Mark Guithues, Esq. Community Legal Advisors, Inc.
Doug Bickham, Esq. Nordberg | DeNichilo, LLP.
Rhonda Goldblatt, Esq. Epsten, APC
Winter 2024 Law Journal Editorial Committee Follow
Hamlet Vazquez, MCAM-HR Wilshire Terrace Co-op
Lorena Sterling, CAFM Community Association Financial Services
Jill Morgan, CCAM Allure Total Management
An archive of past issues can be found under Member Resources at CACM.org
The CACM Law Journal is a digital publication distributed four times per year to all members, in addition to supporters of the California Association of Community Managers.
DISCLAIMER: CACM does not assume responsibility for the accuracy of articles, events or announcements listed. Please be advised that the opinions of the authors who contribute to the Law Journal are those of the author only, and do not necessarily reflect the opinions of CACM and other industry attorneys. Please note that in a constantly evolving industry there are frequently multiple interpretations of the controlling statutes and case law. The information contained in these articles is of a general nature and not intended as legal advice. If you have any questions, please discuss them with your association’s legal counsel.
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Letter from the Guest Editor
It’s hard to believe that the year is nearly over! In this winter edition, the Law Journal committee wanted to address a couple of topics that are timely: preparing for winter and lowering the temperature, in particular as it relates to “emotional” temperature.
Not only are tempers more likely to flare up these days, but in an election year, divisions and differences seem more rampant than usual. Negativity abounds and that can sometimes be fuel for neighbor disputes. So, we have an article on how you can deal with disagreements among neighbors. How about disputes among your board members? We have an article on managing dysfunction in a board, too.
Winter preparation brings with it the fun of the holidays and holiday decorations, some of which linger too long after the actual holidays. Check out the article on dealing with holiday decorations policies.
With the arrival of winter, we often see more rainfall. We’re getting into the season of potential roof leaks or other water intrusion problems. So, we have an article with information on who’s responsible should water damage occur, and how to proceed once you’ve established who’s accountable.
Lastly, we also have articles on changes in laws pertaining to balcony inspections and achieving quorum.
We hope that in this issue you find answers to some of the questions and concerns you’re facing in your communities this time of year.
Wishing you all a great 2025.
Nicole J. Soria, Esq. is an attorney with Chapman & Intrieri LLP that specializes in construction defect and has been in the industry for three years.
Too Little Too Late?
MORE BALCONY BILL INSPECTORS FOR ELEVATED WOODEN STRUCTURES
By Aaron Ehrlich, Esq.
Responding to the 2015 tragic death of six young adults from the collapse of a balcony with extensive hidden dry rot damage at the Library Gardens apartments in Berkeley, the California Legislature enacted SB 326, which became effective on January 1, 2020. It required homeowners’ associations with buildings containing three or more multifamily units to complete periodic inspections of wood-framed, load-bearing exterior elevated elements (EEEs) and their associated waterproofing systems. (Civil Code § 5551.) This is often referred to as the Balcony Bill since balconies are the most common qualifying EEEs in communities, though other building features may also be subject to the Balcony Bill (e.g., elevated walkways). (See Civil Code § 5551, Subsection (a).) The goal of the Balcony Bill is to avoid future loss of life and serious injury due to hidden damage in building portions most susceptible to failure and collapse by requiring “reasonably competent and diligent visual inspection … of a random and statistically significant sample of exterior elevated elements for which the association has maintenance or repair responsibility” in qualifying multifamily communities to ensure they are “in a generally safe condition and performing in accordance with applicable standards.” (Civil Code § 5551, Subsection (b).)
HOW AND WHY THE LAW RECENTLY CHANGED
The California Legislature urgently acted to approve AB 2114 earlier this year, taking the bill from introduction to law in only five months. Effective July 15, 2024, AB 2114 amended the Balcony Bill to add that licensed civil engineers now qualify as authorized inspectors. (Civil Code § 5551, Subsection (b)(1).) Previously, the Balcony Bill only authorized licensed architects and structural engineers to conduct inspections.
Boards should be mindful of the differing qualifications between architects, structural engineers, and civil engineers.
California separately licenses civil engineers (as Professional Engineers in civil engineering) and structural engineers (as Professional Structural Engineers). Generally, civil engineers have a broad focus on all types of structures, whereas structural engineers have a narrower and specialized focus on the safety and stability of structures. Reflecting that specialty, California requires additional qualifications for structural engineers beyond that required for civil engineers. An engineer must first be licensed in California as a civil engineer before potentially applying to be a licensed structural engineer.
