Trump Signs in the Yard!

Aug 7, 2020 0 Views 0 Comments

My HOA allows political signs to be posted in front yards. Some people have overdone it and there are 12 trump signs in a front yard. Not only is this disturbing, but it looks awful. Can we contact the owner and ask that they be removed? The HOA claims they have no control because of the Davis-Stirling Act. Is this true? -Anita S.

RESPONSE: Brace yourself, it's only going to get worse. Trump signs, Biden signs, Black Lives Matter signs. We are less than three months from a national election and the craziness has already started.
Unlike the coronavirus--there is no medical treatment and no vaccine in development.

Fliers, Signs and Altercations. Fliers will be slid under doors and taped to laundry room walls and elevators, then torn down and replaced with opposing fliers, then torn down again. Signs and flags will appear in windows, on balconies and in yards. Yard signs will be defaced and stolen. There will be graffiti on walls and sidewalks. There will be shouting matches and physical altercations.

Political Rallies. In addition, there could be political rallies in the common areas.  Effective January 1, 2018, associations cannot prohibit residents from assembling in the common areas for purposes related to elections to public office. (Civ. Code §4515(b)(1)) That includes hosting public officials and candidates to speak or raise funds. (Civ. Code §4515(b)(2).) Moreover, members cannot be charged a fee or required to make a deposit, buy insurance, or pay premiums or deductibles on the associations’ insurance when using the common areas. (Civ. Code §4515(b)(3); (c).)

Time Periods for Signage. Even though associations cannot prohibit noncommercial signs (Civ. Code §4710), they can establish reasonable time periods for political signage. In mobilehome residency law (regulating subdivisions, cooperatives and condominiums), a political sign "may not be displayed in excess of a period of time from 90 days prior to an election to 15 days following the election, unless a local ordinance... imposes a more restrictive period of time for the display of such a sign." (Civ. Code §799.10.)

Various appellate cases have likened associations to landlords and owners to tenants. By statute, "A tenant shall post and remove political signs in compliance with the time limits set by the ordinance for the jurisdiction where the premises are located... If no local ordinance exists or if the local ordinance does not include a time limit for posting and removing political signs on private property, the landlord may establish a reasonable time period for the posting and removal of political signs. A reasonable time period for this purpose shall begin at least 90 days prior to the date of the election or vote to which the sign relates and end at least 15 days following the date of the election or vote." (Civ. Code §1940.4(d).)

Limiting Number of Signs. Associations can also set reasonable limits on the number of signs. In an HOA case that dealt with real estate signs, the court concluded "to protect all owners it may impose reasonable restrictions for aesthetic purposes.... Moreover, we see no problem with allowing only one sign per unit, or requiring that signs be removed within three days of a lease or sale." (Fourth La Costa v. Seith.) When it comes to political signs, one sign might be too restrictive but maybe not. It will depend on what a court deems "reasonable."

RECOMMENDATION: Associations cannot escape being pulled into the fray. There will be demands on boards to do something about signage, rallies and altercations. It's going to be a mess. Boards should adopt reasonable rules for distributing fliers, restricting signage in the common areas, and regulating the size, number, and time periods for displaying signs in or on separate interests.

For assemblies, guidelines should establish times and locations, noise levels, duration, and scheduling priorities. Penalties need to be adopted for violations. Call us if you need to adopt rules for political signage and rallies.

NO DISCLOSURE OF
EMPLOYEES WITH COVID-19


California's Department Fair Employment and Housing (DFEH) issued a Bulletin Dated July 24, 2020 on employment discrimination during the pandemic. The DFEH prohibits employers from disclosing the names of employees who test positive for the coronavirus. Page 4 of the bulletin states:

What information may an employer reveal if an employee is quarantined, tests positive for COVID-19, or has come in contact with someone who has the virus?

Employers should not identify any such employees by name in the workplace to ensure compliance with privacy laws. If an employee tests positive for or is suspected to have COVID-19, the employer will need to follow the most current local, state, or federal public health recommendations. Employers should take further steps at the direction of public health authorities that may include closing the worksite, deep cleaning, and permitting or requiring telework.

Employers may notify affected employees in a way that does not reveal the personal health-related information of an employee. For example, the employer could speak with employees or send an email or other written communication stating: “[Employer] has learned that an employee at [office location] tested positive for the COVID-19 virus. The employee received positive results of this test on [date]. This email is to notify you that you have potentially been exposed to COVID-19 and you should contact your local public health department for guidance and any possible actions to take based on individual circumstances.”

Employers may not confirm the health status of employees or communicate about employees’ health.

RECOMMENDATION: Boards should work with legal counsel on any messaging to the membership about the coronavirus.


NorCal Counties. The California Department of Public Health issued guidelines on Youth Sports and Elementary School Waivers.

Contra Costa County has new School and Childcare Guidance and a new Mass Isolation Order. Marin County extended their Eviction Moratorium.

Mendocino County has a new order capping permissible outdoor gatherings (including worship/religious services, funerals and memorials and protests) to a maximum of 100 people.

Mono County has a new order which clarifies that gatherings of persons from different households except for gatherings specifically allowed (religious, cultural gatherings and political protests) are prohibited, and wedding ceremonies are limited to 30 persons and receptions and other parties related to the wedding ceremony are prohibited: Mono County Order re Gatherings and Weddings.

Monterey County has approved an ordinance imposing Fines for Face Covering Violations.

Santa Cruz County adopted a new health ordinance for violations of the health orders allowing for fines and jail time.

SoCal Counties. Riverside County: youth sports can resume with social distancing and a stable cohort such as a class or a team--no competition, event or tournament is permitted at this time. The City of Palm Springs issued a modified order for the closure of bars at restaurants to 12 a.m. instead of 11 p.m.

Los Angeles County updated its tennis/pickleball court protocols, including face coverings at all times, except while playing, eating or drinking, and symptom checks before entry (in-person, online, or through signage). The City of Los Angeles updated its order to allow outdoor operations of fitness centers, hair salons, museums and zoos. Also removed allowance for in-person indoor protests and instead provides for in-person protests outdoors.

San Diego County added employer requirements to promptly notify the County Department of Public Health if there is an employee diagnosed with Covid-19 by providing their name, date of birth, and contact information. If three or more cases occur at an employer within a span of 14 days, the employer must provide notice of exposure to the employees, customers or any other persons who may have been exposed to Covid-19 at the workplace. The County strongly recommends providing the same notice if at least one employee is diagnosed with Covid-19.

READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel.
For a list of county restrictions and links to health department orders, see County Chart 8-5-20. The chart is also posted on our website.


ADA access….that is so GREAT….2 thumbs UP for being on top of this issue….!! - Doug R.

Wow, the ADA website is what I'd call "Client-Centered." Thank you! -Deborrah E.

Your response to the inquiry regarding smoking in a non-smoking condo complex was HIGHLY offensive...your recommendation to gift a box of cigars extremely insensitive, unprofessional and plain unacceptable. You owe readers an apology. -Pam V.

RESPONSE: I don't know what came over me. the Artificial Intelligence we installed on our website must have taken over.

I needed a laugh for the day. Thank you! -Carol H.

Mr. Adams, thank you so much for your informative newsletters regarding HOA rules and regs affected by state law. I am a past board member but keep up with changes which affect our association. -Emma M.

Thanks for the exceptionally valuable newsletters. -Keith F.

You write great articles and I enjoy reading all your work. -David C.

Adrian, I'm sure that you know that Senator Wieckowski is the  knucklehead who authored SB 323. This guy is either on someone's payroll or a complete idiot, or both. Is there a way to educate the HOA community about him and his cohorts and sponsors? There should be a coordinated effort to vote this guy out of office. If not, what's next? -Julian M.


RESPONSE: Senator Wieckowski and Marjorie Murray were thick as thieves on the dumpster fire known as SB 323. To defeat bad legislation, readers need to follow CAI's California Legislative Action Committee (CLAC) for alerts on bad legislation and how to stop it. Everyone should subscribe to their newsletter

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to associations only.

2-Minute Video Feedback

Jan 17, 2021 0 Views 0 Comments

We were swamped with your feedback about our first 2-Minute Video, so much so, we can't possibly print everything. Following is a sampling. -Adrian

Phenomenal! Loved the simplicity. –Lisa E.

Great, keep these coming! Suggest boards use them in meetings! –Patricia H.

Excellent video--such an easy way to take in information--and perhaps disseminate to the community? Thank you for initiating this project. –Sukha C.

RESPONSE: Credit goes to Tim Cline for the concept. It was a collaborative effort between his agency and our firm.

What a great service to community associations!!!  -Marilyn B.

Bravo! –George S.

Loved it. Clear, succinct. The visuals are excellent. –Astrid L.

RESPONSE: Kudos to Jeremy Mosst, one of Tim Cline's crew, for the graphics. I write the scripts and Jeremy works his magic. -Adrian

Wonderful snapshot format. One more significant enhancement to your website and the information you provide. Your organization is providing an exceptional service--the go-to website for all things HOA. –Lauri P.

Loved it! I see this as a great resource for managers to share with board members and owners. –Jennifer S.

Your video about reserves during financial hardship is truly excellent and très à propos! As Treasurer, I emailed it to board members as it clarifies what to do and at what stage membership should be informed. Thank you for helping us and looking forward for more videos, it’s such a great idea! –Guy T.

RESPONSE: My French is a little rusty (actually, non-existent), so I had to look up très à propos to see what it meant. It means very opportune, appropriate or important.

This is a great concept and helpful for all board members, especially those newly elected. –Garry D.

Three cheers for getting so much detail into such a short presentation. I will spread news of this series. –Henry C.

YouTube is an excellent vehicle as links to individual videos can be forwarded to non-board members. In this first case, our entire Finance Committee would benefit. Keep 'em coming! -Doug G.

RESPONSE: The Cline Agency is also posting them on Vimeo so they are easily accessible to people seeking information. Today's video is on director conflicts of interest.

DIRECTOR CONFLICTS
OF INTEREST


Our second video addresses board member conflicts of interest and what to do when a conflict exits. There has been an increase in litigation involving breaches of fiduciary duties, mostly because volunteer directors are unclear about what they can and cannot do. This video should help directors avoid litigation.

  Watch Director Conflicts of Interest.


NOTE: We currently have ~40 videos in the pipeline covering basic concepts related to association management and law. The library is free to board members, managers, homeowners and industry professionals. Two more videos will be released in February. 


Love in the Air. LOVE LOVE your newsletters! I find the balance of these educational messages an easy read filled with humor. Thank you, keep up the amazing work to share resources. –Sandra H.

Balcony Bill. A previous newsletter covered balcony inspections. One aspect that wasn't mentioned is that not all balconies need to be inspected. I believe SB 326 only includes balconies that "extent beyond the building's exterior walls and have load-bearing components made of wood or wood-based products." In other words, wood-framed cantilevered balconies. -Lydia S.

RESPONSE: Not just cantilevered balconies but also those with wood post supports. Elevated structures requiring inspection include walkways and stairwells supported by wood products.

Retiring. I am a commercial banker who has been lending to HOAs for many years. My bank is one of the leaders in this industry. I will be retiring soon and was just elected to our board of directors. I was appointed Treasurer. Yes, they always make bankers the Treasurers. Thank you and please do not retire. We enjoy your knowledge and humor. -Robert A.

I may skip other entries in my email, but never yours. –Astrid L.

Thank you so much. I love your newsletters. -Sharon H.

Memories. May this year provide you with memories to last a lifetime. You are appreciated. –Frank S.

RESPONSE: Thank you! Last year provided enough memories to last a lifetime. I'm hoping this year will be a little less memorable.

SB 323. Please, folks, drop a quick email or letter to your state senator and assemblyman each time another bad example of the ills of SB 323 comes up. I have written and called multiple times. I think our elected officials need to know how harmful this legislation is. –Claire B.

RESPONSE: I agree. Legislators need to know that SB 323 is a dumpster fire. The bill made HOA elections long, complicated and expensive. It should be rescinded.

Reserve Borrowing. Hello, When a board decides to borrow reserve funds, reduce reserve transfers, or defer reserve projects, the board needs to provide these details to their reserve provider. Even better, the board should first consult with the reserve provider while exploring these options. -Mike McDermott (Browning Reserves)

RESPONSE: Good point. Too often, boards forget to inform their reserve analyst when they make decisions that impact the association's reserve funds.

NEWSLETTERS. Readers can find current year and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's internal "Google Search" feature. You can find the search line in the upper right corner of the website under our ADAMS|STIRLING logo.


Statewide Updates. The greater Sacramento region exited the regional stay home order effective January 12, 2021. The counties in that region will now be controlled under the tier system. 1/12/21 Press Release re: Exit Regional Stay at Home Order.

Northern California. Butte County issued a 1/12/21 Press Release re Exiting Regional Stay at Home Order.

Calaveras County issued a 1/12/21 Press Release re Vaccine Rollout and Other Updates.

Contra Costa County issued a 1/11/21 Press Release re: Increase Vaccination Efforts.

Fresno County issued 1/8/21 Youth and Recreational Adult Sports Guidance.

Humboldt County moved from Red to Purple Tier.

Lake County issued a 1/8/21 Press Release re: High Risk of Infection in County.

Madera County issued a 1/12/21 Press Release re: Availability of Vaccine for Those 75+ and Call for Volunteers To Assist with Vaccine.

Marin County issued a 1/12/21 Press Release re: All Tiers of Phase 1A Now Open For Vaccine.

Mendocino County issued a 1/11/21 Press Release re: Ramping Up Vaccine Clinics.

Mono County issued a 1/11/21 Press Release re: Vaccine Prioritization and Distribution. The County issued 1/12/21 Rules for Returning to School After Illness During Pandemic.

Monterey County issued a 1/10/21 Press Release re: Vaccination.

Napa County issued a Vaccination Schedule. The County issued a 1/9/21 Press Release re: Extension of Regional Stay at Home Order.

Nevada County issued a 1/12/21 Press Release re: Exiting Stay at Home Order Into Purple Tier.

Sacramento County issued a new Health Order to align with the Purple Tier.

Santa Clara County issued a 1/9/21 Press Release re: Extension of Regional Stay at Home Order. The County also issued a 1/21/21 Press Release re: Misinformation About Availability of Vaccine.

Santa Cruz County issued a 1/12/21 Press Release re: County Seeking Rental Assistance For Renters Unable to Pay During Pandemic.

Shasta County issued a 1/11/21 Press Release re: Vaccination Available to New Groups.

Sonoma County issued a 1/12/21 Press Release re: Vaccine Outreach Campaign.

Sutter and Yuba County issued 1/9/21 AB685 COVID-19 Workplace Outbreak Reporting Requirements. The County also issued 1/12/21 Vaccine Schedule.

Tehama County issued 1/8/21 Vaccine Schedule Update.

Yolo County issued a 1/12/21 Press Release re: Stay and Home Order Lifted and Return to Purple Tier.


Southern California. Riverside County scheduled several Covid-19 vaccine clinics throughout the region in phase 1A, 1B and a clinic for those 65 and older.

San Bernardino County: The Supreme Court of California rejected San Bernardino’s petition seeking local control of Covid measures rather than be restrained by the state’s regional approach.

San Diego County plans to offer Covid-19 Vaccine to people 65 years and older.

Santa Barbara County's Phase 1A Covid vaccinations available at local pharmacies.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 1-13-21. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Request a proposal to represent your association.

Animated Two-Minute Videos

Jan 10, 2021 0 Views 0 Comments

The laws and insurance requirements governing homeowner associations are complex and often confusing to the 15 million people living in California's common interest developments.

To make them easier to understand, we are pleased to introduce a series of 2-minute videos on HOA management and law.

We collaborated with Tim Cline, founder of the Cline Agency Insurance Brokers, to create a library of short animated videos on all topics related to community associations. The videos deliver essential principles on a featured subject without getting lost in the details.

Because of the pandemic's ongoing impact on association budgets, our first video is on Borrowing from Reserves to cover operational shortfalls.

For a deeper dive into topics, Davis-Stirling.com provides details and  cross-linking so users can easily move between commentary, statutes, and case law as they research a topic. In addition to the resources we provide, the Cline Agency has a series of in-depth articles on key HOA Insurance issues.

Watch Borrowing from Reserves
and give us feedback. We will release two new animated videos every month throughout 2021.

ALLYSON CALVIRD
JOINS ADAMS|STIRLING


We are pleased to announce that attorney Allyson Calvird joined our team. She is based in the Central Valley and will work out of our Northern California office.

Allyson previously worked as an attorney in the Social Security Administration where she advised administrative law judges and drafted complex legal decisions.

Allyson's experience includes litigating claims and negotiating settlements with insurance companies on behalf of injured workers. She also worked for the Department of Child Support Services and the Human Services Agency where she assisted clients with benefits and court orders.

Allyson earned a Bachelor of Arts, cum laude, in Sociology from California State University, Stanislaus. She subsequently earned a Juris Doctor, cum laude, in just two years from the California Western School of Law in San Diego, California.

We are pleased to have Allyson on our team. If your association needs legal services, contact us for more information.

COST OF BALCONY INSPECTIONS
AND REPAIRS


QUESTION: The balcony inspection bill, AB 326, is causing a stir. The board claims it makes the HOA responsible to repair balconies. I say it only requires an HOA to enforce repairs to the tenants if required and designated in the governing documents. If I’m wrong I’m afraid assessments will go sky-high in our 506-unit complex. –Tim R.

RESPONSE: You should expect your assessments to go up. The common area structural elements of balconies are the responsibility of the association to repair and replace. That's why it's important for boards to initiate inspections now so they can find out what, if anything, needs repair, how much it will cost, and the timing of repairs. This will allow boards to properly budget for and schedule needed work. For more information, see Elevated Structure Inspections.


Proxyholders. Can one homeowner be the proxyholder for three separate homeowners who are abroad? Due to the pandemic, can this proxyholder submit these ballots along with emailed proxy letter to the inspector, and attend the HOA meeting on Zoom or must the proxyholder physically go to the office where the ballots are being opened, turn them in, and attend the meeting? –Lilly C.

RESPONSE: One homeowner (a "proxyholder") can cast ballots for two, three or more members by proxy. The person can make arrangements to deliver proxies to the inspector of elections in person, by FedEx, fax or email in exchange for ballots. The ballots can then be voted and delivered to the inspector using the double envelopes provided for the election. The person can attend the annual meeting using the video conference platform supplied by the association.


Face Covering Fines. Can the association collect a $300 fine if a person is not wearing a mask in the common area? –S.

RESPONSE: Yes, provided the board adopts and publishes emergency rules regarding face coverings, has a fine policy in place, and follows due process with a noticed hearing and written finding. The fine can then be added to the person's account.


Collecting Fines. We have a member who owes $1,800 in fines. The amount is for fines only, not dues, fees, assessments, repairs, etc. What is the best way for the board to collect this amount from the owner? -Andrew S.

RESPONSE: If everything was done properly per your fine policy, you can file a small claims action to collect up to $5,000 in fines. Once you obtain a judgment, you can use it to garnish the person's wages and levy against his property. For more information, see Collecting Fines.


Old CC&Rs. Our CC&Rs were written in 1974 and are literally 9 pages long. They do NOT state who is responsible for the interior of the homeowner's unit (condo). Does this Civil Code automatically apply to all CC&Rs that are silent about responsibility or does this have to be a legal amendment of the CC&Rs in order to apply? –Jai V.

RESPONSE: The Davis-Stirling Act fills the gaps in your CC&Rs. Unless otherwise provided in your governing documents, your association is responsible for repairing, replacing, and maintaining the common area and owners are responsible for their units. (Civ. Code §4775(a)(1)&(2).)

Exclusive Use Common Area. Older CC&Rs are generally silent when it comes to exclusive use common area. I believe it was attorney Curt Sproul who introduced the concept of exclusive use in 1985 when the Davis-Stirling Act was drafted. In 2017, the Act was amended making owners responsible for maintenance of exclusive use common areas, with the association responsible for repairs and replacements (unless the CC&Rs state otherwise). (Civ. Code §4775(a)(3).)

Amend CC&Rs. When our firm restates CC&Rs, we pay particular attention to defining responsibilities related to exclusive use common areas. Doing so eliminates confusion over duties and minimizes lawsuits when exclusive use elements are damaged or cause damage.

No Internet. Is it okay to hold a Zoom meeting if the association knows that half of its members do not have internet service? –Frank R.

RESPONSE: Yes, the association can hold Zoom meetings. Members do not need the internet to use Zoom. The video conferencing platform has a feature that allows members to join the meeting using their telephone. Those with internet access can take advantage of the video feature and see other participants in the meeting.


Masks Required. Many HOAs post “masks required” signs in the common areas but do not enforce the policy despite the high rate of transmissibility of the virus. I can imagine that one lawsuit asserting this laxness caused one or more infections would shape them up pronto as the cost of a suit would impact all owners. These "no guts” boards should consult their attorneys and scientific professionals before turning a blind eye. -Skip D.

RESPONSE: Exposure to potential litigation (not to mention the virus) is something boards should consider when they adopt emergency rules and then don't enforce them.

NEWSLETTERS. Readers can find current year and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's internal "Google Search" feature. You can find the search line in the upper right corner of the website under our ADAMS|STIRLING logo.


Federal & State. The CDC updated guidelines for multifamily housing and improving ventilation in your home. Information related to vaccination can be found here: Vaccination Schedule.

The state issued California's Safe Schools for All Plan.

The state issued CDPH Travel Advisory.

The Northern California region remains the only one not subject to regional stay at home orders.

The State Public Health Officer issued a 1/5/21 Health Order re: Hospital Surges and an Amendment dated 1/6/21.

The following Counties have changed tiers: Humboldt (Purple Tier to Red Tier); Inyo (Red Tier to Purple Tier).


NorCal Counties. Alameda County issued a 1/7/21 Press Release re: Regional Stay at Home Order indicating the expectation that the Regional Stay at Home Order will extended past the three-week minimum.

Butte County issued a 1/4/21 Press Release re: Regional Stay at Home Order indicating that the County still remains under the Regional Stay at Home Order.

Contra Costa County provided Resources for Businesses and Employees Affected by the Economic Impacts of COVID-19.

Fresno County issued Guidance for Responding to COVID-19 Cases in Schools.

Marin County issued a 1/7/21 Press Release re: Regional Stay at Home Order indicating the expectation that the Regional Stay at Home Order will be extended past the three-week minimum.

Mono County issued a 12/29/20 Press Release re: Extension of Regional Stay at Home Order indicating that the Regional Stay at Home Order has been indefinitely extended. The County issued an updated order related to lodging.

Nevada County issued a 12/31/20 Press Release re: Regional Stay at Home Order indicating that the County remains under the Regional Stay at Home Order.

Placer County issued a 1/1/21 Update re: the County.

Sacramento County issued a 12/31/20 Update re: Regional Stay at Home Order indicating that the Regional Stay at Home Order will likely be extended.

San Francisco issued a 12/31/20 Press Release re: Regional Stay at Home Order and Travel Advisory indicating that both will be extended likely.

San Mateo County issued a 1/7/21 Press Release re: Regional Stay at Home Order indicating that the County will likely remain under the Regional Stay at Home Order.

Santa Clara County issued a 1/8/21 Press Release urging County healthcare workers to get COVID-19 vaccinations.

Santa Cruz issued Amended Quarantine Order and an Amended Isolation Order. The County also issued an Order Suspending Elective Surgeries and Elective Procedures.

Shasta County issued a 12/31/20 Press Release re Vaccinations.

Tehama County issued a 1/5/21 Press Release regarding vaccination distribution.

Tulare County issued a 1/7/21 Press Release regarding vaccination distribution.

Yolo County published the 1/2/21 CDPH Press Release indicating that the Sacramento Region will remain under the Regional Stay at Home Order.


