2008 was remarkable for the fact that the California Legislature did not pass much in the way of new legislation impacting or affecting California Community Associations. We are providing a summary of two changes to the California Civil Code regarding fines/assessments and solar energy that became effective as of January 1, 2009.
Continue reading
2008 was a banner year and for all of the wrong reasons. Foreclosure activity was way up, and the experts project that we will not see a decline in foreclosures in the near future.
RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, released its 2008 U.S. Foreclosure Market Report™, which shows a total of 3,157,806 foreclosure filings – default notices, auction sale notices and bank repossessions – were reported on 2,330,483 U.S. properties during the year, an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006. The report also shows that 1.84 percent of all U.S. housing units (one in 54) received at least one foreclosure filing during the year, up from 1.03 percent in 2007.
Foreclosure filings were reported on 303,410 U.S. properties in December, up 17 percent from the previous month and up nearly 41 percent from December 2007. Despite the spike in December, foreclosure activity for the fourth quarter was down nearly 4 percent from the previous quarter but still up nearly 40 percent from the fourth quarter of 2007.
On December 16th, we posted a blog entry regarding the new the Virginia Graeme Baker Pool and Spa Safety Act (“Act”). The Act is a federal law that took effect December 20, 2008. It requires owners of “public” pools (the Act refers to spas as well) with submerged suction drains to retrofit the drains in order to limit and prevent drowning deaths caused by people becoming ensnared in a pool’s drain.
The Act defines “public” to include multi-family residential dwelling common areas and their (community) associations.
This new law has created a lot of controversy as many California community associations debate whether compliance is required or not, as this is a federal and not state law. Perhaps the real issues here are the potential risk of injury to children and others that use the pool or spa and potential exposure to the Association. As this new law impacts community associations, it is a big issue. It was the subject of a January 20, 2009 article in the Wall Street Journal. It has been reported that some boards of directors at community associations are delaying the appropriate retrofits because they believe that no one is really going to penalize their association for not taking the appropriate action. While it is true that no governmental authorities are (at least as of going to cite or penalize an association for not complying with the new law, and while it is likely that most associations’ insurance carriers will defend and indemnify associations from injury claims, those insurance carriers will not indemnify the association or the individual board members if they are sued for intentional wrongdoing (knowing of the danger and the new law and intentionally deciding not to take action). As the Wall Street Journal article points out (quoting an official with State Farm insurance): (community associations that keep their pools open and do not retrofit) “will probably have a more difficult time proving they are not liable.”
SANDRA GOTTLIEB AWARDED SPEAKER OF THE YEAR BY THE SACRAMENTO CHAPTER OF COMMUNITY ASSOCIATIONS INSTITUTE
On December 4, 2008, Sandra Gottlieb (and other members of her panel) was awarded the coveted Speaker of the Year Honors by the Sacramento Chapter of Community Associations Institute (CAI) for her role in a panel program “Managing Foreclosures”.
This is what the Sacramento Chapter had to say about Sandra Gottlieb (the panel) and this award:
With the world’s economy in turmoil and a significant increase in the unemployment rate, experts are forecasting a big increase in the number of bankruptcy filings in 2009. If your Association receives a Notice of Bankruptcy filing by one of its owners, don’t panic as there are some remedies. But you must take quick action to protect the association’s rights.
Continue reading
Reported by the Associated Press
WASHINGTON (Dec. 16) — Unless new anti-drowning drain covers are installed, tens of thousands of public swimming pools and hot tubs could be forced to close Saturday under a sweeping law designed to prevent drain suction from trapping children underwater.
The rules apply to pools and spas used by the public, including municipal pools and those at hotels, private clubs, apartment buildings and community centers. (CID’s are included.)
NBC’s Today show ran a news story on this issue.
Continue reading
The 2009 Condominium Bluebook by Branden Bickel and D. Andrew Sirkin has been published and will soon be available to the general public. The Bluebook is a useful tool for California homeowner associations, providing quick reference to state statutes and court cases, as well as useful forms for required notices and other documents.
This year’s Bluebook contains a form (at Chapter 17) entitled “Model Election Rules” which we do not believe is suitable for most associations to simply reproduce and adopt as their election rules as required by Civil Code Section 1363.03. In fact, we doubt that any form election rules could possibly be created to suit all California homeowner associations because election rules are subject to an association’s CC&Rs and Bylaws. The provisions in CC&Rs and Bylaws applicable to the election rules vary widely from one association to the next. Following are just a few examples of why we believe the Bluebook’s form election rules are erroneous:
Continue reading
Interesting news report on NPR (National Public Radio) on the effect that this financial crisis is having on community associations:
Homeowners associations across the country are being hit hard by the foreclosure crisis. Millions of dollars of monthly dues are going unpaid. Neighbors are left to pick up the tab – if they can.
Rachael Myrow reports. Listen to her 3.5 minute broadcast; it does not tell us anything we already do not know, but it is certainly interesting to see that the plight of community associations is not something that is being ignored.
Click here to read an interesting article discussing what we all know, that some owners cannot afford their homes and are not paying their regular or special assessments. They may lose their homes. And this comes from North Carolina.
Our country and most of the rest of the world are in an economic recession, and we are all suffering the fallout from the most significant and severe economic crisis since the Great Depression. Major corporations are filing bankruptcy and are going out of business, banks are being taken over by the government and record numbers of homeowners are losing their homes through foreclosure. It is no surprise that we are also seeing a steep rise in the number of delinquent homeowner’s assessment accounts and the loss of assessment income among California community associations.
While it is a fact of life that many community associations will not collect the unpaid assessments from those homeowners that cannot afford to keep their homes, or recover assessments from homeowners that have already lost their homes to foreclosure, there are some things that associations can and should do to maximize their chances of collecting and/or addressing the loss of that income.
Continue reading
