The HOA Holiday Wish List

The HOA Holiday Wish List

During the holiday season, we often struggle to find the perfect gift for those who are important to us. Sometimes we need a little help, and we ask for a “wish list” of gifts to guide us. What would wish lists from the key players in the HOA world look like? For the homeowner membership: Regular communications from the board. Organized and efficient board meetings. An attentive board during open forum. A board committed to follow the law and the governing documents, and to improve the sense of community within the association. Directors who govern with a sense of service, not control. Directors who are not defensive when homeowners bring new ideas or even criticism. A board which will tell the truth to members, even if it is a hard truth (such as the assessments are too low and should be increased). A realistic budget and an increased commitment to funding the HOA’s reserve fund. A written explanation of any significant changes from last year’s budget to the current proposed budget. Neighbors who do not automatically assume that annoyance from another neighbor is intentional. Civility. For the board of directors: Respectful homeowners who acknowledge that the board and committee members serve the community without compensation (and typically without appreciation). Volunteers for committees and board service. Homeowners who use open forum effectively. Homeowners who attend and listen without interfering with board deliberations. Homeowners willing to pay for the level of maintenance and service they desire. A manager who has attained or is actively pursuing the management profession credentials. A manager modeling the highest level of ethical behavior, avoiding conflicts of...
Who Is Watching The HOA?

Who Is Watching The HOA?

Mr. Richardson, Is there an oversight/audit department on a state level that oversees the management of an association? I am finding contradicting and wrong information in the minutes. Thank you, M.H, Laguna Woods   Kelly: Is there a governing body that oversees all HOA groups?  Ours is not enforcing its CC&Rs. What can we do besides sue them?  L.T., Rancho Bernardo Dear MH and LT: Some states, including Nevada, Colorado, and New Jersey, have agencies dealing with homeowner association problems, but statistically none of these three states are in the “top 10” in terms of total number of HOAs. California has about 50,000 HOAs, more than 2 ½ times the total of those three states combined, yet has no state agency enforcing any requirements for HOAs or their managers (Statistics Courtesy of Foundation for Community Association Research 2018 Factbook). The Department of Fair Employment and Housing will handle discrimination claims, but outside of that, California HOA owners with errant HOAs or managers have only one place to turn to – the courts. The Davis-Stirling Act has many provisions providing for a private right of action and an award of attorney fees to the successful homeowner. The door swings both ways on the issue of enforcement, as HOAs generally also rely on litigation to enforce their governing documents (hopefully only as a last resort), seeking attorney fees under Civil Code 5975(c). One may wonder why the state with the largest number of HOAs of any state other than Florida (also approximately 50,000) has no resource to correct errant HOAs other than the courts. The answer may well be in the...
CC&Rs or Rules, and a Forgotten Bylaw Amendment

CC&Rs or Rules, and a Forgotten Bylaw Amendment

Hi Kelly, I’m confused between “rules” and “CC&R’s.” Our board, over the years, has implemented new rules. What I don’t understand is: How is this different than making changes to the CC&R’s, which would require homeowner approval? For example, the board passed a rule that prohibited playing sports in the street. When I bought my house, there was no such prohibition. Now, after my kids started playing sports in the streets, they prohibit it. I didn’t get to vote on this, and had it been in the CC&R’s when I was contemplating my purchase, I would not have bought in this neighborhood because they obviously were not “children friendly.” Do I have any recourse? Can the board just implement new rules whenever they want? Thanks for your insight. R.D., Vista Dear R.D., Rules are called various things by HOAs, including “house rules” or “regulations,” but the Davis-Stirling Act calls them “operating rules.” Per Civil Code 4340, an “operating rule” is “a regulation adopted by the board that applies generally to the management and operation of the common interest development or the conduct of the business and affairs of the association.” If homeowners voted to approve it, it would not be an operating rule. Rules are meant to be somewhat fluid, allowing boards to adapt them to the community’s changing needs and desires. CC&R’s are more permanent since a membership vote is normally required to amend them, and are recorded as equitable servitudes binding all property owners subject to the CC&R’s. If the homeowners largely object to a rule change, Civil Code 4365 authorizes a petition for a membership vote...
Rules Regarding Children, and Blocked Driveways

