2023 NEW LAWS & CASES

TERMINOLOGY
Ranking of Laws. The three sources of law are constitutional, statutory, and case law. The sources are ranked as follows: first, constitutional; second, statutory; and third, case law. 

Laws & Ordinances. Bills (proposed changes to the law) are introduced into the legislature in Sacramento. Once a bill has been approved by both houses of the legislature (the Assembly and Senate) and signed by the Governor, a bill becomes a statute or "statutory law." The Davis-Stirling Act (Civ. Code §§ 4000-6150) is an example of statutory law. Regulatory laws are adopted by executive agencies based on statutes. Ordinances are passed by counties and cities.

Enrolled. A bill that passes both houses is sent for proofreading for consistency before being sent to the Governor for approval.

Transmitted to Governor. The governor must sign or veto legislation within ten days after transmittal, or it becomes law without his/her signature. For bills transmitted after session adjournment, the governor must act within 30 days after the end of the session, or the legislation becomes law without being signed.

Chaptered. A bill is "chaptered" once it is signed by the Governor. It becomes law on January 1 of the following year unless it contains an urgency clause (takes effect immediately) or specifies an effective date.

2023 BILLS

AB 478 – Wildfire Insurance. For insureds 65 years of age or older, this bill would limit an increase in their yearly premium for a policy of residential property insurance by no more than 25 percent for insured property located in a high or very high fire hazard severity zone, as identified by the State Fire Marshal, as specified, and allow only one premium increase in a 5-year period. The bill would allow the increased premium to be paid over a 3-year period as part of the insured’s residential property insurance premium payments. This bill would additionally prohibit an insurer from canceling or refusing to renew a policy of residential property insurance based solely on the fact that the insured property is located in a high or very high fire hazard severity zone, as identified by the State Fire Marshal, if the insured is 65 years of age or older.

AB 572. Assessment Limitation. This bill would, with certain exceptions, prohibit an association that records its original declaration on or after January 1, 2024, from imposing an increase of a regular assessment on the owner of a deed-restricted affordable housing unit that is more than 5% greater than the preceding regular assessment for the association’s preceding fiscal year or more than the percentage change in the cost of living, whichever is larger, not to exceed 10%, as specified. [Chaptered]

AB 648. Virtual Meetings. This bill would authorize board and member meetings, except for meetings at which ballots are counted and tabulated, to be conducted entirely virtually without needing to designate a physical location. [Chaptered]

AB 976. Accessory Dwelling Units. Existing law authorizes a local agency to impose an owner-occupancy requirement on an accessory dwelling unit, provided the Accessory Dwelling Units (ADU) was not permitted between 1/1/20 and 1/1/25. This bill would prohibit a local agency from imposing an owner-occupancy requirement on any ADU. [Chaptered]

AB 1033.  ADUs. This bill would authorize a local agency to adopt a local ordinance to allow the separate conveyance of the primary dwelling unit and accessory dwelling unit or units as condominiums, as specified, and would make conforming changes. [Chaptered]

AB 1458. Adjourned Meeting Quorum. At least 30 days before ballots are distributed for director elections and recall elections, general notice of specified information regarding the election must be distributed, including the date, time, and location of the meeting at which quorum will be determined, if the association’s governing documents require a quorum. In the absence of a quorum, this bill authorizes an association or a CID corporation to adjourn a membership meeting to a date at least 20 days after the adjourned meeting at which time the quorum required for purposes of a membership meeting shall be 20% of the voting members present in person, proxy or by secret ballot. [Chaptered]

AB 1572. Potable Water. This bill would prohibit the use of potable water for the irrigation of nonfunctional turf located on homeowners’ associations and common interest developments. Associations will be required to comply beginning January 1, 2029. [Chaptered]

AB 1661. ADUs. Existing law requires every residential unit in an apartment house or similar multiunit residential structure, condominium, or mobilehome park to be individually metered for electrical and gas. This bill would exclude ADUs from that requirement if the owner of the property has the electrical and gas metered through existing or upgraded utility meters located on the property.

