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Pacific-Island-VillasWe are proud to announce that Pacific Island Villas Homeowners’ Association has selected Tinnelly Law Group as their association’s legal counsel.

Pacific Island Villas is a condominium community located in Dana Point. Residents enjoy a pool, spa, clubhouse, and close proximity to the beach.

hoa laws Our HOA attorneys and staff look forward to working with Pacific Island Villas’ Board and management.

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BikeExhaust-e1534522784547*Asked & Answered

Asked – We have several vehicles that are “extremely loud” due to their exhaust systems. Even with all windows and doors closed and these vehicles 1/2 way across the complex, there is NO PROBLEM hearing them when they start them. They even set off car alarms near them. Can we ask them to address the noise they cause?

Answered – Noisy neighbors are a frequent occurrence in common interest developments, especially in dense housing communities (e.g., condominiums). And while the California Supreme Court has indicated that individuals “in a community must put up with a certain amount of annoyance, inconvenience and interference,” (San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 937), that does not extend to situations which have a substantial impact on residents’ use and enjoyment of their separate interests.

Indeed, residents of a common interest development are generally entitled to the peaceful use and enjoyment of their respective separate interests as well as the common areas. Ensuring such peaceful use and enjoyment is what underlies many of the provisions set forth in an association’s recorded Declaration of Covenants, Conditions and Restrictions (“CC&Rs”). Residents purchase or rent their separate interests within an association in reliance on those restrictions being consistently and faithfully enforced.

The peaceful use and enjoyment to which residents are entitled is typically reflected in the association’s CC&Rs under the heading “use restrictions.” The following is a common example of a use restriction preserving the right of residents to the peaceful use and enjoyment of their separate interest:

No Condominium shall be used in such a manner as to obstruct or interfere with the enjoyment of occupants of other Condominiums or annoy them by unreasonable noises or otherwise, nor shall any nuisance be committed or permitted to occur in any Condominium.

This provision, alone, can serve as a basis to prevent residents from operating vehicles in the community that are “extremely loud.” However, some associations go a step further and adopt operating rules identifying what constitutes an “unreasonable” noise. For example, an association may adopt an operating rule prohibiting residents from operating vehicles that exceed a certain decibel level; or, more commonly, adopt an operating rule prohibiting residents from operating vehicles that produce “excessive” noise thereby providing the Board of Directors with the broad discretion to determine what constitutes “excessive.”

hoa laws In sum, the ability to regulate conduct or activities that constitute a nuisance is well within the scope of authority granted to an association. This power extends to prohibiting residents from operating extremely loud vehicles within the community. Associations facing such issues can and should commence enforcement efforts to remedy the violation, and, if the association has not done so already, adopt operating rules addressing such conduct. 

Content provided by TLG attorney Matthew T. Plaxton, Esq.

To submit questions to the HOA attorneys at Tinnelly Law Group, click here.

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DavenportWe are proud to announce that Davenport Neighborhood Corporation has selected Tinnelly Law Group as their association’s legal counsel.

Davenport is a condominium community located in Ladera Ranch. Residents enjoy the use of multiple pools, spa, clubhouse, tennis, sports court, biking and hiking trails.

hoa laws Our HOA attorneys and staff look forward to working with Davenport’s Board and management.

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RenaissanceWe are proud to announce that Renaissance at Redhawk Homeowners Association has selected Tinnelly Law Group as their association’s legal counsel.

Renaissance at Redhawk is a brand new master-planned community by Beazer Homes featuring new detached homes located in Temecula. Residents live conveniently near Redhawk Golf Course, Old Town, San Diego and Orange counties.

hoa laws Our HOA attorneys and staff look forward to working with Renaissance at Redhawk’s Board and management.

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**New LegislationEmail-1

Homeowners associations are often required to disclose information to their membership.  There are two forms of disclosure: general notice or individual delivery.  When homeowners associations are required to deliver documents by  “individual delivery” or “individual notice,” Civil Code Section 4040 permits delivery by email, facsimile, or other electronic means (“electronic delivery”) only if the recipient has consented in writing to the same.  Civil Code Section 4040 also requires recipients to revoke their consent to electronic delivery in writing.   SB 261 allows recipients to consent to electronic delivery and to revoke consent to electronic delivery by email. This Bill will bring the current law up-to-date with existing technology so that homeowners can easily opt in or out of electronic delivery.

Civil Code 4360 requires the Board Directors to provide general notice of a proposed rule change at least thirty (30) days before making the change to the rule.  SB 261 changes that timeframe from thirty (30) days to twenty-eight (28) days. Under the new statute, the Board of Directors would be required to provide general notice of a proposed rule change at least twenty-eight (28) days before making a rule change.

HOA law attorneys SB 261 is an example of the law evolving with technological advances.  Although “snail mail” is not quite obsolete, more and more people rely on their inboxes for important news and updates.  By permitting Homeowners to opt into electronic delivery with emails, HOAs should be able to more quickly and efficiently provide individual notice to their Members.

