HOA Lawyer Blog

New Client: Woodbury Lafayette Community Association

Published on: June 27, 2016 | by Steven J. Tinnelly, Esq.

We are proud to announce that Woodbury Lafayette Community Association has selected Tinnelly Law Group as their association’s legal counsel.

Woodbury Lafayette is a brand new condominium community by The New Home Company and is centrally located just a short five minute walk from downtown Lafayette. It consists of luxury Garden Flats and Terrace Flats, many with views of Mount Diablo. Woodbury was recently honored with the “Community of the Year” award at the Bay Area Building Industry Association’s (BIA) 2016 Excellence in Home Building Awards.

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

Associations Could Be Held Liable for the Employees of Independent Contractors

Published on: June 22, 2016 | by Steven J. Tinnelly, Esq.

Labor-Unions-Preventive-Practices-1024x683 On August 27, 2015, the National Labor Relations Board (“NLRB”) published its decision in the Browning-Ferris Industries of California, Inc. case (“BFI Case”). In that case, Browning-Ferris Industries of California, Inc. (“BFI”) retained the services of Leadpoint Business Services (“LBS”) to provide staff to one of BFI’s recycling facilities. The contract between BFI and LBS recognized, and the parties understood, that the personnel staffed by LBS were the employees of LBS. Nevertheless, given the fact that the contract granted BFI with some control over the employees of LBS, the NLRB concluded that BFI was a joint-employer of LBS thereby obligating BFI to comply with federal labor laws.

In adopting a new legal standard for determining joint-employer status, the NLRB emphasized that such a determination should not be based solely on actual control over the employees of another, but the “existence, extent, and object of the putative joint employer’s control.” (Browning-Ferris Industries of California, Inc. (2015) 2015 NLRB No. 672, *12 (Emphasis added).) Otherwise, employers would be able to insulate themselves from their responsibility to comply with federal labor laws. (Id. at p. *21) Accordingly, as long as a company retains (e.g., through the execution of a contract) the authority to control the employees of another, said company shall be given joint employer status. (Id. at p. *2.) This is true even if control is exercised indirectly (e.g., through an intermediary). (Id.)

Many associations retain a community management firm for the purpose of executing the duties of the association. These community management firms in turn employ community managers and support staff to manage these associations. While historically recognized as the employee of the community management firm (and an independent contractor of the association), the BFI Case raises some questions with respect to the nature of the relationship between the employees of a community management firm and the association. Accordingly, associations must be cognizant that a Court may find that it is a joint employer of the community manager (and support staff), notwithstanding the fact that it exercises no direct and immediate control over said manager.

Similarly, associations and management companies must take care when hiring maintenance and service providers for the community. When managers, committee members, or board members are conducting job walks with a contractor’s employee, reviewing specifications, or receiving invoices, the management company and the association may become joint employers. In Heiman v. Worker’s Compensation Appeals Board, Cal: Court of Appeal, 2nd Appellate Dist., 3rd Div. 2007 (“Heiman”), a community association manager hired an unlicensed and uninsured contractor on behalf of the association to install rain gutters on the condominium buildings. An employee of the contractor was seriously injured on the first day of the project and sued the contractor, management company, and association for workers’ compensation. The Court held that the contractor, the association, and the management company were all joint employers because the contractor hired the injured employee, and the management company, as agent of the association, hired the contractor. The BFI Case seems to affirm this decision.

In order to insulate the association from a possible finding of joint-employer status, the association should ensure that its contract with independent contractors, requires all proper licenses and insurance, adequately sets forth the desired results, and sets forth the level of care and skill to be used in accomplishing the desired results. (See Id. at p. 12 (“mere ‘service under an agreement to accomplish results or to use care and skill in accomplishing results’ is not evidence of an employment, or joint-employment relationship”).) The agreement should also include a provision that requires the contractor to indemnify and hold the association harmless in the event a labor dispute arises.

Blog post authored by TLG attorney, Matthew T. Plaxton.

New Client: Meadowview Community Association

Published on: June 7, 2016 | by Steven J. Tinnelly, Esq.

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

Meadowview is a planned community of 900 homes situated over 1175 acres within the City of Temecula. Residents enjoy a beautiful 360 acre open meadow, clubhouse, two swimming pools, spa, tennis courts, basketball courts, an equestrian center, park and picnic area with tot lot, and an elaborate trail system that is enjoyed by bikers, walkers, runners, and equestrians, alike.

