May 20

QUESTION: Can a group of owners send newsletters to members regarding HOA issues, including summaries of board meetings? If so, can they request this unauthorized newsletter be included in the association’s monthly mailings and website?

ANSWER: Members have the right to speak out on HOA issues. To that end, they can set up chat rooms on the internet, mail out letters and newsletters, set up websites, talk to other members in the club house, etc. The one thing they can’t do is send smoke signals–the EPA would fine them for air pollution. Polluting the air with overheated rhetoric probably falls outside EPA jurisdiction but I wouldn’t rule it out.

Monthly Mailings. Homeowners can request that their newsletter be included in the association’s monthly mailings and website. However, the board is not obligated to grant their request. Boards can adopt guidelines on what is distributed to the membership at association expense. When considering requests, boards should take into account potential liability for material written by others as well as equal access issues during elections.

Misrepresentation. When it comes to private letters, newsletters and websites, the materials cannot mislead members into thinking they are  communications from the association. For that reason, the association’s name and logo can only be used by the association. It should always be clear to recipients that the private missive is just that–a private missive. When individuals seek to confuse and deceive, they open themselves to litigation.

RECOMMENDATION. If your newsletter group is confusing owners by using the association’s name and logo, they may be doing so innocently. The should be asked to adopt a non-misleading name and logo. If their intentions are good, they will immediately change their name and logo. If they refuse, the association’s legal counsel should get involved.

MULTI-UNIT
VOTING RIGHTS

QUESTION: One of the owners in our association owns three condominiums and is a member of the board. Is that owner entitled to three votes at board meetings?

ANSWER: Owners of multiple units do not have extra votes at board meetings. By statute, “Each director present and voting at a meeting shall have one vote on each matter presented to the board of directors for action at that meeting.” Corp. Code §7211(c).

Member Meetings. That vote limitation does not apply to membership voting. When the membership elects directors, votes for special assessments, amends the CC&Rs, etc., owners of multiple units have one vote for each unit owned. Accordingly, the owner of three condominiums gets to vote three times on each issue presented to the membership.

Fractional Voting. Some HOA documents assign fractional votes to owners based on the square footage of their units. If that is the case, votes at membership meetings may be less than or greater than one vote per unit. Unequal voting rights are allowed by Corporations Code §531 which states that, “Except as provided in or authorized by the articles or bylaws, all memberships shall have the same rights, privileges, preferences, restrictions and conditions.”

WHAT IS AN HOA?

We released a couple of videos that may be of interest to readers. The first is “What is an HOA” with humorous street interviews with people. The second is a video describing Adams Kessler PLC.

LEGAL SIDE OF RESERVES

 

 

This week’s webinar with reserve specialist Robert Nordlund had over 300 attendees. So many questions were submitted that we may schedule a follow-up webinar just to address the questions.

ATTORNEY FEE
AWARD

Last year I reported on Salehi v. Surfside III where an owner-attorney sued her association and lost. The court awarded $250,000 in legal fees to the association. In a separate case, the same owner-attorney represented another member against the association and lost. When the court entered judgment against the owner, he immediately declared bankruptcy.


Once the bankruptcy proceedings were dismissed, the association filed a motion for attorneys’ fees and the court awarded $292,205 to the association. The owner appealed claiming the motion was untimely. The court of appeals affirmed the award, finding that for good cause (such as bankruptcy), the trial court had the power to extend the time for filing a motion for fees. Lewow v. Surfside III.

LESSON: Homeowners who file meritless lawsuits expecting the association’s insurance company to pay them to go away may be in for a rude awakening. Insurance companies don’t always roll over and play dead. In this case the carrier spent over half a million dollars fighting two meritless cases and prevailed. Congratulations to Surfside III and their lawyer Bill Slaughter.

FEEDBACK


Charging Station #1. I suggest [in last week's newsletter] you meant “jerry rigged” not “jury rigged.” -Jeff B.

RESPONSE: I looked up “jerry rig” before using the term and saw that “jury rigged” was a variation with a similar meaning. I opted for jury since rigging a jury sounded more legal. For those who are unfamiliar with the terms:

Jerry rigged was used by World War II British troops to refer to the German use of scavenged parts to keep vehicles and weapons functional. “Jerry” as a pejorative term for German soldiers.

