Fair Housing Regulations Are Here, and a New Protected Class

Fair Housing Regulations Are Here, and a New Protected Class

After five years of work and hearings, the California Fair Employment and Housing Council has completed what appear to be the first state Fair Housing regulations in the country. While in the short space of this column a thorough summary of the regulations is impossible, here are some highlights for associations and their managers to consider. HOAs are “Housing Providers” under the regulations, as are HOA boards and their managers. Managers can also be subject to enforcement or civil liability if they discriminate or fail to respond appropriately to discrimination. The regulations do not cover all fair housing issues but provide helpful guidance regarding the housing provider’s obligation to make reasonable accommodations upon request of the disabled. The regulations describe how disabilities are documented and who can attest to the need for an accommodation. One such reasonable accommodation is allowing assistance animals. Under the regulations, a mere internet certificate or labeled vest is not acceptable to document the animal as an accommodation – a person attesting to a disability must be familiar with the resident’s needs. The regulations do not permit species or breed limitation for assistive animals. The test of “reasonableness” is whether the animal causes damage or danger to persons or property, and the mere fear or suspicion of problems is insufficient reason to deny the animal. A person needing an assistance animal cannot be required to obtain extra insurance or pay a fee or deposit for the assistance animal. The regulations also ban harassment based upon membership in a protected class, meaning a resident may not be harassed because of their race, gender, religion, familial status,...
Is the Handyman An Employee? AB5 May Increase HOA Payrolls in 2020

Is the Handyman An Employee? AB5 May Increase HOA Payrolls in 2020

Traditionally, many businesses often hire part-time or occasional workers and characterized them as “independent contractors.” The IRS and State Franchise Tax Board had guidelines to help determine who was an employee and who could fairly be called an independent contractor. There were many factors which played a role in that characterization. HOAs often hire persons they considered “independent contractors” to perform specific maintenance, repair, or other routine tasks. This avoided payroll tax withholding and other legal obligations. All that began to change in 2018 with a California Supreme Court case called Dynamex v. Superior Court, in which the traditional test of employment vs. independent contractor was replaced with a simple 3-part test, often called the “ABC” test. That ruling was incorporated in Assembly Bill (AB) 5, which was quickly signed by the Governor after passing the Legislature. AB 5 creates a new Labor Code Section 2750.3 and affects any hirer, including HOAs, using “independent contractors” which might be reclassified as “employees.” This new statute adopts the “ABC” test, which determines a worker as an independent contractor if: A) The hirer actually and contractually does not control or direct the person in the course of their work; B) The work performed is outside the hirer’s normal business; and C) The worker also normally and independently performs that work for others. If the hired person meets all of those three requirements, they can be treated as an independent contractor. As before, the element of control over how the person performs their work is key. Some HOA service providers are expressly exempted from the law, such as attorneys, architects, engineers, and accountants....
HOA Election Processes Much More Difficult in 2020 – SB323

HOA Election Processes Much More Difficult in 2020 – SB323

An extensive overhaul of HOA election procedures takes effect in 2020 after passage of the controversial SB 323. Here is a recap of the many changes: The law at Civil Code 5100(g) will finally allow votes by acclamation when, at the close of nominations, there are not more candidates than open seats. Unfortunately it only applies to HOAs of over 6,000 members. Associations will be required by a new Civil Code 5100(a)(2) to hold board elections at least every four years. This will affect few HOAs, since most have board terms which are one or two years in length. In the past, many HOAs have held hearings to suspend the voting rights of members delinquent in their assessments, and others have bylaws barring such homeowners from voting. The new Civil 5105(g)(1), however, requires HOAs to give ballots to all association members. So, delinquent members may vote on HOA matters, even though they are not paying their share of the HOA expenses. Although some HOAs allowed managers to serve as the Inspector of Election, under the new Civil Code 5110(b) this is prohibited. Some HOA Bylaws do not require directors to be an association member, but the new Civil 5105(b) disqualifies non-members from serving. The new Civil 5105(c) allows associations in bylaws or election rules to disqualify candidates if the member: Is delinquent in assessments (without a payment plan in place); Has not been a member for at least a year; Is co-owner with another director; or Has a felony conviction which would harm the HOA’s ability to obtain fidelity (dishonesty) insurance. The law does not specifically state that these...
Protection for ADUs and Doorway Icons Coming in 2020

