Architectural Control

SB 1016 Signed! New Law Expands Rights to Use EV Charging Stations in HOAs

Published on: September 14, 2018 | by Steven J. Tinnelly, Esq.

**New Legislation

For the third time in past seven (7) years, the California Legislature has modified the laws governing the installation and use of Electric Vehicle (EV) charging stations within homeowners associations (“HOAs”). The first time was in 2011 when the Legislature enacted a new statute (now contained at Civil Code Section 4745) designed to nullify any provision in a HOA’s governing documents that prohibited homeowners from installing and using EV charging stations. In the following year, the Legislature then amended the law to give HOAs some regulatory authority in this area. That amendment served two (2) essential purposes: (1) it gave HOAs the ability to impose “reasonable restrictions” on the installation and use of EV charging stations, and (2) it clarified how the statute is primarily intended to apply to EV charging stations to be installed in a homeowner’s exclusive use/dedicated parking space.

This year (2018), SB 1016 was proposed by the Legislature. It makes some significant changes to Section 4745, and also adds new Section 4745.1 to the Civil Code to address EV Charging Station dedicated “TOU” (time of use) meters. Today, September 14, 2018, the Governor signed SB 1016 and its changes to the law will take effect January 1, 2019. The following information summarizes what HOAs should be aware of in the wake of SB 1016’s passage.

Changes to Existing Section 4745, effective January 1, 2019:

Section 4745(a) was amended to expand the scope of rights homeowners have to install EV charging stations. Homeowners will now have the right to install EV charging stations in their “units,” not simply their designated, exclusive use common area parking spaces. Some condominium developments are structured such that each “unit” is comprised of a residential element and a garage element. Other developments actually include spaces within the deeds to the individual units. Thus, regardless of whether a homeowner’s designated parking space is within their unit’s garage, or within a portion of common area, the provisions of Section 4745 apply.
Section 4745(f)(1)(D) was amended to clarify that the homeowner has to pay for not only the electricity usage associated with the charging station, but also for the costs of installation of the station.
Section 4745(f)(3) was amended to relax the insurance requirements of homeowners who install EV charging stations. The $1,000,000 homeowner liability coverage policy requirement has now been replaced with a requirement for the homeowner to simply have “a liability coverage policy” without any specific amount listed. The requirement for the HOA to be named as an additional insured under the policy has also been deleted. **However, somehow the requirement under 4745(f)(1)(C) for the homeowner to, as a condition of approval, agree to provide a certificate of insurance which names the HOA as an additional insured has not been changed. In other words, the law now contradicts itself. Another “head-scratcher” from the California Legislature that should prompt a clean-up bill next year (we hope).
Section 4745(k) has been amended in a way that materially modifies the remedies available in enforcing Section 4745’s requirements. Prior to SB 1016, Section 4745(k) allowed for a prevailing plaintiff in an action to enforce Section 4745 to recover its attorney’s fees. The new law will change this language to allow recovery of attorney’s fees only when “a homeowner requesting to have an [EV] charging station installed and seeking to enforce compliance with [Section 4745]” is the prevailing plaintiff. In other words, regardless of whether the HOA is the plaintiff or the defendant, it will never be able to recover attorney’s fees in a lawsuit to enforce Section 4745 even where the HOA wins! This is the latest example of the Legislature’s willingness to modify the fee-shifting provisions of the Davis-Stirling Act to afford homeowners an advantage over their HOAs.

New Section 4745.1, effective January 1, 2019:

As referenced above, new Section 4745.1 will be added to the Civil Code effective January 1, 2019. It basically mirrors the provisions of Section 4745 (pertaining to EV Charging Station installations) in order to extend them to EV-dedicated “TOU” (time of use) meters. An EV-dedicated TOU meter is an electric meter supplied and installed by an electric utility, that is (a) separate from, and in addition to, any other electric meter, (b) is devoted exclusively to the charging of EVs, and (c) that tracks the time of use (TOU) when charging occurs. It is designed to aid utility companies in determining what price per kilowatt-hour should be charged for the use of an EV charging station at specific times of day.

