing that you are still with us!!! -FGL

Kudos #3. Oh goodness, please don’t die; we love you and need you around. -Elizabeth B.

Kudos #4. I always find your newsletter fascinating and informative--not only entertaining. Does anyone ever unsubscribe? -Nancy H.

RESPONSE: I once had someone unsubscribe because they were offended by my humor. They thought serving on the board was deadly serious and didn't appreciate me poking fun. I had a drill instructor like that. I didn't dare crack a smile the entire 13 weeks I was in boot camp. As soon as I graduated though...


Hiring Attorneys. It seems like every newsletter issue announces still another attorney joining your firm. If so many attorneys are needed to help manage associations, then something must be going wrong. -Joseph A.

RESPONSE: If all we we did was help manage associations, that wouldn't be so bad. It's all those messy legal issues that keep us awake at night. If the legislature would take a 5-year vacation and then renew it every five years, we wouldn't need so many lawyers. Do you know any good lawyers you can send my way? We are hiring.

*****


Realtors. If a member of the association is a Realtor and is on the board of directors, what then? What happens if board members allow the Realtor to press his business agenda and the board sits silent, what then? Replace the whole board? Or, as you have suggested in the past, we, the members of the association, should all move? -Paul S.

RESPONSE: I wouldn't move just yet. Not all real estate agents are bad and some make good board members. If a real estate agent misbehaves and fellow directors allow it, you have recourse. Here are ten options for dealing with bad boards.
If you decide to move, I bet your Realtor/director would be happy to help.

*****


Trucks #1. Most garages will likely not accommodate king cabs or crew cab pickups that are popular for personal transportation. A king cab has a half-door and a crew cab has a full-sized door. Beds are 6-foot and 8-foot. I'm not even going to discuss the dually pickups... -John A.

Trucks #2. Our CC&Rs prohibit trucks larger that 3/4 ton. Our CC&Rs were rewritten about 3 years ago. I made every attempt to educate our board that 1-ton trucks are daily driven in today's society. They voted to keep the restriction from 1983 intact. Does this current information about trucks allow our community to drive a 1-ton truck? -Tony M.

RESPONSE: If you challenged the reasonableness of prohibiting 1-ton pickups, crew cab pickups, or dually pickups, I suspect the courts would uphold the association's restrictions. Since the Bernardo Villas decision, the Supreme Court declared in Nahrstedt v. Lakeside Village that CC&Rs must be presumed reasonable and deferred to by courts. The burden is on the person challenging the restriction to persuade the court that the restriction is (i) arbitrary, (ii) imposes burdens on the use of lands it affects that substantially outweighs the restriction's benefits to the development's residents, or (iii) violates a fundamental public policy. That's not easy to do.

Trucks #3. Any rules/laws that you know of regarding how many vehicles you can park around your property? We have private streets and one house has two vehicles in the garage, 2 to 3 in the driveway, 2 to 3 more out front, and he often parks a couple around the neighborhood. I believe he has seven vehicles. He is the only one who drives them. -Michele G.

RESPONSE: You should check local ordinances to see if the city has any restrictions. In addition, check your CC&Rs and rules. I bet you already have restrictions in place. If not, your board can adopt rules limiting the number of vehicles and where they can be parked. Since your association owns the streets, it has the right to regulate them.


Trucks #4. My association started putting fairly big warning stickers on car windows when someone parks where they shouldn't. I understand they are very difficult to remove. Isn't it illegal to put a sticker like that on a car window? Or is it only prohibited if placed on the windshield? -Alice O.

RESPONSE: I could not find any laws prohibiting the stickers. I checked the internet and found a number of companies doing a brisk business in them.

Associations that use stickers find them quite effective in discouraging parking violations.

There are sufficient problems with towing that I favor the use of stickers. People tend to go ballistic and sue or threaten to sue when their car gets towed. A sticker costs only pennies and gets a violator's attention without triggering lawsuits.

If you slip a paper notice under a under windshield wiper, violators like to throw them away and claim no notice was ever placed on their car, or the notice blew away, or was removed by a passerby, or dissolved in the rain, or whatever. That does not happen when a large, bright-orange notice is stuck to the driver's window.

The stickers are effective deterrents because they are difficult to remove. You need a razor scraper and soapy water to remove them. Generally, that happens only once. Thereafter, people are careful not to park illegally.

RECOMMENDATION: I don't favor using stickers on a first violation if it can be avoided. If possible, they should be kept in reserve for repeat violators. This will depend on the size of the association and the logistics involved. The larger the development and the frequency of violations will impact the procedures followed.

Adrian J. Adams, Esq.

Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

The Digital Elite

May 6, 2018 0 Views 0 Comments

QUESTION: The board has about 350 email addresses for our members. They also have access to a private social network that has 39% of the households as members. Would the board be required to send meeting notifications via postal mail to members not included in our "digital elite"?

ANSWER: I’m impressed you have so many signed up for email. Do you need to send snail mail notices to members who are still in the Dark Ages? Fortunately, "No."

Posting Meeting Notices. As long as the association posts meeting notices in a prominent location accessible to all members, there is no requirement to mail notices. (Civ. Code §4045(a)(3).) Posting notices is allowed so long as the association has designated the location in the annual policy statement prepared under Civil Code §5310. Associations that do not post meeting notices need to use another general delivery method (first-class mail, email to members who have consented in writing, billing statement, newsletter or in-house television broadcast).

Mailing Meeting Notices. The exception to posting is if a member asks for individual delivery. (Civ. Code §4045(b).)Members can ask their associations to have meeting notices sent to them by individual delivery which includes postal mail and email. (Civ. Code §4040.) If any of your members have requested meeting notices be mailed or emailed to them, then, in addition to posting in the common area, the association will need to mail or email notices to the members who have asked.

Content. In addition to the date, time, and location of the meeting, the notice must also contain the agenda. (Civ. Code §4920(c).)

RECOMMENDATION: Make sure you have designated a conspicuous location to post the meeting notices and agendas in your annual policy statement. Although you are not required to also email board meeting notices, your “digital elite” members will appreciate receiving notice by email.

WEEKLY LIST OF
WHO HASN’T VOTED

QUESTION: It is time for our annual election. The ballots are being returned to an independent election company. This company is providing a weekly list to the board of all members who have not yet voted. Board members plan to contact these individuals with a request to vote for certain candidates. Is this legal? Do the other candidates have a right to this list so they can do the same?

ANSWER: A strict reading of the Davis-Stirling Act indicates the list cannot be used by directors, candidates, management or anyone else to campaign for certain candidates.

Campaigning: By statute, association money cannot be used for campaign purposes (Civ. Code §5135(a)) Contacting members to urge them to vote for certain candidates qualifies as a campaign purpose (Civ. Code §4920(b)(1).) The association, in paying for the independent election company, has spent funds for the list of members who have not voted. Therefore, directors, candidates or any one else who uses the list to ask members to vote in a certain manner would be using association funds for campaign purposes. All members have a right to campaign for or against any candidate at their own expense.

Equal Access Required: If any member or candidate advocating a point of view related to an election is provided access to association media (such as newsletters, internet websites) the association must provide equal access to all candidates and members advocating a point of view. (Civ. Code §5105(a).) Associations must ensure access to any common area meeting space during a campaign at no cost to all candidates and members advocating a point of view. (Civ. Code §5105(a)(2).)

Early Ballot-Voter Count: The inspector of elections can provide an early ballot-voter count that includes the number of ballots that have been received. Providing a list of who voted is not one of the inspector’s duties (Civ. Code §5110(c)) but is within the inspector’s discretion.

RECOMMENDATION: Voter apathy is a common ailment in most associations and medical research has not yet developed a cure. Contacting members who haven’t voted and asking them to send in ballots may be helpful to meet the quorum of members requirement.

Using a "non-voter" list supplied by the inspector of elections to contact members is allowed, so long as it is not used to campaign for certain candidates. To ensure the list is being used just to encourage voter participation, contact should be made in writing (email or mail).

If non-voting members are to be contacted by phone, it is best to have man
agement make the calls and use a script that does not endorse any particular candidates, but only asks the members to vote.

Thank you to attorney Laurie Poole for this article.


Kudos #1. Was starting to find out where your funeral was held when I received your newsletter. Your newsletters are my second source for information, but now my main source after the death of the Times columnist. -Eric D.

Kudos #2. Great Issue ........Thanks for all your guidance. -Raye P.


Kudos #3. Really Excellent!!! -S.L.

JAMIE HANDRICK


Attorney #1. Congratulations on choosing Jamie Handrick to join your San Diego team. She is so knowledgeable and keeps my boards at ease when working with her. With Laurie Poole at the lead, it should be a winning combination! -Lynn R.

Attorney #2. I send digital salutations & appreciations to you over the mighty Sierra Nevada (Reno) regarding your illuminating missives. I have noticed a trend: nearly every newsletter introduces another lawyer to your firm. May I assume California HOA laws are not only multiplying in number but also growing in complexity? Or am I more accurate in observing how our species is moving away from kind, considerate, respectful, common-sense conversation with neighbors & association boards and moving swiftly & directly into the courtroom? I beseech you to keep “conversing” with your readership, offering kind, considerate, respectful, common-sense words through your engaging wit-n’-wisdom. -Donald M.

RESPONSE: You are right about the trend. There is a growing need for HOA lawyers in California and I've had the good fortune to attract talented ones to the firm. You are also right about California's laws multiplying in number and complexity. Our legislature has gone off the rails with excessive regulation. I don't know if lack of civility is on the rise but litigation seems to be. Despite our efforts to keep associations out of disputes, our litigation department is on overload.

TRUCK RESTRICTIONS


Trucks #1. You said pickup trucks could not be banned where cars are permitted but I wonder if there could be a size restriction, such as “vehicles longer or wider than xx feet or inches may not park in (certain areas)”? Large pick up trucks can be visually disruptive and lower the look of a condo complex. They are also wider than a car and can make passing them on a driveway difficult. Another large pickup might not be able to get through. -LL

RESPONSE: Yes, associations can impose reasonable restrictions on the size and types of vehicles. In my opinion, RVs, tow trucks, tractor-trailer rigs, monster trucks, etc. can all be restricted. Such vehicles are not normal and accepted means of personal transportation, and some are as unsightly as heck.


Trucks #2. Our CC&Rs say we cannot park non-standard vehicles in our driveways and lists campers, trailers and golf carts. The DMV defines carts as a vehicle, which makes them a cheap Tesla. Is the restriction reasonable? -Dave M.

RESPONSE: Yes, golf carts can be restricted. It depends on the community. Some retirement communities allow them and it makes perfect sense. In other communities, not only are they an eyesore, they could represent a safety hazard as a slow-moving vehicle on a fast, busy road. Each community can decide for itself what makes sense for their association.


Trucks #3. I thought the Nahrstedt case overturned the Bernardo case regarding trucks. -Anon

RESPONSE: I'm glad you asked. The California Supreme Court in Nahrstedt v. Lakeside Village criticized the Bernardo Villas decision for failing to apply a deferential standard to the association's CC&Rs. The Court did not overturn Bernardo Villas. Instead, it established a test for evaluating CC&R restrictions.

It held that CC&Rs are presumed reasonable and will be enforced uniformly against all residents of the common interest development unless the restriction is (i) arbitrary, (ii) imposes burdens on the use of lands it affects that substantially outweigh the restriction's benefits to the development's residents, or (iii) violates a fundamental public policy. Moreover, the restriction must be viewed not by reference to facts that are specific to the objecting homeowner, but by reference to the common interest development as a whole.

If the pickup truck prohibition had not previously been litigated and were tried today under the Nahrstedt standard, it might produce a different result. Until that happens, the Bernardo Villas decision stands and blanket pickup truck prohibitions are invalid.

Adrian J. Adams, Esq.

Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

Realtors in Board Meetings

Apr 29, 2018 0 Views 0 Comments

QUESTION: The Davis-Stirling Act allows only members to attend board meetings. Tenants, property managers, real estate agents, spouses and family members (not on title) attorneys, and other representatives cannot, and should not, attend a board meeting on behalf of a member. Can we exclude a real estate agent who wants to represent owners of rental units?

ANSWER: I need to make a small correction to your question. The Davis-Stirling Act does not prohibit non-members from attending board meetings. Rather, it's an authorizing statute which states: "Any member may attend board meetings, except when the board adjourns to, or meets solely in, executive session." (Civ. Code §4925(a).) That means members have a right to attend meetings and boards cannot exclude them.

Boards can, however, exclude non-members. In my experience, most boards allow non-member spouses and tenants to attend meetings, provided they are not disruptive. It is entirely discretionary with boards.

Realtors. The same principle applies to non-member real estate agents. If an agent wants to speak to the board on behalf of his/her landlord clients, the board can allow the agent to attend if they so choose. If it turns out the agent is doing nothing more than pushing his/her business interests or is disruptive, the person can (and should) be excluded from meetings.

RECOMMENDATION: Boards should consider adopting meeting rules to address who may attend meetings, open forum policies, meeting decorum, recording meetings, etc. If you need assistance, contact us.

POWER OF ATTORNEY


QUESTION: Does the board have the right to request a notarized copy of a power of attorney so that it may be kept on file?