Rules Regarding Children, and Blocked Driveways

Dear Mr. Richardson: Can an HOA come up with new house rules that ban children from playing outside the units? Especially with many young children that live here. G.G., Lawndale Dear G.G., Under the California Fair Employment and Housing Act (Government Code 12900-12996), “familial status” is protected against discrimination by Government Code 12955(a). This means one cannot discriminate against residents with children. Rules targeting the activities of children are illegal discrimination, even if they are well-intentioned and appear to be based upon safety reasons. If due to safety concerns an association wishes to curtail recreational activities in common areas, an operating rule should not mention the age of the person doing so, but instead should simply focus on the activity. For example, would skateboarding by legendary skater Tony Hawk be OK in the common areas? What about Lionel Messi playing soccer in the parking lot or drive aisles? If not, then simply ban skateboarding and soccer and avoid mentioning the age of the participants. California law specifically allows senior communities to discriminate based upon familial status, by exempting them from Government Code 12955. Section 12955.9 specifically excludes “housing for older persons” from the ban on familial status discrimination. Associations should be careful in drafting rules to avoid discrimination. Not only does the Department of Fair Employment and Housing pursue violations, but private housing rights organizations and aggrieved residents all can pursue lawsuits as well. Thanks, Kelly. Dear Kelly, I am disabled and cannot walk easily, properly, or safely when there are obstacles in my way. It is very easy to trip and fall. My HOA has been allowing large numbers of...
We Can’t Seem to Get Copies

We Can’t Seem to Get Copies

Dear Kelly, Do I, as a homeowner, have a right to see the contract between the HOA and a vendor? I have no desire to stir up problems. I appreciate your weekly column in the paper, I wish all my neighbors would read it and understand what the board goes through on our behalf. Thank you, M.L, Dana Point Dear M.L., Yes, you have the right under Civil Code 5200(a)(4) to see executed contracts. You must make the request in writing, which should be a paper document unless your HOA accepts notices vie email. Under Civil Code 5210, that copy must be provided to you within ten business days of the request. The association may require you to reimburse the reasonable copy cost of the document. Make sure you request a specific document – a request that asks the HOA to go hunt for “any maintenance-related contracts” is not asking for a specific document but asks the HOA to research for you, and the HOA is not required to do that. Hoping this is helpful,Kelly Kelly, Does the HOA manager or board have the responsibility to provide me with a copy of the minutes (signed/unsigned) and an update of the financial status from the previous meeting? I attended our meeting the other day and requested that members be provided a copy of the latest financial status and expenditures and copies of the previous meeting minutes, that way we can follow the agenda of the meeting. I was informed that I am provided a copy of the financial status at the end of the year and the budget for the year....
Shaken Up About Earthquake Insurance

Shaken Up About Earthquake Insurance

Hi Kelly, I live in a 100+ unit condo complex without HOA earthquake insurance. I have CEA earthquake insurance for my home. Have you written any articles I could read on how to cover myself if my building suffers structural damage? Thank you, R.M., San Diego Mr. Richardson, Is a planned development HOA required to maintain earthquake coverage insurance? Our association is considering dropping this coverage in order to save money. B.W., Huntington Beach Kelly, My daughter recently purchased a condominium. The financial reserves of the HOA seemed strong, good property management, no obvious area of neglect. However, the HOA does not carry earthquake insurance and on its website suggests you get your own. I can’t find an insurance company that will issue earthquake insurance for just one unit particularly since the fire and general casualty insurance is with the HOA. Any suggestions? L.M., Fountain Valley Dear Mr. Richardson, Our condominium HOA board decided to make common area upgrades rather than obtain earthquake insurance. They feel it is too expensive. I think this is foolish, if not negligent, as it puts the equity of all owners at risk. Do you feel obtaining earthquake insurance is an obligation of the board? Thank you, J.H., Laguna Hills Dear R.M., B.W., L.M. and J.H., Most HOA and residential insurance policies contain an exclusion for damage resulting from earth movement. Owners can purchase an amendment to that insurance, commonly called “earthquake insurance,” in which the insurer agrees to pay for a certain amount of earthquake damage. Many LA County HOAs learned in 1994 after the Northridge Quake how helpful it can be to have earthquake...
Is it Exclusive Use Common Area? Part 3

