Common Assessment Summer 2015 by CAI San Diego

SUMMER 2015

The professional provider of education, advocacy and resources for Community Associations

S u r v e i l l a n c e , T e c h n o l o g y & CID s Security Meets GEORGE JETSON page 12 FIGHT for Air Climb Highlights page 36 The Good, the Bad & the IMPERSONATOR page 32

COMMON ASSESSMENT MAGAZINE

SUMMER 2015

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THE CHAPTER OFFICE HAS MOVED!! New Address: 3914 Murphy Canyon Rd., Suite 114, San Diego, CA 92123 New Phone: 858.836.1119 www.cai-sd.org

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

PAGE 32

PAGE 6

Features

Departments

I Always Feel Like Somebody’s Watching Me

President’s Message

BY RICK SALPIETRA, ESQ.

BY BRUCE ROSENBLATT

Security Meets George Jetson: Advancements in Surveillance Technology

BY CHRISTY GRAMANN

Cyber Criminals and Other Villians

BY TIMOTHY P. FLANAGAN, ESQ.

Cutting Costs Safely

BY MIKE GRAVES, RS AND YVETTE HUFFMAN

Dreading the Drones?

BY LAURIE S. POOLE, ESQ., CCAL

ack 2015 Marketing Plan Members B Cover

Chapter News

The Good, the Bad, and the Impersonator

BY KENNETH H. DILLINGHAM, JR., ESQ

Annual Educational Conference Sponsors & Exhibitors

10 20

Save the Date: Day at the Races

June Trade Show Exhibitors

Craft Beer Night Sponsors (to date)

Wine Night Highlights

Fight for Air Climb Highlights

BY RACHEL WILLIAMS

PAGE 20 COMMON ASSESSMENT MAGAZINE

SUMMER 2015

Common

President’s Message Moving Forward

e have some exciting news! This month the CAI-San Diego Chapter offices moved

to the Kearny Mesa Business Park located at 3914 Murphy Canyon Rd., Suite 114, San Diego, CA 92123-4414. In addition to reduced monthly rent, the new PS Business Park complex has a conference room where we will hold our committee and board

Bruce Rosenblatt has been a member of the CAI San Diego Chapter since 2006 serving as the Chair of the Membership Committee and Marketing/PR Committee member. Bruce has served on the Board of Directors for 4 years and is currently the 2015 President.

meetings and where some of our San Diego education events and classes will be held. This will provide the chapter significant cost-savings, as well as flexibility in planning and scheduling. We anticipate the move will be completed by August 1 and an Open House will be held in September. Stay tuned for more details.

While we have continued our search for a permanent Executive Director, we have been working with our Interim Executive Director, Jerold Kappel, to take a fresh look at all aspects of CAI-San Diego. Through his extensive experience working with other non-profit trade associations, Jerold has provided us with insight, ideas and a new perspective for both our shortterm and long-term planning. We believe it is important to take the time now to set forth a clear direction for the future of CAI-San Diego in order to find a permanent Executive Director who will help us achieve our goals. Some of the “behind the scenes” changes that have already been made include improving online registration for our events, having committee descriptions and chair contact information on our website and posting Board meeting minutes on the website. We are also revamping the marketing plan to improve sponsorship opportunities and benefits, including establishing event dates and providing clear descriptions of sponsorship benefits. In addition to a printed format, we anticipate that the 2016 marketing plan will be accessible and payable online through our website. As always, thank you for your support and dedication to CAI-San Diego.

EXECUTIVE COMMITTEE BRUCE ROSENBLATT................................................PRESIDENT MANAGER JOANNA LABAHN-CORNETT......................PRESIDENT-ELECT LABAHN’S LANDSCAPING LAURIE S. POOLE, ESQ............................................ SECRETARY PETERS & FREEDMAN, LLP BECKY GROENEWOLD ........................................... TREASURER ASSOCIA SHANNON SMITH........................................... VICE PRESIDENT RECONSTRUCTION EXPERTS DIRECTORS VICTORIA COHEN.................................................. HOMEOWNER KRISTINE GAITAN................................................... HOMEOWNER LORI GRAHAM......................................WALTERS MANAGEMENT JEFF MORIN.....GLOBAL DISPOSAL REDUCTION SERVICES, INC.

CHAPTER EXECUTIVE DIRECTOR (INTERIM) JEROLD KAPPEL 619-299-1376 EDITOR IN CHIEF JEROLD KAPPEL executivedirector@cai-sd.org NEW & RENEWING ADVERTISING SALES admin@cai-sd.org DESIGN & PRODUCTION KRISTINE GAITAN REY ADVERTISING & DESIGN / THE CREATIVE DEPT. 760-746-8700 MAGAZINE EDITORIAL COMMITTEE RACHEL WILLIAMS (CHAIR)... BRAD L. STONER PAINTING, INC. LAURIE S. POOLE, ESQ.................. PETERS & FREEDMAN, LLP BRIAN KALMENSON................ MICHAEL ABDOU INSURANCE AGENCY, INC. ELAINE GOWER...................................... NAUMANN LAW FIRM JEFF FRENCH................................ GREEN, BRYANT & FRENCH JEFF MORIN.....GLOBAL DISPOSAL REDUCTION SERVICES, INC. JODI KONORTI................. EPSTEN, GRINELL & HOWELL, APC MELODIE NICKELL........................... WALTERS MANAGEMENT SUSAN FAKHOURI.......................TODAY’S HOA CONSULTING & BUSINESS SERVICES YVETTE HUFFMAN....TRILOGY COMMUNITY MANAGEMENT LINDSAY FOX.............................. PACIFIC WESTERN PAINTING DEE WAITE...................................THE PRESCOTT COMPANIES

All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Common Assessment Magazine or the Community Associations Institute – San Diego Chapter. Information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting or other professional services and should not be relied upon without the consultation of your accountant or attorney. Common Assessment Magazine is the official quarterly publication of the San Diego Chapter of the Community Associations Institute. CAI San Diego Chapter encourages submission of news and articles subject to space limitation and editing. Signed letters to the editor are welcome. All articles submitted for publication become the property of CAI San Diego Chapter. Reproduction of articles or columns published permitted with the following acknowledgement: “Reprinted with permission from Common Assessment Magazine, a publication of the Community Associations Institute San Diego Chapter.” © 2015 CAI - San Diego Chapter

ADVERTISING & CORRESPONDENCE SHOULD BE SENT TO: Common Assessment Magazine CAI - San Diego Chapter 1081 Camino del Rio South, Suite 109, San Diego, CA 92108 619-299-1376 / fax 619-299-1377 / www.cai-sd.org

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

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COMMON ASSESSMENT MAGAZINE

SUMMER 2015

I ALWAYS FEEL LIKE

Somebody’s

Watching Me With 40% of California’s population living in CIDs, personal security and privacy concerns can become a high priority issue for an HOA board.

