California Condo & HOA Law

July 19, 2008

One Remedy For Really Bad Neighbors - Sue the B _ _ _ _ _ _ _ _ _s!

Gosh, I do not generally recommend suing anyone except as a last resort. However, many boards and many owners are at the ends of their rope! The economy certainly takes its toll on the average citizen in more ways than even imaginable. Through the trickle down effect of foreclosures, lost jobs, higher costs in gas, utilities and even groceries, things get left undone, and people resort to "other means" of making money. The neighborhoods are at risk!

So what do I mean by Sue the B _ _ _ _ _ _ _ _ _s?

I am not recommending paying an attorney bizillions of dollars to sue in "big court". There is another option in many cases. I have spoken about it before. If you believe that there is such a nuisance, eyesore, bad element hanging out, possible criminal (drug, prostitute, or otherwise) activity going on next door, and you have some proof (pictures are worth a thousand words), consider this possibility.

Neighbors can sue neighbors in small claims court for up to $7500. Boards can sue individuals or even corporate or trust owners in small claims court for $5,000. Boards and owners can sue the persons or banks that take property back or buy it through foreclosure sales and do not fix it up. There is a cavaet on the amount. Iif two other small claims complaints are filed by the person suing within the same year, the amount requested drops to $2500. These are California figures.

Small claims court is especially designed for people and businesses to seek resolutions to their legal complaints in the form of money.

Nuisance that comes in all forms. If you have read earlier blogs or articles on my website (http://www.californiacondoguru.com) about dealing with abusive and nasty neighbors, and criminal activity in the neighborhood, you will find remedies including the one I am speaking about here. More recently, I have been writing about abandoned property, dilapidated, ugly and responsible for bringing down the neighboring property values.

You don't have to hire an expensive attorney to sue and try to prove the lowered value (which is a real uphill battle these days anyway simply because of the subprime mortgage crisis and hurting economy. You, your family, your neighbors, your HOA, and anyone who is affected by the dilapidated property can head on down to the local county small claims court offices and pick up a complaint form. All you have to do is list all owners as defendants. That can be the tricky part, but once determined, one family of 7 can file 7 complaints, seeking $7500 each. 10 neighbors can file 10 complaints each, seeking $7500. The HOA Board can file a complaint seeking $5000 in damages. You can all work together or separately.

This should get the owners attention.

There are other things you should know, and this is an area in which attorneys can provide expertise (providing advice about what to do if this .... or what to do if that happens ...., etc. And the small claims courts have advisors that give guidance on the process itself (not legal advice, but guidance on the process) for free.

What are you waiting for? Just a suggestion. Don't expect big bucks unless the complaint is served properly and the defendant is a "no show", and write a letter BEFORE filing the complaint with your demands.

This is simply one of the tools in my toolbox that I offer to owners in distress, who cannot afford attorneys, and HOAs that are frustrated, concerned, and suffering a tight budget because of all the extra costs and losses these days, and it may or may not work. I have seen it work. There are ways it can backfire, in certain situations.

And be advised that if you go into small claims un- or ill-prepared, be prepared to lose. There must be some believable evidence to present. Just saying it is so does not often convince a judge or hearing officer that it is.

Posted by Beth Grimm at 11:27 AM

July 14, 2008

WHO DO THEY THINK THEY ARE - TELLING ME WHAT TO TAKE DOWN?

Sometimes one wonders all of the whys and the wherefores. Especially when they hear only one side of the story.

Here is a recent post from a reader (and see my answer in italics following the questions):

"There is an enclosed balcony in my condo with two open air windows. The
space was unusable due to high winds and salt off the sea. So I built very tasteful clear vinyl wind blocks so I could use the space, very similar to blinds, but clear. I thought this was okay.

Earlier, I had met with the owners of the condo and mentioned I was thinking of putting up something there to block the wind. They said they thought if I didn't put up a big sign with a slogan on it or something that it would be ok.

Within a very short time after putting up the wind blocks, I got a letter from the management company saying the wind blocks violate hoa rules andt they tell me they need to be taken down right away.

Do I have to comply even though I did not enter into a contract with the hoa? If I don't take them down, and there are fines against the owners, willm y rental insurance pay for it? The rental insurance includes legal fees if I am sued.

If I leave them up temporarily or permanently, can you see what problems that might cause?"

First of all, I would be asking the question: If the windblocks are clear and cannot be seen without close scrutiny, why object to their presence? It seems obvious in areas by the coast or otherwise subject to high winds that windbreaks are often needed to allow people to fully enjoy the outdoor spaces adjacent to their living units. One sees them everywhere. Just take a walk along the coast in Carmel or Monterey.

I can understand if the Board would be concerned about deteriorating, scratched or discolored windbreaks or mismatched or patchwork styling, but standards can be adopted for consistency and windbreaks that become a hazard or eyesore can be ordered removed or replaced, with penalties for failure to do so. So I invite the readers to tell me what a good reason is to disallow windbreaks in a situation like this (so I can be informed).

That said, the Condo Board does have the legal authority to set and enforce rules and the rules are presumed reasonable and enforceable unless an owner can (essentially) prove they are against the good of or harmful to the community as a whole (in very loosely paraphrased legal terms). That is a tough burden to meet.

Any disciplinary action would normally be rendered against an owner for a renter's conduct (or misconduct, violation of the rules and regulations, etc.) so it is up to an owner to deal with a tenant who creates a situation where penalties are being considered. Of course, a landlord owner can write into their lease (and should, for their own protection), that if the renter violates the rules or regulations of the Condo Association and there are any penalties involved, the renter has to reimburse the owner, and can (and definitely should) include a clause that says if a renter violates the rules and regulations, that is grounds for the owner to terminate the lease. That probably does not sound helpful to this renter who asked the questions, but it is the way it should be.

Now, for the questions about what can happen if a violation continues.
If the documents allow, and California law has been followed with regard to the processes required, fines might be imposed. If the Condo Board has to get legal assistance and the documents allow, and California law has been followed with regard to the processes required, reimbursement assessments might be imposed. The latter, if unpaid, could lead to liens and such, and possibly even foreclosure, so the penalties can be severe.

I wonder if this renter is not telling me something, like any reason given by the Condo Board for not allowing windbreaks. I wonder if you out there can tell me why a Board would not look for some options in this regard to offer owners (at their own expense) in properties subject to high winds?????

I feel the need to be enlightened on this one.

As to renter's insurance, it is very important to have. However, I do not know of any that pays for fines or legal defense for taking action that one knows is likely to lead to fines or legal action.

Posted by Beth Grimm at 10:26 PM

July 7, 2008

MORE ON PARKING - WHAT RULES ARE RIGHT?

I like it when people email me their questions and concerns. It gives me the perspective of both sides. There would be fewer disputes in the HOA world if people could see clearly in all directions, and have some understanding and compassion for others in their own actions, whether a director or a homeowner or anyone else.

Here is the latest comment on parking:

"There was some good reading on your blog about condo community parking (where, how, ethics, etc.), so I thought it would be helpful if you could provide information about what HOA's can't do as far parking rules. In my community, they banned all residents from parking anywhere but their garages. I understand that residents cannot park in the visitor parking places, but they banned the street as well. This makes myself as well as many others upset mostly because we have tandem 2-car garages (one car in front of the other). So its nice to be able to use the street to park the car in front temporarily while we use the car in the back of our garage. So while there is no other parking literally for miles, I guess my question is: Can they banish residents to only use their garage for parking and not provide any other places at all?"

They can, and do. HOA Boards that have to deal with a lack of adequate and convenient parking have to do something to control parking, or it can easily get out of hand. Of course there are boards and board members that abuse power, and I believe it is fair to acknowledge that.

However, the problem above started with tandem parking. Whoever invented that? Of course its inconvenient. And it causes all kinds of problems. Why have it? ... So more can be crammed into a smaller area, obviously, which means more bang for the buck for the persons who created the "footprint" and plan for the development.

Who pays? The citizen who buys there. Is that fair? Did you not think of the ramifications when purchasing?? I am guessing not. So whose fault is it? Who should pay?

If the HOA lets people park on the street temporarily, people will park on the street permanently, and if there are set hours, people will move their cars every so many hours. If a lot of people park on the street, a lot more will start parking on the street. People will think since there is plenty of street parking, its okay to have extra cars. I can almost guarantee that will happen over time. And HOAs that did not start controls early in the game, which left open the door to parking expectations, can develop big problems. And those problems become the owners problems. Bumper to bumper street parking has occurred in many HOAs where parking is limited - and especially where tandem garages were implemented to save space.

That said, the HOA gets its authority for parking and other rules from the governing documents. If the documents say that the streets may be used for parking or that the open parking spaces are restricted to non-exclusive use, then the documents control what can be put into rules on those points and the HOA Board should not adopt rules that conflict with the language.
If, however, the documents say that the Board can adopt rules related to parking in the development, then that controls over what the owners might want.

That's the best answer I can give you. My experieince is that Boards that come to me for advice generally tend not to adopt overly restrictive rules until there is a good reason. In some cases, I may be the culprit by suggesting more rules than they have, simply because I have seen many times what a lack of restrictions in the areas of people, pets and parking can lead to over time.

I would be surprised if anyone got "nailed" for parking on the street just long enough to move cars around in the garage, but if someone wants to run off to the store, the movies, or the park, while parking the car that is usually used more often on the street, then I assume there could be ramifications for that .... and right or wrong, you out there can be the judge of that. I imagine your sympathies will come down on the side of whichever problem you face ... wanting to park your car on the street at times for convenience ... vs. having to look at and maneuver through a crowded "parking lot" on your street every day.

Posted by Beth Grimm at 11:04 AM

June 12, 2008

DO DAY SLEEPERS HAVE RIGHTS?

A reader recently asked me a simple question: "Do Condo-Owner's who work Night Shifts & sleep in the daytime have any right to peace & quiet?"

The answer is yes, reasonable rights, which is what everyone has. In order to find someone legally liable, you have to prove certain things. Every person has an innate duty to act as a "reasonable", or for the legal world "prudent", person would act. What you have to prove to whomever is listening (judge, board, small claims court hearing officer, etc.) is that the person who is giving you grief breached that duty (failed to honor it basically) and that that breach caused you damage in some way (property, health, etc.). In the HOA enforcement world, you have to prove that they created a nuisance in most cases.

So, if you are a day sleeper and your neighbor is not, who wins? No one if there is a fight over wanting silence during the day. The neighbor probably says "you're crazy, I have 3 kids and you expect me to keep them quiet?" And you say, "If I can't sleep I will lose my job."

There certainly is a lot of ground for compromise here, but absent a willingness to do so, day sleepers and daytime noisy people can come to blows. And of course, I have a story on it, so watch for the next blog which I will call: "There is no such thing as a slam dunk!"

Posted by Beth Grimm at 10:56 AM

June 7, 2008

LEASE LIMITATION PROVISIONS - ARE THEY GOOD?

I have done 3 other posts that touch on the subject of Lease Limitation provisions. Based on my research, and experience, I think it time to provide some simple explanations about what they mean. A lease limitation provision might be based on any of the following ideas (or maybe someone out there has something more creative to offer:

Limit on number of units/lots that can be leased at one time.
Limit on leasing for the first year, two, or three after purchase.
Limit on term of lease, for example – one year minimum.

