HOA Law Blog

January 17, 2019

California Legislature Fixes the Law on Member Notice & Notice of Rule Changes-Amends Civil Code §4040 and Civil Code §4360

By the Community Association Attorneys at SwedelsonGottlieb new_laws_2019_rev_pdf_-_Google_Drive-3-300x147

Through SB 261, the California Legislature fixed some issues with prior legislation dealing with delivery of notices and related matters and generally fixed some issues that had come up after prior legislation was adopted. This bill became effective in January 1st and amends the following existing sections of the Civil Code as stated:

• Email Consent to Document Delivery — Civil Code §4040 (Individual Notice), which allows for individual delivery of notices and other documents by email if an owner consents to this in writing was amended to allow an individual owner to permit/revoke consent to allow individual notice by email. While most attorneys thought that an email was considered a writing, this amendment eliminates any confusion.

November 17, 2018

New Case Holds that Post-Petition HOA/Condo Assessments That Become Due After A Homeowner Has Filed For Chapter 13 Bankruptcy Are Also Dischargeable – Ouch!

by Sandra L. Gottlieb

By Sandra Gottlieb and Alyssa Klausner, Community Association Attorneys at SwedelsonGottlieb

Chapter 13 Bankruptcy and California Community Associations As many of you likely know, when a homeowner files a Chapter 7 bankruptcy, they may be able to “discharge” their obligation to pay the pre-bankruptcy petition debts including the assessments they owe their community association. And you likely know that when an owner files a Chapter 13 bankruptcy, they are looking for a way to reorganize and not discharge their debts. And we all understood, or at least thought we understood that the assessments that became due after the owner filed bankruptcy, the post-petition assessments, would not be discharged.

A new case in the 9th Circuit, Goudelock v. Sixty-01 Association of Apartment Owners, changes this understanding. The Court in that case held that post-petition assessments that become due after a debtor has filed for Chapter 13 bankruptcy are also dischargeable under Federal bankruptcy law (11 USC Section 1328 (a)). In the Goudelock case, the debtor/delinquent owner surrendered the property in her Chapter 13 Plan, and the lender subsequently foreclosed on the property. The association then sought to determine that the delinquent post-petition assessments from the date the debtor filed for bankruptcy until the date the lender foreclosed on the property were not dischargeable. While the bankruptcy court ruled in favor of the association, the Court of Appeal reversed the bankruptcy court holding that post-petition assessments arise from the pre-petition debt and therefore the debtor’s personal obligation to pay said debt (both the pre-petition and post-petition assessments) is eliminated when the debtor is granted discharge in his/her/its bankruptcy case.

April 17, 2018

SB1265 – A Dumb Idea for a Bad Law

by David C. Swedelson

Stupid-law A senate bill seeking to prohibit California community associations from establishing qualifications for candidates to run for their boards of directors among other changes and requirements (including possible invasion of owner privacy) is a dumb idea that would create bad law.

On April 5th, Los Angeles Times’ Sacramento columnist George Skelton noted that the California legislature passed nearly 1,000 bills in 2017: “A few were important. Most were not. Many were frivolous, some dumb – a waste of politicians’ time and public money. . . There are many bills pending in the legislature again this year that the state could do just fine without.”

One bill I think the State could do just fine without is SB1265. And if you live in a California community association, I think you’ll agree. You should IMMEDIATELY let the legislature know that this legislation is unnecessary, and that the State could do just fine without SB1265. Let me explain how I and many others in the industry came to this conclusion.

March 12, 2018

Newly Enacted Civil Code Section 4515 Seeks to Protect Political Speech and Peaceful Assembly at California Community Associations

by David C. Swedelson

By Joseph L. Gilman, Esq., Associate at SwedelsonGottlieb, Community Association Attorneys

peaceful_assembly_-_Google_Search-300x211 Effective January 1, 2018, Civil Code Section 4515 was added to the Davis-Stirling Act to protect certain rights of political speech and peaceful assembly within the boundaries of a common interest development.

Senator Bob Wieckowski originally presented new Civil Code Section 4515 to California’s legislature as Senate Bill 407. Remarking on his proposed legislation, Senator Wieckowski stated that it “will prevent HOA boards and management from denying basic rights to their residents” as “Boards have fined and threatened legal action against homeowners for simply exercising basic political free speech rights. Millions of Californians live in these associations and SB 407 is needed to prevent these abuses.” While we have no experience with these types of “abuses,” we understand the basis for this new legislation.

As enacted by California’s legislature, Civil Code Section 4515 (which became effective January 1, 2018) protects political speech and assembly rights by invalidating any provision of an association’s governing documents (which includes rules) that prohibits the following:

• Peacefully assembling or meeting, at reasonable hours and in a reasonable manner, for purposes related to common interest development living, association elections, legislation, election to public office, or the initiative, referendum or recall process.

