S.O.S. to State Capitol

S.O.S. to State Capitol

The 2021-2022 legislative session is underway and by mid-January the Legislature does not have any HOA bills pending. The past two years were eventful due to 2019’s Senate Bill 323’s substantial changes to the election processes, and 2020’s Assembly Bill 3182’s new protections of rentals within HOAs. In case a Legislator or their staff is reading, (or you want to suggest some improvements) here are ideas to HELP California HOAs. First, resolve the questions remaining about HOA elections. The new law lists only 5 possible board candidacy disqualifications, so, for example, term limits are apparently barred. Second, the statute references only board candidacy, so can boards fill vacant seats by appointing a person who would be ineligible as a candidate for election to that seat? Third, new Civil Code Section 5100(g) allows board elections by acclamation if the number of eligible candidates after close of nominations equals the number of open positions. However, this opportunity only applies to HOAs with 6,000 or more members – perhaps ten HOAs statewide. This help should be available to all California’s 50,000 HOAs, so they can forego the expense and effort of sending out ballots if there are not enough candidates for a competitive election. Small HOAs struggle with the election requirements and deadlines. It is ludicrous to require 10-unit HOAs to have Inspectors of Election, secret ballots, and a 90-day election process. A simpler process should be allowed for HOAs under a certain size. Some law changes could help HOAs keep up with an increasingly digital society. For example, allow HOAs to choose electronic membership voting. HOAs are still the only type...
Shorter Meetings are BETTER

Shorter Meetings are BETTER

It may not shock readers to know I have seen innumerable board meetings run far too long, exhausting volunteers and degrading the quality of the deliberations.  Consider these tips to keep meetings moving forward efficiently. Stay on topic.  The Open Meeting Act only allows boards to discuss the posted agenda items, and verbal detours waste time better spent on the scheduled matters anyway. Everybody should help the chair keep the discussion on agenda.  Get back on track, and discuss what the agenda announced the board would address. Use consent calendars. Routine and non-controversial items should be in a consent calendar. All items are voted upon as a group and without discussion but any director desiring to discuss an item can remove it by asking. Use the consent calendar routinely, reserving time for items meriting discussion. Plan your agenda and don’t be too ambitious. If the agenda is too full, avoid a very long meeting by deferring some items to the next board meeting. Some items are sufficiently important that they even merit a special board meeting, but may get short shrift if the agenda is too full.  Refer major topics to a committee, manager, or consultant, who then will make a detailed written recommendation. This can help orient the board and make its deliberations more effective. Don’t discourage dissent.  In a 5-member board, a 3-2 vote is as binding as 5-0.  “No” votes are not bad or disloyal.  Insisting on unanimity puts too much pressure on directors to agree, and lengthens discussion as the board tries to attain consensus on everything. Call for the question.  Boards often over-discuss issues...
Reader Questions – Where Is the Property Line?

Reader Questions – Where Is the Property Line?

Dear Kelly: My association has taken the stand that a side fence on a zero lot line single family dwelling that is entirely on the dwelling’s property is shared 50/50 with the neighbor for maintenance or replacement costs. In my opinion, this is totally incorrect that a neighboring property owner would be responsible for a fence that is entirely on a neighbor’s property. Have you ever seen this with other zero lot line HOAs? Thanks, R.M., Placentia Dear R.M.: For the readers’ benefit, let me explain “zero lot line.” This normally means the buildings are built onto at least one of the property boundaries. There are two major items which can affect the responsibility for a shared fence. I am assuming that your HOA is a planned development and that the fences between neighboring yards are not located in common area. The CC&Rs might address responsibility for shared fences, or otherwise the board may want to consider proposing an amendment to clarify that subject. There is also Civil Code Section 841, California’s “Good Neighbor Fence Act of 2013” which took effect in 2014. Under that law, fences dividing adjacent properties are the shared responsibility of the two neighbors. Hoping this is helpful, Kelly Dear Mr. Richardson: I have a question regarding property ownership.  Our condominium complex consists of free-standing houses each with a yard or patio yard.  Our condominium plan has a map with boundaries that include the unit with the front yards/patios along with a description that a unit consists of the dwelling, garage and private yard areas encompassed by the unit boundary line shown on the plan. ...
Reader Questions – Management Cutbacks

