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Articles Posted in Boards of Directors

covid-19-1330pxOver the last few business days, our firm has received several calls regarding the Coronavirus (COVID – 19).  We understand the obstacles created by COVID – 19 because successful association governance depends upon engaged community involvement and personal interaction.

The purpose of this blog post is to provide a brief overview of our response to some of the common questions we have received.  It is based upon information which is currently available as of March 17, 2020.  The recommendations set forth herein are subject to change based upon governmental mandates.

Continuance of Necessary Business Operations:

Community associations, as non-profit corporations, should continue to perform essential business operations (i.e. collect Member assessments and pay Association bills) during this epidemic.  As of the time of this drafting (3/17/20), President Trump released new guidelines to slow the spread of COVID – 19 by advising the public to avoid groups of more than ten (10) individuals, among other safeguards.  Governor Newsome recommends that restaurants eliminate dine-in options and the closure of movie theaters and health clubs.  Medical professionals have uniformly taken the position that social distancing can minimize virus transmission.  In view of those protections, boards, in consultation with management and legal counsel, should consider the temporary closure of community-based events and functions, particularly in situations where residents constitute a high-risk demographic (i.e. age-restricted communities).

Board Meetings:

Board meeting procedure is regulated by an association’s governing documents and the Civil Code.  An association’s by-laws will set forth the frequency of board meetings.  Boards should consider postponing non-essential general session board meetings, or in the alternative, conducting essential association business in executive session only via teleconference as permitted by California law.  Boards may conduct general session and executive session board meetings via teleconference upon proper notice which identifies at least one physical location so that Members of the association may attend (Civil Code Section 4090 (b)).  At least one director or a person designated by the board shall be present at that location (Civil Code Section 4090 (b)).

To the extent possible, efforts should be made to protect Member rights, such as the right to attend board meetings and participate in homeowner’s forums.  How do we balance those rights with current social distancing recommendations? There might be a viable path under the Open Meeting Act.  Members possess the legal right to attend general session board meetings and shall be entitled to attend teleconferenced board meetings (Civil Code Section 4925). An argument could be made that Members may attend general session board meetings via teleconferencing means if such board meeting was previously noticed as a teleconference board meeting and the procedural requirements are satisfied as referenced above.  Discuss with legal counsel whether the Open Meeting Act could be interpreted to allow Member attendance (via audio and/or video means) at teleconferenced board meetings instead of physical presence at the meeting location.

We recommend that boards consult with legal counsel to discuss teleconferenced general session board meeting procedure before deciding to hold open meetings without members and then issuing minutes thereafter.  It is unclear how a superior court judge, in the event of a later Member challenge, might evaluate the handling of board meeting procedure during this current state of emergency.  A possible judicial response might be to review how the association attempted to substantially comply with the law using the governance tools that are presently available through the Open Meeting Act.

Member Notice:

Medical professionals state that individuals respond to crisis and stress in different ways; it is very likely that some may be scared while others may not be.  Residents may look to the association and management for guidance and direction.  For that reason, transparency is desirable.  Boards should work with their management partners and legal counsel to develop a policy statement which identifies how your community intends to respond to COVID – 19 with respect to association meetings and community affairs.  In the event of common area closure or facility limitations, notices should be posted which explain the board’s reasoning in that regard.  Association residents should be directed to governmental agencies (e.g. CDC, California Department of Public Health, and county health agencies) for more information.

On March 12, 2020, California Governor Gavin Newsom issued Executive Order N-25-20 (“Order”) which modified how legislative bodies may conduct public meetings via teleconference under the Brown Act.  That Order does not apply to private association meetings which are governed by the Open Meeting Act and we are not aware of emergency legislation that might govern how association meetings are expected to be handled during this health crisis.  Although not applicable, the spirit of the Order’s final provision should be considered as we think about association governance during this time; namely, the Order concludes by stating that, “all state and local bodies are urged to use sound discretion and to make reasonable efforts to adhere as reasonably as possible to the provisions of the … Brown Act, and other applicable local laws regulating the conduct of public meetings, in order to maximize transparency and provide access to their meetings.”

California HOA lawyers It is critically important that boards work closely with their management partners and legal counsel to develop practical solutions regarding Board governance which, to the extent possible, complies with the Open Meeting Act while protecting Member safety.

