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ARBORIST REPORT
 QUESTION: Following the removal of 60 trees from
the common areas a committee was formed to select an
arborist who then reviewed our development's trees
and submitted a report. None of the homeowners who
served on the committee have seen the report; only the board has access to it. Can homeowners inspect
the arborist's report?
ANSWER: In my opinion, homeowners can review and copy the report. Even though such reports are not specifically mentioned
by the various statutes governing the inspection of records, the report
is a record of the association and is not subject to the privacy
concerns raised by Civil Code §1365.2(d).
If the board rather than legal counsel contracted with the arborist,
the report does not have attorney work-product protection. Even if the
board included a confidentiality provision in the contract, members'
inspection rights cannot be limited by contract. Corp. Code §8313.
The issue of tree removal is of interest to the community and there is
no reason to withhold the information. Even though the membership has an
interest in the trees, the board retains the authority to make
decisions about maintenance of the common areas, including the pruning
and removal of trees.
IMPOSSIBLE TO AMEND
 QUESTION:
To amend our 1960s-era CC&Rs we need the approval of 3/4 of the
membership. It is impossible to get a 75% of the membership to vote, let
alone 75% to approve. Does current law allow amending CC&Rs with a
simple majority?
ANSWER: Because of the difficulty (sometimes impossibility) of getting a super-majority to amend CC&Rs, the legislature enacted Civil Code §1356
to alleviate the problem. If an association makes a good faith effort
to obtain membership approval and can get at least 50% of the membership
to approve the amendment or restatement, the association can petition
the courts to approve it. The petition must contain the following:
- The reasons for the amendment.
- The number of votes required to amend.
- The number of affirmative and negative votes actually received.
- The association's effort to solicit membership approval.
- A copy of the governing documents, text of the amendment, and the notice and solicitation materials used.
Court Approval. The court may (but is not required to) grant the petition if it finds:
- The membership was given at least 15 days written notice of the court hearing.
- Balloting on the amendment was conducted in accordance with the governing documents.
- A reasonably diligent effort was made to permit all eligible members to vote on the amendment.
- More than 50% of the membership voted in favor of the amendment.
- The amendment is reasonable.
- Granting the petition is not improper for any reason stated in Civil Code §1356(e).
RECOMMENDATION:
We have had great success getting court approval of amendments and restatements. Boards should work with legal counsel to petition the courts if circumstances warrant it.
FEEDBACK
Bank of America and FHA.
I listed my condo and tried to maximize the number of qualified buyers
by having the building FHA approved. The building is owner occupied, no
litigation, no delinquent dues, no deferred maintenance, and reserves
50% funded. The building was turned down by Bank of America's FHA
department because, they told me, they only do FHA approvals for
buildings in which reserves are 100% funded! I was stunned, asked how
many such buildings that came cross their desk were 100% funded and was
told about 25%. Somehow, I don't believe them--I think the number is
closer to 5%. B of A suggested we impose a special assessment of about
$4,000 on each homeowner to bring the reserves to 100% funding. Who the
heck are these people? Luckily, I ended up with four offers, only one
of which needed FHA approval. So, the theory of FHA approval is great,
the reality different. -A.L.
Property Values and FHA. A
reader commented that the board has a duty to maintain property values.
I believe this to be arguable. It is the duty of the board of
directors to protect the assets–not to “maintain property values.” Many
associations will not qualify for FHA loans because of factors outside
of their control, such as the number of delinquent owners, the number of
off-site owners, and deficiencies in reserve funds inherited from past
boards. What a board can and should do is this: respond timely to lender
certifications and questionnaires submitted when a unit is in escrow,
respond truthfully, and follow the association's collection policies.
-Paige B.
Sincerely,
Adrian J. Adams, Esq.
Adams Kessler PLC
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