BY RICK SALPIETRA, ESQ.

here are over 50,200 Common

County has over 6,600 CIDs, second only to Los

interest developments (CID) in the

Angeles County. It is no doubt that with 40% of

state of California, 68% of which

California’s population living in CIDs, personal

have 50 units or less. Condominium

security and privacy concerns can become a

style developments remain the most

high priority issue for an HOA board. Considering

prominent and make up 56% of all the CIDs in

the advancements in technology, including

California. Planned unit developments follow

discreet closed-circuit TV cameras, cell phones

condominiums in popularity and constitute 33%

and drones, it is not uncommon for association

off all CIDs in the state. The average number of

members to want to put up security cameras in

units in a California CID is 96.

and around their homes. There are several issues

Living within those 50,200 plus CIDs are an estimated 14.3 million people – about 40% of the state’s population. Interestingly, San Diego

that come into play if such a request is made to a board of directors. The issue of homeowners installing security Continued on page 8

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

SUMMER 2015

SOMEBODY’S WATCHING ME Continued from page 6

cameras has risen with the advent of smaller and smaller devices. An association typically has a right to regulate cameras on the exterior of a building. This is usually dictated by aesthetics and any architectural guidelines, including the association’s right to approve any change that would be visible from the exterior of the home. However, the question arises: Can a member place a private security camera in the common area? The answer to this question is found in the language that may exist in the CC&R’s or rules and regulations adopted by the association. Typically, a member may not place anything in the common area without approval by the board. This would include attaching it to the exterior of a condominium building or anywhere in the common area of a planned unit development. Conversely, the association board itself may also want to place cameras within the common area of a building or land owned by the association. This too has its own issues, most notably privacy. Members cannot install a camera in or on the outside of their home and have it pointing into a neighbor’s home. If an association is going to allow cameras, it’s reasonable for an association to require that the cameras not be directed so as to unreasonably infringe on anyone else’s privacy. However, it may not be unreasonable for a member to point a camera at their exclusive use patios or balconies; again, as long as it

Some CIDs have already created rules with respect to the use of drones within the boundaries of the association.

does not infringe on the privacy rights of neighboring members. In such a situation, it is unlikely that an association would assume liability for the misuse of a camera by a member. Still, cameras pointing into the common area may not necessarily invade a member’s privacy since there may not be an expectation of privacy in such areas. The general rule is that you cannot have a reasonable expectation of privacy when in public. There are, however, exceptions for children, and if your likeness is going to be used for any commercial purpose or monetary gain. Consideration should also be made for common areas such as pools, spas, and other areas where members may feel uncomfortable being recorded or videotaped. On the other hand, in some situations, a board should carefully consider a member’s request to put a camera in the common area and think carefully before rejecting it. A California court held that a board was liable for a member’s injuries when she was assaulted after the board forced her to remove a security device in the common area. If a member makes a legitimate, reasonable request to place a camera in

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

the common area, in particular if there has been an incident, a rash of breakins, vandalism, or personal assaults on people in the area, the board should seriously consider the pros and cons of the aesthetics versus the potential liability. Another issue is: If an association has security cameras throughout the complex or building, who can review

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the recordings and when? Should any member or non-member have a right to review the recordings? In order to avoid future problems, a board should consider creating a policy, with advice from its legal counsel, stating who

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anyone involved, as well as how long the recordings are kept. The policy should also include the procedure one must use to gain access to any recordings. Interestingly, there have been situations where boards have considered putting up a fake camera. This is

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is recording their actions. This may deter crime, but it comes with its own inherent risks. If an incident were to occur, the association would be without any type of recording, but will have left the members with the impression that a recording was made. This may

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technology is the use of drones within an association. Some CIDs have already created rules with respect to the use of drones within the boundaries of the association. These types of Continued on page 10

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COMMON ASSESSMENT MAGAZINE

SUMMER 2015

SOMEBODY’S WATCHING ME Continued from page 9

rules may include whether a drone may lift off from or land within the common area, and whether it may pass above the residences or private backyards of other members. Privacy is always a concern in this situation. Up until just recently, there were no rules by the Federal Aviation Administration (FAA) that governed drones. However, in February 2015,

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the FAA proposed regulations that would permit commercial operations of remote controlled drones weighing less than 55 pounds. They would only

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be permitted to fly up to 100 miles per hour and 500 feet in altitude. The operator would have to pass an FAA test, and only one operator would be required instead of an operator and a spotter. Furthermore, drones must be operated within eyesight at all times and not within 5 miles of an airport or over crowds. Although drones would not be required to have an FAA airworthiness certificate, similar to those required of unmanned aircraft, they would have to be registered with the FAA and would receive an “N number” for identification purposes similar to those numbers

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adopt their own rules with respect to drones, and consider the recreational use of drones by members versus the commercial use – for example, use of drones by real estate agents or developers and the distinctions between the two. Nearly everyone owns a cell phone that has a camera with the ability to record pictures as well as video.