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

how-should-a-weak-leader-stand-up-against-butt-in-590b43b68caabHomeowners associations (“HOAs”) are governed by a group of volunteer members known as a “Board of Directors” (“Board”). Their primary responsibilities include: (1) managing the common areas, (2) managing the HOA’s finances, (3) setting policies to assist in the operation of the HOA, and (4) enforcing those policies along with the HOA’s governing documents. The Board is therefore vital to the effective operation and management of the HOA, as well as preserving the property values of the HOA’s members.

As indicated previously, one of the primary responsibilities of the Board is to enforce the governing documents. (See Posey v. Leavitt (1991) 229 Cal.App.3d 1236.) In fact, a majority of members purchase their units within the Association in reliance on the governing documents being consistently and faithfully enforced by the Board. However, that power may be abused in situations where a director uses his or her position to target and/or harass particular residents within the community. (See generally Nahrstedt v. Lakeside Village Condominium Association (1994) 8 Cal.4th 361, 383 (“Of course, when an association determines that a unit owner has violated a use restriction, the association must do so in good faith, not in an arbitrary or capricious manner, and its enforcement procedures must be fair and applied uniformly.”).) It is therefore important that the Board, and not any one individual Board member, take action to enforce the governing documents.

The foregoing is not to say that individual directors are precluded from observing and reporting violations. Indeed, a HOA necessarily relies on its members (including its Board members) to report instances where the governing documents may have been breached. Photographing the potential violation is not problematic to the extent that the photograph captures an area that may be observed from a lawful vantage point (e.g., the common area). However, upon observing/documenting a potential violation of the governing documents, the observing party must report that observation to the HOA’s community manager (“Manager”) so that same may initiate the procedures contained in the Association’s enforcement policy (“Policy”). Individual directors should never communicate directly or indirectly with residents concerning their ostensible violation(s) because doing so heightens the concerns referenced above.

Additionally, it is important to point out that the Manager is not acting on his or her own volition; rather, the Manager is executing the duties delegated to him or her by the Association. Therefore, the Manager is acting on behalf of, and at the direction of, the Association. This distinction is important because it underscores the fact that the action is being taken by the Association or at the Association’s direction, and not by any one individual.

In light of the foregoing, each Board member should employ the following procedure when observing a violation of the HOA’s governing documents:

  1. Any observed violation shall be reported to the Manager in writing and shall include any supporting information (e.g., a detailed description of the violation, photographs, etc.).
  2. Thereafter, the Manager, and not the observing Board member, must comply with the procedural requirements contained in the HOA’s Policy, which typically requires the preparation and mailing of a “courtesy notice” to the offending resident advising same of the alleged infraction.
  3. If the violation continues to occur, the Board should direct the Manager to prepare correspondence inviting the offending resident to a hearing before the Board.
  4. At the hearing, the Board may impose discipline pursuant to the Association’s governing documents.
  5. The observing Board member must not communicate with the offending resident at any point during the enforcement process (unless otherwise authorized by the Board).
California HOA lawyers The foregoing procedure emphasizes the fact that the HOA acting through the Board, and not any individual member of the Board, enforces the governing documents. Following this procedure will mitigate the Board members’, and by extension, the HOA’s, liability exposure.

-Blog post authored by TLG Attorney, Matthew T. Plaxton, Esq.

*New Library Article!

Untitled-1

Workplace harassment and hostile work environments are nothing new for management professionals.  Emotionally charged conversations can become uncomfortable and antagonistic for many managers.  Unfortunately, such dialogue frequently crosses the line from demanding direction to demeaning personal attacks.

Previously, employer liability for employee claims based on nonemployee conduct was generally limited to sexual harassment.  Effective January 1, 2019, newly adopted California law (Senate Bill 1300) lowers the burden by which California employees can bring successful harassment claims against California employers and expands the scope by which those employers may now be responsible to their employees for third party, nonemployee conduct, among other things.

Our HOA attorneys have authored a new article to generally summarize SB 1300 and to discuss its application to common interest development practice.

hoa laws The article, entitled “Workplace Harassment in a HOA Environment,” is available for download from our firm’s library. You can access the article by clicking here.

anti-SLAPP*Unpublished Opinion

The recent unpublished opinion of Chemers v. Quail Hill Community Association et al. (2018) shines some light on the oft-misunderstood California Anti-SLAPP statute and its effectiveness as a defense for actions by a homeowners association’s board of directors.  The Fourth District California Court of Appeal held that certain actions by the board in a dispute with a director were not in furtherance of the right of free speech or petition as to be protected by the anti-SLAPP statute.

