SwedelsonGottlieb updated its COVID-19 Community Association Guidebook on March 27, 2020. We put this Guidebook together to address our new reality and how California community associations should be dealing with the pandemic. We are all staying at home unless our jobs are essential and we are socially distancing ourselves from one another. The reality is that community associations cannot close down. Associations must continue to operate as they control the common areas where people live, and so much more. And the COVID-19 pandemic has created issues that we have never had to deal with in the past.
SwedelsonGottlieb is open for business; most of us are working remotely. And, we continue to receive inquiries from board members and managers concerning what community associations should be doing to address the COVID-19 pandemic and the impact on their communities. As we explain in the Guidebook, we do not believe that community associations have any direct or legal responsibility to deal with the coronavirus itself as it is each resident’s responsibility to protect themselves from contracting COVID-19. That said, some commonsense things should be kept in mind and we address those things in the Guidebook.
To be clear, this does not mean that associations should not be implementing policies to address the coronavirus, such as taking steps to clean and sanitize to the extent possible the common area, close common area amenities such as pools, gyms and recreation centers or clubhouses. But there is only so much that associations can do. As we explain in the Guidebook, there are things that each California community association can and should be doing, especially when an association learns that a resident has contracted or been exposed to the COVID-19 virus, to limit liability exposure.
The U.S. Department of Housing and Urban Development (HUD) has finally published the long-awaited final revisions to the Federal Housing Administration’s (FHA) condominium project approval rules. The FHA does not originate loans for purchasing condos, but rather insures these loans for borrowers who might not otherwise qualify for traditional financing requiring a 20% down payment. In practice, these changes will give more people access to FHA-insured financing, which should in turn provide many Californians with a better chance of purchasing a condo. The new rules go into effect on October 14, 2019.
Some of the most significant changes in the FHA regulations include:
As many of you likely know, when a homeowner files a Chapter 7 bankruptcy, they may be able to “discharge” their obligation to pay the pre-bankruptcy petition debts including the assessments they owe their community association. And you likely know that when an owner files a Chapter 13 bankruptcy, they are looking for a way to reorganize and not discharge their debts. And we all understood, or at least thought we understood that the assessments that became due after the owner filed bankruptcy, the post-petition assessments, would not be discharged.
A senate bill seeking to prohibit California community associations from establishing qualifications for candidates to run for their boards of directors among other changes and requirements (including possible invasion of owner privacy) is a dumb idea that would create bad law.
Effective January 1, 2018, Civil Code Section 4515 was added to the Davis-Stirling Act to protect certain rights of political speech and peaceful assembly within the boundaries of a common interest development.
As you may have heard, the Governor signed into law new legislation that now changes a California condominium’s associations ability to prohibit an owner from installing a solar energy system on the common area roof. AB 634, which went into effect on January 1, 2018, amended several provisions of the California Civil Code to set forth language that further clarifies what condominium associations can and cannot do with respect to the installation of an owners own solar energy system on a common area roof and exclusive use common.