HOA Law Blog

August 23, 2023

TENANT BACKGROUND CHECKS AND THE CIVIL RIGHTS DEPARTMENT ACT

By Leena Danpour, Esq.

California’s Civil Rights Department (CRD), formerly known as the Department of Fair Employment and Housing (DFEH) has the responsibility of enforcing state fair housing laws, such as California’s Fair Employment and Housing Act, which makes it illegal for housing providers^[1] to discriminate against tenants with a protected characteristic.^[2]

Many boards of directors want to gain control or maintain oversight over prospective tenants renting out units in their community, because, in their opinion, many tenants fail to abide by the Rules and other Governing Documents of an association. However, taking on the control and oversight of tenant approval will likely expose the association and board to liability. Why? Because they would now be subject to the regulations set forth by the CRD and Housing and Urban Development (HUD), which in turn would subject the association and board to potential discrimination lawsuits from tenants who have not been approved to live at the association.

July 30, 2023

Fostering Harmony and Welcome: Creating an Inviting Atmosphere in Community Associations

by Sandra L. Gottlieb

By Rochelle Ceballos, CMCA

For homeowners, returning to a warm and welcoming environment after a long day’s work is a cherished and vital part of finding solace and comfort. For community managers of Community Associations, it is our responsibility to cultivate an atmosphere that embraces this notion wholeheartedly. The key lies not only in maintaining well-manicured landscapes and pristine facilities but also in ensuring that the interactions within the community are characterized by understanding, respect, and a commitment to de-escalation. This article explores effective techniques for defusing tense situations with angry homeowners, offers insights into creating a harmonious and inclusive community where residents feel heard and valued, and provides valuable tips for staying in the good graces of the Board and the homeowner’s association, enabling you to foster a positive relationship that supports the vision and well-being of your community.

How many times has a homeowner called you or come into your office frustrated, angry and demanding to speak to the manager. If you’re like me, you likely waited to see how your team handled it first because empowerment and leadership are important for the entire team. Once you realize the situation may need additional finesse, leaning into assist the team and address the situation swiftly and calmly its key. Or perhaps you’re a portfolio manager, juggling multiple communities without onsite support. Either way, it’s important to take yourself out of the equation. Most likely you didn’t do anything to upset homeowner so it’s important to understand what is driving this energy. As you can imagine, we all have very long days and fall short when it comes to showing grace at times; thus, it’s important for us to exercise such grace and demonstrate this to our teams to provide that exceptional energy to homeowners, when they need it most.

July 7, 2023

Hard Surface Flooring Considerations To Allow or Not to Allow, That is the Question

by Adrian Chiang and Sandra L. Gottlieb

As many condominium association boards know, hard surface flooring is a popular trend and homeowner demands for its installation are increasing. Benefits of hard surface flooring include its hypoallergenic properties and its durability, and some homeowners simply prefer its aesthetics. In view of this, associations need to consider the following important factors when dealing with hard surface flooring requests or issues.

1. What Do the Governing Documents State? First and foremost, association boards need to review and be familiar with their CC&Rs provisions related to hard surface flooring. Review the architectural section to determine whether hard surface flooring is even subject to architectural review and approval. For example, some CC&Rs allow an owner to install improvements such as hard surface flooring inside the airspace of a unit as long as the common area structural components are unaffected. If the CC&Rs do not subject hard surface flooring to architectural review, then an owner may proceed with installation (subject to the provision referenced in Item 3, Nuisance, below*). Associations should also review the prohibited use section of the CC&Rs. Sometimes this section prohibits hard surface flooring entirely and sometimes only in certain circumstances (e.g., it is permitted for homes located on the first floor but not for upper floors of a building). The rules and regulations of an association should be consistent with the authority granted by the CC&Rs. If the CC&Rs do not enable an association to regulate hard surface flooring, then it can only do so through the enforcement of a nuisance provision (see Item 3, Nuisance, below*). An association may be successfully challenged in court if it imposes standards beyond the authority granted by the CC&Rs.