While the Balcony Bill requires an inspection of qualifying EEEs every nine years, the first compliance period is shorter, requiring that the initial inspection be completed by January 1, 2025. (Civil Code § 5551, Subsection (i).) A combination of the shorter first inspection period, the thousands of California homeowners’ associations with qualifying EEEs, and the initial narrower scope of authorized inspectors, among other factors, has led to limited inspector availability and higher than anticipated compliance costs, hindering homeowners’ associations’ compliance with the first deadline. AB 2114 was fast-tracked by the California Legislature appreciating the first deadline.
Continues on page 6
Too Little Too Late?
Continued from page 5
AB 2114 was approved to help alleviate the market challenges by authorizing more inspectors for Balcony Bill compliance.
While there are roughly 21,000 architects and 4,500 structural engineers licensed in California, there are more than 57,000 civil engineers licensed in California. (See the Brief Overview of the California Architects Board and Board for Professional engineers, Land Surveyors, and Geologists Bulletin.) Thus, AB 2114 effectively tripled the number of inspectors authorized to complete Balcony Bill inspections, dramatically increasing marketplace availability.
Justifying the broadening of authorized Balcony Bill inspectors to now include civil engineers, the author of AB 2114 noted that licensed civil engineers can practice structural engineering under their license provided that structural engineering is part of their expertise and experience. The implication is that civil engineers should be qualified to competently complete Balcony Bill inspections.
CONTINUING CHALLENGES WITH BALCONY BILL INSPECTIONS
Despite the good intentions of AB 2114, the change came too late to meaningfully help homeowners’ associations comply with the first inspection deadline—the marketplace cannot appropriately adjust in less than six months, particularly when masses of homeowners’ associations rush to fulfill the first required inspection. Nonetheless, the broadening of authorized Balcony Bill inspectors should encourage quicker and cheaper Balcony Bill inspections after January 1, 2025, by creating greater marketplace competition.
The availability of authorized inspectors has been one of many challenges facing homeowners’ associations in their Balcony Bill compliance. Perhaps more
Effective July 15, 2024, licensed civil engineers
qualify
as authorized inspectors.
problematic is the differing opinion of inspectors on the method of inspection required by the Balcony Bill. While the Balcony Bill requires a “visual inspection”, which is defined as “inspection through the least intrusive method necessary to inspect load-bearing components”, some inspectors interpret the Balcony Bill to require EEEs’ framing to be fully exposed. (Civil Code § 5551, Subsection (a)(5).) To do so, the cladding (typically stucco, fiber cement or wood) on the EEEs’ underside (called a “soffit”) must be partially or fully removed. This interpretation dramatically increases the Balcony Bill inspection cost as the soffits’ cladding must be demolished and later replaced. While this interpretation may be viewed as extreme, inspectors may not deem the use of “moisture meters, borescopes, or infrared technology” as sufficient to certify the EEEs’ performance, notwithstanding Civil Code § 5551, Subsection (a)(5), and could also be motivated to protect themselves from future liability if their inspection fails to identify existing damage because not enough was exposed. Given that, community managers and their board’s need to understand the proposed inspection method and associated construction costs when selecting the inspector.
INSPECTOR SELECTION CONSIDERATIONS
Community managers and their boards should be mindful of the differing qualifications between architects, structural engineers, and civil engineers. This is particularly important in the context of boards appropriately matching the probable risk profile of their project’s EEEs with the inspector’s qualifications.
Since architects and civil engineers have a broader focus than structural engineers, it is important that your boards inquire about the prospective inspector’s license type and their background, experience, and training relevant to Balcony Bill inspections beyond the proposed inspection method and all-in anticipated cost.
NOTE CONCERNING PROJECTS LESS THAN 10 YEARS OLD
Community managers and their boards in projects under 10 years old should be particularly cognizant of Balcony Bill inspection results as recourse for identified waterproofing failures or vulnerabilities of EEEs may be available from the project’s developer under SB 800 (Civil Code § 895 et seq.). The repair of waterproofing problems with inspected EEEs tends to be a very costly matter and community managers should encourage their boards to evaluate if there are alternatives to the membership bearing that unanticipated and unbudgeted repair cost in younger projects.
Aaron Ehrlich, Esq. is a partner and attorney at Hennigh Law Corporation with 16 years of experience in the industry. Ehrlich specializes in HOA Construction Defect Litigation and is located in the San Francisco and Los Angeles area.
from CIVIL LIABILITY to CIVILITY
BEST PRACTICES FOR MANAGING BOARD DYSFUNCTION
What makes the board of directors of a homeowners association (“HOA”) distinct from say, the board of Apple or Google? For one, the Apple and Google boards don’t typically live next door to, and share common living spaces with, their fellow directors and the company shareholders. The collision of real property and corporate principles is what makes HOA boards so unique. That collision though, can also create conflict and incivility between directors.
Continues on page 8
By A.J. Jahanian, Esq.
