ECHO Journal - January 2017

2016 Legislative and Case Law Update

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Best Price, Highest Quality: Is That All There Is? p.18

Serving Community Associations

Neighborhood Trees

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Vehicle Access Control (VAC) Systems p.26

2016 Community Association Financial Survey p.30

January / February 2017 echo-ca.org

How Do The Recent Legal Developments Affect Your Community Association‘s Interests? p. 6

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news from ECHO

News From ECHO January 2017 Happy New Year!

As for me, the prospect of a new beginning is most welcome. 2016 was a year of changes, with unpredictable outcomes stemming from unforeseen events. And yet, the opportunities ahead are numerous if one plans and executes with commitment and fortitude. Not platitudes: resolve.

In 2017, I will not involve myself in political squabbles that are beyond my control. But, if you are an association board member, a new Court case might require you to do just that. Read about it in Sandra Gottlieb’s roundup of new laws and cases from 2016.

In 2017, I will plan better and invest in the future. As for California HOAs, David Levy’s financial survey article suggests a concerning decline in association reserves, which means either communities will continue deferring maintenance, and reduce the value of members’ homes, or suffer the inevitable special assessment. I implore those with low reserves to begin a steady increase in assessments. The small incremental investment will generate huge returns long term, as well as make communities more welcoming and comfortable.

In 2017, I will not hire the low cost provider, and I will do my homework to ensure the best possible job. I encourage you to heed Burt Dean’s advice on hiring contractors.

In 2017, I will plan to be more secure. Offered in this edition is a description of some gate and resident recognition systems that might benefit your community.

In 2017, despite whatever may happen, I will not blame. Like the article on Trees by Cameron Day, recognize that things happen, and make sure when they do, you know how to deal with them and move on.

Let’s all embrace 2017 and make it a superb year, for ourselves, our families, and our neighbors!

Thank you for being a part of ECHO. Best,

Brian Kidney Executive Director

January/ February 2017 | ECHO Journal

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HIGHEST QUALITY

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2016 Legislative and Case Law Update Recent legal developments affect community association interests in a variety of ways. In 2016, the California Court of Appeal decided several cases concerning such issues as title to common area, board member liability, and attorney’s fees, among others, which may be instructive to board members and managers.

Meanwhile, on the legislative front, new and pending laws affect association interests in the realms of governance, business dealing, FHA certification, annual notifications, and use restrictions.

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Best Price, Highest Quality: Is That All There Is? To avoid liability, scrutiny is needed to protect property owners, property management, insurance companies, finance companies, government, and large corporations; all these entities are liable for errors from negligence from their contractors.

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Neighboring Trees

Copyright 2017 Educational Community for Homeowners. All rights reserved. Reproduction, except by written permission of ECHO is prohibited.

Vehicle Access Control (VAC) Systems

ECHO 1960 The Alameda, Suite 195 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org

2016 Community Association Financial Survey: How Do Your Association’s Finances Compare?

Recent legal developments affect community association interests in a variety of ways. In 2016, the California Court of Appeal decided several cases concerning such issues as title to common area, board member liability, and attorney’s fees, among others, which may be instructive to board members and managers.

Meanwhile, on the legislative front, new and pending laws affect association interests in the realms of governance, business dealing, FHA certification, annual notifications, and use restrictions.

DEPARTMENTS

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Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy.

One of the most common conflicts that arises between neighbors is the liability for damage caused by neglected trees. Of particular concern are invasive roots from neighboring trees due to the unseen nature of the root growth and the costly damage which roots cause to foundations, pools, sidewalks, and underground piping.

Vehicle Access Control (VAC) systems are – as the name implies, systems that control vehicle access to certain defined areas.

These defined areas are residential in nature and include gated communities, luxury high rises, private townhouses, condominium cooperatives, apartment complexes and even closed private estates.

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The ECHO Journal is published bi-monthly by the Educational Community for Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service.

If legal advice or other expert assistance is required, the services of a competent professional should be sought.

News from ECHO 2016 ECHO Educational Calendar Marin Educational Seminar — February 4th, 2017 Santa Cruz Educational Seminar — March 11th, 2017 ECHO Event Calendar ECHO Volunteers Wine Country Educational Seminar — March 25th, 2017 ECHO Bookstore Advertiser Index Legislation at a Glimpse

The ECHO membership list is never released to any outside individual or organization.

Office Hours Monday-Friday 9:00am to 5:00pm BOARD OF DIRECTORS AND OFFICERS President David Hughes Vice President Adam Haney Treasurer Diane Rossi Secretary Carly Melius Directors Sandra Bonato Jerry L. Bowles Rolf Crocker John Gill

David Levy

Karl Lofthouse Robert Rosenberg Jeffrey Saarman Brian Seifert Wanden Treanor

Executive Director Brian Kidney Director of Marketing & Membership Carly Melius Director of Communications Tyler Coffin Design and Production Design Site ECHO Mission Statement Serving Community Associations

January/ February 2017 | ECHO Journal

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2016 LEGISLATIVE and CASE LAW UPDATE Recent legal developments affect community association interests in a variety of ways.

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n 2016, the California Court of Appeal decided several cases concerning such issues as title to common area, board member liability, and attorney’s fees, among others, which may be instructive to board members and managers. Meanwhile, on the legislative front, new and pending laws affect association interests in the realms of governance, business dealing, FHA certification, annual notifications, and use restrictions. Though not a complete or authoritative guide, we hope this article can be a useful resource for you on the most relevant legal updates this year.

By Sandra L. Gottlieb, Esq., CCAL

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overnance issues ranged from an association’s maintenance responsibility to discriminatory conduct.

Assembly Bill 968 which replaces the current language of Civil Code Section 4775, is the legislature’s clarification on the respective maintenance, repair, and replacement obligations of owners and associations with regard to exclusive use common areas. Effective January 1, 2017, the new language of Section 4775 makes clear that an owner is responsible for maintaining his or her exclusive use common area and that the association is responsible for repairing and replacing it, unless the association’s CC&Rs say otherwise. This update to the statute was not intended to change the current law, but merely to clarify the language, which has often been misinterpreted by associations. Of course, if your association’s CC&Rs already address the maintenance obligations for these areas, this new language will not have any effect, as

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such provisions would trump the Civil Code provisions, which function more as fallback provisions for associations whose CC&Rs do not address maintenance responsibilities for these areas/ components. If your association has been relying on a different interpretation of the current language of Section 4775, now would be a good time for an amendment to the CC&Rs if the association wants to keep its historical maintenance scheme in place.

As of October 14, 2016, a Fair Housing Act amendment imposes potential liability on associations for failure to address any discriminatory conduct or harassment by its residents if the association had the power to correct such conduct. The Federal Fair Housing Act prohibits discrimination in housing and housing-related services due to race, color, religion, sex, national origin, disability, and familial status (42 U.S.C. 3601 et seq.). As amended, the Fair Housing Act holds associations directly liable for failing to take prompt action to end any third party’s discriminatory housing practice if the association (1)

knew or should have known about it and (2) had the power to correct it.1 If a manager or the board receives a complaint concerning possible discriminatory behavior being carried out by an owner or resident in the community, the board has a duty to investigate the complaint, even if it ultimately determines that no action is warranted. In light of the association’s potential liability and the sensitivity of the situation, if an association receives an allegation of discriminatory conduct, it would do well to contact legal counsel for guidance.