The thinking behind these restrictions is that the properties will not invite investor purchasers but rather would be enticing to persons intending to reside in the property who are interested in a community with limits on leasing. Resident owners that plan to continue to reside in the property like this idea very much. Resident owners that tend to “move up” in the coming years and want to keep and rent their properties out would not be so fond of the idea that they could be prevented from doing so. Investors and leasing owners would not like the idea at all.

The simple truth that many people believe and experience is that high percentage rental communities tend to have many more problems than lower percentage rental communities. Way back in 1985, the last time I know of that any study was done, the California Department of Real Estate commissioned a study and that is what the study showed. So I am not the only one that believes this, no sir.

Another simple truth is that it is harder to get conventional financing for properties in common interest developments because the largest purchasers of residential loans in the country – namely FNMA and FHLMC (more commonly known as Fannie Mae and Freddie Mac – sounds like something right out of the Flintstones) have limits on purchasing loans in high percentage rental communities. So, if your HOA is over 30-40% rentals, and it becomes especially apparent if it gets over 50% rentals, the financing gets tougher to find, through conventional methods at least. However, see below for more on this in today’s market place.

Another simple truth is that renters are generally more transient than residents. Of course I know there will be those that will come out of the woodwork to let me know they have been darn good renters for more than 30 years! But, get real people, the transient part of society tends to have less interest in taking care of the real estate they occupy for temporary purposes than the buyer who has crossed the line into property ownership and has pride in that “piece of dirt”.

Another simple truth is that investors often have different interests than residents. While some investors take great pride in every piece of property they own, others are only interested in the bottom line – how much rent can they pull in – how little can they spend.

Another simple truth is that the provision when it is posed to the members (it does require a CC&R amendment) could “grandfather all owners” in the development at the time the measure is passed, which would put everyone in the development at that time on the “same plane” and alleviate the second two arguments above that owners who want to rent their properties and investors which would mean they would never be prevented from leasing their property. [There are pros and cons to that which have been and will be further explained in communications on this subject written by me.]

And the last, but perhaps hardest bit of truth, is that while the leasing limitation provisions do help keep or lower the percentage of renters in any community, they still can “bite” the innocent. What about the person that thought the restriction was great, until their life circumstances changed, they needed to move away temporarily or permanently, the market went south (what a concept, huh?), and they could not afford to “give away” their property in a bad market.

And, there is a wide range of enforcement tactics out there; some communities are very lax in enforcement since they do not want to enforce such harsh provisions on their neighbors, others are militaristic in their enforcement. The laxity can lead to legal issues, and the militaristic view can do the same.

In order to make a lease limitation restriction fair, reasonable, and able to pass court scrutiny, I believe (and again, this is based on my reading of the cases all around the country and in California), there has to be some kind of hardship provision. This means that if someone is called off to war, and they are going to be doing a duty tour, they should be able to temporarily lease their property during that time! If someone has a medical disaster – either them or a family member – and they need to be somewhere else for a period of time, they should be able to temporarily lease their property during that time! There are those who would disagree even with that. And, of course, there are those that might “embellish” or make up such a story when the Board members know it to be less than true.

And why would an investor vote for such an amendment? So long as they, at least are grandfathered (which wise at the least if an HOA does not want to get into the argument that has occurred in some state cases where the court recognized that such owners may have a “vested interest”), then it is possible that under such an amendment, rentals by others would be on the decrease and the property values could appreciate considerably. I believe this is especially true in a higher percentage rental development where sales are affected by the lack of available financing. It may take longer to get the percentage down, but to many, at least the development would be headed in the right direction.

So, although we know that these provisions can help dramatically in lowering rentals in a common interest development, we know there are pros and cons to them. We do not know for sure where the law is going on these. There have been some Superior Court decisions in the past couple years in Santa Barbara and further south that have upheld lease limitations. More will be reported on these as the time for appeals and any appeals have run. There is also a statute that has been introduced in California that would place some restrictions on enforcing the restrictions.

Please – if you want more information on this – continue to follow this blog (aka California Condo & HOA blog and Beth’s Blog) at http://www.californiacondoguru.com and also sign up for the free E-newsletters from that site. Watch for future Primers on the topic (helpful learning tools available on the website). I will be circulating the next E-News soon, so sign up soon! The Primers, when completed, are inexpensive and helpful.

There is so much to be done to get the word out. People do not seem to fully understand the benefits and the drawbacks and the only way to do that is to follow the articles and posts. Boards often, believing that these restrictions are for the benefit of the community and will sail through, put a ballot out only to be blasted by those who are either uneducated about the provisions, or have the “King of the Castle” mentality. In other words, they have not prepared the membership and it comes back to stifle the process.

Posted by Beth Grimm at 12:57 PM

June 2, 2008

Take It To The Judge - What Can He or She Do With An Assessment Request

People often ask what the court can do if an HOA or Owner takes a dispute to court. Basically, a judge can make orders to do something or stop doing something, and can make an order interpreting what documents say. However, in order to make an order, even the Judge has to have some legal authority to do it. Here is a question from a reader asking what a Judge can do with a request to approve an increased assessment plan:

"Our HOA just took a vote for assessments for unit painting. The ballot asked for a graduated increase in assessments for reserve funds over the next 7 years. Some houses are two story and some are one story. The CC&Rs required 75% of all units voting positive to change to graduated assessments. Every unit had to vote. A non vote counted as a no on the issue. It did not pass. The Association board is now going to a Judge to ask for a rulling to change to vote to a positive because they want a 50% plus one to make it pass. This is without going through the process of changing the CC&Rs to get what they want. Will this work for them? Can a Judge over rule CC&R requirements and change an election? Can those of us who appose this get our say with the Judge? Do we have to hire a lawyer? The Board is currently using the Association lawyer at all of our expense."

There are a lot of questions here and giving specific answers would require a lot of presumptions about the representations made. I did not review this HOA's documents and am not providing legal advice, but will pull out what I can answer in a generic form:

May a Judge order an increase in assessments in an attempt to sufficiently fund reserves over a period of time for a specific HOA project, when the measure presented to the Owners does not pass?

A Judge could approve an assessment imposed without homeowner approval if the use for the money qualified as an emergency assessment per Civil Code Section 1366. Emergency assessments are those that do not require HO approval and that are imposed to deal with safety and hazard issues, and maintenance items that need to be addressed but which could not be foreseen, but this situation does not seem to fall into that category as the plan is for 7 years of graduated assessments. Other than that, it seems to me that the law leaves it up to owners to approve assessments and not the court. Civil Code Section 1366 says that boards can increase assessments up to 20% a year and/or impose a special assessment that does not exceed 5% of the budgeted gross operating expenses of the association without membership approval. And if the assessments exceed these limits, homeowner approval is required. The statute says that approval of a majority of a quorum is sufficient for the assessment that requires a vote. If the vote is not legally approved by members, then I would be surprised if a judge attempted to overrule the majority will on that. And IF there was a requirement of a higher percentage for approval to fund reserves or adopt a different reserve plan, I believe a judge would be even more disinclined to overrule the documents.

If by "graduated" assessments the implication is increasing assessments that would exceed the Board's authority - then the above discussion would apply. If by "graduated" assessments the reader means changing from equal to pro rata assessments based on size of unit, or the reverse, (am wondering if that is why the one-story two-story reference is raised), then it would take a document amendment to do that, for sure. Many documents do require 75% approval to amend CC&Rs. It's a high percentage and so the legislature has offered a solution when an HOA cannot achieve that high of a supermajority to amend the CC&Rs. Civil Code Section 1356 allows an HOA to go into court and ask a Judge to approve the amendment if the HOA can show that it made diligent attempts to get members to vote, could not get the higher majority, and that at least, more than half of the association members did approve the amendment.

If such a petition is filed with the court, the members who wish to can oppose, but this is a court proceeding and going in without an attorney is a daunting task. There are many procedural rules.

I hope that this information helps this reader and others concerned about what the court can do with requests to raise money through assessments and to amend the governing documents.

Posted by Beth Grimm at 8:40 PM

May 12, 2008

MORE ON FLOORS - WHAT IF YOU LIVE UPSTAIRS?

More about condo flooring/noise issues: what if you are the neighbor who lives upstairs with the down stairs neighbor complaining of noise.

These problems are not easy to solve. A couple of readers' notes have been combined in this series of questions:

"We had our laminate flooring installed over a year ago. We asked our neighbor if he/she had any noise issue and he/she said no. Then our circumstances changed. We [had a baby, got a dog, had a relative(s) move in temporarily, got a new stereo system, a large plasma TV, new speakers, etc.]. The neighbor started complaining about the noise."

The notes go on to say that these writers had obtained architectural approval and that the underlayment that was presented to the Board/ACCs was considered sufficient. And so these owners want to know what they can/should do about the complaints. Two of the writers are selling, and have their properties in escrow, and want to know what to do about disclosures.

The following additional questions were asked:

"Do we have to get acoustical testing done if [the Board/Neighbor] asks for it?"

"If the [Board/Neighbor] decides to sue us for nuisance, would he/she have a case?"

"If the neighbor had complained about the noise earlier we could have [asked the contractor to fix the problem/added some padding or changed the accoustics], but now, we do not know what to do."

"Our board has been notified about the problem - [we] do not know if they will get involved with this issue."

With regard to any given flooring-noise related issue that is brought to my attention, I cannot of course say unequivocally one party [among whom might be the board, the upstairs neighbor, or the downstairs neighbor] is right or wrong, or would win in court if suing or being sued. All I can do is set out a sense of what questions might arise and let the parties or their attorneys have some criteria to consider. The bottom line is that the courts are not really very good at solving these issues unless there is a clear cut "wrong" that can be identified, and in many cases, there is not. I have heard from readers who want to sue, and also readers who have sued or been sued and ended up in court spending a lot of money without getting a satisfactory result.

So here are what I believe are some key questions to consider:

Is this a pre-existing condition or did something change, i.e., flooring, neighbors, change in family circumstances, residents (number or age), and if there was a change that is now creating a problem, will it be remedied any time soon?

Are you just the problem, or also part of the solution?

Did you do anything to cause or exacerbate the noise issue(s)?

Did you do anything to mitigate or minimize the problems or condition leading to the problems?

Did any of the parties violate the governing documents in their actions?

Was there any requirement or duty to make disclosures?

If so, were those disclosures made to the right party?

Are there any viable solutions that do not involve expecting the impossible, such as moving when economics or life logistics do not allow it?

Liability depends on facts and circumstances. Does any party have a duty to the other party? [HINT: Generallly, the parties have a basic duty toward others to act as a reasonable, prudent person. Boards have a higher duty because of their "fiduciary" capacity which means they have some control over owner's assets. Developers have more specialized knowledge which might suggest they have a higher duty as well. By "higher" duty, I mean may have to be more careful, do more investigation, perhaps consult experts, etc., which is "higher" than having to just act reasonably.]

Did any party breach its duty to the other person? That is determined by the facts.

If so, did that breach cause the damages or pain and suffering, nuisance, etc.?

If any of the parties can prove the answer to be "yes" to any of these questions, they may have a case.

