May 19

QUESTION: We have a lot of rentals in our association and most of our rules violations are from renters. The biggest problem we have is pet violations. Can we ban renters from having pets?

ANSWER: There is disagreement in the legal community over whether associations can prohibit renters’ pets. Following are both sides of the argument:

Renter Pet Rights. The argument for renters’ pets is the general proposition that boards cannot adopt rules inconsistent with the CC&Rs. If the CC&Rs allow owners to have pets, that right is passed to tenants. Except for voting rights and the right to attend board meetings, which are reserved to members only, renters enjoy all of the rights and privileges of an owner when they rent a unit. In Liebler v Point Loma Tennis Club, the court held that when a common interest owner leases his unit the renter automatically receives all rights to use and enjoy the common areas.

No Renter Pet Rights. The other side argues that the Liebler decision dealt only with the transfer of common area usage rights to a tenant, and keeping a pet is not a common area right. As a result, Liebler v. Point Loma cannot be used to support a tenant’s right to keep a pet. Following are additional arguments:

1. Statutory Interpretation. The Davis-Stirling Act does not support renters’ pets. The Act was amended in 2001 to state:

No governing documents shall prohibit the owner of a separate interest within a common interest development from keeping at least one pet within the common interest development, subject to reasonable rules and regulations of the association. (Civ. Code §1360.5(a).)

The key word is “owner.” The statute gives rights to owners not renters. The Legislature could have expanded the section to include renters or even more broadly to “residents” but chose not to. Many other provisions in the Act reference renters (such as Civ. Code §1360.2) but the Legislature chose not to include them when it came to pets.

2. Landlord/Tenant
. Apartment building owners routinely prohibit tenants from keeping pets in apartments as do condominium owners. When it comes to associations, the Act specifically authorizes the adoption of reasonable rules concerning the leasing of units. (Civ. Code §1360.5(a).) Because of the transient nature of renters and the difficulty of enforcing rules against them, it is reasonable for an association to restrict renters from keeping pets.

3. Timeshares. When it comes to timeshares, the argument for pet restrictions is even stronger. Timeshare associations have the right to prohibit both fractional owners and renters from bringing pets into units. Business & Professions Code §11211.7 enumerates the sections of Davis-Stirling that apply to timeshare ownership but does not include pet restrictions. In other words, Civil Code §1360.5 does not apply to timeshare associations.

RECOMMENDATION: Because the law unsettled on this issue, associations should consult legal counsel before adopting renter pet restrictions.

RESIDENCY REQUIREMENTS

QUESTION: In our CC&Rs everyone becomes a member of our association upon purchasing a condo. In rewriting our CC&Rs the board is proposing a six-month to two-year residency requirement before a homeowner can run for the board. Your thoughts on the legality of this?

ANSWER: It’s legal. Residency requirements are common in the public sector. Not only must candidates reside in the district they want to represent, candidates must reside for a specified period of time. The time period varies depending on the particular jurisdiction and the office sought. Following are two examples:

President. Natural born citizen of the United States, at least 35 years of age, and a resident of the United States for at least 14 years. (Art 2, §1, Para, 5, U.S. Const.)

Calif. State Senators and Assembly Members. Eighteen years of age, a citizen of the United States, a registered voter, a resident of the legislative district for one year, and a resident of California for 3 years immediately preceding the General Election. (Calif. Const. Art. IV, §2c, S/S Ops.)

Outsiders. The idea behind residency requirements is to ensure candidates have ties to the community they represent. I have one association where a candidate nominated himself to run for the board while he was in escrow to buy a unit. He was disqualified from running because he had not yet closed escrow and therefore was not a member. He turned out to be a nightmare for the community who repeatedly violated CC&R restrictions and alienated neighbors. His blatant architectural violations resulted in litigation, which he lost. He eventually sold and moved out, much to everyone’s relief.

RECOMMENDATION: Residency requirements give neighbors a chance to evaluate candidates before electing them to the board. If an association decides to adopt them, residency requirements should be reasonable not excessive.

FEEDBACK

Zogby Poll. Re the Statistical Review, I can believe 80% positive and 22% neutral and 8% negative even though I didn’t want to at first as I’m on the negative cast. In our association of 8 units we can barely get 3 owners to participate so guess 5 of 8 (63%) are positive because they don’t have to do anything and get away with it. While the other 3 (37%) are pretty teed-off because they have to do all the work to keep the place running. I can also tell you I lived in a 200-unit complex and the HOA could only get 10 people to ever do anything like serving on the board (so 95% positive, 5% negative) It’s those who serve that are the ones who have a negative view because they know what is really going on versus those with their heads in the sand. -David A.

Alphabet Soup #1
. Now I know what some of the professional certifications represent and who issues them. Some people have so many of these after there names and I didn’t know what they all meant. I have a MBA (I don’t show it, but graduated first in my class from Rutgers University, Division of Professional Accounting), PhD (six long years at UCLA) and CPA (since 1974 and I passed all four parts in one sitting). Also a CFE (certified fraud examiner). By wife is not sufficiently impressed and I still take out the garbage cans every Sunday. -Ron S.

Alphabet Soup #2. As a retired California lawyer I am a bit amused by designations following most any name. I have never used my JD degree designation because I considerate presumptuous (arrogant) and suggestive of “doctor” amongst medical folks. I suppose on a business card with full education qualifications for field of specialty there can be use in non-medical endeavors that does make sense.You say you prefer “Esq.” You know in history past that was a member of the gentry “below knight.”

RESPONSE: A member of the gentry? I’m starting to feel entitled.


Adrian Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call us at (800) 464-2817 or email us at info@adamskessler.com.

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May 12

QUESTION: As a community manager, I already have an AMS and CCAM and recently earned a PCAM designation. I noticed that everyone lists them differently behind their name. Is there a proper order?

ANSWER: Good question. Our industry has become more sophisticated and more managers have been earning multiple designations. Unfortunately, style manuals do not agree on how designations should be handled. Following are my observations.

Alphabet Soup. Some authorities, particularly in Europe, advocate listing all degrees and designations in the order earned such as: Adam Smith, BA, AMS, CCAM, MBA, CMCA, PCAM, CPM, PhD. Doing so provides a history of the person’s educational endeavors. However, many view the practice as pretentious. Hence, the trend in the United States is to list only the most advanced degree earned. For example, those who earn a doctorate do not list their high school diploma, undergraduate and graduate degrees: Adam Smith, HS, BA, MA, PhD. Instead, they simply sign their name, Adam Smith, PhD.

No Periods. The trend is also away from putting periods behind the degree’s initials so it becomes Adam Smith, MBA not Adam Smith, M.B.A. Even the cherished “Ph.D.” is increasingly used without periods: Adam Smith, PhD.

