Proposed Law Would Override HOA Self-Determination

Proposed Law Would Override HOA Self-Determination

Assembly Member Ting from San Francisco has authored Assembly Bill 3182. In its original form it was a horrible bill but later amendments improved it from horrible to just bad – a poorly drafted bill cutting back on private property ownership rights. AB 3182 would restrict the ability of homeowners in an HOA to vote to prohibit or limit rentals. The bill proposes to make several amendments to current Civil Code Section 4740 –the section which was enacted in 2012 to “grandfather,” or exempt, current owners from prohibitions on leasing of HOA residences. The bill would remove the current grandfathering and make several other changes regarding rentals in HOAs. Rental bans or limits are normally imposed by HOAs after they are voted upon by the homeowners within the community when they amend their CC&Rs, the contract binding them together. AB 3182 would make rental bans illegal, regardless of how the owners vote to operate their community. Associations choose to adopt rental restrictions for many reasons. The most common reason is to preserve a higher quality of resident, based upon the belief that owners will take more pride in their home and will behave better than tenants. Another common reason is availability of FHA and FNMA-backed mortgages as FHA and FNMA will not allow HOA rentals to exceed a certain maximum amount. AB 3182 would outlaw any restriction which prohibits, effectively prohibits, or unreasonably restricts HOA rentals. Short-term rentals (under 31 days) could still be banned, and HOAs are permitted to have a rental maximum of 25%. One of the bill’s oddities is that HOAs could have a HIGHER (more...
Reader Questions – Short Term Rentals

Reader Questions – Short Term Rentals

Dear Kelly: Our CC&Rs state that a rental must be at least 30 days.  We have recently found several (web-based short-term) rentals in our complex that are just day to day rentals.  I wrote to the internet company and they replied that they would not take any action.  How can they not take some responsibility for making sure the owners of the places they rent out are not illegal?  R.F., Orange Dear R.F.: Your HOA should enforce its CC&Rs. The internet company is happy to make money on short-term rentals, regardless of whether they are allowed. Many cities have zoning limiting short-term rentals, which are considered a nonresidential commercial use, so the city might take enforcement action. Most likely, your CC&Rs also declare the property to be dedicated to residential use. Your association may want to consider adopting a written rule banning such rentals or advertising short term rentals and including a fine for advertising or renting in an amount which outweighs much of the financial benefit of the rental. Best regards, Kelly Dear Mr. Richardson: Almost half of the units in my building are short-term vacation rentals. This results in increased wear and tear on the building. Can we impose a modest “facilities fee” on such rentals to help us maintain the building? If not, is there some other legal way to collect fees from rentals to compensate for the additional expense of maintaining the building? J.S., Pacific Beach Dear J.S.: If the association can create a reasonable but rough calculation of the cost imposed upon the association by a short-term tenant, the 2015 appellate case of Watts...
Reader Questions – Board Meetings

Reader Questions – Board Meetings

Our HOA board has consistently said that they are having meetings to do emergency actions. I know that they talk on the telephone, decide what to say and never send out meeting minutes. They have decided to keep our gym closed. Can they close an amenity and keep it closed long past state and local authorities on the basis of under-educated people without medical consultation or proof? We already have an open swimming pool. We have had no cases of Covid-19 in our building. R.C., San Diego Dear R.C.: Some HOA Boards are mistakenly applying the health emergency to override the Open Meeting Act. However, in the Open Meeting Act (part of the Davis-Stirling Act), the definition of “emergency” is found in Civil Code Section 4923. Per that statute, an “emergency board meeting” can be called “if there are circumstances that could not have been reasonably foreseen, which require immediate attention and possible action by the board” so that the normal 4-day notice to the members is “impracticable.” Many, if not most boards, have adapted their meetings to be all or partly virtual, using a variety of web-based software such as Zoom or Gotomeeting. Closing or reopening amenities may well be an emergency action, but should be disclosed in the next open board meeting. The decision to keep an amenity closed or reopen is correctly a board decision, which should consider the available health guidelines and the community’s desires. Best regards, Kelly Dear Kelly: Would you opine on ability of a renter-of-condo to show up at a noticed board meeting to observe? Does it make a difference if issue...
But I Disagree

