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Princess-Court-300x169It’s our privilege to welcome Princess Court Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

Princess Court is a midrise condominium community located in downtown Long Beach.  Residents enjoy rooftop barbecues and city lights views.

hoa law firm Our HOA lawyers and staff look forward to working with Princess Court’s Board and management.

Home-Equity-Bankrate*Asked & Answered

Asked – We are trying to obtain a loan to conduct much needed, overdue (albeit non-life threatening) repairs and remediation work within the Association. However, the CC&Rs requires us to obtain a 75% vote by the First Mortgagees (i.e., institutional lenders) to obtain the loan because it exceeds 5% of our budgeted expenses. Firstly, why are there provisions in the CC&Rs that protect First Mortgagees (such provisions seem to create unnecessary and nuanced obstacles for the Association)? Secondly, given the urgency of the repairs, how can we expedite the process of obtaining the First Mortgagees’ approval? In other words, what can we do if they do not respond?

Answered – Most, if not all, CC&Rs (“Declaration”) dedicate a section to first mortgagees (“Lenders”) often titled “Lender Rights.” These rights are provided by the Declaration to protect the interests of the Lenders by giving same voting rights in areas that potentially impact the Lenders’ security interests in a property (e.g., single family home, condominium unit) within the homeowners’ association (“HOA”). For instance, many Declarations require Lender approval to amend “material provisions” or make “material amendments” of the Declaration and/or HOA bylaws.

Material amendments that require Lender approval generally consist of provisions affecting the following (among other things):

  • HOA insurance obligations;
  • partition/abandonment of HOA property (i.e., common area);
  • dissolution of the HOA; and
  • maintenance obligations.

All of the above have one thing in common: they impact the Lenders’ security interests (i.e., first mortgages) on the properties within the HOA. For example, if the Declaration was amended to severely limit or eliminate HOA insurance obligations, the Lenders’ security interests are at risk since the properties and/or common area elements are uninsured. Consequently, if a natural disaster occurs and destroys the community, Lenders lose their security interests and are unable to recoup the debt.

For the same reason, most Declarations, if not all, require HOA’s to obtain Lender approval (in addition to membership approval) for an HOA to pull out a loan in excess of a certain threshold (generally loans in excess of 5% of the prior fiscal year’s budgeted expense). This is because if an HOA is able to pull out a loan from a financial institution (“Institution”) without Lender approval and subsequently defaults on the loan, it puts the Lenders at risk of not being able to recoup their respective debts owed by the homeowners. For instance, should the HOA default on the loan, assessment rights are generally assigned/transferred to the Institution (via loan terms). This cripples the HOA’s ability to upkeep and maintain the community, resulting in decreased property values and ultimately hurting the Lenders’ security interests.

Understandably, many HOA’s are frustrated with the additional obstacle of obtaining Lender approval as it increases cost and time to approve certain actions. However, most Declarations will contain a provision (“Provision”) such as the following:

A Lender who receives written request to approve an amendment or action herein and does not deliver or post to the requesting party a negative response within thirty (30) days shall be deemed to have approved such request.

In most cases, this gives HOA’s an “out” because Lenders generally do not take the time to review and submit a vote. However, while most Declarations contain such a Provision, it is not uncommon to come across some that are lacking. Not to worry, this does not mean that HOA’s without the aforementioned Provision are stranded and helpless, thanks to California case law.

In Fourth La Costa Condominium Owners Association v. Barbara Seith (2008) 159 Cal.App.4th 563, the Appellate Court (affirming the Trial Court’s decision) ruled that the HOA’s ballot measure to Lenders (sent via Certified Mail, Return-Receipt Requested) that indicated their failure to return an executed ballot within thirty (30) days shall be deemed “consented” to, was an acceptable method of obtaining “written consent” from the Lenders. (Seith, at 573.) In particular, the Court found that the Lenders’ “written consent” was effectively obtained by the Lenders’ signatures on the return-receipt coupled with the “30-day verbiage,” indicating Lenders’ silence as consent.

California HOA lawyers While most HOA Declarations will have the relevant Provision, HOA’s that do not and are seeking to make a certain amendment or perform a certain action requiring Lender approval may simply send out ballots to Lenders (1) via Certified Mail, Return-Receipt Requested, and (2) provide the 30-day verbiage to obtain “written consent.” Furthermore, HOA’s may seek to amend the Declaration to eliminate the Lender approval requirement altogether; this allows HOA’s to make certain actions/amendments in the future without expending resources in obtaining Lender approval. 

-Blog post authored by TLG Attorney, Andrew M. Jun, Esq.

