Author Archives: Davis-Stirling Condo Law

Executive Session Minutes

QUESTION: A new board wants to review the executive meeting minutes for the last two years. Only one member of this five member board is an incumbent. Does the new board have the right to review another board’s executive meeting minutes and if so, how far back can they demand?

ANSWER: With some narrow exceptions, all board members have the right to review all executive session minutes as far back as they want to go. It does not matter that they were not on previous boards.

Exceptions. Minutes are the historical records of the corporation. By statute, directors have the right to review them. Even so, despite the broad language in the Corporations Code, the right is not absolute. Courts have carved out exceptions involving privacy issues and conflicts of interest.

RECOMMENDATION. If your board has concerns about records as they relate to a specific director, they should talk to legal counsel.

HOARDING WEBINAR
FOR MANAGERS

Attorneys Jasmine Fisher and Cang Le will be presenters in a Webinar Series for managers put on by the California Association of Community Managers. The topic will be “Boxes, Bugs and Blights: How to Combat Hoarding in HOAs.”

The webinar will provide managers with an in-depth review of what qualifies as hoarding, provide strategies for dealing with hoarders, and identify resources that can be used.

The webinar will be held on August 19 from 11:00 am to noon. All community managers are invited to attend. CCAMs earn 1 CEU. Learn more and register at CACM Webinar Series.

FEEDBACK


Ignoring Legal Advice. I found your article extremely interesting. I’m afraid some will take your comments to mean boards can ignore  advice they disagree with. Could you please clarify what you mean? -Marc B.

RESPONSE: A careful reading of my article would not lead to that conclusion. But, I have no doubt some  knucklehead on a board somewhere would do just that or, in the alternative, advocate attorney shopping until he gets the opinion he wants.

Clear Direction. A good HOA attorney will always tell directors what they need to hear, not what they want to hear. Some legal opinions are crystal clear, “No, you can’t do that!” Or, “If you want to call a meeting, here is what the law requires.”

Options. Many times, however, boards are presented with options–Option A or Option B (and sometimes, Option C). The board must then weigh the risks and rewards of each and make a business decision. The attorney might recommend Option A. But, because they are all viable options, the board might weigh factors differently and choose Option C.

Business Judgment. Did they just ignore legal counsel and breach their fiduciary duties? No, they listened, weighed the choices and arrived at a different conclusion. Is it possible there could be fallout? Certainly. If Option C goes badly, so could the membership. Nonetheless, directors are protected from personal liability if they followed the Business Judgment Rule.

*****


Citizen’s Arrest #1.  I wish ALL would follow Linda H’s way of thinking before barking! Common sense is good for the mind and it’s actions. As for George G. and his remark, that is what a newsletter is intended for, helping and protecting no matter what the topic is. It is disturbing if you think this behavior should be on display for all eyes young and old. -Steve C.

Citizen’s Arrest #2. Judging from George G’s remarks, he must engage in the same behavior as the neighbor in the next building. -Will B.

Citizen’s Arrest #3. My comment for George G: If he is exposing himself publicly even through his window he is not “legally viewing” and obscenity and indecency are “illegal content” per the Supreme Court. So I think AK is giving sound legal advice. -Rich S.

Citizen’s Arrest #4. Perhaps George G. might be the one viewing the “legal” movies with his drapes open! He should be the one ashamed of himself! Thanks for my laugh this morning! -Nat R.

*****


Empty Pool. Our HOA considers the pool water a good source for non-potable needs during a disaster.  -John M.

RESPONSE: A valid consideration. An earthquake could rupture water lines with a complete shutdown of the system (as just happened in Los Angeles with a loss of 20 million gallons of water), leaving homeowners with no water for days or weeks. A pool full of water could be a Godsend.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Ignoring Legal Advice

QUESTION: If the association sought and paid for a legal opinion, is the board violating their fiduciary duty if they ignore the opinion?

ANSWER: If board members stick their fingers in their ears and refuse to listen to legal counsel, that’s a problem. But, if they listen to the attorney’s advice, weigh it against other factors and reach a different conclusion, they are not in breach of their fiduciary duties.

Independent Decision. Boards are not required to let experts and lawyers make decisions for them. For example, an attorney and a termite expert might both advise a board to tent their condo buildings to stop a termite infestation. After taking into account the cost of tenting, the financial condition of the association, and the disruption to members who must be moved out of their buildings, the board can decide to spot-treat even though tenting is the superior method.

Business Judgment. This was the scenario in a case that made it all the way to the California Supreme Court. The Court sided with the board and held that,

where a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion…to select among means for discharging an obligation to maintain and repair a development’s common areas, courts should defer to the board’s authority and presumed expertise. (Lamden v. La Jolla Shores; Corp. Code §7231(a).)

Bad Advice. A second scenario under which boards can deviate from legal advice is when they believe the attorney is not knowledgeable or reliable in the issues presented. For example, if a divorce lawyer offers legal advice about HOA corporate matters, the board can (and should) disregard the advice. Instead, they should seek counsel from an experienced corporate attorney with expertise in community association law.

RECOMMENDATION: Boards should be cautious about discounting competent legal counsel. If directors are uncertain about the advice given, they should get a second opinion.

 

FEEDBACK

Empty Pool #1. “Finding a body at the bottom of an empty pool has a way of driving down property values. Plus there is the problem of cleaning up the mess.” Love your wry humor. -Kit C.

