Jun 30

QUESTION: An owner requested over 4,000 documents which we provided. Does she have the right to share those records with others??

ANSWER: It depends on who the “others” are and for what purpose. Since all members have the right to inspect records, there is nothing improper about members sharing records with other members.

Improper Purpose. Where your homeowner can get herself into trouble is if she uses those records for an improper purpose such as (i) using them for personal gain, (ii) altering the records to defame others, (iii) selling them, or (iv) using them for any other purpose not reasonably related to her interest as a member.

Damages. If an owner uses records for an improper purpose, the association can take legal action against him and is entitled to reasonable attorneys’ fees and costs if it prevails. (Civ. Code §1365.2(e)(3))

 

FINES &
COLLECTION AGENCIES


QUESTION: Can an association turn a fine over to a collection agency if an owner refuses to pay?

ANSWER: Only if the fine is first converted into a judgment. Since collection agencies cannot practice law, they cannot go into court to make an association’s monetary penalties collectible. The association needs to first sue the owner in small claims court (up to $5,000) or superior court (over $5,000). If the court determines the fines are reasonable, the association will receive a money judgment that can then be turned over to a collection agency. Most collection agencies work on a contingency fee basis and charge between 25% and 40% on any sums recovered.

EV CHARGING STATION


QUESTION
: I am a townhome owner and would like to install an EV charging station in my private garage. Do I still need HOA approval?

ANSWER: All of the owner requirements in the Davis-Stirling Act apply to installation of charging stations in common areas or exclusive use common areas. If your garage is solely owned by you as your separate property then the association arguably has no interest in the installation of a charging station in your garage.

Licensed and Insured. However, the association has an interest since your townhouse is connected to other townhouses and an improper installation could result in a fire. So as to protect your neighbors, the association has a legitimate interest in ensuring that you hire a licensed and insured contractor who installs the charging station pursuant to building codes.

FEEDBACK

Yippy Dogs. A magic solution to “yippy Dogs” is Silencer Pro. It’s amazing. It runs on a battery or electricity and costs about $90.00. It emits a sound that calms the dog and it doesn’t bark. Absolutely heavenly! It works from your house across to the neighbor’s dog too (within range) Amazing. -Mary J.

Insurance #1. What associations do not realize is that carrying minimum limits of insurance does not immunize them from judgments in excess of policy limits. Assume an owner pulls out of the parking garage and his view is blocked by the association’s hedge that exceeds the city ordinance by a foot. Assume he hits a neurosurgeon riding his bike and turns him into a quadriplegic. The likely judgment against the association would far exceed statutory policy limits and a large special assessment would follow. As you indicated in your newsletter, the cost of insurance is quite reasonable. A $15 million policy for a 20-unit condo would cost $1,500 to $2,000, which is less than what owners pay for auto insurance. -Joel Meskin of McGowan Program Administrators

Insurance #2. What about California Earthquake Authority insurance? If every homeowner carried $50,000 in loss assessment insurance, a small HOA of 20 units could cover $1,000,000 in damage without carrying earthquake insurance, thus keeping the HOA fees down. -Mike G.

RESPONSE: While California Earthquake Authority Insurance is important for all owners to carry, there are risks if the association does not itself carry earthquake insurance and instead relies entirely on the CEA’s loss assessment coverage.

1. CEA loss assessment will only pay for residential structure damage. There is no coverage for pools, clubhouses, detached garages, patio coverings, walkways, driveways, fences, etc.

2. It will not pay for bringing residential structures up to building code standards.

3. It will not pay for special assessments to cover bad debt (caused by members who walk away from their units).

4. Relying on owners to carry loss assessment coverage is risky. Many or most owners will not carry it, thereby providing limited resources for rebuilding after an earthquake.

5. The maximum coverage for CEA Loss Assessment is $75,000 and the deductible is 15% of the coverage amount.

Because of these limitations, boards would be ill-advised to forgo earthquake insurance and rely solely on owners purchasing earthquake loss assessment coverage.

Thank you to Patrick Prendiville of the Prendiville Insurance Agency;  Mike Rey of Rey Insurance Services; and Tim Cline of the Timothy Cline Insurance Agency, Inc. for their assistance.

