Joy Marino, CMCA, AMS, Professional Community Management, AAMC
Eric Zarr, CMCA, AMS, FirstService Residential, AAMC
CHAPTER STAFF
Executive Director
Erica Tenney, CMCA, AMS, AAMC
Administrative Assistant
Elda Pfitzinger
MAGAZINE DESIGN
Rial Marketing Communications
All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Connect or the Community Associations Institute–Greater Inland Empire 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.
Connect is an official quarterly publication of Greater Inland Empire Chapter of the Community Associations Institute (CAI–GRIE). The CAI–GRIE 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 the CAI–GRIE Chapter. Reproduction of articles or columns published permitted with the following acknowledgment: “Reprinted with permission from Connect Magazine, a publication of the Greater Inland Empire Chapter of the Community Associations Institute.”
BRIAN HENRY, 2024 CHAPTER PRESIDENT PARK WEST LANDSCAPE MANAGEMENT
s my year comes to a close, it has been an honor and a privilege to serve as the 2024 CAI-GRIE Chapter President. Over the last 11 months we have been working very hard to continue with a positive path forward for our chapter. In September, we announced the hiring of Erica Tenney as our new Executive Director. She is already off to a fantastic start in her new role and will continue to pick up the intricacies of our chapter and move us forward. Also in September, we held our Annual Meeting and Board of Directors election. After meeting quorum, our chapter voted to elect Greg Borzilleri with Accurate Termite and Pest Control and Steven Penn with Alliance Association Management. Both will be serving new three-year terms. Congratulations Greg and Steven!
Our Education Committee has worked hard and produced nine successful educational programs and luncheons. Each has been highly informative, providing wonderful content to enhance the lives and work for our managers and homeowner leaders. The last of our programs was on December 3 at the DoubleTree Hotel in Ontario and was our very popular, annual legislative update. Our CAI-CLAC Legislative Advocate, Louie Brown, Jr. Esq. came down from Sacramento and joined Jeffrey Beaumont, Esq. to explain the new legislation, how we got here, and some of the planned focuses for the upcoming year. Those in attendance found their presentation to be both informative and very entertaining. The Chapter will continue to work hard to keep everyone informed of legislation that impacts our communities.
As always, our CAI-GRIE social networking events are always a great time. First and foremost, I would like to thank the Special Events Committee for their hard work in putting on so many of our events in 2024. It started way back in January with Comedy Night for CLAC, followed by a little axe throwing in February, a couple of Trivia Nights, a Friday in June riding buses in wine country, knocking down some pins in August, firing shotguns at Trap Shooting, and an epic night of entertainment with the critically-acclaimed band Flashpants to help support CLAC.
In November we hosted our annual Thanksgiving Cooking Competition— two nights of expert learning how to produce fine cuisine. Attendees showed off their skills in the kitchen and had a few laughs with friends at the Claremont Chefs Academy. And coming up, The Nightmare Before Christmas Chapter Holiday Party is on December 13. This will be a time for us to all come together, reflect on 2024 and to commemorate our achievements. Please come out to these wonderful social networking events!
Another committee that puts on two extraordinary events is the Country Faire & Monte Carlo Committee. Both events are always put together so well and heavily attended for a reason. Country Faire this year in May was truly one of the greatest! We had a fantastic turnout, enjoyed the cigar lounge, pig races, chili cookoff competition, the booze walk, a little dancing, and of course, the band. One of my absolute favorite events of the year (and I am sure one of yours as well) is Monte Carlo Night. It was held on November 16 at the DoubleTree Hotel in Ontario with the theme for this year as An Evening in the Mystical Garden . We incorporated TOPS Awards into this event to make it an even more extravagant evening. We came together for our awards program and to celebrate the achievements of our members for their hard work and contributions to not only this chapter but the industry. Thank you to everyone who attended, to the nominees, and to the TOPS Awards recipients!
2025 CAI-GRIE President Elect Greg Borzilleri conducted the annual Board of Directors Retreat in August. The Board came together to discuss all aspects of the chapter and our path to move forward and keep the positive momentum of 2023 and 2024. At the Strategic Planning Session in September Greg shared his and the Board’s vision with the chapter committees to ensure we can achieve more success in 2025 with precise measurables and renewed optimism. Greg and the chapter worked hard to put together the recently launched Marketing Plan and his 2025 The Inland Empire Strikes Back theme. A plethora of education and networking events await, along with 2025 marking the 35th Anniversary of our chapter—so be prepared for a year-round celebration! We are thankful for your leadership and continued support of this chapter, Greg, and we look forward to your presidency!
Lastly, as I reflect on my 2024 theme which was TEAM – Together Everyone Achieves M ore, it truly has been a TEAM effort this year, with so much collaboration and effort by many individuals to make this chapter what it is. Many have put in long hours of work only to then sacrifice more hours to make this chapter function and be a family. I want to take this time to say THANK YOU for all your hard work, passion, and effort in 2024 to help put CAI-GRIE in a better position to succeed for many, many more years to come!
With heartfelt gratitude,
Brian Henry 2024 Chapter President
DEDITOR’S LINK
PRESIDENT’S MESSAGE
A.J. JAHANIAN, ESQ.