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

Privacy issues and security concerns should also be considered with respect to the taking of pictures and video recordings of individuals within a CID with cell phones. California passed a law that went into effect in 2014 that makes it a misdemeanor to videotape or capture the image of a child based on the child’s parent’s or guardian’s profession. Typically, this is a law that will be used by celebrities trying to protect

If an association has security cameras throughout the complex or building, who can review the recordings and when?

their children from paparazzi. Unless the child involved is being harassed because of his or her parent’s employment, however, it may not be relevant to CIDs. Personal security within CIDs is a growing concern, and members and boards alike should consider aesthetic issues and privacy issues if they want to control and regulate cameras. A board may want to work with its legal counsel to establish reasonable CC&Rs amendments or rules and regulations to address this emerging issue.

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SUMMER 2015

SECURITY MEETS GEORGE JETSON:

Advancements In Surveillance Technology

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

BY CHRISTY GRAMANN

From touchscreens to biometric devices, security advancements over the last two decades are proof positive that our neighborhoods are under pressure to keep up with the Jetsons. If we can track our teenager’s whereabouts through technology, then we certainly should be able to track whomever is entering our homeowners association (HOA). Potential intruders who “always feel like somebody’s watching” them, as the band Rockwell’s onehit wonder states, are much more likely to move on to easier targets. Your main goal should be to keep intruders from getting inside your community or personal home. Homeowners may not be able to afford a Hollywood movie-style security program, but they can adopt reasonable, practical and surprisingly affordable security measures to protect loved ones and assets. Continued on page 14

COMMON ASSESSMENT MAGAZINE

SUMMER 2015

SECURITY MEETS GEORGE JETSON

to establish in the first place why

ineffective surveillance. The main killer

Continued from page 13

security surveillance should be on the

of effectiveness in any surveillance

Small Revisions = Big Results

forefront of your community agenda

program is false alarms, and this is

The best solution will always be

and prioritized in your HOA’s budget.

where technology innovations come

a smart combination of technology

Dr. Paul Viollis, in The Security Brief

into play.

and human beings. For example, you

“Safeguarding the Home Front”, dated

can have the most advanced cameras

February 19, 2015, outlines these U.S.

surveying your community but they

statistics from the Department of

are really only as good as the people

Justice:

responding. Conversely, you can have

or 1 every 3 seconds

a dozen security officers patrolling but they may not catch and record

• Property Crimes – 28,800 a day

• Burglaries – 8,640 a day or 1

every detail as effectively as a modern

every 10 seconds (Theft primary;

surveillance system.

no confrontation)

A combination of technology with

• Robberies – 1,440 a day or 1

people presents a myriad of hybrid

every minute (Confrontation

security solutions. Even small revisions

primary; theft secondary)

to exteriors can add up to big results,

Houston, Texas shares his take on the changing scene of video surveillance: “Intrusion alarms and motion detection are examples of antiquated technology. They activate off an extremely simplistic rule set.

camera will activate an event. There’s

Environmental Design (CPTED), not

no intelligence to the signal and false

limited to:

• Adequate and Effective Lighting

• Electronic Fence and Gate

alarms are rampant. BUT technology has advanced much more, providing monitoring personnel the tools to focus

Installation

• Natural Plant Barriers

• Tree and Shrub Pruning or

on the valuable intelligence sought, classifying objects and customizing rule sets within virtual zones. Video

Removal

analytics provides “smart” specifics.

When leveraged with a robust remote

Access Control

monitoring center, video analytics

• Cards or Badges

• License Plate Recognition (LPR)

• Voice or Eye/Retina Biometric

can dramatically impact the level of actionable situational awareness and response. The result: significant

Recognition • Fingerprint Biometric

The FBI projects that in 2015 one

Recognition (more affordable

of every five homes, or over 2 million

than voice or retina)

U.S. households, will be broken into. Even more sobering is the case of

Cameras with Advanced Video

home invasions, defined by primary

Analytics

intent of violence against occupant,

• Remote, Live Video Monitoring

more than 60% involve forcible rape.

• Drones

The Department of Justice reports 8,000 home invasions per day in North

Scary Stats - Justifying the Cost of Security Since the cost of intelligent

America alone. Armed with these statistics, implementing surveillance at your

cameras is increasingly budget

community becomes a critical decision,

friendly, more security companies are

yet the choices can be paralyzing. One

offering remote video monitoring as

of the main reasons HOAs delay is from

a service. But before exploring this

past experience using and paying for

advanced technology, it is important SUMMER 2015

for THRIVE Intelligence based in

alarm triggers. Pixilation change in the

Crime Prevention through

Cale Dowell, Regional Director

The contacts become misaligned, the

including:

“Get Smart” Security: Video Analytics, License Plate Recognition… and What About Those Drones?

COMMON ASSESSMENT MAGAZINE

reduction of false alarms, quicker intervention, and reduced dependency on labor.” But labor is still required, hence the crucial combination of people and technology. Video analytics has the intelligence to distinguish between a person or an animal, a bicycle or a vehicle driving, even distinguishing between a bird and a small drone. Once the computer determines that criminal activity may be taking place, an alarm sounds and a security professional at a remote monitoring data center is presented with a high resolution short video, rather like a GIF. The officer can scroll back and forth

through the continuously-recording video to determine exactly what’s happening. If an event warrants investigation or intervention, the monitoring officer will immediately notify the on-site security officer, who can respond and possibly summon local law enforcement. In addition to video analytics,

Knowledge. Integrity. Commitment. Success.

current video technology enables

a property, covering the parking combining virtual guard tours with conventional officers, associations can simultaneously enhance coverage and save money. Regarding hardware, new cameras with built-in DVRs and analytics software range in price similarly to flat screen TVs, but existing analog cameras can often be retrofitted to work with the new system for a fraction of the cost. This also helps communities obtain excellent coverage while protecting their past investments. Smart Video Analytics are also being used for effective License Plate Recognition (LPR), a pairing of high-tech video cameras with law enforcement crime databases, with the potential to immediately notify police if a wanted criminal enters the community. LPR has advantages over

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storing continuous video on Digital Video Recorders (DVRs). With old technology, if an incident occurred,

police or on-site security could scan

endless hours of DVR video and still not be able to make out the license plate number due to rain, fog or

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darkness. But high-tech cameras, day or night, are better able to capture the license plate number. In a real life example, a car was broken into and the credit cards were used at

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Continued on page 16 COMMON ASSESSMENT MAGAZINE

SUMMER 2015

SECURITY MEETS GEORGE JETSON

before it becomes a reactive situation.