Manager Designations. These same rules apply to manager designations. If a manager has earned multiple designations from a single organization, only the most advanced one is used. For example, the Community Associations Institute offers two designations and a certification (in order from highest to lowest):

PCAM: Professional Community Assn Manager
AMS: Association Management Specialist
CMCA: Certified Manager of Community Assns

If a manager earns all three designations, only the highest one is used: Adam Smith, PCAM. Listing the CMCA certification is unnecessary since a manager must hold it as prerequisite to earning a PCAM. Similarly, the AMS is dropped because the PCAM is more advanced.

Specialty Certifications. CAI also offers specialty designations such as:

LSM: Large-Scale Manager
RS: Reserve Specialist

A manager could include the specialty along with the PCAM (Adam Smith, LSM, PCAM) but to be consistent with the rules stated above, the better approach is to drop the PCAM since managers must earn a PCAM before being awarded an LSM. Hence it would be Adam Smith, LSM.

Other Certifying Organizations. The same is true for certifications from the California Association of Community Managers, which offers the following:

CCAM: Certified Community Association Manager
MCAM: Master of Community Assn Management
Plus various specialty certificates.

If a manager earns a CCAM and an MCAM, only the MCAM is used since it is more advanced and requires a CCAM as a precursor. Accordingly it would be Adam Smith, MCAM not Adam Smith, MCAM, CCAM.

Merging Designations. It gets tricky when a manager earns designations from two or more certifying organizations. Which one is listed first–designations from the Community Associations Institute or those from the California Association of Community Managers? Is it Adam Smith, PCAM, CCAM or Adam Smith, CCAM, PCAM? Or do you keep one and drop the other?

The rule of thumb is to list the most advanced/prestigious one first. Is the CCAM more prestigious because it is specific to California or ithe PCAM because it crosses state lines? Each manager will have to decide for him/herself which order to use.

RECOMMENDATION: Because there is no consensus on how degrees and certifications are listed behind one’s name, I can only offer my observations. Anything beyond one or two certifications behind a manager’s name should be reviewed as to which ones are superfluous. Otherwise, the manager is wading into alphabet soup and risks looking pretentious. I could sign my name as Adrian J. Adams, JD, MBA, BA, CPM, PCAM, SGT, ESQ (I earned them all) but I prefer, Adrian Adams, Esq.

CHANGE IN
ANNUAL DISCLOSURES

I’ve been contacted by people nervous about a change in the Davis-Stirling Act’s annual disclosures. Disclosures in the existing Act and the Rewrite remain largely the same; they were simply reorganized into a “Budget Report” and an “Annual Policy Statement.”

Annual Budget Report. As required by Civil Code §5300(b), the new “Annual Budget Report” contains all financial-related items and must include the following:

  1. A budget,
  2. A summary of reserves,
  3. A reserve funding plan,
  4. If reserve repairs will not be undertaken for particular components, a justification for the decision,
  5. If special assessments will be required to cover reserve items (with estimated amount, commencement date, and duration of the assessment),
  6. How reserves will be funded,
  7. Procedures used to calculate reserves,
  8. Disclosure of outstanding loans, and
  9. A summary of the association’s insurance.

Annual Policy Statement. As required by Civil Code §5310(a), the new “Annual Policy Statement” must include the following:

  1. The name and address of the person designated to receive official HOA communications,
  2. A statement that members may have notices sent to up to two different addresses,
  3. The location, if any, for posting a general notice,
  4. Notice of a member’s option to receive general notices by individual delivery,
  5. Notice of a member’s right to receive copies of meeting minutes,
  6. A statement of assessment collection policies,
  7. A statement describing policies in enforcing lien rights,
  8. A statement describing the association’s discipline policy,
  9. A summary of dispute resolution procedures,
  10. Architectural approval requirements, and
  11. The mailing address for overnight payment of assessments.

January 1, 2014. The new disclosure requirements do not go into effect until January 1, 2014. As long as your association’s notice period falls in the 2013 calendar year, you can continue to use your existing disclosure package. What matters is the date the disclosures are mailed out, not the date they are received. Accordingly, anything mailed in 2013, including reserve studies and reserve disclosures, continue to use the existing Davis-Stirling language and Civil Code numbering scheme. Starting January 1, 2014, everyone must switch over to the new Civil Codes and language.

ELECTRONIC BALLOTING

Thanks to your letters and phone calls (over 200), Assembly Bill 1360 passed the Assembly. AB 1360 allows associations to save money by switching from paper to electronic ballots as is now done in 25 other states. I will let everyone know when it’s time to start calling state senators.


Adrian Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call us at (800) 464-2817 or email us at info@adamskessler.com.

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May 05

More kudos to my Office Administrator Laura Whipple. After completing two conversion charts for the Davis-Stirling Act and the Rewrite, Laura went through every paragraph in both Acts and added links between the two so everyone can easily move between them without the need of a conversion chart. It’s quite impressive.

To see what I mean, take a look at the existing Davis-Stirling Act and the Rewrite and look for  brackets in the text that indicate [Old: Civ. Code] and [New: Civ. Code].

STATISTICAL REVIEW


The Foundation for Community Association Research retained Zogby International to conduct a nationwide survey of community associations. The 2012 poll found that California was number two behind Florida as the state with the greatest number of associations. Zogby found that:

1. 70% of those polled rate their community association experience as positive and 22% were neutral. [That means that only 8% were negative--unfortunately, the ones who legislators seem to listen to and who generate the most litigation.]

2. 88% stated that their board strives to serve the best interests of their community.

3. 81% say they get a “good” or “great” return on their assessments. [Wish we could say the same for our state and federal taxes.]

RECOMMENDATION: The report is interesting. See 2012 Statistical Review.

PRE-LITIGATION
ATTORNEYS’ FEES

A case was recently published that addresses the question of pre-litigation attorneys’ fees, specifically those incurred by parties satisfying ADR efforts required by the Davis-Stirling Act.

Factual Summary. A homeowner built a cabana in his backyard without obtaining prior approval from the homeowners association. In response, the association levied daily fines and then sued the owner.

Court’s Ruling. The court determined that the actions by the association in demanding removal of the cabana and levying daily fines were not in good faith because (i) no one from the architectural committee actually visited the alleged violation until long after the initial decision to require removal of the cabana, (ii) the association denied the owner’s violation appeal even while the ADR process was ongoing; and (iii) the association’s actions were based on the owner’s failure to secure prior approval not on the improvement itself. Moreover, the court noted that the association’s enforcement was inconsistent–it had approved similar structures for other members. As a result, the court ruled against the association.

Attorneys’ Fees. The owner, as prevailing party, asked for attorneys’ fees going back to the unsuccessful ADR engaged in prior to litigation. Normally, fees incurred prior to the filing of a lawsuit are not awarded. Here, the court concluded that pre-litigation ADR mandated by the Davis-Stirling Act was the actual start of litigation. Accordingly, the owner was awarded those fees as well. (Grossman v. Park Fort Washington Assn.)

HOW FAR IS TOO FAR?

