Monthly Archives: September 2016

Landlord Anger Could Be Damaging Your Business

Anger is rarely an asset in a business setting, and it’s no different for landlords and real estate investors. No matter how much effort landlords put into keeping their cool, there have likely been moments where their temper has gotten the best of them. If you are a landlord, you are going to be put into situations where it will be hard to control your emotions, especially anger.

Successful landlords understand that anger and losing control have no place in business, and doing it may cost them an excellent tenant or a ruin a good business relationship. Just like all aspects of business, losing your temper is definitely going to have a negative effect on your landlord/tenant relations as well as your interactions with service people and contractors. Excessive aggression and hostility can even negatively affect your health.

The Emotion of Anger

Anger comes from a negative place inside you where you overwhelmed with irritation, unhappiness, frustration, worry, fear, intense dislike, disappointment or aggravation. If you are going to give into this negative emotion, you will not be able to make good judgments in your daily business decisions. You will also shut down communication between you and the other person, causing them to stop trying to see your side of things. Finally, anger often pushes people to do or say things that they regret, possibly damaging business relationships permanently.

Of course, there are always situations where anger is a healthy emotional response, but should be expressed appropriately. Landlord situations that may trigger anger include discovering excessive damage in a rental property, having to go to court for an eviction, dealing with belligerent tenants when trying to enforce the lease agreement, or working out a big problem with a contracted service person. Any of these can trigger an emotional response, but most professionals manage to keep a cool head during these times and then vent later on in private. But for those landlords that are quick to display their temper, it’s better to keep it under control and use other tactics to resolve a situation.

Tips to Manage Anger

There are many ways to deal with confrontation, conflict and stress than resorting to losing your temper. Landlords have to deal with a wide range of people and some of the most unusual situations. Keeping your cool can help you be a better business owner and will definitely help you resolve conflict in a more effective way.

Here are 5 tips on how landlords can control their anger and get better results from themselves and others in resolving any business situation.

  1. Stop and Think. Anger emerges in big bursts and can often fuel a landlord for a long time. Before opening that symbolic door to anger, people can mentally step away from the situation and take a minute to collect themselves. It’s not out of the way to state, “I’m going to need a minute,” and take a long pause before getting into a conversation with someone. The old trick of counting to ten really can help people get their thoughts together before they speak.
  2. Don’t Match Anger With Anger. Sometimes, anger is triggered because another person is confrontational and aggressive to begin with. Landlords can be the voice of reason in a tense situation and can even steer the conversation toward a more civil tone by keeping calmer than the other person and refusing to rise to the level of anger they are showing. Even if the landlord starts out angry, they can change the tone of the conversation by calming down.
  3. Move Forward. When feeling irritated or frustrated at a landlord situation, it’s important to keep moving forward. Staying stuck in a fit of anger will only make a situation worse and cloud judgement, preventing people from making the best decision. Address the situation with a problem-solving attitude and the anger will fade soon.
  4. Just Walk Away. If a situation is getting too tense and both sides are not expressing themselves well or being heard by the other, it’s time to walk away and resume at another time. Landlords can physically remove themselves from the situation, ask the other person to get out or call the police in extreme situations. With a commitment to resume the conversation at a later time or date, both sides will benefit from a new perspective and from blowing off steam.
  5. Look For The Positive. In almost any situation, there’s a little bit of positive and often that can be enough to hurdle over feelings of anger. For example, if the anger is triggered by heading to court for an eviction, landlords can see the silver lining in that they are almost done dealing with those problem tenants. When confronting a bad tenant about a lease violation, the landlord can keep in mind that a formal written warning may compel the tenant to better behavior.

Anger is never a good emotion to display in a professional situation. If a person wouldn’t show anger at an office or business setting, they shouldn’t show it in their landlord/tenant relationships. The most successful landlords are those that have plenty of control in any situation. The good news is that landlords that have a temper can always improve and get themselves to where they want to be the next time a stressful situation arises.

