The Law Journal, Spring 2023

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2023 CACM Spring Law Journal Editorial Committee

Chief Editor

Attorney Guest Editor

Fred Whitney, Esq. Whitney | Petchul

Dyanne Peters, Esq. Delphi Law Group LLP

Spring 2023 Law Journal Committee Members

Megan Hall, Esq. Adams l Stirling PLC

Lisa Tashjian, Esq. Beaumont Tashjian

Jill Morgan, CCAM Allure Total Management

Hamlet Vazquez, MCAM-HR Wilshire Terrace Co-op

Lorena Sterling, CAFM Community Association Financial Services (CAFS)

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.

Letter from the Guest Editor

The theme of this spring issue is “New, Renew, and Review.” The New Year is a great time to get acquainted with new legislation that affects community associations. There is also a sense of renewal in the spring, so the committee wanted to focus on topics that warrant renewal or review by community managers and associations.

With this first issue for 2023 the committee felt it important to touch on how the new legislation in Assembly Bill 1410 affects community associations. AB 1410 adds to the growing list of legislation focused on rental restrictions within community associations. Our author examines what is required under new Civil Code Section 4739 and how it interacts with rental restrictions previously enacted.

This issue also delves into some important topics for community managers and associations to review and digest. A refresher on the Open Meeting Act is included since it is crucial to the operation of board business to understand the procedures and requirements under California law. Many associations are also looking to renew their governing documents to ensure they are compliant with current law and the current operation of the association; thus, an article in this issue reviews the differences between rule adoption and CC&R amendments.

We have also included an article that contains some contracting tips from an expert in employment law. This information will be useful to associations looking to execute new or review and renew current contracts with vendors in the coming months.

“Spring cleaning” for an association may actually mean reviewing the associations’ maintenance and inspection obligations and scheduling needed inspections, testing, or repairs for the common areas. This issue addresses some of the common maintenance and inspection requirements under an association’s governing documents and the law.

The authors in this issue are knowledgeable and provide expert advice on these topics. The Committee would like to thank the authors for tackling these matters and providing resources and guidance for managers and associations looking forward to all things new, renewed, or reviewed in 2023.

Dyanne L. Peters, Esq., is an attorney with Delphi Law Group, LLP and has 6 years of experience in the industry.

A REFRESHER ON THE OPEN MEETING ACT

By Stephen M. Levine, Esq.

The Davis-Stirling Act, Civil Code §4900, known as the “Open Meeting Act” provides rules for board meetings. The public policy behind the Open Meeting Act is to ensure transparency and keep board members accountable.

The Open Meeting Act ensures that homeowners are apprised of association matters by providing homeowners with the right to attend all board meetings (except executive session meetings), advance notice of such meetings, and access to meeting minutes.

The Open Meeting Act provides certain guidelines, such as boards are prohibited from acting on “any item of business” outside a board meeting (Civil Code §4910(a)), with one exception discussed below.

What is an “item of business?” It means any action within the board’s authority, except those actions the board has validly delegated to any other person or persons, managing agent, association officer, or board committee (Civil Code §4155).

WHAT IS A BOARD MEETING?

A “board meeting” is defined in Civil Code §4090, as: (a) a “congregation” at the “same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board”; or (b) a “teleconference,” where a “sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both.”

If the meeting is via teleconference, the meeting notice must identify at least one physical location where homeowners may attend and at least one director or a person designated by the board must be present (Civil Code §4090(b)). However, because of the COVID-19 pandemic, the legislature enacted Civil Code §5450 which provides an exception for the physical location designation.

Section 5450 applies if gathering in person is unsafe or impossible because of a local, state, or federal state of emergency, and permits associations and boards to meet by teleconference, without designating a physical location, during such times. It does require that certain other requirements are met and an association should review the text of the statute before determining to hold a meeting under Section 5450.

TYPES OF MEETINGS OPEN BOARD MEETING

Typically, regular board meetings are set by the board, unless the bylaws set a specific frequency of regular meetings. Generally, regular board meetings are held monthly. To hold a properly noticed board meeting, the board must give the membership notice at least four days before the meeting (Civil Code §4920(a)).

If the governing documents require a longer notice period, it must be complied with. The meeting notice must contain an agenda and the date, time, and place of the meeting must be provided by general delivery (Civil Code §4920(c)-(d)). The board may not discuss (except for limited exceptions set forth in Civil Code §4930) or take action on any item at a nonemergency meeting unless the item was placed on the agenda.

Open board meetings are open to homeowners to attend and observe and must allow for a homeowner forum (sometimes referred to as “open forum”) where owners can voice concerns, opinions and ask questions (Civil Code §4925).

