HOA Lawyer Blog

Managing the Coronavirus – A Discussion of Preliminary Board Concerns

Published on: March 18, 2020 | by Steven J. Tinnelly, Esq.

covid-19-1330px Over 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.”

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.

Realtors Beware: Your Client’s Country Club Exclusion Can Come Back Around to Bite You

Published on: March 17, 2020 | by Steven J. Tinnelly, Esq.

*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.

New Client: Horse Creek Ridge Community Association

Published on: March 10, 2020 | by Steven J. Tinnelly, Esq.

Horse-Creek-Ridge-300x169 It’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.

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

New Client: Soleil Aliso Viejo Homeowners Association

Published on: March 3, 2020 | by Steven J. Tinnelly, Esq.

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

Soleil is a condominium association located in the coastal community of Aliso Viejo. Residents enjoy a community playground and panoramic views of city lights and mountains.

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

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

Published on: February 25, 2020 | by Steven J. Tinnelly, Esq.

bigstock-Election-Campaign-Election-Vo-131448176-1-1140x660-1 We have just passed the two-year anniversary of California Civil Code 4515. This is the law that protects certain rights of members and residents to political speech and peaceful assembly within California community associations. With election season in full swing, it is important for Boards and management to be reminded that the rights afforded to members and to residents by Civil Code 4515 to utilize Association common area facilities and to campaign are not unlimited.

For many associations, Civil Code 4515 comes into play when members or residents (the code applies to both) seek to use common area facilities to hold campaign or political rallies. Rules that previously required the payment of a deposit and/or fee plus proof of liability insurance to reserve a facility for an event needed to be revised in light of the new law, which prohibits such fees, deposits, and insurance for those using the common area facilities for assembly purposes. Managers and Boards were left with the burden of determining how to differentiate between those wishing to use the common area facilities for private events such as birthday parties where a fee can still be charged and those who desired to use those same facilities for assembly purposes where fees cannot be charged.

Reasonable Restrictions on the Use of Common Area Facilities for Assembly Purposes. Association rules & regulations and facility use agreements are useful tools in balancing the requirements of the law with reasonable restrictions that protect the Association. Possible restrictions on the use of facilities for assembly purposes are as follows:

Not open to the public: Both the rules and facility use agreements may require that any 4515-related meetings or events be restricted to members, residents and their guests only so as not to open the Association’s facilities to the public. If the Association is open to the public, it must comply with the Americans with Disabilities Act, a costly endeavor that exposes the Association to potential significant liability if the strict ADA requirements are not met.
Occupancy restrictions: The fire department of each city typically sets maximum occupancy limits for association facilities such as clubhouses. Those reserving the facilities should be required to limit their events to no more than what is permitted by the fire code or to any other reasonable number determined by the Board as the maximum capacity for each facility. Attendance beyond capacity burdens Associations with traffic, potential for unruliness and nuisance, and excess strain on common area components such as restrooms.
Responsibility for damages: Although no fee or deposit may be charged upfront, this does not mean members cannot be held responsible for damage caused to the common area by their residents and guests during 4515-related gatherings. A facility use agreement may be required for anyone reserving the facilities. Reservations should be required in advance and a stated purpose should be required when making the reservation that the meeting is for proper assembly purposes pursuant to Civil Code 4515. If a non-member resident wishes to use a facility for a proper assembly purpose, the member who owns the Lot/Unit where the resident resides may be required to sign such an agreement assuming responsibility for any damage caused at their event. Additionally, most CC&Rs contain a provision that makes members responsible for damage caused to the common area by them, their tenants or guests and many of these damages can be levied as a reimbursement assessment, depending on the language of the Association’s CC&Rs.
Cleaning fees. A facility usage agreement can also require that a member and/or resident reserving a common area facility return the facility in the same condition in which they received it, which includes cleaning and the disposal of trash. If the individual fails to return the facility in the same condition, the Association can charge the responsible member for cleaning fees as required by a facility usage agreement.
Parking: Parking is a concern for many associations and the scheduling of a large rally poses a potential strain on Associations where parking is limited. Civil Code 4515 does not afford members or residents with additional parking rights. That means that the existing parking rules and regulations apply to attendees of an event for assembly purposes. Once the guest spaces are all occupied, attendees must make arrangements to park elsewhere to avoid being cited and/or towed as provided in the Rules. This should be made clear in any facility use agreement so advance arrangements for parking for their guests if necessary. Compliance by all attendees with the governing document provisions, not just its parking provisions, should be required by the rules and/or a facility use agreement for assembly-related events.
Alcohol use: The Association may ban the use of alcohol at events for assembly purposes – even if alcohol is allowed at private events. Because procuring insurance cannot be required for those reserving facilities for assembly purposes, it is reasonable to ban alcohol or other activities which may increase legal exposure to the Association at these gatherings. Likewise, items such as sound equipment that may be used for private events can be withheld from assembly events with no deposit so long as this limitation is made clear in the facility use agreement and/or rules.
Compliance with the governing documents. Members and residents and their guests using common areas must still comply with the provisions of the Association’s governing documents including as to noise levels, parking, cleaning up after service animals, etc. This can be made clear in a well-drafted facility use agreement.
Reasonable hours: Holding a political rally does not give members and residents 24-hour access to the Association’s facilities or rights above members who request to use the facilities for their private events. Rules should be adopted that ensure all members have equal access to these facilities, including for private events, and that the events end at a reasonable time to ensure noise levels are not interrupting residents’ quiet enjoyment of their property.
Designated Areas. Often, an Association’s clubhouse is near a pool or to other facilities and guests of the assembly event spill out into other areas not reserved for the event. A facility use agreement can require that the event must be contained within the reserved facility and that guests may not migrate beyond said designated area.