AB 1764. Elections. This bill would require associations to disqualify a nominee for the Board of Directors if that person has served the maximum number of terms or sequential terms allowed by the association. It also requires the association to disqualify a director who ceases to be a member of the association from continuing to serve as a director. If an association disqualifies a nominee for the Board of Directors pursuant to Civil Code Section 5105, an association in its election rules shall also require a director to comply with the same requirements. [Chaptered]

SB 71. Small Claims Court. The bill raises small claims limits to $12,500 if brought by a natural person and increases the limit on the amount in controversy for an action or special proceeding to be treated as a limited civil case to $35,000 [Chaptered]

SB 403. Discrimination on the Basis of Ancestry. This bill would include ancestry as a protected characteristic covered by the Unruh Civil Rights Act, the policy of the State of California, and the FEHA. [Vetoed]

SB 477. Accessory Dwelling Units. This bill would make nonsubstantive changes and reorganize provisions in existing law related to the creation and regulation of Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs).

Corporate Transparency Act. Beginning January 1, 2025, associations with less than $5 million in assets and fewer than 20 employees will need to file the names of their directors, their birth dates, home addresses, and driver's license information with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury. Associations must include the identity of the person with substantial control over the association's finances. The purpose of this highly intrusive and burdensome reporting is to track suspicious activity, money laundering, and terrorist financing, none of which community associations are involved with. The Community Associations Institute is working to exempt associations from these regulations. For more information, see CAI's website. 

2023 CASE LAW
Case Law Defined. Case law is created by judicial decisions in California's appellate courts and supreme court. Statutory law demands or prohibits certain acts. Case law interprets statutory law. The cases also explain how the justices arrived at their particular conclusions. If published, their rulings serve as precedence for cases that follow.

Lake Lindero HOA v. Barone. This case concerned the validity of a recall election. The Board that was served with the recall petition did not participate in noticing the special membership meeting, mailing the election materials, appointing the IOE and conducting the election. Instead, the petitioners handled everything.Importantly, this case held the following: (1) The correct membership vote requirement for recalls in corporations of 50 or more members is a majority of a quorum. Corporations Code sections 7222, 5034 and 7151(e) take precedence over Bylaws that require recall votes to be approved by a majority of the total members – again this is for corporations of 50 or more members. (2) Corporations Code 7616 (Action to Determine Validity of Election) applies to recall votes. 

Lauckhart v. El Macero Homeowners Ass’n. Members filed suit to challenge the validity of the Association’s 1995 CC&Rs, the acquisition of a common area lot, and the Association’s status as a common interest development (CID). Their complaint was amended three times to allege additional facts. The Appellate Court sustained a demurrer to the cause of action to cancel the 1995 CC&Rs for fraud, finding the members had not pled the elements of fraud with particularity (i.e., showing signatures were forged, how they were fraudulently obtained, etc.) even as to signatures of some of the Plaintiffs. The Court found that the acquisition of common area by the Association was protected under the business judgment rule as the Members failed to overcome the presumption of the business judgment rule through pleading affirmative affirmative allegations of fact establishing fraud, bad faith, overreaching, or unreasonable failure to investigate material facts. Finally, the appellate Court found the Association was a CID because the other causes of action to invalidate the CC&Rs and acquisition of the Lot failed. It is a nonprofit corporation created to manage the subdivision, which is a planned development with common area, and the association has the power to levy assessments that can become a lien against the separate interests.

LNSU #1 v. Alta Del Mar Coastal Collection. Email communications between board members are allowed, even if directors discuss association business. The court reviewed the language of the statute and concluded that a "board meeting" is defined to mean an in-person gathering of a quorum of directors at the same time and physical location for the purpose of taking action on items of association business. They decided that email exchanges among directors where no action is taken do not constitute board meetings. The court also indicated that once directors unanimously authorize an emergency email meeting, votes by email do not need to be unanimous. It would be a majority of a quorum as with regular meetings.

