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  California's Leader in Community Association Law May 23, 2021
CORPORATION
ELECTED TO THE BOARD

QUESTION: Our HOA has several members that operate commercial vineyards on their lots. Employees of two of these corporations hold board seats, even though they are not owners or members. Is this allowed under Davis-Stirling? â€‘Kathleen C.

RESPONSE: Yes it is. Mitt Romney, in his 2011 presidential run against Barack Obama, correctly pointed out that corporations are people too. What he neglected to say is that they are not natural persons. Instead, they are "legal" persons. As such, corporations have most of the rights and privileges that natural persons have, such as owning property, entering into contracts, belonging to organizations, etc.

Person Defined. The Davis-Stirling Act defines "person" as a natural person, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership, limited liability company, association, or other entity. (Civil Code §4170.) I suspect most homeowners don't know that their association is a person.

Spokesman Required. If a corporation owns property in a common interest development, it automatically becomes a member of the association, meaning it can vote and serve on the board of directors. A corporation, however, needs a natural person to speak for it, just as associations rely on boards of directors to speak for them. That means a corporation can appoint someone to attend meetings on its behalf and even serve on the board of directors.

RECOMMENDATION: We include language addressing the rights of entities such as corporations, companies, partnerships, and trusts when we restate an association's governing documents. Boards should consider doing the same when it comes time to restate their bylaws.

 
MENTAL ILLNESS
AND BOARD DUTIES

QUESTION: One of our members appears to have a mental issue causing her to harass her next door neighbor by playing loud noises throughout the night (cats meowing, car sounds, thumping noises, etc.). She was arrested when police discovered she had placed a speaker in her attic facing her neighbors' wall. The neighbors called law enforcement several times before the arrest and were advised by officers that they should direct their complaints to the HOA. At what point should or must a board get involved in neighbor-to-neighbor disputes? -Guy S.

ANSWER: If you have a nuisance provision in your CC&Rs, the board is obligated to investigate and determine if a complaint has merit. If it does, the board should take appropriate action. The fact that police found a speaker in the attic disrupting the quiet enjoyment of the woman's neighbor is sufficient evidence to hold a hearing and levy fines against her.

Executive Session. As noted in our May 2 newsletter, mental illness is not addressed in the Davis-Stirling Act's list of executive session topics. Even though it's not specified, directors should discuss these kinds of issues in private and with legal counsel.
Talking about the mental illness of an owner in open session could land the board in a lawsuit. Hence, our expanded list of what can be covered in executive session.
 
CCHAL FIGHTING
GOOD LEGISLATION
 
A few readers were unhappy that I spotlighted Marjorie Murray's opposition to four bills currently before the Legislature.

Self-Appointed. Ms. Murray has been operating for years as a self-appointed advocate who lobbies against legislation that benefits homeowners and pushes legislation that imposes heavy burdens on people living in associations. A prime example is SB 323, the election bill sponsored by her organization that complicated elections and made them more expensive.

In the Shadows. Until now, Ms. Murray has been in the shadows. California's 9 million homeowners living in associations impacted by her organization have a right to know about her involvement in legislation. Sunlight is the best disinfectant and it's time some light was shined on her Center for California Homeowner Association Law (CCHAL). -Adrian

Willie-Nillie Lobbyist. Regarding Marjorie Murray, I wasn't aware that someone can just become a lobbyist willie-nillie? Can she be investigated? Can any legal action be brought against her? She certainly has an axe to grind, why else would she be causing so much trouble for so many people? -Frances F.

Terrible for Seniors. I sent this to Ms. Murray and no response, can you tell me why? -Holley R.
Your attacks on HOAs is terrible, especially for seniors. I live in one of the oldest and largest senior community in California. Your 323 bill caused our assessments to go up — what’s wrong with you? Please stop attacking us and get into a good fight against the gangs, drugs, human and sex trafficking in your home town of Oakland, instead of getting into things you clearly know nothing about. Just to let you know, in our area (6-mile radius) there are twelve 55+ communities with over 55,000 residents on very fixed incomes so we do know what’s good for us.
RESPONSE: I suspect Ms. Murray did not respond because she does not have a good answer.

