HOA Lawyer Blog

Imposing Fees on HOA Members who Rent out their Homes?

Published on: December 5, 2011 | by Steven J. Tinnelly, Esq.

The additional burdens that renters impose can be substantial for many common interest developments–especially those developments designed as “recreational communities.” Renters who lack a sense of investment in the community or who are unfamiliar with its operational structure can place greater strain on the community’s management and maintenance resources. This may not only frustrate other owners within the community, but may also significantly impact the financial health of the Homeowners Association (“HOA”) formed to preserve and protect it.

We have written about how HOAs adopt and enforce rental restrictions as a means to alleviate some of the problems posed by renters. We have also published a resource explaining how new legislation taking effect January 1, 2012 will limit a HOA’s ability to restrict rentals in certain circumstances. However, in addition to imposing rental restrictions where possible, can a HOA impose a fee on owners who wish to rent out their homes? In the recent, unpublished decision of Watts v. Oak Shores Community Association, the answer may be yes.

2012 Legislative & Case Law Update Now Available

Published on: November 28, 2011 | by Steven J. Tinnelly, Esq.

Our “2012 Legislative & Case Law Update” newsletter is now available in our library!

The 2012 Legislative & Case Law Update provides an overview of the new legislation impacting California Homeowners Associations (“HOAs”) and the community association industry professionals who service them. The new legislation includes, among other things, bills that impose new requirements on Board Member meetings and new limitations on HOAs that wish to restrict rentals in their communities.

The 2012 Legislative & Case Law Update also provides an overview of some important new case law, along with some links to additional resources we have published on the items discussed therein.

Click here to read our 2012 Legislative & Case Law Update

Have questions on any of the new legislation or case law? Click here to send us a question online.

Granting Exclusive Use of Common Area: Approval Required?

Published on: November 15, 2011 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – Our Board wants to grant homeowners exclusive use of our Association’s common area storage closets and also charge a fee to such homeowners wanting exclusive use. May they do this without membership approval?

Answered – Probably not. Civil Code § 1363.07 substantially restricts an Association’s ability to grant exclusive use of common area. Provided that your Association’s governing documents do not state otherwise, granting exclusive use of any portion of the Association’s common area requires approval by 2/3 (67%) of the membership. There are a few narrow exceptions to this requirement; however, none of the exceptions provided in Civil Code § 1363.07 likely apply to your situation.

An Association is permitted to receive monetary compensation in exchange for granting exclusive use of Association common area. Civil Code § 1363.07 requires disclosure of such compensation when the issue is presented to the membership for a vote.

Be sure to review your Association’s governing documents to determine what provisions, if any, govern the use rights of common areas and exclusive use common areas within your Association. If the Board does not have the authority under the governing documents, or does not have the requisite approval under the Civil Code, to grant exclusive use of Association common area, homeowners may bring an action in court to reverse the grant.

To submit questions to Tinnelly Law Group, click here.

Drifting Tobacco Smoke in the Condominium Environment

Published on: November 11, 2011 | by Steven J. Tinnelly, Esq.

*New Resource

The problem of drifting tobacco smoke is an issue faced by many common interest developments, especially condominiums. In response to complaints received by their membership, Community Associations (“Associations”) often wonder what their rights and obligations are under both their governing documents and California law to prevent these situations and to protect residents from unwanted tobacco smoke exposure. This blog post discusses these rights and obligations, while providing some guidance to Associations dealing with smoke migration issues.

We have also published a resource on this issue entitled “Drifting Tobacco Smoke in the Condominium Environment” that is available for download from our library.
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Electric Vehicle Charging Stations in Your Community?

Published on: November 4, 2011 | by Steven J. Tinnelly, Esq.

In July of this year, Governor Brown signed Senate Bill 209 (“SB 209”) into law. As a result, beginning January 1, 2012, Section 1353.9 will be added to the California Civil Code to restrict an association’s ability to prohibit the installation of Electric Vehicle (“EV”) charging stations (“Stations”). You may have heard of this new law but, like many of our clients and industry partners, wonder what it means for associations and their members. How will the new law ultimately function? Who pays the cost to run the electricity? Must associations permit the installation of Stations on association property? This post discusses the components and criticisms of SB 209 and in doing so addresses some of the questions which have been raised in the wake of its signing.

Right to Withhold Assessments because of Dispute with Association?

Published on: October 26, 2011 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – Our CC&Rs require my Community Association to maintain the landscaping along a walkway leading up to my home. If the Community Association keeps neglecting to maintain the landscaping along the walkway, can I withhold my assessments until they finally do so?

Answered – No. The duty of owners to pay assessments to their Community Association is absolute. California law recognizes how vital assessment revenue is to the successful functioning of Community Associations, as “[a] system that would tolerate [an owner’s] refusal to pay an assessment because the [owner] asserts a grievance…would threaten the financial integrity of the entire [Community Association] operation.” Park Place Estates Homeowners Assn. v. Naber (1994) . The duty of owners to pay assessments is also codified at Civil Code §1367.1(a).

Regardless of whatever grievances owners may have against their Community Associations, they may not legally withhold their assessments. However, owners are entitled to dispute assessments, as well as fines, late fees, penalties, and collection costs by paying the disputed amount under protest and following the procedures set forth in Civil Code Code §1367.6.

The best course of action is to bring the matter to the attention of the Community Association’s Board of Directors at their next scheduled meeting and to try to work with them in finding an amicable resolution to the problem.

To submit questions to Tinnelly Law Group, click here.

Imposing Fines for Member Discipline: How Many Notices are Required?

Published on: October 12, 2011 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – How many notices do you need to give a unit owner about a rule violation before they are called to a hearing and fined?

