So, you are probably asking yourself what a lawsuit against Nordstrom (a department store) has to do with community associations. Plenty. Let me explain.

In a recent decision, the Court of Appeal determined that the trial court had NOT made a mistake when it granted summary judgment in favor of Nordstrom against a woman who sued the department store after the escalator she was riding stopped abruptly due to a power outage apparently caused by a nearby traffic collision (Bozzi v. Nordstrom, Inc.).

The court’s ruling was based on the fact that the woman who sued had failed to show that Nordstrom had breached any duty of care (meaning that she didn’t show that Nordstrom had been negligent) or that the escalator was defective. While her expert opined that the escalator must have been defectively designed or maintained, he was unable to state any facts to support his opinion.

What this case points out is that in order to show that the association or an owner is liable for damages from a roof or pipe leak or some other damage producing event, unless the association’s CC&Rs say that either can be held strictly liable without a showing of fault or negligence, a party (the association or an owner/resident/tenant) who claims that they have suffered damages must show that the other party somehow breached a duty and/or was negligent.
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By David Swedelson, Esq.; Senior Partner at SwedelsonGottlieb

This article follows an earlier post entitled To Foreclose Or Not To Foreclose; That Seems To Be The Question. We had hoped that the economy would have improved so we would not have to revisit the issue. However, board members and managers are still asking the question: Do we foreclose or not? This question is coming up more and more as banks continue to delay foreclosing themselves as they do not want to take title to the property, adding it to unsold inventory and picking up responsibility for its maintenance and the association’s assessments and fees.

The answer to the question is that boards need to seriously consider foreclosing on the assessment liens recorded against the properties of non-paying owners in order to protect the community association – and to protect the other owners who are paying their assessments. Associations need and rely upon the timely payment of assessments to pay the bills, and to maintain the common areas and other amenities. If one owner doesn’t pay, the other owners have to pay and in some instances pay more. Desperate times often require desperate measures, and it may be necessary to force the hand of a non-paying owner (and subsequently the bank) by foreclosing. The ultimate goal by foreclosing is to get a property owner who will pay the assessments; in our experience, the quickest and most efficient way to accomplish this goal is through non-judicial foreclosure.
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A recent column in the Los Angeles Times addressed an interesting issue regarding assessment collection on units or lots owned by soldiers who are serving in Iraq, Afghanistan or elsewhere.

The article referenced a community association in Texas that proceeded to foreclose on its lien recorded against a home owned by a soldier that was on active duty in Iraq. As the article indicates, while the soldier was in Iraq, his wife was in the home but “suffered from anxiety and depression over her husband’s tour of duty, didn’t open the certified letters informing her that the $315,000 home in Frisco, Texas was about to be sold to collect $977.55 in back dues [assessments] (although by the time the home went to auction, legal costs had ballooned the amount to about $2,600).”

The house was sold in a foreclosure sale, the buyer sold it to an investor, a lawsuit ensued and eventually the parties settled.

The Los Angeles Times publishes a column entitled Rent Watch. Recently, the column addressed a situation where a tenant maintained in that tenants apartment a seeing eye dog that barked at night bothering the neighbor(s). The answer applies to community associations as well as rental units. Follow this link to read the selected Q&A.

As that column correctly indicates, while community associations (which are considered housing providers for the purpose of fair housing/accommodation matters) are required to reasonably accommodate disabled residents, the accommodation provided to a disabled individual must be “reasonable”. Quoting from the article, “If the dog’s behavior is an unreasonable nuisance to other [residents], the [association] is not obligated to ignore that.”

It may be necessary to contact the resident directly to advise them that while they are able to have their dog in their unit (which may violate the association’s governing documents) their dog is creating a nuisance and they have to deal with that and the dog will have to leave. Otherwise, their request to maintain their dog in their unit is not reasonable so long as it continues to bark and create a nuisance.

September 22, 2010 marked the beginning of the Jewish holiday of Sukkot. This holiday starts on a different date between late September to late October each year and has agricultural orgins, celebrating the harvest. If it is Sukkot, we can be assured of getting calls asking us what to do about the Sukkahs that some homeowners have erected on their balconies or patios (or in some cases right in the common area). For those of you who don’t know what Sukkot entails, some Jews construct temporary outdoor dwellings, called Sukkahs, where they traditionally eat, sleep, and otherwise spend their time during this seven day holiday. Click here for examples of Sukkahs. The Sukkahs are typically small temporary wooden structures, but can be quite elaborate, incorporating various decorations such as hanging fruit and vegetables.