An association’s business dealings may be impacted by legislative action concerning the minimum wage increase and janitorial service registration requirements.

Recent legislation increasing the minimum wage in California incrementally over the next several years may impact an association’s existing and future vendor contracts. 2 As of January 1, 2017, the minimum wage increases to $11.00 per hour and it will climb incrementally each year until it hits $15.00 per hour in 2022. The combined effect of this rise represents a 50% increase in the statewide minimum wage over its current level. For associations, the biggest potential impact will be on its existing and future vendor contracts. Many vendors serving associations rely heavily on minimum wage employees, so a 50% rise represents a considerable cost for any vendor to absorb. As a result, these vendors will ultimately pass along their higher labor costs to the associations they serve through increased contract prices. Accordingly, association boards should discuss potential cost increases with vendors to determine the extent to which these increased costs should be addressed in annual budget planning.

Managers and associations should also be aware that, effective July 1, 2018, any

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association that contracts for janitorial services with an employer/vendor that is not registered with the Labor Commissioner is subject to a severe fine, pursuant to Assembly Bill 1978. 3 Under Labor Code §§ 1420–34, which have been added to the code, the fine for a first offense ranges from $2,000 to $10,000, and any subsequent violation exposes the association to a fine ranging between $10,000 to $25,000. In light of these fines, a registration check will be an important step in the due diligence process before contracting for janitorial services. Of course, if your association directly employs custodial workers or your management company provides such services, your association or management company will need to comply with the registration requirements itself. Under that circumstance the association should require documentation that establishes satisfaction of the legal requirement of registration.

With regard to annual notifications, new laws

will hold members responsible for providing correct and current addresses to their associations.

Beginning in 2017, every association will be required to solicit its members for their contact information and property status. On January 1, 2017, newly enacted Civil Code Section 4041 will require each association to solicit its members for (1) the mailing address where notices from the association are to be delivered; (2) any secondary address where notices from the association are to be delivered; (3) the name and address of each member’s legal representative, if any, or other person who can be contacted in case of the member’s extended absence; and (4) whether the member’s property is owner-occupied, rented, vacant, or undeveloped land.4 Although the statute does not mention how often an association must solicit this

information, it does state that each member is responsible for providing it on an annual basis. At the very least, the Association will need to solicit such information before such time as it is required to send out the required annual disclosures. In the likely scenario that some (or many) members do not provide this information, such members’ onsite mailing addresses are deemed the proper address for the association to deliver notices to, according to the law. While the association is required to solicit this information, it is the member’s responsibility to provide correct and current contact information.

New legislation should streamline the FHA certification and recertification process.

On July 29, 2016, the Housing Opportunity Through Modernization Act of 2016 became effective as Public Law 114–201.

This body of law affects an association’s ability to receive and maintain its FHA certification in four key ways: (1) reducing the number of units that must be owner occupied from 50% to 35%, unless the FHA can justify a larger percentage; (2) requiring HUD to extend financing to associations notwithstanding its use of transfer or moving fees; (3) requiring the FHA to take up new measures to streamline the recertification process, such as lengthening the time between recertification from 2 to 3 years and allowing associations to recertify by updating previously submitted information instead of resubmitting a new certification application; and (4) allowing mixedused developments more flexibility in obtaining exemptions concerning the amount of floor space dedicated to commercial purposes. Now, when HUD determines whether to issue an exemption, it must consider economic factors related to the local economy where the development is located.

This legislation should loosen FHA certification requirements and allow for associations with high rental occupancy percentages to none the less obtain certification for FHA loans. To

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2017 ECHO educational calendar

2017 ECHO Educational Seminars

San Rafael

If you’ve ever wished that ECHO would hold a seminar closer to your association, chances are that we’ll be nearby during 2017. Don’t miss an opportunity to get the education you need with guidance from some of California’s top HOA attorneys and professionals. Take a look and mark your calendar. We can’t wait to see you there!

Feb. 4

Mar. 11

Mar. 25

Marin Educational Seminar (see page 12)

Santa Cruz Educational Seminar (see page 14)

Wine Country Educational Seminar (see page 25)

Embassy Suites San Rafael, CA

Hotel Paradox Santa Cruz, CA

DoubleTree Rohnert Park, CA

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San Francisco

what extent is still unclear as the FHA is in the process of responding to these new requirements. The potential downside is that this change could allow for and result in higher numbers of renter occupied units in those communities without rental restrictions in place, which can, as we all know, create issues for associations. Boards and managers should stay current on the impending changes to the FHA’s requirements, and those communities without rental restrictions may want to consider amending their documents to put restrictions in place.

Upcoming and pending federal legislation address ham radio antennas and a possible tax break for homeowners living in community associations.

On the horizon, pending legislation would forbid associations from imposing an outright ban on antenna structures used for amateur radio communications. The Amateur Radio Parity Act of 2015 recently passed through the House of Representatives and is currently pending in the Senate. The law, if enacted, would protect owners’ rights to construct and maintain ham radio antennas on their separate interests. Though associations would not be able to prohibit such structures on separate interests, they would still be able to impose reasonable rules governing an antenna’s height, location, size, and aesthetic impact, and to prohibit the installation and maintenance of such structure on common areas. If your association does not currently have architectural guidelines or rules and regulations in place that could protect the association without trampling homeowner rights, now would be the perfect time to start that project so that the Association is ready to comply when that piece of legislation is enacted.

A new proposed law was recently introduced into the House of Representatives, which if approved could give homeowners in community associations a tax break. The HOME (Helping Our MiddleJanuary/ February 2017 | ECHO Journal

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FREE Attendance for ECHO HOA Members!

Join us at the San Rafael Educational Seminar Saturday, February 4th, 2017

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8:30 AM to 12:30 PM

Register online at www.echo-ca.org or fill out the form below.

AGENDA SPEAKERS DAVID FEINGOLD, ESQ., WANDEN TREANOR, ESQ., AND GLENN YOUNGLING, ESQ. WILL OFFER UPDATES AND INSIGHTS WITH A COMPLETELY NEW PROGRAM DESIGNED JUST FOR NORTH BAY ASSOCIATION BOARD MEMBERS.

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FREE for Pre-registered ECHO HOA Members $50 Nonmembers and Walk-ins.

Income Earners) Act proposes to allow owners to deduct up to $5,000 a year for qualified assessments from their federal tax filings. 5 Under the HOME Act, single filers earning less than $115,000 annually and joint filers earning less than $150,000 annually would qualify for the deduction. This deduction would apply for assessments that (1) are mandatory, (2) are regularly occurring, (3) exist solely because of the owner’s required membership in the association (4) directly benefit the owner’s residence, and (5) are applied to the owner’s principal residence. Note that the deduction does not apply for assessments on an owner’s vacation or rental home. While any tax break is welcome, many commentators believe the HOME Act has little chance of being enacted at this time, though it is something to keep an eye on.

