It’s our privilege to welcome The Whelan Ranch Condominium Community Association to Tinnelly Law Group’s growing family of HOA clients.
Whelan Ranch is condo community located near Camp Pendleton and the Oceanside Golf Course in Oceanside. Residents enjoy a pool, clubhouse, two playgrounds, parklike views, hiking trails, and a quiet neighborhood.
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Our HOA lawyers and staff look forward to working with Whelan Ranch’s Board and management. |
As we draw near to the 2020 election, many residents living in HOAs have decided to install yard signs and other displays for their chosen candidate or cause. Many of these “noncommercial” signs have sparked fury in those who oppose such views, calling upon the Board of Directors to have such signs removed. Thus, in recent months, we have received numerous requests from our clients to provide an opinion as to the extent to which a HOA may regulate the display of such non-commercial signs.
It is without doubt that we currently live in a society with varying opinions on political and social issues. Such division has only become more polarized with recent events. While some might find the opinions espoused by certain groups repugnant, upholding a resident’s right to express those beliefs and opinions through the display of signs on their property is more important than the minor discomfort some may experience in observing such signs. The only other option would be to prohibit residents from displaying any signs concerning issues of politics and social justice, something which the California Legislature has expressly forbidden: “[H]omeowners throughout the state shall be able to engage in constitutionally protected free speech traditionally associated with private residential property” and “shall be specifically protected from unreasonable restrictions on this right in the governing documents.” (Historical and Statutory Notes, 8 West’s Ann. Civ. Code (2007 ed.) foll. 1353.6, p. 184.)
Indeed, under California Civil Code section 4710(a), “[t]he governing documents may not prohibit posting or displaying of noncommercial signs, posters, flags or banners on or in a member’s separate interest, except as required for the protection of public health or safety or if the posting or display would violate a local, state, or federal law.” Some may nevertheless argue that certain noncommercial signs incite terror and/or rioting and therefore must be removed “for the protection of public health [and] safety.” Although such argument is speculative at best, Section 4710’s concern with public health and safety relates to concerns relative to the placement of such signs (e.g., view obstructions), not the fact that some might have an adverse emotional or physical reaction to such signs.
Inquiries have also been made concerning a HOA’s ability to restrict the number of noncommercial signs placed on a resident’s separate interest, as well as the duration of their display. Section 4710 does not address the number of noncommercial signs that may be displayed by a particular resident. However, in Fourth La Costa Condominium Owners Association v. Seith, the Court saw “no problem with allowing only one sign per unit,” and requiring that they be removed after a particular duration. ((2008) 159 Cal.App.4th 563, 581.) While Fourth La Costa pertained to real estate signs (i.e., commercial signs), the Court’s reasoning could similarly apply to restrictions on the number of noncommercial signs as well as the duration of display. (See id. at p. 581 (upholding the HOA’s decision “for aesthetic purposes”).) A HOA’s ability to regulate the number and duration would be further supported if the city/county in which the HOA is located has also promulgated codes/ordinances regulating the installation of political signs on a resident’s separate interest.
Again, it is important to recognize that many residents might find some of the political and social views promoted by their neighbors as offensive. Because they live in a HOA, they must necessarily tolerate differing viewpoints and loyalties. As the California Supreme Court has said, “[t]he very existence of organized society depends upon the principle of ‘give and take, live and let live’….” (San Diego Gas & Electric Co. v. Superior Court. (1996) 13 Cal.4th 893, 937-38.) Therefore, in response to resident complaints, such residents should be informed of the limitation imposed by Section 4710 and directed to “avoid further bombardment of their sensibilities simply by averting their eyes.” (Cohen v. California (1971) 403 U.S. 15, 21.)
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Residents who object to the content displayed on noncommercial signs should be reminded that HOAs are limited in the ways in which they may restrict residents from displaying such signs on their separate interests. Nevertheless, HOAs should consult with their general counsel to ensure that the HOA’s operating rules are in compliance with California Civil Code section 4710. |
-Blog post authored by TLG Attorney, Matthew T. Plaxton, Esq.
