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...
Complying With AB3182 is Manageable

Complying With AB3182 is Manageable

This year in Sacramento only one major HOA bill, Assembly Bill 3182, passed to become law effective January 1, 2021. The bill creates a new Civil Code Section 4741 banning “unreasonable” HOA rental restrictions. The new law creates some uncertainties but is mostly manageable. The new Section 4741(a) prohibits HOA governing documents from containing anything which prohibits, has the effect of prohibiting, or unreasonably restricts rentals of homes, accessory dwelling units (“ADU’s”), or junior ADU’s (“JADUs”). It is clear what “prohibiting” rentals means, but the terms “effect of prohibiting” and “unreasonably restricting” are less clear. Most likely, these two terms are close to synonymous. Is a rental restriction a thinly veiled effort to halt rentals, or is there an explanation showing a legitimate purpose? This will be the critical question when evaluating present and future governing documents rental requirements. Associations should be cautious regarding rental restrictions because unreasonable restrictions could result in a $1,000 civil penalty and attorney fees to the complaining party. One positive result of the new Section 4741 is its approval of rental caps as low as 25% of the HOA (excluding ADUs or JADU’s). The law allows caps of 25% or higher, so HOAs with a rental maximum of 25% or more are unaffected. Another helpful addition in Section 4741(c) is its confirmation that HOAs may ban short term rentals (30 days or less). It is not yet completely clear if this will have any impact on HOAs that have lease term minimums in their documents regarding normal non-vacation rentals (often 6 months or one-year initial lease term). However, since short term rentals are considered...
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...
Reader Questions – HOA Elections – Related Inspection Firm, Candidacy Statement Limits, and Campaign Flyers

Reader Questions – HOA Elections – Related Inspection Firm, Candidacy Statement Limits, and Campaign Flyers

Dear Mr. Richardson: According to SB323 management is not allowed to participate in elections. But our management found a loophole – a spouse of one of the owners of the management company opened business as an Inspector of Election. Now this is our Inspector. Also according to Civil Code, candidates and members are allowed to check the election records, including signed envelopes. But now the management does not want to allow it because of Covid 19. Do you know a solution for these problems? L.R., Walnut Creek   Dear L.R.: Per Civil Code Section 5110(b), someone already under contract with the HOA cannot serve as Inspector of Election. However, even before the law changed, most managers (and lawyers) did not accept that role due to liability concerns. Small to mid-sized HOAs usually can handle their elections quite adequately with volunteers acting as Inspector, with assistence from the manager. If a management company has a relationship with (or will receive any benefit from) a vendor submitting a bid to the association, it must disclose any such relationships pursuant to Civil Code Section 5375.5. An Inspector related to management might appear be the best choice due to qualifications or cost, but if it raises concerns, it might not ultimately be the best choice. As to inspection of election records, the pandemic did not suspend the Davis-Stirling Act. HOAs and managers need to take reasonable steps to comply, even during these trying times. Thanks for your question, Kelly   Kelly: We had a situation where our submission form for board candidacy was limited to a stated length. Some incumbent directors sent much...
Reader Questions – Old CC&Rs – Expired Documents, and Who Owns the Yards?

Reader Questions – Old CC&Rs – Expired Documents, and Who Owns the Yards?

Kelly, I wanted to know if you have any information in regard to the expiration of California CC&Rs. I’ve heard 20 years from the time of the recorded filing of the CC&Rs.I ask because I live in a subdivision development of homes that has no common areas but does have an HOA in which the developer transferred the CC&Rs to the HOA and homeowners.The CC&Rs don’t show up in the San Mateo county recorder system and I can only find a single change in the CC&Rs back in 1986. I need to confirm whether the HOA should have renewed and recorded the revitalization of the CC&Rs as they are over 30 years old. Any information would be appreciated. O.M., S. San Francisco Dear O.M.: In past years, real estate attorneys included expiration dates in CC&Rs because of the “rule against perpetuities,” an old legal rule which required a termination date. Although the passage of the Davis-Stirling Act in 1985 may have eliminated that concern, lawyers these days typically write CC&Rs with periodic automatic renewal so the HOA is covered in case a future court rules that CC&Rs still must have termination dates. If CC&Rs expire, the association no longer falls under the Davis-Stirling Act, which could be a horrible problem particularly for a condominium property. To reimpose expired CC&Rs, one would need 100% written consent not only of all the owners but also all the mortgage lenders – a very difficult task indeed. Older HOAs (‘80s and earlier) should check their CC&Rs and ask members to vote to amend and include automatic renewal, to avoid the possible disaster of...
Reader Questions – Who Decides on the HOA Colors? And, A Neighbor Hates Mine.

Reader Questions – Who Decides on the HOA Colors? And, A Neighbor Hates Mine.

Mr. Richardson: Help!  During a monthly meeting, I presented a petition signed by many homeowners concerning the color that they were going to paint the complex – we wanted a newer look. They wouldn’t consider the petition, saying that the subject had already been decided. Shouldn’t the board take into consideration what a goodly number of owners want?  T.W., Anaheim   Dear Kelly: In my complex, we’ve had the same color of exterior paint for all the years the complex has existed.  Our board is proposing/attempting to change the color. Can the board to do that without input from the homeowners? M.S., Anaheim   Dear T.W. and M.S.: On the question of whether a board must seek member input on keeping or changing the color scheme there is a “yes and no” answer. Normally, decisions about maintaining the association property are made by the HOA board of directors. Those decisions can occasionally be limited by the HOA governing documents, such as if a rule specifies the approved exterior building colors. Without some other specific restriction in the governing documents limiting board discretion regarding colors, technically, yes, the board could make the decision without seeking member input. However, even if a board is not required to present the issue to the community for member input, it should do so. If the board abruptly decides to completely change the HOA’s color scheme, it could be very upsetting to the membership and result in bad feelings against the board and even association upheaval. There are times when a board should pause and take time to present its plans to the community before forging ahead, and...
Civility Must Start Somewhere