In 2016, the California Court of Appeal decided a handful of cases affecting community associations which may be instructive for boards and managers.

In Nellie Gail Ranch Owners Association v. McMullin, a California court of appeal held that a homeowner cannot acquire legal title to association common area by adverse possession because no single owner pays all property taxes assessed on it. In McMullin, the owners built a retaining wall on common area and sued for title to the land under a claim by adverse possession. Under California law, a person may acquire legal title to another’s land without paying for it if that person can demonstrate to the court certain key requirements, including that the person who has claimed right to the land openly occupied the disputed land continually for five years, and that that person paid property taxes on the disputed property.

In Nellie Gail, the property tax requirement ruined the McMullins’ claim because as owners of a separate interest in the Association, the McMullins did not pay all property tax assessed on the disputed common area. Property tax on common area is not seperately assessed. Instead,

it is reflected in each owner’s individual property tax because this tax assesment includes both the value of the owner’s separate interest and the value of the owner’s proportionate, undivided share of the common area. Unless any single owner pays all property tax assessed on common area, any similar adverse possession claims are bound to fail.

This is good news for associations

who are concerned that they may have lost the right to reclaim common areas that have been claimed and used by individual owners.

The Business Judgment Rule generally shields board members from liability for acts taken pursuant to their official duties. However, Palm Springs Villas II Homeowners Association, Inc. v. Parth establishes that even the robust protecJanuary/ February 2017 | ECHO Journal

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tion of the Business Judgment Rule has its limits. In Parth, the Association claimed its President, Erna Parth, engaged in multiple actions that were detrimental to its interests and breached her fiduciary duties by taking a number of actions that were outside of her authority, such as signing promissory notes on behalf of the Association without member approval and unilaterally entering into contracts on the Association’s behalf.

Parth argued the fiduciary duty claim against her should be dismissed because she was protected by the Business Judgment Rule, which shields a director from errors in judgment where that director is (1) disinterested and independent; (2) acting in good faith; and (3) reasonably diligent in informing herself of the facts.

Though the trial court agreed with Parth, the court of appeal reversed that decision and held the Business Judgment Rule does not shield a board member who fails to exercise reasonable diligence or act within the scope of his or her authority as granted by an association’s governing documents. In other words, the Parth case shows that Board members are not permitted to ignore or claim ignorance of their duties and the limits of their authority, then rely on the protection of the Business Judgment Rule.

The case of Rancho Mirage Country Club Homeowners Ass’n v. Hazelbaker demonstrates the court’s backing of the public policy favoring resolution of disputes outside of litigation through alternative dispute resolution (ADR).

In Hazelbaker, there was a dispute between the association and the Hazelbakers over architectural approval for patio modifications, which the parties sought to resolve through mediation.

Though an agreement was reached in mediation, it was later breached by the Hazelbakers causing the Association to sue to enforce the terms of the agreement. During litigation a second agreement was reached which resulted in the Hazelbaker’s compliance, however the parties were unable to agree upon whether the Hazelbakers should pay the Association’s attorney’s fees. The court ultimately awarded the Association its attorneys’ fees, reasoning that although the Association’s suit was officially to enforce a settlement agreement, it was, in essence, an attempt to enforce the

Association’s governing documents.

Thus, under California Civil Code § 5975(c), the Association was entitled to recover its attorney’s fees. This decision shows the importance of participating in ADR, as courts, as was the case with this court, will likely look favorably on such participation if the Association is later forced to litigate.

Another case concerning attorney’s fees is Almanor Lakeside Almanor Lakeside Villas Owners Association v. Carson, et al. In Almanor, the Association sued to enforce fines for governing document violations by the Carsons. The court ruled in favor of the Association, though it did significantly reduce the amount of the fines the Association recovered.

In addition to the fines, the court also awarded the Association over $100,000 in attorneys’ fees as the prevailing party.

The Carsons argued they were actually the prevailing party, and thus should have been awarded their fees because the Association failed to collect the full amount of the fines showing that the Association’s fines and fees were based on unreasonable restrictions. However, on appeal, the appellate court affirmed that the Association was indeed the prevailing party and entitled to recover its attorney’s fees and confirmed the Association’s authority to promulgate and enforce reasonable rules and restrictions.

Finally, Boswell v. The Retreat Community Association is a general reminder that when a personal vendetta sours into a lawsuit, it becomes the association’s headache. This suit stemmed from a personal feud between Boswell and the Association’s President that began when Boswell performed unapproved construction work at his residence. This feud spilled over into a smear campaign and general nastiness on both sides. Predictably, a lawsuit ensued, with Boswell alleging 19 instances of intentional infliction of emotional distress, and the Association responding with an Anti-SLAPP motion (which prevents law suits intended to stifle protected/free speech). In the end, the court decided that only 14 of the incidents involved protected speech and that Boswell had a chance of succeeding on the remaining claims. Still, because the Association prevailed on the 14 other instances, the Association was deemed

the prevailing party and awarded its attorney’s fees. This case should serve as a good lesson and reminder to boards and managers not to let their personal interactions turn into vendettas that drag their associations into costly litigation.

Sandra L. Gottlieb, Esq. is a founding partner of the law firm of SwedelsonGottlieb, which limits its practice to the representation of California homeowner associations, including condominiums, planned developments and cooperatives. She can be reached at slg@sghoalaw.com.

1 The Fair Housing Act updates are set forth in 81 FR 63054: Quid Pro Quo and Hostile Environment. Harassment and Liability for Discriminatory Housing Practices Under the Fair Housing Act 2 California’s statewide minimum wage increases are set forth in SB 3 amendments to the Labor Code § 245.5, 246, 1182.12. Note that California law sets the statewide floor for minimum wage, but this floor may be set at a higher level by applicable municipal codes.

3 The registration requirement and fines are incorporated through AB 1978 that adds Section 1420–34 to the Labor Code.

4 These requirements are incorporated under SB 918, which adds Section 4041 to the Civil Code.

5 The Helping Our Middle-Income Earners Act, or HOME Act, was introduced into the House of Representative as HR 4696.

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HIGHEST QUALITY

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BEST PRICE HIGHEST QUALITY IS THAT ALL THERE IS?

By Burt Dean

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o avoid liability, scrutiny is needed to protect property owners, property management, insurance companies, finance companies, government, and large corporations; all these entities are liable for errors from negligence from their contractors. Not only do these entities try to protect themselves by verifying insurance, worker’s compensation, state licenses, business license, permits, etc., but they need to review and verify that their contractors’ policies and procedures meet minimum qualification.

How Do You Join ECHO? Over 1,700 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www.echo-ca.org.

For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.

