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hoa-baloncy-inspection-300x149*New Legislation

In 2015, a wooden balcony collapsed at the Library Gardens apartment complex located in the City of Berkeley, near the University of California, Berkeley campus. The balcony collapse killed six young adults and injured seven others, and investigations later revealed the balcony had decayed wooden joists caused by wood dry rot left untreated because of poor building maintenance.

In response, the California Legislature passed Senate Bill 326 (“SB 326”) which took effect January 1, 2020. SB 326 added new Civil Code section 5551 to require HOAs having three (3) or more multifamily dwelling units to conduct mandatory inspections for “exterior elevated elements,” such as decks, balconies, stairways and walkways, that are supported by wood or wood-based products.  The inspections are intended to determine whether the exterior elevated elements and their associated waterproofing components are in a generally safe condition and performing in accordance with applicable standards.  The inspections are required every nine (9) years, with the deadline for the first inspection rapidly approaching: January 1, 2025. 

In its initial form, Section 5551 allowed only licensed structural engineers or architects to perform these inspections. Assembly Bill 2114 (“AB 2114“) was proposed to add licensed civil engineers to that list of permitted inspectors.  According to the AB 2114’s author, “licensed civil engineers are allowed to practice structural engineering by virtue of that license as long as structural engineering is within the licensee’s area of expertise. Because the deadline for completing the first round of inspections of these elements is January 1, 2025, [AB 2114] has an urgency clause so that HOAs who still have yet to complete their inspections may take advantage of the expanded inspector list before the compliance deadline.”

AB 2114 was passed by the Legislature and approved by the Governor on July 15, 2024. It takes effect immediately as an urgency statute.

California HOA lawyers Condominium HOAs that have still not performed these inspections should take immediate action to get the ball rolling and ensure they comply with the January 1, 2025 deadline. We have already observed significant price increases for these inspections as the deadline draws closer, due to increasing demand. The same is true for construction costs in situations where the inspection reveals the need to perform immediate repairs due to safety concerns.

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Knocking-on-Door

Last time we checked, the mortality rate was 100%. This means that owners of real property within homeowners associations (“HOA’s” or “Associations”) will inevitably pass away at some point. This leaves many questions for Boards and management about how to navigate issues surrounding the separate interest still titled in the name of the deceased.

Enforcement of Governing Documents Against Deceased Owners

For obvious reasons, dead owners usually do not maintain their properties in good condition and are often ineffective landlords if their separate interest is occupied by a tenant. Management and Boards may not even know that an owner has passed away such that they continue to send violation letters and fine these deceased owners to no avail.

If an owner is ignoring fines and other enforcement action combined with not paying monthly assessments or maintaining a property, it is wise to investigate whether the owner is still living. This is especially important because there is a one-year statute of limitation from the date of an owner’s death to pursue enforcement or collection-related action per Cal. Code Civ. Proc. § 366.2. This strict deadline applies even if the HOA had no knowledge the owner was deceased. Law firms can assist Associations with public records searches to detect an open probate or a death certificate.

Court Order or Consent Required to Enter Onto Property

Although many CC&Rs have provisions allowing an HOA and its agents to enter onto a property upon prior notice to cure certain compliance issues, it is recommended for the protection of the HOA and its vendors that a court order first be obtained before entering property without advance express consent. This is the case even if the HOA believes the property is unoccupied because California case law holds that a contractual right to self-help is not a defense to a claim for forcible entry. (Glass v. Najafi (2000) 78 Cal.App.4th 45, 48–49, 92; See also Daluiso v. Boone (1969) 71 Cal.2d 484, 493, “Regardless of who has the right to possession, orderly procedure and preservation of the peace require that the actual possession shall not be disturbed except by legal process.”)

Collection Methods Against a Deceased Owner

Since unpaid regular and special assessments may attach to the property, the lien-related collection process is similar for living and deceased owners, except that with a deceased owner, you are dealing with the administrator or personal representative of the decedent’s estate instead of with the living owner.

If an Association wants to sue a deceased owner or make a claim against their estate for monies owed as a creditor, it must pursue these remedies against the deceased owner’s estate.  Suing an estate of a decedent or making a claim for monies owed against them requires an open probate action in superior court. The problem is that sometimes, an owner passes away with no will or next of kin in which case a probate of the owner’s estate may not be opened.