ANSWER: Yes, if someone has a "power of attorney" to make decisions on behalf of an owner, the association should have a copy of the authorizing document on file.

Otherwise, they could find themselves in hot water accepting direction from a stranger regarding the affairs of an owner.

BANNING TRUCKS


QUESTION: Our association bans pickups from parking overnight in driveways or in common areas. Parking in garages is permitted since the vehicles aren’t visible when they are in a garage. Our CC&Rs date back to the 70s and, as I understand it, things have changed in 40+ years. Can we still legally ban pickup trucks from parking in driveways and common areas overnight?

ANSWER: Yes, a lot has changed in the past 40 years--computers, cell phones, the internet, drones, recreational marijuana...and trucks. If you allow cars to park in driveways and common areas, you have to allow pickup trucks.

Case Law. This issue was addressed in a 1987 case, Bernardo Villas Management v. Black. The association had a CC&R provision that "No truck, camper, trailer, boat of any kind or other form of recreational vehicle may be parked in the development."
Such restrictions were quite common and boards were obligated to enforce them.

A resident in Bernardo Villas bought a pickup which he used solely for personal transportation and parked in his carport. The board did its duty and sued the resident for violating the CC&Rs. Much to everyone's surprise, the trial court found the restriction unreasonable. Convinced the court got it wrong, the association appealed.

The court of appeal also sided with truck owners and agreed the restriction was unreasonable. The court noted that, "As times change, cultural perceptions--including society's acceptance of certain types of vehicles--also change. The pickup truck no longer has a pejorative connotation. One person's Bronco II is another's Rolls-Royce." The court added that
beauty, even with cars, is in the eye of the beholder.

The next time you're on a freeway, look for pickup trucks. You will notice lots of them--Chevy Silverados, Dodge Rams, Toyota Tacomas, Ford F-150s, and scores of others of all shapes and sizes. The Ford F-150 has the distinction of being the most popular motor vehicle of all time. It has been the best-selling vehicle in the United States for over 30 years.

Pickups used as work trucks with signage, racks and tools can still be banned. Pickups used strictly for personal transportation cannot.

RECOMMENDATION: Your association is 30 years behind the times and should revise its rules. If someone mounts a legal challenge to your restriction, I have a good idea who will win that fight.

JAMIE L. HANDRICK
JOINS ADAMS|STIRLING


I am pleased to announce that attorney Jamie Handrick joined our firm.

HOA Law. Jamie brings years of solid CID-law experience to the firm. She has been in practice 17 years with the past 12 exclusively in community association law.

Jamie represents commercial, residential, and mixed-use associations throughout San Diego County.
She has extensive experience in construction litigation, enforcement of governing documents, civil litigation, collections, and fair housing compliance.

Industry Activities. Jamie is active in industry organizations such as the Community Associations Institute (CAI) and the California Association of Community Managers (CACM). In addition, she conducts boot camps for new association board members and speaks at educational events.


Litigation Counsel. Before specializing in community associations, Jamie practiced eminent domain litigation where she handled high profile cases for the City of San Diego and the Metropolitan Transit Development Board. She also litigated labor and employment issues as well as general civil matters. Jamie's experience has been valuable in her evaluation of potential litigation for associations and advising boards on how best to resolve disputes before they turn into litigation.

San Diego. Jamie joins our team of lawyers in San Diego under our newest partner, Laurie Poole. Jamie will work out of our San Diego office in Mission Valley. We are very happy to have such a talented and experienced attorney in our firm.

If your association needs legal services, 
contact us for a proposal.


Some of you caught that I misspelled "unnecesary" two newsletters ago and appreciated my explanation that the second "s" failed to show up for work. In the next newsletter I brought more smiles by referring to "loose canons." This time, it was right spelling, wrong word.

Typo #1. Your recent newsletter, while quite informative (as usual) was a bit confusing when it referred to "loose canons." I would assume that you were not referring to questionable church teachings or misguided musical practices, but to the fear of rolling shipboard artillery in the days of wooden sailing ships when a loose cannon could be quite dangerous. Keep up the good work! -Steve T.

Typo #2. I especially laughed out loud at this: "Nut-Job? If the owner is a known nut-job (yes, they exist), it makes it difficult for boards to evaluate claims. Even loose canons occasionally hit a target." BTW, I have sent many of these newsletters to the BOD! -Cheech A


Typo #3. The "typo" tua culpa was hilarious! Well done, sir. -Erica G.

NOTE: Loosely translated from Latin, tua culpa means "it's not my fault." -Adrian

*****


Laurie Poole #1. Congratulations on choosing Laurie Poole to join your firm. She is a great attorney--very knowledgeable and conscientious. I have known Laurie for a number of years. She assisted with restating our governing documents a couple years ago, has been our association attorney and I served with her on the CAI board of the San Diego Chapter. She is a great addition to your staff. -Carol L.

RESPONSE: With attorneys Carrie Heieck and Jamie Handrick, Laurie is building a great team of lawyers for the San Diego region. We expect to add additional lawyers and staff to her office over the course of this year.

*****
 

Chinese Translations. My December newsletter regarding an association where most members spoke Chinese was published nationally by the Community Associations Institute. Following is a comment by a reader on the difference between translating and interpreting.

For your information, translation is done in writing. Interpretation is done orally. Despite that many people use translation as an action done orally, that is not correct. -Tia H.
Adrian J. Adams, Esq.
Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

Confidential Letters

Mar 18, 2018 0 Views 0 Comments

QUESTION: A homeowner keeps sending letters to board members' homes and every letter says it is “confidential to the board” and the board can’t share it with our management company. Does this homeowner have a right to demand that her communications (which ought to go to the manager) be kept private?

ANSWER:
If the board decides the information in the letter needs to be shared with management, it can do so. When carrying out their duties, directors must balance the general welfare of the community against the interests of the individual. (Cohen v. Kite Hill.) That might mean disclosing the information.

Legal Counsel. The same is true with the association's legal counsel. If a director shares something with the attorney and tells him/her not to share it with the other directors, the attorney is not obligated to keep it confidential.

As corporate counsel to the association, an attorney does not represent individual directors or owners. An association's legal counsel represents the association as a corporate entity.

In representing an organization, a member [attorney] shall conform his or her representation to the concept that the client is the organization itself, acting through its highest authorized officer, employee, body, or constituent overseeing the particular engagement. (State Bar Rules of Professional Conduct; Rule 3-600(A).)

When a director starts a conversation with "I have something confidential to tell you that cannot be shared with the other directors," I have to stop them and explain my obligations to the corporation may require that I share it with other directors. At that point, the director can decide whether to proceed.

Misconduct. Similarly for boards, if the owner's letters allege misconduct by the management company, the board has an obligation to investigate the claims. The investigation may involve talking to the management company about the allegations.

Nut-Job? If the owner is a known nut-job (yes, they exist), it makes it difficult for boards to evaluate claims. Even loose canons occasionally hit a target. Boards need to review each letter to see if there is any substance buried in all the craziness. If it's nothing more than an obsession with a particular issue that has already been investigated but gets repeated endlessly, a letter from the association's legal counsel to the overwrought owner may be warranted.

RECOMMENDATION: The owner should be told (in writing) that the board will not keep her letters confidential if the directors feel the information and its source should be disclosed. You can tell her that all letters dealing with routine matters will automatically be sent to the management company.

THREATENED LAWSUIT
DISQUALIFIES CANDIDATE?


QUESTION: Our HOA is in the process of enacting election rules that disqualifies anyone who ever threatened to sue the association. I am going door to door to get petition signatures opposing the rule. I'm told if I do, I am subject to fines under the prohibition against soliciting.

ANSWER: Disqualifying anyone who ever threatened to sue the association is a bit much. I don't believe a court would find that reasonable. Besides, the association could end up with no one left to serve on the board.

Active Litigation. I am in favor of temporarily disqualifying anyone who is in active litigation against the association and/or its directors. It avoids conflicts of interest that inevitably arise when the plaintiff is simultaneously suing the association and voting on board issues. It also avoids the awkwardness of directors serving on the board with the plaintiff. Once the litigation is over, the person can once again be eligible to serve on the board.

Solicitation. As for penalizing you for circulating a petition, that would run afoul of the Davis-Stirling Act. A change in the Act that went into effect January 1 allows members to canvass and petition members. (Civ. Code §4515(b)(4).) In particular, the association cannot prohibit political activities.


Assessment #1. My association is the one in your column about the special assessment. The assessment of $11,500 was for a city mandated earthquake retrofit. -Anon

RESPONSE: The retrofit qualifies as an emergency special assessment. It is an extraordinary expense necessary to repair the common areas where a threat to personal safety is discovered. (Civ. Code §5610(b).) The monies would not have been in the budget or the reserves and must be raised via a special assessment.

This is not something where the board can say to the city, "We cannot comply with your order because the members refuse to fund it." The city will impose fines and take other actions that could be quite unpleasant. If the city red-tags the buildings, everyone will be forced to move out until the work is done.


Assessment #2. Regarding the $12,000 "unnecessary" assessment, I'd like to know why the person thought it was unnecessary. It is possible the HOA is not communicating as well as it could to owners. -Tony V.

RESPONSE: Poor communication is a possibility. Another explanation is that some people are contrary by nature. It does not matter how valid the assessment, they are against it.


Assessment #3. A membership vote on a special assessment must be done by secret ballot. How can this be done, when they need a quorum--which is a meeting with people in attendance? -Meri N.

RESPONSE: Ballots count toward quorum the same as if the person attended the meeting. (Civ. Code §5115(b).)

Spell Check. For the first time I can recall in the years I have been receiving your informative weekly newsletter I see a misspelling in the titled subject: "Unnecesary"! What happened? -Sharon M.

RESPONSE: The second "s" didn't show up for work. It turns out he doesn't work on Sundays.

*****

Laurie Poole. Congratulations to Adams Stirling and Laurie Poole on the addition of Laurie to your fine cast of attorneys. An excellent move on both your parts! Laurie is one of my favorite attorneys: good-natured, no-nonsense and knowledgeable. Well done! -Sharron B.

RESPONSE: Thank you! Yours is one of many congratulatory notes we received. Laurie is an exceptionally well-qualified HOA attorney and we are pleased to have her as a partner.

*****

Renting Rooms. One of my associations meets at the senior center close to the complex. The fee is $100 for 2 hours. Another association meets in the community room at a local church and the charitable donation of $40 for approx 2 hours. -Joe G.

Adrian J. Adams, Esq.

Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Unnecessary Assessment

Mar 4, 2018 0 Views 0 Comments

QUESTION: My HOA wants every household to pay $12,000 for an unnecessary special assessment. And, they didn't get 51% approval vote. Is that legal?

ANSWER: Special assessments do not require approval by 51% of the membership. By statute, approval is by a majority of voting members once a quorum has been established. (Civ. Code §5605(b).)

Emergency Assessment. If the assessment you describe is being imposed without a vote of the membership, it must be an emergency assessment. Although you called it unnecessary, the board must have determined the assessment was required. Very likely, they reviewed the situation with legal counsel and deemed it an emergency.

Fiduciary Duty. Directors are bound by fiduciary duties to act in the best interests of the association, even when it hurts them personally. Don't forget, each of the directors must also pay the $12,000. I'm sure they don't like it any more than you do. Something must have happened to force an assessment that requires them to reach into their own pockets.

Maintenance. It has been my experience that most emergency assessments are related to significant common area repairs without sufficient reserves. Common culprits are elevator equipment failures, deteriorating plumbing, unexpected roof failures, and widespread window leaks.
Most failures are water related, which damage common areas and create potential health issues from mold.

Too often, prior boards fail to adequately reserve for large-ticket items. They think they are doing everyone a favor keeping dues down by deferring maintenance and skimping on reserves. Doing so means subsequent boards are left holding the bag when big ticket items fail and special assessments must be imposed on unhappy homeowners.

Bank Loan. The negative impact of the assessment can be reduced by borrowing the monies needed from a bank so repairs can be made immediately. Repayment of the loan is then spread over a number of years. Instead of each member writing a check for $12,000, they pay a more manageable monthly assessment until the loan is repaid.

RECOMMENDATION: Failure to make needed repairs will likely lead to litigation and higher special assessments. You are better off accepting the assessment and dealing with the problem now.

RENTING ROOMS
FOR BOARD MEETINGS


QUESTION: The board president is insisting we rent a room at a Best Western Inn for our board meetings and have the HOA pay for it. Our management company has an office 20 minutes away and we have a common area park available as well. Can the president force the other board members to rent a room?

ANSWER: The board as a whole makes decisions about when and where regular meetings are held, e.g., the third Tuesday of the month at 6:30 p.m. in the clubhouse. In this case, it involves renting a room offsite and the president is prompting fellow directors for a decision. There is nothing wrong with that--it's a sign of leadership.

Park. The location of meetings, both for the convenience of the board and the membership, is an important consideration. The association's park has the advantage of being close. It also has the downsides of noise, wind, temperature swings, and rain.

Office. The other option you mentioned is the management company's office. It has the advantage of being free and avoiding all the problems of an open-air meeting. Unfortunately, it is a 20-minute drive from the association, which will discourage many members from attending.


Hotel. If the Best Western is close and the cost is reasonable, it makes sense to hold meetings there. That way, weather, noise and distance won't disrupt meetings and discourage members from attending. It is a business decision for the board to make.