Dark Money. I contacted Ms. Murray about her stance on bills affecting associations. Since she is not an elected official, I asked how and where does she get so much power over our elected folks that she can derail much needed legislation. I even asked where she gets her money to stay in business. Of course I did not receive any real answers to my questions. How does someone like Murray wheel so much power on elected officials without dark money going under the table?? –Gary H.

RESPONSE: Ms. Murray's organization should stop hiding its list of donors and how much they donated. Just as HOAs must disclose current and prior two years of financial records, her organization should be transparent and post online their financial records and list of donors for 2021, 2020 and 2019. You can request transparency by sending an email to [email protected].

Organize Opposition. Emailing this nut-ball Murray is not going to work. We need to mobilize all the HOAs to email the governor and state representatives. Organize it and we will participate. –Marty B.

RESPONSE: CAI's California Legislative Action Committee will send alerts when it's time to email legislators. We will do the same. Everyone should sign up for their newsletter.

Waste of Time. It's obviously a waste of time contacting Marjorie Murray. People need to contact their legislators who vote on these bills. Senator Wieckowski is my representative and he supports everything she does. -Paul C.

RESPONSE: Yes, it appears Senator Wieckowski carries water for Ms. Murray.

A Malcontent. As messed up as it is, Marjorie Murray’s antic opposition is a good exercise for board members to read about. She is that one person who shows up at every HOA meeting and asks questions which are not questions but rants. There is always the malcontent, the critic, the ear bender, the compulsive, and so on, who uses the proceedings to get a cheap high. -Earl R.

What Does AB 1101 Do? Marjorie Murray sent an email stating that AB 1101 does not establish insurance requirements for money collected by associations. She said that Civil Code §5380 established insurance requirements long before the bill’s author arrived in Sacramento. What does the bill actually state? -Anon

RESPONSE: Ms. Murray is either misreading the bill or intentionally misstating what is does. It expands insurance options to include guaranty corporations and it prohibits high-risk investments. The new language is in red:
All of the funds in the account are covered by insurance provided by an agency of the federal government or a guaranty corporation subject to Section 14858 of the Financial Code. Those funds may only be deposited in accounts that protect the principal. In no event may those funds be invested in stocks or high-risk investment options. (Assembly Bill 1101.)
Marjorie's hostility to protecting homeowners' money is perplexing.

Observing Ballot Counts. Marjorie Murray is completely out of touch with the day to day management of HOAs. I am baffled that her opinion is even considered relevant to legislators. -Barbara D.
[MARJORIE MURRAY] Ms. D. --- How would you propose preserving the right of homeowners to witness election returns and the counting of ballots? SB391 eliminates this right. -Marjorie Murray, President
[BARBARA D.] The Inspectors of Election have no problem placing their cameras focused on the opening and counting of ballots for all Homeowners to view via Zoom. Zoom also allows for their cameras to be the main viewing window for everyone during that process....We are talking about emergency situations only. You are inferring this would be the standard of practice. This is “emergency powers and procedures” revision. Boards must be able to function and make decisions with insurance carriers and local authorities during these situations. The proposed legislation accounts for all of this and answers your question to me. I did read it before sending you the email.
RESPONSE: Ms. Murray's antipathy to this common-sense provision is puzzling. No rights are being taken away from anyone. Senator Min's bill clearly addresses the counting of ballots:
The camera is placed in a location such that members can witness the inspector of elections counting and tabulating the votes. (Senate Bill 391.)
NOTE: Ms. Murray's organization is on the wrong side of four bills that benefit consumers:

   1. SB 391:   Communications during declared emergencies.
   2. SB 392:   Distributing notices and documents via email.
   3. AB 502:   Allowing uncontested elections.
   4. AB 1101: Protecting consumer funds against loss.

She should support these bills, not block them. To urge her to reverse direction, you can email her at [email protected] or call her at (510) 435-6642.
 

Zoom Meetings. Our small association does not have a meeting room. We meet in the parking lot during the Summer months when the weather permits and in a garage during inclement weather and the winter. Most uncomfortable at the best of times. We used to meet in a rented room in the City Library for $10.00 a night. They closed and had a new Library built. The meeting rooms in the new Library want $90.00 an hour with a minimum of 2 hours. The Senior Center rented rooms for $40.00 but the distance was quite far from our complex. Meeting in the garage restricts us to be able to accommodate approximately six homeowners plus the board. The pandemic did bring out some hope. -Don C.