In such cases, management may contact the public administrator of the county in which the decedent’s property is located and request that they open a probate. If the public administrator fails to do so or drags their feet, the HOA can open a probate action as a creditor to make sure the probate case is opened and the claim for monies owed is timely submitted.

Once a probate is open, a creditor has only four months from the date the executor or administrator is appointed to file a claim in probate. (Cal. Code Civ. Proc. § 377.40; Prob. Code §§9100 et seq.). An HOA should be mindful that the one-year limit to file a claim against a deceased owner is not extended by this four-month deadline.

Thankfully, an HOA’s ability to foreclose on a secured lien via the nonjudicial foreclosure process set forth in Cal. Civ. Code §§ 2924–2924h is not affected by the aforementioned one-year statute of limitations to seek money judgments, injunctive relief, and/or judicial foreclosure against a deceased person. This is because such debt is secured by the property and is not attached to the deceased person.

Evicting Tenants

Deceased owners can leave occupants behind who may not be compliant with the HOA’s governing documents or who may create nuisance conditions as is frequently the case with squatters. The law provides an owner with the standing to evict tenants via an unlawful detainer action. When the owner is deceased, the HOA can and should call the estate (through its administrator) to a hearing and fine it for violations of the occupants. The administrator of the estate has the authority to gain tenant compliance via eviction or otherwise. Fining the estate can be an effective way to gain the estate’s compliance. Some governing documents even have provisions assigning the standing to evict tenants who violate the governing documents to the HOA via an unlawful detainer action. These provisions usually allow the HOA to charge the owner (or their estate) for the fees and costs incurred to evict non-compliant tenants if the owner or their estate fails to act.

Biohazard Cleanup

It is a macabre reality that occupants can and do pass away in the property. If the occupant lived alone and had no close friends or family, it can be weeks until the death is discovered. An HOA may first learn about such an occurrence via a report of unpleasant odors or vectors emanating from the property. If a dead occupant is suspected, law enforcement should be called. Once the body has been transported by the coroner, the biological materials left behind can pose a risk to the health and safety of the community’s residents such that the Association may consider calling in a biohazard clean up vendor to handle the situation. Depending on the language in the governing documents, the cost of the cleanup may become a charge against the deceased owner’s estate provided the proper processes are followed pursuant to the HOA’s enforcement policy and the laws applicable to probate claims.

California HOA lawyers Collection and enforcement proceedings against deceased owners in California is a complex area of law such that HOA’s should contact their legal counsel to ensure proper compliance and to avoid missing important statutory deadlines.

 

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New-Blog-Post-5-e1697647880758-300x223*New Legislation

On September 22, 2023, Governor Newsom signed AB 648 into law to finally permit homeowners associations (“HOAs”) throughout California to conduct board meetings entirely be teleconference (aka “virtual meetings“).  While existing law permits an HOA to conduct teleconference meetings, HOAs are still required to specify a “physical location” for the meeting at which members or directors may physically attend the meeting if they desired to do so. The only exceptions to this physical location requirement are if the meeting is held in solely in executive session, or if the meeting is held during a government declared state of emergency under Civil Code section 5450.

Effective January 1, 2024, AB 648 will add another exception to the physical location requirement by adding new Civil Code section 4926 to the Davis-Stirling Act.  AB 648’s enactment is based upon the Legislature’s findings that:

“Virtual homeowner association meetings improve and enhance homeowner members’ ability to participate and comment on business-related matters of the association and their community” and “enable greater access for all members of the association.”

Under Section 4926, an HOA will be permitted to conduct its open board meetings entirely by teleconference (without a physical location), provided that all the following requirements are satisfied:

Notice Requirements – The notice for each meeting conducted under Section 4926 must include, in addition to other required content for meeting notices, all the following:

      1. Clear technical instructions on how to participate by teleconference;
      2. The telephone number and e-mail address of a person who can provide technical assistance with the teleconference process, both before and during the meeting; and
      3. A reminder that a member may request individual delivery of meeting notices, with instructions how to do so.

