Apr 24

QUESTION: If an owner of 5 properties lists all 5 properties and signs a petition, does it count as 5 signatures? And if a husband and wife both sign the petition (both are members since both are on title) does that count as two signatures?

ANSWER: The owner of the five properties is counted five times when signing petitions and he gets five ballots for election issues. Husbands and wives (or any co-owners of a property) only get one signature on petitions and one ballot on election issues. It is the number of units (or lots) that count, not the number of owners.


QUESTION: In a recall petition, if the governing documents limit each household to one vote but are silent on the number of people in a household who can sign a petition, how does an HOA determine what number constitutes 5% of the membership for petitions?

ANSWER: Your question is similar to the one above. Any person on title to a property can sign on behalf of the property but it only counts once. If there are ten owners on title for one unit, all of whom sign a petition, it counts as one signature not ten.


QUESTION: Can a membership petition force the board to place a measure on the annual ballot? The petition is a recommendation to the board to remove our manager.

ANSWER: Members can force a membership meeting but only for those matters which members have a right to vote. Firing the manager is not one of them. Nor do petitioners not have the right to set the date of the meeting. That right is reserved to the board.

Board Vote
. Managers, whether association employees or management company employees working onsite, are not subject to firing by the membership. Such matters fall under the authority of the board. Even though members cannot fire the manager, they indirectly have that right by electing directors who agree with their position.

Petition Recommends. If members wish to circulate a petition that recommends termination of the manager, they may do so. Even though the petition cannot call for a membership vote on the issue, it can express the petitioners’ unhappiness and their recommendations. The petition can then be submitted to the board of directors for their consideration. The board is not obligated to follow the recommendations but may if directors believe there is sufficient basis for doing so.


QUESTION: Is it legal for board candidates to solicit and gather proxies for themselves?

ANSWER: If your governing documents do not prohibit proxies, anyone who is a member of the association can be a proxyholder for any other member of the association and cast ballots on their behalf at the meeting. Civil Code §1363.03(d)(1)(A). This statute sometimes creates an interesting anomaly. Not all governing documents require that candidates be members of the association. When that happens, non-member candidates can run for and serve on the board of directors but they cannot collect proxies. Member candidates, however, can.


QUESTION: We are currently in an election. Several owners have raised a concern about their signatures being on the outside of ballot envelopes. They are concerned about identity theft. What steps can be taken to alleviate their concerns?

ANSWER: Under the Davis-Stirling Act, balloting must be secret. To accomplish this, the Act requires that all ballots be placed (unsigned) in a blank envelope that is then put inside a second envelope with the member’s name, address, and lot, parcel or unit number in the upper left-hand corner. The member must then sign and return the envelope to the Inspector of Elections. Civil Code §1363.03(e)(1). If the envelope is sent unsigned, it will not be counted.

Protecting Signatures. If members do not want their signatures going through the mails, they can hand-deliver signed envelopes to the Inspector prior to the election or at the election itself.


QUESTION: Can a board place a spending item on the agenda of a regular board meeting and vote to pass it without referring it to the appropriate committee or using any other procedure?

ANSWER: Unless the governing documents state otherwise, spending issues are not required to pass through any committees before being reviewed and approved by the board of directors. Even if a prior board established a procedure that all spending proposals first be reviewed by a Finance Committee (or Budget Committee or Spending Committee, etc.), subsequent boards are not bound by those procedures. Internal board procedures created by one board can be altered or abandoned by any subsequent board.


Small Claims. If an owner does not pay a fine, we go to small claims court. We have been very successful in having the fines paid before the court date. We have also been successful in having the small claims court rule in our favor. -Sam D.

Contract Formation. Could you clarify your statement that contracts “should” appear on the agenda? If a board decides to form contracts in executive session, is there a legal requirement that they place the item on an agenda or inform the membership? Many boards hold their executive sessions between meetings, what then? -Vicki M.

