HOA Lawyer Blog

No Duty of HOA Insurance Carrier to Defend Non-Monetary Claims

Published on: January 2, 2014 | by Steven J. Tinnelly, Esq.

*New Case Law

In a recent blog post we addressed the importance of involving the HOA’s legal counsel in the decision as to whether a lawsuit brought against the HOA should be tendered to one or more of the HOA’s insurance carriers. The recent case of San Miguel Community Association v. State Farm General Ins. Co. (October 1, 2013) (Cal.App.4th, No. G047738) (“San Miguel”) touched on this issue. Although the ruling in San Miguel focused primarily upon the scope of an insurer’s obligation to defend a HOA under the HOA’s insurance policy, the ruling underscores the importance of reviewing, understanding, and if necessary, seeking professional guidance regarding the scope of insurance coverage afforded to a HOA under its insurance policies.

In San Miguel, two homeowners sought to force the HOA to take action to curb ongoing parking violations within the community. After the HOA refused to take action, the homeowners demanded the HOA’s participation in mediation, thereby prompting the HOA to tender the matter to its insurance carrier, State Farm. In responding to the HOA, State Farm noted that the claims brought by the homeowners did not seek the recovery of monetary damages, and were therefore insufficient to trigger State Farm’s obligation to defend the HOA or to reimburse the HOA for its defense costs…

New Client: Celebrations Homeowners Association

Published on: December 30, 2013 | by Steven J. Tinnelly, Esq.

celbrations hoa lawyers.png

We are proud to announce that Celebrations Homeowners Association has selected Tinnelly Law Group as their association legal counsel.

Celebrations is a 350 unit community located in Moreno Valley. Residents of this community oriented neighborhood enjoy large floor plans while being conveniently located to shopping, schools, and parks.

Our HOA attorneys and staff are privileged to have the opportunity to work with Celebrations’ Board and Management.

Redemption Rights after HOA Nonjudicial Foreclosure

Published on: December 6, 2013 | by Steven J. Tinnelly, Esq.

*New Case Law

Earlier this year, we blogged about an appellate court case that underscored the necessity for a homeowners association (“HOA”) to strictly comply with the statutory procedures and requirements applicable to assessment collection. That case focused on various requirements pertaining to the transmittal of notices (i.e., assessment lien notices, notices of right to request alternative dispute resolution (“ADR”), notice of the Board’s decision to initiate foreclosure of an assessment lien, etc.) The HOA’s failure to strictly comply with those requirements ultimately resulted in the invalidation of the HOA’s assessment lien and also an award of attorney’s fees and costs to the delinquent homeowner.

The case of Multani v. Witkin & Neal et al., (2013) 216 Cal.App.4th 590, (“Multani“) similarly involved allegations of procedural defects by a HOA’s collection agent. However, the Court’s ruling in Multani is significant in that it addresses the statutory, ninety (90) day “right of redemption” afforded to a homeowner that may have lost ownership of her unit through nonjudicial foreclosure of a delinquent assessment lien…

2014 Families Forward Thanksgiving Basket Distribution

Published on: November 27, 2013 | by Steven J. Tinnelly, Esq.

For the second year in a row Tinnelly Law Group participated in the Families Forward Thanksgivng Basket Distribution. Last Friday, Sommer, Kai and Terri joined fellow volunteers on the “school pickup” team and loaded cars full of all the trimmings necessary for a wonderful Thanksgiving meal. The distributions on Friday and Saturday were expected to feed over 700 Orange County families, and the entire TLG team feels blessed for the opportunity to be a part of such a great cause!

Families Forward is a nonprofit organization that was founded in 1984 and is dedicated to providing supported housing programs for families in crisis. The comprehensive array of services offered at Families Forward empowers families to regain stability and self-sufficiency. Their homeless prevention services include career coaching, life-skills education, and food assistance. These services are supplemented by their rigorous Transitional Housing Program, which has resulted in more than 4 out of 5 families successfully transitioning from crisis to financial stability, giving their children a stable home to help them succeed in school. For more information about this organization, or to get involved click here.

