Our association in Artesia, which consists of twelve townhomes, has been
self-managed for many years in order to save money. Our newly
elected board of directors is considering the possibility of
hiring a management company which would result in an increase
of our monthly assessments. The board claims that we should
save money in the long run. What is your experience?
In my experience, I have found that self-managed associations
have higher expenses in the long run than those with professional
management. Overall, self-managed associations pay more for
maintenance and repairs, have more collection problems and pay
out more legal fees because more mistakes tend to be made by
the boards of these associations. Self-managed associations
tend to keep many lawyers working overtime. Top
Can the board of directors of our association spend association
funds on what amounts to a political issue? The board wants
to spend funds to stop a nearby development, based on the belief
that it will harm the value of homes in our community.
a prohibition in the association's bylaws or CC&Rs,
the board can probably justify the expenditure so long as they
In good faith;
In the best interest of the association;
After becoming fully informed, and
After deliberating as a body before deciding. Top
FIX LEAKY ROOF
We live in a three story condominium complex in Woodland Hills that is over twenty
years old. The roof needs replacement, but the association does
not have the funds to replace it. It has been patched numerous
times, over several years, but still leaks when it rains. Our
roofer tells us that patching will only slow the water down
and that we must replace the roof. This has been confirmed with
a second opinion. The board has attempted three times to get
a special assessment passed, but has failed to get one approved
due to a combination of indifference and people on the lower
floors refusing to pay the cost. Our ceiling, walls and furniture
has been damaged. What can be done?
The board can approve an emergency assessment where there is
a threat to personal safety on the property. While your situation
may be a legal stretch, the board should immediately discuss
the option with its legal counsel. Absent a special assessment
and repair, your option is to sue the association for failing
to maintain the common area. Top
Our management company has been using the husband of an employee
to provide maintenance services to our association for several
years. We just learned of the relationship because it was not
previously disclosed to us. Is this a conflict of interest for
the management company?
Absolutely. Whenever a management company uses a related party
to provide services, it must be disclosed in writing, in advance.
This type of conduct does not reflect positively on the management
company to say the least. Top
Our board of directors recently waived a late fee for a board
member because "she puts in so much free time." Other members
of the association are required to pay a late fee whenever they
pay late, without exception. What are your comments?
I strongly recommend that the board cease the policy of waiving
late fees for this or any other board member because such a
policy creates a legal defense for other members of the association
who pay late fees and get fined. If the board ignores my advice,
at the very minimum, the board member who is receiving the special
benefit should be recused from voting on such a waiver. Lastly,
the receipt of such a benefit may have the legal effect of eliminating
the board member's statutory protection because it can be argued
that volunteers do not receive compensation, and that the waiver
of a fee is in fact compensation. In short, it's asking for
trouble to make exceptions such as the one described. Top
TO PROTECT MEMBER
We live in a community of new single family homes in Anaheim Hills that has an
association and common area. Behind our home is a common area
hillside that is draining water onto our lot because of an inadequate
drainage system. The water is starting to lift our patio slabs
and do other damage. We are concerned that with a heavy season
of rain, the damage will become very serious. Our homeowners
association refuses to sue the developer for construction defects
because our home is the only one significantly impacted by the
flow of water. Are we out of luck?
No. If the association refuses to protect your rights, an experienced
construction defect attorney can file a derivative suit to protect
those rights. You should consult an attorney immediately because
you can lose your rights if you wait too long. Top
We live in a condominium building in West Hollywood that is thirty-five years
old. We like it because of its great location, low density and
mature landscaping, but are concerned about the future. What
happens if, in the future, the development becomes an under
improvement for the area and the buildings become obsolete?
California law provides that for condominium projects over fifty
years old that are uneconomic and obsolete, 50% or more of the
members may vote to sell the entire project pursuant to a court
supervised partition action.
I am not aware of any such
sales that have taken place in California. However, I expect
it will become common in twenty-five to thirty years. Top
What exactly is the Davis-Stirling Act?
The Davis-Stirling Common Interest Development Act
consists of sections 4000 through 6150 of the California Civil Code.
These code sections deal exclusively with common interest developments,
which includes community apartment projects, condominiums, planned
developments, and stock cooperatives. Other laws which affect
common interest developments are the Federal Communication Commission
Regulations, California Health and Safety Code, Corporations
Code, Vehicle Code, Code of Civil Procedure and Government Code. Top
The board of directors of our homeowners association is considering
the possibility of terminating the contract with our security
guard company and then hiring the guards directly in order to
save money. Our management company is in favor of the idea.
What are your comments?
I strongly recommend against it. Taking such action will create
a substantial list of potential liabilities. This column does
not permit an adequate discussion of the risks involved. Don't
do it. Top
I am on the board of directors of my homeowners association located in Long Beach.
We have an architectural committee. Traditionally, the architectural
committee has been concerned with building code compliance.
Is this an appropriate matter to be commented upon by an architectural
No. Architectural committees should be concerned about compliance
with the CC&Rs, rules and regulations and the appearance
of proposed modifications. Compliance with building codes
should be left to the local city or county. If your architectural
committee assumes responsibility for making comments
on possible code violations, it places your association
in a position to be held liable in the event that it
makes an error in judgment. There is no reason for an
association to assume that responsibility. Top
My neighbor's tree is only inches from the property line. Do
I have the absolute right to cut roots and branches that encroach
onto my property?
No. You do not have an absolute right. You have only the right
to act reasonably. I suggest you talk to a consulting arborist
before you do any cutting to make certain that you don't damage
the tree and get yourself into trouble. Top
LIABILITY FOR MEMBERS
It appears that the president of the board of directors of our
association may have said something that will result in a defamation
suit being filed against the association. If the association
is sued and a judgment is entered against it, can the individual
homeowners be held personally liable for the judgment?