• Inviting public officials, candidates for public office, and representatives of homeowner organizations to meet with members and residents and speak on matters of public interest.

• Canvassing and petitioning the members and residents for purposes related to the topics listed above.

• Distributing or circulating, without prior permission, information about the topics listed above or other issues of concern to the members or residents, at reasonable hours and in a reasonable manner.

Civil Code Section 4515 also invalidates any provision requiring a member or resident to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy, in order to use a common area for any of the meetings described above. Continue reading

February 7, 2018

What Your California Condominium Association Needs to Know About the New Solar Bill – AB 634! And Yes, Owners May Be Able to Install Their Solar Energy System On The Common Area Roof

by David C. Swedelson

By Nicholas Marfori, Esq. and David Swedelson, Esq., Community Association Attorneys at SwedelsonGottlieb

ugly_solar_panels_on_roof_-_Google_Search-300x224 As you may have heard, the Governor signed into law new legislation that now changes a California condominium’s associations ability to prohibit an owner from installing a solar energy system on the common area roof. AB 634, which went into effect on January 1, 2018, amended several provisions of the California Civil Code to set forth language that further clarifies what condominium associations can and cannot do with respect to the installation of an owners own solar energy system on a common area roof and exclusive use common.

As originally enacted, Civil Code § 714 and § 714.1 already prohibited associations from imposing unreasonable restrictions against the installation of solar energy systems on common areas and on a separate interest owned by another owner. AB 634 amends Civil Code § 714.1 to further clarify that associations are prohibited from doing the following:

January 16, 2018

Foreclosure Strategies For California Community Associations

by Brian D. Moreno, Esq., CCAL

equitable_foreclosure_-_Google_Search-300x180 By Brian Moreno, Senior Associate at SwedelsonGottlieb, Community Association Attorneys

In the assessment collection arena, there have been a number of pro-homeowner court decisions that affect a community association’s ability to collect unpaid HOA/Condo assessments. First, courts have held that associations must accept partial payments, which has allowed homeowners to attempt to avoid foreclosure by paying only delinquent assessments reducing the assessment balance below the $1,800 (or 12-month) threshold. Second, courts have held that an association must strictly comply with the Davis-Stirling Act with regard to imposing an assessment lien against a delinquent owner’s property and foreclosing that lien. These rulings create additional challenges for an association attempting to collect delinquent assessments.

Consequently, in recent years, community associations have attempted to adjust their collection policies and procedures in response to these court decisions; however, owners are continuing to take advantage of these new laws for purposes of challenging assessment liens and tendering partial payments to reduce their assessment balance, leaving attorney fees, costs, interest and trustees fees unpaid. Homeowners are becoming more savvy in challenging assessment liens and obstructing the association’s attempts to foreclose.

Given this, what are an association’s options if a seemingly defective lien has been recorded? What if an owner pays only assessments in an attempt to avoid paying the collection fees? What are the association’s options?

December 7, 2017

New Year, New Laws for California Community Associations/CIDs-2018

by David C. Swedelson

By Sandra Gottlieb, Esq. CCAL, Senior/Managing Partner, SwedelsonGottlieb, Community Association Attorneys

The_Communicator_-_Volume_10__Issue_1-300x185

Recent legal Developments affect community association interests in a variety of ways. In 2017, the California Court of Appeal decided several cases concerning such issues as title to common area and board member liability. These cases may be instructive to board members and managers. Meanwhile, on the legislative front, new and pending laws affect association interests in the areas of governance, business dealing, FHA certification, annual notifications and use restrictions. Though not a complete or authoritative guide, we hope this article (published in the Winter 2017 Volume 10, Issue 1 of the Communicator, Community Association Institute/Bay Area/Central California Chapter’s news magazine) can be a useful resource for the most relevant legal updates this year. Follow this link or click here to download the article.

Sandra Gottlieb is a community association legal expert who has devoted her practice and that of SwedelsonGottlieb to the representation of California CIDs and HOAs. She can be contacted via email at slg@sghoalaw.com

November 14, 2017

2017 – 2018 DISCLOSURE AND NOTICE CHECKLIST For California Community Associations

by David C. Swedelson

SwedelsonGottlieb 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.

October 3, 2017

Amended Civil Code Section 4775 Clarifies Responsibility for Exclusive Use Common Area — Has Your Association Adjusted to The Changes?

by David C. Swedelson

By 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 1^st 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.

September 14, 2017

SwedelsonGottlieb Urges Governor Brown to VETO AB 634

by David C. Swedelson

ugly_solar_panels_on_roof_-_Google_Search-300x195 According 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: