HOA Law Blog

May 16, 2011

FHA Approval and Your Association: What You Need to Know

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.
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May 5, 2011

Mother’s Day is This Sunday, May 8th

by David C. Swedelson

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.

May 5, 2011

How Much Should Your Reserve Contributions Be?

by David C. Swedelson

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?

May 5, 2011

Lawsuit: Sheriff’s Deputy Homeowner Unleashed Chinch Bugs Destroying Neighbor’s Lawn

by David C. Swedelson

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?

May 3, 2011

Dog Waste a “Growing” Issue

by David C. Swedelson

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).
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May 2, 2011

SB 563 (DeSaulnier) Would Cripple Boards’ Ability to Govern

by David C. Swedelson

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.

April 22, 2011

There Was Lots Of Rain And Lots Of Leaks; Who Pays For The Damage?

by David C. Swedelson

By David C. Swedelson, Partner, SwedelsonGottlieb

With record rainfalls in December 2010, and a rainy season that stretched into March 2011, California community associations and their management have been kept busy responding to reports of leaks and “water intrusion” (when the water from any source intrudes into a unit or home). And as expected, we have received many phone calls and emails asking who is responsible to pay for the cost of repair, who makes what repairs, and is there any insurance to cover the cost of all or any part of the repair work?
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April 17, 2011

FBI Raids Las Vegas Condo Association-Alleged Embezzlement

by David C. Swedelson

New embezzlement story out of Las Vegas. The Nevada Attorney General’s Office, with the assistance of the FBI, served a warrant at the Paradise Spa Homeowners Association on Las Vegas Boulevard South near Serene Avenue.

Owners allege the association’s board embezzled more than $1 million of their money.

The news story reports that several units were destroyed by two fires in 2009 and 2010, and the insurance company paid $842,000 but nothing has been repaired.

April 16, 2011

Community Association Rule Enforcement; Not An Easy Task, But It Needs to Be Done

by David C. Swedelson

By David C. Swedelson, Partner, SwedelsonGottlieb This article was prepared for a recent program that David spoke at dealing with rule enforcement.

There is no disputing the fact that serving on the board at any community association is time consuming and can often become frustrating. You have a multitude of issues competing for your attention – whether it’s adopting the budget, monitoring performance and renewing service contracts, insurance renewals, supervision/hiring and retention of employees or collecting delinquent assessments. In addition to running the association’s business, board members are also faced with the task of enforcing rules and regulations.
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April 11, 2011

Is a Kid’s Lemonade Stand a Prohibited Commercial Activity?

by David C. Swedelson

Post by David Swedelson, Partner, SwedelsonGottlieb

We are often asked to assist California community associations dealing with unauthorized homeowner commercial activities when prohibited by the association’s governing documents. Usually, the issue is whether the commercial activity will or is impairing the residential character of the community.

So, for example, we have been called upon to deal with a hair stylist, an employment headhunter, a psychologist, and other service-oriented businesses that had a number of clients and/or employees coming into a gated community or locked building. Once, we dealt with a refrigerator repair service where customers were coming into the association to drop off or pick up their refrigerator. Another time, it was an auto repair business being run out of a garage. And of course, lately we have been dealing with more then one marijuana growing facility. You get the picture.