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  California's Leader in Community Association Law April 17, 2020
PANDEMIC
COUNTY ORDERS

No Visitors. The Los Angeles County Health Department prohibited all private gatherings of any size with the exception of people living in the same household. In addition, you cannot leave your home and visit another household unless you are providing essential services such as delivering food/medicine, repair work, house cleaning, etc.

Our HOA would like to prohibit private gatherings in units. Our lawyer advised these rules wouldn't be reasonable and we can't just say we are enforcing county orders because the county's orders are potentially illegal. What are your thoughts? -Danielle M.


RESPONSE: I agree with your lawyer. Some of the orders imposed by cities and counties are a bit extreme and may not be legal. Your association should not be the enforcer of the county's orders. Let the county enforce its own orders. Instead, your board should focus on adopting rules for common area facilities. You can close some facilities and regulate others to help stop the spread of the virus.

Sunbathing. Some people are using our common area park to sunbathe and picnic. Should we restrict them due to the coronavirus? -Walt H.

RESPONSE: I would allow family unit picnics. They already live together in the same household. If they want to sit on the grass and eat lunch together, it would do them good. If you lock them in their unit and don't let them out, there could be blood on the walls. As for sunbathing, that depends on whether clothing is optional. As long as they wear more than just a mask and maintain social distancing, I don't see a problem.


Parking Lot Singers. San Diego County issued a "no gatherings of any size" health order. One of our members wants to organize a sing-along in the parking lot of our HOA clubhouse. She claims that if the singers wear masks and maintain a distance of 6 feet from one another, this does not constitute a gathering. Is there any merit to her argument? -Rob W.

RESPONSE: Other counties have similar orders, with penalties up to $1,000 per violation. People are chafing under the restrictions and need to socialize. Unless your board adopted emergency rules prohibiting gatherings, I wouldn't interfere. If they wear masks and practice social distancing, they are following CDC guidelines. It's up to the County to decide if it's a "gathering" worthy of fines. If your board adopted emergency rules against gathering, you can tell the organizer "No." If members defy your rule, you should not get into a confrontation with them.

More Violations Likely. If federal, state and local authorities don't start lifting restrictions soon, there will be more of this going around. People can only take so much isolation.

Knee-High Weeds. We live in a foothill community that mainly consists of vacation homes. Our sheriff issued an advisory that homeowners are not allowed in the area if they don't live here full-time. We now have yards with knee-high weeds. We don't want our community to look abandoned. How do we handle this? -Jennifer F.

RESPONSE: This is another order that doesn't make any sense. People can't stay in their own homes? Some basic property maintenance is required. Start calling and emailing owners and get their permission to have a landscape crew mow their lawns. The cost can be covered by the association but added to the person's account.

 
HOA ASSESSMENT
QUESTIONS

Liens. I pay almost $400 per month for my HOA dues. Is there any legal provision during a pandemic that prohibits an HOA from filing a lien if it becomes a financial hardship to pay our monthly dues? -Amy K.

RESPONSE: Associations have authority both by statute and under your CC&Rs to lien your unit if you become delinquent in the payment of your assessments. The lien secures the debt in the event you try to sell your unit or declare bankruptcy. There is no pandemic exception to that authority. It's up to boards to make a business decision whether to temporarily suspend filing liens or not.

No Liens. Can we NOT file a lien as long as owners stick to a payment plan? Liens affect their credit and we don't want to be heavy-handed. We want to word our pre-lien letter such that a lien would be filed only if they don't meet the conditions of the payment plan. Your thoughts? -Netti J.

RESPONSE: As noted above, boards can make a business decision on how to approach collections during the pandemic. You should talk to your association's legal counsel about the wording in your pre-lien letter.

2008 Financial Crisis. Having gone through the 2008 financial crisis with 18 defaults, we recouped 89% of our defaulted assessments when we eliminated late fees, interest and the fees management companies charge. Of the few cases that landed in court, judges removed interest and late fees from our award. -Joseph L.


Delivery Methods. Civil Code section 5305 requires a copy of the annual financial statement be distributed to members within 120 days after the close of the fiscal year. Section 4040 gives the delivery methods and would seem to preclude hand-delivery. For the past 2 years the document has been hand-delivered. Are we asking for trouble if we continue doing so? -David M.

RESPONSE: You're right, the statute does not make allowance for personal delivery. It states that individual delivery must be by (i) first-class mail, registered or certified mail, express mail, or overnight delivery by an express service carrier or by (ii) email, facsimile, or other electronic means (if the recipient consents). This creates an unnecessary burden on small associations where many documents are delivered personally. If you have members sign for the document, it provides proof of delivery similar to registered or certified mail. You can avoid the issue altogether if members consent to delivery by email.

 
ANNUAL MEETINGS

Proxies and Floor Votes. If the association holds a virtual election, how does voting at the meeting go into effect? How do proxies get handled? -Ariel P.

RESPONSE: I don't know which is worse, the coronavirus or SB 323. Both have greatly complicated annual meetings. Both disasters can be handled with emergency election rules.

Eliminate Floor Votes. Since stay-at-home orders prohibit gathering for your annual meeting, floor votes can't be done. You can eliminate the issue by giving notice that balloting will be closed the day before the meeting. That means all voting must be done by mail-in ballots only. No voting can take place the day of the meeting. 

Eliminate Proxies. Proxies are also a problem. If proxies are undirected, the proxyholder can vote on issues at their own discretion. That means the person must physically present proxies to the inspector of elections and receive a ballot for each proxy. Under current pandemic conditions, that can't be done. Accordingly, proxy voting must be suspended so all voting is done by mail-in ballots only.


As noted in earlier newsletters, many associations have already conducted annual meetings under pandemic conditions using a teleconference or video conference platform. Or, in the alternative, you can eliminate the teleconference component and just have the inspector open ballots and tabulate votes and announce the results. This can be done from the inspector's office with a camera recording everything. The video can be streamed to the audience and/or posted on YouTube so members can watch it.

Emergency Election Rules. The board can adopt emergency election rules for conducting elections under the current lockdown. Afterwards, associations should update their documents to get rid of proxies, floor nominations, write-ins, cumulative voting and quorum requirements for the election of directors.

Message to Marjorie. I'd like to send a message to Marjorie Murray and perhaps my local representatives. Would you be able to provide some summary bullet points for why the dumpster fire that is SB 323 should be rescinded? -Chris M.

RESPONSE: As most know, I've been sounding the alarm about the bill for the past two years. SB 323 has made elections complicated and expensive. There is so much wrong with the bill it will take some time to summarize everything. Maybe over the weekend I can make a list. It would be nice if Marjorie Murray's organization would change direction and sponsor a bill rescinding SB 323.
 
Newsletters with real-time information. Priceless! Semper Fidelis. -Ty W.

Thank you on behalf of all the associations out there. You've done a fantastic job keeping us informed. -Walt H.

Thank you for your super coverage of all the changes due to COVID-19 and the California Legislature. -Elaine J.

Manager Shout-Out. I want to give a shout-out to all the managers who are in the trenches keeping their associations operational during the pandemic. They deserve recognition for the work they are doing. -Cat Carmichael, past President of CAI and founder of Strategy 123.

RESPONSE: I agree. Can you imagine the number of calls they receive daily from cranky homeowners and board members who have been cooped up for the past 30 days? Managers deserve promotion to "First Responder" status.


 
Boards can contact us for friendly,
professional advice.


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