Empty Pool #2. I see that you have wisely drawn upon the expertise of a professional (Design Build Associates) who clearly understand the physics of what might happen if an HOA were to drain its swimming pool. Thanks to you Adrian and your staff for your right-on response to this question! -S. Ross

Empty Pool #3. Instead of draining the pool, a pool cover can save a lot of water and heat. With the water shortage and the price of water increasing, they may be worth it. There are products that claim to inhibit evaporation and thus save water and heat. One such product is the ECOSAVR. -Harvey C.

Empty Pool #4. Another consideration is fire danger. Is the pool likely to be a source of water during an fire? -Dennis F.

Empty Pool #5. Our association had considered draining the pool but dismissed the idea because of advice from a soils engineer. What he suggested, which seems to be working, is putting a cover over the pool when not in use. It’s bit of a hassle but seems to be worth it in terms of slowing evaporation and the resultant costs. -Nancy H.

Empty Pool #6. How do people with double-digit IQs get through life? If we drain our three pools, does the water go into a little private aquifer account, with some of it allotted to the potable water bins? How does draining a pool save water? Our pools were drained seven years ago for, as you pointed out, replastering and to repair some leaks. Other than that, they cost us little in water use. I’m flummoxed. -Linda H.

******

Social Events #1. It is my understanding that board members attending the “Coffee Klatch” are prohibited from discussing association business as this constitutes a violation of the Open Meeting Act. -M.H.

RESPONSE: You’re correct. A quorum of the board cannot attend a coffee klatch if board business will be heard or discussed. That would turn the social gathering into a board meeting (Civ. Code §4090(a)), which would require proper notice to the membership and posting an agenda (Civ. Code §4920(a)).

Social Events #2. Anyone who disputes what their board does, needs to run for the board instead of just complaining, that’s what I did. -Alice O.

RESPONSE: If people can’t complain, they wouldn’t have anything to talk about. That would be distressing.

*****


Citizen’s Arrest #1.
Regarding lewd acts in the neighboring building, his unit can probably be seen from several units and floors. Who knows when a child may be visiting. He is obviously aware of the situation as he increased his exposure after being told. I would have the police intercede as it should be considered public if being done in a way that it is purposely visible to others. If warned and repeated it could go down as a lewd act and, although maybe a misdemeanor, may be upgradable after a couple of times. This yo-yo could end up as a Penal Code §290 registrant. -Emile R.

Citizen’s Arrest #2. I generally find the newsletter refreshing and often helpful but this week I just find it wrong and objectionable and find it difficult to believe that your firm would put something like that out there. I can not believe that a law firm would choose to call a person who is legally viewing legal content on their own TV a miscreant. Are you really that judgmental and that prudish that you feel free to insult someone for doing something you may not find to your taste yet completely legal? Really too bad! I think you should be ashamed of yourselves. -George G.

Citizen’s Arrest #3. Why not get someone (with a strong stomach) to videotape what’s going on across the way? If the miscreant knows he could be “exposed” for what he is in a court of law, including all his “shortcomings,” he might think again. Also, are there children in the building who have a view of his antics? Seems like a follow-up in that quarter might be helpful. -Nancy H.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Draining the Pool to Save Water

QUESTION: Since we are in a severe drought and our members barely use the pool, are we obligated to keep it open? It seems like a waste of water and money and we would like to drain it. Does the board have the authority to close the pool?

ANSWER: If they have good reason, boards can close and drain a pool. Often it’s done when a pool needs to be replastered. The closure is short-term and the pool refilled with water. Your scenario is different since the closure would be long-term. Doing so could damage your pool.

In-Ground Pools. In-ground fiberglass and concrete pools are built to withstand the pressure of dirt against them when drained. Even so, ground pressure on fiberglass pools can cause side walls and floors to bulge and split. If ground water is high enough, hydrostatic pressure can cause an empty concrete pool to act like a ship and float several inches. This will break the coping/bond beam and damage the surrounding decks and pipes. Insurance does not cover such damage.

UV Damage. Pools built on solid concrete foundations or in a concrete vault are immune to hydrostatic pressure. However, they are not immune to solar damage. Direct sunlight will dry out plaster, causing spider cracks and tiles to pop off. When the pool is eventually refilled, water will seep into the cracks causing the plaster to blister and crumble. This is also not covered by insurance.

Safety Issues. The possibility of someone taking a swan dive into an empty pool should keep boards up at night. Associations that drain their pools should make sure they lock their gates and post warning signs. Even so, drunks have been known to climb fences for midnight swims. Finding a body at the bottom of an empty pool has a way of driving down property values. Plus there is the problem of cleaning up the mess.

RECOMMENDATION: Before an association drains its pool to save money, the board should talk to a pool construction expert, their insurance broker, and legal counsel.

Thank you to Les Jillson of Design Build Associates Construction Management for his valuable insights on this issue.

CITIZEN’S ARREST

QUESTION: Our highrise building looks onto another highrise where a resident regularly watches porn on his big screen TV. We asked the neighboring building manager to encourage him to lower his shades. This had the opposite effect. He now leaves his shades completely open, watching in the nude and single-handedly participating. Do we have any recourse?

ANSWER: That is an ugly visual. If the porn junkie is in a building that is not part of your association, your options are limited.

Police. The police can be notified. They will talk to the resident but not arrest him unless they witnessed the illicit activity. To arrest him, you would have to accompany the police to the building and make a citizen’s arrest. Penal Code §837 states, “A private person may arrest another: (1) For a public offense committed or attempted in his presence…”

Public Offense. A “public offense” is defined as a felony, misdemeanor or infraction. (Penal Code §16). Is your neighbor’s behavior a public offense? According to California Penal Code §647(a), engaging in lewd conduct in a public place is a misdemeanor.