Boards can set a reasonable time limit for homeowners to speak at the meeting’s beginning or end. However, the board is not required to answer questions posed in an open forum; in fact, they may not discuss questions or issues that have not been noticed on the agenda for the meeting

EXECUTIVE SESSION BOARD MEETINGS

Executive session board meetings are closed to homeowners. The following matters are those which may be discussed or acted upon by the board in executive session:

(a) legal matters involving pending or potential litigation;

(b) formation of contracts (bids) with third parties (although the Civil Code does not address the board voting and executing contracts in executive session, doing so is allowed. However, for transparency, many associations vote on contracts in open board meetings because executed contracts may be requested by homeowners);

(c) member discipline; and

(d) personnel matters (Civil Code §4935).

The following matters are those which must be discussed or acted upon by the board in executive session:

(a) member discipline upon homeowner’s request and must allow the homeowner to attend the meeting;

(b) payment plans;

(c) lien foreclosure; and

(d) disability requests.

To hold a properly noticed executive session meeting, notice to the membership must be provided at least two days before the meeting (Civil Code §4920(b)(2)). Due to the confidential nature of executive session meetings, the agenda should be general in nature (Civil Code §4920(c)-(d)).

EMERGENCY BOARD MEETINGS

A board can hold an emergency meeting if circumstances arise which could not have been reasonably foreseen, and which require immediate attention and possible action

by the board, and which of necessity make it impracticable to provide notice to the membership.

An emergency board meeting may be called by the president or by any other two board members (Civil Code §4923). An emergency meeting may be held via email (see below) or telephone/video conference (Civil Code §4090(b)). No notice is required to the membership for an emergency meeting, assuming all the above requirements are met (Civil Code §4920(b)(1)).

SPECIAL MEETINGS

Special meetings of the members can be called by the board or by the membership, if at least 5% of the members sign a petition to hold a special meeting. Notice requirements for a special meeting depend on whether they were called by the board or the membership.

EMAIL MEETINGS

Boards cannot conduct a meeting or make a decision via e-mail, except for an emergency meeting, so long as all the directors on the board consent in writing to conducting such a meeting via electronic transmission (Civil Code § 4910(b)).

The written consents are filed with the next board meeting minutes. These written consents may be transmitted electronically. Non-business and administrative emails such as setting dates for meetings, and requesting agenda items, do not classify as conducting a meeting and therefore are permitted. Unanimous written consents cannot be used for actions without a meeting unless it is an emergency.

Stephen M. Levine, Esq., is an attorney with The Judge Law Firm who specializes in community association and real estate law and has 23 years of experience in the industry.

Contracting Tips from an HOA Employment Lawyer

Avoiding Employment Claims When You’re Not the Employer

California has long set the national standard for employee protections with robust labor laws covering virtually every aspect of the employment relationship. In particular, California’s “wage and hour” laws governing the payment of employee wages create significant obligations (and risk) for employers and unwitting homeowners associations whose vendor contracts are insufficient. Fortunately, strategies to reduce risk exist.

THE DEVIL IN THE DETAILSLABOR CODE 2810

California Labor Code section 2810 (“Section 2810”) generally prohibits an association from contracting with a construction, janitorial, or security guard contractor if they know (or should know) the contract does not include “funds sufficient to allow the contractor to comply with all applicable local, state and federal laws or regulations governing the labor or services to be provided.” 1

Courts interpreting Section 2810 have interpreted this sweeping (and vague) language to mean that the contract price must be enough to allow the

1 Section 2810 does not apply only to homeowners associations but to any “person or entity” entering into a contract for covered work. Section 2810 provides a limited exception where a person enters into a contract for work or services to be performed on his or her own home residence provided that a family member has resided in the residence for “at least a part of the year.” (Section 2810(c).)

By Aaron Hayes, Esq.

“If the contract price is insufficient to do so, not only is the contractor liable for resulting wage violations, but the aggrieved workers may also sue the contracting association for their actual damages.”

contractor to pay all workers performing the contract at least minimum wage for all hours worked (Castillo v. Toll Brothers Inc. (2011) 197 Cal.App.4th 1172, 1192.).

If the contract price is insufficient to do so, not only is the contractor liable for resulting wage violations, but the aggrieved workers may also sue the contracting association for their actual damages (i.e., wages owed) or penalties of $250 per employee for initial violations and $1,000 per employee for subsequent violations. Coupled with attorneys’ fees and costs employees are allowed to recover in any such action, the potential exposure is substantial.

