We are proud to announce that Surfside Homeowners Association No. 1 has selected Tinnelly Law Group as their association’s legal counsel.
Surfside is an attached single-family home community located in Huntington Beach. Residents enjoy two community pools, two clubhouses, a basketball court, tot lot, barbecue area, and easy access to the beach.
 |
Our HOA attorneys and staff look forward to working with Surfside’s Board and management. |
In the recent case of Dynamex Operations West, Inc. v. Superior Court, the California Supreme Court set forth a new test that employers should utilize to determine whether their workers are appropriately classified as independent contractors or employees. (Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal. 5th 903.) The new test will likely have a significant impact on the obligations and liabilities of employers for matters involving payroll taxes, worker’s compensation insurance, IRS reporting, and minimum wage and overtime requirements. In light of the Dynamex decision, all California employers, like homeowners associations, should re-evaluate whether they have appropriately classified their third-party vendors as independent contractors.
The Supreme Court simplified the test that was previously used to classify workers. Prior to the decision in Dynamex, a multi-factor test was utilized. The principal factor was whether the employer had the right to control the manner and means in which work was performed. However, the courts also considered several other secondary factors, such as whether the employer could discharge the worker at will; the level of skill required to perform the work; whether the employer supplied the tools and location to work; the length of time to be worked; the method of payment (whether by time or by job); whether the worker usually performed this type of work; and the subjective beliefs of both parties. This “totality of the circumstances” test created a substantial amount of uncertainty among employers.
The new Dynamex test, referred to as the “ABC Test,” makes is easier for employers to determine in advance whether their workers should be classified as employees or independent contractors. Although the new test is easier to utilize, employers will now find that it is more difficult to classify their workers as independent contractors. The ABC Test begins with the presumption that all workers are employees. To classify a worker as an independent contractor, the employer bears the burden of proving three elements.
First, the worker must be free from the employer’s control and direction, both in actuality and in contract. This prong is essentially a restatement of the principal factor in the pre-Dynamex test, which requires genuine independent contractors to control the manner and means in which they perform their own work.
Second, the worker must perform work for the employer that is outside of the employer’s usual course of business. For example, a homeowners association would likely be able to satisfy Part B, when dealing with workers hired to perform janitorial or landscaping services. This is because homeowners associations are not in the janitorial or landscaping business; rather, homeowners associations are in the business of managing and maintaining Common Interest Developments.
Third, the worker must be customarily engaged in an independently established trade, occupation, or business of the same nature of work performed for the employer. Using the example from above, a homeowners association could satisfy Part C of the test, if it could show that its janitor or landscaper provides the same janitorial or landscaping services for other homeowners association as well. True independent contractors have their own business cards, a separate place of business, and their own book of clients.
|
It is important to note that the Supreme Court specifically limited its Dynamex holding to disputes involving Wage Orders issued by the Industrial Welfare Commission. In order words, the case’s holding should only be applied to lawsuits that allege violations of Wage Orders (i.e., involving meal and rest breaks and overtime wages). At this point, it is uncertain whether the new ABC Test will be applied to all other legal claims brought against employers. Nonetheless, homeowners associations that routinely hire independent contractors should carefully re-evaluate their hiring procedures to ensure that their workers are properly classified under the ABC Test. |
-Blog post authored by TLG Attorney, Sarah A. Kyriakedes, Esq.
We are proud to announce that Bressi Ranch Community Association has selected Tinnelly Law Group as their association’s legal counsel.
Bressi Ranch is a master planned community located in the City of Carlsbad. Residents enjoy the Village Club, which includes a lap pool, spa, wading pool, BBQ area, outdoor fireplace, fitness room, and playground.
|
Our HOA attorneys and staff look forward to working with Bressi Ranch’s Board and management. |
We are proud to announce that 
Jade Tree Owners Association has selected Tinnelly Law Group as their association’s legal counsel.
Jade Tree is a brand new condominium community by KB Homes. Located in Chino Hills, Jade Tree is convenient to Vellano Country Club and Western Hills Country Club. Residents enjoy Jade Tree’s community park or exploring the nearly 12,500 acres of nearby Chino Hills State Park.
|
Our HOA attorneys and staff look forward to working with Jade Tree’s Board and management. |
*New Library Article!
Assembly Bill 2912 (“AB 2912”) was recently enacted by the California Legislature. Its changes to the law, which take effect January 1, 2019, are intended “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 (a) significantly increases the financial review requirements of HOA boards of directors, (b) limits the ability for automatic transfer of HOA funds without board approval, and (c) imposes a requirement for the HOA to purchase and maintain a fidelity bond.
In the wake of AB 2912’s passage, questions and concerns have surfaced as to how HOAs and management companies may need to adjust their current operational procedures to comply with the new state of the law. Our HOA attorneys have authored a new article to address some of those questions and to clarify some of AB 2912’s key components.
|
The article, entitled “AB 2912: New Protections Against the Misuse of HOA Funds,” is available for download from our firm’s library. You can access the article by clicking here. |
We are proud to announce that 
Juniper at Portola Springs Homeowners Association has selected Tinnelly Law Group as their association’s legal counsel.
Juniper at Portola Springs is a brand new condominium community by Richmond American Homes. The latest addition to the Villages of Irvine®, Juniper at Portola Springs offers easy access to shopping, dining and the Irvine Ranch Conservancy—comprising 50,000 acres of open space, lakes and trails.
|
Our HOA attorneys and staff look forward to working with Juniper at Portola Sorings’ Board and management. |
We are proud to announce that Dorado Homeowners Association has selected Tinnelly Law Group as their association’s legal counsel.