Applications for the installation and use of EV-dedicated TOU meters must be processed in virtually the same way as applications for the installation and use of charging stations, except that the insurance requirements which apply to charging stations do not apply to EV-dedicated TOU meters. Section 4745.1 also requires HOAs to “attempt to find a reasonable way to accommodate” a request to install an EV-dedicated TOU meter, “unless the [HOA] would need to incur an expense.”

SB 1016 is the latest example of the Legislature’s continuing trend of promoting renewable energy technologies and limiting the regulatory authority of HOAs. In our prior blog posts and newsletters on EV charging stations, we have touched on the need of every HOA (especially condominium HOAs) to work with its HOA lawyer to implement rules designed to process homeowner requests for EV charging stations in ways that comport with statutory requirements. That need is even greater now. HOAs that violate Section 4745 and/or new Section 4745.1 are subject to civil penalties and damages.

Solar Panels on Common Area Roofs; Have a Policy Yet?

Published on: March 27, 2018 | by Steven J. Tinnelly, Esq.

hoa-condo-solar

The California Solar Rights Act (“Act”), found at Civil Code §§ 714 and 714.1, provides certain protections for homeowners seeking to install Solar Energy Systems (i.e., solar panels) on their properties (“Systems”). The intent of the Act was to prevent associations from broadly banning Systems for aesthetic reasons—whether through an explicit ban, or through onerous architectural restrictions that greatly increase System costs or reduce performance. To that end, the Act rendered void and unenforceable any provision of an association’s governing documents that “effectively prohibits or restricts the installation or use of a solar energy system.” Civ. Code § 714(b). The Act does permit associations to place “reasonable restrictions” on the installation or use of Systems, as defined in Civil Code § 714(b). However, in reality, those “reasonable restrictions” are extremely limited in scope. To illustrate, any restriction which increases the cost of a System by more than $1,000, or which decreases its performance by more than ten percent (10%), from what was originally proposed by the homeowner is not a “reasonable” restriction and therefore unenforceable. Civ. Code § 714(d)(1)(B).

For planned developments with detached homes, the application of the Act is relatively straightforward because it applied to Systems that were installed on a homeowner’s “separate interest.” However, what was less clear was the extent to which the Act applied to homeowners within condominium developments. In a condominium development, a System would not be installed within or upon a homeowner’s separate interest. Rather, the System would be installed on common area components such as the roofs, garages or carports.

This issue was at the heart of AB 634 which was signed into law in 2017. AB 634 amends Civil Code § 714.1 and adds Civil Code § 4746. Under the new law, which became effective January 1, 2018, associations are prohibited from establishing policies prohibiting the installation or use of Systems installed on the roof of the building in which the owner resides, or a garage or carport adjacent to the building that has been assigned to the owner for exclusive use. It also adds an exemption to the membership approval requirements associated with granting exclusive use of common area to allow for such grants for System installations. Civ. Code § 714.1(b)(1)-(2). In simple terms, condominium associations are no longer able to broadly prohibit Systems from being installed on common area roofs, garages or carports.

AB 634 Signed! Reduced HOA Control of Solar Energy System Installations

Published on: October 16, 2017 | by Steven J. Tinnelly, Esq.

Solar The Governor has signed AB 634 into law changing HOA control over solar energy system (“Solar”) installations. HOAs may no longer adopt policies and guidelines that prohibit Solar installations on common area roofs protecting HOA property and homes from damage and members are stripped of the right to protect common area property by membership vote. HOA’s must conform to a statewide, one-size-fits-all Solar policy summarized here.

Civil Code § 714.1 now provides that Associations are prevented from . . .

Establishing a solar energy system policy that prohibits condominium owners from installing solar panels on the common area roofs of condominium buildings or the owner’s adjacent garage/carport (exclusive use common area);
Requiring membership approval for an owner’s encroachment for Solar equipment on the common area.

New Civil Code § 4746 declares HOAs reviewing requests for Solar installations on common area roofs of multifamily dwellings . . .