No. However, this should not give you great comfort. If the
association has a judgment against it, the judgment creditor
can force the association to special assess every member to
pay the judgment. Top
Is there ever a time when it is appropriate for the board of
directors of a homeowners association to inform the membership
of a serious delinquency in the payment of monthly assessments?
Yes. A board may disclose a delinquency when its collection
action has reached the stage of a lawsuit. When an association
becomes involved in litigation, the members are entitled to
notice. The filing of a suit places the matter in the public
domain and is material to the financial condition of the association.
California Civil Code Section 47 protects the association as
plaintiff from liability for defamation or disclosure of private
information under the "litigation privilege." Top
I am on the board of directors of my homeowners association in
May the board discuss individual delinquencies (identifying names) at regular board
meetings? The association's law firm has advised us that we
may do so. I do not feel comfortable in having these types of
matters discussed in public. What is your opinion?
Discussions concerning individual delinquencies (identifying names) should only
take place during executive sessions. This means that members
of the association will not be present other than board members.
The California Civil Code requires that the board of directors
must adjourn to executive session to consider litigation and
The California Constitution
guarantees the right to privacy. While it is unclear whether
the Constitution protects a person from an invasion of privacy
by a homeowners association (as opposed to the state), it may.
The right to privacy has been liberally interpreted by all courts.
Lastly, the intrusion into private affairs by an individual
may constitute a court for which the plaintiff may collect damages
including punitive damages.
I strongly disagree with
your counsel's opinion and suggest that your board discuss association
delinquencies only during executive committee sessions. Top
INCORPORATION OF ASSOCIATIONS
Are all homeowner associations corporations?
No. However, in California more than 99% are corporations. The others
are unincorporated associations. Top
WON'T SUE MANAGEMENT COMPANY
The management company for our townhome association gave our
board of directors some very bad advice which resulted in our
association losing several thousand dollars. Our association
law firm refuses to get involved in a suit against the management
company. Our board is finding it difficult to find an association
law firm that will sue any management company. Is this common?
Yes. Most association law firms get the vast majority of their
business from management companies and thus, most of these law
firms refuse to represent associations against management companies.
Your board should continue to interview association law firms.
If they are diligent, they will find a competent firm. Top
WITHOUT A LICENSE
What is the penalty for contracting
without a license when one is required?
Contracting without a license
is a misdemeanor punishable by up to one year in county jail
and/or a fine of up to $15,000. Top
LAW WITHOUT A LICENSE
The management company of our association has offered to re-write
our rules. The
hourly rate is far below what our attorney would charge for
the same work. Do
you have any recommendations or comments?
Yes. Your management company
would not be doing the same work as your law firm. Only attorneys are permitted
to offer legal advice. Writing rules for an association
comes dangerously close to practicing law and may cross the
line. I recommend
that any new rules be written by your attorney or at least,
reviewed and approved by him or her. Top
The management company for our homeowners association has a
website with links to various vendors that they use for various
management clients. The
vendors are required to pay the management company a fairly
substantial fee in order to be listed.
Is this a disguised form of kickback?
Possibly. Without knowing the amount of money involved it
is difficult to determine if the fee is reasonable given the
cost of service provided or whether it's a means for the management
company to generate income as a result of providing business
to the vendors. In
any event, at the minimum it creates the appearance of a conflict
and, in my opinion, is evidence of poor judgment. Top
When is it appropriate for a member of our homeowner association
board to recuse himself?
A board member should recuse or disqualify himself or herself
because of self interest, bias or prejudice. If a board member does not
recuse himself or herself when required, he or she will have
a conflict of interest.
If a board member votes on a matter where he or she has
a conflict of interest, he or she violates his or her fiduciary
A CONFLICT EXIST?
Please define "conflict of interest."
A conflict of interest exists where an individual's duty to
one party leads to the disregard of a duty to another. It exists
when an outside influence affects a person's ability to make
an independent, unimpeded, objective decision or when a person
owes duties to separate parties with conflicting interests.
Whether or not a conflict
of interest exists depends on the facts of a particular situation
which must be evaluated on a case-by-case basis. Top
IS A CONTRACTOR'S
Are handymen required to have a contractor's license?
It depends. Work
on a project for which the combined value of labor, materials,
and all other items on one or more contracts is less than $500
does not require a contractor's license. However, work which is part
of a larger project, whether undertaken by the same or different
contractors, may not be divided into amounts less than $500
in an attempt to meet the $500 exemption. Also, unlicensed handymen
must provide the purchaser with written disclosure stating that
they are unlicensed by the Contractors State License board,
or the $500 exemption does not apply. Top
FOR LEGAL FEES
When a homeowners' association is required to obtain legal advice
in order to respond to a member of the association, can it charge
the member for the attorney's fees?
No. A homeowners' association
is entitled to recover its attorney's fees from a member only
when it prevails in a court proceeding or arbitration, usually
in connection with the enforcement of the governing documents
of the association. The only exception, is when the CC&Rs state otherwise. This is very uncommon. Top
Our homeowners association in Lancaster is not being run properly by the
board of directors. Is
there a government agency that has the power to oversee homeowners
Unless the developer is still involved as an owner, no such
government agency exists in California.
Every member of the association has the right to enforce
the governing documents through the process of Alternative Dispute
Resolution (ADR) which involves either mediation or arbitration,
or through use of the courts.
If the developer is still
involved, the California Department of Real Estate will have
jurisdiction over some matters.
Some disputes are political
in nature and have nothing to do with enforcement of the governing
types of disputes can only be resolved through the election
process. A board
of directors of an association has the power to do a great deal
of good or harm. Consequently,
electing a quality board is critical to the success of your
Our homeowners association in Northridge has an owner who insists on parking
his vehicle in a marked fire lane. What can we do?