Jury rigged refers to makeshift repairs or temporary contrivances, made with only the tools and materials that happen to be on hand. It was originally a nautical term.

Charging Station #2. The question regarding the charging station sounded as if the association paid for electricity. In the that case, you might want to address who pays. Even a hair dryer running all night will run up a bill by the end of the month. -David A.

RESPONSE: The owner of the charging station is responsible for paying for the electricity he uses. Civil Code §1353.9(f)(2)(C).

Charging Station #3: The meters for our residential units are in the garage. PG&E said they would run wiring to the relevant parking stall, install a circuit and the charger. That way owners’ electricity costs are tied to their own meters. -Joseph L.

Stray Cats. After reading your article on stray cats, I have to remind everyone that taking a feral cat to a shelter is the equivalent to stabbing it with a knife or shooting it. Shelters don’t shelter. They have no budget and nowhere near enough adoptive parents to take the animals. Our HOA participated in a Trap Neuter Release (TNR) program where we rent traps (for free) then take the cats to a place called “Fix Nation” that spays & neuters them for free. The cats are then returned to their environment the next morning. These fixed cats keep rodent populations down. We fixed 39 cats & the new kitten issue has been almost completely eliminated. -BME

Nuisance Politics. When you mention “prohibition of flyers door to door,” do you mean homeowners cannot distribute flyers concerning an association issue or are you referring to outsiders? We don’t currently have a policy about flyers, but some of us are considering a flyer regarding an important issue. Isn’t this free speech? -Karen S.

RESPONSE: Associations cannot prohibit the mailing of fliers (free speech) but they can prohibit the posting of fliers on common area walls, doors, etc. (litter). Some associations accommodate member fliers by installing a bulletin board where residents can post business cards, for-sale items, fliers, etc.

Adrian J. Adams, Esq.
ADAMS KESSLER PLC


“Legal solutions through knowledge, insight and experience.”
When your association needs legal assistance, contact us at (800) 464-2817 or info@adamskessler.com.

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May 13

QUESTION: We have underground parking which makes it expensive to retrofit anything. A resident wants the HOA to supply power to his parking space so he can install a charging station for his car. He claims the electric draw is less than a hair dryer (not sure I believe that). As more people buy electric vehicles and tap into the association’s electrical panels, at some point we will have circuit breaker issues. What happens then?

ANSWER: Your owner has the right to run power to his parking space. Civil Code §1353.9(f). However, he must do so at his own expense. The association is not required to subsidize the cost.

Who Installs? Installing circuit breakers, conduit and wiring from the association’s electrical panel to the parking space can either be done by the association and billed to the owner or it can be done by the owner. Who does the work depends on how much control the association wants over the installation. Electricians who work for homeowners sometimes take shortcuts and jury rig their installations. Highrise condominiums often prefer that all common area electrical work be done by the association’s electrician. Otherwise, the homeowner’s electrician can install electrical upgrades provided he is licensed and insured and the work is signed off by the association’s architectural committee and the city/county building department.

Overloading the Panel. If the common area electrical panel cannot handle the extra load created by the charging station, the panel will need to be upgraded. All costs associated with the upgrade are at the requesting owner’s expense.

RECOMMENDATION: Boards should work with legal counsel to make sure appropriate agreements are signed by the homeowner and covenants recorded prior to the start of work.

ADVERTISING
OPPORTUNITY


If your company specializes in providing quality services to community associations, we are offering an opportunity for you to reach out to association boards and managers throughout California.

We will allow up to three companies to place banner ads on the front page of the Davis-Stirling.com website. We have over 330,000 visits to our website and two million page-views per year. If you are interested or know a company who would benefit, contact Nathalie Ross at (800) 464-2817 or send an email.

ASSEMBLY BILL 2273

Good news! This past week, the Assembly Judiciary Committee approved AB 2273 by a vote of 8 to 1. The bill now moves to the Assembly floor in the next 2-3 weeks. Skip Daum, CAI’s legislative advocate for this bill, reported that more than 1,000 letters were received in support of the bill. Thank you to everyone who sent letters. Your efforts are paying off.