Getting the work bid using the same specifications is not a guarantee of avoiding the negligence lawsuit. Using the same bid with professionally prepared specifications will obtain the best price, but in addition to the best price, you want quality work, avoiding as many opportunities for problems as possible.

Everyone is aware that State and Federal OSHA safety regulations exist, and must be practiced. Enforcement is usually after the fact, after an accident happens, and failures bring enormous fines with liabilities. Selecting the highest qualified bid may never be the best price, and determination of the highest qualified contractor takes investigation. It is not good enough to get either best price OR highest qualified, taking the investigation step may help reach the goal of the highest qualified contractor for the best price.

It is all about getting the work done safely, with the fewer the incidents the better. Investigation of sensitive areas may include a contractor’s response for Policies and Procedures of the following: 20 echo-ca.org

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Pre-Employment Background Check Polices does the contractor have a policy for minimum qualifications, and

does the contractor avoid convicted felons that might impose a threat to the environment where the employee is assigned to work. Does the contractor have procedures and programs to evaluate the level of employee skill and place them in the best jobs for that level, and offer training for improvement:

Security and Theft Prevention Policy this begins with video and audio security cameras in the contractor’s office and warehouse, and continues through careful analysis for suspicious identity information on their employment applications, document inconsistencies, breach of computer access, alerts from third sources, etc., where an employee

may attempt to obtain non-public information or advantages. Communications with client and third parties, all need to be under carful filing systems

maintained and locked when not being accessed. Perhaps this could even include a Clean Desk and Clean Computer Screen Policy, which every business follows, but do they have it in writing?

Personal Property Handling and Disposal Policy materials delivered need to be carefully inventoried with controlled access. Records need to be

retained for incoming and outgoing inventories with names and dates, and signed receipts for material disposition.

Complaint Resolution Policy includes special polices for verbal and/or written complaints. There

needs to be a form available which an employee or consumer can complete, with the job or account identification.

The person originating the complaint needs to know it is being investigated and a report of findings will be delivered.

All complaints need to be logged and periodically reviewed.

Disaster Preparedness includes planning before, during and after the disaster. No one knows in advance if the disaster will be water, fire, earthquake, financial, etc., but safety of person’s is primary, and securing the property is next. Key elements would be a backup

plan to include methods of communications, off-site storage of job computer data files, on-going physical security,

implementation of “work-around” during periods of communications/information failures, and written lists of key contact persons for contractors, sub-contractors, government, insurance, and safety personnel.

sure to ask for pertinent policies and procedures that will protect your job, and if anything does not look right, it probably is not right for your job.

At the end of the day, has everyone done and investigated enough? Can everyone say there was nothing else I could have done to avoid this problem? When it comes time to select the contractor, be

Burt Dean is the owner of Robello’s Towing Service. Previously he owned an association management company.

Burt has been a member of ECHO and frequent contributor for many years.

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NEIGHBORI An Overview of the Law and Remedies in California

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By Cameron Day, Esq.

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ne of the most common conflicts that arises between neighbors is the liability for damage caused by neglected trees.

Of particular concern are invasive roots from neighboring trees due to the unseen nature of the root growth and the costly damage which roots cause to foundations, pools, sidewalks, and underground piping.

This issue affects not only single family homes, but also townhomes, condominiums, and common area HOA property as we continue to build more dense housing and still desire the beneficial effects that trees provide property owners such as shade, beauty, prevention of soil erosion, and water conservation, among other benefits – all of which help to maintain and raise property values.

The law on liability for encroaching tree branches and roots has been longsettled in California. Since at least 1936, in Crance v. Hems, California courts have relied on case law to make property owners liable for the encroachment of their trees’ roots on neighbor’s property, holding, “It seems to be settled law that overhanging branches are a nuisance, and it must follow that invading roots are.”

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As you can see from the above case, in California we hold an owner responsible for damages caused by negligent maintenance of both tree branches and roots.

However, how do we define who owns a tree when tree branches and/or roots may be in common area with the trunk on an individual owner’s lot, or vice versa?

For this answer we turn to California Civil Code § 833, which states that tree trunks standing wholly on the owner’s property are the responsibility of that property owner, no matter where their branches and roots grow.

This law tells us that if a tree’s trunk is situated on one’s property, the owner of that property is responsible for damage caused both by the tree branches and the tree roots. Of course the governing documents of your association will have more to say about the issue, also.

But what constitutes damage to one’s property?

While some damage is obvious, such as a fallen branch crashing through a roof or a root breaking through a pool wall, the vast majority of damage from neglected trees is neither so notorious nor immediate. Given this fact, where do we draw the line between obvious damage and lesser damage that may not be so blatant, making the owner of the offending tree loathe to take responsibility?

While there are certain legal limitations on what a property owner can do to stop invasive roots (such as limitations on when you can trim back a tree’s branches or roots), California does not allow one property owner to be a nuisance to another property owner. A nuisance, which applies to trees causing damage to another’s property, is defined, in part, in California Civil Code § 3479 as: Anything which is injurious to health… or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property… is a nuisance.

If a neighboring tree is damaging HOA property, what can the HOA do to stop

that interference or recover money for the damaged property?

Generally speaking, if alternative dispute resolution has been tried and has failed, you can rely on California Civil Code § 731, which allows a civil action based on the above section regarding nuisances.

Cal. Civil Code § 731 states: An action may be brought by any person whose property is injuriously affected, or whose personal enjoyment is lessened by a nuisance, as defined in Section 3479 of the Civil Code, and by the judgment in that action the nuisance may be enjoined or abated as well as damages recovered therefor.

Likewise, California Civil Code § 3501 states that the remedy for a private nuisance, such as the encroachment of trees, be they branches or roots, from one property to a neighboring property is “1. A civil action; or, 2. Abatement.”

Most all CC&Rs will also have an anti-nuisance provision.

The code section gives a property owner the legal right to sue a neighboring property owner if their trees are interfering with the comfortable enjoyment of their property. That said, while a property owner may have the right to sue, there are many other factors to consider and other steps that might need to be taken before a court may grant an injunction or award damages.

Additionally, there are many other nuances to this area of law, such as are you allowed to trim back tree branches or roots, are you responsible for any damages you caused to a neighbor’s tree when pruning an invasive tree, what type of damages allow a property owner to sue a neighbor, or what other recourse do you have to abate an invasive tree besides an expensive lawsuit?

The bottom line is that if there is a neighboring tree damaging or interfering with the use of your property, you may have the legal right to stop the interference and recover any damage caused by the offending tree.

Cameron Day, Esq. is an associate attorney with Pratt & Associates, a law firm in San Jose that focuses on Common Interest Developments, and long-time member of ECHO.

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Signature:

FREE for Pre-registered ECHO HOA Members $50 – Nonmembers and Walk-ins

Return with payment to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Phone: 408-297-3246; Fax: 408-297-3517

January/ February 2017 | ECHO Journal

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26 echo-ca.org

VEHICLE ACCESS CONTROL (VAC) SYSTEMS

BY JO POPE

Vehicle Access Control (VAC) systems are – as the name implies, systems that control vehicle access to certain defined areas.