The association may cause the removal (towing) of any vehicle,
without notice, if the vehicle
(1) Parked in a marked fire lane;
within 15 feet of a fire hydrant;
(3) Parked in a
space designated for handicapped persons without proper authority;
in a manner which interferes with any entrance to, or exit
from, the common interest development or any separate interest
If the offending vehicle
is parked in an unauthorized area other than one of those areas
set forth above, all of the following requirements must be satisfied
before the vehicle may be towed:
sign (not less than 17 x 22 inches in size with lettering
not less than one inch in height) must be placed at each entrance
to the common interest development that contains:
statement that public parking is prohibited and that all
vehicles not authorized to park will be removed at the owner's
b) The telephone number of the
local law enforcement agency.
The sign may also indicate that a citation may be issued
for the violation.
(2) If the identity of the registered
owner of the vehicle is known, or readily ascertainable, the
president of the association, or his or her designee shall,
within a reasonable time, notify the owner of the removal
by first-class mail.
(3) If the identity of the owner
of the vehicle is not known or ascertainable, the president
of the association or his or her designee shall immediately
notify the Department of Justice in Sacramento in accordance
with Section 22853 of the Vehicle Code. Top
ON COMMON AREA
Our association has built steps within the common area that
don't meet the requirements of the building code. What are the ramifications?
If someone is injured on the steps, the fact that they don't
meet code will make it much easier for the plaintiff's attorney
to prove that the association was negligent. In short, it increases your
association's risk. The
steps should be corrected to meet code. Top
I work for a small company that manages homeowner associations
in Los Angeles County. What is the minimum age
allowed by law for unsupervised children to use a swimming pool
Unsupervised use by children under the age of fourteen is prohibited. In addition, warning signs
are required in accordance with Section 3119B.5 of the California
Building Code and Title 22, Section 65539(c) of the Code of
Regulations - Environmental Health. Your pool maintenance company
should be familiar with these requirements. Top
TO OBTAIN RESERVE STUDY
Our board of directors refuses to obtain a reserve study for
our homeowner association. Can board members be held legally
liable for negligence if they won't obtain a reserve-study?
Yes. Negligence is a civil wrong (tort) that has the following
(1) In good faith,
(2) In the best interest of the corporation,
(3) In accordance with the business judgment
(4) As a volunteer (not paid).
Immunities are not absolute.
You should contact legal counsel for additional information and
obtain comprehensive insurance coverage from a knowledgeable insurance
I live in a townhouse development with an association in
Torrance. The management company recently
fined me for an alleged parking violation and then liened my property
for non-payment. The
fine was only $25. The lien fee is $350. What can I do?
A monetary penalty imposed by an association as a disciplinary
measure for failure of a member to comply with the governing documents,
except for late payments, may not be treated as an assessment
which may become a lien against the member's separate interest.
In short, the lien must be removed because it is not permitted
by law. In addition, your management
company is in violation
of the Federal Fair Debt Collections Practices Act.
They have created a legal liability for your association
as well as themselves. Top
During the recent rains, the roof to my condominium leaked through
a crack causing damage to my furniture and other personal property.
I have been informed by the association's insurance company that
the master policy excludes coverage for my personal property.
I don't have insurance. Can the association be held liable for
not maintaining the roof?
Possibly. If the board of directors fell below the standard of
care in maintaining the roof, they could be liable for negligence
and would then be responsible for paying your damages. The fact
that the roof leaked is insufficient, by itself, to prove negligence
on the part of the board. For example, if the crack was new, the
board would probably not be held liable for negligence. If the
crack was old and the board failed to have the roof inspected,
it would be more likely that a court would hold them liable. The
facts of your case must be fully investigated before an educated
opinion can be offered.
The lesson is clear. It
is prudent for all condominium owners to obtain insurance to protect
their property. It is inexpensive compared to the risk of harm
an owner can suffer. Top
Our association management company filed a lien against my home
after giving me only ten days notice to pay my monthly assessment.
They also charged me $495.00 for recording the lien. Can they
No. Management companies are required to comply with the Federal
Fair Debt Collections Practices Act. Among other requirements
of the Act, a thirty day written notice is required before a lien
can be recorded to enforce payment of an assessment. Your management
company should immediately release the lien, waive the fee and
obtain legal advice before they get themselves and your association
into serious legal trouble. Top
The management company for our homeowner association recently
hired a lien service to collect delinquent assessments from a
member of our association. The lien company sent the debtor a
written notice stating that he had 30 days to dispute the debt
and that a lien would be recorded if the debt was not paid within
ten days. The debtor did not pay within the ten days and the lien
service has recently started a foreclosure. The debtor claims
that our lien service has violated the law and demands that we
stop all collection action. The lien service is owned and operated
by an attorney. Who is correct?
The debtor is correct. The federal Fair Debt Collections Practices
Act requires that a debt collector provide the debtor with a 30-day
notice before taking any collection action. Your association should
immediately consult with another attorney that specializes in
collection law. Your association may be liable for substantial
damages, however, it appears that your association may have an
excellent malpractice claim against the lien service. Top
We recently purchased a townhome in Valencia only to find out that the former
owners had previously been notified in writing by the board of directors that their patio cover did not meet the architectural
requirements of the community. What can we do?
4525(5) was added to the California Civil
Code to deal with this type of problem. Under this section, a copy
or a summary of any notice previously sent to the owner that sets
forth any alleged violation of the governing documents that remains
unresolved must be provided to the prospective purchaser as soon
as practical before transfer of title.
Any person or entity who
willfully violates this section can be held liable to the purchaser
for actual damages and, in addition, a fine not to exceed $500.00. Top
REQUIREMENTS OF ASSOCIATION
Is a homeowner association required to make disclosures concerning
the condition of the common area to prospective buyers of homes?
