Two weeks ago, I attended a board meeting where the president was absent because he was in quarantine with the coronavirus. That got my attention.
On March 5, California declared a public health emergency, as have many cities and counties around the state. Airlines, colleges, churches, the entertainment industry, and many other organizations are adopting protocols to protect their employees, customers, and clients from the coronavirus.
Precautions related to the virus are making their way into our industry as well. One of the management companies I work with is located in Seattle, Washington. Last week, the CEO implemented company policies and notified the associations they managed. Following is an edited version of his message:
Dear Board Members,
Recommendation. Because of the precautions already being taken by the United States, it is possible the coronavirus will have only a mild impact on us individually and our businesses. Still, it doesn't hurt for homeowner associations, management companies, law firms and other industry vendors to implement common sense precautions such as those described above. Not only will they protect everyone from unnecessary exposure to the coronavirus, it protects us against all other viruses as well.
Kudos #1. I’m a big fan of the newsletter–it’s the one industry communication that I read, in full, every time. Thank you for that. -Jason M.
****** is taking the coronavirus seriously and we ramped up our efforts since the first cases were reported in the Seattle area. We want to inform you of the steps we are taking to protect our team and minimize any service disruptions.
We enhanced office cleaning, expanded our work-from-home policies and created tight restrictions on staff members who travel, have known contact with anyone infected, or show signs of illness. For those of you with onsite staff, we are advising our teams of best practices regarding personal protection and encouraging enhanced cleaning and maintenance of common areas.
We temporarily suspended staff meetings and board and manager education programs and encourage you to do the same by critically considering the benefits of cancelling or postponing board meetings, annual meetings, and community events. We are encouraging our community managers to work with you closely to aid in remote decisionmaking via video conference, conference calls and, when appropriate, unanimous decisionmaking via email. As a company, we will support our individual manager’s decision to attend meetings via video conference or conference call.
We urge you to familiarize yourself with the recommendations of experts, take necessary precautions to protect your community, and set community-specific guidelines.
It is likely the precautions we are taking and the potential of increased use of sick leave by staff members may impact turn-around times for certain services. We ask for your support and understanding. As a company, we are doing everything we can to proactively deal with this situation while also minimizing disruptions as we continue to provide services to each of you.
Kudos #2. I believe Davis-Stirling is the best website ever. -Elsa W.
Kudos #3. I love your newsletter and look forward to each publication. THANKS! -Barbara S.
Kudos #4. Love your newsletters. -Roger K.
Kudos #5. Thank you for all your help in educating the population. -Scott C.
Kudos #6. Great articles. -Bonnie A.
Term Limits. Our HOA allows directors to serve two terms and then requires them to step down for 11 months. This has worked fine for decades. Does SB 323 start the clock over again on term limits for those board members whose two terms expire this year?
RESPONSE: No, the dumpster fire known as SB 323 does not reset terms. Instead, it knocked out term limits. That means there is no limit on how many times directors can be reelected to their boards.
I don't think that was their intention but the legislation backed by Marjorie Murray's Center for California Homeowner Association Law (CCHAL) was so badly drafted that term limits was one of the many casualties of the bill.
CAI's California Legislative Action Committee (CAI-CLAC), is working to correct this glaring defect so associations can once again impose term limits. Because this is pending, I recommend boards not amend their bylaws to remove term limits. You should leave it in place while CLAC works on clean-up legislation.
Email Addresses. What is the status on members requesting and receiving member email addresses? Are members entitled upon request to receive all opt-in email addresses? -George B.
RESPONSE: Yes, if a member opted into receiving notices from the association via email but has not opted out of sharing their email address with fellow members, it becomes part of the association's membership list and all members have a right to receive and use it. Most members will not be happy to have their email addresses floating around the community. To preserve member privacy, boards should notify all members they can protect their email addresses by opting-out of sharing it with the membership.
Contacting Marjorie. Do you know of any way to get hold of Marjorie, or her entity? Their website is down and I really want to ask about uncontested elections. I promise not to yell about it, I just think the intent of the provision is lost in the execution (it had to be, as this is just nuts and is costing us way too much!). -Calli P.