OWNERS ON
PROPERTY WALKS


QUESTION: We have an owner who contends that not allowing owners to go on our monthly manager walk is a violation of the Open Meetings Act. Our manager does a visual inspection of the property for maintenance issues and owner violations. Up to two of our five board members go on the walk. Are we in violation by not allowing owners to join in?

ANSWER: No, you are not in violation. Your manager can inspect the property without having to announce it in advance and publishing an agenda to the membership.

Meeting Defined. Including two directors in the manager's inspection does not turn it into a board meeting. Board meetings are defined by the Davis-Stirling Act as a gathering of a majority of directors at the same time and place to "hear, discuss, or deliberate upon any item of business that is within the authority of the board." (Civ. Code §4090.) Two directors accompanying the manager on her property inspection does not constitute a board meeting.

RECOMMENDATION: If your homeowner wants to be involved in property inspections, he/she should run for a seat on the board.

LAURIE POOLE
JOINS ADAMS STIRLING
AS PARTNER


I am pleased to announce that attorney Laurie Poole joined our firm as our newest partner. Ms. Poole brings nearly 25 years of experience as an attorney in the HOA industry.

CCAL Fellow. Laurie is a fellow of the Community Association Institute’s prestigious College of Community Association Lawyers (CCAL) and was recently elected to its Board of Governors.

Case Law. Laurie is also a member of CCAL’s Amicus Review Committee and devotes time to shaping the laws governing California’s community associations. Laurie has already had a significant impact in our courts of appeal. Ms. Poole was appellate counsel in Quail Lakes v. Kozina (2012), trial and appellate counsel in Mission Shores v. Phiel (2008), and trial counsel in Fourth La Costa v. Seith (2008). Through her efforts, nine appellate decisions have become published case law in California.

Legal Practice. Laurie has extensive experience representing common interest developments, including master planned communities, large condominium projects, mixed-use, and highrise developments. The majority of her practice involves interpreting and amending governing documents, advising boards on compliance matters, addressing governance and insurance issues, and enforcement of governing documents.

Industry Activities. Laurie is an active volunteer for the Community Associations Institute (CAI) and the California Association of Community Managers (CACM). She is currently a member of the Board of Directors of the San Diego chapter of CAI, having served as its President. Laurie is a frequent speaker at industry events and has published numerous articles on common interest development law.

Education. Laurie graduated from the University of California, Santa Barbara with a double major in English and Sociology. She earned her Juris Doctorate from the University of San Diego, School of Law where she was a member of the Law Review.

We are proud to have Laurie Poole on our team. If your association needs legal services, please contact us for a proposal.

 
Beekeeping #1. You didn’t mention Africanized bees, a growing problem in the honey bee population. A lot of apiaries are being removed due to this problem. Putting them in HOA is ill-advised. -Jerry I.

RESPONSE: I don't think anyone is advocating using Africanized bees. The European variety (introduced into the Americas in the 1500s) are preferred because of their gentleness and robust honey production.

Beekeeping #2. Bees are everywhere. They have a hive somewhere, we just don’t know where. When we keep bee hives on top of garages we know exactly where the colonies are and can reduce the colony by giving away bees when the colony gets too large. With proper education of residents, bee keeping in urban communities is actually a safer way of dealing with bees. -Margaret V.
Adrian J. Adams, Esq.
Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

HOA Beekeeping

Feb 18, 2018 0 Views 0 Comments

QUESTION. Do you have information on guidelines for beekeeping in homeowner associations? The board decided not to allow apiaries deeming them a nuisance but is now revisiting their decision.

RESPONSE: Honey bees are wonderful creatures. They are the world's most important pollinator of food crops. One third of the food we consume relies on bee pollination.

Need for Apiaries. Tragically, bee colonies are collapsing at an alarming rate due to pesticides, parasites, and disease. To offset that, there is a push to place more bee hives ("apiaries") in both rural and urban environments.

In HOAs. Because homeowner associations make up such a large portion of California's housing market (~50,000 associations with over 9 million residents), they are being asked to place apiaries in their developments.

Bee Stings. There is a lot of resistance to apiaries because most people are frightened by bees. They are afraid of being stung. In reality, honey bees are not inclined to sting people. Unlike other stinging insects that sting and fly away, honey bees die after stinging. Their sting, while painful, is relatively harmless. In most, the swelling and pain go away within a few hours. However, for those with sting allergies, it can trigger a reaction that is potentially deadly. Thus, the difficulty in establishing apiaries in urban developments--people fear being stung and associations fear potential liability.

Insurance. Because of potential claims, it is important that associations entering into arrangements with beekeepers have legal counsel review the company's insurance. Not all insurance is created equal. I recently reviewed a policy for an association and found so many exclusions it rendered the insurance meaningless. Proper insurance can minimize an association's potential exposure.

RECOMMENDATION: When it comes to apiaries, urban developments are more problematic than rural settings. The higher density of people and and structures put bees in closer contact with people. Depending on the the insurance, boards may wish to consider an apiary in their development.

PORTABLE
CAR CHARGER


QUESTION: The Civil Code applies to installing an electric charging station. It does not seem to explicitly prohibit the use of portable 120V electric vehicle chargers. Is that correct?

RESPONSE: Owners can use portable chargers (a modified extension cord) to charge their vehicles. What they can't do is plug them into a common area outlet. Doing so means your neighbors are paying to charge your car's batteries.

With proper approvals, you can install a dedicated outlet in your parking space to charge your vehicle at your expense rather than the association's. The cost will depend on where the electrical panels are located and what arrangements you make with the association for tracking your electricity usage.

An alternative to installing a charging station is to pay the association a flat rate to plug into a common area outlet. For more information, see "Electric Charging Stations."

CHANGES IN
MOBILEHOME RESIDENCY LAW


Effective January 1, 2018, changes in the mobilehome residency law clarify the distinction between guest and companions and change the verification process for live-in caregivers.

Additional Occupant. Senior mobilehome residents can now have a live-in companion without first requiring a Medical Needs Plan or without being charged additional fees. A resident can designate one person as a companion per calendar year, except in the case of the companion's death.

Live-in Care. Previously, a live-in caregiver over 18 could live in the mobilehome without a park fee provided it was pursuant to a physician's treatment plan submitted to the park. To avoid an invasion of medical privacy, the legislature changed the requirement from submission of a treatment plan to submission of a written confirmation of the need for a caregiver. Moreover, the park can ask for confirmation only if the need is not readily apparent.

Rules Violations. The change in the law also clarifies the companion or caregiver does not have tenancy rights and any violations of park rules by the person is deemed a violation by the owner. It makes clear that these provisions do not create a duty by park management to manage, supervise, or provide care for a guest, companion, or caregiver during that person’s stay in the park. (See Civil Code §798.34.)

RECOMMENDATION: Mobilehome park associations should update their rules to comply with these changes in the law.

Thank you to attorney Jason Savlov for this article. Those needing assistance updating their rules should contact us.


Incarcerated Director. Can the board declare the seat vacant if the director who killed someone in a bar fight is convicted? -James L.

RESPONSE: Yes, Corporations Code §7221(a) allows a board to declare vacant the seat of a director who is convicted of a felony, regardless of whether it is part of the association's governing documents. If the board is not inclined to suffer the optics of a director on trial for murder, obtaining a resignation may be prudent.

*****


Amending Docs. Our association was faced with the same situation of a super majority being necessary to amend our outdated CC&Rs. What we did was amend just the section on amendments so future amendments no longer required a super majority, only a simple majority. Once that was passed and recorded, we moved forward to amend the entire document. -Rick S.

RESPONSE: That same approach has been successful with associations we work with.

*****


Earthquake Insurance. Our HOA master policy does not cover earthquake damage but some members want that protection. Your newsletter mentions that condominium owners cannot purchase insurance on the structure since it is owned in common with other members of the association.

Our community looks exactly like a condo community but is actually a planned unit development. We each own the land on which our unit sits and the entire structure. The association provides a master insurance policy that covers fire damage but not earthquake. Most of us have a renter's policy or our own condo unit policy, and some of us have our own earthquake policies. -David P.

RESPONSE: I checked with Michael Berg of Berg Insurance about your situation. Put on your seat belt; his explanation illustrates the need for insurance professionals who specialize in community associations.

Mr. Berg responded that many communities are constructed with the characteristics of single family homes but are insured like condominiums. The key is to determine what the CC&Rs require the association to insure.

Governing Documents. If the HOA is required to insure structural elements of buildings and maybe property attached to the interior of the units, the agent writes a condominium style policy even if the buildings were built like townhomes, or brownstones, or row houses, or completely detached structures.

If the association is insuring the structure, the owner should purchase an HO-6 condominium owner’s policy. It is quite common, however, for owners to purchase a policy designed for a single family home. Oftentimes, real estate agents, lenders, and personal lines insurance professionals review the type of product being sold rather than consult with the insurance in place for a community.

Special Form Policy. If the association is required to insure the residential structures for typical property perils (once known as “all risk” coverage but now called “special form”), the policy will exclude earthquake damage. Without an additional stipulation in the governing documents, there could be some confusion on which party should insure the structure for earthquake loss.

If the association insures the structure for typical perils, then the cost to repair earthquake damage would be assessed to the membership (an earthquake loss assessment). Each member should have purchased an HO-6 policy and could then purchase a companion policy providing earthquake loss assessment insurance.

Loss Assessment Coverage. The important note on earthquake loss assessment insurance is that it is only available as a companion to an HO-6 policy and only applies to assessments to repair residential property. So, if an owner purchased a special form policy that protects his property as if it were a single family home, he cannot purchase a companion policy that provides him with loss assessment insurance. That is to say, an owner can’t buy single family home insurance and then an HO-6 earthquake companion policy.

Thank you to Michael Berg (MBA, CIRMS, CMCA) owner of the Berg Insurance Agency.

*****


Kudos #1. Today’s newsletter is outstanding, Adrian. Several critical subjects, especially cumulative voting. -Marilyn B.

Kudos #2. I so enjoy reading your newsletters. -Judy B.

Kudos #3. I enjoy the Davis-Stirling newsletter, and I very much appreciate the time it takes to create them and the great information/education they provide. Keep up the excellent, excellent work! -Elise H.

*****


Common Area Keys. A homeowner (who spends her nights on your website) told us utility rooms are common areas so she believes she has the right to a key to the electrical room. Can we refuse her request?

RESPONSE: I am flattered she spends her nights on my website--it's a clear sign of intelligence.

Although owners have an undivided ownership interest in the common areas, it does not give them unfettered access to them. Associations are created to manage the common areas. Member elect a board of directors to handle that duty. That means boards can restrict access to utility closets, roofs, elevator equipment rooms, etc. Most do so for safety and security reasons. Boards can also regulate the time and manner for member access to pools, clubhouses, tennis courts and other association amenities.

Adrian J. Adams, Esq.

Boards can contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Replacing an Incarcerated Director

Feb 11, 2018 0 Views 0 Comments

QUESTION: One of our board members got into an argument in a bar (far from our association with no connection to HOA business) and killed someone. He also shot a second person.

He was quickly incarcerated and will probably stay behind bars for a long time. The board immediately appointed a replacement director but the confined director never resigned. In such a terrible situation, is a written resignation still needed?


ANSWER: The Davis-Stirling Act does not address director resignations. For that, we must turn to the Corporations Code. It states that "Any director may resign effective upon giving written notice to the chairman of the board, the president, the secretary or the board of directors of the corporation..." (Corp. Code §7224(c).)

Still on the Board. If your incarcerated director has not resigned, he is still on the board. Replacing him without a resignation would be deemed an ultra vires act and invalid. An arrest is not sufficient reason to remove a director from the board. It is possible an investigation would exonerate the director and he could resume his duties on the board. From what you described, that seems unlikely, so let's look at your options.


Vacating a Seat. Sometimes, an association's bylaws will authorize the board to vacate a director's seat under certain circumstances. For example, a director fails to attend a specific number of meetings. We routinely add such provisions when we restate an association's bylaws. Without them, a board cannot remove a fellow director, only the membership can.

Removing a Director. For members to recall a director, the association must hold a recall election. Once can be called by the board or by the membership. If the bylaws or CC&Rs provide for cumulative voting, the membership may have difficulty recalling a director. A small minority of supporters can block his removal. That means resignation is your best option.

Resignation. One of your directors should visit your confined director and bring a simple "I resign from the board of directors effective immediately" for him to sign. If, for some reason, that is not possible, an oral resignation should be sufficient, either during the visit or by phone. I suspect your director will readily resign. If an oral resignation is all you can get, record that in the minutes. Doing so creates a written record of the resignation. It is unlikely anyone will challenge the resignation and equally unlikely a court would reject the resignation under the circumstances.

RECOMMENDATION. You should amend your bylaws to add director qualifications and remove cumulative voting. I also recommend eliminating quorum requirements for electing directors. Each of these changes will make your elections run more smoothly and give you the tools you need to remove directors.

EARTHQUAKE
INSURANCE

QUESTION: If my association does not carry earthquake insurance, can I?

ANSWER: Condominium owners cannot purchase insurance on the structure since it is owned in common with other members of the association. Owners can, however, purchase other coverage.

Property. Coverage is available for property improvements such as cabinets and equipment, personal property, and breakables.

