HOA Lawyer Blog

What to Do if There is HOA Slope Movement/Failure

Published on: October 20, 2021 | by Vivian Tran, Esq.

LBLandslide060105 Southern California is known for the warm weather, relaxing atmosphere, and in certain cases, picturesque Homeowners Associations (HOA) situated high enough to see the ocean. However, what happens when those picture-perfect HOAs have a slope movement/failure? What should the Board of Directors (Board) do?

Slope Maintenance

Slopes within an HOA development are usually maintained by the HOAs via a maintenance agreement, by the Lighting and Landscape Assessment District (LLAD), or by the homeowners themselves. Slope maintenance involves management of sub-surface and above-surface areas.

Sub-surface maintenance will most likely involve vegetation root volume and irrigation system preservation, which is integral in supporting the slope structure itself. For steeper slopes, there might be a heavier support system built into the slope. Above-surface maintenance will most likely involve vegetation/brush preservation for aesthetical purposes and to prevent fire hazards, among other things.

The HOA’s management should routinely follow-up with the HOA’s landscape maintenance crew to monitor the slope, v-ditch (concrete channel usually at the bottom of a hill to collect drainage) and other drainage routes, and water pipelines. If maintained properly—barring extenuating circumstances—naturally occurring slope movement should be very minimal. It should be noted that there is always some sort of slope movement due to erosion and time. However, should abnormal slope movement/failure be noticed, the HOA’s management company and Board should and must be notified immediately.

Improvements on Slopes

The structural integrity of slopes is very complex. This means homeowners should consult with the HOA’s management and Architectural Committee before placing any improvements on or surrounding the slope as improperly engineered improvements may cause unwanted slope movement/failure.

Improvements may vary, but the most common ones are plants, fences, poles, pipes, decks, patios, and walkways. The Board should be aware of any improvements that change or interfere with the contour/drainage/support system of the slope. It would be prudent to require homeowners to submit an Architectural Application consisting of detailed improvement plans that have been vetted by a licensed geotechnical expert familiar with slopes. Furthermore, to cover all bases of liability, the Architectural Committee should retain its own geotechnical expert to analyze whether allowing said improvement(s) would be detrimental to the integrity of the slope. Such measures might cost a bit upfront, but compared to a major slope movement/failure, a geotechnical bill to analyze improvement plans would be inconsequential.

Board Action

An HOA’s Board will be called upon to act in the event of slope movement/failure. It is important for the Board to take immediate action as slope movement/failure can be detrimental to the physical wellbeing of everyone in the community and the homeowners’ properties involved. Additionally, immediate action will ensure that more data may be collected for the analyzation of the slope movement/failure. Here are a few things for the Board to consider:

Note the approximate time of the slope movement/failure
Catalog picture and video evidence of the slope movement/failure and any homeowners’ property damage
Contact the HOA’s general counsel
Create an executive committee to promptly handle all matters pertaining to the slope movement/failure
Consult/retain a geotechnical expert as soon as possible
Contact the HOA’s landscape maintenance crew regarding any potential broken irrigation pipelines and/or hazardous vegetation, if applicable (e.g., if there is a leak, the maintenance crew should try to perform temporary repairs/stoppage, or as advised by a geotechnical expert)
Contact the HOA’s insurance carrier and tender claims as necessary (note that some HOA policies might have exclusions regarding earth movement/slope failure, but the HOA’s general counsel will be able to navigate those areas with the insurance representative)
Involve the homeowners’ insurance carrier if they have property damage due to the slope movement/failure
Prepare and have ready past HOA water irrigation reports, water invoices, landscape maintenance invoices…etc.
Review the HOA’s budget and all/pending capital expenditures
Consider winterizing the slopes if the slope movement/failure occurs before or during the rainy season

The following above is by no means an exhaustive list, but it is the bare minimum the Board should do in the event of a slope movement/failure. After the HOA’s counsel and geotechnical expert have been consulted, there would usually be four (4) phases to go through before the slope is back to its original condition: (1) preliminary above-surface investigations (i.e., measurements of movement/failure, noting any damages, reviewing HOA records…etc.); (2) sub-surface invasive investigations (i.e., digging, collecting soil samples, lab analyzation…etc.); (3) drawing building/repair plans and obtaining city approval; and (4) rebuilding/repairing the slope. The HOA should expect each phase to take a minimum of one (1) month if all parties—Board, homeowners, counsel, insurance carriers…etc.—cooperate. However, if parties are uncooperative, the phases can be delayed by months if not a year or more. Moreover, if there is slope movement/failure during the rainy season, the slope must be winterized (e.g., protected against further rainfall, water pooling) and rebuilding/repairs will likely not begin until the spring when the ground is a bit drier.

