HOA Law Blog

September 19, 2011

Governor Brown Signs SB 563; Say Good-bye to Actions Without a Meeting

By David Swedelson, Condo lawyer and HOA attorney; Senior Partner SwedelsonGottlieb

Despite significant industry opposition, the Governor has signed into law amendments to the Davis Stirling Act and specifically Civil Code Section 1363.05, also known as the Common Interest Development Open Meeting Act. Here is the story of how this new law came to be:

As most of you know, the Act was amended with the addition of this code section requiring that board meetings at California community associations be open to members except for certain specified executive session meetings when those meetings should be kept confidential or emergency meetings when the required notice to owners is not possible.
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September 11, 2011

Las Vegas Man Pleads Guilty in Connection with Fraud Scheme to Gain Control of Condominium Homeowners’ Associations

by David C. Swedelson

Blog posting by David C. Swedelson, Condo and HOA lawyer, Partner SwedelsonGottlieb
According to an FBI website article, a Las Vegas man pleaded guilty for his role in a scheme to fraudulently gain control of condominium homeowners’ associations (HOA) in the Las Vegas area so that the HOAs could direct business to a certain law firm and construction company.

The story is amazing, and you might wonder how this could happen. Over my many years as a California condo and HOA attorney, I have seen several community associations that were taken over and controlled by groups that bought up units and votes. But I have never seen this done so that work could be funneled to attorneys or contractors. But considering the money that could be earned on these projects, we should not be too surprised that this happened.
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September 10, 2011

Age-Restricted HOA Doesn’t Want Young Guests Visiting

by David C. Swedelson

Blog posting by David Swedelson, California Condo lawyer and HOA attorney; Partner SwedelsonGottlieb
Community Associations Institute’s Fast Tracks News Bulletin reports on a Fort Myers, Fla. age-restricted homeowners association that is telling an owner that that he does not have the right to have guests who are younger than 55 visit his home while he is away.
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September 1, 2011

Accommodating Medical Marijuana Users Does Not Mean They Can Cause A Nuisance To Other Condo or HOA Association Residents

by David C. Swedelson

By David C. Swedelson and Sandra L. Gottlieb, Partners, SwedelsonGottlieb, Condo Attorneys and HOA Lawyers

We have been receiving a number of calls lately from board members and community association managers asking what they can or should do about complaints from residents about marijuana smoke that is wafting into their units or homes. Many of you may be wondering why this is an issue and questioning why anyone would complain. We won’t go there. We are hearing that some of these marijuana users are saying that the association cannot stop them from smoking their medical marijuana, as they have their doctor’s recommendation and it is permitted by state law. So, must California community associations accommodate medical marijuana use by residents even when it creates a nuisance for other owners/residents? We thought that the answer was pretty clear that even if a resident is legally using medical marijuana, their use cannot cause or create a nuisance which interferes with another resident’s quiet enjoyment of their unit or home. Apparently this is not so clear, as we have been told that some attorneys are telling their condo association clients that they can do nothing about marijuana use by a resident who possesses a doctor’s recommendation. Seriously?! We do not agree. And we have written an article on the issue. Follow this link for our full article on this subject.

August 21, 2011

CAI Slams Latest FHA Guidance

by David C. Swedelson

As we reported on July 31st (follow this link), FHA’s Revised Condominium Guidance Solves Some Problems But Creates Many More. Community Association’s institute (CAI) has been actively addressing the issues. In a July 22 letter to the Office of Information and Regulatory Affairs (OIRA), CAI asserts that the Federal Housing Administration (FHA) “failed to undertake even the most basic due diligence” in its latest mortgage-approval guidance. CAI wants OIRA to require FHA to re-examine its June 30 guidance, which CAI says will prevent many condominium associations from meeting FHA-certification guidelines. “We hope OIRA will take whatever steps are necessary to ensure that FHA conducts a more thoughtful, thorough and transparent analysis,” said CAI Chief Executive Officer Thomas Skiba, CAE. Read more. Visit Mortgage Matters to learn more about what CAI is doing on behalf of HOAs, condominium communities, homeowners, prospective homebuyers and the housing market.

August 17, 2011

SB 150 Limits Certain Rental Restrictions Recorded On Or After January 1, 2012

by David C. Swedelson

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

SwedelsonGottlieb has been responding to a flood of inquiries regarding the recently chaptered California SB 150, a bill which amends Sections 1368 and 1373 of the Davis-Stirling Act and adds a new Civil Code Section to the Act affecting certain rental restriction provisions in CC&Rs that are recorded on or after January 1, 2012. As there seems to be a good deal of confusion about this bill (even among some attorneys in our industry), we thought it would be beneficial for the readers of HOALawBlog to clearly explain the applicability and effect of this new legislation.

