HOA Lawyer Blog

The Benefits of Board Education

Published on: December 28, 2022 | by Carrie Heieck, Esq.

bigstock-Businesswoman-Raising-Hand-Up-230281444-scaled-1-e1668125240647 In the State of California, most HOA’s are non-profit corporations managed by a board of directors composed of volunteer homeowners elected by the membership. Boards derive their authority from the governing documents including the Articles of Incorporation, Bylaws, and Covenants, Conditions, and Restrictions (CC&Rs) that impose rules and restrictions on the use of property within the development. The board of directors, acting on behalf of the HOA, is responsible for the maintenance of the common areas of the property, enforcing the governing documents, and collecting assessments. While most boards delegate duties to management companies and rely on experts such as attorneys and CPA’s to aid in decision-making, the board is ultimately responsible for decisions and actions taken by the HOA.

HOA board members are not compensated for their services and are typically not experts or even very familiar with the strict requirements for HOA management. While new directors typically run with an altruistic motive to help their communities and “get things done,” it is important that they understand the structure of a community association, the association’s authority over the development and its owners, and the unique way an association is governed. Board education is a great way to familiarize new members with an overview of their duties and responsibilities and to provide a refresher for existing Board members so that the HOA runs smoothly, efficiently, and with minimal exposure to liability. Board education can also help protect directors for incurring personal liability for decisions made in the scope of their duties.

Board education is offered by management companies, law firms, CAI chapters, and others with expertise and knowledge in HOA governance. There is no one-size-fits-all educational program as the issues faced by HOA’s are often unique to each association. Some general topics for Board education include but are not limited to:

General Duties and Responsibilities of Directors
Laws Applicable to Common Interest Developments
Types and Hierarchy of Governing Documents
Business Judgment Rule
Conducting Meetings
Enforcement and Disciplinary Matters
Financial Responsibilities
Maintenance Responsibilities
Assessments & Collection
Director Conduct
Contracts

An educated board oftentimes results in a better-functioning HOA with less legal fees, less special assessments, less contentiousness, and higher property values. Board members who are willing to put personal differences and agendas aside, are open to considering expert advice and differing viewpoints, and who work collaboratively with other directors and in the best interests of the Association as a whole, are the directors who best serve their communities. While directors will always be subject to criticism since it is impossible to please everyone, with proper education, those directors’ actions will better withstand such scrutiny.

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

New Client: Pinnacle at Dublin Ranch Subassociation

Published on: December 21, 2022 | by Steven J. Tinnelly, Esq.

Pinnacle-300x169 It’s our privilege to welcome Pinnacle at Dublin Ranch Subassociation to Tinnelly Law Group’s growing family of HOA clients.

Pinnacle is a gated high end community in Dublin Ranch. Residents enjoy lots ranging in size from 1/4 to 1/3 acre, many of which have sweeping views of the Dublin Ranch Golf Course and Amador Valley.

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

New Client: Broadmoor Northridge Community Association

Published on: December 14, 2022 | by Steven J. Tinnelly, Esq.

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

Broadmoor Northridge is a collection of single family homes located in Anaheim Hills. Residents enjoy two community pools and a small tot lot.

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

How to Direct Questions from Potential Homebuyers

Published on: December 7, 2022 | by Steve Tinnelly, Esq.

Civil-Litigation Since COVID-19, followers of the real estate market may have noticed that the housing market is currently booming. There are not as many sellers as there are buyers, so the competition to obtain a buyer’s dream home is through the roof. Many of these potential buyers are looking to buy their next home within a community association (“HOA”). The competition to buy homes creates an increase in the number of questions from real estate agents and mortgage/escrow companies that are directed toward the association and its agents regarding any litigation involving the association. What should the Board and manager be aware of? What should they do in certain situations?

The HOA has no legal obligation to make disclosure to buyers of properties within the HOA or other third parties. These third parties may be real estate agents, loan processors, escrow companies, or anyone else looking for information regarding the HOA and is not an HOA member.

