Jan 27

QUESTION: We have a board member who refuses to sign a rather benign ethics pledge. All the other board members signed it. This person voted to authorize the pledge but now refuses to sign it. What actions can the board or the membership take short of recalling this fool?

ANSWER: Adopting an ethics policy is something all boards should do. Even though directors cannot be forced to sign a pledge adopted by the board, the membership has a legitimate interest in knowing that a director refused to sign it. That means an article can be placed in the association’s newsletter listing which directors signed the pledge and which ones did not. Knowing which directors are ethically-challenged could affect members’ votes when it comes to recalls and reelections.

Bylaw Amendment. If you want to make ethics pledge mandatory, you need to amend your bylaws to make it a qualification for serving on the board. Then if nominees refuses to sign it, they cannot run for the board. Even if they mount a write-in campaign, they can be barred from serving regardless of the number of votes they might receive.

RECOMMENDATION: Boards should talk to legal counsel about drafting an ethics policy and appropriate language for a bylaw amendment.

HANDLING BALLOTS

QUESTION: A homeowner is under the impression that ballots cannot be handled by anyone other than the inspector of elections. We have them sent to the office but no one opens them until the day of the annual meeting. Is this okay or do all ballots have to be sent to the inspector at her home?

ANSWER: It is not uncommon to have the association’s management company or its onsite management office receive ballot envelopes on behalf of the inspector of elections. Some inspectors provide a locked ballot box which is placed in the management office. That way owners who want to hand deliver their ballots (in sealed envelopes), they can do so.

Designated Location. Because many inspectors operate with low overhead, they do not have an office outside of their home. For safety and security reasons, they do not want homeowners (who can get a little crazy at election time) showing up on their doorstep. Hence, they designate an alternative address as allowed by the Davis-Stirling Act:

The [ballot] envelope may be mailed or delivered by hand to a location specified by the inspector… (Civ. Code §1363.03(e)(2).)

Kept Unopened. If the ballots are mailed or delivered to the association’s management office, no person, including directors, employees or vendors, may open ballots prior to the time and place at which the ballots are counted and tabulated. That function is reserved to the inspector of elections who opens and counts them in public at a properly noticed open meeting of the board of directors or members. (Civ. Code §1363.03(f).)

COACHELLA VALLEY
BOARD MEMBER EVENT

On Wednesday, January 30, 2013, Adrian Adams will participate in Desert Resort Management’s annual “Board Member Event” at the Agua Caliente Casino Resort in Rancho Mirage. Speakers will include Larry Pothast, a nationally recognized expert in CID management, Esmael Adibi, a widely respected economic analyst and adviser, and County Supervisor John Benoit. See more about the speakers.

This is a great opportunity to learn about matters affecting homeowner associations in Coachella Valley. To attend, contact Jackie White at (760) 610-7708 or email her at RSVP@drminternet.com.

FEEDBACK

Tenants #1. I’m not sure I agree with your statement regarding whether or not a board has to allow a tenant to attend a hearing for a fine assessed against the owner, even though the fine is based on the tenant’s actions. -Greg M.

RESPONSE: An owner who is subject to disciplinary action has a right to defend himself. Since he was not present when the violation occurred, he has a right to bring a witness who was present—his tenant. Tenant’s are not automatically guilty just because they’re a tenant. In my opinion, refusing to allow the evidence would violate the owner’s procedural and substantive due process. I suspect a judge would agree.

Tenants #2. Only an owner (a “member”) has the right to attend board meetings. While it may be a good idea to allow a tenant to speak at a meeting, no one other than an owner has the right to attend. If an owner is to be fined for the actions of his tenant, it is appropriate for the board to present its evidence to the owner. The owner may then do his own investigation of his tenant’s actions. The board has no right to take any action against a tenant, only the owner may do that. -Robert B.

RESPONSE: It is true that only members have a “right” to attend disciplinary hearings but they also have a right to defend themselves. If they are restricted to repeating what their renter told them about the incident, the information is second-hand (called “hearsay”) and not as reliable as hearing it from the horse’s mouth. Allowing the tenant to attend gives the board an opportunity to ask questions and evaluate the truthfulness of the tenant’s testimony. Moreover, the mere process of going through a disciplinary hearing may be sufficient to cause a wayward tenant to follow the rules.

Abstentions #1
. Can you address the proper use of abstentions? Members of our board abstain when they don’t want to be on record as voting no. -Sandra S.

RESPONSE: All directors should cast votes on all issues put before them (including the president). That is why they are elected to the board. Failure to do so could be deemed a breach of their fiduciary duties. The only time they should not vote is when they have a conflict of interest, at which point they should recuse themselves from the discussion and from the vote.

Abstentions #2. I did not understand your comment that an abstention could be deemed a “no” vote. -Aaron C.

