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*New Legislation

hoa-duplex

Senate Bill 9 (SB 9) was recently signed into law making revisions to the California Government Code effective January 1, 2022.  This bill is touted as a major step in California’s efforts to address the housing crisis by re-zoning single family lots to allow for duplexes and more. Below is an overview of some of the primary components of this rather complicated legislation.

Construction of two (2) units on a single parcel zoned as single-family residential

California law will now permit the division, partial or full tear down of an existing single-family home to create two (2) separate residential units, which need not be attached and which are eligible to be sold separately. A municipality will be required to ministerially approve such a project without any significant review or public comment.  Because this law will operate in conjunction with existing law permitting the construction of Accessory Dwelling Units (ADUs), it will allow even more units to be built on the parcel without public review. Local ordinances that would physically preclude construction of the two units cannot be enforced. Any parking requirements to be imposed by local ordinances must be limited to requiring only one “parking space” (not necessarily a garage) per residential unit, and must be eliminated entirely if the project is located within one-half mile of public transit or if there is a car share vehicle located within one block of the project.

Splitting of an existing parcel into two (2) separate parcels

SB 9 also permits urban lot splits in residential zones to create two (2) equal parcels of a minimum of 1,200 square feet. It further prohibits the application of local requirements that would physically preclude the construction of two (2) units to be built on each split lot, subject to other requirements of questionable merit and enforceability (e.g., the ability for a local requirement to be imposed mandating that the owner of the parcel ‘certify’ that they will live in one of the units for at least the first three (3) years after the project’s completion). The parcel split may operate in conjunction with SB 9’s allowance of two (2) separate residential units on a single parcel–allowing for four (4) units to ultimately be constructed on a parcel where only one single-family home may have existed (and even more units if ADUs and JADUs are also constructed on the newly subdivided parcels).

*Impact on HOA CC&R Restrictions is unclear – The common question/concern we are receiving in connection with SB 9 is whether it will override homeowners association (HOA) governing documents that prohibit the type of development projects within HOAs that SB 9 is intended to provide.  For example, it is common for an HOA’s CC&Rs to contain provisions prohibiting homeowners from subdividing their lots.  Unfortunately, SB 9 is silent with respect to this issue and those in the HOA legal community are concerned that SB 9 could be construed as demonstrating public policy in favor of these types of projects.  California courts have held that CC&R restrictions which violate public policy may be challenged and held as enforceable. (See Narstedt v. Lakeside Village Condo. Assn. (1994) 8 Cal. 4th 361).

Senator Toni Atkins, the author of SB 9, submitted a letter to the California Secretary of State ostensibly addressing this concern.  It provides in pertinent part that:

“…on the issue of common interest developments (CID) and homeowners’ associations (HOA). My office has consulted with Legislative Counsel, and SB 9 would not override CID or HOA restrictions. Specifically, SB 9 is silent on the issue, meaning the bill contains no provisions that supersede HOA or CID governing documents. As we have seen with other housing legislation, SB 9 would have to contain an explicit and proactive provision to override those rules. This bill does not.” (Emphasis added.)

While superficially this may seem helpful, it notably fails to state anything regarding the intent of SB 9 and the California Legislature with regard to this issue.  The letter does not have the force of law and whether it will be given weight by California courts in assessing the public policy of SB 9 as it applies to HOAs is anyone’s guess. Moreover, efforts by CAI’s California Legislative Action Committee to request changes to SB 9’s language to explicitly state that it does not override HOA governing documents were ignored.

California HOA lawyers Questions remain as to what, if any, impact SB 9 will have on HOAs and the degree to which homeowners, investors and residential developers will actually find it financially advantageous to pursue multi-unit residential projects within single-family common interest developments. 

MEGAN4Megan’s Law is a federal law that permits authorities to release information about registered sex offenders (“Registered Offender”). California has a database of Registered Offenders available for public viewing on the internet (see www.meganslaw.ca.gov). Searches can be done by a Registered Offender’s name, or by city, zip or within a predetermined radius of a selected park, address or school. Once a Registered Offender has been located, his or her picture is displayed, as is the person’s present address, offenses, known aliases and any distinguishing scars, marks and tattoos.