No. An association's disclosure obligation is to existing owners,
not prospective owners. Owners who intend to sell are required
to make such disclosures to prospective buyers.
If an association makes
a disclosure to a prospective buyer and it is inaccurate, the
association could be held liable. Top
My rental home in Reseda was built before shower doors and sliding glass doors were required to have safety glass. My property has standard glass in both the shower doors and sliding glass door. I prefer not to spend the money to replace the glass. Is it necessary?
I strongly recommend that you replace the ordinary (annealed)
glass with tempered glass or laminated glass, both of which are
considered safety glass. Ordinary glass can break into dangerous
shards that can cause horrific lacerations, resulting in major
injuries and possibly death. The cost of replacement is nominal
when contrasted to the possible harm from an accident.
Replacing ordinary annealed glass with safety glass will help
to prevent injuries resulting, in part, from common accidents
as well as earthquakes, wind storms, and even explosions.Top
CONFLICT OF INTEREST WITH LAW FIRM
Our homeowner association in Santa Clarita needed a referral to a law firm that
would represent us on a contingency basis. Our management company
made a referral and our board of directors subsequently signed
an agreement with the law firm that was referred to us. The retainer
agreement called for the law firm to receive 40% and the management
company to receive 10%. The management company was required to
provide some minor administrative assistance to the law firm.
The case settled for millions of dollars and consequently the
management company was paid several hundred thousand dollars for
less than $2,000 worth of services! The members were never informed
of the arrangement. As a member of the association, I am very
concerned about this situation. What do you suggest?
You should be concerned about your board, the law firm representing
your association and your management company. The situation you
described calls for a confidential consultation. Top
ASSOCIATION SUED BY MEMBER
Our management company recently recorded an assessment lien against
the property of a delinquent homeowner. Before recording the lien,
they carefully read the CC&Rs and then followed the requirements,
only to find out afterwards that the CC&Rs were outdated and did
not reflect the current law. As a result, we were sued by the
delinquent homeowner and forced to pay a large sum of money to
settle the case. Can we recover from our management company?
I believe you have a good negligence case. Your management company
fell below the standard of care by failing to comply with the
current legal requirements. The recordation of liens can have
serious consequences and should be supervised by an attorney.
The situation you have described clearly illustrates the importance
of amending your association’s CC&Rs in order to make certain
they reflect current law.Top
Someone just moved into our condominium association in Cerritos, with a large pitbull dog. It hasn’t attacked anyone, but it is very aggressive and nearly everyone is concerned about it. Our CC&Rs are silent on the subject expect for permitting members to own up to two domestic animals. What should we do?
It would have been easier to prevent this problem by amending your CC&Rs before the pitbull was brought onto the property. Attempting to deal with the problem after the fact is much more difficult, but not impossible. The dog may constitute a nuisance which is probably a violation of your CC&Rs. More facts are needed to adequately answer your question. The lesson is clear, however: It is far better to address these types of issues with a CC&R amendment before the anticipated problem becomes a real problem. Top
CAN’T AFFORD RESTATED OR AMENDED CC&RS
Our homeowner association in Burbank is relatively small and can’t afford to restate or amend its CC&Rs even though they are obsolete. Do we have any options?
Yes. For a substantially reduced fee, we can review your CC&Rs and provide your HOA with a “CC&R Advisory” that can be distributed to the members of your homeowner association and attached to the association’s CC&Rs.
The CC&R Advisory is not a restatement
or amendment and is not recorded. It does not have to be
approved by the membership of your association. The CC&R
Advisory is a legal opinion setting forth a summary of the major
changes to the law enacted since your CC&Rs were approved and
recorded. While not as beneficial as a restatement of your
CC&Rs, it provides a valuable service at less than 20% of the
DISABLED OR HANDICAPPED OWNERS
Is an association required
to make alterations to the common area in order to accommodate a
member who is disabled or handicapped?
No. However, disabled or handicapped
owners may make alterations to their units or the common area at
their expense to accommodate their handicap. This may include the
installation of handrails, wheelchair ramps or other
modifications. The right to modify the common area is subject to
Modifications must be consistent
with applicable building codes;
Modifications must be consistent
with the governing documents of the association;
Modifications may not impair the
structural integrity of any structure or interfere with any
Modifications may not prevent
reasonable passage by other residents, and must be removed
when the unit is no longer occupied by persons requiring the
Owners who intend to make
modifications must submit plans to the association and the
association may not disapprove them without cause.Top
BOARD REFUSES TO REPIPE BUILDING
Our condominium building in Los Angeles has old galvanized pipes that have been leaking for several years. The board makes repairs, but has refused to repipe the building because our reserves are inadequate. What is their legal duty?
The board should borrow the funds to repipe the building if possible. If a loan is not available, the board should immediately begin the process of increasing assessments so the work can be done at the earliest possible time.
Given that the board has knowledge of the deteriorating pipes, the
association will probably be liable for the total cost of all repairs resulting from future leaks. Repiping will cut off the association's liability.Top
PIPE REPAIRS COVERED BY INSURANCE
Will the association's insurance policy cover the cost of repairs resulting from the leaking of our building's old galvanized pipes?
Most insurance policies will not pay for such damage if it determines that the board knew of the deteriorating pipes and failed to replace them. Insurance policies generally cover only sudden, unexpected losses. Losses from old deteriorating galvanized pipes are expected.Top
SECURITY CAMERAS IN THE POOL AREA
Our condominium association in Simi Valley is experiencing a great deal of unlawful activity around our pool area. Can we safely install security cameras in the pool area in order to discourage this type of activity?
Your association can and should install security cameras in the pool area if illegal activity is taking place. However, it is important that the cameras be installed in such a way as to avoid invading the reasonable expectation of privacy of people using the pool.