In the above examples, there are some things the upper floor owners can do - and maybe should do. After all, it may be incumbent on them to alter the situation, since it is their circumstances which changed after approval had been given for the floors and it was those changes that lead to complaints from a resident living below who had not earlier complained about the flooring. Getting ACC approval does not insure that owners will never have to answer to anyone if a nuisance situation develops.

So the upstairs owners might add some padded runners in the traffic areas, turn down the noisy speakers or TV, place padding under the new surround sound speakers, take the kids out as much as possible or set up their toys in the least offensive (with regard to the noise transmission) room, buy quieter toys or engage the kids in thinking or board games instead of in house running, jumping or throwing things.

Generally, each party can do SOMETHING to alleviate the "noisy" nuisance. Standing firm on principle (such as "I have approval for the floors", or "The neighbor did not complain before", or "We have a right to a quiet home all hours of the day", or "They did not even ask for approval for the floors") rarely leads to resolution of the problems. And unresolved, they tend to escalate into neighbor-to-neighbor battles, unrest in the home, and disclosure issues.

[Of course, I may be able to offer more insightful information and suggestions if I knew more about a situation and if any reader wants more specific information as to what they might or should do in their particular situation. A paid consultation can be arranged. Just go to http://www.californiacondoguru.com and look for the consultation form.

Posted by Beth Grimm at 9:06 PM

May 3, 2008

So Many Questions -So Little Time - About Making An Impact in Your HOA

I am so backed up right now with many, many good questions. I would like to quit everything else I am doing for a week and answer them all, but like taking a cup of water out of a bucket, it would hardly make a dent. However, I notice that a lot of the questions have a common theme - How does one make an impact in the HOA when they do not like the way things are going. I get questions from board members, owners, and relatives of owners and have been on a kick lately to let readers know -

There are lots of questions ...
My time is limited ...
There are lots of resources that are untapped (even on my website)...
There are processes that work.

Check out two of the latest blogs for courses of action to make a difference, to change something, to stop something, etc. Of course, if the pragmatic diligent courses of action do not work, there is always an option to sue. I very rarely recommend that course of action because it can be slow, frustrating, expensive, and downright offensive to the parties. Readers often want to go there first, until I tell them the cost can could exceed the equity in their home if it is a particularly fractious issue. I do not even need to know what the equity is - its just a way of getting things into perspective. That tends to help people get real, and if it really works, it gets them into proactive mode - determined to make a difference on their own.

I can dispose of many questions asked recently with this one blog, because of the common thread. Here are the questions. You can probably recognize the commonality even though the subjects seem unrelated:

Pool: "Workorders [in our HOA] are totally neglected unless of course it’s a board member. They are not doing their job...SAFETY AND CODE violations have been neglected for years ... at this complex. Myself and my roommate are owners so we have two owners ... even the mailman will testify the place appears to be going down... the HOA has failed this community. Do you have any advice for us?"

Trees: "Our Board has arranged to have several trees removed from our small community. Many owners are up in arms! The Board members seem to be focused on views although they protect themselves by saying its to prevent fires. They seem to be forgetting about aesthetics, shade, landscape design, wind protection, beauty in nature, and other methods of fire protection. Our HOA will go from a place of beauty to a place of ugly soon, if something is not done. What can we do?

Use of Pesticides: "I own a town home. I’ve brought up to the property manager my concern over pesticides that are sprayed on the premises. I provided the Board information from an article stating how dangerous and highly toxic these chemicals are especially to the small children on the property and especially now that they are spending more time outside as it is warmer. Pretty much I feel like I’m being ignored. Any solutions?"

Want More Info: "What should ones course of action be if they believe that certain longtime HOA bored members are not being forthright or honest with the members ? Once a year we get a statement and thats it. They do not even try to enlighten us with monthly minutes. Is almost like they do not want us to know what is going on. The last annual statement included a finacial forecast for 30 YEARS OUT. That hardly seems realistic! Thank you in advance for any insight you may offer."

Want Action: "What recourse does a homeowner have if the Association Board takes over 4 months to deal with a simple rule infraction by a tenant? I have been trying to get my neighbor to remove her filing cabinets and 5 gallon water bottles from the front hall since Thanksgiving to no avail. All the Board says is: Have patience. "

Audit: "Me and some of the neighbors think the board and management are pilfering funds and misspending HOA money. We cannot get the Board to do an audit (duh). They say "it is too expensive" and "there is nothing that requires us to do one." What can we do?"

If you want some very practical ways of dealing with questions, concerns and issues like those noted above from readers, check out the two recent blogs: How To Communicate Concerns in Your HOA and What Can You Do If Your HOA Board is Out of Control? . Check out the inexpensive books and publications on the website. If you believe you need more specific information, or need to go a step further, but don't know what that step might be, look for the consultation form on the website at www.californiacondoguru.com. I will make myself available for a telephone consultation if there is no conflict of interest, at my hourly rate (one hour minimum). I need to form to determine whether there is a conflict of interest (I need to know who the parties are and what the problem is in a few words).

And watch this blog for more ...

Posted by Beth Grimm at 2:32 PM

April 15, 2008

What Can You Do If Your HOA Board is Out of Control?

My Board is Out of Control - Is it time for action? What Can I do?

If the board is not responsive to your “ideas”, you may want to try and enlist the support of other owners. There is sometimes “power in numbers”. In California, there are laws regulating condominiums that allow homeowner members to have access to the membership list, and if not that, provide a means for owners to address other members through mailings sent out by the association board, staff, or management. It is never a good idea to stomp through the neighborhoods with vitriolic leaflets expressing your disdain. You may find yourself with followers if you take out a negative message about the board or management, but they may not be the kind of followers that can help you garner respect for your cause.

Here are some things to consider:

**Contact other owners and see if you can get others involved. Sometimes gathering support for a position or demand can prod the Board into action. If you try, and are still the only owner concerned, you have a real uphill battle to get the board’s attention focused on your issues.

**Run for the Board. Sometimes you can get on the Board simply by asking - especially if there is not a full board or someone has just quit or moved. Then you will know why/whether/what is happening.

**Put your request in writing and try again to get neighbors to sign on with you in your presentation. A written message engenders more accountability than a frustrated telephone call or “attack” whenever you run into a board member out walking the complex or swimming at the pool.

**Sometimes (although do not do this without considerable thought) you might just decide – “to heck with it, I am going to just repair whatever it is that needs fixing (if that is the crux of your complaint) and then seeking reimbursement from the board. You have to be careful here. It make sense to test this action on a small scale meaning at a cost less than what you can ask for in small claims court. It is possible that you may not recover compensation. Worse yet, you may be penalized for taking whatever action it is you believe is warranted, so it is best obviously to get legal advice first to see if your "beef" is legitimate.

These and other suggestions appear in my book THE CONDO ANSWER BOOK, available through my website at http://www.californiacondoguru.com

Posted by Beth Grimm at 10:13 PM

How To Communicate Concerns in Your HOA

Ranting, Raving, Cussing, Threatening, Yelling ... are these ways to get attention? Yes they are. But are they the way to get the right kind of attention? The answer is "no". If you want to get the right kind of attention to your concerns in your HOA, try a balanced written communication. Take advice from my recently released book THE CONDO ANSWER BOOK which can be purchased through my website at http://www.californiacondoguru.com. A lot of people write to me and want some "inexpensive advice." I guess it is time to start talking about a helpful resource close to my heart. Here is a passage from the book with helpful advice.

"Showing interest by attending meetings would seem to be the best place to start developing a relationship with the board. Providing questions, concerns or demands in writing may be the method most likely to engender a response and deserved accountability, especially if a board does not appear to be responsive. It is harder to ignore the piece of paper than a face-to-face request which can be dismissed with an: 'I will look into it.'

A written presentation serves several valuable purposes:

[*] It Tends to Illustrate A More “Thoughtful” Approach. A writing tends to force a person to think things through in terms of organization, structure and message, which often presents a more cohesive and understandable demand, question or concern.

[*] It More Likely Assures Delivery of An Accurate Message. A writing gives the recipient of the message the opportunity to deliver it as stated by the writer to all parties that need to see it, which is much more likely to be accurate than the "telephone game" which leads to paraphrasing and re-paraphrasing which often leads to an incorrect message, and which also often gets sprinkled with personal "flavor" as it is passed along.

[*] A Pragmatic Written Presentation of Materials Avoids Idiocy in Delivery (Usually). A writing tends to (although not always the case) be presented in a less offensive manner than a personal affront or confrontation involving "demands", because it tends to temper the emotion somewhat. When you are trying to make a point, you need a process that will allow you to think clearly. Often when people start speaking from a level of frustration, they feed off of it and the message gets skewed or lost. Who wants to look bad on paper? Spouting epithets or threats on paper or otherwise is not advisable under any circumstances, but on paper, they cannot be retracted. You can count a strike against your cause if your demands erupt into a non-cohesive rant or something more. The board will give the message less credibility - the directors may not even finish listening or reading the message if it is offensive in nature. Dissatisfaction, complaints and discrepancies can be noted in a non-confrontational nature. Even better, if you can offer possible solutions to the problems raised, your message may even receive praise, accolades, or a “thank you”.

[*] A Written Message Gives The Recipient a Better Opportunity to Fully “Digest” the Message. Confronting board members with a complicated message given orally may cause a good portion of the message to be lost. The method of delivery plays a large part, but human capacity (or lack thereof) causes part of every message to be lost in translation. If a board member has anything else on their mind when you approach them (a very likely scenario), your message will not receive undivided attention.

[*] Creation of a (Good) Paper Trail. A writing creates a "record" that is hard to ignore and that tends to invite a response, even if just to avoid appearing unresponsive.

[*] Credibility. If it comes down to needing credible evidence either to share with other owners whom you might want to enlist, an attorney with whom you might want to consult, or seeking objective review of a demand, a writing creates a "record" that speaks louder than "he said, she said" types of testimony.

One cannot stress too much the importance of a good, solid written paper trail. It is hard to ignore if matters escalate to needing a third party intervention - like court - to get relief to demands that are made and ignored. Hearing officers even in small claims court, should matters "escalate" to this step, will often ask the party with the demands if they have presented them to the other side in writing, before coming to court. Some small claims judges will not entertain a claim if no written demand was presented before filing the complaint that started the proceeding. A party can say "I called them 10 times and demanded that ...." - which is less compelling (since there is no record of what was said other than testimony) than a well constructed written "demand" providing clearly what it is you want, what the authority is that entitles you to have it, and how urgent it is that you have it including what losses you have incurred because you did not get it."

Take my word for it, a well written, well researched presentation is likely to get a better result than an "attack" on the only people that can help, i.e., the Board.

Posted by Beth Grimm at 10:02 PM

March 25, 2008

Do You Need An Attorney For Noise Issues?

Here I am on the noise kick again. This question is asked of me about every other week.

"Can you please recommend an attorney that is willing to represent a homeowner? I am getting close to exhausting my avenues of getting noise problems resolved."

People get to the end of their rope and think an attorney can solve their problems. What (unforetunately) often happens is that the person that is suffering then ends of suffering from two ills: foottfall noise from the unit above and a cash flow problem. Why? It is difficult to get satisfaction unless there is a clear violation of some kind to pursue. What can happen is that both sides of the dispute make what sound like reasonable arguments about what is right and what is wrong.