The catch is the “public place” part of the statute. Lewd conduct by a lone adult in the privacy of his home wouldn’t normally interest the police or the courts. In your situation, your neighbor is knowingly making his conduct visible to his neighbors. Accordingly, action can be taken.

RECOMMENDATION: Before you rush over and make a citizen’s arrest, you should consider the possibility of retaliation. It’s clear your lewd neighbor does not have any boundaries. If a visit by the police does not resolve the problem, your best bet may be a strongly worded lawyer letter to the miscreant.

FEEDBACK

Social Events #1. When I bring a buyer to show homes, the number one impression is the curb appeal of my community and not social events the association is providing once or twice a year. Money is better spent on beautifying the neighborhood. The goal of the Davis-Stirling Act is keeping home values at the highest possible price by the principle of uniformity and not social events. -Aniko S.

Social Events #2. Three members of our board hold a coffee klatch “social event” every day for two to three hours beginning at 7 a.m. Although it’s open to all residents, it is the same clique of seven or eight people–board members and their spouses and friends. Owners have complained that this type of chit-chat could be held in their private residences, to no avail. The coffee klatch does not create a sense of community, it creates divisiveness, especially at a time when the HOA is strapped for funds needed for dire deferred maintenance repairs in the common area. -Christine B.

RESPONSE:
I suspect the other side will argue that the coffee klatch has a positive effect and the cost is negligible, i.e., the cost of coffee grounds. But, if the community has not embraced the concept, it may be time for the board to reevaluate its utility.

Social Events #3. Relationships are the glue that hold an HOA community together. If the social event dollars are disclosed to the members in the annual budget and the budgeted dollars are a small percentage of the total budget then, yes, hold the social events and build that community feeling. -Phyllis H.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Social Events

QUESTION: Can the board use association funds for social events? Our CC&Rs are silent on the subject.

ANSWER: Unless governing documents specifically prohibit it, HOAs can budget for, assess and spend association monies on social events.

Generic Language. More often than not, there is generic language in governing documents allowing associations to make decisions for the “general health, welfare, comfort and safety” of the membership. A variation is: “The Association may undertake any lawful activity, function or service for the benefit of Owners.” Authorizing language is often found in the preamble of the CC&Rs, in addition to the general powers section, and in the assessments section describing the purpose of assessments. It can also be found in the bylaws and articles of incorporation.

Social Event Benefits. Do social events fall under “health, welfare and safety” categories? I believe they do. Part of being a community is knowing your neighbors, interacting with them and developing a positive community identity. Social events help make that happen. Knowing your neighbors also enhances general security for the association. Finally, developing a reputation for a positive community identity raises property values.

RECOMMENDATION: As in all things, moderation. Boards should not go overboard with extravagant parties. HOAs should also be careful about alcohol at their events and check into insurance. Then get everyone together and have steak and beer or cheese and wine, depending on your political persuasion. (I prefer both…does that make me an Independent or simply indecisive? I can’t decide.)

WILLIAM S. DUNLEVY, ESQ.
JOINS ADAMS KESSLER


I am very pleased to announce that attorney William Dunlevy has joined Adams Kessler as Of Counsel.

Community Ties. A native of California, Bill has been a mainstay of the Ventura County community for over thirty years. His wife taught in public schools in Oxnard and his son is a Deputy District Attorney for the County. Bill has been a long time member of the Ventura Lions Club where he served as President, District Governor and then Chairman of the California Council of Governors.

CAI. Bill’s 29-year involvement with the Channel Islands Chapter of the Community Associations Institute has been a boon to the Chapter. Bill served multiple terms on its board of directors and twice as President. He was the founding editor of the Chapter’s highly acclaimed magazine Channels of Communication and served as editor for 26 years. He has twice been honored as Author of the Year and three times received the prestigious Distinguished Service Award.

HOA Law. Bill Dunlevy is a veteran community association attorney with over 35 years experience. He serves as legal counsel for associations in Ventura, Kern, Santa Barbara, San Luis Obispo and Los Angeles counties and provides service in all areas of community association law with an emphasis on governing document interpretation and enforcement, alternative dispute resolution, governing document revision, business advice, corporate affairs, contract review, common area repair planning, and litigation.

Education. Bill graduated with highest honors from UC Davis with dual majors in history and political science. He is a member of the Phi Beta Kappa and Phi Kappa Phi national honor societies. After graduating from Davis, Bill went on to earn a Juris Doctorate from UCLA Law School.

Contact Us. Bill Dunlevy is a significant addition to the firm. We welcome his broad knowledge and experience in HOA law. To request a proposal for legal services, contact us by email or by phone at (800) 464-2817.

FEEDBACK

Drought #1. Adrian … you crack me up with “pray for rain.” -Kurt V.

Drought #2. Be careful what you pray for–remember 2005? -Bill

RESPONSE: Below is a chart of average annual rainfall for Ventura County. The red line is the average. As you can see, we are in a serious drought. I’m thinking maybe three years of rain like 2005 is in order.

Drought #3. As always another great newsletter. Thank you for your service to HOAs all over California. The state has stopped watering the capitol lawns and removed seasonal plantings during this drought. The once beautiful grounds are looking thread bare right now. Home owners and associations should be setting aside the money they save from not using water to bring back plantings and lawns when the drought ends (which it will). -Paul C.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Remote Denial

QUESTION: Can the board deny a homeowner entry and exit by not allowing them to purchase a remote?