Answered – Associations generally must provide their members with “due process” before they are able to impose disciplinary measures, such as fines, for rule violations. This due process requirement is meant to ensure that the Association’s enforcement procedures are both fair and reasonable. Two central elements of due process are (1) providing the accused notice of her alleged violation and (2) providing the accused a reasonable opportunity to be heard and to defend herself. Applebaum v. Board of Directors (1980). Notices and hearings for Association rule violations are in furtherance of the due process requirement.

Before conducting a hearing to determine whether a fine should be imposed, the Board must “notify the member in writing, by either personal delivery or first-class mail, at least 10 days prior to the [hearing].” Cal. Civ. Code Sec. 1363(h). Assuming that your Association’s governing documents do not contain a more stringent notice requirement or that your Association does not have an enforcement policy which states otherwise, this is the only violation notice required before a member may be called to a hearing and fined. This notice, however, must contain all of the information required by Civil Code Section 1363(h) (the date, time, and place of the hearing, the nature of the alleged violation, etc.). Please note that Associations are also required to annually provide their members with notice of the Association’s enforcement procedures, including its schedule of fines. Cal. Civ. Code Sec. 1363(g).

Though the Civil Code only requires that one notice of violation be given to a member before they may be called to a hearing and fined, it is a better practice for an Association to provide its members with more advanced notice and a reasonable time period (i.e., 30 days) to voluntarily correct the violation before being called to a hearing. Such a practice helps to (1) secure the cooperation of members and (2) demonstrate that the Association is acting both fairly and reasonably in enforcing its rules and restrictions.

To submit questions to Tinnelly Law Group, click here.

SB 150 and the Distinction Between Rental Prohibitions and Rental Restrictions

Published on: October 3, 2011 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – I read your blog post on SB 150 and the new legislation impacting rental restrictions. If I am currently required to provide my HOA with a copy of my lease agreement with my tenant, will I still be required to do so after SB 150 takes effect?

Answered – Probably. Senate Bill 150 “SB 150”, which takes effect January 1, 2012, will have a significant impact on the rental landscape within Homeowners Associations (“HOAs”). At the outset, it is important to note that SB 150 insulates homeowners from rental restrictions that were not already in place at the time the homeowner bought into the community. Therefore, assuming that you already own the property within your HOA, you would still be bound by the current rental restrictions and requirements regardless of the new legislation.

However, assuming you are not yet an owner of property within the HOA, the answer will depend on how California law will ultimately treat rental prohibitions as compared to rental restrictions. SB 150 does outlaw a HOA from having rental prohibitions. However, it is less clear as to whether less serious restrictions, such as rental period minimums, will still be permitted. If rental period minimums are ultimately upheld as valid, reasonable rental restrictions, then the only way a HOA could enforce the restriction would be to examine the contents of lease agreements such as yours.

We have published a resource on SB 150 that discusses the new legislation in more detail and provides a recommendation for HOAs that have, or are considering, adopting rental restrictions in their community. The resource, entitled “Senate Bill 150 and the Impact on Rental Restrictions” is available for download in our Library.

To read our previous blog post on SB 150, click here.

To submit questions to Tinnelly Law Group, click here.

New Legislation Impacts Homeowners Association Board Meetings

Published on: September 20, 2011 | by Steven J. Tinnelly, Esq.

*New Resource

When Senate Bill 563 (“SB 563”) was signed into law this month, the fears of many people within the Community Association industry came true. The new legislation purports to provide better homeowner awareness of the affairs of their respective Associations and the ways in which those affairs are being managed by their elected Boards of Directors. However, many industry professionals and Board members are concerned that the new legislation will restrict a Board’s ability to take the actions required to efficiently address the day-to-day issues that arise within their communities.

SB 563 amends several sections of the California Civil Code–most notably Section 1363.05, known as the “Common Interest Development Open Meeting Act.” The amendments include new restrictions on actions without a meeting and what matters may be considered at a meeting. The amendments also provide new requirements with respect to meetings held in executive session as well as requirements for meetings held electronically or by teleconference.

In response to requests made by our clients and industry partners, we have published a new resource on SB 563 which outlines these new restrictions and requirements. The resource, entitled “Senate Bill 563: Boards and their Business”, is available for download from our library.

Requiring Directors to Sign Ethics Rules

Published on: September 16, 2011 | by Steven J. Tinnelly, Esq.

*Asked & Answered

Asked – Upon being elected to serve on our Association’s Board of Directors, our Management company gave me “Ethics Rules” to sign. These rules are not a part of our CC&Rs or our Bylaws. Am I required to sign the rules in order to serve on the Board?

Answered – Generally no. Homeowners Association (“HOA”) governing documents typically include a set of Bylaws that govern the corporate structure of the HOA and the functions and duties of its Board of Directors. It is not uncommon for Bylaws to set certain eligibility requirements for HOA members to serve as Directors. Such eligibility requirements can include, for example, ownership of property within the HOA, being current on one’s monthly assessments and not being in violation of any of the HOA’s rules or restrictions. We encourage our clients to adopt these types of eligibility requirements to help ensure those members elected to serve on the Board set a good example for the rest of the membership.

Requesting that Directors subscribe to certain “Ethics Rules” or “Codes of Conduct” is always an option available to a HOA’s Board of Directors. Such rules may help to provide guidance to new Directors who wish to better understand the scope of their responsibilities. However, in order to make subscribing to such rules a requirement to serving on the Board, it must be contained in the HOA’s Bylaws or elsewhere in the HOA’s governing documents. Every situation is different, however, and a definitive answer would require examining your HOA’s governing documents and the procedures used in adopting the Ethics Rules at issue.

To submit questions to Tinnelly Law Group, click here.

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