An HOA Board (“Board”) is not prohibited from sharing information obtained from this database with its membership provided it is for the purpose of protecting persons at risk. Additionally, California Penal Code Section 290.03 allows Boards to pass that information along to the Association’s membership as long as it merely restates factual details. However, Boards should nonetheless thread very carefully when considering making disclosures regarding Registered Offenders within the Association because any error in its disclosure could lead to potential civil as well as criminal exposure.

While Directors on a Board are fiduciaries, there does not appear to be a duty by Directors under CA law to disclose the presence of or other information regarding a Registered Offender in the Association. Moreover, due to the different tiers or classifications for Registered Offenders, not all are deemed dangerous notwithstanding their underlying wrongful conduct.  Additionally, the law has created protections for Registered Offenders who have “paid their debt” to society and have been released from custody. The only time disclosure is allowed is to protect persons at risk.

Moreover, the disclosure must not be for the purpose of discriminating against or harassing the Registered Offender. Impermissible disclosures or conduct that prejudices such residents (i.e. limiting access to common areas/amenities or otherwise embarrasses the resident) are arguably discriminatory and could lead to criminal prosecution and civil liability.

However and with the above considerations and potential risks in mind, the following options are available to a Board:

  • Make No Disclosure. The Board could elect not to mention the presence of the Registered Offender. This avoids any potential risk of liability that may arise from improper use of the information, improper notification, or mistaken identification. However, if a child in the Association is molested by the Registered Offender, the parties involved might sue for failure to notify the membership of the potential danger.
  • Direct Members to the Website. The Board could include a notice in the Association’s newsletter about the Megan’s Law website without any comments about the Registered Offender living in the Association; it would simply encourage members to examine the website and contain certain disclaimer language.
  • Contact the local Police Department and ask it to give notice to the membership. The advantage is that the Board would avoid potential liability for giving improper notice. The disadvantage is that the agency may refuse to give notice (the more likely scenario).
  • Lastly, the Board could elect to disclose the identity and address of the Registered Offender. However, this option carries much risk. Although the Registered Offender status is publicly-available information, the direct disclosure of the identity and address may put the Board in violation of the protective statute and create potential for defamation since the information on the State’s website may not be accurate. Moreover, if the Association makes disclosures regarding the Registered Offender, the members may then assume unrealistically, and unreasonably, that the Association is responsible to protect them.

Of the foregoing options, perhaps the most conservative and arguably most prudent is to consider putting a standard notice in the Association’s newsletters that would appear in all future newsletters or website (if applicable). The notice should be generic and state something similar to the following: “For information on registered sex offenders, visit www.meganslaw.ca.gov.” This way, no person in the Association is singled out, but the membership is at least put on notice and provided some guidance to look up the publicly-available information for themselves.

Additionally, it may be best to also indicate that it is not the Association’s responsibility to track or monitor the Registered Offender list, nor to take any action if there is a Registered Offender within the community. Use of such wording would place the responsibility on the residents to check the publicly available website and take whatever precautions they believe is necessary to protect themselves and their families.

If the Board wishes to take more proactive measures while mitigating exposure then the Association’s patrol vendor can be informed of the Registered Offender with clear instructions that they are not to single out or harass the Registered Offender, they must not disclose identifying information about him or her to other residents, and that they shall immediately notify law enforcement if they encounter obvious misconduct that presents an imminent risk to others and particularly when vulnerable groups such as minors are involved.

Otherwise, it may be best not to fully disclose the identity of the Registered Offender to the Association’s personnel, but rather generally put them on notice of the issue for enhanced patrolling purposes. This way, the patrol service can be tasked to generally remain vigilant to promote a sense of safety, but not be given express or implied license to target anyone in particular.

California HOA lawyers If the Board believes that a Registered Offender has moved into the Association in violation of California or federal law or if the Association would like to generally develop a plan to protect it and its membership, then the Board should immediately consult with the Association’s legal counsel. For example, legal counsel can review all guidelines and restrictions for the Registered Offender housing. It is possible that someone in the Association is operating a licensed day-care center that was not considered when granting the Registered Offender housing, or that your community includes a public park that was not officially recognized at the time of the housing determination. These and many other considerations can be explored with the help of your legal counsel to help protect your Association without creating any unnecessary exposure for the Board.