Purpose of Bill. The bill requires banks to record foreclosure deeds within 30 days so associations know who and where to bill for assessments. It makes banks accountable for the properties they acquire. As expected, the lending industry is strenuously lobbying against the bill.

Radio Interview. I was interviewed by Peter Jon Shuler of KQED Public Radio earlier this week. Click here to listen to the interview about this important legislation.

LEGAL SIDE OF
RESERVE STUDIES


REMINDER: For those who want to attend, I will be participating in a webinar with reserve specialist Robert Nordlund presenting the legal side of reserve studies. The webinar is open to everyone with an interest in the subject.

Sign-Up. Select a time and then sign-up by clicking on one of the following links: Tuesday, May 15th at 11am (2:00 p.m. EST) or Tuesday, May 15th at 1:30pm (4:30 p.m. EST).

FREE JOB MARKET

The Job Market portion of our website has suddenly received a lot of listings. That is an encouraging sign that the economy might be loosening a bit.

If your association or management company is looking for people to hire, the Job Market is free and provides a good avenue for you to quickly reach qualified individuals.

JOB ALERT. To speed the process of connecting employers and candidates, we added a “Job Alert” that automatically sends an email to candidates whenever jobs are posted.

FEEDBACK

Nuisance Politics #1. I noticed you did not mention how much Mitt Romney was going to spend on his campaign. -Laura B.

RESPONSE: The information about spending came from Public Radio International. The report did not include any estimates on how much Romney would spend. If it did, I would have included it. The report did, however, project spending for all races nationwide, which I added. The numbers are staggering. This important election cycle will be quite intrusive.

Nuisance Politics #2
. I wanted to thank you for taking the time to devote a portion of your weekly newsletter to political campaigning. You are right, we are in an “election year.” And I feel that the 2012 Presidential election is going to be quite critical. I happen to be a third generation political activist, so I always encourage everyone to get out and vote. My grandmother was the first woman to run for congress in Pennsylvania during the Great Depression. My niece Lindsay is carrying on the family tradition, she’s the campaign manager for California State Assemblywoman Betsy Butler and you bet I’m proud of her! I always enjoy your take on Davis-Stirling issues. Keep up the good work! -Ellen M.

RESPONSE: Thank you Ellen. You have good reason to be proud. Go Betsy Butler! (Oops, that might be viewed as political.)

Nuisance Politics #3. Can any member in good standing request a copy of the membership list with all pertinent information that management has such as address, phone, email? I realize they probably will want to charge for the cost of producing it. -David A.

RESPONSE: Any member, whether in good standing or not, can inspect and copy the membership list. Members do not have a right to phone numbers, and their right to email addresses is uncertain. Associations can bill the requesting member for direct and actual cost of copying the membership list. Civ. Code §1365.2(b). Any person who misuses a membership list is liable for any damage caused by the misuse, including punitive damages for a fraudulent or malicious misuse. Corp. Code §8338(b).

Nuisance Politics #4. Do you recommend that the prohibition of fliers door-to-door and posting of fliers in the common ares be in the association’s governing documents? -Patsy O.

RESPONSE: When you say “governing documents,” that covers CC&Rs, Articles of Incorporation, Bylaws, Rules & Regulations, etc. Adding a restriction to your Rules is sufficient. The board must give proper notice before doing so.

Adrian J. Adams, Esq.
ADAMS KESSLER PLC


“Legal solutions through knowledge, insight and experience.”
When your association needs legal assistance, contact us at (800) 464-2817 or info@adamskessler.com.

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May 06

QUESTION: We live in a security complex and we have a “No Solicitors” sign posted in the front of the building. Somehow political canvassers and campaigners are still entering our complex. Because it’s political, do we have to allow them in the building?

ANSWER: No you don’t have to let them in. What you are experiencing is going to get worse as we get closer to the November election. The political cycle this year will be the most expensive in history. Barack Obama’s 2008 presidential campaign broke all records when he spent $760 million to get elected. His re-election campaign will shatter that record with a projected $1 billion this year. Overall spending by all candidates nationwide is projected to be an astounding $7 billion. On top of that will be significant spending on California propositions seeking to raise our taxes (because Sacramento does such a good job spending our money). The advertising will be relentless.

