By: The Attorneys at SwedelsonGottlieb
As it does just about every year, the California Legislature has made changes to the law impacting community association’s statewide. This article covers those changes effective January 1, 2023 and other recent changes in the law that are worthy of being mentioned, as they may apply to your California community association. We have included examples of the application of the new law.
Outline of what is covered in this article:
Your board of directors is conducting a regular board meeting when a disgruntled owner hands over a petition to the board. Now what? Is it valid? Do you have to hold an election or meeting? If so, by when? Where do you go from here? These are just some of the questions you might have when receiving a petition, and there are many others to consider. Membership petitions are becoming increasingly common for associations, and the relevant statutory authorities do not provide the clearest picture of how associations should handle them. Many owners believe they can demand anything they want through a petition, which is simply not the case.
Petitions are primarily governed by the California Corporations Code. Section 7510(e) of the Corporations Code states that 5% or more of the owners of a corporation can submit a petition for a special meeting of the members for any lawful purpose. Section 7511(e) of the Corporations Code states that the petition must be in writing and submitted to the board chair, president, vicepresident, or secretary. When receiving a petition, there are a few threshold issues to confirm. First, is the petition signed by 5% or more of the owners?
Related to this, do the signatures on the petition belong to actual owners? If 5% or more of the owners have not signed a petition, you can stop there because the petition is invalid. Of course, sometimes this is difficult to tell. When reviewing a petition, confirm that the signatories are record owners on title (i.e., the owners listed on the unit grant deed). Sometimes you will see multiple persons signing from one unit, which is only permissible if all such persons are actual owners. If not, only the owner(s) listed on the grant deed should be counted. Tenants and non-owner family members also do not count toward the 5% requirement.
When SB 323 took effect on January 1, 2020, it greatly modified the Davis-Stirling Common Interest Development Act’s election procedures, including timelines for conducting an election. In the process, it inadvertently created a conflict in the law regarding recall elections that community associations have been struggling with ever since.
Corporations Code §§ 7510 and 7511 state that when 5% of the members of a nonprofit mutual benefit corporation submit a written petition to the board of directors to request a special meeting of the members (which is basically the process for initiating a recall election), the board is required, within 20 days after it receives the petition, to schedule the special meeting on a date that is not fewer than 35 and not more than 90 days after the date it received the petition.
However, Civil Code § 5100 states that notwithstanding any other law (including the Corporations Code), community association elections legally requiring a member vote, including election and removal of directors, must be held by secret ballot in accordance with the Davis-Stirling Act’s election procedures, and Civil Code § 5115 provides a timeline for such elections that is at least 90 days.
It is fall, and for most California community associations, it is budget season and boards and managers are in the process of preparing budgets for the 2022 fiscal year. Along with the next fiscal year’s budget, boards and managers need to be thinking of all of the disclosures that California law requires be made. That is why SwedelsonGottlieb annually publish this Checklist. The good news is that there are no major changes in the law relating to disclosures. But that does not mean that there are no other issues or disclosure requirements to consider.
There are issues that we discussed last year that need to be considered, if the association has not already taken action, including the now required balcony inspections, election rules, rental restriction changes, and accounting for bad debt associated with COVID-19.
In addition, economists are projecting inflation to hit associations in the coming year. We have already seen increased cost for materials, utilities, and insurance. Employees all over the state are demanding higher wages to return to work, which will have a trickle-down effect in every service the association receives, be it janitorial, landscape, management, or pool. Associations really need to contact their service providers, contractors and insurance broker to discuss potential increases in next years fees and costs. To respond to homeowner outcry that usually follows an increase in assessments, boards should be prepared to educate homeowners on the rising costs and the plan to keep the association financially stable.
By David Swedelson, Esq. Partner and Community Association Attorney at SwedelsonGottlieb
Today, June 14th is Flag Day. So, why not a blog post on flags.
I was forwarded an article on flying the American flag at community associations that appeared in the Wall Street Journal which motivated this blog post. According to the article, Flag Day commemorates the adoption in 1777 of the U.S. flag. The article (follow this link) goes on to say that “for condominium dwellers, celebrating could prove challenging. On account of condo by-laws dictating the appearance of units, it isn’t always Yankee Doodle Dandy when members wish to fly the American flag. Courts have addressed disputes of all stripes.” Spoiler alert, and as I will explain below, California has a statute that protects the right of an owner to fly a flag. But there are limits.