55+ Community. Although I am a manager in Minnesota, I enjoy reading the Davis-Stirling Newsletter and it is at the top of my reading list each week. Many of the issues are the same and I feel thankful that I work here in MN every time I read of the latest legislative lunacy being proposed in California. However, I believe that your article from today may have contained a factual error. My understanding of HOPA is that at least 80% of the units must be occupied by at least one person 55 or older, not that 80% of all the residents must be 55 or older. There could be quite a difference between the two standards in terms of what % of the residents are 55 or older. -David S.

RESPONSE. Your understanding is correct. the Fair Housing Act requires that at least one occupant in 80% of the units be 55 or older. Other occupants of those units can be under 55. In addition, the association must publish and enforce policies and procedures to ensure the association meets those requirements.

NO NEWSLETTER. Sorry, no newsletter next week. Nathalie Ross, my Director of Client Relations said I could take the day off so I jumped at it! I will be celebrating the birth of our country and all those God-given rights we too often take for granted.


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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Jun 23

QUESTION: To save money, can we purchase liability coverage of $1 million per occurrence with an aggregate limit of $1 million plus an umbrella policy of $1 million? An insurance agent who wants our business said this would satisfy the Davis-Stirling Act and protect owners from litigation. Our board is not convinced and would like your guidance.

ANSWER: First, a little background. Minimum insurance requirements were added to the Davis-Stirling Act after the Ruoff v. Harbor Creek decision in 1992. Ms. Ruoff, a guest of a member, suffered catastrophic injuries falling down defective common area stairs. Her husband sued the association and every owner in the association, each of whom, he argued, had common liability because they jointly owned the stairs.

The court of appeals agreed and held that every owner in the complex was jointly and severally liable for her injuries, the cost of which greatly exceeded the $1 million limit in the association’s insurance policy. The case sent a chill through the industry and the Legislature responded by adding Civil Code §1365.9. The statute protects owners from individual liability, provided the association maintains at least minimum levels of insurance as follows:

• $2 million for HOAs with 100 or fewer units, and
• $3 million for HOAs with more than 100 units.

Umbrella. To answer your question, assuming your association has fewer than 100 units and assuming the $1 million umbrella is written to act as excess to the underlying $1 million general liability per occurrence, the combination of the two policies would provide the required $2 million for a single tort action brought against the association.

RECOMMENDATION: Meeting minimum levels of insurance may, however, not be enough. Even though owners are not directly liable for a loss exceeding insurance limits, they are indirectly. Assuming a $4 million judgment against an association, owners would be hit with a special assessment to make up the difference between the $2 million policy and the $4 million judgment.

Accordingly, boards need to talk to their insurance brokers to determine appropriate levels of insurance for their associations. A $5, $10 or $15 million umbrella policy is relatively inexpensive and not uncommon for associations to purchase. In addition, homeowners should individually purchase loss assessment coverage in the event a loss exceeds the association’s policy limits.

For their assistance with this question, thank you to Tim Cline of the Timothy Cline Insurance Agency, Inc.; Patrick Prendiville of the Prendiville Insurance Agency; and Mike Rey of Rey Insurance Services.

FORECLOSED UNITS DO NOT
BECOME COMMON AREA


QUESTION: Our HOA foreclosed on a unit last year. The new board decided to sell it without notifying or consulting the membership. Doesn’t the board need permission from the membership to sell common property?

ANSWER: A unit or lot acquired through foreclosure does not become common area. The property is identified in the governing documents as a separate interest not common area. As a result, members do not have the right to enter and use the property as they would common areas. Instead, the property is under the control of the association through its board of directors, who can either rent or sell it without first obtaining membership approval.

Possible Restriction. There might, however, be language in the governing documents restricting the sale of association property over a certain value without membership approval. Depending on the wording of the restriction, it could affect the board’s ability to sell it.

CAN CHILDREN LIVE IN
55+ COMMUNITIES?

QUESTION: Can our 55+ community force an underage resident out if it would result in the person being homeless?

