FUNDRAISING IN THE
QUESTION: As we enter another election cycle, do you think the new law allowing politicians to use the common areas permits a candidate for public office to raise funds using our common areas?
ANSWER: It's a good question with no clear answer. SB 407 went into effect January 1 this year and no one knows yet the reach of the statute. It states that members or residents can invite "public officials, candidates for public office, or representatives of homeowner organizations to meet with members, residents, and their invitees or guests and speak on matters of public interest." (Civ. Code §4515(b)(2).)
Fundraising Free Speech? A recent US Supreme Court decision (McCutcheon vs. Federal Election Commission) held that donating to a political campaign is an exercise of free speech. Does that make fundraising a matter of public interest? Maybe. Clearly, a court will have final say (unless the legislature clarifies it by amending the statute).
Political Parties. In addition to the Republican and Democratic parties, there is a long list of other parties who could use your common areas to campaign. Following are some:
America First Party (paleoconservatism)
If any of the above parties (and many more not listed) were invited by a resident to use your common areas to speak and raise money (free of charge and without insurance), they probably could.
American Indep. Party (strict constitutionalism)
America's Party (Christian conservatism)
American Delta Party (social progressivism)
American Freedom Party (white nationalism)
American Populist Party (libertarianism)
American Solidarity Party (Christian democracy)
Black Riders Liberation Party (black nationalism)
Christian Liberty Party (dominionism)
Citizens Party of the U.S. (centrism)
Communist Party (communism)
Workers Party of America (communism)
Constitution Party (fiscal conservatism)
Freedom Socialist Party Trotskyism
Green Party (environmental socialism)
Humane Party (animal rights)
Independent American Party (paleoconservatism)
Justice Party (social democracy)
Legal Marijuana Now Party (marijuana legalization)
Libertarian Party (libertarianism)
Modern Whig Party (centrism)
National Socialist Movement (neo-Nazi socialist)
Natural Law Party (peace through meditation)
New Black Panther Party (black nationalism)
Objectivist Party (objectivism)
Party for Socialism and Liberation (communism)
Peace and Freedom Party (democratic socialism)
Prohibition Party (temperance)
Reform Party (electoral reform)
Socialist Action (Trotskyism)
Socialist Alternative (Trotskyism)
Socialist Equality Party (Trotskyism)
Socialist Party (socialism, anti-capitalist)
Traditionalist Worker Party (neo-Nazism)
U.S. Marijuana Party (marijuana legalization)
U.S. Pacifist Party (pacifism)
Unity Party of America (centrism)
Veterans Party of America (centrism)
Workers World Party (Communism)
RECOMMENDATION: Boards should talk to legal counsel about how best to handle this situation should it be raised in their association. Following is another question about SB 407.
QUESTION: Hello - As I have tried to read all the newsletters that are sent out, I thank you on keeping the people abreast who want to be engaged. For this one item that was passed by scalawags, SB 407, how can it be overturned?
RESPONSE: For readers unfamiliar with scalawags, it's a legal term that does not get used enough. It means scamp, reprobate, someone who behaves badly, a lying no good rascal. It’s also spelled scaliwag and scallywag.
Public Interest. Unfortunately, SB 407 is here to stay. Politicians want access to community associations so they can campaign for office. They gave themselves (and it seems everyone else in the world via the "public interest" provision) access to your common areas free of charge and without insurance. The poorly worded, expansive bill by Sen Wieckowski will likely remain as-is until litigation erupts over unintended consequences and the statute (maybe) gets tweaked.
HOA's RIGHT TO RESPOND TO
A recent unpublished case involves a homeowner, Robert Kulick, who published a newsletter accusing board members at Leisure Village in Ventura County of lying and cheating, the general manager of perjury, and the association's attorney of extortion and hate mongering.
He also claimed the board election was rigged and the association would be forced into bankruptcy.
Association Responded. At the board's request, the association's attorney prepared a letter responding to Kulick's newsletter denying that board members were cheats or liars or that the association's attorneys engaged in unlawful conduct. The letter described Kulick's newsletter as a reckless communication that contained unfounded, inaccurate and spiteful allegations. The association distributed its letter to its 2,100 members.