The post Landlord Anger Could Be Damaging Your Business appeared first on RentPrep.

Short Term Rentals in Community Associations and Cities – a Constantly-Changing Landscape

Rental restrictions have been a topic of conversation among those living in and serving community associations for several years.  However, in the past few years the conversation has shifted from things such as rental caps to specific provisions regarding short term rentals. Associations are understandably concerned about short term rentals given that associations are “shared risk, shared rewards” entities, owners may have expectations about living in a residential (i.e., primarily owner-occupied) community, most CC&Rs prohibit “transient” housing, associations are self-governing, and associations do not have a legal relationship (or a direct right of enforcement) against tenants.  Associations are struggling with whether to prohibit short term rentals altogether or permit short term rentals under certain circumstances (as evidenced by Watts v. Oak Shores Community Assn. (2015) 235 Cal.App.4th 466). But associations are also dealing with increasing regulation on the part of cities that are struggling with how to address the ever-growing short term rental market.

Community associations are not alone in struggling to deal with short term rentals; cities are struggling with how to deal with them as well. Some cities, like some associations, are banning short term rentals altogether out of a concern over “hotelifying” their cities and the neighborhoods within them. Other cities, such as San Francisco, see short term rentals as a source of tax income and have enacted strict legislation requiring hosts to register with the City, rent their homes for a maximum of 90 days per year, and pay hotel taxes to the City. The San Francisco legislation permits community associations to prohibit short term rentals. Recent changes to the San Francisco legislation requires Airbnb to police its hosts by requiring that hosts register with the City as a condition to being listed as a host on the Airbnb site. What we have learned from this type of legislation is that Airbnb has a great deal of money, and is willing to spend money to oppose legislation like that recently passed in San Francisco.

The city of Dana Point, which had adopted legislation that, among other things, allowed community associations to prohibit short term rentals, recently decided to relinquish authority over the issue of short term rentals to a state agency, the California Coastal Commission. The Coastal Commission, incidentally, in places such as Oxnard, has issued cease and desist letters to associations who have adopted restrictions on rentals for fewer than 30 days, on the grounds that such restrictions limit overnight housing accommodations at the beach.

Short term rentals are not going away and, given the money at stake and the players involved, this is going to be a hot topic (with very few clear answers) for the immediate future. Whatever legislation may be introduced in the future to address this issue will likely face opposition from one group or another.

What is clear is there is not a “one size fits all” approach; associations will need to examine what is in the best interest of their members given the location and general makeup of the community. Those who live in and work with associations should also be on the lookout for “partnering programs” between short term rental platforms such as Airbnb that will allow associations to have more information about short term rentals in the community and provide the associations with a source of income.  We can also expect that CAI and CLAC will continue to monitor any legislation in this area that impacts community associations.

amytinetti-color-nov-2012
Amy K. Tinetti, Esq.

Amy Tinetti is a principal in the law firm of Hughes Gill Cochrane, P.C. Ms. Tinetti has been representing community associations since 2004, and has presented at numerous CAI events on a variety of topics and has published several industry-related articles. Ms. Tinetti is a Past President of the Bay Area Central California Chapter of CAI and currently serves as the Co-Chair of both the Legislative Support Committee and the Education Committee for that chapter. She is also a California Legislative Action Committee (CLAC) delegate.


A Landlord’s Guide to Student Tenants

As institutions of higher learning across the country are opening their doors to waves of new students, many landlords are benefiting from investing in rental property close to colleges and universities. Renting to college students can be highly profitable to landlords who have taken into account all the unique challenges that come with the territory. Of course, owning and operating a rental home full of student tenants can also be a big disadvantage to landlords that aren’t prepared to handle the range of problems that are possible.

What are Student Tenants?

Student tenants are those that are enrolled in a college, university, technical college or some other form of higher education program that operates on a term or semester system. Student tenants generally range in age from 18 to 23, and sometimes even older for those attending graduate schools or specialty programs. Student tenants are primarily single rather than married, and may choose to live with roommates to keep costs down.

