Why Governing Documents Matter

Why Governing Documents Matter

Governing documents are critical for HOA communities and are literally the legal glue which holds the association together. Civil Code Section 4150 defines “governing documents” as articles of incorporation, CC&Rs, bylaws, and operating rules, but I think subdivision maps and condominium plans also should be regarded as governing documents. Each has a distinct purpose and function, and every HOA member should have copies. Subdivision map and condominium plan This document breaks up land into separate pieces of land or airspace sold to homeowners in planned development (“lots”) or condominium (“units”) projects. This document is recorded (i.e. filed) with the County Recorder, is easily retrieved, and defines the “common area” as well as the “separate interest” (i.e., the lot or unit). Sometimes it also delineates exclusive use common areas or maintenance easement areas. It establishes the real estate interests owned, so any amendment requires agreement of 100% of association members and their mortgage holders, and consequently amendment is highly unlikely. Articles of incorporation Articles of Incorporation establish the legal “person” of the association. Filed with the Secretary of State, this document can be retrieved from that office. Older Articles sometimes contain important information about limits on the association or board’s powers. The Articles list the association’s legal name and can be amended by membership vote, although amending is rarely necessary. Check the association’s corporate status at https://businesssearch.sos.ca.gov. CC&Rs The CC&Rs document is recorded (amendments also must be recorded), and therefore is also a public document. Associations often use unrecorded, unofficial copies, but official copies can be retrieved from the County Recorder. CC&Rs are a long contract automatically binding all owners,...
Short Term Rentals: Both Sides

Short Term Rentals: Both Sides

Hello Mr. Richardson, We have a guest house on our half acre lot that we have rented out (using a short-term rental service). We are always home in the main house when guests are present, therefore, there has never been any issue with noise or nuisances over the many times we have rented it out. It has been a nice source of income that has allowed us to pay our utilities, some college tuition for our children and HOA dues. The HOA sent a letter to us stating that we were running a commercial business from our home which is forbidden. Is there anything that protects the ability of a homeowner to rent out a room or, in our case, a spare guest house short of changing our listing to a monthly only rental? Thanks for any help on this! K.A., San Diego Dear Mr. Richardson, Is it legal for one of the other owners in my association to use a unit as a short-term rental without input from the other owners? Privately it was discussed among those of us who vehemently oppose this callous disregard for our concerns. Is this owner acting within legal parameters?  Your input will be greatly appreciated. Thank you. I anxiously await your reply. L.H., South Pasadena Dear K.A. and L.H., While you are on opposite sides of this issue, the basic response is the same. Short-term rentals are considered by many as a commercial and therefore non-residential use of the property. While many web-based companies offer convenient advertising of such rentals, it is closer to a hotel-type operation than a tenancy. An increasing...
Boards Elections [Part 1]

Boards Elections [Part 1]

Mr. Richardson, What recourse does a member have if the board refuses to abide by the governing documents or state law? Our president refuses to hold the annual election in an apparent attempt to stay in power. C.S., Poway Dear C.S., 5% of the members may under Corporations Code 7511(c) send a written petition demanding a membership meeting. However, most likely the board will ignore it. I have seen members announce their own membership meeting, but this is a bad idea because it is too easy to make an error in the very technical election procedures required by Civil Code 5100-5135. A better option may be to file a court petition under Corporations Code 7510(c) for an order compelling an election. This involves legal expense, and is a last resort, but judges are normally sympathetic to these petitions and are willing to order an election. Before going to all the effort and expense of filing a court petition, make sure you have member support (and a few candidates). Best regards, Kelly Dear Kelly, Our association did not make quorum, so our election was postponed a month. Each homeowner gets 1 vote, but there were couples at this meeting so some homeowners got 2 votes. Some homeowners returned a handful of ballots they had collected. I was told each homeowner must mail or bring their ballot in themselves. Is this legal? D.P., Aliso Viejo Dear D.P., Civil Code 5115(a)(2) says that ballots may be mailed or delivered by hand to a location specified by the inspector of elections but does not specify who does that. Election rules could avoid a...
Boards Barking About Dogs

Boards Barking About Dogs

Dear Mr. Richardson, Our CC&R’s limit the number of pets a homeowner can have to a “reasonable” number. City law states a resident outside of an HOA can have up to 4 dogs. Our association manager insists we have to abide by city law. Is that right? Thanks, F.D., San Pedro Dear F.D., Per Civil Code Section 4205, governing documents cannot conflict with state law. Unless your city in its ordinance exempts HOA residents, your association must, like any homeowner in that city, follow the law. The association could adopt a stricter standard, but it cannot be less strict than the city, as the public law sets the floor below which associations may not go. Also, it is the city’s job to enforce ordinances, so the board might not have to become involved (except for a call to the animal control department). Most homeowners do not research city ordinances, so if a pet limitation is important to your community, it is better to state it clearly in the governing documents. Pet limits are probably best placed in CC&Rs, so they are more permanent and cannot be changed from one board to the next. Thanks, Kelly Dear Kelly, Several residents used to take our dogs to an enclosed common area to play. The area was not designated for any specific purpose. One day the HOA president announced that dogs would no longer be allowed in that area. The board then invited residents with grandchildren to take advantage of that common area for play. Wouldn’t each resident who takes their dog to the area be covered through each individual homeowners insurance? D.S.,...