Plaintiff Evan Chemers (“Chemers”) was a member of the board of directors for defendant Quail Hill Community Association (“Quail Hill”), a planned unit development located in Irvine, California.  A series of disagreements and escalating tension between Chemers and other members of the board resulted in the board taking affirmative steps to remove Chemers from the board permanently.  In June 2016, the board proposed a resolution to create an executive committee consisting of all board members except for Chemers, and in July 2016, the board proposed a resolution to declare Chemers’ board seat vacant on the ground that he did not meet the member-residency requirement.  Chemers was not afforded an opportunity to present any evidence of residency, address the board, or have his legal counsel present when he was formally removed.

In October 2016, Chemers filed a lawsuit against the association and other directors, alleging eight causes of action including breach of governing documents, breach of fiduciary duty, negligence, declaratory relief, and various violations of the Civil Code and Corporations Code.  In response, the defendants filed an anti-SLAPP motion seeking an order striking the complaint and the eight causes of action within it.  The trial court granted the moving defendants’ anti-SLAPP motion as to six of the eight causes of action.

Chemers subsequently appealed the trial court’s decision, and the Court of Appeal concluded that the trial court erred by granting the anti-SLAPP motion as to the claims alleged against Quail Hill for breach of contract, violation of Civil Code section 5850 et seq., and for two counts of declaratory relief.  The Court of Appeal reasoned that none of those four causes of action arose out of protected activity – whether speech or petitioning activity – within the meaning of the anti-SLAPP statute.

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*New Library Article!

electronic-funds-transfer-help-e1542145539349Assembly Bill 2912 (“AB 2912”) was recently enacted by the California Legislature.  Its changes to the law, which take effect January 1, 2019, are intended “to protect owners in a [HOA] from fraudulent activity by those entrusted with the management of the [HOA’s] finances.”  To that end, AB 2912 (a) significantly increases the financial review requirements of HOA boards of directors, (b) limits the ability for automatic transfer of HOA funds without board approval, and (c) imposes a requirement for the HOA to purchase and maintain a fidelity bond.

In the wake of AB 2912’s passage, questions and concerns have surfaced as to how HOAs and management companies may need to adjust their current operational procedures to comply with the new state of the law.  Our HOA attorneys have authored a new article to address some of those questions and to clarify some of AB 2912’s key components.

hoa laws The article, entitled “AB 2912: New Protections Against the Misuse of HOA Funds,” is available for download from our firm’s library. You can access the article by clicking here.

social_media-e1532558044753*Unpublished Opinion

With increasing frequency, homeowners associations are confronted with members publishing content related to their association and its operations, whether on Facebook, blog posts, or other various online forums. Sometimes these publications are critical of the association board of directors, misrepresent important information and facts, or fraudulently purport to be official association publications. The various potential issues associated with member publications are seemingly endless, but California courts periodically provide clarity regarding issues that can arise in the context of member/association publications. The recent unpublished opinion of Kulick v. Leisure Village Association (2018) arose out of the publication of such member content and provides insight into how courts view and address some of these issues.

The Kulick case involved two separate lawsuits between a homeowner (“Kulick”) and his homeowner’s association (“Association”), the Association’s board of directors (“Board”), and the Association’s attorneys. Kulick, a long-time resident with a history of conflict and grievances against the Association, anonymously published and circulated newsletters (“Newsletters”) within the community in violation of the Association’s rules and regulations prohibiting anonymous publications. Kulick’s anonymous Newsletters were frequently critical of the Association Board.

The Association successfully filed suit against Kulick for intentional interference with Association insurance coverage. In response to the Association’s lawsuit, Kulick levied accusations against the Board in one of his anonymous Newsletters. In defense of Kulick’s claims, the Association (through counsel) prepared and circulated a letter (“Letter”) to each community member addressing Kulick’s specific allegations by denying Board misconduct and inviting the membership to view court filings in the pending matter. The Letter described Kulick’s most recent missive as a “reckless communication” containing “unfounded, inaccurate, and spiteful allegations” against the Association, Board, and the Association’s attorneys. It also contained details regarding the then-pending matter and the Association’s success in their preliminary injunction against Kulick. After the Letter was circulated, Kulick brought a lawsuit against the Association for defamation arising out of the Letter to the membership, among other causes of action.