Fortunately, Section 2810 provides a statutory safe harbor of sorts, although its requirements are onerous. (Section 2810(b)-(e).) Specifically, Section 2810 permits a “rebuttable presumption.” A contract complies with its requirements if it is contained in a single written document, signed and dated by the parties, containing ALL of the following information:

1. The parties’ names, addresses and telephone numbers and the contractor’s tax identification number;

2. A description of the work/services and when they will commence and be completed;

3. The contractors’ workers’ compensation insurance policy number and the insurance carrier’s name, address and telephone number;

4. The vehicle identification numbers for any vehicles the contractor will use in performing the work/services along with the name, address and telephone number of the contractor’s vehicle liability insurance carrier;

5. If the contractor will provide employees with housing to facilitate the work/services, the address where workers will be housed;

6. The total number of employees who will perform work/ services pursuant to the contract, the total amount of wages they will be paid and paydays;

7. The amount of all payments to be made to the contractor pursuant to the contract; and

8. The total number of persons who will perform work/ services pursuant to the contract as independent contractors along with the identification numbers of any licenses such independent contractors must have by law to perform such work/services.

If the number of employees, wages to be paid, or number of independent contractors is unknown when the contract is initially signed, a best estimate may be stated, but once the actual numbers are known the contract must be supplemented in a single written document signed by the parties.

Likewise, if any other of the safe harbor information above changes during the contract’s performance, the parties must similarly supplement the contract. A copy of the contract and any supplements must be kept for at least four years following the contract’s termination or completion (Section 2810(f).).

STRATEGIES FOR LIMITING LIABILITY

It is no overstatement that Section 2810 creates risk for associations and its safe harbor provisions are somewhat burdensome, however, the following strategies will help mitigate the potential risk.

COMPLY WITH SECTION 2810

Associations should ensure construction, janitorial, and security contracts include statutorily required information to allow the association to assert the safe harbor presumption if a claim arises.

To simplify including this information in vendor contracts and ensure consistency, associations can create a template addendum containing information required by Section 2810, which vendors complete, the parties sign and it then is included as part of the contract. If circumstances require an update to the Section 2810 information while the contact is being performed, a new addendum may simply be executed.

INDEMNIFICATION FOR EMPLOYMENT CLAIMS

Apart from Section 2810, associations should request vendors agree in the contract to defend and indemnify the association, its directors and officers from any employment-related claim made by the vendor’s employees. While such an obligation does not keep an association from being named in a claim, it will offer the association protection if such a claim is made to offset the cost of litigation and the risk of an adverse judgment.

CHOOSING VENDORS FOR SUCCESS

It goes without saying that the vast majority of risk, whether under Section 2810 or otherwise, may be avoided by working with reputable vendors who have reputations for good business practices and honest services. To that end, due diligence is essential in vendor selection through obtaining references, checking license statuses and litigation histories, and verifying insurance coverages.

Doing so not only mitigates risk, but also helps ensure the association does business with vendors who will honor their obligations under their contracts. While the complete elimination of risk is impossible, careful attention to these strategies will go far in limiting associations’ exposure to employment-related claims from others’ employees.

Aaron Hayes, Esq., is an attorney with O’Toole Rogers, LLP and has 10 years of experience in the industry.

New Legislation: AB 1410, Rental Restrictions

As we are all aware, the California legislature has been cracking down on rental restrictions, permitting fewer restrictions year after year. Currently, associations are permitted to restrict leases to a minimum of thirty (30) days and implement a rental cap of twenty-five percent (25%) or more (Civil Code Section 4741).

Additionally, prior to the adoption of Civil Code § 4739, associations were permitted to prohibit leasing only a portion of an owners’ separate interest, and many associations’ CC&Rs strictly prohibit owners from renting only a portion of their separate interest, i.e., a room rental.

What is required under the new Civil Code?

AB 1410 adds Section 4739 to the Civil Code, which renders provisions prohibiting room rentals unenforceable. This new code section provides:

“An owner of a separate interest in a common interest development shall not be subject to a provision of a governing document, or amendments thereto, that prohibits the rental or leasing of a portion of the owner-occupied separate interest in that common interest development to a renter, lessee, or tenant for a period of more than 30 days.”

The code explicitly requires the owner to be occupying the separate interest; therefore, owners may be prohibited from leasing out individual rooms while they are not occupying the home, unless otherwise permitted by law. However, there are no clear guidelines for how many rooms an owner can rent, so an owner could occupy one bedroom and individually rent each additional bedroom in the home.

Further, Civil Code § 4739 clarifies that both the owner and any resident renting or leasing a portion of the owner-occupied separate interest are subject to all provisions of the association’s governing documents. This includes, but is not limited to, parking restrictions and guest access to common areas and facilities, as well as provisions governing minimum lease terms.

How does Civil Code § 4739 interact with previous rental restrictions?

This new code section further limits associations’ ability to restrict rentals, continuing with the theme of loosening rental restrictions to promote adequate availability of housing throughout the state. AB 1410 may help accomplish the goal of increasing housing by providing new options for homeowners that could not previously rent out portions of their

separate interest or accessory dwelling units, or at least clarifying that owners continue to have this right even if they reside in a common interest development.