CIVIL LIABILITY to CIVILITY
Continued from page 7
When boards make decisions outside of meetings or when board members take unilateral action, the HOA and individual board members are exposed to liability. “
THE BOARD’S SHIELD AGAINST LIABILITY
The conduct and statements of individual HOA board members always have the appearance of being “officially sanctioned by the board.” This means that board members’ comments and actions in and around the community, as well as during board and membership meetings, are under heightened scrutiny. As “fiduciaries” to the HOA, board members also have a legal obligation to act in good faith, in a manner the director believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. (Corp. Code § 7231, also referred to as the “Business Judgment Rule.”) By following the Business Judgment Rule with a unified “voice” when carrying out the HOA’s affairs, directors are protected from personal liability and given judicial deference when a decision or course of
action is challenged. (Corp. Code § 7210; Lamden v. La Jolla Shores Clubdominium Association [1999] 21 Cal.4th 429.)
And this is a good thing. After all, who in their right mind would volunteer their evenings and weekends to serve on an HOA board if they could be successfully sued for every misstep or decision? Volunteer directors and their actions should be protected, as long as their decisions are consistent with the HOA’s governing documents and the law.
BOARD DYSFUNCTION: THE HOA’S “KRYPTONITE”
When dysfunction and incivility infect the board, these protections can be shattered. Disagreement between board members is expected, even healthy. On the other hand, when directors exhibit rudeness in the extreme, breach confidentiality, disrupt meetings, and go “off the rails,” they severely undermine the community’s confidence in the collective board.
When boards make decisions outside of meetings or when board members take unilateral action, the HOA and individual board members are exposed to liability. Claims stemming from those unilateral actions may not be provided insurance coverage either. The classic example of this is when an individual board member signs a contract that was not approved by a majority of directors at a duly noticed meeting. In that case, the individual board member may be on the hook for that contract, since it was not approved by the board (and therefore, not binding on the HOA).
Here in the 21st century, there are countless roads that lead to dysfunction. Social media use by individual directors can be a tool to garner membership support in opposition to the will of the board. At a minimum, social media can give the difficult or “rogue” director(s) an audience they would have not otherwise had in years past. The internet itself (and now, artificial intelligence apps) also engenders self-proclaimed “experts,” which can derail efficient communication and complicate the board’s decision-
making ability. And, whether by social media posting or snail mail (we’ve all seen those “anonymous” letters posted on the clubhouse bulletin board), directors who breach confidentiality increase uncertainty, scrutiny, and the risk of legal liability.
The toxicity of a clashing board can bleed into the community. When dysfunction paralyzes the board’s ability to conduct business or meet its basic responsibilities to the community (i.e., making maintenance decisions, paying vendors, meeting annual disclosure requirements, etc.), members may also look to recall the board. Recall elections are not just a significant unbudgeted expense that the HOA will have to incur. They can severely damage the HOA’s reputation by signaling to the community at large that they are fraught with dysfunction.
Once the community “well” is poisoned, it can be difficult to sterilize … but it’s not impossible. Civil liability can turn back to civility.
GETTING BACK ON TRACK
Disjointed, bickering board members may instinctively want to drop the hammer down on their counterparts. First, the board should make an effort to make sure the “other side” feels heard. Is it possible that they’re frustrated or have a poor way of communicating their message, but their ideas are worth listening to for the betterment of the community? Perhaps they just have a disagreeable disposition. Before jumping into disciplinary hearings, censure, and reprimands, make an effort to understand the other side’s issue. Try and hear them, without letting past disagreements (or their attitude) drown out their voice.
If that fails, it may be time to escalate (gently?). That can mean reminding them of the liability risk they are creating for the board and HOA when causing unnecessary conflict. In that same vein, let “rogue” directors who are acting unilaterally know that they are exposed to personal liability for their unilateral actions, which they may be forced to defend against, out of their
Disjointed, bickering board members may instinctively want to drop the hammer down on their counterparts.
own pocket. If this discord is derailing board meetings, disruptive directors may be asked to leave the room, or the meeting may be recessed or adjourned to regain order.
When boards (and management) sense that incivility is creeping in, try to get ahead of it. Propose a “board training” with legal counsel, where counsel can educate directors on their fiduciary duties and the consequences of failing to get along. This can be extremely effective in that a subject matter expert is highlighting the board’s liability exposure, without singling out any particular director(s). Similarly, be proactive by adopting director codes of conduct and/or ethics policies which clarify board duties, expected decorum, and consequences for violating those policies. As mentioned before, social media use can create more problems than solutions, but carefully crafted policies can help directors navigate those risks.
When all else fails, a majority of the directors may elect to reprimand the “problem child(ren)” of the board. This may include disciplinary hearings, stripping them of their officer role, or formal censorship. Ultimately, the members will decide in the next election, or through a recall, whether the current composition of the board is unfit to keep serving together — hopefully, that vote happens before the conflict has spiraled the community into legal trouble.
