HOA Law Blog

January 18, 2013

HOA Rights and Obligations After the Foreclosure Sale; Rent Skimming and Repairs During The Redemption Period

By Sandra L. Gottlieb, Esq., HOA and Condo Attorneys

Attorneys from the law firm SwedelsonGottlieb and Association Lien Services (ALS) attended Community Associations Institute Orange County Chapter’s (CAI-OC) Educational Luncheon on January 15, 2013 dealing with a California community associations’ rights and obligations following an HOA’s lien foreclosure sale. We did not like everything that we heard. This post is intended to set out our thoughts and opinions which differ from the speakers’ opinions with regard to improvements to the property during the statutory redemption period and the yet to be determined application of rent skimming to community associations and management companies.

The speakers at the January 15th program suggested that a California community association association that takes title to a property following foreclosure should not make improvements, including repairs necessary to rent the unit or home. We do not agree. California Code of Civil Procedure Section 729.060 contemplates that such improvements may be made to the property and that the redemption price shall include, in addition to and among other things, the “reasonable amounts for fire insurance, maintenance, upkeep, and repair of improvements on the property.” In fact, this very issue was litigated and the subject of an unpublished Court of Appeal opinion. In that case, the trial court found, and on appeal the appellate court determined, that money spent on improvements could be included in the redemption amount. In addition, the court found that there was no error in finding that the amount due in order to redeem the property previously foreclosed properly included over $17,900.00 in expenses the third party paid for maintenance and repair work on the unit after the foreclosure sale but prior to the expiration of the redemption period, an electric bill and interest on the foreclosure sale purchase price.
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January 10, 2013

Homeowner Evicted For Not Paying His Association’s Assessments

by David C. Swedelson

Blog post by David Swedelson, Condo Attorney and HOA lawyer; Senior Partner at SwedelsonGottlieb, Community Association Attorneys

Under California law, a condo or homeowners association has the right to foreclose on an owner’s interest in their condominium or property if they fail to pay the assessments or fees that are levied on them. It never ceases to amaze me that homeowners are surprised when their association forecloses.

And it never ceases to amaze me when these stories end up in the news. Follow this link to an article out of Florida where a homeowner was surprised when he was evicted after not paying his association for two years.

January 8, 2013

2012 Case Law Affecting California Community Associations

by David C. Swedelson

Each year, there are a number of cases, Court of Appeal or California Supreme Court decisions involving California community associations. These are cases that we lawyers rely upon. Last year (2012), there were several important cases that are important for community association managers and board members to know about. The details of the cases are discussed in an article that Sandra Gottlieb prepared for the Greater Los Angeles Chapter of Community Associations Institute. Below is a brief summary of the highlights:

• Arbitration clauses contained in CC&Rs are enforceable by a developer unless proven to be unreasonable. (Pinnacle Museum Tower Association v. Pinnacle Market Development)

• A board candidate who disparages another candidate is not protected by the First Amendment, litigation privilege or Anti-SLAPP statute. (Silk v. Feldman)

January 3, 2013

Rental Restrictions: An International Issue

by David C. Swedelson

By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

The Los Angeles Times reports (on January 1, 2013) that as a result of government imposed fees on investors that do not reside in their apartments (we assume condos) or buy to flip them, in Hong Kong real estate investors are scrambling to buy parking spaces that are not subject to the fees. “Single spaces are now selling for more than some modest Southern California homes. Someone paid $288,000 in November 2012 for a parking space in a luxury apartment complex on Hong Kong Island. Or the $166,000 tab for a spot in a suburban development called Festival City. A space attached to an exclusive cliffside townhouse community in the ocean view neighborhood of Repulse Bay fetched $385,000 in March. And those are just the recorded sales.”
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January 2, 2013

Exemptions from Rental Restrictions; Not All Transfers Apply

by David C. Swedelson

By Sandra L. Gottlieb, Senior Partner and Community Association Attorney at SwedelsonGottlieb

California Civil Code Section 1360.2 went into effect on January 1, 2012, a little over one year ago, and states that any new provision in a governing document or an amendment to a governing document that prohibits the rental or leasing of any of the separate interests is not applicable to anyone who purchased before the date the governing document and/or amendment was adopted or recorded unless that person expressly consents to be bound. Notwithstanding the limitations created by Civil Code Section 1360.2, many community associations are still adopting new rental restrictions to be applied to new owners or transferees. What they are learning is that not all transfers of an interest in a property will be covered by Civil Code Section 1360.2 which allows for certain exemptions from a leasing restriction. Certain transfers of property do not constitute a change in ownership and therefore, the new owner may not be subject to any provisions prohibiting leasing that were adopted after the new owner obtained title to the separate interest (i.e., unit or lot).
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December 30, 2012