It is also important to note that new room rentals under AB 1410 do not count towards the rental cap because Civil Code § 4741 refers to “separate interests” and states that “an accessory dwelling unit shall not be construed as a separate interest.” Specifically, Civil Code § 4741 states in relevant part:

“(d) For purposes of this section, an accessory dwelling unit or junior accessory dwelling unit shall not be construed as a separate interest.

(e) For purposes of this section, a separate interest shall not be counted as occupied by a renter if the separate interest, or the accessory dwelling unit or junior accessory dwelling unit of the separate interest is occupied by the owner.”

These provisions, in connection with Code § 4739 make it clear that no room rental, nor accessory dwelling unit will count towards an association’s rental cap. This means associations cannot limit the number of room rentals within a community and, in theory, every home could rent a room as long as the owner continues to occupy the home.

Since an accessory dwelling unit is not a separate interest, owners may now be permitted to rent rooms in their accessory dwelling units. This new policy could create an influx of renters, especially in communities with many accessory dwelling units.

Appropriate next steps for associations

Going forward, associations should make sure their governing documents adequately address room rentals. This includes amending rental restrictions in CC&Rs to specifically apply to room rentals and ensuring that guidelines for these new rentals are clear, including requiring that the separate interest be owner-occupied, and that any resident or

lessee is subject to all governing documents.

Owners may try to argue that because it is just a room rental, they do not have to comply with the minimum lease requirements; however, AB 1410 is clear that room rentals are subject to minimum lease terms. If the minimum lease term does not specifically apply to room rentals, then owners may rent rooms as vacation/Airbnb rentals. To protect the association’s interests and ensure compliance with governing documents, associations should require all lease agreements to be on file with the association so there is a record of who is residing in the community.

Additionally, associations should implement a fine policy for violations of rental rules, which is one of the few ways associations can protect property values and prevent the character of the community from shifting dramatically.

Further, it is important that all associations have adequate accessory dwelling unit and junior accessory dwelling unit policies in place. Now that owners can easily rent their accessory dwelling units it is crucial that associations have policies in place to timely approve or deny applications as well as enforce relevant governing document provisions regarding the new units. More owners may be inclined to build accessory dwelling units now that they have the potential for rental income.

A.J. Jahanian, Esq., is an associate attorney with Beaumont Tashjian that specializes in preparation and enforcement of governing documents and contracts, risk management, dispute resolution, fair housing compliance, and all other issues impacting community associations.

in theory, every home could rent a room as long as the owner continues to occupy the home.

Protect Your HOAs

Understanding Inspection & Testing Requirements

By Joe Seltzer, Esq.

Most experienced community managers are familiar with the general rule that an association is responsible for the maintenance and repair of common areas within a given development, while homeowners are responsible for the maintenance and repair of separately owned unit / lot components (See Civil Code § 4775).

Also known by most is that the project CC&Rs and other governing documents help delineate, some more clearly than others, which site improvements are part of common area and/or association maintenance areas, and which are within the boundaries of individual units/lots.

Original budget worksheets prepared by developers and submitted to the DRE as part of the subdivision public report application process, provide a roadmap for annual maintenance, as well as long term maintenance and repairs per the reserve schedule.

The majority of routine scheduled maintenance is thus performed in accordance with these pro-forma budgets, as they are amended each year during the annual budget submission and approval process.

Less known by most managers is that, in addition to routine scheduled maintenance provided for in the operating budget and reserve account, periodic inspection and testing requirements also arise pursuant to the project CC&Rs, as well as under the Civil Code.

Failure to properly maintain the common areas in compliance with these requirements can result in negative financial and legal consequences. Examples include:

Breach of the Governing Documents

The project CC&Rs and other governing documents are equitable servitudes, enforceable by the association and/or any homeowner as part of a claim for breach of the governing documents pursuant to Civil Code § 5975.

Special Assessment

Each association has an obligation to maintain and repair the common areas, regardless of financial considerations. When maintenance and repair expenses exceed available funds, Civil Code § 5600 requires an association to levy special assessments sufficient to perform its duties.

Construction Defect Claims

Failure to maintain common area systems and components in compliance with the CC&Rs and/or maintenance manual can negatively impact a younger association’s ability to successfully pursue claims for construction defects against a builder or other responsible party. Civil Code § 945.5 excuses an otherwise responsible party from liability if a showing is made that the claimed damage is caused through improper maintenance.

But fear not. By identifying these specific inspection and testing requirements, managers can easily budget for compliance, while also ensuring that problems are identified at an early stage and can be addressed over time without the need for a special assessment of the membership!