SoCal Counties. Los Angeles County revised its order, outdoor restaurant seating is closed to public. Updated issues with faith based worship that conflicted with recent case law. (Buffit v. Newsom – BCV 20-102267 (Kern county); Roman Catholic Diocese of Brooklyn .v Cuomo No. 20A87, 2020 WL 6948354; Robinson v. Murphy 592 US ____.) Further, updated order for persons who traveled from outside of southern California region for non-essential travel, must self-quarantine for 10 days. If have symptoms or test positive for Covid-19 must follow isolation health order. Substantially revised social distancing protocols for buildings and grounds.

The City of Los Angeles revised its Safer at Home order to align with the Los Angeles County travel restrictions.

Orange County revised its health order to align with regional stay at home order.

San Bernardino County developed a quarantine and isolation calculator to determine how long should self-isolate after testing positive for Covid, being sick with Covid or being exposed to someone with Covid.

City of San Diego issued an executive order, that all residents comply with the state and county health orders or can violate municipal code. Further, parking enforcement has been reduced to holiday or Sunday enforcement regulations and no longer will enforce parking meters, yellow commercial zones, and short-term green zones. Red, blue and other enforcement areas will continue to maintain public safety.

Santa Barbara revised its health order that continues to January 21, 2021 that aligns with the 12/22/20 supplemented State’s Regional Stay at Home Order which adds the revision that that non-essential business must cease operations between 10:00 pm and 5:00 am. Face covering order is extended to January 22.

READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 1-8-21. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

Felon Director Impacts Insurance

Dec 31, 2020 0 Views 0 Comments

QUESTION: The board found out recently that the President was convicted of a felony a few years ago. The underwriter for the association’s fidelity insurance advised us that if the felon is not removed from the board, the carrier will cancel the policy. I doubt this director will cooperate and resign. Can the board remove him?

RESPONSE: That's a really good question. The election bill, SB 323, was badly drafted with many internal inconsistencies and some glaring oversights. This is one of them.

Nominees and Insurance. The bill sponsored by Marjorie Murray's organization forced all associations in California to accept felons on their boards unless it impacted their fidelity bond. Due to poor drafting, her bill created a large gap. Here is the language:

(c)...an association may disqualify a person from nomination as a candidate pursuant to any of the following: ...(4) An association may disqualify a nominee if...a past criminal conviction that would, if the person was elected, either prevent the association from purchasing the fidelity bond coverage required by Section 5806 or terminate the association’s existing fidelity bond coverage. (Civ. Code §5105(c)(4).)

You will notice the provision only deals with disqualifying someone from nomination. The statute has no authorizing language for removing a director once the person is elected.

Corporations Code. Normally we would turn to Corporations Code §7221(a), which allows a board to declare vacant the seat of a director convicted of a felony. Unfortunately, Ms. Murray's bill overrides this provision because her bill specifically applies to associations and specifically allows felons to serve on boards. Once a felon is elected to the board, the only entities authorized to remove a director are the courts or the membership.

Insurance Takes Priority. With two statutes completely at odds — one mandating insurance coverage (
Civ. Code §5806) and the other preventing boards from removing felon directors — I believe insurance takes priority. No association should operate without insurance. That means the board should vacate that director's seat and appoint a replacement director.

Possible Litigation. The director so removed from the board might sue to regain his seat. I don't mind defending that lawsuit. I can't imagine a judge ordering an association to operate without insurance.

RECOMMENDATION: I recommend amending bylaws to include a provision allowing boards to remove a director whose past or present criminal activity would cause the association to lose insurance coverage required by Civil Code §5806. At some point, let's hope common sense prevails and the legislature rescinds the dumpster fire known as SB 323.

2020 YEAR-END
WRAP!


This is our last newsletter of 2020 — a year of extraordinary challenges for our industry. A pandemic arrived on our shores without warning and overnight everyone had to learn how to quarantine, work from home, social distance, wear masks, and hold meetings via Zoom. The coronavirus decimated California's economy with millions of workers losing their jobs from business closures and mass layoffs. This caused association budgets to suffer shortages from delinquencies.
 
Newsletters. At ADAMS|STIRLING, we are grateful we were able to serve our clients and our readers by answering questions and drafting emergency rules. We normally publish 24 newsletters a year (two a month). However, there was such a demand for information during the pandemic that we published one to two per week for a total of 81 newsletters.

Website Traffic. We also saw an increase in traffic on our website. In one 30-day period, we had over 10.5 million requests on the Davis-Stirling.com website. A “request” is a message from a browser to our website server. It provides the user with desired webpages which are then displayed on the user's screen. Due to the high traffic, of the 109 million websites in the United States, Davis-Stirling.com ranks in the upper 14%.

New Projects. This year we rolled out an "Election Timeline Calculator" to help board members and managers address the confusing election timeline created by SB 323. We have another project in the works we think will be just as useful. We will provide details in our January 2021 newsletters.


Feedback. We want to thank everyone for all the questions, kudos, and newsletter feedback. We also want to thank you for entrusting us with your legal work. This year we added four new attorneys to the firm to meet the demand.

BEST WISHES. May our readers enjoy the holidays and have a New Year filled with health, peace, and happiness. From all of us at ADAMS|STIRLING, Merry Christmas and Happy New Year. See you in 2021!


Balcony Inspectors. Many thanks to all the readers who sent in information about balcony inspectors! Our condo has to have a special assessment to cover the cost. I'm happy to find so many names to pick from! -Christine K.

Millions of Thanks. Millions of thanks for your valuable newsletter. I have read all of them from 2019 to the present. They have shown me how to function effectively and fulfill my fiduciary duties as a board member. Thank you for your consistent efforts to keep us abreast of current laws and trends. –Lilly C.

State Mandates. I bought my condo before the Davis-Stirling Act. Things were simple and I understood what I was getting into. Now I feel like the State has taken over my property with all their mandates; volunteer board members are overwhelmed or clueless; management companies are incompetent or taking advantage of the situation; and the majority of homeowners, who don't even know about the Davis-Stirling Act, are too apathetic to understand the seriousness of the situation. -Lee B.

RESPONSE: The legislature is churning out laws without any thought to their impact. The people of California would be better off if the legislature met once every ten years and then only for an hour.

NEWSLETTERS. Readers can find current year and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's internal "Google Search" feature. You can find it in the upper right corner of the website under our ADAMS|STIRLING logo.


Federal Update. The Centers for Disease Control (CDC) updated their holiday guidelines regarding small gatherings during winter holidays and coping with holiday stress.

Statewide Update. The State rolled out "CA Notify" on December 10th, which will allow persons to anonymously be told they have been exposed to someone with Covid-19 using Bluetooth technology on smart phones. The application will provide an alert if you have been within 6 feet of someone for more than 15 minutes that has voluntarily provided information to the application that they tested positive for Covid-19. December 7, 2020 Press Release re CA Notify; December 9, 2020 Press Release re CA Notify Launch.

The State released a December 13, 2020 Press Release re Vaccine Safety.

The Southern California and San Joaquin Valley regions are under the Regional Stay at Home Order effective December 6, 2020. The Greater Sacramento Region is under the Regional Stay at Home Order effective December 10, 2020. While some Bay Area counties are voluntarily under the Regional Stay at Home Order, the Bay Area Region is close to the threshold for falling under the Regional Stay at Home Order.

NorCal Counties. Bay Area is now under the Regional Stay at Home Order effective 12/17/20. Health Officials issued a Joint Statement regarding vaccine distribution.

San Mateo County issued a December 16 Press Release regarding the Regional Stay at Home Order.

Butte County is under the Regional Stay at Home Order effective 12/10/20 and issued a December 9, 2020 Press Release regarding the same.

Calaveras County issued a December 5, 2020 Press Release regarding the Regional Stay at Home Order.

Contra Costa County updated its Mass Quarantine Order. The County provided Vaccination Information.

El Dorado is under the Regional Stay at Home Order effective 12/10/20 and issued a December 9, 2020 Press Release regarding the same. The County also issued a December 10, 2020 Press Release regarding clarification of Regional Stay at Home Order. This press release indicates that those under the Regional Stay at Home Order cannot honor out of state reservations for non-essential travel unless the reservation allows enough time to quarantine, further, in state reservations for non essential travel cannot be honored.

Fresno County issued updated Youth & School-Based Sports Guidance. Fresno County issued a December 5, 2020 Press Release regarding the Regional Stay at Home Order.

Lake County issued a December 11, 2020 Press Release regarding rising cases and vaccine progress.

Madera County issued CDPH December 7, 2020 Updated Quarantine Guidance.

Marin County issued revised Appendix C-1 (Revised 12/4/20) to comply with the Regional Stay at Home Order.

Mendocino County issued a December 7, 2020 Press Release indicating that eight new cases were traced to Building Bridges Homeless Resource Center and Day Center.

Monterey County issued a December 9, 2020 Press Release indicating that Monterey is choosing to follow the Regional Stay at Home Order and the County issued a December 9, 2020 Stay at Home Order.

Nevada County is under the Regional Stay at Home Order effective 12/10/20 and issued a December 9, 2020 Press Release regarding the Regional Stay at Home Order.

Placer County is under the Regional Stay at Home Order effective 12/10/20.

Sacramento is under the Regional Stay at Home Order effective 12/10/20. The County issued a revised Health Order to comply with these requirements.

San Francisco issued an updated Health Order dated 12/9/20. The County allows meeting one person outside your household to take a walk, hang out at the park or play low contact sports like golf, tennis, pickleball, and bocce ball.

San Joaquin County issued a December 8, 2020 Press Release regarding next steps in the County.

San Mateo County issued a December 10, 2020 Press Release regarding the current state of affairs in the County.

Santa Clara County issued a mandatory directive to follow the State’s Regional Stay at Home Order. The County issued a December 9, 2020 Press Release regarding vaccinations.

Santa Cruz County issued a December 10, 2020 Press Release regarding submission of a vaccine plan.

Sonoma County issued a December 10, 2020 Press Release regarding the County’s adoption of the Regional Stay at Home Order and issued a new Health Order related to the same.

Sutter County is under the Regional Stay at Home Order effective 12/10/20.

Tuolumne County issued a revised Short Term Lodging Order.

Yolo County is under the Regional Stay at Home Order effective 12/10/20. The County issued a revised Health Order.

Yuba County is under the Regional Stay at Home Order effective 12/10/20.

SoCal Counties. Imperial County issued a health order to align with the Regional Stay Home Order and supersedes all local orders in effect while Regional Stay Home Order is in place.

Los Angeles County revised its safer at home health order to align with Regional Stay Home Order. Outdoor pools are allowed to be open for regulated lane swimming, indoor and outdoor pools are permitted to allow drowning prevention classes. Tennis and Pickleball guidelines were updated further, adding that restrooms and frequently used items should be sanitized hourly. Campgrounds and RV parks protocols were updated to comply with Regional Stay Home Order that prohibits overnight stays until further notice.

The City of Los Angeles issued a targeted stay at home order to align with regional stay at home order.

Orange County issued a health order regarding senior residential care facilities with restriction on communal dining if employee or resident tests positive.

San Bernardino County petitioned the California Supreme Court to seek local control of Covid measures rather than be restrained by the state’s regional approach.

San Diego County – New health order to align with Regional Stay Home Order including prohibition of sales of food and drink at outdoor recreation facilities and prohibition of overnight stays at outdoor recreation facilities.

San Luis Obispo County decreased quarantine period from 14 days to 10 days from exposure for those who are asymptomatic and do not work in a high-risk setting. The County published a press release on how Covid-19 vaccinations will be distributed in SLO.

Santa Barbara changed its health order to align with Regional Stay Home Order.

READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 12-14-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

Face Masks Required in the Common Areas

Dec 8, 2020 0 Views 0 Comments

QUESTION: We've had signs at the front door and lobby for several weeks indicating that face coverings are required in all common areas. Everyone has complied, except one recent arrival, a renter, who hasn't. We never see her masked. The situation is infuriating. What should be our first step? Are there actual civil penalties in place yet? –Joshua

RESPONSE: I doubt you can get police officers anywhere in the state to enter a condominium association and ticket someone for not wearing a mask.

Emergency Rules. Boards of directors, however, can fine someone for not wearing a mask. To do so, they must first adopt emergency rules requiring the wearing of masks in the common areas, limiting the number of people from different households on an elevator, etc.

Threat to Public Health. If a board determines that an immediate rule change is required to address an imminent threat to public health, it can adopt emergency rules without the usual 28-day waiting period. (Civ. Code §4360(d).)

RECOMMENDATION: The current wave of the coronavirus qualifies as an imminent threat to public health. The board should have legal counsel draft emergency rules, call an emergency meeting, and adopt them. The rules become effective upon notice to the membership.

TESTING EMPLOYEES
AFTER THE HOLIDAYS


QUESTION: Given the higher risk that employees will be exposed to COVID-19 over the holidays, can the board require employees take a COVID test before returning to work from Thanksgiving, Christmas, and New Year’s Day?

RESPONSE: Pre-COVID, the thought of requiring an employee to take a medical exam before returning to work was unthinkable. Now, it has been expressly sanctioned.

Antigen Test. Employers can require an antigen test, not an antibody test. An antigen test determines whether the employee currently has COVID. An antibody test determines whether the employee had COVID in the past. Employers cannot require antibody tests because whether the employee previously had COVID is protected information.

Positive Test Quarantine. If an employee tests positive, the association does not necessarily have to quarantine all of its employees. It depends on whether the infected employee was in close contact (within 6 feet for more than 15 minutes) of other employees. Any employee who was in close contact with the infected employee should immediately be sent home to quarantine. If the employee does not develop symptoms and tests negative at least twice (with the tests being at least 24 hours apart), the board can allow the exposed employee to return to work.


Cluster Quarantine. If other employees were not in close contact with the infected employee, there is no need to quarantine all employees. However, if multiple employees become ill in a short period of time, this is considered a cluster, and all employees may need to be quarantined.

Thank you to employment law attorney Debbie Birndorf Zeiler for her assistance with this question.

ATTRACTING TALENT TO
ASSOCIATION MANAGEMENT
 
The Foundation for Community Association Research (FCAR) launched a survey on attracting talent to the management profession and identifying the benefits and challenges of community managers.
 
The results of the survey will help management companies identify and attract talented individuals into this valuable and growing profession. The results will be published once the survey is completed.
 
The Foundation wants to hear from (i) managers and (ii) those who hire and/or manage managers. Please take a moment to contribute your feedback. -Adrian Adams


Laurie Poole #1. Congratulations to Laurie Poole [on becoming President-Elect of CAI’s College of Community Association Lawyers  for 2021]! She will enjoy her role as President of such a prestigious legal community. The work CCAL does in preparing amicus briefs is outstanding. -Marilyn B.

Laurie Poole #2. I have, and still am, working with Laurie. She is great! –Wally G.

Balcony Inspection Companies. Readers sent in names of the following SB 326 (elevated structures) inspection companies:
  
1. A7 Group, Inc.
700 2nd Street Unit H
Encinitas, CA 92024
(760) 945-3700
Adam Rohrbaugh
www.a7architect.com

2. A.D. Magellan
701 Palomar Airport Rd. Suite 300
?Carlsbad, CA 92011
Becky Larson
[email protected]
www.admagellan.com

3. AWS Consultants
2030 E 4th St #208D
Santa Ana, CA 92705
(714) 835-2301
Carl Brown
[email protected]
www.awsconsultants.com

4. Axis Consultants
2544 Barrington Court
Hayward, CA 94545
(833) 799-0333
MaryAnne Siena
[email protected]
www.axisconsultants.com

5. Bergeman Group
(833) 558-0888
Robert Grosse
[email protected]
www.bergemangroup.com

6. CL Sigler & Association
523 Charcot Ave, #203, San Jose 95131 (408) 922-0262
74820 Borro Dr., Palm Desert 92260 (760) 469-3048
www.siglercm.com

7. Design Build Associates
5655 Lindero Canyon Road, Suite 321
Westlake Village, CA 91362
(818) 889-0402
Dennis Brooks
[email protected]
www.dbuild.com

8. Focused Inspection Group
1999 S. Bascom Ave., Suite 700, Campbell 95008
333 City Blvd. West, Suite 1700, Orange 92868
Alex Riley
[email protected]
www.focusedinspections.com

9. Southern Cross Property Consultants
4045 Hancock St., Suite 240
San Diego 92110
858.395.8657
Matthew Boomhower, AIA
[email protected]
www.SouthernCrossPC.com

10. Van Sande Structural Consultants
2920 De la Vina St.
Santa Barbara 93105
805-963-6901
Carolle Van Sande, CSM
[email protected]
www.vansandestructural.com


NEWSLETTERS. Readers can find current year and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's internal "Google Search" feature. You can find it in the upper right corner of the website under our ADAMS|STIRLING logo.


Statewide Update. The following counties have updated their Tier: Mono (Red to Purple).

The state issued a new Regional Stay Home Order for regions with less than 15% ICU availability. The Order will remain in effect for at least 3 weeks after it is triggered. The Order prohibits gatherings of any size, requires 100% masking and physical distancing and would only allow travel for critical services.

The San Joaquin Valley and Southern California regions have been moved under this Order effective 12/6/20.

The following sectors must close: indoor and outdoor playgrounds; indoor recreational facilities; hair salons and barbershops; personal care services; museums, zoos, and aquariums; movie theaters; wineries; bars, breweries, and distilleries; family entertainment centers; cardrooms and satellite wagering; limited services; live audience sports; amusement parks.

The following modifications are in place in addition to masking and physical distancing: outdoor recreation allowed only without food, drink or alcohol sales and without overnight stays at campgrounds; indoor retail and shopping centers is limited to 20% capacity with entrance metering and no eating or drinking, with special hours for seniors and those with chronic conditions; hotels and lodging are allowed to open only for critical infrastructure support; restaurants are only allowed to remain open of take-out, delivery, or pick-up; offices must be remote only except for critical infrastructure; worship and political expression is outdoor only; entertainment and professional sports without live audiences. 

The following may remain open when remote options are not available: critical infrastructure; schools that were already open for in-person; non-urgent medical and dental care; child care and pre-K.

The regions are as follows:

-Northern California: Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Shasta, Siskiyou, Tehama, Trinity

-Bay Area: Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma

-Greater Sacramento: Alpine, Amador, Butte, Colusa, El Dorado, Nevada, Placer, Plumas, Sacramento, Sierra, Sutter, Yolo, Yuba

-San Joaquin Valley: Calaveras, Fresno, Kern, Kings, Madera, Mariposa, Merced, San Benito, San Joaquin, Stanislaus, Tulare, Tuolumne

-Southern California: Imperial, Inyo, Los Angeles, Mono, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Ventura

NorCal Counties. -Alameda County issued a December 4, 2020 Press Release indicating that certain Bay Area Health Officers are going to implement the State’s Regional Stay at Home Order. Alameda County will implement the State’s Regional Stay at Home Order effective December 7, 2020.

Calaveras County issued a November 28, 2020 Press Release regarding the move to the purple tier.

Contra Costa County issued a December 4, 2020 Press Release indicating that certain Bay Area Health Officers are going to implement the State’s Regional Stay at Home Order. Contra Costa County will implement the State’s Regional Stay at Home Order effective December 6, 2020.

Fresno County issued a December 5, 2020 Press Release regarding the Regional Stay at Home Order.

Lake County issued a November 28, 2020 Press Release regarding the switch to the purple tier.

Madera County issued a December 5, 2020 Press Release regarding the Regional Stay at Home Order.

Marin County issued a December 4, 2020 Press Release indicating that certain Bay Area Health Officers are going to implement the State’s Regional Stay at Home Order. Marin County will implement the State’s Regional Stay at Home Order effective December 8, 2020.

Mendocino County issued a November 29, 2020 Press Release urging compliance with State Orders.

Mono County moved to the Purple Tier and issued a December 1, 2020 Press Release regarding this change. The County issued a December 3, 2020 Press Release regarding updated guidance on restaurants, wineries and breweries.

Nevada County issued a December 3, 2020 Press Release regarding the State’s new Regional Stay at Home Order.

Sacramento County issued a new Health Order dated November 20, 2020.

San Francisco County issued a December 4, 2020 Press Release indicating that certain Bay Area Health Officers are going to implement the State’s Regional Stay at Home Order. San Francisco County will implement the State’s Regional Stay at Home Order effective December 6, 2020.

San Joaquin County issued a December 5, 2020 Press Release regarding the Regional Stay at Home Order.

San Mateo County issued a December 4, 2020 Press Release indicating that the County would not be observing the Regional Stay at Home Order like other Bay Area Counties until they are required to do so.

Santa Clara County issued a Mandatory Travel Directive that was updated on December 2, 2020. Santa Clara County issued a December 4, 2020 Press Release indicating that certain Bay Area Health Officers are going to implement the State’s Regional Stay at Home Order. Santa Clara County will implement the State’s Regional Stay at Home Order effective December 6, 2020.

Solano County issued a Quick Guide for Schools, a School Case Notification Form, and a School List of Close Contacts Form.

Stanislaus County issued a December 5, 2020 Press Release regarding the Regional Stay at Home Order.

Sutter County issued a December 4, 2020 Press Release regarding the Health Advisory effective December 7, 2020. The December 4, 2020 Health Advisory indicates steps that should be taken in anticipation of the move to the Regional Order.

Tuolumne County issued a December 5, 2020 Press Release regarding the Regional Stay at Home Order.

Yuba County issued a December 4, 2020 Press Release regarding the Health Advisory effective December 7, 2020. The December 4, 2020 Health Advisory indicates steps that should be taken in anticipation of the move to the Regional Order.       

SoCal Counties. Imperial County has a new Order to comply with the Regional Stay at Home Order.

Los Angeles County prohibited outdoor dining for the next three weeks. It only allows take-out, drive thru and delivery services. Issued a temporary targeted safer at home order effective November 30 and expires on December 20, 2020.
Notable playgrounds are closed again, except for playgrounds located within a childcare center or school. Also the protocols for Association outdoor swimming pools temporarily changed until December 20th where outdoor pools may only be used for regulated lap swimming with one swimmer per lane. All other recreational swimming, swimming lessons, family swim is closed. Outdoor pool must be closed between 10:00 p.m. and 5:00 a.m. Indoor swimming pools remain closed.

Updated protocol for gyms as a result of temporary order – Outdoor gyms can remain open at 50% capacity. Must close between 10:00 p.m. and 5:00 a.m. All patrons and staff must wear face coverings at all times and cannot remove for strenuous exercise. Indoor gyms remain closed. Updated protocol for golf courses. Further, screening of employees and visitors to golf course should include whether the individual is currently under isolation or quarantine orders.

Also amended guidance for multifamily residences on 11/21/20 regarding transmission of covid-19 and what to do if you are sick.

The City of Los Angeles issued a temporary new order dated December 2, 2020 that prohibits private and public gatherings with someone outside of a household with exceptions. Also requests residents of the city to stay at home with various exceptions. It also changed its office protocols making it incredibly difficult to remain open.

Orange County issued an amended health order dated November 20, 2020 to align with its purple tier status and the State’s limited stay at home order. Further the order continues to require facial coverings when outside of the home pursuant to the State facial covering guidance.

Riverside County issued a vaccine flyer to show the three phases of vaccine distribution.

San Diego County amended its health order to comply with the State’s stay at home order. Further the order changed guidance on gatherings and face coverings to align with the State’s guidance.

Santa Barbara amended its face covering order to wear face coverings at all times outside of the home with various exceptions.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 12-7-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

New Foreclosure Procedures

Nov 22, 2020 0 Views 0 Comments

In an effort to create more affordable housing, the California Legislature enacted Senate Bill 1079 which modifies procedures for the sale of residential property through nonjudicial foreclosure.

The goal is to assist eligible bidders in finding affordable housing and stem the flow of foreclosures snapped up by lenders and real estate investors.

Sales Are Not Final. Effective January 1, 2021, eligible bidders will be able to bid on foreclosed residential properties after the foreclosure sale has taken place. This is a major change in foreclosure sale procedure. For the past almost 100 years, foreclosure sales have been final when the auctioneer states “sold” at a public auction (subject to the right of redemption).

