HOA Law Blog

By David C. Swedelson, Senior Partner and Joan Lewis-Heard, Senior Associate at SwedelsonGottlieb

It is a good day for the Bridgeport Community Association, a SwedelsonGottlieb client. Today escrow closed and this association was paid the sum of $147,375.65 for the attorney’s fees and costs the Association incurred to obtain the owners and their tenant’s compliance with the CC&Rs. For those of you that think that it cannot be done, read on. The Board and Management at this planned development association located in Valencia, California persevered and took the case through the trial court and appeal and recovered $147,375.65. And they did this because it was the right thing to do, despite all of the time, effort and money it cost the Association.

Continue reading " Homeowners Pay Bridgeport Attorney’s Fee Award of $147,375.65 " »

By David C. Swedelson, Senior Partner, SwedelsonGottlieb

As you have likely noticed, lately there have been a lot of significant earthquakes all over the world. Haiti, Chile, New Zealand, and Japan. Since May 1st, California has experienced over 400 earthquakes, most too small to be noticed. But experts say that it is only a matter of time before California suffers a new and significant earthquake. Are you prepared? What about your community association? Probably not. But all of us can certainly learn from prior experiences. So I found an old article I prepared following our experiences working with hundreds of condominium and planned development homeowner associations following the 1994 Northridge earthquake. Follow this link to read my August 1994 article, Lessons Learned from the January 1994 Earthquake, that was published in Condo Management magazine.

David Swedelson can be contacted via email: dcs@sghoalaw.com

By Sandra L. Gottlieb, Senior Partner, SwedelsonGottlieb

Our firm's work with United Laguna Hills Mutual, a large master community association, is attracting some attention. Follow this link to an article from the Orange County Register. SwedelsonGottlieb assisted the association in crafting a new rule to deal with this association's serious hoarding problem. Among other things, the new rule defines when the line is crossed from harmless clutter to a hoarding problem that creates a fire and/or health hazard that must be dealt with. The association's efforts to address hoarding were also highlighted in a recent issue of Community Association Institute's Common Ground magazine.

If you are experiencing difficulty enforcing your governing documents when it comes to hoarding, contact us at 800.372.2207. Let us evaluate your hoarding issues and let you know the association’s options for dealing with this issue.

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

By David Swedelson, SwedelsonGottlieb Partner

Japan’s massive earthquake has caused many of us to be concerned about earthquakes in California. A March 20, 2011 L.A. Times article reports that the Japan quake has created a surge of interest in earthquake insurance in California.

The article reports that only about 12% of Californians with homeowner’s insurance policies have quake coverage. The article did not report on condominium associations, but Tim Cline, a respected California insurance expert and broker, advises that while there is no statistical data published as to the percentage of California community associations that do carry this coverage, he estimates it at 25%. Tim does indicate that the percentage is closer to 50% of condominium associations, and that makes sense as they have more to protect and deal with than other types of community associations.

Continue reading " Costs and Benefits of Earthquake Insurance: Is it Worth the Cost? " »

Senate Majority Leader Ellen M. Corbett (D-San Leandro) has introduced SB 561 which will, if signed into law, make some fairly significant changes to the law impacting how California community associations collect delinquent assessments. Senator Corbett has been quoted as saying that "[u]nscrupulous debt collectors are increasing the amount owed based on penalties and fees, and foreclosing on people's homes... It's a terrible practice. The penalties are just way too harsh." Unfortunately, Senator Corbett has failed to provide any examples or proof that delinquent owners are incurring anything more then the reasonable costs and fees of collection. We really have no idea what penalties or fees she is referencing, and based on our more than 20 years of experience, what Senator Corbett is quoted as saying is not accurate.

David Swedelson and Sandra Gottlieb have analyzed SB 561, and based on their many years of experience dealing with assessment collection issues, they believe that this is bad legislation based on incorrect facts and circumstances. They have written an article summarizing their analysis. This bill has been approved by the California State Senate and will soon be taken up by the Assembly. We are hoping that a massive showing of opposition will motivate the assembly to reject SB 561. We will be forwarding additional information soon.