These defined areas are residential in nature and include gated communities, luxury high rises, private townhouses, condominium cooperatives, apartment complexes and even closed private estates.

VAC systems are made of three separate parts – an Access Panel or Access Controller, a VI (vehicle identification) Device and a Gate with its Mechanical Operator.

January/ February 2017 | ECHO Journal

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An Access Panel – sometimes called an Access Controller could be considered the brains of this system. It makes decisions, usually controls all the components and works by receiving input from either a keypad, a swipe card, a barcode reader or a transmitter. (More on the individual devices later.) When input is received, it checks the input against its database. If a vehicle is allowed entry, the Access Panel sends a signal to the Gate and its Mechanical Operator. After receiving the signal the gate begins to open.

If the gate does not open, one of two things has happened. Either the Access Panel/ Controller doesn’t recognize the vehicle ID or it has been told to deny access.

There are two different types of Vehicle Access Control –

Manual Vehicle Identification and Automatic Vehicle Identification.

Manual Vehicle Identification (MVI) is any hands-on vehicle identification.

In other words, these systems don’t work without driver input. There are three devices that drivers use to announce themselves to a MVI system – Keypads, Contact Cards and/or Proximity (Prox) Cards and Access Control Transmitters (Remote Clickers). Below are some pros and cons of each mechanism and a brief description of their function.

Keypads – Driver stops, rolls down a window and enters an access code on a Keypad. Pros – these are the most inexpensive MVI systems on the market; they also handle visitors easily. Cons – access codes are too-readily shared with friends, family and delivery drivers.

Rolling down a window exposes the driver to inclement weather.

Contact Cards and/or Prox Cards – Driver stops, rolls down

a window then runs the Swipe Card through a slot. Or the driver places a Contact Card on a touch pad. Pros – though rarely used in residential environments, these cards can also be used to open doors. Cons – this system is more expensive than keypads and the cards are easily loaned, lost or stolen.

Access Control Transmitters (Remote Clickers) – Driver

approaches the gate and simultaneously presses a button on the Transmitter or Clicker. (Each unit functions like a garage door opener.) Pros – works without the driver having to stop, slow down or open a window. They also have longer transmission ranges and work at greater distances from the gate. Cons – cost per vehicle is expensive, the units can be duplicated at local hardware stores and due to its long range, the driver can also open the gate for other vehicles.

Automatic Vehicle Identification (AVI) is any hands-free vehicle identification.

These systems function without any action from the driver. There are three types of AVI systems – Radio Frequency Identification (RF-ID), License Plate Recognition (LPR) and Barcode Technology. Below is a brief synopsis of how each automatic system operates.

RF-ID (Radio Frequency Identification) – Driver approaches

a gate with a radio antenna generally positioned above it on one side, once within range the radio bounces a signal of an ID tag on the front of the vehicle.

When the RF-ID tag is recognized, the gate opens automatically without driver intervention. Pros – it’s completely automatic and operates without line of sight. Cons – High-end luxury vehicles have metal oxides in the windshield glass that causes interference. Radio interference from electronics in vehicles, powerlines, and nearby buildings can reduce performance. A visitor entry system is still needed.

License Plate Recognition (LPR) Driver approaches a gate and a camera – either a video camera or an infrared camera, captures an image of the license plate and decodes each symbol. Pros – these systems capture both visitors and residents. Cons – if the license plate is partially obstructed by dirt, towing or lighting, the image is useless. These also

require very long entries if attempting to use with a gate due to capture and processing time. For this reason currently the technology is more common without a gate or as a secondary system.

Barcode Technology Driver passes a barcode reader while approaching a gate, the reader identifies a barcode decal that has been applied to the side window of the vehicle. When the decal is decoded (read), the vehicle is identified and the gate opens. Pros – lowest per vehicle cost of AVI options, most reliable AVI option. Cons – may not be practical on curved entrances, it is limited to speeds of 25 mph or less.

Barrier Arms versus Gates We’ve compared VI systems and despite their differences, automatic and manual identification systems are the same in one respect. Both require the use of a gate or a barrier arm. In deciding which to use, there is no best choice. It depends on the needs of each community.

Barrier arms could be considered minimalist gates. As such, they do an alright job at keeping vehicles out but are useless against foot traffic. People have been known to walk around or to duck under barrier arms. Because they’re light weight, they are also the fastest to open and the fastest to close. They work well for closed parking areas and because they’re fast, they prevent traffic congestion and long lines of cars.

There are two main types of gates in the residential market – sliding gates and swing gates. Both are effective at keeping out vehicles and foot traffic. However, because they are heavy (some are wrought iron), they are the slowest to open and the slowest to close. They’re first-rate choices when residents want the highest level of privacy.

Barcode Automation, inc. is based in Winter Springs, Florida. www.barcode-auto mation.com.

ECHO event calendar

RESOURCE PANEL CALENDAR ECHO Resource Panels meet during lunch on weekdays to enable managers, professionals and board members to hear about important topics presented by experts in the industry, and share experiences and issues. The meetings are open to all ECHO members, and those interested in learning about ECHO, offered in a casual atmosphere where the cost of attendance is the price of your lunch. The sessions last about an hour and a half. Check-in with the ECHO Panel Secretary for details and to register.

Please join us: DATE

PANEL LOGISTICS

PANEL SECRETARY

TOPIC

Jan. 5, 11:45 a.m.

North Bay Resource Panel Contempo Marin Clubhouse 400 Yosemite Dr., San Rafael

Denise Wolford, CCAM 415-458-3537

Fire Safety

Jan. 10, 11:45 a.m.

Central Coast Resource Panel The Back Nine Grill, 555 Hwy 17 (Pasatiempo Exit), Santa Cruz

Anne Thomas 800-537-4098 ext.7530

TBD

Jan. 19, 11:45 a.m.

Wine Country Resource Panel Serv-Pro 377 Blodgett St., Cotati

Pam Marsh 415-686-9342

TBD

Feb. 8, 11:45 a.m.

South Bay Resource Panel Heritage Bank of Commerce Kiosk 150 Almaden Blvd, San Jose

Susan Hoffman, PCAM 510-683-8614

TBD

Feb. 10, 11:45 a.m.

East Bay Resource Panel Massimo Restaurant 1604 Locust St., Walnut Creek

Cindy Wall, PCAM 925-830-4580

TBD

March 2, 11:45 a.m.

North Bay Resource Panel Contempo Marin Clubhouse 400 Yosemite Dr., San Rafael

Denise Wolford, CCAM 415-458-3537

Short Term Rentals

March 7, 11:45 a.m.