Because of their school requirements, their age and their lack of income or credit, student tenants can be a tricky group to rent to. Some landlords refuse to invest in property near colleges so they don’t have to worry about student applicants, while other landlords thrive on filling their investment properties with this booming segment of the rental population.

Pros and Cons of Student Tenants

It may seem like a no-brainer to rent to student tenants and just implement the same rules and procedures as a traditional rental, but landlords need to understand that this group of renters really do need a slightly different setup than young professionals, families or senior citizens. Here are some of the pros and cons to renting to student tenants:

Pros

  • In most college towns, there’s a shortage of off-campus, student-friendly housing, putting such rentals in high and constant demand.
  • Stable rental rates help landlords with properties close to campus to set rates that are sometimes higher than the average rent for that city due to higher demand. Also, because the overall off-campus rental market is generally slow to change, the rents have a good chance of staying fairly stable.
  • Students generally stay put for the entire school year, giving landlords nine consecutive months of guaranteed income.
  • Despite high turnover, landlords generally have plenty of applicants ready to fill any vacancies.
  • Minimal advertising is needed to fill vacancies, because college students spread information by social media and word of mouth very quickly. Also, landlords can simply advertise exclusively on college-centered mediums.
  • Potential for consistent rental payments is high, either from student loans, parents or financial aid. Some students even pay several months in advance or a semester at a time.
  • Rental properties don’t necessarily need to be the most modern or the most problem-free to appeal to student tenants who are seeking something affordable versus something high end.

Cons

  • Students are generally interested in short-term lease agreements, generally coinciding with an academic year (such as August to May).
  • High turnover at the end of each year can lead to lots of extra work for landlords in regards to screening, repairs and advertising.
  • Summer months can be particularly difficult to fill as students leave town to live back home or work at jobs or internships elsewhere.
  • The student lifestyle may cause problems at the property, such as partying, noise complaints, lots of visitors, purposeful lease violations and inexperienced tenants that choose not to take care of the property or don’t know how.
  • Potential for inconsistent rent payments, due to inexperience in money management or lack of rent money due to unemployment.
  • Properties are exposed to more wear and tear than more mature tenants might create.

All in all, the best type of landlord for a student rental is one that is actively involved in the property, lives nearby or has an active property manager that can be close by and be on hand to handle everything from inspections and repairs to enforcing the lease agreement. When an active landlord puts the effort into student rental properties, they will be well rewarded for their time.

Finding the Best Student Tenants

Like all tenants, there will be some excellent student tenants and some that are less than desirable. Landlords with property in college towns should make sure they have some very strict processes in place to ensure that they are weeding out student tenants that will be much more costly to deal with. It’s possible to find excellent tenants that are students, making the investment very worthwhile.

There are 5 things that landlords can do to ensure that they are attracting and screening the best of the best when it comes to student tenants.

  1. Create a custom lease agreement. The best leases will be those that that are tailored to student needs and habits. Examples of this include starting and stopping the occupancy dates to coincide with the nearby school schedule and renting by the bed so that one roommate can move out or be evicted without affecting the others’ status.
  2. Conduct an applicant screening for everyone. From employment history and credit history to criminal history and references, it shouldn’t be done any differently even though they are students. While students may have nothing turn up because of their age and inexperience, it’s always a good idea to do a background check every time. Also, get a background check on any co-signers as well.
  3. Get solid contact information for parents, co-signers or other emergency contacts. It’s a fact that during the college years, students are often still reliant on their parents for financial and emotional support. Having current contact information for parents and co-signers can help ward off trouble in regards to late rent, behavior issues and even abandonment of the property.
  4. Stay strict on enforcing the lease agreement and community rules. Students have a reputation of being hard on rental properties and disregarding the rules of the lease agreement. Landlords should make sure they enforce the lease conditions such as noise levels, number of people on the lease agreement, charging for damages, and regular inspections.
  5. Cultivate good habits and break bad ones. If the student tenants are doing a good job at paying rent, keeping the place clean and respecting the rules, consider delivering rewards like gift cards or updated appliances to encourage the good behavior. Similarly, don’t allow students to develop bad renting habits by being lenient on late rent or waiving off lease violations.