Here are the most common complaints:

**A toddler or toddlers running, jumping, playing with toys, dropping objects, etc. creating noise magnified by hard surface floors.
**A lack of rules in the HOA prohibiting hard surface floor coverings in second-floor condos.
**A lack of oversight by HOA architectural committee concerning sound-reducing materials or carpet.
**Neighbors exercising their "right" to have hardwood floors.
**Lack of awareness of the extent of the noise at time of purchase because unit above was equipped with padding and carpeting.
**Denial of responsibility by upstairs owners to install any sound-reduction materials or to mitigate noise in any way.
**Denial of HOA to do anything, claiming the problem to be "one between neighbors and none of their affair".
**A claim that the upstairs neighbors have a right to "decorate" their unit as they wish, under the CC&R's.

In some cases, the downstairs owners have even gone so far as to volunteer to pay a portion of reasonable costs of carpeting and the upstairs neighbors will not even talk to them about the possibilities. Some owners resist carpeting stating that they have allergies. (A suggestion of cork flooring in traffic areas may not have been discussed or considered.)

I have suggested in past blogs to try and engage the other side in a mediation to discuss the mitigation possibilities. I have talked about the availability of low to no cost mediation services. Of course, if a person simply cannot get the parties (other owner, possibly association), to come to the table, there is another possibility that does not cost an arm and a leg.

I do not recommend this option as a first step, but it may be an alternative to giving up because you cannot afford an attorney. There are public and private nuisance laws. Most governing documents have a prohibition on unreasonable noise. The Civil Code (in California) has a nuisance law. A person can file a small claims court case for about $25, pay about $20 per party to have it served, and (in California) ask for up to $7500 in damages for nuisance. This is a place where one could "test their theory" that the noise above is unreasonable, because of conditions create by the neighbors.

I do not think any judge or hearing officer would award damages just because of kid or family noise during the daytime; however, I do believe it is possible to get the right kind of attention from a hearing officer or judge who believes that the failure to mitigate the noise in any way, shape or form and the failure of any party to even consider mediation are grounds for either some award of damages, or at the least, a warning to the upstairs neighbors to take some kind of reasonable steps to mitigate the noise (or risk having to come back to the court and answer for not doing so).

On the other hand, if you take your "case" to small claims court and do not have a reasonable position to present, you can expect to be disappointed.

For more on noise and other difficult issues, check out my new book recently released (THE CONDOMINIUM OWNERS ANSWER BOOK) at http://www.californiacondoguru.com - navigate to the "publications page".

Posted by Beth Grimm at 7:43 PM

February 20, 2008

More on Noise - Can a Developer Be Held Responsible?

Just today, during my HOACHAT at noon on issues including noise and hard surface floors (which is a free offering you can join on Wednesdays through my website at http://www.californiacondoguru.com) one of the "attendees" asked: "Can a developer have responsibility when there are noise issues through the walls and floors of a condo?

Noise is a problem in many stacked and wall-to-wall condos. Sometimes alternations and modifications are made by owners in condos that were not meant for hard surface floors. But that is for another blog.

Sometimes a developer will tell you that space is left between the walls of the adjoining condos and that reduces the noise (well, sometimes they will say it eliminates noise transmission but I think that anyone - including me - that has lived in such a condo situation and fell for that line knows better). Sometimes the developer will say, "Sure choosing the laminate flooring upgrade is fine because we add soundproofing," and you think - "Great!" ... And you buy, ... and then experience - "not so great results." I wrote an earlier blog suggesting that the extra money developers collect for installing laminate or hardwood floors in stacked units or townhouses should be placed into a fund to be used later to mediate flooring noise issues. Maybe this sounded like a "flip" comment, but ... why not?

And the answer of course is "Yes", a developer can have some responsibility. And that is apparently what happened in a Colorado case back in 2005. The case took place in Arapahoe County Colorado and it is reported that some of the residents were awarded punitive damages against the developer (as much as $150,000 each, plus costs of trial) and others settled with the developer before the matter came to trial. The owners' attorney's name as reported is David TeSelle. The articles say that the developer had to outfit units with soundproofing materials

I am not representing that this case controls anything in the legal arena, and there is always more to anything than meets the eye. If there were lots of big cases granting damages for noise pollution, builders and architects would have moved noise control to the top of the list of concerns. It does not appear to me that this has occurred, because the noise complaints continue to rage all around the state and in fact, in the nation. I have not located appellate level cases on this subject but feel free to send me some if you read this and know of some so I can add them to my musings.

But I am saying take heart, anyone can be sued for anything, and (hopefully) in matters that escalate to litigation, the culbable party or parties will be "outed" and have to compensate those that are wronged or taken advantage of. I am a California attorney and do not know Colorado law, or the particulars in the Arapahoe County case; however, further research could be done if one wanted to find out more.

My point in discussing this case and this topic is to say that developers need to get on board. And owners need to speak up, to the developer, to the homeowners association, and to each other, if there are noise issues in your building (unless, of course, you want to "move out quietly").

If you visit http://rismedia.com you can find an article about buyers and sellers combatting noise issues, and the gist of the article is that condo builders and architects should take heed. Certain building design and construction is critical if one wants to seriously reduce or eliminate noise transmission between the units.

The article says that while developers or architects might at first refuse to make noise isolation issues a priority because of the cost, they may come to their senses the next time around and spend the money, if they are plagued with complaints from the residents of a building they were responsible for. The article acknowledges that "Quiet does not happen by accident, it has to be engineered ..." and suggests that when you are thinking of buying a condo, it makes sense to set up a sound test, like making sure the neighboring toilets are flushed, the jacuzzi tub next door is filled (and I assume the jets are turned on), the neighbors walk around in their usual foot attire, and run televisions and sound systems.

Nice thought, but it could certainly slow down sales, in more ways than one, especially if potential buyers are given access to current resident neighbors. Short of such a comprehensive test, I think it wise to make sure you have the opportunity to go into a unit during the day, and at night as well, that is next door to a condo with active kids, even if it is not the one you are slated to buy. There is a probably a very good reason that "models" are often built close together and often isolated from the "inhabited" condos or townhouses.

Is it fair to expect a noise-pollution free environment in a condo or townhome? Maybe, if you are willing to pay a premium for it, but in most cases, probably not. But it should be fair to expect that you will not hear the neighbors whispering, talking at low volume, getting a drink of water, having sex, watching TV at a reasonable volume level. If you want more protection, ask developers about the construction of the walls, floors, and ceiling, and whether there is any vibration reducing construction, and write it down, and then talk to an accoustic specialist. This bit of information might help you if you want some more comprehensive research before buying. And accoustics specialists can also be located on the web.

Noise isolation and control may be moving up the priority list of amenities, and well it should. New technology encourages wall mounted window sized TVs, and surround sound systems.

Noise disputes are never easily resolvable, and they make people do things they would not otherwise ever consider doing! And worst of all, they make people sick! If you do not believe me, visit http://newscientist.com and read the articles including one entitled "Hidden Harm from Noise Pollution". In the article which appears in issue 2365 of the New Science magazine, December 22, 2007, the article claims: "Noise kills in much the same way as chronic stress does, by causing an accumulation of stress hormones, inflammation and changes in body chemistry that eventually lead to problems such as impaired blood circulation and heart attacks."

Now, don't get me wrong because while I am saying that noise pollution or transmission disturbances in condos and townhomes can be insidious and must be taken seriously, I also believe that all parties should work toward resolving the issues by means other than litigation. Just because there is noise, and just because it is disturbing, that does not mean there will be big bucks in your future. Visit earlier blogs to help sort out how culpability might be determined, and do not expect that this will be the last blog on the subject.

Posted by Beth Grimm at 8:54 PM

February 14, 2008

STOP THAT INFERNAL WALKING!

This is my 301st blog! Thought it worthy of some unusual step. Since I have on my plate neighbor to neighbor issues today, I decided to give neighbors their own category on this blog.

So, to kick off this special day, I have more to offer in the way of determining fault, options (or lack thereof) and solutions (to the extent there are any) on issues noise related - namely, to hard surface flooring. By the way, if any of you out there are claiming that you cannot live below carpetted-properly padded unstairs rooms, consider yourself lucky, because there is a whole world of unhappy owners out there living under hard surface flooring, and its getting worse every day because there are more and more and .... (well,. this seems a good place to stop with the madness).

So here is the latest that has come to my attention. Different sources sent me an article entitled "The Case of the Upstairs Condominium" apparently written by a flooring person or an attorney, I am not sure which. None of the parties identified the source of the article (naughty naughty) so I do not know who to thank (except if your initials are DLW give me a call or an email and identify yourself, and I will give you full credit). You may be asking me what a flooring person and an attorney could have in common. The article said that the person had received several calls in recent months from homeowners and homeowner association boards about noise issues related to hard surface flooring. That could be a flooring person or an attorney, right?

Anyway, to get to the point, the article talked about a "test" that can be performed to test "the level of noise transmitted through the assembly ..." of a sound level meter. It takes a specially trained accoustics specialist to read the noise from upstairs created by a specialized piece of equipment called "a tapping machine". This machine, according to the article, imitates the impact on the upstairs floor created by a person walking. The measurement from this test can be expressed as a single number that is called "Impact Insulation Class". According to the article (and by referring to it, I guess I cannot be "blamed" by anyone if this is incorrect information), California's "Title 24 Standards require that floor/ceiling separation assemblies between units in miltifamily developments achieve an 'IIC' rating of not less than 45 when field tested."

So I will add this to my list of considerations published earlier, when one is considering what to do about a noise problem related to hard surface flooring, which (now) is reiterated in a (new) list of questions to ask. As for the HOA, the developer, the flooring installer, or any other party that might be confronted with a noise-flooring issue here are some pertinent questions to ask:

**Is this a pre-existing condition or did something change, i.e., flooring, neighbors, change in family circumstances, residents (number or age), and if there was a change that is now creating a problem, will it be remedied any time soon?
**Are you just the problem, or also part of the solution?
**Did you do anything to cause or exacerbate the noise issue(s)?
**Did you do anything to mitigate or minimize the problems or condition leading to the problems?
**Did any of the parties violate the governing documents in their actions?
**Has anyone arranged for an "IIC" or other flooring impact analysis test to be done?
**Was there any requirement or duty to make disclosures?
**If so, were those disclosures made to the right party?
**Are there any viable solutions that do not involve expecting the impossible, such as moving when economics or life logistics do not allow it?

I cannot say that this "IIC" test will make or break any situation. First of all, I do not know if it is well recognized in the industry and by the courts (feel free to send me info on this). And, I do not believe it is necessarily the end of the inquiry. As described, it presents a test with a minimum standard, and I for one believe that the standards for condos should be higher than apartments because if someone does not like the upstairs noise in an apartment, they can move. They have little to lose. When one purchases a condo, the solution is much more complicated. If they remain quiet, they risk having a disclosure issue come up after sale. If they make noise, they risk creating an issue where one might not be there for the next person. Believe me, peoples' tolerance levels seem to be all over the map - and when "friends" live upstairs, people are much more tolerant than if they have nothing in common with the upstairs neighbors.

