For California's Community Associations April 25, 2010

DISCLOSING
DISCIPLINARY ACTIONS

QUESTION: When a homeowner files a complaint against a neighbor for a violation of the governing documents, is that homeowner allowed to know the results of any disciplinary action?

ANSWERNot really. Unlike the public court system where almost every detail of every criminal and civil action can be published, HOA disciplinary actions are usually private.

Executive Session. Although the Davis-Stirling Act allows disciplinary hearings to be held in an open meeting (unless one of the parties objects, Civil Code 1363(h)), most are held in executive session as provided for in Civil Code 1363.05(b). Doing so reduces the potential for claims of defamation, infliction of emotional distress, etc. Minutes of  executive session hearings are not subject to review by the membership. Civil Code 1363.05(d). Moreover, withholding records of disciplinary actions is specifically provided for in Civil Code 1365.2(d)(1)(E)(ii).

Reported Generally. Even so, I believe it is allowable to report in open meeting minutes and in the association's newsletter something generic. For example, "During the month of April, disciplinary hearings were held for the following violations: (i) dog not on a leash that resulted in a warning, (ii) nuisance noise from a late night party that resulted in a fine of $75, and (iii) a parking violation that resulted in a fine of $50." This kind of reporting keeps the membership informed without identifying the persons involved.

DEVELOPMENT AND
REAL ESTATE EXPERTISE

I am pleased to announce that attorney Helene Fransz has joined our firm as "Of Counsel." Ms. Fransz has extensive experience in subdivision law, having spent the last twenty years creating residential and commercial common interest developments. Ms. Fransz is a regular presenter for the CEB (Continuing Education of the Bar) and a contributor to the CEB treatise Forming California Common Interest Developments (“Financing Sales of Units in Common Interest Developments”). Ms. Fransz received her J.D. from the Georgetown University Law Center, where she graduated cum laude. Helene's full bio is posted on our website.

Ms. Fransz's expertise in dealing with newly formed associations, age-restricted communities, unusual forms of ownership such as leasehold condominiums, stock cooperatives and own-your owns, and tax-related real estate issues will allow Adams Kessler to expand the scope of services we provide to our clients.

Watch for Ms. Fransz's upcoming contribution to our newsletter - "Changing an Existing Community to an Age-Restricted Community" and contributions to the Davis-Stirling website focusing on new developments and master planned communities.

FEEDBACK ON
JULIA BROWNLEY'S LEGISLATION

Larry Stirling, author of the Davis-Stirling Act, penned an article about the proposed legislation. It adds to the growing opposition to AB 2502. A hearing is set for Wednesday, April 28, so it's important that everyone fax a letter to Assembly Housing Committee Members expressing your opposition to the bill. Below is some of the feedback we've received.

Bangladesh! Tried to respond [to Assemblywoman Julia Brownley]. Completed my message, but the form rejects any correspondent who is not in her district. Just thought you'd like to know. I sent my feedback instead to my assemblyman--all the way from here in Bangladesh! -Randy K.

RESPONSE: Ms. Brownley authors legislation that affects 9 million HOA residents (the ones who bear the brunt of her legislation) and then rejects input from everyone except those in her district. That seems a bit unfair.

Fax Number. Please also send the phone and fax number for Julia Brownley. -Suzy K.

RESPONSE: Assemblywoman Julia Brownley, State Capitol P.O. Box 942849, Sacramento, CA 94249-0041, Tel: (916) 319-2041, Fax: (916) 319-2141.

Lost Over $100,000. AB 2502 will only burden the rest of the homeowners to make up for lost HOA dues. Our complex has lost over $100,000 in dues and have had to raise dues to cover this loss. This means that more homeowners won't be able to pay their dues. We have not been able to collect on any of this loss and our only defense is to start the process of non-judicial foreclosure while the amounts owed are still reasonable for the owner to pay. It is the only way to make paying their dues a priority for them. -Pat C.

Constituents Only. [After the Assemblywoman rejected my email] I faxed a letter to Ms Brownley’s Sacramento fax number and left a telephone message for her press officer suggesting that if the assemblywoman is going to propose legislation having state-wide effect, then she really should be prepared to accept comment from outside of her district. -Elisabeth D.

Collection Delays. What concerns us about the legislation is just using the current system, some of our collection processes have taken up to 2 years; this will just add more time HOAs cannot afford. We took a hit last year of $132,000 in various collections/lien issues which ended up being non-reserve transfers. -Joseph L.

Dramatic Increases. In the last 18 months we have seen a dramatic increase in delinquencies in the associations we manage. This impacts monthly expense obligations. Our boards are faced with either delaying projects or borrowing from reserves. For some, we have seen delinquency rates more than double. Such jumps have forced boards to enact emergency special assessments which burdens those owners who do meet their obligations. Boards in many of our communities have become frustrated with the current laws that handcuff collection efforts. Further restraints would be disastrous for many HOA's (especially smaller ones). -Steve M.

   Sincerely yours,
 

   Adrian Adams, Esq.
   Adams Kessler PLC

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May 25, 2010

6:30 p.m.


Adrian Adams and Candice Gottlieb will be speaking in Pasadena, CA on "Diffusing Conflict & Dealing with Difficult People." There is no cost to attend. RSVP:  (626) 795-3282 x886 or email Carol Brock


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