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By: David C. Swedelson, Esq.,
Senior Partner at SwedelsonGottlieb
Community managers have been telling us over the last year that much of their time has been consumed by matters relating to delinquent assessments. And they are not just referring to the basic mechanics of the collection process. They are also referring to the many questions that come up, the calls and emails from owners and board members, the foreclosure notices, the bankruptcies, and the list goes on. They lament that this is taking them away from doing their core responsibilities relating to maintenance and repair, etc.

Managers and board members alike are concerned about the impact that this recession is having on the communities they govern or manage. They are concerned about the deficit in the budget that is caused by their associations not receiving all of the revenue that was expected when the annual budget was prepared and the resulting lack of money to do all of the maintenance and repair that is required.

Because of the impact the recession is having on our client base, I have been monitoring articles and reports from experts regarding when we might reach the end of what is now being called the “Great Recession.”
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By Joan E. Lewis-Heard, Esq.
Senior Associate; SwedelsonGottlieb
For those community associations whose CC&Rs provide for assignment of rents from a tenant in the event an association owner who is renting their unit or home is delinquent in the payment of assessments, an association may collect the rent directly from the tenant to pay delinquent assessments.

If done properly, this can be done without a court order or the expense of a court appointed receiver. In order to do this, the following is required: 1) the CC&Rs must have an assignment of rents clause; 2) a lien for the delinquent assessments should be recorded to secure the debt; and 3) a statutory Demand to Pay Rent to a Party Other than Landlord, pursuant to Section 2938 of the Civil Code, is required to be delivered by mail or by hand to each tenant of the property and the landlord/owner. Follow this link for the required text of the demand to pay rent to party other than landlord.
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We see it on the web all the time, articles highly critical of politicians, actors, pop stars and others. Then come the highly inflammatory comments from readers using anonymous names. There are websites where you can critique restaurants, shops, services, etc. Sometimes these criticizers write some of the nastiest things. We are now seeing this type of nastiness on websites set up by disgruntled community association owners.

I recently read an article on the internet that addressed this very phenomena, calling it webtribution. Click here to read the article.

The author comments on people who write nasty reviews for a restaurant or book, “not because they dislike the product, but because they dislike the person who created it. Or signing up an acquaintance for email advertising lists. (I can assure you that if your inbox suddenly fills up with ads for male-enhancement treatments, someone is out to get you.)”

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We are often asked by Boards about what is a reasonable rule. The answer is that I know it when I see it. We prepared an article that addresses this very issue. Click here for that article, “What Makes a Rule Reasonable or Unreasonable? I Know It When I See It!” By David C. Swedelson, Senior Partner of SwedelsonGottlieb.

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Knowingly or unknowingly, sometimes boards adopt rules which are in conflict or more restrictive than the association’s CC&Rs. For example, they make specific rules regarding prohibitions on the installation of washing machines when the CC&Rs are silent on the matter. Boards sometimes prohibit hard surface flooring when this is likewise not covered by their association’s CC&Rs. We sometimes see rules that limit the number of or size of animals that homeowners are able to maintain when this is likewise not covered by the association’s CC&Rs. Sometimes, these rules end up in litigation, especially when the board tries to enforce same. Often the board of directors will argue that the court must defer to their discretion when they are performing their duties. While usually the courts will defer to the board of directors when it comes to decisions covered by the association’s governing documents, this is not true when the board has exceeded its authority.

Such was the case involving an association in Orange County, California, where the board decided they were not going to make homeowners “trim” their palm trees to eliminate a view obstruction and made a rule regarding this even though the association’s CC&Rs prohibited any view obstructions from landscaping. Firm attorneys David C. Swedelson and Stephanie M. Rohde have prepared an article entitled “Decisions of Boards of Directors Regarding Enforcement of Governing Documents Cannot Usually Be Second Guessed Unless the Decision is More Restrictive than the CC&Rs.” Click here for a PDF copy of this important and timely article.

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SwedelsonGottlieb is proud to announce that our firm’s senior and managing partner Sandra Gottlieb has been elected to the Board of Directors of the Channel Islands Chapter of Community Associations Institute (CAI). She will serve as President-Elect in 2010 and as the Chapter’s President in 2011. Sandra looks forward to leading the Chapter to continued success and furthering our firm’s committment to supporting California’s community associations and all that serve and work with them. She will continue to serve CAI’s Orange County Chapter as a Board member in 2010.

If you would like to learn more about Community Associations Institute, visit them at www.cai-online.org

The Channel Islands Chapter has its own website at www.cai-channelislands.org

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It is October, and many association boards of directors and managers are in the process of preparing their associations’ 2010 budgets and statutory disclosure mailings. As we have done every year for the last decade, we have posted SwedelsonGottlieb’s Annual Disclosure and Notice Checklist to assist you with that process. Even if you have already sent out your budget and disclosure package, you may want to review the checklist to make sure that you have not forgotten anything. Note that there are a few changes to statutes. For example, the Notice of Assessments, Foreclosures and Payment Plans pursuant to Civil Code Section 1365.1 has been modified. In addition, there are some new changes effective January 1, 2010 regarding the Assessment in Reserve Funding Disclosure Summary, the creation of a Disclosure Document Index, and other procedural changes. Please check our blog later this week for a summary of those new laws and their application to your associations.

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You have most likely received emails regarding proposed new legislation that would allow California community associations’ Boards the power to enter into long term contracts for water or energy efficiency programs. After considering the pros and cons as expressed in these emails, we have let the Governor know that we support this bill. We urge you to let him know that you do as well, and you need to do that now, as he will soon be finalizing his decision on this bill.

Here are the facts: The California legislature recently passed Assembly Bill 1328, which is now on the Governor’s desk, awaiting his approval or veto. AB 1328, if enacted, would allow an association to enter into a contract for a water or energy efficiency program for a term of up to five (5) years, if the board reasonably anticipates that the contract will result in savings to the association. The members would not have the right to vote on the contract, but would be given notice of the proposed duration of the contract on the agenda for any meeting at which the contract will be discussed or voted on.
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On July 30, 2009 the California Association of Community Managers (CACM) awarded SwedelsonGottlieb’s senior partner Sandra Gottlieb with the organization’s coveted 2009 Vision Lifetime Achievement Award. This is only the second time in CACM’s history that it has awarded an affiliate (meaning a member who is not a manager) the Lifetime Achievement Award. This Award was presented to Sandra for all of the time and effort she volunteers to CACM, including her involvement for many years as the editor of CACM’s Law Journal, sitting on the Professional Standards Committee, teaching CACM’s core courses and all of the other things that she does. To see and hear what the presenters had to say:
 

 

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Chee v. Marina Seagate Condominiums, (2006) 143 Cal.App.4th 1360, 50 Cal.Rptr.3d 40.

Lila Chee (“Chee”) is a 71-year-old resident owner of a condominium at the Marina Seagate condominium complex. She was allegedly injured when a Jack Russell Terrier owned by Olga Kiymaz, at the time a tenant in the condominium next door, ran out of Kiymaz’s unit, unrestrained by a leash. The dog jumped on Chee, allegedly causing her to fall and sustain numerous injuries. Kiymaz rented the condominium from unit owner Jerome Brown. Chee filed a second amended complaint against Brown, the Marina Seagate Homeowners Association (“Association”), and others. Chee brought Brown and the Association (and Brown’s property managers who rented the unit to Kiymaz) into the lawsuit after Kiymaz filed for bankruptcy and was dismissed from the action.
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