October 23, 2014

How Much Can a Community Association Management Company Charge for Escrow Transfer Disclosure Documents? Whatever the Competitive Forces of the Market Will Allow

Brown v. Professional Community Management, Inc.,
Berryman v. Merit Property Management, Inc., and
Fowler v. M & C Association Management Services, Inc.


hoa_escrow_fees_california_-_Google_Search.pngA question that we are often asked is, "How much can the association or its management company charge for the work done to complete the association’s escrow disclosure requirements?" The Davis-Stirling Act, which governs California community associations, specifically covers document transfer disclosure when an association member is selling his or her property. The Code does not specify any limits on what can be charged for providing hard copies of all of the documents and disclosures. This has led to disputes. Fortunately, we have three appellate court decisions that have come down over the last decade that have clarified and confirmed what fees can be charged to owners and by whom.

Download our full article on this subject by SwedelsonGottlieb attorneys David Swedelson and Cyrus Koochek.

October 21, 2014

Updated Disclosure Checklist for 2014-2015

checklist.jpgIt's that time of year again — time to get the community association's budget together and ensure you're making all the proper disclosures under the Annual Budget Report and Annual Policy Statement, as required by the California Civil Code. In order to assist you with this process and other required notices and disclosures, we have again updated our disclosure checklist reference.

Download the new 2014-2015 disclosure checklist here.

Not much has changed in the most recent legislative session with regard to community association disclosures, other than some clarifying language that was added regarding property transfer disclosures. To review our prior blog post regarding that legislation, follow this link.

October 9, 2014

San Francisco’s “Airbnb Law” Does NOT Control Over A Condo/HOA Association’s Governing Documents

By: W. Alexander Noland, Esq., Partner, SwedelsonGottlieb, Community Association Attorneys

Airbnb_Gets_Off_Easy_in_San_Francisco__Its_Hosts__Not_So_Much_-_Businessweek.png
On October 7, 2014, the San Francisco Board of Supervisors voted to legalize the use of residences in San Francisco for short-term vacation rentals, by passing what has been dubbed as the San Francisco “Airbnb law”. Follow this link to a news article. This new law has been more than two years in the making, and removes San Francisco’s long-standing ban on residential rentals of less than 30 days. The new legislation, integrated into the San Francisco Administrative Code, now allows short-term rentals of homes, imposes certain restrictions and requirements on that controversial and unregulated practice, and will take effect in February of 2015.

The stated goal of the legislation is to balance the preservation of affordable housing (by making sure landlords can’t convert permanent units to more lucrative vacation rentals) with allowing residents to earn extra income by renting to travelers for short-term vacation and business purposes. The Airbnb law allows only permanent residents to offer their homes for short-term rentals, establishes a new city registry for hosts, mandates the collection of hotel tax, limits entire-home rentals to 90 days per year, requires each short-term rental listing to carry $500,000 in liability insurance, and establishes guidelines for enforcement by the San Francisco Planning Department.

Continue reading "San Francisco’s “Airbnb Law” Does NOT Control Over A Condo/HOA Association’s Governing Documents" »

October 7, 2014

Does your condominium, cooperative or HOA board know if and when it is appropriate to grant a hardship exemption, a variance from the restrictions in the CC&Rs?

By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

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In a blog post by Donna DiMaggio Berger, a Florida Community Association Attorney, she discuses exceptions or variances granted to owners. Apparently in Florida they deal with some of the same issues we do. As Donna states, many boards want the leeway to grant exceptions when it comes to certain restrictions in their association’s CC&Rs, such as leasing or altering units or exclusive use common area, performing maintenance and allowing certain types of architectural changes or improvements. We see the same thing here in California.

But often boards grant exemptions or variances without thinking about all of the ramifications. As Donna states, what many boards fail to understand is that any time an exemption or exception is granted, they are creating a precedent which may render their restrictions unenforceable in the future.

Continue reading "Does your condominium, cooperative or HOA board know if and when it is appropriate to grant a hardship exemption, a variance from the restrictions in the CC&Rs?" »

October 1, 2014

Successfully Maneuvering Through Post Foreclosure Evictions and Rentals

By Sandra Gottlieb and Cyrus Koochek, SwedelsonGottlieb, Community Association Attorneys

screen-capture-15.pngMany California condominium and homeowner associations end up with units and homes after foreclosing on assessment liens with no third-party bidders at the foreclosure sales. With increased equity, we are seeing more third-party bidders at sales. But that still leaves a lot of associations in the position of being landlords. And many boards do not know the first thing about being a landlord.

This summer, firm partner Sandra Gottlieb and associate Cyrus Koochek wrote an article that was published in CACM’s Law Journal entitled "Successfully Maneuvering Through Post Foreclosure Evictions and Rentals". Their article provides guidelines for dealing with issues such as compliance with legal requirements, preparing for tenants, lease terms and rent skimming laws. Follow this link to read their informative article, especially if your association owns or may be in the process of taking ownership of any unit or home.

Sandra Gottlieb can be contacted via email: slg@sghoalaw.com

September 29, 2014

Does Your Condo/HOA Board Undertake "Due Diligence"?

