HOA Vendors & the Coronavirus

Mar 22, 2020 0 Views 0 Comments

I've received a lot of questions the past few days about allowing vendors on properties. I consider most vendors to be essential to association operations and should be allowed to continue to perform their duties.

Management. It goes without saying that management companies are essential. Without them, you can't collect assessments pay bills, and coordinate repairs.

Pools. With pools and spas closed, maintenance workers may not need to come as often but they still need to keep the pool clean and chemicals balanced. You don't want the pool turning green. It's more expensive to fix something than it is to maintain it.

Roofs. What about roof maintenance, repairs and replacements? They're essential. If roofs leak, you have to repair the damage, plus deal with insurance issues, and face potential litigation. It is much less expensive to keep your roofs watertight. Roofers are not in member's units so social distancing is not an issue. If roofers are willing to work, I would let them. Keep in mind, you may need to bid replacements now, enter into contracts, and schedule repairs during the dry summer months before the next rainy season hits.

Landscaping. As with roofers, landscapers do their work outside. They keep sprinklers repaired, which keeps plants from dying. Pruning trees is important if it involves health and safety of the trees or people. Stopping landscape services might be possible for small projects. What about golf courses? If you stop all work, it will be very costly to get the course back in shape. 

Plumbers. If toilets are clogged or water lines leak, a plumber is s clearly essential. Keep them on speed dial.

Janitorial Services. Surfaces need to be wiped down, floors vacuumed or mopped, trash removed, and common area restrooms serviced. I consider this an essential service. If the workers wear protective gear and maintain social distancing, they should be allowed to do their jobs.

Contractors in Units. What about contractors hired by members working in their units? As long as they are in the person's unit I'm not inclined to interfere with the contractual relationship. The issue of concern may getting through the common areas to the unit. If contractors can use stairwells instead of elevators, I don't see an issue. If they need to use an elevator, they should be few in number and wear protective hear (masks and disposable gloves).

Resources. Following are COVID-19 guidelines from key sources:

California Guidelines
Centers for Disease Control and Prevention
Los Angeles Guidelines
Orange County Guidelines
San Diego Guidelines
San Francisco Guidelines

Disclaimer. The virus is moving faster than the law. This was passed to me and attributed to attorney Dan Eaton. If he said it, he is spot on. While I believe associations and their vendors can (and should) continue to operate if essential to operations and done safely, I can't guarantee someone else might strongly disagree. Boards should consult their association's legal counsel for guidance.
 


I received more emails than I could respond to. Following are some of them. -Adrian

Legislative Body. Some of the state government regulations narrowing the scope of various laws governing open meetings use the term "legislative body." Would a CID board be defined as a legislative body? -George H.

RESPONSE: Associations have already been recognized by the courts as quasi-governmental entities.

Audits. Do you know if the 120-day rule for annual audits/reviews has been relaxed for associations with December 2019 year ends (due to the COVID-19 crisis)? -Jeremy N.

RESPONSE: Not that I'm aware of. However, if your CPA can't meet the deadline due to the virus, I can't imagine any penalties will be imposed if the financial statement is late.

Disabled. I live in a retirement community of over 6,000 condos. Our pool and hot tub have been closed. We have many elderly and partially disabled in our community who rely on the pool for their only physical (therapeutic) exercise. They need a zero-gravity environment to exercise their joints and spine. Can our pool and hot tub be reopened to accommodate this population? -Roxanne S.

RESPONSE: Most, if not all, associations have closed their pools and spas--some under orders from cities or counties. Even if not under local orders, as a practical matter, pools and spas are problematic. If someone is unknowingly carrying the virus and uses the facilities, it will be passed to others. An association has no legal obligation to grant accommodation to a request that would pose a threat to the health and safety of others.

Extend Payment. We bill homeowners the first semiannual assessment on April 1, which is due May 1. Should we extend the due date a couple of months to help out financially? -HOA Board

RESPONSE: I would send out the assessment on schedule. You need the money to pay bills. If someone is out of work, you can work out a payment schedule with them.

Real Estate Sales. We recently sold our property in a gated community. We have a scheduled closing through an escrow company which we are expecting and hoping to happen early week. Considering the current climate and closing of non-essential business, do you have an idea of our chances to complete this transaction? -Marilyn S.

RESPONSE: The people needed to complete your sale should still be working. They may be working remotely but there is no reason they can't keep the closing on track. 

Helping Neighbors. My neighbor and I want send an email to community members offering help during this time. We are proposing to go to the grocery store, run essential errands and the like. We feel that this is a good time to remind everyone we are in this together and we are all here to help one another as best we can. Before writing our letter, I thought I'd reach out to you to see if there were reasons for not proceeding. -Karen F.

RESPONSE: You are good souls. We need more like you. Full speed ahead.

Basketball. I observed four or five young people playing, bumping into each other, all touching the basketball and themselves. I saw large group of young people sitting side-by-side, eating lunch at a picnic table. -Lissa C.

RESPONSE: Young people think they are invincible. Right now, they desperately need adult supervision.

Virtual Meetings. Do the virtual meeting have to have a video capability or can they be done by conference call where everyone can join in? What are the actual guidelines for this type of meeting, it may be the wave of the future. We held one the other day and actually it was quite nice. Everyone who wanted to join the call did. -Ron R.

RESPONSE: Video is not required. You can do your meetings via conference call. At some point, we will publish some guidelines.

Prayers. Love your newsletter. Prayers for everyone’s safety. -Veronica N.

RESPONSE: Ditto on the prayers.

Texas Pools. I am a board member of a condo complex in Houston, TX. Over the past week, via email, our board emailed back and forth about what do while keeping personal contact at a minimum. We made decisions about closing facilities. I am seeking your thoughts on whether the pool should have also been closed for health/safety reasons. -Lynn R.

RESPONSE: I'm in favor of closing California pools for now for the reasons discussed in an earlier answer. You should consult legal counsel in Texas for guidance related to your pools.

My Photo. I seriously love you!!! Thank you for all that you do for our industry. I think some people would be completely lost without you. Also, love your new sign off photo. Hope that does not become a permanent clothing attire. -Andrew M.

RESPONSE: Many thanks. The mask may become a fashion statement. I could change the color to match my mood.

Humor. Glad to see you put that mask back on!! Keep on posting, we need your steady guidance and humor. -Donna G.

RESPONSE: The mask temporarily came off when the Governor locked down the state. It really gave me pause. The economic damage the virus is doing is as serious or worse than the health impact to individuals. It has put many businesses on life support and others have already died. I hope they quickly get this under control.

Election Inspector. Thank you for your update about the coronavirus. What is the minimum number of inspector we need to have? Before we used to have 2 one of them opened the envelopes, and reading who got how many votes, and the other person wrote down the numbers, and at the they both counted them. Is it still okay to do it that way? -Irene N.

RESPONSE: You must have either one or three inspectors. Keep the two you use but designate one as the inspector and the other as an assistant. Do that and you will be fine.

NOTE OF THANKS. I may be biased, but I think legal counsel to associations around the state provide an essential service to their clients. Thank you to everyone for keeping us employed. If we stay calm and push forward, we will get through this. If you need anything, call us at (800) 464-2817 or send an email.

Boards can contact us for friendly,
professional advice.


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

Coronavirus and Natural Selection

Apr 3, 2020 0 Views 0 Comments

I’m confident your newsletter advice doesn’t constitute binding legal advice although good, informative and certainly using common sense and humor (so needed). Nonetheless, it is greatly appreciated as it often triggers something we should at least consider or be aware of in operating our HOAs.

I wish owners had some idea of the complexity of issues boards face almost daily and have greater tolerance of the hard decisions we often have to make. In my opinion, the real pandemic is the wide-spread case of STUPID that has enormously impacted everyone in this country. If only there were a cure for that, short of natural selection. -Joe G.


RESPONSE: You're right, my newsletters can only give general information and point people in the right direction. That's why I keep referring everyone to their own legal counsel. Readers may have circumstances unique to their association that vary from the norm and must be treated differently. Boards who don't retain experienced counsel are being short-sighted.

*****
 

Reducing Fees. We are considering several methods of temporarily reducing our HOA fees during this national shutdown. What would be the logical and correct way to proceed? -Dan W.

RESPONSE: A temporary reduction may be in order if you can reduce expenses sufficiently to cover the reduction and still pay for essential services. How you implement it is something you should work out with your management company.


Short Term Rentals. Our POA has many homes that are used as short term rentals. We have an owner who recently rented to a large group who were all noted to be sick when they came and still sick when they left. We are a small isolated community. Having a group of COVID-19 visitors could be devastating for our community. What can we do about this? -Peggy H.

RESPONSE: Contact the local Health Department and ask them to issue an order to the owner to cease renting their home until the stay-at-home order is lifted. In addition, have legal counsel send a cease and desist letter to the owner.


Tot Lot Closed. We closed the tot lot but I have seen residents and their children continue to play on it. I’m concerned that this may be an HOA liability issue. -Janet S.

RESPONSE: Children are the worst at carrying and spreading viruses. The board should yellow tape the area and post signs telling parents not to use the tot lot.


Virucide Treatment. Our association had our pest control service treat all of our enclosed common area buildings with virucide, sterilizer and sanitizer. The company has been routinely treating professional sports locker rooms and gyms among other businesses, and schools during the pandemic. The sprayed solution is 100% effective in eliminating bacteria and viruses and lasts for at least 30-days. We feel this treatment is a big step toward protecting everyone. The cost is reasonable and we may repeat the treatment. -Connie S.

Elevators. Could you please give some guidance on elevator protocol in highrise condo buildings. I have posted signs suggesting limited occupancy and an owner is screaming that I am over-managing owners. -Helene D.

RESPONSE: Some people have their heads deeply buried in the sand. Keep the signs posted. Social distancing is key to stopping the spread of the coronavirus. Yesterday, the Mayor of Los Angeles asked everyone to wear masks when outside. The CDC is considering the same recommendation. To limit the spread of the coronavirus, boards may need to ask condominium residents to wear masks when in hallways and elevators.


Zoom Meetings. Can we hold meetings solely by Zoom during the shelter in place even though not all homeowners have access to the internet and we don't have a physical location where we could enforce social distancing? -Marian B.

RESPONSE: Under the circumstances, emergency shelter-in-place orders take precedence over Davis-Stirling requirements of a physical location for meetings. Providing meeting attendance to as many homeowners as possible via Zoom meetings is your best solution. They are easy to use and the moderator has the ability to mute attendees so as to eliminate background noises (and attendees who try to disrupt meetings). There are other services available as well and boards should decide which service is best for them.


Goat Reserves. Yes, you need to reserve for goat replacement. You would need to consult a specialist as to the condition assessment and life expectancy estimations. -Scott C.

RESPONSE: Don't goats self-replicate?


Vendor Restrooms. Keeping restrooms open for vendors is extremely helpful and important! Our crews continue to service communities and rely on public restrooms for relief. Given current restrictions, the number of public restrooms has drastically diminished. We have been reaching out to the communities with onsite restrooms to grant us access to continue use but at our own discretion and caution. Our employees carry hand sanitizer and soap so they disinfect areas before and after use. We understand many facilities need to be closed to residents, but if they can keep them open to vendors, we’d greatly appreciate their cooperation in helping us keep our employees healthy and safe! Thank you!!! -Valerie H.

No Annual Meeting. What are the consequences to our board if we do not hold our annual meeting and election of board officers until after the coronavirus is no longer disallowing gatherings and meetings. -Rose L.

RESPONSE: Some associations are postponing annual meetings because they have not yet adopted new election rules required by SB 323. New election rules should be adopted as soon as possible. The bigger problem is the coronavirus and paper ballots--owners may be reluctant to open and return them. We've already discovered that some inspectors of election are refusing to open and count them.


Annual Review. I am a CPA conducting annual reviews for Associations with over $75.000 in gross receipts. How does the current coronavirus situation affect the 120 day due date? Many of my clients run by property managers are well behind due to staffing issues. -Michael D.

RESPONSE: I don't see how any penalties can be imposed if the annual financial statement is late. These are challenging times.

*****


Had Enough #1. In what world do those complainers live? Look at New York. Look at the refrigerator morgue trucks. NYC EMS has now been forced to issue order to not bring in cardiac arrest unless revived on the scene. That is what is coming to those in denial.

Our parents and grandparents were asked to go to war. We are only asked to stay at home in this war. The only way to stop the virus spread is to starve it. That means no personal contact. Period!

We own in Palm Springs resort HOA now 20 years. I was board president in past. Still look forward to your newsletter and SANITY of reality based critical thinking. Don’t back down. Semper Fi! -Leland B.

Had Enough #2. I just read your newsletter for 4/2/20. How selfish is that person talking about prison and it being too restrictive? Some of the people who respond to your newsletters are off their rocker. -Alyne S.

RESPONSE: It's those kinds of people that send boards running to legal counsel.

*****
 
"I'm not sure about San Francisco, but I'm pretty sure San Diego is part of California." LOVE IT! Absolutely agree 100% regarding San Francisco. If not for your humorous asides in the newsletters my day would be very bleak, Adrian. I hope all your readers/fans take note of how we must maintain some link to reality these days…it’s getting to be a test for sure! -Marilyn B.
 
We thoroughly enjoy your newsletters as they allow us to keep apprised of the law and recommended practices. Keep 'em coming! -Netti J.
 
Thanks for all the valuable information that you have consistently provided. It is a pleasure to read your emails. -Frank S.
 
Thanks for sharing. We service over 1,400 communities and want them to be safe. -Patrick O.
 
Thank you so much for your news letter. It’s extremely informative and I love it!! -Janet S.
 
I have been reading your newsletter for years, but now in this coronavirus climate, I wait with bated breath for it to show up. I am the president of a three-member board at a 39-unit condo association. We have no managing company. We self-manage on a volunteer basis. We are in Indiana but nevertheless I find your California newsletter invaluable. It has given me MUCH direction in how to handle incidents -- and especially how to word my correspondence in incidents. Sure wish we had a resource like the A-S Newsletter in Indiana! Thank you. -Joann W.
 
Great sense of humor and I agree totally. (I'm not sure about San Francisco...) -Tim S.
 
I no longer watch or read the news–-I can stick my head in the sand for a few more weeks. BUT, I anxiously open my email for your newsletter. As a board member so many issues are dry and the publications we get put me to sleep. Just think what we could accomplish in this world with a little more humor! I have put a “new pair of shoes everyday” on my bucket list, a girl can dream can’t she? -Dena P.
 
Your newsletter is the first email I read. I love that it arrives daily now! And the goat discussion keeps me laughing. Thank you for all the informative info! -Peggy O.


A new reserve line item. Goats. Too funny! -Dave

Boards can contact us for friendly,
professional advice.


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

Living in a Prison

Apr 2, 2020 0 Views 0 Comments

QUESTION: I feel like I'm living in a prison. The board is telling us what we can and can't do. They closed our facilities and are threatening to fine owners. This is ridiculous! What can we do to stop them? -Had Enough!

RESPONSE: I know people are frustrated but boards are doing what they are supposed to. Your volunteer directors are the ones with fiduciary duties and have, unfortunately, been saddled with the task of managing the crisis created by the coronavirus.

Projected Deaths. If you've been following the news, deaths in the U.S. are now projected at up to 240,000 over the next few weeks. For California to avoid becoming the next New York, everyone must stay home and not interact with others. That means no gyms, swimming pools, hot tubs, tennis courts, basketball courts, restaurants, dinner parties, etc. It's painful but necessary.


Notices, Letters & Meetings. Our firm has been helping boards (i) prepare notices closing recreational facilities, (ii) send cease and desist letters to owners behaving badly, (iii) send letters putting members on notice when a resident has become infected with the virus, (iv) prepare guidelines for handling delinquencies caused by layoffs, and (v) create guidelines for virtual meetings. I suspect many directors would gladly step off the board and let someone else handle the crisis.

 

Emergency Rules. Because some people seem to have trouble with the concept of social distancing, we have been developing emergency rules for associations. Boards are allowed to adopt rules to address an imminent threat to public health or safety without the normal 28-day noticed waiting period. (Civ. Code §4360(d).)

RECOMMENDATION: Boards faced with residents behaving badly should consider adopting emergency rules for their community. Members upset that boards are too restrictive will cry the loudest when the virus hits their community. They will then accuse boards of being too lax. Boards of directors needing our assistance with notices, letters, guidelines, and emergency rules can contact us.

MORE ON
TERMITE INSPECTIONS
 

Feedback. You are correct that having inspections inside homes is an unnecessary risk at the moment. Most termite control operators have already suspended all interior services.
 

However, approximately 65%-80% of termite treatments are done to building exteriors and putting off termite control can lead to unnecessary deferred maintenance costs down the road.

Also, because most pest control operators are expecting a surge of work once the lockdown is lifted, it is very likely pricing will be an issue when all of a sudden requests for inspections and treatments peak.

In many cases, it would be better to start the exterior termite inspections and treatments now to get on warranty, stave of termite infestations, and lock-in pricing now rather than have the unexpected surprise of surge pricing. -Isaac Camacho, Accurate Termite Control

RESPONSE: I agree. External inspections and treatments can and should continue. They protect an association's infrastructure and don't require social interaction. CDC guidelines can be followed so that no one is put at risk and properties are protected.

MISCELLANEOUS QUESTIONS
AND FEEDBACK


Pepper Spray. We have a homeowner who runs her water at all hours, loudly slams her door when she leaves around 6:30, stomps around her unit at all hours and shouts and threatens with pepper spray if another resident comes near her, especially in the elevator. The police have been called, letters written to her, but don't know what else to do. Help! -Dee

RESPONSE: Pepper spray will not kill the coronavirus, but it could land your homeowner in a lawsuit. A cease and desist letter from a law firm is in order. 