TASHJIAN
ear Esteemed Readers,
With great pleasure and appreciation for all of CAI-GRIE’s volunteers, community leaders and contributors, we close out the year with this final issue of Connect Magazine. Inside, you will find legislative updates, which will take effect January 1, 2025, but will impact our communities for years to come. For example, Assembly Bill 2159, which finally allows community associations to implement electronic voting, may finally give communities some relief from low voter turnout.
In addition to covering new laws, this Issue highlights the Chapter’s recent educational luncheons, where industry experts spoke to members and volunteers on an array of topics. As always, with this issue, we hope to equip you with valuable insights from experts and community leaders, who have navigated community association challenges and can share their success stories (and trial and tribulations).
It is my pleasure to serve as editor of Connect Magazine and play a small role in our vibrant community. Without a doubt, we can say that this year’s theme of T.E.A.M. (Together Everyone Achieves More) was met in spades. We look forward to serving you in 2025 and beyond.
A.J. Jahanian, Esq. is a partner with Beaumont Tashjian who devotes his career to serving common interest developments. He can be reached at ajahanian@HOAattorneys.com
CAI–GREATER INLAND EMPIRE
The CAI–Greater Inland Empire (GRIE) Chapter hosts educational, business and social events that provide the Chapter’s Business Partners various opportunities to promote their companies’ products and services to Community Association owners and managers serving the Community Association Industry. It is expected that all participants in Chapter events – whether they be educational, business or social – will conduct themselves in a professional manner representative of their business or service organization so as not to detract from the experience of others seeking to benefit from their membership in the Chapter. For more information, visit cai-grie.org
A LOOK BACK AT OUR BOWLING TOURNAMENT! STRIKES, SPARES, AND CHEERS:
On August 28, 2024, Pins ‘N’ Pockets transformed into a hub of excitement as over 75 of our members hit the lanes for our annual Bowling Tournament! From first-timers to seasoned pros, everyone came ready to bowl their hearts out, aiming to claim the championship and, of course, have a blast along the way.
The energy was electric as pins crashed and high-fives flew. Teams cheered each other on, and the friendly competition brought out the best in everyone. It was clear that our members’ enthusiasm made this event as fantastic as ever, filled with laughter, cheers, and maybe even a few lucky strikes!
Thanks to everyone who joined and made this event such a memorable one. We’re already looking forward to seeing you all again at next year’s tournament!
LANE SPONSORS
Accurate Termite
Animal Pest Management
Antis Roofing
Brightview Landscape
Cornerstone Personal Insurance
Environmental Concepts
Espinoza’s Clean Sweep
Everthrive Landscape
Gothic Landscape
Harvest landscape
NPG Asphalt
O’Connell Landscape
Park West Landscape
Precision Landscape
Villa Park Landscape
Whitestone Industries
FOOD AND DESSERT
California Arbor Care
Sherwin Williams
REGISTRATION
First Citizens Bank
SUPER STRIKE RAFFLE
Dunn Edwards JJ&S BANNERS
Behr
California Arbor Care
Espinoza’s Clean Sweep
Everthrive Landscape
Park West Landscape
ECONOMIC INSIGHTS, NEW LEADERSHIP, AND REAL-LIFE MANAGER STORIES
On September 11, 2024, over 125 members gathered at Pechanga for a highly informative luncheon focused on the economic forecast, led by Dr. Raymond Sfeir, Ph.D. Attendees gained perspective on economic trends that could impact our industry in the coming years. The event also introduced our new Executive Director, Erica Tenney, CMCA, AMS, and unveiled our 2025 Marketing Plan—an exciting roadmap for celebration, growth, and outreach in the year ahead.
On October 9, 2024, members reconvened at Dos Lagos for a lighter, yet impactful, luncheon featuring “Manager Horror Stories.” Panelists Greg Borzilleri; Jessica Clifford, CMCA, AMS; Matthew Gardner, Esq.; Timothy Mahar, Esq.; Jay McGuire, CMCA; and Sarah Reed shared reallife scenarios faced by both managers and business partners. The stories were as entertaining as they were educational, offering guidance on navigating challenging situations with professionalism and integrity.
Both events were memorable opportunities for networking, learning, and connecting with fellow members. Thanks to everyone who joined us—we look forward to additional insightful gatherings to finish out the year!
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Bullseyes BBQ:
A Recap of Our First Trap Shooting Event!
On September 27, 2024, 60 of our GRIE members gathered bright and early at Prado Olympic Shooting Park in Chino for our first-ever trap shooting event! Excitement was in the air as our group took to the range, and while some may have started off as rookies, everyone was eager to give it their best shot. (Literally!)
Under the guidance of our incredibly patient and skilled instructors, members quickly got the hang of things. The competition turned out to be both fierce and friendly, as each participant aimed to hit as many clay pigeons as possible. Laughter, cheers, and a few triumphant “I hit it!” shouts echoed across the park, making an unforgettable morning.
Safety was, of course, our top priority, and we’re happy to report that the event went off without a single scratch. Success all around! As a well-deserved reward, everyone received a mouthwatering BBQ lunch to cap off the event.
