Enforcement

Are Attorney’s Fees for ADR Recoverable?

Published on: February 25, 2013 | by Steven J. Tinnelly, Esq.

*Asked & Answered ADR california hoa law litigation.jpg

Asked – Are our HOA’s attorney’s fees recoverable when we participate in ADR with a homeowner?

Answered – Maybe. Civil Code §1354(c) states that “in an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” Alternative Dispute Resolution (“ADR”) does not technically constitute an “action” as contemplated by Civil Code §1354(c). When a homeowners association (“HOA”) and a homeowner agree to participate in ADR, Civil Code §1369.540(c) states that “the costs of [ADR] shall be borne by the parties.” Accordingly, each side pays its own attorney’s fees, and the mediation fees/costs are split between the parties unless the parties negotiate a different arrangement.

However, if the ADR results in a settlement of the dispute, then the attorney’s fees are allocated according to the settlement terms. If the ADR does not result in a settlement and a lawsuit ensues, then the “prevailing party” in the resulting lawsuit may recover its pre-litigation attorney’s fees incurred for ADR. In the recent case of Grossman v. Park Fort Washington Association (2012) 212 Cal. App. 4th 1128, the prevailing party (the homeowners) were awarded their attorneys’ fees incurred in pre-litigation ADR:

“…[B]ecause the Legislature has required ADR, a party acts reasonably when it spends money on attorney fees and costs during pre-litigation ADR. The alternate view–that such expenditures are categorically unreasonable–is contrary to the strong public policy of promoting the resolution of disputes through mediation and arbitration…Thus, when attorney fees and costs expended in pre-litigation ADR satisfy the other criteria of reasonableness, those fees and costs may be recovered in an action to enforce the governing documents of a common interest development.” Grossman.

Attorney’s fees incurred in ADR are typically not recoverable absent language to that effect in the terms of the ADR settlement. However, if no settlement is reached and a lawsuit ensues, the public policy factors recognized by the court in Grossman suggest that these attorney’s fees should be recovered by the prevailing party (e.g., the HOA) in the lawsuit.

Content provided by Tinnelly Law Group attorney Bruce Kermott

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HOA Parking Rules Versus Handicap Parking Placards?

Published on: October 30, 2012 | by Steven J. Tinnelly, Esq.

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Asked – My HOA requires a parking decal to park in the community. Is my HOA allowed to enforce its parking rules on vehicles with handicap parking placards that are parked within designated parking areas, but are without the HOA required parking decal?

Answered – Yes. Typically, homeowners association (“HOA”) governing documents (e.g., “CC&Rs,” “Rules & Regulations”) contain provisions governing how vehicles may be parked in the common area streets or parking spaces. In the event that a parking violation occurs, the HOA has the authority to enforce disciplinary measures against the violating individuals in accordance with the applicable enforcement procedures set forth in the HOA’s governing documents. Although California Vehicle Code §22511.5 permits individuals with appropriate handicap placards to park in handicap spaces, those individuals must still comply with all other HOA parking rules. Individuals generally may not, therefore, circumvent the requirements of an HOA’s parking rules through the use of handicap placards or plates.

Upon receiving a proper request, a HOA may be required to make “reasonable accommodations” for disabled individuals by designating additional parking spaces as handicap parking spaces. If your HOA has received such a request, the issue should be directed to your HOA’s legal counsel for guidance.

To submit questions to the HOA attorneys at Tinnelly Law Group, click here.

HOA Prohibiting Single Owners from Renting Out Multiple Units?

Published on: July 23, 2012 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – Can the Board amend the HOA’s CC&Rs to limit a homeowner who owns multiple units from renting more than one unit unless they live within the HOA?

Answered – Yes. Provided that the requisite procedures are followed and membership approval is obtained, the Board of Directors does have the authority to amend your HOA’s CC&Rs to include such a rental prohibition. However, because the amendment serves to effectively prohibit a homeowner’s ability to rent out a unit (as compared to a less-severe, reasonable restriction on rentals), the California Civil Code limits the degree to which current homeowners would be bound by the prohibition.