For the sake of the peace and harmony in the community, getting ahead of the problem with early communication is critical. When temperatures are rising, be proactive, not reactive. Remember that disagreement is okay, but unyielding division and internal conflict cause paralysis — or litigation. Boards are serving their HOAs best when finding the sweet spot between healthy disagreement and unity.
“
With eight years in the industry, A.J Jahanian, Esq. is an attorney at Beaumont Tashjian and a part of the HOA legal counsel.
GUIDELINES TO HELP ENSURE THAT YOUR HOLIDAY DECORATIONS POLICY DOESN’T BLOW A FUSE
HO-HOHOLD UP!
By Douglas P. Bickham, Esq. and Daniel C. Heaton, Esq.
With the biggest holiday season of the year around the corner, it is a good time for community managers and their boards to take a fresh look at their association’s governing documents regarding holiday decoration regulations. Many associations will often have detailed requirements in their rules and regulations governing when holiday decorations can be displayed, what can be displayed, and when they must be removed. But before starting enforcement efforts, it is important to make sure the association’s regulations won’t melt away like Frosty on a warm spring day.
First, any regulations on holiday decorations must be set forth in the association’s governing documents to be enforceable. Typically, such restrictions are found in the CC&Rs or other operational rules adopted by the board. The nature of such regulations may also vary depending upon whether the
association is a condominium project or a planned development.
Generally, a condominium project will have stricter rules on holiday decorations because the buildings that house the residential units are usually designated as common area controlled and maintained by the association. As a result, the association has a strong interest in regulating how the common area is used. For example, the association would not want condominium owners nailing holiday decorations to the sides of the buildings or placing decorations on the roof because doing so could potentially damage the common area that the association will then have to repair.
On the other hand, an association with detached homes on separate lots will generally have less restrictive holiday decoration rules because the residential buildings are owned and maintained by the homeowners. In these developments, holiday restrictions are generally more focused on aesthetics and making sure decorations do not become a nuisance or safety hazard to the community. Picture Clark Griswald in “Christmas Vacation” lighting up the entire city with the lights on his house! Clark would clearly not be welcome in an HOA.
Second, regulations on holiday decorations cannot be discriminatory or enforced in a discriminatory manner. Under both state and federal fair housing laws, associations are treated as housing providers and cannot discriminate against residents based on any protected characteristic, including religion or nationality. Rules should avoid naming specific holidays or treating some holidays differently than others because they could be considered discriminatory in violation of fair housing laws.
Instead of focusing on content, holiday regulations can adopt time, place, and manner restrictions. For example, regulations that expressly allow certain decorations like Santa Claus but prohibit others such as nativity scenes would be on thin ice. On the other hand, contentneutral regulations such as limiting the brightness, number, or type of lights to avoid a nuisance to neighbors or restricting the size of decorations displayed in yards or on roofs because of safety concerns are on solid ground.
Associations should set a consistent timeline for when holiday decorations can be displayed. Boards often get into trouble by setting different timelines for different types of holidays. A regulation that allows homeowners to display decorations up to 30 days before Christmas and remove them 15 days after, but then only permits other holiday displays for the period a week before and until a week after the holiday, could be considered discriminatory treatment because such regulation favors Christmas over other holiday traditions.
Instead, decoration regulations should treat all holidays in the same manner. Rather than naming the time when any specific holiday decoration can be displayed, associations can adopt rules that permit decorations for all holidays throughout the year to be displayed up to 15 days before the start and removed within 15 days after the end of the holidays. That way the regulation does not treat some holidays different than others.
FINAL LESSONS FROM THE GHOSTS OF HOLIDAYS PAST
Managers and their boards should pay attention to warnings from other communities that faced fair housing claims based on improper enforcement of holiday policies. Like Scrooge, hopefully associations “will not shut out the lessons that they teach.”
The Virginia homeowners in Sainani v. Belmont Glen HOA, 831 S.E.2d 662 (8/26/19) displayed a string of holiday lights which were on 24/7 for at least 300 days a year. The defendant HOA fined them because the seasonal guidelines only permitted lights during certain listed holidays. Rather than examine which holidays should be permitted, the court determined that the board exceeded its authority because the nuisance provision on which the holiday rules were based only permitted restriction of exterior lighting that caused “an adverse visual impact to adjacent lots.” The court found the board could not dictate when residents could display lights based on certain days. Associations need to make sure their holiday rules fall within the authority granted by the CC&Rs .