David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

The_Community_Association_Law_Blog__Does_your_board_undertake__Due_Diligence__.pngWe community association attorneys are fond of telling boards of directors that they need to "do their due diligence" before making important decisions, especially those that may have a lasting impact on their associations. That being said, just how many board members actually understand what steps are needed to fulfill that directive? That was the question posed in an article on this issue by Florida community association attorney Donna DiMaggio Berger. Follow this link to her blog post.

Donna states a definition of "Due diligence" as an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. But as Donna goes on to state, that definition is not likely going to be enough for some boards or managers to map out a plan. The steps required for a board to perform the required due diligence will vary depending on the circumstances. Donna lays out some examples; I use them with modifications and add some suggestions:

Continue reading "Does Your Condo/HOA Board Undertake "Due Diligence"?" »

September 24, 2014

Nevada Supreme Court Rules that Super Priority Lien Extinguishes First Deed of Trust; Too Bad California Does NOT Have Super Liens

By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

superlien.jpgThe Nevada Supreme Court recently ruled that a super priority lien held by a Nevada homeowners association can extinguish a first deed of trust on a property. The Court stated: “With limited exceptions, this lien is ‘prior to all — other liens and encumbrances’ on the homeowner’s property, even a first deed of trust recorded before the dues became delinquent”

The Las Vegas Review-Journal reports that this decision will create a windfall for some real estate investors in Las Vegas who picked up properties for pennies on the dollar.
I have previously written an article that addressed assessment super priority liens. 19 states have them. Unfortunately, we do not have super liens in California.

Continue reading "Nevada Supreme Court Rules that Super Priority Lien Extinguishes First Deed of Trust; Too Bad California Does NOT Have Super Liens" »

September 17, 2014

Say No to the Amateur Radio Parity Act at Condominium and Homeowner Associations; Support CAI’s Call To Action

By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

ammature_radio_tower_on_condo_-_Google_Search.pngGrowing up, there was a home in our neighborhood that had a massive radio antenna, much like the one in the photograph that is part of this blog post. As a kid, I was fascinated by the antenna. It was so big. Actually, I was captivated by the thought that I could talk to people around the world via a ham radio.

As an adult, while I may still be enamored by the prospect of communicating with people around the world, these days I do that via email, twitter and the telephone. While I have no problem with others wanting to be ham radio operators, I would not want to see one of these radio antennas on the roof of a home at my community association. And I know that many of you feel the same way about not allowing radio antennas, like the one in the photograph, at the associations you live in, manage or work with.

We previously posted a blog article regarding H.R. 4969, the Amateur Radio Parity Act introduced by U.S. Rep. Adam Kinzinger (R-IL), legislation that would make unenforceable community association prohibitions and CC&R restrictions on the installation and use of amateur radio towers and antennas.

If H.R. 4969 becomes law, homeowners who want to install a radio tower or antenna for amateur radio use would NOT have to go through the architectural review process or follow existing community guidelines. They could just install these large antennas.

The national Community Associations Institute (CAI) has been following this proposed legislation in Congress. CAI has initiated a campaign to preserve the rights of America's community associations with regard to amateur radio towers and antennas. Most recently, CAI has issued a Call To Action, as apparently this proposed legislation is gaining support in Congress. We need to let our legislators know that we do not want them supporting the Amateur Radio Parity Act.

David Swedelson is a condo lawyer and HOA attorney. He does not have a ham radio antenna on his home. He can contacted via email: dcs@sghoalaw.com

September 17, 2014

LA City Council Adopts System of Fines For Minor “Quality of Life” Crimes; Too Bad Your Condo/HOA Cannot Follow The Same Procedure

poliCE_officer_issuing_citation_-_Google_Search.pngBy David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

The LA Times reports that the Los Angeles City Council has adopted a new system that allows police officers to issue citations for minor “quality of life” crimes that would typically be resolved with a warning. Read the article here.

According to the article, “a pilot program, called Administrative Citation Enforcement, gives the Los Angeles Police Department and the Department of Animal Services a new enforcement tool that bypasses the court system. It allows city officials to impose fines for offenses such as urinating in public, having dogs off leashes or dumping garbage in public streets.”

Currently, law enforcement officers can issue a warning or write a citation for a misdemeanor “criminal” case against individuals who commit these “minor” crimes. The City Council apparently recognizes that law enforcement is reluctant to file criminal charges and the City is accused of not enforcing the law.

“The city just needs a little clout,” City Counselman Paul Koretz is quoted as saying. “This is one of the most frequent complaints we get: that the city doesn’t enforce its regulation — and it’s true.”

The Times reports that under the program, most first offenses would be $250, the second $500 and the third $1,000. Fines for animal-related offenses begin at $100, which then increases to $250 and then $500 for subsequent violations. In each incident, officers can still decide whether to issue a warning, a financial penalty or a criminal case. If the City can levy these kinds of fines, so can California community associations.

One issue I see with this new proposed system is the lack of due process, as it appears that law enforcement can issue a fine without a hearing. I am assuming that a person who is issued a citation has the right to ask for a hearing. And I also assume that a citation with a fine can only be issued if the law enforcement officer actually witnesses the violation, such as the dog not being on a leash. We will have to see.