ANSWER: They can’t deny ingress and egress but they can deny a remote, depending on the circumstances. If you’re delinquent in your assessments, the association can suspend your privileges. One of those privileges may be the use of a remote to open the front gate. As long as you have another means to open the gate such as a keypad, the loss of the remote is a mere inconvenience. Those who pay for the convenience, receive it. Those who don’t, don’t.

Street Parking. If, however, there are no other means of opening the gate, the denial of a remote becomes murky. You can still park on a public street and walk to your unit (assuming you have a key to the pedestrian gate). That means you still have ingress and egress. You just can’t drive on the association’s streets because you no longer contribute to the maintenance of those streets (or the maintenance of the gates or anything else). This is more aggressive and its enforceability less clear. By analogy, California won’t suspend your drivers license for unpaid taxes but they will ground your car for unpaid registration fees and fine you if you drive it.

Reckless Driving. If your driving has endangered the safety of other residents, the board can suspend your driving privileges for an appropriate period of time. You still have the right of ingress and egress via taxi, bicycle, walking, etc. You just can’t drive. That’s no different than the State of California suspending your license for recklessly driving on public streets. Driving is a privilege not a right. Following due process, your driving privileges can be suspended.

RECOMMENDATION: If your board suspended your privileges because they don’t like the tie you wear, it’s time to call a lawyer. If you’re delinquent, stop whining and pay your bills. If you’re a reckless driver, stay out of my neighborhood; I would prefer not to get run over.

RUSSELL W. HIGGINS, ESQ.
JOINS ADAMS KESSLER

I am pleased to announce that Russ Higgins has joined Adams Kessler PLC.

Legal Experience. Russ has a diverse legal background. It started with ten years managing civil and criminal caseloads. In his criminal defense work, Russell handled case evaluations, plea negotiations and litigation, briefing and trials. This included criminal appeals and a death penalty case. A fellow attorney recognized Russell’s courtroom talents and his ease with people and urged Russ to transition into community association law. Russ investigated the strange world of common interest developments and made the move.

Community Associations. Before joining Adams Kessler, Russ spent the past five years sharpening his legal skills on corporate law for community associations. He worked with boards and managers on vendor contracts, revised governing documents, pursued delinquent assessments, attended board and membership meetings, investigated insurance coverage issues, drafted legal opinions on disability and architectural compliance, and immersed himself in a wide range of matters affecting associations both residential and commercial.

Litigation. Because of his strong litigation background, Russ has been working with boards to minimize unnecessary litigation. When appropriate, he steers matters into mediation and arbitration. In the event litigation is unavoidable, he uses his courtroom skills to obtain favorable outcomes for his clients.

Education. Russ holds a bachelor’s degree in literature from Auburn University in Auburn, Alabama. He earned his Juris Doctor from Pepperdine University School of Law in Malibu, California, graduating cum laude. Russ won multiple awards and commendations from both institutions and served as a senior staff member of the Pepperdine Law Review.

Russ Higgins is a rising star and an excellent addition to our team. If your association needs a proposal for legal services, feel free to contact us by email or by phone at (800) 464-2817.

THE DROUGHT

QUESTION: In light of Governor Brown’s executive order related to the drought, can HOAs enforce their CC&Rs requiring owners to maintain their property in a neat appearance?

ANSWER: Due to the severity of the drought, on January 17 Governor Brown declared a state of emergency and imposed numerous restrictions. This was followed by an executive order on April 25, which contained the following:

Homeowners Associations (commonly known as HOAs) have reportedly fined or threatened to fine homeowners who comply with water conservation measures adopted by a public agency or private water company. To prevent this practice…I order that any provision of the governing document, architectural or landscaping guidelines, or policies of a common interest development will be void and unenforceable to the extent it has the effect of prohibiting compliance with the water-saving measures contained in this directive…

Impact of the Order. While saving water (a good thing), the executive order has had a negative impact on HOAs. In addition to dead lawns, some homeowners are allowing everything to die–flowers, shrubs, bushes and trees. Dead landscaping is obviously unsightly and makes homes less attractive. It also makes them less marketable, not only for owners with dead landscaping but also for neighbors. The result is lower property values.

Owner Compliance. Associations still have some control. They can require that owners pull weeds and keep their lots neat and clean. They can also force the removal of dead plant material and the installation of drought tolerant plants so lots aren’t barren wastelands.

Drought Measures. When it comes to common areas, associations should move to drought tolerant plants and install more efficient landscape irrigation systems. Where feasible, associations should consider using recycled water for landscaping and cooling towers. Those with golf courses and small lakes may want to drill a well (first check with a lawyer).

RECOMMENDATION: Pray for rain.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Changing Director Qualifications

QUESTION: Our bylaws have only one qualification for serving on the board–that directors be members. By a rule change, the board added a new requirement that a director’s primary residence must be in the development. The change eliminates 40% of the membership from holding office. Some believe the president took this action because of disagreements with individuals who do not live in the complex who may run against her. Doesn’t a change like this need a vote of the membership?

ANSWER: Because of a recent court decision, it appears that boards can unilaterally add new director qualifications without input by the membership.

Friars Village. Friars Village HOA had only one qualification for serving on the board, the nominee had to be a member of the association. The board adopted a rule that no one could serve on the board with another director related by blood or marriage. It’s a good requirement but it was done without membership approval. A homeowner sued in small claims to invalidate the rule since it was inconsistent with the bylaws. The board moved the dispute to superior court and the case ultimately ended up in the court of appeals.