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

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PGA-WestWe are proud to announce that PGA WEST II Residential Association, Inc. has selected Tinnelly Law Group as their association’s legal counsel.

PGA WEST II is a master-planned community located in the La Quinta.  Residents enjoy several community pools, and views of the golf courses, lakes, and mountains.

hoa laws Our HOA attorneys and staff look forward to working with PGA West II’s Board and management.

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*New Legislation hoa-financial-review-

Earlier this year, the California Legislature proposed AB 2912 (Irwin) in an effort “to protect owners in a [HOA] from fraudulent activity by those entrusted with the management of the [HOA’s] finances.” To that end, AB 2912 significantly increases the financial review requirements of HOA boards of directors, limits the ability for automatic transfer of funds without board approval, and also imposes a requirement for the HOA to purchase and maintain a fidelity bondAB 2912 was signed on September 17, 2018 and its changes to the law take effect January 1, 2019. The following information summarizes the new state of the law in the wake of AB 2912’s passage:

Requirement for Written Board Approval of Account Transfers Above $10k:

Existing Civil Code § 5380 has been amended to prohibit the automatic/electronic transfer of funds greater than $10,000 or 5% of a HOA’s total combined reserve and operating account deposits (whichever is lower), without prior, written approval from the HOA’s board of directors. This requirement is also reiterated in new Civil Code § 5502.  HOA boards that previously gave blanket consent to their managing agent for such electronic/automatic transfers should expect the need to now give written approval for such transfers (i.e., large payments to vendors of the HOA) each time a transfer is required.

Financial Review by Board Must Now be Performed on a Monthly Basis:

The law previously required the Board to review the financial information of the HOA on at least a quarterly basis. Civil Code § 5500 has been amended to now require that review to be performed on a monthly basis.  Moreover, it now requires the review to include the HOA’s check register, monthly general ledger, and delinquent assessment receivable reports.

But what about HOA Boards that only meet quarterly? Fortunately, new Section 5501 was added to the Civil Code to address this issue.  It provides that the financial review requirements may be met “when every individual member of the board, or a subcommittee of the board consisting of the treasurer and at least one other board member” reviews the financial information “independent of a board meeting” and that review is (a) subsequently ratified by the board at its next meeting and (b) the ratification is memorialized in the board’s meeting minutes. For HOAs that meet on a quarterly basis, there will likely be a need to form an executive finance committee of the board as contemplated by Section 5501. Such HOAs should work with their legal counsel to draft an appropriate charter for such a committee.

HOAs Now Legally Required to Purchase a Fidelity Bond:

A fidelity bond is a form of insurance protection which covers losses that the policyholder incurs as a result of fraudulent acts by individuals. It is used by a HOA to insure losses caused by the dishonest acts of the association’s employees, managers, board members or officers. Previously there was no legal requirement for HOAs to purchase fidelity bonds; however, many HOAs do so either because their CC&Rs require it and/or because it makes good business sense.

New Section 5806 is added to the Civil Code to formally require HOAs to purchase a fidelity bond. Unless a HOA’s governing documents require greater coverage amounts, the fidelity bond must be purchased and maintained in a coverage amount that is equal to or more than the combined amount of reserves of the HOA and total assessments for three (3) months. The bond must also include computer fraud and funds transfer fraud. Additionally, for HOAs that contract with a third-party managing agent or management company (which is the vast majority of HOAs in California), the HOA’s fidelity bond coverage must also include coverage for dishonest acts by the managing agent or the management company and its employees.

HOA law attorneys HOA boards should work with their managing agents to develop a protocol for adhering to the new legal requirements regarding automatic transfers of funds and monthly financial reviews.  Additionally, HOAs should contact their insurance professionals to ensure that they are carrying fidelity bond coverage which satisfies the new legal requirements.

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Del-WebbWe are proud to announce that Del Webb at Rancho Mirage Community Association has selected Tinnelly Law Group as their association’s legal counsel.

Del Webb at Rancho Mirage is a brand new master-planned 55+ community boasting 1,026 homes at build-out.  A well-appointed amenity complex, The Outlook, will feature legendary outdoor and covered pools, a fitness facility, billiards, aerobics rooms, golf simulator, and multi-purpose spaces designed to host the many activities and social clubs offered.  Residents will also enjoy the more than 6 miles of meandering walking trails. In addition to the community’s amenities, golf courses, world class restaurants, shopping areas and downtown Palm Springs are just a short drive away.

hoa laws Our HOA attorneys and staff look forward to working with Del Webb at Rancho Mirage’s Board and management.