Inspection & Testing Requirements Per the Governing Documents & Civil Code

Many CC&Rs contain provisions requiring the association to retain experts and construction consultants to conduct regular inspections of the common areas. In many cases these CC&R provisions further require consultants to produce an annual inspection report, to determine whether the common areas are being properly maintained, to identify the existence of hazards or defects, and to recommend preventative measures, as necessary.

Inspection and testing requirements also arise under the Civil Code. For example, Civil Code § 5551 now requires associations with buildings containing three or more attached units to conduct periodic inspections of elevated elements such as decks, walkways, balconies and stairs that are supported in whole or in substantial part by wood or wood-based products.

Reserve Study Limitations

You may be asking, aren’t these requirements satisfied through the reserve study inspection and reporting process? Unfortunately, no. While extremely important for the long-term management of an association and the equitable funding of major repairs over time, reserve studies do have important limitations.

Reserve studies contain standard disclaimers which state that no destructive testing was undertaken as part of the inspection process, as well as disclaiming that the study does not purport to address any latent and/or patent defects or premature deterioration due to improper design or construction.

In basic terms, this means that unless there is clear visual evidence of damage or distress, the reserve study assumes that each component is constructed properly and will last its entire expected useful life.

Compliance with Inspection Requirements

With these inspection requirements and reserve study limitations in mind, what simple and easy steps can managers take to ensure compliance?

The first step is to identify what specific inspection requirements exist at a given property. Periodic inspection requirements are typically located in the same article as the association’s routine maintenance obligations,

generally under a subsection entitled “association inspections”, or something of the like.

Review these provisions with a preferred maintenance vendor to determine the best and most efficient means of compliance, including an estimated budget for that work on an annual basis. Once known, these costs can be easily calculated into the annual budget and operating account.

Initial inspections of deck and other elevated elements pursuant to the requirements of Civil Code § 5551 must be completed by January 1, 2025, and once every nine years thereafter. Unlike annual inspection and maintenance costs, the best way to budget for these less frequent requirements is through the reserve account.

Obtain an inspection and compliance proposal from a preferred vendor and work with the association’s reserve study analyst to incorporate these costs into the reserve schedule, as necessary.

These simple budgeting steps will ensure compliance with inspection and testing requirements per the CC&Rs and Civil Code. Importantly, through these compliance steps, you will also be protecting your association clients from unexpected financial hardship.

Recent advancements in technology such as sensors, infrared, borescopes and other tools not

only allow efficient and cost-effective inspections, but also a highly informative forensic inspection process. Through routine inspections of the common property, experts and consultants can detect and document water intrusion and premature deterioration of the major systems.

As mentioned earlier, reserve studies assume that each component is operating properly and will last its expected useful life. When problems and/or performance defects that have reduced the expected useful life of a common area system or component are identified early, reserve schedules can be adjusted to avoid catastrophic failure and the potential need for a special assessment of the membership.

Joe Seltzer, Esq., is a partner with Riley Pasek Canty LLP, who works with community association managers and boards of directors to investigate and pursue claims for common area construction defects.

CC&R RULE RESTRICTIONS

UNDERSTANDING THE DIFFERENCES BETWEEN CC&R’s & Rule Restrictions

By Karen St. Onge, Esq.

So, the board wants to implement new restrictions to stop some problematic behavior in the community. Where do you start? The process and procedure that you follow will depend on whether the restriction is added to the operating rules or the CC&Rs.

This article aims to assist community managers in understanding some of the differences and similarities between restrictions contained in those two kinds of governing documents so they can effectively assist boards in implementing new restrictions.

THE PURPOSE OF CC&RS AND OPERATING RULES

The CC&Rs concern the real property rights of the separate interests within the common interest development and establish the board’s authority to regulate and restrict those rights. The operating rules expand upon the rights and restrictions set forth in the CC&Rs or the law, such as the DavisStirling Act, by providing more detail and specificity for owners and residents to know what is expected of them as members of the community.

RESTRICTIONS MUST BE REASONABLE

The board’s discussion should begin with whether the proposed restriction is reasonable. The same definition of reasonable applies to restrictions whether they are contained in the CC&Rs or in

operating rules. Restrictions contained in both documents are reasonable unless they are:

(1) arbitrary;

(2) they impose burdens on the property that substantially outweigh the restriction’s benefits to the development’s residents; or

(3) they violate a fundamental public policy.

Whether restrictions are reasonable is determined not by reference to facts that are specific to the objecting homeowner but by reference to the development as a whole (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal. 4th 361).

AUTHORITY FOR RESTRICTIONS IN OPERATING RULES

To include a restriction in operating rules, either the law or the CC&Rs must grant the board with the authority to restrict the conduct or use of the subject property. Rulemaking authority derived from the Davis-Stirling Act includes the authority for adopting “operating rules” related to the management and operation of the association or the conduct of the business and affairs of the association (Civil Code Section 4340(a)).