Patrick Prendiville of the Prendiville Insurance Agency and I will speak on the impact of the Trayvon Martin shooting on homeowner association security, insurance and volunteer liability issues. The presentation will include:

• Implied security
• Levels of security
• Using volunteers
• Board liability
• Limits of insurance coverage
• When safeguards fail

The program is sponsored by the Coachella Valley Chapter of CAI and will be held Friday, May 10, 2013 from 12:00 to 1:30 p.m. at the Palm Valley Country Club, 39-205 Palm Valley Drive, Palm Desert, CA 92211. To RSVP, contact Wendy Van Messel at wvanmessel@cai-cv.org or 760-341-0559.

FEEDBACK

N. Korea #1. Not sure if you are being “tongue in cheek” about the Rodman/Kim Summit in North Korea; but, if it is real, you have your work cut out for you. I am not sure who is the bigger “Nut”, Rodman or Kim. Lots of luck. -Tom M.

N. Korea #2. Loved your last newsletter and tons of luck in North Korea, maybe you can attempt to redirect the missiles. -Terri V.

N. Korea #3. HAHAHAHAHHAHHAHAHHHAHAAAAAAAAAAAAAAAAA THAT’S FUNNNNYY ADRIAN!! YOU HAVE A NEW CAREER!!! -CARL B.

Calling a Lawyer. On our board, the board president claims that only he can call a lawyer. The other directors must ask him a question and he will decide if it should be passed on or if a follow-up question is permitted. -T.S.

RESPONSE: He is correct, provided the rest of the board agrees to that arrangement. For most associations, making the president and the manager the contact points for the attorney is a common sense way of keeping legal expenses under control. Otherwise, allowing five directors to call and talk the ear off the attorney will significantly run up legal fees. Moreover, the attorney may receive conflicting instructions from five directors. Having said that, the president cannot block requests for legal guidance on issues. If, during a board meeting, a director asks for a legal opinion on an issue and a majority of the directors support that request, the board president cannot overrule the request. (FYI–The director requesting the legal opinion can also vote on his own request.)

Animal Sacrifices. I am the board President who wrote about the tenants in my neighborhood having Santeria ceremonies and sacrificing animals. I am overjoyed to tell you that the animal sacrificing tenants moved out in a hurry the day before Passover. The garage altar was the last thing they moved. I drove by during the move and saw a 3-foot tall statue of Jesus wearing a crown of thorns with blood on His face. He was eerily sitting in the back seat of a car packed tight with clothes. Board members were dreading the Santeria Easter ceremony but the tenants moved just in time to hold the ceremony elsewhere!! Thank you for publishing my question. -Christine D.


Adrian Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call us at (800) 464-2817 or email us at info@adamskessler.com.

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Apr 07

QUESTION: The board is wasting our money calling a lawyer for anything and everything. Our dues are already too high–does a lawyer have to be called every time someone sneezes??

ANSWER: It depends on whether its an allergy or a cold. Knowing when to call legal counsel is no easy matter for boards. There is no need to call an attorney for routine decisions. However, eliminating legal counsel altogether can backfire and subject directors to potential liability.

Personal Liability. As volunteers, directors are protected against personal liability by the Business Judgment Rule, i.e., when they perform their duties (i) in good faith, (ii) in a manner the director believes to be in the best interests of the association, and (iii) with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.

Breach of Duties. As part of their reasonable inquiry or “due diligence,” boards can seek the advice of legal counsel. (Corp. Code §7231(b).) Failure to seek advice on an important legal issue that results in damage to the association could serve as the basis for an action against the board for breach of their fiduciary duties.

Following are categories of matters and events where boards should seek legal advice:

1.
Amending Documents. Whenever CC&Rs and bylaws are amended or restated, legal counsel legal should be involved in drafting and recording the changes.

2. Architectural. Failure to enforce as well as arbitrary and capricious enforcement can lead to costly litigation. Whenever an architectural dispute arises, legal counsel should be called to discuss how to achieve proper resolution or to position the association for litigation.

3. Assessment Collection. Setting up proper collection policies and consistently following those policies is important to maintaining the association’s finances and minimizing legal challenges.

4. Contracts. Agreements not reviewed by an attorney can have significant hidden liabilities.

5. Ethics. Whenever a director or committee member has a conflict of interest and refuses to recuse themselves, it is time to call legal counsel.

6. Injuries. Whether it be slips and falls or other types of injuries in the common areas involving residents, guests, employees, vendors or otherwise, injuries should immediately be reported to insurance and to the association’s attorney so conditions can be documented and steps taken to protect against further injury.

7. Lawsuit Threatened. In addition to putting the association’s insurance carrier on notice of a potential claim, boards should talk to counsel about how best to respond to the threat so as to (i) reduce the risk that a claim is actually filed, (ii) better position the association to defend itself in the event one is filed, and (iii) take the matter into ADR if appropriate.

8. Lawsuit Served. Tendering a claim to the association’s insurance carrier is the first order of business. Sending a copy of the complaint to the association’s attorney is the second. General counsel needs to know of the litigation so he/she can protect the association’s interest in the event insurance is slow to respond or declines coverage. In addition, the board may need guidance on how to respond to the plaintiff on issues outside of the litigated matter.

9. Personnel. The most common high-risk areas are when an employee is hired, disciplined or fired. Employment litigation tends to be expensive so it is best to avoid it.

10. Recall Petition. Emotions run high in recall elections and issues of defamation often arise. Failure to properly handle a recall can lead to significant problems.

11. Request for Reasonable Accommodation. Failure to properly evaluate and respond to a request for disability accommodation can result in costly litigation.

12. Rules & Regulations. At least once, the association’s rules and regulations should be reviewed to make sure proper fine and hearing procedures have been established and to ensure they are enforceable (and not discriminatory, such as rules against children or restrictions on who may use pools, etc.). If enforcement issues are more than routine because of the particular individuals involved or because the issues may be more complex than normal such as with architectural issues, then legal counsel should be consulted before matters deteriorate into litigation.

13. Vendor Disputes. Disputes between the association and its vendors can erupt into litigation. Legal counsel needs to analyze appropriate contract provisions, evaluate the alleged breach, and advise the board on how best to resolve the dispute.

COMMENT: To keep costs under control, many law firms (ours included) offer retainer programs where boards can make unlimited free telephone calls to an attorney. That way, if an issue comes up and directors wonder if they should call legal counsel, they can do so without incurring any expense.

CITY HOUSING AUTHORITY

QUESTION: Our condominium complex has 216 units. The City Housing Authority owns 110 of our units, all of which are used for Section 8 housing. This has a very big impact on our HOA re complying with our CC&Rs, obtaining FHA insurance, being able to get reverse mortgages (too many rentals), and the ability of that entity to use its votes for and against nominees for the board. Could you address my issues in your newsletter?

ANSWER: You need help from someone way above my pay grade. This might be a good time to start a prayer group.

