Articles Posted in Disclosure/Code Compliance

Screenshot%20ExecCommittee.pngBlog Post by David Swedelson, Founding Partner SwedelsonGottlieb

Recent amendments to the Davis-Stirling Act have made it challenging for community association boards of directors to “deal” with important Association business. Don’t know what I’m talking about? As of January 1, 2012, the California Legislature has imposed a prohibition on Boards taking action on any “item of business” outside of a properly noticed Board meeting. Obviously, the inability of a board to make “decisions” via email can restrict a Board’s ability to make time sensitive decisions.

There are ways around this prohibition which would allow a Board of Directors to remain in compliance with the Civil Code. Specifically, Civil Code 1363.05 provides an exception to a board’s ability to conduct business by excluding “those actions that the board has delegated to any person or persons (management, agent, officer of the association, or committee of the board comprising less than a majority of the directors). But there may be issues as to how much authority a committee actually has to make decisions that normally the board would be required to make.

This is a busy time of year for community association managers and board members. For those associations whose fiscal year runs from January to December, and most do, it is budget time. But in addition to the budget, there are a number of other disclosure documents and notices that California condominium and homeowner associations are required to annually distribute to association members.

As we do each year, SwedelsonGottlieb has compiled a list of all of the documents and notices that are required to be prepared and distributed to owners on an annual basis. Follow this link to our checklist for 2012-2013. There were no changes to the Davis-Stirling Act regarding disclosures which apply this year or next year, and this list is not much different from last year’s.

By David Swedelson, Senior Partner, SwedelsonGottlieb; Condo Lawyer and HOA Attorney

email.pngApparently there are many of you out there that are not aware that as of January 2010, California community associations are permitted by law to distribute budget packages and most annual disclosure documents to owners electronically so long as owners give their written consent to receive them by email. Once that consent is obtained, budget distribution can become virtually paperless. To read the statute, follow this link for Civil Code § 1350.7. This statute was amended effective in 2010 to permit all notices listed in a new Index (read the statute) to be distributed electronically, by following the member consent requirements in the Corporations Code.
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By Sandra L. Gottlieb, Esq., Condo and HOA Legal Counsel

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Detailed minutes can prove troublesome for your association. Minutes are required at any association or board meeting. They serve as a record of the actions and decisions made at a meeting; however, they are not meant to be a transcript of everything that was said or done at the meeting. The more unnecessary, superfluous detail that is included in board meeting minutes, the more likely the board’s actions will fall under unnecessary scrutiny by homeowners.

Certain widely accepted guidelines will help your association take appropriate meeting minutes.
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By SwedelsonGottlieb Associate, Community Association Attorneys

We are often asked by California community association board members and managers as to the records members have the right to inspect and copy. One record request that can prove problematic is when a member requests a list of an association’s members. Under Civil Code Section 1365.2(a)(1)(I), an association’s member can request a membership list for the association, including the association’s members’ names, property addresses at the association’s development and mailing addresses (if different than the property address), if (1) the member requesting the membership list states the purpose for the request, (2) that purpose is reasonably related to the member’s interests as a member of the association and (3) the association reasonably believes that the information on the membership list will be used for the purpose stated.

If the association reasonably believes that the membership list will be used for a purpose other than the member’s stated purpose, the association can deny the request. However, if the requesting member brings an action against the association for that denial, the burden will be on the association to prove that the member would have allowed use of the information for purposes unrelated to the member’s interest as a member of the association (which may be difficult to prove). We suggest that any board considering such a denial consult with association legal counsel before denying the request.
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By SwedelsonGottlieb Community Association Attorneys

We are often asked by California community association board members and managers as to the records members have the right to inspect and copy. One record request that can prove problematic is when a member requests a list of an association’s members. Under Civil Code Section 1365.2(a)(1)(I), an association’s member can request a membership list for the association, including the association’s members’ names, property addresses at the association’s development and mailing addresses (if different than the property address), if (1) the member requesting the membership list states the purpose for the request, (2) that purpose is reasonably related to the member’s interests as a member of the association and (3) the association reasonably believes that the information on the membership list will be used for the purpose stated.

If the association reasonably believes that the membership list will be used for a purpose other than the member’s stated purpose, the association can deny the request. However, if the requesting member brings an action against the association for that denial, the burden will be on the association to prove that the member would have allowed use of the information for purposes unrelated to the member’s interest as a member of the association (which may be difficult to prove). We suggest that any board considering such a denial consult with association legal counsel before denying the request.
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By Sandra L. Gottlieb, Esq., Senior Partner, SwedelsonGottlieb

On July 11, 2011, the City of Pasadena passed a “no-smoking” ordinance for multi-family homes, defined as two or more units, applicable to both those now existing and to be built, effective January 1, 2012. The ordinance provides that it will be unlawful to smoke in any common area (broadly defined in the statute to include all areas other than a unit), patio, balcony or inside a unit within any multi-family building, and yes, this applies to condominiums.

As of January 1, 2012, owners and/or their community managers must post “No Smoking” signs, in capital letters, not less than one inch in height, on a contrasting background or, as an alternative, the association may post the international “no smoking” symbol instead of the written words, in the common areas of the association’s building(s) at first floor entrances and exits, lobbies, restrooms and elevators. The international “no smoking” symbol consists of a picture of a burning cigarette enclosed in a red circle with a red bar across it:

By David C. Swedelson and Sandra L. Gottlieb, California Condo Lawyers and HOA Attorneys

It’s fall, and that means that most community association board members and management are busy finalizing their budgets (this applies to most community associations that have a calendar fiscal year). Unlike the old days, the budget is not all that California community associations need to be concerned about. What about all those disclosures that are required annually? Are you sure that your association is in compliance? Never fear, SwedelsonGottlieb is here with our updated annual disclosure checklist. Follow this link for a PDF copy of our checklist which we provide annually, setting out all of the statutory disclosures that California community associations are required to provide to the owners/members.
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By Joan E. Lewis-Heard, Esq., Attorney, SwedelsonGottlieb

Edited by David C. Swedelson, Esq.

Many California condominium associations have common area storage lockers, rooms or areas that are made available to the owners. Sometimes, the storage area is assigned in a deed as exclusive use common area. More often than not, these areas are not assigned, and the board has the ability to assign and rent them to owners. And boards and the association’s management often have no idea of the issues that storage areas can create until they are smack dab in the middle of a dispute with an owner.

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?

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