Reader Questions – Management Cutbacks

Dear Mr. Richardson: I received notice from my association that our management company resigned and that the association intends to self-manage.  I am uncomfortable about the expertise that exists on the board to properly run the business of the complex.  What does the Department of Corporations require? T.Z., Huntington Beach Dear T.Z.: Neither the California Corporations Code nor the Davis-Stirling Act requires that HOAs have professional management. However, the law has become so complex that it is hard to imagine operating an association without the help of an experienced professional manager. For example, who will prepare the monthly financial reports (Civil Code Section 5500), the Annual Budget Reports and Annual Policy Statements (Civil Code Sections 5300 and 5310), the disclosures to prospective purchasers (Civil Code Section 4530), or the required annual reserve disclosures (Civil Code Section 5570)?  In my experience, associations without professional management generally operate far outside the Davis-Stirling Act, and that directors acting as volunteer managers, however well-intentioned, have little idea of what this very complex body of laws requires of HOAs. Best regards, Kelly Hello Kelly: My HOA board has hired a new management company that will only be responsible for collecting fees.  We have over 100 units so it is not “mom and pop.” The board does not want to hire a construction manager to oversee defect repairs from a lawsuit that settled.  It concerns me that this board is assuming responsibility for things they have no expertise in. Thanks, L.F., Carmel Valley Dear L.F.: Many smaller HOAs hire management companies on a “financial only” basis to prepare the monthly, quarterly, and annual reports, to...
‘Twas the Night Before (the HOA’s) Christmas

‘Twas the Night Before (the HOA’s) Christmas

[Apologies to Clement Clarke Moore] ‘Twas the night before Christmas, and through the HOA communityNot a complaint was heard, and there existed pure unity;The thank-you notes were placed by the bulletin board with care,In hopes that the board and manager would soon see them there;The homeowners were nestled all snug in their beds, No worries of paint, roofs, or plumbing disturbing their heads,And the Vice President in her condo, and I in mine too,Had just settled down for a break from reviewing the dues,When out in the courtyard there arose such a clatter,I sprang to my balcony to see just  what was the matter.Away to the railing I flew like a flash,Only to see neighbors with gripes to rehash.I couldn’t figure out in the dark of the night Exactly what they thought gave them the right,But I knew from my time on the homeowners board, Our meetings these neighbors had always ignored,Then in a flash I noticed a visitor,Who tried to join that group of inquisitors He wore a red fur coat over an ample belly, and His hearty laugh made it shake as it were jelly, His smile quickly faded as they all turned away, They told him that nonowners had nothing to say, The jolly man disappeared as quickly as he came here, Amid the sound of eight snorting… reindeer? In a moment came another, without much ado, He arrived with a viewpoint both refreshing and new,I knew instantly it was manager, Nick.He knew what was needed and he brought it quick,He exclaimed “Now, Member! now, Neighbor! Now, Bylaws and Covenant,Please read the rules before bringing your...
Stop The Fights Over Records Requests!

Stop The Fights Over Records Requests!

Over the many years I have been writing this column, the clear number one ranked dispute between homeowners and their associations regards records and information access. These disputes are never productive, and generally avoidable. Here are some tips for HOAs regarding producing requested records and some tips for requesting homeowners. The law has improved dramatically in recent years in this regard. Civil Code 5200 provides a very clear list of what are “association records” which members may request. However, battles continue, and unfortunately HOAs sometimes control the flow of information from critics, and some homeowners use records demands as a weapon. When a board is under severe criticism it is a natural impulse to be defensive and close ranks, but the board cannot refuse a legitimate document request just because it expects the information to be used against it. The more a board stalls or resists providing reasonably requested documents, the higher the suspicion of the requestor that the board “has something to hide.” In my experience, that is almost never the case – but ego and pride is usually the problem. The increasingly common use of HOA web sites presents a great opportunity to provide required transparency with little expense. If the association instituted a habit of making sure that all “association records” for the current year and previous 2 years (the time limit of the statute) are routinely posted on the members only section of the web site, members could access anything they had a right to see without inconveniencing the manager or board. What do members NOT have the right to inspect? Correspondence, member disciplinary matters,...
Reader Questions – Requests for HOA Information Part 2

Reader Questions – Requests for HOA Information Part 2

Kelly, I attended my first HOA meeting and I noticed that the format is slightly different from city council meetings. Board members were provided a lengthy document prepared by management, containing specific details on water usage, maintenance requests, and detailed financials. I queried if the report was available, and was told no, they are only provided to board members. In city council meetings, documents that don’t violate confidentiality or executive session privilege must be made available for review in advance of the meeting. Does the Davis-Stirling Act require something similar? Sincerely, D. R., Ventura Dear D.R.: Civil Code Section 5200 includes a long list of “association records” which HOAs must produce upon member request. A typical board meeting packet, prepared by the manager to inform the board prior to its meeting, may contain documents that are included in the list, but the board packet itself is not a document which is required to be shared with all members. HOAs, even the largest ones, do not have the same resources as cities, and the requirements of the Davis-Stirling Act on community associations are not as strict as the Government Code requirements applicable to public agencies. Board packets can be anywhere from 20-100 pages for most HOA board meetings, so the cost of distributing them would be prohibitive. Furthermore, the audience doesn’t need the board packet in advance, since the board and not the audience is deliberating. However, documents may be identified during the deliberations that are “Association records” which you can later request to see. Thanks, Kelly Dear Kelly:  Our HOA has not been publishing meeting minutes for many months. We have written twice to...
Reader Questions – Questions about committee, board disclosures (Part 1)