North Coast Village Condominium Assn. v. Phillips. Both a civil harassment restraining order and workplace violence restraining order can be based on unlawful violence or a credible threat of violence, but only a civil harassment restraining order can be based on a continuity of purpose, a willful course of conduct intending to vex, annoy or harass serving no legal purpose. The distinction between the workplace and home and when someone is and is not functioning as an employee for purposes of a workplace violence restraining order is not clear, particularly as it is related to directors who live in and conduct Association business in their separate interest and the common area. Trial courts may find that defamation per se, such as calling a director a pedophile during an open meeting and in campaign mailings to the members, is protected speech if the statement is made during a Board meeting or is related to the management of the Association. 

River’s Side at Washington Square v. Sup. Ct. This construction defect action is brought by an HOA for a planned development. The appellate court held that the HOA lacks standing to sue for defects in the individual units (separate interests) under the Right to Repair Act (Civil Code section 945). The HOA could not meet the standing requirements of Civil Code Section 5980 because none of the defects identified in the complaint involved either the common areas or separate interests that the HOA was obligated to maintain or repair. Plaintiff may have standing to allege defects in the individual units in causes of action for breach of contracts, nondisclosure, misrepresentation, if it can meet the requirements for bringing a representative action under Code Civ. Proc. § 382. 

Shetty v. HSBC Bank United States. The purchaser of a foreclosed home with a defaulted bank loan has standing under Civil Code 2924c to cure the default and resume regular loan payments. The purchaser was a successor in interest of the property.

Takiguchi v. Venetian Condominiums. A father and son controlled a 3-member board and perpetuated their power by failing to hold regular annual elections. The father owned 18 units and was elected to the board in 2008. In 2009 he appointed his son to the board. They then controlled the board from 2009 through 2021 and repeatedly failed to hold annual elections, either due to the absence of a quorum or for other reasons. In addition, they targeted opposition candidates by fining them and trying to exclude their candidate statements from ballot packets. The association was sued and the trial court ordered the board to conduct an election pursuant to Corp. Code 7510. The board appealed and the Court of Appeal affirmed the lower court’s decision. 

UNPUBLISHED CASES
The following cases are unpublished opinions and are not binding precedents. However, they give insight into how future courts might deal with similar issues.

Aaronoff v. Olson. The parties to this action converted an apartment building into a condominium, and then each resided in the building. Olson served as president of the HOA. Aaronoff filed various claims and complaints against Olson, including a civil harassment restraining order. At the conclusion of a four day hearing on her restraining order petition, the trial court determined that Aaronoff had failed to demonstrate clear and convincing evidence of harassment. Aaronoff alleged that Olsen had embarked on a campaign through third-parties to force her out of the building, that Olson had confronted her angrily, that Olson had looked at and photographed her through her windows, that her unit had been surveilled by strangers, that her window and door lock were damaged, and strangers escorted by the HOA’s general contractor were behaving suspiciously. Witnesses’ testimony did not support Aaronoff's claims that Olson was harassing her or that other third parties were harassing her on behalf of Olson.

Antonio V. v. Horn. In response to confronting his neighbors over their smokey charcoal barbecue, an HOA director was repeatedly accused of being unfit to serve because he had photographed young girls. The dispute escalated to numerous lawsuits, including the director’s defamation action against his accusers. The accusing barbecuers filed an Anti-SLAPP motion. The Appellate Court held that any statement related to the safety of children is a matter of public concern, so it was protected speech under the Anti-SLAPP statute. Therefore, the burden shifted to the director to show he was likely to prevail on the merits of his case. The Court determined the director was likely to prevail because: (1) the statement that the director was “predatory” was not an opinion. Instead, given the context, the statement could reasonably be understood to be a statement of fact; and (2) the statements were not protected as prelitigation communication because the defendants’ draft Complaint did not allege the Director photographed children. Only after they were sued did they make that allegation in their cross-complaint.