Eligible Bidders Defined. An “eligible bidder” will be defined as (1) a qualifying tenant who is already occupying the foreclosed property, (2) a person who is willing to move into the property for at least one year, and (3) certain nonprofit housing agencies. These eligible bidders can take ownership of the foreclosed properties away from successful bidders at foreclosure sales.

Procedure. Eligible bidders will have 15 days after the sale to give notice to the foreclosure trustee of their intent to bid on the property and 45 days from the sale date to tender payment.
After-sale tenant buyers only have to match the highest bid at the foreclosure sale while owner-occupants and non-profits will have to exceed the successful bid. Responsibility for administering post-sale procedures will fall to foreclosure trustees who handle the original sales.

Thank you to Richard Witkin for this article. Richard is the premier collection attorney in California with extensive knowledge of assessment lien and foreclosure matters.

COLLEGE OF COMMUNITY
ASSOCIATION LAWYERS


We are pleased to announce that partner Laurie Poole has been named President-Elect of CAI’s College of Community Association Lawyers (CCAL) for 2021.

CCAL is the most prestigious designation for attorneys in the community association industry. The College puts on an annual nationwide law seminar providing continuing education for attorneys specializing in community association law.

The College
works to advance the law for the betterment of community associations. It reports on key court decisions throughout the United States and files amicus briefs on cases important to community associations.


Balanced Budget. Regarding balanced budgets, what about Civil Code 5600? In my opinion, the legislature wants associations to have enough money to pay all their bills, but no more than that. –Scott C.

RESPONSE: You are quite right, I completely forgot about Civil Code 5600(b): "An association shall not impose or collect an assessment or fee that exceeds the amount necessary to defray the costs for which it is levied." That means boards need to prepare balanced budgets. I added it to our page on Preparing Annual Budgets.

Rent Restrictions #1. I would appreciate a more thorough explanation of how the new rent restrictions are applied. For example, in a 100 home HOA with 10 currently rented and with a 10% cap on rentals, do the preexisting 10 rentals get counted towards the new cap of 25 or are they added on top so it's 35 rentals? –Bill B.

RESPONSE: The existing 10 rentals count toward the 25% cap, not on top. Once you have 25 rentals, you hit the cap. However, if you don't conform your governing documents to the 25% cap, your 10% becomes unenforceable on January 1, 2021, which means all 100 units could potentially become rentals. 

Rent Restrictions #2. Regarding AB 3182, does it only apply to housing, condo, townhouse etc? We are an RV resort where owners purchase a lot for their recreational vehicle. We are seeing an increase of investors purchasing multiple lots for rental purposes only. –John R.

RESPONSE: It applies to all residential common interest developments--condominiums, planned developments, stock cooperatives and community apartment projects. If an RV resort or mobile home park or stock coop falls under the Davis-Stirling Act, AB 3182 applies. Our short-sighted legislators in Sacramento think that turning homeowner communities into investor-owned rentals is somehow good for housing.

Balcony Inspections #1. Now that balcony inspections are required, where do we find a company that is qualified to do these inspections? What are their qualifications? Are they required to be certified in “balcony inspections?” -Jim M.

RESPONSE: I'm not aware of a certification for balcony inspections. The statute calls for inspections by a licensed architect or structural engineer. (Civil Code §5551(b)(1).) I know of two companies currently providing balcony inspection and repair services: The Bergeman Group and AWS Consultants. If readers are aware of others, let me know.

Balcony Inspections #2. Is the presentation on SB 326 open to anyone who wants to attend? -M.W.

RESPONSE: The event is put on by HOA Organizers and is open to any board member and homeowner who wants to attend. The virtual event features speakers on topics such as changes in the law, balcony inspections, insurance basics, waterproofing, environmentally friendly landscaping, and more. For information about the event, go to ABCs of HOAs. Those who wish to attend can register here.

Nevada Office. We do a lot of work in Nevada and you are sorely needed. As you know, there are excellent attorneys in NV but there isn’t a cohesive messaging strategy for CID issues such as your newsletter. I am on a NV Task Force, "Reserves for the Recovery," helping the state deal with the flood of calls they are receiving about reserve issues, such as borrowing, missing deposits, etc. -Bob B.

RESPONSE: Reserves are essential for associations. I’ve seen too many situations where associations were faced with large special assessments to address significant deferred maintenance with no reserves in place. New owners saddled with the assessment were angry and dismayed. The recently passed balcony inspection law in California will help associations address this oft-overlooked expense. Nevada should consider something similar.

NEWSLETTERS. Readers can find current year and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's "Google Search."


Statewide Update. Governor Newsom moved the state back to a partial lockdown by moving 28 counties to the most restrictive purple tier, nine counties to red tier and two counties back to orange tier. He also issued November 13, 2020 Travel Advisories urging against non-essential out of state travel and asking people to self-quarantine for 14 days after arriving from another state or country. Governor Newsom issued a limited stay-at-home order for purple tier counties for non-essential activities including mixed household gatherings between 10:00 p.m. to 5:00 a.m. starting 11/21 and order is set to expire 12/21.

There are new requirements for face coverings at all times outside the home, with some exceptions (Facial Covering Guidance).

The following Counties have updated Tiers: Alameda (Orange to Purple); Butte (Orange to Purple); Calaveras (Yellow to Orange); Colusa (Orange to Red); Contra Costa (Red to Purple); Del Norte (Orange to Red); El Dorado (Red to Purple); Fresno (Red to Purple); Glenn (Red to Purple); Humboldt (Yellow to Red); Kern (Red to Purple); Kings (Red to Purple); Marin (Orange to Red); Mendocino (Red to Purple); Merced (Red to Purple); Modoc (Orange to Red); Mono (Orange to Red); Napa (Orange to Purple); Nevada (Orange to Purple); Placer (Red to Purple); Plumas (Orange to Red); San Benito (Red to Purple); San Francisco (Yellow to Red); San Joaquin (Red to Purple); San Mateo (Orange to Red); Santa Clara (Orange to Purple); Santa Cruz (Red to Purple); Sierra (Yellow to Orange); Siskiyou (Orange to Purple); Solano (Red to Purple); Sutter (Red to Purple); Trinity (Orange to Purple); Tuolumne (Orange to Purple); Yolo (Red to Purple); Yuba (Red to Purple).

NorCal Counties. Alameda County moved from the Orange Tier to the Purple Tier and issued a November 16, 2020 Press Release regarding the same and indicating some of the changes that this will entail. The County linked to the following updates

Butte County moved from the Orange Tier to the Purple Tier and will require changes in business opening and operations accordingly.

Calaveras County moved from the Yellow Tier to the Orange Tier and will require changes in business opening and operations accordingly.

Contra Costa County moved from Red Tier to Purple Tier and issued a November 16, 2020 Press Release regarding this change and updated their “Openings at a Glance”.

El Dorado County moved from the Red Tier to the Purple Tier and will require changes in business opening and operations accordingly.

Fresno County moved from the Red Tier to the Purple Tier. The County provided the updated facial covering guidance from the State. The County issued updated Youth & School-Based Sports Guidance.

Lake County indicated that they are officially in the Red Tier and will require changes in business opening and operations accordingly.

Marin County moved from the Orange Tier to the Red Tier and issued a November 16, 2020 Press Release regarding this change and necessary changes in business openings and operations.

Mendocino County moved from Red Tier to Purple Tier and updated their Health Order to comply with the changes. The County also issued updated guidance for outdoor gatherings.

Mono County moved from Orange Tier to Red Tier and issued a November 16, 2020 Press Release. Mono County issued Holiday Guidance and the Town of Mammoth Lakes issued a Revised Short-Term Lodging Order.

Monterey County published the CDPH’s new facial covering guidance.

Napa County moved from the Orange Tier to Purple and the County updated the Business Operations FAQs.

Nevada County moved from the Orange Tier to the Purple Tier and issued a November 16, 2020 Press Release.

Placer County moved from the Red Tier to the Purple Tier and will require changes in business opening and operations accordingly.

Sacramento County published Guidance on Safely Celebrating During COVID-19.

San Francisco moved from the Yellow Tier to the Red Tier. The County issued a November 16, 2020 Press Release related to the changes.

San Joaquin County moved from the Red Tier to the Purple Tier and issued a November 16, 2020 Press Release regarding this move.

San Mateo County moved from the Orange Tier to the Red Tier and issued a November 16, 2020 Press Release regarding this move.

Santa Clara moved from the Orange Tier to the Purple Tier. The County updated their Order and issued a Mandatory Directive on Capacity Limitations.

Santa Cruz County moved from the Red Tier to the Purple Tier and issued a November 16, 2020 Press Release regarding the move.

Solano County moved from the Red Tier to the Purple Tier and issued a November 16, 2020 Press Release regarding the move.

Stanislaus County issued a November 16, 2020 Press Release regarding the County’s move to the Purple Tier.

Sutter County moved from the Red Tier to the Purple Tier and will require changes in business opening and operations accordingly. They also published the State’s facial covering guidance.

Tehama County issued Guidance for Gatherings and Travel.

Tuolumne County moved from the Orange Tier to the Purple Tier and will require changes in business opening and operations accordingly.

Yolo County moved from the Red Tier to the Purple Tier and issued a November 16, 2020 Press Release regarding the move. Yolo County issued a November 19, 2020 Health Advisory regarding quarantine after travel.  

Yuba County moved from the Red Tier to the Purple Tier and will require changes in business opening and operations accordingly. 

SoCal Counties. Imperial County issued a limited stay at home order to abide by the state’s guidelines, with no more than sixteen (16) individuals can attend any private gathering. Further, singing, chanting, shouting and playing of wind instruments are prohibited during any private gathering.


Los Angeles County established a curfew for restaurants, breweries, wineries and bars, and all other non-essential retail establishments must close between 10:00 p.m. and 6:00 a.m. Non-essential businesses permitted to operate indoors at 25% capacity (retail stores, offices, personal care services), outdoor gatherings are only gatherings permitted with limit to three households and maximum of 15 people.
Orange County fell back to Purple Tier.

Riverside County issued Thanksgiving guidelines to keep holiday gatherings “smaller, shorter, safer”.

San Diego County changed its health order to comply with restrictions in purple tier. All customers of indoor hair salons and personal care services must sign in with name and telephone number.

Santa Barbara County continued its face covering order until December 14, 2020.  Further, issued an amended health order to align with purple tier status.

San Luis Obispo County released Thanksgiving guidelines and fell back to purple tier.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 11-20-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

Retroactive Rent Restrictions

Nov 15, 2020 0 Views 0 Comments

QUESTION: Regarding AB 3182, are owners who purchased into an HOA prior to the new law coming into effect subject to the same regulations or does the law only apply to new owners after January 1, 2021? We currently have no rules and limited CC&R requirements for rentals. The board plans to establish regulations allowed by law but are unclear to whom they will apply. -Paul B.

RESPONSE: There are three scenarios to consider. The first is where the association does not have a rental cap and wants to add one. In that case, section 4740 of the Civil Code applies and the newly adopted restriction will only apply to owners who purchase after the restriction is recorded.

The second scenario is where the association has had existing rental that was adopted prior to January 1, 2012. If the cap is more restrictive than 25%, such as 10%, 15% or 20%, the board can adjust it to 25% to conform to new rental requirements and it applies to everyone.

The third scenario is if the existing rental cap is more restrictive than 25% but was adopted after January 1, 2012. Since the existing cap only applies to owners who purchased after the cap was adopted, any adjustments to the cap would only apply to those owners. Those homeowners who bought prior to the rental cap would not be subject to the revised cap.

RECOMMENDATION: Boards should work with legal counsel as they amend their documents to conform to the statute--or adopt new rental restrictions.

BALCONY
INSPECTIONS


QUESTION: Under SB 326, what percentage of decks must be inspected? -Carl B.

RESPONSE:
There is no fixed percentage. As required by statute, the number of elevated structures (balconies, decks, stairwells and walkways) inspected must be sufficient to reach a 95% confidence level for the inspector. (Civ. Code §5551(a)(4).) The number will vary depending on the condition of the project and the person performing the inspection (an architect or structural engineer). (Civ. Code §5551(b)(1).)

RECOMMENDATION: I will be speaking on this topic with Robert Grosse of the Bergeman Group (construction management) and Sean Kargari, RS of Association Reserves at an annual event put on by HOA Organizers. It's a free event for board members and will be held on December 5. I will post sign-up information once I receive it.

Expense Reimbursements. Can a board member submit for mileage reimbursement? We have a director who goes to Home Depot often for materials for repairs around the park. –Lohree B.

RESPONSE: Yes, he can be reimbursed. Payment of mileage or other reimbursement expenses to a director is allowed by law and does not affect the person's status as a volunteer. (Corp. Code §7231.5(b); Civ. Code §5800(b).)

Balanced Budget. Is there a requirement under California law for an HOA to approve an annual budget that is balanced (where revenues equal expenses)? Can the board approve a budget with a surplus or deficit? -Jim M.

RESPONSE: Associations are required to prepare budgets annually and do so on an accrual basis. (Civ. Code §5300.) Nowhere in the Davis-Stirling Act does it require that a budget be balanced. However, this is where taxes come into play as discussed in earlier newsletters. Associations are nonprofit organizations and should not end the year with a profit (excess income). If they do and plan to file Tax Form 1120, an excess income resolution needs to be approved so the monies can be rolled into next year's budget.

Election Laws. Am I, as a board member, violating anything by revealing to the homeowners the details of the new election laws, including those regarding inspectors? –Lily C.

RESPONSE: If you discuss your understanding of the laws' requirements, you won't go to jail. If, however, you start giving legal advice, you would be practicing law without a license. If members rely on your advice and things go awry, lawsuits might be filed. Whenever statutory requirements are unclear, it's always safer to say, "Let's check with legal counsel." It satisfies the Business Judgment Rule and protects you from potential liability.

Non-Member Appointments. If SB 323 disqualifies a non-member from being nominated, can the board appoint a non-member to fill a vacancy by a resigning board member? -Terri M.

RESPONSE: Yes. One of the many inconsistencies in SB 323 deals with director qualifications. The poorly drafted bill states: "An association shall disqualify a person from a nomination as a candidate for not being a member of the association at the time of the nomination. (Civ. Code 5105(b).) You will notice, the requirement only applies to candidates at the time they are nominated. The statute does not restrict associations from appointing non-members to vacant seats.


Nevada Office? With Rob Ward joining you staff, will we start to see some commentary regarding Nevada and our NRS 1116 issues? I use as much as I can from the California information, but we are a bit different over here. –Terril R.

RESPONSE: We've had many requests over the years to open an office in Nevada but the workload in California has always kept us anchored here. A large number of new clients have been added to the firm and Rob Ward will be working with many of them. However, if the right attorney came along we might consider expanding into Nevada.

Sewer Lateral Inspections. In regard to sewer laterals, Marin county has a similar ordinance. –Ann V.

RESPONSE: Even if not required by ordinance, all associations should inspect their lateral lines. Lines are sometimes improperly installed by the developer (a construction defect). Even if properly installed, tree roots can be invasive, soils can shift and damage lines, etc. As the court of appeals noted in the Affan case, boards can't just snake lines, they have a duty to inspect them when problems become apparent. A plumber can run a camera down the lines for a modest price and record the condition of the lines. 

Roof Leak. Our HOA learned that negligence can include deferred maintenance, so that if the roof was due to be replaced, the leak could be considered "negligence" for purposes of assigning responsibility. Another reason why maintenance is so important in an HOA. -Paul Y.

RESPONSE: Yes, failure to properly maintain roofs can be deemed negligence by the association, which can make it liable for damage in a unit.

Kickback Rumors. Thank you for warning about being careful when there are rumors of kickbacks. We had a retired general contractor on our board whose advice and guidance were invaluable. He never received a penny for his pro-bono help. A couple of people started a false rumor that he was receiving kickbacks. The damage to his reputation was needlessly hurtful. –Elaine J.

NEWSLETTERS. Readers can find current year and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's "Google Search."


Federal Update. The CDC issued Thanksgiving guidelines and also issued holiday celebration and small gathering guidelines.

Statewide Update. The state issued a November 13, 2020 Travel Advisory for those traveling from out of state/country for non-essential purposes should self-quarantine for 14 days. California residents traveling for non-essential purposes should stay local.

The following counties updated their tiers: Amador (Orange Tier to Red); Contra Costa (Orange Tier to Red); El Dorado (Orange Tier to Red); Modoc (Yellow Tier to Orange); Placer (Orange Tier to Red); Sacramento (Red Tier to Purple); Santa Cruz (Orange Tier to Red); Siskiyou (Yellow Tier to Orange); Stanislaus (Red Tier to Purple); Trinity (Yellow Tier to Orange).

NorCal Counties. Alameda County issued a November 9, 2020 Press Release along with the other Bay Area counties with recommendations for safe holidays and traveling. Alameda issued a November 12, 2020 Press Release pausing further openings due to an increase in cases.

Butte County issued a November 10, 2020 Press Release indicating that the county was trending towards the Red Tier and urging people to exercise caution to prevent this.

Contra Costa County changed to the Red Tier. The county issued a November 9, 2020 Press Release along with the other Bay Area counties with recommendations for safe holidays and traveling. The county issued a November 10, 2020 Press Release related to the switch to the Red Tier which reinforces the changes in openings the county made last week. It issued a November 13, 2020 order as a result of the increased cases which imposes additional restrictions on high-risk business sectors. The order, effective November 17, bans indoor dining; prohibits concessions at theaters and require face masks; and banned indoor fitness centers and gyms.

El Dorado County moved to the Red Tier. The county issued a November 10, 2020 Press Release indicating that they have started the state’s adjudication process to remain in the Orange Tier. The health officer indicated that until the state rules on the adjudication, the county remains in the Orange.

Madera County published the CDC’s guidance for celebrating Thanksgiving.

Marin County issued November 12, 2020 recommendations to reduce indoor dining capacity to 25%; reduce theater capacity to 25% and close concessions; and reduce capacity if indoor faith-based and cultural ceremonies to 25%.

Mendocino County has revised their Quarantine Order and Isolation Order. Mendocino also issued November 12, 2020 Reopening K-12 School Opening Guidance.

Mono County issued a November 9, 2020 Press Release indicating that they have started the adjudication process to remain in the Orange tier as the outbreak at the Marine Corps base is being contained and would not be addressed by changing the County’s tier and impacting the county’s economy.

Monterey County issued a November 9, 2020 Press Release along with the other Bay Area counties with recommendations for safe holidays and traveling. The county issued a November 10, 2020 Press Release indicating that the county’s adjudication request to the state to change tiers was denied.

Nevada County issued a November 10, 2020 Press Release indicating that the county is at risk for moving to the Red Tier and indicating the changes that would bring.

Placer County has moved to the Red Tier and therefore businesses and activities must change accordingly pursuant to the State's Blueprint.

Sacramento County has moved to the Purple Tier and issued a November 10, 2020 Press Release related to the change. The county issued a new order on November 13, 2020 to align with the Purple Tier restrictions.

San Francisco County issued a November 9, 2020 Press Release along with the other Bay Area counties with recommendations for safe holidays and traveling. The county issued a November 10, 2020 Press Release indicating that due to an increase in cases, the county is halting indoor dining, halting the opening of high schools that are not already open with approved plans, reducing capacity at fitness centers and movie theaters to 25% capacity or 50 people (whichever is smaller).

San Mateo County issued Recommendations for Safer Holidays and Recommendations for Safe Travel.

Santa Clara County issued a November 9, 2020 Press Release along with the other Bay Area counties with recommendations for safe holidays and traveling. The county issued a November 9, 2020 Press Release urging strict adherence to safety protocols due to an increase in cases.

Santa Cruz County has moved to the Red Tier. The county issued a November 9, 2020 Press Release along with the other Bay Area counties with recommendations for safe holidays and traveling. The County also issued a November 10, 2020 Press Release regarding the change to the red tier and the impact this has on businesses and activities.

Shasta County issued Guidance for Safer Holidays.

Solano County urged residents to take caution as they are at risk for moving to the Red Tier. The county also issued Holiday Safety Guidance.

Sonoma County issued a November 9, 2020 Press Release along with the other Bay Area counties with recommendations for safe holidays and traveling.

Stanislaus County has moved to the Purple Tier.

Tehama County issued updated Business FAQs.

Yolo County issued November 9, 2020 Holiday Guidance. The county issued a November 10, 2020 Press Release urging residents to follow health directives to avoid a move to the Purple Tier.

SoCal Counties. Kern County is at risk in falling back to purple tier.

Los Angeles County updated its golf course protocols, to allow two different households in golf cart as long as protective partition between the individuals otherwise golf cart must be a single rider or used by members of same household. It also updated protocols for Gyms and Fitness centers, to allow for individual use of indoor restrooms when using outdoor gym facilities. Use of indoor showers, changing rooms and lockers is still prohibited. Updated protocols for office worksites. A maximum of 15 people is permitted for in-person meetings for essential office-based businesses. The County remains in purple tier at least four weeks as cases increase.

Orange County is expected to fall back to purple tier next week if cases continue to rise.

Riverside County is expected to remain purple as cases increase.

San Bernardino County is expected to stay in the purple tier as cases increase.

San Diego County fell back to purple, restrictions start 11/14. List of what is open and closed.

Santa Barbara County issued an amended health order effective 11/14/20 and expires on December 13, 2020. The amended order prohibits gatherings from different household indoors and outdoors unless an exemption applies. The health order is more restrictive than the State’s guidance on gatherings.

Ventura County is at risk of falling back to purple tier.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 11-13-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

Director Kickbacks

Nov 8, 2020 0 Views 0 Comments

Kickbacks. Members are hearing that our president is receiving kickbacks from our contractors. Can we remove him from the board? What other steps can homeowners take? –Nancy W.

RESPONSE: A rumor of kickbacks does not mean they are occurring. It could be that someone is trying to smear a director's name. Even so, an investigation is required.

Board Investigation. If there are allegations of kickbacks, board members have a fiduciary duty to investigate and take appropriate action. If the investigation finds that the rumors are false, the board should clear the director's name.

Censure and Removal. If the investigation reveals the president is receiving kickbacks, the board should censure the president, remove him as president, and demand his resignation from the board. If the director refuses, the board can set a date for a special meeting of the membership to remove him from the board. To initiate the process, an inspector of elections is appointed and notice sent to the membership along with ballots. If the board refuses to take action, 5% of the membership submit a petition to remove the director or the entire board.

RECOMMENDATION: The board should get legal counsel involved on how best to conduct the investigation and appropriate actions based on the findings. Management should verify that the association has crime insurance in place (also known as a fidelity bond) in the event the investigation reveals embezzlement of HOA funds in addition to kickbacks.

DAMAGE FROM A
ROOF LEAK


QUESTION: If a roof leak (association responsibility) damages a unit's drywall and newly remodeled kitchen, does the association have any responsibility besides fixing the leak? –Jean N.

RESPONSE: Yes, the association has some responsibility but the extent depends on the circumstances.

Common Area Drywall. In almost all CC&Rs, the drywall on perimeter walls is deemed common area. And, unless the governing documents state otherwise, the association is obligated to repair and replace common areas. (Civ. Code §4775(a)(1).) This is true whether or not the association was negligent related to the roof leak. That means the association is responsible for repairing/replacing damaged drywall on perimeter walls and ceilings.

Unit Improvements. Since unit improvements (cabinets and counters, hardwood floors, interior walls, etc.) are part of the unit and not common area, the owner is responsible to maintain, repair and replace them. (Civ. Code §4775(a)(2).)

Negligence. If the roof leak was not due to the association's
negligence, each side repairs the damage for which it is responsible. If the association were negligent (the board was notice there were problems with the roofs), the association will be liable for the damage. Another consideration is insurance. Does the owner have insurance and what does the association's insurance cover?

RECOMMENDATION: Associations should amend their CC&Rs to require all owners to carry their own insurance. This helps to ensure repairs can be made in the event a loss occurs.