Due to overwhelmingly positive feedback, we’re thrilled to announce that the Trap Shooting Event will return next year! Mark your calendars on November 14, 2025, for another round of friendly competition and tasty eats.
BY: A.J. JAHANIAN, ESQ. AND LISA A. TASHJIAN, ESQ.
The last several years have seen active State Legislature, often geared towards increasing the availability of housing within the state. Whether it was relaxing rental restrictions in associations or removing regulatory hurdles for ADU construction, recent new laws often seem to come at the expense of common interest development living and community.
This year, with the critical efforts of CAI-CLAC, electronic voting was finally signed into law, marking a long-awaited step towards increasing homeowner participation and facilitating the voting process, while minimizing election costs. Other bills, either enacted or still pending, may also prove to be positive or uncontroversial. What you won’t see here is the mandatory Board Member Education bill, which resurfaced this year, and which CAI-CLAC staunchly (and successively) opposed.
This year, with the critical efforts of CAI-CLAC, electronic voting was finally signed into law, marking a long-awaited step towards increasing homeowner participation and facilitating the voting process, while minimizing election costs.
AB 2159: Electronic Voting
This CAI-CLAC sponsored bill finally puts into law, associations’ right to implement electronic voting, in the place of distributing secret written ballots. Specifically, Civil Code Section 5105 now provides that associations may adopt an election operating rule, to allow owners to either “opt-in” or “opt-out” of electronic voting, as long as certain procedures are followed. If owners opt out under the association’s election rules, they must be given a secret written ballot (per usual), and they must also be provided with individual notice at least 30 days before the deadline to opt out of electronic secret ballot voting, which states:
• The member’s current voting method;
• That if the member’s voting method is by electronic secret ballot and the association has an email address for the member, the email address of the member will be used for voting by electronic secret ballot;
• An explanation that the member is required to opt-out of voting by electronic secret ballot if the member elects to vote by written secret ballot;
• An explanation of how a member may opt-out of voting by electronic secret ballot; and
• The deadline by which the member is required to opt-out of voting by electronic secret ballot if they want to exercise that right.
If the rule allows owners to opt- in to electronic voting, the inspector of elections must provide them with an electronic secret ballot and there are less burdensome requirements. Regardless of which rule the board chooses to adopt, the association must maintain a list of members who are using electronic versus traditional written ballots.
Important to note, electronic voting cannot be used for elections regarding regular assessment increases or special assessments. It is critical that boards work with legal counsel to update election rules if they wish to begin implementing electronic voting. Keep in mind that election rules that are amended within 90 days of an election may not be used for that election—the old rules still apply. Regardless, updating the rules sooner, rather than later, will get the association on track to using electronic voting in the very near future.
SB 900: Repairs & Maintenance
Existing law requires associations to maintain, repair and replace the association’s common areas, or other components and areas that it is required to maintain and repair, under their governing documents. This bill expands on that obligation by mandating associations be responsible for repairing and replacing any components necessary to restore interrupted gas, heat, water, or electrical services, which components begin in the common area, and even if they extend into other areas such as the unit. Now, under Section 4775 of the Civil Code, boards must begin the repair process for any of these interrupted services within 14 days.
Boards will need to begin planning to ensure the cost of these components are incorporated into operating budgets and reserve studies. Note, if reserve funds are insufficient to perform these repairs, the law also allows the association to obtain financing, without membership approval, and impose an emergency special assessment to pay back the loan. Alternatively, boards may want to ensure the CC&Rs are amended to sufficiently describe responsibility and ownership of these components.
There are two exceptions to this law: (1) if the CC&Rs assign a different maintenance responsibility to these components; or (2) if those components are required to be maintained by a utility company.
AB 2114: The “Balcony Bill” Revised
We all know by now that via SB 326, associations must complete visual inspections of exterior elevated elements (load-bearing balconies, decks, patios, etc.) by no later than January 1, 2025. These inspections, to date, needed to be performed by structural engineers or architects. AB 2114 adds to that short list, a “licensed civil engineer” as someone qualified to perform the inspection. Don’t be late! Getting these inspections done early will help with budget and maintenance planning, especially if inspections reveal that significant repairs are needed.
A.J. Jahanian, Esq. and Lisa A. Tashjian, Esq. are Partners with Beaumont Tashjian, a law firm specializing in common interest development law and serving clients throughout California. They can be reached at ajahanian@hoaattorneys.com and ltashjian@hoaattorneys.com, respectively.
LEGISLATIVE CAI-GRIE Visits
Meeting with Senator Rosilicie Ochoa Bogh
BY: JAYCEE GERBER OF ALLIANCE ASSOCIATION MANAGEMENT
On July 18th, 2024, four members of the Chapter’s Legislative Support Committee (Betty Ross, Daniel Heaton, Robert Riddick, and myself) arrived at Senator Rosilicie Ochoa Bogh’s local district office hoping to sit down and speak with her for about fifteen minutes. Instead, we were privileged to have the Senator and her staff engage with us for about an hour and twenty minutes! During this extended meeting, we advocated for the Senator’s support in addressing the pressing concerns of homeowners and community associations throughout the State. Senator Ochoa Bogh was attentive and very passionate as we discussed AB2159, SB900, and the ongoing insurance crisis in California.