RESPONSE: There is no requirement that executive session items be on the agenda. If the board knows it will have an executive session following an open meeting and it knows it will be discussing roofing contracts, there is no reason not to list it on the agenda. So as to avoid any confusion, I added a note to the sample agenda making it clear that listing executive session items is optional. The board’s actions in executive session are then generally reported in the minutes of the next open meeting. Executive sessions held between meetings must be reported in the board’s next open meeting minutes.

Adrian J. Adams, Esq.

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Apr 17

QUESTION: We have a very difficult time getting absentee owners and their tenants to comply with the CC&Rs. Our management company says there’s nothing we can do to collect fines levied against those who ignore the rules. If that is the case, why do HOAs have rules and fines?

ANSWER: Collecting fines is not impossible but it can be challenging. Most residents fall into four categories: (i) those who follow the rules, (ii) those who occasionally stray but immediately comply with a polite warning, (iii) those who chafe at rules but comply when fined (but may or may not pay the fine), and (iv) the scofflaws–those who flout rules and ignore fines. Following are methods for collecting fines.

Non-Judicial Foreclosure. It used to be that associations could include fines in non-judicial (trustee) foreclosures. Not any more. Associations are now prohibited from including fines in liens that lead to trustee sales. Civil Code §1367.1(e).

Judicial Foreclosure. Fines can, however, be included in assessment liens for judicial foreclosures. Unfortunately, collecting them means waiting for the owner to become delinquent and then paying an attorney to it through a judicial foreclosure.

Small Claims Court. Associations can sue scofflaws in small claims court. The benefit is that no lawyers are involved and an abstract of judgment can be recorded against the owner’s property. The downside is it’s a roll of the dice in small claims–you may or may not get an award for the fines. If you lose, you cannot appeal, which means the fines are wiped out.

Superior Court. If the fines are over $5,000, you can file an action in superior court. If your scofflaw has accumulated that much in fines, you have a serious problem on your hands.

Suspend Privileges. Sometimes the best option is to suspend a person’s privileges until the fines are paid. The advantage is that no legal fees are incurred. However, the association may need to amend its governing documents before implementing this strategy. Also, suspensions are only effective if the association has privileges worth suspending.

RECOMMENDATION: Fines need to be reasonable and should be used sparingly. They should not be viewed as a means of raising revenue but rather as a mechanism for encouraging compliance with the associations rules.


QUESTION: When do members get to know about a contract?

ANSWER: Contract formation/approval should be listed on the board’s meeting agenda, which is posted at least four days in advance of the meeting.

Executive Session. Boards are allowed to meet in executive session to consider matters relating to the formation of contracts. The phrase “relating to the formation” is not defined but is generally understood to mean establishing bid specifications, reviewing bids, and voting on bids (following legal review). Although not required, some boards discuss and vote on contracts in open session.

Disclosure to Membership. Any matter discussed in executive session (such as contract formation) must be noted in the minutes of the next open meeting of the board.

Membership Review. Once a contract has been approved the membership has a right to review it. This right extends to all non-privileged contracts. The statute excludes from privileged status contracts for maintenance, management and legal services. In other words, these contracts must be made available for review. Civil Code §1365.2(d)(1)(E)(iv).

Bid Packages. Although not specifically provided for in the statute, boards should also make all bid packages available for inspection once a contract has been approved.

RECOMMENDATION: Boards should immediately post all approved contracts on the association’s website in a password protected area accessible by members. In addition, losing bids should be made available for owners to review.


QUESTION: Is an HOA required to send billing state
ments for regular HOA dues by U.S. mail or is e-mail billing acceptable?

ANSWER: If an association increases its regular assessments or imposes a special assessment, notice must be given by first-class mail not less than 30 nor more than 60 days prior to the increased assessment comes due. Civil Code §1366(d).