The Board must keep in mind that should the slope movement/failure be extreme, the costs associated with determining the cause and rectifying any damages will be vast (~ $300K if not more). This is not taking into account any legal disputes between the parties as liability and responsibility for the slope movement/failure will not be clear until after phase 2 investigations. Therefore, if HOAs have a slope movement/failure, it is best to contact general counsel immediately!

-Blog post authored by TLG Attorney, Vivian X. Tran, Esq.

New Client: The Vineyards at Dublin Greene Owners Association

Published on: October 13, 2021 | by Steven J. Tinnelly, Esq.

The-Vineyards-300x169 It’s our privilege to welcome The Vineyards at Dublin Greene Owners Association to Tinnelly Law Group’s growing family of HOA clients.

The Vineyards is a condominium community located in the city of Dublin. Residents enjoy a community pool and spa.

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

AB 1101 Signed! Welcome Clarity to HOA Financial Protection Requirements

Published on: October 11, 2021 | by Carrie Heieck, Esq.

*New Legislation

AB 2912, passed in 2018, provided welcome protections to homeowners in HOA’s from fraudulent activities by those entrusted with managing an HOA’s finances. AB 2912’s protections included: 1) requiring Associations to secure fidelity bond insurance in an amount equal to or exceeding current reserves, plus three months of assessments; 2) requiring a monthly review of financial statements rather than quarterly; and 3) prohibiting electronic transfers of funds without board approval. However, certain provisions of AB 2912 were unclear.

To settle any confusion, AB 1101 was passed by the California Legislature in September of 2021. Effective January 1, 2022, Civil Code Sections 5380, 5502, and 5806, will be amended in order to clarify existing law by:

1) Specifying that HOA funds shall be deposited into accounts insured by Federal Deposit Insurance Corporation or the National Credit Union Administration Insurance Fund. This ensures that HOA funds are properly preserved and not invested in any high-risk investments or stocks.

2) Establishing clear limits before board approval is required for the transfer of HOA funds. While AB 2912 provided a process by which HOA’s should approve major expenses, the process for calculating those limits was somewhat confusing and was subject to change based on the amount of money on deposit in the HOA’s bank accounts. With AB 1101, the process is clear. For HOA’s with 51 or more units, transfers of $10,000.00 or more must be approved by written approval of the board. For HOA’s with 50 or fewer units, transfers of $5,000 or greater must be approved in writing by the Board.

3) Specifying that the HOA must not just maintain fidelity bond coverage, but that it must now also maintain crime insurance and employee dishonesty coverage, or their equivalent, for dishonest acts of the person or entity and their employees. This coverage would extend not just to the HOA and its directors, officers and employees, but also to managing agents and their employees.

Common sense legislation that protects the financial interests of HOA’s, which are unfortunately often targets for embezzlement, is a breath of fresh air. As always, HOA’s with questions regarding new legislation or legal requirements related to insurance or finances, should contact their HOA lawyer.

-Blog post authored by TLG Senior Attorney, Carrie Heieck.

AB 502 Signed! Board Elections by Acclamation Available to All California HOAs

Published on: October 6, 2021 | by Matthew Plaxton, Esq.

*New Legislation

There has been disagreement within the homeowners association (HOA) legal community as to whether California law permits uncontested director elections to be carried out by acclamation, especially in situations where the HOA’s bylaws contain language permitting such a procedure. Our firm has always held that such a procedure is not permitted regardless of any language within an HOA’s Bylaws to the contrary. Our position is based on Civil Code section 5100(a) which provides that the Civil Code’s election procedures must be followed “[n]otwithstanding any other law or provision of the governing documents…” Accordingly, any Bylaw provisions purporting to permit elections by acclamation were superseded by Section 5100(a) of the California Civil Code.