During our discussion of AB2159, we were able to address Senator Bogh’s potential concerns about ensuring security in utilizing electronic voting process. We explained how similar fears about security problems have been prevented in the other 27 states that have already approved and are currently utilizing electronic voting systems. Because this is not a new concept, it will continue to be integrated in all our systems given our expanding age of technology. After hearing this information, the Senator was eager to do more research and learn more about the bill.
When we brought up concerns regarding the state of insurance in California, the Senator was very sympathetic. She expressed her understanding of the struggle that homeowners face in trying to keep our livelihoods safe. As the Senator was recently added to the Senate Insurance Committee, she was determined to learn more regarding this issue so that she could help find a solution to the problem. This was a great opportunity for us to discuss our own experiences so she could understand the crisis from a homeowner’s perspective. We described the ongoing efforts by CLAC to seek solutions and offered to help put the Senator in touch with members of the established Insurance Task Force.
Finally, we discussed SB900, including certain logistical issues that the Senator raised about what might happen if a special assessment or loan is approved for emergency utility repair, if down the road there is an eventual insurance pay out. We discussed that many associations have built provisions in their governing documents to address this particular circumstance, as well as additional ways to address emergencies without creating financial issues. The Senator was grateful for the additional insights and spoke with her staff about additional areas of research that she wanted to conduct on the bill in order to look at it from the perspective that we discussed.
We also had an opportunity to talk with the Senator about CAI in general, and the efforts of the Chapter’s Legislative Support Committee. The Senator had not previously heard of our organization, and we were able to take advantage of the opportunity to discuss the work that CLAC has done in the past, as well as potential projects that she may be interested in for the future. Senator Ochoa Bogh was very interested in our work and loved the idea of using us as a direct resource for education in the future.
The Chapter’s Legislative Support Committee has been hard at work meeting with government officials all over the Inland Empire to express the needs of homeowners throughout California. These types of meetings allow us to provide information to our governing officials and make change happen in our communities. The benefits of these efforts can be seen in the changes that have already been made in the legislation directly impacting homeowners. By continuing meetings like this, homeowner voices can be heard, and further positive changes can be made.
We are grateful for the support of legislators like Senator Ochoa Bogh, who are open to working with CAI and CLAC and continuing such wonderful dialogue and education with the goal of further strengthening our communities.
(l to r): JayCee Gerber, Betty Roth, Senator Rosilicie Ochoa Bogh, Robert Riddick and Daniel Heaton.
Meeting with Senator Kelly Seyarto
BY FRED BARTZ, MORGAN HILL BOARD PRESIDENT
On June 28, 2024, both Mallory Paproth and I met with Senator Seyarto in his Murrieta office, along with his head of staff. During the meeting, we discussed AB2159 (Electronic Voting), AB2114 (Inspection of Exterior Elevated Elements), and the state of California insurance.
We started out by thanking him for his continuous support for HOAs. I have worked with him on other issues, and he has always been very supportive.
The Senator was very familiar with AB 2159. We mentioned that homeowner associations are the only type of corporation that cannot vote for board members electronically and that 27 other states already permit associations to vote electronically. The Senator agreed that this bill was only logical and that it should be approved. He also mentioned that he is a member of the Senate Housing Committee and that he personally had made the motion to approve the bill and send it on in the process.
We also discussed AB114, which would add civil engineers to the list of approved persons to conduct balcony inspections. The Senator was also very receptive to this concern and expressed that he hoped other legislators would feel the same way.
We spent most of our allotted time discussing the state of homeowner insurance. The Senator was very interested in reviewing the background information that we provided on this subject. We also discussed how in my HOA (Morgan Hill – 1090 homes) many homeowners had their insurance canceled and were having great difficulty finding replacement policies at a similar level of coverage.
We thanked the Senator for taking the time to meet with us and for his ongoing support of HOAs. I was also very appreciative of us coming to visit with him.
Meeting with Assemblyman Bill Essayli –Assembly District 63
BY BETTY ROTH, CMCA, AMS, LSM, PCAM CAI GRIE CHAPTER SECRETARY AND HOMEOWNER LEADER
On July 18, 2024, I was able to join two other members of the Chapter’s Legislative Support Committee, Robert Riddick and Daniel Heaton, and we had the pleasure of meeting with Casey Deaver, a staff member of Assemblyman Bill Essayli from the 63rd Assembly District. As a constituent of the Assemblyman, I was excited to meet with his staff to discuss the CLAC-sponsored bills which were being reviewed by the California legislature.
We began by thanking him for the Assemblyman’s support of our priority bills AB 2159 (Maienschein), AB 2114 (Irwin), and AB 2460 (Ta). We also thanked Casey for the Assemblyman’s support of Community Associations in general.
We also put SB 900 (Umberg) on his radar and discussed the necessity for certain additional amendments to the bill when the legislators return in August in order to make it more favorable for our communities.