PROCEDURES FOR IMPLEMENTING NEW RESTRICTIONS

The procedures for adding restrictions to the operating rules and CC&Rs differ, but the process

begins the same. The process for amending and/or adding to existing CC&Rs and operating rules begins with the board creating drafts with the assistance of legal counsel, other experts and/or management. The board may, but is not required to, poll the membership to get their feedback on the proposed restriction or hold a townhall meeting to discuss the proposed changes.

For both CC&Rs and rules, the board should vote on approving the final version of the document in an open board meeting. It is at that point that the procedures diverge. A proposed rule change only requires board adoption after the requisite comment period but adding a restriction to the CC&Rs needs membership approval through a secret-ballot election.

For operating rules, the association must provide members the text of the proposed rule and a description of the purpose and effect of the proposed rule change. Members must be given at least 28-days General Notice of the proposed rule change to review and provide comments to the board before the proposed rule is adopted by the board at an open board meeting.

The board may also consider comments by members at the meeting before the vote on adoption of the proposed rule (Civil Code Section 4360). Please note, however, that the board is not required to provide notice to implement an emergency rule change, where the rule is required

to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the association (Civil Code Section 4360).

For CC&Rs, the threshold for approval of members for a proposed amendment is usually contained in a provision of the CC&Rs; this may be a simple majority, or a super-majority of 2/3 or more. The proposed amendment is mailed to members with a secret-ballot at least 30 days before the ballot counting meeting.

The association will also need to comply with election law requirements and procedures and any association election rules for the vote. Although an association could get an amendment to the CC&Rs approved in a little over 30 days, if members fail to return enough ballots, elections often need to be postponed until a quorum of ballots are returned.

However, if there are no complications, the procedure for adding a restriction to the rules or the CC&Rs can take about the same amount of time. The cost of amending the CC&Rs is more than amending rules because amended CC&Rs need to be recorded with the county and the election itself is more costly (Civil Code Section 4270).

The same 15-day deadline applies to providing General Notice to the membership of the approval/ adoption of the new governing document (i.e., 15days after the election meeting or 15-days after the board meeting adopting the rule).

MEMBER OPTIONS FOR OBJECTING TO RESTRICTIONS

If a member objects to a restriction in established CC&Rs or operating rules, one potential recourse is to get elected to the board and attempt to get it changed (or go to court). For recently adopted operating rules, but not recently approved CC&Rs, a special membership vote to veto a rule change can be requested by members owning 5 percent or more of the separate interests.

The objecting members must exercise this right within 30 days after the membership was given General Notice of the adoption of the rule by the board. The special membership vote must then be held within 90 days after receipt of the objecting members’ request (Civil Code Section 4365). The same procedure cannot be used by members to amend CC&Rs.

PROCEDURE FOR ENFORCING THE RESTRICTIONS AND COLLECTING FINES

When restrictions are violated, the procedure for addressing those violations is the same regardless of the restriction being an operating rule or in the CC&Rs. First, an alleged violation must be investigated and substantiated. At a minimum, the member must be given notice of the hearing to determine if a fine or penalty will be imposed, and the member must be given an opportunity to present evidence and be heard, and then given notice of the board’s decision (Civil Code Section 5855).

If the member does not pay the disciplinary fines, the association can go to small claims court. The difference may come when having to prove that the member was given notice of the restriction since CC&Rs are public records, but rules are not. Also, because CC&Rs are approved by the membership and recorded, some small claims judges are more likely to enforce fines imposed for violating CC&Rs rather than operating rules.

To overcome these challenges, the board should identify the provision in the CC&Rs that provides the board with rulemaking authority for the restrictions in the operating rules.

Karen St. Onge, Esq., serves as general counsel for homeowner associations. Onge currently practices law out of the Adams Stirling’s Northern California offices and has been in the industry for over 15 years.

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Serving California With General Counsel & Collection Services

21650 Oxnard St., Ste. 1620 Woodland Hills, CA 91367

(866) 788-9998 • Fax (818) 884-1087

info@HOAattorneys.com www.hoaattorneys.com

BERDING | WEIL

Construction Defect Litigation

Steven Weil, Tyler Berding, Chad Thomas, Daniel Rottinghaus, Andrew Baugh, Paul Windust

Walnut Creek, San Diego, Orange County, Sacramento

2175 North California Blvd., Ste. 500

Walnut Creek, CA 94596

(800) 838-2090 • Fax (925) 820-5592

jjackson@berdingweil.com

www.berdingweil.com

COMMUNITY LEGAL ADVISORS, INC.