Central Coast Resource Panel The Back Nine Grill, 555 Hwy 17 (Pasatiempo Exit), Santa Cruz

Anne Thomas 800-537-4098 ext.7530

TBD

REGULARLY SCHEDULED RESOURCE PANEL MEETINGS PANEL

MEETING

LOCATION

Maintenance

First Wednesday, Even Months

ECHO Office, San Jose

North Bay

First Thursday, Odd Months

Contempo Marin Clubhouse, San Rafael

East Bay

Second Friday, Even Months

Massimo Restaurant, Walnut Creek

Accountants

Second Monday, Odd months

Scott’s Seafood Restaurant, Oakland

Central Coast

Second Tuesday, Odd months

The Back Nine Grill, Santa Cruz

South Bay

Second Wednesday, Even Months

TBD

Wine Country

Third Thursday, Odd months

Serv-Pro, Cotati

Legal

Quarterly

Varies

January/ February 2017 | ECHO Journal

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2016 Community Association

Financial Survey: How Do Your Association’s Finances Compare?

By David Levy, MBA, CPA 30 echo-ca.org

January/ February 2017 | ECHO Journal

31

The Survey(s)

H

ow many times have you wondered how your association’s finances compare with those of similar projects? This survey, while not the first of its kind, is certainly one of the largest and most recent 1.

all 58 California counties3). The following statistics compare September 2016 data (associations of known size) with that a decade and a half earlier (August 2001, the earliest such comparative statistics were prepared by Levy, Erlanger & Company, CPAs):

Replacement Reserve Cash and Obligation

Northern California

2001

2016

Change

Annual %

SML (2-50 units) 5,812 10,149 75%

5%

MED (51-150 units) Levy, Erlanger & Company, CPAs (the Firm) of San Francisco, California, in conjunction with the sponsorship and editorial support of Heritage Bank Of Commerce in San Jose, California, has compiled (primarily) 2015 year-end financial data from nearly 2,700 Northern California community associations’ representing more than a quarter million individual units. Associations were grouped according to the following four major variables: size (in units), age (in years), location (by county) and subdivision type (condominiums/condo conversions and planned unit developments). Detailed analyses are presented at pages 25 to 36 of the “Standard” and “Premium” survey books2• The Firm previously compiled financial data from the (primarily) 1994 year-end financial data of 929 Northern California community associations representing 125,326 individual units. The two surveys, 20 years apart, are compared and contrasted in the 2016 Northern California Community Association Financial Survey2.

The Northern California Community Association Market There are a total of approximately 17,600 community associations in the 45 Northern California counti es (out of a total of approximately 52,000 community associations in

32 echo-ca.org

2,099 3,179

51%

3-1/2%

LRG (151-500 units) 923

1,398

51%

3-1/2%

Other and unknown size 2,389 2,846

19%

1-1/4%

Average Percent Funded

Scenario: Reserves & Percent Funded - All Associations 1995 Financial Survey Results Replacement reserve cash $2,325 per unit, (857 HOAs) Replacement reserve obligation $3,693 per unit, (167 HOAs) Average percent funded: 63% 2016 Financial Survey Results Replacement reserve cash $7,437 per unit, (1,868 HOAs) Replacement reserve obligation $15,031 per unit, (1,868 HOAs) Average percent funded: 50%

Based on replacement cash reserves and reserve liability data which was available from nearly 2,000 Northern California community associations, the current average cash reserves per unit is $7,437 and the average percent funded is 50% (versus 63% in 1994/95 - a drop of 21% (63% - 50%/63%) over the last two decades). This implies that the current average unfunded reserves are approximately $7,600 per unit, which, if extrapolated to 50,000+ associations (some 5 million individual units) in California, results in estimated unfunded reserves of approximately $38 billion!

How could there be such erosion in the percentage funded given the never-ending discussion of the importance of reserves? At least one large reserve study company owner in Northern California attributes this trend to a growing number of reserve component line items in reserve studies as Board members (and reserve study preparers) pay more attention to (component inventory) details, and the (greater than inflation) increases in construction costs, particularly in urban areas.

Scenario: Operating Expenses - All Associations Assessments (PUPM)

Scenario: Regular Assessments All Associations 2016 Financial Survey Results Assessments, operations $359 PUPM, 78%, ( 2,621 HOAs)

* Because the individual income/expense line item PUPM and % are computed based upon the number of associations that report financial data for any particular line item, totals of PUPM and/or% may not equal 100%.

Operating Expenses (PUPM)

Assessments, replacement $110 PUPM, 27%, ( 2,562 HOAs)

Assessments, regular $466 PUPM*, 27%, ( 2,621 HOAs) 1995 Financial Survey Results Assessments, operations $225 PUPM, 82%, ( 912 HOAs) Assessments, replacement $50 PUPM, 18%, ( 647 HOAs) Assessments, regular $275 PUPM*, ( 912 HOAs)

January/ February 2017 | ECHO Journal

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Scenario: Operating Expenses - All Associations

Operating Expenses vs. Reserve Expenses (PUPM)

Scenario: Operating Expenses - All Associations (Continued) Total operating expenses averaged $343 per unit per month (PUPM) in 2016 versus $201 PUPM in 1995 - an increase of 70% or approximately 3-1/2% per year (not compounded) over two decades. A comparison of 2016 and 1995 total operating expenses only for those associations reporting such expenses is as follows:

1995 Administration: $62 PUPM, 32% Maintenance: $93 PUPM, 48% Utilities: $39 PUPM* 20%

2016 Administration: $123 PUPM, 32% Maintenance: $167 PUPM, 43% Utilities: $96 PUPM* 25%

34 echo-ca.org

Percentage of Operating Expenses (PUPM)

Overall, administration, including professional fees (legal, accounting and

management), insurance, office expense, etc, as a percentage of total operating expenses remained relatively unchanged over the last 20 years, while maintenance decreased from 48% to 43%, and utilities increased from 20% to 25%. The decrease in maintenance appears to be more than offset by a 7-1/2% per annum increase in replacement reserve expenses ($60 PUPM in the 1995 survey versus $154 PUPM in in the 2016 survey) which is consistent with the aging of buildings.

A comparison of your individual association’s income and expenses with comparable Northern California community associations is available from Levy, Erlanger & Company, CPAs at info@ hoa-cpa.com or by telephone at 415981-9350 xlOl. Criteria considered in this comparison includes association size (in units), age (in years), location (county) and type of development (condominium v. planned unit development. Not all comparative data will necessarily exactly match your association.

Customized Comparison For Your Association

David Levy, MBA, CPA is the founder and managing partner of Levy, Erlanger & Company, CPAs which provides audit, review, tax, consulting and expert witness services to more than 1,500 homeowner associations throughout Northern California.

1 The 2013 Expense Analysis Of Condominiums. Cooperatives & PUDs published by the Institute Of Real Estate Management {IREM) 430 North Michigan Avenue, Chicago, IL 60611, includes 2012 financial data on associations nationwide, including 98 community associations (20,232 units) located in California, Nevada and Arizona.

2 The 2016 Northern California Community Association Financial Survey book is available from Levy, Erlanger & Company, CPAs at info@hoa-cpa.com for $45 (Standard Edition - 41 pages) or $95 (Premium Edition - 146 pages, including 105 additional onepage financial scenarios looking at different combinations of association financial statements based on size (in units), age (in years), annual revenues (in dollars) and location (by county).