The trial court dismissed Kulick’s case after the Association brought an Anti-SLAPP motion against the defamation claim (“SLAPP” stands for Strategic Lawsuits Against Public Participation; such motions are designed to protect defendants who have been sued for acts in furtherance of a constitutionally protected right of free speech or petition). On appeal, the court found that the Letter constituted “protected activity” as a public writing (i.e. circulated to all members throughout the community) in connection with an issue of public interest – the ongoing controversy of the then-pending lawsuit between the Association and Kulick. Additionally, the court found that Kulick could not demonstrate a likelihood of success on the merits because “expressions of opinion that do not include or imply false factual assertions do not constitute actionable defamation,” among other reasons. For these reasons, the appellate court upheld the trial court’s ruling against Kulick.

While the Kulick case did not ultimately address the anonymous nature of Kulick’s publications or the validity of the Association rule prohibiting them, Kulick raises important issues for associations to consider when confronted with homeowner publications, or association responses to them. While it is unclear to what extent associations can restrict member publications, such as the regulation of anonymous publications, the court in Kulick signaled an association’s ability to address specific member allegations in the public forum of the community. However, when addressing such claims, associations should be mindful of the content of these responses as certain communications are not permissible (e.g. false assertions of fact, etc.). Conversely, an association has rights against defamation published by its members and should address any member publications that defame the association, its board of directors, managing agent, or employees.

Additionally, associations should be vigilant regarding member publications that purport to be official association publications, or publications that are circulated that contain patently false information. Such publications can cause significant disruption in an association’s affairs if allowed to exist and perpetuate. Ultimately, while the line between permissible and actionable content is by no means clear and varies case by case, associations should be alert for member publications that contain clearly false assertions of fact or publications that purport to be official association communications. If you have concerns regarding member publications or appropriate association responses to them, association counsel should be contacted to review the material and discuss potential remedies to the extent they are available.

California HOA lawyers Although Kulick is an unpublished opinion, it provides an indication of how a future court may rule in a similar situation.  When confronted with member publications, homeowners associations should consider whether the published content violates any association rules and regulations, whether it contains false assertions of fact, or whether the content purports to be or could be reasonably construed as an official association publication intended to mislead the recipients and/or members.

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

bustingthemyths1-1-300x197Congratulations!  You’ve just been elected to your Board of Directors – now what?  Or maybe you’ve been serving as a volunteer director for some time and you just aren’t sure which way is up.  If you have been dazed and confused but still have a passionate heart to do the right thing in the best interest of your community, then there may be some myths that need to be debunked. Navigating through conflict, financial tough spots, working with your service providers, noncompliance issues, homeowner requests, day-to-day operations, and strategic planning can be overwhelming.  Changing the way you do business can take you from volunteer Board member to community leader.

First and foremost, association directors must recognize that they have the same fiduciary duties as boards of large corporations.  Each director has a duty of loyalty to the association and its members.  He or she must act in the best of the association, accepting that a decision of a majority of a quorum of the board is a decision of the whole board. Volunteer directors are shielded from personal liability, provided they have acted in accordance with their fiduciary duties.

Board members must also act in accordance with the “business judgment rule.”  They must act in good faith and in the best interest of the association; not according to self-interest or the interests of a particular group within the community.  They must act only after reasonable inquiry, consulting with experts when it is prudent to do.  And, they must act as an ordinarily prudent person in a like position would do, minimizing risks where they can be reasonably avoided.  Keeping these two criteria in mind, let’s debunk a few myths of volunteer board service.

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hostile-work-environmentAs HOA industry professionals, there are many positive aspects to our occupation.  We work with a diverse group of people, take fulfillment from helping volunteer boards, and are happy when we solve problems through creativity.  Unfortunately, there are situations that can become difficult.

Most association managers (“Manager”) have had some experience dealing with abusive homeowners and demanding board members (“Hostile Actor”).  Typically, the Hostile Actor exhibits unrelenting behavior that becomes obnoxious despite Management’s best efforts.

The purpose of this article is to provide Managers with a brief primer as you experience hostility in the moment – via email correspondence, telephone calls, or direct confrontations.