Senate Bill 150 added Section 1360.2 to the California Civil Code to insulate certain homeowners from any “provision in a governing document or an amendment to a governing document that prohibits the rental or leasing of any of the separate interests” that was adopted by the HOA on or after January 1, 2012. The only homeowners who may be bound by such rental prohibitions are those who bought their homes after the prohibition had already been adopted and in effect, as well as those who consent to being bound by it.

In your situation, an interesting question becomes how would the Civil Code treat enforcement of such a prohibition against a particular homeowner who owned one unit within the HOA before the prohibition was adopted (“Unit A”), and then later, after the prohibition is adopted, purchases another unit in the HOA (“Unit B”)? The language of Section 1360.2 seems to suggest that the rental prohibition would indeed be valid and enforceable against Unit B. However, a thorough assessment of the facts at issue as they relate to the legislative intent behind Section 1360.2 would be necessary to make a more complete determination.

If your Homeowners Association is contemplating the adoption of a new provision to restrict or prohibit rentals, careful consideration must be given to how the Civil Code’s limitations will impact the enforcement of the new provision and whether those limitations will frustrate the homeowners’ goals in adopting it. Consulting with your Homeowners Association attorney will assist in crafting a provision that serves the interests of the homeowners while also preventing costly legal challenges to its enforcement.

To submit questions to the HOA lawyers at Tinnelly Law Group, click here.

Fining Homeowners for not Completing HOA Surveys?

Published on: July 13, 2012 | by Steven J. Tinnelly, Esq.

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Asked – May our HOA impose fines on homeowners who fail to complete HOA surveys?

Answered – Probably not. In general, a homeowners association (HOA) does have the authority to impose reasonable fines to deter violations of the HOA’s governing documents, as well as any rules and regulations validly adopted by the HOA’s Board of Directors. Liebler v. Point Loma Tennis Club (1995). Even assuming that the survey requirement itself is a reasonable, valid rule adopted by your HOA Board in accordance with the requirements contained in its governing documents and Civil Code §1357.110, fining homeowners for failing to complete the survey is likely to be deemed an unreasonable exercise of the HOA’s authority.

The HOA’s authority to impose fines is premised upon (1) deterring behavior which may damage the interests of the HOA and its members, or (2) reimbursing the HOA for costs it will incur as a result of violations. A homeowner’s failure to complete an informational survey will rarely, if ever, implicate such concerns.

The imposition of disciplinary measures such as fines is often crucial to the success of a HOA’s enforcement efforts. However, the authority to impose fines is not absolute–HOA Boards must comply with the procedural requirements set forth both in their governing documents and the California Civil Code, and furthermore must ensure that the fines at issue are justifiable and reasonable under the circumstances.

To submit questions to the HOA attorneys at Tinnelly Law Group, click here.

Committees: Delegating Board Authority to Achieve Efficiency

Published on: June 13, 2012 | by Steven J. Tinnelly, Esq.

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The 2012 amendments to the “Common Interest Development Open Meeting Act” have made it significantly more difficult for Boards to manage the affairs of their HOAs in a quick and efficient manner. Those amendments, as discussed in our previous resource,”Senate Bill 563: Boards and their Business,” made significant changes to the Civil Code, including, (1) revisions to the definition of meeting to include executive session meetings, (2) the inclusion of a new “No Action Without a Meeting” rule, (3) the implementation of a rule prohibiting Boards from considering items of business not noticed on a meeting agenda, and (4) a prohibition on meetings conducted or actions taken through email. As any Board Member or Manager knows, these changes have not only deprived Associations of many of the tools previously used to conduct business outside of regularly held Board meetings, but have also obstructed the channels and methods of communication that are necessary to effectively assign responsibilities and make ongoing mid-project decisions. Although HOAs are unfortunately bound to abide by these requirements, there are devices available to the Board that can significantly decrease the burdens these requirements impose. This blogpost discusses the use of one such device–the committee–and the various ways in which it may be used by Boards to address HOA business within the constraints imposed by the Civil Code.

Our HOA lawyers have also published this information in our new resource entitled “Committees: Delegating Authority to Achieve Efficiency,” available for download from our library.

HOA Obligation to Combat Nuisances?

Published on: April 18, 2012 | by Steven J. Tinnelly, Esq.