FEEDBACK

Restricting Candidates. We dealt with the horror of a husband and wife on the board at the same time. They’re gone now but a year later we’re still trying to put the place back together after all the deferred maintenance/cost savings they implemented which is costing far more than if it had been done right at the time. My advice: immediately get going on changing the bylaws to disallow more than one person from the same unit to be on the board at the same time. While we were at it, we also did away with cumulative voting. -Nancy H.

Litigation Experience
. I notice from your recent newsletter that your new attorney has lots of experience in litigation. When there are HOA conflicts, I hope you are encouraging boards to seek litigation only as a last resort and only then after all other attempts to solve the problem have failed. Litigation is expensive and leaves very hard feelings. What is the point of that? We really need to learn how to work together to live in community, and this means learning to solve problems without filing a lawsuit against our neighbors. -Jan M.

RESPONSE: I prefer that my attorneys have solid litigation experience, the more the better. With that experience, they can more easily advise boards on the significant financial and emotional costs of litigation as well as the vagaries of litigation. (Vagary [vey-guh-ree] n., erratic, unpredictable, capricious.) In the event attempts at resolution fail, I want my attorneys to know how best to represent our clients in court.

NO NEWSLETTER

Sorry, no newsletters for the next two (maybe three) weeks. I will be traveling to North Korea with Dennis Rodman to try and talk some sense into that country’s Supreme Leader Kim Jong-un and avert World War III.

In between my talks with Mr. Kim, I will be gearing up for oral arguments in the Court of Appeals in one case and testifying as an expert in another.

My office manager tells me I will be too preoccupied by these events to write any newsletters. I always do whatever she tells me.


Adrian Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call us at (800) 464-2817 or email us at info@adamskessler.com.

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Mar 31

QUESTION: A renter was elected to the board because our bylaws are silent on who can bea director. Now we have a husband an wife who want to run for the board. We don’t have time to amend our bylaws before the election, can the board simply prohibit renters and spouses in our Election Rules?

ANSWER: There is a split of opinion in the legal community on this issue.

Opinion - Boards Can Add Director Qualifications. Some attorneys believe that additional qualifications may be imposed by the board without membership approval via the rules. They argue that boards are authorized to adopt election rules and this means they can add director qualifications when they adopt or amend rules. They argue that as long as the qualifications are reasonable, they would survive legal challenge.

Opinion - Boards Cannot Restrict Candidates. In my opinion, boards cannot restrict who can run against them. Only the membership has the power to impose director qualifications. I base my opinion on the following two points:

1. No Restrictions in the Law. The Corporations Code imposes no restrictions on who may be a director except to require that they be a natural person. (Corp. Code §5047.) The Davis-Stirling Act has no restrictions of any kind on who can serve on the board. If neither the Corporations Code nor the Davis-Stirling Act restrict candidates, I don’t believe directors can limit who can run against them.

2. Inconsistent with Bylaws. Moreover, rules adopted by a board cannot be “inconsistent with governing law and the declaration, articles of incorporation or association, and bylaws of the association.” (Civ. Code §1357.110(c).) This requirement is repeated in the election provisions of the Davis-Stirling Act which state that board qualifications in the election rules must be “consistent with the governing documents. (Civ. Code §1363.03(a)(3).) In my opinion, it would be inconsistent to impose restrictions in the election rules where none exist in the bylaws.

RECOMMENDATION: Since there is no consensus in the legal community and no case law to offer any guidance, boards should consult their association’s legal counsel on how best to handle this issue.

FUSS OVER BUDGETS

QUESTION: Is there a requirement for the board to spend no more that the budgeted amount for a particular line-item in the annual budget? If not, why all the fuss regarding establishing, approving and publishing a budget?

ANSWER: Budgets are guidelines only. They are the board‘s best estimate of expenses so (i) directors will know how much to assess the membership and (ii) members will know how the board arrived at that number.

Consequences. If boards were prohibited from spending more than budgeted for a particular line item, it could have significant negative consequences for an association. Theoretically it would mean that if insurance premiums went up mid-year, the board would have no choice but to allow the association’s insurance to lapse. That could be disastrous.

WAYNE LOUVIER
JOINS ADAMS KESSLER

Wayne LouvierI am pleased to announce that attorney Wayne Louvier joined Adams Kessler PLC.

Legal Background. Wayne is an experienced community association attorney. His experience, however, is much broader than CID law. Wayne accumulated twenty-five years of valuable experience in business litigation, commercial insurance defense and maritime law.

Association Law. Wayne now advises boards of directors on all transactional and litigation matters related to commercial and residential common interest developments. This includes drafting and amending documents, contract disputes, employment law issues, FEHA and ADA obligations, rules enforcement, collection of assessments as well as litigation arising out of association disputes. Wayne has solid trial experience including, among other cases, serving as the trial attorney in Crestmar Owners Assn. vs. Stapakis (2008) 157 Cal.App.4th 1223.

Education. Mr. Louvier is a graduate of the University of California, Irvine where he earned a Bachelors of Arts degree in Economics. He then went on to earn a Juris Doctorate from Western State University College of Law and is admitted to practice in California as well as the United States District Court for the Central District of California.

If your association would like a proposal for legal services, contact us at info@davis-stirling.com or 800-464-2817.

FEEDBACK

Contractor #1. Another great newsletter! I would appreciate a little more clarity on the contractor license law. As a manager it is our responsibility to check for valid license and certificates of insurance for vendors who perform work for our clients. Could the law be interpreted that we, managers, have to have a contractor’s license just to request and keep COI’s for everybody from the landscaper, pool vendor, fire alarm monitoring and occasional arborist or plumber, etc.? -Brad S.

RESPONSE: I hope it does not apply to vendors. Unfortunately, the revised statute broadly defines contractors to include “consultants” and historically the Contractors State License Board (CSLB) has broadly applied the licensing statute against those involved in any aspect of construction over $500. As the Supreme Court has already noted, the licensing law “imposes strict and harsh penalties for a contractor’s failure to maintain proper licensure.” (MW Erectors, Inc. v. Niederhauser Ornamental Metal Works (2005) 36 Cal.4th 412, 418.) Unless the law is modified, management companies have potential exposure.

Contractor #2. David Fogt at the CSLB says that they consider HOA managers to be employed by the owners and exempt from the statute. -Glen G.

RESPONSE: I already dealt with employees being exempt. Did Mr. Fogt offer an opinion about third party management companies that are paid to oversee bidding and construction? Did he offer assurances that the courts would follow his opinion? No disrespect to Mr. Fogt but the court did not agree with the CSLB in the Fifth Day v. Bolotin case. I don’t think anyone can say with certainty what the courts will do with the revised law.

Happy Birthday. Your answer for the Happy Birthday sign is beautiful. You just made my day. I think I am printing it and framing it. -Elliot K.


Adrian Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call us at (800) 464-2817 or info@adamskessler.com.

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Mar 24

QUESTION: If an HOA changes its name, do the original CC&Rs and bylaws still remain the governing documents even if the board has not yet paid to have them updated with the new name?

