HOA Lawyer Blog

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.

Overzealous Board Members: Understanding the Scope of the Board’s Authority to Enforce the Governing Documents

Published on: January 14, 2020 | by Steven J. Tinnelly, Esq.

how-should-a-weak-leader-stand-up-against-butt-in-590b43b68caab Homeowners associations (“HOAs”) are governed by a group of volunteer members known as a “Board of Directors” (“Board”). Their primary responsibilities include: (1) managing the common areas, (2) managing the HOA’s finances, (3) setting policies to assist in the operation of the HOA, and (4) enforcing those policies along with the HOA’s governing documents. The Board is therefore vital to the effective operation and management of the HOA, as well as preserving the property values of the HOA’s members.

As indicated previously, one of the primary responsibilities of the Board is to enforce the governing documents. (See Posey v. Leavitt (1991) 229 Cal.App.3d 1236.) In fact, a majority of members purchase their units within the Association in reliance on the governing documents being consistently and faithfully enforced by the Board. However, that power may be abused in situations where a director uses his or her position to target and/or harass particular residents within the community. (See generally Nahrstedt v. Lakeside Village Condominium Association (1994) 8 Cal.4th 361, 383 (“Of course, when an association determines that a unit owner has violated a use restriction, the association must do so in good faith, not in an arbitrary or capricious manner, and its enforcement procedures must be fair and applied uniformly.”).) It is therefore important that the Board, and not any one individual Board member, take action to enforce the governing documents.

The foregoing is not to say that individual directors are precluded from observing and reporting violations. Indeed, a HOA necessarily relies on its members (including its Board members) to report instances where the governing documents may have been breached. Photographing the potential violation is not problematic to the extent that the photograph captures an area that may be observed from a lawful vantage point (e.g., the common area). However, upon observing/documenting a potential violation of the governing documents, the observing party must report that observation to the HOA’s community manager (“Manager”) so that same may initiate the procedures contained in the Association’s enforcement policy (“Policy”). Individual directors should never communicate directly or indirectly with residents concerning their ostensible violation(s) because doing so heightens the concerns referenced above.

Additionally, it is important to point out that the Manager is not acting on his or her own volition; rather, the Manager is executing the duties delegated to him or her by the Association. Therefore, the Manager is acting on behalf of, and at the direction of, the Association. This distinction is important because it underscores the fact that the action is being taken by the Association or at the Association’s direction, and not by any one individual.

In light of the foregoing, each Board member should employ the following procedure when observing a violation of the HOA’s governing documents:

Any observed violation shall be reported to the Manager in writing and shall include any supporting information (e.g., a detailed description of the violation, photographs, etc.).
Thereafter, the Manager, and not the observing Board member, must comply with the procedural requirements contained in the HOA’s Policy, which typically requires the preparation and mailing of a “courtesy notice” to the offending resident advising same of the alleged infraction.
If the violation continues to occur, the Board should direct the Manager to prepare correspondence inviting the offending resident to a hearing before the Board.
At the hearing, the Board may impose discipline pursuant to the Association’s governing documents.
The observing Board member must not communicate with the offending resident at any point during the enforcement process (unless otherwise authorized by the Board).

The foregoing procedure emphasizes the fact that the HOA acting through the Board, and not any individual member of the Board, enforces the governing documents. Following this procedure will mitigate the Board members’, and by extension, the HOA’s, liability exposure.

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

Annual HOA Legislative & Case Law Update (2020)

Published on: January 8, 2020 | by Steven J. Tinnelly, Esq.

New-Newsletter-Tempalte-300x167 In case you missed it, Issue # 43 of our ‘Community Association Update’ newsletter is available now!