Monthly Statements. I could not find anything in the Davis-Stirling Act that required first-class mailings of monthly billing statements once a notice of increase has been given. Since monthly statements are not required, some associations use coupon books rather than incur the expense of monthly mailings. Accordingly, it appears that monthly statements via e-mail are legal.

COMMENT: The use of e-mail is obviously increasing but we have not yet reached the point where it can completely replace first-class mailings. Many disclosures can now be given by e-mail but only if authorized by owners.


Hurt Feelings
. LOVED the hurt feelings document. -Victoria C.

Priceless. THANK YOU for the Hurt Feelings Report. It’s priceless. -Maria S.

Army Report.
Is the Hurt Feelings Report the present day Army’s replacement for my 55 year old Army TS Card? -Robert B.

RESPONSE: The Army is just now catching up to the Marine Corps’ enlightened policies regarding complaints. BTW, thank you for your service to our country.

Adrian J. Adams, Esq.

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Apr 10

QUESTION: I asked the board to include the treasurer’s report in the minutes posted on the association’s website. They refused because homeowners are only untitled to a yearly report and the treasurer’s report contains private information. Is that true?

ANSWER: It’s true that owners are entitled to an annual financial report and it’s true that monthly financials may contain private information related to delinquencies. However, monthly reports are part of the books and records of the association. As such, members have a right to view and copy them. Any private information in the reports can be redacted.

Modified Accrual Reporting. The board might also be reluctant to release monthly reports if they were prepared on a modified accrual basis, which can be misleading if owners are not familiar with this form of accounting. While I understand the concern, it is not justified. Withholding financial information only fuels suspicion the board is hiding something.

Boards should routinely include full financial reports or at a minimum a summary “Treasurer’s Report” in their minutes and then post them for membership review. If the association has a website, the minutes and financial reports should be displayed in a members-only portion of the website.


: Our CC&Rs carry a 15-pound pet weight restriction. This statute has not been enforced for over fifteen years and m
ore than 50% of the homeowners have dogs over 15 pounds. A new board is enforcing the restriction and grandfathering pets currently here. Has enough time elapsed to make this rule unenforceable?

ANSWER: Enough time has elapsed to make the restriction unenforceable against those owners who already have large dogs, which is why the board properly grandfathered those pets.

Restarting the Restriction
. However, associations can reestablish restrictions by giving written notice to all owners that no new violations will be allowed. It’s like hitting a reset button. Over time, existing violations will disappear as grandfathered pets die and replacement pets comply with the restriction.

RECOMMENDATION: Reestablishing the pet restriction will be difficult since anyone wanting a large dog will point to existing violations and argue that they should have one too. Accordingly, current and future boards must consistently and even-handedly enforce the restriction. If the membership does not like the pet limitation, it should amend the CC&Rs to establish a higher weight limit or eliminate it altogether.


QUESTION: My HOA had an annual meeting but could not reach quorum. So the current board stayed in place til next year’s election. Is this the proper way to handle this situation?

ANSWER: Maybe. Boards need to make a good faith effort to achieve quorum. More often than not that means making multiple appeals for ballots and extending the annual meeting date to continue collecting ballots until quorum has been achieved.

Petition the Court.
If quorum cannot be achieved, the board can petition the court to reduce the association’s quorum to the number of votes cast. Corp. Code 7515. If the court approves, the ballots can be opened and a new board seated. Unfortunately, that means spending money on lawyers. If lack of quorum is a chronic problem, that means petitioning the court after every election. That also means raising dues to cover the annual legal expense.

Do Nothing. If despite the board’s best efforts turnout is especially low, it is understandable that a board might take no further action. Very low turnouts usually means the membership is satisfied with the existing board and sees no reason to vote. When members are unhappy, they turn out in large numbers. Accordingly, doing nothing under these circumstances may be a viable option.

Owner Petition. If balloting was close to quorum but the board failed to extend voting and did nothing to encourage turnout, the current directors may be purposely sitting on their hands so they can stay in office. If so, members can seek a court order. In Samii v La Villa Grande HOA, the Court of Appeal noted that if an association refuses to hold an election as required by the governing documents, any association member can petition the court for an order that the election be held.