MUST require:

Applicants to notify each owner in the building of the proposed solar installation, AND
Owners/successive owners to maintain homeowner liability coverage, providing the HOA with proof of insurance within 14 days of approval and annually thereafter;

MAY impose reasonable provisions that:

Require owners to provide a survey of “usable solar roof area” prepared by a licensed contractor/knowledgeable salesperson;
Require survey to include equitable allocation of usable solar roof area for all owners sharing the roof/garage/carport;
Require owners/successive owners to be responsible for:
- Costs for damage to any common area resulting from installation/maintenance/repair/removal/replacement of Solar installation;
- Costs for maintenance/repair/replacement of Solar installation until its removal;
- Restoration of all common area and separate interests after removal;
- Disclosing the Solar installation to prospective buyers and all related responsibilities

Civil Code § 4600 now includes Solar installations as an exception to the rule requiring approval of 67% of members before the HOA can grant exclusive use of any portion of the common area to a member.

In light of AB 634, HOAs should have their legal counsel review their current architectural guidelines with respect to the installation of solar energy systems.

-Blog post authored by TLG Attorney, Terri A. Morris, Esq.

Business Judgment Rule Doesn’t Apply When the Board Acts Outside its Authority

Published on: June 14, 2017 | by Steven J. Tinnelly, Esq.

*Unpublished Case

ISSUE:

Is an HOA Board of Directors (“Board”) entitled to protection under the Business Judgment Rule (“BJR”) when it applies an unambiguous view restriction contained in the governing documents in a manner other than written?

RULE:

No. In Lingenbrink v. Del Rayo Estates Homeowners Association, 2017 WL 1075062 (“Lingenbrink”), the Court of Appeal concluded the BJR only applies to matters that are within an HOA Board’s discretion. A Board does not have the discretion to interpret or re-write a restriction where the meaning of the restriction is perfectly clear.

ANALYSIS:

The HOA consists of eighteen (18) “high end” homes in Rancho Santa Fe built on 21 lots, each with sweeping views of the Pacific Ocean. The CC&Rs contain very specific language that protects each Lot’s view as follows:

“No tree, hedges or other plant shall be so located or allowed to reach a size or height which will interfere with the view from any Lot and, in the event such trees, hedges or other plant materials do reach a height which interferes with the view from another Lot, then the Owner thereof shall cause such tree(s), hedge(s) or other plant material[(]s) to be trimmed or removed as necessary.”

Governor Brown Declares the End of the Drought

Published on: April 20, 2017 | by Steven J. Tinnelly, Esq.

water-rain-raindrops-drops

On April 7, 2017, Governor Brown signed Executive Order B-40-17, ending the drought state of emergency in most of California. Drought restrictions will remain in effect in Fresno, Kings, Tulare, and Tuolomne counties, which continue to face drinking water shortages and diminished groundwater supplies. The new Executive Order rescinds the emergency proclamations from January and April 2014, along with four drought-related executive orders.

Over the last few years, the California legislature has passed several bills aimed at water conservation within community associations. AB 2100 amended Civil Code Section 4735 to prohibit associations from fining or threatening to fine an owner for failing to water vegetation or lawns during a state or local government-declared drought. SB 814 also authorized penalties for excessive residential water use during periods of government-declared droughts. Now that the state of emergency has been lifted, these laws are no longer in effect, provided the local jurisdiction has not declared a local drought.

AB 2104 further amended Section 4735 to restrict an association from prohibiting low-water using plants as a group, and AB 349 amended Section 4735 to restrict an association’s authority to prohibit artificial turf. Although the drought restrictions have been lifted, this legislation protects homeowners from having to reverse or remove any landscaping measures that were installed in response to the government-declared drought.

The State Water Resources Control Board (SWRCB) also adopted emergency regulations that subject associations to fines of up to $500 per day for violating the provisions of Section 4735. These regulations will remain in effect until November 25, 2017, or until they are modified or repealed by SWRCB.

The decision to lift drought restrictions was partly based on unprecedented water conservation. Californians saved more than 20% of urban water since the Governor mandated water use reductions in 2015. Despite the record levels of water conservation, the State cautions, “This drought emergency is over, but the next drought could be around the corner,” said Governor Brown. “Conservation must remain a way of life.”

Executive Order B-40-17 continues the provisions in the previous Executive Order, “Making Water Conservation a California Way of Life.” Permanent restrictions prohibit the use of potable water for:

hosing off sidewalks, driveway and other hardscapes;
washing automobiles with hoses not equipped with a shot-off nozzle;
using non-recirculated water in a fountain or other decorative water feature;
watering lawns in a manner that causes runoff, or within 48 hours after measurable precipitation; and
irrigating ornamental turf on public street medians.

