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August 28, 2007
Elections in HOAs in California -Round Two
It's been a year now that we have had a completely revamped elections system for HOAs in California (Civil Code Section 1363.03 and following). The final wrap up of the law came in September 2006, with clean-up legislation that made a complicated and imperfect set of laws somewhat less complicated and imperfect. We are still living in the fallout. Here is an all too common question that comes to me:
"Does the new law require us to change our governing documents?"
Apparently, some attorneys are saying that the answer is "yes". Some managers have decided the answer is "yes". However, the answer is an emphatic "No!" The law does not require amendments to the governing documents.
If there is any exception I have yet to see anything suggesting that. I have seen plenty of documents that present some challenging hurdles (like those below), but I have yet to see a set of documents that presents an impossible hurdle. There are ways to conform the rules to satisfy the documents, at least closely, and the law fills in the blanks for things that are unclear.
It is conceivable that in some cases attorneys say the documents need to be changed so that the Association documents will conform to the attorney's rules because the attorney likes his or her rules and does not want to change them. Maybe the rules are really good, and changing the documents is a good idea to simplify procedures. But still, amending the governing documents is not a legal requirement ... and rules can be adjusted to comport with every set of governing documents I have seen to date.
And then there is the problem of rules that were drafted either without any regard to what the governing documents say, or were drafted after the law was signed, and before it was "fixed". Check your rules! Here are some areas to consider, i.e., the most common areas of controversy:
Board Elections at the Annual Meeting. Obviously, under the new law, board member elections cannot be accomplished wholly at the annual meeting. But if the documents say that elections "shall" be held at the annual meeting, and if they say nominations shall (or possibly even "may") be presented at the annual meeting, then it is my belief that there should be an annual meeting involved in the process and the process must allow for nominations at the meeting. This takes some "finesse" in the process. I believe the annual meeting can be the culmination of the collection of ballots and counting (allowing for turnover of ballots at the meeting after the nominations) or it can occur during the balloting process (while the polls are open), or it can be used as the "kickoff" for the annual board election as a night for candidate statements, etc., and the ballots can be sent out afterwards. (They do have to be counted at a meeting but I believe it can be a board meeting after the annual meeting.)
Qualifications. Lots of Boards would like to add qualifications to the election rules. Since the law says that the rules shall contain qualifications, more and more people are asking what they are and liking what they hear. "Good standing" is a perfect example. It usually means current in assessments and not in violation of the governing documents, although some documents do not define it at all. But the last changes in the law specifically point to the fact that the qualifications to be in the rules are what appears in the governing documents. So yes, you may want to amend the documents to provide qualifications, so you can have them in your rules, but you do not want to prevent any person from running as a candidate based on disqualification, without the backing in the governing documents (most likely - the Bylaws).
Proxies. Some are apparently interpreting the new law to mean that proxies are no longer applicable and they cannot be used. The new law does not say that. In fact, it requires reflecting what is in the governing documents. The new law says that HOAs do not have to distribute proxies, and doing so can complicate the intended mail in balloting process, but it does not say it eliminates proxy use. In fact, the request was made to the legislator authoring the bill that proxies be eliminated, but he purposely did not go that far because it was quite controversial.
Adoption of Rules. Some associations amend their documents (owner approval is required) but do not adopt rules, being under the misimpression that the amendment of the documents is enough. It's not. Some associations have not adopted rules, some on purpose and some that simply have not heard about the new law or just heard about it. The law is clear - HOAs shall adopt rules. So buck up and get help and go through the process to get good rules!
Appointment of Inspectors: Some Associations are using managers or the HOA attorney without having any rules in place. You may get away with it once, but the law clearly says that if a paid vendor of the Association is going to be used, the rules must say that.
Cumulative Voting. Cumulative voting complicates things under a voting process that is accomplished for the most part by the mail. In fact, the California Corporations Code says that an election using cumulative voting cannot be conducted by written ballot. But the new elections law requires that cumulative voting be in the rules if it is in the governing documents. So it cannot be eliminated simply by changing the rules. Now this is a case where you definitely may want to seek an amendment to the governing documents; however, the new law does not require that you amend the governing documents - it just requires you to provide for cumulative voting if its in the documents.
The law certainly may complicate things, and things can be simplified by governing document amendments. However, there is no requirement to change the documents to fit the law.
Posted by Beth Grimm at 9:59 PM
August 19, 2007
Assessment Allocation - Is it Equal or Based on Square Footage Or What Mother Thinks It Should Be?