Loss of Use. Loss of use coverage is available to pay for living expenses if you need to move out while repairs are being made after an earthquake.


Loss Assessment Coverage. You can also purchase loss assessment coverage which pays special assessments imposed by the association to repair structures in the community. Even if your association has earthquake insurance, a special assessment may be imposed to pay the deductible. Loss assessment coverage is available in amounts from $25,000 to $100,000, and deductible options are available as well.

RECOMMENDATION: Recently, the California Earthquake Authority made significant changes to earthquake policies available to homeowners, including more limit and deductible options. All homeowners should contact their insurance brokers and purchase the coverage described above. We are overdue for a large seismic event.

Thank you to Terri Guest, CIRMS, Berg Insurance Agency for her input on this question.

AMENDING
GOVERNING DOCUMENTS

QUESTION: Our governing documents are pathetically out of date. We tried to do a full restatement but the super-majority requirement was unattainable. We are now advised that even updating Civil Code sections requires a membership vote.

We have items in the documents that are severely non-compliant with the law and require a significant rewrite. It seems absurd that a member vote would be required to bring such clear violations of statutes into compliance. What is your take on this mess?

ANSWER: You are not alone, a lot of associations face the same situation. I have a bit of good news for you--if you want to change outdated references to the Civil Code, you can do so with a simple board resolution, update the numbers, and re-record your CC&Rs. (Civ. Code §4235(a).)

Substantive Changes. More substantive changes require approval by the membership, even if you are bringing your documents into compliance with the law. That means making a big push to get at least 50% of your members to vote for the changes and then petitioning the court to lower the approval from a super majority to a simple majority. We have successfully done this with a large number of associations over the years.

Hierarchy. If you cannot get enough members to vote and miss the 50% threshold, the legislature created a hierarchy which states that any conflicts between your documents and the law, the law controls. See Hierarchy of Documents.

REGINALD SCHUBERT
JOINS ADAMS STIRLING

I am pleased to announce that attorney Reginald "Reggie" Schubert joined our firm.

Developer Experience. Reggie brings to ADAMS|STIRLING a detailed knowledge of business and real estate law. He has more than 13 years' experience representing developer and corporate clients with an emphasis on real estate, finance, strategic planning and execution of business transactions.

Reggie worked as in-house counsel to a developer of multi-family housing and master planned communities. His duties included subdivision planning, condominium development, commercial center development and leasing, finance and defeasance transactions, multi-family construction, land acquisition, entitlement processing, and project dispositions.

Environmental Law. Before going in-house with a developer, Reggie worked in a law firm that handled environmental litigation where he gained extensive experience representing defendants and plaintiffs in lawsuits arising under CERCLA, RCRA, as well as state environmental and nuisance statutes. Reggie handled issues involving soil and groundwater contamination and remediation, insurance coverage disputes, bad faith claims, and declarative relief actions in state and federal courts.

Education. Reggie earned a Juris Doctorate from the University of California, Davis and a bachelors in Economics from California State University, Sacramento.

Contact Us. We are very happy to have such a talented and experienced attorney in our firm. If your association needs legal services, contact us for a proposal.

My article on aggressive assistance animals struck a chord. Following is some or 5h3 feedback. -Adrian


Emotional #1. I am on the board of a 360-unit condominium complex situated in a 25-acre park-like environment. At one of our meetings we had a discussion about the cost of repairs for damage done by dogs and their owners (we have a lot of dogs). I suggest that perhaps we could charge dog owners an extra fee per month to help defray these costs. I am wondering if any other condos do this and/or what you think of this idea. Thanks. -Dolores B.

RESPONSE: Theoretically, pet owners could be charged a fee under the Watts v. Oak Shores decision. You would need credible evidence of the costs to establish a reasonable fee. I am not aware of any associations who are currently charging a pet fee. Maybe our readers know of some.

Emotional #2. I was reading the newsletter and agree with the article on the Aggressive Assistance Animals, especially how the law has been abused. I am wondering if the owner of an assistance animal can be required to provide proof of insurance for both liability and property damage that might be caused by the animal? -Steve D.

RESPONSE: I know associations can require vaccinations and insurance for pets. I will have to do some research on service animals.

Emotional #3.“While the ruling in Vermont is not binding in California, it seems likely our courts would render a similar verdict.” California courts? Are you kidding? Ha! I enjoy your newsletter. Keep it up, especially the humor. -Bob C

Emotional #4. Boards should require a letter from a licensed physician or psychiatrist, not an internet psychic. The owner should be required to submit written proof that the dog has passed beginning and intermediate obedience training at a legitimate training facility such as PetSmart (our dog was trained there). The board should observe the dog obeying basic commands such as sit or down or off without a treat. A dog that exhibits the level of aggression in the article is not an emotional support dog. It is a ticking time bomb. -John A

RESPONSE: Those are all good suggestions but unenforceable. People with disabilities have the right to train the dog themselves and are not required to use a professional service dog training program. You can only ask two questions: (1) is the dog a service animal? and (2) what task has the dog been trained to perform? You are not allowed to request any documentation for the dog, require that the dog demonstrate its task, or inquire about the nature of the person’s disability. A bill was introduced last year (AB 1569) to require verification
from a reliable third-party source of a disability and the owner's need for a service animal. That alone would have brought things under control. As with all good bills, it died.

Emotional #5. In Zatopa v. Lowe, the United States District Court for the Northern District of California came to essentially the same conclusion as it pertains to Aggressive Assistance Animals: so long as reasonable alternative pets are acceptable to the landlord, as here, then the disabled tenant has no right under the disability laws to insist on a pit bull. -Craig C.

RESPONSE: Even though the court ruled that pit bulls do not qualify as emotional support animals, HUD has taken the position that “breed, size, and weight limitations may not be applied to an assistance animal.” A housing provider may deny a request for an assistance animal only where “(1) the specific assistance animal in question poses a direct threat to the health or safety of others that cannot be reduced or eliminated by another reasonable accommodation or (2) the specific assistance animal in question would cause substantial physical damage to the property of others that cannot be reduced or eliminated by another reasonable accommodation.”

Emotional #6. Did you see the news earlier this week about the person who flushed her emotional support hamster down the toilet because the airline would not allow her to take it on the plane? -M.W.

RESPONSE: I do not recommend this solution when boards are faced with aggressive emotional support animals. (The hamster could not have offered much in the way of emotional support if the owner so readily flushed it down the toilet.)

*****

Political Activities. Thanks for your interesting articles, very informative. When can a resident be charged a deposit for using common area club house? We charged a security deposit until this new law came out. -Jacqueline W.

RESPONSE: You can charge for birthday parties, weddings, Super Bowl parties, etc. You cannot charge if someone reserves the room for purposes relating to common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes. A member or resident shall not be required to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy, in order to use a common area for these activities. (Civ. Code §4515.)

What if the political event leaves the room in shambles and you have to pay someone to clean it up? You can charge the person who reserved the room, following a properly noticed reimbursement hearing. What if the clean-up is done by staff already on payroll so it does not cost the association anything extra? I don't think anybody knows the answer to that.

What if folding chairs are kept in a locked storeroom? Can the association charge the person to have staff setup the chairs? Yes. What if the staff are on payroll so it does not cost the association anything extra? Good question.

I don't like this statute. It is very intrusive and has a lot of unknowns that may require judicial intervention.

*****

Director's Term. My question arises from the “Reconvened Term” question in your January 28 Newsletter. If the board member’s term starts on the date when the person is elected, when does it end? If a director’s term is one year, does the term end a year after it began or when the next annual meeting is held? In other words, does the annual meeting date have to be pushed back so the director gets a full one-year term?

I think you would agree that a delay in holding the election does not change when annual meetings are held or when board terms end. Thus, for example, if a reconvened meeting delays an election from its usual annual meeting date in May to sometime in June or even later, that director’s term will still end the following May, assuming the association is able to meet the quorum and holds an election. -Jay H.

RESPONSE: You nailed it.

*****

Rentals. I read your website regarding the percentage of renters and its impact on the association. Once a complex is near 50% renters because original docs have no restrictions, is there anyway to reverse that percentage when we restate our governing docs? Can we set a limit at 10% in the restatement which would then apply to/restrict any new owners once implemented? -Steven S.

RESPONSE: When you have a high population of renters in a development, I've found caps hard to pass and to enforce. I think the only real chance you have is to adopt an amendment that requires new owners to live in their unit as their primary residence for at least two years before they can rent out their unit. Over time, the population will change from renters to owner occupants and you will see an increase in property values.

*****

Forcing Legislators to live in HOAs. I love reading your Newsletters--they bring common sense to readers. With all the new laws, how can managers manage anymore? Lawmakers should be forced to lived in a homeowners' association.

Who is going to check if a resident has diarrhea before going into the pool? We are not allowed to ask residents to stop dangerous activities such as riding bikes on sidewalks, climbing trees, driving too fast, and so on or Fair Housing will sue the association.

Yesterday, a lady in her fifties was at the pool with the top of her bathing undone and bottom two sizes too small showing her backside--not a good look for her. I nicely asked that she please tie the top and pull up the bottom of the suit. She said I was harassing her. -Karen E.

RESPONSE: Requiring all politicians be subject to the laws they create would drastically reduce the number of new laws and make them more reasonable. If you are circulating a petition, I will sign it.

Adrian J. Adams, Esq.

Boards can contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Aggressive Assistance Animals

Jan 28, 2018 0 Views 0 Comments

Allowing homeowners to have an emotional support animal is not only compassionate but often necessary for the well-being of some residents.

Abused. It is also one of the most abused exceptions to pet restrictions in practice today. All anyone needs is a letter from a medical professional to overcome restrictions. It doesn't matter the "medical professional" is an internet psychic who passes out form letters like candy (for a modest fee).

Weird. The abuse is not limited to the size and number of dogs, it extends to the weird. Some are claiming squirrels, bearded dragons, miniature horses, turkeys, goats, and pigs as necessary to their emotional well-being. The proliferation of animals has created problems for condominium associations, apartment complexes, restaurants, and airlines. Commercial carriers have already put the brakes on what they will allow on their planes. The courts are now injecting some common sense into the issue as well.

Aggressive Animals. Gill Terrace is a no-pet apartment complex in Vermont. Despite their "no-pets" policy, the landlord grants reasonable accommodation to residents with disabilities. However, he drew the line when a resident (Ms. Johnson) asked for reasonable accommodation for aggressive guard dog named Dutchess.


Dog's Behavior. Dutchess is a large mixed breed pit bull that reared up on her back legs, lunged at people and other dogs, and bared her teeth at them. She has a distinct angry bark and growl. Even indoors, Dutchess goes crazy when other dogs walk by the window. Ms. Johnson was not able to control Dutchess and some residents were fearful and stayed indoors whenever the dog was outside.

Lower Court Ruling. The landlord told Ms. Johnson she could have an emotional support animal--just not Dutchess. When Ms. Johnson failed to get rid of Dutchess, the landlord began eviction proceedings. (Gill Terrace Retirement Apts v. Marie Johnson). Even though the dog had not yet bitten anyone, the lower court found sufficient evidence the dog was a threat that it ruled for the landlord. The court concluded that reasonable accommodation does not extend to aggressive assistance animals.

Supreme Court Ruling.
Ms. Johnson appealed. Fortunately, the Vermont Supreme Court upheld the lower court's ruling. It concluded the landlord was justified in denying a reasonable accommodation request for a specific dog on the grounds it posed a threat to others.

RECOMMENDATION: While the ruling in Vermont is not binding in California, it seems likely our courts would render a similar verdict. That means boards of directors can (and should) investigate complaints about aggressive animals and take action when the behavior of a specific animal adversely affects the safety and well-being of residents. If a board knows a specific animal is a threat, failing to take action could have unpleasant consequences if the animal were to attack residents or their pets.

POLITICAL ACTIVITIES
AND FLYERS


In September, I reported on SB 451--the bill that eliminates an association's ability to control its common areas when it comes to political activities and flyers. Effective January 1, HOAs must now allow a wide range of activities in the common areas without charging a fee or requiring insurance.

Assemblies. Associations must now allow residents to reserve common areas (clubhouses, parks, etc.) so public officials, candidates for public office, and representatives for homeowner organizations can meet with members, residents, and their guests to speak about any matter of public interest.

For Free. Previously, associations could charge a fee whenever someone reserved facilities for an event. Now, associations are prohibited from requiring fees, deposits, or insurance when facilities are used for any matter of public interest or matters involving common interest development living (whatever that means).  

Canvassing & Flyers. Members and residents are also allowed, without prior approval, to canvass and petition members and residents and distribute flyers about elections, legislation, referendums, recalls, and other issues of concern to members and residents.

Penalties. Any violation by an association is subject to injunctive relief and/or a penalty up to $500 per violation in civil or small claims court.

RECOMMENDATION: Associations should adopt rules regarding reasonable hours for common area meetings, priority of overlapping events, requirements that common area facilities be left clean and undamaged, when a fee can be charged, when and how flyers may be distributed, etc.

For a more complete description of the statute, see "Political Activities and Flyers" by senior attorney Wayne Louvier.

