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From the Community Association Attorneys at SwedelsonGottlieb

The minimum wage is going up. As a result of a change in the law to take effect on January 1, 2017, the statewide minimum wage will gradually increase over the next six years until it hits $15 per hour. Further, Los Angeles and San Francisco already have their own laws in place to hit this mark even sooner and may see higher increases depending on the rate of inflation as measured by the Consumer Price Index (CPI).

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The wage increase will affect an associations existing employees and will likely impact any association’s existing and potential vendor contracts. Roughly one-third of all California employees are paid minimum wage, and many vendors serving associations rely heavily on minimum wage employees. In the past, California has increased the minimum wage by 1-3% annually, but the pending increase represents a 50% rise over six years, which represents a considerable cost for any vendor to absorb. As a result, vendors will undoubtedly pass along their higher labor costs to the associations they serve.

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;

fair_housing_harassment_-_Google_Search.pngFrom the Community Association Attorneys at SwedelsonGottlieb

An update to the Fair Housing Act, effective October 14, 2016, clarifies an association’s responsibility to address discriminatory conduct and harassment by its residents. The Fair Housing Act prohibits discrimination in housing and housing-related services due to race, color, religion, sex, national origin, disability, and familial status (42 U.S.C. 3601 et seq.). Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices Under the Fair Housing Act

This update to the Fair Housing Act clarifies that an association is directly liable for failing to take prompt action to end any third party’s discriminatory housing practice if the association knew or should have know about it and had the power to correct it. A commentator for the U.S. Department of Housing and Urban Development stated, “a community association generally has the power to respond to third-party harassment by imposing conditions authorized by the association’s CC&Rs or by other legal authority […].”* Accordingly, an association must take some action to address any alleged discrimination by residents or other people within its authority.

By David Swedelson, Senior Partner at Swedelson & Gottlieb, California Community Association Attorneys

Protect_your_condo__co-op_or_apartment_building_with_commercial_umbrella_insurance_-_Mackoul___Associates__Inc_.png We are often asked how much insurance a condo or coop association should carry. I often respond by saying as much as the association can afford. Here is a great example of a situation involving one of our firms clients (the facts have been altered to maintain confidentiality). A woman was trying to get into a condo association and the parking arm was stuck. She and her entourage were physically trying to get the arm to move when it dropped hitting her in the leg. It hit an artery and she almost died. She suffered some permanent disabilities and then she sued the association.

Turns out the association knew about the problem and its maintenance guy had been fiddling with the equipment to get it to work. Long story short, there was little question that the association was negligent and the association’s insurance carrier paid out almost 3 million to settle the claim just before trial was supposed to start. The association had a $2 million general liability policy. Fortunately, the association also had a $1 million umbrella policy and with that additional money was able to settle a claim that had the potential for damages that could have exceed the association’s insurance coverage. This is just one of many other examples.

So, what is an umbrella policy?
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By David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys

Google_Image_Result_for_http___blogs-images_forbes_com_olliebarder_files_2015_09_pokemon_go_title_jpg.pngHave you noticed some unusual behavior from some association residents lately? You may have seen them walking outside swiping their smartphones. They may have a newfound interest in going to parks. And when they talk, they use unfamiliar words like Pikachu, Snorlax, and Pokéstops. If this sounds familiar, then your residents are into Pokémon GO.

I have heard about this new phenomena, but knew little about it. I saw an article entitled Back In The Race: The Employer’s Guide To Understanding (And Dealing With) Pokemon GO that was directed to law firms and decided to use it as the basis for this blog post as to how Pokemon GO would impact California community associations. (Follow this link to read the article)

By David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys

communityassociationlawblog_com-Zika_Virus_and_Your_Community_Association__1_page_.png Although the Zika Virus has not yet been found in California, that does not mean that it will not find it’s way here. Florida community association attorney and blogger Donna DiMaggio Berger addresses a community association’s obligation to protect owners and residents from the foreseeable risk of harm from something inside the community and adds the Zika Virus to the list. Maybe we in California should take note. (follow this link to read Donna’s blog)

As Donna states regarding an association’s obligation to protect residents from harm, “[w]hether or not that duty is spelled out in the governing documents, there is the expectation that the association will ensure that residents do not get sucked into a non-compliant pool drain and drowned, trapped inside an unsafe elevator or mugged in the parking lot.”

