HOA Lawyer Blog

Court Concludes Rental Restrictions are Reasonable

Published on: July 5, 2017 | by Steven J. Tinnelly, Esq.

*Unpublished Case

Recently, many residential common interest developments have experienced an influx in the number of short-term rentals within their community. This problem is exacerbated by the increased popularity of websites such as Airbnb and HomeAway. Although profitable, short-term rentals have a significant negative impact on community associations, such as increased damage to common area and violations of the Association’s governing documents. To address these concerns, many associations are amending their CC&Rs to include restrictions imposing a minimum lease period (e.g., thirty days). In a recent unpublished opinion, the California Court of Appeal upheld such a restriction as reasonable.

In Ocean Windows Owners Association v. Spataro, the Court affirmed the decision of the trial court granting the Association’s petition to reduce the requisite approval necessary to amend their CC&Rs pursuant to Civil Code section 4275. The proposed amended CC&Rs included, among other things, a provision imposing a minimum lease term of “thirty (30) consecutive days in any one (1) calendar year….” A homeowner filed an objection to the petition stating that the record was void of any facts sufficient to support a conclusion that the amendments “were necessary for the good of the community.” The Court of Appeal rejected this argument for two reasons.

At the outset, the Court noted that the homeowner had misstated the standard under Civil Code section 4275. Specifically, Civil Code section 4275(c)(5) requires that the “amendment is reasonable.” Reasonableness has been defined as:

Not arbitrary or capricious, rationally related to the protection, preservation and proper operation of the property and the purposes of the Association as set forth in its governing instruments, and is fair and non-discriminatory.

(Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159 Cal. App. 4^th 563, 577; see Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4^th 361, 382 (citations omitted).)

Using the appropriate standard, the Court concluded that the rental restriction was reasonable. The Court’s decision was predicated, in large part, on the declarations of the Association’s community manager and its general counsel. Both averred that short-term rentals had resulted in damage to the common area, increased costs and violations of the governing documents, and the inability or difficulty with obtaining financing due to the association’s appearance as a “condotel.” As such, the Court concluded that there was substantial evidence to support the conclusion that the rental restriction contained in the amended CC&Rs was reasonable (i.e., rationally related to the protection, preservation and operation of the community as a whole).

Although unpublished, this case underscores the courts’ awareness of problems affecting communities with short-term rentals, and their willingness to assist associations in addressing the issue. HOA Boards that are dealing with these types of issues should consult with their HOA’s legal counsel for guidance and recommendations.

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

New Client: Weatherly Bay Homeowner’s Association

Published on: June 27, 2017 | by Steven J. Tinnelly, Esq.

Weatherly-Bay We are proud to announce that Weatherly Bay Homeowner’s Association has selected Tinnelly Law Group as their associations’ legal counsel.

Weatherly Bay is a luxury condominium community located next to Huntington Harbour in northwest Huntington Beach. Residents enjoy harbor views, private boat slips, a large community pool and tennis courts.

Our HOA attorneys and staff look forward to working with Weatherly Bay’s Board and management.

New Client: Alder Community Association

Published on: June 20, 2017 | by Steven J. Tinnelly, Esq.

Alder We are proud to announce that Alder Community Association has selected Tinnelly Law Group as their associations’ legal counsel.

Alder at McKinley Village by The New Home Company is a progressive urban village set in East Sacramento that connect residents to where they want to be, and how they want to live – modern design and amenities foster connectivity and healthy living with village parks, paths, pools, spa and clubhouse.

Our HOA attorneys and staff look forward to working with Alder’s Board and management.

Business Judgment Rule Doesn’t Apply When the Board Acts Outside its Authority

Published on: June 14, 2017 | by Steven J. Tinnelly, Esq.

*Unpublished Case

ISSUE:

Is an HOA Board of Directors (“Board”) entitled to protection under the Business Judgment Rule (“BJR”) when it applies an unambiguous view restriction contained in the governing documents in a manner other than written?

RULE:

No. In Lingenbrink v. Del Rayo Estates Homeowners Association, 2017 WL 1075062 (“Lingenbrink”), the Court of Appeal concluded the BJR only applies to matters that are within an HOA Board’s discretion. A Board does not have the discretion to interpret or re-write a restriction where the meaning of the restriction is perfectly clear.

ANALYSIS:

The HOA consists of eighteen (18) “high end” homes in Rancho Santa Fe built on 21 lots, each with sweeping views of the Pacific Ocean. The CC&Rs contain very specific language that protects each Lot’s view as follows:

“No tree, hedges or other plant shall be so located or allowed to reach a size or height which will interfere with the view from any Lot and, in the event such trees, hedges or other plant materials do reach a height which interferes with the view from another Lot, then the Owner thereof shall cause such tree(s), hedge(s) or other plant material[(]s) to be trimmed or removed as necessary.”

New Client: Presidential Heights Community Association No. 2

Published on: May 23, 2017 | by Steven J. Tinnelly, Esq.

Presidential-Heights-II We are proud to announce that Presidential Heights Community Association No. 2 has selected Tinnelly Law Group as their associations’ legal counsel.

Presidential Heights is a condominium community located above the San Clemente Municipal Golf Course, in close proximity to Vista Bahia Park, and a variety of hiking and biking trails. Residents enjoy multiple pools, spas, and panoramic coastal and city lights views.

Our HOA attorneys and staff look forward to working with Presidential Heights’ Board and management.

New Client: Tidelands Owners Association

Published on: May 16, 2017 | by Steven J. Tinnelly, Esq.