ANSWER: Yes, the documents are still valid even though they contain the old name. CC&Rs are recorded against all property in the development so they remain intact regardless of what you call the development. It is like a young lady getting married, she is still the same person and her credit card debt follows her regardless of the name change (not that she has any debt…I’m just saying it would if she did). In the same way, bylaws follow the corporation not the name. Even so, the board should be diligent about updating documents.

Loss of Name. Sometimes an association will inadvertently lose their corporate name because it was suspended for failing to file tax returns or statements of information. When that happens, it could end up with one name for the corporation and another for the development (via the CC&Rs).

HAPPY BIRTHDAY

QUESTION: For 12 years I was able to put a Happy Birthday sign for one day on a common area. Nothing was said to me about the sign. Now I got a letter from the management company that I can no longer do that?

ANSWER: For years I rolled through a stop sign at particular intersection without being molested. One day a cop gave me a ticket. He was not sympathetic to my argument about the years of precedent I had set. He must work for your management company.

MANAGER CONTRACTOR
FEEDBACK

There were too many responses to my article on contractor licensing for me to print them all. Following is a sampling:

Contractor #1. What if a board member serves as project manager? -Jim P.

RESPONSE: As long as the board member is not paid to oversee the project, there is no violation. The association, through its board, is the owner-builder and as such is not required to be licensed. Make sure you put something in the minutes delegating authority to him to oversee the project on behalf of the association.

Contractor #2.
With regards to managers acting as contractors, does this apply to in-house managers who are employed by and work exclusively for an HOA? -Claire M.

RESPONSE: Because your manager is an employee of the association, he is exempt. If you were paying a third party (a management company) to oversee the project, there could be exposure.

Contractor #3. The management contract for our association calls for the management company to “monitor the activities of the contractor… including…the obtaining of contract documents, certificates of insurance, copies of bonds, warranties, releases of liens and other necessary or prudent documentation.” -C. L.

RESPONSE: The case that triggered the Legislative action involved a construction manager who engaged in various oversight activities for an owner. Those activities included the following:

assist, on behalf of the Owner, in coordinating the activities of the various workers to enable them to complete their assigned tasks in an organized and efficient manner, on time and on budget; to maintain records such as insurance certificates, as well as the financial books and records for the project; to keep the Owner apprised of the status of the project; to be the onsite “point person” to respond to issues as they arose; and generally to act as the Owner’s agent with respect to the various parties connected with the development of the project. Plaintiff had no responsibility or authority to perform any construction work on the project, or to enter into any contract or subcontract for the performance of such work. (The Fifth Day v. Bolotin (2009) 172 Cal.App.4th 939, 948.)

The court decided that these activities did not make the consultant a contractor. The Legislature disagreed and revised the law to broaden the definition of who needed a contractor’s license. By implication that means that a manager who engages in the above activities would be subject to criminal and civil penalties if not licensed as a contractor.

Contractor #4.WOW! This is a big one. I agree that managers should not oversee construction projects. To do this the HOA manager should not act in the capacity of a general contractor. They should hire a general contractor when multiple trades are involved in the same project. They should never put themselves in a position of coordinating the work between sub contractors or dictating the “means and methods” of work. Managers should not oversee the actual work of the project which includes (from Merriam-Webster): administration, care, charge, control, direction, governance, government, guidance, handling, intendance, management, operation, conduct, presidency, regulation, running, stewardship, superintendence, superintendency, supervision. -Mike G.

RECOMMENDATION: Legislators have a way of targeting one thing and hitting something else. Perhaps if they were members of the NRA, their aim would be better. If a management company would volunteer to be sued, I could nail down how broadly the contractor licensing requirements will be interpreted. Until then, all I can do is recommend that boards and management companies take a close look at how they handle construction projects.

MORE FEEDBACK

Ant Invasion. If the HOA would be responsible for ants in a unit, would they also be responsible for every spider, fly, flea, worm, roach, etc. that got into a unit? Maybe its time for some condo owners realize they own a home not a apartment. -Pamela G.


Adrian Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call us at (800) 464-2817 or info@adamskessler.com.

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Mar 17

AB 2237 went into effect January 1, 2013. The Assembly Bill received very little notice but may have a significant impact on association managers. The Bill was in response to a court decision that consultants who oversee contracts between project owners and contractors were not required to be licensed. The Bill negated the court’s decision by requiring consultants be licensed as contractors. Because of the way it defines “consultant,” HOA managers could find themselves in violation of the statute.

Size of the Project. First, any project that costs more than $500 in combined labor and material costs requires that the work be done by a licensed contractor. (Bus. & Prof. Code §7048.)

Consultant Defined. Second, a contractor is defined to include anyone who oversees bids for a construction project, arranges for subcontractor work and schedules and/or has oversight of a construction project. (Bus. & Prof. Code §7026.1.) Since most associations have their management companies solicit bids and oversee common area maintenance projects and since most projects costs over $500, management companies and their managers appear to be at risk for criminal and civil penalties.

RECOMMENDATION: The safest position for managers and management companies is to not oversee construction projects for their associations. Clearly, that should be the case for large projects–such work should be done by licensed construction managers. The small ones are the problem. Managers routinely handle them for their boards. Boards and management companies should talk to legal counsel about how best to address this issue.

PAUL ABLON
JOINS ADAMS KESSLER

I am pleased to announce that attorney Paul Ablon has joined Adams Kessler PLC. Paul brings a wealth of experience to the firm, especially in the area of litigation and appeals.

Paul is a graduate of UCLA where he was inducted into the Phi Beta Kappa and Pi Gamma Mu honor societies and graduated summa cum laude. Paul was then accepted into U.C. Berkeley’s Boalt Hall where he earned his Juris Doctorate and graduated “Order of the Coif,” an honorary scholastic society that recognizes excellence in legal education.

In private practice, Paul Ablon handled real estate and business litigation, contract disputes, business torts, defamation, fraud and homeowners association disputes. Paul was also involved in a significant amount of appellate work, including the briefing and arguing of Calder v. Jones before the United States Supreme Court in which his client prevailed.

Paul taught Appellate Advocacy at Loyola Law School and later became Senior Research Attorney at the California Court of Appeal where over two dozen of his opinions were published. Paul will be in charge of appellate work for Adams Kessler. We welcome Paul to the firm.

CPM OPEN HOUSE

On Thursday, March 21, I will participate in the 4th Annual Open House put on by Community Property Management. I will be speaking on the rewrite of the Davis-Stirling Act and the impact it will have on community associations throughout the state. In addition, I will touch on board duties and communications and take questions from the audience.

Karen Conlon, President and CEO of the California Association of Community Manager will be speaking on the State manager certification program. Randy West, an HOA Board President will speak on creating goodwill among members through positive communication, rules enforcement and conducting meetings.

