Rules & Regulations

New Legislation Restricts the Ability of HOAs to Adopt & Enforce Rental Restrictions

Published on: August 8, 2011 | by Steven J. Tinnelly, Esq.

*New Resource

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.

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.

Board Member Qualifications: Defining “Ownership” for a Trust Beneficiary

Published on: May 9, 2011 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Question – One of our incumbent Board Members was recently discovered to be the beneficiary of a trust that holds title to her home. The title was transferred by Grant Deed to the named Trustee many years ago. The Board Member asserts that she is an owner and thus eligible to serve as a Board Member. Is she correct?

Maybe. Associations are permitted to set reasonable requirements/qualifications in their Bylaws or CC&Rs for members to serve on the Board. Laguna Royale v. Darger (1981). These requirements typically include that any member wishing to serve on the Board have an ownership interest in a property located within the Association. We typically treat the trustees as the owners of the property due to their ability to control title. However, general principles of trust law in California view trust beneficiaries as holding “the equitable estate or beneficial interest in” property held in a trust and are “regarded as the real owner[s] of [that] property.” Steinhart v. County of Los Angeles (2010).

The answer will ultimately depend on a number of factors including the nature of the restrictions/qualifications contained in your Association’s Governing Documents and the type of trust involved. We recommend discussing the issue with your Association’s legal counsel.

To submit questions to Tinnelly Law Group, click here.

Homeowners Compelled to Submit to Hoarding Inspections by HOA

Published on: March 11, 2011 | by Steven J. Tinnelly, Esq.

Laguna Woods’ United Mutual HOA board voted unanimously this month to adopt a policy to compel residents suspected of hoarding to allow the association to inspect their home.

In the wake of the policy’s adoption, the HOA’s board of directors sought to assure the association’s members that the policy would not be abused and that members would not be subject to the HOA “breaking down” their doors.

The policy states that once a complaint is filed by one of the association’s members, an inspection would be ordered of the residence where the hoarding is suspected. The HOA board must first get the resident’s permission to enter the unit for the inspection. However, residents who refuse the inspections will be called to a disciplinary hearing before the board.