I receive a lot of emails with questions about assessments. This is one area that can always use a refresher. The question:
"I have recently purchased my first condo and am not sure how to research an HOA's Dues concern. I live in a 20 unit building and the HOA dues are the same for everyone (1, 2 or 3 bedroom). The CC&R's state that the dues and assessments are to be shared equally by the owners (1/20th each). The HOA is looking to implement an Emergency Assessment to repipe the plumbing in our building and is imposing a large assessment for each unit. At first I thought to go along with it until my mom asked how much is my portion since I own a 1 bedroom condo. "After all", she said, "you use less of the plumbing than a 3 bedroom condo". In further research, I found out that generally the dues and assessments in condos are not assessed equally, but rather proportion to their unit size. So here I go....the trouble maker, looking to amend the CC&R's that have been in place for over 20 years. Do I have any recourse, mainly with this Emergency Assessment? And where could I get more information on this."
I am afraid (or maybe happy to say - if that simplifies things) that the documents that regulate the association (the currently effective Declaration of Covenants, Conditions and Restrictions - commonly called the CC&Rs) are highest source for determining what the assessment allocation is for units in a condominium. Sometimes they are not clear, but if they are, they are generally the final word on the subject. However, since there is always a "depends", if the validity of the CC&Rs or any amendment addressing this issue is in question, my answer would have to be qualified to say - "It depends."
There are generally at least two places to look for assessment allocation in the CC&Rs, and that would be the Article or Section addressing assessment allocation, and another would be the "Damage and Destruction" clause. Why check both places? Some docs have an equal allocation for operating expenses and a different allocation, such as one based on square footage, for rebuilding or reconstruction. Some have different allocations for exterior maintenance even when the everyday costs are on an equal basis. Some have equal shares of obligation for management, administration, insurance and other categories but a square footage or ownership percentage allocation for water.
Certainly, it makes sense that the smaller units would usually use less water, and have less exterior to maintain, fewer pipes to replace, and less square footage to rebuild in a fire or other casualty loss.
But good sense does not dictate the allocation of expenses - the Declaration does. It is prudent to note here, though, that not all Association Boards follow the documents. Sometimes the books have been carried down through the ages without anyone noticing that the regulatory documents have a different allocation than that being practiced. That is not to say that the practice is legal - it is not. And unraveling such a mess is not easy.
To amend documents for a different allocation of assessments, at the least, owner approval is required - per the requirements stated in the CC&Rs. There are some statutory provisions for CC&Rs that answer the question for CC&Rs that do not have amendment provisions. However, changing the responsibility for a share of assessments often triggers a requirement of approval of the lenders in addition to the owners, and sometimes it even requires City or County approval.
It gets complicated. To do what is contemplated legally, [knowledgeable] attorney assistance is certainly needed.
And a parting thought .... listen to your Mother ... Mothers are often givers of sage advice ... but unless she is an HOA lawyer, don't take her advice on this as the final word!
Posted by Beth Grimm at 5:57 PM
August 13, 2007
LOW INCOME HOUSING PROTECTION BILL - IS IT A GOOD ANSWER?
AB 952 is currently before the California Legislature. It would essentially give unit owners of "affordable housing" (often called "BMR" or below market rate units) the power to veto any regular or special assessment that is proposed in an HOA in California. You may want to look into this and pose your views to your legislators, and the California Legislative Action Committee Arm of Community Associations Institute makes it easy for you to do this on its website at caicalif.org (navigate to "HOT BILLs").
Anyway, if you have not heard of this bill, here is my take on it, which has been shared with reporters, industry professionals and the legislators in my district.
_____________________
Letter to Legislators voting on AB952 August 20
I am an attorney in California that is active in all of the industry groups in the State and have some National affiliations as well. I have written two books, have ongoing publications, have written many, many articles, have spoken to many groups, and write an ongoing blog. I have addressed the question of "affordability" of common interest development housing therein. I have a website (www.californiacondoguru.com) that offers a wealth of education for homeowners, managers, board members, realtors and anyone interested in the subject matter. There are times I feel like I am doing more than the State of California to "enlighten" the general public about CID living and its pros and cons.
I have provided pro bono services for a person who lives in a BMR unit in the South San Francisco Bay Area - trying to work with his association and also with the City to find a resolution to the question as to how these people who are "lucky enough" be able to get into this housing are supposed to cope with rising assessments and special assessments. In his association, the members were facing an assessment to upgrade the garage doors, and it is something he would not be able to benefit from. The Association's response was, of course (and as expected) - a tough luck type of answer - we are sorry but we did not buy with the expectation of subsizing the BMR units and it is not our responsibility. The answer of the City was more or less a tough luck answer - we will let him get a roommate if he cannot afford to live there. It was a very frustrating experience trying to help him.