General Counsel & Assessment Collections

Mark Guithues, Esq. & Mark Allen Wilson, Esq. Inland Empire | Orange County | San Diego

509 N. Coast Hwy.

Oceanside, CA 92054

(760) 529-5211 • Fax (760) 453-2194

mark@attorneyforhoa.com

www.attorneyforhoa.com

EPSTEN, APC

Community Association Law, Construction Defect, Litigation & Assessment Recovery

Jon Epsten, Esq. & Susan Hawks McClintic, Esq.

San Diego | Inland Empire | Coachella Valley

10200 Willow Creek Rd., Ste. 100 San Diego, CA 92131

(858) 527-0111 • Fax (858) 527-1531

jepsten@epsten.com

www.epsten.com

FIORE RACOBS & POWERS, A PLC

Community Association Law & Assessment Collections

Jacqueline D. Foster, Esq., Peter E. Racobs, Esq., & John R. MacDowell, Esq.

The Recognized Authority in Community Association Law

Orange County | Inland Empire | Coachella Valley l San Diego County

(877) 31-FIORE • Fax (949) 727-3311

dweissberg@fiorelaw.com

www.fiorelaw.com

GURALNICK & GILLILAND, LLP

Association Law, Assessment Collections, General Counsel

Wayne S. Guralnick, Robert J. Gilliland Jr. Serving Community Associations for Over 30 Years

40004 Cook St., Ste. 3 Palm Desert, CA 92211

(760) 340-1515 • Fax (760) 568-3053

wayneg@gghoalaw.com

www.gghoalaw.com

HICKEY & ASSOCIATES, P.C. Community Association Law

David E. Hickey, Esq. 27261 Las Ramblas, Ste. 120 Mission Viejo, CA 92691 (949) 614-1550 • Fax (949) 748-3990

dhickey@hickeyassociates.net www.HickeyAssociates.net

HUGHES GILL COCHRANE TINETTI, P.C. Community Association & Construction Defect Law

Michael J. Hughes, Esq., John P. Gill, Esq., Amy K. Tinetti, Esq. Complete Representation of Community Associations

2820 Shadelands Dr., Ste. 160 Walnut Creek, CA 94598 (925) 926-1200 • Fax (925) 926-1202 atinetti@hughes-gill.com www.hughes-gill.com

THE JUDGE LAW FIRM

Providing General Counsel & Collection Services Throughout CA For Over 20 Years

James Judge, Esq. HOA LAW

18650 MacArthur Blvd., 4th Fl., Ste. 450 Irvine, CA 92612 (949) 833-8633 • Fax (949) 833-0154 info@thejudgefirm.com

www.thejudgefirm.com

LOEWENTHAL, HILLSHAFER & CARTER, LLP

Construction Defect Litigation

Robert Hillshafer | David Loewenthal

Los Angeles, Ventura, and Surrounding Counties

5700 Canoga Ave., Ste. 160 Woodland Hills, CA 91367 (866) 474-5529 • Fax (818) 905-6372

info@lhclawyers.net www.lhclawyers.net

THE NAUMANN LAW FIRM, PC

Construction Defect Litigation Construction Defect Analysis

William Naumann l Elaine Gower

San Diego l Orange County l Los Angeles l Riverside l San Bernardino

10200 Willow Creek Rd., Ste. 150 San Diego, CA 92131

(858) 522-0763 • Fax (858) 564-9300

elaine@naumannlegal.com

www.naumannlegal.com

PRATT & ASSOCIATES, APC

Community Association Law

Sharon Glenn Pratt

Los Gatos, CA

634 North Santa Cruz Ave., Ste. 204

Los Gatos, CA 95030

(408) 369-0800 • Fax (408) 369-0752

spratt@prattattorneys.com

www.prattattorneys.com

RAGGHIANTI FREITAS LLP

Community Association Law, Construction Defects & Mediation

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, General Counsel, Assessment Recovery

Kelly G. Richardson

Matt D. Ober

Throughout California

(877) 446-2529

matt@roattorneys.com

www.roattorneys.com

SWEDELSONGOTTLIEB

Community Association Law, Construction Defect, Assessment Collection

David C. Swedelson, Esq.

Sandra L. Gottlieb, Esq.

Los Angeles | Orange County |

Palm Desert | San Francisco l Ventura 11900 W. Olympic Blvd., Ste. 700

Los Angeles, CA 90064

(800) 372-2207 • Fax (310) 207-2115

slg@sghoalaw.com

www.lawforhoas.com

TINNELLY LAW GROUP

Community Association Law

Richard A. Tinnelly, Esq.

Steven J. Tinnelly, Esq.

