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Alta-Del-Mar-Mesa-300x169It’s our privilege to welcome Alta Del Mar Mesa Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

Alta Del Mar Mesa is a newly constructed neighborhood in the Del Mar Mesa area of San Diego, CA. This affluent and semi-rural residential community consists of 136 single family homes, and is nearby preserved outdoor space, perfect for hiking, cycling, horseback riding, and viewing natural habitat.

hoa law firm Our HOA lawyers and staff look forward to working with Alta Del Mar Mesa’s Board and management.

photo-1529567591152-9abba27ab13b*Asked & Answered

Asked – Can a homeowners’ association prohibit owners from smoking within the interior of their units?

Answered – The California Legislature has recognized that homeowners associations (“HOAs”) require flexibility in adopting and enforcing “operating rules” governing the use of common areas and “exclusive use” common areas (or “Restricted Common Areas”) such as parking spaces, patios and balconies.  The California Civil Code provides this flexibility by granting HOAs authority to adopt and enforce such operating rules without requiring a formal amendment to the HOA’s Declaration of Covenants, Conditions and Restrictions (“CC&Rs”). (See Cal. Civ. Code § 4350.

However, a HOA’s authority to adopt operating rules is not absolute.  For an operating rule to be valid and enforceable it must satisfy various requirements.  One of those requirements is that the operating rule must be “within the authority of the board conferred by law or by the declaration.” (Cal. Civ. Code § 4350(b).)  In other words, for the board of directors (“board”) to implement rules regulating conduct within the units, either the CC&Rs or prevailing law must confer upon the board the authority to implement such rules.

Most CC&Rs provide that the board’s rule-making authority extends to activities affecting “the Common Area and the facilities thereon.” Such a provision therefore does not authorize the board to promulgate new operating rules regulating conduct inside the units.   Notwithstanding that fact, many CC&Rs also contain a use restriction prohibiting residents from engaging in activities within their units which would constitute a “nuisance.” Indeed, such a provision may read something like:

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New-Newsletter-Tempalte-300x167In case you missed it, Issue # 44 of our ‘Community Association Update’ newsletter is available now!

Topics covered in this issue include:

  • HOA Assessment Collection During the Pandemic
  • A Member in Our Community Tested Positive for COVID-19 – What Do We Do?
  • Dog Parks:  Best Practices for Limiting an HOA’s Liability Exposure
  • Overzealous Board Members:  Understanding the Scope of the Board’s Authority to Enforce the Governing Documents
  • There is no Such Thing as a Free Lunch – Or a Free Clubhouse:  Implementing Reasonable Limitations on Political Speech and Assembly Rights in California HOAs

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.

Wanis-View-Estates-300x169It’s our privilege to welcome Wanis View Estates Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

Wanis View Estates community of large scale homes located in the city of Oceanside.  Situated alongside the San Luis River, residents enjoy easy access to the beach and downtown Oceanside.

hoa law firm Our HOA lawyers and staff look forward to working with Wanis View’s Board and management.

hoa-covid-assessments*Asked & Answered

Asked – Our common area recreational facilities have been shut-down as a result of the pandemic. With this, and with the economic impact of COVID-19, should our HOA be excusing homeowners from having to pay assessments? What about reducing our assessments or changing our policy to not charge any late fees or interest on delinquent homeowners?

Answered – It is important to recognize that an HOA is a nonprofit corporation with a fixed budget. The amount of assessments it levies is based upon the budgeted gross expenses the HOA will incur to satisfy its contractual obligations. Those obligations include, among others, payment of insurance premiums, maintenance expenses, management expenses, etc. The HOA must continue to fulfill these obligations despite the pandemic.

