The Laws of the Land

BY WILLIAM M. SCHERER, ESQ. & LOUIS J. SARMIENTO, JR., ESQ.

Every level and layer of government issues an abundance of new laws, regulations, guidelines, and executive orders (collectively, “laws”). The issuance of laws has only accelerated these past few months due to the COVID-19 pandemic. A few laws may even contradict one another, causing many to ask the question: “Which law must we follow?”

If the state says one thing, the county another, and homeowners/ community/owners association’s (“association”) governing documents say something entirely different, what is one to do?

What about the situation in which the Federal and state governments permit an activity, but a local government prohibits or otherwise regulates that activity?

Generally speaking, the order of priority (from highest to lowest) is Federal law, state law, local (i.e., county and municipal) law, and association governing documents. Federal law sets the foundation, state law builds upon that foundation, and so forth. The law becomes more specialized and nuanced along the way.

The interplay among the laws of the different bodies of government is as follows:

If Federal law is: a) silent about a subject matter, b) delegates the authority to regulate that subject matter to the states, or c) does not preempt state law concerning the subject matter, then a state government may regulate that subject matter.

Continued on page 12

GOVERNING DOCUMENTS

LOCAL LAW

STATE LAW

FEDERAL LAW

If California law a) does not regulate that subject matter, b) delegates authority, or c) does not preempt local ordinances, then the counties may do so.

If the county in which an association is situated does not regulate the matter, then the city or town in which that association is situated may do so.

Lastly, if none of the other levels of government regulate an action, then an association may do so.

Federal Law – Supreme Law of the Land

Any article that addresses the layers of laws begins with the

FEDS

US Constitution Supremacy Clause. Article VI of the US CALIFORNIA Constitution states: “This COUNTY Constitution, and the Laws of the United CITY States which shall be made in ASSOCIATION Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” (Emphasis added)

As in all aspects of life in these United States, the U.S. Constitution, federal statutes, and federal regulations (collectively, “federal law”) control associations and their respective boards and members. A few of the more well-known federal laws that apply to associations include the Americans with Disabilities Act of 1990, Fair Housing Amendments Act of 1988, and Fair Debt Collection Practices Act.

California laws apply to activities in this state, unless the state’s laws are preempted by federal law. Federal law preempts state laws through either express preemption (i.e. a valid Federal statute states that it preempts the state’s laws) or implied preemption – the state’s laws are inconsistent with federal law or federal law occupies the field such that there is no room for the state’s laws.

State Law – General Laws Uniformly Applying to Californians

After federal laws, California’s laws make up the next level of the metaphorical pyramid of laws applicable to association members. Echo Journal readers are, no doubt, aware of at least one major body of California law that applies to associations – the Davis-Stirling Common Interest Development Act (the “Act”). In addition to the Act, the Corporations Code, which includes titles that apply to corporations or unincorporated associations, and other state laws and regulations affect associations and their members. In recent months, Californians are also becoming more familiar with another aspect of state law that controls our daily life: our Governor’s executive orders. Taken all together, the state’s laws are key parts of what is referred to in this article as “state law.”

Local Law – Other Ordinances and Regulations Not in Conflict with General Laws

California Constitution, Article XI, Section 7 states, “A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.” “General laws” are defined to be those laws that apply statewide and deal with matters of statewide concern.

The general legal preemption principles between state law and a county’s and municipality’s laws (“local law”) are as follows: local laws that conflict with California’s laws are void. A conflict exists when the local law duplicates, contradicts, or enters an area fully occupied by state law, either expressly or by implication. (Sound familiar?)

So, if there is an area of regulation at the local level that is not preempted by state law or federal law, then the local law may stand. Of course, someone just might challenge the local law when that law is enforced against them, but that is a topic for another edition of the Echo Journal.