But I Disagree

In our culture, disagreement is mishandled more than ever before. However, disagreement is to be expected between directors of common interest developments (aka “HOAs”), and the way it is understood and handled can either enhance or harm the association community and its governance. Voting “no” is not disloyal.  Volunteer directors are expected to think independently and use their best judgment on board decisions and not just rubber stamp their colleague’s opinions. With varying backgrounds and viewpoints, different votes can be expected, as everyone tries their best for the HOA. Unanimity is NOT required. Majority votes are as binding as unanimous votes. There are some decisions on which unanimity is important because of the importance of the decision, in which the membership needs to see a united board.  However, trying to attain unanimity on everything creates the impression that disagreement is bad and discourages directors from voting their personal views. Disagreement is not a rejection of you. Don’t take disagreement personally. Contrary to our current political and social climate, prove that you can take disagreement gracefully and without offense. Instead of declaring, ask. The moment one hears disagreement, the first impulse is to declare one’s rejection of that disagreement. However, consider asking one to explain their position further. It’s just possible you may learn something that causes you to question your position. Asking instead of declaring shows respect to your board colleague. To paraphrase John Lennon, give agreement a chance. Knowing when to say “when. Once everyone has said their opinion on a motion and explained why, call for the question. When the majority speaks, move on to the next...
Reopening HOA Amenities in the COVID-19 World

Reopening HOA Amenities in the COVID-19 World

As the seesaw battle of the COVID-19 pandemic continues, HOA boards and managers are torn between the fear of reopening amenities and the desire of residents to enjoy their use. Pools, gyms, and tennis courts are hot issues now as HOAs try to return toward normalcy. Most County Health Departments have specific guidance regarding reopening amenities such as pools, gyms, or tennis courts. In addition, the Center for Disease Control (CDC.gov) and the California Department of Public Health have helpful on-line information. The Community Associations Institute published a comprehensive ten-page document titled “Healthy Communities,” addressing HOAs and the COVID-19 pandemic. It can be found by visiting www.caionline.org or by an internet search for “CAI Healthy Communities.” Liability concerns regarding reopening involve at least two areas – alleged carelessness regarding reopening the amenity or guaranteeing the users’ safety. Most counties have established minimum guidelines of operation regarding reopening of amenities, and HOAs should meet those standards. That can be powerful evidence that can help the HOA in the event a user tried to cast blame for contracting the virus. Another problem is appearing to make a promise the HOA cannot keep. If the user follows all the usage rules, does that guarantee that the user will be safe from the virus? Of course not, so avoid making statements that promise that the rules are to keep the users safe from the virus. It is better to warn users that there is no guarantee the guidelines will prevent any virus transmission, that there is always a risk of other users failing to follow safe practices, and that users should decide upon...
The Myths about Mold, Like Mold, Just Won’t Die [Part 2]

The Myths about Mold, Like Mold, Just Won’t Die [Part 2]

You cannot handle it yourself.  Many mold consultants treat mold as if it were asbestos.  Asbestos is truly dangerous.  Unlike mold, when inhaled into the lungs, the body cannot absorb or break down asbestos.  But mold consultants typically develop repair protocols which are virtually identical to asbestos protocols.  Several trade organizations have created mold credentials and extensive (and expensive) cleanup protocols for mold consultants to use.  On the other hand, the EPA’s recommendation to clean up a moldy area of up to 10 square feet is to wipe it with a cloth dampened with a diluted bleach solution. For more information, visit https://www.epa.gov/mold/mold-cleanup-your-home or the mold Frequently Asked Questions at www.cdph.ca.gov. The EPA and California Department of Public Health always recommend mold consultants.  They do not, but do recommend that minor mold situations be handled by the resident or janitorial staff. Mold consultants are licensed. Mold inspectors or consultants are not licensed in California. A few states require a license to perform mold remediation work. Most mold consultant and mold remediation companies instead hold credentials and memberships in trade organizations that promote the interests of the mold inspection industry. Mold cannot be caused by the resident.  Mold accumulation can often be caused or worsened by inadequately ventilated living space.  Mold can build up in stuffy bathrooms or any area where the environment is humid, warm and poorly ventilated.  Before the mold scare started in 2000, with the new term “toxic mold,” residents would clean up mold in shower or bath enclosures and would simply wipe it off with a cleaning solution. Insurance never covers mold.  Partially true: Delayed discovery...
The Myths about Mold, Like Mold, Just Won’t Die [Part 2]

The Myths about Mold, Like Mold, Just Won’t Die [Part 1]

In 2000, right after we survived “Y2K,” a new “toxic mold” panic swept the country, and twenty years (of lawsuits and billions of dollars) later, major myths persist, frightening property owners and managers.  The myths all too often cause exaggerated repairs, unduly frighten residents, and create unnecessary conflict. This and the next column will address thirteen pervasive myths. Mold is new. Mold, one of the earliest and simplest life forms, has existed for thousands of years.  In 1928, mold was the basis of the discovery of penicillin.  Mold is ever-present, as is dust or pollen. The scientific and medical communities confirm mold’s many dangers.  In 2004, the National Institute of Medicine published its comprehensive study on indoor mold exposure, called “Damp Indoor Spaces and Health.” A central finding of this book was: “Scientific evidence links mold … to asthma symptoms in some people with the chronic disorder, as well as to coughing, wheezing, and upper respiratory tract symptoms in otherwise healthy people… However, the available evidence does not support an association between … mold and the wide range of other health complaints that have been ascribed.”  That sounds like mold is no more dangerous than dust or pollen, which also can severely affect those with respiratory sensitivities.  The book did not receive much attention – stories of frightened people living in tents are more interesting. One must know what kind of mold it is.  Mold consultants and injury attorneys often describe some molds as worse than others.  Their star is stachybotrys chartarum, a black mold reported to produce infinitesimal quantities of a toxin. It sounds frightening, but the scientific community long ago debunked...
Reader Questions – They Aren’t Enforcing The Rules!