Landlords can really benefit from catering to the student tenant market, but only if they have all the tools and preparations in place to ensure the interaction will be as good as it can be. Student tenants are often inexperienced in what it takes to be a good tenant, so landlords need to be extra thorough in how they run their business.

Red Flags and Students

Just as with more typical tenants, there are going to be good ones and bad ones. Landlords can keep their eyes open for any red flags during the application process to try to weed out those that may not be the best choice. Of course, landlords must treat everyone equally and fairly during the application process, but there are often clues to behavior and temperament that can help landlords make the right decisions on who to rent to.

Here is a list of red flags that landlords should watch out for when selecting student tenants based on their applications and interviews:

  • Applicants get nervous when told there will be a background check done.
  • They have a long and convoluted story about past problems with credit or a previous landlord.
  • Student applicants that don’t provide references.
  • Parents that seem to control every aspect of their student’s life could mean an ill-prepared tenant or a demanding parent that micromanages their living situation.
  • They seem distracted, uninterested or too focused on their electronic devices during phone conversations or in interviews.
  • Applicants are not polite or respectful during the application process.
  • Student applicants are evasive about how many people will be living in the rental property.
  • They appear slovenly or have a messy car.
  • Applicants are late to the appointment or miss it altogether.
  • Students omit or lie about something on their application.

Landlords will know that not all of these red flags actually mean that the student tenant should be avoided, but they are warning signs of a potentially deeper problem with the applicant that should be included in an overall assessment. If there are more than a few of these red flags with any student applicant, landlords should take a closer look to get to the truth.

Conclusion

Remember that rental properties in college towns are considered a great investment by many experts. Landlords can take advantage of the benefits and avoid many of the risks in providing students with a place to live when they develop a sound strategy. The specialized approach to student rentals isn’t for everyone, but for those landlords that can supply a clean, quiet, safe and convenient rental property, they should have an endless supply of tenants that are eager to live there.

The post A Landlord’s Guide to Student Tenants appeared first on RentPrep.

The ‘New’ Brass Is Back in Home Design

Photo by Westborough Design Center, Inc. – Discover traditional kitchen design ideas   By Melissa Dittmann Tracey, REALTOR(R) Magazine It’s all about that brass. But don’t expect to see that 1980s super shine. Today’s trendy brass is more of an antique brass, which is being used in light fixtures, mirrors, frames, and even furniture trims. […]

What Tenants Need To Know About Meth Homes

You have probably heard of the street drug “crystal meth” which is short for methamphetamine, a synthetic stimulant that is plaguing the streets with its highly addictive qualities. What you may not know is that meth can be manufactured by amateurs with the proper ingredients and a space that can accommodate the equipment needed to cook the drug into its finished state.

Meth makers often use the kitchen of their rental residence to make the drug. In addition to this operation being illegal, the cooking process also leaves a toxic residue on the home that is not always detectable and can lead to very serious health issues like migraines, seizures, respiratory problems and kidney disease.

The Cost of Meth Cleanup

Cleaning a home that has been used to make meth is an expensive and arduous process and must be passed off by the health department as habitable before it can be rented out again. A friend of mine was able to buy several homes very inexpensively because they had been the sites of meth production labs and the landlord was financially unable to fix them. Each of the homes required full carpet and drywall replacement throughout the home.

Once these were removed and disposed of properly, he had to power wash each room with a chemical cleaning solution. Before he could replace anything, the health department had to come and check for residue and give the green light to begin restoring the homes. All of this work had to be done while wearing a protective suit. After new carpet, new drywall and new paint, he could finally rent out the homes. Some experts estimate the cost of repairs to a meth home to be around $30,000.