What do you do if a homeowner puts up a Sukkah on their exclusive use common area, or worse, on the common area that is not theirs to use exclusively, in violation of governing documents that contain prohibitions on exterior modifications without architectural committee approval? Despite our constant admonishments to uniformly and consistently enforce the governing documents, the association’s right to enforce its restrictions has to be weighed against the homeowners’ right to practice their religion.
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An interesting trial court decision was reported in the Daily Journal, a newspaper for attorneys. The article dealt with a the trial judge’s decision in a lawsuit between two owners in a Newport Beach gated zero lot line community regarding a purported landscaping encroachment. A zero lot line refers to a type of home where one boundary wall of the structure is built right on the property line (rather then there being a wall between the two homes with a setback).

Follow this link to read the article/summary.

One neighbor claimed that the other neighbor’s shrubbery that grew along a 2.5 foot wall on their shared property line was interfering with their view. They also sought a declaration from the court that their neighbor would be responsible for future damage to the drainage system that may be caused by their landscaping. The plaintiff owner requested $100,000 in damages and injunctive relief (and a court order requiring that the conditions be eliminated).
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On August 13, 2010, the Federal Housing Finance Agency (FHFA) issued a proposed regulation to ban the use of deed-based or covenant-based transfer fees. The proposal would prohibit Fannie Mae, Freddie Mac and all federal home loan banks from purchasing mortgages for properties in communities with deed-based transfer fees. While the target of the regulation appears to be private transfer fees that require a payment to a third party each time a property is sold, the proposed rule, as currently written, would include deed-based transfer fees used by many community associations. Click here for a recent Los Angeles Times article that addresses this issue.

A Private Transfer Fee is defined any fee or payment required at time of sale of a property by a deed or covenant restriction.

This new rule, if adopted, could have a significant impact on those communities that have private transfer fees in their governing documents.
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Calemine v. Jared Court Homeowners Association, Inc.

In an unpublished opinion, the California Court of Appeals, relying on the Supreme Court’s decision in Lamden, upheld a trial court ruling that a condominium association, acting in good faith and in the best interests of the community, can decide not to take action to stop water from intruding or leaking into a unit due to construction defects in common areas.

Jared Court, an 18 unit townhouse style condominium association located in Woodland Hills, California, is made up of four buildings and common area that includes a tennis court, swimming pool, concrete walkways, front patios and mature landscaping. The CC&Rs require that the Association “maintain the portion of the project not occupied by the units [the common area], in good, clean, attractive and sanitary order and repair.”
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Lately, a number of our firm’s clients have contacted us regarding disputes they are having with vendors or their management regarding termination of their relationships. One association was very dissatisfied with the laundry room service/equipment provider, and when they went to terminate that relationship, they received a letter from the laundry company’s attorney advising that the contract had recently renewed for an additional five-year term. To make matters worse, there was no provision in the agreement for terminating the contract for cause.

Another client wanted to get out of their contract with their management company, wrote a letter of termination, and was then advised that the contract had renewed for another year (and the manager never told the board when the deadline was to terminate). And this was after the board had been asking the management company for a copy of their contract. The management company denied that it had any obligation to advise the association as to when the contract term ended or when or if there was a deadline for termination.
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Posted by David Swedelson

From time to time we hear from association clients that are in a dispute with owners over documents that the owner wants to inspect or copy. They often want copies of the attorney’s billing statements. The problem is that most attorneys are descriptive as to the nature of the services provided, and these narratives include confidential attorney-client privileged communications and are not for distribution.

In response to an owner’s request to review the association’s legal bills, it is appropriate for the Board to respond denying the request on the basis that the legal bills are subject to the attorney-client privilege, and that a member’s right to review association documents does not extend to documents subject to the privilege. Yes, the Civil Code does say that the owners are entitled to see the contract between the association and the attorney. But the retainer agreement is not a billing invoice. And the owner is entitled to documents showing what the attorney has been paid; but not the billing invoice.

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