Equal Participation Requirement – Every director and member must have the same ability to participate in the meeting that would exist if the meeting were held in person.

Roll Call Vote Requirement –Any vote of the directors at a Section 4926 meeting must be conducted by a roll call vote.

Option to Participate by Telephone Requirement – Any vote of the directors at a Section 4926 meeting must be conducted by a roll call vote.

It is important to note that AB 648 did not have any impact on existing law governing HOA meetings at which ballots are counted and tabulated pursuant to Civil Code section 5120. If an HOA wants to conduct a ballot counting meeting via teleconference, it must still specify a physical location as discussed above.

California HOA lawyers AB 648’s passage is welcome news to HOA board members and industry professionals that appreciate the convenience and efficiencies of conducting board meetings entirely by teleconference, utilizing popular tools such as Zoom and Go2Meeting.

 

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New-Newsletter-Template-300x167In case you missed it, Issue # 59 of our ‘Community Association Update’ newsletter is available now!

Topics covered in this issue include:

  • Email Discussions Between Board Members are not “Meetings”
  • Are Your HOA Volunteers Covered for Injuries?
  • What if Our HOA’s Insurance is Canceled Due to Risk of Wildfires?
  • Court Steps in to Force Recalled Board to Step Down

A link to the newsletter is here.

Need to be added to our mailing list? Click here to sign up. Links to previous editions of our newsletter can be found here.

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hoa-email-meeting-300x207*New Case Law

The Open Meeting Act (“OMA”) contains various provisions regulating how the board of directors of a homeowners association (“HOA”) may meet and conduct business. One of the most common questions we receive pertains to whether email exchanges between board members on items of HOA business constitute a “board meeting” under the OMA, even if those emails are merely for discussion purposes without any vote (or “action”) being taken on the item.

Fortunately, we finally have an answer to this question from the California Court of Appeals via its ruling in LSNU #1, LLC v. Alta Del Mar Coastal Collection Community Association (“Alta Del Mar”) that will have a significant, immediate and beneficial impact on HOA governance throughout California. That answer is no. Email exchanges/communications between HOA board members that merely discuss items of HOA business are not within the statutory definition of a “board meeting” under the OMA and are therefore lawful.

In Alta Del Mar, the HOA board was discussing, over email, two items of business that are relatively routine for HOAs: whether to approve a homeowner’s landscaping plans and whether to fine another homeowner. The plaintiff homeowner in Alta Del Mar claimed that this email discussion was considered a board meeting and thus violated the OMA by not affording the homeowner notice and an opportunity to be heard.

The Court rejected this argument with reference to two central provisions of the OMA upon which the homeowner relied in making their argument: Civil Code section 4090 (defining what constitutes a “board meeting”) and Civil Code section 4910 (prohibiting a board from “acting” on items of business outside of a board meeting).  The Court’s interpretation of these provisions is summarized below:

  • Email exchanges between board members are not a “gathering” of the board, and therefore do not constitute a “board meeting”.

“By sending e-mails to one another through cyberspace, often hours or days apart and from different homes and offices, the Association’s directors did not simultaneously gather in one location to transact board business, and therefore they did not conduct a “board meeting” within the meaning of [the OMA].”

  • The OMA prohibits the board from “acting on” items of business outside of a board meeting, not from “discussing” those items via email outside of a meeting.

“By discussing items of Association business in e-mails… the directors did nothing contrary to the purpose of the OMA, because they took no action on those items in the e-mails. Although the OMA prohibits the board from acting on items of Association business outside a board meeting…it does not prohibit the board from discussing the items outside a meeting.” 

California HOA lawyers Many HOA boards find it difficult to reserve all discussion on items of HOA business solely for the board’s regularly scheduled meetings. This is due to a variety of common factors, such as the large amount of business that must be discussed/acted upon at any given meeting, the intervals at which regularly scheduled Board meetings typically take place (monthly), and the need to share information regarding unforeseen or exigent issues that may arise between Board meetings.  The Court’s holding in Alta Del Mar now confirms the ability of an HOA’s board members to freely email with one another to discuss items of business facing their community. This will allow for HOA boards to be in a better position to take appropriate and timely action on those items during their actual meetings.  