Community associations buy insurance to obtain coverage in the case it becomes necessary. The reality is pre-litigation costs are expensive, ranging anywhere from a few thousand to tens of thousands of dollars. Litigation itself can be even more and this is not including any estimated fees for an appeal. No association wants to pay out of pocket for all these fees when there is a perfectly good insurance policy bought just for these types of situations. However, sometimes, an insurance company will want to cut corners to avoid paying out its policy coverage amount. If an association’s insurance carrier(s) denies coverage, your association’s legal counsel will work together with the insurance adjuster to persuade the insurance carrier to provide coverage, as a bad faith insurance claim would not be beneficial to either parties.
What is a bad faith insurance claim?
The law implies a covenant of good faith and fair dealing in every contract, including insurance policies. (Wilson v. 21st Century Ins. Co. (2007) 42 Cal. 4th 713, 720). “[T]he essence of the implied covenant of good faith and fair dealing is that [t]he insurer must refrain from doing anything that will injure the right of the insured to receive the benefits of the [insurance] agreement, the terms and conditions of which define the duties and performance to which the insured is entitled.” (Brandwein v. Butler (2013) 218 Cal.App.4th 1485, 1514- 1515.) Therefore, breach of a specific provision of the insurance contract is not a necessary prerequisite to bringing a bad faith claim. (Carson v. Mercury Ins. Co. (2012) 210 Cal.App.4th 409, 429.)
The implied covenant of good faith and fair dealing is breached where an insurer delays or denies payment of policy benefits unreasonably (i.e., without any reasonable basis for its position) or without proper cause. (Jordan v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1072-1073; see Wilson, supra, 42 Cal. 4th 713, 723, —“[A]n insurer’s denial of or delay in paying benefits gives rise to tort damages only if the insured shows the denial or delay was unreasonable”; see also Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co. (2001) 90 Cal.App.4th 335, 346.)
“[F]or a variety of [public] policy reasons, courts have held that breach of the implied covenant (in insurance cases) will provide the basis for an action in tort.” (Foley v. Interactive Data Corp (1988) 47 Cal. 3d 654, 684, 765 P.2d 373.) Insurance companies know that people buy insurance to obtain peace of mind and security, and that they expect to be paid promptly in the event of loss. (Egan v. Mut. of Omaha Ins. Co. (1979) 24 Cal. 3d 809, 819, 620 P.2d 141, 145.) Having sold insurance on this basis, insurers are not permitted to put their interest (in avoiding claims losses) ahead of the insureds’ interests in obtaining the protection for which they bargained. (Id. at p. 819.
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If the association timely notifies the insurance carrier upon learning of a potential claim that may be covered by their insurance policy, insurance companies must cooperate in the investigation or settlement of the claim or defense against the lawsuit among other things. |
-Blog post authored by TLG Attorney, Vivian X. Tran, Esq.
It’s our privilege to welcome Menifee Hills Community Association to Tinnelly Law Group’s growing family of HOA clients.
Located in the Temecula Valley, Menifee Hills is a Lennar product featuring two collections of homes offering spacious designs and mountain views. Amenities include parks and trails throughout the community. Residents can also enjoy boating and fishing at Diamond Valley Lake. The association is close to the California Citrus Heritage State Park and the renowned wine tasting region in Temecula Valley.
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Our HOA lawyers and staff look forward to working with Menifee Hills’ Board and management. |
It’s our privilege to welcome Chelsea Park Owners Association to Tinnelly Law Group’s growing family of HOA clients.
Chelsea Park is located in the heart of Mission Dolores District of San Francisco. Residents enjoy a short walk to the Castro, Valencia Corridor, Dolores Park, award-winning restaurants and all neighborhood conveniences.
