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What If Our HOA’s Insurance is Cancelled Due to Risk of Wildfires?

Published on: August 4, 2023 | by Bradley Walker, Esq.

fire-gb0de99a85_1920 If your homeowners association (“HOA”) is located in a high-risk fire area, what can your Board of Directors do if the current master policy of fire and casualty insurance on your condominium or townhome buildings is not renewed? Due to the massive wildfires that have swept California over the past two years, many insurance companies (and their re-insurance partners) are reassessing their willingness to underwrite fire and casualty insurance in the state. Those carriers that are willing to write coverage are limiting their risk exposure by greatly reducing the coverage limits available for purchase. To compound this problem, the premiums being quoted are 5-10 times the amount of the prior year’s premium for much less coverage.

In order to protect the HOA and the members’ investment in their homes, members should contact their own insurance broker and inquire into purchase of an HO-3 policy that will cover the portion of the condominium (or townhome) building containing that member’s unit. An alternative insurance product, combining “Building Property” coverage with the member’s HO-6 unit policy, may also be available. Members should also consider adding “Loss Assessment” coverage to their current unit policy to offset exposure to future special assessments.

Many HOAs are finding that they are unable to purchase “full replacement” coverage for the attached common buildings at any price. These HOAs are electing to purchase whatever reduced coverage is available and affordable and passing the increased premium costs back to the members as a special assessment. With the current lack of any legislative solution from Sacramento, combining reduced coverage under the HOA’s master policy with individual purchase of an HO-3 policy may represent the only available option for members to protect their investment for the foreseeable future.

HOAs facing this problem should carefully consult with their insurance broker and legal counsel to assure that the Board is acting reasonably and obtaining the maximum amount of fire and casualty insurance coverage that is available and affordable. Boards of Directors should also consider whether any amendments to the HOA’s governing documents are needed to limit the risk of claims against the HOA for underinsuring the project and requiring members to obtain additional building property coverage on their individual unit policy.

Non-renewal of an HOA’s master casualty and liability insurance policy can have disastrous effects on the HOA’s finances and the value of the member’s separate interests. This is why HOA’s should immediately contact their legal counsel in the event they receive a notice of non-renewal.

New Legislation: California Paves the Way for Mandatory EV Charging Stations in Existing Buildings

Published on: May 25, 2023 | by Steven J. Tinnelly, Esq.

hoa-ev-charging-300x178 For more than a decade, the California Legislature has passed laws making it easier for residents to install electric vehicle (“EV”) charging stations within HOAs. For example, in 2011, the Legislature enacted what is now Civil Code section 4745, which nullified any provision in an HOA’s governing documents which prohibited homeowners from installing EV charging stations. In 2012, the Legislature amended the law to provide HOAs with some control over the installations. That is, it allowed HOAs to impose “reasonable restrictions.” More changes were made in 2018 with Senate Bill 1016.

Consistent with California’s commitment to green energy, Assembly Bill 1738 was codified paving the way for mandatory EV charging station installations in multifamily dwellings (i.e., condominium projects) during specifically defined construction activities. Through AB 1738, Section 18941.11 was added to the Health and Safety Code requiring the Department of Housing and Community Development to research and develop “mandatory building standards for the installation of electric vehicle charging stations in existing multifamily dwellings….” These installations are to occur “during specified retrofits, additions, and alterations to existing parking facilities for which a permit application is submitted….”

Compliance with the new legislation may be difficult for some communities; particularly, those with aging infrastructure and inadequate electrical systems. Indeed, the underground electrical systems servicing many condominium projects do not provide sufficient electricity to enable multiple residents to install EV charging stations. Extensive (and costly) upgrades may be necessary, which raises issues concerning funding and membership approval.

Once these standards are incorporated into the California Building Code, common interest developments will need to inquire with its experts concerning the association’s infrastructure and ability to comply with the new standards, particularly during projects impacting the association’s parking facilities. Associations impacted by the Bill should be prepared to undertake the necessary installations and should start reserving for the expense now.

New Client: Dominquez Hills Village Community Association

Published on: October 19, 2022 | by Steven J. Tinnelly, Esq.

Dominguez-Hills-Village-300x169 It’s our privilege to welcome Dominguez Hills Village Community Association to Tinnelly Law Group’s growing family of HOA clients.

Dominguez Hills Village is a private, gated single family home community in Carson. Residents enjoy at a clubhouse, swimming pool, basketball court and tennis courts, tot lot, entry gates, and parks and walkways.

Our HOA lawyers and staff look forward to working with Dominguez Hills Village’s Board and management.

New Client: Cerrato Community Association

Published on: October 12, 2022 | by Steven J. Tinnelly, Esq.

Cerrato-300x169 It’s our privilege to welcome Cerrato Community Association to Tinnelly Law Group’s growing family of HOA clients.

Cerrato features spacious new homes on walkable tree-lined streets. Located a few blocks from Downtown Hollister, Cerrato offers convenient access to nearby parks, schools, shops and restaurants.

Our HOA lawyers and staff look forward to working with Cerrato’s Board and management.

Membership Notification of Potential Issues

Published on: May 26, 2021 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – Our HOA Board of Directors has become aware of a potential issue with the fire resistive construction in the walls between two condominium units. The Board is split on whether notice to the membership as a whole is warranted at this time, prior to the conclusion of the investigation, given that this potential issue affects a life safety system. Half of us feel that the issue is only technical in nature, while the other half believes that any potential issue should be communicated to the membership. We do not want to unnecessarily alarm the membership or incur thousands of dollars investigating the issue throughout the community if it is not significant, but at the same time we do not want to expose the Board or Association to a risk of liability.