When you encounter hostile situations, it is important to remember that your Management Company was hired to serve as the managing agent for the Association.  Your primary responsibility is to implement the board’s directives and to serve as a communications liaison between the board and the residents.  For the most part, substantive decisions are made by the board at monthly board meetings.  Recognizing that legal relationship can assist the Manager when confronted with a threatening email or any other form of communication.  Below is a sample response to consider when responding to a Hostile Actor:

Thank you for your email.  The board values resident communication relating to Association business.  I understand your concerns and will forward your communication to the board for review at the next board meeting. 

A phone call is usually the next step if the Hostile Actor is not satisfied with Management’s return correspondence.  You should be able to tell where the call is headed based upon his or her initial tone and word choice.  Hostile situations may be diffused or avoided altogether by giving the caller a chance to be heard; the Manager can use the call for good as an opportunity to further explain why it would be inappropriate and unfair if Management were to respond at that time.

You do not deserve to be the subject of personal attacks.  Phone calls that lapse into volatile language should be ended as soon as possible by stating that all future communication must be sent in writing for board review.  After the call concludes, it is advisable to send an email to the Hostile Actor which politely confirms your prior statement about future communication.  If possible, the Manager should prepare an internal memo which documents what was said with as much detail as possible.  The memo can be used to notify other Management employees regarding the Hostile Actor’s prior phone call and for evidence preservation purposes.  Preserving inflammatory communication can help general counsel with later drafting cease and desist correspondence and, if necessary, filing a temporary restraining order if abusive behaviors later escalate.

With limited exception, there is no need for in-person meetings between Managers and Hostile Actors who have demonstrated a prior pattern of disruptive conduct.  In general, Hostile Actors do not show up at Management’s business office unless they are angry.  For that reason, direct confrontations, which are rarely productive, are not recommended because of the potential for further abuse.  Management’s receptionist, if available, should screen the reason for the visit and then direct the Hostile Actor to forward his or her concerns to the board in writing.  If a Manager interacts with a Hostile Actor, then all meetings should be held in the open presence of at least one (1) other Management professional so that conversations can be witnessed.  One-on-one meetings in a private office are discouraged.

What happens when the Hostile Actor is a board member?  Management’s executive team, if available, should be contacted for assistance to navigate the delicate client relationship.  The board member should be reminded that your ability to support the Association depends upon establishing a professional working relationship.

The appearance of the Hostile Actor at board meetings is not uncommon.  The Manager can reduce the possibility of hostile meeting environments by being proactive.  Distributing policy statements for board meeting conduct and requiring the completion of homeowner speaker cards are effective ways to create a healthy work space.  Those documents can state that homeowner forum will be time limited and interruptions will not be tolerated, among other things.  Unruly board members may be tempered by emphasizing the importance of only discussing agenda items and underscoring the negative consequences to the Association by engaging in harmful dialogue.

hoa laws The Hostile Actor is a frequent character in the business of managing community associations.  Disruptive situations should be identified and handled swiftly by the board and Management on a case by case basis through a collaborative process.  The Manager should consider contacting ‘legal’ if abusive communication intensifies.  General counsel can then offer potential solutions for board review such as sending cease and desist correspondence, initiating the Internal Dispute Resolution process, or seeking judicial relief. 

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

notboss63Previously, we wrote on a decision published by the National Labor Relations Board (“NLRB”) wherein the NLRB concluded that, where a contracting party has reserved the authority to exercise control over the employees of another, said contracting party will be found to be the “joint employer” of the other entity’s employees.  In the case of Browning-Ferris Industries of California, Inc. (2015) NLRB No. 672 (“BFI”), BFI retained the services of Leadpoint Business Services (“LBS”) to provide staff to one of BFI’s recycling facilities.  Although the contract between BFI and LBS recognized that the personnel staffed by LBS were the employees of LBS, BFI retained some control over the employees. As such, the NLRB concluded that as long as a company retains (e.g., through the execution of a contract) the authority to control the employees of another, said company will be given joint-employer status. (Id. at p. *2.)

The BFI decision caused quite a stir in the realm of common interest developments. As discussed in our prior post, many associations retain a community management firm to facilitate the duties of the association (e.g., solicit bids for common area maintenance and repair). And while the community managers were historically viewed as the employees of the management firm, the BFI case raised some questions with respect to the nature of the relationship between the employees of a management firm and the association.