Public Bathrooms. I live in a 55+ RV park. They closed our pools, but left the restroom/shower area open. It is connected to the pool area. All of our RVs are self-contained so it seems that the restrooms/showers, at the very least, should be closed. -Deborah P.

RESPONSE: I agree. Close the restrooms. Otherwise, they will be a source of contamination that could spread the virus through your park. As a 55+ community, you can least afford to have the virus catch fire in your association.


Pressure Washing. The HOA received a homeowner urgent request that the common areas immediately be "disinfected" by pressure washing. We do not find much guidance on the CA State website for this. What do you recommend? Our greatest concern is liability issues for the HOA concerning COVID-19. -Marla N.

RESPONSE: I can't imagine what you would pressure wash. If it's sidewalks, parking lots and building exteriors, that would be a bit much. Close all of your facilities and keep them closed for now.


Free WiFi. I have a new board member wanting to instal community-wide Wifi. How do you feel about free wi-fi in an HOA? -David S.

RESPONSE: Free is never free. Plus, I cringe at the security problems it creates--hacking, identity theft, viruses, etc. When I travel, I NEVER log on to public (free) WiFi. It can be as deadly as the coronavirus.


Teleconference Meetings. We teleconference our meetings. Not only can residents listen in, they can participate in the homeowners forum portion, and sometimes we open it up to the audience during agenda discussions. -Janet L.

More Tax Info. No, no, no, the banner associated with ca.gov link actually reads: News COVID-19: Tax file and pay deadlines extended to July 15, 2020. Get updates for California taxpayers affected by the COVID-19 pandemic. Read more and the IRS link reads: Tax Deadline Changed The deadlines to FILE and PAY federal income taxes are extended to July 15, 2020. -George H.

RESPONSE: Everyone--talk to your tax preparer and check official websites.


More Goats. I don't agree that weed abatement should be a reserve expense. Since weeds grow every year, taking care of them should be an annual activity and should be budgeted as an annual operational expense, not a reserve item. Reserve fund items should be items which happen less frequently than every year (replace a clubhouse, large fence, etc). -Bob F.

RESPONSE: I
t depends on how often the goats are used. If they are rented annually, the expense is operational. If it's less often, it's a reserve item. A more interesting question--if the association owns the goats, should they reserve for replacing them?

Large Parties. I am the president of our association of 219 homes. We have large numbers of residents outside partying, drinking, gathering in groups with large groups of kids all day and night. People are concerned about their own safety and the noise levels when they try to work from home. Is there really anything the board can do if residents just don’t care about the social distancing order? -Heather

RESPONSE: This is where emergency rules need to be adopted and lawyer letters sent to residents who seem to have a death wish. Contact us if you need help.

HOA Fees. We had an owner request that her monthly HOA fees be deferred. Are we allowed to do this and if not, why given the current economic situation? -Rick F.

RESPONSE: You can work out payment plans with those who need it, but you should not waive assessments. See my Newsletter of March 26.


Severe Allergies. About the coughing...I have severe allergies and airway reflux. Both cause chronic coughing. I've had this for over 50 years. I"m not contagious or ill, I just have a chronic cough. I know it alarms people but it is not something I can control. When I'm on my patio, people see and hear me cough. I get dirty looks. I thought about having cards printed that I can hand out to reassure people but I don't think they would touch the cards if I try to hand them out. -Pamela L.

Electronic Voting. How could we could agitate to get the laws updated to allow for electronic voting and online meetings –permanently? Ballot inspectors aren’t looking forward to opening double envelope ballots with layers of spit on the flaps… this year or in the future… -Brad P.

RESPONSE: One of our associations has already had their inspector of elections resign. I expect others may do the same. Someone needs to have a heart-to-heart talk with Marjorie Murray. Her organization has repeatedly opposed elections by acclamation and electronic voting.

    Marjorie Murray
    Center for California Homeowner Association Law
    3758 Grand Avenue, #56
    Oakland, CA 94610
    [email protected]
    (855) 648-4043


Laundry Facility. Our condo has a small laundry facility. It has 8 dryers and 8 washers. Should we close the laundry due to the Covid-19 virus. It does provide cleaning facilities for 144 units that do not have washers and dryers. -James T.

RESPONSE: That's a problem--people need to wash clothes. Contact us about adopting emergency rules.


Statewide Order. In your article dated 3/31/20 there is a reference to Governor Newsom’s order that shared courts in housing community are to be closed. Just to be clear is that a statewide order including San Diego? We have some homeowners wanting to use our tennis court which the board closed. -Ben C.

RESPONSE: I'm not sure about San Francisco, but I'm pretty sure San Diego is part of California. That means a statewide order would apply to San Diego. Keep your recreational facilities closed.


Zoom Meetings. We have three homeowner hearings coming up. All meetings are now on Zoom. Our office manager will contact each of the three homeowners to let them know we are using Zoom. They will receive an invitation and then can either call in or connect through their computer. I assume during this COV-19 crisis, hearings by teleconference will be deemed the best way to proceed? -Sue B.

RESPONSE: Yes. Video and teleconferenced meetings are the only acceptable means for now.


Zoom Limitations. We are a master association with 1,963 members. Our monthly board meetings are attended by 20-25 members. We plan to hold our first virtual board meeting using the free version of Zoom. With the limitation of 100 participants using this format, can we legally restrict access to the meeting to the first 100 individuals that sign in? Or, are we obligated to pay for an extended service that would accommodate all 1,963 members, even if only the same expected 20-25 people actually log in for the meeting? -Boyce S.

RESPONSE: In the current climate, I suspect you will have more than your usual 20-25 members joining your meeting. You should pay the Zoom fee so your meeting is open to all members. I should add a note of caution, limit your notice to members only. If your login information is disseminated publicly, you may encounter "Zoom Bombing" where non-members join your meeting display obscene material or do other stupid things. We are all in a learning curve. Report back your experience with a large-scale Zoom meeting.

NEWSLETTER SIGN-UP: The quicker people get serious about the virus, the quicker we can return to work. If you know someone who should receive our newsletter, add their email address here: Newsletter Sign-Up

*****

Good Morning, I am so glad I went through my spam and started releasing these newsletters. They are fantastic! Great sense of humor! Keep sending! -Shelie X.

Good Morning. I love your newsletter. I read it religiously. -David S.

Your letter regarding shoes in the hallway could not have come at a more appropriate time. We had a person doing this. To solve the problem, we printed out the newsletter, highlighted the article in pink and stuffed it in her shoes. Low and behold, the next morning the shoes and shoe rack were gone!! Love your newsletter!!! -Stephen L.

It’s almost worth having COVID19 around to get a DAILY newsletter! Seriously, it’s both informative and humorous. Regarding the shoes in the hall issue, I keep a spray bottle of alcohol in my car and spray the soles of my shoes when I get back in it. -Nancy H.

RESPONSE: The alcohol part makes sense. I keep several bottles on hand.

I want to sincerely thank you for the expert advice and information you freely give. I've been reading your newsletter for 6 years and look forward to every issue. -Boyce S.

I’m sorry to admit, with so much in my inbox, I often didn’t read your newsletters. But now when I see it in my inbox, I read the whole thing immediately, and quite often end up laughing out loud. Thank you for bringing a bright spot to these somber times. -Tracy B.

I just have to say THANK YOU! THANK YOU! THANK YOU! For your information and badly needed humor!!!!! I read and learn from all of your newsletters! -Sandra C.

Boards can contact us for friendly,
professional advice.


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

Termites & the Coronavirus

Apr 1, 2020 0 Views 0 Comments

QUESTION. I, like everyone, appreciate your newsletters. We are due for our annual termite inspection. I am board president and think we should suspend inspections because seniors like myself do not want strangers in our homes. Prudent or not? -Jill H.

RESPONSE: Yes, prudent. According to news reports this morning, the virus will not peak in California until April 26. For now, it does not make any sense to invite strangers into your home (or friends for that matter). Inspections can be done in May or June and treatments thereafter.

*****

Possible Association Relief. We put together information on applicability of CARES Act to associations. Nothing really definitive, but gives some guidance on where to search further. -Gary Porter, CPA, Porter & Laseiewicz, CPAs

Business Relief. The U.S. Chamber of Commerce has put out a nice guide for small business emergency loans. See Coronavirus Emergency Loans. -Adrian


How It Spreads. See CDC Information on How Coronavirus Spreads. -Georgianne M.

Closed Board Meetings. Our board is holding all of its meetings by teleconference but members are not allowed to join. Can our board legitimately close all meetings to owners for the foreseeable future? -J.C.

RESPONSE: No, there is no reason to keep their meetings closed. Meetings can be conducted via conference call services so members can listen to the meeting. The services are readily available and easy to use.

Goat Rental Fees. Goat rental fees could be considered a reserve expense. Boards of directors are tasked with maintaining the common areas and the reserve fund is a primary tool for fulfilling that responsibility. The specifics of the maintenance, a human with a weed-whacker or a goat with an appetite, are at the discretion of the board under the Davis-Stirling Act. -Scott C.

Spitting & Coughing. Thank you for the article regarding owners who spit and cough from their balconies. One of our owners does this and it's horrible. Especially in the current situation we are in, this is very offensive and unsanitary. They also spit around the central mailbox area. Should this be reported to the management company? -Barbara K.

RESPONSE: Yes, it can be reported to your management company. The board can send a cease and desist letter to the owner. Not only it it disgusting, it endangers other owners.

Fire Repairs. We recently suffered a fire in one of the buildings in our complex. Can we legally have a construction company working to repair the damage during the pandemic? -Walter H.

RESPONSE: Yes, I believe repairs can proceed. However, you should talk to your association's legal counsel. He/she will know the specifics of your situation and can advise you accordingly.

Pot in Stairwell. How about board member bad behavior? He has been smoking pot in the stairwell. The stench seeps into our hallway and into my home. -Janet L.

RESPONSE: Not only is it not neighborly, it violates the nuisance provision of your CC&Rs. If your board has not already done so, it should adopt a rule banning all smoking in the common areas.

FILING RETURNS
AND PAYING TAXES


No, no, no! Bob I. is wrong! The federal tax FILING deadline is also extended from April 15 to July 15. Here is the link to the IRS website. Wow, I almost had a heart attack! Of course, if you are due a refund, they urge you to file asap. Thanks for keeping us informed daily! -Sandy M.

According to both the IRS and the California Franchise Tax Board websites, both the filing deadlines and the payment deadlines have been extended until April 15. See the following links: https://www.ftb.ca.gov/ (banner at top of page) and https://www.irs.gov/coronavirus -Pat C.

The IRS extended tax payment and filing dates both to July 15, 2020. -Christie D.

The IRS issued Notice 2020-18, superseding Notice 2020-17. The new notice postpones the due date for filing Federal income tax returns and making Federal income tax payments due July 15, 2020. -Sandra S.

Check the IRS website where they will find that July 15, 2020 is indeed the revised deadline for both FILING and PAYING Federal Income Taxes. Also note that the extension may or may not be true for filing or paying STATE income taxes, so one should check with their tax preparer. According to the California Franchise Board website, the deadline for filing and paying California taxes this year has also been extended to July 15th. -Gerald F.

The deadline for paying property taxes in Ventura County is still looming April 10 despite the coronavirus outbreak, although some residents may qualify for waiver of penalties for failure to pay on time. See News Story. -Irene F.

According to the IRS, "The deadlines to FILE and PAY federal income taxes are extended to July 15, 2020." (IRS emphasis, not mine.) California is the same. -Bruce B.

SHOES
IN THE HALLWAY
 

I cannot stop laughing when I read this: "She can put her shoes in a Ziploc bag before taking them into her unit. Or, she can throw them in the trash and wear new shoes each day. It would help the economy." You made my day! Thank you for the humor! I am still laughing! -Lorna L.

The lawyer can wipe her shoes/soles down with a Clorox wipe before entering house. And then she can sign up for a "Miss Manners" course on living in a world with other people! -Judy O.

Good info! Thank you for your newsletter, much appreciated! -Alicia C.

Our team thoroughly enjoys both your advice and wit with your daily newsletter updates! Thanks so much for helping to keep our “ships” reasonably on course as we move through these uncharted waters – your advice is certainly helping us all navigate and stay the course despite the storm surrounding us! -John

Having once been on the board of our planned unit development I still receive your newsletter. Thank you for your informative and knowledgeable tidbits and especially for your quirky sense of humor (most recently, your comments regarding coughing and spitting, high heels in the hallway, and the cute goats!). -Virginia M.

Love your newsletter. -Irene F.

Great effort on the newsletter since the COVID-19 crisis hit us. It's a must-read. -Christie D.

I love your sense of humor hidden in plain sight! thanks for the laughs sprinkled in with the solid advice :) -Joy K.

Love the not-so-subtle snark! Laughter will save us, even if social distancing does not! Thank you for your practical advise delivered with a wonderful sense of humor. -Maggie L.

Love your newsletter....love the humor....keep up both the newsletter and the light jokes. ;) -Bobbie L.

Just want you to know I thoroughly enjoy your newsletter. Getting accurate information out there is crucial, and I know I kept reading longer than I might have when I saw you are using humor to get the message across. Thanks! -Ann and Dean W.

Love your newsletter. Thank you! -Sandra S.

Thank you so much for your newsletter. It is always filled with both concrete information and great humor. Stay safe, stay healthy and wash your hands like you have OCD. -Janis D.

Thanks for the newsletter. Best 5 minutes of my day, these days. -Scott C.

Best newsletter EVER! Thank you for the humor!!!!!! -Stephen J.

Boards can contact us for friendly,
professional advice.


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

Owner Bad Behavior

Apr 1, 2020 0 Views 0 Comments


Coughing & Spitting. A resident is coughing and spitting from their balcony. Is there any HOA responsibility? What are your thoughts? -A.S.

RESPONSE: A jail cell comes to mind. Is your association liable for the bad behavior of a resident? No. However, a strong letter from the association's attorney is in order.

Parking Lot Coffee. We have a group of regulars who used to sit in the clubhouse lobby and drink coffee an chit chat. The clubhouse is now closed and they moved their meeting to the parking lot with their folding chairs and coffee mugs. There is never more than 6 or 7 of them and they all stay 6 feet apart. What do you think? Should we be patrolling the parking lots? -Jane F.

RESPONSE: All you can do is advise people to behave responsibly. It sounds like they are following CDC guidelines. If you tell them to leave and they refuse, then what? I doubt the police will arrest them. According to news reports, the police are already letting real criminals out of their jail cells. Talk to your association's legal counsel and follow their advice.


Shoes in Hallway. We have an owner who is leaving her shoes in the hallway because she fears that bringing them into her unit will bring the Covid-19 virus into her home. The cleaning staff is complaining because they have to move her shoes to do their cleaning. The owner is a lawyer so the board is being cautious. -V.S.

RESPONSE: The board does not have to accommodate the lawyer's bad behavior. Leaving her shoes in the common area can expose employees and residents to the virus. She can put her shoes in a Ziploc bag before taking them into her unit. Or, she can throw them in the trash and wear new shoes each day. It would help the economy.

Recreational Facilities. Our residents are getting restless. They are demanding the board open our recreational facilities and threatening legal action if they don't. -Fearful

RESPONSE: Some people are obviously not watching the news. The virus is expected to intensify over the next two to four weeks. It originated in China, yet it traveled around the world to our neighborhoods. How did it move so far so quickly? It did so through social contact.

Surfaces touched by infected individuals spreads the virus. The only way to stop it is to close all facilities and maintain social distancing until the virus is brought under control. 

State and County Orders. State and county health departments have ordered the closure of all facilities where the virus might be transmitted. The following is taken from one county website:

Can I leave home to exercise? If you will be outdoors and not in close contact with other people, yes. Fitness centers, exercise gyms, recreational centers, tennis clubs, golf courses, and public/private shared pools are not allowed to operate.

Can I participate in or hold an exercise class outside if we stay in a group of less than 10 and practice social distancing? No. Public events and gatherings are not permitted under the Governor’s Order.

Can I participate in recreational sports? Recreational sports, like basketball or tennis, being played on a court attached to a single-family home which is not shared by persons outside the residence may be used by the inhabitants of the home only. Public Events and gatherings, like recreational sports occurring in a public park or on a shared court as part of a hotel/apartment/housing community, are not permitted under the Governor’s Order.

Can golf courses remain open? No. Both public and private golf courses must be closed under the Governor’s Order. However, golf course maintenance and landscaping are considered “essential” public works and can continue so that golf courses will be able to resume operations once the state and local orders are lifted.

Can private pools, like those in a gated housing development or apartment building, remain open? No. Both public and privately-owned shared pools must be closed, including apartment pools, hotel pools and neighborhood pools. Pools attached to a single-family home and not shared by persons outside the residence are permitted to be used by the inhabitants of the home only.

RECOMMENDATION: Boards should follow the orders posted by their County Health Departments. Everyone need to be patient. This will soon pass.

Rec Facilities & Insurance. Boards have an obligation to protect, preserve and enhance the assets of the community association. As you indicated that what about the tennis balls, none of us are experts. When it comes to recreational facilities, I am far more comfortable relying on the strictest opinions of the various governmental admonitions and orders, than board members, or unit owners. Following experts will support the boards with the business judgment rule defense. If they open tennis courts, basketball courts, pickle ball courts, lawn bowling, they will not have any such protection. Moreover, in my humble opinion, I believe this would be a quick path to non-renewal of D&O insurance policies. Furthermore, insurance carriers will be concerned that if the boards are willing to make these extremely questionable decisions, what other decisions are they likely going to make? This could result is the significant increase for substantially weaker policies. -Joel W. Meskin, Esq., CIRMS, CCAL Fellow, MLIS, EBP, Managing Director Community Association Products, McGowan Program Administrators

RESPONSE: Those who don't respect the virus should at least be concerned about insurance issues.

Gate Keypad. We have a keypad at our front gate. We have 124 homes in our development and many people use it all day long. We have no way to sterilize it after each use. Should we open our gates? I am wondering about the board's liability in this issue. -Myrna B.