I recommend that you consult with an attorney before purchasing and installing any cameras in the pool area.Top
The board of directors of our condominium association in
Thousand Oaks is considering the installation of dummy cameras in our parking garage and entry areas to deter crime. I have been told this may not be a good idea. What is your opinion?
Dummy cameras are never a good idea because they create potential liability for the association. When owners, renters and visitors see dummy cameras, they often believe the premises are being monitored and therefore, they are reasonably safe. If a serious crime takes place, you can be certain the
association will be named as a defendant. It is far better for the association to spend its money on real cameras to deter crime.
Check with an experienced insurance broker to determine if your association can qualify for a discount on its premiums if it installs real security cameras.Top
GUARDS AS EMPLOYEES
Our homeowner association in Van Nuys is spending a great deal of money on several security guards at our condominium association. We are considering hiring our own guard employees who will be required to obtain guard cards. The board is split. Some board members are agreeable to paying more to a guard
company even though it is more expensive. What is your opinion?
Do not hire your own guards. Hire a professional security firm that trains and supervises its guard employees. You will greatly reduce your association's potential liability. The money you will save is not worth the increased risk. If there is a serious incident at the property resulting in a lawsuit, you want the benefit of the guard company's insurance and expertise in training and supervising guards.Top
DAY CARE CENTERS
Our HOA recently sent a letter to one of our members demanding
cease using her condominium as a day care center. The
owner refused and told us that we cannot stop her from running a
day care center as long as the number of children does not
exceed 14. Is this correct?
Yes, however there are some additional conditions. The California State
Legislature has determined that day care centers may be operated in
residential communities so long as the number of children does not exceed 14
and do not stay over 24 hours at a time. Other conditions include licensing,
insurance, proper supervision of the children, indemnification of the
homeowner association, and following certain regulations and operating procedures.Top
In order to provide better security, our board recently installed security cameras in the common area. Are we required to post signs informing members and visitors that we have surveillance cameras?
No. If the cameras are limited to common areas where there is no expectation of privacy, posting signs is not required. If the cameras are in the pool area, signs should be posted because of the greater expectation of privacy.
Notwithstanding, I believe posting such signs is a good idea because these types of signs act as an added deterent.Top
Can a homeowners association
charge a transfer fee when a home sells?
Yes. However, associations may charge no more than what is
defray the costs. This limitation does not apply
to management companies.
Thus, if an association relies on its
management company to handle all
record keeping, the
association cannot charge a fee.Top
Our association in Santa Monica is self-managed.
We do not have anyone capable of preparing a reliable budget. What
do you suggest?
First, you should hire a management company that is capable of
your budget. If you don't hire a management company,
your association should interview reserve study providers. Some of
these firms will prepare
association budgets for a fee.Top
VIOLENCE AT BOARD MEETINGS
We recently had an incident at a board meeting where one member pushed another. Can we install a video camera in our community room and record our board meetings on video tape?
Yes. Installing cameras and recording the meetings is likely to deter such future conducts.Top
REAL ESTATE TAXES
Are homeowner associations required to pay property taxes on the
No. Taxes on the common areas are paid by the members of the
association through their individual tax bills. The value of the
common areas is reflected in the value of each e
required to paseparate interest. Notwithstanding, it is possible
that an association could by a special district user fee, but this is not
FINES ON FINES
Can the board of my condominium association levy a fine on a member of our
association for failure to pay a prior fine?
No. Fines may be levied only for violating the Operating Rules or CC&Rs of
an association assuming they are written so as to authorize fines.
Your association can sue a member of the association in small claims court
for failure to pay a fine. The likelihood of having a judgment entered
against a non - paying member, which will harm their credit, may be a
greater incentive to pay a fine levied by the association through its board. Top
THEFT OF HOA FUNDS
Our homeowner association in Glendale has been self managed for many years. We have only 8 units. Our treasurer of twelve years recently embezzled most of our funds and now claims that she doesn’t have the ability to repay the association. What are our options?
This is a fairly common question without a simple answer. Your best course of action can only be determined after an examination of your association’s insurance policies, a determination of whether your former treasurer has equity in her home, and possibly a professional asset search. Sometimes we find that the guilty party has quietly cancelled the coverage for dishonest acts in an attempt to discourage the association from attempting to obtain restitution. Your association needs to consult with an experienced attorney to determine the best course of action.
One lesson is clear. It is dangerous for an association to place its funds under the control of one person or even two related people. There is no substitute for accounting checks and balances. Top
One of the homeowners in our condominium building in Thousand Oaks barbeques on his covered balcony. The board is very concerned about the possibility of a fire. Do you have any recommendations?
The barbeque may be a violation of California Fire Codes Sections 308.3.1 and 308.3.1.1 which state that open - flame cooking devices may not be operated on combustible balconies or within ten feet of combustible construction. The law also places limits on propane containers. You should check to see if your city has adopted these codes. The only exceptions are for single family dwellings and buildings that have automatic sprinkler systems that include all interiors, balconies, and decks.
Even if your building is excepted, the association board may adopt a rule prohibiting open fires on balconies. Top
RULES FOR CHILDREN
Our association board is very concerned about the safety of the children living within our condominium complex. Can we create a rule prohibiting children from skateboarding within the common areas?
Such a rule would probably be considered discriminatory. A rule prohibiting all persons from skateboarding would probably be enforceable. Top
AGENT FOR SERVICE
Due to no fault of our association board, we have had several management companies over the last few years. As a result, there has been confusion over who is the agent for service of process. We want to avoid this problem in the future. Any suggestions?
Many law firms will provide corporations, including non – profit mutual benefit corporations, with the service of being the legally designated agent for service of process for a nominal cost. Using a law firm avoids the risk that the association will be sued and a default entered for failing to respond on a timely basis. Top
Our board insists on using a gardener who is uninsured because he does a good job and is inexpensive. What risks are we taking?