It is true that BMR unit owners do not reap the same benefits that non-BMR unit owners would reap by such an improvement. And since there are two BMR units in his complex, he and his other BMR neighbor could, if the passage of AB952 were to occur, essentially block this kind of thing in the future.
But - how fair is that to the owners that have a real estate investment and want to improve their property? How fair is that if his association needs an assessment to replace the roofs to supplement the reserves, and cannot get it approved? It is a real catch 22 and I find that articles written by reporters looking for the sensational story, and someone to blame, find it way too easy to point the finger at HOAs and tag them as - "the enemy".
I have written many articles about problems in HOAs and one appears on my website that explains what happens when a board pinches a penny too tightly. It's a serious problem in this state and a large percentage of the homeowner associations are seriously underfunded, hence, large special assessments are needed to make long overdue repairs. A very common problem HOAs face is preparing for a paint job or roofing job and finding out there is dry rot rampant underneath, because of years of deferred maintenance. Associations that look good on the outside aren't immune from the problems. Beauty is truly skin deep in many situations.
So why not be fair and real in your assessment of things, and recognize that hobbling boards of directors further is collecting money sufficient to pay the association expenses (as required by Civil Code Section 1366.1) is not the answer to the dilemma the BMR unit owners face.
Housing in California is not affordable! It will not ever be. Allowing lenders to squeeze owners in who cannot afford Condo Units and townhomes with subprime lending has caused disastrous results in assessment collections for HOAs - really disastrous. Increasing compliance costs fostered by more "consumer friendly" legislation has forced increases in assessments, and tougher laws on reserves has created funding efforts that are draining homeowners in many instances - but that are necessary to alleviate future suffering in the form of large special assessments. Creating "BMR" units has created a very difficult situation and the passage of AB 952 will exacerbate the problem in California with already underfunded associations. Someone has to get real about this situation, make an honest assessment of things, and look for a solution to the overall dilemma.
There are better solutions than giving the owners of BMR units the ability to veto assessments that are needed to maintain the HOA infrastructure in this state. Being honest about whether "affordable housing" is a reality - or not - is closer to the answer of what needs to be done. My suggestion is that if a City is going to require BMRs, that it force developers to write into the documents that owners understand that the assessments for the BMRs have more limitations on them, because their ability to withstand assessments is hampered, and their ability to capitalize on the improvements is hampered, and allow the general public to subsidize a few BMR units in each association by picking up the slack for the extra overage in special assessments. A fair and honest disclosure needs to be made to potential purchasers. Honestly, this might be less painful than picking up the slack for the foreclosed unit owner that could not pay the special assessment and was forced out of his or her opportunity for "home ownership." And it certainly is less painful than preventing HOA boards from being able to raise money sufficient to meet its legal obligations.
Hopefully, we are a society of people that would step up, if the burden is not too heavy (limited number of BMR units). And if not, maybe the myth of "affordable housing" should die. It is a term that should be reconsidered.
Sincerely,
BETH GRIMM
Posted by Beth Grimm at 10:22 PM
Long Term Contracts - Be Very Wary
I am starting a series on contracts that will result in a full blown article which will be posted on my website at some point, and will also trigger the next E-newsletter touting the 5 most common - and worst - mistakes that Boards of Directors make in signing contracts. If you want to get on the list to receive the E-newlsetters automatically, go to my website [http://www.californiacondoguru.com] and enter to get to page 2, and all you need to do is signup - that's the only way I can reach you!
Now, for one of the worst situations I have seen. Some boards get locked into long term contracts without even realizing it - I mean really long term, with really long term rollover provisions. These often occur if the Board or management misses a short "window of opportunity" to terminate the contract. When I say locked in, I mean really locked in. Some of the laundry providers' contracts are the worst. Notice that I did not say "service provider". Some do not provide very good service.
POINT 1: Competive Bidding is the Key! Almost Every Contract is Negotiable.
If you have 3 laundry provider contracts to review, and like the terms of one better than the other, talk to the provider you like the best and negotiate!
POINT 2: Long Term Contracts Are The Bane of Boards.