SAN FRANCISCO EAST BAY
PRIVATE SEWER LATERAL ORDINANCE


In response to an EPA and California Regional Water Quality Control Board order, San Francisco's East Bay Municipal Utility District (EBMUD) enacted an EBMUD Consolidated Regional Private Sewer Lateral Ordinance intended to fix old, cracked sanitary sewer pipes.

Inspections. Under this ordinance, associations must have their lateral lines inspected, repaired or replaced if necessary, and obtain a compliance certificate from EBMUD.

Verification Test. All associations in the affected areas will need to hire a plumber to inspect their lateral lines and complete any necessary repairs or replacements. Once that is done, they must schedule a verification test and obtain a compliance certificate from EBMUD.

Deadlines. Associations responsible for less than 1,000 feet of sewer lines must complete this process by 7/12/21. Associations responsible for more than 1,000 feet must complete this process by 7/12/26. Deadlines vary depending on when the development was constructed.

Affected Areas.
Alameda, Albany, Emeryville, Oakland, Piedmont, Kensington, El Cerrito, and Richmond Annex. The City of Berkeley has its own program, which can be found here: City of Berkeley Compliance Guide. More detailed information can be found on our website at "East Bay Sewer Lateral Ordinance."

Thank you to attorney Megan Hall for her research on this issue.

ROBERT "ROB" WARD
JOINS ADAMS|STIRLING

 
We are pleased to announce that senior attorney Rob Ward joined our firm. Rob is an experienced HOA attorney, serving both as a litigator and general counsel to boards of directors for over 22 years.

Active in Industry. Rob is active in our industry as a speaker and writer on matters affecting associations. He is also involved in monitoring legislation affecting common interest developments and recently served as a delegate to CAI's Legislative Action Committee.

Counsel to Associations.
Rob has litigated complex matters for homeowner associations throughout California and Nevada, helping to recover over 200 million dollars in settlements and judgments. He handled disputes involving product liability, misrepresentation, landlord/tenant disputes, and residential construction defects. In addition, Rob has advised homeowner association boards on general legal matters, including governing document amendments, rules and policy updates, and community association disputes.

We welcome such an experienced attorney into our firm. If your association needs legal services, contact us for more information.


HOA Taxes. I read your most recent newsletter about income taxes and IRS audits. I have been involved in over 30 IRS audits and all of them were of associations that used Form 1120. In those more than 30 IRS audits of Form 1120, the IRS never made nor proposed making any adjustment(s) to the Form 1120 as filed. In each instance, the association’s membership approved the IRS Revenue Ruling 70-604 and a budget existed showing what the budgeted transfers to reserves were. I guess the dilemma will need to be decided by a higher authority. -William S. Erlanger, CPA, Levy, Erlanger & Company

RESPONSE: I received feedback from CPAs expressing differing opinions about excess income resolutions per Revenue Ruling 70-604. It's interesting that this 50-year old ruling still generates uncertainty and disagreement.


Leaky Shower Pan #1. If the shower pan is part of the unit and the board can force an owner to repair the leaky shower pan because of damage to the downstairs unit, doesn't it also hold that a board can/should force an owner to perform maintenance on upstairs unit floors for reasons of noise abatement? -Michele J.

RESPONSE: Yes, boards can require noise abatement using the nuisance provision of the CC&Rs. See Hardwood Floor Violation.


Leaky Shower Pan #2. In our condo, the leak under the shower turned out to be the drain line, not the pan. We were told that that is the usual source of shower leaks, not the pan. Not a difficult fix for an experienced plumber. The access for this is through the ceiling of the unit below. -Bebe

NEWSLETTERS. Readers can find current year and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's "Google Search."

 

Statewide Updates: The following Counties have changed Tiers: Colusa (Red Tier to Orange); Plumas (Yellow Tier to Orange); San Mateo (Red Tier to Orange); Shasta (Red Tier to Purple).

NorCal Counties. Contra Costa County issued new Orders due to a rise in cases. The Sporting Events Order limits spectators at professional or college games to 25 people from no more than 3 households. The Health Order prohibits outdoor bars without food service; limits indoor dining to 25% or 100 people, whichever is fewer; limits indoor movie theaters to 25% or 100 people, whichever is less; limits religious services indoors to 25% or 100 people, whichever is less; prohibits indoor cardrooms and satellite wagering sites. Contra Costa issued an 11/5/20 Press Release regarding a mass COVID-19 testing event on November 7, 2020.

Fresno County issued a Guide to Reopen K-12 Schools and School Reopening Attestation.  

Lake County issued an 11/5/20 Press Release regarding November free drive-thru flu vaccine events.

Marin County provided an update to Appendix C-1.

Mendocino County issued new Guidance for Outdoor Gatherings and issued a new Order intended to implement the State guidance for private gatherings.

Nevada County issued an 11/4/20 Press Release regarding the risk that they may be moving back to the Red Tier based on their recent rise in cases.

San Francisco County has a new Order that provides specifics to businesses on how to reopen. San Francisco is requiring businesses to meet ventilation requirements. The County is allowing indoor dining at museums to open at 25% for each room, up to 100 people. In person real estate showings are allowed by appointment. Drive in gathering with up to 6 performers are allowed. Indoor and outdoor film production is expanded to 25 people.

San Mateo moved to the Orange Tier.

Shasta County has moved to the Purple Tier as a result, by 11/6: restaurants, museums, zoos, aquariums, places of worship, movie theaters, gyms and fitness centers, wineries, family entertainment centers and cardrooms can only be open outdoors; retail and shopping centers can open indoors at 25% capacity.

Solano County issued a 10/29/20 Press Release indicating their first flu and COVID-19 co-infection case. A 10/30/20 Press Release indicates that the County is at risk of moving to the Purple Tier and urges residents to reduce the spread.

Stanislaus County issued an 11/5/20 Press Release indicating that the County was at risk of moving to the Purple Tier and encouraging residents to take action to prevent this move.

Tehama County issued a 10/3/20 Announcement that contact tracing has identified a potential source of exposure at the Round Up Saloon from 10/16-10/18. The County also issued School Guidance FAQs.

Yolo County issued an 11/4/20 Press Release urging residents to exercise caution as the County may be moving to the Purple Tier.


SoCal Counties. The City of Los Angeles amended its Safer LA Order to align with state guidelines for private gatherings. Also removed closure for outdoor playgrounds and indoor malls and shopping centers.

Riverside County answered a question if HOA board meeting of 20-30 can take place. Gatherings are currently not permitted. See Q&A on the Covid-19 site on gatherings: "State public health directives prohibit professional, social and community gatherings. Gatherings are defined as meetings or other events that bring together persons from multiple households at the same time for a shared or group experience in a single room, space, or place such as an auditorium, stadium, arena, large conference room, meeting hall, or other indoor or outdoor space. They pose an especially high danger of transmission and spread of COVID-19."

San Bernardino County released an infographic on how to move from the purple to red tier.

San Diego County amended its health order allowing schools to hold classes under industry guidance by the state. Requires TK-12 bi-weekly reporting of statistics to the San Diego County Office of Education and also notify health officials immediately of any positive case of COVID-19 and exposed staff and families.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 11-6-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

Leaky Shower Pan

Nov 1, 2020 0 Views 0 Comments

Last week I answered a question about how boards can force an owner to fix a leaky shower pan causing damage to a lower unit. I discussed fines, lawyer letters and litigation. That prompted the following question from a reader:

QUESTION: If a unit is defined as air space, isn't the shower pan part of the common area structure and would, therefore, be the HOA’s responsibility to repair? –Mike H.

RESPONSE: The standard definition of a condominium unit is airspace bounded by the unfinished surfaces of perimeter walls, ceilings and floors. Anything inside that airspace is an improvement to and becomes part of the unit. This includes paint and wallpaper on walls; carpet, tile and hardwood on floors; kitchen cabinets and countertops; lighting fixtures; and plumbing fixtures such as toilets, tubs and sinks.

Shower Pans. A shower pan is installed on top of the unfinished floor of a unit. (See How to install a shower pan.) That means shower pans are inside the boundaries of a unit. As such, they are not common area nor exclusive use common area. Instead, shower pans are part of a unit and the responsibility of unit owners to maintain, repair and replace. (Civ. Code §4775(a)(2).)

RECOMMENDATION: To minimize disputes and potential litigation, condominium associations should have legal counsel prepare a maintenance chart describing the respective maintenance obligations of the association and its members. In addition, many associations need to amend their CC&Rs. When we restate documents we include extensive language related to maintenance obligations.

TAXING
RESERVE FUNDS


QUESTION. I am a CPA providing tax and accounting services to HOAs and commercial associations. Recently, some of my commercial association clients have questioned the taxation of reserve assessments. Is any tax law which would make those assessments tax exempt for a commercial association? -Steve M.

RESPONSE: Commercial associations must file Form 1120 whereas residential associations can elect to file either Form 1120 or 1120-H. 

Form 1120-H. Although Form 1120-H (Internal Revenue Code 528) carries a tax rate of 30%, it provides a safety net that protects associations from two significant negative occurrences--taxation of excess member income and taxation of reserve contributions.


Form 1120. Commercial associations (and residential associations that file Form 1120) are treated as nonexempt membership organizations under IRC Section 277, which carries a tax rate of 21%. The risks in filing this form are that excess member income is subject to taxation (unless an election is made under Revenue Ruling 70-604) and reserve contributions may inadvertently be taxed because the association failed to comply with all the requirements to exclude reserves from income by treating them as capital contributions.

Reserves. IRC Section 118 defines contributions of capital to a corporation. This code section is used by associations to identify reserve assessments as capital contributions that are not subject to tax. IRC 118 has been interpreted and modified by treasury regulations, revenue rulings, and various court cases. "Reserves as Capital Contributions" explains the requirements for reserve assessments to be considered capital contributions for tax purposes. Failure to comply with all requirements may cause the IRS to challenge the exclusion of reserve assessments from taxable income.

Thank you to Gary Porter of Porter & Lasiewics, CPAs for his assistance with this question. Gary has consulted or directly represented associations in 70 IRS audits, 66 of which were Form 1120 tax returns. All but one of the 66 associations filing Form 1120 were required to pay additional taxes.


Religious Experience. As a board president, I read your newsletter religiously. Not only do all the other board members subscribe, we have lots of regular homeowners reading it too!!! That makes our job more easily understood for all. Plus, I always enjoy a chuckle here and there from your humor. Thank you, thank you, thank you for the time you spend providing this VALUABLE RESOURCE!!!!! Please don't ever stop. –Linda L.

Deer in the Headlights. I agree with the feedback from Leland B. on “driving with eyes closed” that your wit and dry humor are great; it’s a big part of what I look forward to and I pity those who can’t see the humor. We might acknowledge that sometimes the written word may be more difficult to ascertain, since no twinkle in the eye can be seen as a hint. But that shouldn’t apply when the statement itself is obviously not literal. Yet my experience was always having to quickly say that my husband was joking, even when face to face with people sometimes, when I saw that “deer-in-the-headlights” look in their eyes. They were legitimately uncomfortable, and didn’t know how to respond–there was never the slightest indication he didn’t mean it. Thanks for all you do. -Sharon A.

Trying Times. Thanks so much. Very helpful in these times..... –Bill


Statewide Updates. The following Counties have changed tiers: Calaveras (Orange Tier to Yellow); Contra Costa (Red Tier to Orange); Glenn (Purple Tier to Red); Marin (Red Tier to Orange); Mendocino (Purple Tier to Red); San Mateo (Red Tier to Orange); Santa Cruz (Red Tier to Orange); Shasta (Purple Tier to Red).

NorCal Counties.
Alameda County issued a press release about COVID-19 Testing, Flu Shots, and Voting (Ballot Drop Off) at the Oakland Coliseum October 31 to November 2. 10/29/20 Press Release re: Oakland Coliseum. It issued a 10/28/20 Press Release regarding the timeline for opening middle and high schools. Starting November 9, middle school and high schools submitting a plan can reopen.

Calaveras County moved to the Yellow Tier in the State’s Blueprint.


Contra Costa County issued a 10/29/20 Press Release regarding the move to the Orange Tier and urging safety with the new gathering allowances. The County moved to the Orange Tier and issued a 10/27/20 Press Release indicating that the following may open in the orange tier: worship services and indoor cultural activities at 50% or 200 people, whichever is fewer; indoor dining at 50% occupancy or 200 people, whichever is fewer; indoor swimming pools; bars and other businesses that sell alcohol without meals may open for outdoor operations; indoor family entertainment centers that naturally socially distance at 25% capacity; indoor cardrooms at 25% capacity; small amusement parks at 25% capacity or 500 people, whichever is fewer; professional sports venues at 20% occupancy; live outdoor theatrical, musical and artistic performances with a maximum of 50 people. Contra Costa County updated their social gathering order.

Fresno County issued a Non-Medical Employer Screening Tool and a Medical Employer Screening Tool. It also issued Guidance for Early Education and Care Sites.

Madera County has approved Elementary school waivers for: Bass Lake JUESD, Chawanakee, Chowchilla Adventist, ETAA Charter, Golden Valley, St. Joachims, Sherman Thomas & Yosemite USD.

Marin County has moved to the Orange Tier. Marin County has a new Risk Reduction Order which better aligns with the State’s health orders and guidance. They also updated the Appendices of additional business and allowed activities.

Mendocino County has moved to the Red Tier and issued a 10/27/20 Press Release regarding this change. The press release indicates that the following are now open: restaurants may open indoors at 25% capacity or 100 people, whichever is less; gyms may open indoors at 10% capacity; places of worship may open indoors at 25% capacity or 100 people (whichever is less) without indoor singing and chanting activities; retail stores can open at 50% capacity; skilled indoor nursing facilities may have limited indoor visitation.


Mono County’s Weekly Press Briefing provided a number of local updates regarding Halloween activities, outbreaks etc. It updated its order on gatherings. Along with other changes, the order allows gatherings of a maximum of 3 households, up to 12 persons that comply with the State Guidelines.

Outdated orders for Monterey County have been updated.


San Francisco issued a 10/30/20 Press Release temporarily pausing reopenings planned for November 3 due to an increase in cases and hospitalizations. Some reopenings will still proceed: reopening indoor dining at museums at 25% capacity up to 100 people; expanding outdoor film production from 12 to 25 people with safety protocols; allowing additional outdoor live performances with up to six performers in a drive in setting; increased real estate showings with social distancing. It issued a 10/27/20 Press Release regarding further openings. Most non-essential office can open at 25% capacity following Guidance for Offices; gyms and fitness centers can open indoors up to 25% capacity following Reopening Guidance for Fitness Centers and Gyms; customers may also take off face coverings for personal care services on their face.

San Mateo County moved to the Orange Tier and issued a 10/27/20 Press Release regarding the same and those openings which are now allowed.
San Mateo County 10/29/20 Order for Long Term Health Facilities; San Mateo County 10/29/20 Order re Quarantine; and San Mateo County 10/29/20 Order re Isolation.

Santa Cruz County moved to the Orange Tier and issued a 10/27/20 Press Release regarding the same. 

Shasta County moved to the Red Tier after an appeal from the County.


Sutter and Yuba issued a video for safe Halloween practices.

SoCal Counties. Los Angeles County amended its health order 10/23/20 – Aligns with state guidance personal care establishments to be open indoors with modifications. Miniature Golf, Batting Cages and Go Cart Racing can reopen outdoors. Permits K -2nd grade classrooms to reopen with a waiver application approved by county health department. Increase percentage of students with IEPs and Els and other high need students at K-12 campus from 10% to 25%. Revised what’s open in Los Angeles. Updated Guidance on hot tubs in the gyms and fitness center protocols, where an outdoor hot tub can only be used by household groups or in cases where six feet of distancing can be maintained. Indoor pools, hot tubs, saunas and steam rooms to remain closed. Updated what's open. Also amended guidelines for short term rentals, referring to the county’s guidance on optimizing ventilation.

Riverside County released video of safety guidelines for Halloween and Día de los Muertos. Recommend to not trick or treat and provided guidance on alternatives. Also said to not wear a mask under a Halloween mask as will have difficulty breathing. For Día de los Muertos, practice social distancing and wear a mask at cemetery or have a zoom meeting to remember loved ones. News release on Halloween alternatives.

Palm Springs announcements: reopening the two lanes of Palm Canyon Drive between Tahquitz Canyon Way and Baristo road, while still continuing outdoor dining parklets on both sides of the street for “Al Fresco” dining. The city issued a supplementary order for private and public golf courses.

City of San Diego extended the issuance of permits for outdoor city park to places of worship, gyms, and fitness trainers to conduct their business and deferred payment of the permits to January 31, 2021.

San Bernardino County issued guidelines for ski resorts.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 10-28-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

No Names on the Ballot

Oct 23, 2020 0 Views 0 Comments

QUESTION: What happens when there are no names on the ballot sent to members? Our management company did not ask current directors if they wanted to be on the board and sent out ballots with no names. –Anon

RESPONSE: You have a couple of options. If your election rules don't allow write-ins and floor nominations, sending out ballots was unnecessary and current directors remain in place. If write-ins or floor nominations are allowed, directors could write-in their names on their own ballots and vote for themselves. If you want to eliminate any confusion and uncertainty, you can restart the election process.


PROPOSITION 15. Do you have an opinion on whether Proposition 15 will have any direct or indirect effect on residents of HOA communities? -Leonard S.

RESPONSE: If it passes, Proposition 15 will have no direct effect on residential associations. It will, however, indirectly impact HOAs since many business owners will likely lose their businesses and employees lose jobs. That, in turn, will lead to delinquencies and foreclosures in associations around the state. Negative effects will be more direct in commercial and industrial associations because Prop 15 will dramatically raise taxes on businesses as well as the rents they pay, which will drive more of them out of California or out of business altogether.

California Exodus. California businesses are already leaving the state in large numbers. In 2018 to 2019, 765 commercial businesses left California. They are relocating to states with lower taxes. For example, Texas imposes a 0.75% franchise tax on business margins, compared to California’s 8.85% corporate tax. If Prop 15 passes, businesses will be hit with an estimated $11.5 billion in new taxes annually. I expect the flow of businesses and citizens out of California will accelerate. From July 2018 to July 2019, California saw a net loss of 197,594 people to other states. People are voting with their feet. Our current politicians seem to be blind to the concept that their actions have consequences.


Independent Contractor? Our association has one individual performing manager duties and another one performing maintenance. Is the manager, who is currently treated as an independent contractor, in fact an employee? It is much cheaper for the association to treat them as independent contractors. -Annie C.

RESPONSE: Yes, it's cheaper to treat employees as independent contractors because you don't pay all the required employee withholdings and worker's comp insurance. It's also illegal. If the two individuals only work for the association, they are your employees. See Employee vs Independent Contractor. Since there could be significant legal consequences plus penalties for treating employees as independent contractors, you need to address the situation. If your management company is willing, it can take them on as employees. If not, you will need to make them direct employees of the association. you should talk to legal counsel about how best to handle the situation.


Proxies. We have an election but some homeowners are abroad. They are afraid that the proxy procedure might delay their votes. Can they have someone mail the ballot to them out of the country and they will complete it and mail it back? –Lily C.

RESPONSE: Yes, the ballot package can be mailed or sent by FedEx (or some other expedited means) to the individuals. Once ballots are voted, they can be returned directly to the Inspector of Elections in the same manner.

Amending Bylaws. To amend our bylaws do we need a majority of the voting power of the association? Do we need secret ballots? Since we use cumulative voting for elections, do we need to have cumulative voting for amendments? –Rebecca B.

RESPONSE: Your bylaws should have a provision describing the approval requirement for amending your bylaws. Most require a majority of the membership but I've seen some use a majority of a quorum. Yes, you need secret ballots for a membership vote. "No" on using cumulative voting. It's only used in the election and recall of directors.


Leaky Shower. If a unit has a leaking shower pan (causing damage to the common areas and unit below), what can the board do to force the owner to fix it? -Michael I.

RESPONSE: Start with a hearing and fines. If that doesn't work, have legal counsel send a letter threatening a lawsuit and offering pre-litigation ADR. If the owner still refuses, head to court for an order that the owner repair the leak (or step aside and allow the association to make repairs and bill the owner for those repairs). If the leak is serious, you can bypass all the above and go straight into court on an ex parte basis. You should talk to legal counsel and decide which option is best.

Sub-Association Separation. Do you know of any sub-association successfully separating from the master association? If possible, how difficult was it? -Nick K.

RESPONSE: Theoretically, you can separate associations and you can also merge them into a single association. We've done both, but they are rare and can take years to accomplish. It requires (i) approval by the master association's membership and amendment of the master documents; (ii) approval by the sub-association and amendment of their documents; and (iii) may require approval by lenders. There is a great deal of legal work involved. Also, the physical layout must lend itself to the separation. If the sub-association shares roads and amenities with the master association, separation becomes untenable. In my experience, m
erging associations is much easier than separating them.

Recall Elections. Does SB 323 have any bearing on recall elections? Any insight would be most appreciated! -Susie M.

RESPONSE: The bill sponsored by Marjorie Murray's organization made a complete mess of recall elections. The timelines for each no longer match-up.

When the membership submits a recall petition, the date for a special meeting cannot be less than 35 nor more than 90 days from receipt of the petition. (Corp. Code §7511(c).) Before SB 323,
the vote to recall sitting directors and elect new ones could be done on a single ballot in ~60 days, start to finish.

Longer Timeline. Unfortunately, Ms. Murray's bill extended the timeline for electing replacement directors to ~120 days with a lot of built-in delays, which means the election of new directors cannot be on the same ballot as the recall of sitting directors. Now, it's a 2-step process. Members first vote to recall the board, which remains in place until another set of ballots are circulated to elect a new board. Inspectors of election are retained for each election.

More Expensive. Because of SB 323, recalls are now more expensive and take ~7 months to complete. Ms. Murray's anti-consumer legislation harmed homeowners. SB 323 should be rescinded in its entirety so we can return to reasonable timelines and procedures.


Driving With Eyes Closed. “To avoid stress, drive with your eyes closed." It is a sign of the times and an indication of our level of national contention that the reader did not see the obvious humor. Your dry and pointed humor trying to bring some sanity to absurd and ridiculous situations is one of the delightful features of the newsletter. -Leland B.

Trump-Biden Signs. Readers are now sending me photos of "offensive" Biden signs. I thought about adding them to the newsletter but decided against it. Those who are easily offended would be up in arms and I would have to go into hiding. Thank goodness the election will soon be over.

55+ Communities. I realize last week's feedback by Ron G. could have meant “occupancy” instead of “purchase.” However, in case he was accurately recounting his association’s current practices, it should be clarified that an individual of any age can purchase in a senior association...it’s just all about who actually resides in the home that the law cares about. -David B.

RESPONSE: Thank you for the clarification. Anyone can buy into a senior community but not everyone can reside in one. The age restriction applies to residents. For a good explanation of the subject, see the DRE Real Estate Bulletin from Spring 2019.

****


Kudos #1. I don't write as much as years ago, but I do thank you often silently. I still enjoy all the emails and posts. I have learned so much by way of the short yet powerful emails we have exchanged in the past. I tell anyone who will listen about your law firm, newsletter, website, and app. God knows, all folks can learn so much by just investing a little bit of time. THANK YOU AGAIN FOR ALL THAT YOU DO!!! -Masud O.

Kudos #2. Great and constant and well needed information in your Newsletter.....Boards need your vital and current information.......Keep up the needed, and valuable and most appreciated work in the Newsletter. –Sheldon S.

Kudos #3. Many thanks for having the best HOA legal newsletter in the country! -Chris

Kudos #4. Great newsletter...you are an awesome lawyer –David C.

Kudos #5. Your newsletter is AWESOME! Good information. –Nick K.