Reasonableness Requirement. The court of appeals concluded that boards have the authority to adopt additional director qualifications without the need to amend the bylaws, provided the qualifications are “reasonably related to the performance of the Board and will serve to protect its overall mission — protecting the best interests of the Association.” (Friars Village Association v. Hansing.) I’m not comfortable with the court’s decision but it’s now the law.

Residency Rationale. Is the residency requirement adopted by your board reasonable? Probably. The argument in favor of residency is that board members who live in your development will have a stake in the community and will be more inclined to act in the best interests of the membership.

RECOMMENDATION: Despite the arguments for a board-imposed residency requirement, a judge could easily decide that disqualifying 40% of the membership from serving on the board is not reasonable. Therefore, the safer course of action is to seek membership support for new director qualifications and then amend the bylaws. Doing so reduces the risk of a legal challenge and an adverse ruling.

CUMULATIVE
VOTING


QUESTION
: Thanks to cumulative voting, an attorney whose home was heading into foreclosure got herself elected to the board. She then sued the board for failure to enforce the CC&Rs. She then demanded the association’s insurance represent her as she was doing this “for the good of the community.” Our insurance company declined with the explanation that “We don’t pay for people to sue us.” It makes one wish there was some kind of entrance exam before becoming an HOA owner.

ANSWER: As someone once noted, “Common sense is like deodorant–the people who need it most never use it.” The scenario you describe is exactly why associations should amend their bylaws to eliminate cumulative voting. It helps to keep some of the more ethically challenged owners off the board. Or, if they happen to get elected, they can more easily be removed by the membership.

FEEDBACK

Damaged Driveway #1. Could it be that the money charged the member for the damaged common driveway will be applied to the road update expenditures when the driveway is repaired along with the rest of the road maintenance for the year? That would be a logical board decision, if safety were not a factor. I would question whether the member was charged the full cost for bringing in the necessary equipment to do a road repair to a driveway. I’ve found that boards tend to be misjudged by members lacking the full story. -Jim G.

RESPONSE: I agree, if it’s not a safety issue and if larger-scale driveway maintenance is already planned, it makes sense to put a hold on an individual repair. Sometimes, even safety issues can have a temporary or “band aid” fix while the board puts together a larger program of repairs. As long as boards use good business judgment, some repairs can be delayed.

Damaged Driveway #2. I wish you would have been more careful how you framed your argument. Lawsuits do not hurt the board of directors. THEY HURT THE ASSOCIATION. So, while you might get results with a lawsuit, you should also point out that this should be a course of last resort. Unless you enjoy shooting yourself in the foot. Penalizing “for profit” General Motors is not the same as penalizing a “not-for-profit” board. People need to remember that money for legal fees and settlements come out of owners pockets even if D&O insurance covers some or all of it. Even when insurance pays, you pay later in premium hikes. In the end the association is the loser. -Jeffrey S.

RESPONSE: Take another look at last week’s answer. The point of mentioning lawsuits and fines was to highlight the danger of not making repairs. Plaintiff’s attorneys are often too aggressive and make overblown claims, which associations must spend precious time and money refuting. Because litigation is almost always too expensive and too unpredictable, boards should take care to avoid it whenever possible.

Paid Directors. Wonderful responses! Our secretary/treasurer has collected a “stipend” of $4,000 a year for 25 years and claims to not be a member of the board and that this stipend isn’t a salary (although it shows as such on tax returns). Thanks again for your very informative newsletters! -Julia C.

NO NEWSLETTER. There will be no newsletters for the next week or two. While everyone else is taking vacations, I will be working on a case preparing for trial. Okay, I’m done whining.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Damaged Driveway

QUESTION: My association billed a resident for damage he caused to a common area driveway. The resident paid but the board intends to keep the money without making  repairs. Any thoughts?

ANSWER: Although there is nothing directly on point about taking money for one purpose and using it for another, the statute “Thou shalt not…” comes to mind—it’s quite authoritative. (Bible, Commandment #8.) The Davis-Stirling Act also comes into play, i.e., association’s are obligated to repair and maintain the common areas. (Civ. Code §4775(a).)

Unsafe Condition. Moreover, if the damage is safety related, I’ve found that juries tend to punish boards who have a a known unsafe condition, do nothing and someone is injured. General Motors is well acquainted with the concept. For some reason, they thought it was a good idea to ignore defective ignition switches. Last week they were fined $35 million. That’s in addition to the enormous legal expense to defend and settle a slew of lawsuits and the cost to replace 2.6 million ignition switches.

Cosmetic Damage. If the driveway damage is purely cosmetic, the board could choose not to make the repair and sit on the money. But that would likely create unhappy homeowners.

CHANGING
MAINTENANCE DUTIES

QUESTION: Is a 75% vote of mortgagees as well as owners required to amend maintenance obligations of CC&Rs?

ANSWER: That depends entirely on the amendment requirements in your CC&Rs. Amendment provisions are normally found in a paragraph at the tail-end of your CC&Rs. It spells out the voting percentages for owners.

In addition, you need to check the mortgagee (lender) provisions–often an entire section toward the middle or end of your CC&Rs. It will list any categories of changes requiring their approval (which might include any changes to maintenance obligations).