ANSWER: Possibly. As described in last week’s newsletter, senior communities are exempt from age discrimination laws. Moreover, both state and federal laws establish that in order to meet the criteria for maintaining an age restriction, at least one occupant in 80% of the units must be 55 or older.

If the underage person would cause the development to lose its status as a 55+ community they might still qualify under Civil Code §51.3(b)(3) which defines a “qualified permanent resident” to include disabled persons who are the children or grandchildren of a qualifying resident in an age restricted community. In these limited circumstances, a disabled child can live in the community and not count toward the 20%.


Jasmine Fisher, Esq.
Adams Kessler PLC

RECOMMENDATION: The 80-20 rule does not give communities license to throw open the gates and let underage residents into the development until they hit 20%. To keep their status as 55+ communities, boards must monitor and enforce age restrictions.

Because the right of an underage person to reside in a community depends on the circumstances surrounding the person as well as facts related to the particular community, boards should seek legal counsel before taking action against underage residents.

FEEDBACK

Yippy Dogs. [Re: Senior communities restricting children.] It’s too bad there aren’t similar rules for those awful nuisances wrapped up in a ‘yippy’ dog! I bet there are more noise problems with those nuisances. In my 61 years and having lived in ~20+ places–-those uncontrolled, barking at the moon, yippy dogs have been by FAR the biggest nuisances that cause me NOT to be able to enjoy my abode. -Rose C.


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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Jun 16

QUESTION: I live in a retirement community in Palm Springs. My grandkids visit during the summer and want to use the swimming pool but the association limits the hours for children. Isn’t that discriminatory? I didn’t think associations could restrict children from using pools.

ANSWER: Because you live in a senior community (I’m assuming 55+), your association can impose restrictions on children that other associations cannot.

Federal Statutes. Under the Housing for Older Persons Act of 1995 (HOPA), senior communities are exempt from the Fair Housing Act’s prohibition against discrimination against children, i.e., discrimination on the basis of familial status. As such, 55+ communities can limit or even prohibit children from using recreational common facilities. According to the Department of Housing and Urban Development (HUD):

If a housing community facility qualifies under HOPA as housing for older persons, the community facility is exempt from the Act’s prohibition against discrimination on the basis of familial status. The housing community facility may restrict families with children from benefits of the community, or otherwise treat family households differently than senior households… (HUD Guide).

California Statutes. California has similar exceptions. Civil Code §51.3 legalizes 55+ communities and Government Code §12955.9(a) provides that familial status discrimination prohibitions do not apply in retirement communities.

Case Law. The Sunrise Country Club Assn. v. Proud (1987) 190 Cal.App.3d 377 case upheld a community association’s practice of creating separate “adult only” and “family” areas on the basis they were not unreasonable and thus did not violate applicable laws, including the Unruh Act which precludes discrimination by businesses within the State of California. The Unruh Act does not prohibit all age-based discrimination, only that which is unreasonable, arbitrary or invidious.

RECOMMENDATION
: If a 55+ community with pools and other amenities has a sizable population who receive frequent visits from grandchildren, they may want to create a plan that accommodates those who want peace and quiet versus those looking for some quality time with the younger generations.


Jasmine Fisher, Esq.
Adams Kessler PLC   

Strategies such as “adults only” swim times are a reasonable way to address the needs of a majority of the community in a way that does not violate state or federal laws. When adopting rules related to children, 55+ communities should seek legal counsel.

Internet “Use” Tax. A number of associations have been contacted by California’s Board of Equalization (BOE) in recent weeks asking about internet purchases they made. If no taxes were paid on those purchases, the BOE is telling associations they must retroactively pay a “use” tax plus penalties and interest.

BOE Demands. The BOE has been asking for records for time periods that are all over the map–11 years, 3 years, 10 years and 8 years. One association we represent provided everything requested, but was told it was not enough. The tax representative wanted the information resubmitted in a spreadsheet format with contact information for all vendors together with at least one invoice from each vendor for the past eight years. In addition, the BOE is requiring that an account be set up with the State to report and pay tax on an annual basis on all out-of-state purchases.