-Blog post authored by TLG Attorney, Sam I. Khil, Esq.

116390863_l-1024x683-1Neighbor-to-neighbor disputes are on the rise. These types of homeowner conflicts are typically characterized as governing document violation complaints that are personality conflicts between neighboring homeowners rather than legitimate concerns that impact the Association and its membership more broadly. Refereeing these squabbles can quickly become burdensome and costly for an Association and its volunteer Board where the complaining homeowner is attempting to use the Association’s enforcement authority as a weapon against their neighbor. Accordingly, Associations plagued with complaints over these types of homeowner tiffs should consider setting clear limits to their involvement in such matters.

Management companies and Boards often receive homeowner complaints for alleged violations that are not easily discernable through a visual inspection of the community. A common neighbor-to-neighbor dispute is a noise complaint like a barking dog or an upstairs disturbance where no other neighbors have complained of the noise and where there are no other witnesses to the alleged ruckus. These complaints are often repetitive, adding to their burdensome nature. Initially, the Board has a duty to investigate the alleged violation, which often falls under a general nuisance provision in the CC&Rs. However, if after investigation, the Board does not find demonstrable or credible evidence that a nuisance or other governing document violation exists, such as where the only evidence is one neighbor’s word against another’s, the Board is well within its authority to deem the matter a neighbor-to-neighbor dispute and to exercise its discretion to decline further action. Failing to exercise restraint in intervening in these disputes could result in problems for the Association by increasing its operational burdens, and by having the balance of its membership subsidize (via their assessments) the resolution of isolated disputes between feuding neighbors that have no bearing on the Association or on a significant portion of its membership.

Declining to intervene in a neighbor-to-neighbor dispute does not leave homeowners without recourse. Each homeowner may enforce the governing documents in their individual capacity against other homeowners (Civ. Code 5975(a)). Depending on the situation, they may also contact local law enforcement, animal control, or request appropriate relief in the civil court. While the complaining homeowner may object to the Association’s use of its discretionary power to decline intervening, “anyone who buys a unit in a common interest development with knowledge of its owners association’s discretionary power accepts the risk that the power may be used in a way that benefits the commonality but harms the individual.” Nahrstedt v. Lakeside Village Condominium Association, Inc. (1994) 8 Cal.4th 361, 374.

Due to uncertainties in determining what constitutes a neighbor-to-neighbor dispute and when to (and when not to) intervene, Boards are encouraged to contact their legal counsel to discuss adopting a Neighbor-to-Neighbor Dispute Policy. Such a policy may be drafted in a manner to prevent the Association’s involvement in a Neighbor-to-Neighbor Dispute until such time as the complaining homeowner demonstrates their willingness to expend their own resources in trying to work out a resolution directly with their neighbor through requiring participation in Alternative Dispute Resolution (“ADR”) before the Board will consider involvement.

California HOA lawyers Boards are cautioned that legitimate complaints by residents of harassment on the basis of their membership in a protected class are not neighbor-to-neighbor disputes and must be investigated and addressed. See Code of Fed. Reg. §100.7(a)(1)(iii). California HOA’s have been deemed housing providers under the law for purposes of requiring their compliance with this statute. Boards are encouraged to discuss adopting an Anti-Harassment Policy with their legal counsel to address these types of complaints.

-Blog post authored by TLG Attorney, Carrie N. Heieck, Esq.

8-things-you-should-know-about-living-featuredThe homestead exemption protects the value of a homeowner’s primary residence in the event of a bankruptcy. Specifically, it provides that a specified portion of equity in a homestead is exempt from execution to satisfy a judgment debt. Existing state law prescribes that the amount of this homestead exemption is $75,000 for single homeowners, $100,000 for married homeowners, or $175,000 for homeowners who are seniors and/or disabled. (Code Civ. Proc., § 704.730(a).)