We also discussed at length the state of homeowner insurance. We explained that we did not see the legislature engaging in insurance bills this year, and that our communities may need Assemblyman Essayli’s support to assist us in helping community associations with affordable insurance in the future.
Casey was generous with his time, and we thanked him for a very productive meeting.
(l to r): Fred Bartz, Senator Kelly Seyarto and Mallory Paproth.
(l to r): Robert Riddick, Casey Deaver (Senior Field Rep), Betty Roth and Daniel Heaton
Totally Rad NIGHT AT THE CONCERT FOR CLAC!
On October 24, 2024, we threw it back to the max with a rockin’ Concert for CLAC at Haven City Marketplace, featuring the ultimate 80’s cover band—Flashpants! Close to 50 of our totally awesome members came out to support the California Legislative Action Committee and catch some majorly rad tunes.
Flashpants hit the stage, and it was like, party on! They played a killer mix of 80’s, 90’s, and 2000’s jams from across genres, and before we knew it, everyone was on their feet, dancing and singing along like it was 1985. The vibe? Pure electric!
If you missed this one, you missed out, dude! But no worries—mark your calendars for next year, because it’s gonna be even bigger and bolder.
THANK YOU TO OUR SPONSORS:
HEADLINER SPONSORS
Park West Landscape
OPENING ACT SPONSORS
Cornerstone Personal Insurance
GIG SPONSORS
AMS Paving
Bemus Landscape
California Arbor Care
Everthrive Landscape
Fiore Racobs & Powers
Harvest Landscape
Nordberg|DeNichilo
Painting Unlimited
Reconstruction Experts
SCT Reserves
PHOTOBOOTH SPONSORS
The Miller Law Firm
BANNER SPONSORS
Everthrive Landscape
Park West Landscape
And a last Thank You to AMS Paving for donating the pizza and water for everyone!
THE BENEFITS AND CHALLENGES of ELECTRONIC VOTING for CALIFORNIA HOMEOWNERS ASSOCIATIONS FOLLOWING the PASSAGE of AB2159
BY: KEVIN LANGLEY OF THE HOA ELECTION GUYS
California’s Assembly Bill 2159 (AB2159) was enacted and is effective January 1, 2025, introducing significant updates to voting procedures within Common Interest Developments (CID). One of the most impactful changes is the ability for boards to adopt procedures utilizing electronic voting, which presents numerous benefits for CID boards and their members. Here’s an overview of how electronic voting can enhance California’s CIDs—and some challenges to consider as well.
POTENTIAL BENEFITS of Electronic Voting for CIDs
1. Increased Participation
One of the primary advantages of electronic voting is the potential for increased participation among homeowners by making it easier to participate in elections, meetings, and decision-making processes.
2. Convenience and Accessibility
Electronic voting systems are designed to be user-friendly and accessible. Homeowners can easily access the voting platform via computers, tablets, or smartphones, making it simpler for everyone to participate, regardless of their technological proficiency. This convenience is especially beneficial for those with mobility limitations or those who travel frequently, as they can engage in their community’s matters without the need to attend in person.
3. Cost-Effectiveness
Implementing electronic voting can potentially lead to significant cost savings for CIDs. Traditional voting methods often involve printing ballots, mailing them, and remailing when the ballot packages are overlooked or lost. By transitioning to an electronic system, CIDs
should be able to reduce these costs substantially, allowing funds to be allocated to other community improvement projects or services.
4. Enhanced Security and Transparency
AB2159 emphasizes the importance of secure voting practices. Electronic voting systems can incorporate advanced security measures, such as encryption and authentication, to protect against fraud and ensure the integrity of the vote. Additionally, many electronic platforms offer transparent processes that allow for real-time monitoring and verification, giving homeowners confidence in the legitimacy of the voting outcomes. One well received security measure will be that members will no longer need to send their signature on an envelope exposed for all the world to see.
5. Streamlined Processes
Electronic voting can simplify the entire voting process. From sending out notices to tallying votes, the system can automate many administrative tasks that typically consume significant time and resources. This efficiency not only benefits CID boards, but also enhances the overall experience for homeowners, who can expect more timely results and updates on important issues.
6. Environmental Benefits
Transitioning to electronic voting aligns with eco-friendly practices by significantly reducing paper waste. By minimizing the need for printed materials, CIDs can contribute to environmental sustainability efforts, in theory, appealing to the growing number of homeowners who prioritize green initiatives.
7. Adaptability for Future Needs
As technology continues to advance, electronic voting systems can be
updated to accommodate new features and security protocols. This adaptability helps CIDs to remain current with best practices in voting and governance, continuously improving the homeowner experience.
8. Proxy Reduction
With members able to vote electronically from anywhere in the world, this should significantly reduce the use of proxies. Such a change may serve to simplify the voting process and instead promote direct engagement from homeowners who will be able to cast their own votes independently.
CHALLENGES AND CONSIDERATIONS with Electronic Voting
While electronic voting offers many benefits, CIDs should also be mindful of potential challenges in implementing this new system.
