2013 Laws
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2013 CHANGES IN THE LAW

2013 BILLS

AB 746: Smoking Ban. Smoking would be prohibited in individual units and within 100 feet of unenclosed areas where children are permitted. DEAD.

AB 968: Small HOA Balloting. It allows small associations (no more than 6 units) to conduct elections without mail-in ballot process.

AB 1360: Electronic Balloting. It allows associations to use electronic balloting instead of the costly double-envelope mail-in balloting system. TWO-YEAR BILL.

SB 298: Contracted Law Enforcement. Authorizes Orange County associations to contract for law enforcement services to enforce the Vehicle Code in their private communities. SIGNED.

SB 391: Recorded Document Fee. It will impose a $75 fee on all real estate related recording of documents. The money will go to Sacramento to fund affordable housing projects and other matters. TWO-YEAR BILL.

SB 454. Electric Vehicle Charging Stations. Prohibits a subscription fee on persons who use an electric vehicle charging station and prohibits any requirement for persons to obtain membership in any club, association or organization as a condition of using the station. The bill would require the total actual charges for the use of an electric vehicle charging station to be disclosed to the public at the point of sale. SIGNED.

SB 652: Construction Defects. Requires more understandable notifications to buyers of alleged construction defects. Revises the transfer disclosure form. SIGNED.

SB 745: Housing Omnibus Bill. Made changes to the Davis-Stirling rewrite to correct oversights in the drafting of the rewrite and to include amendments which were added after the Act was approved. SIGNED.

SB 752: Commercial CIDs. Moves commercial and industrial common interest developments out from under the Davis-Stirling Act and dedicate a new part of the Civil Code beginning with §6500 to the "Commercial and Industrial Common Interest Development Act." SIGNED.

SB 822. Managers as Contractors. Cleanup legislation that clarifies that managers do not need to be licensed contractors when soliciting bids for HOA and overseeing small projects. SIGNED.

Rural Fire Fees. Six bills address rural fire prevention and suppression fees imposed on condominium owners. DEAD.

2013 CASE LAW

Diamond v. Superior Ct. (Casa Del Valle HOA). Diamond claimed the association (1) failed to send her a copy of the recorded notice of delinquent assessment by certified mail within 10 days of the recording per 1367.1(d); (2) failed to give a pre-foreclosure notice of her right to ADR per §§1367.1(c)(1)(B) & 1367.4(c)(1); (3) failed to record in the minutes the board's vote to initiate foreclosure per §1367.4(c)(2); and (4) failed to personally serve her with the notice of the board’s vote to foreclose prior to commencement of the foreclosure action per §1367.4(c)(3). The court agreed and ruled than an association's failure strictly to comply with notice requirements set forth in Davis-Stirling Act barred it from proceeding with judicial foreclosure.

Multani v. Witkin & Neal (2013). Castle Green HOA foreclosed on the Multanis. Even though the Multanis had actual knowledge of the pending sale, they sued to set aside the sale alleging irregularities in the notices and sale procedures. The Court of Appeal concluded the HOA failed to demonstrate they had notified the Multanis of their right of redemption and the applicable redemption period.
 
Grossman v. Park Fort Washington Assn. (2013). The Grossmans built a cabana and fireplace in their backyard without obtaining prior approval from the homeowners association. The court determined that the subsequent actions by the association in not approving the cabana and levying daily fines were not in good faith because (1) no one from the Architectural Committee actually visited the site until long after the initial decision to require removal was made and well into the ADR process; (2) the Association acted upon and denied the Grossmans' appeal even while the ADR process was ongoing (which violated the spirit of Civ. Code, § 1363.820); and (3) the Association's decision was partially based on the Grossmans' failure to secure prior approval from the Architectural Committee. Moreover, the court noted that the association's enforcement of its restrictions was inconsistent. It ruled against the association.

Attorneys' Fees. The significant portion of the court's decision, and the only portion that was published, was the award of attorneys' fees. Normally, any attorneys' fees incurred prior to the filing of the complaint are not awarded. Here, the court concluded that the pre-litigation ADR process mandated by the Davis-Stirling Act is the actual start of litigation. Accordingly, it awarded attorneys' fees expended by the homeowner expended in pre-litigation ADR.

Lansdowne on the Potomac HOA v. OpenBand at Lansdowne (2013). The Lansdowne Association sued OpenBand, alleging that OpenBand gave themselves the exclusive right to provide video services to the association in violation of the FCC’s order. The United States Court of Appeals, Fourth Circuit, agreed and declared OpenBand's exclusivity provision null and void.

SB Liberty v. Isla Verde Association (2013) 217 Cal.App.4th 272. The Isla Verde Association disapproved the scope of construction on a new owner’s house. The owner hired a lawyer to handle the matter.  The lawyer showed up at a board meeting and was turned away. The homeowner transferred his property into a limited liability company (SB Liberty) and appointed his lawyer as his agent for the company so he could attend board meetings and present requests to the board. He was again turned away. The homeowner sued the association to stop it from interfering with his lawyer's participation in the board's meetings. The Court of Appeals ruled that because the Association's CC&Rs defined “member” as the owner on title for the property and the lawyer was not on title, he was not a member and not entitled to attend meetings.