Since the inception of the homestead exemption, California Courts have liberally construed declarations of homestead. (see Johnson v. Brauner (1955) 131 CA2d 713, 722, 281 P2d 50.)  California Courts have taken this lenient approach because ‘the law and facts to promote the beneficial purposes of the homestead legislation to benefit the debtor’” [Phillips v. Gilman (In re Gilman) (9th Cir. 2018) 887 F3d 956, 964 quoting Tarlesson v. Broadway Foreclosure Invs., LLC, 184 CA4th 931, 936, 109 CR3d 319 (2010)]. Emphasis added.) However, existing law does not provide for any modifications or adjustments to account for inflation. The legislature has identified this oversight and provided an avenue for correction to this approach.

On September 18, 2020, Governor Newsom signed Assembly Bill No. 1885 (“AB 1885”), which drastically modifies a debtor’s protection in their homestead in the event of a bankruptcy. AB 1885, which took effect January 1, 2021, makes two (2) important changes:

  • Makes the homestead exemption the greater of $300,000 or the countywide median sale price of a single-family home in the year prior to the year in which the judgment debtor claims the exemption, not to exceed $600,000.
  • Adjusts annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.

While the sharp increase in the value of the homestead exemption may be staggering at first blush, AB 1885 is adjusting state law to account for the drastic increase in property values that California has experienced over the past several years.

The Effect of a Homestead Exemption

A declared homestead limits the extent to which a subsequently recorded judgment lien, other than a judgment lien based on a judgment for child or spousal support, will attach to the declared homestead. As a result, a judgment lien attaches only to the surplus value of the property over the amount of the homestead exemption, plus the amount of all liens and encumbrances on the declared homestead at the time the abstract of judgment is recorded to create the judgment lien. (Code Civ. Proc., §704.950; see also Code Civ. Proc., § 487.025(b).) Thus, if there is no “surplus equity” when the judgment lien is recorded, the judgment lien may not be enforced to any extent.

Additionally, the homestead exemption applies to any interest of the judgment debtor in a homestead [Code Civ. Proc., §704.720(a)] and to all procedures for enforcement of a money judgment [Code Civ. Proc., §703.010(a)].

In light of the foregoing, bankruptcy courts may experience an increase in bankruptcy filings for homeowners struggling with mounting debt but have built equity in their home.

The Impact on Assessment Collections

As a result of AB 1885, our office has been receiving various inquires regarding how this will impact assessment collection. In short, AB 1885 will only have an impact on an HOAs ability to satisfy a delinquent account if the delinquent Owner files bankruptcy. While AB 1885 may reduce some potential revenue sources to satisfy the debtor’s creditors, there are still various collection options available.

California HOA lawyers To ensure your HOA is taking all appropriate measures to secure debts and collect from delinquent Owners, contact your attorney for individual case analysis.

-Blog post authored by TLG Attorney, Corey L. Todd, Esq.

*Asked & Answered

court-diagram-photoAsked – Several members of our association have requested that we convert a portion of our common area into a pickleball court. Does your office recommend moving forward with the installation?

Answered – Generally, no. For those who may not know, pickleball is a paddle sport that combines elements of tennis, badminton, and ping pong. Two or four players use solid paddles to hit a wiffleball over a net. It is an activity that can be played amongst all age groups and provides various health benefits and has increased in popularity in recent years. However, with its benefits comes numerous issues.

Considering that pickleball is played with a solid paddle and a wiffleball, it is an extraordinarily loud sport. Moreover, as it grows in popularity, it generally brings large gatherings of people together whose yells and cheers can be heard over great distances. This noise may result in a substantial nuisance to those within earshot and may subject the association to various lawsuits unless the pickleball courts are constructed far out of the earshot of the residences.

Unfortunately, our office has seen many associations attempting to convert croquet lawns, bocce ball courts, etc. into pickleball courts that are centrally located to other amenities provided by the association. These are typically areas which many members regularly visit as a place of quiet enjoyment and relaxation. Unfortunately, this quiet enjoyment could be severely disrupted once the pickleball courts are installed.

Even more concerning is when associations attempt to install the pickleball courts in areas immediately adjacent to residences. The owners of the surrounding homes will be routinely battered with the noise emanating from the pickleball courts. This will no doubt result in substantial frustration to those residents, may have a negative impact on their property value, and will, almost certainly, result in a nuisance lawsuit for the association.