 

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Marina-Pacifica-300x149It’s our privilege to welcome Marina Pacifica Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

Located in the heart of the Long Beach Marina, Marina Pacifica is on 18 acres with over 550 units featuring 6 pools, 6 spas, 3 lagoons, a gym, clubhouse and 24/7 security. And it doesn’t end there – in addition, boat slips are located on site along with laundry facilities, underground parking garage and gated bridge access to shopping at the Marina Pacifica Mall, making this community one-of-a-kind!

California HOA lawyers Our HOA lawyers and staff look forward to working with Marina Pacifica’s Board and management team.

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hoa-workers-comp-insurance-300x178Homeowners Associations (“HOAs”) rely on the efforts of their volunteer directors, officers, and committee members to perform all manner of tasks needed in assisting the HOA with its operations. Participation by these HOA volunteers in common tasks such as site inspections, including slope inspections, landscape committee walk-throughs, and even meeting room set up and take down can all create a risk of personal injury to the volunteer. If such injury were to occur, would the volunteer be covered by the HOA’s insurance policies?

The answer is yes with respect to an HOA’s worker’s compensation policy, but only if the HOA affirmatively “opts-in” to such coverage by adoption of a written declaration. California Labor Code section 3363.6(a) provides that: “…a person who performs voluntary service without pay for a private, nonprofit organization, as designated and authorized by the board of directors of the organization, shall, when the board directors of the organization, in its sole discretion, so declares in writing, and prior to the injury, shall be deemed an employee of the organization” for purposes of being covered under a policy or workers compensation insurance. Absent such a written declaration, injured volunteers will likely be excluded from the definition of an “employee” and not covered under the workers compensation and insurance laws. (Labor Code section 3352(a)(9).).

In the course of our experience representing HOAs and community associations throughout California, we are finding that many HOA Boards form committees of volunteer homeowners without making this written declaration.  To make matters worse, they often fail to even memorialize the formation of the committee and the persons to serve as its members. This is problematic. At a minimum, Boards should memorialize the creation of the committee and the names of its members within the minutes of the Board meeting in which the Board passed the motion to form the committee.

The better approach is for the Board to pass a written resolution that memorializes (a) the Board’s creation of the committee, (b) the Board’s appointment of named individual volunteers to serve as members of that committee, and (c) the Board’s adoption of a formal charter for the committee that defines the scope of authority and responsibility vested in the committee’s members. This resolution and charter should be drafted by the HOA’s lawyer and made part of the Board’s meeting minutes.  As the composition of the committee changes (i.e., as different people are appointed or removed from the committee by the Board), the Board may simply document those changes in its meeting minutes without having to pass a new resolution or amend the charter.

California HOA lawyers If your HOA Board has not made a written declaration to “opt-in” to workers compensation coverage for volunteers, the HOA may be exposed to direct claims of personal injury. Adding so called “participant” or” volunteer” accident insurance coverage to the HOA’s general liability policy may be another option but, in any event, Boards should confirm adequate insurance coverage for their volunteers with their HOA’s insurance agent, and verify precisely what their insurance carrier requires in terms of a written declaration for the purposes discussed above.

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fire-gb0de99a85_1920If your homeowners association (“HOA”) is located in a high-risk fire area, what can your Board of Directors do if the current master policy of fire and casualty insurance on your condominium or townhome buildings is not renewed? Due to the massive wildfires that have swept California over the past two years, many insurance companies (and their re-insurance partners) are reassessing their willingness to underwrite fire and casualty insurance in the state.  Those carriers that are willing to write coverage are limiting their risk exposure by greatly reducing the coverage limits available for purchase. To compound this problem, the premiums being quoted are 5-10 times the amount of the prior year’s premium for much less coverage.

In order to protect the HOA and the members’ investment in their homes, members should contact their own insurance broker and inquire into purchase of an HO-3 policy that will cover the portion of the condominium (or townhome) building containing that member’s unit. An alternative insurance product, combining “Building Property” coverage with the member’s HO-6 unit policy, may also be available. Members should also consider adding “Loss Assessment” coverage to their current unit policy to offset exposure to future special assessments.