1. Updated Election Rules Required
To implement electronic voting, CIDs will be required to first revise their election rules to comply with AB2159’s guidelines. This step will involve careful planning and communication with members to ensure understanding and compliance. Boards who wish to implement electronic voting for their communities should seek the assistance and guidance of their legal counsel in updating their election rules.
2. Additional Disclosure Requirements
Associations will be required to maintain a voting list that identifies which members will vote electronically and which will vote by written ballot. This information must be included in the annual disclosure, adding a new layer of administrative responsibility for boards and community managers.
3. Extended Election Cycles
In some circumstances, in order to meet certain requirements under the new provisions of AB2159, CIDs may need to start their election cycles earlier and allow for longer periods of notice. For instance, members must be provided individual notice about their balloting options at least 120 days prior to an election.
4. Early Voting Method Selection
Members are not permitted to receive both a paper ballot and an electronic ballot. Members must decide how they will cast their vote (either by paper ballot or electronically) at least 90 days prior to the election. Members who have received a paper ballot cannot vote electronically, and members who have received a paper ballot cannot change their mind and instead opt for an electronic ballot while an election is underway.
Overall, the passage of AB2159 authorizing CIDs to utilize electronic voting marks a pivotal moment in the industry. The benefits, ranging from increased participation and convenience to enhanced security and cost-effectiveness, make a compelling case for this modern voting solution. As CIDs consider implementing electronic voting, many will not only be able to streamline their operations but also foster a more engaged and connected community. Embracing this change is not just an opportunity; it is a step towards a more inclusive and efficient governance model for many California homeowners.
Kevin Langley is the owner of HOA Elections Guys, Inc.
A Culinary Showdown AT THE CLAREMONT CHEF’S ACADEMY
On November 12, 2024, members gathered at the Claremont Chef’s Academy for an unforgettable evening of competition, cooking, and camaraderie. This Iron Chef-style challenge had everyone donning aprons and getting creative in the kitchen, with teams competing to whip up the winning dish.
The competition was fierce, with each group showcasing impressive culinary skills and creativity. While the judges had a tough time selecting just one winner, everyone agreed that the night was a victory all around. The event was filled with delicious food, plenty of laughs, and even a few friendly rivalries—all enjoyed over drinks and great company.
Thanks to everyone who joined in for this evening of Flavor and Fun!
THANK YOU TO OUR SPONSORS:
KITCHEN TOWEL
Reconstruction Experts
WINE OPENER
McKenzie Mena
TEAMS
Antis Roofing
Environmental Concepts
Cornerstone Personal Insurance
Miller Law Firm
Managers are required to recertify every 2 years and pay the maintenance fee each year. of continuing education must be completed within this twoyear recertification cycle.
1,000
16 hours
Credit hours must either: Pertain to community association operations or management Contribute to the professional development of the CMCA
No classes in your area?
Online Courses can help you complete your requirement. Online courses must provide proof of participation.
Courses related to buying and selling real estate are not acceptable. There are more than pre-approved continuing education courses. continuing education
Visit CAMICB.org for a full list of preapproved continuing education.
Monte Carlo & TOPS Awards
On November 16, 2024, members and guests gathered at the DoubleTree Ontario for an unforgettable Evening in the Mystical Garden. The night was a dazzling celebration of the year’s TOPs Awards winners, filled with elegance, enchantment, and nonstop fun.
The Mystical Garden theme was meticulously crafted, transporting attendees into a beautifully curated realm of magic and sophistication. As awards were presented, the room filled with applause for each deserving winner, honoring their achievements and contributions to our Chapter and communities. After the awards ceremony, guests took to the dance floor.
We all extend our gratitude to the dedicated Monte Carlo Committee, who made this magical evening possible with all their hard work. Congratulations to all the 2024 TOPs Award winners! We can’t wait to build upon this extraordinary Monte Carlo and TOPs Awards tradition in 2025!
(l to r): Monte Carlo Co-Chair, Miranda Noble; Board President, Brian Henry; Executive Director, Erica Tenney and Monte Carlo Co-Chair, Desiree Noble.
Attendees enjoying the event.
(l to r): Executive Director Erica Tenney with 2024 Program of the Year winner, Ami Reynaga.
2024 President Brian Henry and Deisree Aubel of CMS on the dance floor.
Brian Henry (left) and Kristina Butler with Park West, presenting Community Manager of the Year Onsite to Lee Jeffrey.
Brian Henry with 2024 Hall of Fame inductee Greg Borzilleri (left).
Nick and Heather of Everthrive, with Lana of Avalon Management, both 2024 Industry Innovator of Year award winners, presented by Jolen of First Citizen’s Bank.
Members enjoying the music from DJ Gabriel Torres on the dance floor.
Brian Henry (right) congratulating 2024 Program of the Year winner, AJ Jahanian.