BMR-Summers Ridge LP v. H.G. Fenton Co. BMR, Fenton and ARE are lot owners in Fenton Technology Park (“Park”), a small, 4 lot, commercial CID located in a large industrial area between 2 freeways. BMR wanted to sell its lots to Amazon, who planned to build a distribution facility. The sale depended on the approval of the Association. The Association rejected BMR's request, saying that Amazon's use did not fit with the Park's character or the CC&Rs' intent. Amazon backed out of the deal and BMR sued the Association and its Board members. The defendants filed an Anti-SLAPP motion alleging that they were facing a lawsuit for their actions in a Board meeting. The defendants argued that the Board meeting was an "official proceeding" and that they acted in a "public forum" on high-profile "public interest" issues. The Court of Appeal examined whether the Board’s meeting and decision were protected activity under CCP Section 425.16. The court held that the Association’s Board meeting was not an official proceeding under Section 425.16(e)(1) or (e)(2), because (a) the Park’s small size make its proceedings less "closely linked to any governmental, administrative, or judicial proceedings,” (b) the Association’s duties were limited to internal affairs like maintaining common areas, assessment collection, and rules enforcement, and (c) the Association managed a commercial CID and not the life of a residential community. The court then examined whether the Board meeting was a public forum per CCP Section 425.16(e)(3). The court concluded that the Board meeting did not qualify as a public forum because (a) the Open Meeting Act or any other open meeting law does not apply to commercial CIDs, and (b) the Association manages a commercial CID, so it is not similar to a municipality or other governmental body that regulates a residential community. Also, the defendant’s conduct was not protected under subsection (e)(4) because (ii) BMR's application did not spark any public involvement, such as meetings, petitions, letters, or other forms of engagement from the community, and (ii) the Board’s meeting and vote did not raise awareness of any public issues related to the Amazon facility, such as its possible environmental or traffic effects on nearby areas.

Cabot v. Gelder. The plaintiff, Cabot, and defendant, Gelder, are both residents of a 7-unit condominium project managed by a homeowners association (“HOA”). On December 12, 2020, Cabot was involved in a physical altercation with another resident, and both men involved were taken to the hospital for their injuries. Cabot was arrested and detained but was not charged with a crime. On December 29, 2020, a director emailed the homeowners stating that the Board had met and decided not to take any action and solicited input from the members about the need for additional security measures. Gelder responded to the email and stated (1) that the altercation was a “pre-meditated vicious attack,” (2) that “the police, ambulance, and fire dept have been called to [the project] numerous times in the last 2 years”, and that the altercation was “a criminal case.” The court held that Gelder’s statements were private communications about a private matter and were not made in connection with a public issue or an issue of public interest. The court explained that statements made in connection with board elections, recall campaigns and the manner in which a large HOA would be governed are protected speech. Here, Gelder’s statements about Cabot did not involve board elections, recall campaigns, who should be the manager of the HOA or a governance issue of potential interest to all homeowners. Also, false accusations of a crime do not arise from protected activity when the plaintiff is a private party, and the accusations were made only to a small group of other private parties. The court noted that it does not matter that Gelder was responding to an email from the HOA when he made the accusations because “not every mundane communication between an HOA and homeowner gives rise to a freedom of speech issue. The court remanded the case and directed the trial court to deny Gelder’s anti-SLAPP motion.

Dollar Point Ass'n, Inc. v. United States Liab. Ins. Co. Members sued the HOA for declaratory relief and quiet title via adverse possession. The Association’s insurer did not have a duty to defend the HOA under a claims made non-profit professional liability policy because the HOA was not sued for a “loss”; therefore, the policy did not cover the claim.

Drooyan v. Action Prop. Mgmt. Co. Even though a construction defect lawsuit included past repair costs as damages, the Association was not required to use the lawsuit’s settlement funds to reimburse owners for those past assessments or to lower assessments. The terms of the Settlement Agreement did not require the Association to reimburse owners for those repair costs and the settlement funds belonged to the Association, not individual owners. Of note, when awarding the Association “reasonable” attorney fees, the trial reduced its $47,000 request to just $15,000.

Doss v. Brehaut. The CC&Rs limit the use of certain easements to “landscaping purposes.” The term “landscaping” is not defined in the CC&Rs; thus, a dispute ensued. The dictionary definition of “landscaping” should have been used, not an interpretation based on the CC&Rs as a whole or how they are used in the industry.  The Association’s approval of an architectural application to build a “sister” fence on an easement was improper because building a fence is not within the dictionary definition of “landscaping,” and the fence burdened the dominant tenement. 