Continued from page 15

This is a technology for boards and

4:30 a.m.. Law enforcement looked

community representatives to keep a

at the plates of vehicles between

close watch on, pun intended. One thing is certain, by embracing

midnight and 4:00 a.m. and one of

When selecting a remote video-monitoring provider, consider the technology they deploy, their ability to integrate with existing hardware, and their training and certification. Important questions to ask:

them matched their suspect. They

hybrids of old and new technology,

knew the particular make, model

along with manpower and computer

and license plate. The suspect was in

power, you’ll be trending toward

the community at 3:30 a.m. and was

the future in the smartest and most

the only car that entered. They had

practical way. You may not quite be

this car as a suspect in another case,

The Jetsons, but the Flintstones will

and the driver of that car was on the

be trying to keep up with you!

surveillance video at the convenience store where he tried to use the stolen credit cards. The police pieced it together and apprehended the criminal! Lastly, drone technology for

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surveillance use is particularly fraught with concerns about privacy. Some

• What does the provider offer? Man power, access control, CCTV solutions? • What do they offer in-house, and what do they offer through partnership? • Who are the people monitoring events, and what training and certifications do they have? • How can they integrate their technology with what you already have, to maximize your budget?

• Where would they recommend augmenting or reducing your existing man hours (if any)?

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HOAs are taking a proactive stance and consulting their legal counsel to begin drafting language surrounding this new technology advancement

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COMMON ASSESSMENT MAGAZINE

SUMMER 2015

Cyber Criminals & Othe PROTECTING YOUR COMMUNITY ASSOCIATIONâ&#x20AC;&#x2122;S

A board of directors owes a fiduciary duty to the community association and its members to act with due care, and should take precautions with the operation of an association website.

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

BY TIMOTHY P. FLANAGAN, ESQ.

er Villains WEBSITE

ore and more community associations have created websites for their communities. Websites can be a source of community pride and

a tool for providing information to members. Unfortunately, as most people know, once information is placed on the web, it may be vulnerable to cyber criminals. Since a board of directors owes a fiduciary duty to the community association and its members to act with due care, it should take precautions with the operation of an association website. Community associations need to pay particular attention to the information that is made available on the site, as well as control who has access and can post comments or information.

Information That Should be Available on the Website Boards of directors should control the information that is posted on the association’s website, and avoid posting confidential information or information that may violate an owner’s right to privacy. Privileged communications such as bids received from vendors, or an attorney’s legal opinion also should not be posted on the website. Additionally, posts about individual owners should be avoided unless the owner expressly consents to the post. This includes posting pictures of an owner at an association social function or posting personal information about the owner, even if it is meant to be positive (e.g., “Congrats to Mr. and Mrs. Smith on the birth of their baby girl, Jane”), because cyber criminals could use this information to commit identity theft. Continued on page 22

COMMON ASSESSMENT MAGAZINE

SUMMER 2015

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SUMMER 2015

CYBER CRIMINALS

Continued from page 19

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If the community association

REpaiR

allows owners to post comments or

inSTallaTion

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pRoTEcTion

be regularly and carefully monitored.

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policy should inform members about restrictions on the dissemination of information on the website. If there is a member comments section, chat room, or internal email operation on the website, the policy should describe what types of communications are inappropriate. Further, the policy should allow the association to unilaterally remove inappropriate communications at any time. The association should require an owner to

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to allowing an owner to post content. The board of directors should consult with its legal counsel to assist drafting such a policy. Finally, community associations should exercise caution when it comes to accepting payments on its website. Associations should consult with an information technology specialist to make sure that any transactions made online are secure, and to take precautions to protect owners’ personal information.

Website Access Many associations like to use their websites as a selling point to prospective buyers, and this is fine, but as a practical measure, non-

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members should be limited as to what information they can access. The association may provide general information to non-members, such as the location of the community, benefits of the living in the community, and pictures that highlight the community’s amenities. However, newsletters,

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meeting minutes, governing documents, pictures of individual

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

owners and other information should

debit card number, or any other

steps to protect themselves (and their

be limited to member use only.

financial information. The association

members) from cyber criminals and

will need to provide the member(s)

security breaches.

In order to prevent access to certain information, the website should be

whose personal information was

password-protected to only allow

compromised with: 1) the date of

members access to restricted areas.

the breach; 2) what information was

An association should implement

comprised; and 3) contact information

procedures to provide protected access

to obtain consumer reports.

and to terminate that access when the member leaves the association.

Timothy P. Flanagan is an associate attorney with Green, Bryant & French, LLP.

In order for the association to protect itself from liability for cyber breaches consider purchasing cyber-

What to Do in Case of a Security Breach

security insurance, which is essentially

If a community association becomes a victim of a security breach and it is believed that personal information may have been acquired, then the association has a duty to notify the person(s) whose personal information was comprised. Personal information includes information that could be used to identify someone. This includes a person’s name, signature, social security number, driver’s license, bank account number, credit card number,

an extension of the association’s directors and officers (D&O) insurance. This insurance is becoming more common, and associations would be well served to consult with their

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COMMON ASSESSMENT MAGAZINE

SUMMER 2015

Cutting M

ost managers have experienced the challenge of drafting a budget for

an association that does not have a well-funded reserve account or an operating income sufficient to cover all association expenses. Budgeting for an association flush with reserve and operating funds takes less effort when researching costs and reviewing the reserve study for a recommended funding amount. Budgeting for associations not flush with funds takes more time and the question of where to cut expenses is never an easy one. It is important be reminded that CAI recommends first budgeting for those items that are necessary, such as utilities (i.e. water, trash, electricity, gas, phone). Contracts such as management, landscape, pool service, porter service, common maintenance, and reserve funding should also be prioritized before considering a

If the association can at least maintain the current level of funding, this will serve

budget for items that may not be

the community better than reducing the reserve funding. Reducing the funding

necessary for the daily operations of a

of reserves is the easiest way to reduce expenses, but maintenance and repair of

community (i.e. social events).

reserve components should always be considered a necessary budget item.