Too many for this column, but I will focus on the biggest risk. If your gardener is seriously injured on the job, his attorney is certain to make the claim that he was your employee and not an independent contractor. If your association does not cover the gardener under a workers' compensation insurance policy, the association may be sued for damages. Unless you purchase coverage , it is likely that the association’s insurance policy will not cover the cost of defense which means the association will be required to hire its own attorney on an hourly basis. If the injured person decides to file a claim with the UEF (Unemployed Employers Fund) which is the State of California, the UEF also has the power to fine an uninsured employer up to $10,000 per violation. Obviously, it is important to make certain that everyone working on the common area is insured. Top
EVICTION OF TENANT BY BOARD
Can the board of directors of our homeowners association evict the tenant of a member if the tenant is violating rules of the association?
No. Only the owner of a property can evict the tenant. If the tenant is violating rules of the Association, the board of directors should take action against the member. This can be in the form of a nuisance lawsuit or fines. Some associations have included language in their CC&Rs allowing the association to evict tenants. I believe this is a dangerous approach. Top
MANAGEMENT OF RENTAL HOMES
The management company of our homeowners association offers rental services to those members who desire to lease their units. Will permitting the management company to represent individual members in renting out their units create a conflict of interest?
It will not create a conflict of interest, but it will create a potential conflict of interest. Not withstanding the fact that a conflict could arise, it is my opinion that permitting the management company to represent individual members in renting their units is generally good for the association. When a management company rents a unit within an association, it normally takes the steps required to screen the potential tenants. Thus, it is more likely that the tenants will comply with the Rules and Regulations of the association. Top
WATER INTRUSION AND MOLD
My twenty year old condominium in Los Angeles is located on a large slope which means that part of my living room is below grade. The wall has been leaking for five years because of poor water proofing. I have complained to the board but they refuse to spend the money for repairs since I am the only owner with this problem. What can I do? I am certain the wall is full of mold. I cannot sell my unit under the circumstances and I have been turned down for a lower interest rate loan because of the problem.
If your CC&Rs are written like most, the HOA is responsible for the repair. There is no reason for you to suffer any longer. Experienced HOA attorneys will represent you on a contingency basis and will advance any costs required. Top
We live in a common interest development. Based on the recommendation of our management company, our board of directors obtained three bids for landscaping maintenance and then selected the company with the highest bid. The bids were for identical work. Since all three companies were proposing to do the same work, shouldn’t our board have selected the lowest bid? Our monthly assessments are already too high and many of us live on fixed incomes.
The board should use its best judgment in deciding which company to use, based on all facts available. This is their legal duty. While the three companies may have submitted bids for the same work, it does not logically follow that all three companies will provide the same quality of work. Sometimes experience is helpful in determining which company will provide the highest quality work and, likewise, who will be the most reliable contractor. One of the advantages of hiring an established local management company, is that they have experience with contractors and can provide valuable recommendations to the board of directors. Top
WATER INTRUSION CLAIM
What is the most common claim made by a condominium unit owner against the association and how is it typically resolved?
The most common claim made by the owners of condominium units against their homeowner associations is that their unit is experiencing water intrusion because the association has failed to maintain the common area. Generally, this involves leaking roofs, decks, planters, walls, and windows, and often improper slopes and drainage. When a condominium unit owner makes a claim against the association, it is generally because the statue of limitations has run and therefore a claim cannot be made against the developer of the condominium community.
When a condominium unit owner has exhausted his or her patience with the board and files a lawsuit against the association, (not the board), the association will almost always contact its insurance company. Assuming there is coverage, the insurance company will hire a law firm to represent the association and the law firm will hire any appropriate experts needed to investigate the situation and provide advice on how to remedy the problem.
As part of the process, the plaintiff's attorney will hire one or more experts to provide advice and repair cost estimates.
After all experts have completed their investigations, have developed a scope of repairs, and cost estimates, a mediation session will be arranged so that the parties can avoid further litigation and settle the matter short of going to court. In 95% of these matters, the dispute is settled in mediation.
Settlements usually, but not always, consist of the following:
The association agrees to repair the common area in a manner that is acceptable to the expert working for the plaintiff's attorney;
The association agrees to pay the plaintiff a dollar amount sufficient to make interior repairs and pay for loss of use; and
The association agrees to pay all of the plaintiff's attorney fees and costs.
Most importantly, depending upon the insurance coverage, the cost of settling the case will be paid in part or completely by the insurance company.
Our condominium association in Westchester is experiencing a high level of vandalism and other criminal activity. In your experience, does a neighborhood watch program help?
An active neighborhood watch program can be an excellent deterrent to crime. Your association's management company should be able to assist you in establishing one for your community or you can get information on the internet. Most neighborhood watch groups will suggest the use of surveillance cameras and burglar alarms to maximize the safety of your members and their property. Top
ELECTING A CONVICTED FELON
A convicted felon was recently elected to our board and made treasurer. The board believes he has paid his debt and has learned a lesson. They claim he is now a model citizen. Many owners are very concerned. What are your thoughts?
It is not illegal to elect a convicted felon to the board of an association and it is not illegal to make the person treasurer. Notwithstanding, the fact should be disclosed in writing to your association’s directors and officers liability insurance carrier to determine whether they will cancel or not renew the policy if the individual continues to serve. In addition, if you have coverage for dishonest acts, you may run into the same problem. I believe it is a matter of poor judgment to elect this individual to the board and then make him the treasurer.
CAN'T LOCATE PLANS
Our homeowner association has serious water intrusion problems in the common areas. We have attempted several times to obtain a set of plans from the developer without success. What should we do?
Sections 19850 and 19851 of the California Health and Safety Code require that every city or county maintain a copy of the plans for every common interest development during the life of the building(s) for which the building department has issued a permit.