EDITOR’S NOTE: URGENT BREAKING NEWS
BY: DANIEL C. HEATON, ESQ. OF NORDBERG | DENICHILO, LLP
After completion of final editing for the present Issue and right before intended publication, we received breaking news regarding a critical development impacting the need for compliance with the beneficial ownership reporting requirements of the Corporate Transparency Act (CTA), which is the subject of the article to follow.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in the case of Texas Top Cop Shop, Inc. v. Garland (E.D. Tex., No. 4:24-cv-00478, 12/3/24). Judge Amos L. Mazzant found that “[t]he CTA is likely unconstitutional as outside of Congress’s power…. Neither [the CTA or the reporting requirements] may be enforced, and reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”
The Court’s full Opinion and Order can be found here: cta-v-garland-district-court-opinion-preliminary-injunction.pdf
The scope of Judge Mazzant’s injunctive order is much broader than the ruling that was issued earlier in the year by the Alabama District Court in the National Small Business United v. Yellen case (N.D. Ala., No. 5:22-cv-01448, 3/1/24). That ruling only provided relief to the plaintiffs in that case. By contrast, Judge Mazzant determined that a nationwide injunction and stay of the compliance deadline was appropriate, which means that it also applies to all community associations in California
This was confirmed by the U.S. Department of Treasury’s FinCEN in a post on its Beneficial Ownership Information (BOI) website: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
On December 5, 2024, the Department of Justice filed a formal notice of appeal to the Fifth Circuit, challenging the preliminary injunction and seeking a stay of its application. This means that although FinCEN is currently unable to enforce the CTA or impose any penalties for non-compliance while the injunction remains in effect, the Fifth Circuit could potentially revise the scope of the injunction or stay it entirely while the appeal is pending, thereby permitting FinCEN to resume enforcement.
With the status of the CTA seemingly changing from day to day, and the original January 1, 2025 compliance deadline now only a few weeks away, everyone should keep a close eye on how this case progresses so that they can be fully aware of the state of their obligations regarding the CTA.
Daniel C. Heaton, Esq. is a Senior Associates at Nordberg | DeNichilo, LLP, representing community associations throughout California as corporate and litigation counsel. Daniel is a member of the Chapter’s Legislative Support Committee. He can be reached at daniel@ndhoalaw.com.
UNDERSTANDING THE CORPORATE TRANSPARENCY ACT:
What Boards Need to Know for Compliance and Insurance Protection
BY: JAMIE HACKWITH, CMCA, AMS, PCAM OF PRENDIVILLE INSURANCE AGENCY
The Corporate Transparency Act (CTA) is a federal law that was designed to combat certain illicit activities like money laundering by increasing transparency from company ownership. The CTA requires certain entities, including some homeowner associations (HOAs), to file reports with the Financial Crimes Enforcement Network (FinCEN), detailing information about their beneficial owners. For HOAs, this could mean disclosing personal details about board members or others who exert significant control over the association.
Timeline for Compliance
For HOAs established before 2024, the deadline to submit the initial report to FinCEN has been extended to December 31, 2024. HOAs formed after January 1, 2024, must submit their initial report within 30 days of formation. Adherence to these deadlines is critical to avoid penalties and ensure compliance.
Although the CTA is currently in effect with the above compliance deadlines, on July 15, 2024, Representative Richard McCormick (R-GA-6) introduced H.R. 9045 to exempt community associations from the CTA’s reporting requirements. If passed, this bill would protect your association by removing the need to comply with these regulations. Given the ongoing legislative activity, boards should expect to submit the required reports by the compliance deadline but also continue to regularly monitor updates to ensure that they are aware of any new requirements or changes.
CAI’s Lawsuit Against the Federal Government
The Community Associations Institute (CAI) has also challenged the CTA, arguing that its requirements impose an undue burden on HOAs by mandating the reporting of beneficial ownership information to FinCEN. CAI’s lawsuit seeks to exempt HOAs from these requirements, emphasizing that nonprofit community associations operate differently
from other traditional for-profit business or corporate entities. The lawsuit is ongoing, and the outcome remains uncertain, so HOAs should prepare for the possibility that the CTA will continue to apply to them through the end of year compliance deadline.
Implications for HOAs and Individual Board Members
If the above legislation or CAI’s lawsuit fail and the CTA continues to include HOAs, board members could face severe consequences for non-compliance, including civil penalties of up to $500 per day and criminal penalties for willful non-compliance. The administrative burden of complying with the CTA could increase operational costs, potentially leading to higher assessments for homeowners. Additionally, board members could be held personally liable if their non-compliance is deemed willful misconduct or gross negligence, leading to legal action and reputational damage that could negatively affect property values and the overall community.
The Risks of Management Companies Taking on CTA Compliance
While it might seem straightforward for management companies to be tasked with ensuring compliance with the CTA, significant risks are
involved. Management executives must carefully assess the potential liabilities their companies could face, as non-compliance may result in substantial fines and penalties, potentially sparking disputes over who should cover the costs. Given the complexities and legal implications of the CTA, this responsibility might be better suited to professionals with specific expertise in compliance and legal matters. Management companies are often hesitant to take on CTA compliance due to concerns about securing and storing Personally Identifiable Information (PII) and the liability associated with submitting this sensitive data to FinCEN and ensuring that the information is updated when required.