If you are handed a contract that has a term that is more than a year with a rollover provision for the same term that kicks in if you miss the termination date, and there is not a reasonable way to end the relationship if you do not like the service that you (don't get), then run the other way. My question to you: have you even checked your Bylaws to see if they even allow the Board to enter into such a contract? Many Bylaws have a one year limitation on contracts.
You may hear the song and dance from the provider that entering into a long term contract is necessary to allow the provider to recoup the cost of the installation and/or the machines. You may hear that the long term nature of the contract will save you money, and it may, in certain situations, but in others, it can spell disaster. Of course, I advise you strongly to check with your legal counsel with regard to any contract. However, if you end up with a long term in a contract, with no way out, with an automatic rollover provision for the same or a similar long term, that happens automatically, and you forget to calendar the magical 90 day window to terminate, it can be very frustrating, costly and disastrous. (And can someone please tell me who can effectively calendar some event 5 or 9 years out?)
A laundry service provider (or cable, or other provider "selling" the idea of a long-term contract) does not have to lock you into a long contract to win and keep your business; all they have to do is perform. Believe it or not, there are providers that believe performance and satisfaction is important.
There will certainly be more on contracts to come .... stay tuned!!
Posted by Beth Grimm at 6:52 PM
August 7, 2007
May a Condo Association Mandate Individual Homeowners Coverage?
When you purchase a California condominium, the governing documents usually require the Association to purchase insurance to cover the buildings for fire and other common casualties and for liability for accidents in the complex. If they don't, be very concerned. (Besides the serious risk of loss, when buying or selling you may run into trouble finding a policy that will be satisfactory to the lender, as your individual insurance would not cover the unit next to yours, and if there is a fire destroying both of them, it will be difficult to rebuild only one).
The next inquiry is whether the documents require the Association to purchase earthquake insurance. It is hard to tell which is more common - that they do or don't. In either event, there are other articles on the subject right here on the blog so I suggest you search them out.
The question I have not yet addressed is whether the Association can mandate that owners purchase individual coverage. What would be the need of that, you ask. Many people believe the Association's insurance covers "everything." It does not.
Owners should have an individual policy called an HO-6 policy if they reside in the condo. If not, they should have a landlord's policy.If every owner had individual coverage, that would provide important protection for everyone. What are some examples of how this individual coverage would pay off:
If there is a fire and the buildings are severely damaged, there will be a deductible to pay which may result in a special assessement and the individual coverage should include loss assessment coverage for this situation - you can increase the basic loss assessment coverage without breaking the bank.
If there is an accident in your unit and someone is hurt, the Association's coverage will probably not cover it (unless it occurred because of some condition in the common area portion of the unit) - you need this protection!
If there is a fire in your condo only, the association may (assuming the governing documents allow it) charge the deductible to you as a special assessment. An HO-6 should cover this. And if the fire burns up your furniture, which is your responsibility, you will be happy you had the contents insurance that is provided in the HO-6 policy.
If there is a fire and you have to move out during the rebuild, you would be very relieved to have coverage for this expense.
If your refrigerator tubing breaks or your washer hoses fail and the result is a flood of yours and the lower or next door units, the people below you whose personal property is damaged have the right to seek compensation from you. Having protection in the form of an HO-6 policy would come in very handy - these situations can become very expensive. Even if your neighbor's personal property is not lost, the damage to your own unit could be devastating.
Each owner is at risk if all do not have the separate individual coverage for such incidents as this last one. In fact, with regard to earthquake, where the chance of a very large development-wide special assessment is high if there is earthquake damage, the whole of the development can benefit greatly if each individual has coverage. (Note that it is very important to understand that an HO-6 policy does not cover earthquake or earthquake special assessments - so again, read the other blogs on this subject.)
Associations can get into deep trouble if the owners do not help carry the load of risk by purchasing individual coverage on top of the master coverage purchased by the association, and there is a big fire, flooding of units because of faulty pipes, or an earthquake. This is because when an owner suffers a large loss of property because of a fire or flooding, they often try to squeeze the money from the Association, leading to legal disputes and costs. They try to make claims on the master policy when the claims are not justified.
