Articles Posted in Davis-Stirling Act

checklist_-_Google_SearchSwedelsonGottlieb annually updates and publishes its Disclosure and Notice Checklist as a resource for Managers and Board Members of California Community Associations. The updated Checklist is 14 pages (there are a lot of things that California community associations are required to give notice of or disclose) and sets out what disclosures and notices California community associations are to provide to homeowners, when and how they are to be provided, as well as other considerations. Included is information regarding the Code requirements for the Annual Budget Report, the Annual Policy Statement, Fiscal Year End Disclosures, and other Additional Disclosures/Notices. We have included information regarding the recent changes to Civil Code Section 4041 relating to the solicitation of owner mailing addresses, etc. and the required New Management Disclosures. Follow this link to download your copy of this important resource.

balcony_waterproofing_-_Google_Search-300x232By David C. Swedelson, Community Association Attorney at SwedelsonGottlieb

Many California community association’s CC&Rs, particularly those in older communities, do not clearly state who is responsible for the repair or replacement of exclusive use common area. This typically relates to the waterproofing of patios and balconies at most condo associations. That is the exclusive use area defined in the CC&Rs that requires repair and/or replacement (for most condominium associations, exclusive use common area is limited to balconies, patios and parking spaces). Before January 1st of 2017, there was some uncertainty as to who is responsible for the repair or replacement of exclusive use common area which led to disputes between associations and owners.

Fortunately, amended Civil Code Section 4775 helps clarify this issue. If the CC&Rs are not clear, we look to Civil Code Section 4775. That section, like former Civil Code section 1364, its predecessor, had since the mid 1980s provided that the association is responsible for repairing, replacing, or maintaining the common area, other than exclusive use common area, and the owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common area appurtenant to the separate interest.

ugly_solar_panels_on_roof_-_Google_Search-300x195According to CAI’s California Legislative Action Committee, there is still time to stop AB 634, a bill that impacts a condominium association’s ability to control the placement of solar panels in common interest developments. BUT YOU MUST ACT TODAY BEFORE THE GOVERNOR SIGNS THIS BILL INTO LAW.

CAI reports that “AB 634 has passed the state legislature and, if signed by the Governor, will eliminate local association-approved rules and replace them with statewide mandates that allow a single homeowner to monopolize a common area roof with solar panels for their sole benefit.”

It also allows the installation of panels without regard for their impact on our community’s architectural guidelines, suitability for that particular building or roof, or any adequate protections from property or water damage.

PLEASE click here to easily email Governor Brown and ask him to VETO this bill that will hurt all of those living in our communities!

Below is SwedelsonGottlieb’s letter to the Governor:

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new_leglisation_notice_to_owners_to_provide_contact_information_-_Google_Search.pngBy the Community Association Attorneys at SwedelsonGottlieb.

Starting January 1, 2017, every California community association will be required to ask its members to provide their contact information and property status. New Civil Code § 4041 will require, starting January 1, 2017, that each association must solicit the following information from its members:

1. The mailing address where notices from the association are to be delivered;

By David Swedelson and Cyrus Koochek, Community Association Attorneys at SwedelsonGottlieb

Relocation_expenses_-_Google_Search-2.pngSince the old Davis-Stirling Act was made into law in 1985, there has been a small debate over whether an owner or their association is responsible for temporary relocation costs incurred when owners in a common interest development are required to vacate their units or homes for common area repairs. Former California Civil Code Section 1364(c) stated that the “costs of temporary relocation during the repair and maintenance of the areas within the responsibility of the association shall be borne by the owner of the separate interest affected.” On its own, this provision seems clear enough; however, because this language was found in the code section that also dealt with termite fumigation, and because it followed the provision dealing with termite fumigation, some owners were confused and debated the issue with their association’s board and management, claiming that unless the relocation was as a result of a treatment for termites, their association had to pay their relocation costs. They were confused and wrong.

