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reserve studies

5/6/2020

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California Civil Code 5550 requires a Reserve Study based on a “diligent visual site inspection” at least every third year, but requires the Board review that Reserve Study annually and “consider and implement necessary adjustments”. That’s called an annual Reserve Study update.

More information:

https://www.reservestudy.com/blog/is-a-reserve-study-required-annually-in-california/
https://www.reservestudyusa.com/2-reserve-laws/36-california-reserve-study-laws
​
https://dre.ca.gov/files/pdf/re25.pdf

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New case law on liability

5/6/2020

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HOA LIABILITY FOR FAILURE TO UPHOLD MAINTENANCE OBLIGATIONS
Sands v. Walnut Gardens Condominium Ass'n (2019)
Takeaway: CC&R provisions may dictate standard of maintenance to be performed and failure to investigate and conduct maintenance issues may constitute a breach of contract by the HOA.

In Sands v. Walnut Gardens Condominium Association, the California Appellate Court held the HOA could be responsible for damages sustained by a homeowner as a result of a plumbing leak originating from a pipe on the roof of the condominium building (i.e., HOA common area). In Sands, the HOA repaired the pipe and the roof, but did not compensate the homeowners for the damages they sustained to the interior of the unit and their personal property. The homeowners sued the HOA for breach of contract and negligence.
In addressing the the breach of contract claim, the Court of Appeal noted that the HOA had a contractual obligation under the CC&Rs to maintain the common area in "a first-class condition." A jury could find that the HOA breached that contract by failing to perform preventative maintenance, and by failing to periodically inspect the pipes and roof. The Court dismissed the HOA's argument that "no evidence showed [that] the [HOA] was 'on notice that it needed to make repairs or do something to the roof or the pipes.'" Rather, it was sufficient that the HOA knew that no maintenance was being performed, which a jury could find as a breach of the CC&Rs' requirement that the common area be maintained in a first-class condition.
However, as to the second cause of action for negligence, the Court sustained the trial court's judgment of nonsuit (i.e., the homeowners failed to present sufficient evidence to conclude that the HOA was negligent). The Court noted that "the [HOA] had no independent duty as to the pipes and roof arising from tort law." In other words, absent a showing of a duty independent of the CC&Rs, an HOA cannot be held liable for the tort of negligence for its maintenance failures. 

From: ​https://hoalaw.tinnellylaw.com/limitation-on-hoa-tort-liability-for-failure-to-uphold-maintenance-obligations/
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elections

5/6/2020

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SB 323 makes substantive modifications to the Civil Code's provisions governing HOA elections, effective January 1, 2020. Some of the more significant modifications require associations to amend their election rules to conform to new statutory requirements, limit the types of candidate qualifications an association may adopt, address the only circumstance for elections by acclamation, place limitations on who may serve as an inspector of elections, and bolster the ability of members to overturn an election that is not conducted in accordance with proper procedures.
From: 
https://tinnellylaw.com/wp-content/uploads/2019/10/New-HOA-Election-Laws-Tinnelly-Law-Group.pdf
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The RIght to assembly... in an HOA

5/6/2020

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California Civil Code 4515. This is the law that protects certain rights of members and residents to political speech and peaceful assembly within California community associations.