In Morris v. West Hayden Estates 1st Addition HOA, 104 F.4th 1128 (6/17/24), the 9th Circuit reviewed a fair housing claim involving religious discrimination. The Morris family hosted a multi-day “Christmas festival” to raise money for charity. The program included 200,000 lights, carolers, and a live nativity scene featuring an actual camel. Although the association never actually engaged in any enforcement efforts, the board drafted a letter to the Morris’s prior to their purchase of their home within the HOA expressing concern because some residents were atheists and the display would attract “riff-raff.” The letter was eventually revised to replace “atheists” with “non-Christians,” then sent. After the trial court held the HOA was entitled to a new trial, or to reduction of the $75,000 jury award in favor of the Morris’s down to $4, the Morrises appealed. On appeal, the 9th Circuit found sufficient evidence that the board “threatened, intimidated, or interfered with” the Morrises’ right to enjoy their home free from religious discrimination. The case is pending a new trial. Not only should associations avoid religious discrimination, but boards and community managers need to be conscious of everything they say and write when engaging in enforcement efforts.
In conclusion, to avoid acting like a Grinch, boards should ensure holiday regulations are reasonable, nondiscriminatory, and enforced in a consistent manner so all holidays can be merry and bright!
Not only should associations avoid religious discrimination, but boards and community managers need to be conscious of everything they say and write when engaging in enforcement efforts.
Douglas P. Bickham, Esq. is a Partner and Daniel C. Heaton, Esq is a Senior Associate at Nordberg | DeNichilo, LLP, serving as corporate and litigation counsel to community associations throughout California.
By Chloe Apter, Esq.
Battle of the Karens
When to Intervene in Neighbor-to-Neighbor Disputes
Like the Hatfields and the McCoys, there are some neighbors who find themselves simply unable to get along. Managers can feel caught in the middle of these bitter disputes, fielding issues from both sides and acting as a sounding board and peacemaker in the process. Understandably, boards often take the position that these are neighbor-to-neighbor disputes that do not, and need not, involve the homeowner’s association. After all, boards are educated that they should always act in the best interest of the membership as a whole and not for an individual member’s interest. However, when one or both owners involved in a neighbor-toneighbor dispute make a complaint to the association or management, the board needs to get involved and conduct an investigation. A hands-off approach is not the right answer.
Boards have a duty to investigate complaints. Typically, an association’s governing documents will contain a provision that includes a board’s duty to investigate allegations of violations. Boards are also required to enforce the governing documents and uphold the restrictions. While the board is afforded leeway in exercising discretion and making decisions, their failure to fulfill these obligations could negatively impact the association by putting the association at risk for a claim it has violated its own documents. Additionally, boards have a duty to act in good faith. By investigating a complaint, this creates a paper trail of evidence to show efforts made to act diligently and cooperatively. Although resolving the underlying issues is an understandable goal, boards should also focus on determining if there is evidence of a violation of the governing documents that warrants the association’s involvement. Put another way, resolving the neighbor dispute in the process is a welcomed side effect, but should not be the board’s main goal.
While the board does have a duty to investigate, it is not without constraint. Boards should always act promptly to investigate complaints, gather evidence, and make a determination and finding(s) in writing. If there is insufficient evidence upon which to make a finding, then this should be stated as well. If the complaint is found to be valid, the board has the discretion to determine the type and severity of discipline to be imposed, so long as it is in line with the association’s enforcement policy, due process is satisfied, and it is consistent with the board’s prior actions for similar situations.
Adopting rules that outline and address the steps the association will take to investigate neighbor-to-neighbor disputes can help create a clear roadmap for both the board and members on how such complaints will be handled. Many associations will as the first step have the affected neighbors attempt to work out their issues directly. While in theory this makes sense, in practice one or both neighbors may be unwilling to take this step, and even if a meeting is conducted, rarely is a resolution reached. Instead of requiring neighbors to complete this, boards should only request it be attempted.
The next step should address the association’s investigation process. It can include interviewing both neighbors, any witnesses, reviewing video evidence if available, and inviting the affected neighbors to meet with one or more members of the board to discuss the issues. Document the investigation and the findings and review these with the association’s legal counsel if warranted. If a resolution is reached, the terms should be written down and signed by both parties. Also, encourage boards to remain neutral and not take sides or appear to favor one neighbor over the other. Disciplinary measures should be applied fairly and in a non-discriminatory manner.
While seemingly counterintuitive, by becoming involved and investigating neighbor complaints, boards can actually help minimize the risk of claims that they are failing to perform their fiduciary duties and enforce the governing documents. Even if the dispute remains unresolved, and so often they do, the association can maintain it has acted in good faith and will have the documentation to support it which helps to lower its risk in the long run.
Boards should always act promptly to investigate complaints, gather evidence, and make a determination and finding(s) in writing.
,,
Chloe Apter, Esq. is a member of the Construction Defect Litigation department of Berding | Weil. Apter has experience handling real estate, commercial litigation, complex construction defect, and class action lawsuits throughout California.