By David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys

Signs_of_Mold_in_House.pngEffective January 1, 2016, California Senate Bill 655 amended provisions of the California Health and Safety Code, specifically Sections 17920 and 17920.3. Although the Health and Safety Code impacts almost all persons and entities in California to some extent, SB 655 and the changes it makes to the Code will likely have a more direct impact on California community associations than was even intended by the legislature.

The new legislation adds to the Health and Safety Code a definition for mold as microscopic organisms or fungi that can grow in damp conditions in the interior of a building. It is worth noting that because there is no scientific definition of mold, the new law’s definition is not scientific in nature and may prove vague going forward. More importantly, the changes to the law will add the presence of visible mold to the Health and Safety Code’s recognized list of conditions upon which a residential multi-unit building can be considered as substandard.

Although visible mold growth is being added to the foregoing list of substandard conditions, it is important to remember that the statute will specifically exclude the presence of mold that is “minor and found on surfaces that can accumulate moisture as part of their properly functioning and intended use.” Additionally, the list of conditions in the statute only rise to a “substandard” level to the extent the condition, in this case mold, endangers the life, limb, health, property, safety or welfare of the public or occupants of the building. We expect that there will be some debates on this.

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By David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys

Housing_Opportunity_through_Modernization_Act_-_Google_Search.pngCommunity Associations Institute (CAI) announced today that on Friday, July 29 President Barack Obama signed H.R. 3700, the Housing Opportunity through Modernization Act. H.R. 3700 is now federal law.

CAI reports that H.R. 3700 reforms the process used by the Federal Housing Administration (FHA) to determine if condominium unit owners qualify for a mortgage with FHA insurance. FHA does not originate mortgage loans, but instead insures mortgages against default.

By David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys

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Many homeowners want hard surface flooring instead of carpet. And they will often present a prescription from their doctor for a hard wood floor in an effort to get around their association’s restrictions or prohibitions on hard surface flooring. Yes, a prescription for a hard wood floor on a doctor’s prescription form. But anyone that works with condos knows that hard surface flooring may create nuisance problems for the downstairs neighbor. And when the downstairs neighbor complains to the board about the hard surface floor that was not approved and violates the CC&Rs, the board is sometimes reluctant to take legal action thinking that a court is not going to rule in its favor. The California Court of Appeal debunked that thinking in the case of Ryland Mews v. Munoz upholding a California condominium association’s ability to limit hard surface flooring in response to nuisance complaints.

The story in the Ryland Mews case is all too familiar. Munoz moved into their upstairs unit at Ryland Mews and replaced the carpets with hardwood floors allegedly to accommodate the wife’s severe dust allergy. And it was not to soon after that when the downstairs neighbors complained about the additional noise they were now hearing.

When the association’s manager wrote to Munoz regarding the complaints and the fact that the alteration of the flooring was made without prior approval of the association, Munoz did not respond within the 30 days Management had given them. Management wrote to Munoz again, this time requesting Alternative Dispute Resolution (ADR) under the Davis-Stirling Act. Munoz still did not respond to the Association’s Request for Resolution.
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By David Swedelson, Partner at SwedelsonGottlieb, Community Association Attorneys

7_New_PA_Laws_That_May_Change_Your_Life_In_2016___Patch.pngAs we previously reported, (follow this link) Section 5300 of the Civil Code was amended in 2015 and becomes effective as of July 1st of 2016. The changes to section 5300 of the Civil Code requires California community associations to include statements in their annual budget reports disclosing whether the Association is certified by the Federal Housing Administration (FHA) and Veterans Affairs (VA).

If an Association’s fiscal year runs on or after July 1, 2016, it will be required to include the FHA and VA required information in the Annual Budget Report.

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