Perch-300x169It’s our privilege to welcome Perch Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

Perch by Trumark Homes is a brand new condominium community located in Chula Vista.  Residents enjoy rooftop decks, nearby shops, restaurants and easy BART access.

hoa law firm Our HOA lawyers and staff look forward to working with Perch’s Board and management.

Vista-Mar-Collection-300x169It’s our privilege to welcome Vista Mar Collection Community Corporation to Tinnelly Law Group’s growing family of HOA clients.

Vista Mar Collection is a community of solar-powered condominiums in Chula Vista.  Residents enjoy a resort-inspired pool, fire pit, and views of the San Diego Bay.

hoa law firm Our HOA lawyers and staff look forward to working with Vista Mar Collection’s Board and management.

contractorportal_12columnOur industry depends on a close network of skilled industry professionals who are dependable and responsive.  Emergencies are common, particularly in condominium developments where breaks in shared or common water lines can lead to disaster.  Quick action by association vendors can extinguish the root cause of the emergency and potentially reduce, if not eliminate, thousands of dollars of damage.  Ideally, the vendor’s scope of work should be limited to those actions only; however, vendors occasionally wade into dangerous waters when they (albeit innocently) strike up conversations with residents about damage responsibility.  Do the following real-life examples sound familiar to you?

A plumbing invoice states:

“Service call.  Performed leak detection.  Source of leak found to be Owner responsibility.  Water line is leaking and needs to be replaced.”

A resident says the following to the association’s community manager, “Your roofer told me that the ceiling leak is the HOA’s responsibility.  Why shouldn’t I believe him?  Wasn’t he hired by the HOA?”

Community managers and board members routinely rely upon trained vendors to provide competent services in one of two (2) contexts: preventative maintenance and reactionary repairs.  As to the latter, reactionary repairs, which are usually of an emergent nature, may involve vendor entry into a separate interest and the presence of a concerned resident.  In that circumstance, residents have been known to question the vendor regarding loss responsibility.   Cornered, the vendor might feel obligated to provide an answer.  Vendor communication in that regard is rarely beneficial to the association – especially in those infrequent situations where the resident seeks to manipulate the dialogue to develop a potential legal claim.

When working at a residence, vendors should try to limit resident dialogue except as necessary to perform the work that they were hired to perform.  Why? Vendor opinions regarding fault or responsibility may not be correct.  Responsibility likely depends upon a review of the association’s governing documents, among other things.  Most vendors are not trained to analyze the responsibility allocations set forth in the association’s declaration; indeed, a responsibility allocation in one context may not necessarily be the same in another situation because governing documents usually differ.  Second, vendor statements can create public relations challenges for management and board members when they try to explain to an upset resident why the vendor’s in-field statements are not accurate.  Most significantly, vendor representations could potentially bind the association under a legal theory called ostensible agency.

Ostensible agency occurs when the principal (i.e. the HOA) intentionally, or by want of ordinary care, causes a third person (i.e. the resident) to believe another (i.e. the vendor) to be his agent who is not really employed by him (Civil Code Section 2300).  Under California law, a resident can argue that the vendor is an [ostensible] agent of the association by proving that the association carelessly created (by want of ordinary care) the impression that the vendor was an agent or employee of the association; and that the resident was harmed because he or she reasonably relied on his or belief (California Civil Jury Instruction 3709).

How do management professionals and board members avoid the possibility of binding statements by an unassuming vendor?  Exercising ordinary care by vendor education at the outset of the vendor relationship.  If possible, vendor agreements should include contract language which prohibits vendor communication (orally and in writing) with residents regarding responsibility after a loss.  Before repair work begins, vendor employees should be told that their role is limited to stopping the problem and, if warranted, developing a repair plan.  They should be reminded that they have been hired by the association, and as such, are obligated to report their factual findings only to the association; vendor invoices should not include responsibility or fault determinations.  Perhaps most importantly, vendors should be forewarned about the possibility of resident confrontation – and instructed to politely tell residents that their responsibility inquiries should be directed to management or the board for review.

California HOA lawyers Existing vendor and association relationships can be strengthened by a mutual understanding of the vendor’s expectations when interfacing with a resident.  It is critical that vendors and HOA leaders stay aligned so that potentially inaccurate in-field responsibility determinations do not become the basis of a future legal action involving the association.

-Blog post authored by TLG Attorney, Kumar S. Raja, Esq.