Kudos #6. Thank you for the terrific newsletter. You’ve helped our HOA in so many ways by keeping us up-to-date on changes in the law, making laws understandable to the lay person, suggesting practical solutions, and citing examples. We really appreciate your time and effort that goes into the maintenance of the Davis-Stirling.com website. -Netti


Statewide Updates: The State issued new guidance for Theme Parks, Sporting Events at Outdoor Stadiums, and Personal Care Services:

CDPH Amusement Park/Theme Park Guidance: Smaller parks with a capacity of 15,000 or less can open in the Orange Tier at a limited capacity of 25% or 500 people, whichever is less. Outdoor attractions only may open and ticket sales are limited to those residing in the same County that the park is located in. All parks can open at 25% capacity in the Yellow Tier. The Guidance provides further measures that must be taken to operate.

CDPH Sporting Events at Outdoor Stadiums and Racetracks Guidance: Professional sports operations (not youth, adult recreational, amateur, semi-pro or collegiate) can open in the Orange Tier with a limited capacity of 30% and in the Yellow Tier at 25% capacity. Tickets can only be sold to those traveling within a 120 mile radius. The Guidance provides further steps that must be taken to open.

CDPH Expanded Personal Care Services Guidance: Personal care services including esthetic, skin care, electrology, body art professionals, tattoo parlors, piercing shops and massage therapy may open for indoor operations in all Tiers.

NorCal Counties. The following Counties changed Tiers: Butte (Red Tier to Orange); Napa (Red Tier to Orange); Riverside (Red Tier to Purple); San Francisco (Orange Tier to Yellow); Shasta (Red Tier to Purple).

Alameda County has a new Health Order that is effective October 23, 2020.  Under the new Order, Alameda has allowed the following activities: indoor family entertainment centers that are naturally socially distanced at 25% capacity; indoor dining at 25% capacity or 100 persons, whichever is less; indoor worship services at 25% capacity or 100 people, whichever is less; indoor movie theaters at 25% or 100 people, whichever is less; indoor retail and malls up to 50% with indoor food courts; indoor gyms and fitness centers at 25% capacity, no indoor pools; outdoor non-contact fitness classes up to 20 people including the instructor; and wedding and funeral services up to 25% of venue or 100 people, whichever is less. They have also aligned their social gathering requirements to the State, allowing three households (no more than 20 people).

Butte County move from the Red Tier to Orange Tier and issued a press release regarding the Butte County Move to Tier 3 and the impact of this move.

Madera County issued a press release indicating that they are On the Way to Red Tier. Currently the County meets the requirements, and must sustain the metrics for another week to make the move. They also issued notice of the updated CDPH Expanded Personal Care Services.

Marin County has issued Tools to Assist with Reopening of Marin Schools.

Mendocino County has a new Order. The Order clarifies that the 3 household gatherings allowed by the State are not allowed while the County remains in the Purple Tier.

Napa County moved from Red Tier to Orange Tier and issued new Business FAQs indicating the changes in openings as a result of the Tier change.

San Francisco moved to the Yellow Tier and issued a Press Release re Yellow Tier Openings. The press release indicates that effective October 27, non-essential offices can open at limited capacity; indoor climbing gyms can reopen at 25% capacity; indoor fitness centers can increase capacity to 25% without cardio or aerobic classes; some indoor personal services requiring limited face covering removal can open; and higher education can increase capacity of outdoor classes to 25 people and request an exception to the 2 hour limit. The timeline for future openings was updated as follows: November 3 indoor pools; indoor bowling alleys; indoor fitness can open locker rooms and showers; indoor dining can increase to 50% or up to 200 people with a 3 hour maximum per table; indoor worship can expand to 50% or up to 200 people; outdoor worship or protests can expand to 300 people; indoor museums, zoos and aquariums can increase to 50% capacity; movie theaters can increase capacity to 50% up to 200 people without concessions; some live performers in drive in setting; film productions can expand indoor activities and outdoor activities up to 50 people. Mid-November they hope to open bars not serving food for outdoor operations. San Francisco schools are being opened as their applications are approved.

Shasta County moved from Red Tier to Purple Tier. By October 23: bars/breweries/distilleries with no meals must close; restaurants, museums, zoos, aquariums, places of worship, movie theaters, gyms and fitness centers, wineries, family entertainment centers and card rooms can only open outdoors; retail and shopping centers can open indoors at 25% percent capacity; personal care services can open indoors.

Sonoma County issues an Amendment to the Health Order related to Residential Care Facilities Visitation. The County provided information related to the opening of personal care services and Halloween and Dia de los Muertos Guidance.

Tehama County issued Halloween Guidance.

Yolo County issued guidance indicating that gatherings are limited to 3 households with a maximum of 16 people, for two hours only, and only outdoors.

SoCal Counties. Imperial County amended its health order to align with the state’s gathering guidance allowing private gatherings of up to three (3) households with a maximum of 16 individuals. It also amended its order to align with state’s modification of expanded personal care services to all tiers.

Los Angeles County amended its health order to align with State’s guidelines for private gatherings for up to three households outdoors. Persons over the age of 65 or persons of any age that have active or unstable preexisting health conditions should continue to avoid gatherings.

Riverside County moved back to the purple tier on 10/20. Indoor operations for industries such as restaurants and gyms that were allowed in the red tier will need to move operations outside or close.

San Diego County amended its health order to include compliance with the state gathering guidelines, though San Diego county still limits gatherings to one household, with exceptions listed in paragraph 15 of the order.

Santa Barbara County continued its order to wear face coverings in high risk situations to November 15, 2020.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 10-22-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. Keep in mind we are corporate counsel to California associations only. Ask us for a proposal to represent your association.

No Open Board Meetings

Oct 18, 2020 0 Views 0 Comments

QUESTION: We are currently holding executive session meetings only. Our clubhouse isn't big enough to hold open meetings for 112 members and still maintain social distancing. We tried explaining this members but they aren't having it. -Ed H.

RESPONSE: I agree with your members--you should hold open board meetings. Boards throughout California have been doing it for the past six months via video conference. You don't have to worry about social distancing since all 112 members can attend without leaving their units. Here are some links to videos on how to hold Zoom meetings.

    1. How to Use Zoom Video for Meetings
    2. Seven Zoom Meeting Tips

You can find guidelines for holding virtual board meetings here: Online Meeting Guide.

Special Assessment. Our HOA will be voting on a special assessment. One of the board members sent a letter to all owners encouraging them to vote for the assessment. Is this allowed? He claims he did this as a homeowner, not a director. –Marie S.

RESPONSE: Board members can campaign for a measure, provided they do so at their own expense. I
f they don't use association media or resources, the entire board could send a letter advocating for a special assessment. If they were to use the association's newsletter or website to urge approval, they would be required to provide equal access to members advocating a different point of view. (Civ. Code §5105(a).)

Entity Ownership? Our CC&Rs state that only a natural person, not an impersonal entity, can own a separate interest. In the Murray election rules, it has a clause that allows impersonal entities. Can we remove that to correspond with our CC&Rs? –Georgeann H.

RESPONSE: The statute does not require associations to allow ownership by impersonal entities. It merely states that if title is held by a legal entity that is not a natural person, the entity can appoint someone as a candidate for election to the board. (Civ. Code §5105(b)(2).) On the larger issue of ownership, I don't know that you can prevent an impersonal entity from owning property. It would likely be deemed an unreasonable restraint on alienation. You should have your association's legal counsel provide an opinion on this issue.

Communicating with Tenants. My neighbor rents out her condo. Our management company says that under no circumstances can it communicate directly with the tenant, but all communications must go through the owner. That makes no sense to me. Seems the association would have a right to communicate with the renter for certain things. –Mar

RESPONSE: There is nothing in the law barring associations from communicating with tenants. Many adopt a policy of only communicating with the owner but there are times when it's appropriate to contact the tenant. On many occasions I've written demand letters to tenants with a cc to the owner and followed up with a separate letter to the owner threatening to sue the owner if he didn't get his tenant under control.

No Insurance. For most HOA insurance, pandemics are excluded on coverage. Riders are not offered either. What should HOAs do if a resident contracts COVID and sues? -Bette M.

RESPONSE: When sued, always tender claims to insurance and provide your association's legal counsel with a copy. He/she will need to calendar the deadline for filing a response in case your insurance carrier is slow to respond or denies coverage. If coverage is denied, your association will be paying out of pocket to defend against the claim. This explains why some boards keep their facilities closed. They don't want to risk getting sued.

Resignation. One of our directors resigned. I nominated a past board member. The nomination was seconded. One director voted no and the president abstained. I was told it did not pass because the president abstained. Can you confirm this please? -Cheryl G.

RESPONSE: With four directors in your meeting, you need three affirmative votes to pass a motion. You only received two votes, which means the motion failed. If the president had remained silent when the vote was taken, it could have been counted as silent acquiescence and your motion would have passed.

 

Trump Flag #1. The picture of a Trump flag is contrived--it's not a picture of one flying in an association. -Jeff B.

RESPONSE: It's real and was hung on a wall. The photo was sent by a reader along with the question about offensive language.

Trump Flag #2. I take offense that you only used a Trump sign--what about  similar Biden signs? -Joan M.

RESPONSE: The reader did not send a Biden sign. If he had, I would have used it and the answer would have been the same.

Trump Flag #3. It would be good to note that NOBODY has a "right" to not be offended. It's kinda at the heart of our 1st Amendment guarantees and is among the foundations of the Declaration of Independence and the Constitution. –Fred C.

RESPONSE: With radical elements putting graffiti on walls, sidewalks and streets, and people putting election signage on cars and lawns and in windows, these are exciting times for those who are easily offended. As you pointed out, being offended is not a basis for destroying free speech rights.

 

Trump Flag #4. This must be a misprint: “To avoid stress, drive with your eyes closed"??? -Christine H.
 

RESPONSE: Smile.
 
Trump Flag #5. Is there a limit on the number of political signs that can be displayed? Can the HOA limit the number of signs to one per candidate? Civil Code §799.10 states that mobile homes can display a political sign (singular) but Civil Code §4710 uses signs (plural). –Ray M.
 
RESPONSE: I think boards can set a reasonable limit on the number of signs but not everyone agrees with me and they may be right. Filling your yard with one candidate's signs could be a form of speech. It reflects enthusiasm for a candidate. The only case I'm aware of deals with limitations on commercial signage. (Fourth La Costa v. Seith.) At this point, I recommend letting people display as many signs as they want. The election is only 16 days away. After that, things can return to normal(?).


AB 3182 #1. Does AB 3182 affect the enforcement of 55 and over senior associations? Currently our association prevents the purchase by individuals that do not meet our minimum age requirement of 55. –Ron G.

RESPONSE: As long as the legislature is out of session, your age restrictions are valid. Once the legislature reconvenes, it's anybody's guess. The stream of bad legislation coming out of Sacramento is truly distressing.

AB 3182 #2. If our governing documents prohibit an Airbnb situation and the only difference I can see with the new legislation is we will need to allow 25% rental/leases instead of the 20% stated in our CC&Rs, do we still need to come up with new rules? -Polly B.

 

RESPONSE: You don't need to do anything with your limitation on short-term rentals. You will, however, need to amend your governing documents to conform to the 25% requirement.


Kudos #1. Once again you have made my Sunday. Thank you for your letter. -Bill B.

Kudos #2. Thanks for sending this excellent resource. -Alice M.

Kudos #3. Your newsletter is my very favorite. What would board members do without it?! You’re brief and to the point; yet cover just about everything we need to know. Thank You! Thank you! -Ros M.

Kudos #4. As a past board president, I cannot thank you enough your enlightening newsletter. –Rebecca B.


NorCal Counties. The CDPH has issued new guidance for private gatherings which has been added to the chart.

The following Counties have changed Tiers: Alameda (Red Tier to Orange); Colusa (Purple Tier to Red); Kern (Purple Tier to Red); Kings (Purple Tier to Red); Placer (Red Tier to Orange); San Benito (Purple Tier to Red); Santa Clara (Red Tier to Orange); Sierra (Orange Tier to Yellow); Stanislaus (Purple Tier to Red); Sutter (Purple Tier to Red).

Alameda County issued a press release re: Orange Tier after moving to the Orange Tier. The County noted that Orange Tier activities allowed to open will not yet be opened and noted that they are working to update the Health Order to allow for the following activities: indoor dining, worship, and theaters at 25% capacity or less than 100 people, whichever is less; indoor retail and malls at 50% of capacity and limited food courts. Beginning October 16, outdoor activities, including playgrounds will be allowed following State guidance. The County also released guidance for the arts community and a Joint Statement of the Bay Area Health Officers urging flu shots.

Butte County issued a tip sheet for celebrating Halloween. Butte County noted that schools are now allowed to reopen for in-person instruction following the State’s guidance.

Contra Costa County issued new Openings at a Glance which has been added to the chart. They also issued recommendations for safe voting and a Joint Statement of the Bay Area Health Officers urging flu shots. The County noted that Elementary and secondary schools are allowed to open for in-person instruction without a waiver or permission, for more information residents can visit the Schools and Childcare page.

Fresno County issued an Amended Order effective 10/9/20. They have also linked to the CDPH Guidance for a Safer Halloween and Guidance for Private Gatherings.

Madera County has posted the CDPH Guidance for safer Halloween and gatherings (which has been added to the chart). The County noted that Elementary School waivers were approved for: Chawanakee, Chowchilla Adventist, ETAA Charter Golden Valley, St. Joachims.

Marin County issued Joint Statement of the Bay Area Health Officers urging flu shots.

Mono County/Town of Mammoth Lakes issued Guidance for Halloween and Dia de Los Muertos Celebrations.

Napa County linked to the CDPH Guidance regarding gatherings which has been added to the chart. They also updated their business FAQ sheet which has been updated on the chart.

Nevada County issued Halloween Guidance.

Placer County moved from the Red Tier to the Orange Tier.

Sacramento County has a new Order. The new Order indicates that all grade levels are permitted to conduct in-person instruction with measures in place and also updates to align with the new CDPH gathering guidance.

San Francisco issued a press release announcing reopening of playgrounds.

San Joaquin County has a new Order that implements the directives from CDPH on gatherings.

San Mateo County issued Halloween Guidance and the Joint Statement of Bay Area Health Officials Urging Flu Shots.

Santa Clara County has a new Risk Reduction Order and issued a press release indicating the impact of that order and businesses now permitted to open: Santa Clara County Press Release re Orange Tier. Santa Clara County issued the Joint Statement of Bay Area Health Officials Urging Flu Shots.

Santa Cruz County issued a press release regarding guidance for private gatherings and the Joint Statement of Bay Area Health Officials Urging Flu Shots.

Solano County linked to the CDPH Guidance for Private Gatherings.

Sonoma County issued guidance for Halloween and Dia de los Muertos.

Stanislaus County moved from the Purple Tier to the Red Tier.

Sutter County moved from the Purple Tier to the Red Tier.

Tehama County issued a press release related to the move from the Red Tier back to the Purple Tier: Tehama County Press Release dated 10/7/20.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 10-15-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. You can talk to us. Keep in mind we are corporate counsel to California associations only.

Political Signs and Banners

Oct 11, 2020 0 Views 0 Comments

Political Banners. A homeowner has a banner draped across the front of the home (see photo). Is this allowed? The curse word is the part that makes me question it, especially with children playing in the neighborhood. –Sam N.

RESPONSE: Unfortunately, we will see a lot of political signs and banners over the next 3 weeks that will offend people.

Signage Allowed. The Davis-Stirling Act specifically allows for the display of "noncommercial" (political) signs. It does not restrict content except to protect the public or if in violation of the law:

The governing documents may not prohibit posting or displaying of noncommercial signs, posters, flags, or banners on or in a member’s separate interest, except as required for the protection of public health or safety or if the posting or display would violate a local, state, or federal law. (Civ. Code §4710(a).)

Obscene? Some might consider the above banner obscene or claim it incites violence or affects their mental health, but a court will deem the message permissible free speech. Even if the banner used the "F" word, you would have trouble convincing a court to order its removal. In 1968, Paul Cohen wore a jacket with the words “F*** the Draft” into a Los Angeles courthouse and was subsequently convicted of disturbing the peace. His conviction was appealed to the U.S. Supreme Court where it was overturned. (Cohen v. California.)

RECOMMENDATION: To reduce stress, avoid watching TV, stay off social media, don't talk to relatives, and drive with your eyes closed. Once the election season is over, we can move on to the next catastrophe.


Size of Signs. We love your newsletter in San Diego! Our association has a rule that signs can be posted but it conflicts with Civil Code Section 4710 regarding size which allows up to 15 square feet. Which rule has precedence? -Suzanne S.

RESPONSE: When there is a conflict between an association's rule and the law, the law controls. (Civ. Code §4205.)


Inspectors of Election. I thought inspectors could no longer come from the membership and instead needed to be paid outside parties and our election rules needed upgrading to reflect this change. –Jeff K.

RESPONSE: You are right that election rules need to be updated. However, you aren't entirely correct about inspectors of election. SB 323 prohibits anyone under contract to the association from serving as an inspector. That means associations can no longer use their management company or CPA to perform those duties. You can still use a volunteer from the membership provided the person is not a member of the board or a candidate for the board or related to a member of the board or a candidate. (Civ. Code §5110(b).)


Moved to Another State. If a director moves to another state but still owns the property, can he/she stay on the board? -Anon

RESPONSE: Yes, members not living in the association can serve on the board. We have a lot of snow birds who are Canadian citizens with their primary residence in Canada but who own property in associations in the Palm Springs area and serve on their boards. It's perfectly legal and we like having our Canadian cousins on our boards.


Term Limits. Our bylaws have a limit of no more than 2 two-year terms. What is your opinion on whether this limitation was voided by SB 323. Thanks for your great website. Lots of HOAs use it! -Gregg F.

RESPONSE: As everyone knows by now, the bill sponsored by Marjorie Murray's Center for California Homeowner Association Law (CCHAL) made extensive changes to election procedures. Unfortunately, the bill was badly drafted with a lot of internal inconsistencies and negative consequences for associations and their members. One of them was the voiding of term limits.

Qualifications Voided. SB 323 (now law) stripped all qualifications from governing documents that would prevent someone from running for the board. It created one mandatory qualification--membership in the association (a blunder that is particularly harmful to small associations).

Discretionary Qualifications. The bill allows associations to adopt four discretionary qualifications for candidates--term limits was not one of them. This has caused a great deal of distress in associations that want term limits. Early this year, CAI's California Legislative Action Committee (CAI-CLAC) began work on clean-up legislation to undo the harm caused by Ms. Murray's Center. Unfortunately, everything stopped when the pandemic hit. Repairing the damage will have to wait for the next legislative cycle.


Non-Trustee Spouses. Is there a way for the spouse of a trustee of a living trust to qualify for the board of directors? –Suk M.

RESPONSE: SB 323 does not allow a spouse not on title to run for the board. I know it's absurd, association members should be allowed to decide for themselves who they want to represent them. Unfortunately, we are stuck with the bill for now. The only way for the spouse to be a candidate is to amend the trust, make him/her a co-trustee and re-record title.

Are Appointments Allowed? One line of thought among attorneys is to appoint the spouse to the board. He/she cannot run for the board as a candidate but some attorneys argue that appointments are not prohibited by Ms. Murray's bill. Other attorneys are more conservative on the issue and argue that persons who are not qualified cannot serve on the board. Boards should talk to their association's legal counsel on this matter.

Trustee Member? We have members who owned the property for years and put it into a trust with a relative as trustee. Our CC&Rs state the member is the one who holds the title. We want it to be the people who bought the house to be members, regardless of how title is held. Who is the member? –Netti J.

RESPONSE: The person on title is the member.

EARTHQUAKE RESILIENCY
FOR COMMUNITY ASSOCIATIONS

 

Dr. Lucy Jones (US Geological Survey and CalTech Seismologist), Glenn Pomeroy (CEO, California Earthquake Authority) and Adrian Adams will discuss the impact of the next major earthquake on California's community associations.
 
What can boards do today to avoid a catastrophe? What should be done after the big one hits?
 
The program, California Shakin', is approved for 1.5 CE credits for managers. It will be presented Tuesday, October 13 from 11 am to 12:30 pm. CLICK HERE to register.
 


Reopening Gyms #1. "They decided not to risk anyone dying from the coronavirus and imposed stringent restrictions on reopening facilities until science could find a cure for death." They are going to wait a long time before they find a "cure for death." –Nelson I.

Reopening Gyms #2. This guy cracks me up. Only in California. –Ann C.

Reopening Gyms #3. Currently .019 chances of death! Why do they use death? Scare tactics totally. –Michael G.

Reopening Gyms #4. A cure for death was announced 2000 years ago. Now if we can just get churches at more than 25% of capacity?? –Robert F.

Reopening Gyms #5. I love your emails and advice....keep up the good work. If a board decides to open their indoor gym without complying with the local ordinances does that decision to operate "illegally" impact the HOA liability insurance? Could the HOA Liability insurance carrier deny coverage for operating a gym "illegally", since public policy generally prohibits insurance coverage for illegal behavior? If so, then there is a huge liability risk for operating an HOA gym with no insurance coverage. -Marc D.

RESPONSE: Here is what San Francisco's Health Department says about its orders:

Health Orders are enforceable laws and are usually accompanied by one or more Directives which provide legally binding instructions for how to comply with the Health Order. The Orders and Directives may also be accompanied by Guidance that provides suggestions and frameworks to facilitate compliance.

The City's statement is not entirely accurate. "Laws" are created by legislatures. Orders and directives from health departments or other executive agencies are not laws but are, nonetheless, enforceable. People who violate them can be charged with a misdemeanor and fined. The problem is that health department orders, directives and guidelines have been changing weekly, sometimes daily. In addition, state, county and city orders, directives and guidelines often conflict. Finally, it is sometimes difficult to determine if a guideline is just a guideline or an order. Even health department officials and county supervisors are often confused by their level of enforceability.

Currently, various counties have allowed gyms to open. If a board opens their association's gym in a good faith effort to comply with health department guidelines but fails to fully comply as intended by the health department, an official would likely issue an order to comply or close the gym. A fine may or may not be imposed. Normally, a warning is issued first. It's unlikely the state, county or city (once they decide who's in charge) would sue unless there were willful defiance of their order. If your board told the official to pound sand and the association were sued, insurance would likely not defend. 

Recommendation. If a health inspector shows up on your doorstep and issues an order, you should probably comply. Talk to legal counsel first before refusing. The official could be dead wrong and legal counsel could make inquiries and seek clarification. It's possible the order would then be reversed.


AB 3182 #1. I see that all existing rental rules are now unenforceable, although HOAs can limit rentals to 25% of total units; what does this mean for buildings like mine that already have more than 25% rentals? Also, if we're not prohibited from requiring a lease longer than 30 days, how does this prevent us from banning short-term rental platforms like AirBnB? Is there any chance of this law being repealed? –Lynn P.

RESPONSE: Not all restrictions were unenforceable, only non-compliant ones. What are the chances of getting the law repealed? If we had a new governor and new legislators, we might have a chance. Otherwise, chances now are less than zero. You can still ban short-term rentals. It might be possible to impose lease terms longer than 30 days if an association can fully justify the longer lease term. There seems to be some wiggle room on this point.

Recommendation. Associations with non-compliant restrictions need to amend their documents. We are already reviewing and amending documents for HOAs. We can quickly determine if restrictions are okay as-is or need to be amended. Contact us if you need your documents reviewed.


AB 3182 #2. Love your gallows humor! It helps to tolerate all the absurdities of life with HOAs and POAs. We are a road association only. Does this new law apply to us, i.e., the requirement to yet again amend our agreements? –Maggie L.

RESPONSE: If you don't have rent restrictions, you don't need to amend your documents. As a road maintenance association, I can't imagine you have rent restrictions.


AB 3182 #3. You said to change rules and regulations first regarding rental restrictions by the end of the year, but also said all existing restrictions would become void as of January 1. Wouldn't any changes we make now be wiped out? –Lynn P.

RESPONSE: If you amend your rules to comply with AB 3182, your rules will be fully enforceable once adopted and continue to enforceable on January 1.