The nuisance created by this loud sport has resulted in various lawsuits and settlement agreements costing associations tens of thousands of dollars and has severely harmed many associations’ financial wellbeing. This, in turn, is then passed back to the membership by way of increased assessments.

As such, if the association decides to move forward with the installation of the pickleball courts , it is not a matter of if, but a question of when a lawsuit may be filed. Thus, unless the association has an area far removed from the residences and other common area amenities, it is likely not worth exposing the association to the increased risk of liability.

California HOA lawyers If your association has any questions as to whether to install a pickleball court in your association, contact your attorney to provide an in-depth analysis to ensure the association is not needlessly exposing itself to liability.

-Blog post authored by TLG Attorney, Corey L. Todd, Esq.

*Asked & Answered

temporary-outdoor-fence-privacy-ides-rental-panels-bamboo-backyard_outdoor-patio-and-backyardAsked – Our association has two homeowners that have requested the association’s intervention to assist with resolving a dispute that has arose from damage to a shared wall. Should the Board get involved? Does the Association have any responsibility to cover the cost to repair the shared wall?

Answered – As a general matter, the Association is not obligated to intervene in this neighbor-to-neighbor dispute and is not responsible for covering the cost of the damage to the shared wall (“Party Wall”).

California Civil Code § 4775 provides the general allocation of maintenance responsibilities between associations and individual homeowners as follows, “unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, and maintaining the common area.” (Civ. Code § 4775(a)(1). Emphasis added.) The code further provides that “[u]nless otherwise provided in the declaration of a common interest development, the owner of each separate interest is responsible for repairing, replacing, and maintaining that separate interest.” (Id. at (a)(2). Emphasis added.)

In this situation, the damaged Party Wall is located between two private lots, not on the Association common area. As such, absent any provision in the association’s governing documents to the contrary, the association has no obligation to repair the Party Wall.

This point is further clarified by California Civil Code § 841(a), which states, in pertinent part: “[a]djoining landowners shall share equally in the responsibility for maintaining the boundaries and monuments between them.” Which, necessarily, would include the damaged Party Wall. This maintenance obligation extends to “reasonable costs of construction…or necessary replacement of the fence.” (Civ. Code § 841(b)(1).)

There may be circumstances where the Board of Directors (“Board”) may sympathize with the homeowners and want to intervene (eg. the damage to the Party Wall was no fault of the homeowners). While this feeling is valid and shows the Board’s virtues, the Board should remember that they are fiduciaries of the Association and must act in the best interests of the association as a whole.

The Board lacks the authority to expend association funds to repair the damaged Party Wall. The association levy’s and collects assessments from its owners for various reasons including among other things, promoting its members’ welfare, improving and maintaining association property, and discharging association obligations under their governing documents. However, covering the cost of the Party Wall, which is a separate interest, would be outside the scope of the association’s authority.

Thus, the association has no obligation or authority to intervene with this dispute and make the repairs to the damaged Party Wall. That burden lies solely with the homeowners.

California HOA lawyers In addition to the above, prudent associations adopt neighbor-to-neighbor dispute policies to offset many disputes that can likely be resolved with effort between the homeowners.

-Blog post authored by TLG Attorney, Corey L. Todd, Esq.

*New Legislation

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On January 1, 2012, Section 1360.2 (now Section 4740) was added to the California Civil Code to limit a HOA’s authority to adopt and enforce certain rental “prohibitions.”  The legislative intent behind the law was the recognition that “the rights of Owners in [a HOA] to rent or lease their properties, as the rights existed at the time the Owners acquired them, should be protected by the State of California…”  Nevertheless, by its own terms, Section 4740 applies to rental prohibitions, not necessarily less serious restrictions that are reasonably related to the Association’s interests in maintaining and preserving the community.  Thus, many HOAs adopted restrictions regulating the rental of separate interests within the development (e.g., one-year minimum term limit, owner-occupancy requirements, individual room rental restrictions, etc.).

