Legal Expenses

By Kirk Wooldridge, General Manager

OVER THE COURSE OF A PAST FISCAL YEARS, the Tahoe Keys Property Owner Association (TKPOA) Board of Directors has faced a variety of legal issues ranging: • Tahoe Keys Marina & Yacht Club (TKM&YC) violations of the 1991 Superior Court of California – Stipulation Agreement

No: 1225 • TKM&YC legal cases filed in El Dorado Superior Court SCLT – 4914, SC2020-0148 and SC2017-0140 • Lighthouse Shores Claims of violations of the El Dorado

Superior Court of California – Court Order SV92-0066 • Property Owner and Commercial Water Company

Collection Activities • Compliance with the Davis-Stirling Act Civil Code • Amended and Restated – BYLAWS Project • Amended and Restated – Declaration of the Covenants,

Conditions and Restrictions (CC&Rs) Project • Tahoe Keys Water Company – Rule and Regulations Project • Employment Law Claims • Perchloroethylene (PCE) Litigation Investigation and

Strategy • Environmental Law Strategy for the TKPOA required

Environmental Impact Report (EIR) for California

Environmental Quality Act (CEQA) and Environmental

Impact Statement (EIS) for National Environmental Policy

Act (NEPA) 1991 • Community and Single-Family Home Property Owner Dock

Disputes • Community Ink Publisher – Legal Claim and Arbitration • Fire and Water Damage Claims • Architectural Control Rules and Operating Rules

Enforcement • Legal Strategy against external issues that may impact the

Association • El Dorado Superior Court – Small Claims Court Cases filed against the Association or against the TKM&YC

As a result of these issues the TKPOA like most California Large Scale Associations from time to time and on an ongoing basis require knowledgeable legal counsel representation. To that end, the TKPOA Board of Directors, Finance Committee and TKPOA Staff struggle each year to determine the association’s budget for legal expenses. The amount allocated, whether $5,000, $10,000, $20,000, $40,000 or more, will depend on the anticipated number of legal issues.

Unfortunately, legal expenses are not as predictable or as steady as insurance or utility expenses. Associations could go an entire year with no legal expenses and the next year spend $50,000 or more. The more prudent course is to properly fund this expense line item each fiscal year and hope it will not be needed.

The Board of Directors is ultimately responsible for the management and conduct of the affairs of the Association. As of December 16th, 2020, the newly adopted BYLAWS, give the Board of Directors authority through Article 8 – Board of Directors Authority:

Section 8.14 Other Powers and Duties. The Board shall have the power to exercise for the Association all powers duties and authority vested in or delegated to the Association and not reserved to members by other provisions of the Governing Documents and undertake any action on behalf of the Association as the Board shall deem necessary or proper in the furtherance of purposes and powers of the interest o the Association and its members.

In carrying out this Section 8.14 the Board of Directors will need to consult Professional Advisors such as an Attorney or Legal Firm: 8.2 Consult Professional Advisors. The Board shall have the power to consult with, seek the advice of, and reasonably rely on the advice of attorneys, accountants, and other professionals in carrying out the Board’s authority and responsibility under the Governing Documents and the law, and to pay for such professional services.

Many of these legal issues are discussed and documented in the Board of Directors - Executive Session per the Davis-Stirling Act Civil Code and the TKPOA BYLAWS as provided: 6.10 Executive Session. To the fullest extent permitted by law, including Civil Code section 4935, the Board may meet in executive session to confer with legal counsel or to discuss and/or vote upon personnel matters, Member discipline, litigation in which the Association is or may become involved, matters that relate to the formation of contracts between the Association and others, and for the purpose of meeting with a member, upon such member’s request, regarding the member’s payment of assessments.

Over the past seven years there have been many legal issues that have confronted the Board of Directors, the timing of these issues is never ideal. In addition to this the Board of Directors has also pro-actively taken on legal issues that have for past Board’s not been a priority to

CONTINUED FROM PAGE 13

address, but instead they have currently moved forward with legal action to finally achieve an outcome. In the past seven years the TKPOA has spent $1,303,714 in legal expenses.

