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In an unpublished opinion, the California Court of Appeals, relying on the Supreme Court’s decision in Lamden, upheld a trial court ruling that a condominium association, acting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.

In July, David C. Swedelson, Esq. was a speaker at the CACM expo, in a program entitled “Technology Horoscope”. Several attendees have requested copies of the article that David prepared for that presentation with the actual links to some of the new technology, applications and programs that David discussed at the expo. Follow this link for a copy of the article. David will continue to periodically provide new information on technology that can benefit those that serve on boards of directors or manage California condominium associations and planned developments.

On July 27, 2010, the Santa Monica City Council voted to adopt a city ordinance banning smoking within 25 feet of a door or window in any multi-unit residential building. This new city ordinance will go into effect in September 2010 and will effectively bar residents of condominiums and apartment buildings from smoking on patios, balconies and terraces adjacent to their dwelling, whether or not those areas are considered a part of the unit/apartment or exclusive use common area. Currently under the ordinance, there is no fine by the City for violation of the ordinance, but violators can be taken to small claims court for a violation, which could result in the court imposing penalties. The City is currently exploring other enforcement options.

This new ordinance is indicative of Santa Monica’s history of restricting smoking in public places and trying to diminish the effects of secondhand smoke. Santa Monica previously enacted a City ordinance that bans smoking in the common areas of all multi-unit developments. It is unclear whether this ordinance will be adopted by other cities, but it points to the anti-smoking direction that many cities and communities are heading towards. The Santa Monica Daily Press recently published an article regarding the new ordinance.

This blog post by SwedelsonGottlieb, Community Association Attorneys.

The Americans with Disabilities Act (“ADA”) recently celebrated its twenty (20) year anniversary. The ADA has had a significant impact on all of us by knocking down architectural construction barriers that had previously prevented people with disabilities from being able to access public facilities, for example by making sure that business entrances are wheelchair accessible, requiring that store aisles be widened, and mandating other modifications that provide people with disabilities the ability to access public buildings and public recreational facilities. However, despite what some homeowners will want their associations to believe, the ADA does not generally apply to California community associations. The purpose of the ADA has always been to provide people with disabilities access to public places, and community associations are, for the most part, private and not public.

In the winter of 2009, the Greater Los Angeles Chapter of Community Associations Institute published an article written by firm attorneys David C. Swedelson and Stephanie M. Rohde entitled “Does the Americans With Disabilities Act (“ADA”) Apply to Your Association? Probably Not!” Follow this link to read or download a copy of their article. And if you have any questions regarding whether the ADA applies to your California community association, please do not hesitate to contact David C. Swedelson, Esq., at dcs@sghoalaw.com or Stephanie M. Rohde, Esq., at smr@sghoalaw.com.

Governor Arnold Schwarzenegger signed Assembly Bill 2016. Assembly Member Norma Torres (Dem, Pomona; she chairs the Assembly Housing Committee) authored this bill and her press release is set out below.

AB 2016 relates to the notice that can be recorded on a property in a community association that tells a foreclosure trustee that they are required to provide certain information to the association. This bill will allow California community associations to record a single “blanket” recordation for all homes or units at an association rather then the one notice per property under prior law.

The recorded notice requests a foreclosure trustee to mail a notice to the association of:

1) The name and mailing address of the successor in interest that acquired title to a property that was foreclosed on; and
2) The date the sale of the property took place.

While there is not much an association can do if a foreclosure trustee fails to comply, the hope is that when they do provide the information requested, that will make finding the new owner easier and sooner for purposes of giving them notice of the assessments and other obligations and of course will hopefully make collecting assessments easier as well. This new legislation takes effect January 1, 2011.

AB 2016 is a follow up bill to Senate Bill 1511 (Ducheny, Dem, San Diego) from 2007 that allows California community associations to find out who the new owner is sooner then was possible previously.

Below is the the press release from the author of this bill, Assembly Member Norma Torres.
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