Condo Law in California

I am pleased to announce that Google, the most powerful search engine on the internet, has been added to the Davis-Stirling website.  With Google’s permission, we embedded their search engine in our website and then customized it to fit our needs. This will allow users to quickly find relevant data from statutes, case law, and articles posted on Davis-Stirling.com. We are still tweaking the engine to tighten relevant search results. Let us know if you run into any problems so we can make adjustments. Enjoy!

REPEAT VIOLATIONS vs.
CONTINUING VIOLATIONS

Probation Analogy. I not only disagreed with your opinion regarding hearings and fines, I disagree even more with your definitions of repeat vs continuing violations. I have been advised by separate legal counsels over the years that if a member continues to violate the governing documents in a similar fashion, no matter how it’s done, fines can be assessed without a further hearing as long as the determination of future violations is made by the board at the hearing.

The law allows probation and I am a big fan of time-frames. If a member violates a restriction and has a hearing, then the board can rule that he/she must not violate for a time-period (6 months/18 months/etc.) without further fines. In the alternative, a board could say that if a time-frame expires, then a new violation occurs, which would require the due process to start again. Your too strict interpretation gets in the way of practical fairness. The spirit of the law is sometimes more important than the letter. -Ed V.

COMMENT. Due process may be a hassle but it ensures fairness. In the criminal justice system, those who violate probation still get a hearing. Simply being accused of violating probation does not trigger automatic penalties; a hearing must be held to prove that probation has actually been violated. -Adrian Adams

3-Strikes Rule. I agree with you that there is a difference between a repeat violation and a continuing one. Another example of a continuing violation is a front door that has been painted, without ARC approval, a color that is not acceptable by the ARC. The violation continues until the door is repainted or the ARC approves it in writing. I have my own personal “rule†regarding fines that I try to get boards and compliance committees to adopt. Don’t impose more that 3 fines for the same violation. Fines are imposed for a past bad behavior which violates the CC&Rs (as compared to some uncertain belief that a violation will continue into the future). A fine is also imposed to change the owners bad behavior into compliance. If three fines haven’t done the job, then fines are not going to work and the board must either stop wasting its time on enforcement attempts for this violation, or move on to injunctive relief. -Richard Neuland, Attorney at Law, Neuland, Nordberg, Andrews & Whitney LLP

COMMENT. Mr. Neuland’s “3-Strikes” rule is a good idea. Boards should not endlessly impose fines on repeat offenders. At some point, they must take legal action against habitual offenders. -Adrian Adams

EXECUTIVE SESSION MINUTES

QUESTION: We were advised not to put names or unit numbers in executive session minutes but to use APN or account numbers because of confidentiality issues if executive session minutes are accidentally lost or misplaced.

ANSWER: Boards can and probably should put names and unit numbers in executive session minutes. It provides a clear record of the board’s actions. Since executive minutes are not open to membership inspection, there are no issues of privacy or defamation. However, boards should take care to keep executive minutes separate from open meeting minutes so they are not accidentally distributed to members.

IT’S OKAY IF OLD PEOPLE DROWN

QUESTION: We closed our swimming pools until we can get them in compliance with the new Virginia Graham Baker Pool & Spa Safety Act. Some board members want to open the pools anyway with a stipulation that they can only be used by people over the age of 18. Your thoughts and comments on this please.

ANSWER: I’m amazed at how some people keep looking for ways to avoid compliance with the new law. If persons over the age of 18 drown because the pool violates Federal law, the association will get hit with the same lawsuits and fines.

QUESTION: Is there a conflict of interest when one board member is a practicing attorney & makes pronouncements on all issues that come before the board? He often twists the law to suit his own personal wishes, and intimidates the other two members who are not lawyers.

ANSWER: There is no conflict of interest unless the lawyer or his firm has been hired by the association.

Good Lawyers. A lawyer on the board can be a valuable asset to an association. Legal training brings unique analytical skills to problems faced by boards and a good lawyer can be invaluable at spotting potential liability issues.

Problem Lawyers. Where lawyers get themselves and everyone else into trouble is when they freely offer legal advice. The problem is that they often have no experience with community association law. They mean well but but their advice is sometimes dead wrong. Associations should hire good corporate counsel and follow their advice. Seasoned lawyers on boards will defer to corporate counsel.

Nightmare Lawyers. The nightmare lawyers are the ones with the giant egos–the bullies. They constantly remind everyone that they are the smartest person in the room (or so they think), and they regularly threaten and intimidate fellow directors to get their way. They are an embarrassment to the profession. The membership should replace them as quickly as possible–either through a recall petition or by electing someone else to the seat at the next annual meeting.