FEEDBACK

I had too many responses on animal sacrifices to print them all. Following is a sampling:

Animal Sacrifice #1. I am HOWWWWWWLING!! You made my “Monday Morning Madness” worthwhile! And I thought that I was the ONLY ONE that had this insanity in my building….and then some! -Helene S.

Animal Sacrifice #2. In your Newsletter, you describe Santería as combining elements of African paganism, Roman Catholicism and ritualistic animal sacrifice. Please tell me what elements of Roman Catholicism are in Santeria? -Michael M.

RESPONSE: Adherents of Santeria worship Catholic saints and use Catholic symbols in their practices, including baptism. The word “Santeria” means “Way of the Saints.” I suspect the Catholic Church is troubled by the usurping of their symbols and practices into a pagan religion. See Wikipedia and The BBC for more information.

Animal Sacrifice #3. Excuse me… Roman Catholics do not practice animal sacrifices of any sort…where did you get this idea? It is very offensive… -Marlene J.

RESPONSE: It’s the other way around. Followers of Santeria blend paganism and Roman Catholicism with animal sacrifice.

Animal Sacrifice #4. One of the most interesting topics yet! Our city won’t let me have a gas BBQ on my patio, but I can chop off a few goat heads on a Friday night? I feel for that HOA, I thought we had it bad with lawsuits and plumbing problems. -Karl

Animal Sacrifice #5. Something about this week’s newsletter reminded me of Abigail Van Buren’s column…….. Don’t know whether it’s the questions or the answers. -Bond S.

RESPONSE: I used to fill in for “Dear Abby” when she went on vacation.

Animal Sacrifice #6. Thank you, as always, for the information you share every week. Regarding the animal sacrifice in a homeowner’s unit, the person mentioned blood escaping from the common area trash. Blood is a bio-hazard and the HOA should check local waste management requirements for the proper (and non-leaky) disposal of the blood and animal carcasses. Following the law will not infringe on religious freedom of the Santeria practitioner. -C.P.

Animal Sacrifice #7. Most associations have the limitation of “customary domestic animals,” i.e. dogs, cats and birds. Why couldn’t the association prevent goats from being brought in? Does the association have the right to require the resident dispose of the carcass and blood off-site and not in the association’s dumpsters or common trash cans? Doesn’t the health department have something to say about blood disposal? -Dee D.

MORE FEEDBACK

Bible Study: A Bible study in a private home a violation? You answered it well with comparison to a card game. I have property in three different HOA communities and they all B__ch about something. Makes me never want to retire and become one of them. -Steve C.

Ant Invasion #1. Rather than having an exterminator spraying chemicals in your home, sprinkle a tiny line of cornstarch at your baseboards or wherever you see ants coming in. They carry the grains back to the nests and it kills them. -Carol S.

Ant Invasion #2. So, the ants are jumping from the street or nearest public area, over the common condo area, not touching down for one moment on common area, and sitting down to dine at the condo owners unit? I would think that the HOA would have to prove their theory TECHNICALLY, that ants simultaneously appear, rather than their traditional “ant trails” through building structures (AKA common area) before they can make a stupid plea that it’s the homeowner’s problem. Given the fact that any ant would HAVE TO go through a common area to get into any condo, I’d sue the HOA for negligence and failing to perform their duty. -K.P.


Adrian Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call us at (800) 464-2817 or info@adamskessler.com.

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Mar 10

QUESTION: We have a tenant conducting Santeria ceremonies which include the sacrifices of goats, chickens and roosters. On trash days we have seen blood coming from trash bags running into the storm drains. What is the best way to go about stopping these practices without violating their religious freedoms?

ANSWER: Okay, those are images I don’t need in my mind. For those who are unfamiliar with Santería , it is a religion similar to voodoo. It originated in Cuba and combines elements of African paganism, Roman Catholicism and ritualistic animal sacrifice. Although there are no cases involving Santería and homeowner associations, there are two cases involving cities.

Church Building. In 1993 the City of Hialeah in Florida passed an ordinance to prevent the practice of Santería in the city. The ordinance prohibited the killing of animals in a public or private ritual not for the primary purpose of food consumption. The Church of Lukumi Babalu Aye sued. Based on the First Amendment’s free exercise of religion, the United States Supreme Court declared the ordinance unconstitutional and the church was allowed to conduct animal sacrifices in its church building. (Lukumi Babalu Aye v. City of Hialeah.)

Private Residence. In 2009 the City of Euless, Texas passed an ordinance aimed at stopping the practice of Santería in a residence by prohibiting the torture and killing of animals in residential homes. The Court of Appeals ruled that Merced, a Santería priest, was acting within his Constitutional rights when he sacrificed goats and other animals as part of his home-based rituals. The court noted that home sacrifice is “a crucial aspect of Santería, without which Santería would effectively cease to exist.” (José Merced v. City of Euless.)

Both cases involved governmental interference with the free exercise of religion. In each case the courts found that the object of the laws was to to suppress religiously motivated conduct which is why the courts struck them down.

Homeowners Associations. Neither of the cases addressed private restrictions, such as those imposed by homeowners associations. Accordingly, it is possible that CC&R restrictions against any (not just religious) activity that causes a nuisance could withstand legal challenge. Just as private organizations can restrict free speech, they could conceivably restrict religious practices that negatively impact other members (see question below on Bible studies).

RECOMMENDATION: Because this is uncharted territory, boards should consult legal counsel when faced with these kinds of situations.

BIBLE STUDY IN UNIT

QUESTION: We have a home owner in our condo complex who holds Bible studies in his home. Is this a violation?

ANSWER: Would the same question be asked if a group of atheists got together to study the Humanist Manifesto? By itself, studying religious material does not violate anything and should not be regulated. As with animal sacrifices, boards need to look at non-religious factors.

Nuisance. The issue to examine is one of nuisance. Sacrificing animals in a condo can be quite disruptive to the quiet enjoyment of other members who have to listen to screaming animals meeting an untimely death. Moreover, ritualistic sacrifice may create unsanitary conditions (such as blood leaking from trash bags into the common areas).

A Bible study, on the other hand, is no different than friends getting together to play cards or a book club discussing the latest best seller. If, however, the Bible study turns disruptive from a pounding piano and loud singing together with parking problems from illegally parked vehicles, then nuisance becomes an issue. In the scenario I described, the nuisance needs to be more than mere inconvenience, it needs to be significantly disruptive to convince a judge that injunctive relief is warranted (following appropriate violation hearings, fines, IDR and ADR).

Reading Material. The bottom line is the motivation for taking action against the Bible study. Is it because religious material is being studied? No judge is going to allow an association to regulate what people read. (Fountain Valley Chateau Blanc v. Dept. of V.A.)

ANT INVASION

QUESTION: I have ants that come up through the foundation of my unit. The board has a pest control that sprays the complex twice a month, and has paid for an inspection of my unit. Who pays for my unit to be treated for ants that come in through the foundation? The board said it is a homeowner expense since the ants are not in the structure or common area.