But, the saga continues. And I will continue to say that if attorneys continue to tell developers not to put limitations on hard surface flooring un upper stacked units, and attorneys continue to tell HOAs not to put stringent limitations and standards on the installation of hard surface flooring, and owners continue to be discourteous (like placing speakers on hardwood floors and turning up the base, like refusing to try any form of carpet or padded runners in traffic areas, like giving the neighbor who complains the finger instead of listening to what they have to say), the problems will not go away.

Of course, before condemning attorneys, I should say that the attorney does not make the ultimate decision on what goes into the governing document or the rules or standards. The developers and HOA boards do that. In every set of docs I have written in the past 20 years (ugh, has it been that long) that involves stacked units, I have advised boards to put some limitations or restrictions on hard surface flooring in the upper units. More than half, probably more than 90% (I lost count) have heeded my words and done it, but those that rejected my suggestion either could not fathom that it could ever raise an issue, have put property values ahead of human values, or have had or were considering converting to hardwood or laminate floors. Had they put limitations on the flooring, at least, if the HOA did not want to spend the money to sue someone who installed hard surface floors without getting approval, the neighbor below would have a potential remedy for the violation of the documents. However, this sometimes falls on deaf ears.

It seems simple to me. If there is a prohibition on installing hard surface flooring in upstairs units, or there are standards involving installation of cork or some good form of padding below the new floor, or developers go the extra mile to add good and true soundproofing materials below hard surface or laminate flooring, it eliminates a major problem. That problem is the awful situation that occurs when the parties might otherwise be willing to resolve the issues but are left looking at major reconstruction (raising other potentially serious issues) involving both the upstairs and downstairs units as the only remedy.

People. Wake up!

Posted by Beth Grimm at 11:18 AM

January 29, 2008

NEW HOA AGENDA BILL - DOES IT LIMIT HOMEOWNER FORUM?

I have been writing about Owner frustration more than Board frustration because weighing the incoming emails, more HOs seem to be willing to write about it than Boards. And, there is this, the issues raised are worthy of a blog.

Here is the latest question, and it came in context from an Owner who mentioned the new Agenda law, so I am wondering if the boards and/or attorneys are using the new Agenda law to try and control Homeowner Forum content. This was the question:

Can the Board force homeowners to submit in writing before the Board Meeting starts items the owners wish to discuss during the open forum?

My answer: I do not see anything in the new law that allows this Boards to limit subject matter in the comment time. The board can let a homeowner say what they want to, and move on, using the new agenda law to say that no action can be taken on the homeowner comment, which may be a better approach than trying to say a homeowner may not talk about his or her issues or concerns. If a member raises an issue and the Board cannot talk about it, then another option for the Board is to ask the member to submit their request in writing, but to require them to submit their subject before the homeowner forum occurs, that does not feel right to me. It smacks of the possibility that the Board may misuse that information.

[I wrote the above and the prior two sentences before I heard from some Board members as to their purpose for asking about subject matter, so I have a different perspective now, and refer you to my March 8, '08 blog on the subject. My view has changed but I wanted to leave this blog in tact so you could see how more information often turns the conversation around in discussing what is reasonable and what is not. So I suggest reading this older blog with the understanding that I might have just erased it and no one would then get the real picture of how asking a simple question - like "why do you want to know what subject we are going to address" might have resolved this difference of opinion.]

Perhaps the Board's intentions are based on a misunderstanding of the new law. If the Board is receiving legal advice, that assumption may be a stretch to find good where other motives may be lurking. It seems likely to me that in some cases the intent might be to (1) make it harder for members to address the board, (2) get an opportunity to object or stop someone from addressing the Board, (3) try to control content in the homeowner forum, or (4) intimidate or discourage owners from speaking who might show up poorly on paper.

People: understand that if an owner plans to address the board on some outrageous subject, they will shoot themselves in the foot! So let 'em talk their 3 or 5 minutes! If the Board is more business-like in their manner of receiving the blast, the attendees will immediately see who is the right party to place their trust in. If the speaker is logical and rational in their approach, and the Board is also so, the attendees will have respect for the process. There need not be fear about what someone says. If they criticize the Board or management, so be it. Everyone is entitled to their opinion. And that is just what it is, an opinion. If someone raises a big political issue, it is better for the Board to know what is coming so it can respond appropriately, without trying to address issues that are discussed through the rumor mill.

I personally see no good purpose to be served by forcing something that is not in the law. It just creates stress for everyone.

That said, of course, a Board might have a need to set some limits on the forum time so that the whole time set for the meeting is not used up by owners attacking the Board or management, and that (setting a time limit on comment) is allowed. 3-5 minutes seems to be the going allotment of time per member as far as I can tell, leaving about 20 minutes to a half hour before the meeting or during it for members to speak up. If someone has more than 3-5 minutes of "presentation", they should do it on paper and submit it. A writing engenders more accountability than a spoken presentation anyway. It becomes part of the permanent association record.

Perhaps Boards are mislead by the limitations and restrictions in the new California Agenda law, and feel "hobbled" about speaking of certain matters, but all the Board has to do if someone asks the Board to take action on something that is not on the agenda is say "We cannot address new business at this meeting that is not on the agenda," or "You are entitled to your thoughts, if you want more information on the subject .... or you want to submit the request to the Board, ... [please do so in writing ... or tell them how to get additional information]."

If someone out there can provide me with feedback on the necessity for this practice, and the actual source of authority other than the new Agenda law (which I do not see as support for this practice), I will review it, and comment. Until then, I believe it might be perceived as an improper intent to "chill" homeowner comment.

[You can contact me through my website at http://www.californiacondoguru.com.]

I remain open-minded; I have changed my opinions before, given sufficient evidence to support an argument. And perspective can be an important consideration.

[See my blog of March 8 to see how feedback can change an opinion.]

Posted by Beth Grimm at 8:18 PM

California HOA Elections - Is Small Claims the Right Venue?

I get several emails every week about elections issues. Many are generated simply because of the confusion in the law. Some are generated by sore losers. Some are generated by people who fail to pay assessments and complain alot about things, but still think they should be able to serve on the Board (withholding assessments is not the way to get there, folks). Some are really incredible stories about what their boards did during the elections process, to thwart the efforts of wannabe candidates.

My experience in following up with some of these is that some HOA Boards, and/or some attorneys that are advising them, are way, way out in left field in the way they conduct elections.

One particular area of concern is Boards that are, or are advised to, start suspending voter rights after ballots have been sent out to owners, and the buzz is that the election might not go the way the Board wants it too. Sometimes a Board will "revive" a voter suspension clause that has been sitting in the dust for years, just before an important election wherein some minority candidates have indicated an interest in running. Sometimes the revival comes through "alleged" violations that are not justified.

Now, no one out there has to get their shorts in a bind if they do things in a fair and above-board manner. Anyone reading this with a guilty conscience may well come back and blast me for saying this, but when a Board and/or its attorney does something like what is described above, the owners deserve a reasonable chance to challenge that election, and it should not cost them a fortune to do it.

To some degree, I am willing to backtrack from earlier communications I had with the author of the Elections legislation, at least on one point . (Note that there are still a bunch of issues created by the new laws that require a fair amount of creativity in reconciling practicalities, document provisions, the Corporations Code and the Davis Stirling Act, and that leave HOAs open to varying legal interpretations, don't get me wrong.) And what point is it that deserves this "backtracking"?

It's simple - abuses that I have seen. I now believe that many challenges should be able to be brought at the small claims court level. In some cases, the wrongdoing is so obvious that it begs attention.

True, small claims court hearing officers may not have the expertise to fully understand and interpret the HOA election laws, which are complicated (and which many an attorney - even HOA trained - have trouble agreeing on), but Defendants can appeal and get higher authority if they feel justified in doing so. And some of the scenarios that have been presented to me smell so bad that it would be obvious to any lawyer looking for elements of fairness that, as the old saying goes "something is rotten in the State of Denmark." [Not meant as a blow to Denmark, just making a point.]

The law on remedies for elections says this:

"1363.09. REMEDIES. (Operative July 1, 2006.)

(a) A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by an association of which he or she is a member, including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues. Upon a finding that the election procedures of this article, or the adoption of and adherence to rules provided by Article 4 (commencing with Section 1357.100) of Chapter 2, were not followed, a court may void any results of the election.

(b) A member who prevails in a civil action to enforce his or her rights pursuant to this article shall be entitled to reasonable attorney's fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member of the association equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.

(c) A cause of action under Section 1363.03 with respect to access to association resources by a candidate or member advocating a point of view, the receipt of a ballot by a member, or the counting, tabulation, or reporting of, or access to, ballots for inspection and review after tabulation may be brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court."

I have commented in my book THE DAVIS STIRLING ACT IN PLAIN ENGLISH:

"Comment: The remedies are potentially quite severe for failure of an Association to comply with these new rules related to elections. Recovery of damages is available a well as court orders to void the election. And as you can see, owners will have access to resolve some of the issues in small claims court. The latitude and attitude of the small claims hearing officers is yet to be determined, and it is not crystal clear what remedies and what errors can be addressed there. It is more likely that an owner would be seeking a recount or new election than dollar damages, which is the remedy of small claims court. But what is clear is that there are new penalties that can be imposed on the Association by the court for failure to comply. This is a turn of events."

Now I have to say that it is my belief that most HOAs try to be fair in their elections and if they are, and they try in good faith to comply with the new law, it would be my hope that no small claims court officer would unravel their election or penalize the Board. The law is tough to understand. But I do believe that some situations deserve consideration. And some legal advisors are not acting in the best interests of the association. Attorneys are required by California ethical rules to take their direction from the Board, that is true, and that may lead them to think they should support the Board to the detriment of the members, but that is not true. Attorneys should be considering the entire HOA and should be acting in a manner that is in the best interests of the HOA, not of any individual board member. Zealousness in holding onto a client is no excuse or justification for innapropriate advice.

Posted by Beth Grimm at 7:42 PM

November 27, 2007

My Neighbor is *!#*&%!* - What Do I Do?

I hear this at least a once a week. "My neighbor is [crazy, bi-polar, unruly, mean, harrassing, scary, ......] and I am frightened to live here. What can I do? What can the Board do for me?"

First of all, it makes sense to think about what would you do if you did not live in a common interest development (CID) because it may be something that you have to resolve on your own with your neighbor.

If the person committed a crime (assault, battery, vandalism, etc.) you should call the police and talk to an officer, perhaps make a formal report/complaint.

If the neighbor is engaged in activity that is a nuisance, you might be successful in filing and pursuing a small claims court claim - however, that does require physical presence and confrontation in court (if the neighbor shows up) and explaining to a judge why you should get some dollars for the disruption of your enjoyment of your property so be prepared for this.

If the person is just plain mean, you would probably try to avoid them. Of course, the closer the quarters the harder that is.

You might talk to other owners and see if there is something that can be done, safety in numbers.

You might decide to file for a restraining/stay away order if you fear for your safety. In many courthouses there is assistance available in the form of a packet that explains the process and that contains the court papers necessary to file, without paying an attorney. Of course, again, the closer the quarters the more difficult it can be to get/enforce a restraiining order.

These are things you can do in a CID neighborhood also.