YEAR

2014

2015

2016

2017

2018

2019

2020

TOTAL TOTAL

$58,011 $46,515 $98,626 $333,544 $361,141 $213,130 $192,746

$1,303,714

The Board of Directors has been pro-active in defending lawsuits and protecting the Associations interests and rights in regard to major issues. In taking on these legal issues the Board of Directors is protecting the association and you as an individual property owner against legal claims. Since 2014, the TKPOA has defended and won all legal claims, insurance claims, El Dorado Superior Court – Small Claims cases and Department of Fair Employment & Housing (DFEH) claims. For the past seven years the TKPOA has received legal settlement payments of approximately $150,000 and has defended against claims successfully of over $1,500,000. To make this happen the TKPOA has utilized the following attorneys and legal firms to defend your interests:

Richardson Ober DeNichilo LLP

• Association Legal Counsel • California Common Interest - Association Law • Employment Law • Collection Law • Architectural Control Rules Enforcement • DFEH Claims

Brownstein Hyatt Farber Schreck LLP

• 1991 Superior Court of California – Stipulation Agreement

No: 1225 Enforcement • Tahoe Keys Water Company – Rules and Regulation • Tahoe Keys Water Company – Collection Activity • Tahoe Keys Marina and Yacht Club (TKM&YC) Legal Claims

Downey Brand LLP

• Environmental Law • Environmental Impact Report (EIR) for California Environmental Quality Act (CEQA) and Environmental Impact Statement (EIS) for National Environmental Policy Act (NEPA) 1991

Coopers & Scully

• Perchloroethylene (PCE) Litigation Specialty • Tahoe Keys Water Company – Legal Claims against

Responsible Parties

Gordon & Rees LLP

• TKPOA Property Owner – Community Dock Disputes • Insurance Claim Coverage

Boutin Jones Inc.

• Employment Law • Insurance Claim Coverage

Sandhu Law Group LLC • Injury and Accident Law • Insurance Claim Coverage

TKPOA Staff

Representation of the TKPOA and Individual Property Owners in Superior Court of El Dorado County – Small Claims Division

These attorneys and legal firms are backed up with our comprehensive insurance coverage provided by Hays Insurance Services whom over the last three years has grown to understand the unique demands of the TKPOA. Each year they strive to find the best insurance coverage to meet our legal and potential liability coverage concerns.

These legal expenses can be staggering when they are unplanned, and the timing of these issues can present ongoing challenges for the TKPOA Board of Directors and TKPOA staff. The $1,303,714 in legal expenses does not represent the countless hours spent by TKPOA Board of Directors, Committee volunteers, and TKPOA staff to support and defend these legal issues and support these legal teams in their cases to provide cost effective and positive outcomes. As part of your quarterly assessment, you are paying for these legal expenses which is a reality as a member of a large-scale association like the TKPOA. It sounds simple, but any legal action put forward by a TKPOA property owner against the TKPOA, is legal action against yourself as a property owner, which will result in an increased legal expense for the TKPOA property owners. The TKPOA Board of Directors and TKPOA staff will continue to try to minimize these expenses on a caseby-case basis to determine the best legal outcome for the TKPOA property owners based on the legal counsel review and advisement.

PENDING | 1922 CATHEDRAL COURT FULLY REMODELED BOATERS RETREAT IN TAHOE KEYS WITH 170FT OF WATER FRONTAGE, A PRIVATE BOAT DOCK SUITABLE FOR 2 LARGE BOATS, WITH EASY ACCESS TO THE OPEN WATERS OF LAKE TAHOE. LOCATED AT THE END OF A CUL DE SAC, THIS 3,241SF, 4 BED/3 BATH, 2 1/2 BATHS, WITH A 2 CAR GARAGE. OFFERED AT $2,798,000.

SOLD on 7/07/2020 | 319 Beach Drive | Located on a premiere Tahoe Keys lakefront street! This 4,190sf fully remodeled home sits on a level lot with 100ft of sandy beach.

LIST PRICE: $4,295,000 | SOLD PRICE: $4,050,000

SOLD on 7/22/2020 | 2037 Aloha Drive | Perched along the shores of a vast Keys waterway leading into the open waters of Lake Tahoe, this Nautical styled home is a boater’s getaway.

LIST PRICE: $2,188,000 | SOLD PRICE: $2,188,000

SOLD on 8/27/2020 | 2015 Kokanee Way | A boaters retreat in the Tahoe Keys with 50 ft of water frontage, a private boat dock, and easy access to the open waters of Lake Tahoe.

LIST PRICE: $980,000 | SOLD PRICE: $1,195,000

MTN LUX PROPS statistics since launching in May 2020:

* Total combined gross sales: $87,358,500 * Average single family home sales price CA & NV: $2,076,149 * Average single family home sale price in NV only: $3,664,000 * 5 lakefront transactions: 3 listings, 2 buyers

Mountain Luxury Properties is a progressive indie brokerage serving all of Lake Tahoe California & Nevada, offering a concierge experience that rises above. Founded by two of Lake Tahoe’s perennial Top Producers, Founder Gregory Ochoa and co-founder Jennie Fairchild, Mtn Lux has established itself as one of the area’s premiere luxury brands.

GREGORY OCHOA

Founder | CA Broker Associate | NV Broker 775.339.1919 | gregory@mountainlux.com

BRE CA 01725318 / DRE NV B.144619