These plans and specifications are open for inspection and may be copied, with some limitations.
Your association board should also contact an attorney who specializes in construction defects as soon as possible. The "statutes of limitation" extinguish the legal rights of the association after the passage of time, as set forth in the various statutes.
FUNDS FOR NEIGHBORHOOD WATCH
The board of directors of our association would like to start a Neighborhood Watch group for our community. Is it appropriate for the board to spend association funds on modest refreshments to be served at neighborhood watch meetings and activities?
Yes, as long as the expenditures are reasonable. I suggest that your association create a line item in your annual budget for neighborhood watch expenditures. There are many good neighborhood watch websites on the internet that you may want to view for ideas on how to make your group successful. Top
NO RESERVE STUDY
Our homeowners association has not obtained a reserve study for more than four years. We do obtain audits each year. Can an audit report be truly accurate if we don't have a current reserve study, when the audit is completed?
No. Without a current reserve study, the balance sheet included in your audit report will reflect the numbers on your books, but it will not reflect your association's current, actual liability for future replacements. This liability may be substantial.
The California Civil Code requires associations to complete a reserve study every three years and to review it for accuracy each year. Not only are reserve studies required by law, they are excellent planning tools. Top
CLAIM AGAINST HOA FOR DEFECTS
We live in a large townhome community in Riverside County, which has extensive common areas. There are numerous construction defects associated with the common areas. Unfortunately, the law firm which represents the association has advised us that we no longer have the ability to sue the developer due to the board's failure to take action on a timely basis. Do we as individual homeowners have the right to sue the association for the purpose of forcing it to correct the construction defects?
Yes. A condominium unit owner has legal standing to bring a claim for damages against the association for the cost of remedying defects to the common area. This rule has been established by many court decisions. In accordance with California law and the provisions included in most
CC&Rs, the association is required to maintain and repair the common areas. This duty to repair and maintain the common areas exists, even though the association may be required to special assess its members to obtain the money to make the repairs. I strongly suggest you contact counsel to discuss this matter. This is a complex area of the law. Top
CHILDREN'S USE OF SPA
Can our association prohibit children from using our spa? We are concerned about safety.
Yes. You are probably safe in prohibiting children under the age of six from using the spa even with adult supervision. Children between the ages of six and thirteen must always be supervised by a responsible adult.. Top
USE OF CLUBHOUSE
Can our association adopt a rule prohibiting the use of our clubhouse for religious study? We are concerned about the possible teaching from the Qur'an.
No. As long as all other rules are complied with, members may use the clubhouse for any religious studies. Top
DON'T PURCHASE CONDOMINIUM
We were about to make an offer to purchase a condominium in Los Angeles when we learned that the board’s attempt to get restated CC&Rs failed to get approved. The existing CC&Rs were recorded in 1998 so they are totally obsolete and do not reflect the current laws. The proposed CC&Rs are in no way harmful to the membership, make many improvements, and most importantly, reflect the current laws. There is really no good reason for members of the association to vote them down other than ignorance. I am concerned and would like your opinion.
I would recommend that you purchase a condominium in another community. The type of community you have described is not a good place to invest your money. There are many condominiums on the market where the membership understands the value of modern CC&Rs. Top
DEPARTMENT OF REAL ESTATE
Does the Department of Real Estate assist with the enforcement of homeowner association bylaws and CC&Rs?
Homeowner associations are subject to the Davis-Stirling Common Interest Development Act (California Civil Code Sections
4000 et seq.), which is designed to provide homeowners with a system of self government and dispute resolution. The Department of Real Estate reviews the legal framework of all new homeowner associations to ensure compliance with the Subdivided Lands Law through the public report application process prior to the homes being offered for sale to the public. Once sales have commenced, the Department’s jurisdiction is limited to the subdivider’s obligations under the public report, which does not include intervention in association disputes. Presently, there is no state or local agency that regulates associations or their members. Top
INSPECTION OF RECORDS
Do members of the HOA have the right to inspect correspondence between the board and the association’s attorney?
No. It is absolutely privileged. Top
Can we amend our CC&Rs to prohibit pit bulls and other aggressive breeds of dogs?
Yes. Your insurance company will love you for it. Top
WAIVING RESERVE STUDY
We live in a small homeowners association in Burbank. Can our board of directors waive the legal requirement for a reserve study?
Is there ever a time when it is appropriate for the board of directors of a homeowner association to inform the membership of a serious delinquency in the payment of monthly assessments?
Yes. A board may disclose a delinquency when its collection action has reached the stage of a lawsuit. When an association becomes involved in litigation, the members are entitled to notice. The filing of a suit places the matter in the public domain and is material to the financial condition of the association. California Civil Code Section 47 protects the association as plaintiff from liability for defamation or disclosure of private information under the “litigation privilege”. Top
I own a condominium and have suffered a substantial loss due to water damage. I want to file a claim with the association's insurance carrier but our board and management company will not allow it. Am I within my rights to file a claim?
Yes. Members of an association are considered additional insureds under the association's policy and therefore have an absolute right to benefit from the association's coverage. It is your policy as much as it is the association's policy.
California Code of Regulations, Title 10 Chapter 5, Subchapter 8 states that an insurance agent is obligated to immediately transmit a notice of claim to the insurance company regardless of whether the claim is made by the association or homeowner.
Also note that in accordance with section 5300(9) of the California Civil Code, the association's board is required to distribute to all of its members a summary of its insurance policies, including but not limited to, the name of the insurer(s) within sixty days preceding the beginning of the association's fiscal year. Top
CONDOMINIUM UNIT ABOVE LEAKS
The condominium above ours has a defective shower pan that leaks into our home. Our management company insists that we must deal directly with the person above us and will offer no assistance. Their position is that the association has no power to act. Are they correct, or should they take action to force the owner with the leaking pan to repair it?
