12 minute read
All-New 2022 Statute Books Will Be Available Soon!
2022 EDITION The Statute Book & Legal Directory
THE DAVIS-STIRLING ACT AND OTHER STATUTES GOVERNING CALIFORNIA COMMUNITY ASSOCIATIONS
© 2022 Echo - Executive Council of Homeowners www.echo-ca.org
Education Advocacy Connection
MANAGEMENT FIRMS & PROFESSIONAL SERVICE
PROVIDERS: A customized, co-branded cover with your logo and contact information is available for management companies, law firms and other professional service providers.
Pre-order the 2022 Statute Book in an expanded version to include the Davis-Stirling Act and other laws and case citations governing California community associations.
This comprehensive reference provides the legal framework for HOA board members, homeowners, and professionals in an easy-to-use coil-bound format.
Available to Echo HOA members for download from the online store or as a printed booklet. Order your copies today!
PREORDER YOUR COPIES TODAY!
© 2022 Echo - Executive Council of Homeowners
YOUR LOGO AND CONTACT INFORMATION HERE
2022 EDITION The Statute Book & Legal Directory
THE DAVIS-STIRLING ACT AND OTHER STATUTES GOVERNING CALIFORNIA COMMUNITY ASSOCIATIONS
www.echo-ca.org
Education Advocacy Connection
RISKY BUSINESS
RISKY BUSINESS
BY JASMINE F. HALE, ESQ., CCAL
Self-managed associations are a risky business. A quick internet search will bring up countless articles on the risks of self-managed homeowner associations, covering everything from record-keeping challenges to keeping up with legal compliance requirements. Too often, these articles fail to address one of the largest sources of self-managed association risk: employee claims and issues. This article aims to provide an overview of common employee practice pitfalls and solutions to help lower risk and liability exposure for boards and general managers of self-managed communities with employees.
First and foremost, every association that has an employee, even just one, must have an employee handbook. Boards often feel the time and expense of adopting a handbook is wasteful, and so they skip this essential best practice. For others who have at least adopted an employee handbook, many boards treat it as a one-and-done exercise. Employee handbooks should be routinely updated to comply with the myriad changes in the law. For instance, in 2021, the California Family Rights Act was updated to apply to employers with five or more employees and mandated certain changes to arbitration agreements.
Employee handbooks should include legal requirements, such as anti-harassment statements and harassment reporting policies, but also practical considerations such as job duties and expectations, processes
Risky Business Continued from page 25 for requesting reasonable accommodations, and benefits and leave policies. Failure to have a properly drafted job description can hamstring an association when an employee in a protected class is failing to meet their performance expectations; the association is prevented from terminating the underperforming employee without significant risk exposure. Associations that skip implementing an employee handbook not only run the risk of increased claims due to not having legally required policies in place, but they exclude themselves from requiring an employee to go through an internal process before pursuing legal action.
Next, self-managed communities (whether through the general manager or the board) often fail to follow standard employee management best practices, such as performing periodic employee reviews. Or, when associations do perform employee evaluations, they lack candor for fear of providing critical feedback. Problem employees can sometimes be trained into better performing employees. However, if they aren’t receiving feedback, or the feedback they receive is routinely positive, they have no way of knowing improvements are needed.
A lack of performance reviews or, worse yet, a history of positive reviews suddenly followed by negative ones, can substantially hinder an association from claiming that its termination or negative employment action was for a lawful business reason. Legal counsel often receives pleas from associations wishing for an expeditious termination of an employee who has received glowing written reviews, with the board assuring that such reviews mask the reality of a longstanding challenge. Associations find it frustrating to receive counsel explaining that their risk exponentially increases because what is on paper is what matters most in employment litigation.
One of the best ways to protect an association from employee claims of wrongful termination and discrimination is by providing periodic employee reviews that offer honest feedback. Boards or general managers should at least schedule regular reviews but also should provide feedback as often as needed, especially when issues and the need for improvement are first noticed. Constructive feedback does not have to be bad or undesirable. Identifying areas where an employee’s performance is overall positive, followed by areas where improvements are needed, can be a learning opportunity for the employee especially if assistance is offered and used by the employee to improve.