By David Swedelson, Senior Partner and Community Association Attorney at SwedelsonGottlieb
I first heard about voter suppression in law school, where I learned that the United States has a long tradition of threatening voter access. I thought it was a thing of the past. But I have been surprised by recent news stories that tell us that there are real efforts in 2020 to make it harder for some Americans to vote. For example, a Memphis, Tenn., poll worker turned away people wearing Black Lives Matter T-shirts, saying they couldn’t vote. Robocalls warned thousands of Michigan residents that mail-in voting could put their personal information in the hands of debt collectors and police. In Georgia, officials cut polling places by nearly 10%, even as the number of voters surged by nearly 2 million.
Simply stated, voter and candidate suppression is a strategy used to influence an election’s outcome by discouraging or preventing specific groups of people from running as a candidate in an election or voting. Unlike political campaigning, which attempts to change voting behavior through persuasion and organization, activating inactive voters, or registering new supporters; voter suppression attempts to reduce the number of voters who might vote against a candidate or proposition. The tactics of voter suppression range from minor changes to make voting less convenient, physical intimidation, and even physical attacks on prospective voters, which is illegal.
From the Community Association Attorneys at SwedelsonGottlieb
When community associations decide to have chemical pesticides or weed-killing herbicides such as Roundup applied, they must provide detailed, written advance notice to homeowners and residents.
Pursuant to Civil Code §4777(b), “an association or its authorized agent that applies any pesticide to a separate interest or to the common area without a licensed pest control operator shall provide the owner and, if applicable, the tenant of an affected separate interest and, if making broadcast applications, or using total release foggers or aerosol sprays, the owner and, if applicable, the tenant in an adjacent separate interest that could reasonably be impacted by the pesticide use with written notice…”
By David Swedelson, Community Association Attorney at SwedelsonGottlieb
Interesting story out of Florida About an 86-year-old owner who wanted to do something to show his support for the black lives matter movement. He wanted to stand in solidarity with those that are protesting to protect black lives, so, with the help of his granddaughter, he wrote out “Black Lives Matter” in chalk paint on the sliding glass door that leads to the balcony of his condo. His neighbors confronted him and also complained to management, and the association’s manager told him to remove the sign.
This owner was not deterred and he wanted to figure out a way to get what he felt was an important message across, so he and his granddaughter took the paint off the window and replaced it with cardboard cut-outs that spell out “BLM.” They hung the letters from the door on the inside of the condo using fishing wire — a display that could be considered interior art.
Prepared by the Community Association Attorneys at SwedelsonGottlieb
Senate Bill 323, proposed new law that would impact how California community association conduct elections, was approved by the Senate and Assembly was presented to Governor Newsom for his signature. This proposed legislation will impact and change the procedural requirements for most California community associations’ elections. Unfortunately, this proposed legislation goes too far and it is not the right solution to whatever it is that motivated Senator Wieckowski to author this new legislation.
For example, under current law, Civil Code Section 5200(a)(9), members of a community association can request their association’s list of members, including the members names and addresses. Currently Civil Code section 5220 allows members the ability to opt out and keep their contact information, which they deem private, off the list. SB 323 includes a loophole that effectively eliminates the ability for owners to opt out of having their name and personal contact information provided to another member. This proposed new law requires owners to provide their name and address on the envelope that includes the ballot, which SB 323 would make part of the list of records available for member inspection.
From the Community Association Attorneys at SwedelsonGottlieb 
It is no secret that community associations are often targets for embezzlement. But they are not alone. Newspaper articles tell us that it happens to various types of businesses and organizations, even attorneys and lawyer/bar organizations. Fraud and embezzlement seems more likely to occur when no one is watching those that control the checkbooks. And unfortunately, many many condominium, stock cooperative and planned development boards of directors become too trusting and they don’t keep an eye on what their manager or treasurer are doing.
To ensure that community associations are better protected, the California legislature passed AB 2912, acknowledging that associations are susceptible to fraud and embezzlement, and that more is needed to completely achieve the goal of protecting community association funds. Pay close attention as there are new requirements for both managers and boards amending two sections of Civil Code and adding three new ones. AB 2912 made the following changes to the law:
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