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

Tinnelly Law Group Accolades – June 2016

Published on: June 1, 2016 | by Steven J. Tinnelly, Esq.

accolade ribbon-blog We are privileged for the opportunities we have to build relationships with our HOA clients throughout the state of California. We are humbled when board members and managers take the time to express their appreciation for the work we provide to their communities:

“The HOA meeting went well and I feel the homeowners association is now on solid ground for the first time in our history. I would like to thank each and everyone of you for your hard work and dedication to the homeowners association. We are now moving forward with reducing our assessment fees and this is very good news.”
(Board President, Planned Development in Moreno Valley)

“I just finished reading your letter/update on the [legal] matter. I loved it! I have to say that was one of the best letters I’ve ever read! I would normally scan through correspondence from legal counsel, but I actually enjoy reading your correspondence! You have a gift and are a breath of fresh air! … I think you were exactly what the Association needed to come full circle and finally have some resemblance of being on the same page!”
(General Manager, Planned Development in San Diego)

“Once again thanks for handling this so quickly and professionally. Your assistance is very much appreciated!”
(General Manager, Active Adult Community in Menifee)

Our firm strives to serve our clients with the utmost care and attention. We are committed to building lasting relationships with our clients and to advancing the professional standards of our industry.

Governor Lifts 25% Mandatory Water Reduction & Directs Local Water Suppliers to Regulate Water Conservation

Published on: May 19, 2016 | by Steven J. Tinnelly, Esq.

hoa-water-usage In April of last year Governor Brown ordered mandatory water use reductions for the first time in California’s history in order to address the prolonged California drought crisis. That order directed the State Water Resources Control Board (SWRCB) to impose a twenty-five percent (25%) reduction on the state’s 400+ local water supply agencies. Complying with these mandated reductions caused communities throughout the state to immediately and drastically address their water usage and conservation practices, and to incur significant expense in doing so. This order was issued amidst a string of legislative and regulatory changes aimed at addressing the historic drought. For example, legislation was enacted to prohibit homeowners associations (HOAs) from fining homeowners for failing to water their lawns during the drought, and the SWRCB adopted emergency regulations that subject HOAs to fines of $500 per day for failing to comply with the SWRCB’s restrictions on potable water use.

In an apparent policy reversal, yesterday the Governor lifted the 25% mandated statewide water reduction. The Governor’s new executive order directs the SWRCB and the Department of Water Resources (DWR) to work with water suppliers to develop rules and water use targets that are tailored to the unique conditions of their respective regions.

Under the new rules, which take effect on June 1, communities would set water reduction guidelines based on their own projection of water supplies with the assumption that the next three (3) years in California will be uncommonly dry. The state would then review the projections and impose restrictions on communities it determines are being unrealistic. These rules and restrictions are consistent with legislation proposed earlier this year (SB 814) that, if adopted in its current form, would require water suppliers to establish their own methods to identify and restrict excessive water use.

These rules may lead to a significant reduction, or even an elimination, of water reduction mandates that have compelled HOAs to drastically alter their water usage and watering practices at substantial costs to the HOAs and their membership. The $500 daily fine to which HOAs are subject remains in effect; however, allowing for water reduction mandates to now be established at local levels will hopefully result in more sensible water reduction targets.

New Client: Esencia Neighborhood Corporation

Published on: May 17, 2016 | by Steven J. Tinnelly, Esq.

Esencia We are proud to announce that Esencia Neighborhood Corporation has selected Tinnelly Law Group as their associations’ legal counsel.

Esencia is a brand new master planned community located in Rancho Mission Viejo. It is expected to include approximately 2,700 attached and detached homes within 33 distinct neighborhoods. Residents will enjoy trails, parks, indoor and outdoor retreats, a sports park, Esencia Farm, Oak Canyon, The Canyon House, The Hilltop Club, and Canyon Coffee.

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

New Client: Country Road Homeowner’s Association, Inc.

Published on: May 10, 2016 | by Steven J. Tinnelly, Esq.

Country-Road We are proud to announce that Country Road Homeowner’s Association, Inc. has selected Tinnelly Law Group as their associations’ legal counsel.

Country Road is a planned community situated over 35 acres within the City of Brea. Residents enjoy a clubhouse complete with kitchen, fireplace and conversation area, fitness room, two pools, spa and wading pool, BBQ, and greenbelt.

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

Could Assessments Become Tax Deductible?

Published on: May 5, 2016 | by Steven J. Tinnelly, Esq.

Taxes-Picture A bi-partisan group of the House of Representatives would like to think so. According to the Community Associations Institute (CAI), more than 66 million Americans live in homeowners associations across the country, with an estimated 13 million of them living in California. These homeowners pay assessments to cover the costs of road maintenance, street lighting, street cleaning, snow removal and other municipal services. However, they also pay for these services through their local, county, or state property taxes. U.S. Representatives Anna G. Eschoo (D-CA) and Mike Thompson (D-CA) have introduced H. R. 4696, the “Helping Our Middle-Income Earners (HOME) Act” to correct this double-taxation. The bill is co-sponsored by US Representative Barbara Comstock (R-VA).