Failure to properly classify employees (e.g., claiming someone is an independent contractor when they really qualify as an employee or listing someone as exempt when they are legally non-exempt) and lack of appropriate wage and hour tracking systems are other areas of liability exposure for self-managed associations. The complexities of employee classification merits its own article. Associations that did not evaluate their independent contractor relationships in 2020 after the addition of Sections 2775
KAUFMAN, DOLOWICH, VOLUCK, LLP (KDV LAW)
SERVING SAN FRANCISCO AND WINE COUNTRY
The Real Estate Practice Group at Kaufman, Dolowich, Voluck, LLP (KDV Law) handles transactions, consulting and litigation on behalf of clients across the nation. Our full spectrum of services allows clients to rely on one law firm for all of their real estate needs. We take a transaction through all stages, including contract negotiations, contract drafting, due diligence, and complex hurdles such as zoning, contamination, land use and taxation matters. When disputes arise, we work to achieve equitable, cost-effective solutions that meet our clients’ goals.
A. Jeanne Grove, Co-Chair of the Real Estate Practice Group and Managing Partner of the Sonoma office has nearly two decades of experience litigating and resolving HOA disputes. Most recently, Ms. Grove was featured as an HOA legal expert in the Daily 360 Journal and other news media outlets to address the Surfside tragedy and its impact on HOAs nationwide. She has also been at the forefront of discussions regarding California’s newest laws, SB-9 and SB-10, which are poised to dramatically expand development of multi-unit properties across the state.
Ms. Grove’s practice includes real estate and business litigation, including HOA and co-ownership issues, purchase/sale disputes and nondisclosure claims, and boundary, title, development, and construction matters. This full spectrum of real estate legal experience serves HOAs well, as they face a myriad of different real estate issues in the governance of their properties and their members. Based on her deep litigation experience, Ms. Grove regularly counsels HOAs on how to avoid conflicts, by managing their day-to-day operations and compliance matters. The Real Estate Practice Group co-chaired by Ms. Grove also offers 40+ years of experience representing developers and HOAs with condominium conversions, subdivision projects, and CC&Rs.
Ms. Grove and KDV Law have been prominent leaders of diversity in the legal profession. Ms. Grove was awarded a California State Bar Real Property Section Morning Star Award for excellence in real estate law in 2013, and in 2017, she received the Minority Bar Coalition Unity Award for advancing the cause of diversity in the legal community at-large. KDV Law achieved Mansfield Rule 4.0 certification in 2021, one of only 118 firms nationwide to achieve this status, representing the firm’s ongoing success with diversity and inclusion initiatives.
Ms. Grove and the KDV Law team apply their diverse backgrounds to reach creative and effective solutions based on the unique circumstances of each of their clients.
A. Jeanne Grove, Esq. Co-Chair of the Real Estate Practice Group and Managing Partner of the Sonoma office
Sonoma Office: (707) 509-5260 San Francisco Office: (415) 926-7600 jgrove@kdvlaw.com | kdvlaw.com
We counsel:
• Condominium Associations • Planned Unit Developments
(408) 345-4000 http://wm-llp.com
• Mixed Use Associations • Commercial Associations
We provide general counsel to Associations including the following services:
• Construction Defect and
Civil Litigation • Dispute Resolution • Governing Document Interpretation • Governing Document Revisions • CC&R and Rules Enforcement
Risky Business Continued from page 26 to 2787 to the California Labor Code should absolutely review their classifications to ensure their employees and contractors are appropriately categorized. Associations should also review how employees list their hours and, budget permitting, consider migrating toward automated or software-based systems that take the guesswork and potential for errors out of the equation.
Lastly, self-managed associations with employees must have adequate workers’ compensation insurance coverage and should consider having an employment practices liability (EPL) insurance policy in place as well. While workers’ compensation insurance covers claims arising from on-the-job injuries, EPL insurance protects against employee claims alleging that the association violated their legal rights (e.g., harassment, discrimination, wrongful termination, etc.). Failure to have an EPL policy in place can, when an employee claim arises, result in the association having to pay out of pocket for unbudgeted legal expenses.