On September 28, 2020, Governor Gavin Newsom signed Assembly Bill 3182 (“AB 3182”), which was introduced as another measure “to address the housing and homelessness crisis” in California. According to Assembly Member Phil Ting (the author of AB 3182), “[t]here are millions of homes across the state that have the potential to be rented to Californians in need of housing but that are prohibited from being leased under outdated [HOA] rules.” While the stated objective of providing more affordable housing units is a laudable goal, AB 3182 significantly limits the extent to which HOAs may impose rental restrictions and prohibitions.

Under AB 3182, California Civil Code section 4741 is added to the Davis-Stirling Common Interest Development Act and renders void and unenforceable any provision in a governing document or amendment thereto “that prohibits, has the effect of prohibiting, or unreasonably restricts the rental or leasing of” a separate interest “to a renter, lessee, or tenant.” Despite this prohibition, Section 4741 does authorize a HOA to adopt and enforce:

  • A rental cap of twenty-five percent (25%) of the separate interests (or greater); and
  • A provision “that prohibits transient or short-term rental of a separate…interest for a period of 30 days or less.”

Moreover, Section 4741 adds that a separate interest (including Accessory Dwelling Units and Junior Accessory Dwelling Units) is not considered “occupied by a renter” if the separate interest is also owner-occupied. Thus, for example, a cap on the number of rentals within a HOA would not apply to an owner renting out individual rooms within his or her separate interest.

Other than the rental restrictions specifically identified in Section 4741, there is much uncertainty as to the extent to which other common rental restrictions would be rendered unenforceable as a result of AB 3182. Indeed, the Legislature provides no guidance as to what would constitute an “unreasonable restriction” on the rental of a separate interest. Therefore, each rental restriction contained in a HOA’s governing documents must be evaluated in light of AB 3182’s intent: to increase the number of housing units made available.

California HOA lawyers There is much uncertainty that remains concerning the extent to which other typical rental restrictions remain valid and enforceable. To the extent certain rental restrictions are rendered unenforceable by AB 3182, same must be removed from the governing documents no later than December 31, 2021. Failure to comply with Section 4741 may result in a HOA being liable for actual damages (e.g., lost rental income) and a civil penalty of up to one thousand dollars ($1,000). It is therefore important for each HOA to consult with their attorney to determine whether the HOA’s rental restrictions are enforceable in light of AB 3182, and to take action to amend their governing documents to remove such unenforceable provisions.

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

Support-animal-1*Asked & Answered

Asked Our Association does not allow pets in the pool area, but a resident has recently begun bringing her emotional support dog to the pool-side lounge area. Do we have to let the dog accompany its owner to the pool?

Answered – Probably. The Federal Fair Housing Act requires housing providers to make reasonable accommodations that may be necessary to allow persons with disabilities to enjoy their housing, including common area spaces. An accommodation is typically considered reasonable if it does not impose an undue financial and administrative burden on the housing provider or fundamentally alter the nature of the provider’s operation. Normally, allowing an emotional support dog to use a common area that is otherwise off limits to pets will not create such a burden on the homeowners association (“HOA”).

In this case, since the HOA’s restriction on pets from the pool area may be serving as a barrier to prevent this resident from using the pool area, making an exception to this rule and allowing her to bring her emotional support dog to the pool deck is likely a reasonable accommodation that the HOA can make.

However, like other dogs within the Association, an emotional support dog must remain under the control of its owner. This means the HOA can require that the dog remain on a leash while it is poolside with its owner unless a specific accommodation to allow the dog off-leash is requested by the dog’s owner and granted by the HOA – there are very limited circumstances when a dog does not have to be leashed or crated. Furthermore, if the dog causes a nuisance (for example, uncontrolled barking) or poses a threat of harm to another person or the property of another person, the HOA can restrict the dog’s presence in order to eliminate the nuisance or threat to other residents of the HOA.

It is worth noting, however, that just because the emotional support dog is allowed in the pool area does not mean the dog may enter the pool. Public health regulations prohibit dogs in swimming pools, and the HOA may not ignore this regulation to allow the dog inside the pool with its owner. If the owner is in the pool, the dog must continue to remain under control, whether the dog’s leash is held by another person capable of controlling the dog or tethered to a stable element.