In a CID, you may get an extra layer of assistance, depending on one basic thing: is the neighbor doing something that is a violation of the governing documents? And sometimes the governing documents include a violation of the law as a violation of the documents.

So, in the case of a nuisance situation, the Board may have to take some action to abate the nuisance. To what degree the Board should act depends on the circumstances and what remedies are available in the governing documents (fines, reimbursement assessments perhaps, suspension of rights such as use of common area or attendance at meetings, etc.)

With regard to criminal or threatened criminal activity, the board may have a duty to warn about the dangers, provide more lighting, provide more security, take steps to make things safer, etc. Again, it depends on the circumstances. The Board is never to be considered a substitute for animal control or the police and if the problem suggests a call to either of these, the complaining person should do it.

For issues related to "bi-polar" (or other psychiatric or physiology-challenged or "affected" neighbors) it gets more dicey. Sometimes it is obvious when affected parties are "on" or "off" their medication because of their behavior. Sometimes its obvious someone is adversely affected by alzheimers or dementia. For these issues, you might consider the following:
***Keeping logs of activity so that if you do seek help, you can fully describe the situation and what is occurring, the frequency, times of day, etc.
***Seek help from local Social Services/Health Department representatives.
***Seek guidance or advice from the local police, or in some cases, where available, the phsychiatric section of the police department.
***Conduct some online research to find out more about the disease(s), what it means to those around the affected person, and how others handle it.
***Seek assistance from the courts or an attorney knowledgeable in HOA people type of issues.
***Write to the Board if you believe the person is likely to cause damage or harm to the association residents or property.

Beyond this, so much depends on the facts that are occurring, and what in the way of help is available in your locality. The remedies depend on the condition of the perpetrator, and also on what the documents require of the residents, and authorize in the way of remedies.

And, the path to a solution might be found in board action, rallying of neighbors, instituting a neighborhood watch, asking that fines or other penalties be imposed, etc. I hate to be evasive, but what works in one situation might not work in another.

Posted by Beth Grimm at 10:21 PM

September 19, 2007

What Board Conduct is Acceptable?

I receive a lot of emails telling me of board conduct that is outrageous. I, of course, do not always hear the other side when these issues come to me as complaints so do not consider this advice on a given situation, but I can respond as to what I do understand, have seen, have experienced first hand, and have heard about, as inappropriate behaviors.

Board members are fiduciaries and the mystery of that word can be resolved. They are responsible for managing and administering the assets of others; they have some control over that, and they are therefore held to a higher standard than other owners. They have responsibilities, and they can be sued.

So long as they are acting within their capacity as board members and in good faith - and there are statutorily defined components to that which are not going to be reiterated here, because this blog is for simple truths - a board member should be fine. The wrinkle comes when a board member is in denial, in a state of unrealistic entitlement, is inebriated, sick, or is just basically full of himself or herself. In my own experience, the following behaviors are things that have been brought to my attention as conduct of board members, and I can say with conviction, are things that they should absolutely not do. Whether anyone reading this "has a case" is not to be decided here.

Board members do not have license to:

Spill confidential information learned in valid executive session meetings - to anyone outside of the circle of confidentiality, EVEN IF THEY DO NOT LIKE THE INFORMATION OR THE WAY THE BOARD IS GOING WITH IT. Enron aside, and "whistle-blowers" law aside, I find in actual real life HOA experience that most directors that do it, and although they would like to consider themselves "whistleblowers", they are really just trying to trip up the other board members by using the information improperly.

Confront homeowners in anything less than a business-like or professional manner. Some board members feel the position gives them rights that a regular person does not have. Certainly, some power is conferred, but not the power to "get in someone's face". If Board members shout, pound tables, threaten members including other board members with anything other than what the governing documents and law allows, harass them (within the simplified definition which basically means engaging in continued actions intended to offend or threaten them), promise to make their lives within the association miserable, pick on them or single them out (which rises to inconsistency of enforcement of the documents), tell them they are "being watched", etc., they are acting improperly.

Get physical. A board member is acting in bad faith AND outside their capacity of a board member if he or she gets physical with anyone else, and claims protection of the board member status in his or her defense, or is "addressing" board member business.

Visit homes or confront others in the dark of night or engage in other conduct that is likely to unreasonably and intentionally escalate a situation. Any board member that confronts others to do "association business" after dark, in their homes, in an inebriated state (that means either party), in any situation with the intent to embarass the person, in a demeaning manner, or that condemns or confronts an owner about a situation or purported violation without catching them in the act or having proof or evidence that would stand up in court that there is a violation occurring (in other words, treat them as guilty, and punish them, without any due process consideration) is acting improperly.

Paying themselves from Association funds without presentation and receipt of proof of item to be reimbursed. Most documents for HOAs prohibit paying compensation to board members, and if compensation is paid, (without a separate contract for specific services, approved by the Board and disclosed to members), not only is the responsible board member(s) violating the governing documents in those cases, but the recipient of the "token pay" or any other compensation is losing important protections that exist in the law for unpaid volunteers. But the worst case scenario are those board members that "help themselves" without any oversight, even in cases where payment would otherwise be justified. Of course, if they are the only "volunteer" willing to serve, I could listen to arguments to the contrary on the necessary limits of oversight.

An association board that allows any board members to engage in the above types of conduct AND the board member who does it are both liable to find themselves at the nasty end of a lawsuit, and furthermore, could conceivably find themselves without insurance coverage to protect them. Gross, intentional and malicious conduct, discrimination and harrassment charges are often excluded in coverages.

So, if the conduct is occurring, stop it immediately. Get help if you do not know how to do that. I meet with many boards and have many conversations about this. I know that there are actions that can be put into place to address these behaviors. There are some other blogs on components of this subject, and I will try to do a full article on this specific subject (oh, there are so many things that need to be addressed) sometime soon. And boards, lest you think that I am picking on board members, you can expect a blog soon on what can be considered "legally actionable conduct" exhibited by owners. Many times, these blogs are triggered by an experience I have, or an email that I receive with a valid question, and since I have helped owners and board members and associations and managers in many varied situations and various capacities (advocate, mediator, negotiator, counselor, etc.), I try very hard to keep a good perspective and address both sides of an issue.

Posted by Beth Grimm at 10:37 AM

September 13, 2007

In the Event of An EQ -Are You Willing To Walk Away From Your Home? Lose Your Investment?

I will say it again: In the Event of An EQ -Are You Willing To Walk Away From Your Home - Lose Your Investment? How about this: Are you willing to force others out of their homes? If you are on the board, do you want to set your association up for failure in the event of a big earthquake? Do you want to let those with little invested in their homes dictate the level of protection of property for everyone in the development? Would you adopt the “Chicken Little " philosophy (“the sky is falling in so why bother planting the seeds”)?

Think about it. Certainly, if there is a devastating earthquake and your association is downed, that would be a very bad thing, but that does not mean the world is coming to an end. What is left are owners that need a solution. Certainly, there would be serious repercussions. The question is: is there going to be a chance that your members will be able to support rebuilding? And: What are you going to do to try and make sure it is within the realm of possibility that your association can rebuild?

If you are not willing to look at the possibilities, you can always throw your hands up and say - “if there is a big earthquake we are all cooked! So why try?” This is the “Chicken Little” philosophy.

I am in favor of the former, which is, looking at all options, and presenting all options to the members of the Association. I believe that Boards should look past the rising premiums and the lowered coverage aspects - painful as it might be - get above the anger with the insurance companies for doing this, and the disdain for the messengers (agents and brokers) who are scrambling to find you coverage, and get on with a plan to succeed if there is a big earthquake and if it hits your community hard.

Looking forward, and backward for that matter, if there is/was an EQ centered in your community, and it devastates your association, and others within a reasonably small radius, the Chicken Little "world is falling in" theorizing will/will have buried you. There will be heck to pay, lawsuits and pointing fingers all over the place. Few will think back that the $500, $1000 or $2000 that each owner would have had to pay for a year of some very basic protection was too heavy a price to pay.

And think about this too: even if the governing documents do not require the purchase of earthquake insurance, they do require that the board take measures to protect and preserve the property values. What can be more graphic a misstep than allowing the EQ to lapse, suffering EQ damage, and finding the property values are in the dumps?

This is why Boards need to take great pains to make sure that owners understand the ramifications of letting all EQ insurance go. There are various layers of coverage that can be considered to save money, and as layers are added, the price goes down. Individual owners can get protection through the CEA for up to $50,000 in loss assessment coverage for any special assessment they might have to pay in the event of an EQ event. If you as a Board tell owners they can get the coverage, and you take it a step further and calculate the amount of protection owners could get by multiplying the number of owners in your association by $50,000, you can realistically look at a reasonable deductible that may be higher than anything you have considered acceptable in the past. If 100 owners got the CEA coverage in your association, that is $5,000,000 worth of coverage (by my math) and encouraging this practice could allow raising the deductible, which could save some dollars.

It's a tough decision, purchasing earthquake insurance, or any insurance for that matter, as it seems like money gone into the wind, if there is no "event". But if we buck up and pay now, we may not have to pay 100 times over later on. Betting against yourself may seem a waste, but to me, the fact that such insurance still can be bought is a blessing in disguise. Some of the wind and flood damaged areas of the country no longer offer any of this kind of "sleep-at-night" protection at all.

Beth A. Grimm is an attorney who serves homeowner associations and homeowners alike. She is a frequent contributor to the Echo Journal and other similar publications in the State of California and on a national level. She is provides several publications written in plain English to help people who information about California law as it relates to homeowner associations. She posts a wealth of information on her web site at www.californiacondoguru.com.

Posted by Beth Grimm at 9:59 AM

May 8, 2007

Does Anyone Care About the Homeowner Who Has No Resource?... I mean Recourse .....

From a visitor of the condoguru site:

"I am beginning to feel the anger that the anti-HOA folks feel. I'm beginning to understand their position about HOA's. There is always a song and dance why we can't or shouldn't have

* Term limits for Board members. We currently have the same people on the board that we had 10 years ago and it is being run like a dictatorship of the worst kind.

* 100% funding. Even if we have problems coming up with a solution as to what is 100% funding is it is a disaster unless we have adequate funds. Our board of directors will NOT levy any special assessments nor will they increase our dues. That's how they get re-elected every year; homeowners love that. So maintenance is deferred year after year after year.

* Management Companies giving legal advice to board members and not being held legally liable for a thing they do. The board members are usually ignorant and rely on the management companies and believe anything they are told.

* Ombudsman... too costly? What is it costing us homeowners to not have one?

Does ANYBODY care about the homeowner who has no recourse?"

To this reader: Yes. Many do care about the owners, and everyone else involved. To comment:

TERM LIMITS: On the question of term limits, the reason in most cases that board members remain on the board for many years is that they cannot find replacements to serve. And as often happens, once a board member has served more than 5 or 10 years, they begin to feel resentful when owners who are not willing to serve start to criticize what they are doing or have been doing. Some do get dictatorial. It's not a pretty picture. And taking a nonpaying job that makes a person a target of disdain for trying to run a business while minimizing the "cost" to owners is less than fun; it is extremely challenging and a pain in the ___s. Establishing term limits could backfire as it limits the pool of willing volunteers, which is already shrinking as the laws continue to get tougher and more complicated, and the costs continue to rise without any viable means of conrolling them. And it could confuse the people serving who are not up to speed on association issues if it destroys continuity. The answer to this dilemma is getting more people to run for the Board, so there is reasonable turnover.