Knowing where to cut costs that result in a significant reduction of financial output is key. If the

Analyzing Your Reserve Study Get your just completed copy of the reserve study out from under your bird

association is underfunded in the

cage and find two amounts: The annualized cost of the components and the

reserve account, it can have an impact

reserve balance. This information will help in determining what little you may

on the positive acquisition of loans for

be able to do. The annual cost of components amount is a good baseline in

sale or refinance, which can negatively

determining the true costs of maintaining the Association. It is calculated by taking

impact property values. The last place

one year of the full life and multiplying that by the current cost. Do this for every

to consider cost savings should be the

component, add them all up and that gives you the amount to allocate annually.

funding of reserves â&#x20AC;&#x201C; even though it

You can allocate more or less depending on how well-funded the association is.

is the easiest place to cut the budget. 24

SUMMER 2015

The second most important number is the reserve balance. This is the amount

COMMON ASSESSMENT MAGAZINE

BY MIKE GRAVES, RS AND YVETTE HUFFMAN

not guarantee a lower premium will be found but it is better to know what coverage is available in the current market (remember that natural disasters can impact premiums even if the disaster occurs in another state). A reduction in expenses does not mean to suggest that abandoning the current common area maintenance contractors in favor of contractors with promises to charge half the rate is a good practice or the best option. Taking such a drastic move will most likely have a long-term negative

Safely

impact on the aesthetics of the property and will cost more to remedy in the long run. Safe reductions in cost can include control of water. Providing the landscape company with copies of the water bill at least 6 times per year can help them help the association control common area water. It may come down to not heating the pool

currently saved in the reserve account. Next, look at the reserve study and find the percentage funded. If it doesnâ&#x20AC;&#x2122;t reflect 100% funded, thatâ&#x20AC;&#x2122;s okay; you can build it up over time. Reserve studies show a 30 year cash flow analysis so you can see your funding level improve if you follow the funding plan. The goal with your cash flow is to not run out of money and to build it to a comfortable level. So what does all that mean? It means that if you evaluate your reserve allocation and cash flow you can often hold steady or lessen the reserve allocation for a short period of time. You must realize this method cannot be sustained indefinitely. If you must lower the allocation, the reserve study should be revised to

during the winter months or foregoing adding mulch to the common area planters. When making these cost cutting decisions it is beneficial to consult with community contractors for input. If an assessment rate increase will result in increased delinquencies, and cutting costs is not an option, then

reflect this short term plan.

an alternative is to exercise control

Increase Assessments or Cut Costs?

partners should be advised that the

over costs (output). All business

It can be helpful to shop common area insurance, especially if this has not been done in a long time. Shopping does not equate to changing carriers.

association has to control expenses and that additional expenses will be

Longevity with the same carrier has benefits. Shopping for insurance rates does COMMON ASSESSMENT MAGAZINE

Continued on page 26 |

SUMMER 2015

ssl_CAI_0210:Layout 1

1/19/10

10:23 AM

Page 1

Improving more than just your property.

CUTTING COSTS SAFELY Continued from page 25

scrutinized and only the most urgent of expenses (determined by the board) will be undertaken. Sometimes there is no way to avoid cutting costs for an association, but there

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are things you can do as a community manager to assist a board in their effort.

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COMMON ASSESSMENT MAGAZINE

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

The FAA’s Modernization and Reform Act of 2012, Section 336(a) provides that the flight of any model aircraft that meets the following requirements does not require approval from the FAA:

BY LAURIE S. POOLE, ESQ., CCAL

t’s a bird, it’s a plane, no –

to effectuate deliveries of

it’s a drone! A new trend

packages and other items.

that your common interest

Commercial/business use of

development may be facing

UAS is currently banned by

(or may soon face) is the use

the FAA, with rare exemptions.

of drones. Several associations

However, earlier this year, the

have experienced issues with the

FAA proposed regulations that,

flying of drones [officially known

if adopted, will allow routine

as Unmanned Aircraft Systems

use of certain small UAS (under

(UAS)] over the common area

55 pounds) conducting non-

and other owners’ backyards.

recreational operations. The

These incidents have raised legal

proposed rule limits flights

issues and have associations

to daylight and visual-line-of-

asking what can be done to

sight operations and addresses

regulate or prohibit such use.

height restrictions, operator

Drone usage within the

certification, optional use

United States has increased

of a visual observer, aircraft

dramatically within the last

registration and marking, and

several years and will continue

operational limits.

to rise. Due to this increase,

Also prevalent within

under the Federal Aviation

community associations are

Administration’s (FAA)

non-commercial use of drones

Modernization and Reform

by hobbyists, which has resulted

Act of 2012 (Act), the FAA

in complaints by other owners/

is required to fully integrate

residents regarding nuisance

unmanned aircrafts into the

and privacy concerns.

National Airspace System by September of this year. In community associations,

When flown within 5 miles of an airport, the operator of the aircraft provides the airport operator and the airport air traffic control tower with prior notice of the operation. The FAA has also issued operating standards regarding unmanned aircrafts which, among other requirements, restricts flight to 400 feet above the ground.

Currently, the FAA allows an exception for flying “model aircrafts.” Under the Act,

the use of drones has also

§ 336(c), a model aircraft is

increased, both for commercial

defined as an unmanned aircraft

and recreational purposes.

that is: “(1) capable of sustained

Commercially, UAS are

flight in the atmosphere; (2)

being used to take property

flown within the visual line of

photographs for real estate

sight of the person operating

transactions. It is anticipated

the aircraft; and (3) flown for

that drones will soon be used

The aircraft is flown strictly for hobby or recreational use. The aircraft is operated in accordance with a communitybased set of safety guidelines and within the programming of a nationwide community-based organization. The aircraft is limited to no more than 55 pounds unless otherwise certified through a design, construction, inspection, flight test, and operational safety program administered by a community-based organization. The aircraft is operated in a manner that does not interfere with and gives way to any manned aircraft.