I believe requiring individual earthquake insurance might be going to far, but requiring owners to have liability coverage for accidents in their units and loss assessment coverage for special assessments, and personal property coverage would be reasonable, if the members approved an amendment to the CC&Rs for the condo association carrying the requirement. However, "policing" the purchases could become cumbersome and having the obligation to do so could also create extra liability for the Association if it fails to keep after the owners to get the policies. So my suggestion is to require the purchase of a homeowner's policy (HO-6 or appropriate landlord policy) for owners that carries liability, loss assessment and personal property coverage (if a resident), and suggest that the owners should consult with a condominium-knowledgeable insurance agent or broker; however, also include in the verbiage that the requirement does not impose on the Board the obligation to collect copies of the policies or actively enforce the requirement. It is better in my opinion to write something to the effect that the Owners need to procure the policies to protect themselves and cannot look to the Association for losses covered by such policies.
I am sure there are attorneys that disagree with this assessment of the matter, so as always, consult your own attorney and rely on his or her advice. There may be something about your situation that suggests deeper inquiry about what is best.
If nothing else, take away the idea that everyone in the association needs to be better educated about what the master insurance policy covers, if there is one, and what it does not cover. Owners should be encouraged to consult with a knowledgeable agent and find out what they need to "close the gaps" between the association's coverage and the extent of their risk and exposure to loss. There is an annual disclosure required by statute (Civil Code Section 1365(e) that has specific verbiage indicating that the association's master policy does not cover everything. (You can look this up at www.ca.gov by navigating to the Legislature and the Laws.)
Posted by Beth Grimm at 9:52 PM
August 6, 2007
A Manager Violates the Davis Stirling Act - What Can Be Done?
This is a question that came in recently. If an HOA Manager fails to disclose to the Board/Association that they are not certified, what can be done? Can they be reported to the Department of Real Estate?
This is a really good question. First of all, the Department of Real Estate does not regulate CID Managers. The Industry more or less is "self-regulating" and there is no state oversight group. Whatever remedies there are would come from California law, and if the manager holds a designation through CACM (California Association of Community Association Managers) or CAI (Community Associations Institute), there might be a remedy there. However, if the manager holds one of these groups designations, there is a good likelihood that they would qualify as a Certified Common Interest Development Manager as the designations were grandfathered up to the year the law was changed to provide the requirements for certification and since, the requirements for achieving the industry group designations are probably going to coincide with the requirements for Certified CID Managers.
Now, what if a person does not disclose that they are not certified?
The requirement comes from here.
California Civil Code Section 1363.1 says (in pertinent part):
1363.1. (a) A prospective managing agent of a common interest development shall provide a written statement to the board of directors of the association of a common interest development as soon as practicable, but in no event more than 90 days, before entering into a management agreement which shall contain all of the following information concerning the managing agent:
(1) The names and business addresses of the owners or general partners of the managing agent. If the managing agent is a corporation, the written statement shall include the names and business addresses of the directors and officers and shareholders holding greater than 10 percent of the shares of the corporation.
(2) Whether or not any relevant licenses such as architectural design, construction, engineering, real estate, or accounting have been issued by this state and are currently held by the persons specified in paragraph (1). If a license is currently held by any of those persons, the statement shall contain the following information:
(A) What license is held.
(B) The dates the license is valid.
(C) The name of the licensee appearing on that license.
(3) Whether or not any relevant professional certifications or
designations such as architectural design, construction, engineering, real property management, or accounting are currently held by any of the persons specified in paragraph (1), including, but not limited to, a professional common interest development manager. If any certification or designation is held, the statement shall include the following information:
(A) What the certification or designation is and what entity issued it.
(B) The dates the certification or designation is valid.
(C) The names in which the certification or designation is held.
(b) As used in this section, a "managing agent" is a person or entity who, for compensation or in expectation of compensation, exercises control over the assets of a common interest development. A "managing agent" does not include either of the following:
(1) A full-time employee of the association.
(2) Any regulated financial institution operating within the
normal course of its regulated business practice.
Civil Code Section 1363.2 which prohibits commingling an association's funds with other funds has a remedy that allows the prevailing party to recocvcer attorney fees for an action filed under it; but it us limited to 1363.2. If a person holds themselves out to be a Certified CID Manager without being qualified, the ultimate worst possible remedy is "disgorgement" of profits. But, it does not appear to me that failure to make a disclosure at all would rise to this level of wrongdoing.
Here are some possible remedies if a board or owner discovers a manager failed to make the required disclosure that they are not a Certified CID Manager:
The Board could probably terminate the contract without having to follow steps in it for termination as this failure to disclose might be portrayed as misrepresentation or even fraud.
The Board or an owner might be able to seek damages (a money judgment) even without having to prove any losses simply because the manager violated the statute (this is called "negligence per se"). However, it is likely that in order to prevail, the party that wants to seek a remedy might have to show the error was on purpose to collect any serious monetary judgment, or show losses.