*****

Board Member Arrested. It has come to my attention that our treasurer was arrested for felony burglary and misdemeanor false financial statements. He was found not guilty due to lack of evidence. As a homeowner I am concerned who has access to the HOA's bank accounts. Would it be prudent to bring this to the board's attention? -GG

RESPONSE: Homeowners always have the right to bring concerns to the board. Directors can then evaluate whether the concerns have merit. An arrest is not proof of guilt. It could be the treasurer was going through a nasty divorce where the spouse brought unfounded charges to gain financial advantage.

Speaking Chinese. Although no longer a California resident, as past president of an HOA I have read and enjoyed you newsletter for many years. I was somewhat taken aback when I read in your December 17 Newsletter that a state as liberal as California has a clause in its constitution making English the official language of the state. Keep up the good work and I hope to enjoy your weekly Newsletter for many more years to come. -James H.

*****

Reconvened Term. If there is a reconvened annual meeting due to lack of quorum, does the elected board member term start with the month of the reconvened meeting or the original? Thank you. -Kathleen M.

RESPONSE: It starts from the date the person is elected.

*****

Water Damage. [Commenting on my article on "Liability for Water Damage and Mold"] We HATE water. It causes 90% of our troubles. The other 10% of our troubles are caused by people. -Esme G.

RESPONSE: Water is an amazing substance. It makes up 71% of the Earth's surface but, unlike other substances, water expands when it freezes causing it to float.
Because ice floats--it serves as an insulator for lakes, streams and oceans keeping the water and all living organisms underneath from freezing. If ice behaved like all other substances, it would sink to the bottom and all bodies of water would become perpetually frozen blocks of ice. At that point, most life on the planet would cease to exist. 

Another remarkable fact is that we can drink water and swim in it without harm even though water is a universal solvent. Almost every known chemical compound will dissolve in water, making it one of the most corrosive chemicals on the planet. That's why water is the enemy of property managers--it destroys almost everything it touches when it leaks into buildings through roofs, windows and pipes.

As Esme pointed out, water causes 90% of the maintenance problems for associations. When it comes to non-maintenance trouble, I've found that 90% of the problems are caused by 10% of the residents. When that happens, call me--I know a guy who knows a guy. He's good at alternative dispute resolutions.

Adrian J. Adams, Esq.

Boards can contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Speaking Chinese

Dec 17, 2017 0 Views 0 Comments

QUESTION: The majority of our members speak Chinese. Can our board meetings be conducted and minutes taken in Chinese? If not, are we required to provide a translator?

ANSWER: Good question. There is nothing in statutes or case law that requires your meetings be conducted in a particular language. Nor is there anything on point regarding translation of meetings and records. Even so, there is enough in the law to adopt a reasonable policy.

California Law. Article III, Section 6 of the California Constitution provides that “English is the official language of the State of California.” The Davis-Stirling Act (which governs community associations) and the Corporations Code (which governs corporate entities) are both written in English. That indicates that, at a minimum, all association records must be kept in English.

Conducting Meetings. As a practical matter, if everyone on the board and everyone attending a meeting speaks Chinese, then Chinese should be spoken. If even one person speaks English-only, the meeting should be conducted in English or a Chinese-to-English translator provided at no cost to the attendee. The minutes, as the official records of the association, must be in English. They can be taken in Chinese but must be translated into English whether or not English speakers reside in the association.

Translators. If meetings are conducted in English, HOAs are not required to provide translation into other languages since English is the official language of California. If there are attendees who speak other languages and want to bring a translator to board meetings, they may do so at their own expense. Boards should not exclude a translator just because the person is not a member of the association. If the translator happens to be the member's attorney, you should show the lawyer to the door.

NOTE: Language issues are not unusual. We have a large number of immigrants in California and they often seek out fellow immigrants. I was once legal counsel to an association made up entirely of Spanish speaking members. When I attended meetings, they supplied a translator so I could understand their questions and they could translate my answers. Their management company kept all their records in English.

Thank you to attorney Jennie Park for her research on this issue.

FINDER'S FEES TO
HIRE MANAGERS


QUESTION: The board is paying $45,000 in finders fees to an agency to find another general manager. In 5 years our HOA has had 4 managers. In 3 months, 5 administration employees left. Should the $45,000 be voted on by the membership?

ANSWER: Four managers in five years and the loss of five administration employees?? Something is amiss.

High Turnover. Employees often leave for the following reasons: (i) they are underpaid, (ii) they are badly treated, or (iii) they cannot meet expectations and are let go. It seems unlikely you had four managers and five admin employees who were unqualified to do their jobs. That means working conditions are a problem.

Bad Reputation. Word gets around when an association burns through four managers in five years. That means paying a recruiter to find a manager may be necessary. Can boards pay a finder's fee? Yes. Does it require membership approval? No.

RECOMMENDATION: It sounds like one or more board members and/or homeowners are out of control and need to be medicated (or tasered). Otherwise, the problem of staff turnover will continue. High turnover means membership services decline, costs climb and projects end up on the back burner. Members should demand an explanation.

DOG PREVENTING
MAIL DELIVERY


QUESTION: I own a condo and cannot receive mail due to a neighbor's aggressive dog (deemed so by the USPS). Because of the dog, our mail has been suspended. We have to go to the post office to retrieve our mail. I have been hounding the board but they refuse to deal with the dog's owner.

ANSWER: I'm surprised the board is refusing to act. The loss of mail service is more than enough reason to take action against the owner and his renter. In addition, there is the potential liability the association is exposed to.

Potential Liability. A dog known to the board to be aggressive and deemed so by the U.S. Postal Service creates potential liability for the association. If the dog were to maul a child, can you imagine the lawsuit that would follow? If the damages exceed the association's insurance policy, you will be paying an emergency special assessment. There is also the prospect of punitive damages which are not covered by insurance. That means an even larger special assessment.

Director Liability. If the membership gets hit with a large special assessment because directors sat on their hands rather than deal with a known safety threat to the membership, they could be sued personally.
I am baffled by the board's inaction.

Lawyer Letter. Legal counsel for the association should make a written demand on the owner to immediately evict his tenant or face a lawsuit. It has been my experience that landlords are averse to litigation. The goal of an investor is to make money on rental property, not lose money on legal expenses. Landlords tend to do the right thing when facing litigation over a problem tenant.

RECOMMENDATION. If the board continues to put the community at risk by their inaction, it may be time to recall the board or run candidates against them in the next election. The loss of mail service should be sufficient to motivate members to elect a new board.

YEAR-END
THANK YOU!


A sincere thank you to our readers and clients. Many of your newsletter questions have been added to the Davis-Stirling website to form an ever-expanding database of information free to board members, homeowners and managers alike.

I want to welcome the over 300 new clients who joined the firm this year. Because of your support we have grown to 10 offices around the state with 22 lawyers providing corporate counsel and litigation services to commercial, residential and mixed-use associations.

BEST WISHES. May you enjoy the holidays and have a New Year filled with peace, prosperity and happiness. From all of us at ADAMS | STIRLING, Merry Christmas and Happy New Year. See you in 2018!


Mold #1. Great coverage of the mold issue, mold can be a nothing or it can kill you. Your point of having proof of mold is spot on. -Finn M.

Mold #2. Something to clarify on the insurance aspect of the water intrusion is that most policies provide at least some coverage for mold removal resulting from a covered water loss. Associations can also protect themselves from third-party mold liability allegations with environmental impairment liability (“EIL”) policies with specific extensions for mold. EIL is more common for businesses with significant pollution exposures (gas stations, etc.) but the policies are also available for community associations, though inclusion of third-party mold coverage significantly increases the premiums. -Brian Kalmenson, Abdou Insurance Agency

*****


Appointing Directors. I thought your answer to the board vacancy question was excellent. -T.J.

Appointing Directors. Does a director appointed by the board have the same protection of only being removed by the membership? -Victoria C.

RESPONSE: Only under limited circumstances can directors, whether appointed or elected, be removed by fellow directors.

Boards may declare vacant the office of any director who ceases to meet qualifications that were in effect at the beginning of that director's term of office. (Corp. Code §7221(b).) In addition, the board may declare vacant the seat of a director who has been declared of unsound mind by a final order of court, or convicted of a felony or, if at the time a director is elected, the bylaws provide that a director may be removed for missing board meetings. (Corp. Code §7221(a).)

Adrian J. Adams, Esq.

Boards can contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Liability for Water Damage & Mold

Dec 3, 2017 0 Views 0 Comments

QUESTION: A leak in the roof caused rain water to drain into a lower unit causing mold to grow on drywall. Who is responsible for removal of the mold and repairs?

ANSWER: The first place to look is in your CC&Rs to see if they address the issue. Assuming it is a common area roof the association is obligated to maintain, the association is not automatically liable just because the roof leaked. Only if the association were negligent (or intentionally caused the leak) would it be liable for the damage.

No Negligence. If the association is not negligent, each side pays for its own damage--the association repairs the common areas and the owner his unit. If the association's negligence caused the leak, then the association is responsible for repairing all damage and removing the mold.

No Presumption. Because there is no presumption of negligence whenever a homeowner suffers damage, the onus is on the damaged party to prove the association breached its duty of care. The owner must point to some act (or failure to act) by the association that resulted in foreseeable harm to the owner.

Burden of Proof. For example, the owner must show the association knew or should have known of the potential roof leak. Were there reports of other leaks, thereby putting the association on notice? Were the roofs past their useful life as noted in the association's reserve study? If the roofs were well-maintained with no reports of leaks, it's unlikely the damaged owner could prevail in an action against the association.

Mold. Mold is always a consideration whenever there are water leaks. Mold is natural to the environment and already exists in the air everyone breathes, both indoors and outdoors. (See Chart of Indoor Molds.) If the number of mold spores inside a unit are similar to outdoor levels, then everything is fine. If the count inside a unit is significantly elevated, it means there is active mold in the unit that needs to be removed. If, as you noted, mold is visible on the drywall, it must be removed. If it's a small amount of surface mold, it can be removed with bleach and water. If it's more extensive, it will require removal of the drywall.

Responsibility. If the mold is on a common area wall for which the association is responsible, the association is obligated to remove it regardless of who was at fault. If another party caused the water damage and mold, the association can then bill that party for reimbursement (following a properly noticed hearing). If the mold is on a wall the owner is obligated to maintain, then the owner makes appropriate repairs and goes after the party that caused the damage. Normally, everyone turns it over to their insurance.

Insurance.
Insurance will cover water damage from a sudden leak but will not pay for mold removal or personal injuries associated with mold. That is why it is important to thoroughly dry everything immediately following a water leak. Promptly removing all moisture avoids mold growth.

RECOMMENDATION: Associations should have restoration companies on speed dial. If there is a large water leak, they should immediately bring in fans, water vacs, and dehumidifiers to remove all moisture. In addition, the source of the water leak should promptly be repaired. The damage and subsequent repairs should be documented. See Water Damage Checklist.

CC&Rs AND
TITLE INSURANCE


In what appears to be the first case of its kind, I served as an expert in a title insurance action that focused on how use rights are created in CC&Rs.

Luxury House. The owner of a lot in Palm Desert built a large custom home, pool and other amenities for the purpose of selling at a profit. The house overlooked a golf course and had large open-space areas around the house with berms on property lines to act as noise and privacy buffers from adjacent properties. The home was sold to Mr. Pasternack.

Neighbor's Construction. With the association’s approval, the owner of an adjacent lot removed Pasternack’s improvements, berms, landscaping, and underground irrigation lines and began building structures on the property line, including a 2-story house less than 8 feet from the line.

Litigation Erupts. A survey revealed the seller had overbuilt Pasternack's lot. Improvements and structures sold to Pasternack spilled onto adjoining lots and the common area in violation of the CC&Rs and building codes. Litigation erupted with the filing of claims and counter-claims by all parties. Because his property rights were impaired, Pasternack demanded that his title insurance company, Fidelity National, defend him. They denied his claim.

Title Insurance. Pasternack prevailed in his litigation against the seller and then sued Fidelity National for not defending him on the cross-claim. Fidelity National pointed out that their policy covered "use rights" as defined in the CC&Rs. They then argued that CC&Rs do not confer use rights. Instead, they restrict property rights, nothing more.

Use Rights. I argued that "use rights" were created in the negative. In other words, restrictions such as setback requirements, tree height limitations, open areas, and berms created rights to views and privacy that benefited all owners, including Pasternack. Accordingly, his property rights were impaired when the association failed to enforce the CC&Rs, thereby damaging the desirability, attractiveness, and use of Pasternack's property.

Court's Decision. The court agreed and ruled that Pasternack suffered a loss of property rights which Fidelity had a duty to defend. It ordered Fidelity to reimburse the substantial legal bills Pasternack incurred defending his rights in the first action. (Pasternack vs. Fidelity National Title Insurance Company, Nov. 21, 2017, Case No: 30-2014-00742249-CU-IC-CJC.)

COMMENT: Kudos to attorney Greg Hatton for successfully asserting Pasternack's rights.

THOMAS QUILLING
JOINS ADAMS STIRLING

I am pleased to announce that attorney Tom Quilling joined our firm.

Tom brings to the firm extensive experience in business, commercial and real estate litigation, transactional work, and architectural expertise.