Continued on page 30

COMMON ASSESSMENT MAGAZINE

SUMMER 2015

DREADING THE DRONES

physical impression of the plaintiff

vehicle below the navigable airspace.

engaging in a private, personal, or

The proposed legislation would also

hobby or recreational purposes.” (See

familial activity, through the use of any

extend liability for wrongful occupation

sidebar on page 29 for additional FAA

device, regardless of whether there is a

of real property and damages to a

requirements for model aircrafts).

physical trespass, if this image, sound

person who operates an unmanned

recording, or other physical impression

aerial vehicle below the navigable

could not have been achieved without

airspace overlaying the real property,

a trespass unless the device was used.

without permission.

Continued from page 29

California Law Invasion of Privacy There are two elements of a claim

Trespass

for invasion of privacy: (1) an intrusion into a private place, conversation or matter, (2) in a manner highly offensive to a reasonable person. One important factor to consider is whether there is a reasonable expectation of privacy. The general rule is that there is no reasonable expectation of privacy when in public. Therefore, there can be no reasonable expectation of privacy when in the common area (except for children). However, owners/residents who are in their backyards or homes have more expectations of privacy. California Civil Code § 1708.8(b) creates a cause of action for constructive invasion of privacy relating to the use of certain devices. This section, sometimes referred to as the “Paparazzi Law,” was established to protect privacy in situations where a physical trespass does not occur, but the existence of technology

Flight by aircraft in the airspace

Given the potential legal issues involved in the operation of drones within community associations, it is prudent to be proactive and enact regulations addressing operation of Unmanned aircraft systems.

above the land of another is a trespass if it involves entry into the immediate reaches of the airspace next to the land and the entry interferes substantially with the owner’s actual use and enjoyment of his land. In order to comply with the FAA regulations, drones would have to be flown within the sight line of the operator. A flying robotic camera that is capable of capturing images and sounds of owners, residents, and guests within the privacy of their homes and backyards would be a substantial interference with the use and enjoyment of the land.

Nuisance Most CC&Rs of community associations include provisions that prohibit nuisances. These include any

allows a person to invade the privacy

unreasonable interference with another

of another. Previously, this section

occupant’s right to quiet enjoyment.

only applied to a “visual or auditory

More specific legislation addressing

enhancing device.” In 2014, the

drones was introduced earlier this

legislature recognized that the statute

year. Currently liability is imposed

was too narrow and that an argument

for physical invasion of privacy, if a

could be made that it did not apply

person knowingly enters onto the

to drones. Accordingly, § 1708.8(b)

land of another without permission or

was amended last year to apply to

otherwise commits a trespass in order

“any device” so that the statute would

to capture any image or recording of

apply to more technologies, including

a person engaging in a private activity

UAS.

and the invasion is offensive to a

(b) A person is liable for

reasonable person. Proposed Senate

constructive invasion of privacy when

Bill 142, if adopted, would add a new

the defendant attempts to capture,

Civil Code section (1708.83) to expand

in a manner that is offensive to a

the definition of “knowing entry”

reasonable person, any type of visual

upon the land of another to include

image, sound recording, or other

operation of an unmanned aerial

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

Under California law, a private nuisance is defined as the unreasonable, unwarranted, or unlawful use by an individual of his or her own property so as to interfere with the rights of others. Whether conduct constitutes a private nuisance cannot be determined by any fixed rule. Instead, it is determined as a question of fact by consideration of various factors and the conflicting interests of the parties, such as the nature of the use, the extent and frequency of the injury, the effect of the activity on health and the enjoyment of property, and other similar factors, indicating that the harm

suffered outweighs the utility of the

be placed on the time of day that

conduct.

drones can be operated. Language

There are currently no California

should also be included that allows

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cases addressing whether flying

the association to permanently

UAS over the property of another is

prohibit the operation of any drone

a nuisance. However, in June 2014,

that is a nuisance or has violated the

the National Park Service ordered a

rules. Drone operators should also be

ban on the use of personal drones at

required to indemnify the association.

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COMMON ASSESSMENT MAGAZINE

SUMMER 2015

BY KENNETH H. DILLINGHAM, JR., ESQ.

THE GOOD, THE BAD

The Impersonator It is important for associations to manage their online presence carefully, whether a Facebook page or website, to avoid legal problems and misunderstandings.

he term “social media” is quite a broad

social media have exploded in number, with new

term, and refers to online tools from

sites and information being posted daily. Types

websites and applications that enable

of sites include: Google+, Facebook, Foursquare,

users to create, share and exchange

Yelp, Twitter, Pinterest, LinkedIn and YouTube. It’s

information. Much like traditional media

a dizzying array of possibilities!

(think newspapers, television or radio), this information consists of words, pictures and videos - all of which are

Are You “In?” Is Your Community “In?” Lots of community associations are interested

used to communicate ideas and thoughts among

in having an internet presence. Many chose a

a variety of people. This information is found on

website. Others have utilized Facebook for their

computers, electronic notepads, tablets, mobile

online internet presence, rather than a specific

phones, and virtually any device with internet

website. With such a selection of types and sites,

access. But the main difference between social

who knows what else is available or is on the

media and traditional media is the ability to have

horizon?

a two-way interaction. Traditional media does

An online presence provides easy access to

not have that capability or allow for anonymous

association material all day, every day, without the

input.

need for people to contact the association during

Social media outlets can be found on

specific “open” hours. Also, some association

websites, internet forums, blogs for posting

websites include areas for discussion forums, like

articles or video websites. Websites devoted to

chat rooms or bulletin boards. These areas allow Continued on page 34

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

SUMMER 2015

THE GOOD, THE BAD... Continued from page 33

people to post communications and respond to posts. It is important for associations to manage their online

Regularly Monitor What Others Post Watch for personal attacks, either against the association,

presence carefully, whether a Facebook page or website,

a director, or another owner. Watch out for lies, threats of

to avoid legal problems and misunderstandings. Generally,

violence, or obscene material. Make sure that users know, or

anything online is accessible by anyone at any time, unless

are advised, that posting items on the website is or is not

there’s a protected, members’ only area. Even with a

communicating with the board. Such a misunderstanding

“members’ only” portion of a site, there are still issues with

could result in member communications that are never

what can or can’t be posted by the association. Also, there

received. With obscene, threatening or otherwise illegal

are issues with who can post, and what guidelines may be

material, you could have law enforcement looking for you if

applicable to their posting. Finally, there can be problems

that material is posted and allowed to remain. Further, such

with postings and sites that are misleading or try to portray

posts have the tendency to invite “like” or similar postings,

themselves as someone other than the poster.

which can lead to strings of inappropriate discussions.