Orange County | Los Angeles |

Palm Desert | San Francisco | San Diego 27101 Puerta Real, Ste. 250

Mission Viejo, CA 92691

(949) 588-0866 • Fax (949) 588-5993

ramona@tinnellylaw.com

www.tinnellylaw.com

Continues on page 16

2022-23 LEGAL DIRECTORY,

Continued from page 15

WHITE & MACDONALD, LLP

COMMUNITY ASSOCIATION LAW, CONSTRUCTION DEFECT LAW

Steven M. White, Esq., Rob D. MacDonald, Esq., James P. Hillman, Esq.

COST EFFECTIVE SOLUTIONS BASED ON EXPERIENCE

1530 The Alameda, Ste. 215 San Jose, CA 95126

(408) 345-4000 • Fax (408) 345-4020 info@wm-llp.com

www.wm-llp.com

WHITNEY PETCHUL APC

Community Association Attorneys

Fred T. Whitney, Esq. l Dirk E. Petchul, Esq.

From Inception To Build-Out And Beyond

27 Orchard Rd.

Lake Forest, CA 92630

(949) 766-4700 • Fax (949) 766-4712

dpetchul@whitneypetchul.com www.whitneypetchul.com

WOLF, RIFKIN, SHAPIRO, SCHULMAN & RABKIN, LLP

Community Association Law

Michael W. Rabkin, Esq.

11400 W. Olympic Blvd., 9th Floor

Los Angeles, CA 90064

(310) 478-4100 • Fax (310) 479-1422

mrabkin@wrslawyers.com www.wrslawyers.com

CONSTRUCTION DEFECTS

BERDING | WEIL

Construction Defect Litigation

Steven Weil, Tyler Berding, Chad Thomas, Daniel Rottinghaus, Andrew Baugh, Paul Windust

Walnut Creek, San Diego, Orange County, Sacramento

2175 North California Blvd., Ste. 500

Walnut Creek, CA 94596

(800) 838-2090 • Fax (925) 820-5592

jjackson@berdingweil.com

www.berdingweil.com

CHAPMAN & INTRIERI, LLP

General Counsel & Construction Defect Litigation

John W. Chapman, Esq. & Mark G. Intrieri, Esq.

Alameda l Roseville l Orange County l San Diego

2236 Mariner Square Dr., Ste. 300 Alameda, CA 94501

(510) 864-3600 • Fax (510) 864-3601

jchapman@cnilawfirm.com www.cnilawfirm.com

FENTON GRANT MAYFIELD

KANEDA & LITT, LLP

Construction Defect Litigation & CID Education

Charles R. Fenton, Esq. & Joseph Kaneda, Esq.

Servicing California & Nevada Communities for Over 30 Years

2030 Main Street, Ste. 550 Irvine, CA 92614

(877) 520-3455 • Fax (949) 435-3801

cfenton@fentongrant.com www.fentongrant.com

THE MILLER LAW FIRM

Construction Defect Analysis & Litigation

Thomas E. Miller, Esq. & Rachel M. Miller, Esq.

The Authority in California Construction Defect Claims for 40 Years

19 Corporate Plaza Dr. Newport Beach, CA 92660

(800) 403-3332 • Fax (929) 442-0646

rachel@constructiondefects.com www.constructiondefects.com

ELECTION ADMINISTRATION

THE INSPECTORS OF ELECTION

Providing Superior Election Support for California HOA’s Since 2006

Kurtis Peterson

Completely Independent Full-Service Election Provider

2794 Loker Ave. W., Ste. 104 Carlsbad, CA 92010

(888) 211-5332 • Fax (888) 211-5332

kurtis@theinspectorsofelection.com www.theinspectorsofelection.com

LIBERTY HOA ELECTION SERVICES, LLC

Election Administration

Deanna M. Libert

We Make Association Voting Management Easy

1900 Camden Ave. San Jose, CA 95124

(408) 482-9659

deanna@hoaelection.com

www.hoaelection.com

RESERVE STUDY FIRMS

ASSOCIATION RESERVES

Reserve Study Firm

Carol Serrano

Reserve Studies for Community Associations

6700 Fallbrook Ave., Ste. 255 West Hills, CA 91307

(800) 733-1365

cserrano@reservestudy.com

www.reservestudy.com

THE HELSING GROUP, INC.

Reserve Study Firm

Ryan Leptien

Serving All of California 4000 Executive Pkwy., Ste. 100 San Ramon, CA 94583

(925) 355-2100 • Fax (925) 355-9600

reservestudies@helsing.com

www.helsing.com

VENDOR COMPLIANCE

ASSOCIATION SERVICES NETWORK

Vendor Compliance

David Jeranko

Vendor Compliance & Risk Management

24000 Alicia Pkwy., Ste. 17-442 Mission Viejo, CA 92691

(949) 300-3702 • Fax (877) 404-2008

davidj@asn4hoa.com

www.asn4hoa.com