Taking the location of this provision into context, it is easy to understand why confusion arose. Immediately preceding the temporary relocation costs provision was a subsection devoted to explaining whether the association or the individual owners are responsible for repairs and maintenance of areas subject to wood-destroying pests and organisms. This had led to some owners and others to question whether the temporary relocation costs provision was intended to apply only to wood-destroying pests and organisms, or for all circumstances resulting in temporary relocations. There really was no debate, as the section that dealt with temporary relocation was separate from the section dealing with wood destroying pests. But it was apparently confusing.
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By Robert Nordlund, Association Reserves and David Swedelson, SwedelsonGottlieb

Reserve%20article.pngThe body of statutory law (as opposed to case law) governing California Community Associations, known as the Davis-Stirling Common Interest Development Act, went into effect on January 1, 1986. As the industry developed and matured over the last 27 years, approximately 50 changes and amendments were made to the Act. While those adjustments were well-intended, the net effect yielded a disorganized and confusing body of law. To address this problem, a multi-year effort was launched to rewrite the Davis-Stirling Act. This “new” Davis-Stirling Act, signed into law in 2012, becomes the guiding law for California residential community associations on January 1, 2014. So you are probably asking what are the major changes and how does the re-write affect reserve funding issues? The answer is no major changes have been made regarding reserve funding. For the most part, the new updated law amounts to new set of Civil Code references for reserve funding matters. Fortunately, the majority of the changes are just re-organization and renumbering. But there have been changes made to the Act as it applies to reserves.

To read the article prepared by David Swedelson and Robert Nordlund, follow this link.

(a) The following provisions do not apply to a common interest development that is limited to industrial or commercial uses by zoning or by a declaration of covenants, conditions, and restrictions that has been recorded in the official records of each county in which the common interest development is located:

(1) Section 1356.

(2) Article 4 (commencing with Section 1357.100) of Chapter 2 of Title 6 of Part 4 of Division 2.

(a) The owner of a separate interest, other than an owner subject to the requirements of Section 11018.6 of the Business and Professions Code, shall, as soon as practicable before transfer of title to the separate interest or execution of a real property sales contract therefor, as defined in Section 2985, provide the following to the prospective purchaser:

(1) A copy of the governing documents of the common interest development, including any operating rules, and including a copy of the association’s articles of incorporation, or, if not incorporated, a statement in writing from an authorized representative of the association that the association is not incorporated.

(2) If there is a restriction in the governing documents limiting the occupancy, residency, or use of a separate interest on the basis of age in a manner different from that provided in Section 51.3, a statement that the restriction is only enforceable to the extent permitted by Section 51.3 and a statement specifying the applicable provisions of Section 51.3.

(a) The articles of incorporation of a common interest development association filed with the Secretary of State shall include a statement, which shall be in addition to the statement of purposes of the corporation, that does all of the following:

(1) Identifies the corporation as an association formed to manage a common interest development under the Davis-Stirling Common Interest Development Act.

(2) States the business or corporate office of the association, if any, and, if the office is not on the site of the common interest development, states the front street and nearest cross street for the physical location of the common interest development.

By Sandra Gottlieb, Senior Partner SwedelsonGottlieb; Condo Lawyer and HOA Attorney

We know that there is a tendency to classify some condo and HOA staff as independent contractors rather then employees. Some community association boards want to do this because they think that such a classification will mean that their association will not have to pay for all of fees, charges, taxes, etc. that are normally associated with an employee. They also think that they can avoid vacation pay, payroll taxes, medical insurance, etc.

The staff member may want the independent contractor classification as then they believe that they will not have taxes deducted from their checks, that they can then write off their car and other expenses and benefit in other ways.

Well, the government knows what you are doing and they are not happy about it. There has been an increasing effort by the State and Federal governments to address this “problem”. The fact is that in many situations, that staff member is not really an independent contractor, as they work full time at the association, use the equipment, etc. provided by the association and get their direction from the association.
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