FEEDBACK

Paid Directors #1. Please inform me of the name of the complex that pays their board members. I am already packing and ready to move. And to the grouch with no sense of humor NUTS TO HIM! Thanks for your weekly informative e-mails and do not lose your sense of humor. With much appreciation. -Gloria F.

Paid Directors #2. Our board of directors/officers, receive a monthly stipend. All directors are elected by the owners of our association. They are not volunteers. Should we stop paying stipends? -T.C.

RESPONSE: “Stipend” is merely a euphemism for paid directors. If it were me, the stipend would have to be REALLY big to make it worth the risk I take on as a paid director. It’s like robbing a bank for $50. It doesn’t make any sense; the risk outweighs the reward.

Nuts on the Board. From where we stand, most associations are so dysfunctional that members stay as far away as possible from the headaches of participation because “nut jobs” who get themselves permanently planted on boards. -Teresa A.

RESPONSE: The worst case scenario for the membership is a board with truly bad directors. I believe it was Edmund Burke in the 1700s who wrote that, “The only thing necessary for the triumph of bad directors on HOA boards is for good members to do nothing” (or something to that effect). Fortunately, bad boards are the exception not the rule. Most boards have good people doing their best under difficult circumstances.

Corporate Proxies. Corporate vs. HOA proxies–OK, what if your HOA is a corporation as well? Which statute controls in that case? -Robert M.

RESPONSE: The Davis-Stirling Act.

Thank You. Thank you for your personal help and a wonderful internet site. It has been fascinating watching your business grow during the past ten year I’ve lived in this condo. -Dick S.

RESPONSE: It’s been my pleasure providing the service.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Director Salaries

QUESTION: Are we allowed as homeowners to view the salaries of directors?

ANSWER: Yikes! Directors are not supposed to receive salaries. Let me clarify that…directors are allowed to earn a living, just not from the association. Board members are supposed to be volunteers. If they are paid directors, they lose the protections afforded volunteer directors. Another problem is that if they voted to give themselves salaries, it’s a conflict of interest.

Disclosure. If directors are paying themselves a salary, members have a right to know. The association’s financial records should fully disclose and track any monies paid to directors.

RECOMMENDATION: Your association should immediately cease paying its directors.

CORPORATE vs HOA
PROXIES

QUESTION: Corporations Code §7613(a) states that “Any member may authorize another person or persons to act by proxy…” This appears to conflict with Davis-Stirling which says a proxy can’t be given to a renter. When Davis-Stirling and Corporations Code conflict, which one governs?

ANSWER: In this case, the Davis-Stirling Act controls. The Corporations Code is generic to all corporations and not all associations are corporations. (Civ. Code §4800.) The Act is specific to common interest developments, whether incorporated or unincorporated. (Civ. Code §4200 & §4805) The Act does not mention renters. Instead, it states that if a member wants to give someone a proxy, the recipient must also be a member of the association. (Civ. Code §5130(a)(1).)

COULD’A, WOULD’A,
SHOULD’A

Nothing lasts forever! Bart Mendel of Stonemark Construction Management and I will provide real life examples of the legal and financial impact of unreserved “lifetime” components.

Many building elements are routinely overlooked by boards and managers when it comes to maintenance and reserves. These turn into huge special assessments. In addition, simple protective measures are ignored that later erupt into litigation. What you don’t know can cost you a fortune. If only you could’a, would’a, should’a.

The program will be held at the Courtyard Marriott, 15433 Ventura Blvd., Sherman Oaks on Wednesday, May 21 from 11:30 a.m. to 1:30 p.m. You can register online at www.cai-glac.org or by telephone at (818) 500-8636. Managers can earn 1 hour of continuing education credit.

FEEDBACK

Drones #1. If you write a rule prohibiting drones, I would add that you can get permission from the board, that way a home owner selling a house can get permission to get a drone shot. Keep in mind places like Yosemite have prohibited drones but you can still get a limited permit if you are filming for commercial purposes. -Finn M.

Drones #2. All people have an expectation of privacy to their backyard and inside their home. Should an HOA provide rules; perhaps the rules should be to not fly drones outside of where UPS Brown can walk. In other words, drones may fly in common areas of the association and not in areas where expectation of privacy areas exist (backyards), and not in areas that create a nuisance outside of common areas of the interior boundaries of the HOA (within 5 feet of a building window), no drone may record inside any homeowners home (in reality, if the window is not covered and one can see in from the street, there is no expectation of privacy). -Ted S.

Drones #3. I was thinking that we might use drones for property inspections in the future. Like a carrier pigeon. We can send it out and get info. It would be easier to look at slopes and violations. -Meigan E.

RESPONSE: Provided they meet local, state and federal regulations (if there are any), an association could use drones to inspect for rules violations. However, I suspect there would be push-back from the membership.

*****

Nuts #1. I am new to an HOA board and I love the experience. So far, your newsletter has been extremely valuable to me. Even where we do not face a specific issue you address, the spirit and approach has general application. Above all, I have learned that we can address problems with a sense of humor. People are wonderful and so are their ways and if they are not so great today, they will be better tomorrow. I liked your comment to the person who didn’t like the use of the word “NUTS”. You stick to your guns. Right on. Nutty is as nutty does. It is nice to know that it is a “respected legal term.” At this moment we seem to be nut-free. I know there could be a one lurking just around the corner or over the horizon. Perhaps my time will come. -Earl R.

Nuts #2. I agree, one “nut” even in a large HOA can be stressful for the board. If you have legitimate grievances you should find out what your HOA’s governing documents say, check the law (of course, www.davis-stirling.com is the perfect resource) and then bring up your concern with your board (needless to say, in a calm, respectful manner). If all else fails, run for the board (put your money where your mouth is). -Alice O.