Under the Home Act, association members with annual incomes of $115,000 or less (or $150,000 in the case of joint returns) would be eligible for a tax deduction of up to $5,000 for qualifying assessments. To qualify, assessments must be mandatory and regularly occurring, apply to the taxpayer’s principle residence, and benefit the taxpayer’s principle residence. The obligation to pay assessments must also arise out of the taxpayer’s automatic membership in the association. Under these provisions, special assessments and rental properties would not qualify for the deduction.

Homeowners associations would be required to provide a statement to each member showing the name, address, and tax ID number of the homeowner, the amount of qualified assessments received from the homeowner during the calendar year, and the name, address, and phone number of the contact person for the association. The statement must be provided annually by January 31st.

“The Home Act recognizes that millions of middle class homeowners are struggling to keep up with rising household expenses like child care, college tuition, health care, mortgage and community assessments,” says Rep. Eschoo. “The Home Act can go along way by providing relief from this tax burden on millions of middle class families.”

“Congress needs to do all that it can to reduce barriers to homeownership for hard-working middle class families,” said Thompson. “By helping to alleviate the cost of community association fees this legislation is an important step.”

The Home Act has been referred to the House Committee on Ways and Means, but may have trouble moving forward during an election year. CAI has taken a “support” position on the bill, and has issued a Call to Action to seek additional sponsors. Even if the bill does not pass in 2016, it sends a message to the legislative committees working on tax code changes, that it’s an initiative whose time has come.

Blog post authored by Tinnelly Law Group’s Director of Business Development, Ramona Acosta.

New Client: Mallorca Condominium Association

Published on: April 6, 2016 | by Steven J. Tinnelly, Esq.

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

Mallorca is an exclusive private guard gated community located in the city of Mission Viejo, overlooking Mission Viejo Lake. Residents enjoy views of the lake, mountains and city lights, a private sandy beach, private docks with boat slips, fishing pier, two community pools, and a private beach walk and promenade trails.

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

Sober Living Homes in your HOA?

Published on: March 30, 2016 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – We have seen several sober living homes surface within our community. What can our HOA do to prohibit these facilities? Aren’t they businesses which violate the commercial use restrictions in our CC&Rs or other HOA laws?

Answered – Regardless of how you feel about sober living homes, it is certainly a hot issue that numerous communities are dealing with–particularly coastal communities. HOA CC&Rs often contain provisions that prohibit the non-residential uses of properties or the use of properties for anything other than “single family” residential purposes. However, the California Legislature has, through the Health & Safety Code, mandated that a sober living home (an “alcohol or drug abuse recovery or treatment facility“) which services six (6) or fewer persons to be deemed “a residential use of property and a use of property by a single family, notwithstanding any disclaimers to the contrary.” (H&S Code § 11834.25.) This was done in order to immunize sober living homes from City, County and HOA restrictions (i.e., CC&Rs restrictions) on the use of properties for non-residential purposes. The Legislature has even declared it to be the public policy of California to “encourage” the development of sober living homes. To learn more about the law in this area, click here to read our article on FindHOALaw.com.

In situations where a HOA could potentially take action against a sober living home, it is usually because the home is continually violating some other provision of the CC&Rs which the HOA can enforce. However, in our experience, sober living home operators are savvy; they know the playing field and how to keep themselves out of trouble. Moreover, these facilities are generating substantial amounts of monthly revenue from insurance companies and private parties who cover the costs for patients to stay at the home. That revenue dwarfs any potential fines that a HOA might be able to impose for other CC&R violations which may stem from the home’s operations.

Efforts which have been taken by cities against sober living homes have also proven ineffective, largely because recovering addicts are a protected class under the Americans with Disabilities Act (ADA) and other Federal statutes. For example, the City of Newport Beach in 2015 settled a lawsuit brought against the City by several sober living home operators. The operators sued the City over an ordinance it adopted which sought to restrict the facilities’ operations. The operators asserted that the ordinance violated anti-discrimination and fair housing laws. In addition to spending $4 million in legal fees, the City had to pay the sober living home operators $5.25 million as part of the settlement.

Any meaningful restrictions to curb the growth of these facilities within private residential communities will likely need to be enacted at the State level (and potentially the Federal level). California HOAs are virtually powerless to do anything and the current options available to cities in regulating/licensing these facilities are relatively weak.

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

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