Wittenburg v. Beachwalk Homeowners Association (2013) 217 Cal.App.4th 654. This case established that if a Board uses any association media – for example, its newsletter, website, or bulletin board – to advocate a position in a campaign, election, amendment to governing documents, or any member vote, Civil Code §1363.03(a) is triggered, and the board must provide equal access to its media to members advocating a different point of view. This drastically affects most associations’ standard practices by expanding the application of election rules to all member votes. Boards must now be very careful in providing information to its members during any vote. Any material or information in association media should not advocate, in any way, any viewpoint or position at issue in the vote. In particular, the materials should avoid stating that the Board “recommends”, “requests”, or otherwise asks the membership to vote a particular way. If the Board does engage in advocacy, they are obligated to provide equal access to any member wishing to present an opposing viewpoint.

Friars Village HOA v. Charles Hansing (2013) 220 Cal.App.4th 405. Friars Village has a 9-member board. The Bylaws had no qualifications for serving on the board except that the nominee be a member of the association. Without going to the membership for a vote amending the bylaws, the board adopted a rule that no one could serve on the board with another director related by blood or marriage. The husband of one of the directors nominated himself to run for the board and was refused a listing on the ballot. He sued in small claims to invalidate the rule since election rules must be consistent with the governing documents. (Civ. Code §1363.03.) The board responded in superior court with a complaint for declaratory and injunctive relief. The small claims judge transferred the case to superior court. The Court concluded that the board had the authority to adopt the additional qualification for serving on the board.

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Unpublished Opinions. The following cases are unpublished opinions and are not binding precedent.

W&W Del Lago, LLC v. Rancho Del Lago Homeowner’s Ass’n (2013) Del Lago bought lot 42 and hired an engineering company to provide plans for construction. The company made an error in their calculations that resulted in the pad being 7 feet too high for construction. The Art Jury did not catch the discrepancy when they reviewed plans for an adjacent lot that had correct elevations for lot 42 and approved the plans. Del Lago began construction and was sued by his neighbor for blocking his view. Del Lago found the error in his plans and settled by paying his neighbor $210,000 and tearing down his house. He then sued the Association for negligently approving his plans. The court held that the association’s architectural committee was not negligent in failing to verify the accuracy of the submitted engineering plans or notice a discrepancy between measurements in these plans compared to other plans on file. The Court found that neither the Davis-Stirling Act nor the Association’s CC&Rs required the architectural committee to verify the accuracy of plans submitted for review. That duty falls on the homeowner, not the association.

Savoy Community Association v. Zhang (2013, 2nd Appellate District B226979). Zhang purchased a condominium unit in the Association’s building. Zhang’s disability required her to remove carpeting in the unit and replace it with hardwood flooring. When she applied to install the flooring, and after her flooring was installed, the Association refused to provide a reasonable accommodation of her disability, took disciplinary actions against Zhang, and imposed numerous financial and other penalties against Zhang. Zhang suffers from hereditary Hashimoto’s thyroiditis, acute allergies to chemicals in perfume, cleaners, and chlorine, some foods, and dust and mites, and a t-cell mediated immunodeficiency. Her allergies require her to avoid dust and mites in carpets, which cause allergic reactions, and also to avoid hair, makeup, and household chemical cleaning products. Her physician testified that Zhang had to strictly avoid carpeting, dust mites, and common chemicals. Even though the jury found that the association discriminated against Zhang be refusing to allow reasonable accommodation, the trial judge struck down punitive damages against the association. The appellate court reversed the trial court's order association and remanded for a new trial on the amount of punitive damages to be awarded to Zhang.

Gold Strike Heights Homeowners Ass’n. v. Financial Pacific Ins. Co. (2012) The HOA subdivision sued its developer for failing to build the planned common area clubhouse. Although the developer included the clubhouse when advertising the development, it also provided to all prospective home buyers a copy of the CC&Rs and a public report from the Department of Real Estate – both of which specifically stated that the clubhouse was not a part of the first phase of development. In addition, the CC&Rs did not obligate the developer to build anything beyond the first phase, and the public report even cautioned that the second phase might never be built. The court found that despite the advertising materials, the CC&Rs were clear, and the developer was not obligated to build the clubhouse. In other words, the buyer’s understanding of the CC&Rs was the responsibility of the buyer, not the seller.

Noxsel v. Boquet Estates Owners Ass’n (2013) Noxsel, the developer of the Boquet residential community, was required by a city permit and the association’s CC&Rs to only sell and rent the community’s unattached garage lots to association members. Noxsel tried to sell and rent the garages to the general public, arguing that the buyer/renter becomes an association member in the process. The court rejected this argument, citing detailed communications recording the clear intentions of the city permit and association CC&Rs to limit the garages to existing members.

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