Explanation. I contacted the Board of Equalization and talked to a representative. According to the tax rep, it is technically not a sales tax but rather a “use tax” that all organizations must report and pay whenever they go out of the state to purchase goods where the retailer does not charge a tax. I followed-up with Bill Erlanger, a CPA specializing in community associations. He confirmed that the use tax was created by the Legislature to protect California sellers who would be at a competitive disadvantage when out-of-state retailers sell goods to California consumers without charging a tax. Bill publishes a guide for HOAs and explains that:

Sales tax generally applies to the sale of merchandise in the state. Use tax applies to the use, storage, or other consumption of those same items when a similar purchase was made from outside the state. The use tax is set at the same rate as the state’s sales tax and must be paid directly to the Board of Equalization on your Franchise Tax Board Income Tax Return.

ICAT. According to the BOE tax representative, the use tax was implemented in 1935 but rarely enforced until seven years ago when California formed  the Interstate Consumer Analysis Team (ICAT). She noted that the ICAT quadrupled in size over the past three years when they were given a directive to start looking at every nonprofit in the state with revenues over $100,000 (including homeowners associations).

RECOMMENDATION: In case you’re not already doing so, boards and managers need to work with CPAs who are experienced and knowledgeable when it comes to common interest developments. Second, make sure you diligently keep receipts on all internet purchases and report them to your association’s tax preparer. (COMMENT: As if the recession were not hard enough on associations, now the locusts are descending. My client offered to turn over his emails related to internet purchases. The BOE declined–the NSA already has them.)

Thank you to William S. Erlanger, CPA of Levy, Erlanger & Company, CPAs for his assistance on the use tax.

FEEDBACK

Wasps. I truly appreciate your wicked humor and your very useful comments on life in an HOA. A wasp nest is attached to an eave of our neighbor’s house. We have asked our neighbor to stop the wasps from interfering with our enjoyment of our property but these requests have been to no avail. The association manager says this issue is strictly between homeowners. The eves are maintained by the association so some liability is attached to the association should someone be harmed by these “pests.” Life would be so much easier if every person always did the right thing in every situation. What is the right thing in this situation? -Ron V.

RESPONSE: If you can clearly support your position via the CC&Rs that the HOA has a duty to remove the wasps, address the board in Open Forum and follow-up in writing. If they fail to act, you may need to take your neighbor and the HOA to court and ask a judge to sort it out.

FHA Guidelines. Please explain how the new ruling by FHA impacts reverse mortgages. These people are not short-term residents. -Bill G.

RESPONSE: Reverse mortgages allow homeowners 62 or older to take equity out of their homes as cash in a lump sum, or as monthly payments or a line of credit. Without certification of the association as a whole, FHA refuses to insure individual reverse mortgages. Frankly, FHA has been acting irrationally for some time. Rumor has it they will revise their transient housing policy shortly. If and when they do, I will report it.


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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Jun 09

The Federal National Mortgage Association (Fannie Mae) is the nation’s largest player in the secondary mortgage market. To ensure a steady flow of monies into banks, Fannie Mae buys FHA insured loans from lenders.

Because many condominium developments have CC&Rs that prohibit units from being leased for less than 30 days (to avoid transient rentals), Fannie Mae and Freddie Mac previously required that CC&Rs exempt lenders from the restriction so foreclosed units could be rented short-term. In the past thirty days, the FHA has abruptly adopted a “no-tolerance” stance on transient housing–including any exception for lenders.

Now, if a development’s CC&Rs contain any exceptions for transient housing, the FHA will refuse to certify the development until the CC&Rs have been amended to remove the language. That means a significant source of financing will dry up for the condo market in California. It will also impact retirees who need a reverse mortgage to stay in their units since most are FHA insured.

RECOMMENDATION: If your association wants FHA certification and your CC&Rs contain an exception for mortgagee transient housing, you have two options. The first is to amend your CC&Rs–a difficult and sometimes costly process. The second is to wait to see if the FHA adopts a more rational approach to the issue. I would not count on the latter.

The Community Associations Institute is conducting a survey to see how many developments are affected by the FHA’s erratic policy shifts. To take the survey go to CAI Survey.

Thank you to Anne Gutierrez of Project Approval Services for providing valuable background information on this issue.