Our position was recently supported by the adoption of Senate Bill 323 (“SB 323”) in 2019. SB 323 finally addressed the issue of elections by acclamation, and in doing so, specified that such a procedure was only available to HOAs with 6,000 or more units. This provided clear indication of the Legislature’s intent to require smaller HOAs (those with less than 6,000 units) to comply with the secret ballot procedure and conduct a full election even in situations where the election was uncontested (where, at the close of nominations, the number of candidates was not greater than the number of board positions to be filled).

This statutory scheme has understandably been the source of frustration for HOAs who have been compelled to incur the expense of conducting a full election (preparing, printing, and mailing ballots, etc.) in situations where the election is uncontested and the outcome of the election is already known prior to the distribution of ballots. We were therefore pleased at the introduction of Assembly Bill 502 (“AB 502”) earlier this year. AB 502 is aimed at resolving this problem by expanding the election by acclamation procedure to all HOAs irrespective of their size.

We are thrilled to report that AB 502 was just signed into law. Effective January 1, 2022, HOAs will be available to utilize an acclamation procedure specified under a new section of the Civil Code, subject to certain requirements that must be satisfied during the pre-balloting process. Those requirements include (among others):

Holding a regular director election at least once every three (3) years;
*Providing specified notices to the membership of the potential for the acclamation procedure to be utilized if the number of candidates does not exceed the number of board positions to be filled. This notice must be provided least ninety (90) days before the nomination deadline, and another reminder notice must be provided between seven (7) and thirty (30) days before the nomination deadline;
Confirming receipt of the nomination within seven (7) business days of receipt of same; and
Notifying a nominee as to whether they are qualified to be a candidate and, if not, the reason for the disqualification and the procedure to appeal the decision.

*It is important to note that, under the new law, the notices described in Item 2 above must be provided via “individual notice”—meaning they must be mailed directly to every member within the HOA who has not previously consented to the receipt of individual notices electronically, as authorized under Civil Code section 4040(a)(2). Previously, notices regarding the election procedure were only required to be delivered via “general notice” (e.g., posting the notice in a prominent location within the HOA). This may undercut the cost-saving benefit HOAs hope to receive from being able to utilize the acclamation procedure; while the HOA may save on expenses by not having to prepare, mail and tabulate ballots for an uncontested election, it will have to incur greater expenses during the pre-election procedures to prepare additional notices and mail them to each member. This should motivate every HOA to take additional measures to secure their members’ consent to the receipt of individual notices via email, at least in the context of election-related notices.

Although the pre-election procedures are more cumbersome, AB 502 provides much needed relief from meaningless elections. This does not mean, however, that an HOA is able to dispense with its annual meeting altogether, as the language of its CC&Rs or Bylaws may still require an annual meeting for other purposes. HOA Boards and management professionals should consult with their HOA attorney to understand the impact of the new law and the corresponding impact on their HOA’s annual meeting and director election procedure.

-Blog post authored by TLG Partner, Matthew Plaxton.

New Client: Meredith Manor Homeowners Association

Published on: October 6, 2021 | by Steven J. Tinnelly, Esq.

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

Meredith Manor is a Spanish inspired condominium community located in the city of Fullerton. Residents enjoy a community pool and views of the city lights.

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

Due Process Regarding an Association’s Disciplinary Procedures

Published on: September 29, 2021 | by Vivian Tran, Esq.

Due-Process Rules are meant to be followed. However, some homeowners unknowingly or knowingly violate these rules. What should an association do under these circumstances?

First and foremost, every association should have clear disciplinary and enforcement procedures (i.e., due process) regarding the handling of a homeowner’s violation of the association’s governing documents (Civil Code section 5850(c)). Think of associations as miniature governments in which each homeowner would have certain constitutional rights associated with their life, liberty, and property. Due process refers to the fact that in such matters, the association must provide homeowners with notice of the violation, the opportunity to be heard, and a decision upon neutral analyzation by the association (Civil Code section 5855).

For due process to be effective any disciplinary procedures and enforcement of such must be clearly delineated in a policy. The purpose of such a policy is to ensure the association will not arbitrarily or capriciously adjudicate enforcement matters. The enforcement policy should include:

The method of how to report violations, whether by a homeowner or association agent (i.e., patrol, Board member, violations committee). Usually, associations have management companies and require that all reported violations be submitted in writing or email to management first.
Clear steps on what is to occur when a violation is noted. An association might decide to send an initial courtesy violation notice to the homeowner stating the observation of a violation.