16106042-10158060050850114-2869680242197711700-n-1484846578*New Legislation

On July 30, 2019, SB 652 was signed into law by Governor Gavin Newsome in response to several incidents in which a homeowner’s association (HOA) asked a resident to remove a mezuzah from their unit’s entry door or doorframe.  A mezuzah is a small scroll that is affixed to the doorframe of Jewish homes to fulfill the mitzvah (Biblical commandment).  For observant Jews, this is not a choice, but rather, a religious duty.  Attempts to bar them from fulfilling this duty violated their religious freedom, argued Jewish residents.

In Connecticut, an HOA threatened to fine a resident fifty ($50) dollars if she did not remove the mezuzah affixed to her doorframe.  The HOA permitted religious displays (e.g. Christmas wreaths) on doors, but restricted any adornments from being placed on exterior walls.  The HOA argued that doorframes are considered exterior walls.

In Florida, an HOA ordered a resident to remove a mezuzah, citing its bylaws prohibiting owners and occupants from attaching, hanging, affixing or displaying anything on the exterior walls, doors, balconies, railings and windows of the building.

In New York, an HOA fined a resident fifty ($50) dollars for affixing a mezuzah to her doorframe shortly after she moved in.  The HOA cited its bylaws prohibiting residents from altering the exterior of their home without approval from the Association.  The rule included affixing of signs, advertisements or statuary.

While there were only a handful of instances nationwide in which a resident was asked to remove a mezuzah, the bill was designed to have a broader scope in protecting any displays of religious items on doors and doorframes so long as the display reflects “sincerely held religious beliefs.”  Specifically, SB 652 prohibits a “property owner” (defined to mean an HOA, an HOA board, or landlord) from adopting or enforcing any rule that prohibits the display of one or more “religious items” on an entry door or doorframe.  The bill defines “religious item” to mean any item displayed “because of sincerely held religious beliefs.”  The bill also identifies reasonable exceptions, such as allowing an HOA or landlord to prohibit the display of anything that threatens public health or safety, violates existing law, contains obscenities, hinders the opening or closing of any entry door, or is larger than 36” by 12” inches.  Also, an HOA may require a separate interest owner to remove a religious item as necessary to perform maintenance on a door or doorframe.

Prior to SB 562, federal and state law provided some protections against religious discrimination in housing, but the author of the bill believed that these protections were not sufficient enough to protect the display of religious items.   For example, the federal Fair Housing Act (FHA) prohibits housing discrimination on the basis of religion.  Likewise, the state Fair Employment and Housing Act (FEHA) makes it unlawful for the owner of any housing accommodation to discriminate against or harass any person because of the religion of that person. (Gov. Code § 12955.)  The Davis-Stirling Act, which regulates homeowner’s associations and common interest developments, contains a provision that prohibits the HOA governing documents from prohibiting the posting or displaying of noncommercial signs, posters, flags, banners, on or in an owner’s separate interest, subject to certain exceptions.  (Civil Code § 4710.)  To the extent that a “religious item” is a sign, poster, flag, or banner, one could argue that existing law already prohibits an HOA from adopting or enforcing any rule that bans the display of religious items.  But arguably there is a question of whether a mezuzah or cross hung from a door is a “sign.”  SB 562 eliminates that ambiguity by protecting any “item” which is displayed because of a sincere religious belief, whether or not it is a “sign.”

SB 652, which takes effect January 1, 2020, will likely conflict with many HOA policies, which have aesthetic and architectural rules that bar hanging anything on an entry doorframe.  According to the author of the bill, such restrictions from HOAs leave the affected people unable to freely practice their religious obligations and in some instances are forced to leave their residence and seek another place to live.  By passing this bill, California’s legislature has followed the recent trend in caselaw suggesting that the religious freedom of individuals should take precedence over the communal interests of homeowner’s associations.

California HOA lawyers Notwithstanding, it is important to note that the right afforded to HOA members and tenants in this bill is extremely limited, only applying to a “religious item” and, even then, only when the item is posted on an entry door or doorframe.  For instance, the bill would not provide protection to an owner who wanted to post a similarly-sized religious item in a window, or a door other than an “entry” door.   

-Blog post authored by TLG Attorney, Reuben D. Kim, Esq.

Bay-Collection-300x169It’s our privilege to welcome The Bay Collection Homeowners Association, Inc. to Tinnelly Law Group’s growing family of HOA clients.

The Bay Collection is a community of single family homes in Carlsbad.  Residents enjoy large lots, ocean and sunset views, and close proximity to the beach.

hoa law firm Our HOA lawyers and staff look forward to working with The Bay Collection’s Board and management.

Bluffs-at-Belmont-300x169It’s our privilege to welcome The Bluffs at Belmont Association to Tinnelly Law Group’s growing family of HOA clients.