The good news with respect to employer liability is that small changes to existing practices will often result in a meaningful reduction of liability and, quite possibly, an increase in employee satisfaction. Boards need not fear that investing in their association’s employee practices and systems is a bucket without a bottom or somehow will result in increased liability. Simply adopting and periodically updating an employee handbook, conducting honest routine performance evaluations, auditing employees for proper classification, automating wage and hour tracking, and maintaining an EPL insurance policy can provide a community with a lowered potential for claims being brought in the first place and greater protection when they are filed.
Bottom line: When properly communicated to employees as to why changes are being made, and to members as to why costs may increase, boards can increase transparency, lower risk, and demonstrate to all stakeholders that the community is professionally and responsibly operated – a win-win if ever there was one!
Jasmine F. Hale, Esq., CCAL, is a partner with Berding Weil LLP, representing clients throughout Northern California in the Bay Area and Sacramento. Ms. Hale has represented community associations for over 15 years and also specializes in employment law.
You’re not alone. Join Echo’s exclusive Board Members’ Club.
• Meet other board members • Share ideas and information • Learn peer-to-peer It’s part of your membership!
Sign Up for the Board Members’ Club Here
CEO’s Message Continued from page 6 Echo adapted its business model in order to remain a resource for quality education and to support HOA boards and engaged homeowners. Echo transitioned from in-person events to more than 26 online events serving more than 4,200 registrants. We established the Echo YouTube channel and expanded its video content; delivered six Journals, four of which were printed, two electronic; distributed six Insight e-newsletters; and published the Statute Book & Legal Directory. Our reach broadened: registrations more than tripled since 2019 and we expanded into Southern California and across the United States. We are grateful for those who stuck with us and continue to support our elusive value proposition that knowledge builds community. We deliver knowledge and connections to homeowners and industry professionals based simply on the non-commercial premise that people with homes also need an advocate and a center from which to build their communities.
New Leadership at Echo
The world has changed and continues to change for HOAs and for Echo. New challenges, new opportunities, and new leadership. Stability, adaptability, and resolve are essential for any business, but even more so for an association, such as Echo or an HOA. We operate to provide a valuable service and our leaders are committed to serving others. These servant leaders have sustained Echo over these many years and are deserving of our appreciation and support. At the November Echo board meeting, our leadership changed. The volunteer president for the past 12 years, David Hughes, decided it was time to step down and let new leadership step up. Adam Haney was unanimously elected by his board peers to serve as David’s successor. Sandra Long assumed the vice chair position, Mark Guithues accepted the post of secretary, and Karl Lofthouse remained treasurer.
We appreciate all that David has done to lead the association through years of maintenance, repair, and replacement. He leaves a legacy of outstanding leadership. David, as president, always put Echo and the membership first. He often said to me that Echo is the only association of its kind that focuses on HOA communities and board development. That is our purpose. His servant leadership style has been embedded in the Echo culture. It is an important concept for all volunteer board members, including HOAs, to embrace. Integrity, selfless commitment, and a dedication to mission … thank you, David, for your leadership and friendship as president of Echo.
Invite a Homeowner Membership Program
Help educate homeowners. Invite them to be individual Echo members for only $50 with a member referral. Click here for more information.
Contact Jacqueline Price (408) 297-3246 x203
Inflation Drives Modest Dues Increase
Facing increasing inflationary pressures, the Echo board of directors approved the 2022 budget including a modest 4% dues increase for professional service providers (PSPs) and HOA community memberships. Individual and benefactor memberships will remain unchanged. The new budget includes the expansion of services to members, and it is hoped that many who have participated in Echo’s online educational programs in 2021 as nonmembers will join in 2022 and enjoy the benefits of being a member. We also hope that our HOA boards will encourage (or thank) their management firms, vendors, and neighboring HOAs to support Echo and its mission to build better HOA communities.
Happy New Year, and thank you for being an Echo member.