Answered – The Board, as fiduciaries to the Association, is obligated to rely on subject matter experts in situations such as these. (Raven’s Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783.) If the components in question fall within the scope of the Association’s repair responsibilities, the Association has a duty to retain experts to investigate the matter. Given the technical complexity of fire resistive construction systems, and the potential life safety implications, the Association should specifically ask their retained expert to evaluate and comment on whether membership notification of the issue is warranted at this time or whether further investigation is required. Often times, technical violations may exist that do not impair the overall performance of the system, but the Board should not rely on their own intuition or experience to make that determination. Such decisions can only be made after expert recommendations are provided and reviewed by the Board.

While a court will defer to a board’s discretion in its decision making, that deference will only apply if the board conducted a reasonable investigation and relied on the advice of experts. (Lamden v. La Jolla Shores Clubdominium Homeowners Association (1999) 21 Cal.4th 249.)

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

Pickleball Installation

Published on: November 18, 2020 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – 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.

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.

SB 323 Signed! The New State of HOA Election Laws

Published on: October 23, 2019 | by Steven J. Tinnelly, Esq.

*New Legislation

Governor Newsom recently signed into law Senate Bill 323 (“SB 323“). SB 323 makes substantive modifications to the Civil Code’s provisions governing HOA elections, effective January 1, 2020. Some of the more significant modifications require associations to amend their election rules to conform to new statutory requirements, limit the types of candidate qualifications an association may adopt, address the only circumstance for elections by acclamation, place limitations on who may serve as an inspector of elections, and bolster the ability of members to overturn an election that is not conducted in accordance with proper procedures.

*We have published a detailed article on SB 323, entitled “The New State of HOA Election Laws.” The article is available for download, here.

*Also included with the article is a “Director Election Timeline” that illustrates the new pre-election notice requirements imposed by SB 323. The timeline is also available for download, here.

SB 323 requires HOAs to make immediate changes to their election rules, especially those HOAs that have their annual meeting set to take place in the first quarter of 2020. Time is of the essence. Our team of HOA lawyers is ready to assist our clients with the steps needed to conform to the changes imposed by SB 323.

SB 234 Signed! Keeping the Kids Close to Home Act

Published on: October 17, 2019 | by Steven J. Tinnelly, Esq.

*New Legislation

Governor Newsome recently signed into law Senate Bill 234 (“SB 234“), also know as the “Keeping Kids Close to Home Act.” The new law will take effect on January 1, 2020. SB 234 permits large daycare homes, which provide care for up to 14 children at one time, to operate within HOA communities regardless of contrary language in their CC&Rs. The purpose of SB 234 is to increase the availability of childcare for families across the state by making it easier for daycare homes to operate in residential neighborhoods.

“It is the intent of the Legislature that family daycare homes for children should be situated in normal residential surroundings so as to give children the home environment that is conducive to healthy and safe development. It is the public policy of this state to provide children in a family daycare home the same home environment as provided in a traditional home setting.”

The California legislature previously declared that small daycare homes (those providing care for up to 8 children) were immune from HOA restrictions, like those against commercial use. (See H&S Code, section 1597.40(c).) Prior to SB 234, local governments could decide whether to classify large daycare homes like small daycare homes or to subject the large daycare operators to additional restrictions and requirements.

In effect, SB 234 voids CC&R provisions that prohibit Owners from utilizing their properties as large daycare homes, so long as those Owners follow the necessary state licensing requirements and provide care for no more than 14 children. The bill also informs those wishing to open daycare homes that remedies are available if the local governments or HOAs discriminate against them.

HOAs across the state should be aware that Owners have the right to open large daycare homes within the community, regardless of restrictions against commercial use or for single family use. However, the new law does not allow Owners to violate other CC&R restrictions, like those prohibiting noise nuisances.

HOAs should always consult with their legal counsel when responding to Owners’ requests to open daycare homes within the communities in order to ensure compliance with the new state law and their CC&Rs.

-Blog post authored by TLG Attorney, Sarah A. Kyriakedes, Esq.

New Client: Portarosa Community Association

Published on: March 12, 2019 | by Steven J. Tinnelly, Esq.

Portarosa-300x169 It’s our privilege to welcome Portarosa Community Association to Tinnelly Law Group’s growing family of HOA clients.

Portarosa by Lennar is a community of beautiful new townhomes set behind private gates conveniently located near the Birch Hills Golf Course in Brea. Innovative new home designs provide open interiors, private courtyards, and indoor-outdoor living space. Expansive amenities including a community pool with spa, outdoor barbecue, and neighborhood park offer family-friendly options for entertainment.

Our HOA lawyers and staff look forward to working with Portarosa’s Board and management.

New Client: Park Vista Maintenance Association

Published on: July 10, 2018 | by Steven J. Tinnelly, Esq.

Park-Vista We are proud to announce that Park Vista Maintenance Association has selected Tinnelly Law Group as their association’s legal counsel.

Park Vista is part of the Woodbridge Village Association in the City of Irvine. Residents enjoy tennis courts, green parks, association pools and spas, and use of the lagoons and clubhouses.

Our HOA attorneys and staff look forward to working with Park Vista’s Board and management.