Litigation Ensued. Kulick sued the association claiming he had been defamed by the letter. When his lawsuit was dismissed on an anti-SLAPP motion, he appealed. The court of appeal upheld the trial court's ruling because the content of the association's letter was of public interest regarding a controversy initiated by Kulick when he published newsletters accusing directors, management and attorneys of misdeeds.
OBSERVATION. Homeowners who distribute scurrilous material should not be surprised when someone disputes their allegations and makes a few of their own. To read the case, see Kulick v. Leisure Village.
CASE LAW UPDATE
In addition to laws passed each year by California's legislature, our courts of appeal and supreme court add "case law" by interpreting statutes.
We have approximately 300 cases on Davis-Stirling.com which are indexed alphabetically by name.
I am pleased to announce the addition of a new page to the website that organizes cases into categories and summarizes the relevant holding of each case. We hope you like it. If there are cases you think should be on our list, drop me a line.
A special thanks to attorneys Wayne Louvier and Aaron Schwarzkopf for assisting me on this project.
I am pleased to announce the opening of an ADAMS|STIRLING office in Santa Barbara.
Our office is located at 831 State Street, which is within walking distance of the historic Santa Barbara courthouse.
We represent a large number of clients in Ventura, Santa Barbara and points north. Our new office allows us to work more closely with our growing base of coastal clients.
HIRING. We are continuing to hire attorneys. To learn more, contact me.
AB 2912 #1. Why should any association insure their reserves plus three months of assessments? According to the Davis-Stirling Act associations are not supposed to assess more than the costs for which they are collected. Any association that has three months of assessments in their account(s) must be over-charging their members or not paying their bills. Sounds like legislation backed by insurance companies. -Tamara B.
RESPONSE: The reason for insuring your association's money is because it can be embezzled. I've worked with many associations over the years who have had their funds stolen--some in the millions. In most cases, they were able to recoup their loss through their insurance. Three months of assessments sets a minimum amount stolen by an embezzler. It does not have to be done all at once, it can be done over time.
Fidelity insurance is relatively cheap and not having it could result in a large special assessment to replace embezzled funds. Members get a little touchy when that happens. They start demanding resignations, threaten recalls, and sometimes threaten to sue directors who "allowed" the embezzlement to occur and negligently (or intentionally) failed to ensure the funds.
Rental Prohibitions. I find your newsletter to be very informative and entertaining. Your June 17th newsletter item about grandfathered rules raised the following question in my mind: Does Civil Code 4740 apply to an amendment restricting only short-term rentals? -Mark B.
RESPONSE: It applies to rent prohibitions. I do not believe a requirement that rentals be at least 30 days is a prohibition. Rentals are still allowed, they just can't be less than 30 days. Such restrictions have have been deemed reasonable by the courts. (Mission Shores v. Pheil.)
Far Away #1. I wanted to say how much I appreciated—and laughed at!—your response to Gregg G.’s outrageous diatribe likening HOAs to concentration camps: "You might cut back on coffee and consider moving to a cabin far away from civilization. Far, far away.” What a perfect response!
As you know far better than I do, not everyone who lives in an HOA is reasonable and rational, and because people can’t be reasoned out of anything they haven’t been reasoned into, your response didn’t try to do the impossible, but simply and calmly offered two very practical and helpful suggestions. Bravo! -Scribner M.
Far Away #2. I always try to read your informative newsletter promptly. Today’s was helpful until I reached the outrageous and vicious item by Gregg C. I have immense pity for his neighbors/owners who are exposed to him, as well as for the association’s board of directors. He must live a miserable life since he’s lost touch with reality. You probably gave all your readers a wake-up call! -Marilyn B.
WIECKOWSKI BILL NULLIFYING
OWNER RIGHTS ADVANCES
SB 1265 is the bill put forward by the Center for California Homeowner Association Law (CCHAL) and Sen. Wieckowski that strips homeowners of their right to adopt reasonable qualifications for board members. CCHAL and Sen. Wieckowski decided you should accept felons and delinquents on your boards as well as those suing your association and those in serious violation of the CC&Rs.
The hearing before the Assembly Housing Committee on June 20 did not go well. The bill passed on a party line vote. It then went to the Assembly Judiciary Committee on July 3 where it again passed on a party line vote. It will be eligible for a vote on the Assembly floor when the legislature returns from summer recess in August.