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The California Solar Rights Act (“Act”), found at Civil Code §§ 714 and 714.1, provides certain protections for homeowners seeking to install Solar Energy Systems (i.e., solar panels) on their properties (“Systems”). The intent of the Act was to prevent associations from broadly banning Systems for aesthetic reasons—whether through an explicit ban, or through onerous architectural restrictions that greatly increase System costs or reduce performance. To that end, the Act rendered void and unenforceable any provision of an association’s governing documents that “effectively prohibits or restricts the installation or use of a solar energy system.” Civ. Code § 714(b). The Act does permit associations to place “reasonable restrictions” on the installation or use of Systems, as defined in Civil Code § 714(b).  However, in reality, those “reasonable restrictions” are extremely limited in scope.  To illustrate, any restriction which increases the cost of a System by more than $1,000, or which decreases its performance by more than ten percent (10%), from what was originally proposed by the homeowner is not a “reasonable” restriction and therefore unenforceable. Civ. Code § 714(d)(1)(B).

For planned developments with detached homes, the application of the Act is relatively straightforward because it applied to Systems that were installed on a homeowner’s “separate interest.”  However, what was less clear was the extent to which the Act applied to homeowners within condominium developments.  In a condominium development, a System would not be installed within or upon a homeowner’s separate interest.  Rather, the System would be installed on common area components such as the roofs, garages or carports.

This issue was at the heart of AB 634 which was signed into law in 2017. AB 634 amends Civil Code § 714.1 and adds Civil Code § 4746. Under the new law, which became effective January 1, 2018, associations are prohibited from establishing policies prohibiting the installation or use of Systems installed on the roof of the building in which the owner resides, or a garage or carport adjacent to the building that has been assigned to the owner for exclusive use. It also adds an exemption to the membership approval requirements associated with granting exclusive use of common area to allow for such grants for System installations. Civ. Code § 714.1(b)(1)-(2).  In simple terms, condominium associations are no longer able to broadly prohibit Systems from being installed on common area roofs, garages or carports.

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IslandsWe are proud to announce that Islands Homeowners Association has selected Tinnelly Law Group as their associations’ legal counsel.

The Islands HOA is an intimate community consisting of 117 beautiful California-style homes. Located in Aliso Viejo, this community has close and easy access to schools, family recreation, arts, entertainment, and business centers.

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

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Cinnamon-HollowWe are proud to announce that Cinnamon Hollow Homeowners Association has selected Tinnelly Law Group as their associations’ legal counsel.

Cinnamon Hollow is a condominium community in Anaheim. Residents enjoy a pool, spa, and close proximity to shopping, restaurants, and transportation.

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

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Court-TrialPreliminary injunctions are temporary court orders requested by one party that prevents another party from pursuing a particular course of conduct until the conclusion of a trial on the merits.  A preliminary injunction is proper where the moving party proves the following two factors: (1) the likelihood that the moving party will ultimately prevail on the merits at the time of trial; and (2) that relative interim harm to the parties from issuance of the injunction weighs in that party’s favor.

Occasionally, HOAs seek preliminary injunctions as a means to enforce the HOA’s governing documents.  Among other reasons, the purpose behind that request for judicial relief is to restrain homeowner actions or omissions when such conduct potentially poses a threat of harm or risk to Association Property or the Association’s Members.  Examples include a homeowner’s unauthorized alteration of structural common area components (e.g. removal of a bearing wall within a condominium unit; unapproved building activities on common area property).

Under the Davis-Stirling Common Interest Development Act (“Act”), at the conclusion of a trial on the merits, the prevailing party shall be awarded reasonable attorney’s fees and costs in an action to enforce the HOA’s governing documents (Civil Code Section 5975).  Historically, there has been some question as to whether a moving party may recover statutory attorney’s fees and costs if the court grants a preliminary injunction in a HOA enforcement action.  In January 2018, the California Court of Appeal addressed that issue in the case of Artus v. Gramercy Towers Condominium Association (19 Cal.App.5th 923).

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The-FaircrestWe are proud to announce that The Faircrest Homeowners Association has selected Tinnelly Law Group as their associations’ legal counsel.

The Faircrest is a new luxury single family home community by Emerald Homes and D.R. Horton located in the Faircrest Heights neighborhood of Los Angeles. Located on the former ten acre site of the historic KJH “Boss Radio” station, residents enjoy expansive back yards and close proximity to shopping, restaurants, and transportation.

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

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Morgan-HillWe are proud to announce that Morgan Hill Homeowners Association has selected Tinnelly Law Group as their associations’ legal counsel.

Tucked away in the rolling hills and wine country of Temecula, Morgan Hill is a collection of luxury view homes showcasing new and innovative floor plans and distinguished architecture. Inspired by the vineyards of Temecula, ease and elegance live side by side in one of the most desirable communities in the Temecula Valley. Morgan Hill amenities include a private, three acre community center with swimming pools, spa, tennis courts, fitness center, game room, two ballrooms and outdoor fireplace lounge. The elegant wine country-themed master planned community is perfectly located in the beautiful Temecula Valley, where residents will enjoy access to highly acclaimed schools, excellent shopping and entertainment and notable golfing, such as prestigious Redhawk Golf Club, Temecula Creek Inn and Journey at Pechanga, all adjacent to Morgan Hill!