When a homeowner takes title to a home within the HOA’s development, the homeowner automatically assumes the mandatory responsibility to pay assessments levied by the HOA. This remains the responsibility of the homeowner regardless of the degree to which the homeowner utilizes HOA’s common area facilities. Whether as a result of a pandemic, remodeling project or other circumstance, there may be situations where the common area facilities are not available for use by a homeowner. These situations do not relieve the homeowner of his or her responsibility to pay assessments. This is why the often-used term of “dues” is not accurate in the context of homeowners associations. “Dues” refer to ongoing payments made in connection with a voluntary membership—such as membership dues to a health club or social club. “Assessments,” by contrast, are mandatory payments that must be made for so long as the homeowner retains ownership of a property within the HOA.

We understand the impulse to assist those who have been financially injured as a result of the pandemic. However, an HOA is not the type of entity to render such financial assistance. It is not a for-profit lender, financial institution or government agency, nor does it receive government subsidies or guarantees to serve as a source of credit. If an HOA were to forbear from collecting assessments during this time, or to relax the penalties associated with assessment delinquencies, it will create disincentives for homeowners to pay assessments in a timely fashion. This will inevitably frustrate the HOA’s ability to satisfy its obligations to the financial detriment of the entire membership.

California HOA lawyers HOAs should continue to collect assessments and to utilize their assessment collection policies to address assessment delinquencies. Homeowners who fail to pay assessments in a timely fashion should remain subject to late charges and interest, in addition to the other collection remedies the HOA has under its governing documents and California law (e.g., the recording of assessment liens). Situations where accommodations may be made for a delinquent homeowner should only be evaluated by the Board on a case-by-case basis after consideration of the facts and circumstances underlying the delinquent homeowner’s assessment debt. However, such accommodations, if granted, should be structured through a formal payment plan that ensures the HOA—and by extension, its entire membership—will not subsidize any amount of the assessment debt or the collection fees and costs incurred by the HOA in connection therewith. 

 

NaggingCough*Asked & Answered

Asked We just found out that two homeowners in a community we manage are infected with COVID-19 and they are currently self-isolating in their Units. What must be done on our end and what information can we disclose to help prevent the spread?

Answered – Even if there is not a known case of COVID-19 in the community, Associations should be taking the pandemic seriously. This includes implementing full compliance with Governor Newsom’s Executive Order (“Order”), the Department of Homeland Security’s Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response referenced in the Order,  and the California Department of Public Health (“CDPH”) Guidelines (“Guidelines”). In short, the Executive Order mandates that everyone is required to stay home except to get food, care for a relative or friend, obtain necessary health care, or to perform an essential job. And, if one must leave their home, they must keep at least 6 feet of distance from others. Aside from the stay-home mandate, the Guidelines encourage people to wash their hands with soap and water for at least 20 seconds, to cover coughs and sneezes with a tissue, to clean and disinfect frequently-touched objects and surfaces, and, if soap and water are not available, to use alcohol-based sanitizer.

In response to the Order and Guidelines, Associations should be temporarily closing community recreational facilities, allowing staff and contractors (including management) to work from home where possible, implementing enhanced cleaning of any on-site facilities, postponing annual elections and Board meetings or working with counsel to determine how meetings may proceed virtually to comply with the Executive Order as well as the Davis-Stirling Act, and encouraging members to stay home and to use proper hygiene to avoid the spread of the virus.

If the Association is aware of a resident in the community infected with COVID-19, proper disclosures to the membership apprising them of the situation are recommended for heightened awareness with the goal of reducing the transmission of the virus between residents in the community.

Boards have a fiduciary duty to act in the best interests of their communities. Additionally, the Articles of Incorporation for many Associations state a corporate purpose of promoting the health, safety and welfare of the members. To that end, it is recommended that Associations disclose to members that resident(s) in the community have recently tested positive for COVID-19 and are in self-isolation. To protect the privacy of the infected members, names, addresses, and other identifying information should not be disclosed under any circumstances.