3 From the 2016 California Community Association Statistics book, also available from Levy, Erlanger & Company, CPAs at info@hoa-cpa.com for $30. Contains detailed community association data size, age, annual revenues and type of development - by county. 39 pages.

January/ February 2017 | ECHO Journal

35

ECHO honor roll

ECHO HONORS VOLUNTEERS Resource Panel Chairs

Seminar Speakers

Recent Contributing Authors

Accountant Panel Adam Haney, CPA 888-786-6000 x317

East Bay Marion Aaron, Esq. Charlotte Allen William Countner Marc Dunia Stephanie Hayes, Esq. David Hughes David Levy, CPA Alex Noland, Esq. Jordan O’Brien, Esq.

October 2015 Karl Lofthouse Susan Green Thomas J. Connelly Adrian Adams, Esq. Julie M. Mouser, Esq.

Central Coast Panel John Allanson 831-685-0101 East Bay Panel Cindy Wall, PCAM, CCAM 925-830-4580 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Judy O’Shaughnessy 408-839-6926 North Bay Panel Diane Kay, CCAM 415-846-7579 Stephany Charles, CCAM 415-458-3537 South Bay Panel Susan Hoffman, PCAM 510-683-8614 Wine Country Panel Pam Marsh 415-686-9342 Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Roy Helsing Geri Kennedy, CCAM Wanden Treanor, Esq.

Annual Seminar Julie Adamen John Allanson Tyler Berding, JD, PhD William Countner Rolf Crocker Marc Dunia Lisa Esposito John Garvic, Esq. Sandra Gottlieb, Esq. David Hughes Michael Hughes, Esq. David Levy, CPA Julie Mouser, Esq. Sharon Pratt, Esq. Ann Rankin, Esq. Rob Rosenberg Deon Stein, Esq. Steven Weil, Esq.

Nov/Dec 2015 Beth A. Grimm, Attorney Karl lofthouse James H. Ernst, CPA, MS-Tax Tim Polk Julie Mouser, Esq. Jan/Feb 2016 Beth A. Grimm, Attorney Matt Haulk, Esq. Larry J. Pothast, PCAM, CCAM David J. Larsen, Esq. Jeffrey A. Barnett, Esq. March/April 2016 Julie Adamen Neal Back, CPA Harvey Radin David Kuivanen, AIA Joel Meskin, Esq., CIRMS, CCAL May/June 2016 Steven S. Weil, Esq. Graham Oliver Wayne Scott Steve Saarman Jordan M. O’Brien July/August 2016 Joel W. Meskin, Esq., CIRMS Victoria Cohen Mary Anne Sayler Richard Tippett Tom Fier, Esq. September/October 2016 Sandra L. Gottlieb, Esq. David Swedelson, Esq. Sharon Glenn Pratt, Esq. Glenn H. Youngling, Esq. Berding | Weil Rich Ellenson November/December 2016 Joe Winkler, CMCA Clint McClure, CCAM Cameron Day, Esq. Julie M. Mouser, Esq. Adrian Adams, Esq. Wayne Louvier, Esq.

36 echo-ca.org

FREE Attendance for ECHO HOA Members!

Wine Country Educational Seminar Save the Date!

Saturday, March 25th, 2017 8:30 AM to 12:30 PM /

Yes, reserve _____spaces for the ECHO Wine Country Seminar Amount enclosed: $______(attach additional names)

AGENDA TOPICS

Name:

We will bring you a completely new lineup of topics and speakers. Check our website, and the March ECHO Journal for updates.

Email Address: HOA or Firm: Address:

ADDRESS

City:

DoubleTree Sonoma Wine Country, One Doubletree Drive, Rohnert Park, California, 94928, USA

State:

Zip:

Phone: Visa/Mastercard No. Exp. Date: Signature: Return with payment to: ECHO, 1960 The Alameda, Ste 195, San Jose, CA 95126 Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Phone: 408-297-3246; Fax: 408-297-3517

PRICE FREE for Pre-registered ECHO HOA Members $50 Nonmembers and Walk-ins.

January/ February 2017 | ECHO Journal

37 25

BOOKSTORE The ECHO Bookstore is your source for publications providing essential information for HOA Board Member service obligations. Order online at echo-ca.org or fill out form on the facing page.

NEW ON TI I D E

Robert’s Rules of Order Member Price: $7.50 Non-Member Price: $12.50 A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.

Home and Condo Defects Member Price: $12.95 Non-Member Price: $17.95 Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process.

38 echo-ca.org

2016 Condominium Greenbook Member Price: Non-Member Price:

$17.00 $25.00

This companion to the Condominium Bluebook is an in-depth guide to all aspects of association finances, including accounting methods, financial statements, reserves, audits, taxes, investments and much more.

Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances.

Board Member Handbook Member Price: Non-Member Price:

$15.00 $25.00

This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues.

Revised and updated in June 2012.

Construction Defect Claims Member Price: Non-Member Price:

$19.95 $25.00

New buildings can conceal extensive faults.

It’s a board’s worst nightmare—rainstorms damage buildings and bring owner complaints. Is legal action necessary? With this new book, you’ll learn about the resolution process for construction problems, and how to handle complex claims.

Condominium Bluebook 2016 Edition Member Price: $17.00 Non-Member Price: $19.95 This well-known compact guide for operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequentlyasked questions about associations, along with succinct answers.

ciation o s s A unity Book Comm Statute dition 2014 E

Publications to answer your questions about common interest developments Order Online at www.echo-ca.org

Bookstore Order Form

EDUCATIONAL COMMUNITY FOR HOMEOWNERS 1960 THE ALAMEDA, STE 195, SAN JOSE, CA 95126 PHONE: 408-297-3246, FAX: 408-297-3517

TITLE

QUANTITY AMOUNT

SUBTOTAL CALIFORNIA SALES TAX (Add 8.625%) TOTAL AMOUNT

Yes! Place my order for the items above.

Check

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Credit Card Number Exp. Date

Signature

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January/ February 2017 | ECHO Journal

39

directory updates

All current listings may be found in our Professionals Directory available online at www.echo-ca.org.

New Members Bryzek CPA 3461 Castro Valley Blvd.

Castro Valley, CA 94546 Contact: Ian Bryzek, CPA Tel: (510) 538.6014

Noland Law PC 100 Pine Street, Suite 2150 San Francisco, CA 94111 Contact: Alex Noland Tel: (415) 481-0825

OnView Security 46750 Fremont Blvd. Suite 210 Fremont, CA 94538 Contact: Joel Anaya Tel: (408) 677.6429

Barcode Automation, Inc. 207 N. Moss Rd., Suite 105 Winter Springs, FL 32708 Contact: Ryan Waxberg Tel: (407) 327.6172

Vista Paint 11043 Folsom Blvd.