Fairly-Haze v. Whitesails Cmty. Ass'n. An owner’s request that the Association create an accessible parking space in an underground parking structure was properly denied. The HOA did not have the authority to reassign deeded parking spaces which would have been necessary to create the space. Alternatively, the owner would be granted exclusive use of an accessible space outside the garage in exchange for one of his other spaces.

Gorenberg v. Emerson Maint. Ass'n. A peremptory writ issued under CCP 1094 for association records to be produced to an owner, could be enforced under CCP 1097 on individual directors of an association. CCP 1097 allows for imposition of a fine up to $1,000 and persistent refusal to obey can be subject to imprisonment. In so holding, the COA said: “Today we reaffirm a bedrock principle of corporate law; "the simple reality that an entity acts through its board and/or agents[.]" (Ritter & Ritter, Inc. Pension & Profit Plan v. The Churchill Condominium Assn. (2008) 166 Cal.App.4th 103, 124, 82 Cal. Rptr. 3d 389 (Ritter).)”

Groth v. Park III. Condo HOA Owners and their tenant who sued their HOA and its board president for civil rights violations and defamation defeated an Anti-SLAPP motion to strike because they presented sufficient evidence that racist and defamatory letters were authored and distributed by the board president. The HOA’s Anti-SLAPP motion was also denied because the board president’s acts are imputed to the HOA under the doctrine of respondeat superior.

Haghnazarzadeh v. Suntree Townhomes Owners' Association. Haghnazarzadeh owns property adjacent to the HOA’s common area. Haghnazarzadeh alleged that he had an easement for ingress along the border of the common area and when the HOA built a wall along the border, the wall prevented Haghnazarzadeh’s use of his easement.  Haghnazarzadeh sued the Association and the Association cross-complained for quiet title. The HOA tried to vacate the dismissal arguing that (1) the HOA’s members were indispensable parties without whom the settlement was not effective; and (2) only the full board, not one board member, and all the members have the authority to settle the matter. The court disagreed that the HOA members were indispensable parties to the suit and settlement agreement because (1) the Association’s cross-complaint alleges that it is the authorized representative of the individual homeowners; (2) the Association did not join the individual owners as parties to its quiet title action; and (3) although the Plaintiff filed doe amendments naming all individual owners, they were not served. The court found that the board member had ostensible authority to act on behalf of the HOA based on evidence of representations by the Association’s counsel that the board member had authority and the Association’s actions ratifying the settlement agreement. 

Harris v. Dollar Point Association. Owners of a residence that abutted a strip of land owned by their HOA, failed to establish adverse possession rights over the land (“Encroachment Area). The fact that the Owners watered and tended grass on the Encroachment Area, and at one point installed irrigation, bushes, trees and rocks to obstruct others from using it, was not enough to establish exclusive possession or that their possession was hostile to the HOA.  Further, over the years, the Owners’ interactions with the HOA reflected their continuous acknowledgment and respect for the HOA’s ownership of the Encroachment Area, including complaining to the HOA about foot traffic through the Encroachment Area and relying on the HOA to trim tree branches in the Encroachment Area.

Hutcherson v. G&P Enterprises d/b/a Allied Trust Services, Sommerset Villas Maintenance Corp. Attempts by a collection agency to collect regular HOA assessments do not fall within the Rosenthal Act (Civ. Code §1788) because assessments for ongoing maintenance and general services do not represent money due for property, services or money acquired on credit primarily for personal, family or household purposes. Also, assessments are not the same as mortgages because they are not an extension of credit from the HOA to the homeowner. Finally, the grace period for paying the assessment is not a consumer credit transaction.

Kan v. Verdera Cmty. Ass'n. A delinquent HOA member failed to prevent the Sheriff’s sale of his home by his HOA. During the foreclosure proceeding, the debtor became violent and criminal charges were brought against him. The Debtor brought a Motion to Stay the foreclosure pending the criminal proceedings against him. His Motion to Stay was denied without prejudice, and the Court granted the Debtor leave to amend his Complaint.

Kramer v. Park Central Towers. The owner of a penthouse challenged a CC&R amendment approved by the membership that imposed assessments on the two penthouse units that were double the rate of the 36 non-penthouse units. The court found for the association because Kramer failed to show the assessment structure was wholly arbitrary, violated a fundamental public policy, or imposed burdens on the use of the affected property that substantially outweighed the benefits.