Nuisance Campaigning. In addition to political advertising on billboards, radio and television, voters will be subjected to telephone calls, fliers, and knocks on the door. Associations will receive requests to use common area facilities for political organizing and for meeting candidates running in state and local races. Finally, there may be requests for the association’s membership list which could be turned over to political organizations for email blasts and money solicitations. The political wave will hit like a tsunami.

Association Response. Most homeowners will want their associations to shield them from the pervasive and intrusive political noise. Associations can buffer residents from some of the intrusion but all.

  1. Fliers & Solicitation. Associations can prohibit door-to-door solicitors and the distribution of fliers, provided the development has restricted access. Developments that are freely and openly accessible to the public cannot prohibit leafleting, solicitations, and fliers. Golden Gateway v. Golden Gateway. The distribution of fliers door-to-door by residents and the posting of fliers in the common areas can be prohibited and appropriate fines levied. 

  2. Meetings. Meetings in the common areas can be regulated. Typically, associations require a cleaning/damage deposit and a restriction on the number of outside guests. Most HOAs also charge a fee for reserving facilities for events. Fees for non-HOA political activities do not violate the “free access” requirement related to board elections. 

  3. Membership List. Members can be notified that they can opt out of the membership list. In addition, associations can adopt rules for misuse of the membership list. One association we represent has a fine not just on the list itself but on every name on the list. That means that instead of a $500 penalty for misuse of the list, it’s a $500 fine multiplied by the number of names on the list.

RECOMMENDATION: Associations can, but are not required to, set aside one or more bulletin boards where residents can post business cards, announcements, and fliers. When it comes to door-to-door fliers and misuse of membership lists, boards should adopt rules now so they’re in place before the mayhem starts. Then, in November, everyone should get out and vote for a candidate who can fix the economy.

JUDICIARY COMMITTEE LETTER

The lending industry is strenuously lobbying against AB 2273–the bill that would require banks to record their foreclosure deeds within 30 days and start paying association dues.

As reported last week, the bill was unanimously approved by the Assembly Housing & Community Development Committee due in large part to the 550 letters sent by you to the Committee.

The Assembly Judiciary Committee Hearing is scheduled for Tuesday morning. Please sign the suggested letter and fax it ASAP to (916) 772-3781. Letters that arrive by NOON on Monday will be delivered to Committee members.

LEGAL SIDE OF
RESERVE STUDIES

For those who want to attend, I will be participating in a webinar with reserve specialist Robert Nordlund presenting the legal side of reserve studies. The webinar is designed for board members, managers and homeowners but is open to everyone with an interest in the subject. Some of the topics covered are:

  • Do you need to follow your reserve study?
  • Who controls what appears in it?
  • Do national reserve study standards conflict with state law?
  • What are the board member and Manager roles?
  • What are potential legal liabilities surrounding reserves?

The live 45-minute webinar will be held at two different times on Tuesday May 15 so as to accommodate everyone’s schedule. You can sign up by clicking on one of the following links:

Tuesday, May 15th at 11am PDT (2pm EST)
Tuesday, May 15th at 1:30pm PDT (4:30pm EST)

FEEDBACK


Rogue Treasurer #1. The association with the rogue treasurer–sounds like they need you as their attorney!!! -Your Mother

RESPONSE: Thanks Mom.

Rogue Treasurer #2. Once you remove the rogue treasurer, one of the first things to do is notify the bank as well. You don’t want this “rogue” remaining on any of the accounts, or having access to on-line transactions. -Kerri H.

Rogue Treasurer #3. Thank you for your “Rogue Treasurer” item. It occurred to me that the board should dig deeper and see if there is any embezzlement or fraud involved. -Sam D.

Poo/Spa Cover. The Santa Clara County Health Dept. requires a floating spa cover to be removed in the morning when the spa area opens and stored in an area away from the spa. It can be replaced at the end of the day when the spa area is closed. I found a child in the spa under the cover while the parent sat and watched! -Linda S.

AB 2273. Skip Daum does great work. I hope that Jerry Brown appreciates common interest communities and their needs; he worries me a bit. -Marilyn B.

Adrian J. Adams, Esq.
ADAMS KESSLER PLC

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