Your association has the power to act whenever common area property is being damaged by a member of the association. If the defective shower pan is allowing water to wet the internal structure of the building (common area), it may cause dry rot, electrical problems, or other damage. Thus, the association has the power to act.
If your management company and association will not provide you with assistance, you may take legal action yourself. Before filing a suit against your neighbor, your attorney should review your CC&Rs. If a claim can be brought for the enforcement of the CC&Rs, you may be entitled to recovery of legal fees. Top
AREA FLOODS AROUND TOWNHOUSE
The common area of our homeowner association floods around the area of my townhouse every time we get a strong rain. The water easily reaches a depth of six inches which causes foundation movement and resulting interior damage. The flooding and damage are due to the failure of our board of directors to maintain the existing drainage system and to enhance it where needed. Is our association legally responsible for such maintenance?
Probably. In accordance with section 1364 (a) of the California Civil Codes, “Unless other wise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, or maintaining the common areas other than exclusive use common areas***”
While you should check your CC&Rs (Covenants, Conditions and Restrictions), it is highly unlikely that they require anyone other than the association to maintain the area described. Top
Our association's management company recently informed the board that the corporate status of the association had been suspended. How does a homeowner association become suspended and what are the consequences?
Possible reasons for suspension are:
Failure to pay taxes,
Failure to file taxes,
Failure to file a Statement by Domestic nonprofit Corporation, or
Failure to file a Statement by Common Interest Development
The consequences include the loss of:
The right to bring and defend lawsuits,
The right to collect assessments,
The right to enforce contracts with contractors and vendors, and
The right to enter into contracts.
A suspended corporation (association) can be revived. When this occurs, a Notice of Revivir is provided by the Secretary of State. Top
DAMAGE TO COMMON AREAS
The board of directors of our homeowner association in Huntington Beach is permitting members of our association to grow ivy on the exterior stucco of our buildings. The stucco is common area that must be repaired by the association if the ivy damages it. Since I don't want to be responsible to pay for stucco repairs through my association dues in the future, what should I do?
First, point out to your board the specific provisions in your CC&Rs (Covenants, Conditions and Restrictions) that obligate the association to maintain the stucco. Next, point out the fact that the future stucco repairs are only one potential liability being created by permitting the ivy to grow on the stucco. When ivy or other vines cause the water-proofing quality of stucco to be destroyed, moisture can enter the buildings causing substantial interior damage, including but not limited to mold infestation. Some molds are highly toxic resulting in immune system disorders and other serious medical problems. In short, your board is assuming a big and unnecessary risk by allowing ivy or other plant materials to grow on the stucco. Top
SUSPENSION OF ASSOCIATION
How can I determine if my homeowner association has been suspended by the California Secretary of State?
First, go to the California Secretary of State website:
www.sos.ca.gov. Then click on the “Business Entities” button. Next, click on “California Business Search”. Type the exact name of your association into the “corporations search bar” and click on search. The exact name will be found in the bylaws. When the name comes up on the screen, click on it. The "status" will indicate either active or suspended. Top
What happens if our homeowners association has been suspended by the Secretary of State?
This is a serious problem. Most importantly, your association may not be able to defend itself in court or use the courts to assert its rights. There are also fines to pay and other legal consequences. You should have your association attorney or CPA resolve any deficiencies and most importantly, determine the reason for the suspension. Usually, suspensions result from the failure to file tax returns or other required forms. If your management company is solely at fault, it should pay any fines and costs. Top
Our association in Santa Monica is not incorporated. Do you recommend that we incorporate?
Yes. The cost is relatively small and incorporation will reduce the association's liability. There is a long history of case law which provides protections and procedural guidelines that do not apply to unincorporated associations. Top
BOARD REFUSES TO SUE DEVELOPER FOR DEFECTS
I live in a large condominium community in San Bernardino County with extensive common areas. The community is only two years old. While we have several serious construction defects, the board refuses to sue the developer because they want to avoid litigation and would rather special assess to repair the defects. Do I, as a member of the association, have the right to sue the developer for these defects?
Yes. As a member of a condominium association, you have standing to file suit. You should immediately consult with a construction defect attorney concerning your rights because they can be lost if you delay taking action. Top
RECUSAL OF BOARD MEMBER
When is it appropriate for a member of our homeowner association board to recuse himself?
A board member should recuse or disqualify himself or herself because of self interest, bias or prejudice. If a board member does not recuse himself or herself when required, he or she will have a conflict of interest. If a board member votes on a matter where he or she has a conflict of interest, he or she violates his or her fiduciary duty. Top
RESPONSIBILITY FOR WATER DAMAGE
Can our condominium association amend its CC&Rs to make every condominium owner responsible for interior damage caused by water intrusion?
Yes. However, unit owners may still claim that the association is responsible for such repairs due to negligence. Top
Our association just lost a case in small claims court over the issue of who is responsible for paying the association's insurance deductible. Can we amend our CC&Rs to address this subject?
Yes. It is common for associations and homeowners to argue over who has responsibility for paying the insurance deductible because many CC&Rs don't adequately address this subject. Top
Our homeowner association in Beverly Hills recently lost money on its mutual fund account. Is a board of directors allowed to invest association funds in a mutual fund?
Absolutely not. All funds must be placed in an insured account in a bank, savings and loan association or credit union. Top
Our board recently spent almost $500 on having our condominium buildings professionally decorated for Christmas. While the cost was less than $10 per unit, I would like to know if they have legal authority to use our funds this way?
Unless the CC&Rs of your association prohibit such an expenditure, the board can exercise its judgment by voting on the matter at an open meeting. The trend is for more and more homeowner associations to decorate their common areas for Christmas and other holidays such as the 4th of July. Top