TELECONFERENCING
FOR MEMBERS

QUESTION: Regarding directors joining meetings via teleconferencing, is the same right available to owners who cannot attend in person?

ANSWER: The Corporations Code provides for teleconference attendance by directors but not members. However, boards can voluntarily provide for remote membership attendance. Some associations broadcast their meetings over a private cable TV channel. Others are exploring internet broadcasts.

REPEAT VIOLATIONS vs.
CONTINUING VIOLATIONS

I received a number of inquiries about last week’s article on automatic fines. I wrote that each violation requires a hearing before fines can be levied. They wanted to know if there is a distinction between repeat violations and continuing violations. There is.

Repeat Violations. An example of a repeat violation is where an owner violates a rule by letting his dog off the leash. The board holds a hearing and fines him. The next month the owner’s dog is off the leash again. That requires another hearing and another fine. The following month he does it again–a third hearing and another fine. The rules may allow for escalating fines, $50, $75, $100, but each incident requires a notice, a hearing, presentation of evidence, and a written decision.

Continuing Violations. A continuing violation is a single violation that persists. For example, If an association limits owners to one dog of no more than 25 pounds (typical for dense condominium developments with elevators) and an owner moves in with a 200-pound Mastiff (scary for people in narrow hallways and tight elevators), the board may impose a daily fine against the owner until such time as the dog is removed from the property. The board holds one hearing and imposes a continuing fine for the continuing violation.

Carrot and Stick. I like the carrot and stick approach when using daily fines. The goal is to eliminate the violation not to make money. Once the fine is levied, the board should simultaneously offer to waive the fine if the owner complies within 30 days (or some other reasonable time period set by the board). Offering to waive the fine encourages compliance and eliminates trips to court. We include a provision for daily fines in our documents and I recommend that boards update their documents to allow for such fines.

BANKS AND SPECIAL ASSESSMENTS

QUESTION: We have two foreclosed units in our complex. If a special assessment becomes necessary can we require the banks to pay their share of the assessment in addition to the monthly HOA dues?

ANSWER: If the special assessment is imposed after the bank foreclosed and took ownership, the bank is responsible for paying its portion of the assessment. The same may be true if an assessment is imposed prior to a bank’s foreclosure but payments are not due until after the transfer of ownership. You should ask your association’s legal counsel for an opinion regarding your particular assessment.

QUESTION: If an owner is fined for a violation one month, then repeats the violation the following month, can we go straight to a fine or does the hearing process start over again?

ANSWER: You cannot levy fines without hearings. Like speeding tickets, getting one ticket does not mean all subsequent citations result in automatic fines. The accused gets an opportunity to contest each citation. The same applies to rules violations; each requires a hearing before fines can be levied.

TELECONFERENCING FOR
MEMBERS

QUESTION: Regarding directors joining meetings via teleconferencing, is the same right available to owners who cannot attend in person?

ANSWER: The Corporations Code provides for teleconference attendance by directors but not members. However, boards can voluntarily provide for remote membership attendance. Some associations broadcast their meetings over a private cable TV channel. Others are exploring internet broadcasts.

AREA CODE OVERLAYS

New area code overlays for telephones continue to be added throughout California. If your association has fire alarm monitoring equipment that alerts a company or the fire department whenever an alarm is activated, you need to make sure the automatic dialer has been upgraded to handle the new ten digit dialing requirement. This may also be true for elevator phones as well. To avoid potential liability, associations should immediately update their automatic dialers. Thank you to Craig Jacob of Management Emporium for pointing this out.

FLOOR NOMINATIONS

QUESTION: At the annual meeting, nominations from floor were requested. One person wanted to volunteer but wondered how anyone could vote for him if they had already voted with a mail-in ballot.

ANSWER: That is one of the unintended consequences of the new election law. To fix this and other problems, we add director qualifications, eliminate floor nominations, get rid of cumulative voting, and drop quorum requirements whenever we amend an association’s bylaws. It makes director elections run a LOT smoother.

18-YEAR OLD PRESIDENT

Feedback #1. Regarding your statement “I think 18 is too young to drink or vote,” it amazes me that people do not think 18 is too young to go to war! There are some very bright 18-year olds out there. I say let’s give them a shot at it. As the o’le saying goes, actions speak louder than words. Judge them on that. -Ingrid K.

Feedback #2. I was first elected to my community’s board at age 17. I was the Secretary and Treasurer and was placed in that position as I was the most qualified of those elected or serving on the board. I was able to read and understand the financial statements and had better language skills. I was also the only one on the board that read the governing documents cover to cover and understood them. Age doesn’t have much to do with it, maturity and common sense are better factors to judge by. As long as there is no conflict of interest and the person has the maturity and common sense to deal with the issues facing the community, let the person serve without judging them based on their age. Twenty years after first being elected and with a long break in between, I am again serving on the board and own my own management company. Funny how the future writes itself…. Maureen McCormick, Common Interest Community Management LLC, Rancho Cucamonga.