Even though the HOA has no legal obligation to make disclosures, its management company and even its Board will be asked numerous times by third parties to provide further information regarding any pre-litigation matter or lawsuit the HOA is engaged in. Some typical questions are:

- - Can the HOA or management provide a copy of the complaint?
  - Can the HOA provide certain certifications or expert documentation?
  - How much money is the HOA and/or management being sued for?
  - Would the anticipated or known damages and legal expenses be expected to exceed some percentage of the HOA’s reserve fund?
  - Can the HOA’s attorney provide an opinion that any award granted in the lawsuit will be covered under the HOA’s master insurance policy?
  - When will the matter be resolved and will it be resolved in the HOA’s favor?

Sometimes, these third parties will require that the answer to the above questions come from the HOA’s legal counsel. In any case, neither the HOA’s Board, nor its managing agent, or any of its agents (including legal counsel) should answer any of the above questions. If legal counsel is handling the matter, they should prepare a disclosure letter that the HOA may use to present to any third parties requesting further information. In addition to not answering any of the questions above, the disclosure letter should also not contain any predictions or conclusions. The more vague the better, as the disclosure letter is meant to be an official tool to block further communication from third parties. If applicable, the disclosure letter will provide the appropriate contact information if the HOA’s insurance carrier picked up the case and assigned insurance defense counsel and an adjuster. If the HOA and its managing agent need help navigating this scenario, they should direct all questions to its legal counsel.

If a homeowner wants more information regarding any pre-litigation or lawsuit in order to refinance their home, and the pre-litigation or lawsuit is not resolved, no material or information should be disclosed beyond the fact that things are in progress. The general disclosure letter may be provided to the homeowner. The HOA is not obligated to assist homeowners in refinancing and should not if the information being requested is privileged (confidential).

Any questionnaire sent to the HOA or its managing agent should be forwarded to legal counsel for analyzation. The questionnaire should not be filled out and returned without legal counsel’s input as any disclosures might create unwanted liabilities for the HOA.

While evading questions from homeowners and third parties might seem frustrating, such action is a necessity. Pre-litigation and the proceedings of a lawsuit do not guarantee any outcome. The HOA and its managing agent should know that homeowners and third parties will be very aggressive in trying to obtain further information. However, the best course of action would usually be to: (1) direct the matter to the HOA’s legal counsel; (2) provide the disclosure letter; and (3) indicate, in some fashion, that there is no further information at this time as the matter is ongoing or in the process of being resolved (descriptions will vary depending on each scenario).

New Client: Canyon Crest Estates Homeowners Association

Published on: November 30, 2022 | by Steven J. Tinnelly, Esq.

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

Canyon Crest Estates is a condominium community located in Corona Del Mar. Residents enjoy a community pool, spa and tennis courts.

Our HOA lawyers and staff look forward to working with Canyon Crest Estates’ Board and management.

New Client: Waverly Terrace Owners Association

Published on: November 23, 2022 | by Steven J. Tinnelly, Esq.

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

Waverly Terrace is a condominium community located in the Silver Lake area of Los Angeles. Residents enjoy a community pool, sauna, and fitness center.

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

Evidence of Violations is Necessary

Published on: November 16, 2022 | by Vivian Tran, Esq.

pexels-photo-2179205 There will come a time when a homeowner violates an association’s governing documents (i.e., CC&Rs, Rules & Regulations, Architectural Guidelines…etc). If there is a possibility those violations will be litigated, the association must have a proper trail of evidence to bolster their claims.

Q: What are some types of violations that would need evidence?

A: Unapproved architectural improvements (i.e., walls, patio covers), failing to maintain property exterior in planned developments (i.e., shutters, paint, landscaping), inappropriate parking…etc.

Q: What should the association or its community manager do when there is this type of violation?

A: For these violations, the association’s community manager should clearly document in their written records: what the violation was, which governing documents provision was violated, who committed the violation, if known (e.g., an owner, guest, tenant), when the violation occurred (i.e., date and time), where the violation occurred, and anything else that might be relevant. Additionally, a photo of the violation should be taken on the date it occurred and reoccurred.

Q: How should the photo be taken?

A: The photo should be taken directly in front of the violation. There should be plenty of natural light to clearly see what type of violation it is. Flash should be utilized if it improves the picture quality. The photo should not be taken from within a vehicle because there will be light and color distortion; furthermore, the violation photo should not include portions of the vehicle. If there is a parking violation that occurs in the evening, any photos submitted by the association patrol vendor should be taken from the outside of a vehicle.