1. If so, the association should include: (1) details of the violation (i.e., when, where, who, what, how); (2) cite the association rule(s) the homeowner violated; (3) include a photo or photos of the violation; and (4) request compliance within a specific amount of days. The time period for the homeowner to rectify the violation may vary depending on the nature of the violation, but the association should always adhere to what would be considered reasonable under the circumstances. Additionally, the association should mention that should the violation not be rectified, the homeowner may be fined pursuant to the association’s fine schedule.
2. The association’s fine schedule should detail: the different categories of violations, fine to be assessed for each type of violation, and fines associated with repeated offenses. Please note that different categories of violations may have different fine schedules so that the fine fits the type of violation (e.g., short-term rental fine versus nuisance fine).

If the initial courtesy letter does not prompt the homeowner’s compliance, the enforcement policy may delineate whether the association will be sending either another violation notice detailing a shorter period of time to correct the violation OR a notice regarding the hearing when the Board is to meet to consider or impose disciplinary measures upon a member pursuant to Civil Code section 5855 and Corp. Code section 7341(d).

1. The second violation/hearing notice should detail the violation in the same manner as the initial courtesy violation notice.
2. Note that the association must notify the homeowner of a hearing in writing and deliver the notice pursuant to Civil Code section 4040 at least ten (10) days prior to the meeting at which fines may be imposed, or at least fifteen (15) days prior to the meeting at which the association may suspend the member’s common area use privileges. A homeowner must have an opportunity to be heard and present their case to the association before they may be disciplined.

If disciplinary measures or a monetary penalty is imposed, the association must provide written notification of this decision pursuant to Civil Code section 4040 within fifteen (15) days following the action.

If levying a fine upon the homeowner in accordance with the association’s fine schedule does not induce the homeowner’s compliance, the enforcement policy may then indicate legal counsel involvement. On the other hand, the enforcement policy might detail situations where the association will elect to grant a homeowner an extension of time to abate the violation OR dismiss the enforcement matter entirely due to lack of substantive evidence against the homeowner.

1. Note that in certain circumstances, the association may skip the standard enforcement procedures and involve legal counsel immediately upon notice of the violation(s) (i.e., cease & desist, dangerous situations concerning member safety, irreparable damage to association property will occur).

It is quite important for associations to have a clear enforcement policy and to strictly adhere to such policy. If the homeowner’s violation(s) remained unresolved, the association might proceed with litigation, in which case the court will scrutinize whether the association observed procedural due process. Associations should look to their general counsel to draft or update their enforcement policy and ensure their management is familiar with the policy and its execution.

-Blog post authored by TLG Attorney, Vivian X. Tran, Esq.

New ‘Community Association Update’ Newsletter – Issue 51

Published on: September 22, 2021 | by Steven J. Tinnelly, Esq.

New-Newsletter-Template-300x167 In case you missed it, Issue # 51 of our ‘Community Association Update’ newsletter is available now!

Topics covered in this issue include:

SB 9 Signed! Statewide Re-zoning of Single-Family Neighborhoods & Urban Parcel Splits
Removal of Common Area Amenities
Recall Petitions
Court Confirms not Everyone is Entitled to a Protected View
Megan’s Law HOA Disclosures

A link to the newsletter is here.

Need to be added to our mailing list? Click here to sign up. Links to previous editions of our newsletter can be found here.

New Client: Deer Ridge Homeowners Association

Published on: September 22, 2021 | by Steven J. Tinnelly, Esq.

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

Deer Ridge is an upscale community of single family homes located in San Ramon. Residents enjoy large lots and views of the San Ramon hills and valley.

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

SB 9 Signed! Statewide Re-zoning of Single-Family Neighborhoods & Urban Parcel Splits

Published on: September 21, 2021 | by Steven J. Tinnelly, Esq.

*New Legislation

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.

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.

New Client: Heritage Ranch Community Association

Published on: September 15, 2021 | by Steven J. Tinnelly, Esq.

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

Heritage Ranch is a planned development located in the foothills of San Jacinto. Residents enjoy the pool, fitness room, billiard room, and beautiful mountain views.

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

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