I illustrate this to impress upon you as a renter, what a meth cooking operation can do to the habitability of a home. Simply painting the walls and cleaning the carpets will not shield you from the potential health issues you may face and the effects are particularly dangerous for young children and for the elderly.

What Tenants Can Do To Avoid Meth Homes

According to the New York Times, meth labs discovered in residential homes in the United States rose by 14 percent last year and the numbers continue to increase. While some landlords may simply be unaware that their unit was used improperly and have not taken steps to correct the problem, others deliberately do not disclose the history of their rental units for fear of having to make financially debilitating repairs.

You can take matters into your own hands by being aware of what to look for in a potential unit:

  • Check the walls, sinks, showers and drains for yellowing.
  • Look for blue discoloration on the valves of fire extinguishers and propane tanks within the
  • home.
  • Check to see if smoke detectors have been taped off or removed.
  • Be aware of an itchy throat, burning eyes, breathing problems or a metallic taste in your mouth while in the property.
  • Take note of strong odors such as ammonia, paint thinner or solvent.

Because only 20 states currently have laws that require official contamination clean up, it is in your best interests to be proactive about the safety of any potential home. If you want to be particularly thorough, you can always check police reports for the specific address. The U.S. Drug Enforcement Administration has also made a state-specific map of meth lab incidents so that home buyers and renters can check out a potential area. You can also purchase a meth residue kit to test a unit before signing a lease.

As the problems with meth continue to plague the rental industry, it’s a good idea to be proactive in checking out any properties you might be interested in, no matter what age, condition or neighborhood. Remember that the best rental home and amenities in the world aren’t worth risking the health and safety of your family.

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Goodbye to a True Community Association Supporter, Thank You Skip Daum

For those of you who hadn’t heard yet, Community Associations Institute’s, California Legislative Action Committee (CAI-CLAC) is officially announcing the retirement of its long term lobbyist Skip Daum of Capitol Communications Group on September 30th.

Skip had a well-deserved reputation for success when he and Capitol Communications Group began working for CAI-CLAC 24 years ago. He had interned for two lobbyists in Sacramento after 10 years in the US Air Force as an instructor navigator.  He has served us well since.

Skip has been the voice of CAI-CLAC at the Capitol. He is the one that identified legislative threats and possibilities for the community association industry. He would then act as expert, co-strategist and advisor every year as the Committee discussed issues, legislation and goals. With Skip at our side, CAI-CLAC has seen many successes. Just in the last legislative session we achieved many of our goals including:

  • AB 1448 (LOPEZ) – PERSONAL ENERGY CONSERVATION – CLOTHESLINES

Due to Skip’s and CLAC’s efforts, community associations may restrict the use of clotheslines in front and side yards, and balconies. Associations may also prohibit drying clothes and towels on balconies, railings, awnings, and other parts of structures. Those rights would have been lost otherwise.

  • AB 596 (DALY) – DISCLOSURE OF FHA AND VA CERTIFICATION

Because of CLAC’s and Skip’s work, condominium projects will be required to add only two additional pages to their annual budget report, instead of sending separate notice every time it is reasonable to expect a status change.

  • AB 349 (GONZALEZ) – ARTIFICIAL TURF

Through its efforts CLAC retained the community association’s ability to require owners to obtain approval to install artificial turf if the governing documents provide for it.

  • AB 786 (LEVINE) – FINES FOR FAILURE TO IRRIGATE IF RECYCLED WATER USED

CLAC sought and received amendments that allow community associations to insist owners who receive recycled water irrigate their landscape.

Darren Bevan, CAI-CLAC Chair had this to say about Skip’s retirement, “We’re grateful for Skip’s fine work during the nearly 25 years he represented CLAC. We will miss his humor and knowledge about community associations.”

During his time as our advocate, Skip says community association issues literally consumed 75% of his time thinking, writing, lobbying, public speaking, traveling and testifying on our behalf. His parting words of advice are “Preserve your commitment, continue to raise the awareness of CAI and CLAC among community association owners and the media, keep holding fundraisers, and (especially) grow your grassroots network — there’s strength in numbers.”

