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Articles Posted in Renters

hoa-caregiver.jpgThe ability of California homeowners associations (“HOAs”) to adopt and enforce restrictions on the renting of units has been limited by changes in the law over the past couple of years. Those changes have purported to provide greater protections for homeowners seeking to rent out their units to third parties. HOAs have therefore been required to modify their approach to the enforcement of rent restrictions that may be contained in their governing documents, including the adoption of additional rent restrictions binding only on future homeowners.

However, a recent unpublished Appellate Court decision confirms the ability of a HOA to enforce rent restrictions adopted decades in the past that are intended to address the unique concerns and characteristics of the HOA’s development.

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The problems posed by second-hand smoke have become a burning issue for California homeowners associations (“HOAs”), expecially condominium developments. A HOA typically does have the authority to adopt operating rules that prohibit smoking in common areas and exclusive use common areas; however, those rules may be insufficient to address problems posed by second-hand smoke emanating from inside an owner’s unit. Prohibiting that type of activity generally requires language to that effect contained in the HOA’s recorded CC&Rs. Where there is no such language, HOAs often refuse to get involved and opt to treat those situations as a “neighbor-to-neighbor” disputes.

However, we have written before about how a HOA may have an obligation to enforce the nuisance provisions contained in its CC&Rs to address problems posed by smoking within units. An Orange County jury recently affirmed this fact in the first ruling of its kind in California. The jury in Chauncey v. Bella Palermo Homeowners’ Association, et al., OCSC Case No. 30-2011-00461681, found the defendants HOA and its management company negligent and also found the HOA in breach of its CC&Rs for failing to enforce its nuisance provision protecting the plaintiffs’ rights to their “quiet enjoyment” of their unit. The jury held the HOA liable for doing nothing to abate the alleged nuisance resulting from the second-hand smoke, despite the fact that the CC&Rs contained no provision specifically prohibiting smoking within the units.

hoa attorney More and more municipalities are adopting “no-smoking” ordinances within multi-dwelling residential units. However, where there are no such ordinances, or any similar restrictions contained in a HOA’s recorded CC&Rs, a HOA may be still be obligated to enforce its nuisance provisions to address problems posed by second-hand smoke emanating from the interior of a unit. Where the problems persist, a HOA should consult with its legal counsel and also consider a formal amendment to its CC&Rs to prohibit smoking throughout the entire development.

Content by TLG attorney Terri Morris

*Asked & Answeredhoa law firm

Asked As a HOA member, do I have the right to see a copy of a lease agreement pertaining to a home that was acquired by my HOA through foreclosure of an assessment lien?

Answered – Yes, you may request to see a copy of the lease agreement. Under Civil Code §1365.2(a)(1)(D),a HOA member is entitled to inspect certain “Association records” for any “proper purpose reasonably related” to her interests as a member of the Association. “Association records” include “[e]xecuted contracts not otherwise privileged under law.” 1365.2(a)(1)(D).

The term “privileged” in Civil Code §1365.2(a)(1)(D) essentially pertains to confidential or sensitive information, as well as records/communications which are protected by attorney-client privilege. A standard lease agreement between a HOA and a renter is generally not a “privileged” contract and is therefore subject to inspection as an “Association record.”

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The lease agreement may, however, include confidential information such as social security numbers. The HOA Board of Directors and/or management should ensure that such confidential information is adequately redacted from the lease agreement prior to providing it to a member for inspection. A HOA that has questions or concerns regarding the disclosure of HOA lease agreements and the information contained therein should consult with the HOA’s legal counsel.

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

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AskedCan 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.

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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.

rent_fee2.jpgThe additional burdens that renters impose can be substantial for many common interest developments–especially those developments designed as “recreational communities.” Renters who lack a sense of investment in the community or who are unfamiliar with its operational structure can place greater strain on the community’s management and maintenance resources. This may not only frustrate other owners within the community, but may also significantly impact the financial health of the Homeowners Association (“HOA”) formed to preserve and protect it.

We have written about how HOAs adopt and enforce rental restrictions as a means to alleviate some of the problems posed by renters. We have also published a resource explaining how new legislation taking effect January 1, 2012 will limit a HOA’s ability to restrict rentals in certain circumstances. However, in addition to imposing rental restrictions where possible, can a HOA impose a fee on owners who wish to rent out their homes? In the recent, unpublished decision of Watts v. Oak Shores Community Association, the answer may be yes.

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Our “2012 Legislative & Case Law Update” newsletter is now available in our library!

The 2012 Legislative & Case Law Update provides an overview of the new legislation impacting California Homeowners Associations (“HOAs”) and the community association industry professionals who service them. The new legislation includes, among other things, bills that impose new requirements on Board Member meetings and new limitations on HOAs that wish to restrict rentals in their communities.

The 2012 Legislative & Case Law Update also provides an overview of some important new case law, along with some links to additional resources we have published on the items discussed therein.

Click here to read our 2012 Legislative & Case Law Update

Have questions on any of the new legislation or case law? Click here to send us a question online.

*Asked & Answeredlease.jpg

AskedI read your blog post on SB 150 and the new legislation impacting rental restrictions. If I am currently required to provide my HOA with a copy of my lease agreement with my tenant, will I still be required to do so after SB 150 takes effect?

Answered – Probably. Senate Bill 150 “SB 150”, which takes effect January 1, 2012, will have a significant impact on the rental landscape within Homeowners Associations (“HOAs”). At the outset, it is important to note that SB 150 insulates homeowners from rental restrictions that were not already in place at the time the homeowner bought into the community. Therefore, assuming that you already own the property within your HOA, you would still be bound by the current rental restrictions and requirements regardless of the new legislation.

However, assuming you are not yet an owner of property within the HOA, the answer will depend on how California law will ultimately treat rental prohibitions as compared to rental restrictions. SB 150 does outlaw a HOA from having rental prohibitions. However, it is less clear as to whether less serious restrictions, such as rental period minimums, will still be permitted. If rental period minimums are ultimately upheld as valid, reasonable rental restrictions, then the only way a HOA could enforce the restriction would be to examine the contents of lease agreements such as yours.

https://hoalaw.tinnellylaw.com/wp-content/uploads/sites/26/2015/06/logo-icon.png We have published a resource on SB 150 that discusses the new legislation in more detail and provides a recommendation for HOAs that have, or are considering, adopting rental restrictions in their community. The resource, entitled “Senate Bill 150 and the Impact on Rental Restrictions” is available for download in our Library.

To read our previous blog post on SB 150, click here.

To submit questions to Tinnelly Law Group, click here.

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Homeowners Associations (“HOAs”) have traditionally encountered problems with renters in their communities. Because renters do not have an ownership interest in their units and the HOA, they may feel less invested in the community. This often results in renters failing to (1) comply with the HOA’s CC&Rs and/or (2) properly adhere to the HOA’s rules and regulations. HOAs that have high quantities of renters typically find themselves paying more in enforcement costs compared to those Associations that have smaller renter populations.

Senate Bill 150 (“SB 150”), which takes effect January 1, 2012, will effectively prohibit HOAs from adopting the types of rental restrictions they have utilized in the past. In sum, SB 150 exempts owners in a HOA from any rental restrictions that were not in effect prior to the date the owner bought into the community.

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We have published a resource on SB 150 that discusses this issue in more detail and provides a recommendation for HOAs that have, or are considering, adopting rental restrictions in their community. The resource, entitled “Senate Bill 150 and the Impact on Rental Restrictions” is available for download in our library.

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