Insurance Considerations
A key concern for boards is whether the association’s insurance policy will cover penalties for non-compliance with the CTA, especially since the Act imposes penalties for ‘willful non-compliance.’ This raises serious questions about the applicability of Errors & Omissions (E&O) insurance, underscoring the need for boards to thoroughly review their policies and consult with their insurance providers. Given the potential ramifications of the CTA, HOAs and their board members must engage in detailed discussions with their insurance agents to ensure adequate coverage under their Directors & Officers (D&O) insurance policies. Key considerations include:
1 D&O Coverage: D&O insurance generally covers wrongful acts, errors, and omissions by board members in their official capacity. If a board member unintentionally fails to comply with the CTA, the D&O policy might cover legal defense costs and any resulting settlements or judgments. However, most D&O policies exclude coverage for criminal acts or willful misconduct . As a result, if non-compliance is found to be intentional or willful, the D&O carrier may deny coverage for any related claims. Boards should specifically ask the HOA’s insurance agent about these exclusions to fully understand what their policies do and do not cover.
2 Exclusions for Fines and Penalties: Both general liability and most D&O policies typically exclude coverage for fines and penalties imposed by the government. This means that if an HOA is fined for noncompliance with the CTA, it would likely need to pay those fines directly from its own funds. Because the Act contemplates daily fines in some circumstances, the financial impact of such fines could strain the HOA’s budget, potentially leading to increased assessments or cuts in services. To mitigate these risks, boards should explore potential riders or additional coverage options that could address these gaps in protection.
3 Potential Claims from HOA Members: There is a chance a homeowner may file a D&O claim if they believe the board’s failure to comply with the CTA constitutes a breach of fiduciary duty or another wrongful act. While the D&O carrier would likely defend such a claim, coverage might be denied if the claim stems from intentional or criminal behavior. This further highlights the importance for boards to review the association’s policy carefully and consider additional protections where necessary.
Third-Party Compliance Services: A Potential Option
Third-party companies are preparing to offer services that manage the paperwork for CTA compliance. These services can reduce the
administrative workload but come with a fee that should be included in the association’s annual budget. Before engaging a third-party service, boards should carefully assess potential risks, including the consequences of reporting errors that could result in fines, and verify that the service has appropriate insurance to protect the HOA from liabilities. Consulting with legal counsel is essential to thoroughly review any agreement to ensure the HOA’s interests are protected.
Recommendations for Preparation
1 Legal Counsel Involvement: It is very important to work closely with the association’s legal counsel to navigate the complexities of the CTA. They can help guide the association through the compliance process, ensuring that all necessary steps are taken to avoid penalties.
2 Insurance Review: The board should review the association’s insurance policies with the HOA’s insurance agent, particularly the D&O coverage, to ensure appropriate protections are in place. This might include discussing potential policy enhancements or riders that could cover any gaps in coverage related to the CTA.
The High Cost of Non-Compliance: A Hypothetical Scenario
Imagine the Happy Homeowners Association, established in 2015, ignores the new CTA requirements, assuming they don’t apply. The board fails to file the necessary beneficial ownership information by the December 31, 2024, deadline. FinCEN imposes a fine of $500 per day. After a month, the fines accumulate to $15,000, only discovered when vigilant homeowners bring it to the board’s attention. In a scramble to resolve the issue, the board files a claim with their D&O insurance, only to have it denied because the non-compliance was deemed intentional. The board is forced to levy a special assessment on the community members to pay the fines, causing financial strain and dissatisfaction among homeowners.
Conclusion
Non-compliance with the CTA can have serious implications for both individual board members and the HOA as a whole. The potential for personal liability, fines, and reputational damage is significant. While D&O insurance might provide some protection, it is not a blanket safeguard, especially in cases of willful non-compliance or criminal behavior. HOA boards must understand their obligations under the CTA and take steps to ensure full compliance to avoid these risks.
For further guidance on the Corporate Transparency Act, several resources are available. The full text of the CTA regulations can be reviewed on the Code of Federal Regulations website. FinCEN also offers detailed FAQs and updates on their official website. Additionally, CAI provides valuable insights and updates regarding the CTA’s implications for HOAs.
Jamie Hackwith, CMCA, AMS, PCAM is an Agent-Broker and Commercial Account Manager with Prendiville Insurance Agency, and can be reached at jamie@PrendivilleAgency.com.
BUSINESS PARTNERS
7X, Inc.
Allied Universal
America’s Finest Lighting and Mailbox Co.
California Tree Service
Farmers Insurance Federal Credit Union
Highland Commercial Roofing
Modern Landscape and Tree Care, Inc.
Oakridge Landscape, Inc.
Platinum Security, Inc.
Roof Pro Inc.
Safeway Electric
Servpro of Woodcrest
The HOA Election Guys, Inc.
Vortex Plumbing Inc
Wallrug
COMMUNITY MANAGERS
Alexandra Guerrero
Annette Chavez
Darlene Harris
Emily Alexakis
Kara Peters
Jennifer Sanders, CMCA, AMS
Michael Spielmann, CMCA
Michelle Medina, CMCA
Victoria Hall
Yueqiu Bai, CMCA
COMMUNITY ASSOCIATIONS
Cottonwood Canyon Hills Community Association
La Paloma at the Corona Ranch Homeowners Association