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Watch for information on Kahn, Soares and Conway, LLP (KSC) who has been engaged to handle CAI-CLAC’s continuing advocacy work.


Why Landlords Must Insist On Renters Insurance

Landlords can set up requirements for tenants to follow in the lease agreement, and including a clause that requires them to carry renters insurance is growing increasingly common. Renters insurance policies cover the tenant and their guests and fill the gaps where the landlord’s property insurance does not cover. Such policies are not expensive, but they can make things much easier on both landlords and tenants when they are in place as part of a successful tenancy.

The worst landlord/tenant conflicts usually have to do with money and disagreements about who needs to pay for what. Many tenants don’t know that a landlord’s home owner insurance only covers damage and issues with the property itself, not the possessions inside. So, if there is a flooded basement and the tenant’s belongings get damaged, they may not understand why the landlord’s insurance simply won’t compensate them for their loss. Getting everyone on the same page with insurance coverage is a fine way to start a landlord-tenant relationship.

5 Reasons To Insist On Renters Insurance

When landlords are interviewing potential tenants about singing a lease, it’s a great time to bring up renters insurance. Landlords should require either proof of current coverage or require tenants to show proof within a set time period. More and more, landlords are making it mandatory before the applicants sign the lease agreement. Not only is this legal, it’s good protection for both tenants and landlords.

Here are the top 5 reasons why landlords should insist that their tenants carry renters insurance and make it a condition of the lease agreement:

  1. Protect Personal Property: If the tenant experiences any kind of loss of personal property, through an accident at the rental home, the insurance policy will compensate them for the loss. Landlords won’t have to get drawn in to a conflict about whether or not they are responsible.
  2. Damage or Injury for Guests: If the tenant has guests over and they suffer property damage or injury, the renters insurance will provide that compensation. This will often alleviate the injured party from seeking out landlord liability as well.
  3. Theft Protection: Not only does renters insurance protect a tenant’s personal property in the event of theft, it covers their possessions that aren’t even in the rental home. For example, if something valuable is stolen from their vehicle, it is covered by the insurance.
  4. Temporary Expenses: If something should happen to the property that makes it uninhabitable for a while, such as a fire or weather-related damage, renters insurance will cover those temporary living expenses until the rental property becomes habitable again.
  5. Cooperation: If a tenant is familiar with how renters insurance works and either already has a policy or is willing to get one, it can signal that the tenant is the type that is cooperative, compliant and will therefore make a better tenant than one that fights it every step of the way.

It’s helpful for landlords to hand out brochures of nearby insurance agents to applicants that don’t have renters insurance yet so they can get some coverage lined up as soon as possible. With all the possibilities out there of what can go wrong, it only makes sense to insist on renters insurance for tenants.

Adding a Renters Insurance Clause to the Lease

Landlords that don’t already insist on renters insurance may be a little unsure about how to begin incorporating such a policy. The most obvious way is to include a clause into a new lease when the tenant is either renewing or is signing for the first time. It’s important to discuss each clause of the lease with the tenant or applicant, and the section about obtaining renters insurance is no different.

Landlords can also put together an addendum with a notice that starting at a certain month, all tenants will be required to carry a renters insurance policy. Of course, landlords should give a generous amount of time for this to be enacted and enforced as any change in a tenant’s budget or their spending is likely to be met with resistance if done too quickly. If the tenant’s lease renewal is in a few months, it is usually better to wait until then, for example.

Here is an example of a clause that incorporates renters insurance:

“The tenant, _____________________, understand that the owner’s property insurance (fire, hazard, and liability coverage for injury or damage), does not include or extend to the tenant or guests. Therefore, the owner requires that the tenant obtain their own renters insurance coverage against all risk to personal harm and property damage. The tenant’s insurance policy needs to include liability insurance. The tenant must also show the owner written proof of insurance coverage annually.”