Nuts #3. Find the one owner who believes the word “nuts” is “offensive” “unprofessional” and “poor business ethics” and you’ve likely found the “there’s always one person in an HOA who creates problems.” I will now replace the use of “nuts” in all my legal pleadings with “trail mix” if that is more PC? Wait, PC is offensive to us Mac users. Nuts! Whoops, I meant “trail mix” -K.A.

Nuts #4. Small versus large associations struck home with me. I’ve been on the board since the Earth cooled and we went through a hellacious legal battle with a certified lunatic who sued the board. It was finally settled. Small is wonderful and easy when it works. God forbid you get a sociopath as a neighbor. -Dave W.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Drones

QUESTION: Our neighbor’s teenage son has been flying a drone over houses in the neighborhood, including our swimming pool. This is an invasion of my privacy. Can the board do something to stop him?

ANSWER: Privately operated drones are increasingly in the news because of the noise they make, the danger they pose to commercial air traffic, and invasion of privacy issues (many carry high definition cameras). Last week, the National Park Service banned drones in Yosemite. Visitors were using them to photograph the park and climbers on Half Dome. Noise, safety and privacy issues were factors in the Park’s decision.

Restricting Drones. The same concerns raised in the Yosemite ban can be the basis for prohibiting drones in community associations. Restrictions can be implemented through amending CC&Rs or through a rule change. Adopting a rule is much easier than amending the CC&Rs since it can be done by the board after a 30-day notice period. However, a CC&R amendment is easier to enforce if an HOA needs to go to court.

City and County. Any ban adopted by an association would apply only to members, residents and guests. If drones are being flown through the development by people outside the association, the board’s options are limited. The HOA would need to go to the city or county to seek a ban.

RECOMMENDATION: I recommend that boards start with a simple rule change. At some point when they update their CC&Rs, they can include the restriction. If your association needs assistance, contact us.

FEEDBACK

Small HOA #1. Even one nut-job in a small association can be incredibly stressful and divisive…1/8th of the membership. You’d have to have over 60 of them in a 500-member association to have the same impact. We had two (a husband and wife) who did plenty of damage and two years later their impact is still felt. What the board learned from this is communicate, communicate, communicate! Newsletters, face-to-face, e-mails, phone calls, these all help owners feel connected and, in most cases, positive. -Nancy H.

Small HOA #2. I liked this article and your opinion. I was secy/pres for both a large and small HOA. I also created a 501(c)3 organization with a large annual event. I learned what I termed the a__hole factor, i.e., for every 100 people I could count on one person to be a problem. For a 1,000 to 3,000-person event, the ratio stayed the same. I also learned to factor this ratio into how much security I needed. -Michael M.

Small HOA #3. You used the word “NUTS”. Not only is it offensive but unprofessional and reflects poor business ethics! -Alexis C.

RESPONSE: “Nuts” is a respected legal term. You never know when you will run into them and every association suffers through at least one at some point in their existence.

Small HOA #4. I’m certainly not a serial killer but I do live in an 85-unit HOA and find myself impelled to assume the roll of activist. Does that make me a “nut-case” or a “crazy” because I insist that our board not make up rules on the fly and not govern under the cloak of secrecy? -Sam R.

RESPONSE: Someone who legitimately challenges improper board action is an asset to the community. How they go about challenging board authority, however, can put them into the “crazy” category. I had one nut smearing dog feces on a board member’s window. Another was leaving used condoms on the front door of the board president. I’m sure both thought they had legitimate grievances. Both were nut-cases.

*****

Thank you to everyone who responded to the story of my parents. There were too many to print them all. Following is a sampling.

Wedding #1. I loved the story of your parents’ meeting. What a lovely way to start my Sunday morning, reading about them. -Astrid L.

Wedding #2. Wow… great story! Nice of you to publish it. -S.D.

Wedding #3. Beautiful, beautiful story about your parents. Thanks for making my day! -Jan M.

Wedding #4. What an amazing story! Thank you for sharing it with us. The many current and past board members of our association appreciate your weekly newsletter, appreciate this story even more! -Neda F.

Wedding #5. Good for you, leaving the HOA business for just enough time to give air to a love story. I was moved. Bless you Adrian for being open to the reality of love, in a world too often seems devoid of it. -R.N.

Wedding #6. Happy Anniversary to your Mom & Dad. Quite a great story of how they met. Funny how life works out that way! -Dan F.

Wedding #7. I loved the story about your parents…it made my morning start on a happy, sweet note. My parents were married almost 67 years before my Mom passed away. They were so in love…my father said he knew she was the one when she went riding by on her bicycle at 10 years old…they were married when they both turned 21. It was a lifetime love affair. Weren’t we the lucky ones!! -Barabra S.

RESPONSE: Love stories that last a lifetime seem so rare now. You’re right, we are the lucky ones.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.

Small Associations

QUESTION: I am a board member for an 8-unit association. Perhaps you can help me with some questions: (1) Do smaller associations have fewer disputes or legal problems? (2) Is governance different from that of a large association?

ANSWER: There are distinct differences between large and small associations. When it comes to disputes, large associations have more of them but small associations experience greater suffering when conflicts erupt.

