January 24, 2010

CANDIDATES WHO WITHDRAW
FROM ELECTIONS

QUESTION: Our annual meeting is coming up and we have two seats up for election. One of the four candidates running for the board withdrew after the ballots were sent to members. If this person gets enough votes to be elected, can we just ignore the votes for this person and install the next person with the most votes? Our bylaws have no provision for this kind of situation.

ANSWER: Yes, you can ignore the votes. Everyone who voted for this person unfortunately wasted their votes. The two people with the highest votes (discounting the person who withdrew) will be the winners. You should still report all vote tallies, including those for the person who withdrew.

HUD/FHA APPROVAL UPDATE

In November 2009, the Federal Housing Administration issued new requirements outlining their lending requirements for condominium associations.

U.S. Approvals, a company that provides HUD/FHA and VA project review services published an updated summary of the requirements.

If you want to know why the housing market collapsed, which led to a world-wide recession and the new FHA restrictions, I recommend A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers by Lawrence G. McDonald. It is a riveting story.

SATELLITE DISHES ON
COMMON AREA ROOFS

QUESTION: Civil Code 1376(b)(2) says in part: "...that has a diameter or diagonal measurements of 36 inches or less on a separate interest owned by another." Questions and confusion keep arising on the interpretation of the phrase in bold lettering. We have some condominiums whose balconies cannot receive a satellite signal. The owners of these units want to place dishes on the common area roof. They claim the wording of 1376 allows them to do this as the roof is "a separate interest owned by another." Are they correct?

ANSWER: No, they are not correct. The term “separate interest owned by another” refers to the portion of the project owned exclusively by another member of the association which, in the case of condominium projects, is air space.Civil Code 1351(l)(2)&(f). The portions of the project owned by the association are referred to as “common area.”Civil Code 1351(b). Therefore, Civil Code §1376(b)(2) would not give residents the right to install a satellite dish on a common area roof.

Federal Preemption. Moreover, parts of Civil Code §1376 have been preempted by the Telecommunications Act of 1996 (47 USC § §151-615b) and Over-the-Air Reception Devices Rule (OTARD rule) (47 CFR §1.4000), which provides that while owners have a right install satellite dishes on their separate interest or exclusive use common areas (i.e. balconies, patios), they do not have a right to install them on common area roofs.

Roof Damage. Finally, due to possible damage to roofs and potential liability from injuries, most associations do not allow the installation of antennas on common area roofs. A small percentage of our clients allow installation in designated roof areas that have been prepped for antennas so as to avoid damage. Even so, some impose strict restrictions on when and how installations occur, and some require signed releases from owners. NOTE: Such restrictions do not apply to single family homes and do not necessarily apply to townhomes.

FEEDBACK

Late Charges. I believe your opinion regarding late payments is misleading at best. The law says that assessments are late 15 days after the due date. Nothing in the law addresses the issue of postmarks. May I advise you that credit card and mortgage companies to not accept a postmark as acceptable dates of delinquency. If you’ve missed their grace period, too bad. -Ed V.

Late Charges #2. In our industry most times, post mark dates are not relied on. Since a vast majority of our business is through lock box services at banks, the date posted to a homeowner's account is the date received by the bank. Also, many homeowners choose to use banking on line for paying their assessments, and once again it is when the payment is received by the bank. And finally, for those payments sent by an over night delivery service, it is based on when the payment is received. -Lisa E.

RESPONSE: From the feedback on this subject, there seems to be a split in our industry on when late charges can be applied. Some use the postmark and some do not. I will poll others in the industry to see if there is a majority opinion on the subject. -Adrian

 Taxes. While associations wouldn’t owe property taxes, there frequently are special district user fees put on by, for instance, the water district which I understand the association does need to pay. -Marla H.

RESPONSE: Good point.

Old Decade. Please do not perpetuate sloppy thinking and cheapen your excellent Newsletter -- US citizens suffer more than most from poor arithmetic "skills" -- a century or decade starts with 1, ends with 10. That 's why we have ten fingers instead of a zero finger and 9 other digits. You uphold the law, so please uphold the laws of logic & arithmetic! -LeRoy M.

New Decade. If a decade is ten years, and the year 2000 (for instance) counts as a year (why wouldn’t it?), then 10 years takes us to the end of 2009. -Marla H.

RESPONSE: One of the research attorneys in my office did a quick search of the internet and found an article that does a good job of summarizing both sides of the "decade" debate. Wikipedia also makes arguments pro and con. I'm hanging tough with the new decade argument, i.e., 2010 is the start of a new decade. -Adrian

Bankruptcy. In chapter 7 the trustee does not want us to file a proof of claim unless they ask us to. Your response gives the impression that we are to always file a claim in a 7 which is not true. Also, in a chapter 7 why would you file for relief from stay to pursue post petition?? In a chapter 7 it just stops the collection process until completed which is just a few months so a relief from stay is not necessary in a 7. If the lien was on the property before the sale and the owner is keeping the property the association can recover pre and post petition debt. If the lien was not on the property in time then the pre is wiped out but the owner is responsible to pay the post until they are no longer the owner of the property. If the chapter is a 13 and the owner is keeping the property but not paying the post petition debt then and only then should the association consider a relief from stay AFTER they verify that the lender has not initiated foreclosure or seeking relief. -Beverlee G.

RESPONSE: Actually, my response was aimed more at getting legal advice from lawyers. They can better assess legal issues. Each bankruptcy must be evaluated on its own merits. Were liens filed? How much is owed? What is the potential for recovery? What will it cost? How long will it take? What form of bankruptcy was filed? Board members who rely on managers for legal advice will likely lose the protection of the Business Judgment Rule since an ordinarily prudent person would not seek legal advice from a non-lawyer. When it comes to nonjudicial liens and foreclosures, collection companies (such as SBS Lien Services, ASAP Collection Services, Association Lien Services, and Witkin & Neal, to name a few) are also good sources of information.

   Sincerely yours,
 
   Adrian Adams, Esq.
   Adams Kessler PLC
 
Frazier Mt. Electric

(800) 651-2757

 Election Inspectors
 (888) 558-0421 x3


 Management Services
 (818) 437-3331

Hon. Larry Stirling(ret)

HOA
Disclosures


Advertising

Manager
Country

Link to
 

Amendments & restatements

To learn about court rulings affecting associations, go to:
 
Copyright
Adams Kessler PLC

Davis-Stirling.com is not affiliated with or sponsored by any governmental agency. Newsletters are for advertising & general information. Readers should not act on articles without consulting legal counsel.

You may reprint articles provided there are no changes and you include the following:
Reprinted from
Davis-Stirling.com by Adams Kessler PLC


ADAMS KESSLER PLC
Corporate counsel
to associations.
Offices in San Francisco, Sacramento, Los
Angeles and San Diego.
800-464-2817

To receive newsletters subscribe here.