Of course, landlords can consult with a landlord/tenant attorney to receive additional help on writing up a lease agreement, including clauses about renters insurance.

It’s also a good idea for landlords to require that they be named as the “additional insured” additional insured on the tenant’s renters policy. This means that the landlord will be notified if the insurance policy is ever cancelled for any reason, such as non-payment. Unfortunately, some tenants may sign up for a renters insurance policy just to get into a rental property and then promptly cancel it. With the landlord listed on the policy this way, they both remain protected or the landlord has a reason to evict the tenant for violation of the lease agreement.

In the end, tenants that have adequate insurance coverage will be grateful when and if something happens, and they may even thank their landlords for insisting on obtaining a policy.

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Home Design Trends to Watch: The Herringbone Pattern

By Melissa Dittmann Tracey, REALTOR® Magazine Herringbone is emerging as the pattern of choice in 2016. Herringbone is the arrangement of rectangles that is so named for its resemblance to the bones of fish. This pattern is popping up on everything from hardwood floors, kitchen backsplashes and shower walls. It may be subtle or bold. […]

Meeting Without A Quorum

QUESTION: Two out of five board members attended an open meeting. To establish quorum, the president called one of the absent members on his cellphone and called the meeting to order. The director on the phone then hung up. With just two of five directors the meeting began. Is that legal?

ANSWER: It’s legal but if the board does not have good reason for its action, it abuses the statutory provision. By statute, a board can continue meeting once quorum is present notwithstanding the subsequent loss of quorum provided any action is approved by at least a majority of the required quorum for the meeting. (Corp. Code §7211(a)(8).)

In other words, a board of five directors needs three to establish quorum. It then needs two of the three to approve any motion. If one of the three leaves the meeting, business can continue as long as the remaining two directors vote in unison.

Duty to Attend. Directors are required by statute to perform their duties as directors (Corp. Code §7231(a).) Attending meetings to conduct the business of the association is the primary duty of a director. Failure to attend meetings without good reason is a breach of that duty.

Attendance by Phone. By law, directors can attend meetings by telephone provided all directors can hear and participate in discussions. (Corp. Code §7211(a)(6); Civ. Code §4090(b).) There is no reason for directors to miss meetings since conference phones are inexpensive–including conference speakers for cell phones. I’ve attended meetings where directors were on vacation and called in for meetings. One dedicated director called from France. It’s not that hard to do.

RECOMMENDATION: Unless there was critical business that needed to be done and the other three directors truly could not attend in person or by phone, it may be time for them to resign and be replaced with three members who can attend meetings.

NO SMOKING
ON BALCONIES


QUESTION
: Burbank has a second-hand smoking ordinance that prohibits smoking of any kind in the common areas. The police will ticket but only if they see the person smoking. What are my enforcement options when residents ignore the ordinance and smoke on their balconies? Can I force the board to take corrective action?

ANSWER: If the CC&Rs require owners to follow the law, then yes, an anti-smoking statute is enforceable via the CC&Rs. Your board can hold hearings and levy fines against the smoker. In addition, smoking can be restricted as a violation of the nuisance provision of the CC&Rs.

Individual Action. If your association refuses to take action, it could face potential liability. Not only can you take action against your association, you can enforce the CC&Rs against your neighbor, unless they provide otherwise. (Civ. Code §5975.) That means you can sue your neighbor for breach of your CC&Rs. For good measure, you can include causes of action for violation of your city’s anti-smoking statute, anti-nuisance statute, and negligence statute. To enforce a statute you must be a party the statute intended to protect, which is the case with the anti-smoking statute.

TIGHT BUDGETS AND
TOUGH CHOICES


Robert Nordlund (Association Reserves, Inc.) and I will speak to managers and board members at a luncheon sponsored by the Los Angeles Chapter of CAI.

We will discuss ways to properly fund reserves when an association faces difficult funding decisions. We will address the duties and potential liability of managers and directors alike when it comes to reserves.