Who
INTRUSION AND
IS RESPONSIBLE FOR WATER
DAMAGE CLAIMS WhatWHEN WINTER RAIN COMES?
By John F. Baumgardner, Esq.
Undetected water leaks (whether from plumbing, windows, or roofs) can be disastrous. This is especially true as the leak is often hidden until the extent of the damage is suddenly apparent. What starts as a pinhole in a water line leak, or a hairline stucco crack can morph into thousands of dollars of repairs to common areas and damage to personal property. Given the financial toll water damage can have on a community, it is important for associations and managers to understand the nuances of maintenance responsibility and how to prevent these common and potentially expensive problems.
1.
WHOSE JOB IS IT ANYWAY?
The Davis-Stirling Act, Civil Code § 4000, et seq., provides the default maintenance requirements for the association and members. Generally, the association is responsible for maintenance, repair, and replacement of the common area while the owners are responsible for their separate interests. In other words, most of the outside of the building is the responsibility of the association, while homeowners are typically responsible for the inside. (Civil Code § 4775.) However, unless the governing documents are silent as to maintenance and repair responsibility, the obligations detailed in the governing documents will control.
While the governing documents may provide some clarity, they can also create confusion regarding water-related damages.
Sewer and plumbing systems in multiunit buildings are a prime example. These systems can be separate interest when they service only one unit but become association responsibility if they service multiple units. This distinction can be complex for even the most experienced community managers and attorneys.
Additionally, some ambiguities are created at the time of the original construction. For example, while the association would normally be responsible for maintenance of exterior cladding and roof systems for a condominium, these components can be defined as “common” components or “limited maintenance areas.” These creative definitions transfer the responsibility to the owners, thus requiring multiple owners to share the maintenance obligation of these building systems. If the obligations are unclear, the association should seek an opinion from its general counsel and/or amend its declaration to clarify the scope of maintenance responsibilities within the community.
2.
DEALING WITH THE LEAK AND AFTERMATH
Once the association is informed of an ongoing water leak, it may need to take emergency action to stop the leak and prevent further damage to the common area. Governing documents commonly provide the association a right of entry to units in order to comply with its obligations
and maintenance duties. Under nonemergency circumstances, e.g. a non-active roof leak, the governing documents protect owners from unauthorized entry by, among other things, requiring proper notice, before the association can enter a unit. However, “during an emergency, the board may take any action that it determines to be necessary or appropriate to respond to the emergency [and] mitigate the effects of the emergency . . .” (Corp. Code § 7140 (m)(3).) The governing documents may also include additional guidance for emergencies. While most unit owners will cooperate under these circumstances, it is good practice to follow the association’s normal procedures once the emergency is resolved in order to reduce complaints related to the repairs.
Once the leak is resolved, the question becomes who is responsible for the damage? Although it can be difficult news for an owner to hear, the association is generally only responsible for repairing the common area components. Despite the general rule that an owner is responsible for damage to their personal property, an association may be liable if they do not make “good faith” maintenance and repair decisions. As noted by the Court in Affan v. Portofino Cove Homeowners Association, “[t]he judicial deference doctrine does not shield an association from liability for ignoring problems . . .” (Affan, supra, (2010) 189 Cal.App.4th 930, 942.) Other California courts have noted “[r]easonable jurors could . . . [conclude that] a total failure to maintain common areas breached a [contractual] promise to keep these areas in a first-class condition.” (Sands v. Walnut Gardens Condominium Assn. Inc. (2019) 35 Cal. App.5th 174, 176.) Given the potential liability, always recommended that associations reasonably inspect and maintain all building components for which they are responsible.
USE THE GOVERNING DOCUMENTS AND RULES TO YOUR ADVANTAGE
The judicial deference doctrine does not shield an association from liability for ignoring problems .
“settled principles of condominium law establish that an owner’s association, like its constituent members, must act in conformity with the terms of a recorded declaration.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 239 (emphasis added.)
Governing documents may also provide the association with the power to perform the maintenance and seek a reimbursement from the owner for the costs. Lastly, “California and many other jurisdictions have long upheld such general covenants vesting broad discretion in homeowners associations or boards to grant or withhold consent to construction.” (Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 977.)
When an owner submits an application for the removal and/or replacement of a building component, the association should apply its architectural approval procedure to confirm that the design and installation will protect the common area and separate interests from water intrusion. When in doubt, the association and community manager should rely on their trusted vendor partners to ensure the association has performed reasonable investigations, made “good faith” decisions related to maintenance, and reasonably enforced its rules to prevent water damage in its community. 3.