Open/Available versus Member’s Only Area Internet sites are open areas that can be seen by anyone with an electronic device and internet access, worldwide. Associations with such open sites can keep them, but with only open-type information on that page (for example, a general description of the community, pictures, and contact

Consider the adage of, “Don’t put anything online you wouldn’t want your parents or grandparents to see.” Also consider talking with your legal counsel about developing standards for posting.

What Happens with Imposters? With the relative anonymity of the internet and postings,

information; general stuff that’s readily available through

it’s relatively easy to impersonate others. And whether

other sources). Other material should not be accessible

that’s a person or an organization – like a homeowners

to just anyone. Items like CC&Rs, bylaws, rules, minutes of

association – doesn’t make much difference. People who

open meetings, architectural request forms, etc., should be

have some disagreement or grudge against their association

in a “member’s only” area where a password is required.

can create web pages, even misleading ones that appear

Keep in mind the ability of hackers to break that password.

to be authorized by the association. Ideally, these pages

Further, you need to have a way to block access from former

should have disclaimers that they are not the “authorized”

members, those who have sold or otherwise lost their

or “official” website of the organization, but they don’t

homes. You should address the issue of members giving out

always have that disclaimer. If you have a situation where

access information to third parties, like their realtor, buyer or

you’ve been challenged by imposters, definitely check with

even their computer-savvy nephew George. You may want

your legal counsel, intellectual property consultant or other

to consult with an expert in information technology for more

appropriate professional. The things you should do and

specific guidance.

the steps you should take will need special attention and

Be Careful What You Post Again, associations should be careful about what is posted, both on the open portion and the restricted portion, of the site. Refrain from posting anything that may be considered private, such as names of delinquent owners, disciplinary hearing results, executive session minutes, and

knowledge. Don’t forget that unlike newspapers that can be recycled or burned, or phone calls you can hang-up on, things placed on the internet can exist in the virtual world almost indefinitely. Keep this in mind before you post pictures of you or your association in compromising positions!

attorney-client privileged material, as well as any other sensitive material. Make sure minutes which discuss private matters that are posted do not contain names or addresses, or other readily identifiable material. By all means, avoid posting items that could lead to vigilante action (think Trayvon Martin and George Zimmerman). Finally, resist the urge to treat your internet site as a “posting” for general notices to the community; the law doesn’t support that type of communication at this time. 34

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

Ken Dillingham is an attorney with Dillingham & Associates, working with homeowner association communities since 1986.

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• • • • • • •

ADA & DEFH Compliance Amendments to CC&Rs & Bylaws Architectural Matters Contracts & Insurance Elections & Recalls Employment Law Legal Opinions San Diego: 760.529.5211 • Fax 760.453.2194 Orange County: 949 322 6838 • Fax 949 766 4712 www.AttorneyforHOA.com COMMON ASSESSMENT MAGAZINE

SUMMER 2015

CONTRIBUTED BY RACHEL WILLIAMS

On March 29, CAI-San Diego’s team of 11 came together to climb the tallest building in San Diego. Six hundred fiftyseven steps later, they reached the top. Why? The American Lung Association (ALA) held one of its most unique fundraisers that Sunday, called the Fight for Air Climb. Often referred to as “vertical road races”, these climbs take place in skyscrapers and arenas across the country. Fight for Air Climbs help to raise both money and support for lung disease research, advocacy and education. CAI San Diego would like to extend a thank you to all of the climb’s participants and sponsors for making the chapter’s first-ever climb a success. CAI San Diego raised $1,832 – making them the fourth top fundraising team. In total, San Diego’s Fight for Air Climb raised over $65,000! Congratulations are also in order for Nancy Edwards of Professional Management Consultants, Inc., for being the team’s top individual fundraiser at $400 and Sarah Hall of Reconstruction Experts, Inc., for winning third place in her age group at a race time of six minutes and thirty-nine seconds. With energy like this, together we can beat lung disease and find a cure. 36

SUMMER 2015

COMMON ASSESSMENT MAGAZINE

36 Years www.westerntowing.com FerraraAd11.5.12_Ferrara Ad 7/8 11/7/12 8:21 AM Page 1

MICHAEL J. FERRARA Certified Public Accountant

✓ Reviews & Audits ■ ✓ Taxes ■ Palomar Professional Building ✓ ■ Reserve Study Updates 615 Aldwych Road • El Cajon, CA 92020 ✓ ■ Budgets 619/ 444-6065 2340 Tampa Avenue • Suite C El Cajon, CA 92020

619 698-4291

American Institute of CPAs

email: mjfcpa@juno.com

CAL Society of CPAs

got credentials? More than just letters after your name, CAI credentials give employers confidence that you have the knowledge, experience and integrity to provide the best possible service to their associations.

z Professional Community Association manager (PCAm®)

CAI provides opportunities for industry professionals to fast-track their companies and careers and stand out from the competition. If you hold a CAI credential, you are automatically listed in CAI’s online Directory of Credentialed Professionals, where potential employers and clients can find you—and see that you stand above the rest.

z large-scale manager (lsm®) z reserve specialist (rs™) z Community Insurance and risk management specialist (CIrms®) z Accredited Association management Company (AAmC®)

Learn how to earn CAI credentials today! Visit www.caionline.org/credentials or call (888) 224-4321 (M-F, 9–6:30 ET) for more information.

COMMON ASSESSMENT MAGAZINE

CAI CrEdEnTIALs For ProFEssIonALs: z Association management specialist (Ams®)

SUMMER 2015

Service Directory Display advertisers receive a complimentary listing in the Service Directory.