RESPONSE: “To abstain means not to vote at all.” (Robert’s Rules, 11th ed., p 45.) An abstention is a meaningless vote except that it can have the practical effect of a “no” vote since a motion may fail for lack of sufficient “yes” votes. Unless a greater number is called for in the articles or bylaws, a matter is deemed approved by the board if at any meeting at which a quorum is present at least a majority of the required quorum of directors votes in favor of the action. (Corp. Code §7211(a)8.) If five out of five directors attend a properly noticed meeting and two vote for a motion and the other three abstain, the motion fails (the same as if the three abstentions had voted no).


Adrian J. Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” Our lawyers are friendly; if your association needs legal counsel, contact us at (800) 464-2817 or info@adamskessler.com.

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Jan 20

QUESTION: If an owner is called into a hearing for the actions of a tenant, can the tenant join him at the hearing? Can the board refuse the tenant since the owner is the one being fined, not the tenant?

ANSWER: The board cannot prohibit the tenant from appearing with the owner. Even though the board will be fining the owner, the fines are because of the tenant’s behavior. Due process requires that the owner and tenant have a right to defend themselves. How can the tenant dispute evidence at the hearing if he is barred from attending?

DIRECTOR ABSTENTIONS

QUESTION: I have a question concerning abstentions at board meetings. We have seven board members. With six directors present at a recent meeting, three members voted yes, one voted no, one was absent and two abstained. Is the motion approved?

ANSWER: No, the motion is not approved. With six directors present, you needed a majority (four) to approve the motion. The two abstentions essentially acted as “no” votes since they were not “yes” votes. Because three is not a majority of six, the motion failed.

MORE ABSTENTIONS

QUESTION: We are a five member board with one vacancy. We are scheduled for a meeting when one of the four members will be out of the country, leaving three directors for the meeting. What happens if one of the directors abstains from voting on a issue–will the vote of just two directors carry the motion?

ANSWER: Yes the motion will carry. For a five-member board, a quorum is three. If three directors attend a properly noticed meeting, they can conduct business. To pass a motion they need a majority of quorum, i.e., two “yes” votes. It does not matter if the remaining vote is a “no” or an abstention; the motion carries two-to-one. This allows an association to function even when two directors are on vacation, sick or otherwise unavailable. This, of course, can lead to shenanigans. To avoid mischief, directors should attend all meetings even if only by telephone.

ORANGE COUNTY OFFICE

To better serve our growing Orange County client base, I am pleased to announce the opening of our new Irvine office.

     ADAMS KESSLER PLC
     18101 Von Karman Avenue
     Suite 330
     Irvine, CA 92612

For a list of all of our California offices, see offices. If your association needs legal assistance, you can call us toll free at (800) 464-2817 or e-mail us at info@adamskessler.com. We’re friendly, give us a call.

FEEDBACK

Squatters #1. We recently changed the key to our pool. To get a key you had to show ID that matched our owner list or a signed letter with picture ID of the owner. No ID, no key. Could you not change the building lock and require the same? -David A.

RESPONSE: Squatters, tenants and others can be denied keys to common area facilities as you described but not ingress and egress to their units. If they reside in a unit, you cannot block access. The trick is knowing who resides in a unit and who does not. If a person cannot show that he/she is a resident, you can deny them a key. That may lead to a legal confrontation but it will resolve occupancy issues.

Squatters #2. Your section on squatter’s rights was extremely helpful because we have a granddaughter and her boyfriend squatting in a deceased owner’s home. They live like animals and ignore requests to clean up their patio, etc.Attempts to contact other relatives have not been successful. It looks like we’ll have to wait until the lender forecloses and boots out the squatters. It’s too bad HOAs don’t have more rights and remedies in matters like this. -John A.

RESPONSE: Even though you can’t block access to the unit, you can suspend the granddaughter’s privileges (and her boyfriend’s). That may or may not be helpful depending on your association’s amenities.

Dogs #1. We prohibit dogs in all landscaping areas. We have had no challenge to this and those few who repeatedly violate the rules are called to a hearing and in some cases fined. -Joseph L.

Dogs #2. Are you seriously suggesting the use of tasers on owners and dogs??? SHAME SHAME SHAME! And no, I wouldn’t believe it was an attempt at humor. -Bryan S.

Dogs #3. Ha ha! I hope you mean tasering the owner and not the dog… The dog’s just doing its business. The owner had the choice to take the dog to the common area grass or not. -Kelly M.

RESPONSE: I agree with you, it’s not the poor creature’s fault. The dog doesnt know he can’t use the grass to do his business. The owner on the other hand…

Dogs #4. With all the talk about the distinction between hunting rifles and assault rifles it occurs to me that there is a difference between a dog as a companion and an assault dog. My next door neighbor has a dog that snarls viciously from a 2nd floor balcony at passing dogs on the sidewalk. Almost every night I can hear a growling confrontation in front of my building. An attack dog seems unnecessary and out of place in a condo. -D.H.