RECOMMENDATION. Rather than spend money on lawyers filing court petitions, associations should spend their money amending their documents to eliminate quorum for the election of directors. Once this requirement has been eliminated, elections become fairly routine.


Speed Bump Gas Bogus. The greenhouse gas argument is bogus. A 15 mph speed limit usually accompanies speed bumps/humps. Drivers are not supposed to race and slow repeatedly through a street with these safety devices. Cruising slowly at 15 mph does not require acceleration after each bump/hump. -Glenn B.

Heart Problems. I’m a 67-year-old guy with heart problems and a family history of the same. When the inevitable paramedic call is made for me, seconds will count. Can my widow sue the association because the speed bumps held up the emergency equipment? Hurry and answer because I feel a chest pain and she needs the money. -David A.

RESPONSE: Sorry, you don’t have a case if the City’s Department of Building and Safety or the Fire Department approved the speed bumps. You better get an insurance policy quick.

Street Paving. I failed to mention in last week’s question that the board is paving entire streets with no access for 24-48 hours. The only streets being paved in halves(?) are the main access routes. Even at that, there is no traffic control and not enough room to maneuver safely. Most of the residents here are in their 70′s and 80′s. Not a safe situation.  -Michael M.

RESPONSE: The additional facts completely change my opinion. Industry practice is to pave one side of the street at a time so as to allow for resident and emergency access. If entire streets are being closed, then the board is needlessly exposing the association to potential liability. If they’re doing it to save money, the decision is ill-advised.

Lookey-Loos. BODs should not impede potential buyers from doing their due diligence. In this tough real estate market, many Orange County management companies are charging potential buyers for HOA docs just to review! I understand there is a cost to produce these documents but we should look for opportunities to help buyers acquire property, not make it tougher. Many of the buyers are replacing a delinquent account, best for all members! How about posting minutes, CC&Rs, Rules, etc. online? -Len M.

Hurt Feelings. Since you seem to have a great sense of humor, I’ll pass along the attached form that an attorney friend of mine, who is a colonel in the Army JAG Corps, sent to me for modification and possible use when responding to certain types of homeowners. -Wayne W.

RESPONSE: I always liked the JAG Corps. Your form brings back fond memories of my days in the Marine Corps.

Adrian J. Adams, Esq.

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Apr 04

QUESTION: We currently give each prospective buyer twelve months of board minutes. Do we have to continue giving them or can we stop?

ANSWER: It depends on who is asking. If the property is in escrow and the request is made by an escrow officer (who is acting on behalf of the seller), you must timely submit records to escrow. Even though minutes are not included in the list of required records (Civil Code §1368), members separately have a right to minutes (Civil Code §1365.2(i)(2)). Accordingly, you must provide them if so requested.

Lookie-Loos. If the property is not in escrow and the request is from a potential buyer (a “lookie-loo”), you can politely decline. A drive-by looker has no right to records and you have no obligation to provide them.

Member Request. Whether a unit is in escrow or not, an owner has a right to view and copy records. That does not mean he can make a standing request that any potential buyer who asks for minutes be given a set. The owner must make the request for himself. You can then provide minutes to the owner and he can take on the cost of copying and distributing minutes to potential buyers.


QUESTION: I feel the HOA is unreasonable in asking residents to walk a mile (really) while streets are repaved. Is there relief under Civil Code 1361.5? -Michael M.

ANSWER: You’re kidding right? Tens of thousands are resolutely and without complaint enduring the devastation of an earthquake, tsunami and radiation leaks, and you want to take action against your association for the temporary inconvenience of street paving? No, you don’t have cause to sue your association. A little walking will do you good.