Protection for ADUs and Doorway Icons Coming in 2020

Two new laws are coming in 2020, which provide protection for HOA owners in regard to accessory dwelling units and religious decorations on doorways. One of the most basic elements of residential CC&Rs is the requirement that residences are limited to “single-family” use. However, at least in California planned developments, that requirement is partially overridden through Assembly Bill 670. That bill, recently approved by the governor, creates a new Civil Code 4751 taking effect on Jan. 1, 2020. Under this law, a planned development lot owner can add a second smaller residence attached to the primary residence, so long as applicable building and zoning codes are satisfied. Accessory dwelling units have been increasing in priority with the state Legislature in recent years. In 2016 SB 1069 passed, creating a requirement that local building departments allow construction of ADU’s that meet minimal standards (Government Code Section 65852.2(e)). This year AB 670 passed, adding a new Civil Code Section 4751 to the Davis-Stirling Act. Starting in 2020, planned developments may not have an outright prohibition against ADUs, but may impose “reasonable” restrictions so long as they do not unreasonably increase the cost or effectively make ADU’s impossible. The law only applies to planned developments and does not apply to condominiums, stock cooperatives, or community apartments. Homeowners should check their CC&Rs before seeking an ADU on their property. Some detached home communities actually are not planned developments but are condominiums. Even if the condominium has a “yard,” it is not covered by this law. Planned developments often involve “townhouse” construction, in which homes are attached side by side but still are wholly...
2019 Bills Proposing New HOA Laws Are A Mixed Bag

2019 Bills Proposing New HOA Laws Are A Mixed Bag

This year Sacramento presents another spring season full of ideas for HOAs – some bad, some good, and some well-intentioned but needing revision. SB 323 Senate Bill 323 is a recycle of last year’s SB 1265, a bill vetoed by Governor Brown in September 2018. SB 323 would add burdensome new elements to the HOA election process and dictate to HOAs who could or could not serve as directors. The bill is as bad an idea this year as it was last year. As Governor Brown wrote while vetoing its predecessor, SB 323 “takes a once-size-fits-all(sic) approach, but not all homeowner associations are alike. If changes to an election process are needed, they should be resolved by the members of that specific community.” Associations should set their board eligibility standards, not Sacramento. SB 652 SB 652 addresses the conflict between architectural conformity and religious observance. Does a Jewish Mezuzah or Christian cross violate rules banning alteration of doorways? SB 652 would add a new Civil Code 4706, prohibiting associations from limiting or prohibiting display of religious items on entry doors of a member’s residence. There is no limitation on size, number, or appearance of doorway decorations, so long as they are religious. Perhaps some reasonable limit could be stated. Coauthored by sixteen legislators, it awaits committee assignment. SB 434 SB 434, authored by Senator Archuleta of Southeastern L.A. County, proposes to add a new Civil Code 5382. The proposed statute would require managing agents to produce the association’s records and property (manuals, transponders and keys, for example) within a certain time after termination and/or association request. Managers could not...
HOA Election Glitches [Part 1]

HOA Election Glitches [Part 1]

Dear Mr. Richardson, Is there any restriction on note taking while inspecting election ballots in a delegate-based election? I believe copying is not allowed, but isn’t note taking considered to be different and unrestricted? Thank you sincerely, T.R., Rancho Santa Margarita Dear T.R., In most HOA elections, any candidate or member may witness the vote counting, under Civil Code 5120, and inspect the ballots after the election, under Civil Code 5125. However, the voting by delegates is not subject to the election procedural requirements of Civil Code 5100-5145, per Civil Code 5100(d). So, during the member voting for delegates, the members may observe the vote counting, but not the voting of the delegates. I cannot imagine the rationale of barring you from taking notes while you inspect the ballots. Thanks for your question, Kelly Kelly, Our management company had our board hire an outside company to mail out ballots, receive them, and count them. The ballots are to be counted at their office and if a homeowner wants to go there for the process they may do so. The company is 30 minutes away. They also put the annual election after the regular homeowner meeting and then the executive meeting so if anyone wanted to stay for the election results they could do so by waiting outside until the board had finished their executive meeting. Some homeowners feel that they are disenfranchising residents. Can you provide some insight? D.H., Newport Beach Dear D.H, The votes must be openly counted at either a membership meeting or at a board meeting convened to count the votes. A meeting at the management company...

What Sacramento Did For (Or is it to?) HOAs in 2017

The California Legislature was quite active this year in creating laws affecting HOAs, as six bills take effect in 2018. SB 2 Senate Bill (SB) 2, known as the “Building Homes and Jobs Act”, was signed by the Governor on September 29 as an urgency statute, which means it took effect on the day it was signed. Its stated goal is to increase housing supply and reduce homelessness, and it creates a fund called the “Building Homes and Jobs Trust Fund. The new statutes are Government Code Section 27388.1 and Health and Safety Code Sections 50470 and 50470.5. The Fund will receive the proceeds from a new tax of $75 per document on documents recorded with County Recorders, except for documents recorded as part of a transfer of property ownership. Despite being called an urgency statute, it practically does not begin until January 1, 2018, when the County Recorders start collecting the $75 fee on recorded documents. In the future, various documents commonly recorded by HOAs will be subject to the $75 fee, such as amendments to CC&Rs, common area alteration agreements, and liens and lien releases. Delinquent members will now face an additional $150 cost, as the cost to the HOA of recording an assessment lien and later removing the lien will be passed along to the member as part of the delinquency. AB 534 A bill which brings some help to HOAs is Assembly Bill (“AB”) 534. Civil Code 4615 previously barred contractors from recording a mechanics lien (yes these in the future will also be subject to SB 2’s $75 fee) against an entire condominium project...