Land Use. As Deputy City Attorney for San Dimas, Tom handled matters involving the Subdivision Map Act, zoning laws, land use approvals such as general plans and zoning amendments, specific plans, conditional use permits, and variances. His private practice involved construction, environmental and real estate law related to contractors, owners, developers, public agencies, architects, and engineers.

Litigation. Tom’s litigation experience includes environmental litigation, real estate land use, zoning and regulatory litigation, and class action defense. Tom represented real estate developers, cities, redevelopment agencies, and housing authorities in construction-related cases for public works contracts and construction claims management. His clients included the Walt Disney Concert Hall in the defense of a multi-million dollar construction lawsuit. He also represented the City of Los Angeles in a complex, multi-million dollar marine construction lawsuit.

Architectural. As a former architect, Tom reviewed and utilized residential building codes, regulations and ordinances, and conducted project site analysis with emphasis on land planning and urban design.

Education. Tom earned a Juris Doctorate from Loyola Law School, Los Angeles, CA and a Bachelor of Science in Architecture, with academic honors, from the University of Wisconsin, Milwaukee, WI.

We are very happy to have such a talented and experienced attorney in our firm. If your association needs legal services, contact us for a proposal.


Vacancy. As I read the question; “We had a director resign upon the successful appointment of her successor.” If she had not yet resigned and voted for her replacement the entire vote was improper and void. The seat was not vacated if she was still on the board and able to vote. If she resigned she can’t vote if she vacated, then the vote is a tie 2:2. -Gary S.

RESPONSE: By statute, directors can make their resignation effective at a future date. (Corp. Code §7224(c).) A resigning director can then participate in the selection of his/her replacement, provided the selection takes place prior to the effective date of the resignation. (Mayo v. Interment Properties.) If the resignation is offered so it takes effect upon the appointment of a successor, the appointment of a successor and resignation become simultaneous. As soon as the appointment is made, the resignation becomes effective. That's why the two unhappy directors I discussed in my last newsletter can't have a "do-over." The resigning director is already off the board and the new one on. Even if the board now voted 4 to 1 to undo their vote, they can't. Doing so would have the effect of removing a director, which the board cannot do. That requires a vote of the membership.

*****


Opening Ballots #1. Regarding board members opening ballots, we hired a notary public for our membership votes. There is no conflict of interest and she keeps the records for us. I like your newsletter. -Trish Y.

Opening Ballots #2. Is it legal for board members who are subject to a recall to choose the inspector for counting the ballots? -Victoria S.

RESPONSE: Yes, it is. Until such time as directors are actually recalled (which might never happen), they continue to function as duly elected directors.

Reserves Minimum: Counselor, I enjoy your newsletters! In the Oct 29 edition you discuss reserves and your advice was excellent. What I need to know is what is the recommended minimum level and what factor do you use? The article mentions 17% and 70% but doesn't endorse either. And, 70% of what--annual expenditures, I presume? -Charles Q.

RESPONSE: 100% funding is ideal but may not be necessary. If your association's reserves are in the 70% range, they are deemed "healthy" and the chances of special assessments are quite small. If they are 7% funded, you're staring at special assessments in the near future. See "Fully Funded Reserves" for an explanation of how funding is calculated.

*****


AV Rated. You wrote that your new attorney is "AV Rated." What does that mean? -T.J.

RESPONSE
: Attorney ratings are performed by Martindale-Hubbell, a company founded in 1868 that provides services to the legal profession. One of their services is peer review attorneys. They do so by inviting lawyers and judges to provide their opinions about a lawyer's expertise and ethics.

The first letter in a rating denotes the attorney's legal ability as A, B, or C (preeminent, very high, good). The second letter "V" stands for "very high" and signifies adherence to high professional standards of conduct and ethics. A lawyer cannot receive a legal ability rating (A, B or C) unless he or she has first received a “V.”

Martindale-Hubbell's peer review ratings are considered the gold standard in attorney ratings. An "AV" rating is the highest rating offered and is a testament to the fact that a lawyer's peers rank him or her at the highest level of professional excellence. I've had the good fortune to be rated by my peers as AV Preeminent, something I am grateful for. Other attorneys in our firm have also received such ratings.

Adrian J. Adams, Esq.


Boards can contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

No Vacancy

Nov 12, 2017 0 Views 0 Comments

QUESTION: We had a director resign upon the successful appointment of her successor. During the board meeting, a director made a motion to appoint a member to fill the seat. It was seconded and passed with 3 voting in favor.

The other 2 directors said nothing. The president announced the motion had carried. But an argument erupted and 5 minutes later the president told the other 2 directors they could submit a candidate to fill the seat.

ANSWER: I know the president was trying to make everyone happy but the horse was already out of the barn. Unless there were some kind of procedural violation or the Russians tampered with the vote, the first motion appointing an owner to the seat passed and you have a new director.

The other two directors might want to submit a different candidate but their motion would be out of order since you no longer have a vacant seat to fill. The resigning director is now off the board and her replacement is now on the board. There is no longer a vacancy to fill.

DIRECTORS
OPENING BALLOTS


QUESTION: For a special assessment vote, can the board open the ballots?

ANSWER: No. The Davis-Stirling Act requires that boards retain an independent inspector of elections to open ballots and tally the votes. Doing so avoids any suspicion of ballot tampering. Election procedures regarding an inspector should be found in your association's Election Rules.

DIRECTOR ACCESS TO
POLICE REPORT


QUESTION: Recently, when a board member told an owner he could not park in a fire lane, the owner used profanity, shouted at the board member and damaged personal property the director had in her hand. The director filed a police report, a copy of which is in the homeowner's file. Do board members have a right to view the police report?

ANSWER: Some people have no business living in an association. If your hot-tempered owner assaulted a director for trying to keep fire lanes open, you will likely have more trouble with him in the future.

Hearing. Do board members have a right to see the police report? Yes. The board should call your scofflaw to a hearing for parking in a fire lane and assaulting a director.
Assaulting a director is probably not in your rules but could fall under the general nuisance provision of your CC&Rs.

Recusal and Evidence. The director who was attacked must recuse herself from deliberating and voting at the hearing but may testify about what happened. The police report also serves as evidence. The homeowner who violated the rules has a right to a copy of the police report, which should be given to him at the hearing.

Penalties. If the board concludes the owner parked in a fire lane and assaulted a director, it can levy fines in accordance with the association's fine policy. Suspending his privileges for up to 30 days is another possibility.

Restraining Order. The board might also consider seeking a restraining order against the person. Your board should seek legal counsel about how best to proceed with legal action against the owner.

RECOMMENDATION: Directors should avoid confrontations with homeowners over rules violations. A letter from the management company is safer and it creates a paper trail, which may be important if there are repeated violations.

JASON SAVLOV
JOINS ADAMS STIRLING


I am pleased to announce that attorney Jason Savlov joined our firm.

Litigation. Jason is an accomplished AV rated civil litigator with a comprehensive background in real estate and business.

Before joining us, Jason handled state and federal cases through mediation, arbitration, jury trials and appeals.

Real Estate. Jason also managed transactional and litigation matters involving landslide/inverse condemnation, partition, construction defects, breach of contract, fraud, trespass, Home Equity Sales Act, mortgage and lien issues, title fraud, REOs, bankruptcies, collections and evictions.

Employment Law. Jason’s experience includes employment law matters such as wage & hour hearings and appeals, preparing employment contracts and handbooks, and advising clients on state and federal requirements.

Education. Jason earned his Juris Doctorate from Southwestern University School of Law in Los Angeles and earned a Bachelor of Science in Management Information Systems from New York University, Stern School of Business.

5th ANNUAL
ABCs of HOAs

I will be speaking at an event in Los Angeles hosted by HOA Organizers. 

This is a free event for board members with a catered lunch and raffle prizes. I will cover new laws impacting associations. Neda Nehouray will address board management responsibilities and procedures. There will be Q&A following each session.


When: Saturday, December 2 from 11 a.m. to 3:30 p.m.
Where: Olympic Collection, 11301 Olympic Blvd #204,
RSVP:  Sophia Lomeli by email or (818) 778-3331.

This year's event will be streamed live on Facebook. If you are unable to attend, you can log onto HOA Organizer's Facebook page around 12 noon to watch the event.

Adrian J. Adams, Esq.

Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Who Pays for Ballot Recount?

Oct 29, 2017 0 Views 0 Comments

QUESTION: During the election, if a candidate wants the ballots recounted because two candidates have the exact same votes, who bears the cost of the recount?

ANSWER: Neither the Davis-Stirling Act nor the Corporations Code addresses recounts. Although not binding on homeowner association elections, California's Elections Code sometimes provides useful guidelines on voting issues.

No Automatic Recount. As a rule, the person asking for a recount bears the cost. Until last year, not even the State of California had a policy for state-funded recounts. In October 2016, Gov. Brown signed Assembly Bill 44 which requires the state to pay for certain recounts. The bill allows the Governor to order a recount if the number of votes separating two candidates is razor thin.

HOA Elections. In an HOA election, if there is a tie vote, there is no mechanism for an automatic recount. The inspector can, however, on his/her own order a recount. As provided in Civil Code 5110(c), inspectors have the authority to determine the tabulated results of the election and to perform any acts as may be proper to conduct the election with fairness. In addition, the board could authorize a recount if they thought it beneficial, i.e., it would be less expensive than a run-off election.

The Cost. If neither the inspector nor the board initiates a recount, the person requesting it pays. The cost will depend on the size of the association (the number of ballots cast) and whether the recount is done by machine or by hand. If a recount is too costly and the candidates want to avoid a runoff election, they could agree to a coin toss to break the tie. Barring that, the association will need to conduct a runoff at the association's expense.

RECOMMENDATION: Boards should amend their election rules to address recounts and tie votes.

FAILED RECALL
BALLOTS


QUESTION: We launched a recall of our board and one of the directors resigned. If our recall fails for lack of quorum, our inspectors of election said their policy is to not open ballots. We would like the inspector to tally the votes even if there is no quorum. We want the board to appoint the candidate with the highest number of votes to fill the empty seat.

ANSWER: It is common that inspectors not open ballots when there is no quorum. Even if you could convince them to do so, the board is under no obligation to fill a vacancy with the person receiving the highest votes in a failed election. Directors have the discretion to pick someone they believe will contribute the most to the board.

Those members who initiated the recall will have to wait for the next election cycle to make another run at getting their candidates on the board.

CARRIE HEIECK
JOINS ADAMS STIRLING


I am pleased to announce that attorney Carrie Heieck joined our firm and will anchor a new office in Carlsbad, our tenth office in the state.

Corporate Experience. Carrie joins ADAMS | STIRLING with more than a decade of experience representing businesses, property owners, and homeowners' associations in real property issues, corporate formations, contract negotiations, HOA disputes, compliance matters, and business law.

Litigation Experience. In addition to her corporate experience, Carrie has significant litigation and trial experience involving real estate and foreclosure matters representing large institutional clients.

Education. Carrie earned her Bachelor of Arts in Communications from the University of Arizona, Tucson. She then earned a Juris Doctorate from the Whittier Law School in Costa Mesa, California where she attended on a full academic merit scholarship and graduated magna cum laude.

We are very happy to have such an experienced attorney in the San Diego market. If your association needs legal services, contact us for a proposal.


SMALL HOAs. In your latest newsletter, an answer to a question included this: “the Davis-Stirling Act is not designed for small associations.” Can you expand on this? What constitutes a “small association”? Ours has 17 units and we have a management company. Is this considered too small for the Davis Stirling Act? I have been on the board for 5 years and receive your newsletters. We thought we were covered by the Davis-Stirling Act. -Lois L.

RESPONSE: When it comes to the Davis-Stirling Act, size does not matter. The Act applies to tiny 2-unit associations the same as large 10,000-unit ones. That's the problem. The legislature did not take into account that small HOAs don't have the resources to comply with all the Act's requirements.


Members of CAI's Legislative Action Committee raised the issue when the DS Act was being rewritten. We urged California's Law Revision Commission to reduce the burden on small associations. For a variety of reasons, the rewrite took effect January 1, 2014 without the requested relief.

Defining Small. The primary problem is defining "small." Should it be 5, 10, 15, or 20 units? If 10 is the cutoff, all those with 11 units will be forced to shoulder the burden. That does not seem fair. What about a 100-lot association with very little common area and a tiny annual budget with dues of $9 per month? They can't afford compliance any more than a 10-unit association.

The variable for determining size is not the number of units, it's the budget. However, once you set a dollar value, most associations will do everything in their power to get under that threshold and stay there, even if it means deferring maintenance and underfunding reserves. Legislation has a way of producing perverse results.


What To Exempt? Once "small" is defined, the next task is deciding which of the Act's requirements to exempt. I can think of a number of provisions to strike. Unfortunately, persuading the legislature is another problem.

NOTE: Reducing the burden on small associations does not have much traction with the legislature. They are preoccupied with more important matters such as controlling cow flatulence. Governor Brown signed a bill last month regulating the gas passed by cows. Small associations would likely be viewed as a fly on the cow's hide--a nuisance.

*****


Reserves. Your reserve discussion intrigues me. Our reserves are at 17% and the BOD proposed a $16,000 special assessment to achieve a 70% funded reserve but it was defeated by a margin of 2 to 1 in a community vote. The board then increased dues by 20%. Does the BOD have a legal obligation to fund the reserves to maintain the community? -Wayne R.