Reader Questions – Questions about committee, board disclosures (Part 1)

Are homeowners allowed to read or copy committee minutes? Our manager says no because they are not “standing committees” like the architectural committee. I say all records, receipts, minutes can be read and copied except for executive minutes. The Davis-Stirling Act is a little confusing on this subject. — P.W., Beaumont Committee meeting minutes are treated differently than minutes of board meetings. If the committee has decision-making authority, then Civil Code Section 5210(a)(2) requires that minutes of such a committee be kept permanently and provided to members upon request. However, most committees do not make final decisions but instead make recommendations to the board, and so would not have “public” minutes. Committees normally make reports, not minutes. The one exception would be the architectural committee, which normally has decision-making authority over architectural applications. Normal committees also are not required to comply with the Open Meeting Act, unless the committee has a quorum of the board participating, and then under Civil Code 4090, it is also considered a “board meeting” triggering compliance with the Open Meeting Act. I recently attempted to obtain a copy of our HOA rules from our association’s website. They were dated 2016. The next day our manager sent me a copy of updated rules as of 2018. Isn’t it illegal to hide governing documents from the membership, especially rules that were implemented two years prior to a request? — G.C., San Diego Under Civil Code Section 5200(a)(11), governing documents must be made available to any requesting member. Civil Code Section 4530(a) requires the association to provide those documents within 10 calendar days of a member’s written...
Reader Questions – Assessment Payment

Reader Questions – Assessment Payment

Dear Kelly: Recently our board stopped dues collection for 6 months because they said some homeowners were experiencing financial hardship.  The board has no plans to ask owners to pay back dues. Is this legal? P.B., Marin County Dear P.B.: One of the HOA board’s fundamental responsibilities is to make sure the association’s bills are paid, and that means also collecting the money to pay those bills. Civil Code Section 5600 states that “the association shall levy regular and special assessments sufficient to perform its obligations…” A similar situation came up in the Great Recession of 2008-2009, when many owners were in financial distress and some boards struggled with whether to require such owners to pay their assessments. However, members who fail to pay assessments harm those who are paying their share of the HOA costs, so associations must insist that all members pay their assessments. The HOA’s bills do not stop during the pandemic so assessments cannot stop either. The board should be businesslike in its handling of HOA finances, which includes good stewardship of the HOA’s income – and not cutting it off! Best regards to your HOA, Kelly Mr. Richardson:  Our HOA over the last 20 years has used up its reserves because of increasing maintenance and irrigation costs. The CCRs forbid raising the annual dues and special assessments are only permitted for litigation emergencies. We have tried to modify the CCRs but we cannot get a majority of the homeowners to vote to OK a change. What would you suggest? A.B., Solana Beach   Dear A.B.: The law has a provision which allows HOA boards...
Embrace Open Forum!

Embrace Open Forum!

Many HOA boards treat open forum as something to be endured, but if handled properly it can be a very positive feature of HOA meetings. The law requires that all membership meetings (when members are voting, not the board) and open board meetings must have an open forum time, per Civil Code Section 4925(b). This is valuable element of HOA meetings is an opportunity for neighbors to convey information or concerns to board or management of which they might not be aware. This is the part of the meeting in which the board demonstrates its regard for neighborly concerns. Well-run HOA board meetings should include well-run open forum sessions, so here are some tips which may help. Don’t Delay. Some boards prefer to schedule open forum at the end of the meeting, but it is better to have open forum early in the meeting. That shows respect to the homeowners, many of whom would like to address the board about agenda items before they are discussed. At the end of the meeting, after the agenda business is concluded, it is too late for their comments on those items. Time Limits. Have reasonable time limits – the law specifically allows it. Three minutes is the most common standard but reduce the time limit to two minutes if at least ten people wish to speak so that everyone gets a chance without prolonging the meeting. Speaker Limits. Per Civil Code 4925, members have the right to attend and speak at HOA meetings. Tenants, owner’s guests, or residents not on title are not members and so do not have the right to...