The SWRCB will continue to plan for future droughts and promote water conservation as a way of life, which may result in more legislation.

Blog post authored by TLG Director of Business Development, Ramona Acosta.

Encroaching on HOA Common Area Could Cost You

Published on: January 3, 2017 | by Steven J. Tinnelly, Esq.

*New Case Law

Rural, equestrian, and large-scale planned developments may include properties with spacious lot sizes bordered by common area lots and open spaces. When property lines are not clearly delineated or easily identified in these communities, there may be instances where a homeowner seeks to expand his property by constructing yard improvements that extend beyond his property line and encroach onto adjacent, HOA-owned common area. If this is not discovered and addressed by the HOA in a timely fashion, there are avenues under California law through which the homeowner may assert that he has obtained an easement over (and in extreme circumstances, actual ownership of) the encroached area. The thought of a homeowner annexing common area for his/her own use is a scary thought, as is the prospect of the HOA failing to prevail in costly litigation that may be needed to reclaim its common area.

Fortunately, the recent holding in Nellie Gail Ranch Owners Association v. McMullin (2016) 4 Cal.App.5th 982 (“McMullin”) helps strengthen a HOA’s ability to defeat a homeowner’s attempt to encroach onto common area and claim it as his own…
Continue Reading ›

Attorney’s Fees are Recoverable to Enforce Settlement Agreement Reached in ADR

Published on: November 1, 2016 | by Steven J. Tinnelly, Esq.

*New Case Law

The Davis-Stirling Act promotes the nonjudicial resolution of disputes between homeowners associations (“HOAs”) and their members in various respects. One example is found contained in Civil Code Sections 5930 et. seq. which, in sum, require that the disputing parties to endeavor to resolve the dispute through Alternative Dispute Resolution (“ADR”) before a lawsuit is filed. ADR is essentially a form of mediation that uses a neutral third-party mediator (often a retired judge) to assist the parties in securing a mutually acceptable resolution.

Experienced HOA Board members, management professionals, and attorneys understand that ADR is often successful in resolving a dispute before it escalates to costly and protracted litigation. That resolution is typically memorialized in a written settlement agreement negotiated during ADR and executed by the parties. The settlement agreement often governs what actions must be taken by the parties within specified time frames. For example, in an architectural dispute, the settlement agreement may require the homeowner to take corrective measures (i.e., to modify or remove unapproved architectural improvements) within a specified time frame.

However, in some instances, a party to the settlement agreement may subsequently fail to honor its terms. The other party is then placed in a position of having to take legal action to enforce the other party’s compliance with the settlement agreement. The enforcing party may then have concerns regarding its ability to recover its attorney’s fees in taking such action. While the Davis-Stirling Act allows for a prevailing party in an action to enforce a HOA’s governing documents to recover its attorney’s fees, it is unclear whether enforcement of a settlement agreement reached at ADR constitutes such an enforcement action.

Fortunately, the recent case of Rancho Mirage Country Club HOA v. Hazelbaker (2016) 2 Cal. App. 5th 252 (“Hazelbaker”) addressed this exact issue… Continue Reading ›

AB 1448 Signed! HOA Bans on Clotheslines Get ‘Hung out to Dry’

Published on: October 12, 2015 | by Steven J. Tinnelly, Esq.

hoa-clothesline *New Legislation

Many sets of HOA governing documents contain provisions that prohibit clotheslines from being hung outside of an owner’s unit and/or in any area that is visible from adjoining properties or HOA common area. AB 1448 (Lopez) was proposed earlier this year in order to limit the extent to which such provisions may be enforced. AB 1448 was based upon the belief that bans on clotheslines “prevent low-income families and energy-conscious persons from using a low-cost, low-technology energy conservation tool.” (Senate Floor Analyses, AB 1448 (09/08/15).)

AB 1448 sought to add new Civil Code Sections 1940.20 and 4750.10. Section 1940.20 would limit the degree to which landlords may prohibit the use of clotheslines or drying racks by their tenants, provided that certain conditions are met. Section 4750.10 would place similar limitations on HOAs by rendering void and unenforceable any provisions of a HOA’s governing documents that prohibit or unreasonably restrict an owner’s ability to use a clothesline or drying rack in an owner’s backyard.