The intended effect of the disclosure is to: 1) inform the membership as to the virus’ presence in the community, a fortunate side effect of which is promoting trust and transparency; 2) educate members how to best protect themselves and their neighbors through following the Governor’s Order and the CDPH Guidelines by staying home and using proper hygiene; 3) apprise members what the Association is doing to stop the spread of the virus; and 4) instruct members per the CDC website, that if they think they have been exposed to COVID‑19 and develop a fever and symptoms, such as cough or difficulty breathing, they should call their healthcare provider immediately for medical advice.

California HOA lawyers Associations are encouraged to work with their counsel to prepare such disclosures given the legal implications of properly balancing the disclosure of private and sensitive information related to a member’s health with promoting the health and safety of the membership during a pandemic.

-Blog post authored by TLG Attorney, Carrie N. Heieck, Esq.

Tustin-Imperial-300x169It’s our privilege to welcome Tustin Imperial Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

Tustin Imperial is a townhome-style community located in the city of Tustin.  Residents enjoy a pool, basketball court, tot lot and neatly manicured landscape areas.

hoa law firm Our HOA lawyers and staff look forward to working with Tustin Imperial’s Board and management.

covid-19-1330pxOver the last few business days, our firm has received several calls regarding the Coronavirus (COVID – 19).  We understand the obstacles created by COVID – 19 because successful association governance depends upon engaged community involvement and personal interaction.

The purpose of this blog post is to provide a brief overview of our response to some of the common questions we have received.  It is based upon information which is currently available as of March 17, 2020.  The recommendations set forth herein are subject to change based upon governmental mandates.

Continuance of Necessary Business Operations:

Community associations, as non-profit corporations, should continue to perform essential business operations (i.e. collect Member assessments and pay Association bills) during this epidemic.  As of the time of this drafting (3/17/20), President Trump released new guidelines to slow the spread of COVID – 19 by advising the public to avoid groups of more than ten (10) individuals, among other safeguards.  Governor Newsome recommends that restaurants eliminate dine-in options and the closure of movie theaters and health clubs.  Medical professionals have uniformly taken the position that social distancing can minimize virus transmission.  In view of those protections, boards, in consultation with management and legal counsel, should consider the temporary closure of community-based events and functions, particularly in situations where residents constitute a high-risk demographic (i.e. age-restricted communities).

Board Meetings:

Board meeting procedure is regulated by an association’s governing documents and the Civil Code.  An association’s by-laws will set forth the frequency of board meetings.  Boards should consider postponing non-essential general session board meetings, or in the alternative, conducting essential association business in executive session only via teleconference as permitted by California law.  Boards may conduct general session and executive session board meetings via teleconference upon proper notice which identifies at least one physical location so that Members of the association may attend (Civil Code Section 4090 (b)).  At least one director or a person designated by the board shall be present at that location (Civil Code Section 4090 (b)).

To the extent possible, efforts should be made to protect Member rights, such as the right to attend board meetings and participate in homeowner’s forums.  How do we balance those rights with current social distancing recommendations? There might be a viable path under the Open Meeting Act.  Members possess the legal right to attend general session board meetings and shall be entitled to attend teleconferenced board meetings (Civil Code Section 4925). An argument could be made that Members may attend general session board meetings via teleconferencing means if such board meeting was previously noticed as a teleconference board meeting and the procedural requirements are satisfied as referenced above.  Discuss with legal counsel whether the Open Meeting Act could be interpreted to allow Member attendance (via audio and/or video means) at teleconferenced board meetings instead of physical presence at the meeting location.

We recommend that boards consult with legal counsel to discuss teleconferenced general session board meeting procedure before deciding to hold open meetings without members and then issuing minutes thereafter.  It is unclear how a superior court judge, in the event of a later Member challenge, might evaluate the handling of board meeting procedure during this current state of emergency.  A possible judicial response might be to review how the association attempted to substantially comply with the law using the governance tools that are presently available through the Open Meeting Act.