2. Establish Consistent Flooring Standards. Putting members on notice of hard surface flooring standards is key to minimizing future architectural and nuisance disputes. Such standards allow owners to plan ahead and avoid costly mistakes. This also allows the association to act consistently and avoid claims of selective enforcement or special treatment in regard to architectural applications or owner violations. These standards should be in either the CC&Rs of an association or its rules and regulations, such as the architectural guidelines section.

July 3, 2023

ADUs…are The Winners!

by Sandra L. Gottlieb

By Leena Danpour, Esq.

Recent California legislation, which became effective as of January 1, 2023, makes it easier for homeowners

to obtain permits for building accessory dwelling units (ADUs) on their lots. An ADU is an additional residential structure built on the same lot as a primary structure. California Senate Bill 897 and Assembly Bill 2221 (subsequently codified as Government Code Section 65852.2 and Health and Safety Code Section 17980.12), were enacted to increase the housing supply across the state, which, by doing so, significantly amends California state laws in favor of homeowners who want to build ADUs on their properties. The new laws have an astounding impact on how housing infrastructure will change. Below is a breakdown of the changes to the process of approving an ADU, the location of where an ADU may be constructed, and

January 9, 2023

NEW LAWS EFFECTIVE JANUARY 2023 and OTHER RECENT CHANGES IN THE LAW IMPACTING COMMUNITY/HOMEOWNERS ASSOCIATIONS

by David C. Swedelson

By: The Attorneys at SwedelsonGottlieb

Cursor_and_new_legislation_in_california_-_Google_Search-300x148 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:

September 20, 2022

Mastering the Understanding of the A to Z of Petitions MEMBER PETITION Process

by Cyrus Koochek

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.

August 16, 2022

THIEVES BEWARE! A Surveillance Camera Policy Checklist for Boards of Directors

by Adrian Chiang and Sandra L. Gottlieb

Theft! Whether it occurs in the common area lobby, hallway, parking area, or on an owner’s porch, it is on the rise. Many associations are installing or updating surveillance cameras in response to this criminal behavior. Cameras may not stop all thievery, but they can still help to prove criminal damages or that a theft has occurred. Surveillance cameras can be valuable tools for insurance purposes, to deter would-be criminals, and to provide law enforcement with proof so they can hold criminals accountable for their behavior. Below is a checklist of key points for boards of directors to consider when making surveillance camera policies. Every association with cameras should adopt these guidelines.

Affirm that Association Cameras Do Not Provide Security – Unless an association’s governing documents state otherwise – and they never should – associations do not generally provide security to their residents and should take care in their communications, policies, and actions to avoid creating a duty (and liability) to provide security to residents. This is important so that residents do not rely on such representations for security. Associations should state that the surveillance cameras have a limited purpose and are for the benefit of the association. That is, the cameras are placed to provide evidence of association property damage or theft, for the board to review after an incident has occurred. Associations should also provide a disclaimer to advise residents of limited video storage, the overwriting of older footage, and the fact that cameras may not be actively monitored with a live viewer. The association should make it explicit in policy that residents are responsible for protecting themselves and their own personal property. This is important so that residents do not rely on the association’s cameras for such footage, which may not exist.

Address Privacy Issues – One of the major liability concerns regarding the installation of cameras is, of course, the issue of privacy. State law does not permit the recording of others without their consent when there is a reasonable expectation of privacy. Typically, there is no reasonable expectation of privacy in the common areas, such as a garage, lobby, or shared hallway, since anyone can come and go through these areas. However, there is a likely expectation of privacy in the interior of someone’s home, a backyard, or a restroom.