AB 3182 #4. Our HOA has a restriction which states no subleasing without consent of the board, is that still valid? -Carl

RESPONSE: Yes, it's still valid. This is important if you want to prevent someone from renting a unit/home for 30 days and then turning around and running Airbnb rentals through it. In addition to no subleasing, you will want something in your governing documents against transient, hotel-like operations. That should cover all the angles.

AB 3182 #5. What happens if the board approves a CC&R change but cannot get the required number of HOA members to vote for it? –Jim G.

RESPONSE: If you are amending CC&Rs to comply with AB 3182, it may be possible for your board to record an amendment without a vote of the membership since the change is mandated by the State of California. Provided the changes don't deviate from AB 3182, the changes are not ones the membership can reject. You should consult with legal counsel first to see if they agree and, if so, provide the  appropriate language in your board resolution and CC&R amendment.

AB 3182 #6. This is ridiculous, legislators (lawyers) mandating that the public pay lawyers (obvious conflict of interest) to change documents every 6 months in California. A revolution is needed – or at the end of the law state it must be changed for free by all lawyers in the state. -Ed S.

RESPONSE: AB 3182 is harmful, badly written and completely unnecessary. We fought hard to stop the bill. When it passed, we fought to have it vetoed. Over 5,000 emails and letters were sent. All to no avail. It's time citizens voted for new legislators.

Priceless! I love it when your information hits board members and HOA management companies in the head, to make them walk the center line. Priceless! -Ty W.


NorCal Counties. The following Counties have changed tiers: Humboldt (Orange Tier to Yellow); Inyo (Red Tier to Orange); Merced (Purple Tier to Red); Plumas (Orange Tier to Yellow); Santa Barbara (Purple to Red); Shasta (Orange Tier to Red); Siskiyou (Orange Tier to Yellow); Tehama (Red Tier to Purple); Trinity (Orange Tier to Yellow); Ventura (Purple Tier to Red); Yuba (Purple Tier to Red).

Alameda County has released information indicating that as of October 13 elementary schools can open if they complete a reopening plan and that they are considering permitting middle and high school students to return to in-person education in phases: Alameda County Guidance re School Opening. The County indicated that indoor gym and fitness guidance is coming soon and that those inside the facility may not exceed 10% capacity.

Butte County issued a press release encouraging residents to get the flu vaccine by Halloween: Butte County Press Release dated 10/9/20 re flu vaccine.

Lake County issued a press release indicating that Lake County was going to remain in the red tier and would not be moving back to purple: Lake County Press Release dated 10/5/20 re Remaining in Red Tier. Lake County has a new Order clarifying guidelines for facial coverings by superseding prior facial covering orders and replacing them with the State Guidelines: Lake County Order Clarifying Facial Covering Guidelines dated 10/8/20.

Merced County moved from the Purple Tier to the Red Tier.

Monterey County has swimming pool guidance which has been added to the chart.

Napa County issued an official Rescission of the 4/25/20 Health Order Napa County Rescission of 4/24/20 Order.

Nevada County issued a press release re Halloween safety.

Sacramento County has updated pool guidance which has been added to the chart.

San Francisco has a new Health Directive dated 10/7/20 re Movie Theaters that allows reopening (without concessions and common areas at 25% capacity.

San Joaquin County’s Order re schools has replaced the press release previously in the chart.

Santa Clara County revised their Risk Reduction Order on 10/5/20 that will go into effect when the County moves into the Orange Tier. The Order will allow additional activities and businesses to open if the State allows such as indoor dining and indoor gatherings.

Shasta County moved from the Orange Tier back to the Red Tier. Based on this change Shasta County issued a release indicating the impact that this has on business and activity openings: Shasta County Press Release re Red Tier Business Closings.

Sonoma County has issued a press release on October 8, 2020 indicating the status of school waiver applications: Sonoma County Press Release dated 10/8/20 re School Waiver Update.

Sutter County has a new Order and revoked the prior Order and all Amendments thereto. This Order is intended to align local Orders with the State’s Order.

Tehama County has moved from the Red Tier back to the Purple Tier.

Yuba County has moved from Purple Tier to Red Tier. Yuba County has a new Health Order and revoked the prior Order and all Amendments thereto. This Order is intended to align local Orders with the State’s Order.


SoCal Counties. Los Angeles County amended its health order allowing for indoor nail salons and indoor malls to reopen with capacity restrictions. It also removed restrictions on outdoor playgrounds. A further amendment permits non-restaurant breweries and wineries to operate outdoors with restrictions. On October 6, 2020 The city of Los Angeles amended its order removing cardrooms and wineries from exempt essential activities.

San Diego County provided Halloween guidelines, prohibiting in-person parties with non-household members, further does not recommend door-to-door trick-or-treating or “trunk treating” or leaving bowls of candy for others to grab.

San Luis Obispo County provided guidance for a safer Halloween. Prohibiting in-person parties with people not in your small social bubble. Further classifies door-to-door trick-or-treating as high risk. Also since the county has been in the red-tier for two weeks, the county is allowing in-person schooling with modifications.

Ventura County issued an amendment to its July 13th health order that closed specified indoor activities and are now allowing gyms, fitness centers, worship services and personal care services to operate indoors with compliance with the State and County health orders.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 10-8-20. The chart is also posted on our website.

Enlarging Text. If for some reason you do not have scrolling capability (my mouse died!), hold the "CTRL" button while you strike the key with the "+" [multiple times] to enlarge the text, and the "-" [multiple times] to shrink the text. These are the keys in the upper row, NOT the keys in the "numeric key-pad area" (right-hand side of the key board). –Hank J.

RESPONSE: Good information for readers without mice. I hope you gave yours a proper burial.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to hire us. It's okay, we're friendly. You can talk to us. Keep in mind we are corporate counsel to California associations only

Restrictions on Pools & Gyms

Oct 4, 2020 0 Views 0 Comments

QUESTION: We have two swimming pools and hot tubs and two tennis courts. The board is citing excessive liability because of Covid-19 and wants to charge us for an attendant and a large extra insurance policy. They are citing Los Angeles County regulations as their justification. I believe it's unreasonable. –Tamra T.

RESPONSE: The mayors of Los Angeles and San Francisco got together with Governor Newsom to discuss reopening community association facilities. They decided not to risk anyone dying from the coronavirus and imposed stringent restrictions on reopening facilities until science could find a cure for death. Following is one of the many requirements for reopening gyms in San Francisco:

If the gym...is unattended by staff at any time during hours of operation, it must remain closed... Indoor gyms may operate if they meet strict conditions that include daily screening of patrons, enhanced personal and equipment sanitation measures, enhanced ventilation requirements, and strict rules on face covering, distancing and [10%] capacity limits. Gyms without full time staff cannot meet these critical risk-reduction standards and must stay closed.

It means unstaffed associations (small to mid-size and some large) cannot open without hiring extra help.

Risk Tolerance. Boards have different levels of tolerance to risk. Some are risk-averse and unwilling to chance fines and potential litigation. As a result, they are keeping their facilities closed.

Associations that can afford it are hiring personnel to comply with health department requirements. If it's not in their budget, some are willing to open if users pay for the extra attendants.

Boards who are less risk averse have already opened their facilities after posting warning signs, installing hand sanitizers, and requiring members to sign hold harmless agreements. They might not be fully compliant with state/county requirements but they decided the lack of regular exercise is too detrimental to their members to keep them closed.

RECOMMENDATION: Health officers are doing the best they can to minimize the spread of the coronavirus. Some think they are being too lenient and want the state to go back into full lockdown, while others believe their requirements are too strict and should be loosened. Since it may take a while for science to find a cure for death, associations that want to reopen facilities should consult with legal counsel and decide which is the best course of action for their association.

GOVERNOR SIGNS
INTRUSIVE & UNNECESSARY BILL


Governor Newsom signed AB 3182. This is another in a series of senseless decisions coming out of Sacramento. The Legislature and the Governor seem to think that converting owner-occupied homes into rentals will solve their housing crisis. It won't. All it does is destabilize community associations.

Investor Rentals. Signing AB 3182 means almost 3 million of the state's 11 million HOA housing units are now fair game for investors to buy and convert to rentals. It also means that rules enforcement problems, deferred maintenance, and lower property values will inevitably follow.

Better Solution. The better solution would have been loosening restrictions on the construction of apartments and new homes. As more units are built, rents and housing prices drop. It's a simple matter of supply and demand. Assemblyman Ting's bill:

  • voids rental caps more restrictive than 25%;
  • allows 30-day lease restrictions but appears to void anything greater than 30 days (law firms are split on this point);
  • mandates all associations amend their governing documents;
  • voids restrictions on January 1  but allows associations until December 31, 2021 to amend their governing documents;
  • imposes a penalty of $1,000 on associations that do not comply; and
  • has internal inconsistencies (we are currently trying to decipher).

Consequences. Even though associations have until December 31 2021 to amend documents, in reality it needs to be done by January 1 (in less than 3 months), which is when non-compliant restrictions are voided. That means those associations will have zero rent restrictions on January 1. This opens the door to investors buying up units and converting them into Airbnb rentals.

ADU Problem. Ting's legislation also includes a requirement that building departments jam through ADU approvals. He and the Governor want everyone to convert their garages into rentals as quickly as possible. In addition, Ting specifically carved out ADUs from the 25% cap, which means HOA rentals could climb well above the 25% ceiling.

RECOMMENDATION:
This is really frustrating. We are in the middle of a pandemic; millions are out of work; associations just went through unbudgeted election rule revisions, and now this. Despite heavy lobbying by CAI and thousands of emails from homeowners, Governor Newsom signed Ting's bill anyway. Last year, he signed Marjorie Murray's SB 323 dumpster fire election bill.

Boards with non-compliant restrictions should immediately talk to legal counsel about amending their governing documents before January 1 when existing restrictions become unenforceable. We plan to start with rule changes since those will be the quickest and least expensive for clients. This should protect against Airbnb rentals and avoid the threat of penalties. Then, we can work on the more difficult task of amending CC&Rs.

NEW EMPLOYER REQUIREMENTS
FOR REPORTING COVID-19


Governor Newsom signed AB 685 and SB 1159 into law. These bills impose more burdens on employers.

SB 1159. Workers’ Compensation. Employers with 5 or more employees are required to report all known employee COVID-19 positive tests to their workers' compensation claims administrator. This applies even if the employee is not claiming workplace exposure. If an employee claims they contracted the virus while performing their job, the new law creates a rebuttable presumption the employee contracted it at work. The burden is on the employer to prove otherwise.

AB 685. Notice to Exposed Employees. If an employer receives notice of potential exposure to COVID-19 in the workplace, the employer must provide written notice to all employees as well as the employers of subcontracted employees who were on the premises at the same time as the employee who was diagnosed with COVID-19, ordered to isolate, or died of the virus. In addition, employers must provide exposed employees with information about benefits to which they may be entitled including, but not limited to, workers’ compensation and COVID-19-related leave, including company sick leave, state-mandated leave, federal sick leave, as well as anti-retaliation and anti-discrimination protections available.

RECOMMENDATION: Associations and management companies should talk to their HR administrators and/or legal counsel about the new requirements. Non-compliance can result in penalties of up to $10,000.


Election Timeline Calculator. It works like a charm! Clear, simple, efficient. Thank You. Thank You. Grateful to your team. I very much appreciate also that each step includes a paragraph spelling out in a few words the requirements of the law behind it. A gem! -Denyse B.

RESPONSE: I appreciate the feedback. Our team put a lot of work into the timeline calculator. It's already getting a lot of use as boards implement the confusing requirements imposed by SB 323.


CAI Legal Forum. The following comment was passed to me about the CAI's recent Legal Forum:

"What I loved most: was learning about CAI and the network of individuals available to homeowners and board members. I want to thank Adrian Adams and his staff for their newsletter that lead me to this legal forum. It was great being able to talk directly with the experts. I did not know that anything like this was available. -Kay D."


Rent Restrictions #1. I am a subscriber to the Adams-Stirling Newsletter, and I am never disappointed. It always has something useful to our HOA in it. Despite letters to the Assembly and Senate, the Legislature passed SB 3182. And, despite letters to the Governor to veto the bill, he signed it. So now HOAs will have to allow up to 25% of their units to be rented before they can restrict additional renters. Way too few make the effort to send letters that you make so easy for us to send, so all of those who didn't send letters share the blame for SB 3182. -John C.

Rent Restrictions #2. Our association does not have a rent cap, but instead requires that new owners must live in the property for two years before it can be a rental unit. How does AB 3182 affect this? -Rick S.

RESPONSE: Your restriction is common in governing documents and very effective at discouraging investors from buying units while still allowing existing owners to rent their unit if they need to. These kinds of restrictions keep communities stable. Effective January 1, such restrictions are unenforceable.

State Officials announced a metric that takes effect October 6. It is intended to address communities which have been disproportionately impacted by COVID-19. See: Press Release re Equity Metric.

The CDPH issued the following guidelines related to public outdoor playgrounds and outdoor recreational facilities. This could assist associations with playgrounds or similar facilities: CDPH Guidance re Public Outdoor Playgrounds and Outdoor Recreational Facilities


NorCal Counties. The following Counties have Updates to their status: Amador (Red Tier to Orange); Butte (Purple Tier to Red); Calaveras (Red Tier to Orange); Contra Costa (Purple Tier to Red); Fresno (Purple Tier to Red); Sacramento (Purple Tier to Red); San Francisco (Red Tier to Orange); San Joaquin (Purple Tier to Red); Sierra (Red Tier to Orange); Yolo County (Purple Tier to Red).

Alameda County has issued a press release indicating that indoor nail salons can now open: Alameda County Press Release dated 9/25/20 re Indoor Nail Salons Opening. Also see: Bay Area Health Officers Joint Press Release dated 9/28/20.

Butte County has moved to the Red Tier and has issued the following press release regarding Red Tier: Butte County Press Release dated 9/29/20 re Red Tier.

Calaveras County has moved into the Orange Tier and has issued a press release regarding the status in the County and the Orange Tier: Calaveras County Press Release dated 9/29/20 re Orange Tier.

Contra Costa County has issued the Bay Area Health Officers press release related to Halloween: Bay Area Health Officers Joint Press Release dated 9/28/20.  Contra Costa has moved into the red tier and has allowed the following to open: indoor places of worship, restaurants, movie theaters and museums at 25% capacity or 100 people, whichever is less; indoor gyms at 10% capacity; indoor personal care services, including massage; indoor shopping malls at 50% maximum capacity and food courts following state guidance; indoor retail stores at 50% capacity; outdoor playgrounds. The following press release related to this change and indicates that elementary and secondary schools can open for in-person instruction on October 13 if the County remains in the Red Tier for two weeks: Contra Costa County Press Release dated 9/29/20 re Red Tier.

Fresno County has moved to the Red Tier and issued a press release related to the same: Fresno County Press Release dated 9/29/20 re Red Tier. They have issued Guidance for Celebrating Halloween as well as Guidance re Youth and School Based Sports and Band.

Lake County has noted in a press release that they fear there may be moved back to the Purple Tier: Lake County Press Release re Tier Changes.

Mendocino County has issued Mendocino County Order re Drive-In and Drive-Through Events.

Mono County has published a press release from Mammoth Lakes re Interim Restaurant and Retail Business Operating Rules for the Town of Mammoth Lakes.

Sacramento County has moved to the Red Tier and has a new Order which limits indoor operations of certain sectors and follows the new tier system.

San Francisco County has moved to the Orange Tier. They have issued a press release related to the opening of indoor dining and places of worship at 25% capacity or up to 100 people, whichever is smaller; 200 person political persons; Certain outdoor family entertainment; gyms and indoor dining at hotels; indoor malls at 50% capacity and indoor food courts. See: Guidance re Indoor Dining, Indoor Worship and Other Activities; San Francisco County Press Release dated 9/30/20 re business reopenings.

San Joaquin County has moved to the Red Tier and issued a San Joaquin County Press Release dated 9/29/20 re Red Tier Openings.

Solano County has issued Solano County Guidance for Celebrating Halloween Safely.

Sonoma County issued Sonoma County Guidance re Outdoor Playgrounds and Outdoor Recreational Facilities.

Tehama County issued a Public Service Announcement dated 9/30/20 re Tier Movement indicating that there is a possibility that Tehama may move back to the Purple Tier. 

Yolo County has moved to the Red Tier and issued Yolo County Press Release dated 9/30/20 re Red Tier


SoCal Counties. Los Angeles County issued a timeline for certain industries for reopening with restrictions: October 1 for nail salons; October 5 for cardrooms; October 7 for indoor shopping malls. Outside playgrounds can reopen at the discretion of city and county parks and recreation.

Riverside County issued a medical exemption for facial coverings and recommends a face shield to be used if possible for those with a medical exemption.

San Diego County made minor amendments to its health order on 9/25/20 regarding reporting of covid-19 testing and recreational boating to follow state guidelines. Further, it amended its 9/29/20 health order to conform with state’s guidance on outdoor playgrounds.

Santa Barbara updated its health order on 9/30/20 with California Blueprint changes, opening with restrictions personal services, dance studios, gyms, movie theaters, museums indoor dining, skating rinks and zoos. Further, updated health order on 10/2 for opening of outdoor playgrounds, brewpub, breweries, bars, pubs and distilleries that provide for a meal in same transaction can open indoors at 25% capacity or 100 people whichever is less, with no more than 10 people at a table. Similarly, higher education can open indoors at 25% capacity or 100 people whichever is less.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 10-3-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can talk to us. Keep in mind we are corporate counsel to California associations only.

Candidate Misdemeanors

Sep 28, 2020 0 Views 0 Comments

QUESTION: I was asked by a committee member If they could be on the board if they had misdemeanors that are 35 years old.

RESPONSE: Misdemeanors are irrelevant. Felonies are relevant only if they prevent the association from purchasing or maintaining fidelity bond coverage. (Civ. Code §5105(c)(4).

No Volunteers. We sent out a call for candidates for 3 seats on our 7 member board. No one volunteered. Do we have to keep sending out calls for candidates? Our election rules do not allow for write-ins. –Kristi H.

RESPONSE: If no one is willing to run for the board, there is no point in holding an election — there is no one to vote for. You still hold an annual meeting as required by your governing documents but the current board remains in place. At the annual meeting, everyone gets together and talks about the prior year's accomplishments and what is planned for the coming year. Prior to the pandemic, I attended annual meetings where some had catered meals for attendees, some had wine and cheese and live music. Now we sit in front of our computers and see attendees on a video screen and inspect the interiors of their units.

Giving Away Votes. Can a director give their vote to another director, giving that director two votes on an issue and not vote themselves? –John E.

RESPONSE: No, directors cannot give their votes to another director (or to anyone else for that matter). Attending meetings and voting are nondelegable duties. That is what directors are elected to do.

Inspectors of Election. Our board voted to allow two homeowners to serve as the election inspectors for our election. Is there any minimum or maximum number of inspectors for the board election? Our community has more than six homeowners who want to service as an inspector. –Lily C.

RESPONSE: By statute, the board can only appoint one or three inspectors (Civ. Code §5110(a).) The other volunteers can be appointed to assist the Inspector(s).

Executive Session Violation? Every month we want to fire our manager but there is usually a reason to postpone. We would like to do this in executive session, so I put executive session on the agenda every month. We are supposed to include a general subject which, in this case might be anything from "personnel issues" to "firing property manager." But I can't think of anything that would not alert the manager that we are talking about firing him/her. How long of a jail term would we be looking at if we simply put "Executive Session" on the agenda with no further details? - Tom U.

RESPONSE: It's ten years in solitary confinement but you can shave off two for good behavior. Your agenda should state "Personnel Issues." If the manager is on a contract, then list "Contract Review." If it's highly sensitive and you fear the manager may sabotage your computer system, hold an emergency executive session meeting with directors to discuss the matter, appoint two directors to meet with the manager and terminate his/her employment. Walk the manager out the door and then unplug the computer and have an IT person reset passwords and backup files. Don't forget to talk to legal counsel about the basis for termination. You want to make sure everything is done properly.

No 2020 Election. With regards to the election timeline; are there any repercussions to not having an election in 2020? –Michele J.

RESPONSE: It would be nice if we could completely erase 2020 from the calendar. Are there repercussions to not having an election? Potentially. If a member wanted to, they could run into court for an order that one be held. At this point, however, Marjorie Murray's SB 323 timeline makes it impossible to hold one this year. Depending on your bylaws, you can schedule one for early 2021 or wait until your normal annual meeting date. You should talk to legal counsel about how best to proceed.

Recording Zoom Meetings. I am so happy that I found your newsletter there's always something new to learn! We record our Zoom board meetings. Should the recordings be available to members to view? Would that also apply to the executive session meetings? -Mitchelle V.

RESPONSE: You can record and post your open meetings in a password protected portion of your association's website for members to view. But not executive session meetings. Those deal with confidential matters. It's already too easy for a disgruntled director to release confidential information. There could be serious legal repercussions if recorded executive session meetings were posted on the internet for all to see.

Raising Dues Annually. I've lived in the same complex for 12 years and every year our dues have gone up. This past year they went up 5.5%. I am tempted to have a revolt and change the bylaws to limit dues increases. Can boards keep raising the dues by 5% year after year? Can we amend our bylaws to limit dues increases to 2% per year? –Luke B.

RESPONSE: Let's hope your directors don't get elected to political office. By statute, directors can raise assessments up to 20% every year. You could amend your governing documents to limit increases but it wouldn't do any good. The statute overrides any such limitations. (Civ. Code §5605(b).)

Worst Case Scenario. In defense of your board's actions, small cost of living increases each year to keep pace with inflation make sense. It is actually harmful to go 12 years with no increases. That means the board is deferring maintenance. In a worst case scenario, significant deferred maintenance could result in roof and plumbing failures, property damage, lawsuits, special assessments, and loss of property values. I've witnessed it many times.

Cost of Living Increases. If a board keeps common areas well-maintained and reserves healthy, it enhances property values and avoids special assessments. In addition, regular cost of living increases allow owners on fixed incomes to make adjustments to accommodate the increases and, if necessary, make orderly plans to move to lower-cost housing.

AFTER THE PANDEMIC?
EARTHQUAKES!
Dr. Lucy Jones (US Geological Survey and CalTech Seismologist), Glenn Pomeroy (CEO, California Earthquake Authority) and Adrian Adams will discuss the impact of the next major earthquake on California's community associations.
 
What can boards do today to avoid a catastrophe? What should be done after after the big one hits?
 
The program, California Shakin', is approved for 1.5 CE credits for managers. It will be presented Tuesday, October 13 from 11 am to 12:30 pm. CLICK HERE to register.


NorCal Counties. The following Counties have changed Tiers: Alameda (Purple to Red); El Dorado (Red to Orange); Lassen (Red to Orange); Marin (Purple to Red); Mariposa (Orange to Yellow); Nevada (Red to Orange); Riverside (Purple to Red); San Luis Obispo (Purple to Red); San Mateo (Purple to Red); Solano (Purple to Red); Tehama (Purple to Red).

Alameda County issued a press release that even though they have moved to the red tier, there will be no change at this time to the permitted or prohibited activities. One of the first priorities will be the reopening of schools. Alameda County Press Release

Butte County announced that two schools have met the criteria to reopen and the Health Department is working with them to determine a reopening date. Butte County Press Release.

Contra Costa County has allowed nail salons to open indoors. They have also issued a new Health Order requiring local health providers to expand testing. Contra Costa County Order.

El Dorado County moved from the Red to the Orange Tier and published a chart indicating what is open, open outdoor only, or remains closed.

Fresno County has K-12 Return to School Guidance, as well as a School Waiver Letter and Application: FCDPH School Waiver.

Lake County issued a press release clarifying that local businesses should not be concerned about enforcing face mask requirements: Lake County Press Release

Madera County has now begun accepting school waivers. The link to information on this issue can be found here: Madera County School Waiver.

Mendocino County has a new order removing portions that are duplicative of the State order and clarifying permissible activities. The order also removed almost all of the local restrictions specific to the tourism industry. The household support group has been increased from 6 to 12 people. Finally, the Order removes the requirement of restaurants, wineries, and tasting rooms to discontinue serving alcohol at 8 pm.