Governing Documents – An Association’s Own Laws

As previously mentioned, federal law, state law, and local law are higher in priority than an association’s governing documents. Simply put: if there is a conflict between the laws and governing documents, the laws prevail. Otherwise, the governing documents could regulate activities within

Use of the Association Pool

As in all aspects of life During a Pandemic A topic currently on the in these United States, the U.S. Constitution, federal minds of many association statutes, and federal regulations control associations boards as Summer hits midstride and temperatures rise is and their respective boards and members. the association pool. Members of associations that have a place conditions on, or permit short-term rentals.

For the sake of example, let us presume: 1) Federal law and state law do not prohibit shortterm rentals; 2) Local government permits short-term rentals, but requires hosting platforms to collect a tax on each transaction on behalf of the government; and 3) An association’s governing documents ban all renting of units for any term shorter than one year.

Even though the federal, state, and local governments allow short-term rentals, an owner in that association would be prohibited from renting their unit for 30 days or less because of the governing documents. In this example, the different levels of law provide a layer of regulations that coexist. common area pool have likely already asked themselves a common interest development. whether their association

Even among association governing documents, could allow members to use the pool considering the there is an order of priority, which in order of highest various regulations relating to pool use and efforts to to lowest is: CC&Rs, Articles of Incorporation, Bylaws, keep everyone healthy.

Operating Rules, and Policies and Procedures. State law effectively required associations to Short Term Rentals either explicitly or implicitly prohibited the use of

To provide an example of the interplay of laws, association pools during this COVID pandemic. consider a subject for which multiple levels of The state and some counties have recently started regulations concerning that subject operate among permitting pools to reopen. one another: the rental of all or part of a home for 30 At the time of writing, federal law does not days or less (“short-term rentals”). prohibit operating public pools. Instead, the Centers

To the best of our knowledge, federal law is for Disease Control and Prevention (“CDC”) provide generally silent regarding short-term rentals. State guidelines for public pools, including pools operated law requires hosting platforms to post a notice on by association. Those guidelines provide lists of ways the hosting platform to non-owner occupants listing pool owners can promote behaviors that prevent their residences for rent, warning that such shortthe spread of the virus and directs pool operators term rentals may violate the non-owner occupant’s to consult with local health departments. While lease or contract, and requiring an affirmative state law previously banned the use of public pools, acknowledgement that the occupant has read the the California Department of Public Health and the notice. Some local governments place restrictions, State of California Department of Industrial Relations impose registration requirements, or require that currently provide guidance for fitness facilities, taxes be paid on short-term rentals, while others including pools, which must be implemented by prohibit short-term rentals completely. At the association level, governing documents could ban, Continued on page 14

close their pools in March 2020. As a result, counties

The Laws of the Land Continued from page 13 county health officer approval.

With federal and state law allowing counties to determine whether swimming pools should be reopened, counties and associations are left to decide whether to permit an association pool to reopen. Some counties have already approved the reopening of association pools. If the county has not yet implemented pool reopening guidelines and has not approved reopening public pools, then an association in that county would not be permitted to reopen its swimming pool. Check with the county’s department of public health to see what the applicable protocols are to reopen and operate public or shared residential pools. Heads-up: some counties consider association swimming pools as “public pools” and others treat them as private or residential pools.

Even assuming that the county allows for association pools to reopen while following applicable procedures, an association could decide not to reopen its pool immediately depending upon how its board assesses the risk.

Conclusion

The intersection of federal law, state law, local law, and governing documents is rife with conflict among the governing bodies. There are also instances in which laws coexist, creating a figurative tapestry of laws in which state laws are woven into local law and embellished by obligations within an association’s governing documents. Consult with your association’s counsel to navigate the layers of laws.

William M. Scherer, Esq., is a founding partner of Scherer Smith & Kenny LLP, a business, real estate, and litigation firm. He has advised homeowners associations, stock co-ops, and entrepreneurial companies for over 30 years.

Louis J. Sarmiento, Esq., is a real estate and business law attorney at Scherer Smith & Kenny LLP, where he advises homeowners associations and stock co-ops, as well as association members and other real property owners.

For information, please visit www.sfcounsel.com.

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