Rancho Cordova, CA 95670 Contact: Bryan Jerolaman Tel: (916) 241.6637

K&D Landscaping, Inc. 62-C Hangar Way Watsonville, CA 95076 Contact: Justin White Tel: (831) 728.4018

Become an ECHO Professional Member and receive the benefits of membership.

To learn more, visit our membership page at www.echo-ca.org 40 echo-ca.org

advertiser index

about ECHO

Applied Reserve Analysis....................20 www.appliedreserveanalysis.com

Heritage Bank of Commerce.................9 www.heritagebankofcommerce.com

Barcode Automation, inc. ...................11 www.Barcode-Automation.com

Hughes Gill Cochrane, P.C....................21 www.hughes-gill.com

Benjamin Moore Paint & Company...........................................13 www.benjaminmoore.com

IQV, Inc. .................................................34 www.iqvinc.com

Berding Weil.............. 2, and Back Cover www.berding-weil.com Bridgeport Co........................................13 www.bridgeportco.com Cornerstone Community Management.........................................10 www.cornerstonemgt.biz Eugene Burger Management................8 www.ebmc.com

Levy, Erlanger & Company..................16 www.hoa-cpa.com PML Management................................15 www.pmlmanagement.com R.E. Broocker Co...................................35 www.rebroockerco.com Silicon Valley Civil & Structural Engineers............................17 www.Qengineers.com White & MacDonald, LLP....................15 www.wm-llp.com

WHAT IS ECHO? Serving Homeowners to Build Strong Community Associations The Educational Community for Homeowners (ECHO) is a nonprofit membership corporation dedicated to assisting California homeowner associations. ECHO provides help to homeowner associations on many fronts: finances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, online education, a monthly full-color magazine and discounted publications.

Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations.

Benefits of Association Membership • Subscription to bi-monthly magazine • Members-only online education • Updates to the Association Statute Book • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento

ECHO Membership Dues

Office 1960 The Alameda, Suite 195 San Jose, CA 95126-2308

Association Membership HOA 2 to 25 units...........................$130 HOA 26 to 50 units.........................$180 HOA 51 to 100 units.......................$275 HOA 101 to 150 units.....................$375 HOA 151 to 200 units.....................$450 HOA 201 or more units..................$575 Professional Membership.................$500 Association Management Membership.......................................$500 Individual Membership.......................$75 Journal Subscription............................$15

How Do You Join ECHO? Over 1,700 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www. echo-ca.org.

For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.

August2017 2013 ||| ECHO ECHOJournal Journal February 2014 ECHO Journal January/ February

41 41

legislation at a glimpse

Catch up on 2016 Legislative Session!

It’s over! The 2016 legislative year ended on September 30th, the final day for Governor Brown to sign or veto bills. The bills below represent the ECHO Legislative Committee’s review of the 2500 bills introduced in Sacramento this year. Watch an upcoming issue of the ECHO Journal for our analysis of those bills that will become law on January 1st, and how they may affect your community..

For the most up-to-date information, visit the HOA Advocacy section at the ECHO website: www.echo-ca.org/hoa-advocacy

Current Legislation Bill Information

Summary

AB 587

Mobilehomes – Nonpayments or Late Payments

Support Status: Signed by Governor

For certain applicants who wish to register or transfer registration of a manufactured home or mobilehome prior to December 31, 2018, and meet other requirements, would require the department to waive all outstanding charges assessed by the department prior to the transfer of title of the manufactured home or mobilehome, release any lien imposed with respect to those charges, issue a duplicate or new certificate of title or registration card, and amend the title record.

AB 1720

Homeowner Attorneys at Board Meetings

Oppose

Current law requires the board to permit any member to attend and speak at any meeting, except for executive session meetings. This bill would require the board to permit a person (including an attorney) who represents a member to attend board meetings, and would require written notice to be given, as specified. ECHO recognizes the potential pitfalls of attorney involvement at board meetings, and we are watching this bill very closely.

Author: Chau

Author: Wagner Status: In Assembly Housing and Community Development, Failed Passage.

AB 1736

Tax Deduction – Homeownership Savings Accounts

Support

This bill would provide that a qualified taxpayer may withdraw amounts from a homeownership savings account to pay for qualified homeownership savings expenses, and would provide that any amount withdrawn from that account that is not used for these expenses would be included as income for that taxpayer.

Author: Steinorth Status: In Assembly Appropriations, 2-Year Bill

AB 1799

Uncontested Elections

Oppose Unless Amended

Current law requires an association to use an inspector of elections and secret ballots (among other requirements) for assessments legally requiring a vote, election and removal of directors, amendments to the governing documents, or the grant of exclusive use of common area. This bill would additionally except from those election requirements an election of directors if the election is uncontested, as defined.

Author: Mayes Status: Hearing Cancelled, 2-Year Bill

AB 1963

Construction Defect Claim Conditions

Watch

Current law specifies conditions to be met before an association may file a complaint for damages against a builder, developer, or general contractor based upon a claim for defects in the design or construction of the common interest development. The law is set to expire on July 1, 2017. This bill would delete the inoperative and repeal dates of the above described requirement.

Author: Calderon Status: Signed by Governor

42 echo-ca.org

legislation at a glimpse

Current Legislation (continued) Bill Information

Summary

AB 2362

Pesticide Application & Notice

Watch

This bill would expand upon the 2016 law concerning notice requirements for the application of pesticides in common interest developments. It would require an association to provide notice to an owner or tenant of a separate interest, and under certain circumstances to owners or tenants of adjacent separate interests, if pesticide is to be applied without a licensed pest control operator.

The bill would also authorize an owner or occupant to agree to immediate pesticide application.

The bill would also permit the notice to be posted, as specified, after the pesticide application if the pest poses an imminent threat to health and safety.

Author: Chu Status: Signed by Governor

SB 477

Mobilehomes – Property Tax Postponement

Support

This bill would authorize an owner of a mobilehome , who is a qualified person, to seek postponement of ad valorem taxes under provisions similar to other owners of real property.

Author: Leyva Status: 2 -Year Bill

SB 918

Member Contact Information for Notices

Support

This bill would require the owners of the separate interests of a common interest development to annually provide the association with specified written information for the purpose of receiving notices from the association.

Author: Vidak Status: Signed by Governor

SB 944

Housing Omnibus Bill

Support

The Annual Housing Omnibus Bill cleans up errors and makes non-substantive changes in the law. ECHO has proposed several amendments to correct errors and improve clarity within the statute..

Author: Committee on Transportation & Housing Status: Signed by Governor

SB 1431

Service of Summons or Subpoena

Watch

This bill would require an investigator who is employed by an office of a district attorney or a public defender, upon the display of proper identification, to be granted access to a gated community for the sole purpose of performing lawful service of process or service of a subpoena.

Author: Morrell Status: Signed by Governor

What Do You Think?

Read more about HOA legislation on our website or visit our Facebook page and join the discussion.

On the web: echo-ca.org/hoa-advocacy, On Facebook: facebook.com/echoorg

January/ February 2017 | ECHO Journal

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