Lachtman v. Ocean Terrance Condominium Association. HOA and its management company were sued by a resident who was attacked by another resident while using the common area hot tub. The HOA and management company prevailed on summary judgment because the court determined they had no prior knowledge that the attacker had a history of violence; therefore, the incident was not foreseeable. There were complaints of the attacker having loud and raucous parties, but that did not make it foreseeable that he would be violent. The court dismissed plaintiff's contentions that issuing warnings to the attacker regarding the parties would have prevented the attack as speculation and conjecture.

Ladera Ranch Maintenance Corp v. Tinsley. Even though an association, as prevailing party in litigation, may be entitled to recover attorneys' fees, the fees must be reasonable relative to the claims and the complexity of the case. Although an attorney fee analysis must begin with the lodestar method, the lodestar figure may be further adjusted based on factors specific to the case, such as the nature of the litigation, the complexity of the issues, the dollar value of the claims, the skill required to handle the case as well as the skill employed, and the time spent on the case. The appeals court found nothing in the trial record to suggest that the amount of time spent by 11 lawyers was necessary to prosecute simple rules violations and defend against equivalent complaints. 

Manrodt v. Albelo. Constant surveillance by an association member on another member to document potential rules violations without actual evidence of a violation constitutes illegal stalking and harassment. 

Mascaro v. Brown. This case is a neighbor to neighbor dispute over trees that block the plaintiffs’ view in the Bridlewood Planned Unit Development. The CC&Rs require owners to trim trees to prevent obstruction of other owners’ view. Defendants trimmed their trees on numerous occasions at the request for the HOA but the Plaintiffs complained of inadequate trimming.  The Plaintiffs filed suit pleading only one cause of action, nuisance. The court ruled in favor of the defendants granting them over $130k in attorneys fees. Plaintiffs appealed the attorneys award arguing that the complaint was based solely on the tort of nuisance and not based on the CC&Rs; therefore, under the American rule, each party pays their own attorneys fees. The court disagreed holding that the complaint was based on the CC&Rs; therefore, attorneys fees were warranted.  The court noted that (1) the complaint sought a permanent injunction to not violate the CC&Rs in the future; and (2) the theory of nuisance was based on a view easement created by the CC&Rs.

Noel v. Collier-Key. A board member and her husband sued a member for defamation and defeated the member’s anti-SLAPP motion to strike. The Anti-SLAPP statute protected the posts even though the defamatory statements were posted to a private social media group. Accusations that the board member was getting kickbacks from vendors, tampering with Association mail, and that her husband was a woman-beater were identifiable crimes, not opinion, hyperbole, metaphorical insults, or vague. Although insults were “colorful figurative language” and not defamatory, they were evidence of the speaker’s malice toward the board member supporting her defamation claims.

Palos Verdes Homes Association v. Avedon. This case arose out of a neighbor to neighbor dispute over a plan by one neighbor to plant trees that would allegedly block the plaintiffs’ ocean view in the Palos Verdes Estates development.  Both properties have ocean views with the Plaintiffs’ property on a higher elevation that overlooks the rear of the Defendants’ property. In 2021, Defendants sought HOA approval of a new plan to plant numerous trees on their property for privacy. Plaintiffs did not submit any objections to the plan submitted to the HOA, and the HOA ultimately approved the landscaping plan.  The Plaintiffs then filed for preliminary injunction alleging that new trees would exceed the height allowed in the existing agreements/order and the trees would block the Plaintiffs’ ocean view. The Defendants argued that the height limitations in the agreements/orders did not apply to future landscaping, but only then existing landscaping.  The trial court disagreed and applied the height limitations in the agreement/orders to the defendants’ landscaping plan and ordered a preliminary injunction prohibiting the planting of trees known to mature to a height prohibited by the agreement/orders. The Plaintiff appealed arguing that his landscaping plan only needed Association approval, which he received, and did not need to comply with the parties agreements/orders.  The parties’ agreement stated that the decision of the Association regarding defendants’ landscaping would be “binding and non-appealable, but shall be interpreted and enforced through this agreement by [the arbitrator].” 