RESPONSE: There is only so much boards can do. People need to take responsibility for their own behavior. They can use a tissue to touch the keypad or use hand sanitizer afterward. If the board opens the gates, crime becomes an issue. I suspect residents would prefer to keep them closed.

Brush Clearance. With respect to the question about a landscaper refusing to clear brush, maybe the association should rent or purchase a herd of goats to do the work. This is the ultimate social distancing. They may not be as quick as the landscaper, but I think the result is longer lasting. -Joel M.

RESPONSE: Our firm represents a large association that rents goats for brush clearance. Besides being cute, they never threaten lawsuits. I like them.

Davis-Stirling Extension? Do you think there will be emergency legislation to extend Davis-Stirling mandated time lines (budgets for instance)? -Wayne D.

RESPONSE: It's unlikely timelines will be extended. The legislature is preoccupied with other matters. Boards can, and should, continue their budget duties and other financial obligations. Everything can be done remotely (conference calls, Zoom meetings, etc.) so deadlines can still be met.

Jogging Path. We keep our small jogging path open. It’s like a little nature hike. With all the public park trails closed, should we close our jogging path? -Chaya

RESPONSE: That's a tough one. I walk each day and maintain my distance from people. I don't know what your trails are like. Are they so narrow that people are forced into close contact? Or, can people pass each other safely? I don't know what to tell you. Your board should talk to legal counsel.

Taxes. While your advice to contact a CPA for tax filing advice for the association was spot on, the original question contained faulty information. While paying taxes was extended to July 15, everyone must still file their returns by April 15. Didn't want individuals reading this letter to think they could not file tax returns. -Bob I.


Riverside Taxes. I called Riverside County Tax Collector, there will be no extension. I also spoke with my area Supervisor and his staff told me they have a form which can be used to waive late fees if you can prove a legitimate reason you need the waiver. -Joyce N.

Ventura Taxes. According to the Ventura County Tax Collector, property taxes are still due by April 10 and that deadline can only be changed by a change in state law, The Tax Collector also says that property owners who pay their property taxes after the deadline can apply for waiver of late fees and interest if the failure to pay by the deadline is due to a financial difficulty caused by the coronavirus. -William D.

RESPONSE: The last time taxes were waived, it was snowing in Hades. Everyone should file their returns and follow the advice of their tax preparers.

*****

Thank you and everyone at Davis-Stirling.com! Such a great resource for the HOA BOD who are volunteers and trying to learn the best we can. -Diane

I look forward to the newsletters; many thanks for your service. It is needed with my being president of our HOA. -Donna H.

Love your newsletter. Great information. Thanks. -Ronald C.

Thank you for the great advice in these trying times. -Lee G.

I so appreciate your newsletter each week (or more often of late). I look forward to your guidance on a regular basis, but with this pandemic, even more so. -Myrna B.

Boards can contact us for friendly,
professional advice.


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

Miscellaneous Lockdown Questions

Apr 1, 2020 0 Views 0 Comments
Brush Clearance. Our community is surrounded by open space on three sides and our association is responsible for all brush clearance. Prior to the coronavirus emergency, we asked our landscape vendor to get our community ready for fire season by clearing brush on the surrounding slopes. Our board believes that fire mitigation efforts constitute "essential services" and in any event it is remarkably easy for workers to practice social distancing. Can our board suspend paying the landscape vendor the monthly payment until such time as we see them working again? -Greg H.
 
RESPONSE: I agree with your board. Fire safety is an essential service. I believe it is reasonable to stop paying your landscape vendor until work resumes. Social distancing is not a problem for workers on hillsides cutting weeds and clearing brush. Have legal counsel review their contract and advise you how best to proceed.
 

Tennis Courts. Some towns are opening their tennis courts to family groups. One of our board members is advocating that we open our tennis and basketball courts with the gates in the locked open position so gates do not have to touched to enter or exit. Do you think we should do this? -Lisa S.

RESPONSE: California's website states the following:

Can I still exercise? Take my kids to the park for fresh air? Take a walk around the block?

Yes. So long as you are maintaining a safe social distance of six feet from people who aren’t part of your household, it is ok to go outside for exercise, a walk or fresh air. Gyms are closed.

County Websites. Counties have issued their own orders regarding the closure of recreational amenities. As noted in previous newsletters, many counties, such as Riverside, have closed all swimming pools. One thing is clear--it's difficult to navigate county websites when it comes to the coronavirus. It's almost impossible to locate information. I could not find any information related to tennis courts.

Reduced Risk? Some believe that risks associated with playing tennis are lower than gyms, pools and hot tubs. If they play singles, people are able to maintain social distancing on the court. Doubles carry more risk since players can bump into each other. The one element they can't control in either scenario is the tennis ball. Everyone involved will be handling the ball.

Legal Counsel. Boards should consult legal counsel on whether sufficient safeguards can be put in place to allow people to play tennis.

OC Pools. HOA pools in Orange County--have they been ordered closed? -Ronald M.

RESPONSE: Cities have closed public swimming pools but I could not find anything on the county's website. Readers will need to follow the example of Ronald Z. and call the health department to find out. Ask about swimming pools and tennis courts and let me know what you find.

SD Pools. Have you addressed private pools in HOA communities in San Diego County? Statewide? Are they to be closed? -Stan D.

RESPONSE: Same answer as with the OC website. The county websites have pretty graphics but are generally useless when it comes to finding information. Someone needs to contact the County's Health Department and let me know what they find.

Social Distancing. What should boards do about residents who are not heeding social distancing? In my association, parents are allowing their children to play with others in the common areas like it's summer vacation time. -Barbara M.

RESPONSE: There is very little you can do. Some things are under the board's control, such as closing the association's amenities, and others are not under their control. Social distancing is something each individual must practice per the recommendations of the CDC. If people engage in risky behavior, they may find themselves in the emergency room (or the morgue).


Taxes. Is there any chance the 4/10 deadline for payment of property taxes may be extended? This will probably eat up the entire forthcoming federal "stimulus" payment for owners who do not have impound accounts. The assessor's position at this point is to insist that this is a matter of state law that cannot be changed and that owners who pay late can appeal (paperwork, justifications, etc.) to have late payment fees (10% of the amount due) rescinded. -Irene F.

RESPONSE: I have to defer to the CPAs on tax issues. Maybe some of our CPA readers can write in with the answer.

Close Community Gyms. Thanks for all the informative Covid-related information. You spoke about closing down community pools. What about community gyms? -Alicia G.

RESPONSE: Per the state's website, gyms and fitness centers are closed. 

No President. Can you have a HOA meeting without an elected president? We only have a treasurer, person at large, and a secretary. -Bill G.

RESPONSE: Yes, you can hold meetings. One of you needs to appointed president.

Conference Call Meetings. I found it very easy to use FreeConferenceCall.com. -Christine K.

RESPONSE: Many boards are learning that it's easy to use teleconferencing and videoconferencing for their meetings. We are using both in our meetings with boards.


Kudos #1. Thank you for the wonderful newsletters! i love the humor injected into them, too. Fun, informative, and...virus-free! -Anonymous

Kudos #2. Love your newsletter. Many thanks for keeping us up to date. What are the differences between policies and rules in a CID? -Jill B.

RESPONSE: Policies are not the same as rules. For more information, see Policies and Procedures.

Mask. Could you measure the straps on your mask. I am making fabric ones and need to know the real measurement of the straps. -Jackie B.

No Computer Virus. Wearing gloves and mask while composing the newsletter? At least you know you won't get a computer virus. :-) -Lee G.

Boards can contact us for friendly,
professional advice.


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

Riverside Pools Closed

Apr 1, 2020 0 Views 0 Comments

There has been a lot of confusion over the closure of swimming pools in Riverside County. The issue is not readily apparent on their website. I received emails from Ron Z. and other readers who contacted the Riverside Health Department directly to find out for sure.

Pools Must Close. On their March 24, 2020 Frequently Asked Questions on Riverside County Public Health website, information about swimming pools can be found on Page 8:

Can private pools, like those in a gated housing development or apartment building, remain open? No. Both public and privately owned shared pools must be closed, including apartment pools, hotel pools and neighborhood pools. Pools attached to a single family home and not shared by persons outside the residence are permitted to be used by the inhabitants of the home only.

Continue to Maintain. Associations must continue to maintain pools and spas. Pool companies are essential services and keeping pools and spas cleaned is a public health consideration.

San Mateo Pool Closure. San Mateo County Health Order mandates closing public pools, and defines those as pools permitted by the Health Department. For Portola Ranch Association, we are regulated, inspected annually, and permitted by the County and have utilized their website FAQs to explain our choice not to open our pools as intended. -Mac I.

VIRTUAL BOARD &
COMMITTEE MEETINGS


Meeting Contractors. I am concerned about meeting with contractors to get bids on future projects, parking lot painting, tree trimming (not currently a safety issue), etc. -Ron T.

RESPONSE: Get in front of your computer and hold Zoom meetings with the contractors. They are easy to setup and free. You can get everything you need without leaving your unit. Proposals can be emailed to you in pdf form by contractors, which can then be distributed to fellow board members.

Architectural Applications. I am wondering what your thoughts are on reviewing architectural applications during this time. Our board has postponed all meetings but our committee is willing to review applications via email. The only concern the board has is the implication that the HOA is pursuing work to be done while the Governor has the stay-at-home orders. I think we can still review applications but give homeowners an extended period of time to complete projects. Is that okay? -Brinna K.

RESPONSE: Reviewing architectural applications on your computer does not violate the Governor's order. Giving extensions to complete projects makes sense since very little work can be done right now.

Processing Applications. Any suggestions on how to run an architectural review meeting? Receiving and handling the applications, because of the virus threat, is a problem. The master board’s attorney has stated that we must process the applications. -Ray L.

RESPONSE: I agree with their attorney. There is no reason applications can't be processed.

Annual Meeting. Our HOA annual meeting is scheduled for April 15. If the current restriction is still in effect what do we do? -Arnold B.

RESPONSE: There are a number of conferencing services available for boards to use to hold board and annual meetings. Here are some:

  -Amazon Chime
  -ClickMeeting
  -ezTalks
  -Google Hangouts
  -GoToMeeting 
  -Join.me
  -Skype
  -Zoom

For annual meetings, another option is to record the meeting without anyone in attendance, except the president and the inspector of elections. The inspector can open and count ballots. The recording is then posted so members can observe the meeting.

Email Meetings. Our members are 55+. There are a small group of members who are upset about the board holding meetings through emails, accusing us of not giving them opportunity to voice their opinions. Civil Code 4910(b)(1) allows email meeting though. We do have business to conduct to ensure the association is operating. What would you recommend? -Gwen C.

RESPONSE: Unless it's an emergency, there is no need to conduct meetings by email. Boards can conduct telephone conference calls or video conference calls through a number of different services, some of which are listed above. Members can call in and listen to boards conduct their meetings.


Exempted Businesses. The L.A. Times nicely summarizes the exceptions to the Governor's stay-at-home order. I hope this is helpful to your readers. -David G.

Reserve Study. Our fiscal year ends October 31 and this is also the year of our full reserve study which is conducted by our management company with the close involvement of our budget committee and board. Can these functions be postponed beyond the end of our fiscal year? -Steve A.

RESPONSE: There is no need to postpone your reserve study. As I noted in my March 24 newsletter, site visits are normally done by a single individual. The reserve report is pursuant to statutory requirements so boards can prepare s budgets and make disclosures as required by the Davis-Stirling Act. I see it as an essential service--it helps boards fulfill their duties.

Street Parking. Our CC&Rs allow RV parking on our private streets for 4 hours to load/unload only. A resident firefighter requested the board to allow him to park his RV for 2-4 weeks so he can live in it after his shift as he is concerned about contracting COVID-19 and infecting his family. Is this something the board should allow? -Kent W.

RESPONSE: Yes, they should allow it. Boards can grant temporary waivers for extraordinary circumstances such as these. If directors don't allow it, they should have their heads examined.

Stimulus Bill. Great info on the Senate Stimulus Bill contents. Thanks for including in your newsletter. -Ray O

Regular Updates. Thank you for these regular updates during this time. I was just putting together a summary similar to this for training our managers not only during the next few months of COVID but through the next however long this recession will be. -Dave R.

Manager Kudos. Thank you for breaking this all down for us. I am gratefully living in a Park here in Scotts Valley. We have an amazingly competent young manager. She shut us down immediately, much to the whining of many of us who love our programming and exercise. Her name is Rachaell Monroy and she is my hero. -Diane C.

No Fake News. In a world of fake news, it is great to get reliable information. Keep up the great work. -Jim G.

Spilled Coffee. Oh you must be exhausted, I saw you tipped over your coffee. Time to take a mid-day nap. -Donna G.

RESPONSE: No time for naps now--I can sleep later. Because of our newsletter list snafu, I urge everyone to signup those they think would benefit from our newsletter. Go here and enter their email address.

Library Closed. Our biggest push back is the closing our small library! Are private HOA libraries required by state or health organization to close? -Bob C.

RESPONSE: Most boards are closing all facilities where members might gather and transmit the virus. That includes clubhouses, libraries, gyms, pools, hot tubs, etc. It's expected the virus will intensify in California over the next couple of weeks. Let's hope not, but better safe than sorry.

Tax Filings. First, let me say that I greatly appreciate all your insights and sense of humor as we deal with the COVID-19 problems. In your March 26th newsletter you commented that both the IRS and California pushed back the deadline for payment of taxes and filing of tax returns from April 15th to July 15th. While this is true for individual tax returns, I believe the extension may not apply to corporate and other business returns. -Gerald F.

RESPONSE: Boards should contact their association's CPA about the deadline for filing a tax return. The date may depend on the association's fiscal year-end.

Kudos #1. This is Adams Stirling finest hour! Thank you for rising to the occasion with such timely information, keeping us abreast of midnight breaking developments. -Elise F.

Kudos #2. Great reading and information. Thank you! -Bonnie A.

Kudos #3. I wanted to thank you for your newsletter. You all put a lot of time into it, and I appreciate it. Humor is good for us at a time like this. Keep up the good work. -Patricia

The Mask. Put the mask back on. :). Love the newsletter. -Bill D.

RESPONSE: I practice safe newslettering. I wear a new mask and disposable gloves each day I write one. Yesterday, I ran out. I had to run to the store for more. Also, the typos in my newsletters are due to disposable gloves. It's hard to type wearing them.

Boards can contact us for friendly,
professional advice.


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

How to Maintain Operations

Apr 1, 2020 0 Views 0 Comments
Yesterday, I covered the rising tide of delinquencies caused by mass layoffs related to the coronavirus. This morning, I will cover how boards can keep operations moving despite the delinquencies.
 
Borrow from Reserves. To meet cash flow problems created by the pandemic, boards are allowed to borrow from the association’s reserves without a vote of the membership. (Civ. Code §5515(a).)
 
Notice of Borrowing. Boards are required to give notice of their intent to borrow reserve funds by listing it as an agenda item in their notice of board meeting. The notice must include the reasons the reserve transfer is needed, some of the options for repayment, and whether a special assessment may be considered. If a board authorizes a transfer, it must issue a written finding, recorded in the minutes, explaining the reasons for the transfer, and describing when and how the money will be repaid to the reserves. (Civ. Code §5515(c).)
 
Repayment. Monies borrowed from the reserves must be repaid within one year of the date of the initial transfer, except that boards may temporarily delay repayment. (Civ. Code §5515(d).)
 
Defer Expenses. The next step is to defer discretionary spending. For now, any major projects that can be delayed, provided they are not life/safety related, can be rescheduled for a later date.
 

SBA Loan. The Small Business Administration might be making loans available to associations that need them. It appears monies for nonprofits were included in the rescue packed approved by the Senate.

Senate Stimulus Bill. Wednesday night, the Senate approved a stimulus bill for the economy. The bill is scheduled for approval by the House today, which will then be signed by the President. Following are some key provisions:

Individuals
-Direct payments to low and middle-income families ($1,200 per adult + $500 per child)
-Extend unemployment benefits by 13 weeks and a 4-month enhancement of benefits by an additional $600 per week
   · Benefits expanded to include furloughed employees
   · Funding to pay for first week of unemployment

Employers
-Deferral of payroll taxes for employers
-Refundable employee retention payroll tax credit for 50% of wages paid during the crisis

Distressed Businesses
-$500 billion fund for distressed businesses (such as airlines)
  · $454 billion for federal loans to distressed companies
  · $46 billion for industry-specific loans
  · must agree not to conduct furloughs or reduce pay rates
-Loan program for mid-size businesses (500 to 10,000 employees)

Small Business
$375 billion federally guaranteed loans, partially forgiveable for small businesses and non-profits that continue paying employees through the crisis
   · Loans available through June 30
   · $10 billion in SBA grants up to $10,000

State and Local
-$150 billion for state and local government coronavirus relief fund
-$1 billion in community services block grants to address unemployment and business interruption
-$1.5 billion to the Economic Development Administration for economic adjustment assistance

Financial Institutions
-FDIC program to guarantee debt of solvent insured depositories
-Exception to lending limits for non-bank financial companies
-Financial institutions may suspend GAAP requirements

Housing and Real Estate
-Prohibits foreclosures on federally backed mortgages for 60 days
-Up to 90 days forbearance for multifamily borrowers
-Temporary moratorium on eviction filings

Education
-$30.75 billion in emergency education funding
-Defers student loan payments for through 9/30/20 for all federally owned loans

Summary. Boards have the ability to pay bills and keep their associations on track as the country starts to recover. Delinquencies caused by the coronavirus should abate once businesses restart and workers are rehired. The $2 trillion stimulus package will help alleviate some of the disruption until the economy restarts. Although the coronavirus has not yet peaked, it will soon and the economy will recover.