Nevertheless, on December 14, 2017, the NLRB did an about-face reversing its decision in the BFI case.  In Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand”) the NLRB held that the BFI standard was “a distortion of common law as interpreted by the Board and the courts…[wa]s contrary to the [National Labor Relations] Act…is ill-advised as a matter of policy, and its application would prevent the [NLRB] from…foster[ing] stability in labor-management relations.” ((2017) 365 NLRB No. 156, *2.) Accordingly, the NLRB concluded that a joint-employment relationship will be found where there is evidence demonstrating that an entity has “exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control).” (Id. at p. *5 (emphasis original).) Said control must be “direct and immediate,” as opposed to “indirect,” and must be more than control which is “limited and routine.” (Id.)

Although the BFI case has been abrogated restoring the prior position of the NLRB, associations and management companies must continue to exercise caution when hiring vendors to perform services for the association to prevent a finding of a joint-employment relationship. In Heiman v. Workers’ Compensation Appeals Board, the Court of Appeal concluded that the community manager (and by extension, the association) was the joint-employer of an employee of an unlicensed and uninsured contractor. ((2007) 149 Cal. App. 4th 724.)  Under California law, one of the legal consequences for hiring an unlicensed contractor is that the person who hired the unlicensed contractor may be considered an “employer” for tort-liability purposes. (Id. at p. 735.) Since the community manager hired an unlicensed contractor, it was found to be the joint-employer of the injured worker. And, because of the agency relationship between the management company and the association, the association was found liable. (Id. at p. 744.)

California HOA lawyers In sum, despite the shift in position, associations must continue to insulate itself from a finding of joint-employer status by ensuring that it retains only licensed and insured vendors, and adequately sets forth the scope of work and the level of care and skill required to achieve the desired result within its contract with the vendor.  Moreover, the contract must include a provision requiring the contractor to indemnify and hold the association harmless in the event a labor dispute arises between the contractor and its employees.

-Blog post authored by TLG Attorney, Matthew T, Plaxton, Esq.

Director-LiabilityOn September 25, 2017, Governor Brown signed AB 1412 (effective January 1, 2018) which seeks to clarify Civil Code Section 4041 (Annual Notice of Owner Contact Information) and Civil Code Section 5800 (Limitation of Director and Officer Liability).

Under current law, Civil Code Section 4041 requires the Association to solicit, on an annual basis, mailing addresses from the Members for purposes of providing notice.  Members are required to state the primary and secondary addresses to which notices from the Association are to be delivered, among other things.  If no such notice is provided, that Section 4041 provides that the default mailing address for purposes of delivery shall be the Member’s property address within the Association.

The existing version of Civil Code Section 4041 potentially inconveniences non-resident Members because they must annually notify the Association of their current mailing address.  If they fail to do so, Management is then legally obligated to change the Members’ mailing address back to the Members’ Association address.

AB 1412 removes those administrative burdens by stating that the default mailing address shall be the last address provided in writing by the Member to the Association, if any.  Under that circumstance, the Association no longer needs to annually update its Member address records if the Members forget to supply their existing mailing address to the Association.

Civil Code Section 5800 provides liability protections to volunteer Directors and Officers if certain conditions are satisfied (i.e. the act/omission was performed in good faith and within the Director/Officer’s Association duties, etc.).  Current law provides that such protections are only available to Directors/Officers in common interest developments that are exclusively residential.  The protections previously offered by Section 5800 were unavailable to volunteer Directors/Officers in mixed use settings, such as common interest developments with residential and commercial units.

In view of the growing number of common interests developments throughout the state, the California legislature recognized that Section 5800 did not provide liability protection to Directors/Officers in mixed use common interest developments.

As such, AB 1412 seeks to expand the breadth of Civil Code Section 5800 because it now generally applies to volunteer Directors/Officers in mixed use settings.  Such protection is limited to those Directors/Officers who are tenants of a residential separate interest or who own no more than two (2) residential separate interests.

California HOA lawyers AB 1412 will save time and money because the Association is no longer burdened with the duty to update Member address information if a Member fails to provide Management with his or her mailing address. 

Mixed use common interest developments may experience increased Board participation by volunteer Directors/Officers because liability protections are now available under Civil Code Section 5800.

AB 1412 does not address whether volunteer commercial unit owners or Members who own three (3) or more residential units are immune from liability under the same liability protections.  A review of the legislative history for AB 1412, coupled with general principles of statutory construction, suggests that those individuals may be excluded in that regard.

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

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