Parkside/El Centro Homeowners Ass'n v. Travelers. Board members were found negligent for allowing the HOA’s community manager to embezzle funds for years. The board members’ negligence triggered a claim on the HOA’s directors and officers insurance policy.The HOA’s insurance company denied the loss. The HOA filed a case against the insurance company alleging the denial was a breach of contract and breach of duty of good faith and fair dealing. The defendant insurance company brought a motion for summary judgment. The Court denied the insurance company’s motion for summary judgment. It analyzed the policy's language and determined that the manager was an “officer” and, therefore, an insured under the policy. The Court also determined that without a judgment establishing the manager’s dishonesty, the related exclusion did not apply.

Saks v. Landi. Two condominium owners had a verbal altercation when the plaintiff parked in defendant's parking space and refused to move his car. The altercation ended with the defendant hitting plaintiff in the face. The defendant happened to be on the board of directors of the HOA. The injured owner was denied a permanent restraining order against defendant because he could not show a high probability that future harm was likely to occur. The court found substantial evidence that the incident was a "one time" event and not likely to reoccur. The court based its opinion on: (1) that the two men had lived in the same building for six years without incident; (2) defendant admitted to losing his control, was sorry for his conduct, and called the police himself; and (3) the chances of the two men interacting in the future was reduced by the fact that defendant had a dedicated elevator in and out of his unit, and the plaintiff did not currently reside in the building. The court was not persuaded by the fact that a few weeks before the incident, the defendant confronted plaintiff about his refusal to wear a mask in the elevator and again confronted plaintiff about it prior to hitting him. The court was also not persuaded by defendant's criticism of plaintiff as antagonistic toward the HOA's contractors, or that defendant was upset with plaintiff because he had pending lawsuits against the HOA.

Schuchmacher v. Rockpointe Homeowners Ass'n. A rented condominium suffered damage from a fire. It was in foreclosure at the time of the fire.  The HOA’s insurer covered the claim, but the Owner,  Schuchmacher, failed to pay the $10,000 deductible necessary to receive the insurance proceeds from the HOA.  Shortly thereafter, the lender foreclosed and the unit was sold. The tenant continued to reside in the unit and began to repair the fire damage herself. The tenant sought reimbursement for her repairs from the HOA out of its insurance proceeds.  For various reasons, the HOA refused to give the insurance proceeds to the tenant or the contractor who did the repair work, so the tenant, contractor and Schuchmacher sued the HOA and board members for breach of fiduciary duty, breach of CC&Rs, conspiracy and conversion.  (The board president ultimately purchased the unit and repaired it using insurance proceeds.). The court further reasoned that because the foreclosure terminated Schuchmacher’s membership in the HOA, it terminated the contractual relationship between the HOA and Schuchmacher and any duties the HOA had to Schuchmacher. Pursuant to the CC&Rs, the HOA had a duty to repair damaged units, which it  did not do. The alleged wrongdoing of the board and HOA occurred after the unit was sold in foreclosure. 

Taggart v. N. Coast Vill. Home Owners Assn. Taggart is a member of North Coast HOA which is a condominium development.  The HOA’s monthly assessments were $590 in 2020. The Board decided to charge an extra $1000 per unit that year to cover increased insurance costs, staff wages, inflation, utilities and other expenses. In 2021, the monthly fees went up to $645 and the Board added another $1000 per unit for the same reasons. Both the 2020 and 2021 extra charges were more than the 5% limit set by Civil Code 5605(b) for special assessments and the HOA did not obtain membership approval. Taggart claimed that both assessments were special assessments and not regular assessments, so membership approval was required. The Court of Appeal stated that the Davis-Stirling Act does not give clear definitions of “special” or “regular.” Since the terms are ambiguous, the court looked to legislative intent. The court cited Section 5620, which states, “regular assessments imposed or collected to perform the obligations of an association under the governing documents or this act shall be exempt from execution by a judgment creditor of the association only to the extent necessary for the association to perform essential services, such as paying for utilities and insurance,” which implies that regular assessments are for essential services like utilities and insurance. In addition, previous iterations of Section 5610 used the term “special assessment,” which suggests that special assessments are for unexpected or extraordinary expenses beyond those needed for essential services. The court concluded that since the assessments in question were used for essential operating costs, not for capital improvements or other extraordinary or unforeseen costs, they were regular assessments and not subject to the 5% limitation under Section 5605(b).

