Federal Relief for Associations
Adams Stirling PLC
  California's Leader in Community Association Law April 16, 2020

The Community Associations Institute sent the following appeal for everyone to ask Congress to include community associations in the Paycheck Protection Program. -Adrian

Paycheck Protection Program. The House and Senate are currently negotiating additional funding in response to the COVID-19 pandemic. While community associations are included in the Small Business Administration Economic Injury Disaster Loans, they are not included in the PPP, which potentially offers greater access to financial support than other loan programs.

Delinquencies & Defaults. CAI is concerned that community association defaults may rise concurrent with mortgage default payments, imposing unsustainable cashflow constraints on associations that will limit retention of employees and contractors and substantially impair delivery of essential services to owners. Funding from the PPP could help community associations facing cashflow constraints.

1.  Email your Members of the U.S. House of Representatives & Senators asking for community associations to be included in the Paycheck Protection Program.

2.  Send your community’s story and the financial implications of COVID-19 to [email protected]. We will use these stories in our advocacy efforts to make the case for community associations.

RECOMMENDATION: California has been under a Stay-At-Home order since March 19. The announcement by Governor Newsom on Tuesday sounds like his order will not be lifted any time soon and only in stages. Every day his order stays in place, people are being forced into unemployment. That puts a strain on associations. I recommend everyone take a few minutes and respond to CAI's plea for action. Click on the above links and send a request to Congress that they expand their relief to include associations. -Adrian

Email Addresses. I was surprised to read your response to the question about email addresses. I'm sure I read in your October 20 newsletter that opting out of having your email address available to all other members had to be done before January 1, 2020. -Sandy M.

RESPONSE: We are encouraging all associations to notify their members to opt out if they want to protect member email addresses. Doing it before January 1 protected everyone. Sometimes boards move slowly. If they have not yet notified their members, they should do so now.

Members want to receive email communications from their associations but want their privacy protected. Marjorie Murray's Center for California Homeowner Association Law sponsored SB 323 which exposes everyone's email address to all other members unless they opt out.

Non-CID Association. I am on the board of a mobilehome owners association. We are not an HOA. Does SB 323 apply to us? -Leonila K.

RESPONSE: If your association is not a common interest development (CID), SB 323 does not apply to you. Many mobilehome associations are CIDs. You should have legal counsel review your governing documents to confirm your status as a non-CID association.

Floor Nominations. A delinquent member was nominated at our annual meeting, which means he was not eligible to serve on the board. Because SB 323 requires IDR before disqualifying the person, must we adjourn the meeting to some future date until an IDR can be held and a resolution is determined? -Bill B.

RESPONSE: SB 323 is the gift that keeps on giving. To comply with the new IDR requirement, it appears you will need to adjourn your meeting until you go through IDR with the nominee and he either pays under protest or works out a payment plan. To minimize the disruption created by SB 323's requirements, we are eliminating write-in votes and floor nominations from bylaw restatements and from election rules.

Volunteer Inspector. Finding a volunteer within our townhouse association is not happening. We cannot get someone to volunteer to take the open board position and have little hope of an inspector, which is a lot more work than a board position. A homeowner suggested we ask a neighboring association to serve as our inspector and we would do the same for them. All went well until we found that there was no insurance. -Polly B.

RESPONSE: SB 323 has been costly for associations across the state. Since you can no longer use your management company, you may have no choice but to pay for a professional inspector to supervise your election.

Reserve Expenditure. Our board plans to build a new administration building from reserves. Does this expenditure have to show in the proposed budget for 2020-2021? -Prescott J.

RESPONSE: No. Your annual budget is for ongoing operational expenses plus contributions to reserves. Reserve repairs and replacements are part of the reserve study, not your operational budget. Clearly, a project of the size you describe should be communicated to the membership. That can be done in your newsletter and/or sending a letter to everyone.

Property Inspections
. Should portfolio managers continue to complete property inspections during the current stay-at-home order? I realize we are essential for the HOAs, just not sure how safe the inspection process is during the current health crisis. -Lori D.

Managers should not be forced to make inspections if they feel unsafe doing so. The Stay-at-Home order will be lifted sometime in the next century and everyone can return to work. You can probably inspect properties now if you follow CDC Guidelines: wear a face mask at all times and practice social distancing. Discuss it with your company's CEO and follow his/her direction.

New Construction. The board is restricting non-essential construction but new owners are moving into a unit and want to renovate unit prior to move-in. Can the board restrict them because of disruptive noise whether they use contractors or do the work themselves? -Ronald O.

RESPONSE: Yes, the board can restrict non-essential construction while the Stay-at-Home order is in place. With everyone working from home, or out of work watching Netflix movies made in Romania, the noise could be incredibly disruptive. Plus, owners may be uncomfortable with strangers in the common areas until the order is lifted.


Always enjoying reading your informative Newsletter. Thank you! -Guy T.

Thank you for all your insight. Your newsletters have become very valuable, especially with the changing times! -Cindy G.

Thank you so very much for your newsletters, enjoyable and informative. -Lee D.

I appreciate your newsletters. I have been a manager for two years and I find the information that you provide very informative and entertaining. I LMAO on the response you gave to the woman that complained that their board president was being too controlling by removing the pool furniture from the pool deck. -Robert R.

Boards can contact us for friendly,
professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner
DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some get it and are amused. Others are appalled. Some readers are excited because they scored free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to associations only.

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