Feedback #3. I’m not a prude by any standard, but the 2nd paragraph in the answer to the 1st question seems wholly inappropriate. “Very close†can be an old friend from school, or a friend of the President’s parents, or any number of things other than painting this picture of promiscuity for the thousands of people who read Davis-Stirling.com. Perhaps it could have been left to suggesting that the President divulge to the association owners who elected her to the board the exact nature of her relationship with the manager, and that the manager should probably recuse himself or herself and have another manager assigned to the project. -Jim A.

RESPONSE: I agree, “very close” might be an old friend from school. When the writer used “extremely close” in quotes, that suggests more than just an old school friend. For that reason, a different manager should be assigned to the account–one who is not “extremely close” to any of the directors.

PRIVATE RECORDING
OF MEETINGS

QUESTION: I understand that it is illegal to record a conversation without the consent of the participants. Am I correct? Wouldn’t everyone at the meeting have to give their okay to have the meeting recorded?

ANSWER: The Penal Code makes it a crime to record confidential conversations without the other person’s consent. However, it does not apply to open board meetings or to membership meetings. Such meetings are considered public forums for free speech purposes. As a result, recording an open meeting (as opposed to executive sessions) does not violate the Penal Code. However, the board can adopt rules against private recordings. For a more complete discussion on this subject, see “Private Recordings of Meetings.”

QUESTION: How young can someone be to be on the board? There are “extremely close” ties between our offsite manager and the president, an 18-year-old daughter of an owner.

ANSWER: Unless the bylaws set an age limit, an 12-year old can serve on the board. Most bylaws created by developers have zero qualifications for directors. That means anyone can serve on the board, including the homeless person sleeping next to the association’s dumpster. I think 18 is a bit young to be a director–but then I think 18 is too young to drink or vote. If you want to establish qualifications for who may serve on the board, you need to amend your bylaws.

If by “extremely close,” you mean the manager is sleeping with the president, that creates ethical issues that need to be addressed by the board. Let’s hope the manager isn’t charging for his extra meetings with the president.

NOTICE OF MEETINGS

QUESTION: I told the board that I expect written notice of the meetings because I rarely notice posted signs because of my schedule. The board maintains that a posted sign is all that they need to do.

ANSWER: Civil Code §1363.05(f) requires that in addition to posting a  notice in a prominent place the common areas, notices must be mailed to each owner who requests notification by mail, at the address requested by the owner. The notice must also contain the agenda for the meeting.

PAYING TWICE MEANS VOTING TWICE

QUESTION: One of our members owns two units. Whenever there is a vote on a subject, she only gets one vote–correct? Also, there is going to be an assessment to paint the building. She will have to pay twice–correct?

ANSWER: If she owns two units, she not only pays twice but she gets to vote twice.

DISRUPTIVE OWNERS

QUESTION: Can a member of a homeowners’ association be removed from a board meeting because their behavior is disruptive? Where is this covered in the Davis-Stirling Act?

ANSWER: Ejecting disruptive members is not in the Davis-Stirling Act; it’s part of parliamentary procedure.

RECORDING MEETINGS

QUESTION: Can a homeowner record board meetings if there are no prohibitions in the bylaws?

ANSWER: Absent any restrictions in the CC&Rs, bylaws, or rules adopted by the board, yes.

EXECUTIVE SESSION MINUTES

QUESTION: A board member has informed me that I was discussed in executive session under the heading “disciplinary.” I have requested those minutes that concern me and have been told I will need to have an attorney subpoena them.

ANSWER: Members are not entitled to executive session minutes. Civil Code §1363.05(d). This would be true even if the board is discussing a subject relating to the requesting member in executive session, since there is no such exception in the statute.

SCHEDULING MEETINGS

QUESTION: Yesterday’s board meeting was canceled due to a lack of quorum. The president is trying to push for a meeting within two weeks even though there are no emergency issues. However, two of us have very busy work schedules and can’t meet. Is the board obliged to accommodate ALL schedules rather than proceed without two board members?

ANSWER: The board should try to accommodate schedules whenever possible but there is no legal obligation that it do so. Unless otherwise provided in the articles or in the bylaws, board meetings may be called by the chairman or president of the board or any vice president or the secretary or any two directors. Corp. Code §7211(a)1. Even though you may not be able to get away from work, you still have the right to attend meetings by phone. If you request it, the president must make arrangements to have a speakerphone at the meeting. It must have a conferencing feature so your other busy director can attend as well.