Topics covered in this issue include:

SB 323 – Elections
AB 670 – Accessory Dwelling Units
SB 326 – Balcony Inspections & Builder Defect Actions
SB 234 – Family Day Care Homes
SB 652 – Religious Items on Doors & Doorframes
HOA Liability for Failure to Uphold Maintenance Obligations
Voter Apathy Not a Required Showing in a Petition to Reduce CC&R Approval Requirements
Davis-Stirling Act Does Not Authorize ‘Continuing’ Assessment Liens

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.

New Client: Park West Association

Published on: January 7, 2020 | by Steven J. Tinnelly, Esq.

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

Park West is a high-rise condominium community located in the Bankers Hill area of San Diego. Residents enjoy a community rooftop deck with fabulous views of the ocean and Balboa Park.

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

Limitation on HOA Tort Liability for Failure to Uphold Maintenance Obligations

Published on: January 6, 2020 | by Steven J. Tinnelly, Esq.

*New Case Law

One of the primary purposes for which a homeowners’ association (“HOA”) is formed is to maintain and repair the HOA’s common areas, as well as any other areas designated within the HOA’s recorded Declaration of Covenants, Conditions and Restrictions (“CC&Rs”) (i.e., HOA Maintenance Areas). Faithfully executing the maintenance obligations under the CC&Rs is important to preserve property values and generally enhance the quality of life of all residents residing in the community. Failure to do so may expose the Association to liability.

For example, in the recent case of Sands v. Walnut Gardens Condominium Association, the California Appellate Court held the HOA could be responsible for damages sustained by a homeowner as a result of a plumbing leak originating from a pipe on the roof of the condominium building (i.e., HOA common area). ((2019) 35 Cal. App. 5th 174, 176.) In Sands, the HOA repaired the pipe and the roof, but did not compensate the homeowners for the damages they sustained to the interior of the unit and their personal property. The homeowners sued the HOA for breach of contract and negligence.

In addressing the former first (i.e., the breach of contract claim), the Court of Appeal noted that the HOA had a contractual obligation under the CC&Rs to maintain the common area in “a first-class condition.” (Id.) A jury could find that the HOA breached that contract by failing to perform preventative maintenance, and by failing to periodically inspect the pipes and roof. The Court dismissed the HOA’s argument “no evidence showed [that] the [HOA] was ‘on notice that it needed to make repairs or do something to the roof or the pipes.’” (Id.) Rather, it was sufficient that the HOA knew that no maintenance was being performed, which a jury could find as a breach of the CC&Rs’ requirement that the common area be maintained in a first-class condition.

However, as to the second cause of action for negligence, the Court sustained the trial court’s judgment of nonsuit (i.e., the homeowners failed to present sufficient evidence to conclude that the HOA was negligent). The Court noted that “the [HOA] had no independent duty as to the pipes and roof arising from tort law.” (Id. at p. 177.) In other words, absent a showing of a duty independent of the CC&Rs, an HOA cannot be held liable for the tort of negligence.

This case is important for several reasons. First, while the Rule of Judicial Deference generally requires courts to defer to maintenance decisions made by HOA boards even if a reasonable person would have acted differently in the same situation, the rule does not protect HOAs when they fail to perform any preventative maintenance and/or periodic inspections. Thus, a HOA should not wait until it receives maintenance requests and/or notice from homeowners concerning the need for common area repairs; rather, the Board should consult with experts and establish a preventative maintenance program addressing all common areas.

Second, there is no separate tort claim (e.g., negligence claim) for a HOA’s failure to maintain the common area. This is not to say, however, that a HOA will not be liable under a negligence theory for other reasons. For example, if a HOA voluntarily assumes a duty to protect residents from criminal activities and breaches that duty, the HOA may be held liable for negligence. (See Frances T. v. Village Green Owners Association (1986) 42 Cal. 3d 490.) The language contained in Frances T. also seems to suggest that a HOA may be found negligent for failing to maintain the common area which results in personal injuries. (Id. at p. 499.)