RESERVES ISSUES: It is nothing short of a small disaster that so many HOAs in California are seriously underfunded in reserves. Likewise, it is very sad that most buyers are not informed well enough to understand the reserves disclosures. However, some people care enough to write books on the subject - watch for the book "Condominium Answers" a national answer book which will be released this fall by Sourcebooks (author: yours truly) - the first three chapters are on what a person can do to avoid getting into a bad deal when buying a condo. The next three are about finances in HOAs. The next three are about how things work, basically, and the last two chapters are what to do if one does not like what they have gotten into, including how to get out of a bad situation.

The unfortunate fact with regard to finances and reserves is that the issue of how hard to hit current owners for past as well as future expenses is always a subject of debate. Should current owners have to bear the burden of years of underfunding? They already in many cases have to bear the cost of seriously deferred maintenance. And one has to consider the flipside which is that many California HOA owners would be forced out of their homes if immediately charged with assessments sufficient to pay up and fund reserves to 100%. And as to those that are forced out because they are unable to pay the special assessment needed to fund the reserves, the other owners will have to make up the difference, thereby presenting an extra burden for those who can afford to pay their own fair share. It's a difficult problem. The only realistic answer is addressing those things that require fixing right now, and using diligence in planning to bring up the reserves levels in the coming years at a reasonable pace with the goal to reach 100%. And the other critical thing is to be honest in disclosures. California law requires quite a graphic explanation, now, of the plans for the future, which was not the case in past years. So .... pay attention to them if you are thinking about buying a condo or townhome. And if your association has not given a Civil Code Section 1365.2.5 disclosure worksheet to you, ask for the equivalent information. It is this sort of accountability that will engender better planning, not strapping current owners with the burden of the past and future.

MANAGEMENT ISSUES: Truly, management companies should not give legal advice - and yet I often see communications (ugh, the emails) and management reports that flat out give [bad] legal advice. But on the flipside, boards often expect that managers should advise them on actions that have legal ramifications (after all - they are required to get some training about the laws, right?) and the boards do not want to spend money on legal fees, so this puts managers in a very difficult position.

I think we will very likely see more managers being held responsible though, for their own negligence or bad acts, or possibly even for giving legal advice without a license, in the coming years. (There was a seminar about this at a recent national law conference - guess what - some lawyers on the East Coast are really up in arms about this!) The truth is that most management contracts have indemnification provisions intended to protect the managers and the market place in many areas does not allow for much negotiation by Boards to make these provisions mutual, however, the question is whether these provisions will really fully protect managers who do make serious mistakes. In some other states, boards have sued the managers challenging the indemnification clauses. And I am told by some experts at recent national law and management conferences (although you must not take this as legal advice, only as information) that in some states, managers are losing these cases.

OMBUDSMAN IN CALIFORNIA: On the subject of a state ombudsman - it sounds pretty good to imagine that one can call the state ombudsman and get resolution to all the frustration. But there are no guarantees that such an agency will be a success. Staffing it with knowledgeable people and getting it up and running will be very expensive. Many forms of state agency have been discussed. The truth seems to be that no department of the state wants it unless it is self-sustaining (meaning paid for through sources outside the state coffers).

Ultimately, the cost could be very high to HOA owners, who are already feeling the effects of increased costs each year due to many things. And everyone in the industry from the managers, board members and down to the owners are paying a price due to the addition each year of expensive statutory compliance obligations in California. Who is winning the war? Condos that are supposed to be "affordable" often turn out not to be. One could say it is the attorneys who are winning the war, but that would be unfair too. It is not the HOA attorneys in this state pushing for complicated legislation, believe it or not. In most cases, it is constituent pressure on a legislator for more laws regulating boards. Not to say we are problem-free in this industry; however, California law has gotten so complicated that the average person (and many attorneys) cannot even fully understand the ultimate obligations for various actions or the number of statutes involved in answering one simple question. For example, if a board is having trouble with owners leaving out garbage cans for days on end after pickup, and wants to adopt a deterrent fine, it cannot consider even the most minimal fine until it has: (1) reviewed its governing documents to see if fining authority is apparent, reviewed the laws on fining, and tried to reconcile the two to determine what controls, (2) proposed a fines policy for proper circulation to owners and the legally required comment period (subject to a complicated set of statutes), (3) circulated the adopted legal fines policy (subject to complicated laws), (4) given proper legal notice of a hearing (and again, reconciling complicated laws on process with what is in the governing documents), (5) holding a hearing, (6) giving proper written legal notice of the board's decision (subject to statutory mandate about timing and contents), and then (7) collecting the fine if the conduct continues, via a small claims court process that requires board participation or hiring an attorney. What seems the most simple task is extremely complicated.

Let's say that the state approves an ombudsman program - one has to determine what is the better use of the money collected from the owners (as that is the group that will pay for this state agency), and all of the following have been considered:

Gathering and Dissemination of Educational Materials
Provision and Arranging of Low Cost Mediation Services
Enforcement of Laws through Fines and Other Punishments Against Board Members
Due Process Hearings for Accused

$5 per year per door (what has been suggested as a reasonable contribution by the state officials) will not begin to cover sll of the above processes, so look for higher costs than that or selective services (my bet is the focus will be on punishing uneducated board members). Take into consideration the buffer of costs (or should I say "waste") inherent with a state-run bureacracy and understand that the price for a state agency will be high - with no guarantee of happiness or justice.

All that said, maybe a state ombudsman is the answer to many homeowners' "prayers". If homeowner complaints engender more widespread education and accountability, that is a good thing. It is important to understand, however, that the flip side is that an ombudsman or state agency may just be an added cost of living in an HOA. Time will tell, because it is clear that the subject will keep coming up, again and again...

People do care! And I think it a favorable-odds bet that for each and every homeowner that is upset, there is probably also a board member and/or a manager that is just as frustrated within their role in this industry. My mantra: for every problem there is a solution, but before you decide which one to choose, sit at the other side of the table for a minute, and check out the view.

Posted by Beth Grimm at 7:33 PM

November 16, 2006

Does the Board Need to Have a Membership Meeting to Fine Someone?

There are many frustrated people in California, simply because answers are hard to find. Free answers at least. One of my readers asked this of me: "I need some clarification between CC1363 (g) and CC1357.100 - .130 (Adopting or Changing Operative Rules). My question is: Can a Board of Directors implement and enforce a monetary penalty for violations without having a membership meeting first? I am currently a homeowner. My attempts to get clarification from other sources failed because they were not attorneys. I just want to make sure the Board is following proper procedure. Thank you!"

The law in California is complicated but the first inquiry in any event is the governing documents. I have seen a few sets that have some requirements for passing rules, and setting a fining policy could be interpreted as rules. However, notwithstanding anything in the documents (a good legal phrase meaning basically ignore what is in the documents), this is what California law says on the subject:

A Board has to implement a fining schedule and circulate it to members before any member can be fined. The schedule has to be sent out to members when it is approved by the Board and thereafter, when changed. CC1363 (g)

However, when Civil Code Section CC1357.100 et seq. (Adopting or Changing Operative Rules) was signed into law effective the beginning of last year (2005), it added some steps to the process before implementation. The fine schedule is considered to be operating rules and so is subject to that statute. The law requires circulation of new or changed operating rules to the membership so that the members will know what is being proposed and will have an opportunity for commenting on the proposed rules. The period of time is often referred to as the "comment period". Members must have at least 30 days notice before the Board will take action on proposed rules, and must be able to attend the Board meeting where the action is proposed to be taken. There are some exceptions to this circulation requirement, such as if the rule simply reflects California law or some provision in the governing documents (and why, you say? because the Board is not exercising its own discretion or judgment, it is following existing legal requirements).

The Board must then consider implementation at an open BOARD meeting, not a membership meeting. The owners do not get to vote on the rules, only comment (except that if there ARE provisions in your governing documents consult an attorney on this so you are not steered in the wrong direction by the law).

There is a lot more to the inquiry. The fine schedule cannot conflict with the regulatory (called governing) documents of the Association. Once the schedule is circulated and the Board is considering fining an owner, the owner must be given a hearing before any fine is imposed. The law nicely calls it a meeting, ... if the Board is considering meeting to consider disciplinary action, the owner must be given notice and an opportunity the attend the "meeting." There are technical timing and notice requirements on hearings. Whew, the things a person must know just to accomplish a seemingly simple task!!!

Posted by Beth Grimm at 8:24 PM

November 11, 2006

Recall of the Board - How Hard Is It?

Wanting to recall a board is a common desire of an owner or owners who are frustrated with the Board's actions. Sometime the issues are about parking, sometimes pets, but probaby the most common complaint is about financial issues. From the standpoint of the Owners, it looks like the Board is misspending funds. And when Board Members get peppered with questions, they often close down. And when Owners want records and verification for the expenditures, many Boards get tight lipped and closed fisted. Sometimes it's a defensive response. Sometimes it's just because no one has ever shown any interest in doing any of the volunteer work to figure out the budget or in any other capacity, and so the other members of the Association are completely in the dark about finances, by their own design. However, special assessments tend to get the Owner's attention. They serve as a wakeup call, and the immediate reaction often is this (from a reader):

Our Board just passed a special assessment and demanded that it be paid immediately. There was no meeting about it, no warning, no explanation, and a lot of us are upset. I had a meeting with several other Owner's and we all signed a Petition to Recall The Board. We asked for a meeting for the Recall - just like the law says we can do. The Board did not give us notice of when the "Special Meeting" will be called and I advised the other members that we need to pick the time and the place of the 'Special Meeting.' What happens if the BOD decides not to show up at our meeting? Are they automatically recalled?"

The simple answer is "no" the Board is not recalled just by virtue of the fact that they do not acknowledge a meeting called by Owners for recall. In the "old days" (pre the new elections law requirements), the Corporations Code had a process similar to that described above that was enforceable. It basically allowed homeowners to proceed to schedule a recall meeting if the Board did not answer a valid petition asking for recall properly, i.e., by scheduling a meeting within 30-90 days out, and providing notice within 20 days of the petition to the members. However, that process, though it still exists within the Corporations Code, is hobbled by the new elections law requirements. Even in the "old days" if a group of owners did schedule a meeting it often ended in chaos because many times, the Board would just ignore the results and then the battle was who had rights to the checkbooks and accounts, or the old Board claimed that the owners did not do the proper procedures and the matter often ended up in court or one side or the other got tired of the fight and gave up.

Today, it is harder for a group to proceed on their own, if the Board is resistent to honoring a valid petition for recall. The Board should, because if the Board members fail in their duty to follow the law, they could conceivably end up with some personal liability. However, the question is how to properly respond to a petition. In the "old days" scheduling, noticing and proceeding with the recall meeting and vote would be a legal and appropriate response (assuming the petition was "valid" and satisfied the legal requirements). The meeting would be held, the vote usually was decided by the result of the "proxy war", and the sides went their ways when the results were in. Sometimes the Board voted in, because of cumulative voting, ended up consisting of two strong members from each "camp" and one "fence-sitter." As it happened then, the "fence-sitter" (or a kinder word might be neutral) became the most powerful person on the board as they were always the "tie breaker".

