QUESTION: An owner is complaining about the health hazards of cigarette smoke coming from a nearby unit. She claims it violates the "no illegal, obnoxious or offensive or nuisance activities" provision of our CC&Rs.
Her attorney is demanding we take action to remedy health hazards affecting the owner's young daughter. Is the board obligated to take action even though there is no specific ban on smoking in units?
ANSWER: Yes, it is. The nuisance provision of your CC&Rs is sufficient to require action by the board.
Carcinogen and Nuisance. Secondhand smoke is a known carcinogen and has been classified by the State of California as a toxic air contaminant. The courts have deemed even low levels of exposure as a nuisance. Cities throughout California have already passed ordinances banning smoking in apartments and condos. Many associations have also imposed complete bans on smoking, including inside units.
Fiduciary Duty. Directors have a fiduciary duty to investigate. That means your board must investigate her complaint, either personally or by delegating the investigation to management or to an expert. Based on the outcome of the investigation, the board could determine the infiltration is so slight as to not constitute a nuisance or there is enough to be deemed a nuisance.
Appropriate Action. If smoke cannot be detected or is only slight, the board should send a letter to the owner (or the the owner's attorney via the association's attorney) of the investigation and their determination that no further action will be taken.
If the board decides the smoke is a nuisance, it can order the neighbor to abate the nuisance by taking steps to stop the transfer of smoke into the neighboring unit. If that is not possible, the board can require that he stop smoking in his unit.
RECOMMENDATION: As many other associations have already done, you might consider amending your CC&Rs to eliminate smoking altogether. This will also help with the growing problem of pot smoking in units affecting neighboring units.
I am pleased to announce that attorney Stefan Herpel joined our firm's litigation team.
Clients. Before joining ADAMS|STIRLING, Stefan worked as a litigation partner in a large law firm where he represented corporations such as Marriott International, Ritz-Carlton, Wyndham Worldwide, and American Airlines.
Trial Attorney. As a trial attorney, Stefan handled boundary disputes, eminent domain, easements, partition actions, defamation (for national media clients), products liability, and securities fraud (class action defense).
Supreme Court. In addition to trial court experience, Stefan argued in the U.S. Courts of Appeals for the Third and Sixth Circuits, the Michigan appellate courts, and the U.S. Supreme Court (where he briefed and argued Bennis v. Michigan).
Media. Stefan's media appearances include Rivera Live (former MSNBC legal talk show); Burden of Proof (former CNN legal program); America and the Courts (C-Span); and All Things Considered (National Public Radio).
Education. Stefan earned his Juris Doctor degree from Michigan Law School, Ann Arbor, MI, where he served as senior editor of Law Review. He also received a Bachelor of Arts in Economics and English from the University of Michigan, Ann Arbor, MI.
HIGHRISE MANAGER LUNCHEON
Wednesday, December 12, is the 25th anniversary of our annual highrise managers' luncheon.
This is exclusive to onsite managers.
We host 50-60 managers each year to enjoy an elegant lunch, review changes in the law, discuss things relevant to onsite managers, and enjoy each other's company.
This will be our last newsletter of the year.
We wish everyone holiday greetings and a heartfelt thank you for your questions and feedback. You keep things interesting and relevant.
We also want to welcome the almost 400 new clients who joined the firm this year. Because of your support, we have grown to 12 offices around the state with 30 lawyers providing corporate counsel and litigation services to commercial, residential and mixed-use associations. We are grateful to be able to serve you and your communities.
BEST WISHES. May you enjoy the holidays and have a New Year filled with peace, prosperity and happiness. From all of us at ADAMS|STIRLING, Merry Christmas and Happy New Year. See you in 2019!
Wildfires. Great, as always. Thanks for mentioning that the reserve specialists may have extra photos of common areas. We take hundreds of photos that are never used, but we keep on file, and would be happy to give to our clients to assist with insurance claims.
Thanks for keeping the public informed! -Scott Clements, RS, PRA, CMI
Living Trust. As a former bank commercial loan officer I disagree that a living trust cannot own property. A bank will not make a real estate loan to an entity that is not the fee simple legal owner.
The loan is made to the living trust with all trustees as the guarantors. -John A.
RESPONSE: I hate to disagree but trusts are estate-planning tools, not entities capable of owning real estate. A living trust is a legal document that transfers ownership of property to a person or institution called a trustee. The trustee manages the property for the benefit of one or more beneficiaries.
Because trusts are not entities (they are not registered with Secretary of State) nor are trust documents public, there would be no way of knowing who to serve in the event an association needed to sue for delinquent assessments or foreclose if the trustee were not on the deed.
In the example I gave, ownership of a condominium is not owned by the "John D. Smith Family Trust." For the transfer of ownership to be effective, it must be transferred to a trustee, such as Mary Jones as Trustee of the John D. Smith Family Trust.
Email Meetings #1. I am on the board of a small association. Our directors have full-time jobs and can't call a special meeting every time we need to make a decision. It's too burdensome. We handle routine, day-to-day decisions by email. I understand the need for transparency but the law should be changed to allow for routine operational decisions to be made by email. -David S.
RESPONSE: This is a common complaint by boards of associations both large and small. The Open Meeting Act has made it difficult for volunteers with full-time jobs to conduct business for their associations—especially small associations which are self-managed.
The legislature’s intentions were good but the practical effect has been mixed. Regulations imposed on governmental entities, such as the Brown Act, are not always appropriate for volunteer organizations which is why the Open Meeting Act is a stripped down version of the Brown Act. Finding the right balance is an ongoing struggle.
Email Meetings #2. Does the prohibition on email preclude two board members emailing, texting or speaking to each other concerning a potential issue to better understand if there is a need for board action? -Ron L.
RESPONSE: It is precluded if your board consists of three directors, since two out of three constitutes a quorum. If your board is five or more directors, two directors can text, email, telephone, and meet to discuss board business.
Raising Dues #1. Last week's newsletter--does this mean HOA boards can increase monthly dues 20% every year? If so, then this would mean our monthly assessments could legally double within four years!! The statute seems to have been addressing high rates of inflation some 40 years ago. You reported our rate of inflation is now less than 2%! If legislation on assessment increases was caused by inflation rates, should it not have a clause that actually links them to inflation rate changes? -Andrew B.
RESPONSE: Yes, boards can raise dues 20% per year indefinitely. However, that will never happen. There are two limiting mechanisms. First, directors are raising their own assessments along with everyone else's, something they have no interest in doing. Second, if boards did embark on endless increases, the membership would rise up and replace them.
Even though inflation is now less than 2%, there is still merit in the 20% allowance. Too many boards go ten or more years with no increase in assessments despite inflation. As a result, the budget actually shrinks from year to year and boards compensate by deferring maintenance and cutting contributions to reserves.
At some point, chickens come home to roost and a subsequent board is forced to make painfully large increases in assessments to get the association's fiscal house in order.
Raising Dues #2. Referring to your newsletter from 11/18, you said the Davis-Stirling Act specifically overrode CC&Rs when it came to dues increases. How can it be determined in which instances Davis-Stirling overrides governing documents?
RESPONSE: If governing documents conflict with the law, the law prevails (see hierarchy of documents). There are times when a statute specifically overrides documents and other times when it defers to them. To help you maneuver through the process, I posted "Rules of Interpretation" on our website.