Articles

Board members face decisions every day in performing their duties on the Board of their association. These decisions range from maintenance decisions, such as hiring contractors to perform work, to enforcing governing documents. As we all know, every decision can be second-guessed by someone and can lead to litigation and potential exposure to personal liability. It is important for board members to know what steps they need to take to make sure their decisions are not second-guessed by another member of the association (or by the court if the decision is challenged in litigation).

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On April 7, 2017, Governor Jerry Brown declared an end to California’s historic drought, and lifted the drought emergency in all California counties except Fresno, Kings, Tulare and Tuolumne via Executive Order B-40-17. Consequently, unless a local government has declared a local emergency due to drought, an association is no longer prevented from imposing a fine against an owner for reducing or eliminating the watering of vegetation or lawns. (Civil Code Section 4735 (c)(1)-(2).) Associations are encouraged to confirm with the local water purveyor/agency to determine the scope of local emergency drought regulations before taking enforcement action.

Note, Executive Order B-40-17 builds on actions taken in Executive Order B-37-16, which remains in effect, to continue making water conservation a way of life in California. The State Water Resources Control Board will continue to maintain urban water usage reporting requirements and interdictions on wasteful practices, such as watering during or after rainfall, hosing off sidewalks and irrigating ornamental turf on public street medians.

Although the Governor’s emergency order has been lifted, with exceptions, associations cannot adopt or enforce governing documents that prohibit, or effectively prohibit, owners from using low water-using plants or artificial turf in landscaping design. (Civil Code §4735.) Given the complexities surrounding this issue, many of our clients have enlisted our help to prepare guidelines on low water using plants and artificial turf, including rules and regulations regarding same. Please feel free to contact us to further discuss how we can help your association effectively address these issues.

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By Brittany A. Ketchum, Esq.  

It seems as though the laws change as frequently as the tides. Some years see more legal changes than others – changes that greatly affect the way boards manage the association’s affairs. The laws governing community associations have experienced so much change within the past three to four years alone that it may make your community’s governing documents unreliable, especially as they relate to homeowner rights and the functions of the board, officers, and management. It only makes sense to have governing documents that are updated and reflect modern law. Moreover, relying on outdated, antiquated governing documents may expose associations, board members, and even management to liability.

Step #1: Evaluate the Existing Governing Documents

The first step in amending or restating governing documents, whether the CC&Rs or Bylaws, is to review and evaluate the documents to determine whether any provisions are inconsistent with laws. To the extent there is any conflict or inconsistency between the law and the CC&Rs, the law will prevail. To the extent there is any conflict or inconsistency between the CC&Rs and Bylaws, the CC&Rs will prevail. This became California law on January 1, 2014 when Civil Code Section 4205 was adopted to establish a hierarchy amongst governing documents. Reliance on a provision of the CC&Rs or Bylaws that is inconsistent with the law exposes the association to liability.

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The following is a summary of legislation enacted and court decisions from this past year, and news and current events, which impact common interest developments.

ENACTED STATE LEGISLATION

AB 968 (Gordon) Exclusive Use Common Area
Civil Code §4775

Section 4775 of the Civil Code currently holds associations responsible for maintaining, repairing, and replacing common areas while owners are responsible for maintaining their separate interest (e.g., condominium unit or lot) and any attached exclusive use common areas, unless the community's governing documents state otherwise. However, the current law fails to delineate whether associations or owners are responsible for the repairs and replacements of exclusive use common areas if the community's governing documents do not clearly establish same. In trying to clarify the current code's language, the legislature passed Assembly Bill No. 968 to amend Section 4775.

Effective January 1, 2017, associations will be responsible for maintaining, repairing, and replacing the common areas and repairing and replacing the exclusive use common areas while the owners of each unit are responsible for maintaining, repairing, and replacing their units and merely maintaining the exclusive use common areas, unless the community's CC&Rs provide otherwise.

This new bill may affect your community's obligations pertaining to exclusive use common areas. Reviewing your community's governing documents with legal counsel is strongly recommended to ensure that the new Civil Code language does not change how your association assigns maintenance duties. As many community's governing documents do not clearly establish responsibilities for the repair and replacement of exclusive use common areas, associations may now be responsible for them, which could significantly impact your community’s budget.

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By Brittany A. Ketchum, Esq.
Published in the CAI-Greater Inland Empire Chapter's Connect 2016 Third Quarter Magazine

 Section 4775 of the Civil Code currently holds associations responsible for maintaining, repairing, and replacing common areas while owners are responsible for maintaining their separate interests (e.g., condominium unit or lot) and any attached exclusive use common areas, unless the community’s governing documents state otherwise.  However, the current law fails to delineate whether associations or owners are responsible for the repairs and replacements of exclusive use common areas if the community’s governing documents do not clearly establish same.  In trying to clarify the current code’s language, the legislature passed Assembly Bill No. 968 to amend Section 4775.

Effective January 1, 2017, associations will be responsible for maintaining, repairing, and replacing the common areas and repairing and replacing the exclusive use common areas while the owners of each unit are responsible for maintaining, repairing, and replacing their units and merely maintaining the exclusive use common areas, unless the community’s CC&Rs provide otherwise.