Is it Exclusive Use Common Area? Part 3

Hi Kelly, I was interested in your recent answer that a club’s storage space would not be considered exclusive use common area. Statewide there are thousands of HOAs with swim teams, tennis teams, bridge clubs, etc using HOA facilities. Surely this is also permissible if the board gives its blessing?  Regards, L.Q., Concord Dear L.Q., Exclusive use areas are defined by Civil Code 4145 as areas serving one or more members and are appurtenant to the interests of those members. A club storage room or closet space may be allocated by the HOA board, but since it is not dedicated to a single home or group of homes, it would not be “exclusive use” under the statute. Therefore, the Civil Code 4600 vote requirement would not apply to that allocation. Thanks for your question,Kelly Hi Kelly, We were told by a board member that the patio attached to our unit is “common area with exclusive use rights” for us, but no one seems to have any documentation. The neighbor behind us disputes this and is now asking for documents showing that the patio is ours (or is for our exclusive use), but we cannot locate anything saying so. We asked the management company for documents related to this, but they don’t have anything, and I couldn’t find anything in the CC&Rs. How can I prove that we are the only ones who can use the patio (or is it possible to show that we own it?)? Thank you, L.G., Beverly Hills Dear L.G., Exclusive use common areas are hopefully defined by the CC&Rs and Condominium Plan, but if they...
How Exclusive is Exclusive Use Area? Part 2

How Exclusive is Exclusive Use Area? Part 2

Hi Kelly, I live in a condo complex in which the restricted common area is the front and back yards of each unit. The board says it has the authority to grant permission to an owner to make room additions in the backyard. I do not believe they have such authority as it would be “giving” ownership of the restricted common area which would then be enclosed in his unit. Do you believe the owner can build an addition to his unit? Thank you, P.W., San Diego Dear P.W., First, the unit is not defined by what the board says, but by the condominium plan. That recorded document is part of the legal description of the condominium. If one adds living space to the unit, that new living space, outside the boundaries of the original unit, is still common area. This could create a significant disclosure problem for members, who surely will want to disclose the larger square footage even though they do not own that space. If such a modification to a home were to be allowed, a written agreement between the HOA and the homeowner is essential. Such agreement should, at a minimum, reflect that the homeowner is responsible for the new structure, the HOA has no responsibility to insure, repair or maintain it, and it still is common area. Another issue is whether the board violated Civil Code 4600, which requires a 2/3 vote of the membership before the HOA allows a homeowner to convert “pure” common area to exclusive use. Some may argue that the area already was exclusive use. There are also some exceptions to...
Recall Questions: Part 2

Recall Questions: Part 2

Kelly, Our HOA recently had a total board recall and election. The new (self- appointed) president handed out terms based on votes received, with three two-year and two one-year terms. Our bylaws specify a procedure for the first election, namely drawing of lots to determine terms, to be two (two-year) and three (one-year). Subsequent elections should be for two-year terms, for a staggered election pattern. Should the president have followed the bylaws’ first election procedure, as the situation is identical, or should the president have given more two-year terms than is specified? I can’t find the answer anywhere on the Internet. J.T., San Jacinto Dear J.T., First, president does not appoint offices or board terms and is one vote out of the five who should be making that decision. Having not seen your association governing documents, I cannot say exactly what was required to happen. Normally, when an association begins to use staggered terms, the first election will have directors with the higher vote totals receiving the longer terms. We normally draft such bylaw provisions or amendments that way. If everyone received two-year terms the staggering would be destroyed so your suggested approach makes sense, if it does not violate the governing documents. Best regards,Kelly Dear Mr. Richardson, We had a five-member board. Two of the members did not like the others, organized a total board recall election, recalled the entire board, and then ran again and won. Is this legal besides being unethical? E.F., Temecula Dear E.F., Directors are also members and at election time can personally support or oppose who they choose as directors. What directors cannot...
Recall Questions: Part 1

Recall Questions: Part 1

Dear Kelly, In our recent HOA election, one new member was elected but resigned six weeks later. There is an all-out war between the four remaining directors. All business has stopped due to the inability of the four to agree on anything that needs a vote. Homeowners want the board to appoint the next in line from the last election, two board members will not agree to this. We have cumulative voting and I understand recalling anyone less than the entire board is very difficult, no? We are being told that our bylaws require 25% of the owners to demand a special election. Is this so? K.C., Mission Viejo Dear K.C., Very sorry to hear of the discord within your board. Recalling the entire board is one possibility, which normally requires approval of a majority of a quorum of the members. Pursuant to Corporations Code 7222(b)(1), associations with cumulative voting find it much harder to recall a single or a few directors, because under that statute “no” votes are multiplied by the number of authorized seats, so it takes many more “yes” votes to remove a director. However, a less hostile alternative would be simply to ask the board to set a special election to fill the open seat. Another option, undesirable due to its cost, would be to ask the Superior Court to appoint a provisional director to break the tie and get a special election set. As to the minimum members necessary to petition for a special membership meeting, Corporations Code 7510(e) says that 5% or more of the members can petition for such a meeting. If the...