California HOA lawyers When an HOA receives a request from a resident for an accommodation based on the resident’s disability, the Board should address the request timely and maintain an open dialogue with the resident. The Board should be careful to address these requests in compliance with all applicable laws and should not ask about the nature or extent of the person’s disability. Oftentimes in a request regarding an emotional support animal, the person’s disability and the animal’s related service task is not readily apparent (as may be the case for a dog that helps guide an individual in a wheelchair). HOA’s should consult their legal counsel regarding requests for accommodation of disabled residents.

-Blog post authored by TLG Attorney, Joelle M. Bartkins, Esq.

CondoAmenitiesCommunity associations across the state are wrestling with the idea of opening common area facilities after closure due to COVID-19.  Residents are becoming increasingly restless under the state’s stay-at-home order; naturally, they desire to use their community association’s recreational amenities (“Amenities”).

“When can we use the pool?  When will the gym be opened?”  Boards must balance resident pressures with their fiduciary obligation to do what’s best for their communities.

The purpose of this blog post is to identify a two-part test that can help boards and community managers evaluate when to re-open the Amenities and, if so, under what circumstances: (1) Can the Amenities be opened? (2) Should the Amenities be opened?  The information provided herein is current as of Tuesday, May 12, 2020.

Can the Amenities be opened?

Community Associations Institute (CAI), a worldwide industry trade group for community associations, recommends that community associations comply with governmental regulations regarding COVID-19.  Therefore, the first question to be asked is whether it is legally permissible to re-open Amenities in view of the government’s current stay-at-home orders.  The answer to that question depends upon state and local declarations regarding recreational use.

Federal and state authorities do not appear to have provided guidance with respect to the closure and re-opening of HOA facilities in view of COVID-19.  Understanding how the government is managing similar recreational facilities in the public arena (e.g. pools; parks; gyms; and community centers, etc.) can offer a blueprint for California HOAs.

California Governor Newsom (“Newsom”) is opening California through a four (4) stage Resilience Roadmap.  As of the date of this correspondence (May 12, 2020), it appears that the state is slowly moving into Stage 2 of that Roadmap (Lower-risk workplaces).  According to the state’s web site (covid19.ca.gov/roadmap/), gyms and fitness studios, community centers, public pools, playgrounds and picnic areas are categorized as “Higher-risk workplaces” which are NOT in Stage 1 or 2.  It seems that the state has not yet adopted guidelines with respect to the safe operation of those areas.

Newsom states that county officials and localities can decide to move more quickly (or slowly) into Stage 2 of reopening than the statewide baseline.  It is possible that county and local governments could potentially open gyms, pools and community facilities after adopting their own safety guidelines.  Under that circumstance, it would be safer for community associations to open their similar private facilities because operating procedures can mirror available public health standards.  If government orders are not clear or are silent with respect to the extent of lock down orders in your region, then Amenity opening could be premature – and to some degree risky.   You can imagine the first question at a deposition in a personal injury lawsuit against the association: “Why did the association open the pool when your county was still under lockdown?”

Should the Amenities be opened?

Presuming Amenities can be opened because of the absence of applicable stay-at-home orders, the next question becomes: Is opening the Amenities the right decision for your community at this time?  Are we able to comply with governmental regulations?  If so, how can we keep our facilities safe?  Those questions should be asked before Amenities are opened.

A primary consideration should be whether the association’s liability policies cover COVID-19 liability claims (i.e. a resident alleges that he or she became infected because of the Association’s improper disinfection efforts).  Industry insurance professionals have noted that association liability insurance policies may include a coverage exclusion for bacteria and viruses, such as COVID-19.  Under that circumstance, the association could be directly liable for personal injuries because the risk of such damage has not shifted to the insurance carrier.  It is recommended that boards discuss application of that policy exclusion with the association’s insurance professional.

Before re-opening the Amenities, boards should develop a risk mitigation safety plan (“Safety Plan”), in accordance with CDC guidance and state/local regulations.  That plan can be previewed with the association’s legal counsel (for purposes of legal compliance) and management (for purposes of managing logistics and enforcement).  Industry experts believe that additional cleaning and enforcement efforts could create unforeseen expenses – up to as much as 25% of an existing Association budget.  Management can be an excellent source to identify cost-savings measures, such as limiting resident use of Amenities and their hours of operation.