What is a Proper “Assembly” Purpose Under Civil Code 4515? Most Associations are concerned about the potential abuse of this statute in the form of members reserving facilities without paying a fee stating it is for assembly purposes when it is really just a private event. Examples of qualified purposes of assembly are to discuss common interest living, association elections, legislation, election to public office, or any initiative, referendum, or recall process involving the Association or other political body. If the stated purpose for reserving a facility does not fall into one of these categories, then it is a private event.

Limitations on Canvassing and Petitioning. While Associations cannot restrict canvassing, petitioning, or the circulation of materials for political purposes, they can place reasonable restrictions on these activities such as requiring that it take place only during certain hours. This type of political speech often gives rise to complaints by members disturbed by such unsolicited campaigning and door-knocking, but the Association may not bar such free speech activities when done in a reasonable manner.

To implement reasonable and common-sense restrictions on political speech and assembly without violating Civil Code 4515, HOAs should have their legal counsel review their current rules and policies with respect to campaigning, solicitation and common area use and to prepare agreements concerning the use of common area facilities. Rules or policies which violate Civil Code 4515 subject the HOA to court action and fines.

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

New Client: Parkview Terrace Owners Association

Published on: February 18, 2020 | by Steven J. Tinnelly, Esq.

Parkview-Terrace-300x169 It’s our privilege to welcome Parkview Terrace Owners Association to Tinnelly Law Group’s growing family of HOA clients.

Parkview Terrace is a brand new community of single-family homes by KB Home in San Diego. Residents will enjoy a plethora of local recreational opportunities, including Parkside Neighborhood Park, the Camacho Recreation Center, Las Palmas Pool and Paradise Hills Skate Park.

Our HOA lawyers and staff look forward to working with Parkview Terrace’s Board and management.

New Client: Meadow Park Community Association

Published on: February 11, 2020 | by Steven J. Tinnelly, Esq.

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

Meadow Park is a brand new condominium community by William Lyon Homes in Claremont. Residents will enjoy a large great lawn at the center of the community, ideal for socializing and relaxing. Meadow Park will also have a private recreation area with a lap pool, picnic areas, and barbecues.

Our HOA lawyers and staff look forward to working with Meadow Park’s Board and management.

Can the Association Lien for Fines?

Published on: February 4, 2020 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – Is there any way to collect a fine other than going to court?

Answered – Monetary penalties (i.e., fines) are just one of the many tools in a homeowners association’s (“HOA’s”) arsenal to enforce its governing documents. They are primarily used to deter violations, as well as to compel compliance from a member, guest or tenant who is in violation. However, many HOAs find fines ineffective at deterring violations because of the difficulty in collecting the fines once levied.

Indeed, when a member fails to pay regular or special assessments levied by the HOA in a timely fashion, the HOA may record an assessment lien against the member’s separate interest to act as security for the payment of the assessment debt. The HOA then has the power to enforce the lien through, among other methods, foreclosure. Unfortunately, the HOA’s ability to collect delinquent assessments through foreclosure does not extend to the collection of fines:

A monetary penalty imposed by the association as a disciplinary measure for failure of a member to comply with the governing documents, except for the late payments, may not be characterized nor treated in the governing documents as an assessment that may become a lien against the member’s separate interest enforceable by the sale of the interest [through nonjudicial foreclosure].

(Cal. Civ. Code § 5725(b).)

Accordingly, an HOA is limited to the following methods to collect fines: (1) bring a lawsuit against the member (typically in small claims court unless the amount of the fine(s) exceed(s) the jurisdictional limits imposed under the California Code of Civil Procedure), or (2) wait until the member’s separate interest is sold and make a demand during escrow. Neither situation is ideal because of issues inherent with each.

For example, judicial action can be a costly and time-consuming endeavor. If the HOA prevails, debtors rarely pay judgments entered against them. Thus, it will take time (and money) to secure payment, either through a wage garnishment or bank levy. Moreover, failure to strictly adhere to the HOA’s Notice and Hearing procedure, along with its Enforcement Policy and Fine Schedule, will preclude the HOA from prevailing in an action to collect fines.

With respect to the latter option (wait until the member sells his or her separate interest), there is no guarantee that the debt will be satisfied through escrow. That is because the debt is not secured by the property. As a result, if the debt is not satisfied through escrow, the HOA will be forced to bring a lawsuit against the now-former member.

As noted above, the purpose of levying a fine against a member is to encourage compliance with the HOA’s governing documents. If the fine works (i.e., the member complies after being fined), the HOA should consider reversing the fine as its objective has been achieved. However, if the fine does not work (i.e., the member continues to violate the governing documents), the HOA should bring an action to enforce the governing documents. Through said action the HOA may seek to collect the fine(s), but its primary objective should be to secure compliance.

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

New Client: Grand Park Community Association

Published on: January 28, 2020 | by Steven J. Tinnelly, Esq.

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

Grand Park is a brand new master planned community by Lennar Homes in Ontario. Residents will enjoy the resort-style amenities of the Recreation Center, including a swimming pool, spa, clubhouse, dog park and playgrounds.

Our HOA lawyers and staff look forward to working with Grand Park’s Board and management.

New Client: The Oaks at Lake Forest Homeowners Association

Published on: January 21, 2020 | by Steven J. Tinnelly, Esq.

The-Oaks-300x169 It’s our privilege to welcome The Oaks at Lake Forest Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

The Oaks is a beautiful tree-lined community located within the Lake Forest II Master Association. Of the many benefits to living within the Lake Forest II Master Association is the Sun and Sail Club. The Sun and Sail Club amenities include Swimming Pools, Spa, Fitness Center, Youth Center, BBQ Areas, Snack Bar and Amphitheater.

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

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