The Bluffs at Belmont is a highly desirable condominium community located in the North Hills of Orange.  Residents enjoy a community pool, spa, barbecue area, and close access to hiking and biking trails.

hoa law firm Our HOA lawyers and staff look forward to working with The Bluffs’ Board and management.

residential-packageAs security technology becomes less expensive and more accessible to average consumers, homeowners are provided with an exponential increase in available options for exterior security devices. A cursory Amazon search reveals hundreds of such devices including motion sensor lights and home camera offerings that can be accessed remotely from the convenience of one’s smart phone. Given the benefits and low cost, many homeowners have installed security systems in and around their residences to mitigate the risk of theft, property damage, and other criminal activity. As purchases and installations of these devices increase, associations and architectural committees are increasingly confronted with the conflict between the owners’ interest in safety and security, and the association’s interest in uniform aesthetics and neighborhood privacy.

Association Regulation and Liability

Most common interest developments are structured and organized where the association maintains the residence/building exteriors and has the ability to regulate improvements attached and/or integrally related to them. This authority generally includes the ability to approve or deny owner applications to install exterior security devices. Some associations with strict architectural approval procedures may be inclined to significantly limit or outright reject owner installed exterior security devices. However, this approach can expose an association to potential liability, especially where there is a demonstrated need for such devices.

In the case of Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, the California Supreme Court held that a homeowners association stands in relation to owners as a landlord and can be liable for breaches of traditional landlord duties such as failing to address unreasonable risks of criminal activity. The Court found that there was ample evidence to place the association on notice of an unreasonable risk to the plaintiff’s safety, and the failure to act or to allow the owner a self-help remedy subjected the association to liability.

In light of the holding in Frances T., associations should avoid outright prohibitions on owner installed exterior security devices. Instead, associations should develop and implement a comprehensive policy that governs the application, approval, and installation process for such devices. Such a policy allows the association to control the aesthetic characteristics, installation locations, and fields of view (for cameras) necessary to preserve the aesthetic appearance of the community, while preventing the devices from intruding into the seclusion of other residences and infringing privacy rights.

Exterior Security Device Policy

When developing an exterior security device policy, one of the primary considerations should be to limit the risk of invading the privacy of other residences. Generally, there is no recognized right of privacy in common areas. However, California acknowledges that privacy interests can be infringed through devices that provide a technological intrusion from otherwise lawful vantage points. Civil Code section 1708.8(b) states in pertinent part:

A person is liable for constructive invasion of privacy when the person attempts to capture, in a manner that is offensive to a reasonable person, any type of visual image . . . or other physical impression of the plaintiff engaging in a private, personal, or familial activity, through the use of any device, regardless of whether there is a physical trespass, if this image . . . or other physical impression could not have been achieved without a trespass unless the device was used.

Under the guidance of the foregoing prohibition against such privacy infringement, any approval of exterior security devices should be focused on ensuring that the primary purpose of the device is to advance the security interests of the applicant owner, and the device does not present an unreasonable risk of privacy invasion to other residences.

To limit the risk of privacy intrusions, a security device policy should contemplate the following requirements:

    1. An installation plot plan/map should be submitted by the applicant to indicate the intended installation locations and their corresponding fields of view for any visual recording devices such as cameras.
    2. Such fields of view should not be permitted to observe neighboring residences, exclusive use, or common areas. Depending on the development/community layout, some installations may not be possible without capturing some of the foregoing areas (such as a doorbell camera that points towards common area). The association body tasked with the review and approval of security device installations should ensure that in such cases, the primary purpose is to advance the security interests of the applicant and that any common area field of view is merely incidental and as limited as possible.
    3. Cameras must be “fixed view”, without panning capabilities.
    4. Finally, any approved installations should be revocable if the device violates the privacy of neighboring residences so as to constitute a nuisance.
California HOA lawyers Given the limitless permutations of common interest developments and their various layouts, there is no one size fits all approach to resolving the complex issues surrounding owner installation of exterior security devices. As such, consult with legal counsel to develop workable solutions to advance the association’s interests, while preserving the owners’ interest in security and privacy.

-Blog post authored by TLG Attorney, Tim D. Klubnikin, Esq.

Rocky-Point-300x169It’s our privilege to welcome Rocky Point Community Association – Nohl Ranch to Tinnelly Law Group’s growing family of HOA clients.

Rocky Point is a collection of single family homes in the Nohl Ranch area of Anaheim Hills.  Residents enjoy large lots and scenic views of the city lights, hills, and mountains surrounding Orange County.

hoa law firm Our HOA lawyers and staff look forward to working with Rocky Point’s Board and management.