*Asked & Answered hoa attorney

Asked – In response to a complaint by a homeowner that her noisy neighbor is causing a nuisance, is her homeowners association obligated to take legal action to remedy the problem?

Answered – Maybe. A homeowners association’s (HOA’s) governing documents often contain use restrictions which prohibit homeowners from conducting activities that unreasonably interfere with other homeowners’ use and enjoyment of their units. However, HOA Boards are granted discretion in determining whether they should take legal action in enforcing such use restrictions. A nuisance which is minor (e.g., only impacts one homeowner) may not ultimately justify the expense the HOA will incur in taking action to remedy the problem. However, a more significant nuisance which impacts multiple homeowners (e.g., constantly throwing loud parties) is likely a situation where the HOA should step in.

That is not to say that an individual homeowner suffering from a minor nuisance is without recourse. HOA governing documents typically contain provisions which permit homeowners to take action themselves to enforce the governing documents. Additionally, unless the governing documents state otherwise, that right is also codified at Civil Code § 1354(a).

Homeowners suffering from nuisances should attend Board meetings to present their case to the Board. While the Board has discretion in determining the propriety of legal action, the homeowner can suggest that the Board employ less serious enforcement measures such as violation notices, imposing fines or suspension of privileges.

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Neighbor to Neighbor Enforcement of HOA CC&Rs

Published on: February 6, 2012 | by Steven J. Tinnelly, Esq.

Owners often question whether they can enforce their HOA’s CC&Rs on neighboring owners in the event that their HOA is either unwilling or unable to do so. Owners also question whether they can recover any attorney’s fees that they expend in bringing such an enforcement action.

The recent, unpublished opinion in Klein v. Nyamthi (2012) illustrates that owners may bring such enforcement actions in certain circumstances and may also recover their attorney’s fees should they prevail.

In Klein, the Defendant was violating the HOA’s CC&Rs by not fixing a landscape grading problem which ultimately caused his neighbor’s (the Plaintiff’s) home to sustain flooding damage. The Defendant violated the maintenance and nuisance provisions of the HOA’s CC&Rs by not “plant[ing] and water[ing] the slopes of [his] property, or otherwise maintain[ing] it in such a manner” as to prevent erosion and potential flooding. In recognizing that CC&Rs essentially constitute a contract between each of the owners and the HOA, the court highlighted the fact that CC&Rs are “enforceable by the owner of any lot in the development” pursuant to Civil Code Section 1354(a). Moreover, because the Plaintiff prevailed “in an action to enforce [the] CC&Rs,” in accordance with Civil Code Section 1354(c), the court ruled that the Plaintiff was “entitled to recover [attorney’s fees] as a matter of right.”

The Civil Code does provide owners the general right to enforce their Association’s CC&Rs against neighboring owners and the Association itself. However, some CC&Rs may contain provisions which limit or otherwise affect this right in certain situations. As a general rule, it is best for an owner to defer to the enforcement efforts of her Association and its Board of Directors when violations of the CC&Rs exist. Exercising “self-help” should be a measure of last resort in the rare instances where the Association is either unable or unwilling to comply with its enforcement obligations.

Surveillance Cameras Within Your Association

Published on: January 26, 2012 | by Steven J. Tinnelly, Esq.

*New Resource

Video surveillance cameras are now being installed almost everywhere, so why not in your homeowners association (HOA)? When used properly surveillance cameras can provide additional security, a greater sense of safety and a deterrent to would be criminals. Yet several questions and considerations are often raised with respect to the installation of surveillance cameras within a HOA.

Does it violate the law for a HOA to install surveillance cameras within the community? Are these cameras helpful in reducing criminal activity? Is it acceptable to use “dummy” cameras instead of operative cameras? Does a HOA have to post signs notifying the homeowners that they are under video surveillance? These are some of the questions that HOAs are asking legal counsel as their Boards consider installing surveillance cameras to monitor entry gates, parking facilities and other common areas.

This blog post will address some of these questions while providing your HOA and management personnel with some guidance in this area. This information can also be found in our new resource entitled “Surveillance Cameras within your Association”, available for download from our library.

Charging Homeowners HOA Attorney’s Fees in Violation Hearings?

Published on: January 23, 2012 | by Steven J. Tinnelly, Esq.

*Asked & Answered