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**New Legislationhoa-electric-vehicles

For the third time in past seven (7) years, the California Legislature has modified the laws governing the installation and use of Electric Vehicle (EV) charging stations within homeowners associations (“HOAs”). The first time was in 2011 when the Legislature enacted a new statute (now contained at Civil Code Section 4745) designed to nullify any provision in a HOA’s governing documents that prohibited homeowners from installing and using EV charging stations. In the following year, the Legislature then amended the law to give HOAs some regulatory authority in this area. That amendment served two (2) essential purposes: (1) it gave HOAs the ability to impose “reasonable restrictions” on the installation and use of EV charging stations, and (2) it clarified how the statute is primarily intended to apply to EV charging stations to be installed in a homeowner’s exclusive use/dedicated parking space.

This year (2018), SB 1016 was proposed by the Legislature. It makes some significant changes to Section 4745, and also adds new Section 4745.1 to the Civil Code to address EV Charging Station dedicated “TOU” (time of use) meters. Today, September 14, 2018, the Governor signed SB 1016 and its changes to the law will take effect January 1, 2019. The following information summarizes what HOAs should be aware of in the wake of SB 1016’s passage.

Changes to Existing Section 4745, effective January 1, 2019:

  • Section 4745(a) was amended to expand the scope of rights homeowners have to install EV charging stations. Homeowners will now have the right to install EV charging stations in their “units,” not simply their designated, exclusive use common area parking spaces. Some condominium developments are structured such that each “unit” is comprised of a residential element and a garage element.  Other developments actually include spaces within the deeds to the individual units. Thus, regardless of whether a homeowner’s designated parking space is within their unit’s garage, or within a portion of common area, the provisions of Section 4745 apply.
  • Section 4745(f)(1)(D) was amended to clarify that the homeowner has to pay for not only the electricity usage associated with the charging station, but also for the costs of installation of the station.
  • Section 4745(f)(3) was amended to relax the insurance requirements of homeowners who install EV charging stations. The $1,000,000 homeowner liability coverage policy requirement has now been replaced with a requirement for the homeowner to simply have “a liability coverage policy” without any specific amount listed. The requirement for the HOA to be named as an additional insured under the policy has also been deleted. **However, somehow the requirement under 4745(f)(1)(C) for the homeowner to, as a condition of approval, agree to provide a certificate of insurance which names the HOA as an additional insured has not been changed. In other words, the law now contradicts itself. Another “head-scratcher” from the California Legislature that should prompt a clean-up bill next year (we hope).
  • Section 4745(k) has been amended in a way that materially modifies the remedies available in enforcing Section 4745’s requirements. Prior to SB 1016, Section 4745(k) allowed for a prevailing plaintiff in an action to enforce Section 4745 to recover its attorney’s fees. The new law will change this language to allow recovery of attorney’s fees only when “a homeowner requesting to have an [EV] charging station installed and seeking to enforce compliance with [Section 4745]” is the prevailing plaintiff. In other words, regardless of whether the HOA is the plaintiff or the defendant, it will never be able to recover attorney’s fees in a lawsuit to enforce Section 4745 even where the HOA wins! This is the latest example of the Legislature’s willingness to modify the fee-shifting provisions of the Davis-Stirling Act to afford homeowners an advantage over their HOAs.

New Section 4745.1, effective January 1, 2019:

As referenced above, new Section 4745.1 will be added to the Civil Code effective January 1, 2019. It basically mirrors the provisions of Section 4745 (pertaining to EV Charging Station installations) in order to extend them to EV-dedicated “TOU” (time of use) meters. An EV-dedicated TOU meter is an electric meter supplied and installed by an electric utility, that is (a) separate from, and in addition to, any other electric meter, (b) is devoted exclusively to the charging of EVs, and (c) that tracks the time of use (TOU) when charging occurs. It is designed to aid utility companies in determining what price per kilowatt-hour should be charged for the use of an EV charging station at specific times of day.

Applications for the installation and use of EV-dedicated TOU meters must be processed in virtually the same way as applications for the installation and use of charging stations, except that the insurance requirements which apply to charging stations do not apply to EV-dedicated TOU meters. Section 4745.1 also requires HOAs to “attempt to find a reasonable way to accommodate” a request to install an EV-dedicated TOU meter, “unless the [HOA] would need to incur an expense.”

HOA law attorneys SB 1016 is the latest example of the Legislature’s continuing trend of promoting renewable energy technologies and limiting the regulatory authority of HOAs. In our prior blog posts and newsletters on EV charging stations, we have touched on the need of every HOA (especially condominium HOAs) to work with its HOA lawyer to implement rules designed to process homeowner requests for EV charging stations in ways that comport with statutory requirements. That need is even greater now. HOAs that violate Section 4745 and/or new Section 4745.1 are subject to civil penalties and damages.

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OrangecrestWe are proud to announce that Orangecrest Country Community Association has selected Tinnelly Law Group as their association’s legal counsel.

Orangecrest Country is a master-planned community located in the City of Riverside.  When the neighborhood is complete, there will be more than 5,000 homes over 2,461 acres.

hoa laws Our HOA attorneys and staff look forward to working with Orangecrest Country’s Board and management.