Blog post by David C. Swedelson, Partner, SwedelsonGottlieb

How many times have you heard a delinquent condo or HOA homeowner (or their attorney) complain that the fees and costs of collection are almost as much as the amount of the unpaid assessments or fees they owe their community association? I am betting that you have heard this complaint before. But the fact that the collection and attorneys' fees are not proportionate to the amount sought to be collected is not a defense that can legitimately be asserted by a delinquent owner. Had they timely paid their assessments or not let the collection action go on for so long, the fees would not have been that much. And what do they expect their association to do? Not seek collection?

Continue reading " Attorney’s Fees For Assessment Collection Need not be Proportionate to the Underlying Claim " »

Blog post by David Swedelson, Partner, SwedelsonGottlieb

On May 6, 2011, the Community Associations Institute (CAI), the Institute for Real Estate Management, the National Association of Home Builders and the National Association of Realtors united in calling for greater transparency and opportunity for public input into the development of Federal Housing Administration (FHA) lending rules for condominiums. In addition to calling for greater public input, the group united in specific recommendations on key elements of the FHA Condominium Insurance Program. Follow this link to read the entire article.

By David Swedelson, Esq., Senior Partner, SwedelsonGottlieb

Check out this interesting article about former potential presidential candidate, TV star and real estate mogul Donald Trump and all his bankruptcies. Four, to be exact. They do not seem to have stunted Trump’s prospects. The article addresses how Trump has made bankruptcy work for him. And in case you have not noticed, there are a lot of people filing bankruptcy these days. Since the beginning of the “Great Recession,” our office has been involved in hundreds of them, monitoring, filing claims and motions for relief from stay.

Bankruptcies impacting your assessment collection efforts? Interested in more information regarding bankruptcy? Check out the following articles and hoalawblog posts on the subject:

Bankruptcy Basics: What You Need to Know

Bankruptcy Update

Secured Lenders Get a Full Recovery

The Homeowner Filed Bankruptcy; File a Proof of Claim

Have questions about a bankruptcy at your association? Contact Alyssa Klausner, Esq. at SwedelsonGottlieb, abk@sghoalaw.com

By Sandra L. Gottlieb, Partner, SwedelsonGottlieb

Now that the “spot loan” approval process (which allowed for on-the-spot FHA approval of an association for the benefit of a buyer) has been eliminated, it is only possible for an owner or prospective purchaser of a condominium to obtain an FHA-insured loan if the association is or becomes FHA certified. This leads to the question of what, if anything, California community associations should do to obtain FHA certification. FHA certification is effective for two years, after which time the association must be recertified, although it is worth noting that the certification process has changed so frequently that there is no guarantee that the same certification requirements will be in place two years from now.

Continue reading " FHA Approval and Your Association: What You Need to Know " »

Blog Posting by David C. Swedelson, Partner, SwedelsonGottlieb

Mother’s Day is coming up, and I was thinking about my mom, who passed away almost 25 years ago. I still remember some of the sage advice she handed out, although I must admit that, at times, I did not appreciate everything she had to say.
In honor of Mother's Day, I'm sharing an article I read in May of 2010 by LA Times Personal Finance reporter Kathy Kristof, who shared some of her mom’s words of wisdom and advice as it related to the workplace. What her mother had to say about being respectful, listening, honesty, being responsible, apologizing and not whining applies to all of us, whether it relates to the work we do for community associations, or serving on the board. Follow this link to read the article. And if it applies to you, Happy Mother’s Day.

Blog Posting by David C. Swedelson, Senior Partner, SwedelsonGottlieb.

I just read an excellent article by Robert M. Nordlund, P.E., R.S.
 with Association Reserves, Inc. that addresses the issue of how much California condominium associations should be reserving. He starts out with the proposition that “[t]ypically (that is a dangerous word), most condominium associations should be setting aside 15% - 40% of their assessments towards Reserves. This ratio is lower for associations where each homeowner maintains their own home and the association is only responsible for some minimal common areas. Obviously, every association has its own unique list of common area assets it is responsible to maintain. Some may have a longer list that force higher Reserve contributions (pool, elevator, tennis court, balconies, wood siding, etc.), some may have shorter lists of amenities or more cost-efficient exterior finishes.”