ACCOUNTANTS

Sonnenberg & Company Leonard Sonnenberg................ 858-457-5252 fax 858-457-2211 lens@sonnenbergcpas.com www.sonnenbergcpas.com Please see our ad on page 35 Michael J. Ferrara Michael Ferrara......................... 619-698-4291 fax 619-698-3937 mjfcpa@juno.com Please see our ad on page 37

Greco Traficante Schulz & Brick, APC Peter Schulz, Esq. ..................... 619-234-3660 fax 619-234-0626 pjs@gtlaw.cc www.gtlaw.cc Please see our ad on page 5 Kriger Law Firm Janet Wilcox. ............................ 619-589-8800 fax 619-589-2680 jwilcox@KrigerLawFirm.com www.KrigerLawFirm.com Please see our ad on page 27

Pacific Backflow Company, Inc. Bill Coulter ................................ 800-603-4467 fax 760-639-4005 bill@pacificbackflow.com www.pacificbackflow.com Please see our ad on page 22

Curtis Management Company, Inc. AMS Paving Patrick S. Campbell, CCAM....... 877-587-9844 Liz WIlliams................................ 800-357-0711 fax 858-587-9972 fax 888-357-0715 pcampbell@curtismanagement.com liz@amspaving.com www.curtismanagement.com www.amspaving.com Please see our ad on page 23 Please see our ad on page 27 Diversified Asphalt Products Lou Moreno............................... 714-449-8666 fax 714-449-8660 Please see our ad on page 10 NPG â&#x20AC;&#x201C; Nelson Paving Sharon Nelson........................... 951-940-0200 fax 951-940-9192 marketing@npgasphalt.com www.npgasphalt.com Please see our ad on page 17

Walters Management Joe Farinelli, PCAM.................. 858-495-0900 fax 858-495-0909 jfarinelli@waltersmanagement.com www.waltersmanagement.com Please see our ad on page 9

FINANCIAL SERVICES

Mutual of Omaha Bank / CondoCerts Brendan Concannon................. 619-961-6346 fax 888-493-1973 brendan.concannon@mutualofomahabank.com

ATTORNEYS

Community Legal Advisors Inc. Madeline Orey ......................... 760-529-5211 fax 760-453-2194 madeline@AttorneyforHOA.com www.AttorneyforHOA.com Please see our ad on page 35 Epsten Grinnell & Howell, APC Jon H. Epsten, Esq. ................. 858-527-0111 fax 858-527-1531 jepsten@epsten.com www.epsten.com Please see our ad on page 15

SUMMER 2015

GENERAL CONTRACTORS

Horizon Construction Clint Miller.................................... 760-458-7500 fax 760-688-3746 info@horizon-carpentry.com www.horizon-carpentry.com Please see our ad on page 11

BACKFLOW

COMMUNITY ASSOCIATION MANAGEMENT

ASPHALT REPAIR/PAVING

Union Bank HOA Services Tracy Stephens.......................... 866-210-2333 fax 866-401-2911 tracy.stephens@unionbank.com HOAbankers.com/Smartstreet.com Please see our ad on page 5

www.mutualofomahabank.com Please see our ad on page 26 Pacific Western Bank Susan Abubo............................. 760-432-1335 fax 760-432-1339 sabubo@pwbonline.com www.pwbonline.com Please see our ad on page 31 Popular Association Banking Larry Hooper.............................. 714-864-5171 fax 714-864-5190 lhooper@bpop.com www.bpop.com Please see our ad on page 17

COMMON ASSESSMENT MAGAZINE

INSURANCE

Berg Insurance Agency Kimberly Lilley, CMCA, CIRMS 800-989-7990 ext. 230 fax 949-540-0218 kimberly@BergInsurance.com www.BergInsurance.com Please see our ad on page 17

LANDSCAPE MAINTENANCE and/or CONSTRUCTION

Pacific Green Landscape, Inc. Jade Celentano......................... 619-390-9962 fax 619-390-0865 jadeceletano@pacificgreenlandscape.com www.pacificgreenlandscape.com Please see our ad on page 16 Steven Smith Landscape Gigi Golden-Smith.................... 760-745-9916 fax 760-745-1982 ggolden@stevensmithlandscape.com www.stevensmithlandscape.com Please see our ad on page 26

MAINTENANCE & REPAIR

Horizon Construction Clint Miller.................................... 760-458-7500 fax 760-688-3746 info@horizon-carpentry.com www.horizon-carpentry.com Please see our ad on page 11

PAINTING CONTRACTORS

Horizon Construction Clint Miller.................................... 760-458-7500 fax 760-688-3746 info@horizon-carpentry.com www.horizon-carpentry.com Please see our ad on page 11

PEST CONTROL

Mt. Helix Pest & Termite Control Robert Bacon............................. 619-584-6794 fax 619-584-3864 mthelixpc@yahoo.com www.mthelixpestcontrol.com Please see our ad on page 26 Payne Pest Management Jason Payne............................... 858-277-2228 fax 858-277-2212 jpayne@paynepestmgmt.com www.paynepestmgmt.com Please see our ad on page 9

SECURITY SERVICES

Bald Eagle Security Dmitriy Todorov......................... 619-230-0022 fax 619-230-6610 dmitriyt@baldeaglesecurity.com www.baldeaglesecurity.com Please see our ad on page 22

TOWING

Western Towing Kathy Tighe................................ 619-297-8697 fax 619-296-2822 denisetb@westerntowing.com www.westerntowing.com Please see our ad on page 37

CAI

webinars CAI webinars offer affordable, specialized training without leaving your home or office. Conducted via Internet and audio teleconference, the 60– to 90–minute programs are led by industry leaders to keep you up to date on the latest legislative activity, management trends, industry best practices and other topics of special interest to community managers and homeowners.

New, live webinars are presented every month, and more than 100 webinars are available on demand. If you’re a professional in need of continuing education units or a board member in need of expert advice, CAI webinars can help. REGISTER TODAY at www.caionline.org/webinars, and keep your community and career on track!

COMMON ASSESSMENT MAGAZINE

SUMMER 2015

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