The Legislative Counsel’s Digest contains a good summary of the purpose of the bill: “This bill would prohibit the owner of a separate interest in a common interest development from being subject to a provision in a governing document, or a provision in an amendment to a governing document, that prohibits the rental or leasing of all or any of the separate interests in that common interest development to a renter, lessee, or tenant unless that governing document, or amendment thereto, was effective prior to the date the owner acquired title to his or her separate interest.” As noted above, this bill applies to some, but not all, rental restrictions recorded on or after January 1, 2012.

August 16, 2011

How Does Fraud Take Hold In A Private Residential Community?

by David C. Swedelson

By David Swedelson, Senior Partner at SwedelsonGottlieb, Condo Attorney and HOA Lawyer

I came across an interesting article with this title written by fellow community association attorney, Donna DiMaggio Berger, who practices in Florida. As Donna states in her article, “fraud is certainly nothing new but in today’s troubling economic climate, the chance that your community may be harmed by a fraudster, especially if you don’t have a series of checks and balances in place, rises dangerously.” This is so true. I track news articles that relate to condominiums and homeowners associations around the country, and I have not been surprised by the many news articles I have seen reporting on fraud and embezzlement committed by board members and association managers. And they go to jail!
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August 3, 2011

Short Sale: Words That Should Strike Fear, or The Good Alternative to Foreclosure? You Decide

by David C. Swedelson

By David C. Swedelson and Sandra L. Gottlieb, Condo and HOA Legal Experts, Community Association Attorneys
As we maneuver our way through the end of this recession, the words “short sale” are being bandied about more than at any other time that we can remember. Lenders are apparently more receptive to considering a discount on a mortgage rather then taking the property back in foreclosure. We wrote about short sales back in May 2011 (follow this link). Wikipedia defines a short sale as “a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.”
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August 2, 2011

How One Association’s $30,000 Mold Water Damage Claim Turned into a $169,000 Arbitration Award

by David C. Swedelson

(and why condominium associations should be responsible for waterproofing on balcony decks)

By David C. Swedelson, Condo Lawyer and HOA legal expert; Senior Partner at SwedelsonGottlieb
I know that many boards contemplate the idea of making owners responsible for the waterproofing on the balconies or decks in condominiums (and yes, generally the association is responsible for repairing or replacing what is considered common area waterproofing). Bad idea. The reality is that owners will not do what is required, and the leaks will damage the common area and other units. One association client learned this the hard way. And while the end result was good for the association and we consider this an excellent result, the road was rocky and stressful. And the association had to finance our fees and the costs.

It all started with that association amending and restating its Governing Documents (through another firm). As a part of that process, their former attorney suggested that they make the homeowners responsible for the maintenance, repair and replacement of the waterproofing on each homeowner’s exclusive use balcony decks. Many associations tell me they would like to see the homeowners responsible for the waterproofing, as they claim that the association does not want to have to save or expend the money for that work. However, in practice this is not a good idea.
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July 31, 2011

Governor Signs Senate Bill 209 Dealing WIth Electric Charging Stations

by David C. Swedelson

Posted by David C. Swedelson,
Partner, SwedelsonGottlieb; Community Association Legal Expert
With the proliferation of electric vehicles comes a new law that limits and restricts California community associations’ ability to prohibit an owner from installing their own electric charging station. On July 25, Governor Brown signed Senate Bill 209, which adds new Civil Code Section 1353.9. The new law takes effect January 1, 2012.

New Civil Code Section 1353.9 will prohibit California condominium and other community associations from unreasonably restricting the installation of electric vehicle charging stations. Homeowners who place charging stations in the common areas will be responsible for costs associated with maintaining and repairing the station, as well as costs for damage to common areas and adjacent units resulting from installation and maintenance of the station. The new law will impose other responsibilities on the homeowner, including maintaining a liability insurance coverage of $1,000,000 that names the association as an additional insured.

Unfortunately, the new law allows individual owners to use or occupy common areas, contrary to existing statutes and case law. In his signing message, Governor Brown stated that the author of the bill plans to introduce legislation that protects the right of common interest developments to establish reasonable rules for any use of common areas for charging stations. Governor Brown recognized this issue in his signing message:
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