RESPONSE: Boards have a duty to impose regular and special assessments sufficient to perform their obligations under the governing documents. (Civ. Code §5600(a).) Setting aside sufficient funds to repair and replace major components is arguably one of those duties. In Raven's Cove v. Knuppe, the court held that the failure of the developer-controlled board to fund the reserves was a breach of their fiduciary duties.

Expert Cases. Over the years, I have been retained as an expert in cases where associations (and their boards) were sued for failing to properly fund reserves. In each case, lawsuits were triggered by large dues increases and special assessments to repair major components. The two most common big ticket items are roofs and plumbing.

Deferred Maintenance. Boards who want to be "nice" and not raise dues should know that no good deed goes unpunished. The only way to keep dues artificially low is to defer maintenance and reduce funding of the reserves. That eventually leads to a costly day of reckoning. In one of my cases, roofs failed throughout the complex flooding many units. The association was sued for the damage caused by the deferred maintenance and for negligently funding reserves that resulted in huge dues increases and special assessments. The court focused on CC&R provisions obligating the board to maintain the common areas. It did not go well for the association.

RECOMMENDATION: Fund your reserves! Small increases in reserve contributions over time are much kinder to members than large special assessments, huge dues increases, and litigation.

*****


Peeping Board #1. I gain knowledge and a bit of humor reading the wacky legal liability of board and committee members and managers over-stepping their legal bounds. -Ted S.

Peeping Board #2. I seem to recall that something in the Talmud prohibits the "unwanted gaze." -Fred G.

Peeping Board #3. Being a retired Fair Housing investigator, I’m concerned that this peeping board member may be using his role as a pretext for what might certainly be construed as sexual harassment. Perhaps it might be helpful to address the board’s responsibility to abide by the federal, state and city Fair Housing laws, including but not limited to disparate treatment and behavior (like peeping) that may interfere with the peaceful enjoyment of an owner or renter’s living environment or create an intimidating and hostile environment with a board or board member who wields much power over many owners--many of whom are women. -Peggy S.

*****
 
Reno, NV. Merely due to the content & brevity of your newsletter, I kinda wish I was living back in CA in an HOA which utilizes the services of one of your offices. Sad to say, there are no other reasons enticing me to return to my birth state. It would be truly wonderful to work with a law firm in my own state just as helpful, knowledgeable and good-natured as you folks in the HOA business. Know of any firm in or near Reno, NV? -Donald M.
 
RESPONSE: I'm not familiar with firms in Nevada. There is, however, a California attorney who goes back and forth to Nevada handling HOA clients. His name is Matt Grode. You might send him an email. Maybe one of our readers can recommend a Nevada firm they like.
Adrian J. Adams, Esq.
 
Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Peeping Board Member

Oct 22, 2017 0 Views 0 Comments

QUESTION: I live in a PUD where members own their lots, which includes a small fenced in backyard. We have an over-zealous president who looks over fences for violations. He upset a husband who caught him gawking at his wife sunning herself in a bikini.

ANSWER: I suspect most residents would find it unseemly and an invasion of their privacy for a board member to be peering over their fence looking for violations.

Inspection Notice. Most sets of CC&Rs allow for the inspection of lots. However, they also include a prior notice requirement. Unless there were an emergency, no board members, managers or agents should enter onto lots or peer over fences without first giving appropriate notice to the owner. Even then, there should be a good reason to conduct the inspection.

RECOMMENDATION:
A fence creates an expectation of privacy and board members should respect that privacy. If violations cannot be seen from the common areas, directors should not be climbing fences looking for them.

DECEASED MEMBER
IN NEWSLETTER


QUESTION: Is it legal for the association's newsletter to publish that a member has passed away without first consulting the deceased family who still reside in the community?

ANSWER: Is it legal? Yes. Your newsletter is reporting an event that occurred in the community that would be of interest to the membership. Hopefully, dying is a rare event in your community. If it were to happen again, contacting resident family members first to express sympathy would be appropriate.

JEFFREY A. BARNETT
JOINS AS PARTNER
 

I am pleased to announce that the highly qualified attorney Jeffrey Barnett joined ADAMS | STIRLING as a Partner in our firm.

Bay Area. Mr. Barnett is a well-respected attorney with extensive experience as general and litigation counsel to associations throughout San Francisco's Bay Area and the Central Coast.

Los Gatos Office. He brings with him a staffed office in Los Gatos where he provides legal services to approximately 300 residential, commercial and mixed-use associations.

Education. Jeffrey has a rich academic background. As an undergraduate, he attended UCLA and then Wadham College in Oxford England before graduating from UC Berkeley with great distinction and Phi Beta Kappa. He then earned his Juris Doctorate from the University of Santa Clara School of Law where he graduated magna cum laude and served on Law Review.

ECHO Author. Mr. Barnett has written extensively for ECHO Journal and we are excited about the knowledge and experience he brings to the firm. If your association needs legal services, contact us for a proposal. For more information about Jeffrey see his website bio.


Airport HOA. Our board manages our small HOA’s airport. Items come up regularly that require immediate action that can vary from trivial to major. Any available board member can take the lead and decide if the consent of the board is called for. Sometimes we take action and formally approve it at the next scheduled meeting. While this system works well for us, we feel we are operating in gray areas. How concerned should we be about our practices? -John W.

RESPONSE: A small HOA with its own airport? That's impressive. Unfortunately, the Davis-Stirling Act is not designed for small associations. The laws affecting common interest developments have become so burdensome that management companies and legal counsel are increasingly necessary for boards to rely on. However, small associations can rarely afford them. Thanks to the legislature, the problem gets worse each year.

Fortunately, management decisions do not fall under Davis-Stirling's Open Meeting Act requirements. It sounds like most of the decisions you referred to are management decisions. Anything requiring full board approval (large expenditures, setting policy, etc.) should be done in a properly-noticed open meeting of the board.

*****


Saving Emails. Thank you for another excellent newsletter. I was very impressed with the data retention and backup policies you mentioned. I would be cautious about burning information to CDs or other media and storing them indefinitely with other records. Technologies change. Software changes. Imagine trying to read data off an old floppy disk in this day and age. I recommend associations recall, restore, and re-save their data at least annually to insure it remains accessible. This should be part of an organization's disaster response and recovery plan. Organizations often forget that the objective is not the maintenance of data backups but the recoverability and accessibility of the information stored. -Al P-Y

RESPONSE: The technology is moving so fast that most kids today will have no idea what a floppy disc is (no it's not a social disease). Fortunately, most data stored by an HOA will have little value after a few years. See: Records Retention Policy.

*****


Reserves. I’ve been thinking about your comments regarding Robert Norlund’s study showing that property values are affected by the strength of an association’s financial reserves.

I’m wondering if you might be confusing cause and effect. In other words, do good financial reserves promote property values, or do higher property values mean the association is more likely to be better financed?

In my experience, higher HOA fees tend to reduce home prices. Personally, I don’t know anyone who bought their home based upon the HOA’s reserve funding. Rather I think people are more likely to recognize value in how the property looks and how well it appears to be run. -Edward T.

RESPONSE:
You would be surprised at how sophisticated some buyers have become. No one wants to spend their last dime squeezing into the condominium of their dreams only to be hit six months later by a huge special assessment. That's also why lenders are interested in reserve funding levels.

I agree that excessive dues tend to drive down property values. However, rebuilding reserves does not have to be done on a crash-course basis. They can be rebuilt over time in a sensible fashion that keeps dues within market levels.


I think Robert's study was spot on. He did not compare expensive HOAs against lower-end ones. By comparing (as best as could be done) similar associations so the primary variable is reserve funding strength, a picture emerges that well-funded reserves have a positive effect on property values. Not surprisingly, well-run associations and well-funded reserves tend to go hand-in-hand.

*****


Politicians. I read and enjoy your newsletter. Your topic about utilizing HOA common area for general public political discussions caught my eye. HOAs should not open the door to general public free speech activities. Yes, the KKK did set the precedent by demonstrating/marching at a shopping center that had been allowing other organizations to demonstrate. The courts ruled in favor of the KKK. As you can imagine, this rocked the industry and it took many years and bags of money to get to the middle ground of “reasonable time place and manner rules.” -Carolle V.

RESPONSE: Too often, the legislature does things with the best of intentions that produce terrible results. Sometime, somewhere, someplace when it least expects it, an association will get burned by Senate Bill 407.

*****


Restating Documents. Our association tried twice to gain the necessary votes (2/3) and failed each time. We considered going to court but our attorney advised us that the process is VERY expensive. This was painful to hear because we had already had our previous attorney revise our documents and now, after these expenses, we are apparently restricted by further legal costs. Do you have any specific knowledge of these extra legal costs? Any input would be appreciated. -Allan S.

RESPONSE: Most restatement petitions are not that expensive. It can change, however, if an owner mounts a vigorous challenge and the judge is uncertain what to do. When that happens, the court may set multiple hearings and briefings. I had that happen once. We eventually prevailed but it was much more expensive than it needed to be. Because there is no attorneys' fees provision in the statute for restatement petitions, the association could not recover its fees as the prevailing party.

If an association spends money and time modernizing its governing documents and the enormous effort required to get at least half the membership to vote in favor of the restatement, it makes sense to spend the money required to get court approval of the documents.

*****


Throwing Away Mail. We have a board member who walks around our mailbox areas and if a piece of mail is on top of the boxes for whatever reason, he picks it up and throws it away. What can be done? -Jim W.

RESPONSE: You might remind him that it's a federal crime to open, tamper with or destroy someone else's mail. (18 U.S. Code 1702.) If that doesn't work, see if the Post Office will install a return mail box for misdelivered mail. If your board member feels compelled to tidy up the mail room, he can drop unclaimed mail in the box instead of the trash.

Adrian J. Adams, Esq.

Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Saving Management Company Emails

Oct 15, 2017 0 Views 0 Comments

QUESTION: When a management contract is terminated, what about emails sent and received by the manager? Should they be given to the new management or the board? And how do we even retrieve them? We don't always have a code telling us this is "Association XX."

ANSWER: When HOAs change management companies, they generally ask for financial records only so the issue rarely comes up. It changes if there is litigation—actual or threatened. Then there may be a demand for all emails involving that association. The ease of segregating and transferring emails will depend on how the management company is saving its emails.


What Emails? I know some of you are thinking, "What emails?" Boards are not supposed to hold meetings via email. True. However, there could be a significant amount of of email communication with management about scheduling meetings, requests for bids, instructions on violation hearings, maintenance issues, distribution of financial reports, etc. These communications do not violate the Davis-Stirling Act. As a reminder, boards should be using dedicated email accounts to avoid mixing private emails with board emails.

Litigation. Preserving electronic documents is important for litigation because such communications show when a board learned of a particular problem and what they instructed their managing agent to do about it. They often exonerate the association.


Proper Protocol. I suspect most management companies have no systems in place for segregating and saving email communications due to the relative newness of the technology and the cost to purchase document management software and to train their managers. Implementing a proper system would drive up management fees for HOAs—something companies are loathe to do because the industry is so cost sensitive.

For example, our firm captures, tags with client information, and stores all email communications and saves them to an offsite server that then backs up to another server in another location (and then a third redundant server in yet another location). All servers are in hardened sites to protect against theft. They also utilize fire retardant systems that use inert gases to smother flames without harming the computers.

We also scan and save all documents using the same system. As a result, client records are secure and searchable. That means we can find and  download all client files in a matter of minutes. It is possible that larger, more sophisticated management companies have begun moving to such systems. I know from experience, however, that other companies have not done so. Sophisticated computer networks, software, and IT support is expensive.

Transferring Data. You raise the problem of transferring electronic records once your relationship with an association is ended. Putting it on a board member's computer is a bad idea. Because directors come and go and their home computers have little or no protection, the data will eventually be lost. Putting it on the new management company's computer is better, provided they have a way to segregate and protect the data.
The best solution may be to burn the records to a CD, label it and give it to the new management company to store with the association's paper records.

RESERVES AFFECT
MARKET VALUES


I recently spoke at an event with the founder of Association Reserves, Robert Nordlund.

He mentioned a study he recently completed to see if property values were affected by the strength of an association's financial reserves.

He compared the sales price
(measured in price per square foot) of units in 100 comparable condominium associations to the their reserve fund strength (measured in % funded).

He found that market values were 12.6% higher in associations with strong reserves (over 70% funded) than in associations with weak reserves (under 30% funded).

I took out my calculator and did the math. If you own a $300,000 condo in an association with weak reserves and persuaded your board to build strong reserves, your property value increases by $37,800. Building reserves is like putting money in your own piggy bank.

I always had a sense that healthy reserves had a positive effect on property values. Kudos to Robert Nordlund for quantifying it. 

AB 1412
SIGNED BY THE GOVERNOR


A little bit of good news out of Sacramento, Governor Brown signed Assembly Bill 1412, which corrects a problem created by one of last year's bills.

When an absentee owner fails to annually update their contact information,
AB 1412 allows associations to use the last address provided by the owner.

The bill also extends limitations on personal liability to volunteer officers and directors of mixed-use developments. For more information, see AB 1412.

Congratulations to CAI's California Legislative Action Committee for sponsoring this bill.