Nevada County issued a press release indicating the move to the orange tier and indicated changes to business operations under this tier.

Sacramento County has a new order limiting indoor operations of certain sectors. Nail salons and physician-ordered electrolysis are allowed to resume indoor operations with modifications.

San Francisco has a new Health Directive dated 9/18/20 which allows for indoor museums, zoos, aquariums, and art galleries to open with modifications: Indoor Museums.

San Mateo County moved to the Red Tier and issued a press release.

Sonoma County has a new amendment to their order to align with the existing Health Order from the State. The amended order means that businesses don’t have to wait for amendments to reopen when Sonoma County moves to a new tier.

Stanislaus County linked to the CDPH Guidance on expanded personal care Services.

Tuolumne County has a new order that indicates all current and valid State orders, including the Blueprint for a Safer Economy, are in effect in the County. The County also has a new order modifying short-term lodging Orders to comply with the Blueprint.

Yolo County noted that they are one week away from moving to a lower tier. They also noted the new openings permitted by the State: indoor nail salons and physician-ordered electrolysis.


SoCal Counties. Imperial County amended its Health Order to open nail salons.

Riverside County moved to red tier for the state’s Blueprint for Safer Economy.

San Luis Obispo County moved to red tier for State’s Blueprint for Safer Economy.

San Bernardino County nail salons are open indoors pursuant to State’s loosening of guidelines for all tiers. The County issued guidelines for Halloween.

Santa Barbara County updated its Order to conform with State’s loosening of guidelines for all tiers.

Ventura County changed its Health Order to allow outdoor alcohol serving establishments to be open until 11 pm. Only members of same household may sit together at a single table. Also, patrons can only be on the premises for a maximum of 90 minutes.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 9-24-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can talk to us. Keep in mind we are corporate counsel to California associations only.

Shifting Employees to Management

Sep 20, 2020 0 Views 0 Comments

QUESTION: Is an association's liability reduced if employees are shifted from the association's payroll to the management company's payroll?

RESPONSE: There is some benefit to shifting an associations employees to a management company, but it's mostly one of convenience.

Cost Savings. There are no significant cost savings since salaries, worker's compensation insurance, health insurance, and the employer's portion of payroll taxes are passed through from management to the association.

Potential Liability. Potential liability might be reduced but it does not go away since management contracts routinely indemnify the company, i.e., if the company is sued, the association is obligated to defend the company and pay most judgments. In addition, the association will likely be viewed as a co-employer since it exercises a great deal of control over the employees. Finally, recent HUD and DFEH regulations make associations responsible for investigating and eliminating harassment in the association, including harassment of vendor employees. Failure to do so can result in liability.

Convenience. At best, shifting employees to the management company is more convenient because it reduces the hassle of dealing with payroll, scheduling employees, hiring and firing, etc., all of which will be handled by the management company.

RECOMMENDATION: Transferring employees to a management company's payroll can reduce potential liability if the company has good HR policies and procedures in place. Do they have an HR department and an updated Employee Handbook? Do they have a system for hourly employees to clock in and out so as to avoid wage and hour claims? If they have good systems in place, it reduces the risk of claims being filed. Boards will want to have legal counsel review the management contract before signing it.

DEED IN LIEU
OF FORECLOSURE


QUESTION: As I understand it, a deed in lieu of foreclosure will not eliminate any liens junior to the one with the lender’s interest. It is handled very much like a grant deed transfer and does not eliminate past due assessments. But, a trustee’s deed as the result of a foreclosure will remove any junior liens or encumbrances from the property as well as any past due assessments. Is that correct? -Robert B.

RESPONSE: Yes, your understanding is correct. A purchase money lender will be in the first position. As the senior lien holder, if a first mortgagee forecloses, it wipes out all junior liens. An association can still sue the delinquent owner for a personal money judgment since assessments are a personal obligation of the owner but the property no longer serves as security.

Lien Protections. If an association's assessment lien (Notice of Delinquent Assessment) is recorded prior to the recordation of a deed in lieu of foreclosure, the party accepting the deed takes it subject to the assessment lien which can be enforced against the property. If the deed in lieu is from the owner to the first mortgagee, the lender is not personally liable for past assessments but the property is subject to the association's lien and the assessment lien can be foreclosed upon for the amount secured by the lien.

Notice of Non-Acceptance. Also of interest, because a deed in lieu can be recorded by the grantor alone, without the consent of the grantee, Civil Code Section 1058.5(a) allows the grantee to refuse the recorded deed in lieu by recording a Notice of Non-Acceptance. This prevents owners from unilaterally undermining the lender's right to foreclose and extinguish junior liens.

Deeds In Lieu Not Favored. Finally, due to the fact that a property remains subject to all other liens in a deed in lieu transaction, as a rule, a lender will not accept a deed in lieu when there are junior liens which the lender could, as mentioned above, extinguish through a foreclosure action. Usually, an escrow is opened in the deed in lieu transaction and a policy of title insurance is issued in favor of the grantee assuring that there are no junior liens on the date that the deed in lieu records. Otherwise, the property owner could record a junior deed of trust the day before the deed in lieu records and the lender would take the property subject to same.

RECOMMENDATION: General information about liens and foreclosures can be found in our Assessment Collection Menu. Boards should always work with legal counsel or their assessment collection service whenever they have questions about delinquent assessments. This is particularly important since the pandemic has complicated the entire collection process. Many thanks to Richard Witkin of Witkin & Neal for his assistance with this question.


NorCal Counties. Contra Costa County has a new order to align with the State's Blueprint guidance. At this time, the County does not have different reopening rules for business and activities beyond what is required by the State. The order allows the following additional businesses to reopen: personal care services that involve close contact with the face may operate outdoors (excludes tattooing, piercing and nonmedical electrolysis); racetracks and cardrooms may operate outdoors; music, television and film production may resume; professional sports without live audiences may resume.

Mono County issued a press release indicating that the Mammoth Lakes has adopted an urgency ordinance to enforce Mono County Health Orders. That press release can be found here: Mammoth Lake Press Release dated 9/11/20 re: Ordinance to Enforce Health Orders.

San Francisco has new Health Directives related to the following: indoor operation of gyms and fitness centers up to 10% capacity; indoor personal care services with restrictions; hotels and lodging opening for tourists; drive-in movies and gatherings; specified outdoor gatherings with health guidelines. Guidance links for gyms and fitness centers has been posted in the “notes” section of our chart.

Santa Clara County has a new order related to required testing for certain persons: Santa Clara County Order dated 9/16/20 re Testing.

SoCal Counties. Los Angeles County updated its tennis/pickleball protocols to prohibits group lessons over four (4) students.

Orange County schools are allowed to reopen for in person instruction starting 9/22.

San Diego County made minor changes to its health order on 9/10 with clarifications to reopening schools.

Santa Barbara County updated its face covering order to align with state’s blueprint for safer economy.  Effective 9/18/20 through 10/17/20. 

Ventura County released Halloween guidance, similar to Los Angeles County’s guidelines.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 9-16-20. The chart is also posted on our website.


Timeline Calculator #1. Thank you, thank you, thank you for creating such a wonderful and useful tool. Awesome effort, maximum benefit for all. I'm truly grateful for the creativity and thought into this. You guys are the best in supporting this HOA industry. -Tina W.

Timeline Calculator #2
. I was very excited to see your Election Calculator. When trying to use it, the form wouldn't let me enter the date for counting ballots. -MaryAnn C.

RESPONSE: We had a few emails similar to yours. The calendar will not accept dates that do not allow enough time to complete the election. Dates that are too soon are grayed out. You can see at a glance when viewing the pop-up calendar the earliest possible date for conducting your annual meeting--those dates are not grayed out. The other issue we discovered is the calculator works on iPhones but not Androids. We did a little more coding and corrected the problem. We welcome all feedback on any issues that users might encounter.

Timeline Calculator #3.The election timeline calculator--very cool tool. -T.G.

Timeline Calculator #4. Woo-hoo it works! Great application. -Candice S.

Timeline Calculator #5. Thank you very much for creating the Election Timeline Calculator. I can’t use the date 12/03/20 for our voting deadline. Am I mistaken about our date being 12/3/20? -Donald S.

Timeline Calculator #6. Do you have an Election Calculator for Florida condominiums? -Merrill F.

RESPONSE: We did not create one for Florida--we don't practice law in your great state. We've had many requests to open offices in Florida, Texas, Arizona, Nevada, Missouri and Illinois. California keeps us so busy we couldn't possibly open offices in other states.

Timeline Calculator #7. Thank you for the calculator. My inspector provided a time line for our meetings, but only after we approved the bid, so this is great to prepare an annual calendar for next year for each community. –Jennifer S.

Timeline Calculator #8. Thoughtful to have designed an election time line calculator! Many thanks. -Denyse B.

Timeline Calculator #9. Your website makes it easy for board members and homeowners to research their respective rights and obligations. Is there a similar website for other states (specifically Arizona?) –Bob D.

RESPONSE: I am not aware of any websites like ours in other states. You might check with the Arizona chapter of CAI to see if there is something similar in your state.

Not Appalled. Hello, I am one of your subscriber’s that appreciates your newsletter, not appalled. :) -Nicole S.

Non-Owner Spouse. Thank you once again for a fabulous newsletter. I do have one dissenting opinion. If a spouse doesn’t see fit to put their partner on title for whatever reason the association shouldn’t have to allow him or her to be on the board no matter how well meaning. My main concern is the non-owner spouse doesn’t have any fiduciary interest. Their vote may not be in the associations best interest. I have also experienced the spouse that has something to prove or the need to wield power. –Gary S.

Can't Believe What I Missed. I read all of your newsletter/emails and forward them but this is the first time I looked at the rest of your website. I can't believe what I've missed!!! Must be age! LOL. I would like to direct people to all the options on your website, because, if I, Miss Busybody, missed them, I know others are missing them, too. Thank you a million times for all your wonderful efforts. -L.Q.

RESPONSE: Thank you for directing people to our website. We cover every aspect of the law related to community associations in California. In addition to the Main Index of topics we have over 60 menus dedicated to important subjects from board meetings to rules enforcement, accounting, architectural issues, assessment collection, discrimination, and dozens of other issues. Wherever possible, we provide practical advice. We also keep track of all the new legislation and case law and provide a free job market.

AB 3180 #1. Several municipalities here in Coachella Valley have passed legislation restricting short term rentals in designated areas and require permitting in other areas. Would the passage of AB 3182 by the State override and eliminate these local restrictions? Thank you for your on-going excellent advice for board members. –Larry D.

RESPONSE: The bill is not aimed at municipal rent restrictions, it targets community associations. If signed into law, associations will not be able to enforce rent restrictions that don't comply with AB 3182.

AB 3182 #2. I sent my email to Gov. Newsom regarding AB 3182, you made it so easy, thank you. How can these mayors and the governor get away with such fiduciary mismanagement? I think they should be sued. And, I want a moratorium on laws in California. They're working 24/7 and the laws are slipshod and biased. -L.Q.

RESPONSE: I agree with a moratorium on new laws--the stuff coming out of Sacramento has been awful. If any of our readers have not yet done so, please immediately ASK GOV. NEWSOM TO VETO AB 3182.

 
Boards can contact us for friendly,
professional advice.


Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC
DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can talk to us. Keep in mind we are corporate counsel to California associations only.

Election Timeline Calculator

Sep 13, 2020 0 Views 0 Comments
There has been a great deal of confusion and frustration over the extended election timeline imposed by SB 323. Any missteps in complying with the complicated sequence opens associations to litigation and penalties.
 
Election Calculator. To make life a little easier for board members, managers and inspectors of election, we did a little programming (actually, a lot of programming) and created an Election Timeline Calculator. It will eliminate some of the stress and potential errors in preparing for elections.
 
How It Works. When you put in a date for your annual meeting, it creates a timeline with dates and instructions for each of the key points in the election cycle. If you have not allowed enough time to meet election requirements, it tells you that as well.
 
Election Menu. You can find the Election Calculator and a full menu of election information and procedures in our Election Menu.
 
Many thanks to Senior Attorney Wayne Louvier in our Orange County office and our website tech guru Eugene Ladyzhenskiy for their work creating the calculator.
ANNUAL ELECTION
QUESTIONS


Director Not on Title. One of our board members is not on the title of his home (his wife is sole owner). We have some homeowners complaining that he cannot continue to serve. He knows he cannot serve next term. Can he remain on the board until the election? -Rhonda S. 

RESPONSE: Yes, he can continue to serve until his term ends. (Corp. Code §7220(b).) After that, he can no longer serve no matter how much the community might want him. This is one of the many detrimental provisions imposed by SB 323. 

Waste of Money. We are a small HOA of 22 single-family homes with an annual budget under $40,000. Bids to outsource the inspector of election function (previously handled by our HOA manager for free) have come in between $700 and $1,000. Those bids were dead on arrival. Do we really have to use an outside firm to send out election notices and count ballots for 22 homes?! This seems like a complete waste of homeowners' dues. -Gregory H. 

RESPONSE: Small and medium-sized associations throughout California previously used the services of their management companies to handle their elections. Most elections were handled efficiently and without controversy. SB 323 removed that option. If you can find a volunteer, you can still conduct your elections without the need to hire an outside company. The trick is finding a volunteer.

No Quorum? After many months of delays, our HOA board finally agreed to hold an election. The three board members who are up for election decided not to run but are encouraging people NOT to return ballots so a quorum cannot be reached. Does that mean they remain on the board? -Irene M.

RESPONSE: Yes, they remain on the board. A corporation cannot legally operate without a board of directors. Accordingly, your three directors remain in office until their replacements are elected. (Corp. Code §7220(b).) You need to encourage everyone to vote so you meet quorum and elect a new board. Then, amend your bylaws to eliminate quorum requirements for the election of directors so this never happens again. We include the provision whenever we restate bylaws for clients (along with eliminating cumulative voting, write-ins, and floor nominations). It makes elections easier and less expensive.

Candidate Positions. With annual elections coming up, how am I supposed to determine a candidate's position on matters so I can make an intelligent decision when I vote? -Hank J.

RESPONSE: Common sense tells you that candidates should be allowed to include their position on issues in a candidate statement mailed to members along with a ballot. Unfortunately, this is another pointless restriction imposed on associations. If candidates are allowed to advocate a point of view via association media, equal access must be provided to all candidates and all members advocating a point of view. (Civ. Code §5105(a).) To avoid problems, most associations limit candidate statements to pictures and bios only. If candidates wish, they can separately send their own position statements to members.

Reverse Mortgage. If a board member does a reverse mortgage can he still be on the board? -Beverly D.

RESPONSE: Yes, he can remain on the board (and run for re-election). When an owner takes out a reverse mortgage, title to his home remains in his name.


NorCal Counties. The following Counties have designations which have changed: Amador County went from Tier 1 to Tier 2; Placer County went from Tier 1 to Tier 2; Santa Clara went from Tier 1 to Tier 2; Santa Cruz went from Tier 1 to Tier 2;

Butte County’s COVID-19 website and dashboard cannot be updated and one of their hotlines is down as a result of the Bear Fire.

Contra Costa County has a new order of September 4, 2020 which allows for specified activities involving children and youth, allows mining and logging businesses to operate, and clarifies vehicle gatherings remain an exception to gatherings of those from more than one household.

Marin County has 15 schools which have been cleared to resume in-person classroom learning as of September 8: Press Release dated 9/3/20 re 15 Marin Schools Cleared to Open. Marin County issued a press release on September 8, 2020 indicating that the County’s planned move to Tier 2 has been delayed while the State conducts further review:  Press Release dated 9/8/20 re Marin Not Moving to Tier 2 Yet.

Mendocino County has a new order dated September 8, 2020 which removes the 24 hour vacancy restriction between reservations for transient lodging and campground establishments, removes the specific capacity number on permissible outdoor gatherings and allows the number of attendees which can be accommodated in the outdoor location maintaining six feet. The order also removes the prohibition of use of commercial wedding venues, commercial event centers and conference centers for outdoor religious and cultural ceremonies. The order also instituted a requirement that places of worship and providers of religious and cultural ceremonies maintain a sign-in sheet for attendees of such services/ceremonies for at least 14 days following the event to share with health officials for contact tracing purposes.

Placer County moved from Tier 1 to Tier 2 and issued a press release dated September 9, 2020 indicating that the County Board of Supervisors approved a resolution declaring the end of Placer County’s local health emergency but reminded residents that the state emergency and orders are still in effect: Placer County Press Release dated 9/9/20 re: End of Local Health Emergency.

San Francisco has new health directives allowing gyms and fitness centers to open outdoors: San Francisco County Press Release dated 9/9/20 re Outdoor Gyms and Fitness Centers Open.

Santa Clara County moved from Tier 1 to Tier 2 and updated their County order to reflect the same. The following are now permitted to open in compliance with industry-specific directives: schools (after 14 days in Tier 2); indoor personal care services; museums, zoos, aquariums indoors at 25% capacity; gyms and fitness centers indoors at 10% capacity; and indoor shopping malls at 50% capacity. Indoor dining, indoor movie theaters, and indoor gatherings remain prohibited.

Santa Cruz moved from Tier 1 to Tier 2 and issued a press release dated 9/8/20 indicating that following are allowed to open indoors with modifications: personal care services such as waxing, nails and massage; restaurants; places of worship; movie theaters; gyms and fitness centers; museums, zoos and aquariums. No schools may open for in-person instruction until the County has been in Tier 2 for 14 days.


SoCal Counties. Los Angeles County issued guidelines on Halloween, not permitting Halloween gatherings of non-household members including outdoors, further carnivals, festivals, live entertainment, and haunted houses are also not permitted. The health department does not recommend door to door trick or treating. The guidelines also provided ideas for safer Halloween celebrations of online parties and contests, car parades, and Halloween drive-in movies.

The County also updated its tennis & pickleball protocols that doubles play is permitted when standing six feet apart from each other and wearing a mask when not actively playing on the court.

*Los Angeles made a major concession in it's pool policy--masks are not required when in the water.

Orange County provided a new health order as of September 8, 2020 as it moved to Tier 2 in the state system, where personal care services, gyms, movie theaters, museums, and restaurants can open indoors with specific modifications and capacity limitations for each industry sector. There is a mandatory flu vaccinations for providers in congregate settings, health care providers, or emergency responders. All other residents are strongly recommended to obtain flu vaccination.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 9-10-20. The chart is also posted on our website.


Thank you so much for alerting us to this terrible law [AB 3182]. It is a mystery to me why this was passed; it does nothing to help the housing crisis is California. But I wish the letter to Newsom were more specific about the problems with this new law. I know these messages should not be too long, but the last two points in your problem list should have been pointed out specifically it seems. -Joan W.

RESPONSE:
Everyone should immediately ASK GOV. NEWSOM TO VETO AB 3182. Please feel free to compose your own email message rather than use the one proposed by CAI-CLAC.

I'm just shocked that these idiots in Sacramento keep up the onslaught [AB 3182]. After reading your newsletter today, I posted a notice on the local NextDoor website to communicate this to all the condominium readers in the Tarzana area. -Julian M.

RESPONSE: Assemblyman Phil Ting, author if AB 3182, is a graduate of U.C. Berkeley and Harvard University. I checked each school's curriculum and common sense is not a course taught at either school.

WHO ELECTS THESE IDIOTS IN SACRAMENTO?? -Hank J.

RESPONSE: With the steady stream of bad legislation out of Sacramento, we need to elect different people to the Assembly and Senate. In addition, everyone needs to sign-up for CAI-CLAC's newsletter and write your legislators whenever alerts are sent out.

Limiting Rentals. Thank you for helping us contact the Governor about AB 3182. How does an HOA limit the number of rentals? We are currently near 30–35% rentals. If we wanted to place a limit of 25%, for example, how would we go about making that change and implementing it? -Robert C.

RESPONSE: The best way is to amend your CC&Rs, which requires membership approval and is easier to enforce in court. Because CC&Rs are difficult to amend, boards can amend their Rules & Regs to have something in place until such time as their CC&Rs can be amended.

OUTSTANDING, AS ALWAYS!!! -BILL B.

Your newsletter is wonderful--what a great resource. Always fun and informative to read! -Sonal J.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to California associations only.

Rent Restrictions Voided

Sep 9, 2020 0 Views 0 Comments

Assembly Bill 3182 passed both the Senate and the Assembly last week and is on the Governor's desk. If signed into law, it will negatively impact associations and their ability to regulate rentals.

Problems with Renters. Although there are exceptions:

  • renters tend to violate rules more often than owners,
  • renters have more calls to the police than owners,
  • renters & landlords are less inclined to invest in the upkeep of their properties,
  • short-term rentals create security issues due to their high turn-over,
  • landlords are less likely to volunteer to assist the community,
  • landlords have a higher delinquency rate,
  • a high percentage of renters depresses property values,
  • lenders recognize the problems associated with renters and are less inclined to loan or will lend at a higher interest rate in communities with a high percentage of renters.

Limit Renters. To ensure stability and preserve property values, many associations limit the number of rentals in their communities by imposing a cap at 10%, 15% or 20% of their units. In addition, many require leases to be at least six months or one year to avoid a high turn-over of residents. They want renters to stay long-term and integrate into the community.

Restrictions Voided. Assemblyman Phil Ting (D-San Francisco) pushed through AB 3182, which makes unenforceable rental caps more restrictive than 25% and lease terms longer than 30 days. An association can adopt a 25% (or less restrictive) rental cap and require leases to be at least 30 days (but not more restrictive).

Requires Amendment of Documents.
Associations already have impaired budgets due to high unemployment created by the Governor's lockdown order. And we just went through a costly round of election rule amendments imposed by SB 323. If signed into law, AB 3182 requires another round of document amendments:

...a common interest development shall amend their governing documents to conform to the requirements of this section no later than December 31, 2021.

$1,000 Penalty. AB 3182 imposes a civil penalty of up to $1,000 on associations that fail to update their documents.

A common interest development that willfully violates this section shall...pay a civil penalty...in amount not to exceed one thousand dollars ($1,000).

Loss of All Rental Restrictions. Since AB 3182 voids existing non-compliant rent restrictions, associations that can't amend their documents will not have any rent restrictions. For those associations with lease term requirements longer than 30 days, they will cease to have any lease term requirements. That opens them to short-term vacation rentals and hotel-like operations.

Destabilizing Communities. According to Assemblyman Ting's website, "AB 3182 would...bolster the state’s housing supply." That is not true. Converting stable owner-occupied housing into rentals does not increase the housing supply, it merely converts owner-occupied housing into rentals. The obvious solution to increasing the state's rental housing is to build more apartments.

Please immediately ASK GOV. NEWSOM TO VETO AB 3182.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to California associations only.

Excessive Rentals

Sep 4, 2020 0 Views 0 Comments

Excessive Rentals. Our community is only 6 years old. Investors came in, rented their property, and left. As it stands now, out of 350 homes, 60% are rented and the other 40% are owned.

Renters don't care about the property and have little sense of community pride. When we send violation letters out, we're sending them to the homes that are rented, because that's the address the owner left with the HOA.


Investors are renting for profits and not for the stability of the community. What can our HOA do to decrease the level of renters occupying these homes? -Geoffrey G.

RESPONSE: With 60% of your community as rentals, I don't think there is a solution. I've seen too many association's hit the 40%+ mark and never recover.

AB 3182. Amending your CC&Rs to limit rentals will be impossible. All the investors will vote against it. Moreover,
AB 3182 passed the Senate and Assembly earlier this week and will wreak havoc on community associations if signed into law. It opens the door to even more rentals in HOA communities. I will report on it in our next newsletter.

No Solution. A high percentage of rentals is the death knell of a community. There will be a steady decline in the upkeep of homes, opposition to dues increases to build strong reserves, ongoing problems with rules enforcement, and a negative impact on property values. I know it's a pessimistic view. You can either grit your teeth and do your best to hold the line or sell your home and get out while the community is still new and your property values high.