Tucker v. Heritage Custome Estates Ass’n. Tucker parked a trailer in their driveway and on the nearby street in violation of the Association’s CC&RS. Tucker ignored the Association’s notices to park the trailer elsewhere or face daily fines. The Association fined Tucker $100 per day for eight weeks until the trailer was removed. Tucker failed to pay the fines, and the Association filed a lawsuit to recover $21,200 in fines plus interest. The Association obtained a default judgment for $21,200 plus interest, attorneys fees and costs. Tucker and the Association entered into a settlement agreement that required Tucker to pay the Association $5,600 within 30 days of executing the settlement agreement. The settlement agreement also required the Association to "execute a request for dismissal with prejudice of the complaint" upon payment by Tucker. Tucker failed to pay, so the Association began efforts to enforce the default judgment. Tucker then sued to enforce the settlement agreement and appealed the trial court’s order that the Association was entitled to enforce the default judgment. The Court affirmed the trial court's order and found that Tucker did not pay the settlement sum, so Tucker was not released from the default judgment. Therefore, Tucker was required to pay the default amount.

United States v. Aqua 388 Community Ass'n. HOA claimed that deed restrictions and local and state laws prohibited it from assigning an accessible parking space to a paraplegic homeowner. Court held that the deed restriction that parking spaces shall be “managed as a common pool of shared parking”, does not prohibit the Association from assigning a space. Also, any state or local law that would result in a discriminatory housing practice is invalid.

WCST Enters., LLC v. Ling. Two neighbors in a condominium complex disagreed over who had the right to use a detached two-car garage and the CC&Rs, the developer's grant deeds, the condominium plan and maps all indicated different and conflicting answers. The trial court concluded that the starting point of its analysis is the developer's grant deed to the original unit owners as it is the "property interest conveyed at the inception of the common interest development" and not the condominium plan or CC&Rs. The appellate court disagreed with the trial court's method of analysis. It held that the condominium plan map, took priority over the other documents to determine who held the property and use rights to the parking spaces. Because of the discrepancies between the documents, the trial court concluded that the garages were exclusive use common area and that one owner had somehow transferred their interest in the garage to the other owner. The appellate court would not uphold this finding because the trial did not fully explain its reasoning or cite to supporting evidence. The matter was remanded for further proceedings by the trial court.

Wilen v. Churchill Condo. Assn. A condominium that includes stand-alone guest/employee rooms located outside the boundaries of a Unit, is a single Separate Interest for regulating the HOA’s rental restrictions pursuant to Civil Code section 4041. The guest/employee rooms are portions of the Separate Interest and not individual Separate Interests; therefore, an HOA prohibition on renting the guest/employee rooms as portions of the Unit, does not violate Civil Code section 4041. 

Young v. Schultz. An HOA Member who discovered that the board president and her friends were running several "internet churches" without parishioners threatened to release the information to authorities if she did not resign.  He told them their church-related behavior raised red flags for possible fraud and/or money laundering. The Board president and her friends sued the Member for extortion, intentional infliction of emotional distress and other claims. The Member’s anti-SLAPP motion to strike was granted. His threat was protected speech because it related to a matter of public concern and not extortion because he did not ask for money. The board president failed to establish a probability of prevailing on her claims, because: the Member’s statement was opinion, not fact; he only sent letters to the board member and her friends, which does not constitute a "publication"; and his threat did not “shock the conscience.”  

Yu v. Broadway Hollywood HOA. In this mixed-use condominium, the HOA had a duty to provide valet service to residents and their customers. The valet parking fees imposed on the residents’ customers were reasonable and enforceable because: (1) Civil Code §5600 does not prohibit HOAs from imposing fees on third parties; and (2) the revenue generated by the valet fee did not necessarily exceed the Association’s parking costs since it was applied toward the following year’s parking budget. 

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.