Dorado is a brand new single-family home community by Pulte Homes. Dorado is close to many attractions including the Queen Mary, The Pike, Aquarium of the Pacific, Cal State Long Beach and the delicious culinary scene downtown. Ideally situated between Los Angeles and Orange Counties, Dorado is conveniently located in Long Beach.
|
Our HOA attorneys and staff look forward to working with Dorado’s Board and management. |
It is well settled that an association’s CC&Rs (“Declaration”) establishes and controls, among other things, a board’s authority to govern an association provided that the CC&Rs do not conflict with California law and regulations (i.e., Davis-Stirling Act). In such cases, the plain language of the CC&Rs control. (Franklin v. Marie Antoinette Condominium Owners Assn. (1993) 19 Cal.App.4th 824, 829.) This was the case in Branches Neighborhood Corporation v. CalAtlantic Group, Inc. (2018), where Branches Neighborhood Corporation’s (“Association”) Declaration required the same to obtain a membership vote of fifty-one percent (51%) or more prior to the initiation of its construction defect claim (“Claim”) against CalAtlantic Group., Inc. (“Developer”).
In Branches, the Association properly followed all procedural requirements under California law in the initiation of the Claim, however, failed to obtain the prerequisite vote in accordance with its Declaration. Approximately two years after the initiation of the Claim, the Association obtained a membership vote in excess of fifty-one percent (51%), approving and ratifying the Claim. Taking into consideration these undisputed facts, the arbitrator assigned to the Claim granted Developer’s motion for summary judgment, holding that the “after the fact expression of consent cannot be transmuted into the prior consent required by the CC&Rs…when such a result would adversely impact the rights of a party to the agreement by which the CC&Rs were created…[t]he Developer is such a party.”
In its opposition to Developer’s motion to confirm the award, the Association based its argument on the theory that the arbitrator exceeded its powers under Code of Civil Procedure (“CCP”) § 1286.2(a)(4), which requires a court to vacate an arbitrator’s award if it determines that the arbitrator has exceeded its powers. Specifically, the Association argued that the arbitrator exceeded its powers by (1) depriving the Association of its unwaivable statutory right to affirmatively ratify the Claim, and (2) overriding public policy in favor of ratification. Both trial and appellate courts (collectively, “Court”) confirmed the arbitrator’s award.
The Court predicated its decision on the established foundation of the “Rule of Finality,” which in short, provides extreme deference to an arbitrator’s decision, subject to limited exceptions such as CCP § 1286.2(a)(4).
In support of its first argument, the Association provided the Court with several sections of the Davis-Stirling Act (“Act”) that provided the Association with the ability to retroactively ratify its actions, claiming that it is its “statutory right.” As such, the Association asserted that the provision in the Declaration that requires membership approval prior to the initiation of the Claim (“Provision”) is unenforceable as it waives said right. The Court quickly disposed of this argument because all the statutes mentioned by the Association provided the right to ratify only if a provision of the Act required an action to be approved by a majority vote. (See Civil Code §§ 4065, 4070.) Here, the Court found no provision of the Act that required the Association to obtain a majority vote prior to the initiation of the Claim, holding that “absent a specific requirement in the Act to hold an election, the association’s governing documents control.” Branches, at 6.
The Association then went on to argue that public policy supports its position due to the Legislature’s “clear pronouncement of public policy favoring ratification.” Branches, at 8. The Court disagreed with this proposition, stating that the Act was created to regulate the governance of homeowners associations, placing a system of checks and balances (“System”) against the Association and its board of directors (“Board”). The Court noted Civil Code § 6150 (requiring an association to provide notice to its members 30 days prior to the filing of a claim, unless such requirement would cause the statute of limitations to run) as an example of the System the Act is intended to establish. The Court found the Provision to go a “step further” by requiring the Association to obtain membership approval prior to the initiation of the Claim, as opposed to the mere requirement of providing notice of same. Id.
Retroactively approving the Claim went against public policy as it stripped Association members of their ability to “check” the authority of the Board (i.e., provide authorization to file the Claim); even if the members had the ability to disapprove the Claim, the Association would suffer damages in the form of legal costs and expenses already expended in the Claim, going further against the System, Act, and Declaration. Accordingly, the Court found no violation of public policy and thus, no violation committed by the arbitrator.
Branches emphasizes the importance of the plain language of an association’s Declaration. So long as the Declaration does not conflict with existing law (i.e., Act) and/or goes against public policy, the plain language of the Declaration controls, to which a homeowners association must strictly abide by.
|
It is of crucial importance for a homeowners association to thoroughly interpret, analyze and understand its authority under its governing documents, in particular, its CC&Rs, prior to the taking of any action in order to avoid unnecessary consequences. For the same reason, it is of equal importance for homeowners associations to obtain general legal counsel that specializes solely in HOA law and related matters to provide unfettered and sound legal advice from an objective perspective. Law firms that specialize in multiple areas of law (e.g., HOA and construction defect) may overlook certain provisions of an association’s governing documents and inadvertently guide associations in a direction that may prove to be detrimental, such as the outcome in Branches. For more information and guidance related to the interpretation and/or amending of CC&Rs and other governing documents, please contact us. |
-Blog post authored by TLG Attorney, Andrew M. Jun, Esq.
We are proud to announce that Breeza Owners Association has selected Tinnelly Law Group as their association’s legal counsel.
Breeza is a high-rise condominium community located in the Little Italy area of downtown San Diego. Situated along what has been dubbed “Millionaire’s Row” on Pacific Highway, residents enjoy a community pool, spa, workout facility, concierge service, security attendant and underground parking.
|
Our HOA attorneys and staff look forward to working with Breeza’s Board and management. |
We 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.
|
Our HOA attorneys and staff look forward to working with Pacific Island Villas’ Board and management. |
HOA Lawyer Blog