On October 8, 2015, AB 1448 was approved and signed into law. As a result, effective January 1, 2016, “any provision of a [HOA’s] governing document…shall be void and unenforceable if it effectively prohibits or unreasonably restricts an owner’s ability to use a clothesline or drying rack in the owner’s backyard.” (Civ. Code § 4750.10(c).) However, as is typically the case with new legislation of this type, Civil Code Section 4750.10 will create additional questions that are not so easily answered with reference to the statutory language itself. Specifically, HOA Boards and management professionals will likely have questions concerning the following issues: (1) what qualifies as a “clothesline” or “drying rack,” (2) what area(s) must owners be permitted to utilize clotheslines or drying racks, and (3) what qualifies as a “reasonable restriction” on the use of a clothesline or drying rack that may still be imposed and enforced by a HOA. Some guidance on these issues is provided below…

Effectively Immediately! HOAs may not Prohibit Artificial Turf (Grass)

Published on: September 8, 2015 | by Steven J. Tinnelly, Esq.

hoa-artificial-grass-turf New Legislation*

In recent years the California legislature has proposed bills that would require homeowners associations (HOAs) to permit the installation of artificial turf (grass) in their communities. Those bills never made it into law, and were vetoed by the California Governor due to the Governor’s belief that “[t]he decision about choosing synthetic turf instead of natural vegetation should be left to individual homeowners associations, not mandated by state law.”

AB 349, proposed earlier this year, marked the latest attempt by the California Legislature to restrict the authority of HOAs to prohibit artificial turf. AB 349 was proposed as an urgency statute based upon the following rationale of the California Legislature:

“While in the middle of a water shortage crisis, homeowner associations are not allowing homeowners to make voluntary sacrifices and are still forcing them to maintain grass lawns, by installing artificial grass, and are fining them if they are out of compliance. [AB 349] ensures that all homeowners have the right to better conserve water by voluntarily replacing grass with artificial grass. Property owners who pursue water conservation by installing artificial grass should be encouraged, not sued or fined. Thus, this act is necessary for the immediate preservation of the public peace, health, and safety.”

The prolonged California drought has apparently lead to a reversal in the Governor’s position on this issue and AB 349 was signed into law on September 4, 2015. As a result, Civil Code Section 4735 has been amended to render void and unenforceable any provision of a HOA’s governing documents (i.e., a HOA’s architectural standards) that “prohibits, or includes conditions that have the effect of prohibiting, the use of artificial turf or any other synthetic surface that resembles grass.” (Civ. Code § 4735(a)(2).)

This language was modeled after similar protections already existing in Section 4735 for homeowners seeking to use “low-water using plants.” An additional amendment to Section 4735 as a result of AB 349’s passage includes the incorporation of new subpart (d) that protects homeowners from having to “reverse or remove” water-efficient landscaping measures that were installed in response to a government-declared drought period once the drought period concludes.

AB 349’s changes to the law take effect immediately as an urgency statute. HOA boards, architectural committees and management professionals must take note of the changes to Civil Code Section 4735. While AB 349 does not address what types of restrictions (as opposed to flat prohibitions) a HOA may place on the installation of artificial turf, HOAs should endeavor to amend their architectural standards in order to provide some guidance to homeowners on this issue and to deter the use of low quality turf materials.

Hardwood Flooring & ‘Nuisance’ Noise

Published on: March 9, 2015 | by Steven J. Tinnelly, Esq.

*New Case Law

Homeowners within condominium developments are typically granted broad authority in making improvements to the interior of their respective Units that do not require modification of association common area. However, because of the way in which condominium projects are built, certain improvements made within a Unit may ultimately impact the quiet use and enjoyment of neighboring homeowners (i.e., sound transmissions from hardwood or hard surface flooring). As indicated by the recent case of Ryland Mews Homeowners Association v. Munoz (2015) 234 Cal.App.4th 705 (“Ryland“), to the extent that a homeowner’s interior improvements result in a nuisance to neighboring homeowners, an association does have the authority to compel the homeowner to modify or remove the improvements as necessary to abate the nuisance…