By David Swedelson, Esq., SwedelsonGottlieb, Community Association Attorneys

Home.pngA manager at a planned development community association we represent contacted me regarding a dispute with an owner. The board was refusing to allow the owner to make a change to the common area solely because the owner had made a change without first submitting a plan and obtaining the required prior approval. I was informed that the board was refusing to provide approval as punishment for the owners’ actions. And the board was doing this despite the fact that the owner had come to them with two options that would have minimal impact on the common area and/or the aesthetics of the association, and the cost for the owner to bring the property back to its prior conditions would have been very expensive. The owner was not happy, and there were some rumblings of a lawsuit. I had to tell the manager and the board that their approach was not appropriate and that there was a possibility that the association could lose if a lawsuit were to be filed.

What I describe above is not an atypical board response to an owner’s failure to seek prior approval for a modification. It is not the correct response, and it can lead to lawsuits that associations may lose. We know this because the Court of Appeal has decided a similar case and told us that California community associations must consider the plans and approve or disapprove the proposed modification based on the usual and customary factors, such as impact on the common area, on the community, neighboring owners, etc. Boards need to show that their actions were regular, fair, and reasonable as a matter of law. Refusing to consider an owner’s plans for a modification because the owner had already made the modifications without approval is not a fair or reasonable response.

IMG_1482%20copy.pngSwedelsonGottlieb Senior Partner Sandra Gottlieb was recently honored by the Greater Los Angeles Chapter of the Community Associations Institute with a nomination for the chapter’s award for Excellence in Education. Sandra was nominated as a result of her January 2014 presentation, Hoarders, Board Member Hostility & Controlling Rental Tenants. Slides from Sandra’s presentation appear below (if you are reading this post via email, click through to see the presentation).

If your homeowners association is located in the Greater Los Angeles area, be sure to get involved with CAI-GLAC and take advantage of all the terrific educational programs that they offer, some of which are free to board members and managing agents. Our attorneys are frequent speakers at their events, so be sure to watch for when we’ll be there. And if you’re in a different area of California, find your local chapter on CAI’s national website.

[Pictured: Left, Joan Urbaniak, CAI-GLAC Executive Director; Right, Sandra L. Gottlieb]

checklist.jpgIt’s that time of year again — time to get the community association’s budget together and ensure you’re making all the proper disclosures under the Annual Budget Report and Annual Policy Statement, as required by the California Civil Code. In order to assist you with this process and other required notices and disclosures, we have again updated our disclosure checklist reference.

Download the new 2014-2015 disclosure checklist here.

Not much has changed in the most recent legislative session with regard to community association disclosures, other than some clarifying language that was added regarding property transfer disclosures. To review our prior blog post regarding that legislation, follow this link.

By: SwedelsonGottlieb, Community Association Attorneys

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On October 7, 2014, the San Francisco Board of Supervisors voted to legalize the use of residences in San Francisco for short-term vacation rentals, by passing what has been dubbed as the San Francisco “Airbnb law”. Follow this link to a news article. This new law has been more than two years in the making, and removes San Francisco’s long-standing ban on residential rentals of less than 30 days. The new legislation, integrated into the San Francisco Administrative Code, now allows short-term rentals of homes, imposes certain restrictions and requirements on that controversial and unregulated practice, and will take effect in February of 2015.

The stated goal of the legislation is to balance the preservation of affordable housing (by making sure landlords can’t convert permanent units to more lucrative vacation rentals) with allowing residents to earn extra income by renting to travelers for short-term vacation and business purposes. The Airbnb law allows only permanent residents to offer their homes for short-term rentals, establishes a new city registry for hosts, mandates the collection of hotel tax, limits entire-home rentals to 90 days per year, requires each short-term rental listing to carry $500,000 in liability insurance, and establishes guidelines for enforcement by the San Francisco Planning Department.
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By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

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In a blog post by Donna DiMaggio Berger, a Florida Community Association Attorney, she discuses exceptions or variances granted to owners. Apparently in Florida they deal with some of the same issues we do. As Donna states, many boards want the leeway to grant exceptions when it comes to certain restrictions in their association’s CC&Rs, such as leasing or altering units or exclusive use common area, performing maintenance and allowing certain types of architectural changes or improvements. We see the same thing here in California.

But often boards grant exemptions or variances without thinking about all of the ramifications. As Donna states, what many boards fail to understand is that any time an exemption or exception is granted, they are creating a precedent which may render their restrictions unenforceable in the future.
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By Sandra Gottlieb and Cyrus Koochek, SwedelsonGottlieb, Community Association Attorneys

screen-capture-15.pngMany California condominium and homeowner associations end up with units and homes after foreclosing on assessment liens with no third-party bidders at the foreclosure sales. With increased equity, we are seeing more third-party bidders at sales. But that still leaves a lot of associations in the position of being landlords. And many boards do not know the first thing about being a landlord.

This summer, firm partner Sandra Gottlieb and associate Cyrus Koochek wrote an article that was published in CACM’s Law Journal entitled “Successfully Maneuvering Through Post Foreclosure Evictions and Rentals”. Their article provides guidelines for dealing with issues such as compliance with legal requirements, preparing for tenants, lease terms and rent skimming laws. Follow this link to read their informative article, especially if your association owns or may be in the process of taking ownership of any unit or home.

David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

The_Community_Association_Law_Blog__Does_your_board_undertake__Due_Diligence__.pngWe community association attorneys are fond of telling boards of directors that they need to “do their due diligence” before making important decisions, especially those that may have a lasting impact on their associations. That being said, just how many board members actually understand what steps are needed to fulfill that directive? That was the question posed in an article on this issue by Florida community association attorney Donna DiMaggio Berger. Follow this link to her blog post.

Donna states a definition of “Due diligence” as an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. But as Donna goes on to state, that definition is not likely going to be enough for some boards or managers to map out a plan. The steps required for a board to perform the required due diligence will vary depending on the circumstances. Donna lays out some examples; I use them with modifications and add some suggestions:
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By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

superlien.jpgThe Nevada Supreme Court recently ruled that a super priority lien held by a Nevada homeowners association can extinguish a first deed of trust on a property. The Court stated: “With limited exceptions, this lien is ‘prior to all – other liens and encumbrances’ on the homeowner’s property, even a first deed of trust recorded before the dues became delinquent”

The Las Vegas Review-Journal reports that this decision will create a windfall for some real estate investors in Las Vegas who picked up properties for pennies on the dollar.
I have previously written an article that addressed assessment super priority liens. 19 states have them. Unfortunately, we do not have super liens in California.
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By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

ammature_radio_tower_on_condo_-_Google_Search.pngGrowing up, there was a home in our neighborhood that had a massive radio antenna, much like the one in the photograph that is part of this blog post. As a kid, I was fascinated by the antenna. It was so big. Actually, I was captivated by the thought that I could talk to people around the world via a ham radio.

As an adult, while I may still be enamored by the prospect of communicating with people around the world, these days I do that via email, twitter and the telephone. While I have no problem with others wanting to be ham radio operators, I would not want to see one of these radio antennas on the roof of a home at my community association. And I know that many of you feel the same way about not allowing radio antennas, like the one in the photograph, at the associations you live in, manage or work with.

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