OPEN FORUM

QUESTION: There is a notice on our bulletin board stating: “General Session – homeowner forum is 7 pm sharp. All owners are welcome to address the board until all owners are heard. Once Open Forum is closed the Board meeting will NOT allow commentary during their session as it is a corporate meeting of the directors only.” Can the Board do this? If something is being discussed, homeowners are not allowed to ask questions for clarity???

ANSWER: Restricting homeowner comments to the Open Forum is legal and a common industry practice. It is the same procedure used by city councils. Your board is elected to conduct the association’s business. As volunteers, they need to get through the agenda so they can get home to their families. Large associations tend to be more formal with their proceedings whereas small ones are less formal and often allow audience participation. The degree of participation is entirely discretionary with the board. Also, by statute the board’s ability to answer questions is limited.

HAPPY BIRTHDAY

QUESTION: The manager of our community publishes my birthday and anniversary date on our community bulletin board along with the information of other owners in the month of their occasion. Along with our name, birthday-anniversary date, she also includes our unit number. I have asked and written to her several times asking to be removed from these lists as I consider them an invasion of my privacy. What can I do to make her stop?

ANSWER: Your request for privacy is perfectly reasonable and I am surprised the manager is so indifferent to your privacy. Your next step is to make a request of your board at an open meeting. If that does not work, make an IDR demand. If all else fails, you might consider a small claims action. You don’t need to hire a lawyer and the filing fee is small.

I want to thank everyone for the outstanding response we received to the introduction of our cloud-based Smart HOA management system. A large number of associations have already signed up. To learn more about this inexpensive, easy-to-use program, attend today’s webinar at 4:00 p.m. or one of our Wednesday offerings:

    •  June 12 at 10:30 a.m.
    •  June 12 at 1:30 p.m.

To sign-up, click on webinar registration. Any board member or manager who wants to try the program can have a free 30-day trial. If you have any questions, contact us at info@SmartHOA.com.

FEEDBACK

Wasps #1. Good guidance on pests. I have one question: Which of the two pests cited in the first sentence of your answer does the advice apply to [wasps or the IRS]? -Darryl H.

RESPONSE: The IRS…

Wasps #2. I’m responding to your answer regarding wasps. Not all wasps are bad. Paper wasps do not sting and are not aggressive. They actually do a service by eating insects. If you’re referring to yellow jackets, that is another story. They are a pest, can be quite aggressive, and have a nasty sting. I’m just asking you to get your wasps straight before maligning them all, and having a possible colony of paper wasps killed for no good reason. -Jeanne K.

RESPONSE: I must have missed that in my court-ordered PETA training.

Wasps #3. Your wasp eradication suggestion may be short-sighted. Just because there are wasps doesn’t mean it’s the association’s responsibility or management’s. The writer didn’t say there were nesting wasps, only that wasps were in the area. The association and management have only the duty to eliminate wasps if they are nesting on common property, but if they are nesting next door and visiting flowers in the community there is no duty to the residents. -Rob F.

RESPONSE: Good point. If the wasps are just passing through, there is nothing the association can do. If they are nesting in the common areas, that’s when the association steps in.

Peering Over Fences. In our CC&Rs we have the following: “The right and easement for its agents and employees to enter any Residential Lot when necessary in connection with any emergency, maintenance, landscaping, inspection for compliance with the Governing Documents, and/or construction work for which the Association is responsible…..” Is this statement legal? -Rhea W.

RESPONSE: I’s legal. And it is a fairly common provision. For emergencies and necessary maintenance, the association needs an easement to enter onto lots (with appropriate notice).

Conflict of Interest. For all the people who think they know the right answer to your “Conflict of Interest” question, they should READ THE NEW STATUTE (Civ. Code §5350). It adds quite a bit to Corp. Code §7233 & §7234 and to the law on conflicts of interest in HOA boards generally. -Phillip M.


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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Jun 02

I am proud to announce the launch of “Smart HOA,” a cost effective, cloud-based management program for associations of all shapes and sizes, whether they be 2 units or 20,000 units.