It is important that the photo be taken with a high-definition camera, if possible, so as to not be grainy or blurry. There should be no objects distracting from the violation (e.g., people, pets, vehicles).

Q: Why so particular about the violation photo and written evidence?

A: If the matter goes to litigation, the association will need to prove that a homeowner has committed the violation(s) alleged by the association. A judge will want to see actual physical photo evidence and clear documentation of the homeowner’s violation history. Without proper evidence, the association might have a hard time winning its case. If there is a clear violation history and evidence, the judge will be able to order the homeowner to correct the violations.

Even if the matter does not go to litigation, a proper trail of evidence will assist the association’s general counsel in dealing with the matter.

The association should request that management take a photo of every violation if they wish to properly retain evidence and enforce their governing documents. Without a photo, no matter how big or small the violation, the homeowner can always argue that the association was mistaken, and the violation never occurred. It would be a case of “he said, she said” argument that would go nowhere—it would definitely not hold up in court.

-Blog post authored by TLG Attorney, Vivian X. Tran, Esq.

New Client: Pelican Ridge Community Association

Published on: November 9, 2022 | by Steven J. Tinnelly, Esq.

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

Pelican Ridge is located in the Pelican Hill Communities in Newport Coast. Residents enjoy spectacular views of Newport Beach, the Newport Coastline, Catalina Island, City Night Lights, the Pacific Ocean and beautiful sunsets.

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

New Client: Links Pointe Homeowners Association

Published on: November 2, 2022 | by Steven J. Tinnelly, Esq.

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

Links Pointe homes are located in the coastal community of Laguna Niguel. Residents enjoy lush green views of the greenbelt, shimmering creek and beach trail.

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

What Happens When a Delinquent Homeowner Dies?

Published on: October 26, 2022 | by Carrie Heieck, Esq.

funeral-etiquette-1000x500-getty-1200x675-1 When a delinquent homeowner dies, there is a strict one-year statute of limitations to sue them or to continue a lawsuit against their estate. (Cal. Code Civ. Proc. § 366.2). This is true even if the statute of limitations would have been longer had the person survived. This harsh rule applies even if you did not know that the person died so Boards and management should take notice if a homeowner does not respond to communications or suddenly falls in arrears and then investigate further by contacting family members or emergency contacts during circumstances of non-responsiveness and/or extended non-payment.

The second important rule when a debtor dies is that when a probate estate has opened, any creditor has only four months from the date the executor or administrator is appointed to file a claim in probate. (Cal. Code Civ. Proc. § 377.40; Prob. Code §§ 9100 et seq.). Sometimes the decedent has no family or heirs or the heirs fail to open a probate. In this case, the HOA may reach out to the public administrator in the county where the real property is located to request that they open a probate. If this is not done, then it is incumbent on the HOA to open the probate as a creditor to ensure that the above-referenced statute of limitations does not run. (See Prob. Code §§800; 48).

Since a dead person cannot be sued, the HOA must sue the estate of the decedent. If a lawsuit was filed while the homeowner was alive, but they are now deceased, a motion should be timely filed to substitute the deceased person with their estate. (Cal Code Civ. Proc. § 377.31). Counsel should be mindful that the motion must be filed within three (3) months of the rejection of the HOA’s creditor’s claim, which is deemed rejected if not responded to within thirty (30) days of submission. (Prob. Code §§ 9256, 9352, 9353, 9371). It is important to note that once the creditor’s claim is filed, the one-year time bar pursuant to Code of Civil Procedure §366.2 is tolled. Nevertheless, the creditor’s claim must be filed within one year of the decedent’s death or the claim is barred entirely.

Thankfully, the above harsh requirements do not apply when the debt is one that can be secured via a lien on real property that may be foreclosed, such as with assessment liens. This is because such debt attaches to the property and not to the deceased person.

The death of a delinquent homeowner can pose complex and time-sensitive challenges. This is why HOA’s should promptly contact their counsel or collections professional for assistance in the event of a delinquent homeowner’s death.

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

HOA Lawyer BLog