Many HOAs are finding that they are unable to purchase “full replacement” coverage for the attached common buildings at any price. These HOAs are electing to purchase whatever reduced coverage is available and affordable and passing the increased premium costs back to the members as a special assessment. With the current lack of any legislative solution from Sacramento, combining reduced coverage under the HOA’s master policy with individual purchase of an HO-3 policy may represent the only available option for members to protect their investment for the foreseeable future.

HOAs facing this problem should carefully consult with their insurance broker and legal counsel to assure that the Board is acting reasonably and obtaining the maximum amount of fire and casualty insurance coverage that is available and affordable. Boards of Directors should also consider whether any amendments to the HOA’s governing documents are needed to limit the risk of claims against the HOA for underinsuring the project and requiring members to obtain additional building property coverage on their individual unit policy.

California HOA lawyers Non-renewal of an HOA’s master casualty and liability insurance policy can have disastrous effects on the HOA’s finances and the value of the member’s separate interests. This is why HOA’s should immediately contact their legal counsel in the event they receive a notice of non-renewal.

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New-Blog-Post-1-300x170*New Case Law

The Court of Appeals recently ruled in Lake Lindero Homeowners Association, Inc. v. Barone that Corporations Code section 7616 may be used to validate a recall election removing the former board of a homeowners association (“HOA”), in addition to validating the election of a new HOA board.

In this case, the board was properly served with a recall petition for the entire sitting board.  The HOA held an election meeting on December 19, 2019; however, quorum was not present. In compliance with the HOA’s bylaws, a majority of the members at the December 19, 2019 election meeting voted to adjourn the meeting to December 23, 2019, wherein only 25% of the votes of the membership would be required to constitute a quorum, as opposed to the usual 50%.

Thereafter, at the election meeting on December 23, 2019, the necessary quorum of 25% of the membership was present. The recall of the entire board passed, and a new board was elected and certified.

In January of 2020, Plaintiffs filed a complaint seeking a declaration under Corporations Code section 7616 validating the December 2019 recall election and the election of the new board. Plaintiff’s action was necessitated by Defendant Barone, and other prior board members, refusal to recognize the validity of the December 2019 recall. The trial court granted Plaintiff’s request for declaratory relief and validated the December 2019 recall. Defendant Barone appealed.

Defendant argued on appeal that Corporations Code section 7616 pertained to validating elections only and did not authorize Plaintiff’s action or the trial court to validate a recall election. The Court of Appeals disagreed with Defendant Barone’s narrow reading of the statute.

First, the Court found the statutory text of Corporations Code section 7616 to evidence a clear legislative intent providing trial courts with broad authority to determine the validity of board elections.  While the Court acknowledged recall elections are not expressly referenced in the code section, the Court looked to subdivision (d) of Corporations Code section 7616 to support its holding, which authorizes the Court to “…direct any such other relief as may be just and proper.”

The Court concluded Corporations Code section 7616(d) was broad enough to serve as a “procedural vehicle” to clarify Plaintiffs recall rights under the HOA’s bylaws, even though the statute does not expressly mention recall elections. The Court reasoned that it was “just and proper” to enter an order confirming the recall, as it could not determine the validity of the election of the new board without first addressing the recall. The Court further concluded that having validly confirmed the recall and subsequent election of the HOA’s new board, the same code section authorized the trial court to enter an order confirming Defendant Barone had no authority to act on the HOA’s behalf.

California HOA lawyers This case is an unfortunate example of an HOA board of directors refusing to recognize the will of its membership in exercising their rights to control the leadership of their community. HOA boards which are unclear about the procedural aspects of their board elections should consult with a qualified HOA lawyer for guidance. 

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New-Newsletter-Template-300x167In case you missed it, Issue # 58 of our ‘Community Association Update’ newsletter is available now!

Topics covered in this issue include:

  • Paying for Increases in your HOA’s Insurance Premiums
  • Addressing Requests for Installation of Solar Panels on Shared Roofs
  • What Happens When a Delinquent Homeowner Dies?
  • Evidence of Violations is Necessary
  • How to Direct Questions from Potential Homebuyers

A link to the newsletter is here.

Need to be added to our mailing list? Click here to sign up. Links to previous editions of our newsletter can be found here.

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