Where separate interests and common area components intersect, it is important that the association utilize its governing documents and rules to help prevent water leaks at these locations. Under many circumstances, an owner’s failure to maintain its separate interest can be a violation of the governing documents. As noted by the California Supreme Court,
John F. Baumgardner, Esq. is the primary attorney with Chapman & Intrieri, LLP in their Roseville, California office. His practice focuses on representing homeowners associations in complex construction defect disputes, general counsel matters, general civil litigation, and revision of governing documents.
The Proper Method for HOA
Adjourning to a Reconvened Meeting of Members
(Civil Code §5115 as amended by AB 2460)
By Frederick T. Whitney, Esq. & William Curry, Esq
For a meeting of members to be held, a “quorum”i of the association’s members must participate. Members can participate in a meeting in several ways: (1) by sending in a ballot; (2) by signing a proxy; or (3) by personally attending the meeting. Mostly due to member apathy, many (if not most) associations are not able to conduct a meeting of members because a quorum is not achieved. All too often an association will go several years -- or even decades -- without ever achieving quorum.
The California Legislature, recognizing the lack of quorum at membership meetings as a problem, adopted legislation in 2023 to help. Specifically, California Civil Code §5115(b)(5) was added (effective January 1, 2024) to permit an association’s board of directors to adjourn a membership meeting to another date and time, at which the association’s quorum requirement would drop to 20%. This was great news for many associations, particularly those whose bylaws did not offer any opportunity for a “step-down” quorumii
The 2023 amendment, however, created some confusion because it introduced an entirely new method for an adjournment to take place. Specifically, it expressly authorized the board of directors to call a subsequent meeting of the members where the quorum would be lowered to 20%. Historically, the only method of adjournment available to the association was for the members in attendance at the attempted meeting to motion and approve the adjournment. Thus, there has been a great deal of confusion since § 5115’s amendment and the traditional method have often been conflated.
Thus, to simplify the matter, the California legislature recently amended § 5115 (via AB 2460) to eliminate any
reference to a board approval and instead expressly authorizes the members to call a reconvened meeting at a 20% quorum, but only where a lower quorum is not already provided for in the bylaws iii . Thus, the following explains the various methods for an association’s members to call a reconvened meeting under the old method, followed by specific references to the requirements under the new.
“Now naturally, like many of us, I have reluctance to change too much of the old ways.”
- Kazuo Ishiguro
An association’s bylaws define the association’s quorum. If no quorum is specified in the bylaws, then the California Corporations Code sets a default quorum at one-third (33 1/3%)iv. Quorum is typically stated in terms of “voting power,” which describes the total number of votes that may be cast. For the vast majority of associations, the voting power is the same as the total number of homes in the development (i.e., each home in the community gets to cast one vote). For new developments, the total voting power can change daily as new homes are annexed into the development. Moreover, the total voting power can get more complex as some owners will get multiple votes per lot (e.g., the Class B member often gets 3 votes for each lot owned) or voting power can be diluted (e.g., an apartment owner might be entitled to only one vote for every three apartments owned).
Under the traditional method of adjournment, a majority of the members in attendance at any attempted meeting of members may approve an adjournment to a different time and place to reconvene
that meeting. In fact, so long as the date, time, and place of the adjourned meeting are announced, the association does not need to otherwise provide any additional notices (unless its governing documents require it)v
Many associations have bylaws that will provide for a step-down quorum in the event that a first meeting is attempted and quorum is not achieved. For example, a standard paragraph relating to adjourned meetings provides that:
“[I]f any meeting of Members cannot be organized because a quorum is not present, a majority of the Members who are present may adjourn the meeting to a time not less than five (5) nor more than thirty (30) days from the time the original meeting was called, at which meeting the quorum requirement shall be the presence in person or by proxy of the members holding at least twenty-five (25%) of the voting power of the Association.”
Even without the new law, an association’s members have the right to adjourn an attempted meeting of members without regard to whether the quorum lowers. For those bylaws that do provide for a stepdown quorum, the members can likewise adjourn, and a lower quorum applies to the subsequent meeting. So long as the bylaws do not provide for a quorum (stepdown or otherwise) lower than 20%, then the association members can also adjourn pursuant to the newly amended § 5115.
“If you always do what you’ve always done, you’ll always get what you’ve always got.”
- Henry Ford
California Civil Code §5115(b) defines what an association must include in its pre-ballot notice. For most of us in the industry, the
better part of last year included updating forms to include the required references to “the board’s” ability to set a reconvened meeting. Effective January 1, 2025, subsection (b)(5) was amended to remove any reference to the board and, instead requires that an association include in its pre-ballot notice a statement that: “The association may call a reconvened meeting to be held at least 20 days after a scheduled election if the required quorum is not reached, at which time the quorum of the membership to elect directors will be 20 percent of the association’s members, voting in person, by proxy, or by secret ballot.” vi
The adjournment under § 5115 still requires the members in attendance at an attempted meeting to approve the adjournment. The notice requirement for such a meeting, however, differs from the more traditional method. Specifically, while the traditional method required no further notice if the date, time, and place were announced (other than what might be required in the association’s governing document), the new method of adjournment requires that the association post general notice of the date, time, and place of the meeting at least 15 days prior to the date of the reconvened meeting.