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Our HOA lawyers and staff look forward to working with Chelsea Park’s Board and management. |
If 2020 has taught us anything, it is to expect the unexpected. California community associations base their successful and continuing operations on careful planning and budgeting, but Associations must also plan for the unexpected. To that end, association vendor contracts should be drafted to ensure they afford adequate protections for when peril strikes.
Community associations regularly contract with vendors for a variety of services including landscaping and the maintenance and repair of common area components. Vendor contracts are often woefully sparse and fail to contain language to provide the parties with a mechanism to deal with unexpected disasters like war, fire, terrorist acts, or even pandemics like COVID-19.
Force majeure is a Latin phrase that means “superior force.” A force majeure contractual clause defines a set of events or circumstances beyond the contracting parties’ control that may excuse or delay parties’ contractual obligations for performance because performance would either be too difficult, impossible, or impracticable. Without it, the parties are bound to perform even in the face of a deadly viral pandemic which has resulted in shelter-in-place orders and business shutdowns across the state.
Citing Witkin Summary of Law, California courts have specifically held that “force majeure is the equivalent of the common law contract defense of impossibility and/or frustration of purpose: performance of a contract is excused when an (1) unforeseeable event, (2) outside of the parties’ control, (3) renders performance impossible or impractical.” Citizens of Humanity, LLC v. Caitac Int’l, Inc., No. B215233, 2010 WL 3007771 (Cal. Ct. App. Aug. 2, 2010). (emphasis added). In the realm of community association vendor contracts, COVID-19 has made the performance of certain contractual obligations impossible or impracticable. A large non-emergency construction project like a balcony repair which requires access by strangers to the inside of owners’ units comes to mind.
Very few vendor contracts which have not been prepared or negotiated by an attorney contain force majeure clauses. While it is always advisable for Associations to have vendor contracts reviewed by counsel, COVID-19 is an additional reason to seek the advice of counsel before signing a vendor contract. Given that a pandemic and shutdown of this magnitude is, forever more, a foreseeable event, its description should be included in all force majeure contractual provisions moving forward, so as to erase any doubt as to what events constitute the triggering of a force majeure event.
Not all force majeure clauses are created equal. Boilerplate language has been held insufficient in California and other states—a good example being Watson Labs, Inc. v. Rhone-Poulenc Rorer, Inc., 178 F.Supp.2d 1099, 1111 (C.D. Cal. 2001), where language referring to “regulatory, governmental … action” was found to be too vague and boilerplate to reflect that the parties considered that the shutdown of the Defendant’s plant would be encompassed.
Accordingly, an approach of over-inclusiveness should be adopted in drafting force majeure clauses. This ensures that not just a pandemic, but the effects of a pandemic, such as shelter-in-place orders, quarantines, government shutdowns, and other economic ripples caused by the response to an epidemic or pandemic be included in the definition of a force majeure event.
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Associations should have all contracts reviewed by counsel and vendor contracts should contain a well-drafted force majeure clause to afford associations protection from liability in the event a pandemic or other force majeure event requires the delay or termination of a contract. |
-Blog post authored by TLG Attorney, Carrie N. Heieck, Esq.
California homeowners associations started reopening community gyms when the State of California began easing restrictions imposed by the initial COVID-19 stay-home orders from March 2020 according to stages of a reopening roadmap. Thereafter, COVID-19 cases across the state began to spike, causing the state to issue renewed restrictions as set forth in the July 13, 2020 Statewide Public Health Officer Order (“Order”). These renewed restrictions forced HOAs in counties on the Monitoring List, including Orange, San Diego, Placer & Santa Cruz counties, to close previously-reopened gyms and fitness centers unless they could safely operate outdoors.