BOARDS NOT
ANSWERING QUESTIONS


QUESTION. Does the board have a responsibility to answer questions asked by members during public comments at a board meeting? I know we are not obligated to answer during the board meeting, however, do we NEVER answer the question? Seems kind of counter productive to not communicate with the community. -Sue B.

RESPONSE: There is nothing in the Davis-Stirling Act that requires the board to answer questions. Instead, there is a provision in the Act limiting the board's ability to answer questions at board meetings, which makes no sense at all. (Civ. Code §4930(b).)

When boards refuse to answer questions, members get frustrated and become suspicious that directors are hiding something. Fortunately, there is no penalty attached to the restriction and, in my experience, most boards readily answer most questions. I am not aware of anyone running into court for an order to stop boards from answering questions.

As a practical matter, boards need to keep the membership informed and answer questions in a timely fashion. Some questions can't be answered on the spot, and a director or manager will follow-up with the person asking the question. Some questions are answered in a newsletter so all members receive the benefit of the answer.

RECOMMENDATION: I recommend boards be as open as possible and communicate frequently with the membership.

Circulating Agenda Items. Our president inquires of the rest of the board if they have agenda items for the board meeting. The president then puts the item on the agenda. Is this legal? -Brenda H.

RESPONSE: Yes, it's perfectly legal. It's an administrative function and does not violate the Open Meeting Act. See Exceptions to Open Meeting Act.


Proof-Reading. Is it acceptable for board members to pass around documents via email for the purpose of proof-reading and adding input like grammar corrections, etc.? -Roger D.

RESPONSE: Yes, it's legal. As with setting the agenda, it's an administrative function. As long as the board is not discussing matters that will come before the board but, instead, is performing an administrative task such as proof-reading, it does not violate the Open Meeting Act.

Snowbirds. How can boards communicate without violating the law? Four out of five of our board members are snowbirds and currently out of country. We are dealing with landscape issues that require immediate action so I have written a few emails to the entire board but our management company has informed me that my emails violate the Civil Code. -Marius O.

RESPONSE: You can hold open meetings via teleconference or video conference such as Zoom with 4-days' notice. If it's urgent, you can hold an emergency meeting. In all cases, keep minutes so you have a record of the board's decisions.


NorCal Counties.At his press conference on Friday, Newsom announced that the Monitoring List would no longer be used and that it was being replaced by the Blueprint for a Safer Economy. More information can be found here: Blueprint for a Safer Economy. You can track your County here: State County Tracker I have noted what tier counties are in based on the number next to the County name With 1 being the worst (widespread), 2 (substantial), 3 (moderate) and 4 being the best (minimal). This resulted in new businesses being allowed to open throughout the State (noting that Counties can be more restrictive): What Businesses May Open Pursuant to Blueprint. The CDPH issued a new Order dated 8/28/20.

Alameda issued a press release on August 31, 2020 indicating that they are evaluating which businesses they will be opening pursuant to the new regulations noted by the State. Alameda County August 31, 2020 Press Release

Butte County issued another press release about a spike in cases among college aged persons. The press release notes that gatherings of any size are required to be postponed or canceled.

Contra Costa County issued a press release August 31, 2020 indicating that indoor hair salons and barbershops may now open, indoor shopping malls may reopen at 25% maximum capacity with congregation and food courts closed, gyms and fitness centers may open outdoors.

El Dorado County issues a press release indicating that it believed it was misclassified in the tiered system. On September 1, 2020, a new press release was issued indicating the circumstances under which the County can more to tier 3 by the week of September 21.

Fresno County issued an advisory on September 2, 2020 regarding the status of schools noting that all schools are to remain closed for in-person instruction and providing more specific guidance. They also provided updates re Youth and School-Based Sports: Guidance re Youth and School Based Sports.

Marin County has come out with a new way to report businesses that are in violation of the Health Order, which can be found here: Marin County Form to Report Business Violations of Health Order.

Mendocino County issued a new Order on August 28, 2020 to comply with the State’s new tiered system and update the open businesses and restrictions.

Mono County Briefing on September 1, 2020 outlined what businesses could open in mono County based on their status in the tiered system including information about schools, some of which have determined to open in late September. Mono County Briefing dated 9/1/20.

Napa County updated their FAQs related to business operations to comply with the opening based upon the new tiered system. The link for Napa County’s Ordinance re violations of the Health Orders is posted in the Notes section.  Nevada County has a new press release re the tier system and businesses which may now open.

Sacramento County has a new Order dated 8/31/20 that aligns with the State’s new guidance. Sacramento County has a new Order dated 8/28/20 re schools indicating that all schools transitional kindergarten through grade 12 shall immediately close for in-person instruction and remain closed until they are instructed by the Health Officer of Sacramento County that they may reopen.

San Francisco has a new Health Directive dated 9/1/20 which provides industry-specific guidance for businesses. They also issued a press release indicating which sectors are open, noting that they are being more restrictive than the State allows and outlining the goal for future openings.

San Joaquin County has a new Order dated 8/31/20 implementing the Blueprint directives. They also issued an Order of the same date regarding brewpubs, bars, breweries, and pubs indicating that they must follow the State’s Order issued August 28, 2020. The County’s July 29, 2020 press release re schools has also been added.

San Mateo issued an updated that certain sectors are allowed to open pursuant to the State’s Blueprint model which can be found here: San Mateo County Reopening.

Santa Clara issued an update to their Order dated 8/31/20 implementing the State’s Blueprint.

Santa Cruz indicated in a press release dated 8/28/20 that they expect to be in tier 2 on September 8th barring an increase in cases. The press release indicates that indoor hair salons, barbershops and malls may open and that schools must remain closed for in person instruction at this time. A press release was released dated 9/2/20 reminding of beach closures over Labor Day weekend: Santa Cruz County Press Release dated 9/2/20 re Beach Closures Labor Day Weekend.

Solano County issued a revised Order dated 9/1/20 to incorporate the State’s new Blueprint framework.

Sonoma County issued a press release dated 8/30/20 indicating that barber shops, hair salons and malls are allowed to resume indoor operations based on the State’s Blueprint framework.

Tuolumne County issued a new Order dated 8/31/20 implementing the State’s Blueprint framework.


SoCal Counties. Imperial County amended its health order to incorporate the State’s new blueprint model.

Los Angeles County amended its golf course protocols and now allows barbershops and hair salons to operate at 25% capacity indoors. Beginning Monday, September 14, schools K-12 may offer in-school services for small cohorts of students with Individualized Education Plans (IEP), students requiring instruction for English as a Second Language (ESL) or students needing assessments or specialized in-school services, as long as the school is able to fully implement the Health Officer’s re-opening protocols.

The City of Los Angeles updated their Safer LA order to allow indoor hair salons and barbershops.

Riverside County indoor malls can reopen at 25% capacity and indoor barbershops and hair salons.

San Bernardino County indoor malls may reopen at 25% capacity and indoor barbershops and hair salons.

San Diego County amended its health order to follow state guidelines for face coverings and allows the opening of indoor businesses for tier 2 of State’s new blueprint model, allowing indoor operations for gyms and fitness centers, dining, personal services, barbershops and hair salons.

San Luis Obispo County indoor barbershops and hair salons may reopen.

Ventura County indoor malls and barbershops and hair salons can reopen.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 9-2-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to California associations only.

Campaigning for Office

Aug 31, 2020 0 Views 0 Comments

Candidate Statements. Our HOA will not allow candidate statements. How do we know what their qualifications are and who to vote for? -Ron B.

RESPONSE: A nominee must have a reasonable opportunity to communicate to the members the nominee's qualifications and the reasons for the nominee's candidacy. (Corp. Code §7522(c).) However, if the board allows candidates to advocate a point of view using the association's media, equal access must be given to any member advocating a different point of view. (Civ. Code §5105.) At a minimum, boards should allow candidate bios and pictures so members have some idea who they are voting for. Doing so does not fall into the category of advocacy.

Membership List. Can I use a membership list to mail letters campaigning for candidates for the annual election? -John E.

RESPONSE: Yes you can. You have the right to request a copy of the membership list (Civ. Code §5200 and §5205) if it's for a proper purpose (Civ. Code §5225). Communicating with the membership to urge them to vote for particular candidates is a proper purpose. In addition, you can circulate flyers urging members to vote for or against anything on the ballot. (Civ. Code §4515(b)(5).)


Contentious Political Season. During these unprecedented times, signs are being displayed at the risk of graffiti and other vandalism. Is it appropriate for board to ask people not to put up anything for everyone's safety? -Mimica N.

RESPONSE: I understand your concerns. We've seen non-stop rioting in some badly run cities around the country. In one instance it spilled over into a gated community when a mob smashed the association's gate. This is going to be a contentious political season and very likely there will be graffiti and vandalism. You can always ask people not to display signs but you can't prohibit signs if they are properly constructed, sized and displayed. I expect we will see a fair number of them this year. 

QUESTION: If our HOA president takes a salary or doesn't pay monthly dues, who must he disclose it to? To all homeowners or just the board? -Gary G.

RESPONSE: The Davis-Stirling Act protects volunteers from personal liability. (Civ. Code §5800.) If a director takes a salary or his/her assessments are waived, the director ceases to be a volunteer. The director becomes a "professional" director and loses the liability protections afforded to volunteers. Getting paid could also violate the association's governing documents. Your president should disclose the arrangement to the board and record it in the minutes so it's disclosed to the membership. If the Board is smart, it will rescind the arrangement.

An Owner-Manager. Is there a conflict with having an owner as a manager? This owner is trying to recall the current board and install a whole new board with no experience and would appoint himself as manager. -Dan T.

RESPONSE: There are potential conflicts and the arrangement is fraught with problems. It's harder to fire a neighbor/manager than an independent third party. Moreover, the homeowner will not have the insurance that a management company carries. And, when fired, the ex-manager does not go away because he/she lives in the development. Finally, the ex-manager can launch a recall because he/she is a member of the association. I've seen it happen in other associations and now it's happening to you. I always tell boards not to hire a homeowner to manage their association. Some ignore my advice and hire the owner anyway. They always come to regret the decision.

Nonessential Management. Are management companies considered essential services? Can they shut down and claim they are not essential? -Cat W.

RESPONSE: Yes, they are essential. If your management company has declared itself nonessential and has shut down, you should let them go and get a management company that is still operating.

Finding Good Management: What steps do you recommend in finding management firms? Also, does ADAMS | STIRLING provide HOA management services? -Navi G.

RESPONSE: We don't provide management services since it would create significant conflicts of interest. Boards should never hire a management company with an in-house attorney that offers legal representation to the associations they manage. Boards should only accept truly independent legal counsel.

As for management companies, you want one that places a premium on training their managers. If their managers are all certified (or working on certification) through CAI or CACM, you will be in better hands than a management company with no certified managers. See Designations and Certifications. Ask how long they've been in business since nothing can match the wisdom that comes with years of experience. Ask about insurance — what do they have and at what limits? Finally, take a look at the financial statements they generate for their associations. It's really important that you can read and understand them. Otherwise, they have no value to you.

Lender Foreclosures. As I have always understood, lenders who obtain title to a unit through deed in lieu of foreclosure are responsible for no more than 6 months of assessments. We have received differing information — that if a lender receives title through deed in lieu they are liable for all previous owners assessments, and none if obtained through foreclosure. Can you please clarify which is true? -Amy G.

ANSWER: A lender who takes title through a deed in lieu is not responsible for any past dues UNLESS there is an assessment lien recorded at the time of the transfer to the lender, in which case the lender takes title subject to ALL dues secured by the lien.

HARMFUL LEGISLATION

AB 3182 limits your association’s ability to restrict rentals. The legislative session ends on August 31 and the State Senate will likely take up AB 3182 today, so act now to protect your association. As soon as you read this, tell your Senator to OPPOSE AB 3182.  

AB 3040 allows local governments to rezone single-family residential lots to allow up to 4 primary dwellings per lot — and associations cannot prohibit construction of three additional dwellings per lot. This would negatively impact property values and significantly increase the load on amenities, sewer, water and parking. Moreover, it's unclear whether associations could increase assessments on lots that added extra houses. The bill is truly moronic. Fortunately, it stalled in the Senate.


Governor Newsom issued a color coded system for reopening businesses. Starting Monday, some businesses will be able open indoors even if on the watch list, such as hair salons and barber shops next week.

The State released Guidance for Small Supervised Groups of Children on August 25, 2020.

As of August 27, 2020, there were 34 Counties on the Monitoring List: 8/27/20 Monitoring List. All Counties on the Monitoring List are noted with an *.

The State issued the following new guidance: Guidance on Returning to Work or School Following COVID-19 Diagnosis; Guidance for Small Cohorts/Groups of Children and Youth; COVID-19 Case and Contact Management Within Child Care Facilities


NorCal Counties. A Butte County press release announced that there has been a spike in cases among college-aged persons, many in an apartment complex. The press release urged those in multi-unit housing complexes to wear face coverings in common areas.

Contra Costa County has a new Order dated August 26, which is effective August 28. The new Order allows for outdoor operation of personal care services that do not involve close contact with the face, outdoor gyms and fitness centers, hotels and short-term rentals may open for personal or recreational travel. Contra Costa also issued a press release indicating leveling in transmission.

Mono County has a new press release indicating that they have been removed from the Monitoring List but that indoor business operations must remain closed at this time. Mono County anticipates an update from Governor Newsom on this point shortly. Mono County Press Release dated 8/24/20 re Mono County no longer on monitoring list.


Tehama County has a press release dated August 26, 2020. The press release discusses what businesses must be closed as a result of being on the monitoring list.

SoCal Counties. Imperial County was granted a variance by the State to begin reopening businesses and issued an amended health order to follow state guidelines for businesses to reopen.

Los Angeles County revised what’s open in Los Angeles.

Santa Barbara County closed their beaches during the Labor Day weekend (9/4–9/7) for non-exercise activity such as sunbathing, sitting, standing, picnicking, sightseeing. Watersport activity, walking, jogging, and cycling are OK.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 8-27-20. The chart is also posted on our website.


Insurance Claims. I have one area of concern or possible disagreement. As a unit owner is an insured, the Department of Insurance respects their right to submit a claim WITHOUT BOARD APPROVAL. Accordingly, I do not agree that the board (the trustee) of the policy has the right to deny or withdraw a claim already submitted by the unit owner, thus denying an insured their right to make a claim. -Glenn Robinson, Senior Vice President, Armstrong/Robitaille

Pool Correction. CAI’s respondents in California in June reported that only 34% of pools were closed! 13% were opening soon, and 36% were open for use. So of course we are nearly 2 months after the survey and that pool open percentage in California has only grown larger. That 7% number is the nationwide percent of pools that *did open on time.* An additional 37% of pools are open; they just didn't open on time. Only 40% of pools were responded to be closed nationwide. Here is a link to their report. -Mike M.

Boards can contact us for friendly,
professional advice.


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

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to California associations only.

Managing Insurance Claims

Aug 24, 2020 0 Views 0 Comments

Insurance is a mystery to most board members and managers. What is covered and what is not? Who can submit claims? What causes premiums to rise?

Recently, a question was asked about a broker's duty to submit claims. What happens if a homeowner suffers property damage from a flood and wants to file a claim against the association's insurance but the board is opposed to filing the claim?

I posed the question to four leaders in the field of HOA insurance: Clifford Treese, President of Association Data, Inc.; Tim Cline of the Cline Agency (representing a number of major carriers); Joel Meskin with McGowan Insurance; and Michael Berg of the Berg Insurance Agency (representing Farmers Insurance). The question generated a great deal of information from the four. I synthesized and edited down their responses.

Owner Submits a Claim. Most CC&Rs make unit owners an insured under the association's commercial general liability (CGL) policy, which means they can file a claim against the association's policy. If a unit owner contacts the association's agent/broker, the representative is obligated to inform the carrier.

Upon receiving notice of claim, every licensee or claims agent shall immediately transmit notice of claim to the insurer. (Calif. Code of Regulations, Title 10, Chapter 5, Subchapter 7.5(d).)

The carrier then makes a determination if the loss is covered and, if so, appoints an adjuster to set an appropriate value for the loss.

Association Withdraws the Claim. Because the board of directors is the "insurance trustee," it has the option of withdrawing a claim submitted by an owner. If the loss is small and the deductible large, the board can exercise its business judgment to handle the matter internally. Doing so preserves the association's loss history, which helps keep premiums down.

A Claim is not Submitted. If a manager or board member calls the association's insurance broker about a loss and asks about coverage and how the claim would affect premiums if it were filed, is the broker obligated to notify the carrier of the loss even though the board is not submitting a claim? No.

"Notice of claim" means any written or oral notification to an insurer or its agent that reasonably apprises the insurer that the claimant wishes to make a claim against a policy... For purposes of these regulations, the term "notice of claim" shall not include any written or oral communication provided by an insured or principal solely for informational or incident reporting purposes. (Code of Regs, Subchapter 7.5(n).)

As noted above, the board of directors can manage claims made against the policy. If it has a $10,000 deductible and a unit owner suffers a $3,000 loss, submitting a claim to the carrier offers no benefit to the unit owner and creates a record of a loss. If numerous small claims are filed over the policy period, the carrier could raise premiums or not renew the policy even if no monies are paid out by the carrier.

Later Submission. If the initial $3,000 loss slowly expands into a much larger claim, the board could submit a late claim. There are two potential problems. The first is that any litigation expenses incurred by the association prior to their submission of the claim will not be covered. The second is a potential denial of the claim because notice was not timely given to the carrier.

RECOMMENDATION: Boards should coordinate loss claims with legal counsel and their insurance broker. Putting their agent on notice of a potential claim while they investigate small losses makes sense but, at some point, the board must timely make a decision to either settle the claim internally or give notice to the carrier. If the association is experiencing numerous small water loss claims, it may indicate a larger maintenance issue that needs to be addressed. Deferring maintenance is not a solution. Boards should immediately address the problem before small losses turn into large ones.

Many thanks to Cliff Treese, Tim Cline, Joel Meskin and Michael Berg for their input. If there are any errors in the above summary, they are solely mine. For additional information on when and how claims should be made, see "Tendering Claims."

MISCELLANEOUS
ISSUES


Pools and ADA. People with their disabled spouses use the pool for physical therapy. Is shutting down the pool a violation of ADA accommodations? Could the HOA make the pool accessible to members with a doctor's note or does this have to evolve into a lawsuit??? -Wendy L.

RESPONSE: Most associations in California have kept their facilities closed because they cannot meet the strict requirements imposed by the Governor. Opening facilities without meeting those requirements creates potential liability for the association. According to a survey by the Community Associations Institute, only 7% of HOAs have opened their pools. No one is happy with the current situation. You should direct your frustrations toward the Governor and your legislators.

Solar Panels. We are interested in installing a solar system for the community. The system would not cost us any monies up-front or monthly costs. Our solar committee distributed an unofficial vote whether owners favored the installation and received 114 yes and 2 no votes. Our board is concerned that this unofficial vote violates SB 323 and would make the association liable to legal action. -Roger E.

RESPONSE: The circumstances you described do not require a membership vote. As required by Civil Code §5100(a), the following matters must be voted by secret ballot:

  • special assessments over 5% (see exceptions) or regular assessments over 20% (Civ. Code §5605),
  • election and removal of directors,
  • amendments to the governing documents (see exception), and
  • grant of exclusive use of common area property (see exceptions).

Because the solar panels do not fall into any of these categories, a non-binding, non-secret poll of the members is acceptable.

Elevated Structures. SB 326 states "exterior elevated elements” must be inspected. Our development has many balconies that do not extend beyond the exterior wall. Do these balconies have to be inspected if they do not extend beyond the exterior wall? -David G.

RESPONSE: Even if the balcony itself can't fall to the ground, it's railings may be covered by the statute:

“Load-bearing components” means 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).)

You should have them inspected and included in your reserve study. Safety rails have a limited life and will need to be replaced at some point.


NorCal Counties. Alameda County has a new order that allows for a number of additional activities: small gatherings of those outside the same household outdoors; childcare for all children; educational institutions to offer career internship and pathways programs; libraries can offer curbside pickup; utilizes a site specific Protection Plan; allows some businesses with limited person to person contact to resume; allows outdoor religious services and cultural ceremonies; allows outdoor political rallies and protests; allows outdoor dining; allows outdoor non-contact fitness classes; allows outdoor museums, historical sites and publicly accessible gardens to open; allows dog parks to open subject to conditions; allows school and college sports teams to train or hold non-contact practices, conditioning, or drills outdoors; allows professional sports teams to resume practices, games, and tournaments without fan attendance.

Unstaffed pools must create a reservation/sign-up system and staffed pools must implement capacity and lane limits. Face coverings must be work when not swimming. Hot tubs, saunas and steam rooms must remain closed. Indoor pools are closed except if part of a healthcare operation or a personal pool used only by those of the same household.

Butte County has resources related to school reopening waivers.

Calaveras County has been removed from the State's Monitoring List. Pursuant to their August 20 press release file. Places that offer tattoos, piercings and electrolysis may not be operated outdoors and must close. Schools that have not yet started the school year will continue to conduct distance learning only until Calaveras County remains off the County Monitoring List for 14 consecutive days. Schools that have already started the school year will not be required to move to distance learning educational delivery only.

Contra Costa County has begun accepting waivers from elementary schools to allow in person classrooms. The waiver checklist is here. They have also noted that live music is not permitted at outdoor dining establishments or wineries:

El Dorado County's website providing guidance for HOA pools links to the State's fitness center guidance.

Marin County is reopening local hotels, motels, and short term rentals for tourism based business and clients.

Mendocino County has a Health Order dated August 14 that will be effective through September 11. The new Order reduces the number of persons from 100 to 50 that may attend outdoor faith or cultural ceremonies, funerals or weddings or protests. The Order updates the definition of Children's Extracurricular Activity Unit to a stable group of 12.

Mono County has a new order related to the isolation period for those suspected to have COVID-19 dated August 14, 2020:

Sacramento County has Health Order shutting down all public and private schools in Sacramento County for in person learning:  The order makes it clear that doing so under the guise of day care, child care etc. is not permissible. There are a few exceptions that allow students to be on campus which are identified in the order.

San Mateo County has released their application and review process for elementary schools to apply for waiver to allow in person learning.

Santa Clara County has an ordinance date 8/13 allowing for enforcement of Health Orders.

Santa Cruz County indicated that they have been removed from the State's Monitoring List effective August 14. Beaches in the unincorporated area of Santa Cruz County will be closed September 5 at 5 a.m. through Monday, Sept. 7th at 5 p.m. Beach crossings would be permissible to access the ocean for the purposes of activities such as surfing, paddle-boarding, boogie-boarding, swimming, snorkeling and kayaking. Beaches will remain open for public use on Saturday, Sept. 5, and Sunday, Sept. 6, between the hours of 4 p.m.-8 p.m. each day. Jurisdictions throughout Monterey Bay are expected to have same or similar beach restrictions in place.

Tulare County issued a press release August 21 indicating that they were aware some schools were opening under the "day camp" guidelines. While Tulare indicates that they do not have the authority to allow or disallow this, they discourage it and have contacted local schools who are utilizing this model.

SoCal Counties. Los Angeles County update to shared residential pool protocols and campground and RV parks protocols, only outdoor pools can be open; indoor pools remain closed.

Riverside County elementary schools can apply for an in-person instruction waiver starting on 8/24.

San Diego County revised its health order effective 8/22, requiring temperature screenings of employees at all essential and reopened businesses, and not allowing anyone to enter the workplace with a temperature above 100. Also allows schools to follow state industry guidelines.

Santa Barbara County issued an order on 8/20 to continue the use of face coverings in high risk situations, which expires on 9/18.

City of San Diego issued an executive order for Department of Recreation and Parks to issue permits to faith based organizations, gyms, fitness facilities, and personal trainers to hold activities at city parks.


READING THE CHART. Because the chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of county restrictions and links to health department orders, see County Chart 8-22-20. The chart is also posted on our website.

Boards can contact us for friendly,
professional advice.


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

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