RESPONSE: There has been a lot of speculation about why CCHAL's website is no longer operational. To contact Marjorie Murray, try:
Center for California Homeowner Association Law
3758 Grand Avenue, Suite 56
Oakland, CA 94610
Full Disclosure. While you are at it, you might ask Ms. Murray for a list of her members' names and email addresses, the same requirement her organization imposed on nine million members of homeowner associations. Also ask her for a list of the financial backers of her organization. I've been told CCHAL partnered with lawyers who make a practice of suing associations. If so, Ms. Murray should disclose it.
Election by Acclamation. Thanks for adding your “finished thought” to last week’s response to my email. Acclamation is in our governing documents and it makes no sense not to allow it. The law should always make sense (my hope). -Barb D.
RESPONSE: We should pass a law that all laws must make sense and not harm citizens. I can think of a few people who should not be allowed to draft legislation.
Uncontested Election. Our bylaws state: "5.7 Uncontested Elections. When, at the close of nominations, the number of qualified candidates nominated does not exceed the number of vacancies, the candidates may be declared elected without need for balloting and shall take their seats on the date set for the membership meeting." The word "acclamation" is not contained in the text. Do our bylaws, as written, meet the criteria for an election by acclamation? -Sandy F.
RESPONSE: Yes, your bylaws allow for elections by acclamation. I believe associations can conduct such elections despite SB 323, provided their bylaws allow it. But, I'm just one person. You might send an email to Marjorie Murray and ask what she thinks: [email protected].
Investors on Boards. We recently sent an inquiry to an attorney about investors serving on boards. The bylaws require that directors must reside in the development. The attorney answered that SB 323 did not specify that this was not okay. Therefore, it was fine. Am I reading correctly that you disagree and that any bylaw provision which specifies that directors must live onsite is no longer valid? -Jason M.
RESPONSE: Sometimes attorneys disagree. This is one of those times. To me, SB 323 is clear--there is one mandatory and four permissive director qualifications. You can qualify a candidate for election with these five points only:
1. Must be an owner.
2. Not delinquent in their assessments (with lots of exceptions).
3. Not joint owners.
4. Not an owner less than one year.
5. No criminal conviction that voids fidelity insurance.
Requiring a director to live in the community is nowhere in the five qualifications listed above. Therefore, it cannot be imposed. For more information, see Candidate Qualifications.
ELECTION RULES. All associations must adopt new election rules to comply with SB 323. Failure to do so could subject elections to legal challenge and may result in new elections, monetary penalties and an award of attorney fees. To avoid this, contact us for new election rules.
Stock Co-ops. Does the Balcony Bill (Senate Bill 326) apply to co-ops in addition to condominiums? -Colleen M.
RESPONSE: If your co-op has three or more units constructed as a multi-family dwelling, it applies. (Civ. Code §5551(l).)
End of Times. Thank you very much for the inclusion of the “Balcony Bill” in your newsletter. Also appreciate the shout-out to Robert Nordlund and the list of RS companies. He and Mike McDermont, the current APRA President, have been great about getting all the other providers on the same page and proactively setting policies and procedures.
We are confident that our reserve study industry is prepared to have a fairly high level of uniformity with the interpretation of what is and is not included, the timelines for such, and the procedures for including the inspections themselves in the reports.
They, you, and a whole bunch of other great lawyers, deserve the thanks and gratitude of Reserve Specialists. I’m optimistic that the explosion of anger and confusion will be delayed a couple years until these inspections, and their findings implications actually start taking place. Then, of course, it will be the end of times. -Scott Clements, Reserve Studies Inc.
Licensed Contractor. I am in the SoCal area. Where can I find a licensed and qualified contractor to do this work? -Jim M.
RESPONSE: Both management and reserve companies are already lining up inspectors and contractors for the work that needs to be done with elevated structures. You should ask them for recommendations.
Accessory Dwelling Units. Does this mean that every community must allow people to live in garages? -Nancy B.
RESPONSE: Yes. If the house is a not a condominium and has a garage, owners can convert their garages into apartments. I'm not a fan of Governor Newsom's solution to the housing crisis. Destroying existing communities is not the best way to create new housing.