Family Day Care Homes Can Operate Within California Community Associations—So Long As They Follow The Law

by David C. Swedelson

By Sandra L. Gottlieb, Esq. Senior Partner at SwedelsonGottlieb, Community Association Attorneys

Did you know that California community associations are required to allow an owner to operate a “family day care home” within their unit or lot at an association and that the day care can have up to 14 kids in it!? Yup, it is true. This blog post is intended to address family day care homes and what your association can do to deal with them to reduce, if not eliminate, its liability and protect the community.
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December 14, 2012

What the Heck Is A Power of Attorney And How Does It Work For Board Meetings?

by David C. Swedelson

Screenshot%2012%3A14%3A12%206%3A03%20PM.png Blog article by David C. Swedelson, Esq.

On occasion, a director will seek to appoint another person to attend board meetings on their behalf (and make board decisions and vote as if they were a board member), or a homeowner’s friend or relative will attend the homeowners forum and attempt to speak on the homeowner’s behalf. This article is intended to address and explain the concept of “Power of Attorney”, or in other words, the ability for a person to appoint a representative to act on their behalf.

Can a representative attend executive or open session meetings and sit in the director’s seat, make and vote on items of business within the board’s authority?

December 4, 2012

The Ins and Outs of Executive Committees

by David C. Swedelson

Screenshot%20ExecCommittee.png Blog Post by David Swedelson, Founding Partner SwedelsonGottlieb

Recent amendments to the Davis-Stirling Act have made it challenging for community association boards of directors to “deal” with important Association business. Don’t know what I’m talking about? As of January 1, 2012, the California Legislature has imposed a prohibition on Boards taking action on any “item of business” outside of a properly noticed Board meeting. Obviously, the inability of a board to make “decisions” via email can restrict a Board’s ability to make time sensitive decisions.

There are ways around this prohibition which would allow a Board of Directors to remain in compliance with the Civil Code. Specifically, Civil Code 1363.05 provides an exception to a board’s ability to conduct business by excluding “those actions that the board has delegated to any person or persons (management, agent, officer of the association, or committee of the board comprising less than a majority of the directors). But there may be issues as to how much authority a committee actually has to make decisions that normally the board would be required to make.

December 4, 2012

CAI Policy on the Fair Debt Collections Practices Act

by David C. Swedelson

Screenshot%2012%3A4%3A12%203%3A05%20PM.png Blog Post By David Swedelson, SwedelsonGottlieb Community Association Attorneys

I recently posted a blog article regarding the Fair Debt Collection Practices Act or commonly referred to as the “FDCPA”. Follow this link for my blog post entitled Neither a Community Association Nor its Management Have Liability Under the Federal Fair Debt Collections Practices Act.

I received several questions and comments regarding the FDCPA. Some readers reminded me that Community Associations Institute (CAI) has a policy statement regarding the FDCPA. Follow this link to CAI’s Overview of the Fair Debt Collection Practices Act and follow this link to CAI’s policy.

November 29, 2012

Are Persons Who Are Not Owners Allowed to Attend Association Board Meetings? Yes, If The Board Allows This. Otherwise, The Answer Is No.

by David C. Swedelson

Screenshot%2011%3A29%3A12%207%3A17%20PM.png Blog Post by David Swedelson, SwedelsonGottlieb Community Association Attorneys

We are often asked whether persons who are not members of the association can attend association board meetings. The short answer to this question is yes, subject to the considerations discussed below. We are also asked if non-members can be excluded from board meetings; the answer is yes, and this is also subject to considerations that are addressed below.

California Corporations Code § 1363.05, known as the Common Interest Development Open Meeting Act, provides, at subsection (b), that any member of the association may attend meetings of the association’s oard of directors, except executive session meetings of the board. This statutory provision is silent as to whether non-owner residents of the association or other non-members can attend open/general session Board meetings. Further, most association’s bylaws do not prohibit non-members from attending board meetings, and are silent on this issue.
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