Reader Questions – They Aren’t Enforcing The Rules!

Kelly: Residents in our HOA are encouraged to report rule violations. I and others have reported violations directly to the manager, primarily because the phone numbers and email addresses for any of the board members are not public for the residents.  How do we follow up on reports of violations and/or obtain statuses? Some of these reported violations have not been taken care of in over a year.  When I asked our manager and our president, they each said they could not divulge this information.  What can we do? E.R., Chula Vista Dear Kelly: I live in a small HOA and each homeowner is responsible for home exterior maintenance.  The current board will not enforce any of the community rules because they do not want to offend any of the residents with violation letters. What are my options since our neighborhood is beginning to look shabby? Thank you, J.M., Newport Beach Dear Mr. Richardson: Our board members do not adhere, follow, or enforce any of the HOA policies.  What can we do about them not fulfilling their obligation? J.D., Yorba Linda Dear E.R., J.M., and J.D.: Enforcement of association operating rules is a basic function of the board. Per Civil Code Section 5975(b), only the association can enforce rules. Homeowners can enforce CC&Rs against their neighbors, but not rules. It can be frustrating when it appears the association is not acting against violators. Associations should keep their disciplinary actions confidential. So, once a complaint is received of a CC&R or rule violation, the complaining party needs to trust that the HOA is handling it appropriately. Typically, if there is...
Reader Questions – Meetings During A Pandemic

Reader Questions – Meetings During A Pandemic

Dear Kelly: Our association cancelled the March meeting and then April’s meeting was held by a teleconference with just the board members. Is this legal? We have not received any information about what was discussed in this meeting. Thank you, S.V., Portola Hill Dear S.V.: Associations are finding that virtual web-based platforms work well for board meetings. Civil Code Section 4090 allows for telephone or video meetings so long as all persons can hear and/or see the open session deliberations. The problem is that the statute also requires a physical location to be established where members can physically attend. During the “stay at home” orders, HOAs are unable to accommodate a meeting of many persons in one place, so under unprecedented circumstances that requirement cannot be met. Boards should learn to conduct proper virtual or telephonic board meetings. Also, minutes of that April meeting should have been made available within 30 days of the meeting, per Civil Code 4950. The Open Meeting Act is still in effect, even during the pandemic. Sincerely, Kelly Good Evening Kelly: I read in a recent column that an officer can be replaced without reason at any time by a board majority. Can a board also fire, by majority vote, a board member without cause?  Our governing documents are silent on this and we have a divided and feuding board split on every decision. Thanks for the public service you perform. Best, J.W., Huntington Beach Dear J.W.: Normally, HOA bylaws provide that officers serve at the pleasure of the board and can be replaced in an open meeting (after agenda notice) for any reason....
Don’t Be Reserved About Reserve Accounts

Don’t Be Reserved About Reserve Accounts

Unfortunately, too many HOA boards overlook or disregard the reserve fund as unnecessary. This is unwise, because the reserve fund is a critical component of the healthy HOA. Don’t fall for the myths. MYTH  – Funding is not expressly required by law, so it is less important. California law does not expressly require associations to accumulate money in reserve accounts.  However, the law requires that such an account exist, that the board review it monthly, that the association every three years obtain an analysis (“Reserve Study”) of the funds needed, and make detailed disclosures annually to members and to prospective buyers.  While state law does not require funding, federal lending guidelines since 2009 do require it.  For condominium projects to be eligible for FanniMae or FHA loans, they must confirm that 10% of the annual budget is deposited into the reserve account. California Realtors® have long been concerned that HOA residence prices were unaffected by the level of the HOA’s reserve funding, despite that logic would dictate that homes in well-funded HOAs should be worth more than in poorly funded HOAs.  This led to several new laws sponsored by the California Association of Realtors expanding disclosure requirements, requiring more detailed disclosure of the money it has actually accumulated for each building component (Civil Code 5570) and requiring boards to have a plan regarding how it will accumulate the money recommended by its reserve study (Civil Code 5550(b)(5)). MYTH – We can’t afford it.  Many associations suspend reserve fund deposits, based on the belief that this helps hold assessments down and protects the members.  However, the project components (roofs, paint,...