I do not know of any cases that provide more definitive information about what the remedy is for non-disclosure - that has been the question of the century with regard to the Davis Stirling Act. Because of a shortage of any identified remedies for violations of the Davis Stirling Act, legislators are writing more and more remedies into the law itself, and many of the current remedies involve the right to bring an action in small claims court for the smaller and limited jurisdiction cases.
Posted by Beth Grimm at 9:57 PM
May Associations in California Force Owners To Plant Greedy-Water Plants?
Homeowners associations are usually allowed to set guidelines relating to what owners in them can plant in their yards. These would normally be called landscaping guidelines.
Sometimes Boards have stringent guidelines that would prohibit native or water conserving plants.
However, in these days of serious water shortages, water conserving landscapes are "in” vogue in many areas and it is "cool" to replace water-greedy lawns with native plants that require less of such a precious resource. Still, Boards and Owners fight over this. And Developers want "green" to make "green."
So are there limits on what requirements can be enforced?
Yes, there are.
See California Civil Code Section 1353.8 which was added to the State Code last year. It says: "The architectural guidelines of a common interest development shall not prohibit or include conditions that have the
effect of prohibiting the use of low water-using plants as a group."
Posted by Beth Grimm at 9:44 PM
August 1, 2007
What If A Pre-Meeting Agenda Is Required But There is No Place to Post?
You may have read the earlier post about a bill in California that is pending that would require Boards to circulate an agenda before each board meeting so that members could see what matters were to be discussed. The bill would also prevent Boards from discussing or taking action on items that were not on this agenda. Of course, this could make life even more difficult for Boards and more expensive for homeowners in associations in California. What else is new, really.
There are exceptions to the rule in the bill (those present can override the requirement on subject matter that is an emergency and needs action), but one would not want to rely on that. If the bill becomes law, which is likely, the disclosure may be difficult for associations that do not have any common area place to "post". The law would require (as to notice):
Notice shall be given by posting the notice in a prominent place or places within the common area and by mail to any owner who had requested notification of board meetings by mail, at the address requested by the owner. Notice may also be given by mail or delivery of the notice to each unit in the development or by newsletter or similar means of communication. The notice shall contain the agenda for the meeting...."
So the question arises - what if there is no common area? Here is a specific note from a reader:
"I see you have discussed the new (pending) law in the blog, but I see no guidance about where such an association as ours (862 separate homes, with no commons buildings, no central bulletin board, etc) would be expected to post."
Does the Board have to send a mailing to each owner? Of course, this could get quite onerous and quite expensive if before each monthly board meeting a mailing had to be arranged. So what are the options?
**If there is an entry gate or this is a gated community, then crafting an aesthetically pleasing frame or box and posting it on the entry kiosk or area is an idea.
**If there is any set of kiosks for mail delivery, this is an option.
**Are billing statements mailed to owners each month or quarter? If adjustments can be made to mail billing statements out so they reach owners at least 4 days before the meeting, the notices and agenda could be sent with the billing statements.
**It is possible that "...or by newsletter or similar means of communication..." could mean posting on the association website (assuming there is one).
So long as you would allow owners to ask for mail delivery of the agenda if they do not have internet service, this would seem reasonable to post the agenda on the website, especially in a community where there is no place else to post the agenda.
If this bill passes and any member challenges the method chosen by the Board to provide notice to the owners, that member will probably have the burden to show that the method used was not a reasonable means of notice. Obviously, it is easier to pre-schedule the meeting dates and times than it is to pre-schedule the agendas as putting the agenda together for each meeting generally occurs shortly before the meeting. If this bill passes, it will definitely present challenges for Boards. Everyone will have to move up the timing for agenda preparation rather than waiting until the last minute. And an item that comes up after the agenda is put together will have to be treated as an emergency matter and handled either by the statutory exception in the proposed bill at the open meeting or, possibly (don't take my word for it - consult your own attorney), via an emergency board meeting as authorized by Civil Code Section 1363.05.
Unforetunately, as with every difficult bill that offers more to the individual owners, the job of the Board gets more and more difficult and the costs of the association increase. There is a trade off for almost every piece of legislation that is passed so no legislation should be considered lightly. Every board in California has the option of contacting their local legislator and discussing these difficulties, but like every other aspect of HOAs, apathy reigns and the legislators probably will not hear from many individual boards or board members on this issue. So who's to blame?
Posted by Beth Grimm at 9:57 PM