HOA Law Blog

January 1, 2012

Civil Code § 1368 – Documents Provided To Prospective Purchaser.

(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.

January 1, 2012

Civil Code § 1368.2 – Billing Disclosure Form.

by David C. Swedelson

1368.2. The form for billing disclosures required by Section 1368 shall be in substantially the following form and in at least 10-point type:

Follow this link to download the required form.

January 1, 2012

Recent Community Association Appellate Court Decisions

by David C. Swedelson

• Yan Sui v. Price (2011) 196 Cal. App. 4th 933

– A California Court of Appeal upheld a board’s adoption of a rule prohibiting inoperable vehicles.

– Plaintiff alleged discrimination on the basis that he was the only homeowner that had an inoperable vehicle.

January 1, 2012

Civil Code § 1363.5 – Articles Of Incorporation Disclosure Statement.

by David C. Swedelson

(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.

December 20, 2011

Discrimination Based On Genetic Information Prohibited (SB 559)

by David C. Swedelson

Blog Post by David Swedelson and Sandra Gottlieb, Senior Partners at SwedelsonGottlieb; Condo Lawyers and HOA Attorneys

SB 559 goes into effect on January 1, 2012 and expands the prohibited bases of discrimination under the Unruh Civil Rights Act and the California Fair Employment and Housing Act (FEHA) to include genetic information.

“Genetic information” is broadly defined, and includes information relating to an individual employee’s genetic tests, the genetic tests of the employee’s family members, and the manifestation of a disease or disorder in the employee’s family members. Under the new law, discrimination in hiring or employment based on any of these characteristics would be considered a violation of law.

December 14, 2011

Court Awards Substantial Fees ($236,976) to Association in Case Against Owner

by David C. Swedelson

Blog post by David C. Swedelson, California Condo Lawyer and HOA/ Community Association Attorney
We regularly handle cases where the owner has sued the association as a defense to their association’s claims against them. These cases sometimes go to trial as efforts to settle are not successful, and more often then not, the association prevails and recovers an award of attorneys’ fees. Often for substantial sums of money.

The case of Seltzer v. Eugene Burger Management Corp., an unpublished appellate court decision, is a perfect example as to why owners need to think twice before suing their association. Here, Seltzer filed a lawsuit against the association and its management. Seltzer, an attorney and owner of a condominium unit located in a Marin City condominium development known as The Headlands View Homes filed the lawsuit seeking, among other things, to enjoin what Seltzer alleged were unlawful actions on the part of the association’s management. The association then filed a cross-complaint alleging that Seltzer had damaged and destroyed trees without the association’s authorization (the trespass claims) and claims arising from Seltzer’s failure to pay assessments (the assessment claims).
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December 9, 2011

Association Responsibility for Association-Owned Units and Lots Acquired Through Nonjudicial Foreclosure

by David C. Swedelson

By Sandra L. Gottlieb Condo Lawyer and Community Association Attorney at SwedelsonGottlieb

It is a sign of the times that an association’s board of directors has to consider and consult with association legal counsel on the association’s responsibilities with respect to an owner’s separate interest unit or lot to which the association obtains title through the nonjudicial foreclosure process (for purposes of the following discussion, we will refer to an owner’s separate interest unit or lot as a “unit”). As more and more California community associations are deciding to foreclose against an owner’s unit for non-payment of assessments (rather then waiting for the senior lien holder to foreclose), and with many associations taking title by reversion to units following those foreclosure sales (when third parties don’t bid on the unit at the foreclosure sale), many association boards and managers want to know what the association’s responsibilities are once it takes title to a unit through foreclosure.
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December 8, 2011

Bankruptcy and The Motion For Relief From Stay

by David C. Swedelson

By David Swedelson and Alyssa Klausner, Attorneys at SwedelsonGottlieb, Condo Lawyers and HOA Attorneys

When a delinquent owner files for bankruptcy relief by filing a petition under either Chapter 7 or Chapter 13 of the United States Bankruptcy Code, the Code provides that an automatic stay, subject to certain exceptions, is immediately put into place. An automatic stay is like a restraining order, and it happens as soon as the bankruptcy is filed. This “stay” applies to creditors, including the association to whom the owner owes money, and it means an association can no longer collect or even attempt to collect any money (or foreclose on the property) from the owner, at least without getting permission from the bankruptcy court. The stay is intended to protect the delinquent owners who file bankruptcy. All actions to collect the delinquent assessments must stop, including lawsuits, foreclosures, as well as the suspension of membership and/or common area privileges.
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December 5, 2011

Judge Rules That Transfer Fees to Original Developer Not Enforceable pursuant to California Civil Code Sections 1098 and 1098.5

by David C. Swedelson

Blog post/article by David Swedelson, Senior Partner SwedelsonGottlieb, Condo Lawyer and HOA Attorney

The Daily Journal reports that Los Angeles County Superior Court Judge Madden recently ruled on the monthly fee that owners at Marina Pacifica Homeowners Association (located in Long Beach, California) paid to a developer. The Judge found that the fee constituted a “transfer fee” that was a violation of California Civil Code sections 1098 and 1098.5.

California Civil Code sections 1098 and 1098.5 took effect on January 1, 2009, eliminating real property “transfer fees,” particularly targeting fees written into the recorded CC&Rs at some California community associations. These fees are not the fees charged by an association or its managing agent for providing documents and other information as part of Civil Code Section 1368; these transfer fees were typically being paid to the original developer. Since the legislation’s enactment in 2009, we have not seen any court cases, at least until now.
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December 1, 2011

Another Flag Story—This Should Not Happen Under California Law

by David C. Swedelson

Some community association boards of directors just do not use common sense. This story was reported by Newsy, a video news source.

A retired New York City police officer who rescued people on September 11th is apparently being told by his Florida homeowners’ association he cannot fly two flags, just one, the American flag. His association is telling him that he cannot fly The Flag of Honor, a flag that commemorates 9/11.  

Richard Wentz claims to have lost 43 friends in the attacks on the World Trade Center, and he is suffering from cancer that he says is a result of Ground Zero contamination. He flies two flags outside his Florida home – the American flag and The Flag of Honor (also called a ghost flag, its colors are faded and the name of each person who died in 9/11 is embroidered on it).
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