Information Management. I designed Smart HOA to give boards and managers the tools they need to effortlessly manage their communities and the enormous amounts of information they generate, such as:

  • Member/Tenant Information: Names, addresses, phones, emails, and emergency contacts, pets, vehicles, storage spaces, etc. (and easily print up-to-date mailing labels).
  • Rules Violations: Warning letters, hearing notices, incident reports, photos and hearing results.
  • Work Orders: Generate and track work orders, materials and labor costs and notes about repairs.
  • Parking: Vehicle and parking space information.
  • Guest Access: Track guest lists, guest and vendor entries, and print parking passes on the fly.
  • Moving and Deliveries: Authorized move-ins and outs, deliveries, damage deposits and special instructions.
  • Package Tracking: Track packages being received and picked up (also compatible with barcode readers).
  • Architectural Applications: Checklists, date stamping, deposits, etc.

Green Technology. Because Smart HOA is “green” it allows communities to go paperless. Governing documents, minutes, work orders, violation letters, photographs and the like can be stored in the program and viewed by the board and management at the touch of a screen.

Owner Portal. I included a homeowners portal in the program so homeowners can (i) opt in and out of receiving notices by email, (ii) opt in and out of the membership list, (iii) add and remove guests for immediate viewing by the front desk and gate guards, (iv) receive notice of package deliveries and (v) view all of the association’s governing documents online.

Cloud Based. Because the management system is cloud-based, it can be accessed from any device with access to the internet–desktop computers, laptops, tablets and smart phones from anywhere in the world. That means there is no need to purchase expensive software or expensive equipment for running it, or hiring IT people to load and configure the program. We handle everything on our end on high-speed, secure servers.

Pricing. Instead of expensive front-end costs and costly updates, Smart HOA is provided at a low monthly fee with no long-term commitments.

Webinar. To see what it looks like, watch a short video describing Smart HOA. Then sign-up for one of our free webinars on June 9 at 4:00 p.m. or June 12 at 10:30 a.m or again at 1:30 p.m. See Webinar Registration. Any board or manager who wants to try the program can have a 30-day free trial. If you have questions, contact us at info@SmartHOA.com.

WASPS

QUESTION: We have wasps in the common areas but management refuses to do anything about them. What can we do?

ANSWER: Wasps are almost as bad as a swarm of IRS agents. Both are safety hazards that should be avoided. The association needs to call pest control. If management refuses to take action, you and your neighbors need to show up en masse at a board meeting to demand that something be done. The board has a duty to reasonably protect the safety of residents. The cost of eliminating wasps is considerably less expensive than litigation.

CONFLICT OF INTEREST

QUESTION: The president of our board wants to install a window facing a side wall of our building. He proposes to do this at his personal expense. Any changes to the outside of our building require board approval. Can he vote on his own request?

ANSWER: No he cannot vote on his request. He has a conflict of interest and must recuse himself from the vote. This principle has been codified in the Davis-Stirling rewrite in Civil Code §5350(b)(5) which takes effect January 1, 2014.

FEEDBACK

Peering Over Fences. We had the same problem with board members looking over fences for CC&R violations. We called the police who told the directors they could be arrested under “Peeping Tom” laws and that they could only look from the common areas at a yard. One board member was cited by the police for trespassing because she was using a step ladder to peer over fences. It cost her $1,500 in fines. In northern California where I grew up you could get shot for peeking over a fence. -B. Stelter

Renters. Great newsletter this week! Always enjoy reading all the situations. Thanks for the clarification on CAR. This has offered some insight on how we can adjust our CC&Rs for owners with renters. Wish us luck on getting the owners to approve the changes. Hopefully, they will see how it helps maintain their investment as well. -Margie M.

RESPONSE: Since adopting a rental cap after January 1, 2012 has no practical value, occupancy requirements are the best way to go.

Residency Requirement. Restricting a new owner from running for the board because he knows nothing about what’s going on…in our association the majority of residents, new or old, know nothing about what’s going on! -Pat C.


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 26

QUESTION: How difficult is it to disband an HOA? Our association has common areas and single family homes. We have a large group who would like to disband the HOA so we can stop it from peering into our yards.