Nordlund does go on to say that in addition to these physical factors, there are three other important influences to your reserve contributions: 1. Economic assumptions for interest and inflation; 2. Your current “starting point”, measured in terms of “Percent Funded”; and 3.Your Objective, full funding or baseline funding?

So what is the bottom line for your association? Don’t know? Don’t understand these terms? Then you need to read the entire article. Follow this link.

And if you have “legal” questions regarding reserves, contact David Swedelson via email: dcs@sghoalaw.com.

Blog posting by David Swedelson, Senior Partner, SwedelsonGottlieb

As community association attorneys, we are often asked to assist boards and management in dealing with disputes between homeowners. We have seen disputes over view obstructions, dog waste or barking, noise issues from hard surface flooring or too many parties. Usually, we are asked to referee what usually amounts to a war of words. Sometimes, tempers flare and one neighbor may take what they think is justice into their own hands. But infecting their neighbor's yard with insects is a new one. That's what one owner in Florida is accused of doing.

In a story reported by the Palm Beach Post, a Palm Beach County sheriff's deputy is being accused of using his training to thwart agro-terrorism to destroy his neighbor's yard with chinch bugs. The bug invasion, which destroyed the nearly one-acre yard in The Acreage, is one of numerous tactics Detective Terrance Senecal has used to harass his neighbors, according to a lawsuit filed this week in Palm Beach County Circuit Court. The Acreage sounds like the name of a planned development; wonder what the homeowners association is doing about this situation?

By David Swedelson, Senior Partner, SwedelsonGottlieb

There is an old saying that the three big “issues” at community associations are people, pets and parking. Some may disagree, but the fact is that pets are often an issue. And when it comes to pets, and specifically dogs, dog poop or waste is often at the top of the list. We often get calls or e-mails from managers or board members asking our advice on how to deal with residents who fail to pick up after their dogs or complaints regarding same. This is not something they teach in law school.

Recently, a disgruntled owner at one association we represent was so unhappy about the dog poop allegedly being left on the common area grass in front of her condominium unit that she took the poop and wiped it all over an association monument sign (we have no idea what she used as the scraping implement; we are hoping it wasn't her hands).

Continue reading " Dog Waste a "Growing" Issue " »

We were advised that the California Senate Transportation & Housing Committee is prepared to vote on SB 563 (DeSaulnier) that deals with Community Association Board Meetings. We encourage you to contact the members of this Committee and tell them to vote "NO" on SB 563 which will, if made law, prohibit any actions and communications among community association board directors outside of noticed board meetings (excluding emergencies). Both the California Legislative Action Committee of Community Associations Institute (CLAC) and the Cailfornia Association of Community Managers are opposed to this bill in its current form.

Community associations are, for the most part, corporations and are required to comply with the sections of the California Corporations Code and Civil Code that already deal with the requirements for making decisions, taking actions in furtherance of their fiduciary duties, and reporting to the members.

Board members are volunteers, and things are always coming up that require their action. Day-to-day matters need to be acted upon as they arise, and holding off until the next board meeting (which may not be for months) may be impossible or impractical for a variety of reasons.

Nobody has presented any information regarding abuses that would warrant this proposed legislation, which will make it more difficult for boards to carry out their responsibilities.

Please follow this link for a notice from CLAC that provides information as to where to voice your objections to SB 563.

CLAC sets forth the following reasons to OPPOSE SB 563:
1. Prohibits directors from talking about ANY item outside of a noticed meeting.
2. Cripples a board's ability to act on non-emergency but essential items between meetings.
3. Wipes out the ability for directors to agree by written consent between meetings, a long standing right for all other corporations.
4. Requires additional notices, costing HOAs more money.
5. Informs members about Executive Committee meetings that they are not allowed to
attend, causing severe member frustration.
6. Impossible to enforce; even casual conversation at social events could be intentionally unlawful.
7. Will lead to litigation; minor perceived violations will be seized upon.
8. How can directors even talk or email about convening the next meeting?
9. Informal outreach and "walk around" gatherings among members and board directors would be unlawful.