Under the Davis-Stirling Act, California condos and homeowner associations CANNOT follow the same system, unfortunately. In the old days, this was the system at many associations. But then owners complained to their legislators that their associations were issuing tickets with fines without first giving them a hearing. The legislature adopted a change to the Civil Code to address these owners' concerns, making it more difficult for many community associations to enforce their rules and CC&Rs, as many boards do not want to have to go through the hearing process.

The Davis-Stirling Act has for many years required a hearing before the board can levy a fine. Follow this link to see Civil Code Section 5855 that states that the board cannot impose “discipline” (fine, monetary charge, suspension of privileges, towing, etc.) upon an association member, without first giving the member notice and holding a hearing.

The Times also reports that this new system is a revenue generator for the City, as it is expected to generate $1.59 million in net revenue annually. It still requires final approval from Mayor Eric Garcetti before it can go into effect.

David Swedelson is a condo lawyer and HOA attorney. David can be contacted via email: dcs@sghoalaw.com

September 3, 2014

Oppose AB 1738 So We HOA Lawyers Don't Make More Money; IDR Should Be An Informal Dispute Resolution Process

Benefits_of_Alternative_Dispute_Resolution___Lawyers_com.pngWho said you can't trust lawyers? You can certainly trust SwedelsonGottlieb, as we are actively opposing proposed new legislation that would make us more money, AB 1738. This bill concerning internal dispute resolution (IDR) in common interest developments (Civil Code Sections 5900-5920) was recently passed by the the California State Assembly and the Senate unopposed. It's clear that the legislators do not understand the implications of what may happen if this legislation is signed into law by the Governor. If signed into law, this new law will most certainly make more work for us community association attorneys, as owners will be bringing their attorneys to IDR meetings, and many boards will opt to do the same.

Review the proposed revised language to Civil Code Sections 5910 and 5915 by following this link. On its face, the revised language is pretty innocuous. However, those with real-world experience with IDR in community associations (such as board members, managers and the attorneys that guide them) realize that AB 1738 will end up costing community associations more money for legal fees if this bill becomes law. Why? Because, as CAI’s California Legislative Action Committee (CAI-CLAC) suggested in its Call To Action on this Bill, “AB 1738 encourages members to bring attorneys and others to their first meeting with a single board member who has volunteered to help work out the member's problem or concern. These simple 'meet-and-confer' conversations over coffee most often resolve an issue. When they occasionally don't, either party may pursue a more formal Alternative Dispute Resolution (ADR) process that does involve lawyers. Nothing in law prevents lawyers from attending IDR right now, but AB 1738 actually promotes having them present to argue the issue(s). This will invariably make the discussion adversarial.”

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August 26, 2014

40 Foot Hedge View Obstruction Dispute Between Condo Owner and Neighboring Property Owner Going to Trial

By David Swedelson, Partner, SwedelsonGottlieb, Community Association Attorneys

Phil_Angelides___Curbed_LA.pngWe deal with a lot of view obstruction disputes. We are able to resolve most of these disputes, as they are subject to CC&Rs which set out what view is protected. And the CC&Rs and the Civil Code provide that the prevailing party is entitled to collect their attorneys’ fees. That usually convinces most people that the fight is not worth the cost.

Sometimes, these view disputes cannot be resolved. For example, in July of 2013, I blogged about a case I had tried and won that dealt with a homeowner who was not part of the association she sued, claiming her cherished view of the association’s lake was obstructed by the trees in the association’s park; she claimed it was a spite fence. Follow this link to read that story.

So, I found an article about a lawsuit involving a 40 foot hedge to be interesting. The legal battle over the hedge is between two Santa Monica properties. Follow this link to read the Daily Journal article.

The article tells us that while they tried to settle the dispute, the “Santa Monica neighbors - well-known local plaintiffs' attorney Browne Greene and former California state treasurer Phillip N. Angelides - are instead opting to go to court in September over the 40-foot hedge between their two homes.”

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August 22, 2014

Homeowner Apathy, Quorum and Prizes to Get Owners to Vote

By: David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys. Alex Noland, also a Partner at SwedelsonGottlieb, assisted in the preparation of this article.

voter_apathy_-_Google_Search.pngIt is an old problem. Many California community associations cannot motivate their owners to participate or even vote at association elections. We have had clients that have been unable to obtain a quorum for director elections for more than 20 years. Even my own association recently reported a failure to achieve a quorum and decided not even to bother holding a second meeting, knowing that the chances of obtaining a quorum was remote.

Some condominium and homeowner associations have the ability under their governing documents to reduce the required percentage for a quorum at adjourned meetings, often from 50% to 25%, but even then some of those associations cannot get 25% of the owners to vote.

Many board members and managers have told me that they believe this is a problem with community associations in general. The fact is that this is not just a problem for community associations; it is a problem for federal, state and local elections as well. A recent Los Angeles Times article stated that “alarmed that fewer than one fourth of voters are showing up for municipal elections, the Los Angeles Ethics Commission voted... to recommend that the City Council look at using cash prizes to lure more people to the polls.”

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