QUESTION: Our HOA is trying to recoup overdue assessments from owners. We’ve gone to small claims court and received a judgment against an owner. However, when we try to levy a bank account CCP §684.110(c) says “. . . service shall be made at the office or branch . . . at which a deposit account levied upon is carried.” We have debtors that we know have bank accounts but the branch is unknown and finding it is nearly impossible. Any recommendations?

ANSWER: Some banks do not require service of a levy on the specific branch where the account is located. This is more common now because of the advent of online banking. Otherwise, where would you serve a levy if the account is online instead of being held at a branch office?

Agent for Levies. Where there is a specific location requirement, the levy must be served on that location. There is legislation requiring banks to designate a local agent or office for all levies but most banks are slow in complying. There is growing movement in California’s creditor lobby to compel banks to move faster to comply.

RECOMMENDATION: Until banks designate an agent or office for levies, you can hire a private investigator familiar with locating bank accounts. Some collection attorneys offer investigative services to their clients. The cost is approximately $200. Most private investigators do not charge if no account can be located (or charge a nominal fee).

Thank you to John D. Guerrini of the the Guerrini Law Firm for his assistance with this question. Mr. Guerrini’s firm specializes in commercial and consumer debt collection.


QUESTION: Our HOA has proposed a policy where we stop trash pick-up from homes that are more than 90 days delinquent. We save money since we don’t have to pay for service to those owners. Do we need to send the proposed policy to members and give 30 days to respond since there isn’t any monetary penalty involved?

ANSWER: It is always a good practice to send policy changes to the membership for review and comment. In this case, I’m not sure you can adopt the policy even if the membership supported it.

Operating Rules.
Your proposed policy appears to fall under the definition of an “operating rule.” The Davis-Stirling Act defines an operating rule as a regulation adopted by a board that applies generally to management and operations or the conduct of the business and affairs of the association. Civil Code §1357.100(a). Even though you are not imposing a monetary penalty, suspension of services arguably falls into the category of member penalties for violation of the CC&Rs (failure to pay assessments). Civil Code §1357.120(a)(3). As such, a 30-day notice should be given to the membership for review and comment. Civil Code §1357.130.

Enforceability. The Davis-Stirling Act goes on to state that an operating rule is valid and enforceable only if it is:

  • in writing,
  • within the authority of the board,
  • consistent with the law and the governing documents,
  • adopted in good faith and in substantial compliance with the requirements of statute, and
  • reasonable. (Civil Code §1357.110)

Reasonableness. If your policy ended up in court, a judge could decide that suspension of trash removal was inconsistent with your governing documents and/or unreasonable. If your CC&Rs are typical, they have a generic provision obligating the board to act in the best interests of the health and safety of the membership. The accumulation of garbage attracts vermin, i.e., flies, cockroaches, mice, rats and the like. That creates a potential health risk for the community. Even if health and safety were not covered by your governing documents, a court could still find the practice unreasonable.

Contrary to Law? The courts treat associations as landlords when it comes to suspension of utility services. Under landlord-tenant law, landlords may not willfully cause, “directly or indirectly,” the interruption or termination of utility service to a tenant’s residence. Utilities covered include, but are not limited to, water, heat, light, electricity, telephone, gas, elevators and refrigeration. Civil Code §789.3. A judge could decide that trash removal qualifies as a “utility” and could not be withheld by the association.

RECOMMENDATION: You should run this by legal counsel before adopting your proposed policy. If it were me, I would not adopt the policy.


Speed Bumps. Speed bumps undoubtedly save lives and prevent damage to property caused by speeding motorists. I think that trumps the small amount of greenhouse gases created when a car may accelerate after driving over a speed bump. Without the speed bumps in our complex, some people would drive as though they were on a NASCAR track, endangering everyone. The delivery people are the worst culprits. -John A.

RESPONSE: Associations will not get sued over a minuscule increase in greenhouse gases arguably generated by speed bumps. But they can (and likely would) get sued if a child is run over because of a known unsafe street where the board did nothing to address the problem.

Adrian J. Adams, Esq.

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