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.
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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.
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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:
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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.
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Community Associations Institute (CAI) has weighed in on the side of a Vail, Colorado condominium owner who won a costly and contentious, seven-year court battle with his association over who was responsible for resolving a water-intrusion issue. The court determined that the association should pay $550,000 in attorneys’ fees and related costs in light of what the trial judge called the association’s “stubborn refusal” to address the problem. What was that board thinking? To read the entire article click here.
July’s 5.4-magnitude Chino Hills Earthquake was a jolting reminder that we all need to prepare for the “big one”. It is no secret that California is riddled with earthquake faults. Click here for a map which shows seven of the faults with the probability of a magnitude 6.7 earthquake. Scientists have been reporting to us for some time now that we are due for a significant (big) earthquake. The southernmost section of the San Andreas Fault, which is just east of downtown Los Angeles, undergoes a major shift every hundred and fifty years or so. The last serious earthquake was about 100 years before Los Angeles was founded. So, Los Angeles is approximately 178 years overdue for the “big one”.
There is no doubt that when a serious earthquake strikes, and it is only a matter of time, millions of California citizens will be left without tap water, freeways and bridges will crumble and fall and hundreds of fires will likely break out. The 1994 Northridge earthquake registered a magnitude of 6.7, killed 57 people and caused over 20 billion dollars in damage.
To get our attention, geologists and others have developed the Great Southern California Shakeout, which is taking place this week.
As part of an association’s preparation for an earthquake, inevitably there is the “issue” of earthquake insurance. In 1994, at the time of the Northridge quake, less than half of all associations had earthquake insurance. I do not believe the statistics have changed much since 1994.
Earthquake insurance is not required or mandated by any associations’ governing documents or California Law. After the 1994 earthquake, it was not available and/or was too expensive. Many associations say they are relying on their homeowners to obtain their own earthquake insurance. However, homeowners cannot buy insurance to cover the damage to the common area. While they can obtain earthquake loss assessment coverage and other earthquake coverage that will cover their personal property, the reality is that community associations need to seriously consider whether earthquake insurance makes sense for their association.
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I, along with over 70% of other California citizens, have or will vote today (11/4/08). And then, not wanting to pass up a good deal, I went to my local Starbucks for my free cup of joe. That’s right, Starbucks offered a free cup of coffee to anyone that came in with proof that they voted. Then I saw an article on the Internet indicating that the prize offer was a violation of federal election laws and I had a brainstorm. While it may be a violation of federal law to give someone a gift or prize for voting, it is not a violation of law for a community association to offer free food or some other incentive to get owners to vote. However, unless written into your governing documents (and even then I question whether it’s enforceable), community associations cannot fine or penalize a homeowner for not turning in their ballot or voting. Why? Because most CC&Rs provide associations with the power to make rules regarding use of a common area and there is nothing in California law or in any governing documents I’ve seen which would give a Board of Directors the power or authority to penalize a homeowner for not voting. If you are having difficulty getting owners to vote and cannot make a quorum, offer free food or maybe even a certificate for a free cup of copy at a local coffee house (and make sure it is in the budget).