Reasonable Restrictions on the Use of Common Area Facilities for Assembly Purposes. Association rules & regulations and facility use agreements are useful tools in balancing the requirements of the law with reasonable restrictions that protect the Association. Possible restrictions on the use of facilities for assembly purposes are as follows:
  1. Not open to the public: Both the rules and facility use agreements may require that any 4515-related meetings or events be restricted to members, residents and their guests only so as not to open the Association’s facilities to the public. If the Association is open to the public, it must comply with the Americans with Disabilities Act, a costly endeavor that exposes the Association to potential significant liability if the strict ADA requirements are not met.
  2. Occupancy restrictions: The fire department of each city typically sets maximum occupancy limits for association facilities such as clubhouses. Those reserving the facilities should be required to limit their events to no more than what is permitted by the fire code or to any other reasonable number determined by the Board as the maximum capacity for each facility. Attendance beyond capacity burdens Associations with traffic, potential for unruliness and nuisance, and excess strain on common area components such as restrooms.
  3. Responsibility for damages: Although no fee or deposit may be charged upfront, this does not mean members cannot be held responsible for damage caused to the common area by their residents and guests during 4515-related gatherings. A facility use agreement may be required for anyone reserving the facilities. Reservations should be required in advance and a stated purpose should be required when making the reservation that the meeting is for proper assembly purposes pursuant to Civil Code 4515. If a non-member resident wishes to use a facility for a proper assembly purpose, the member who owns the Lot/Unit where the resident resides may be required to sign such an agreement assuming responsibility for any damage caused at their event. Additionally, most CC&Rs contain a provision that makes members responsible for damage caused to the common area by them, their tenants or guests and many of these damages can be levied as a reimbursement assessment, depending on the language of the Association’s CC&Rs.
  4. Cleaning fees. A facility usage agreement can also require that a member and/or resident reserving a common area facility return the facility in the same condition in which they received it, which includes cleaning and the disposal of trash. If the individual fails to return the facility in the same condition, the Association can charge the responsible member for cleaning fees as required by a facility usage agreement.
  5. Parking: Parking is a concern for many associations and the scheduling of a large rally poses a potential strain on Associations where parking is limited. Civil Code 4515 does not afford members or residents with additional parking rights. That means that the existing parking rules and regulations apply to attendees of an event for assembly purposes. Once the guest spaces are all occupied, attendees must make arrangements to park elsewhere to avoid being cited and/or towed as provided in the Rules.  This should be made clear in any facility use agreement so advance arrangements for parking for their guests if necessary. Compliance by all attendees with the governing document provisions, not just its parking provisions, should be required by the rules and/or a facility use agreement for assembly-related events.
  6. Alcohol use: The Association may ban the use of alcohol at events for assembly purposes – even if alcohol is allowed at private events. Because procuring insurance cannot be required for those reserving facilities for assembly purposes, it is reasonable to ban alcohol or other activities which may increase legal exposure to the Association at these gatherings. Likewise, items such as sound equipment that may be used for private events can be withheld from assembly events with no deposit so long as this limitation is made clear in the facility use agreement and/or rules.
  7. Compliance with the governing documents. Members and residents and their guests using common areas must still comply with the provisions of the Association’s governing documents including as to noise levels, parking, cleaning up after service animals, etc. This can be made clear in a well-drafted facility use agreement.
  8. Reasonable hours: Holding a political rally does not give members and residents 24-hour access to the Association’s facilities or rights above members who request to use the facilities for their private events. Rules should be adopted that ensure all members have equal access to these facilities, including for private events, and that the events end at a reasonable time to ensure noise levels are not interrupting residents’ quiet enjoyment of their property.
  9. Designated Areas. Often, an Association’s clubhouse is near a pool or to other facilities and guests of the assembly event spill out into other areas not reserved for the event. A facility use agreement can require that the event must be contained within the reserved facility and that guests may not migrate beyond said designated area.
From: ​https://hoalaw.tinnellylaw.com/there-is-no-such-thing-as-a-free-lunch-or-a-free-clubhouse-implementing-reasonable-limitations-on-political-speech-and-assembly-rights-in-california-hoas/
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HOA Board

5/6/2020

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Homeowners associations (“HOAs”) are governed by a group of volunteer members known as a “Board of Directors” (“Board”). Their primary responsibilities include: (1) managing the common areas, (2) managing the HOA’s finances, (3) setting policies to assist in the operation of the HOA, and (4) enforcing those policies along with the HOA’s governing documents. The Board is therefore vital to the effective operation and management of the HOA, as well as preserving the property values of the HOA’s members....

Each Board member should employ the following procedure when observing a violation of the HOA’s governing documents:
  1. Any observed violation shall be reported to the Manager in writing and shall include any supporting information (e.g., a detailed description of the violation, photographs, etc.).
  2. Thereafter, the Manager, and not the observing Board member, must comply with the procedural requirements contained in the HOA’s Policy, which typically requires the preparation and mailing of a “courtesy notice” to the offending resident advising same of the alleged infraction.
  3. If the violation continues to occur, the Board should direct the Manager to prepare correspondence inviting the offending resident to a hearing before the Board.
  4. At the hearing, the Board may impose discipline pursuant to the Association’s governing documents.
  5. The observing Board member must not communicate with the offending resident at any point during the enforcement process (unless otherwise authorized by the Board).
From: ​https://hoalaw.tinnellylaw.com/overzealous-board-members-understanding-the-scope-of-the-boards-authority-to-enforce-the-governing-documents/
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