Emotional Needs Dogs. We are a timeshare HOA and have owners who show up with "emotional needs" dogs. Most appear bogus as you can imagine, which ruins it for legit dogs. But in reading what you sent us, we can now ask them to provide a note from a physician to continue bringing their dogs with them? Also, if someone shows up to rent a unit with an emotional needs dog, we can refuse unless they provide a letter from a physician? I just want to be clear on how I am interpreting the info in the newsletter! -Debra C.
RESPONSE: People falsely claiming emotional needs dogs is the most abused area of the law I can think of. When the medical condition of the person claiming an assistance animal is not readily apparent, an association can require a letter from a medical provider that the dog is necessary for the person's health. Once the letter has been produced, the association must grant the requested accommodation. Unfortunately, too many doctors will write such notes even though no medical condition actually exists.
Recommendation. You should talk to your association's legal counsel about creating a written policy for you to follow when people show up with squirrels, peacocks, goats, miniature horses, pigs, goats, and the occasional dog, claiming they are assistance animals that must be allowed into common areas, club houses, gyms, pools, etc.
Dog DNA. I am the president of our 1,290-home gated community. We try to maintain our community as a safe and enjoyable place to live. Many residents have dogs and walk them every day but do not pick up after their pets. Is there anything that would prevent us from having a DNA test done on dog droppings and fining owners? -Ruth G
RESPONSE: There is nothing more disgusting that stepping into a dog's feces. Yes, you can test a scofflaw's dog droppings. (See DNA Testing.)
Mailbox Break-In. To what degree is the association liable when thieves break into both incoming & outgoing mail boxes on the property? -Elliot S.
RESPONSE: Except under rare circumstances, associations are not liable for the criminal acts of others. (See Criminal Activity and Liability for Security.)
Internal Dispute Resolution. Are there any new rules on IDRs? -Roger K.
RESPONSE: Not that I'm aware of. For information about IDRs, see Internal Dispute Resolution.
Association records. What documents should be transferred when an association terminates a management contract? We changed management companies and when we receive an inquiry regarding accounting or correspondence information, no documentation can be located. -Barbara S.
RESPONSE: When you change management companies, all association records should be transferred to the new management company or to the association. This includes both paper records and electronic. Unfortunately, that does not always happen. Part of the problem is the sheer volume of records management companies handle. From each association the company manages, they receive:
CC&Rs, bylaws, amendments, articles of incorporation, condominium plans, rules & regs, architectural guidelines, collection rules, election rules, minutes (board open and executive session plus annual and special meetings), deeds, budgets, financial records (general ledgers, journals, accounts payable, accounts receivable, canceled checks, vendor invoices, deposit slips, etc.), contracts, insurance policies, general correspondence, newsletters, emailed instructions and correspondence, hearing notices, litigation related materials, and more.
The number of records can be staggering. Not all management companies have the same systems in place to handle the volume.
Storage Costs. Paper is expensive to archive and it's difficult to find a particular document without investing significant time looking for it. Sometimes they are warehoused and then forgotten. Ideally, all records are digitized and stored in a searchable format on a hard drive. For that to happen, the management company must invest in the technology for digitizing records and the manpower needed to scan, name, and store records. Our law firm went paperless years ago, but many management companies have yet to make the investment.
Shortsighted Boards. It means boards should be willing to pay a little more for a management company that is paperless. If a board is solely concerned with the lowest possible cost for management, it is being shortsighted and is foregoing a lot of services--one of them being the conversion of paper to electronic records.
Recommendation: Ask how your management company how they are storing your records.
Roof Antenna. When we had a new roof installed two years ago, the owners agreed to not reinstall the antenna (vintage 1974) as no one used it. Now an owner wants to have a new antenna installed. Is the HOA required to do that and to pay for the installation? -Ursula F.
RESPONSE: No, you are not required to install an antenna. You can, however, allow the requesting owner to install it. Since it only benefits him/her, it would be at that owner's sole expense. You want to be careful that it not be installed in a manner that would void your roof warranty. You should consider recording a covenant making the installing owner responsible for maintaining the antenna and any damage it may cause.