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

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hoa-membership-id-cards*Asked & Answered

Asked – Our HOA makes us take a photograph which they put on an ID card to use at the various amenities on site. Upon move out, they make us turn in the IDs. I found out that they don’t destroy the cards that have our name and photograph and what unit we are in. The HOA keeps it in the “unit file” in perpetuity. I don’t feel comfortable with this, but I turned mine and my husband’s in to avoid paying $25 each for not handing them in. My step-daughter has lost hers and I’m being charged $25. In finding out the fee does not go to defray any costs incurred by the board. This does not sound legal/in-line with privacy laws. Suggestions?

AnsweredThe HOA’s practice of retaining photo ID cards does not violate the law; however, the ID cards do not contain information that HOA’s are required to retain as HOA “records” such as copies of the HOA’s governing documents, minutes, financial records, and litigation files. There is no arguable reason for the HOA to retain photo ID’s of past members, so it would be our recommendation that rather than retain the photo ID cards the HOA shred them once they are surrendered, thereby preventing any opportunity for misuse of the information and photographs contained in the cards.

hoa laws The charge of $25 for members who fail to turn in their ID cards upon moving out of the community is probably a penalty charge listed in the HOA’s Fine Schedule.  As a fine, the charge is not required to be used to defray costs incurred by the HOA, but is a penalty designed to motivate members to surrender their cards, so they are not used for entrance to the HOA’s amenities by unauthorized individuals. The amount of the fine is not “unreasonable,” so it does not violate the Civil Code that governs homeowners associations.

Content provided by TLG attorney Terri A. Morris, Esq.

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

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WaterpointWe are proud to announce that Waterpoint Owners Association has selected Tinnelly Law Group as their associations’ legal counsel.

Located at the water’s edge in the heart of Point Loma, Waterpoint is a limited collection of 40 new upscale mixed-use condominiums developed by ColRich.  Waterpoint fronts the shoreline Promenade at Point Loma which is part of a contiguous waterfront pedestrian connector from Point Loma all the way to downtown San Diego.  Residents enjoy breathtaking bay and downtown skyline views, large outdoor spaces, and al fresco balconies.

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

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harvestWe are proud to announce that Harvest at Upland Association has selected Tinnelly Law Group as their associations’ legal counsel.

Harvest by KB Home is a new gated master-planned community in Upland that promotes a “Farm to Fork Lifestyle.”  Residents enjoy an agrarian neighborhood with edible plantings in community gardens and orchards, and a recreation center with a demonstration kitchen, pool, spa, fitness center, BBQ area and outdoor loggias.

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

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notboss63Previously, we wrote on a decision published by the National Labor Relations Board (“NLRB”) wherein the NLRB concluded that, where a contracting party has reserved the authority to exercise control over the employees of another, said contracting party will be found to be the “joint employer” of the other entity’s employees.  In the case of Browning-Ferris Industries of California, Inc. (2015) NLRB No. 672 (“BFI”), BFI retained the services of Leadpoint Business Services (“LBS”) to provide staff to one of BFI’s recycling facilities.  Although the contract between BFI and LBS recognized that the personnel staffed by LBS were the employees of LBS, BFI retained some control over the employees. As such, the NLRB concluded that as long as a company retains (e.g., through the execution of a contract) the authority to control the employees of another, said company will be given joint-employer status. (Id. at p. *2.)

The BFI decision caused quite a stir in the realm of common interest developments. As discussed in our prior post, many associations retain a community management firm to facilitate the duties of the association (e.g., solicit bids for common area maintenance and repair). And while the community managers were historically viewed as the employees of the management firm, the BFI case raised some questions with respect to the nature of the relationship between the employees of a management firm and the association.

Nevertheless, on December 14, 2017, the NLRB did an about-face reversing its decision in the BFI case.  In Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand”) the NLRB held that the BFI standard was “a distortion of common law as interpreted by the Board and the courts…[wa]s contrary to the [National Labor Relations] Act…is ill-advised as a matter of policy, and its application would prevent the [NLRB] from…foster[ing] stability in labor-management relations.” ((2017) 365 NLRB No. 156, *2.) Accordingly, the NLRB concluded that a joint-employment relationship will be found where there is evidence demonstrating that an entity has “exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control).” (Id. at p. *5 (emphasis original).) Said control must be “direct and immediate,” as opposed to “indirect,” and must be more than control which is “limited and routine.” (Id.)

Although the BFI case has been abrogated restoring the prior position of the NLRB, associations and management companies must continue to exercise caution when hiring vendors to perform services for the association to prevent a finding of a joint-employment relationship. In Heiman v. Workers’ Compensation Appeals Board, the Court of Appeal concluded that the community manager (and by extension, the association) was the joint-employer of an employee of an unlicensed and uninsured contractor. ((2007) 149 Cal. App. 4th 724.)  Under California law, one of the legal consequences for hiring an unlicensed contractor is that the person who hired the unlicensed contractor may be considered an “employer” for tort-liability purposes. (Id. at p. 735.) Since the community manager hired an unlicensed contractor, it was found to be the joint-employer of the injured worker. And, because of the agency relationship between the management company and the association, the association was found liable. (Id. at p. 744.)

California HOA lawyers In sum, despite the shift in position, associations must continue to insulate itself from a finding of joint-employer status by ensuring that it retains only licensed and insured vendors, and adequately sets forth the scope of work and the level of care and skill required to achieve the desired result within its contract with the vendor.  Moreover, the contract must include a provision requiring the contractor to indemnify and hold the association harmless in the event a labor dispute arises between the contractor and its employees.

-Blog post authored by TLG Attorney, Matthew T, Plaxton, Esq.