The whole firm is looking forward to spending more time throughout the Holiday Season volunteering our time with Families Forward.

Is There a ‘Model’ Set of HOA Rules & Regulations?

Published on: November 22, 2013 | by Steven J. Tinnelly, Esq.

rules and regulations california hoa assocaition.png *Asked & Answered

Asked – Are there recognized models of well-written rules and regulations for homeowners associations?

Answered – No, there are not, and the reason is because homeowners association (“HOA”) CC&Rs typically leave the drafting and amending of rules and regulations to the HOA’s Board of Directors. The types of rules and regulations (defined as “operating rules” under the Civil Code) that a HOA may adopt will depend on the language contained in the HOA’s governing documents as well as the unique characteristics of the common interest development. For example, the CC&Rs for condominium developments usually contain provisions explicitly addressing the Board’s ability (and in many cases, the Board’s obligation) to adopt a set of parking rules that regulate the HOA’s finite number of common area parking spaces. By contrast, CC&Rs for single family home projects may broadly state the Board’s ability to adopt rules governing the use of the HOA’s streets.

Here are the common issues that HOA Boards should address in drafting a good set of rules and regulations: common area rules, parking restrictions, noise and nuisance guidelines, trash can rules, pet restrictions, tenant rules, sign restrictions, pool and clubhouse hours, and the association’s disciplinary policy. Many of our clients also choose to include within their rules and regulations a restatement of some of the important restrictions contained in their HOA’s CC&Rs. This provides a valuable “quick reference guide” for residents who may not take the time to read through the entire set of the HOA’s CC&Rs.

The Board may also include a copy of the following policies that are provided to members in the Annual Policy Statement pursuant to Civil Code § 5310 as part of the “quick reference guide:” Architectural Guidelines and Application Procedures, Neighbor-to-Neighbor Dispute Policy, Alternative Dispute Resolution Procedures, Election Policy, and Assessment Collection Policy.

Rules and regulations are a valuable tool for resolving certain issues that are not explicitly addressed in a HOA’s CC&Rs. However, a Board must be aware of the limitations placed upon its rule-making authority under its HOA’s governing documents as well as the Civil Code. Therefore, where a Board’s authority to adopt or amend any particular rule or regulation is unclear, the Board should consult with the HOA’s legal counsel.

Blog post authored by Tinnelly Law Group attorney, Terri Morris.

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

Tendering Lawsuits Brought Against the HOA

Published on: November 14, 2013 | by Steven J. Tinnelly, Esq.

hoa insurance *New Library Article

There are instances where a disgruntled homeowner may file a lawsuit against his or her homeowners association (“HOA”). The lawsuit may be based on a variety of claims (i.e., claims involving property damage or alleged malfeasance on the part of the HOA’s Board of Directors). This is one of the reasons why HOAs are legally required to purchase and maintain certain insurance policies designed to protect the HOA and its membership from a variety of risks.

However, problems may arise in response to the actions taken by the HOA and its management once the lawsuit has been served. Those problems generally result from the way in which the lawsuit may have been “tendered” (sent to) to one or more of the HOA’s insurance carriers, including whether it was even appropriate to tender the lawsuit in the first place. This blog post addresses some of those problems and provides guidance to HOA Boards and their management with regard to this issue…

Our attorneys have also published this information in an article that is available for download from our Web site’s library.

New Client: Laguna Surfer Homeowners Association

Published on: October 29, 2013 | by Steven J. Tinnelly, Esq.

laguna surfer new client hoa california.png

We are proud to announce that Laguna Surfer Homeowners Association has selected Tinnelly Law Group as their association legal counsel.

Our HOA attorneys and staff are privileged to have the opportunity to work with Laguna Surfer’s Board and Management.

Court Upholds Use of HOA Election Rules for Director Qualifications

Published on: October 28, 2013 | by Steven J. Tinnelly, Esq.

