By David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys
SB 298, which adds Section 53069.81 to the Government Code, is an unusual piece of legislation that provides community associations in one county of California with the ability to contract with local law enforcement agencies to provide Vehicle Code enforcement services at the association. We had not heard about this bill until now and do not know why it was limited to Orange County community associations as we know that associations in other parts of the State have a need for help with enforcement of the Vehicle Code on their private streets.
AB 298 authorizes the Board of Supervisors of the County of Orange, or the city council of a city within this county, to contract to provide supplemental law enforcement services to a homeowners’ association on an occasional or ongoing basis to enforce the Vehicle Code on a homeowners’ association’s privately owned and maintained road, as provided by Vehicle Code Section 21107.7.
Consider the following, a somewhat typical scenario: your association has been sued by an owner who claims the board failed to maintain the common area that resulted in water leaking into that homeowner’s unit, causing damage. The board tenders the claim to the association’s insurance carrier. The claim is not resolved, or it may not even be a covered claim under the association’s insurance policy, and the owner files a lawsuit. The lawsuit is tendered to the association’s insurance carrier with a request that the carrier defend the lawsuit and indemnify the association from any damages. The insurance carrier accepts the tender with limited reservations of rights (insurance carriers always reserve rights to deny coverage if it later determines or discovers there is no coverage). 
In 2012, many managers were concerned when the California legislature enacted AB 2237, amending Business and Professions (B&P) Code Section 7026.1 relating to contractors, which became effective at the beginning of this year. The amendments to AB 2237 mandated required “consultants” overseeing some construction projects to be licensed “contractors”. This caused some managers to be concerned as to whether they were considered “consultants” and therefore required to be licensed contractors when performing management services for condo and homeowner associations. Specifically, there was concern that doing typical management functions such as bid solicitation, bid management and/or oversight of common area maintenance projects would require a contractor’s license. 
Unfortunately, there is fraud and embezzlement being committed at community associations throughout California as well as across the country every day. We have written about this issue in the past; 
You may have heard an attorney refer to the “SB800 process” and not really understood what it was all about. SB800 refers to a California Senate Bill that became law about ten years ago, requiring and setting out a new procedure that had to be followed for construction defect claims and lawsuits against the builders and developers of condominium and homeowner associations. SB800, which was codified in Civil Code § 875 et seq., applies to homes and condominiums and provides the procedure for instituting construction defect claims for new residential property “sold” on or after January 1, 2003. Although the express legislative intent of SB800 was to improve standards and procedures for the administration of civil justice and early resolution of construction defects, according to the California Building Industry Association, SB800 would lead to increased production of affordable condominiums and townhouses. Not sure if that actually happened. But it is clear that a lot of condos have been built in the last ten years. This bill significantly changed the way defect cases were being handled. 
The Court of Appeal recently came down with a decision regarding a lawsuit filed by several condominium owners who bought units in the Hard Rock Hotel San Diego, a mixed-use development with 420 condominium units. The Court of Appeal’s decision indicates that when these owners bought their units, they not only entered into purchase agreements, they also signed rental management agreements eight to fifteen months later. Does this mean that they get to sue for securities violations? Relating to a condo association? The following is a good definition of “Securities Fraud”.
I recently read with interest an article prepared by an attorney that represents developers with the title “Residential Real Estate: Lessons From The Recession” written by attorney Nancy Scull, who represents developers. Her article commented on the fact that it was not that long ago that we were hearing new stories about “broken projects” and “fractured condominiums” which she described as the “remnants of the residential communities that fell victim to our most recent real estate recession.” It has been awhile since we heard about condominium or other homeowner association developments that were not completed and were abandoned by developers in the wake of the Great Recession. But as our economy and the real estate market continues to recover, the projects are being reevaluated, and new real estate development projects are being started. As Ms. Scull suggests, “with such positive news, it is easy to forget the problems and challenges that confronted residential developers only a few years ago. Real estate is cyclical, and the failure to learn from the residential housing economic downturn may only result in history repeating itself when the inevitable real estate ‘bubble’ bursts.”
Many of our clients have been confronted with issues relating to service and companion animals at homeowners associations. Typically, the question is whether those animals are permitted to remain at the association (typically condo or stock cooperative associations) even if this would be a violation of their association’s governing documents (and generally, they are).
You may not have noticed this, but it is a fact that the United States has a large and growing population of senior citizens. Between 2000 and 2050, The number of older people is projected to increase by 135%. And the population of people 85 and over is projected to increase by 350%. In fact, the proportion of the population that is 85 and older will increase from 1.6% in 2000 to 4.8% in 2050. The aging of our population will place additional pressure on healthcare facilities and support programs for older people. This will also place some pressure on community association (mostly condominiums and stock cooperatives) boards and management.