This new bill may affect your community’s obligations pertaining to exclusive use common areas.  Reviewing your community’s governing documents with legal counsel is strongly recommended to ensure that the new Civil Code language does not change how your association assigns maintenance duties.  As many community’s governing documents do not clearly establish responsibilities for the repair and replacement of exclusive use common areas, associations may now be responsible for them, which significantly impact your community’s budget.

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By Brittany A. Ketchum, Esq.
Published in the CAI-Greater Inland Empire Chapter's Connect Magazine

Among the many membership rights and privileges afforded to homeowners under the Davis-Stirling Common Interest Development Act (“Act”) and the association’s governing documents is the right to inspect and copy association records. The records retained by an association are copious, to say the least, and responding to homeowner requests can feel like finding the proverbial needle in a haystack.

Too often, such requests stem from, or become, a source of contention. Imagine (or recall from your own experiences) a scenario where a disgruntled homeowner seeks information from management or the board or makes excessive requests for documents from the association. More often than not, when a homeowner asks for “information” or “documents,” the impetus behind the request is to support his or her position in a dispute (or potential lawsuit) with the association.

Before creating documents or compiling information for a requesting owner, take reasonable steps to avoid these common pitfalls.

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By Lisa A. Tashjian, Esq.

Published in the CAI-Channel Islands Chapter's Channels of Communication
2016 2nd Quarter Magazine 

Boards are continually faced with trying to turn lemons into lemonade. The most common “lemons” boards are faced with are neighbor-to neighbor disputes. What should boards do when faced with these types of owner disputes which are never pleasant and almost always adversarial?  Does the Board of Directors have a duty to step in and, if so, what authority does it have to act in such situations? How does the Board make lemonade from these lemons?

Many neighbor-to-neighbor disputes arise from smoking complaints and noise violations.   Owners often complain when smoke, loud music or other noise emanates into their units from a neighbor, either through the interior of the units, common areas, or exclusive use common areas, such as patios and balconies.  The board’s duty to act in these types of situations depends on the specific provisions contained in the association’s governing documents and the specific facts regarding each violation.  Each is unique, and each should be analyzed separately. If these matters are not resolved at the inception they can escalate exposing the association to liability.

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By Calvin S. Rose, Esq. and Tracy R. Neal Esq.

Published in the CAI-Greater Inland Empire Chapter's
Connect 2016 2nd Quarter Magazine 

The “no cost collection” model has come under attack in recent years, culminating most recently in the collection case, Hanson v. JQD, LLC d/b/a Pro Solutions, (N.D. Cal., 2014) (“Hanson v. Pro Solutions”). California community associations and the common interest development industry at large have watched this case unfold, beginning with a homeowner filing a lawsuit against a assessment collection services provider, and culminating in takeaways that will undoubtedly resonate throughout California.

Assessments have been termed the “lifeblood” of an association. Assessments are the sole source of income for associations, from which association expenses are paid, including daily operating expenses to common area maintenance and repairs. Boards have a fiduciary duty to levy and collect assessments. Like most businesses, community associations and the boards that run the day-to-day business of an association, seek out services at the best price, which in some cases may mean the lowest price.  As a result, delinquent assessment collection services at no cost have appealed to community associations as they are non-profit corporations operating on a zero budget. Hanson v. Pro Solutions, however, has shown the potential real cost of “no cost collection”.

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Section 4775 of the Civil Code currently holds associations responsible for maintaining, repairing, and replacing common areas while owners are responsible for maintaining their units and any attached exclusive use common areas, unless the community's governing documents state otherwise. However, the current law fails to delineate whether associations or owners are responsible for the repairs and replacements of exclusive use common areas if the community's governing documents do not clearly establish same. In trying to clarify the current code's language, the legislature recently passed Assembly Bill No. 968 to amend Section 4775.

Effective January 1, 2017, associations will be responsible for maintaining, repairing, and replacing the common areas and repairing and replacing the exclusive use common areas while the owners of each unit are responsible for maintaining, repairing, and replacing their units and merely maintaining the exclusive use common areas, unless the community's CC&Rs provide otherwise.

Read more . . .

The following is a summary of legislation enacted and court decisions from this past year, and news and current events, which impact common interest developments. 

ENACTED STATE LEGISLATION

AB 349 (Gonzalez) Property Use and Maintenance – Artificial Turf

Effective immediately as an urgency statute, AB 349 amends Civil Code Section 4735 to make any provision of a governing document or policy, including architectural or landscaping guidelines, void and unenforceable if it prohibits, or includes conditions that have the effect of prohibiting, the use of artificial turf or other synthetic surface resembling grass. AB 349 was enacted to reduce outdoor water use to help meet the Governor’s mandated 25-percent statewide water use reduction in a time of drought.

This bill also amends Civil Code Section 4735 to prohibit associations from requiring a member to remove or reverse water-efficient landscaping measures, installed in response to a declaration of a state of emergency, once the state of emergency due to drought is lifted.

AB 596 (Daly) Annual Budget Report – FHA/VA Certification

Beginning July 1, 2016, the annual budget report of a condominium project must include a separate statement describing the status of certification by the Federal Housing Administration (FHA) and the federal Department of Veterans Affairs (VA).
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