The case of Sands v. Walnut Gardens highlights the importance of properly executing maintenance obligations under the CC&Rs. While the Board is granted judicial deference in determining how the common areas are to be maintained, a HOA may be held liable for its failure to investigate maintenance problems and to take reasonable action. (See Affan v. Portofino Cove Homeowners Association (2010) 189 Cal. App. 4th 930 [the deference afforded to HOA Boards may not extend to situations where the Board fails to act or to investigate the scope of required maintenance or repairs].) HOA Boards should therefore consult with experts to establish and execute an appropriate common area maintenance plan.

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

New Client: Lake Forest No II Homeowners Association

Published on: January 2, 2020 | by Steven J. Tinnelly, Esq.

Lake-Forest-II-300x169 It’s our privilege to welcome Lake Forest No II Homeowners Association to Tinnelly Law Group’s growing family of HOA clients.

Lake Forest II is a planned community of 3,436 homes located in the city of Lake Forest. Residents enjoy a 36-acre lake, Sun & Sail Club, Fitness Center, Adult Lounge, playground, tennis courts, pickleball courts, basketball courts, volleyball courts, four pools and a spa.

Our HOA lawyers and staff look forward to working with Lake Forest II’s Board and management.

Dog Parks: Best Practices for Limiting an HOA’s Liability Exposure

Published on: December 26, 2019 | by Steven J. Tinnelly, Esq.

dogparkdogs One of the many benefits of living in a homeowners association (“HOA”) is the amenities provided to its residents. Common amenities include recreational rooms, pools, and fitness facilities. One amenity gaining in popularity is designated for the community’s canine companions: dog parks. Dog parks provide dogs with a designated off-leash area where they can run, exercise and play while minimizing damage to other common areas. However, having such an amenity could increase a HOA’s liability exposure, especially if the dog park is not designed properly and the HOA does not have rules and regulations governing the use of the dog park. Accordingly, the purpose of this article is to provide HOAs with best practices and guidance on adopting rules regulating the dog park.

Design

For HOAs contemplating the construction or installation of a dog park, or for those with pre-existing dog parks, the Board of Directors (“Board”) should consider the park’s design. One critical design aspect is the fence enclosing the dog park; the fence should be tall enough so that a large dog cannot jump over it. Additionally, the entrance into the dog park should be through a double-gate system. Such a system reduces the likelihood of a dog escaping. Finally, the HOA should also have two separate areas; one for larger dogs and one for smaller dogs. These are just a few of the design features a Board should consider when creating or modifying a dog park.

Rules

Most HOAs already have rules regulating the maintenance of pets within the community. However, if a HOA is considering installing a dog park, it should incorporate rules specific to the park. Moreover, those rules should be posted at all entrances to the park in a highly visible location.

Some rules to consider include the following:

Dogs are permitted to be off leash while in the dog park provided that they are able to respond to audible controls, such as whistling.
Dogs must be leashed upon exiting the dog park.
Dog owners shall remain in the dog park and shall maintain visual observation of their dog at all times.
Dogs must be current on all vaccinations.
Dogs with known violent propensities or aggressive behavior are prohibited from using the dog park. Any dog showing signs of aggression while in the dog park shall be removed immediately by the dog owner.
Owners shall pick up their dog’s waste. Waste must be put in a tightly sealed plastic bag before being disposed of.
Owners are required to fill any holes created by the owner’s dog.

Dog parks are a great amenity but can increase a HOA’s liability exposure. It is therefore important for the Board to engage legal counsel before beginning the process of constructing and installing a dog park to ensure that the HOA is protected.

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

New Client: Hidden Crest Homeowners Association

Published on: December 17, 2019 | by Steven J. Tinnelly, Esq.

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

Hidden Crest Homeowners Association is a community consisting of single family homes. This association has beautiful homes with tree-lined streets and plenty of sidewalks throughout the community. Set against the foothills of Corona, residents of Hidden Crest enjoy the views of hills, as well as take advantage of the trails and natural areas close by.

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

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