ANSWER: It is almost impossible to disband an association–you need it to maintain the common areas. As for peering into yards, if you are unhappy with a fly buzzing around your horse, you don’t kill the horse, you kill the fly. If you are unhappy with rules enforcement, you don’t disband the association, you change the rules. If the rest of the membership agrees with you, that should be easy enough to accomplish.

APPROVING MINUTES

QUESTION: I am part of an entirely new board that was recently elected. We were presented with a backlog of unapproved meeting minutes. How do minutes get approved when no directors on the current board were at the meetings being approved?

ANSWER: I checked with Attorney-Parliamenatrian Jim Slaughter, author of The Complete Idiot’s Guide to Parliamentary Procedure. It turns out that directors who were not present at the meeting for which minutes are being approved (or even on the board when the meeting occurred) can vote to approve minutes. The association as an organization has a continuing legal existence, even if specific members come and go over time. Accordingly, the new board can approve the minutes of the old board. The only downside is the minutes might contain errors of which the new board would be unaware.

Fixing Errors. If at some future date errors are discovered, they can be corrected. The board that discovers the error can amend the minutes, even though it may be years after the fact. The correction can be made by a “Motion to Amend Something Previously Adopted.” (Robert’s Rules, 11th ed., pp. 469 & 475.)

RECOMMENDATION: For more information, see Chapter 11 of The Complete Idiot’s Guide in which Jim discusses minutes–what should be in them, what should not, approving minutes, changing minutes after the fact, and executive session minutes. He also provides templates.

A few years ago I kicked around ideas for a product that would fill a void and meet the needs of associations small and large–a product with unrivaled service and value, something uniquely Davis-Stirling.com.

Today I am proud to announce that after years of work, the product has arrived. In next week’s newsletter I will announce what I’ve been up to for the past three years. Stay tuned! -Adrian Adams

FEEDBACK

Director Qualifications #1. I always enjoy reading what other associations are dealing with–makes our problems pale in comparison (usually). We just got someone off our board who had missed seven of the last nine board meetings. Can we make it a requirement that anyone running for the board be current on their dues? When the aforementioned board member ran for the board she was nearly $13,000 in arrears and declared bankruptcy the day before the association was foreclosing on her unit. -Nancy H.

RESPONSE: Yes, you can amend your bylaws to require that directors be in good standing to be elected to and remain on the board.

Residency #1. We have an owner that lives offsite about 20 miles from the complex, he rents out the unit, can this offsite owner run for the board? -Barbara K.

RESPONSE: If your bylaws do not require that he reside in the development, he can run for the board.

Residency #2. We have investors who own 30+ units but do not reside in the community. Can we make living in the community a director qualification? -Teresa H.

RESPONSE: Yes, you can make residency a requirement for serving on the board. You would need to amend your bylaws.

Renters #1. I struggle with why our legislators don’t get the need for rental restrictions. As of this month we now have 5 of 8 units rented. At 62.5% rental, anyone trying to sell won’t find a buyer qualified with FHA, Freddie or Fannie. Our legislators don’t see the harm they caused. -David A.

RESPONSE: You can thank the California Association of Realtors (CAR) for the destructive piece of legislation (SB 150) that crippled the ability of associations cap the number of rentals. CAR railroaded the legislation over the objections of two state-wide organizations and one national organization that warned CAR of the damage it would cause.

Renters #2. If only owners can attend board meetings, how is it possible for a non-owner to be on the board? Our CC&Rs have no restrictions on who can be on the board. It can be anyone off the street. So in this case isn’t it absurd to restrict attendance at board meetings to owners only? We are left with a situation where, when a non-owner is on the board, that person cannot attend the meeting. Welcome to Catch 22. -Anne B.

RESPONSE: Just because renters don’t have a legal right to attend board meetings does not mean you should ban them from attendance. Also, electing them to the board changes their status and gives them the right (and the obligation) to attend meetings.

Small HOAs. I live in a small (18-unit) condo association. Will the new rules about annual disclosures apply to HOAs of our size? -John B.

RESPONSE: Despite the disproportionate burden on small associations, everything in the Davis-Stirling Act applies to all associations regardless of size. The only concession to small associations is AB 968 now before the Legislature that would simplify the voting process for associations with fifteen or less units.


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 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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