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  California's Leader in Community Association Law September 30, 2018
Everyone,

It's been awhile since I published a newsletter and I'm getting lots of emails asking if I had removed readers from the newsletter because they had been bad.

No one has been bad (that I'm aware of). The delay is because I upgraded the security levels on my newsletter and moved to a more secure platform.

I've also been busy hiring people. I've added four more lawyers to the firm and will be announcing them once I get photos.
 
Adrian
 
WORKING
BOARD MEETINGS

QUESTION: We would like to have manager-board "working meetings" where no votes are taken. For example, we want to come up with ideas for improving the park. One of our board members said we could only do that if there is no quorum of directors.

ANSWER: Your board member is correct. It doesn't matter that no votes will be taken. If a majority of directors attend a meeting to hear board business, it's deemed a board meeting.

Board Meeting Defined. Board meetings are defined by the Davis-Stirling Act as a gathering of a quorum of directors at the same time and place to "hear, discuss, or deliberate upon any item of business that is within the authority of the board." (Civ. Code §4090.)

Meeting Types. You can still hold working meetings with a majority of directors but only if you give four day's notice and post an agenda. I put together a summary of board meeting types you may find useful.
 
IS TWO OUT OF
FIVE A MEETING?

QUESTION: In the context of unauthorized board meetings, is majority meant as majority of the the serving board members, or majority of authorized board members? For example, five directors are authorized but only three seat are filled. Two members talk about whether or not to hire a new landscaper--legal or illegal?

ANSWER: Two out of the five authorized directors is not a quorum. You need three directors to establish a quorum to conduct your meetings even with two empty seats. Per the Davis-Stirling Act:
A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board. (Civ. Code §4090.)
Unless the bylaws state otherwise, a majority of the number of directors authorized in the bylaws constitutes a quorum of the board for the transaction of business. (Corp. Code §7211(a)7.)
 
ELECTRIC VEHICLE
CHARGING STATIONS

QUESTION: The Davis-Stirling Act requires homeowners to meet certain requirements when installing an electric vehicle charging station. Newer vehicles can now charge from a standard outlet without the need for a charging station. Does that mean we do not need to comply with Civil Code §4745?

ANSWER: Compliance issues depend on how the electricity is supplied and paid for. If you plug into a common area outlet, that means your neighbors are paying to charge your vehicle. I don't know any associations that would agree to that.
 
You can avoid installing an EV charging station if you work out a payment plan with the association based on estimated electrical usage. Otherwise you will need to install a metered outlet or charging station. If you install a charging station, you will need to comply with Davis-Stirling requirements:
•  Comply with the association's architectural standards.
•  Use a licensed contractor to install the station.
•  Within 14 days, provide a certificate of insurance.
•  Pay for electricity usage associated with the station.
See full explanation of the requirements.
 
MANDATORY PLUMBING
FIXTURE REPLACEMENT

In 2009, the Governor signed legislation requiring all noncompliant plumbing fixtures be replaced with water-conserving plumbing fixtures before January 1, 2019.

Noncompliant fixtures means any of the following: (i) toilets that use more than 1.6 gallons of water per flush; (ii) urinals that use more than one gallon of water per flush; (iii) showerheads with a flow of more than 2.5 gallons of water per minute and (iv) interior faucets that emit more than 2.2 gallons of water per minute.

RECOMMENDATION: Have a plumber inspect your common area plumbing fixtures to make sure they are compliance. Notify your owner of the requirement and help facilitate the use of a licensed and insured plumber to change out fixtures throughout your condominium complex.

 
GOVERNOR SIGNS
AB 2912

Assembly Bill 2912 was signed by the Governor. The bill is designed to prevent fraud and embezzlement in community associations. The bill was sponsored by the consumer advocate organization "California Legislative Action Committee" (CLAC) chaired by John MacDowell.

Fidelity Bond. The bill requires associations to purchase fidelity insurance in an amount equal to or exceeding current reserves, plus three months of assessments.

Fund Transfers. The bill prohibits transfers of funds greater than $10,000 or 5% of an association’s total combined reserve and operating account deposits, whichever is lower, without prior written approval from the board.

Financial Statements. The bill also requires board members to review financial statements monthly rather than quarterly and prohibits electronic transfers of association funds without board approval. Directors do not have to meet monthly, but managers will need to prepare and send financial statements monthly.

RECOMMENDATION: Since most associations are in their budget season, they should (if they haven't already) add a line item for fidelity insurance.
Adrian J. Adams, Esq.
 
Boards should contact us for friendly, professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC


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Our newsletter is for advertising and general information only. Readers should consult legal counsel.

ADAMS | STIRLING PLC


 
Articles may be reprinted provided there are no changes and the following is included:

Reprinted from
Davis-Stirling.com by ADAMS | STIRLING PLC
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Hon. Lawrence W. Stirling, Senior Partner ADAMS|STIRLING
Author of the Davis-Stirling Act