Thus, to recap, if an association’s governing document do not provide a lower quorum, then the members may adjourn a meeting to a date at least 20 days after the attempted meeting, so long as general notice is posted at least 15 days prior to the meeting. Moreover, the pre-ballot notice for all meetings where the 20% quorum is available must include the language immediately above.
In closing, once the dust settles and the new provisions become a habit, this should help associations deal with the longstanding and rampant problem of obtaining quorum.
I A “quorum” describes the minimum number of members that must participate in a meeting before any action can be taken (e.g., the election of directors to the board).
II A “step-down” quorum describes a lowered quorum, typically provided for in the bylaws, that is expressly authorized in the event that a meeting is attempted but quorum is not reached. It permits the members to approve an adjournment of a meeting to a later time and place where the quorum will be lowered (e.g., from 33% of the members to 25%).
III Note that for those lucky few that have annual meetings prior to January 1, 2025, the board approval option is still available. Its provisions must be followed if your association wishes to use the 20% offered therein.
IV California Corporations Code §7512(a).
V Corporations Code §7511(d): “When a members’ meeting is adjourned to another time or place, unless the bylaws otherwise require and except as provided in this subdivision, notice need not be given of the adjourned meeting if the time and place thereof (or the means of electronic transmission by and to the corporation or electronic video screen communication, conference telephone, or other means of remote communication, if any, by which members may participate) are announced at the meeting at which the adjournment is taken.”
VI § 5115(b)(5)(B) provides that the statement is not required if the bylaws already provide for less than a 20% quorum.
Frederick T. Whitney, Esq. has been a part of the industry for over 20 years and is a founder at Whitney | Petchul. He presently serves as counsel to some of the largest master planned communities in California and as Chief Editor of the Law Journal.
William Curry, Esq was admitted to the California State Bar in 2018 and received his Juris Doctor degree the same year. He has been involved in a number of new developments at Whitney | Petchul but prior to joining he served as Orange County’s deputy sheriff for 12 years.
2024-2025 LEGAL DIRECTORY
ASSESSMENT COLLECTION SERVICES
ALLIED TRUSTEE SERVICES
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COMMUNITY LEGAL ADVISORS, INC.
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FELDSOTT, LEE & NICHTER, ATTORNEYS AT LAW
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ATTORNEYS
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CHAPMAN & INTRIERI, LLP
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COMMUNITY LEGAL ADVISORS, INC.
General Counsel & Assessment Collections
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DELPHI LAW GROUP, LLP
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EPSTEN, APC
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HICKEY & ASSOCIATES, P.C. Community Association Law
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HUGHES GILL COCHRANE TINETTI, PC Community Association & Construction Defect Law
John P. Gill, Esq. l Amy K. Tinetti, Esq. 1350 Treat Blvd., Ste. 550 Walnut Creek, CA 94597 (925) 926-1200 • Fax (925) 926-1202 atinetti@hughes-gill.com www.hughes-gill.com
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LOEWENTHAL, HILLSHAFER & CARTER, LLP
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David A. Loewenthal I Robert P. Hillshafer
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THE NAUMANN LAW FIRM, PC
Attorney and Construction Defect Analysis
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PRATT & ASSOCIATES, APC
Community Association Law
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RAGGHIANTI FREITAS LLP
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David F. Feingold, Esq.
Matthew A. Haulk, Esq. Serving Bay Area Communities Since 1986 1101 Fifth Ave., Ste. 100 San Rafael, CA 94901 (415) 453-9433 • Fax (415) 453-8269 dfeingold@rflawllp.com www.rflawllp.com
RICHARDSON | OBER LLP
Community Association Law, Assessment Collection
Kelly G. Richardson | Matt D. Ober Throughout California (877) 446-2529 info@roattorneys.com www.roattorneys.com
SWEDELSONGOTTLIEB
Community Association Law Construction Defect Assessment Collection
David C. Swedelson, Esq., Sandra L. Gottlieb, Esq., Cyrus Koochek, Esq.
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TINNELLY LAW GROUP
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FENTON GRANT KANEDA & LITT, LLP
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Rachel M. Miller, Esq.
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Construction Defect Resolutions & Construction Defect Analysis Attorneys
Rick Riley, Melissa Pasek, Kevin Canty Representing Community Associations Throughout the State of California 780 San Ramon Valley Blvd. Danville, CA 94526 (844) 775-5000 JWebster@RileyPasek.com www.rileypasek.com
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ASSOCIATION RESERVES
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