May 9, 2022

Preparing for the Inevitable: Raising Assessments and How to Do It

by Adrian Chiang and Sandra L. Gottlieb

Preparing for the Inevitable: Raising Assessments and How to Do It

Whether it’s to pay for repairs to the common area, replenish reserve funds, pay for increased utilities, stay even with inflation, raise funds for a new project addition such as a playground or pool (also known as capital improvement), or even help pay for litigation, there will come a time when a homeowners association will need to raise its assessments. This article explains why, how, and when to raise assessments, and how to best communicate it to the membership. When you go through this process keep in mind everyone knows that the cost for a gallon of milk has gone up along with a gallon of gas, so increases in assessments should not be a surprise. Our association boards shouldn’t have to approach the news of assessments increases with shame or threats of retribution, the truth is it is just a “sign of the times.”

First, it’s important to know how assessments work. An association’s annual or “regular” assessments should total the amount of expected expenses for the year which are collected from the membership. These regular assessments are deposited in the operating account and some of the funds may be saved in a reserve account for designated line items as identified in the association’s annual budget. As the association incurs expenses, the operating funds are used to pay for such expenses. If the association has reserve funds set aside for, as an example, major repair items, such as a pool or a roof, then the association can use those reserve funds as that is what the reserve funds are intended for. But when there are additional ongoing operating expenses that arise in which the operating account is insufficient and in which reserve funds can’t be used for that purpose*, the association will have to raise its regular assessments or may need to levy a special assessment based on urgency and need. (Note*: Associations do have the ability to borrow from reserve funds for ongoing operating expenses but are required to pay back the borrowed reserve funds which typically result in raising assessments.). Below is a summary of the methods of raising assessments.

April 19, 2022

New Election Laws

by Sandra L. Gottlieb

In October 2021, Governor Gavin Newsom approved the following three bills affecting homeowner association elections: SB 392, SB 432, and AB 502. These bills made some improvements to the HOA election laws that were passed in 2019, but then they complicated others. First, SB 392 made one simple improvement regarding election material retention. The prior law required retention until the election cannot be contested, which left many people wondering, when is that? And the new law that became effective January 1, 2022, made it simple by requiring retention of election materials for one year after the election date.

As a reminder, California Civil Code § 5200 (c) defines “association election materials” as returned ballots, signed voter envelopes, the voter list of names, parcel numbers, and voters to whom ballots were to be sent, proxies, and the candidate registration list. Signed voter envelopes may be inspected but may not be copied.

Next, SB 432 cleaned up a discrepancy that the 2019 law had left between the Davis-Stirling Act andnthe Corporations Code, both of which apply to most community associations. Corporations Code Section 7511(c) was amended by extending the maximum time for associations to hold the recall/removal and new board member election vote from 90 to 150 days from the date of receipt of the petition. This will allow associations to comply with both Civil Code Section 5115, which requires associations to send a general notice 90 days before an election, and the Corporations Code, which requires the recall/removal to occur within 90 days of the receipt of the petition. According to the old law, in order to comply with both statutes, associations would have been required to send the notice on the day they received the petition.

March 23, 2022

Creating Committees

by Stephen T. Brindle

committee-300x300 Does your board table decisions because you can’t get through all of the discussion? Is there a big project that your association needs to complete, but the minutia of it is overwhelming the board? Don’t let the added work hold you back. Recruit volunteers from the membership to assist the board through the creation of a committee.

Under Corporations Code § 7212, the board of directors of a community association may, subject to the association’s governing documents, vote to form one or more committees that serve at the pleasure of the board. There are two basic types of committees: committees with decision-making authority—such as an executive “committee of the board” made up entirely of directors to which the board has delegated certain powers, or an architectural review committee—and advisory committees, which merely provide the board with non-binding information and advice regarding specific issues, such as a social committee.

A special type of committee, applicable only to community associations, is a “subcommittee” of the board consisting of the treasurer and at least one other board member that performs the required monthly review of the association’s finances, which is required under Civil Code § 5500, independent of a board meeting. When this subcommittee performs this financial review, the board must ratify that review at the next open board meeting and note that ratification in the meeting minutes.