RESPONSE: Ditto your sentiments. Attack dogs and condos dont mix.

Religious Experience. Just wanted to wish you a happy new year and say that I read your column religiously. Thanks for all you do!! -Toni W.

Wonderful Person. You do a fabulous job of educating real estate agents in California. You are a wonderful person, keep up the good work!!! -Mary B.

RESPONSE: That’s what I keep telling my wife but she’s skeptical.


Adrian J. Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” Our lawyers are friendly; if your association needs legal counsel, contact us at (800) 464-2817 or info@adamskessler.com.

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Jan 13

QUESTION: A longtime owner in her 80s recently died. Her son, a now and again resident and ne’er-do-well, is living in the unit. No maintenance fees have been paid since her death almost 6 months ago. The son is not on the deed and no probate has been filed. We are about to re-key the building. We will be giving keys to each owner of record. Our manager said we must give this squatter a key even though he has provided us with no documentation whatsoever because he is a “resident.” Do we have to give him a key?

ANSWER: Your manager is right. Both under the Davis-Stirling Act and landlord-tenant laws, an association cannot block access to the unit. As provided in the Davis-Stirling Act:

Except as otherwise provided in law, an order of the court…, an association may not deny an owner or occupant physical access to his or her separate interest, either by restricting access through the common areas to the owner’s separate interest, or by restricting access solely to the owner’s separate interest.(Civ. Code §1361.5.)

Landlord-Tenant. A similar provision can be found in landlord-tenant laws (Civ. Code 789.3(b)(1)) which includes penalties up to $100 per day if a landlord locks out a tenant. Even though your association does not own the unit, California courts have analogized associations to landlords and held them to the same standards. (Frances T v. Village Green.) If you re-key the building and refuse to provide a key to the ne’er-do-well, you would be locking him out of his mother’s unit. Whether or not he has a legal right to occupy the s unit is something for the courts to decide, not the board of directors.

Police & Courts. Calling the police to escort the son off the property is not an option since it is a civil matter not criminal and the police will refuse to get involved. Going to court to evict the son via an “unlawful detainer” action will also fail since the association is not the owner of the unit. In short, your HOA has all the liabilities of a landlord but none of the rights.

RECOMMENDATION: Your best bet is to lien the unit for delinquent assessments and foreclose. However, giving proper notice to the mother will be problematic (unless you know where she is buried). You will need to work with legal counsel to pursue the foreclosure.

NO DOGS ALLOWED!

QUESTION: Can the board make a rule not allowing dogs on common area grass?

ANSWER: I suppose they could but that would likely provoke a recall petition the next day. If someone were to challenge the rule in court, the board will have the burden to convince a judge the rule is reasonable. I would not bet the farm on that one. If the board is concerned about dogs relieving themselves on the grass, there are better ways to deal with the problem–fines, suspending privileges and tasers come to mind.

COST OF HOA
REMODEL PROJECTS

QUESTION: Are members of an association entitled to know the costs of a remodeling project or is this confidential?

ANSWER: If you mean your neighbor’s remodel project, no. If you mean the common areas, you have a right to review (i) contracts approved by the board for the remodel project, (ii) monthly financial statements that would reflect HOA expenditures, and (iii) financial records such as invoices and checks. (Civ. Code §1365.2(a)(2))

WHO CAN
CHANGE THE RULES?

QUESTION: Some owners insist that if we do not enact a rule they want, they will force the board to send a ballot to the membership for a vote. Can they force the board to place a rule change on a ballot or does it stop at the board level?

ANSWER: It stops at the board level. Only the board has the authority to adopt and amend rules. (Civ. Code §1357.130.) Members can, however, veto a rule if they follow the steps described in Civil Code §1357.140 but that is the extent of membership authority (unless the governing documents state otherwise). Although members can petition for a special meeting for any lawful purpose (Corp. Code §7510(e)), forcing a ballot to add or change rules is not within their authority. Indirectly, members can change the rules by electing board members who agree with their position.

MEMBERSHIP MEETING
MOTIONS

QUESTION: A ballot requesting a bylaw amendment is mailed to the membership prior to the annual meeting. At the annual meeting, ballots are counted and it is announced that the proposal failed. Can an amendment to the original proposal be offered at that time if a quorum is present?

ANSWER: If you mean revise the failed amendment and put it to a vote on the spot? No. The only thing you can do is have a show of hands on a recommendation to the board to send a revised amendment to the membership. If the board agrees, they can mail out a new amendment together with a ballot for approval. The reason the failed amendment cannot be revised and approved on the spot is that voting must be by secret ballot with a minimum 30-day voting period. (Civ. Code §1363.03(b)&(e))


Adrian J. Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” Our lawyers are friendly; if your association needs legal counsel, contact us at (800) 464-2817 or info@adamskessler.com.

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