ANSWER: I side with the board on this one.

FEEDBACK

Service Animal #1. I had to laugh at your distinction of a “service animal” vs. a “companion” animal. As a new owner of a 15-week old pup, it is evident that my little companion has no special training; but I have to say… this lack of training GIVES me anxiety!! -Cyndi B.

Service Animal #2. Can a HOA prohibit ANY pets from pool area? From swimming in the pool? -Charlie H.

RESPONSE: Associations can prohibit animals from pool areas EXCEPT service animals. If someone is blind and needs their guide dog to safely maneuver to a lounge chair, the association cannot prohibit the dog. Swimming is a different matter. From my review of applicable laws, it appears that service animals can be prohibited from entering the water for health and safety reasons. However, there may be an exception if the service animal has been trained to perform a specific task essential to its disabled owner’s use of the pool and the animal does not pose a threat to the health and safety to others or to the sanitary conditions of the pool. Then it is possible that reasonable accommodation could be required. You should get a legal opinion from your attorney on this issue.

Service Animal #3. People with diagnosed depression can and often do have service dogs who provide emotional support. The key word here is “diagnosed.” Some people can claim they suffer from depression even when there has been no diagnosis. So, they could try to have a dog where one is not allowed using the alleged depression as a subterfuge. A companion dog for a person suffering from depression should undergo obedience training even though the type of service the dog renders is not obvious, i.e. the person is sighted. Training can be obtained at a reasonable cost from some of the major pet supplies retailers such as Petsmart. -John A.

Service Animals #4. Service dogs are not just for physical disabilities, the ADA now includes psychiatric disabilities. The revised definition became effective March 15, 2011: “Service animals are defined as dogs that are individually trained to do work or perform tasks for people with disabilities. Examples of such work or tasks include guiding people who are blind, alerting people who are deaf, pulling a wheelchair, alerting and protecting a person who is having a seizure, reminding a person with mental illness to take prescribed medications, calming a person with Post Traumatic Stress Disorder (PTSD) during an anxiety attack, or performing other duties. Service animals are working animals, not pets. The work or task a dog has been trained to provide must be directly related to the person’s disability. Dogs whose sole function is to provide comfort or emotional support do not qualify as service animals under the ADA.” -Kelly M.


Adrian J. Adams, Esq.
Adams Kessler PLC


Legal solutions through knowledge, insight and experience.” We are friendly lawyers; when your association needs counsel, call me at (800) 464-2817 or info@adamskessler.com.

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Mar 03

Service animals and comfort animals are not the same. A “service animal” is one specially trained to assist the disabled retrieve objects, open doors, guide the blind, etc. A “companion” animal has no special training but provides emotional support to relieve anxiety and depression.

Widely Abused. Both service and companion animals are invaluable to the disabled. Unfortunately, the perfectly fit have abused disability rights to get around pet restrictions. The subterfuge starts by persuading their doctor to write a letter that the disallowed animal is necessary to their patients health. The person then goes on the internet and pays a certificate mill to “certify” that their dog is a service animal. For a few dollars more, they can receive special dog tags and other paraphernalia for their newly minted service animal. And voila, their pet is exempt from the association’s restrictions. A recent case in Florida addressed this practice.

Florida Case. The Sun Harbor HOA prohibited dogs. One member, Vincent Bonura, invited his fiancee to move in with him and she brought her dog in violation of the association’s restriction. The association sent a violation letter and Bonura lied about having a dog. He later admitted to it but then claimed it was a registered service animal necessary for his fiancee’s disability. He provided the association with a certificate he purchased on the internet.

The association was skeptical and requested evidence that his fiancee suffered from a handicap and asked what special training the dog had received to accommodate her handicap. Bonura ignored the board and litigation ensued. At trial, the fiancee’s newly hired psychiatrist testified that he believed the dog helped her anxiety and depression. When the court ruled for Bonura, the association appealed.

Reversal. The court of appeals reversed. The justices noted that federal courts have long recognized that,

[T]he duty to make a reasonable accommodation does not simply spring from the fact that the handicapped person wants such an accommodation made. Defendants must instead have been given an opportunity to make a final decision with respect to Plaintiffs’ request, which necessarily includes the ability to conduct a meaningful review of the requested accommodation to determine if such an accommodation is required by law.

The court found that Bounura had refused to comply with the association’s request for reasonable documentation of his fiancee’s disability and the need for a service dog. Even more problematic for Bonura, testimony failed to establish that his fiancee suffered from a disability.

Reviewing the record, there was no competent, substantial evidence indicating any substantial limitation on one or more of Ms. Vidoni’s major life activities. In fact, the testimony indicated Ms. Vidoni was able to travel and work without the dog. Along those same lines, the evidence also failed to establish the necessity of the accommodation. Ms. Vidoni admitted that she was not as dependent on the dog as she had been originally and she could be independent of the dog at times including for work. (Sun Harbor v. Bonura.)

RECOMMENDATION: Even though Florida HOAs are allowed to prohibit pets, California has effectively ended the practice. Even so, California allows for reasonable pet restrictions (weight limitations, number limitations, etc.). When faced with a request for accommodation for a nonconforming pet, associations should consult legal counsel.

PAINT COLORS

QUESTION: Our HOA requires homeowners receive approval from an architectural committee before painting their homes. The committee does not have any standards for reviewing paint colors. Can they deny a color simply because they dont like it?

ANSWER: Yes they can reject a paint color simply because they don’t like it. That is precisely why an architectural committee exists–to make aesthetic decisions about what is appropriate for the community and what is not.

Another important function of the Association is to preserve the aesthetic quality and property values within the community. (Cohen v. Kite Hill.)

Maintaining a consistent and harmonious neighborhood character, one that is architecturally and artistically pleasing, confers a benefit on the homeowners by maintaining the value of their properties. (Dolan-King v. Rancho Santa Fe.)

Written Standards. Not having written standards, however, is a problem. It leads to discord and potential litigation because members jump to the conclusion that they are somehow being discriminated against if their request is denied. If the committee were to adopt written standards, applicants would know what colors to choose from and would submit a conforming color, thereby avoiding rejection.

Disapproval Requirements. Per the Davis-Stirling Act, any decision by the architectural committee must be in writing. If a proposed change is disapproved, the committee’s decision must include both an explanation of why the proposed change is disapproved and a description of the procedure for reconsideration of the decision.

RECOMMENDATION: All associations should adopt clearly defined architectural standards. Once adopted, enforcement of those standards must be in good faith and not arbitrary or capricious.

DIRECTOR SEMINAR

I will be participating in Monarch Management’s 17th Annual Directors Seminar entitled “Law and Order.”

The event will follow the format of the courtroom drama television show with the founder of the Monarch Group John Handel serving as the presiding judge. Board members will be given real-life fact patterns and discuss enforcement, hearings, penalties and how to avoid litigation.