The educational luncheon will be held this Wednesday, September 21 from 11:30 to 1:30 at the City Club in downtown Los Angeles. For more information and to register, CLICK HERE.

FEEDBACK


Banning Criminals #1
. While an association can vet owners who want to become officers or directors, I don’t know if there is any practicable or legal way for an association to vet prospective buyers or tenants of owners or even force an ex-con owner to move out. Any thoughts? -Stephany Y.

RESPONSE: Once we learned of Robert Durst, the association passed an amendment and made a demand. When the demand was not met, they suspended all of Durst’s privileges (including parking, cable TV, and internet). This was followed by court hearings, at which point Durst agreed to move. Rather than vetting all prospective buyers or tenants, HOAs can bring the restriction into play when they learn of a person’s disqualifying criminal conviction.

Banning Criminals #2. San Francisco recently passed a law limiting our ability to check the background of job applicants before offering them the position. This has already caused problems with a new hire for one of our HOA clients. Can associations pass restrictions in their CC&Rs covering employees and vendors similar to those you outlined covering residents? -Ed D.

RESPONSE: Ah, yes. San Francisco. You should talk to your association’s legal counsel. I don’t have any expertise with foreign governments.

Banning Criminals #3. We may have two drug dealers who reside with an owner. They do not own or even rent. I believe they are squatters with permission. Do you have any advice on how to go about finding out their criminal history? -Devorah A.

RESPONSE: If you can get their names, a private investigator can quickly track down their criminal histories. If you have evidence they are actively dealing, you can get the police to take action. If they are living in the unit peacefully and following the rules, there really isn’t much you can do. Smart criminals fly under the radar.

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This feedback addresses the unauthorized practice of law by managers and members.

Practicing Law #1. The unauthorized practice of law is a good topic. Many “legal” concerns by board members have answers that are routine, administrative, and common knowledge in the industry, which managers can answer. Our standard response for complicated issues is “Here is our current understanding of that issue (the code, regulations, case law, commentary, etc.). If you want to pursue it, we will work with counsel to develop a cost effective response.” -Donald W. Haney, CPA, MBA, MS(Tax)

Practicing Law #2. One of our residents graduated from law school. However he either did not take or did not pass any bar exams in any state and has never been licensed to practice law. Yet he constantly offers “legal” advice to our board, often disagreeing with their well-qualified HOA attorney. Unfortunately, many residents and board members take this guy’s advice seriously no matter how flawed it is. Can you suggest a way to remedy this situation? -Anonymous

RESPONSE: The Chicago way comes to mind but that presents all sorts of legal problems. Self-important homeowners are annoying and exasperating. They have an exaggerated view of their own intellect and love to show everyone how smart they think they are.

Fiduciary Duty. Boards owe fiduciary duties to the membership and one of them is due diligence. That means properly investigating a matter and relying on the advice of qualified individuals. Accordingly, your board should follow the advice of your HOA attorney regardless of any advice to the contrary by your lawyer-wanna-be. Following a pretend lawyer can put your board at odds with the Business Judgment Rule and expose them to personal liability.

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Old Folks. There are way too many stereotypes about “old people,” and their lack of computer skills is one of them. I’ve been using the internet since Al Gore invented it! -Wayne W.

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Next Door #1
. I guess all Next Door groups are different. I belong to one where I have yet to hear one member complain about condo management issues. Maybe we’re just lucky. As far as I know whoever manages the Next Door group can issue warnings and delete the membership of anyone who abuses it. Obviously, Next Door was never intended for discussions about condo management. I can see where that would ruin a good community service. -Lulu L.

RESPONSE: Next Door can be quite useful if the administrator is willing to set guidelines and block anyone who abuses their privileges. If it becomes a platform for complaints, Next Door deteriorates into a harmful echo chamber.

Adrian J. Adams, Esq.

Adrian J. Adams, Esq.
ADAMS | STIRLING
A Professional Law Corporation

We’re friendly lawyers–boards and managers can reach us at (800) 464-2817 or info@AdamsStirling.com.