 
Confused. In your newsletter today, a person complained that the president of the association was being controlling by shutting down the pool area. The response was along the lines that “of course it was for control. What other reason would there be?” Please tell me that was a sarcastic response. Three people have looked at it and did not think so. -Jan C.

RESPONSE: Grin.
 

Satire. Although satire is usually meant to be humorous, its greater purpose is often constructive social criticism, using wit to draw attention to both particular and wider issues in society. Thanks for the newsletter. Informative, entertaining, and FREE. -Scott C.

Masked Man. “Who was that masked Man”? He left us a world of great information–sure is a “Swell Guy”! Thanks for all you and your firm do for so many! Recalls Churchill: “So few for so many!” -Bob A.

National Emergency. One of your best in real time, unfortunately during our nation's national emergency. -Ty W.

Helpful. I want to thank you for all the accurate, useful information you send out with regularity. Your newsletters are extremely helpful to many homeowners associations. -Gary F.

Brilliant. Brilliant newsletter as usual. I offer this hopeful post by
Pema Chodron: “You are the sky. Everything else–it’s just the weather.” -Henry C.

Riverside Pools. In your March 26, 2020 newsletter under the section called “All Pools Closed” you make reference that the County of Riverside Department of Public Health stated all Pools must be closed. You said this info was published on Riverside County Public Health FAQ’s quoting the Governors Office. I cannot find the link to the webpage to read the facts. -Don S.

RESPONSE:
The report by Ronald Z. does not appear to be accurate. I spent part of yesterday looking for the order and could not find it either.

Closing Pools. You state that "before a board decides to reopen facilities (swimming pools), they should carefully consider the spread of the virus ...etc". However, our Management Company advised our Association that Riverside County has told us to we must close pools and tubs. Please advise: does our Board have the discretion to reopen our pools, or not? -Stephanie A.

RESPONSE: Boards have the discretion to close or keep open their pools. The problem is not the water, its the transmission of the virus on all the other surfaces related to the pool.


Oregon Chuckle. I still read your newsletter although I moved to a beach condo complex in Oregon some years ago. The vacation renters in this area were told to leave by noon. We have had limited food for 2 weeks now, doctors working in ERs, not seeing patients, and your readers complaining about pools causes me to shake my head. Our clubhouse closed some time ago. Our excellent restaurants are closed even to takeout. Stay well and keep writing, it's always good for a chuckle. -Sandy

NEWSLETTER SNAFU
 

I learned yesterday that people who signed up for the newsletter over the past two months were not added to the mailing list.

A security upgrade knocked out the link. The link to the list has now been restored. If you know of anyone who should be receiving our newsletter, please add their email address here: Newsletter Sign-up.

Boards can contact us for friendly,
professional advice.


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

Waive Coronavirus Assessments?

Mar 26, 2020 0 Views 0 Comments

Over the past few days, I've received a large number of emails from board members asking about delinquent assessments related to the pandemic. Should boards waive late fees and interest? Should they waive assessments for a month, three months, longer? Should they waive for some members but not others?

Balancing Board Duties. Boards have a fiduciary duty to keep their associations operational. That means paying utility bills, paying for insurance, maintaining the property, responding to emergencies, maintaining security, paying vendors, etc. At the same time, boards need to balance these obligations against the fact that increasing numbers of members cannot pay their assessments because of the pandemic.

Late Fees & Interest. Members have been laid off through no fault of their own. Accordingly, boards should immediately suspend late fees and interest on all delinquent accounts related to the coronavirus. Older delinquencies having nothing to do with the pandemic can be treated differently. With those accounts, boards can choose to continue late fees, interest and foreclosures.

Foreclosures. While liens can be recorded against new delinquencies, no foreclosure actions should be initiated against them. With older delinquencies, it may be appropriate to move forward with foreclosure actions, up to and including selling units. This would be the case for delinquencies that predate the coronavirus where there is no chance the person will pay the delinquent amounts. For others, foreclosure actions might move forward to the point of sale and then stop if amounts owed will be paid.

Waive All Assessments? Waiving assessments altogether is compassionate but also problematic. As noted above, boards have a duty to keep the association operational and pay its bills. It can't be done if no one pays their assessments. What about waiving assessments for delinquent members only? This presents a different problem. Do you waive for delinquent accounts that have nothing to do with the coronavirus? That would not be prudent. Forgiving assessments for those laid off because of the coronavirus is easier to defend but still a problem.

Waive Some Assessments? How do boards decide which ones are pandemic related? How long do they waive assessments? What if there is a rolling waive of layoffs for months to come because of the virus? At what point do boards stop waiving assessments? Also, waiving them creates a budget shortfall that increases the financial burden on everyone else. The best solution is to work out payment plans with members laid off from work.

Payment Plans. Fortunately, most (hopefully all) layoffs will be temporary. The coronavirus will soon peak, stay-at-home orders will be lifted, businesses will restart, and workers rehired. In addition, last night's approval by the Senate of a $2 trillion stimulus package includes cash payments to individuals hurt by the epidemic. Boards should work out payment plans on a case-by-case basis with members. Each will be a little different depending on how long the person has been laid off. Boards should be balanced and reasonable in their payment plans.  

Reduced Fees? Readers wrote that some owners were demanding a reduction in assessments since they could not use the association's amenities such as the pool, spa, fitness center, tennis courts, etc. Boards should politely decline all such requests. The loss of use is temporary. Besides, how do boards calculate the amount of reduction and who do they give it to? Many members do not use the facilities or only use them occasionally. Should they get a reduction? Do those who use the facilities more often receive a greater discount than those who don't? This is a non-starter.

Conflict of Interest? What about board members who are delinquent? Can they vote on issues involving assessment relief? To avoid conflicts of interest, a director who is delinquent must recuse him/herself from votes involving their own delinquency. They can still vote on matters related to payment plans and foreclosures for others but may want to recuse themselves to avoid any appearance of conflict.

Steady the Ship. The storm will soon pass. Board members need to keep a steady hand on the ship's tiller. Homeowners need to be patient.

POOLS
AND HOT TUBS
 

Kids in the Pool. I asked the board to close down our two pools and spas. They refused stating, “With all the kids out of school, that could be a problem” which is exactly the problem. Children have no idea what social distancing means. Is there anything I can provide this board to help them understand what they are doing? -Marla M.

RESPONSE: My newsletters.

Pool Furniture #1. The board president put up a sign the pool area was closed per the city. The city did not close pool sitting areas. She has taken all the chairs and folded them and put them on one side of the pool area so no one can sit on them. I pay a lot of money to this association and want to know if I can at least go into the pool area to sit and get some sun. Are we prisoners in our complex because this woman makes us inmates? I understand the severity of this virus but as long as we practice good sanitation and common sense, should a person like this board president be allowed to rule because she likes control? -Diane C.

RESPONSE: Of course, control is the only reason she closed the pool. What other reason could there be?
 
Pool Furniture #2. People who go to the pool & spa areas typically also sit on the loungers, touch the pool/spa handrails, use the pool area shower, etc. Even if it was just going into and out of the pool, infection is still a risk even if water is not the vehicle for spread. Thanks for all that you do. -Brian K.


Pool Accidents. Thanks for great updates, especially regarding pools and spas. Our HOA of nearly 10,000 homes puts out emails on an almost-weekly basis—even in the non-Covid-19 era—about 24-hour pool closures to allow for sanitization following “accidents”. These are NOT slip, trip, or fall incidents! So, I cannot imagine why anyone would want to use a public pool or spa now. -Frank D.

ESSENTIAL BUSINESS


Management. As early as the week before CACM canceled the 2020 Southern California Law Conference, my staff was already observing strict sanitizing procedures for our office, including making arrangements for owners to continue interacting with my staff on a limited basis. As to the issue of being an essential business, common sense already answered that question for me even before consulting with corporate counsel. Legal counsel confirmed that management companies ARE essential businesses. Discussions took place as early as two weeks ago with many of our regular everyday vendors and again the issue of the essential business question was validated. We also mandated immediate implementation of strict compliance with sanitizing procedures and protocols for our various janitorial companies and onsite managers. Gyms and restrooms were closed and social distancing notices were posted in every building with elevators and lobbies. As always, you seem to hit the nail on the head. -Steven C.

Teleconferencing. Our company has been using Jitsi as a teleconferencing mechanism for some time and it works flawlessly and is free. Our staff has been disbursed from our brick and mortar building working remotely from home. All our systems are cloud based and we hold daily meetings with our staff so that we do not lose sight of our main concern, our clients. -Steve C.

Indoor Construction. We are a large condo complex in the Los Angeles area. We were in the midst of a new flooring project for the hallways in 7 buildings, replacing old dog urine stained carpeting with vinyl flooring. The vendor's crew completed 5 buildings, with 2 more to go. We suspended the work. Can we continue if the crew wears gloves and N95 masks, has no contact with owners and residents, and works only in the long wide hallways of the 2 remaining buildings? -Rick B.

RESPONSE: The work can be done safely. Whether it violates the Governor's stay-at-home order is the question. That is something you should discuss with your association's legal counsel.

Outdoor Construction. Just wondering what your position is on small construction jobs that do not interfere with residents directly. We are a stock cooperative with hundreds of units. Some contractors would like to continue working on out door projects: i.e. building storage cabinets in the carports for a few residents and another involves installing flooring in in an unoccupied unit. Although this is not essential work, it does provide income to these contractors and does not put any residents at risk. Should that sort of work be allowed? -Donna G.

RESPONSE: The virus is crushing the economy and putting people out of work. The outside work you described can be done safely. I see construction projects still in effect around the city. I don't think one or two guys working outside and following social distancing creates a violation. But, I'm just one person. You need to talk to your association's legal counsel for guidance.

MISCELLANEOUS


Tax Filings. Thank you for your newsletters, which allows us all to be kept up to date on covid-19. I have a few questions on property values in California. We live in an HOA community in Riverside county. Do you know if California will be re-assessing the property tax on properties in the near future?  Also, is the date to file taxes been pushed back to the middle of July or the middle of August? -Mike B.

RESPONSE: I've heard nothing about tax reductions. Keeping in mind that we live in California and judging from historical actions, taxes move in one direction only...UP. As for tax filings, the IRS extended its deadline for payment of taxes and tiling tax returns from April 15 to July 15. California did the same. You should check online to confirm.


Parking Lot Cocktails. As a former board member at an HOA of almost 500 units, I’ve always enjoyed your helpful newsletters, and now more than ever. I heard indirectly about this idea: within our complex, one neighborhood, sponsored by 2 tenants, having another social distancing social at 5:30 on Wednesday in the parking lot. Bring your own cocktails. Wondered what you thought about this, in particular, whether the BOD should actively discourage this and/or whether it creates any liability. It just seems like a bad idea and an unnecessary risk (what if more than 10 people show up? what if people don’t practice social distancing as they drink more). -Wilhelmina T.

RESPONSE: If they keep it under ten persons and maintain social distancing, they aren't in violation. If the state keeps everyone in lock down much longer, I might join them.


Annual Meetings. It will be very helpful if you could write an article on the essential importance of holding an HOA election and not cancelling or postponing that. Perhaps there are guidelines, only allow a small number of members. We need to cooperate with the wishes of the election company, but the show must go on... as they say. To be frank, we are concerned about board members that don't want changes. -Ted H.

RESPONSE: It's a business decision by the board whether to delay the annual meeting or not. To move forward, arrangements need to be made with the association's management company for printing and mailing of ballots, for hiring an inspector of elections, for the televised opening and counting of ballots, etc. That's assuming new SB 323 compliant election rules have been drafted and adopted. Logistically, this is all possible but it may result in election delays.


ELECTION RULES. Election RulesAll associations must adopt new election rules to comply with SB 323. Failure to do so could subject elections to legal challenge and may result in new elections, monetary penalties and an award of attorney fees. To avoid this, contact us for new election rules. We offer them at an affordable fixed price.

KUDOS


That you are daily providing timely information that helps to navigate these scary times is an outstanding service and a model of everyone doing what they can, based on their abilities! -Kit

Love the mask. -Steve C.

Thank you for the continued communications in these challenging and fast-changing times. I think it’s been a great resource for folks in the industry. -Brian K.

Thank you for continuing to provide informative, useful and appropriately humorous advice during this crisis. We all need to adjust to keep moving forward, thanks for doing your part. -Edward F.

That's funny with a mask, great sense of humor, which is what we need. -Hector T.

Adrian, Thank you for DAILY updates on COVID-19’s effects in the HOAs! Greatly appreciated as an important reference on the issue. -Michael S.

Boards can contact us for friendly, professional advice.

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

Swimming Pools & Hot Tubs

Mar 24, 2020 0 Views 0 Comments

I received a number of questions about closing swimming pools and hot tubs.

CDC Guidelines. According to the CDC website: "There is no evidence that COVID-19 can be spread to humans through the use of pools and hot tubs. Proper operation, maintenance, and disinfection (e.g., with chlorine and bromine) of pools and hot tubs should remove or inactivate the virus that causes COVID-19."

US Masters. U.S. Masters Swimming is a national membership-operated nonprofit that provides membership benefits to nearly 65,000 swimmers across the country published information about swimming and the coronavirus. According to their website, the average amount of chlorine that’s in a pool will kill the virus--assuming the pool is properly maintained. The problem, however, is that people can become infected before they ever reach the chlorinated water.

Infecting Other Areas. If someone is infected, how many surfaces will they touch on a normal visit to and from the pool? Anything they touch will be contaminated. Others who are not infected will then touch those same surfaces and become infected. As the website noted, "You’re reaching for a door handle and using the card scanner or otherwise signing in. You’re getting changed and putting your clothes in a locker or on a bench. You’re touching a communal shower tap. If you use the restroom, that’s a whole other series of doors and surfaces to navigate. There’s plenty of places for a tiny, invisible virus to cling to and follow you home where it might infect you or a loved one."

Board Decision. According to news reports this morning, the virus is continuing to spread. Most associations have temporarily closed all recreational facilities, including pools, hot tubs and saunas. Before a board decides to reopen facilities, they should carefully consider how they can prevent the spread of the virus to residents who use the facilities.


Reserve Studies. Can you please provide your opinion on reserve study site visits? Do you think it is appropriate for a board to allow them at this time? -Steve J.

RESPONSE: Reserve study site visits are normally done by a single individual. The report they prepare is pursuant to statutory requirements so boards can prepare the association's budget and make disclosures as required by the Davis-Stirling Act. I see that as an essential service. If the reserve study professional follows health guidelines and maintains social distancing, I don't see a problem.


Painting Contractors. We are a large commercial paint contractor up in the Bay Area. Have you had any questions or found any information, specifically about painting contractors working on HOAs? -Jeff U.

RESPONSE: I have not found anything in any of the guidelines. If the painting is purely cosmetic, it can be rescheduled. If it's exterior work to make surfaces watertight to avoid leaks and dry rot, the work could be deemed essential. Boards should talk to their legal counsel about how best to proceed.


Street Sweeping. With California's Stay at Home order, we have many more cars in our community during the daytime. With street sweeping, our community tends to tow cars. Can the board suspend towing as an executive decision or do they need a board meeting? -John P.

RESPONSE: Associations should suspend towing and fines related to street sweeping while stay at home orders are in place. The suspension can be done by the association's president in consultation with fellow directors without the need for a board meeting.


Package Deliveries. USPS, UPS, and FedEx drivers have keys to our package room to drop off packages in our gated community. The manager & assistant have an app to scan the packages and notify residents to pick them up during daily office hours. In light of the pandemic, should the board suspend package deliveries? -T.

RESPONSE: Boards should not suspend package deliveries since may people receive medicines and other necessities via UPS and FedEx. If everyone maintains social distancing and regularly wipe down surfaces in the package room, it can be done safely.

Thank you Adrian. You are the voice of reason! -Susan D.
 
So grateful your newsletter. A voice of insight in chaos. Thank u!!! -Melinda J.
 
Thanks for the contractor info, Adrian! Stay healthy! -Elyse E.
 
Thanks for keeping our HOA and us informed. -Mary L.
Boards can contact us for friendly, professional advice.

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

HOA Operations Are Essential

Mar 21, 2020 0 Views 0 Comments

Associations and their management companies should continue to operate.

Executive Order. A memorandum by the Department of Homeland Security referred to in the Governor's Executive Order allows for workers needed to ensure continuity of building functions, including security.

Essential Business. Various cities in California have included the following in their definition of essential businesses: Plumbers, electricians, exterminators, custodial/janitorial workers, handyman services, funeral home workers and morticians, moving services, HVAC installers, carpenters, landscapers, gardeners, property managers, private security personnel and other service providers who provide services to maintain the safety, sanitation, and essential operation to properties.

Boards of Directors. Homeowner associations need to keep their lights on and the water running. At a minimum, boards of directors should continue to pay bills and hold "virtual" meetings. There are a number of conferencing services available for boards to use. Here are some:

  -Amazon Chime
  -ClickMeeting
  -ezTalks
  -Google Hangouts
  -GoToMeeting 
  -Join.me
  -Skype
  -Zoom


Recreational Facilities. For now, all recreational facilities, such as gyms, pools, spas, tennis courts, and playgrounds, should be closed.


I run a senior living community HOA, we provide meals, care, supplies to residents. We are essential services. Without us at work, we would be abandoning these vulnerable people. We have cut all non-essential staff, like leisure service/activities staff, but kept of or kitchen operation to feed them, janitorial to take out trash, and security to name a few. The governor makes no mention of assisted living or senior communities, but I am sure we are essential, regardless of what he thinks----we will be at work to perform this critical service to the, safely of course. -Chris A.
RESPONSE: Yes, you qualify as essential.

Thank you for your daily updates related to Covid-19. Just letting you know that according to the City of Long Beach, property managers are “essential” workers (in today’s newsletter there was some uncertainty regarding this). It’s addressed in 14.h. of their health order.  -Linda C.