Due to reduced cases and otherwise meeting the requirements for slowing the spread of COVID-19, Orange, San Diego, Placer and Santa Cruz counties were recently removed from the state’s Monitoring List. However, the removal does not mean that community gyms and fitness centers may reopen at this time. This is because Section 3 of the Order provides that counties placed on the Monitoring List must close indoor gym and fitness center operations, but does not provide for the reopening of those indoor operations once a county is removed from the Monitoring List. For that to happen, the state must modify the Order and authorize the re-opening of indoor fitness facilities. Applicable county orders must also be similarly updated.
For now, the state’s COVID-19 website clearly states, “[c]ounties on, or recently removed from, the County Monitoring List must close indoor operations for the following business sectors, events, and activities . . . Gyms and fitness centers . . .” This means that outdoor fitness facilities are the only option for HOAs in counties on or recently removed from the Monitoring List. However, caution should be exercised (no pun intended) before moving community gyms outside as the equipment could easily be stolen, damaged due to exposure from the elements, cause costly damage to the HOA common area while being moved, or injure workers or volunteers whom are not otherwise qualified to move heavy equipment. Moreover, gym equipment left outside and unattended could increase the HOA’s liability exposure due to, for example, those improperly using it for play or climbing.
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While this state of events may be disappointing for homeowners, continued reduction of COVID-19 cases across the state should encourage state officials to reopen indoor fitness facilities when reopening can be accomplished safely. Homeowners associations are encouraged to consult with their legal counsel before reopening their fitness facilities to ensure compliance with all applicable laws. |
-Blog post authored by TLG Attorney, Carrie N. Heieck, Esq.
It’s our privilege to welcome Bermuda Dunes Community Association to Tinnelly Law Group’s growing family of HOA clients.
Bermuda Dunes is comprised of 1,200 homes in a guard-gated community, with the majority of homes located adjacent to the well known Bermuda Dunes Country Club golf course.
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Our HOA lawyers and staff look forward to working with Bermuda Dune’s Board and management. |
It’s our privilege to welcome Camberly Place Community Association to Tinnelly Law Group’s growing family of HOA clients.
Camberly Place is a new community of single family homes developed by KB Home in the city of Winchester. Residents enjoy a nearby baseball field, walking trails and basketball courts at Washington Park and close proximity to Temecula Valley wine country.
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Our HOA lawyers and staff look forward to working with Camberly Place’s Board and management. |
*Asked & Answered
Asked – Our HOA community manager always recommends that our vendor contracts be reviewed by our HOA attorneys before we sign them. Is this really necessary?
Answered – Yes! Contract review is an integral step to protect the HOA against future contract disputes. Oftentimes, HOA Boards of Directors don’t think twice about a contract until there is a dispute with the other party later on. By this point, it’s too late to negotiate contract terms, and the Board is often left to interpret and navigate poorly written and single-sided provisions that do not provide any support or protection to the HOA.
Contract disputes can be extremely costly and time-consuming. Since contract disputes and related expenses are unpredictable, they aren’t necessarily incorporated into the HOA’s annual budget; this can put a lot of financial strain on the HOA and could lead to special assessments on the membership to cover the costs. Furthermore, contract disputes can leave the HOA tied up with a vendor in which they’d rather part ways. This could leave the HOA without the ability to hire a new, better-qualified vendor to perform the job at hand.
Our HOA attorneys are skilled in the review, revision, and negotiation of contracts specific to HOA needs. Our attorneys can spot concerns that may not be obvious to a Board member, recommend alternative or additional language to provide HOA specific protections, and also communicate these concerns directly with the vendor. Additionally, our attorneys can identify whether the Board may be prohibited from entering the contract pursuant to the HOA’s governing documents. Combined, these efforts will result in a more comprehensive contract and more balanced protections for the HOA.
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By taking the time up front to work with our expert attorneys, Board members can be assured that they are prudently adhering to their fiduciary duties and feel confident that they have taken appropriate measures to mitigate costly and time-consuming contract disputes in the future. |
-Blog post authored by TLG Attorney, Joelle M. Bartkins, Esq.
HOA Lawyer Blog