*New Case Law

Provisions setting forth the qualifications for serving on a homeowners association (“HOA”) Board of Directors are typically found in the HOA’s Bylaws. At the time when these provisions were originally drafted, they may have been insufficient to establish a set of specific qualifications designed to avoid operational issues and potential conflicts of interest. Therefore, HOAs have been traditionally required to formally amend their Bylaws in order to establish, clarify or expand director qualifications. This generally requires the approval of the membership and a formal vote which, as many Boards and industry professionals understand, often acts as a significant hurdle to achieving the HOA’s goals.

However, in light of recent case law, it appears that a less onerous mechanism for enacting new director qualifications may now be available. In Friars Village Homeowners Association v. Hansing (10/9/2013) the HOA adopted an election rule which prevented any member from seeking a position on the Board if that member was related by blood or marriage to any current Board member or other candidate for the Board. Subsequent to the adoption of the rule, a husband whose wife was already serving on the Board sought to nominate himself as a candidate in an upcoming election. There was a provision in the HOA’s governing documents that permitted members to “self-nominate.” However, the Association denied his request to submit his candidacy on the basis of the newly enacted “relationship” rule. The husband then brought suit against the HOA to challenge the validity of the rule on the theory that it exceeded the HOA’s authority and violated his self-nomination rights under the HOA’s governing documents.

The Court ruled for the HOA, noting that the new election rule acted as a qualification which preceded the right to self-nominate, and was therefore not inconsistent with the HOA’s governing documents or governing law. Furthermore, as the rule was based upon the legitimate concern that spouses or relatives might form unfair alliances on the Board, the Court found that the rule was both reasonable and rationally related to the proper conduct of the business affairs of the HOA.

It is important to note that the Court’s decision was made in relation to the individual facts of the Friars Village case and the specific language found in the HOA’s governing documents. However, the Court’s decision may indeed establish a basis for adopting director qualifications through the implementation of reasonable election rules rather than through formal amendments to the Bylaws. HOA Boards of Directors should therefore consult with their HOA’s legal counsel prior to adopting new election rules to which HOA members may be opposed.

Blog content provided by Tinnelly Law Group attorneys Bruce Kermott and Kai Macdonald.

New Client: Crest de Ville

Published on: October 23, 2013 | by Steven J. Tinnelly, Esq.

crest de ville new client post.png

We are proud to announce that Crest de Ville Community Association has selected Tinnelly Law Group as their association legal counsel.

This gated community in Laguna Niguel is just minutes from Salt Creek Beach and Pacific Coast Highway. Many of the large lots have canyon and ocean views. In addition to the fantastic location, Crest de Ville has a pool and a spa for the residents to enjoy.

Our HOA attorneys and staff are privileged to have the opportunity to work with Crest de VIlle’s Board and Management.

SB 752: Commercial & Industrial CID Act Signed into Law

Published on: October 11, 2013 | by Steven J. Tinnelly, Esq.

*New Legislation

Commercial and Industrial Common Interest Developments (“Commercial CIDs”) in California have historically been governed by the same provisions that apply to planned residential developments and condominiums: the Davis-Stirling Common Interest Development Act (“Davis-Stirling”). However, some of those provisions have resulted in unnecessary burdens and requirements for Commercial CIDs that were really tailored to provide consumer protections for homeowners in residential settings (i.e., open meeting, election and disclosure requirements).

In light of this issue, on September 6, 2013, the California Legislature passed SB752: the Commercial and Industrial Common Interest Development Act. SB752 mirrors many of the provisions contained in Davis-Stirling, but omits some of requirements that were geared toward residential homeowners. For example, SB752 contains provisions governing Commercial CID formation, governing documents, assessments and construction defect litigation, but omits certain Davis-Stirling provisions governing association elections and disclosure requirements.

SB752 was officially signed into law by Governor Brown on October 5, 2013 and will take effect January 1, 2014.

This is fortunate news for the Commercial CIDs that are becoming more prevalent within the community association industry. SB752 will help to simplify the management and operation of Commercial CIDs and will provide them with a workable framework that is better suited to address their unique needs.

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