Member Notice:

Medical professionals state that individuals respond to crisis and stress in different ways; it is very likely that some may be scared while others may not be.  Residents may look to the association and management for guidance and direction.  For that reason, transparency is desirable.  Boards should work with their management partners and legal counsel to develop a policy statement which identifies how your community intends to respond to COVID – 19 with respect to association meetings and community affairs.  In the event of common area closure or facility limitations, notices should be posted which explain the board’s reasoning in that regard.  Association residents should be directed to governmental agencies (e.g. CDC, California Department of Public Health, and county health agencies) for more information.

On March 12, 2020, California Governor Gavin Newsom issued Executive Order N-25-20 (“Order”) which modified how legislative bodies may conduct public meetings via teleconference under the Brown Act.  That Order does not apply to private association meetings which are governed by the Open Meeting Act and we are not aware of emergency legislation that might govern how association meetings are expected to be handled during this health crisis.  Although not applicable, the spirit of the Order’s final provision should be considered as we think about association governance during this time; namely, the Order concludes by stating that, “all state and local bodies are urged to use sound discretion and to make reasonable efforts to adhere as reasonably as possible to the provisions of the … Brown Act, and other applicable local laws regulating the conduct of public meetings, in order to maximize transparency and provide access to their meetings.”

California HOA lawyers It is critically important that boards work closely with their management partners and legal counsel to develop practical solutions regarding Board governance which, to the extent possible, complies with the Open Meeting Act while protecting Member safety.

-Blog post authored by TLG Attorney, Kumar S. Raja, Esq.

download*Unpublished Opinion

In January 2016, plaintiffs and appellants, Michael Dubasso and Jenny Dubasso (collectively, the “Dubassos”), purchased a home in the Tradition community (“Tradition”) in La Quinta, California. The Dubassos hired real estate agent Kathleen O-Keefe (“O-Keefe”) and LQR Desert Real Estate, Inc. (“LQR”) as their real estate agent and broker, respectively.  Shortly after closing escrow, the Dubassos applied for membership in Tradition’s Golf Club, a social and golf club, but the club membership committee decided the Dubassos were not a good fit for club membership and rejected their application.

The jilted Dubassos sued O’Keefe and LQR (collectively, “Defendants”) for failing to disclose that club membership was not automatic for Tradition homeowners, but was, instead, subject to a vetting process by Tradition’s membership committee. According to the Dubassos, O’Keefe and LQR breached their fiduciary duty to them by failing to inquire whether they would want to purchase the home without a club membership, and failing to advise them to make their purchase contract contingent upon approval of their Club membership application.

The trial court granted the Defendants’ motion for summary judgment (judgment without a trial based on undisputed material facts) based on the fact that the Tradition declaration of covenants, conditions, and restrictions (“CC&Rs”) expressly stated that the rights to use the club facilities would be granted only to those persons, and on those conditions, as may be determined by the club.  The CC&Rs further provided that no right to use the club facilities arose from ownership of a lot, but arose, if at all, only from a membership agreement with the club.

The Dubassos appealed the trial court’s decision, claiming that they raised triable issues of material fact as to whether the Defendants had a fiduciary duty to them to (i) inform them that membership was contingent upon acceptance by the club, (ii) determine whether they desired to purchase the home even if their Club membership application would be rejected, and (iii) advise them to make their purchase contract contingent on their acceptance as Club members.

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Horse-Creek-Ridge-300x169It’s our privilege to welcome Horse Creek Ridge Community Association to Tinnelly Law Group’s growing family of HOA clients.

Horse Creek Ridge is a community inspired by nature, by history and by the traditions of old California. It is a place where today’s lifestyle meets all that is worth preserving from the area’s rich past. Horse Creek Ridge will feature an impressive collection of five, single-family and two, detached condominium neighborhoods. Residents will enjoy the Harvest House recreational facility and eight parks including an 8.5 acre San Diego County Sports Park.

hoa law firm Our HOA lawyers and staff look forward to working with Horse Creek Ridge’s Board and management.
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