Critical Mass. Whenever you put people together, you have potential for conflict. The more people, the more conflict. You have more nut-cases in a 500-unit association than a 50-unit, and a 50-unit has more than a 5-unit. The other factor is density–the tighter people are packed together, the greater the friction. If you put 500 people into single-family homes with 20-foot setbacks, there are very few neighbor-to-neighbor disputes. If you stack people on top of each other with nothing more than a wall or ceiling separating them, you suddenly have a lot of squabbling over pets, parking, noise and water leaks. It’s like uranium, if you pack enough of it into a confined space, you get an explosion.

Resources Help. Because small associations are small, they have fewer people. With fewer people, there is less chance of a crazy living in the development. The disadvantage of a small association is its lack of resources. If an 8-unit gets a Ted Bundy in their midst, they have no way of stopping him. He can terrorize his neighbors and cripple the association’s budget. Large associations have the benefit of healthy budgets that allow them to hire legal counsel and professional management to address disruptive homeowners. The intimacy of a tiny association is wonderful when it works and a nightmare when it doesn’t.

Governance. It’s been my experience that governance of small associations is more casual and more consensus driven. If there are only a handful of families, they get together, discuss a matter and make a decision. The opposite occurs with large associations. The larger the community, the more formal meetings become with directors setting policy and others handling the details, e.g., professional management is employed, legal counsel hired and consultants retained. See factors to consider when Buying a Condo.

WEDDING ANNIVERSARY

I recently asked my mother how she met Dad. She sent me the following:

April, 1951—Corning, Arkansas. Your grandfather Herb brought your grandmother Josephine to our little hospital in hopes of finding a cure for her cancer. He ate at the diner where I worked. He was NOT one of my favorite customers. After looking over our menu, he asked if I had frog legs and I said “NO I just walk that way.”

A few days later I asked my boss, “Who is the stranger in the booth by the jukebox?” She said he was Herb’s son, Don. I replied, “I don’t like him either.” She said, “I bet you 50 cents you can’t get a date with him” (big money back then). I said “You’re on.”

I kept filling Don’s coffee until he asked if he could walk me home. I said “Sure” knowing I would win my bet and collect 50 cents. He then asked if I would go to the movie with him the next day. I was already engaged to a high school sweetheart and needed to politely get rid of Don. I said sure if he would go to church with me, knowing he would decline.

To my surprise he said “Okay.” What was I to do? I was already engaged and my mother would not approve of this. In a panic, I called my friend Mary and she agreed to go with us. That way people would think Don was with her.

One week later your Dad let me drive your Grandpa’s Packard and to my surprise and delight he kissed me on my cheek. I saw stars, bells went off in my head and I knew this was the one for me.

One week later we drove 12 miles to the town of Pocahontas to get married. I was only 17 and in Pocahontas I could say I was 18 and no one would know. We were married on May 5. My fiance cried when I gave back his ring and told him I was married. On May 18 I graduated from high school and on May 19 we left for California. That was 63 years ago and six children followed. -Mom

HAPPY ANNIVERSARY. Happy Anniversary Mom and Dad! And Happy Anniversary to readers with 60+ years of marriage. That’s quite an accomplishment.

FEEDBACK

Unrecorded Title #1. Family Code §760 provides that “all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” Even if formally titled in the name of one spouse alone, real property acquired during marriage is presumed community property, with the non-titled spouse having a 50% legal ownership interest in the property. Notwithstanding the presumption of FC §760 referenced above, the “owner of record” made it clear to the HOA that his/her spouse was, in fact, also an owner by virtue of the deed provided to the HOA, which included his wife’s name. There is NO legal requirement that the transfer document be recorded to be valid, referencing your own laundry list of requirements as to what constitutes a valid transfer. Recording only “perfects” an ownership interest; it does not “create” it. -Barry P.

RESPONSE: Community property comes into effect primarily in divorce and death. When it comes to real estate, some rights immediately flow to a person on title while others emerge at a later date to those with community property rights. Also, while community property might be presumed, such rights are not guaranteed–prenuptial agreements may have been signed. Accordingly, it is reasonable for associations to limit voting rights to members, i.e., those who are on title.

Gun Control. California does not prohibit shotguns or rifles from being openly carried unloaded in vehicles to and from hunting areas and ranges. I do not think that HOA boards can legally deny a Concealed Carry Weapon permit holder the right to carry at any meeting–only recommend or make a new rule that no one shall possess or bring to the meetings any firearm for any reason and to do so will result in expulsion from the meeting. However nothing short of having a private security guard at the door checking everyone will prevent a weapon from getting into a meeting. -B. Stelter

Trash Privacy #1. The Greenwood case only held that police did not need a warrant to search trash containers once they were off private property, not that they are fair game for one and all. If you see strangers pawing through trash, you can call the police, since the person may be up to no good, it is likely a law is being broken. -Ronald S.

Trash Privacy #2. Aren’t most condo garbage bins contained on their property, which is private and not public, making it illegal to rummage through them? Also, our police department says it is illegal to dumpster dive. -P. Calloway

RESPONSE: It’s true that some municipalities have an ordinance against dumpster diving. It’s not clear how that affects private communities regulating their own trash bins. Nor does it address trash bags that don’t make it into the dumpster, and bags that spill their contents onto the ground (the subject of the original question). If staff members have to clean up a mess caused by a careless homeowner and the owner’s phone records are part of the trash, there are no privacy violations for someone to pick up the records and notify the board of the culprit.


Adrian Adams, Esq.
Adams Kessler PLC


“Legal solutions through knowledge, insight and experience.” We are friendly lawyers; you can contact us at (800) 464-2817 or info@adamskessler.com.