An Order from Los Angeles County, which specifically names property management as essential businesses (13h). -Brian F.

The exceptions to the City Order in Los Angeles includes property managers who are considered essential services. A valet might be considered essential if needed to allow travel of essential personnel. Tennis is not advised since it is an activity that involves multiple people. Solitary exercise is okay. Thanks for the frequent newsletters. -Paul Y.

Our complex of 513 condos and about 25 acres of property has closed our office window. We are transacting business via telephone and/or email. We are a self managed community with a maintenance staff, security and office personnel. -Virgil M.

I am passionate about tennis. I have been advised by a doctor that playing tennis should be avoided. Everyone handles the same ball and even if no symptoms could spread the virus by contact with the ball. I suggest changing your advice that it is “probably safe” -R.T.

In our large Senior HOA, we post notices, minutes, newsletters, etc. on bulletin boards in our laundry rooms, i.e., "Canceled Board Meeting." Only a third or so of our members are on email where we also post. We do post with gloves, masks, etc. but no control on what happens after that. Should we be posting high-touch notices in the highly used laundry rooms? If not, how do we comply with the noticing laws? Thank you. Love your humor too. -Concerned Board Member.

RESPONSE:
You should continue to post notices. Sometimes, it's hard to protect people from themselves. By now, members should know better than to touch surfaces. If you think it helps, post a notice not to touch notices.

As a former HOA board member I consider your newsletters "essential." You impart a lot of needed info in lay language, simply stated, in few words. Keep it up! -Bud A.

What if we outsource accounting to an independent third party and they refuse to cut checks for essential HOA services such as utilities, insurance premiums, etc.? -Tracy D.

RESPONSE: Let them know if they don't start cutting checks, you will find someone who will.

Adrian ... our HOA held a very successful virtual board meeting on Wednesday. Our only hitch was making sure directors and members mute their phones when not speaking. -Norbert K.

OPEN
FOR BUSINESS

Even with most Californians sheltering at home, ADAMS | STIRLING is open for business and fully functional.

Because we invested in technology that allows us to operate during emergencies, we continue to respond to client needs when others cannot.

If you need anything, call us at (800) 464-2817 or send an email.

Boards can contact us for friendly,
professional advice.


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

California Lockdown

Mar 20, 2020 0 Views 0 Comments

Overnight, California went into lockdown. The Governor ordered 40 million Californians to stay home. (See Executive Order.) To get the pandemic under control, only those in essential services are allowed to work.

No Timeline. The dramatic move does not have a timeline. The order is in place until further notice. If everyone complies, the immediate cessation of human contact should stop any new cases of the coronavirus.

Even with a complete lockdown, the number of reported cases will continue to rise as testing identifies people who already have the virus but don't know it.


HOA Management. The order exempts essential services like grocery stores, pharmacies, gas stations and doctor’s offices. I believe management services are essential to association operations but I suspect the Governor does not. Management company CEOs will need to decide who to send home and who is critical to their continued operations.

Condominium Highrises. What about condominium highrises? They will need at least skeleton crews to respond to plumbing emergencies, facilitate package deliveries, etc. Since all residents need to stay home, it's unlikely valet services would be deemed essential.

What Now? If we hope to get back to normal any time soon, we need to stop the spread of the virus. That means temporarily stopping all social contact. You may want to invest in Disney+ and Netflix since, for now, people will be spending a lot of time parked in front of their TVs.


Thank you for your newsletters. It is comforting to read your common sense and positive replies to all of the HOAs in California. We will get thru this together! -John


Does your mask come in different colors? :) Thanks for the continuing no-nonsense guidance with a bit of added humor. -Shirley P.

Love your newsletter. Thank you! -Michael W.

Hahaha…I agree some we should always practice social distancing _ hahahhaa ! Sending love and thanks for all you do… -Elizabeth B.

What??? Threatening lawsuits if they met using electronics ??? I didn’t know whether to laugh or cry when I read that! But thanks always for all your wonderful information! -Elaine J.

Our association is having a Zoom board meeting, but they keep our restaurant open. We also have not limited access to the club house. Most committees are shutting down but clubs continue to meet. Would it be prudent to at least put up a warning sign to avoid potential lawsuits? -Finn M.

RESPONSE: It would be prudent to stop all meetings, except those conducted electronically.

I'm the president of our 12-unit HOA and a freelance writer by trade. I've been tamping out fires for many of my clients and reiterating the same thing: use your social media to keep your customers informed. So HUGE THANK YOU for utilizing your list and continuing to send very relevant information. Many, many thanks. -Christine K.

I, for one, have always practiced safe computing. So you're a little late with the mask! Seriously, though, thank you so much for your newsy newsletter. I am president of our HOA board and trying to keep up with everything can be quite daunting. I know that whatever you are writing, I can trust and use it for our own explanations. -Nadine S.

“I can think of a few people who should continue to practice social distancing.” BAAAHAAA! Love it. Love the newsletter. Constantly cutting and pasting tidbits for my boards and other managers. -Sam N.

Thank you for providing such great information. -Jennifer C.

How about an article on how to hold HEARINGS by teleconference. Yes I know we should postpone them but then you know how some clients can react to that suggestion. -Michael H.

Great stuff, as always. However, I found an error at the end of paragraph five--I’m sure you can think of more than a FEW who should continue to practice social distancing… Thanks for keeping us updated. -Scott C.

I love that response. I can't believe some are dumb enough to threaten a lawsuit. Too much! -Alexander P.

Your messages are highly appreciated! As former president of an association and now an active owner and volunteer, I see the great value in your advice and suggestions. -Kerry G.

As the longtime president of a 14-unit townhouse HOA, I really appreciate your newsletter. It’s not only super informative, but also funny and easy to read. So thank you! Regarding annual elections and the new voting requirements: is it necessary to have an outside person count the votes if the election is uncontested? We are planning on distributing the ballots ahead and opening them at the start of the meeting which we are going to conduct via Zoom. With only 14 units and 5 positions on the board, contested elections are never an issue. Thank you. PS, love the face mask. -Janet G.

RESPONSE: I am an advocate of elections by acclamation. I don't like wasting people's time and money on meaningless elections when the outcome is already known. Even though others disagree, if elections by acclamation are authorized in your bylaws, I believe they can be done.

Thank you for your newsworthy emails. I enjoy them thoroughly. Question, what is your opinion since I have not seen it mentioned as to charging late fees or interest during these trying times? -Randy S.

RESPONSE: I believe late fees and interest on delinquent accounts should be suspended for now.

Any advice about closing down tennis/pickleball courts? If the tennis committee decides it’s a good idea? Can the president authorize it or does there have to be a meeting? Can the Board vote by email? -Kate L.

RESPONSE: It's the board's decision about facility closures. Swimming and tennis could probably be done safely but...

I’ll bet when you started the A/S Newsletter you never imagined you would get so much love from your readers. It’s a reflection on your genuinely good nature and compassion. Razor sharp analysis, with the ability to solve problems with an eye to not creating new problems in the process. And your humor takes the edge off of some painful subjects. If you were President of the United States, Governor of California, or Mayor of San Francisco, I’d feel better knowing a wise and thoughtful adult was running the show. Best wishes to all of your staff–stay well! And continue working to slay those dragons. -Tony V.

RESPONSE: Many thanks for the compliments. However, if nominated, I will not run. If elected, I will run...in the other direction.


Closing Comments. Everyone stay home and stay safe. The crisis will soon pass but we need to do our part to make it happen.

Adrian J. Adams, Esq.

Boards can contact us for friendly,
professional advice.


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

More COVID-19 Questions

Mar 18, 2020 0 Views 0 Comments

Delinquent Assessments. Now that we are crisis mode, how do we handle owners who are losing their jobs/income? Don't really want to see people losing their homes due to this crisis. What if the HOA can't pay its bills? What are your thoughts on how to best handle this situation? -Sandy A.

RESPONSE: The crisis will end at some point (hopefully soon) and businesses will restart. I recommend boards place a lien on delinquent properties to protect the association’s interests, but suspend all foreclosure activity. Once people return to work, you can work out payment plans with delinquent owners.

Permanent Job Loss. The more difficult scenario will be those persons who permanently lose their jobs. They will be looking for new jobs once the economy reengages. How long do you wait for them to find work? What if they can't? When you get to that point, you will need to discuss options with legal counsel and decide how best to proceed.

Drop in HOA Revenue. If delinquencies impact cashflow, associations still need to pay their bills. If boards need to, they can borrow from reserves. Without a vote of the membership, boards are allowed to borrow from reserves to meet short-term cashflow problems. (Civ. Code §5515(a).) Monies borrowed from the reserves must be repaid to the reserve fund within one year of the date of the initial transfer, except that the board may, after giving the same notice required for considering a transfer, and, upon making a finding supported by documentation that a temporary delay would be in the best interests of the association, temporarily delay the repayment. (Civ. Code §5515(d).) 


Postpone Annual Meeting? Our HOA is in the midst of an election. Our annual meeting is at the end of March (31st). The election results are to be tallied then and new board members announced. Our recent board meeting was canceled because of the COVID-19 Virus. What do you recommend we do in order to complete the election? -Cleona W.

RESPONSE: Two days ago, Federal health officials limited the size of all gatherings to 10 people. Yesterday, Orange County's Health Officer prohibited all public and private gatherings of any number of people, including at places of work. These orders highlight the importance of avoiding public gatherings.To protect your membership from the spread of the coronavirus, you have two options.


Option 1. Suspend the Annual Meeting. Suspend your annual meeting until the coronavirus crisis passes. At that point, reschedule the meeting, have the inspector of elections bring in the ballots, open them in front of the membership and tabulate the results. At that point, new directors are seated. Until then, existing directors remain in place. 

Option 2. Suspend Attendance but Count the Ballots. Your second option is to suspend membership attendance at the annual meeting but have the inspector open ballots and tabulate results. To protect the inspector, the counting could be done at the inspector's office. That way, the inspector avoids traveling to and working in an area that may already be contaminated. The downside is that members cannot observe the counting of ballots. Even thous this is contrary to the requirements of the Davis-Stirling Act (Civ. Code §5120(a)), I believe it is acceptable under the circumstances.

The option you choose is a business decision for the board to make in consultation with legal counsel. Once a decision is made, make sure you communicate it to the membership.

Rules Enforcement. Should we suspend parking rules? College kids are coming home, so there are lots of extra cars in the community. -Bob W.

RESPONSE: Earlier this week, Los Angeles indefinitely suspended parking tickets for street-sweeping violations. It would make sense for boards to suspend enforcement of rules that are somehow impacted by the coronavirus. Parking seems to be one of those rules. Boards need to be smart about how they handle this unprecedented crisis. They should not be heavy-handed and make the situation worse.

Kudos #1. Great effort Adrian during unprecedented times. Thank you. -Mike P.
 

Kudos #2. Just a quick note to you (and your team) to express my sincere thanks for all you are doing, through your newsletter updates, to keep our industry on the leading edge of this scary situation. Your comments, advice and humor are very helpful and informative. -DS
 


Teleconference Meeting. One of our associations has no onsite office and is a good distance from our management office. Every meeting place in town is closed down due to coronavirus. We have time-sensitive business to conduct but it is not executive session material, so we need an open meeting. Without a physical location to meet, could we hold an open meeting via teleconference or web ONLY? -Kevin K.

RESPONSE: Yes, you can hold it via teleconference or web only--even if members object.

Online Platforms. Adrian, many of the online meeting platforms (zoom, skype, go to meeting etc.) have free versions that can easily handle a small board meeting, even allowing members to watch or listen, and contribute verbally or in a chat feature. This is FAR superior to a conference call. Some special rules may be needed as far as recognition, voting procedure etc. -James S.

Swimming Pool. If an association has a pool for the HOA community, what is your advice as to whether it should remain open? -Larry H.

RESPONSE: Close it.

Closed Gym. Thanks 4 all your hard work. Seems insane to close those things that keep us healthy? {i.e. our gym} People have been incredibly diligent in following protocol--the machines have never been cleaner. Many of our health depends on using this gym daily. I understand what is going on around us. Felt this needed to be said. -Bonnie J.

RESPONSE: Right now, stopping the spread of the virus is paramount. Let's hope it soon passes.

Gym/Spa/Pool. We are in the City of Los Angeles. The HOA maintains a gym and pool and spa. The pool is currently not heated and nobody uses it. However the spa is heated. Should the spa be turned off and the gym closed to the community? -Barry G.

RESPONSE: Yes. Some knucklehead will use the gym, catch the virus and sue the association. It seems unlikely they could win, but you would still have to defend the suit and it's unpredictable what juries will do.

Boards can contact us for friendly,
professional advice.

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

COVID-19 Virus Feedback

Mar 17, 2020 0 Views 0 Comments
Since everyone in the state is now quarantined, you clearly have more time to send emails. I received far more than I can include in the newsletter. Following is a small sampling. -Adrian


Open Meeting Act. I applaud your decision to ignore a small section of Civil Code regarding having to have one person present in a room for owners to attend. Last week we notified our clients that teleconferencing is the only method we will use for the duration of the current health issue. Keep up the good work. -Michael H.

Webinar Meetings. A possible solution regarding board meetings--we are considering a webinar where members can call in and use computer to log in and view our PowerPoint presentation on agenda items while they listen to the meeting. We'd have open forum at the end. At work we use webinar for other agencies and state meetings. Even JoinMe is an option. -Joseph L.

Free Conference Call. We will be holding our board meeting via FreeConferenceCall.com so board members, our manager, and our association members can call in from their homes. Just thought you might want to know about this option. -Jan K.

Florida HOA. As always, thank-you for your sound advice and guidance. What do you know about Florida HOA law? Do you have a presence there as well? -Susan M.

RESPONSE: We don't have an office in Florida. Your best bet is to contact your local chapter of the Community Associations Institute. They can provide you with a list of law firms that specialize in HOA law. There are eight chapters in Florida. Following is a list with links providing contact information:


  Central Florida Chapter? (Orlando and vicinity)
  Gold Coast Chapter? (Palm Beach, Boca Raton, and vicinity)
  Northeast Florida Chapter? (Jacksonville and vicinity)
  North Gulf Coast Chapter? (Pensacola and N. Gulf Coast)
  Southeast Florida Chapter (Broward County and vicinity)
  South Gulf Coast Chapter? (Ft. Myers, Naples, and vicinity)
  Suncoast Chapter (St. Petersburg and vicinity)
  West Florida Chapter (Sarasota and vicinity)


Managers at Risk? Is the managing agent supposed to put themselves at risk by being at the meeting location? -Carolina R.

RESPONSE: No.


Holding Board Meetings. With the coronavirus scare going on, we held an open meeting via teleconference: (1) We advertised the meeting 4 days in advance. (2) We sent out the teleconference number so all members could attend from home. (3) We allowed an "Open Forum" for owners to speak and be heard by everyone. (4) One Board member went to the normal meeting place and was the "Leader" of the call via a speaker/spider phone. (5) Minutes of the meeting were created. All went well. (We have 261 units.) -Ray O.

Live Stream Meetings. Our board is going to hold their meeting this coming week, but is planning to live stream to members who can watch at home; there will be no member attendance allowed.....at least that is the current plan. -Melinda A.

Facebook Meetings. You might consider telling people to hold meetings via Facebook. They can do them live on a cell phone camera and it can be two way for questions from the homeowners. The Facebook page can be private to HOA members only. Just offering a suggestion. -Wendy W.

Suspected Covid-19. What do we do if we suspect Covid-19 may be present in the HOA? -PJS

RESPONSE: Be careful not to accuse people of having the virus--we are also in the middle of our annual flu and cold season. You don't want to find yourself on the wrong end of a defamation lawsuit. Stay calm and maintain social distancing. This will soon blow over.


KEEP MEMBERS INFORMED. One of our boards sent a letter to their members updating them on their actions related to the coronavirus. The letter is a model of how communications should be handled. I recommend all boards consult legal counsel regarding coronavirus updates with their members. Following is a copy of the letter:

To All Residents,

This correspondence is to let you know that the Board of Directors met in an Emergency Executive Session on Saturday, March 14, 2020 at 5:00 p.m. to discuss the ongoing COVID-19 health crisis. After consulting with legal counsel, we feel that it is necessary to provide you with the information below.

The health and safety of our staff and residents is our highest priority and we have asked management and staff to implement certain changes in an effort to contain and mitigate the possible transmission of the virus within our premises. While we know that you have received several communications regarding preventative measures, we thought it would be helpful to provide you with some additional information and reminders.

1. No cases of COVID-19 have been reported by any resident or staff member of the Mirabella. Residents and staff will be promptly informed if this changes.

2. Social Distancing measures are being implemented and everyone should try to maintain a distance of 6 feet from one other.

3. We have increased the frequency of cleaning in all common areas including door handles, surfaces and elevator buttons. Hand sanitizer stations have been ordered and will be placed in strategic areas when they arrive.

4. We are suggesting that everyone use caution when touching public surfaces and to engage in frequent hand washing.

5. The valet attendants are using rubber gloves when accessing vehicles and we urge residents to use disinfectant wipes in situations where other individuals may have access to your automobile and keys.

6. Residents are encouraged to self-park their vehicles if they are confident they can do so safely.

7. If you have determined that you need to self-quarantine whether you have the virus or not, it is imperative that you inform management so staff can do what they can to facilitate your self-quarantine. However, we cannot put staff at risk by bringing items into your home.

8. The fitness center, saunas, swimming pool, spa, pool area and conference room have been closed. Management will contact you to reschedule your events as soon as the facility is re-opened.

9. Delivery personnel will no longer be permitted on residential floors. All food deliveries are to be left at the front desk. Residents are encouraged to use delivery APPs that include payment and tipping within the APP or to come to the front desk to finalize their order.

Thank you in advance for your patience and cooperation. While we understand the seriousness of this situation, we are encouraged that by implementing these measures and following the CDC guidelines that we can minimize the effects of this virus on our community.