Today, the process is more convoluted. The new elections law requires a written secret ballot by mail and the good news is (from the owner's perspectives) each Owner can vote in private, by mailing their ballot from home to be held, protected and counted by an independent source. The bad news is that there is no road map now for getting there. The Corp Code requires "calling a meeting". The elections law requires voting by mail. The Board may decide to try and satisfy neither, or both. Even if the Board decides to send out ballots and to call a meeting to deliver and count the ballots, the members may end up in a barrage of pre-meeting hit pieces and be confused about choosing. Neighbors may be pitted against neighbors. The proxy gatherers may go out in force. However, the issues and questions surrounding proxy distribution and use complicate the process considerably. No matter which side is being represented, there is likely a challenge from the other side on almost every step of the way, because there is no clear guidance on how the recall should proceed.

For example, the Board may decide not to distribute proxies thinking it not necessary to use them. It is true that because the new law says the returned ballots count as if the person was at a meeting, no proxies are necessary to establish quorum. And the Board may decide not to accept any proxies. But if the association documents allow members to vote by proxy, I would have to question the legality of that position.

And there is the question of how the election for Board members should proceed if the Board or any director is recalled. If the whole Board is recalled, who is going to conduct the election of the successors? If it is the Board that is recalled, owners may come unglued as the risks continue of the actions complained of that lead to the recall. If it is not the Board, then who will it be? A prudent Board could appoint the Inspectors of Election to conduct the election for the Board but what Board is likely to have that much insight or desire to make things easier for the "insurgents." And even if the Board is pragmatic and has a process in place for someone else to conduct the election of the successors, who makes decisions during the "in between" time, especially if a contract comes up for renewal or if there is a weather event that causes severe damage to the complex or an accident in the pool that needs addressing or something like that. It's like a boat without a rudder.

In the "old days" the recall and relection of successors (if the Board was removed) would commonly occur the same night. But now that is quite difficult because of the election law requirements of having to send the ballot out 30 days before the votes are to be tabulated. Some boards may try to combine the ballots into one - the question of the recall, and the election of successors in case the recall is successful. But this is difficult as the slate of proposed candidates cannot really be firmly established until one knows if the entire Board is going to be recalled. And even then, though the incumbents and the proponents of recall may have their slates identified, the neutrals have not had an opportunity to weigh in on the nominations for the Board that would be in effect if the Board is recalled.

So you can see, it gets quite complicted. There is an article on my website called "Recall in An HOA - A Blesssing or a Curse! I suggest you read it (http://www.californiacondoguru.coat the Guru site) and then decide if there is not a better way to address grievances. Groups of owners do not always think like individuals. There are such things as forcing a meeting to discuss a difficult ballot measure or special assessment, inviting a face-to-face with the concerned owners and the Board, asking for a group or representative mediation on an issue. The owners are entitled to seek help to enforce the document proviisions against Boards doing things in violation of the documents, and a good legal representative may be able to help apply pressure in the right places. The members can ask for an arbitration on the issue, ask for a neutral opinion from an expert, etc. The key is find the right buttons to push to get what you want and need, and what is legal. If the button is too hard to push (it is stuck) you may have to resort to desperate measures such as attempting recall. However, given the difficulty in trying to integrate proper procedures under the new Davis Stirling requirements and the Corporations Code, a group of owners will probably need legal counsel or at least a savvy advisor.

Leading a group of owners through recall is more difficult than ever. A Board can put up a lot of hurdles, but it is not out of the question. Sometimes the threat or pressure of a recall effort will scare board members off. No one likes to be threatened with that sort of action. There is nothing precluding a group of owners from going to court and asking the court to direct the processes for the election, laying out what is acceptable and what is not. It may be possible that less money would be expended and more accomplished by doing this. A group can fight hard and make all the wrong mistakes, even with paid legal counsel, and this area of actions has become so complicated as to necessitate a real expert and a real good fight to achieve a legally successful recall effort. I am guessing the cost of the process is doubled or tripled from earlier times because of the many more hurdles that can be put up by the opposition. In my experience, it used to take between $1500 and $3000 to get to a successful recall meeting and election; now I would guess the cost to be more like $3000-$6000. Some have been able to accomplish the effort without help or expenditures like this, but if those efforts were achieved by bullying and threats, one can almost predict that the other side will be back with a vengence. I have seen situations where in one association they end of with several recall efforts within the course of a year or two. I hope you do not end up there if you are considering such an effort.

Posted by Beth Grimm at 1:26 PM

August 25, 2006

DOG LOVERS - LISTEN UP - DOGS AT THE POOL

Here is an email I received from a dog lover. " What is the rule of law for California with regards to dogs on leash in the "pool area" ... if dogs are on the leash, and are not a threat to anyone, because of their distance from others, it seems cruel not to allow a dog to sit outside in the sun as opposed to having to stay inside. Pets add a lot of the life of people, and to exclude pets from all condos, is not realistic and unlawful. I live by the pool and I will say that the kids down there are a lot louder then the noise my dog makes."

I sympathize and empathize with this person. I had to put my dog of 16 years down last year and she was the best behaving dog I have ever seen. Without professional training she healed pretty much from the day she learned to walk with me. She never bit anyone and never barked in her whole life except for one time when a strange man came to the door at night one time and spoke without knocking through the screen door. She would have sat by my chair at the pool and watched the activity without batting an eye. She was a great companion. But I never took her to a community swimming pool - why? Because there were rules about that.

How many dogs do you see at the public pools? Seeing-eye dogs, maybe. And I know someone is going to tell me that their complex allows dogs at the pool. Heck, one time a board member told me their association has a swimming time at the pool when the dog owners can swim with their dogs. (No one asked my opinion - the statement came at a seminar when someone came to a booth I was manning and told me that.) I get calls from managers who say that certain owners or tenants are taking their dogs to the pool and letting them swim, and they want a letter from me because their letters and demands have gone unheeded.

I am not a believer that dogs or any pets or animals (other than a bona fide service animal) should be allowed at the swimming pool or in the clubhouse. That is because these facilities were not built for the dogs. They were built for human use and enjoyment. A dog run is for a dog's exercise and enjoyment, although I know of one association that built a dog run for people to exercise their dogs and the dog owners opt instead for exercising their dogs in the adjoining park, I assume, because people are not picking up after their dogs in the dog run.

I believe rules excluding dogs from these places are justified. Maybe one dog owner is a good "parent" but another is not. How is a board or management expected to deal with this reasonably? How about the owner that brings their dog during the day and is the perfect "parent" and then brings the pet back after dark and lets them swim under cover of darkness. What about the dog owner who has a dog that is perfect until a child approaches and then goes into protective mode? What about the dogs that shed, exude odor or spread dander around.

Yes, children can be a pain too and a dog owner may be justified in saying that children at the pool are more of a nuisance than his or her dog. And they are probably right - but children are different. They are a protected class in the eyes of the law, and they are exactly what swimming pools, parks and playyards are all about.

If your association wants a dog park, and there is space for it, it may work out for the owners. But if not, I think it best not to expect that the Association will allow dogs and other pets at poolside.

Posted by Beth Grimm at 10:37 PM

August 9, 2006

Frustrated? No One Listening? Opportunities For Face-To-Face Meetings

I put this blog under Owner frustration but it could just as easily go under Board frustration. In California, if either an owner or the Board has been attempting to resolve a situation or dispute with the other, sometimes the written word (as suggested in an earlier blog as a means of addressing problems) does not work. I always think it is a good idea to work on establishing the best "paper trail" possible because if someone else is reviewing a situation, they generally glean the most credible information from the written word. Of course, the written word can work for or against you. Writings that contain facts and accurate statements are more credible than personal attacks and offensive language. Oral communications often become "he said-she said" arguments. Still, there are many cases where a face-to-face exchange may have a better result than a written "demand".

In California, owners have various options that command an audience with the Board. Pursuant to Civil Code Section 1363.05, homeowners are entitled to address the Board at any open meeting. The Board can set parameters on time (meaning time of opportunity or length of "time"), and if an owner is very offensive in their approach, it may lead to ejection from the meeting or adjournment (get legal advice on these matters if they are remedies you want to consider). Also, Owners have a right to request a meeting with the Board to discuss payment options on overdue assessments (Civil Code Section 1367.1) or request an "internal dispute resolution" meeting (dubbed IDR - Civil Code Section 1363.810 and following). If the Owner requests an IDR meeting, the Board has to comply. It may include one board member or all, but the usual advice is no less than 2 (because of the "he said-she said" possibilities). On the other hand, if the Board asks an owner to attend an IDR meeting, the Owner has the choice whether to attend or not.

There is another option available to Owners or to the Board, as a means of dispute resolution, (short of litigation and coming face-to-face in court). It's called ADR (alternative dispute resolution). Under California law, owners and boards are required in many instances when a CC&R or rule violation or board failure is involved and someone wants a court order or declaration from a judge to try and get the other side to engage in some form of ADR. (Civil Code Section 1368.520 and following) There are various forms of ADR, two of which include arbitration or mediation. If either party refuses, and there is a lawsuit, a judge can take a refusal to participate in ADR into consideration in determining an attorney fees award, so there is incentive to participate written into the law.

In a future blog I will address more face-to-face options including the reality of "hearing"s. Look for that in the Board frustration category!

Posted by Beth Grimm at 9:26 PM

July 28, 2006

FEES FOR KEYS

I often get questions about the reasonableness of fees charged by associations. This is a recent inquiry: " The management company has a policy to charge $75 for a copy of the hoa common area keys. Is this legal?"

Usually costs for items provided by the Association are tied to actual costs to reproduce but in the case of keys, there is some recordkeeping when keys are lost, so one can generally expect a fee that is more than just the cost of the keys. I do not know what it costs the Assn to replace keys and change the records - it would vary depending on whether real keys or key cards are used. Possibly, there are records involving an owner and a tenant involved. A $75 charge for key replacement indicates to me a possibility that the association set the price high because of a history of too many people losing keys, or too many past residents using the keys to use the facilities. Sometimes the locks have to be replaced and everyone has to have a new key - and that can get expensive. A $75 cost to replace keys discourages losing them.

Posted by Beth Grimm at 11:26 PM

July 14, 2006

My Board is Unresponsive - What Do I Do?

This is a followup to an earlier blog that pointed out a number of resources that are available for owners or board members that want to be educated in California homeowner association legal requirements. I am beginning a series on how to deal with difficult Boards (to help owners) and how to deal with difficult owners (to help Boards). This needs to be a continuing saga because there is no shortage of either in California (or across the nation for that matter). Although I am an attorney practicing only in California, much of what I lay out here is pertinent to any situation where a Board or owner is unresponsive or unwilling to follow the law or requirements set forth in the governing documents of a homeowners association.

For resources in addition to those set forth in the earlier blog, check out the resource page at the Guru website (http://www.californiacondoguru.com).

For guidance on actions, stay tuned and follow the blogs, starting here.

Here goes as to strategy- remember this reader question?

"I am a homeowner in a __ unit association. Our board is unresponsive to questions, requests, etc. I feel helpless in my own home. What recourse do I have or what escalation point is there for me. "

There a