Discussing how to manage resident communication is critical as boards decide whether to re-open Amenities.  Regular updates in some form are desirable for purposes of education and transparency.  Use of a waiver agreement should be considered for purposes of acquiring their appreciation of the risk associated with Amenity use.  It is important for residents to know that the association cannot guarantee that no one will get sick or that the premises are COVID-19 free.  In that regard, disclaimer signs should be posted throughout the Amenities which state something like, “The Association is not ensuring that the [insert name of Amenity] is free of COVID 19 contaminants.”

Is Amenity re-opening the right decision for your community at this time?  Factors which may be relevant for a neighboring community may not be relevant to your association, even though both developments exist within the same city.  Compared to your neighbor, your community may have more or less Amenities, may or may not have the same capacity to comply with governmental safety mandates, and will likely have a different budget for purposes of maintaining a safe environment and enforcing the Safety Plan.

California HOA lawyers The understandable desire to re-open common area facilities should be balanced by prudent business practices.  Understanding risk and the government’s safety guidelines are essential for purposes of making informed decisions.  Fortunately, there are many sources of information in that regard.  Boards of Directors and management professionals are strongly encouraged to consult with the association’s vendors and consultants during the decision-making process.

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

NaggingCough*Asked & Answered

Asked We just found out that two homeowners in a community we manage are infected with COVID-19 and they are currently self-isolating in their Units. What must be done on our end and what information can we disclose to help prevent the spread?

Answered – Even if there is not a known case of COVID-19 in the community, Associations should be taking the pandemic seriously. This includes implementing full compliance with Governor Newsom’s Executive Order (“Order”), the Department of Homeland Security’s Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response referenced in the Order,  and the California Department of Public Health (“CDPH”) Guidelines (“Guidelines”). In short, the Executive Order mandates that everyone is required to stay home except to get food, care for a relative or friend, obtain necessary health care, or to perform an essential job. And, if one must leave their home, they must keep at least 6 feet of distance from others. Aside from the stay-home mandate, the Guidelines encourage people to wash their hands with soap and water for at least 20 seconds, to cover coughs and sneezes with a tissue, to clean and disinfect frequently-touched objects and surfaces, and, if soap and water are not available, to use alcohol-based sanitizer.

In response to the Order and Guidelines, Associations should be temporarily closing community recreational facilities, allowing staff and contractors (including management) to work from home where possible, implementing enhanced cleaning of any on-site facilities, postponing annual elections and Board meetings or working with counsel to determine how meetings may proceed virtually to comply with the Executive Order as well as the Davis-Stirling Act, and encouraging members to stay home and to use proper hygiene to avoid the spread of the virus.

If the Association is aware of a resident in the community infected with COVID-19, proper disclosures to the membership apprising them of the situation are recommended for heightened awareness with the goal of reducing the transmission of the virus between residents in the community.

Boards have a fiduciary duty to act in the best interests of their communities. Additionally, the Articles of Incorporation for many Associations state a corporate purpose of promoting the health, safety and welfare of the members. To that end, it is recommended that Associations disclose to members that resident(s) in the community have recently tested positive for COVID-19 and are in self-isolation. To protect the privacy of the infected members, names, addresses, and other identifying information should not be disclosed under any circumstances.

The intended effect of the disclosure is to: 1) inform the membership as to the virus’ presence in the community, a fortunate side effect of which is promoting trust and transparency; 2) educate members how to best protect themselves and their neighbors through following the Governor’s Order and the CDPH Guidelines by staying home and using proper hygiene; 3) apprise members what the Association is doing to stop the spread of the virus; and 4) instruct members per the CDC website, that if they think they have been exposed to COVID‑19 and develop a fever and symptoms, such as cough or difficulty breathing, they should call their healthcare provider immediately for medical advice.

California HOA lawyers Associations are encouraged to work with their counsel to prepare such disclosures given the legal implications of properly balancing the disclosure of private and sensitive information related to a member’s health with promoting the health and safety of the membership during a pandemic.

-Blog post authored by TLG Attorney, Carrie N. Heieck, Esq.

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