Board of Directors

Kudos #1. I have read many emails from many senior executives this week about the evil virus. Your message is perfecto --- short, sweet, simple, and to the point! -Masud O.

Kudos #2. I cannot believe what we are seeing and appreciate your emails more than you will ever know. -Bill B.

Kudos #3. Like many other people affiliated with HOAs, we are extremely glad to have the resources of the Adams Stirling website. Our board routinely accesses it for valuable information. Additionally, we are very pleased with the newsletter and the information it contains. -Ron C.

Kudos #4. Good morning, your newsletter is great and filled with a wealth of information. -Leonila K.


Kudos #5. Great update…at least now with all the panic buying we will know that food stuffs, canned goods and frozen products will all be “turned over” restocked items fresh in the stores. Again—thank you for your timely and informative newsletter. -Donna G.

Adrian J. Adams, Esq.

Boards can contact us for friendly, professional advice.

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

Coronavirus - Board Meetings

Mar 15, 2020 0 Views 0 Comments

It's remarkable how quickly events are moving related to the coronavirus.

Panic Buying. This morning, I drove to the supermarket to pick up a few cleaning supplies for the office. I walked into Vons and was stunned to see a huge line of people with grocery carts filled to overflowing waiting to check out. The line snaked throughout the store. I did a quick walk-through and shelves everywhere were empty. People are panic buying. It was unsettling.

Social Distancing. The news media has wall-to-wall coverage about the virus and everyone is being encouraged to stay home. Events everywhere are being canceled. This morning, I sent an email to everyone in our firm encouraging them to cancel face-to-face meetings. For now, all communications with clients will be done via email and phone calls.

Board Meetings. Yesterday, I published a newsletter that association board meetings should be done in compliance with the requirements of the Davis-Stirling Act. One of the options was to encourage members to gather in a room and listen to the board conduct its business via a speaker phone. Given the rapidly changing circumstances, I am revising my advice.

Meeting Protocol. Boards should not encourage members to gather together. It pains me to say that, for now, boards may need to hold meetings via email and conference calls without member observation. Meeting minutes still need to be taken and published.


The situation is temporary and should not be abused. Where possible, boards should utilize conference call services where members can attend meetings by calling into a conference number without leaving their units.

Let's hope the virus quickly burns itself out.

Adrian J. Adams, Esq.

Boards can contact us for friendly, professional advice.

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

Coronavirus Impacts Associations

Mar 15, 2020 0 Views 0 Comments

Due to the growing impact of the coronavirus on all industries, I decided to publish a newsletter today rather than wait until Sunday. With rising concerns about what is now a pandemic, boards of directors are uncertain what actions, if any, they should take.

Following are questions we received about the coronavirus and general guidelines I believe are prudent. While boards are obligated to make good faith decisions in the best interests of the membership, we are in uncharted territory when it comes to the coronavirus. -Adrian

#1. Conducting Board Meetings. Would associations be justified in holding their board meetings via conference calls as “emergency meetings” due to the declared pandemic, and then ratifying those actions after the health issues are over? -Russ H.

RESPONSE: Probably not.

Older board members with underlying medical conditions are justifiably concerned about possible exposure to the coronavirus. There are steps they can take to minimize their risk and still fulfill their duties as directors.


Conference Phone. Concerned directors can attend meetings electronically via telephone, provided they can hear all other directors in the meeting and all other directors can hear them. This is easily accomplished with a conference phone. Attendance in this manner counts as if the director were physically present in the meeting. (Corp. Code §7211(a)(6).)

The Entire Board. If ALL directors wish to attend a board meeting by telephone, they can do so. However, notice of open meetings must identify at least one physical location with a conference phone where homeowners can attend the meeting and listen to the board conduct business. (Civ. Code §4090(b).) The statute does not require any of the directors be physically present at the meeting location--only a representative of the board (such as the manager).

Emergency Meeting? What if the management company has suspended all meeting attendance for their managers due to the coronavirus? If no other representative can be found to set up the conference phone, can the meeting still be held as an emergency meeting. Unfortunately, this does not meet the definition of an emergency. An emergency is defined as "circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice" to the membership. (Civ. Code §4923; Civ Code §4930(d)(1).)

Fortunately, technology has reached the point where a call-in number can be published along with the agenda so members who wish to attend can also call into the meeting. All attendees except the board should mute their phones and only listen to the meeting. Except for open forum, members cannot participate in the board's meeting. For associations where there may be a large number of attendees, boards should consult with a technology expert to determine which call-in service best serves their needs.  

#2. Close Pool/Spa Facilities? Would you advise boards close their pool/spa facilities for the duration? -Russ H.

RESPONSE: Yesterday, Governor Newsom limited all public gatherings in the state to no more that 250 people. Los Angeles announced it was limiting gatherings to no more than 50 people.
Disneyland and all other theme parks in California announced they were suspending operations to help limit the spread of the coronavirus. If boards want to temporarily close their pool/spa facilities, they can certainly do so. If directors are uncertain what to do, they can consult health care professionals for recommendations, as well as consulting legal counsel.

#3. A Quarantined Resident. How should boards respond if they learn that a resident tested positive for the coronavirus? Do they have an obligation to inform residents? Is there liability for the board if it does not? -Anonymous

RESPONSE: This raises conflicting interests--a person's privacy about their medical condition and the membership's safety.

Authorized Disclosure. If the person with the coronavirus authorizes full disclosure, the board can disclose the person's name to the membership. This allows residents who had contact with the person to immediately self-quarantine and get tested for the virus.

Before doing so, I encourage two precautionary steps for boards. First, the authorization should be in a written communication from the person or the person's attorney. It should never be based on hearsay and rumors.

Second, the disclosure should be limited to members and residents. Particular vendors who may have had contact with the person could also be alerted. The board should not broadcast the information outside of the community.


No Authorization. If the infected person tells the board in confidence that he contracted the coronavirus and does not want anyone to know, the board may still have a duty to notify the membership. However, ti would do so without disclosing the person's name. The board would simply report, “A resident has reported testing positive for the coronavirus.”

A disclosure, however limited, alerts residents to take extra precautions to protect themselves.
In addition to giving notice, the board should contact the Centers for Disease Control. The CDC has the power to make additional disclosures, trace contacts, quarantine individuals, and take other actions it deems medically necessary.

Self-Quarantine. What if the person does not have the coronavirus—he is simply self-quarantining as a precaution? If that is all he is doing, I don't believe the board has an obligation to notify the membership.

Potential Liability. There is always the potential for liability if a board becomes aware of a threat to their community and does nothing. If, as a result of the failure to disclose, members fall ill and some die from the illness, lawsuits will likely follow. Accordingly, silence may not be the best course of action.


Recommendation: As volunteers, boards are allowed to seek expert advice. When confronted with issues involving the coronavirus, directors should not make decisions based solely on recommendations in a newsletter--whether mine or someone else's. They should contact legal counsel and the CDC for guidance.

#4. Law Firm Disaster Plan. Two years ago, our firm established a disaster continuity plan. With our existing onsite computer servers, we were vulnerable to a complete shutdown of the firm's operations in the event of a natural disaster.

To address the problem, we "virtualized" our operations, i.e., we moved all operations into the cloud. Instead of onsite servers, we moved everything to servers housed in hardened facilities with multiple redundancies for power, cooling, and backup systems in areas of the U.S. with little or no vulnerability to natural disasters.

Seamless Operation. Since our document management system, accounting programs, office productivity suite, time tracking software, internal communications and phones are now in the cloud, our entire law firm--all attorneys, paralegals, staff members and executive team--can work remotely from any device. If some or most were quarantined at home (or on a cruise ship), we can continue to operate without missing a beat.

Zombie Apocalypse. When we did our disaster planning, we thought it would be an earthquake or fire. We never imagined it would be a zombie apocalypse. Boards should take stalk of their own planning for a natural disaster. At some point, their association may have to wrestle with the aftermath of a major earthquake or fire.

TONYA TODD
JOINS ADAMS|STIRLING

I am pleased to announce Tonya Todd joined our team of attorneys.

Former JAG Officer. As a Captain in the Army and a JAG officer, Tonya led the prosecution of felony crimes including sexual assaults, larceny, aggravated assaults, child abuse, fraud, conspiracy, and homicides.

Magistrate Judge. Tonya also served as a Magistrate Judge and presided over pretrial confinements, reviewed evidence, made findings, issued warrants and ruled on law enforcement applications for search and seizure authorizations. In addition, Tonya authored over 150 legal opinions on matters such as sexual harassment, discrimination, ethics, and environmental law.

Education. Tonya received her Bachelor of Arts in Sociology from Sacramento State University in Sacramento, California. She then went on to earn a Juris Doctorate from the Hastings College of Law in San Francisco, California.

We are delighted to have Tonya join our team. If your association needs legal services, contact us for a proposal.

Adrian J. Adams, Esq.

Boards can contact us for friendly, professional advice.

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

Coronavirus Protocols

Mar 8, 2020 0 Views 0 Comments

Two weeks ago, I attended a board meeting where the president was absent because he was in quarantine with the coronavirus. That got my attention.

On March 5, California declared a public health emergency, as have many cities and counties around the state. Airlines, colleges, churches, the entertainment industry, and many other organizations are adopting protocols to protect their employees, customers, and clients from the coronavirus.

Precautions related to the virus are making their way into our industry as well. One of the management companies I work with is located in Seattle, Washington. Last week, the CEO implemented company policies and notified the associations they managed. Following is an edited version of his message:

Dear Board Members,

****** is taking the coronavirus seriously and we ramped up our efforts since the first cases were reported in the Seattle area. We want to inform you of the steps we are taking to protect our team and minimize any service disruptions.

We enhanced office cleaning, expanded our work-from-home policies and created tight restrictions on staff members who travel, have known contact with anyone infected, or show signs of illness. For those of you with onsite staff, we are advising our teams of best practices regarding personal protection and encouraging enhanced cleaning and maintenance of common areas.

We temporarily suspended staff meetings and board and manager education programs and encourage you to do the same by critically considering the benefits of cancelling or postponing board meetings, annual meetings, and community events. We are encouraging our community managers to work with you closely to aid in remote decisionmaking via video conference, conference calls and, when appropriate, unanimous decisionmaking via email. As a company, we will support our individual manager’s decision to attend meetings via video conference or conference call.

We urge you to familiarize yourself with the recommendations of experts, take necessary precautions to protect your community, and set community-specific guidelines.

It is likely the precautions we are taking and the potential of increased use of sick leave by staff members may impact turn-around times for certain services. We ask for your support and understanding. As a company, we are doing everything we can to proactively deal with this situation while also minimizing disruptions as we continue to provide services to each of you. 

Recommendation. Because of the precautions already being taken by the United States, it is possible the coronavirus will have only a mild impact on us individually and our businesses. Still, it doesn't hurt for homeowner associations, management companies, law firms and other industry vendors to implement common sense precautions such as those described above. Not only will they protect everyone from unnecessary exposure to the coronavirus, it protects us against all other viruses as well.

Kudos #1. I’m a big fan of the newsletter–it’s the one industry communication that I read, in full, every time. Thank you for that. -Jason M.

Kudos #2. I believe Davis-Stirling is the best website ever. -Elsa W.

Kudos #3. I love your newsletter and look forward to each publication. THANKS! -Barbara S.

Kudos #4. Love your newsletters. -Roger K.

Kudos #5. Thank you for all your help in educating the population. -Scott C.

Kudos #6. Great articles. -Bonnie A.


Term Limits. Our HOA allows directors to serve two terms and then requires them to step down for 11 months. This has worked fine for decades. Does SB 323 start the clock over again on term limits for those board members whose two terms expire this year?
-Toby S.

RESPONSE: No, the dumpster fire known as SB 323 does not reset terms. Instead, it knocked out term limits. That means there is no limit on how many times directors can be reelected to their boards.

I don't think that was their intention but the legislation backed by Marjorie Murray's Center for California Homeowner Association Law (CCHAL) was so badly drafted that term limits was one of the many casualties of the bill.

CAI's California Legislative Action Committee (CAI-CLAC), is working to correct this glaring defect so associations can once again impose term limits. Because this is pending, I recommend boards not amend their bylaws to remove term limits. You should leave it in place while CLAC works on clean-up legislation.

Email Addresses. What is the status on members requesting and receiving member email addresses? Are members entitled upon request to receive all opt-in email addresses? -George B.

RESPONSE: Yes, if a member opted into receiving notices from the association via email but has not opted out of sharing their email address with fellow members, it becomes part of the association's membership list and all members have a right to receive and use it. Most members will not be happy to have their email addresses floating around the community. To preserve member privacy, boards should notify all members they can protect their email addresses by opting-out of sharing it with the membership.


Contacting Marjorie. Do you know of any way to get hold of Marjorie, or her entity? Their website is down and I really want to ask about uncontested elections. I promise not to yell about it, I just think the intent of the provision is lost in the execution (it had to be, as this is just nuts and is costing us way too much!). -Calli P.

RESPONSE: There has been a lot of speculation about why CCHAL's website is no longer operational. To contact Marjorie Murray, try:

    Marjorie Murray
    Center for California Homeowner Association Law
    3758 Grand Avenue, Suite 56
    Oakland, CA 94610
    [email protected]
    (855) 648-4043

Full Disclosure. While you are at it, you might ask Ms. Murray for a list of her members' names and email addresses, the same requirement her organization imposed on nine million members of homeowner associations. Also ask her for a list of the financial backers of her organization. I've been told CCHAL partnered with lawyers who make a practice of suing associations. If so, Ms. Murray should disclose it.

Election by Acclamation. Thanks for adding your “finished thought” to last week’s response to my email. Acclamation is in our governing documents and it makes no sense not to allow it. The law should always make sense (my hope). -Barb D.

RESPONSE: We should pass a law that all laws must make sense and not harm citizens. I can think of a few people who should not be allowed to draft legislation.

Uncontested Election. Our bylaws state: "5.7 Uncontested Elections.  When, at the close of nominations, the number of qualified candidates nominated does not exceed the number of vacancies, the candidates may be declared elected without need for balloting and shall take their seats on the date set for the membership meeting." The word "acclamation" is not contained in the text. Do our bylaws, as written, meet the criteria for an election by acclamation? -Sandy F.

RESPONSE: Yes, your bylaws allow for elections by acclamation. I believe associations can conduct such elections despite SB 323, provided their bylaws allow it. But, I'm just one person. You might send an email to Marjorie Murray and ask what she thinks: [email protected].

Investors on Boards. We recently sent an inquiry to an attorney about investors serving on boards. The bylaws require that directors must reside in the development. The attorney answered that SB 323 did not specify that this was not okay. Therefore, it was fine. Am I reading correctly that you disagree and that any bylaw provision which specifies that directors must live onsite is no longer valid? -Jason M.

RESPONSE: Sometimes attorneys disagree. This is one of those times. To me, SB 323 is clear--there is one mandatory and four permissive director qualifications. You can qualify a candidate for election with these five points only:

  1. Must be an owner.
  2. Not delinquent in their assessments (with lots of exceptions).
  3. Not joint owners.
  4. Not an owner less than one year.
  5. No criminal conviction that voids fidelity insurance.

Requiring a director to live in the community is nowhere in the five qualifications listed above. Therefore, it cannot be imposed. For more information, see Candidate Qualifications.


ELECTION RULES. Election RulesAll associations must adopt new election rules to comply with SB 323. Failure to do so could subject elections to legal challenge and may result in new elections, monetary penalties and an award of attorney fees. To avoid this, contact us for new election rules.

ELEVATED STRUCTURE
INSPECTIONS


Stock Co-ops. Does the Balcony Bill (Senate Bill 326) apply to co-ops in addition to condominiums? -Colleen M.

RESPONSE: If your co-op has three or more units constructed as a multi-family dwelling, it applies. (Civ. Code §5551(l).)

End of Times. Thank you very much for the inclusion of the “Balcony Bill” in your newsletter. Also appreciate the shout-out to Robert Nordlund and the list of RS companies. He and Mike McDermont, the current APRA President, have been great about getting all the other providers on the same page and proactively setting policies and procedures.

We are confident that our reserve study industry is prepared to have a fairly high level of uniformity with the interpretation of what is and is not included, the timelines for such, and the procedures for including the inspections themselves in the reports.

They, you, and a whole bunch of other great lawyers, deserve the thanks and gratitude of Reserve Specialists. I’m optimistic that the explosion of anger and confusion will be delayed a couple years until these inspections, and their findings implications actually start taking place. Then, of course, it will be the end of times. -Scott Clements, Reserve Studies Inc.

Licensed Contractor. I am in the SoCal area. Where can I find a licensed and qualified contractor to do this work? -Jim M.

RESPONSE: Both management and reserve companies are already lining up inspectors and contractors for the work that needs to be done with elevated structures. You should ask them for recommendations.

MISCELLANEOUS
QUESTIONS


Accessory Dwelling Units. Does this mean that every community must allow people to live in garages? -Nancy B.

RESPONSE: Yes. If the house is a not a condominium and has a garage, owners can convert their garages into apartments. I'm not a fan of Governor Newsom's solution to the housing crisis. Destroying existing communities is not the best way to create new housing.

Emotional Needs Dogs
. We are a timeshare HOA and have owners who show up with "emotional needs" dogs. Most appear bogus as you can imagine, which ruins it for legit dogs. But in reading what you sent us, we can now ask them to provide a note from a physician to continue bringing their dogs with them? Also, if someone shows up to rent a unit with an emotional needs dog, we can refuse unless they provide a letter from a physician? I just want to be clear on how I am interpreting the info in the newsletter! -Debra C.

RESPONSE: People falsely claiming emotional needs dogs is the most abused area of the law I can think of. When the medical condition of the person claiming an assistance animal is not readily apparent, an association can require a letter from a medical provider that the dog is necessary for the person's health. Once the letter has been produced, the association must grant the requested accommodation. Unfortunately, too many doctors will write such notes even though no medical condition actually exists.

