HOA Law Blog

Some California community associations charge transfer fees. The Federal Housing Finance Agency was proposing a ban on such fees, and they have now backed off this proposal. Community Associations Institute (CAI) was very much involved in addressing the proposed ban. Now the Federal Housing Finance Agency says they will exempt the fee if it is imposed to benefit the property or community. Follow this link to a LA Times article that addresses this issue in more detail.

By Sandra L. Gottlieb, Esq.

Our 55 and older age-restricted communities sometimes ask whether they are required to survey and certify that they comply with the 55 and older qualification standards (if you live in or are on the board of an age-restricted community, you likely know what this means), seeing as they have already surveyed and certified residents in units. They do not want to have to recheck and recheck, year after year, inasmuch as the owners are not getting any younger over time.

For those that are wondering what the heck we are talking about, the Fair Housing Amendments Act of 1988 (the “Act”) provides an exception for communities for older persons (55 and older), which allows restrictive occupancy without violating the Act by discriminating against families with children or against persons that are 54 years of age or younger. The FHA has been amended by the Housing for Older Persons Act of 1995 (“HOPA”). HOPA sets forth standards, which allows, if followed, the 55 and older communities to satisfy the exemption by completing the age restriction requirements.

55 and older communities must survey their residents every two years to ensure the 80% threshold requirement is met (units must be occupied by at least one person 55 and older). Failure to complete and confirm the age status of each resident in the community could, if the threshold fails, impair the ongoing exemption for the 55 and over housing exemption (meaning that they would lose the right to be an age-restricted community). Make certain that your survey questions are compliant with the law. Follow this link to view the requirements that should be followed, which are set forth at page 16327 in the first full paragraph in the third column.

If you have any questions concerning compliance, please do not hesitate to contact SwedelsonGottlieb at 310-207-2207 and speak to one of our attorneys, or email us at slg@sghoalaw.com.

The California Contractors State License Board (CSLB) recently issued a news release regarding their recent sting operation, which caught several unlicensed contractors attempting to perform work for more than $500. Unlicensed contractors tend to prey on senior communities such as the Sun City retirement community, which assisted with the sting operation. Boards of directors and managers of senior communities should be especially vigilant and ensure due diligence is performed when hiring contractors. See the news release for a list of important tips and red flags when hiring contractors.

Check contractors' status with the CSLB here.

The law firm of SwedelsonGottlieb, Community Association Attorneys, is pleased to announce that firm associate Alex Noland has been nominated for three awards to be given out by the Orange County chapter of Community Associations Institute (CAI).

Alex was nominated for the Best Program of the year, Best Committee Member of the Year and Best Published Article of the Year. Read Alex’s article on companion and therapy dogs that was nominated for the best published article here.

The winners will be announced and awards presented at the chapter's leadership awards dinner to be held on February 25, 2011 at Disney's grand Californian Hotel. We are proud of Alex’s nominations for these prestigious awards. He put in a lot of hard work.

By David C. Swedelson, SwedelsonGottlieb

Effective January 1, 2011, California law imposes new requirements and notice procedures for contractors who are serving and recording mechanic’s liens. California Civil Code § 3084(a)(6)-(7) now mandates that a valid mechanic’s lien must contain the following information in addition to what the law currently prescribes:

• Particular language in 10-point boldface type entitled “Notice of Mechanic’s Lien” as set forth precisely in the statute, and

• Affidavit of proof of service on the owner or reputed owner.

We expect that contractors will use old forms, or commercially prepared forms that may not comply with the new law. The law makes clear that a failure to meet the requirements would cause the mechanic’s lien to be unenforceable as a matter of law.
Contractors often fail to comply with the law as it relates to mechanic's liens. Often, they name the wrong party as the owner (the association does not usually own the common area), and these new changes will further frustrate some contractors' efforts to lien the property at California condominium associations.

These amendments also affect the recordation of a lis pendens for a suit to foreclose a mechanic’s lien. The lis pendens, recorded as an extra step to secure the contractor's purported obligation, is now legally mandatory beginning January 1, 2011 under Civil Code § 3146. The lis pendens must be recorded within 20 days after filing of the foreclosure action, and we suspect that some contractors and their attorneys will miss this requirement. You can read this new legislation here.

If your association is served and/or receives a mechanic’s lien, it is best that you confer with legal counsel who can determine, among other things, whether the lien is valid and enforceable.

For more information or to consult regarding a mechanic's lien or other California common interest development issue, please contact SwedelsonGottlieb Senior Partner David C. Swedelson directly at dcs@sghoalaw.com.