Civility Must Start Somewhere

From presidential debate stages to courtrooms to families to HOAs, civility is becoming so rare, it should be considered endangered. Differences of opinion are no longer allowed – either you agree with me or you are a demon and I will reject any dialogue with you. So, we need some serious rethinking of disagreement and relationship in HOAs. Since we clearly cannot count on our political leaders to model civility, we must start it from the grass roots level. Here are some thoughts to consider regarding disagreement and what it means (or doesn’t). You don’t know or see it all. In the old parable of the blind monks and the elephant, each monk was stationed at a different part of the animal, and each had a distinctly different impression than the others. None were lying, yet each had a different truth. It is entirely possible that others in the HOA know something you don’t and see something you haven’t seen. Allow others to share that divergent view. These people are your neighbors. While it may be satisfying to lash out and say or write awful things about someone you are angry with, you have to see these folks around the HOA. While you can disconnect on social media, you can’t disconnect your neighbors- they are still there. Remember you have to live with these folks and extend courtesy and respect. You’ll make your life (and theirs) less stressful and uncomfortable. Your opinions are not you, and rejection of your argument is not rejection of you. If I think that a remodeled clubhouse is important and you don’t, does that...
Reader Questions – Surprised by Assessments – are they Legal?

Reader Questions – Surprised by Assessments – are they Legal?

Hi Kelly, There is going to be an assessment at my condo and we are being told that we all must pay equally even though a number of us will have no benefit from the work being done. Is there anything we can do? P.M., San Diego   Dear P.M.: Condominiums consist of two elements, 100% ownership in the unit (aka “separate interest”) and an undivided interest in everything else (aka the “common area”). The HOA has a duty to maintain and repair all parts of the common area, including parts of the association complex which are not near your home. You along with all other members each own a fractional share of the common area and so its care concerns all the members. This is one of the tradeoffs of shared ownership, in that while you receive the benefits of shared ownership and shared costs, some HOA funds will be expended on the other homes within the project. However, the day your roof leaks and causes repair expense, someone on the other side of the project could ask how your roof repair benefits them – but it does, if it’s common area. Thanks for your question, Kelly.   Dear Mr. Richardson,  A month after I became owner of my condominium, I received a letter and bill from the HOA board for a large special assessment fee. I don’t feel I should be responsible to pay this fee because nobody disclosed this special assessment to us prior to purchasing the property and the decisions were discussed and made prior to us purchasing the property. The assessment was discussed shortly before...
Reader Questions – Tenants With Criminal Backgrounds, and Are Drying Racks OK?

Reader Questions – Tenants With Criminal Backgrounds, and Are Drying Racks OK?

Dear Kelly, Apparently my HOA made a change in the CC&Rs. The HOA requires that any prospective tenants must be approved by the board, and that no applicant who has a criminal record will be approved. The amendment says nothing about buyers of any of the units. Can they make these demands for just rental units and not units being sold? Wouldn’t criminal records be just as important about a potential buyer? Thank You, J.S., San Pedro Dear J.S.: Leaving aside whether a condominium board can approve prospective tenants, this HOA is taking on potential liability for alleged discrimination. In this instance, if the HOA is banning anyone with a criminal record from renting in the building, the HOA appears to be violating the new Fair Housing Regulations, which took effect at the beginning of 2020. Regulations Article 24, Section 12265 prohibits owners of housing accommodations from applying blanket bans against anyone with a criminal record. According to the Regulations, HOAs are considered a “housing accommodation” and the board and manager of the HOA are considered the “owner” for purposes of enforcement action. Owners may use criminal background information, but not in a blanket fashion. Only relevant information may be used. The past criminal history of a prospective tenant must relate to being a bad tenant. For example, someone who previously had a drunk driving felony or securities fraud conviction, would be treated differently than someone who had convictions for violent crimes or arson. This is a new requirement in California and goes beyond the federal H.U.D. regulations upon which much of the California regulations were based. Thanks for...
Reader Questions – Fair Housing Violations? Restrictions on Hard Floors and Outside Play

Reader Questions – Fair Housing Violations? Restrictions on Hard Floors and Outside Play

Mr. Richardson: I enjoy reading your column. I recently bought a condo and was in the process of replacing the carpet with laminate flooring because of allergies. The HOA informed me that there is a rule prohibiting hard flooring to be installed in condominiums above another condominium. I asked the management company for the definition of “hard flooring” but have been ignored. Is there a legal definition?  Would vinyl flooring or linoleum be considered “hard flooring” or is carpet my only option? This is a health issue. I am hoping you can provide some direction.  Thanks, R.N., Los Angeles Dear R.N.: California Fair Housing laws and regulations require that the HOA make “reasonable” accommodations upon request to deal with your allergy issue (a disability). Have you provided the HOA with documentation that your allergies do not permit you to have carpeted floors? However, if you have documented the health necessity of the hard floor, that does not end the discussion. The purpose of a restriction against hard floors above the ground floor is to protect the lower neighbor from noise nuisance. The accommodation of a non-carpeted floor could be unreasonable if it creates a disturbance for the lower neighbor. So, your HOA and you should dialogue in what the regulations call “interactive process” to agree upon reasonable measures to buffer the floor. That may require the advice of an acoustic expert to specify an installation providing a reasonable amount of buffering. Since the cost of accommodation is normally paid by the requestor, you may be asked to pay for the consultation. The HOA may also ask you to promise...