Recommendation. You should talk to your association's legal counsel about creating a written policy for you to follow when people show up with squirrels, peacocks, goats, miniature horses, pigs, goats, and the occasional dog, claiming they are assistance animals that must be allowed into common areas, club houses, gyms, pools, etc.

Dog DNA. I am the president of our 1,290-home gated community. We try to maintain our community as a safe and enjoyable place to live. Many residents have dogs and walk them every day but do not pick up after their pets. Is there anything that would prevent us from having a DNA test done on dog droppings and fining owners? -Ruth G

RESPONSE: There is nothing more disgusting that stepping into a dog's feces. Yes, you can test a scofflaw's dog droppings. (See DNA Testing.)


Mailbox Break-In. To what degree is the association liable when thieves break into both incoming & outgoing mail boxes on the property? -Elliot S.

RESPONSE: Except under rare circumstances, associations are not liable for the criminal acts of others. (See Criminal Activity and Liability for Security.)


Internal Dispute Resolution. Are there any new rules on IDRs? -Roger K.

RESPONSE: Not that I'm aware of. For information about IDRs, see Internal Dispute Resolution.

Association records
. What documents should be transferred when an association terminates a management contract? We changed management companies and when we receive an inquiry regarding accounting or correspondence information, no documentation can be located. -Barbara S.

RESPONSE: When you change management companies, all association records should be transferred to the new management company or to the association. This includes both paper records and electronic. Unfortunately, that does not always happen. Part of the problem is the sheer volume of records management companies handle. From each association the company manages, they receive:

CC&Rs, bylaws, amendments, articles of incorporation, condominium plans, rules & regs, architectural guidelines, collection rules, election rules, minutes (board open and executive session plus annual and special meetings), deeds, budgets, financial records (general ledgers, journals, accounts payable, accounts receivable, canceled checks, vendor invoices, deposit slips, etc.), contracts, insurance policies, general correspondence, newsletters, emailed instructions and correspondence, hearing notices, litigation related materials, and more.

The number of records can be staggering. Not all management companies have the same systems in place to handle the volume.

Storage Costs. Paper is expensive to archive and it's difficult to find a particular document without investing significant time looking for it. Sometimes they are warehoused and then forgotten. Ideally, all records are digitized and stored in a searchable format on a hard drive. For that to happen, the management company must invest in the technology for digitizing records and the manpower needed to scan, name, and store records. Our law firm went paperless years ago, but many management companies have yet to make the investment.

Shortsighted Boards. It means boards should be willing to pay a little more for a management company that is paperless. If a board is solely concerned with the lowest possible cost for management, it is being shortsighted and is foregoing a lot of services--one of them being the conversion of paper to electronic records.

Recommendation: Ask how your management company how they are storing your records.

Roof Antenna. When we had a new roof installed two years ago, the owners agreed to not reinstall the antenna (vintage 1974) as no one used it. Now an owner wants to have a new antenna installed. Is the HOA required to do that and to pay for the installation? -Ursula F.

RESPONSE: No, you are not required to install an antenna. You can, however, allow the requesting owner to install it. Since it only benefits him/her, it would be at that owner's sole expense. You want to be careful that it not be installed in a manner that would void your roof warranty. You should consider recording a covenant making the installing owner responsible for maintaining the antenna and any damage it may cause.

Adrian J. Adams, Esq.

Boards can contact us for friendly, professional advice.

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

New Assistance Animal Guidelines

Feb 23, 2020 0 Views 0 Comments

On January 28, 2020, the U.S. Department of Housing and Urban Development (HUD) issued new guidelines addressing assistance animals that individuals with disabilities may request as reasonable accommodations. They replace HUD’s 2013 guidance on service and assistance animals.

Assistance Animals Defined. Under the Federal Fair Housing Act (FHA), assistance animals are trained service animals or untrained animals that perform tasks and/or provide emotional support (“support animals”). Assistance animals are not considered pets and must be allowed if the individual needs the animal due to their disability.

The number of requests to HOAs for support animals has significantly increased. One of the most common fair housing complaints that HUD receives is denial of an assistance animal. According to HUD, the new guidelines were provided “to help housing providers distinguish between a person with a nonobvious disability who has a legitimate need for an assistance animal and a person without a disability who simply wants to have a pet or avoid the costs and limitations imposed by housing providers’ pet policies, such as pet fees or deposits.”

Internet Certification. Often, individuals requesting to keep a support animal have obtained a certificate off the internet. According to the new guidelines, these internet certificates are not “sufficiently reliable” to establish that an individual has a non-observable disability or disability-related need for an assistance animal. Rather, individuals need a note from their health care professional (who has personal knowledge of the person) that confirms the disability and/or need for the support animal.

Unique Animals. Requests to keep unique assistance animals have also increased and are addressed in the new guidelines. Unique animals are those that are not traditionally kept as a pet. Traditional pets are dogs, cats, small birds, rabbits, hamsters, gerbils, other rodents, fish, turtles or small domesticated animals. An individual requesting a unique animal has a “substantial burden” of demonstrating a disability-related therapeutic need for the specific animal or the specific type of animal. Documentation from the individual’s health care professional confirming the need for the unique animal is likely required.

Best Practices. The new HUD guidelines provide best practices for documentation that can be requested to support a request to keep a support animal when the requesting person’s disability and/or need for the animal is not obvious.
They should be read together with other HUD documents, including the Joint Statement with the Department of Justice on Reasonable Accommodation.

Our firm can assist associations in preparing guidelines and protocols for handling requests for reasonable accommodations.

Thank you to partner Laurie Poole for this article.

ELEVATED STRUCTURE
RESERVE TASK FORCE


Because Senate Bill 326 (the "Balcony Bill") implicates reserves, Robert Nordlund, CEO of Association Reserves, Inc., coordinated meetings of reserve study companies throughout California to discuss how best to address issues raised by the bill.

One of the goals of the Task Force was to create some consistency in the application of new Civil Code §5551. Members of the Task Force are:

Advanced Reserve Solutions (ARS)
Association Reserves, Inc.
Barrera & Company
Browning Reserve Group
Complex Solutions, LTD
Foresight Financial Services
The Helsing Group, Inc.
Murray Joseph Reserve Studies
Reserve Data Analysis, Inc. (RDA)
Reserve Studies, Inc. (RSI)
SCT Reserve Consultants, Inc.
Strategic Reserves

Mr. Nordlund generated a written report which is linked to below. Following is a summary of key points from the report.

Affected Associations. Associations affected by the law are condominium developments of three or more units with balcony/deck/stair surfaces designed for human occupancy more than six feet above the ground, supported by beams, joists, columns or posts, that extend beyond the exterior walls of the building, and made of wood or wood-based products.

Deadline for Inspections. The law went into effect January 1, 2020. Associations must have their first inspection completed before January 1, 2025. The sooner inspections occur the better, since it will allow boards to begin reserving for any repairs that may be needed.

Additional Reserves Needed. Monies will need to be set aside for inspection costs. In addition, either special assessments and/or higher reserve contributions will be needed following the inspection, depending what is revealed by the inspection. Starting inspections and reserve contributions now will help reduce any significant expenses required by the bill beginning January 1, 2025. 

Inspection Costs. Achieving the 95% confidence level required by the bill will be expensive. Early estimates are that most associations should expect costs in the range of $5,000 to $20,000. The cost will depend on the number of elevated structures inspected to achieve the high confidence level required by the bill. Getting those estimates now will help boards budget for the expense.

Inspection Cost Included in Reserves. Because inspection are directly related to reserves needed to repair elevated structures and because the definition of "replacement cost" includes related expenses, inspection costs can be included in an association's reserve budget.

Full Report. For photographs of different elevated structures and whether they fall under the statute, see the full report of the Reserve Task Force.


Thank you to Robert Nordlund, CEO of Association Reserves, Inc., for providing the report on Task Force recommendations.

20/20--A VISION
FOR THE FUTURE

Adrian Adams will join a panel of attorneys at the Management Trust's Annual Director's Symposium. The program will be held on Friday, March 6 at the Agua Caliente Resort Casino in Rancho Mirage.

The legal panel's "Seeing Through the Fog" will discuss challenges boards face with new laws imposed by the legislature and the courts.

For more information see 2020 Vision Flier. Board members can attend this free event by sending an RSVP to Terri Jones.

Kudos #1. God I love your newsletter. -Terri G.

Kudos #2. I want to express my gratitude for CAI-CLAC’s work in serving as a counter to the excesses our legislature seems to so thoughtlessly embrace. -John W.

Kudos #3. Thank you for your great newsletter. -Patricia S.

Kudos #4. I always look forward to and enjoy your Newsletter. -Stan M.

Kudos #5. Thanks so much. I used to specialize in coverage work, but I also frequently represented common interest developments in civil litigation for one of my clients who insured lots of associations in Northern California. Every time I worked with a board or management company I referred them to your site, which I always found invaluable. I retired from active practice in early 2017, and the only thing related to my work that I still do is read your newsletter. Keep up the great work. -David B.

 

$75,000 Threshold. An item I believe CLAC should include in any proposed legislation is to raise the amount of assessment revenue when small HOAs have to engage a CPA to perform an audit or review. It has been set at $75,000 for decades by Civil Code §5305. Inflation is pushing small HOAs to include a couple of thousand dollars in their budgets for reviews as they cross the magic $75,000 threshold. It should be raised to $100,000+ and index it to avoid inflation creep in the future. -Philip A.

RESPONSE: Good suggestion. I will pass it on to CAI's California Legislative Action Committee.


Owner of 9 Units. I want to point out something relating to the question about the owner of 9 units who is running for the board. It should be noted that the law does not provide protection from personal liability if the director owns more than 2 units. Thanks for your wonderful work, as always! -Terri G.

RESPONSE: I'm glad you raised the issue. Very few owners of multiple units realize they are held to a higher standard than other board members when they serve on the board. Because of their ownership of multiple units, they are at risk for personal liability in excess of insurance coverage. I don't know the reasoning behind this provision, only that it exists. Following is the relevant language from the statute:

(a) A volunteer officer or volunteer director...shall not be personally liable in excess of the coverage of insurance...to any person who suffers injury, including, but not limited to, bodily injury, emotional distress, wrongful death, or property damage or loss as a result of the tortious act or omission of the volunteer officer or volunteer director if [within the scope of their duties, in good faith and not willful, wanton or grossly negligent and the association carries at least $500k for 100 or fewer units or $1M if more than 100 units]...

(e) This section shall only apply to a volunteer officer or director who... is an owner of no more than two separate interests... (Civ Code §5800.)

Management Contract. Our association does not have a current contract with our property management company. The contract is 18 years old and the person who signed it as president of our association is now deceased. Is this a valid contract since the current president has not signed a new one? -Patricia S.

RESPONSE: If the contract has a provision that allows it to automatically renew each year, then the agreement is valid even though it's 18 years old. If the board wants a new contract, it will need to give notice of non-renewal to the management company within the time period specified by the contract. The board can then renegotiate the agreement with your current management company or enter into one with a different  company. The board should have legal counsel review the agreement and advise the board on how best to proceed. [NOTE: boards should always have all contracts reviewed by legal counsel when entering into or terminating them.]


Flower Boxes. I was hoping for some clarification on SB 326. Do elevated structures "designed for human occupancy or use" include flower boxes? -Heike

RESPONSE: Even though flower boxes are clearly designed for human use, it fails the statute's definition of load-bearing components:

...those components that extend beyond the exterior walls of the building to deliver structural loads to the building from decks, balconies, stairways, walkways, and their railings, that have a walking surface elevated more than six feet above ground level, that are designed for human occupancy or use, and that are supported in whole or in substantial part by wood or wood-based products. (Civ. Code §5551(a)(3).)

Flower boxes can still be a problem if they hang over balcony railings or outside windows. When filled with soil and watered, they are subject to dry rot and can eventually fail. If they go crashing to the ground and injure someone, lawsuits will fly.

Unless your CC&Rs specifically state that owners are obligated to maintain, repair and replace flower boxes, the association is responsible for them. (Civ. Code §4775(a)(3).) That means they can become a source of potential liability. Accordingly, associations should inspect and repair flower boxes as-needed or amend their CC&Rs to assign that responsibility to owners.

ACCESSORY
DWELLING UNITS

Vehicles Only. Concerning ADUs, our rules state that garages are to be used only for vehicles. Will we have to amend rules to say something about allowing an ADU in the garage? -Linda H.

 

RESPONSE: No, you don't need to amend your CC&Rs. Restrictions in CC&Rs and rules that require owners park in their garages are automatically voided for those owners who convert their garages to ADUs. They still apply to all other owners, just not to garages that become apartments.

 
The ADU statute is so problematic, that boards will need guidelines on how to handle ADU requests. Our firm has already drafted ADU rules for a number clients. If your board would like more information, contact us.


Forced Housing. Our association has a large greenbelt space we call "the meadow." Given California’s push for more affordable housing and the recent legislation to change R-1 zoning and restrict local control over R-1 zoning, could the government require housing on our meadow? Can our HOA be required to allow multiple housing units on the existing lots within our community under the new changes to R-1 zoning? -Richard B.

RESPONSE: I certainly hope not. It would amount to a "taking" of the association's property. The new accessory dwelling unit (ADU) laws will create a huge mess. It strips controls from associations, and will make parking unmanageable, burden association amenities, and depress property values. The Golden State is becoming less golden with each new piece of legislation.

Homeless Encampments. It is more likely your meadow will become the site of a homeless camp. If so, the association may be obligated to remove the homeless and clean up the encampment at association expense. Governmental agencies are, at best, irrational when it comes to the homeless. They have done very little to address the problem. However, they are quick to bill homeowner associations for their own dereliction of duty.

Bill for Camp Cleanup. Last month, an association in the San Francisco Bay Area was charged $20,000 to clean up a former homeless camp that had been discovered in a ravine. That portion of the ravine turned out to be the association's property. Even though the association did not create the homeless problem, had no control over removing the homeless, and had no way of knowing the encampment existed in a heavily wooded corner of the association's property that was unmarked with fences, they were hit with a $20,000 bill.

Pleas to Law Enforcement. Many associations have complained that pleas to law enforcement about the homeless sleeping outside their gates, drug use, public urination and defecation, and assaults have gone unheeded. If you see homeless tents springing up in your meadow, you should immediately notify your association's legal counsel to start making demands on your city and county officials.


The Number of Rentals? Can planned developments in California limit the number of houses that are considered rentals? -Denise Z.

RESPONSE: This is another problem with ADUs. If your CC&Rs limit the number of houses that can be rented, your restriction is still valid, but only as to existing houses. For example, CC&Rs might state that no more than 20% of the houses can be rentals. However, the restriction does not apply to ADUs. That means you can have the absurd result where only 20 out of 100 houses can be rented but all 100 can convert their garages into apartments--which gives you 120 rentals (and the nightmare parking that goes with it).

MORE SB 323
DUMPSTER FIRES


The following is an email from a homeowner to Marjorie Murray about SB 323.

Dear Marjorie: Please help me understand how you intended SB 323 to make peoples’ lives better and who, specifically, you were intending to help. Perhaps you can make me a believer in the good that your organization endeavors to achieve. Respectfully, Robert C.

RESPONSE: Let me know how she responds. I think Marjorie believes her legislation somehow helps homeowners. She once cornered me as I was about to speak to a room of managers at a law seminar in Northern California. She berated me for calling her legislation a train wreck. Out of respect for Ms. Murray, I no longer call it a train wreck.


Nasty Grams. Getting lots of nasty grams from our lovely Marjorie Murray! I am sorry she is so upset that we don’t want SB 323. She tells me it is for the good of homeowners. Isn’t that what I am, a homeowner? Unreal. Her argument is sad. -Pam S.

Stunned! I confess I am stunned at the complexities and gnarly problems due to SB 323! It has proven to be both an enormous headache and a gigantic source of fees for HOA attorneys! Certainly that was never the intent of the legislature–or was it?? -Elaine J.

Disincentive to Volunteer. Our HOA is relatively small. We do not utilize a management company or employees. For the past 32 years our volunteers have successfully managed our association at no taxpayer cost. With the day-to-day workload it imposes on our volunteers, we really, really do not have the excess management capacity to deal with the sort of entirely inappropriate, pointless, time-&-money consuming regulation represented by a one-size fits all poorly written kludge like SB 323. The total impropriety of the requirements being imposed on us cannot be overstated. The entirely unwarranted imposition of unnecessary administrative costs and hours of work by our volunteers acts as a disincentive to the volunteerism on which a small HOA depends. -John W.

 
Meaningless Regulatory Compliance. I work a job that is more than full time and spend additional hours each month serving as on the board for my HOA. I have seen firsthand how SB 323 has added burden and expense to our way of life. We now spend even more time and money on meaningless regulatory compliance. Our association has had no difficulty using our accounting firm as the inspector of elections. It's included in their contract. Under SB 323 we are now required to hire another vendor to source, contract with, negotiate, manage and pay. -Robert C.
 
Four-Unit Association. The governing documents of our four-unit condo building make no provision for elections. Rather, all four owners are required to be board members with a rotation system for the office of president. Does SB 323 pertain to our situation? I’m hoping this is the one good thing about a really small association. -Dee F.
 
RESPONSE: You're lucky. From what you described, you don't have to comply with SB 323.
 
Automatic Amendment? Do you happen to know if incorporating SB 323 is an automatic amendment to our bylaws? I was told by the management company that no vote needs to be taken, just ratified. Any advice to navigate this situation would be appreciated. -Jennifer Y.
 
