Articles Posted in Disclosure/Code Compliance

Blog Posting by David C. Swedelson, Senior Partner, SwedelsonGottlieb.

I just read an excellent article by Robert M. Nordlund, P.E., R.S.
 with Association Reserves, Inc. that addresses the issue of how much California condominium associations should be reserving. He starts out with the proposition that “[t]ypically (that is a dangerous word), most condominium associations should be setting aside 15% – 40% of their assessments towards Reserves. This ratio is lower for associations where each homeowner maintains their own home and the association is only responsible for some minimal common areas. Obviously, every association has its own unique list of common area assets it is responsible to maintain. Some may have a longer list that force higher Reserve contributions (pool, elevator, tennis court, balconies, wood siding, etc.), some may have shorter lists of amenities or more cost-efficient exterior finishes.”

Nordlund does go on to say that in addition to these physical factors, there are three other important influences to your reserve contributions: 1. Economic assumptions for interest and inflation; 2. Your current “starting point”, measured in terms of “Percent Funded”; and 3.Your Objective, full funding or baseline funding?

Prepared By David C. Swedelson.

We are amazed by the number of board members and managers that do not know that there is a Vehicle Code Section (§22658) that addresses how and when California condominium and planned development community associations can tow vehicles that are not legally parked. Compliance with the Vehicle Code is required, and non-compliance could subject the Association to potential fines, legal liability and damages.

On January 1, 2007, changes and amendments to the provisions to California Vehicle Code §22658, relating to towing from private property, including common interest developments, went into effect. No longer can an association instruct security services or a towing service to tow vehicles that may not be authorized. Rather, the association must comply with the new stringent laws.
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Calemine v. Jared Court Homeowners Association, Inc.

In an unpublished opinion, the California Court of Appeals, relying on the Supreme Court’s decision in Lamden, upheld a trial court ruling that a condominium association, acting in good faith and in the best interests of the community, can decide not to take action to stop water from intruding or leaking into a unit due to construction defects in common areas.

Jared Court, an 18 unit townhouse style condominium association located in Woodland Hills, California, is made up of four buildings and common area that includes a tennis court, swimming pool, concrete walkways, front patios and mature landscaping. The CC&Rs require that the Association “maintain the portion of the project not occupied by the units [the common area], in good, clean, attractive and sanitary order and repair.”
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Posted by David Swedelson

From time to time we hear from association clients that are in a dispute with owners over documents that the owner wants to inspect or copy. They often want copies of the attorney’s billing statements. The problem is that most attorneys are descriptive as to the nature of the services provided, and these narratives include confidential attorney-client privileged communications and are not for distribution.

In response to an owner’s request to review the association’s legal bills, it is appropriate for the Board to respond denying the request on the basis that the legal bills are subject to the attorney-client privilege, and that a member’s right to review association documents does not extend to documents subject to the privilege. Yes, the Civil Code does say that the owners are entitled to see the contract between the association and the attorney. But the retainer agreement is not a billing invoice. And the owner is entitled to documents showing what the attorney has been paid; but not the billing invoice.

The Americans with Disabilities Act (“ADA”) recently celebrated its twenty (20) year anniversary. The ADA has had a significant impact on all of us by knocking down architectural construction barriers that had previously prevented people with disabilities from being able to access public facilities, for example by making sure that business entrances are wheelchair accessible, requiring that store aisles be widened, and mandating other modifications that provide people with disabilities the ability to access public buildings and public recreational facilities. However, despite what some homeowners will want their associations to believe, the ADA does not generally apply to California community associations. The purpose of the ADA has always been to provide people with disabilities access to public places, and community associations are, for the most part, private and not public.

In the winter of 2009, the Greater Los Angeles Chapter of Community Associations Institute published an article written by firm attorneys David C. Swedelson and Stephanie M. Rohde entitled “Does the Americans With Disabilities Act (“ADA”) Apply to Your Association? Probably Not!” Follow this link to read or download a copy of their article. And if you have any questions regarding whether the ADA applies to your California community association, please do not hesitate to contact David C. Swedelson, Esq., at dcs@sghoalaw.com or Stephanie M. Rohde, Esq., at smr@sghoalaw.com.

Don’t you wish that you could utilize e-mail or other new technology to disseminate important association documents? Maybe you can! Effective January 2010, Civil Code Section 1350.7 was amended to allow community associations to send certain documents to the owners via e-mail or other methods of electronic delivery. Our Senior Partner, Sandra Gottlieb, has prepared an article regarding electronic delivery and the amendment to Civil Code Section 1350.7. This article was published in the March/April 2010 edition of the O.C. View, the bi-monthly publication of the Orange County Chapter of the Community Associations Institute. Follow this link to read this important article.

It is October, and many association boards of directors and managers are in the process of preparing their associations’ 2010 budgets and statutory disclosure mailings. As we have done every year for the last decade, we have posted SwedelsonGottlieb’s Annual Disclosure and Notice Checklist to assist you with that process. Even if you have already sent out your budget and disclosure package, you may want to review the checklist to make sure that you have not forgotten anything. Note that there are a few changes to statutes. For example, the Notice of Assessments, Foreclosures and Payment Plans pursuant to Civil Code Section 1365.1 has been modified. In addition, there are some new changes effective January 1, 2010 regarding the Assessment in Reserve Funding Disclosure Summary, the creation of a Disclosure Document Index, and other procedural changes. Please check our blog later this week for a summary of those new laws and their application to your associations.