I had a grammatical error in the ad for lawyers I placed in my last newsletter. A number of you caught the error. Here is one of the comments:

Proof Reader
. You am, am you? Yes, someone with business writing skills would be helpful. LOL. -Shelly D.

RESPONSE: Smile. I wish I could blame my auto-correct feature but I can't. The error was all mine. Fortunately, the ad was effective in bringing excellent lawyers to the firm. I hired two more for my Los Angeles and Riverside offices. I'm looking for another for my Northern California office. If you know any HOA lawyers you can send my way, have them call me at 800-464-2817 or send an email.

*****
 

Restricting Pot #1. You make reference to amending CC&Rs for smoking marijuana in a development, can HOAs make this part of their rules and regulations, pending their amending their CC&Rs? -Sharon B.

RESPONSE: Yes, boards can adopt rules regulating all smoking, including pot.


Restricting Pot #2. How can HOAs steer clear of the Compassionate Use Act of 1996 regarding medical use? Just curious. -Carey C.

RESPONSE: People can take cannabis in other forms without smoking it. I cover this issue in more detail on my website. See Medical Marijuana.


Restricting Pot #3. A few years ago our HOA amended our CC&Rs to exclude all types of smoking, posted "This is a non-smoking zone " sign at our entry. Now we have no issue with odor from any type of smoke leaking to/from decks, open windows. -Astrid L.

*****


I had a lot of feedback on my article about politicians. Here are a couple of comments:

Politicians #1
. So, are you saying we can’t charge our normal fees for use of our common house if someone wants to host a candidate or a political rally? -Claire S.

RESPONSE: Yes. In Senate Bill 407, politicians gave themselves a free ride. They get to hold a rally and the association picks up the tab for insurance, clean-up, etc. Is this a great country or what?

Politicians #2. On the new law making the common area available to politicians, if the community is gated can an owner invite the public at large to enter the common area for a political purpose? This would seem to open up a huge amount of potential liability for an HOA. -Debra G.

RESPONSE: Right now, the legislation is a little hazy.

Inviting the Public. In the worst case scenario, the public can be invited in. The statute states that associations cannot prohibit "guests" or "invitees" from attending the event. I have no doubt that a resident holding a political rally will deem the general public to be his guests and invitees. I disagree with this interpretation and oppose inviting the public into private developments because of the cascade of problems and liability exposure that could follow.

Disability Accommodation. Inviting the public to political events in the common areas subjects the association to the Americans with Disabilities Act. Not that it carries any weight in California but the ACLU of Virginia agrees with my position. They believe a campaign rally in a private location open to the public must follow anti-discrimination public accommodation laws and ADA. That means older HOA developments would be forced to retrofit their facilities to make them handicap accessible or face lawsuits from disability activist groups.

Radical Speakers. Another problem involving public access is who might show up. If guests and invitees are interpreted to mean the general public, a resident could schedule the Grand Wizard of the KKK to speak at a rally in your common area park and invite the general public, white sheets and all.

Security. While 99% of all political meetings are peaceful, at some point someone will hold a rally involving a radical group. It could get violent--just look at Berkeley's anti-free speech radicals. If a board suspects a planned event could turn violent, does it have an obligation to hire a security company to keep the peace? It might.

Can the association charge the cost of the extra security to the rally organizer? Not according to the statute--the cost is borne by the association. If the board fails to hire security and people are injured, lawsuits will fly because the board "negligently" failed to ensure safety in the common areas.

Insurance. Insurance could also be an issue. Typical HOA insurance policies might not cover common areas being used for public purposes. That means the association could be paying out of pocket to defend itself against lawsuits.

RECOMMENDATION:
The legislature created a mess. To prevent the general public from accessing an association's common areas for political events, associations should require anyone holding such events to provide a typewritten list of his/her guests and invitees. Persons not on that list would not be allowed to attend. That should keep an association's insurance intact and avoid ADA issues. It does not, however, address the problem of radical speakers creating security problems. I could see residents protesting a radical speaker and things getting ugly.

*****


Restating Documents. You speak of amending CC&Rs like it's a walk in the park. Amending our CC&Rs requires a 2/3 majority membership approval. That's impossible, which means we have to go to court. Short of that, how do you propose we amend our docs? -Karani J.

RESPONSE: It's never a walk in the park--it's more like a hike through steep terrain covered with poison ivy. Even so, most associations successfully restate their governing documents. We handle ~30 per year. Contact us if you would like a quote.

*****


Ham Radio Law. Any comment on the bill making its way through Congress that, if signed into law, will permit the instillation of amateur (ham) radio antennas in HOA common areas? Thx and Semper Fi. -Wayne W. W7TFY. (Yep, I’m a “ham.”)

RESPONSE: A ham communications bill (H.R. 1301) failed last session. Another bill (H.R. 555) was introduced this session and passed the House. It is currently in the Senate though no action has been taken on it. See H.R. 555.

*****


Voting. At our last meeting the board had 4 out of 5 members present. They took a vote, 1 abstained, 1 no, 2 yes. Did the motion pass? -Melinda G.

RESPONSE: If the abstention was a vocal abstention rather than quiet acquiescence, the vote failed. A majority of 4 is 3. A vocal abstention is not a "yes" vote. I give a full explanation in "Abstentions & Recusals."

Adrian J. Adams, Esq.

Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC

Prohibiting Pot

Sep 25, 2017 0 Views 0 Comments


QUESTION: With the recent passage of Proposition 64, can homeowner associations prohibit residents and guests from smoking marijuana in the development?

ANSWER: Yes, you can. It can be done by (i) adopting a rule relying on existing nuisance provisions in your CC&Rs or (ii) amending your CC&Rs to specifically prohibit smoking of any kind.

A Nuisance. The right of associations to prohibit smoking tobacco is well established. Second-hand cigarette and marijuana smoke are both on California's Proposition 65 list of carcinogens (cancer causing substances). As such, the smoking of either product is a health hazard and constitutes a nuisance. The definition of nuisance includes “[a]nything which is injurious to health….” (Civ. Code §3479.)

Health & Safety Code. H&S Code §11362.3 specifically states that the statute cannot be construed to permit any person to smoke cannabis in a location where smoking tobacco is prohibited. Therefore, if an association prohibits smoking, marijuana is included.

RECOMMENDATION: When we restate CC&Rs for associations, we offer the option of prohibiting smoking in the common areas that includes vaping, tobacco, marijuana, or any other substance. Many associations are extending the prohibition to the entire development, including inside condominium units. Contact us if your association wants to amend its governing documents.

COMMON AREAS
OPEN TO POLITICIANS

Currently, associations can regulate how their common areas are used and require damage deposits and insurance if reserved for events.

Politicians wanted access to HOA clubhouses so they passed and the governor signed into law a bill which takes effect January 1, 2018. It provides the following:

Common Areas. Members and residents can use the common areas, including the clubhouse, to meet with members, residents, invitees, guests, public officials, and candidates for purposes related to legislation, election to public office, referendums, and the like.

Canvassing & Fliers. Canvassing and petitioning of members and residents for political activities cannot be prohibited. Fliers about elections, legislation, and elections can be distributed without prior permission. This will be problematic for many associations whose members do not want fliers on their doorsteps and currently prohibit them. There is now no way to stop them.

Fees, Deposits, and Insurance. Associations can charge fees and require damage deposits and insurance for private parties but not for any matter described above. If injuries or damage occur, the association's insurance will be picking up the tab. If common areas are damaged, associations will no longer have damage deposits or agreements to pay for the damage. They will need to resort to more difficult means to recover the cost of repairs.

RECOMMENDATION: Boards should consult with legal counsel to ensure policies, forms, and rules are consistent with the new law. Associations needing assistance should contact us.

OPPOSE BILLS ON
THE GOVERNOR’S DESK

There are two bills on the Governor’s desk which would be harmful to associations if signed into law. Our office joins with CAI's California Legislative Action Committee in opposing these two bills:

SB 2 (Atkins): This bill claims to address affordable housing in the state but does so at the expense of homeowners by charging a $75 fee on real estate recordations. This would significantly increase the cost to those who can least afford it--delinquent homeowners in collections.

AB 634 (Eggman): This bill will allow condominium unit owners to install solar panels on common area roofs, garages, and carports without regard for their impact on an association’s architectural guidelines, suitability for a particular building or roof, or any adequate protections from property or water damage. Click here to email the Governor to veto AB 634.

HIRING LAWYERS


We are hiring attorneys for our growing Northern California, Orange County, Riverside, and Los Angeles offices.

Candidates should have at least five years' transactional and/or litigation experience.

I value clear legal analysis, business writing, and people skills.

We offer growth opportunities and excellent benefits. If you are interested, contact me at 800-464-2817 or by email.

 


Elite Warriors #1. Your comment adding board members to your list of the special forces groups was hysterical, but you forgot one group. Managers. I love your newsletter, always informative and regularly entertaining. -Lisa H.

RESPONSE: I agree, managers deserve special recognition. They often walk point for their boards and get hit first in ambushes.


Elite Warriors #2. I'm waiting for you to share how Adams Stirling's senior partner, the Hon. Lawrence W. Stirling's public service actually stretches wa-a-ay back before his legislative efforts as author of the Davis-Stirling Act, to his service as an Army officer. Good job! I thank you for that. -Patsy F.

RESPONSE: Judge Stirling has an impressive career of service. He commanded a large 550-man unit in Korea where he was awarded the Combat Badge for infantry operations along the DMZ. He was then assigned to the 12th Special Forces (Green Berets), went to airborne school, and became an A-Team commander. From there, he was assigned to the Pentagon before retiring from the Army as a Major. His leadership skills were then used in the Assembly where he authored ~200 bills, including the highly successful Adopt-A Highway program and the Davis-Stirling Act. He is a remarkable man and an enormous asset to our firm.


Elite Warriors #3. Your article on the mottoes of different service groups was truly informative. It also explains what happened to UDTs (Underwater Demolition Teams), they became SEALS. I laughed out loud when I came to the last branch of service. The only difference between us board members and the military is they get paid, can retire with a pension, and at some point people stop shooting at them. -Nancy H.

RESPONSE: Excellent point. You should know that as part of the motivation for keeping trainees from dropping out of SEAL training, the Navy pays me to spend two days each year explaining the rigors of being a board member to them. I then give an ultimatum--stay in the program or spend a year serving on an HOA board of directors. It scares the daylights out of them.


Elite Warriors #4. You should compile all of your letters in a book and sell them. -John M.

RESPONSE: Only board members and managers would believe the stories.


Elite Warriors #5. Could you possibly be any smarter or any funnier? Being an "elite warrior" myself, I agree wholeheartedly. Thank you for the LOL. -B.
 

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Searching Coolers #1. Greatly enjoy and benefit from your always informative Newsletter. On enforcement of pool rules, our large association has no staff on site after-hours and weekends. While we have rules against both glass and alcohol at the pool, they are often ignored. What, if anything can be done? Even if coolers were searched, there are a variety of ways to smuggle alcohol and we have four pool entrances, all unmanned. Thank you. -A. Nony Mous

RESPONSE: An association's ability to enforce rules depends on the resources available to it. Many associations rely on volunteers, i.e., a neighbor gently reminds a person they can't have alcohol or glass around the pool. If that doesn't work, a complaint is lodged with the board and a letter sent. If that does not work, a hearing is held and fines levied and privileges suspended. That is followed by a lawyer letter and so on. Some associations install security cameras at the pool so neighbors don't have to testify at hearings. Footage from the CCTV provides sufficient evidence of the violation.

Searching Coolers #2. Our local police department informed us that drinking in public or public intoxication is not allowed. Avoid any confrontations and just call the police and report the incident. Let the cops be the bad guys. Violations will cease real quick. It worked for us. -Gary S.

RESPONSE: Before calling in the police, I recommend sending a letter to the membership explaining the safety and insurance situation and letting everyone know you have no choice but to start calling the police if the violations continue. Include a plea that everyone please abide by the rules.

Searching Coolers #3. We are a small Association and do not restrict alcohol. We have not had any issues with public intoxication nor any complaints. I don't want to restrict homeowners' enjoyment of the pool area if we don't have to. -R.S.

RESPONSE: Every association gets to choose the level of risk it is willing to accept. The newsletter question two weeks ago dealt with intoxicated members creating problems with staff and guests and broken glass. If you have well-behaved members who drink an occasional beer from a can or wine from a plastic container and don't cause problems, the status quo may be fine. I recommend, however, that you contact your insurance carrier to make sure they are okay with the situation. You don't want a serious injury or death and then discover your carrier won't cover the loss.

 

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Satellite Dishes. Years ago, we were advised not to allow satellite dishes on roofs because they cause leaks. We told all homeowners they had to move their dishes to a fascia board, a side mount on the stucco, or a tripod on one of their decks. There was grumbling but eventually everyone complied. -John A.

RESPONSE: Some associations set up a platform on the roof where satellite dishes can be installed without damaging the roof.

 

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Training Programs. In Northern California, the Executive Council of Homeowners is another helpful source for board member education. -Ken M.

RESPONSE: Yes, a fine organization and worth contacting. They recently changed their name to Educational Community for Homeowners (ECHO). You can check out their website at www.echo-ca.org.
Adrian J. Adams, Esq.

Boards should contact us for friendly and professional legal advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS | STIRLING PLC