RESPONSE: No, it's not an automatic amendment but it's the equivalent--it makes unenforceable any provisions in your bylaws that are contrary to the mandates of SB 323. At some point, you will want to amend your bylaws. At the moment, however, you do need to amend your election rules. If you narrowly update them to comply with the strictures of SB 323, the rules can probably be approved by the board without being distributed to the membership for a 28-day review. If, however, the board includes any discretionary changes to the rules, they must go through s 28-day membership review followed by a vote of the board. If you are unsure how to proceed, check with your association's legal counsel.
 
NOTE: Another one of the many problems with the dumpster fire known as SB 323 is the prohibition against amending election rules less than 90 days before an election. (Civ. Code §5105(h).) With the separate mandatory 28-day notice period for membership review of proposed rule changes (Civ. Code §4360(a)), the waiting period for updating election rules is extended to 118 days (4 months) since the change cannot be approved by the board until the end of the 28 days.
 
Hopefully, this is another problem CLAC can persuade legislators to fix--elimination of the 90-day prohibition against election rule updates. 
 
Investor Candidates. Can absentee owners be on the board--especially if they are investors? -Gloria D.
 
RESPONSE: Yes, investors and absentee owners can serve on the board.  Only rarely have I run across bylaws that require directors reside in the development. That requirement is no longer valid. I don't recall ever seeing a provision prohibiting investors from serving on boards. If they exist, such restrictions are also invalid.
 
CORRECTION. Last week I responded to a question about elections by acclamation. I noted that SB 323 only applied to associations with 6,000 or more units and hoped the legislature would extend acclamation to all associations. Unfortunately, I hit "SEND" before finishing my thought. I intended to add that elections by acclamation can be used if specifically provided for in an association's governing documents--something I've advocated for years. However, not everyone agrees with me. I discuss the split in opinion on our website. See Uncontested Elections.
 
This is another in the long list of fixes that need to be made to SB 323--elimination of any ambiguity that all associations have the right to elections by acclamation when the number of candidates is less than or equal to the number of open seats.
Adrian J. Adams, Esq.
 
Boards can contact us for friendly, professional advice.

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

Dumpster Fire Election Questions

Feb 18, 2020 0 Views 0 Comments
We received so many questions related to elections that I'm dedicating this newsletter entirely to answering them. I have a backlog of questions on other issues and will cover them in future newsletters. -Adrian
 
Costly Bill. SB 323 is a disaster for associations. The mess created by Marjorie Murray's SB 323 is making attorneys rich & causing extra costs we can ill afford. It needs to be repealed ASAP. The cost of rewriting bylaws, going to a vote which will never pass and must be resent several times at a high cost plus attorney's fees, is a waste. How could such a measure ever be approved and why?? -Louise W., horrified property owner.
 
RESPONSE: Even though SB 323 is a dumpster fire, it's unlikely this burdensome bill will be repealed. At best, we can fix some of the more serious flaws and internal inconsistencies. CAI's California Legislative Action Committee (CLAC) is working on legislation to clean up the mess.
 
CAI-CLAC. Recognition should be given to CLAC's Executive Committee--they fought hard last year to stop SB 323 and came within one vote of defeating it. The Committee is currently working to undo some of the damage. Recognition should be given to:
 
Chair: Nathan McGuire, Adams|Stirling PLC
Vice Chair: Jeff Beaumont, Beaumont Tashjian
Treasurer: Julia Souza, The Management Trust
Secretary: Darren Bevan, Baydaline & Jacobsen
Co-Chair: Kieran Purcell, Epsten Grinnell & Howell
Co-Chair: Thomas Ware, Kulik Gottesman Siegel & Ware
PR: Natalie Stewart, FHA Review
Past Chair: John MacDowell, Fiore Racobs & Powers
 
In addition to our legislative advocate Louie Brown, there are delegates from around the state working on your behalf, you can see them here: CAI-CLAC Delegates.
 
CACM Advocacy. I understand the California Association of Community Managers (CACM) also worked to oppose SB 323. I'm not as familiar with their legislative activities but urge support of their efforts.
 
When the time is right, we will ask for readers' help to put out the dumpster fire created by the Center for California Homeowner Association Law (CCHAL).
 
Quorum of Voters. In our small association, we have a problem reaching quorum. We retain our existing board when that happens. Is this still allowed under SB 323? If it is and the only candidates for open board positions are members of the current board, do we still have to have the full-blown election process? -Sandy M.
 
RESPONSE: Sadly, yes. SB 323 does not make allowances for small associations, or for the inability to make quorum, or for uncontested elections. Until good legislation can be passed, the best way to address these problems is to amend your bylaws to eliminate quorum requirements for the election of directors and address elections by acclamation. We have done this for many associations and it has greatly simplified their elections. Not only does it reduce the cost and complication of elections, it alleviates some of the problems created by SB 323.

Delegate Qualifications. My association uses district delegates to elect the board of directors. Our management company advises that election requirements only apply to member votes and not delegates. Thus, additional qualifications for delegates are still permissible. One of the qualifications our HOA has for delegate candidates is that they attend a minimum of three general session meetings within six months preceding the distribution of the candidate interest form. Is this acceptable? -Jim K.

RESPONSE: Unfortunately, no. SB 323 impacts the election of delegates as well as directors. By statute, election rules must "specify the qualifications for candidates for the board and any other elected position." (Civ. Code §5105(a)(3).) That means mandatory and permissive qualifications for candidates and the procedures for electing them apply to delegates. You should talk to your legal counsel about amending your election rules.
 
Email Addresses. SB 323 added email addresses to the membership list information. Civil Code 5225 requires requests for membership list information be reasonably related to the requester's interest as a member. Is that still a requirement or can a member request membership information without giving a reason or for any reason whatsoever? Also, can an association's website list membership information without the member's explicit permission? -Lee B.

RESPONSE: Association's can still restrict how membership lists are used. For example, a member cannot request the list so he/she can solicit real estate listings. The request for a membership list must be reasonably related to a member's interest as a member--not for business purposes.
 
Websites. Member information should never be posted on public accessible websites. It exposes members to unnecessary solicitation and loss of privacy. Even with restricted website postings, members should be given an opportunity to opt-out before their information is posted.

Which Rules Apply? Our annual homeowner meeting is scheduled for February. Should we follow the new election rules or do they not apply until our 2021 election? -Leslie S.

RESPONSE: New election rules apply--they went into effect January 1.


Cumulative Voting. We received notice that cumulative voting will be used in our election even though our governing documents do not specify cumulative voting anywhere. Should we be using cumulative voting if our governing documents do not provide for it? -Angela S.
 
RESPONSE: No, cumulative voting should not be used. The Corporations Code states that "If the articles or bylaws authorize cumulative voting, but not otherwise, every member entitled to vote at any election of directors may cumulate the member's votes..." (Corp. Code §7615(a).)
 
Recall Elections. With SB 323, can a new board be elected at the same meeting if the recall vote is successful? Or, is the rigorous SB 323 nomination process required to elect a full new board after a successful recall vote? -Gail R.

RESPONSE: This is another problem created by SB 323. The timeline for electing directors is now much longer than the timeline for recalling directors. That means the two cannot be done simultaneously. As a result, the recall election must be conducted first. If successful, recalled directors remain in place until the election of replacement directors has occurred--a process that now takes up to 4 months thanks to requirements imposed by the Center for California Homeowner Association Law. This is really problematic and will need to be addressed by the legislature.
 
Election by Acclamation. By my reading of SB 754, it mandates acclamation for HOAs of 6,000 or more units, but does not deny it for smaller associations. The “shall” vs. “may” plays a role in this. What would be the purpose of wasting money on sending and counting ballots that are irrelevant? -Barb D.

RESPONSE: It would be wonderful if your interpretation of the statute were the case. Unfortunately, acclamation only applies to associations with 6,000 or more units--and only if they follow the requirements imposed by SB 323. See Civil Code §5100(g). With luck, the legislature will extend acclamation to all associations
.

Email Addresses. Can the board "opt out" all homeowners from the membership email list and request that anybody who wants to "opt in" to make their e-mail addresses available to other residents, can do so. We worry that some folks do not want their e-mail disclosed, but failed to opt out. -Tom W.
 
RESPONSE: With the steady increase in junk email, identity theft, malware and hacking, most owners do not want their email addresses made public without their permission. Unfortunately, SB 323 exposed email addresses unless members specifically opt-out. Hopefully the legislature will undo this provision.
 
QUESTION: A current board member who is re-running for election owns nine units. Is it legal for her to vote for herself nine times on the ballot? -Raghda Z.

RESPONSE: Yes. If she owns nine units, she has nine votes. Worse, if your bylaws allow for cumulative voting and there are three open seats, she has 3 x 9 = 27 votes she can cast for herself. I recommend your association amend your bylaws to eliminate cumulative voting.


QUESTION: If a board member resigns term and the board fills the vacancy, does that person remain for full remainder of the person's term or just to the next election? -Raghda Z.

RESPONSE: Normally, anyone appointed to fill a vacant seat serves for the remainder of the term assigned to that seat. You should check your bylaws to see if they require something different.


QUESTION: Our association paid our attorney to update our outdated CC&Rs and bylaws. With the passage of SB 323, we had to pay for additional updates. We understand the law has major flaws. Is the “clean-up” going to cause us to make more changes to our CC&Rs and bylaws? –Becky D.

RESPONSE: Yes, that's a possibility. SB 323 is the gift that keeps on giving. If the major flaws in the bill can be corrected, your election rules may need to be updated again.


QUESTION: We are a small association. SB 323 is written in legalese so that any normal person cannot understand the new code. It requires hiring a lawyer to interpret the contents and that poses a financial problem for small associations. Why is there not a version for layman to understand? Of course we want to comply with the new law but there should be a simple version explaining the new requirements. -Daniel G.

RESPONSE: SB 323 is so badly drafted that law firms around the state put in overtime untangling the impact of the bill. To help boards and managers interpret this dreadful legislation, many firms published summaries. You can find ours at Election Timeline and Candidate Qualifications. For a complete outline of the election process, go to the Election Menu.
 
QUESTION: Can candidates running for the board mail information about themselves to offsite owners? -Elaine B.
 
RESPONSE: Yes, they can. They can request a copy of the membership list and then send letters, postcards and flyers to members.
 
Ethics Policy: At our board meeting, the agenda included new directors signing an ethics policy adopted by the board in 2019. One carry-over director who signed it in 2019 claims the policy expired after twelve months because our governing documents don't permit contracts with a term longer than twelve months. I believe policies adopted by the board are in effect until modified or eliminated by the same or subsequent boards. They do not automatically expire at the end of twelve months. Is this correct? -Sue O.
 
RESPONSE: Yes, you are correct. Signing an ethics policy is not a vendor contract with a one-year limit. It's a commitment by a director to abide by the association's ethics policy. Your carry-over director's commitment to abide by your ethics policy remains in effect until he repudiates it. It does not expire after 12 months and leave him free to engage in unethical behavior.
 
Inspectors of Election. If we appoint a homeowner to act as our inspector of elections, will they be covered by our insurance? -Fred M.
 
RESPONSE: That is a really good question. In a recent article published by Ryan Gesell and Timothy Cline of the Cline Insurance Agency, the authors pointed out that protection of volunteer inspectors depends on whether the association's D&O policy covers volunteers for non-monetary claims and the person was specifically identified in the minutes as a volunteer.
 
They also raised the problem of whether a volunteer could comply with the extensive duties now imposed by SB 323. To minimize exposure to liability, Gesell and Cline recommend that professional inspectors of election be hired by associations. I agree.
 
Hiring a professional should shift liability away from the association. Unfortunately, professional inspectors also recognize the inherent problems in conducting HOA elections. As a result, many include language in their contracts requiring the association indemnify them from potential liability. 
 
As Gesell and Cline noted, since D&O policies extend coverage to volunteers, not professional inspectors, associations could find themselves paying to defend election results, should a claim arise. The authors pointed out that insurance policies are available for professional inspectors of election. Some offer the option of adding associations as additionally insured. Accordingly, boards should ask about insurance when hiring professional inspectors of election.
 
For more information about insurance issues, boards should check with their insurance agent or call Ryan Gesell or Timothy Cline at the Timothy Cline Insurance Agency.
 
ELECTION RULES. Election RulesAll associations must adopt new election rules to comply with SB 323. Failure to do so could subject elections to legal challenge and may result in new elections, monetary penalties and an award of attorney fees. To avoid this, contact us for new election rules.
 
HIRING LAWYERS


We are looking for experienced attorneys to join ADAMS|STIRLING.
Candidates should have at least five years' experience as an attorney.
We offer growth opportunities and excellent benefits. Contact me at 800-464-2817 or by email.

Adrian J. Adams, Esq.

Boards can contact us for friendly, professional advice.

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

Meeting Without A Manager

Feb 9, 2020 0 Views 0 Comments

QUESTION: What happened to the Newsletter? I haven't received one at all in 2020 and can't find any on your website. -Sally B.

ANSWER: I'm glad you asked. In addition to the enormous amount of work generated the new election rule requirements, we've been busy hiring attorneys. Later in this newsletter is an introduction to attorney Megan Hall. Other introductions will be made in later newsletters.

Election Feedback Needed. Speaking of election rules, CAI-CLAC is reviewing how best to introduce much-needed clean-up legislation in the wake of the mess created by SB 323. To that end, they need to know if your association experienced any costs or problems due to the new election requirements. Please report your experiences to CAI's Legislative Strategy & Research Committee at [email protected]. Your feedback will help legislators understand why we need to fix this badly flawed legislation.

MEETING WITHOUT
THE MANAGER


QUESTION: Our board properly posted a meeting notice and agenda 4 days prior to the meeting. Our manager said the meeting must be done over because she was not aware of the meeting and did not attend. Do we need to do everything over?

ANSWER: No, you don't need to repeat the meeting. The manager's presence at a board meeting is not what makes it valid. Board meetings are valid when they are properly noticed along with an agenda and a quorum of directors is present.

RECOMMENDATION: Check again with the manager, she must be concerned about a procedural issue. If it's still unclear, check with your association's legal counsel.

BUDGET DEADLINE
AND DUES INCREASE


QUESTION: Our association's fiscal year begins February 1. As of mid-January, the board has yet to deliver a pro-forma budget for the upcoming fiscal year. Our CC&Rs require budget notice no less than 30 days before the start of the fiscal year. What are the consequences for failure to deliver the budget?

ANSWER: The Davis-Stirling Act requires the annual budget be distributed to the membership not less than 30 nor more than 90 days before the end of the association's fiscal year. (Civ. Code §5300(a).) Actually, it's more than the budget. It's a budget report consisting of the following:

  • a pro forma operating budget;
  • a summary of the association’s reserves;
  • a statement regarding any deferral of reserve item repairs;
  • a statement whether special assessments are anticipated related
     to reserves or reserve components;
  • a statement of how reserves will be funded;
  • a statement of how the reserves were calculated; 
  • a statement regarding any outstanding association loans; and

In addition, there are a number of policy disclosures that must be distributed to the membership.

Failure to Timely Distribute. Failure to distribute the budget report not less than 30 nor more than 90 days prior to the end of the fiscal year voids any increase in regular assessments approved by the board of directors. Any such increase in dues must then be approved by a majority of a quorum of members. (Civ. Code §5605(a).)

MEGAN HALL
JOINS ADAMS|STIRLING


I am pleased to announce that attorney Megan Hall joined our firm.

Diverse Clients. Prior to joining ADAMS|STIRLING, Megan represented a diverse client base from the San Joaquin County to individuals in business. She dealt with employment issues, personal injury, CEQA, unlawful detainer and probate matters.

Litigation. Megan has extensive experience litigating matters for clients. In addition to mediations and arbitrations, she handled depositions, motions, summary judgments, trials, and settlements. Megan brings her diverse litigation background into corporate transactional matters for our clients.


Education. Megan earned a Bachelor of Arts with a major in Political Science and minors in Business and Communications from the University of Oregon. This was followed by a Juris Doctorate from the Santa Clara University School of Law in Santa Clara, California where Megan was on Law review and Honors Moot Court.

We are delighted to have such an experienced attorney join our team. If your association needs legal services, contact us for a proposal.

HIRING LAWYERS


We are looking for attorneys to join ADAMS|STIRLING.

Candidates should have at least five years' experience as an attorney.

We offer growth opportunities and excellent benefits. Contact me at 800-464-2817 or by email.

 


Kudos. I spoke with you many years ago while I was still president and manager (for 10 years!) of an HOA. I have since moved on and am no longer in an HOA. However, I just want you to know how much I enjoy your newsletter, how informative it is, and will continue to do so as an attorney "wannabe." I can just observe that with the way the legislature and Ms. Murray are screwing things up, I'm glad I'm out! Keep up the good work! -Bob T.

RESPONSE: I can't complain too loudly about Marjorie Murray and her Center for California Homeowner Association Law (CCHAL) making such a mess of things. Ms. Murray has been a boon for business for law firms all over the state. I may send her a fruit basket. Unfortunately, the legal work she generates comes at the expense of 9 million homeowners who live in community associations.


Newsletter. Can you guys include a PDF attachment that shares the same info as each newsletter but it’s formatted so we can print it and save them in a binder for reference? -John H.

RESPONSE: We post newsletters on our website at: www.Davis-Stirling.com/Newsletters. You can always go there to print newsletters. We only post current and prior year's newsletters. Posting anything older runs into the problem of constantly changing laws which makes some information in our newsletters out of date. For current information, go to the Index on the Home page of Davis-Stirling.com to look up topics or use our website's Google search to find what you need.

ELECTION RULES. Election Rules I have a lot of feedback material to cover in my next newsletter. I could not get to it this week due to the large amount of legal work generated by Marjorie Murray's SB 323.

As previously noted, all associations must adopt new election rules. Failure to do so could subject elections to legal challenge and may result in monetary penalties and an award of attorney fees. To avoid this, contact us for new election rules.

Adrian J. Adams, Esq.

Boards can contact us for friendly, professional advice.

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