SUCCESSFUL HEARING ON
LEGISLATION

The California Legislative Action Committee reported that the April 28 hearing before the Assembly Housing Committee went well. At least 843 letters were received by the Committee. This was a large show of strength and paved the way to amending the bill so it no longer jeopardizes homeowners associations.

The bill now only deals with debt collectors, leaving intact the existing $1,800/12-month delinquency threshold. As reported by CLAC, the amended bill also:

• deletes a requirement that all payment plans be approved in open session;
• deletes the power of a delinquent owner to unilaterally alter payment plans and reduce payments;
• allows an HOA to retain counsel; and
• requires that agents of the association be bound by payment plans entered into by the association and owner.

As amended, CAI-CLAC has dropped its opposition to the bill. I want to thank everyone who sent letters Assemblywoman Brownley and the Housing Committee. -Adrian Adams

RECALLING
THE WRONG BOARD

QUESTION: A recall petition was circulated against the existing board. Before the date of the recall there was an annual meeting and a new board with new directors was elected. The leaders of the recall insist their petition is still valid against the new board.

ANSWER: The recall petition is no longer valid; it became moot with the election of a new board. The old board that petitioners sought to remove is no longer in existence. If they want to recall the new board, they need to circulate a new petition.

LIABILITY FOR
SEISMIC GAS VALVE?

QUESTION: Our association looked into installing seismic gas shut-off valves but the board is concerned that they may have liability in the event there is an earthquake and the valves fail. They don't want to open themselves to liability unnecessarily. Is this a valid concern?

ANSWER: A seismic valve automatically shuts off natural gas to a building when an earthquake of a sufficient magnitude occurs. Turning off the gas greatly reduces the risk of explosions and fires after a major earthquake. They are so effective that (i) some insurance companies will reduce the cost of insurance if they are installed and (ii) some cities require shut-off valves on all new construction and any remodeling valued at $10,000 or more.

RECOMMENDATION: Not installing seismic valves because they might fail is a poor argument against safety equipment. The potential damage from explosions and fire is much greater than the potential liability from a failure. With all the recent earthquake activity around the world, the more prudent course of action is to install the valves.

FORECLOSURE
RIGHT OF REDEMPTION

QUESTION: My association foreclosed on a delinquent unit. Since no one bid at the foreclosure sale, the association now owns the unit. How does the right of redemption affect us? How do we get the old owner out?

ANSWER: The association’s right to the property is subject to the foreclosed owner’s 90-day right of redemption. Code of Civil Proc. §729.035. The redemption period allows the foreclosed owner to "redeem" the property by paying the delinquent amounts plus any collection fees and costs in that 90-day period.

Holding Period. Because title does not transfer until after the 90-days, the trustee records a "certificate of sale," which gives notice of the association's right to the property but does not transfer ownership. As a result, the association cannot evict the owner from the property during the redemption period. This gives the foreclosed owner an additional 90-day free ride to live in the unit without paying any monies to the association.

Right to Evict. After the 90 days, the trustee records title in the association's name, thereby transferring ownership and possession rights to the association. Once that happens, the association can file an unlawful detainer action to evict the foreclosed owner from the property. -Tina Wang, Esq.

HOLDING RAFFLES
TO MAKE QUORUM

QUESTION: To achieve quorum at its annual meeting, can an association hold a raffle? Can we give away one month's dues? If this can be done, do we write a check to the owner or simply credit the owner's account?

ANSWER: Yes, you can hold a raffle. There is nothing illegal or improper with raffling off one month of free dues. It can be done by crediting the owner's account. Some associations get local vendors to donate free dinners to restaurants, free car washes, gift baskets, etc.

SPECIAL ELECTION
UNNECESSARY

QUESTION: One of our directors recently resigned. The remaining directors want to wait until the upcoming annual meeting to fill the vacancy. We have a member insisting that we immediately start the election process to replace the resigning director. Can we save the association some money and wait until the annual meeting?