The event will be held from 8:30 a.m. to 3:30 p.m. on March 15, 2013 at Agua Caliente Casino Resort Spa in Rancho Mirage. Contact Zoe Lombard for more information and to reserve a seat.

FEEDBACK

Mary J. #1. Does Mary J. want to move? We have an opening coming up in our complex. -Esme G.

Mary J. #2. Mary J. is indeed a breath of fresh air. If homeowners would run for the board for the purpose of serving their community, not because they have an agenda or pet peeve, our terms of office would be filled with positive accomplishments. We need homeowners without strings attached, who want to feel good when they leave office, because they have done “good.” -Ruth W.


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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Feb 24

QUESTION I serve on the board of a townhome association. We have a potential buyer of a unit that is a limited liability company. If the LLC becomes an owner and the LLC has 50 members, will all 50 members have rights to use the common area facilities?

ANSWER: Good question. Because of the uncertainty and to avoid potential litigation over the issue, we address it when we restate CC&Rs and bylaws for our clients. We define who does and does not hold voting and common area usage rights for (i) those who merely hold a security interest in the property, (ii) tenants, (iii) trusts, (iv) corporations, (v) partnerships, and (vi) other ownership entities. Doing so eliminates the problem. Your association should consider doing the same. If you have questions, contact us.

NOTICE OF
RULE CHANGE

QUESTION: We are changing several rules. May we send only the rules that are changing to homeowners? Our manager says we must send out all the rules for the 30-day homeowner comment period, not just the ones being changed or added. I do not read Civil Code 1357.130 that way. Who is correct?

ANSWER: You’re correct. The statute only speaks to proposed changes not the entire package.

The board of directors shall provide written notice of a proposed rule change to the members at least 30 days before making the rule change. The notice shall include the text of the proposed rule change and a description of the purpose and effect of the proposed rule change. (Civ. Code 1357.130(a).)

Once the rule change has been approved by the board, notice of the approval must be given to the membership before the change can take effect. Ideally, changes are incorporated into the rule book and a full set is mailed or delivered to the membership. For some associations that can be quite costly. An alternative is to mail the changes to the membership and post a full set of revised rules on the association’s website.

MORE ON
ABSTENTIONS

In recent newsletters I’ve discussed director abstentions. The issue generated follow-up questions because of the confusion people have about this issue. James H. Stewart, PRP, also known as “Mister Parliamentarian” was kind enough to offer a further explanation.

Non-Vote. People get confused because Robert’s Rules and the law differ. An abstention is NOT A VOTE, IT DOES NOT COUNT-EVER. It is not a protest vote, it is not a negative vote, it does not “go with” any side. An abstention simply means that the person is not casting a vote on a motion (the reason why does not normally matter).

Under Robert’s Rules, abstentions are not counted or even taken (asked for) in normal circumstances. The only time abstentions are recorded is if a roll-call vote is taken. It is good practice to record an abstention in the minutes if the reason for the abstention is a conflict of interest, otherwise it should not be recorded. There is no right to have a director’s abstention recorded, as that would give a privilege not given to other directors.

Corporations Code. Under Robert’s Rules, votes are normally taken as the number present and voting, which means that abstentions are not counted and do not matter. Confusion occursbecause the Corporations Code has a requirement that a board must have the affirmative vote of a majority of those present to adopt a motion. (Corp. Code §7211(a)(8).) While an abstention does not count, in that scenario it has the same affect on the outcome as a negative vote. For example:

Present and Voting: 10 present, 5 yes votes, 4 no votes, 1 abstention = motion passes as a majority of the votes cast are yes (9 votes cast, 5 yes, 4 no).

Majority of Those Present: 10 present, 5 yes votes, 4 no votes, 1 abstention = motion fails, as a majority of those present is 6.

FEEDBACK

Clubhouse Wi-Fi: Even if the board has authority to install Wi-Fi in the clubhouse, are there any potential problems? -Irene M.

RESPONSE: Yes. If the association installs an “open” or unsecure Wi-Fi system, there are risks. First, anyone can piggyback onto the wireless signal to commit crimes. A hacker can access other users’ passwords, bank accounts, emails, etc. Or they can use it to download child porn (which will bring federal agents knocking).

If an association intends to set up Wi-Fi in the clubhouse, it should be careful to set up a secure network with appropriate firewalls and use restrictions. For more information, read security tips from the U.S. government’s “Computer Emergency Readiness Team” on wireless technology. The association should also add a disclaimer and a “terms of use” page to the sign-in process where users agree to hold the association harmless.

City Ordinances. You wrote that because HOAs and local governments each have their own jurisdictions and enforcement powers, they operate independently and the ordinances of one do not void the rules of the other. Already, owners are asking me how can this be, as they reference city anti-smoking ordinances. In SF, the ordinance is no smoking in internal common areas of condos/apartments. These owners say, based on your explanation of an HOA lifting leash rule, we could lift our own anti-smoking rule despite the city ordinance. Is there a distinction between some ordinances which are basic such as leashes vs Health & Safety codes? -Joseph L.

RESPONSE: Some people struggle with the concept of overlapping jurisdictions; they think that if the association doesn’t adopt city ordinances, the association is somehow breaking the law. Boards enforce HOA rules and cities enforce their own ordinances. Unless the ordinance states otherwise (see mobilehome laws below), an association is not obligated nor is it authorized to be the enforcement arm of the city. If an owner violates the city’s anti-smoking ordinance, someone notifies the city and the city orders the person to cease violating its ordinance. If the association’s CC&Rs have a provision that any violation of a local ordinance is deemed a violation of the nuisance provision of the CC&Rs then the association can go after the person, but it does so as a violation of the CC&Rs not as a violation of the ordinance.

Mobilehomes. If an HOA is a mobilehome park, the park is under the jurisdiction of the Department of Housing and Community Development. HCD’s health and safety regulations do not permit free-roaming pets in mobile home parks, including cats, although I bet few mobilehome parks observe that portion of the regulation. In my experience, HCD will levy fines against the mobilehome park as well as the individual depending upon the violation. -Shelly D.

RESPONSE: You are correct. Mobilehome parks, in addition to the Davis-Stirling Act, fall under “Mobilehome Residency” laws. As such, mobilehome park operators are required to inspect their parks for loose domestic animals. “Dogs or other domestic animals, and cats (domestic and feral) shall not roam at large (free) in the park. Lots and park areas are to be maintained reasonably clean of domestic animal waste.” (Mobilehome Park Inspection Operator Information Booklet, p. 6, ¶ 5.) The requirement is based on Title 25. Housing And Community Development, Mobilehome Parks and Installations Regulations §1114.

Rewarding. I think it’s very rewarding being on the board, not thankless at all. To think you have the trust of your fellow homeowners to make careful decisions for them is a reward in itself. I wish more good people would get involved. I personally love it! -Mary J.

RESPONSE: If I could clone you, I could make a fortune renting you out to HOA boards around the state.


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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