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

Tidelands is a brand new condominium community by The New Home Company. Located in San Mateo, Tidelands offers the very best of waterfront living. Its modern residences provide homeowners a rare opportunity to live in the heart of the San Francisco Peninsula with easy access north to the city or south to Silicon Valley. In addition to a great climate, San Mateo boasts numerous parks making it easy to enjoy a healthy outdoor lifestyle. Residents will enjoy a Club Room, Fitness Center, and views of the San Mateo wetlands, bay and city skyline.

Our HOA attorneys and staff look forward to working with Tidelands’ Board and management.

Swallows Nests are Protected by the Migratory Bird Act

Published on: May 9, 2017 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – I’m receiving calls regarding swallows nests. Folks want them removed. Pest control is reminding everyone they are protected and removing is punishable by law. We are in high time for swallow activity! Is there anything our HOA can do to address this issue?

Answered – All swallows and their nests are fully protected under the “Migratory Bird Treaty Act of 1918” by state and federal regulations. It is illegal for any person to intentionally kill, injure, take, possess, transport, sell, or purchase them or their parts. It is illegal to intentionally destroy the nest, eggs or young of a swallow without a permit. If an adult swallow is occupying a half-built nest, or a fully built nest without eggs, then the law protects it. A permit is not required to remove swallow nests under construction that do not contain an adult, any new eggs or young, or nests abandoned after the breeding season. Permits to kill swallows or destroy swallow nests are only issued by the U.S. Fish and Wildlife Service, and only in very extreme cases. An example would be concerns for aircraft safety from a nesting colony at an airport. In most cases a permit for lethal control of swallows will not be issued for swallows nesting on a residence or other buildings and causing aesthetic damage.

The best strategy appears to be preventing nest building by “exclusion”, meaning methods that deny physical access to the nest site area. Exclusion represents a relatively permanent, long-term solution to the problem, and California does not require a permit for this method if it is done before the birds arrive, during nest building when there are no eggs or young in the nest or after the birds have left for the winter.

For methods of exclusion, please see the article “Living with Wildlife” published by the Washington Department of Fish & Wildlife.

-Blog post authored by TLG Attorney, Terri A Morris, Esq.

New Client: Lanai Owners Association

Published on: May 2, 2017 | by Steven J. Tinnelly, Esq.

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

Lanai is a brand new single family home community by Shea Homes. Located one mile from the Pacific Ocean Beaches in the heart of Carlsbad, residents will enjoy ocean views and easy access to beaches, entertainment, shopping, and dining.

Our HOA attorneys and staff look forward to working with Lanai’s Board and management.

New Client: Heirloom Community Association

Published on: April 25, 2017 | by Steven J. Tinnelly, Esq.

We are proud to announce that Heirloom Community Association has selected Tinnelly Law Group as their associations’ legal counsel.

Heirloom is a brand new townhome community by The New Home Company. Heirloom at The Cannery presents an extraordinary opportunity to reside in California’s first farm-to-table new home community. Heirloom received the prestigious “Community of the Year” honor at the 2016 MAME Awards presented by the North State Building Industry Association. The idea for living at The Cannery in Davis is pure and natural: Surround homes with parks and a working farm. Residents enjoy an urban garden, producing farm, market, pool and ranch clubhouse.

Our HOA attorneys and staff look forward to working with Heirloom’s Board and management.

Governor Brown Declares the End of the Drought

Published on: April 20, 2017 | by Steven J. Tinnelly, Esq.

water-rain-raindrops-drops

On April 7, 2017, Governor Brown signed Executive Order B-40-17, ending the drought state of emergency in most of California. Drought restrictions will remain in effect in Fresno, Kings, Tulare, and Tuolomne counties, which continue to face drinking water shortages and diminished groundwater supplies. The new Executive Order rescinds the emergency proclamations from January and April 2014, along with four drought-related executive orders.

Over the last few years, the California legislature has passed several bills aimed at water conservation within community associations. AB 2100 amended Civil Code Section 4735 to prohibit associations from fining or threatening to fine an owner for failing to water vegetation or lawns during a state or local government-declared drought. SB 814 also authorized penalties for excessive residential water use during periods of government-declared droughts. Now that the state of emergency has been lifted, these laws are no longer in effect, provided the local jurisdiction has not declared a local drought.

AB 2104 further amended Section 4735 to restrict an association from prohibiting low-water using plants as a group, and AB 349 amended Section 4735 to restrict an association’s authority to prohibit artificial turf. Although the drought restrictions have been lifted, this legislation protects homeowners from having to reverse or remove any landscaping measures that were installed in response to the government-declared drought.

The State Water Resources Control Board (SWRCB) also adopted emergency regulations that subject associations to fines of up to $500 per day for violating the provisions of Section 4735. These regulations will remain in effect until November 25, 2017, or until they are modified or repealed by SWRCB.

The decision to lift drought restrictions was partly based on unprecedented water conservation. Californians saved more than 20% of urban water since the Governor mandated water use reductions in 2015. Despite the record levels of water conservation, the State cautions, “This drought emergency is over, but the next drought could be around the corner,” said Governor Brown. “Conservation must remain a way of life.”

Executive Order B-40-17 continues the provisions in the previous Executive Order, “Making Water Conservation a California Way of Life.” Permanent restrictions prohibit the use of potable water for:

hosing off sidewalks, driveway and other hardscapes;
washing automobiles with hoses not equipped with a shot-off nozzle;
using non-recirculated water in a fountain or other decorative water feature;
watering lawns in a manner that causes runoff, or within 48 hours after measurable precipitation; and
irrigating ornamental turf on public street medians.

The SWRCB will continue to plan for future droughts and promote water conservation as a way of life, which may result in more legislation.

Blog post authored by TLG Director of Business Development, Ramona Acosta.

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