RESPONSE: That is one of the problems with the existing statute; it makes no provision for associations that don't have anywhere to meet. Once the emergency provision passes, we should remove the physical location requirement for associations that do not have one.

Election by Acclamation #1. AB 502 is certainly a welcomed bill. If it becomes law, just wondering how associations with governing documents that allow nominations from the floor will be affected. Will that provision be considered contrary to the bill as the nominees would be elected by acclamation as of the nomination deadline? –Jean A.

RESPONSE: Language in the bill appears to address that issue indirectly:
(g) Notwithstanding the secret balloting requirement in subdivision (a), or any contrary provision in the governing documents, when, as of the deadline for submitting nominations provided for in subdivision (a) of Section 5115, the number of director nominees is not more than the number of vacancies to be elected, as determined by the inspector or inspectors of the elections, the director nominees shall be considered elected by acclamation... (Assembly Bill 502.)
To avoid any confusion, bylaws should be amended to remove write-ins and floor nominations (plus cumulative voting and quorum requirements for the election of directors).

Election by Acclamation #2. The acclamation provision is essential for smaller associations. Our owners do not have the wherewithal to pony up for complicated and expensive nominations and elections processes. Most of us know everyone in the complex and are grateful that people are willing to volunteer to serve. -Doris B.

RESPONSE: Ms. Murray's SB 323 made elections complicated and expensive. Associations throughout California are suffering under the heavy burden her organization imposed on them. AB 502 by Assembly Member Davies provides some relief. It's a good bill that benefits consumers.

 
 
Federal Update. OSHA has decided that any adverse reaction to vaccines, where an employer required employees to be vaccinated before returning to work, would be considered a workplace incident and subject to all OSHA standards of coverage. If employees take the vaccine voluntarily (not as a requirement for returning to work), any adverse reactions will not be deemed work-related. There are three FAQs from OSHA that are helpful to review.

Statewide Update. The State has indicated that it will align with the CDC’s face mask guidance on June 15, 2021.

The CDPH issued new Guidance for Women who are Pregnant or Breastfeeding.

The CDPH issued a Face Covering Fact Sheet.

The following Counties changed Tiers: Amador (Orange Tier to Yellow); Santa Clara (Orange to Yellow); Santa Cruz (Orange to Yellow); Tehama (Red Tier to Orange).  

Northern California. Alameda County issued the 5/19/21 Joint Statement From Bay Area Health Officers re: following State Masking Guidance. Appendix A for the County Orders has been updated.

Contra Costa County issued the 5/19/21 Joint Statement From Bay Area Health Officers re: following State Masking Guidance.

Fresno County issued a 5/17/21 Press Release re: CDPH Masking Guidance.

Madera County issued a 5/17/21 Masking Statement.

Marin County issued a 5/20/21 Press Release re: Encouraging Vaccination.

Mono County issued a 5/17/21 Press Release re: Vaccine Eligibility for Those 12 and Up. The County issued a 5/18/21 Press Release re: Mask Mandate in Effect Until June 15.

Monterey County issued a 5/18/21 Press Release re: Bay Area Health Officials Joint Statement re: following masking guidance until June 15.

Sacramento County issued 2021 Pool Guidance.

San Francisco issued a 5/20/21 Press Release re: Additional Reopenings in Yellow Tier.

San Mateo County issued a 5/19/21 Bay Area Health Official Joint Statement re: masking guidance in place until June 15.

Santa Clara County moved to the Yellow Tier and issued an updated Health Order with significant changes. The County also updated their masking guidance.

Santa Cruz County moved to the Yellow Tier and issued a 5/18/21 Press Release re: Move to Yellow Tier. The County issued a 5/19/21 Bay Area Health Officer Joint Statement re: face mask requirements in place until June 15.

Sonoma County issued a 5/16/21 Press Release re: 70% of Those 16+ Are Partially Vaccinated. The County issued a 5/19/21 Bay Area Health Officers Joint Statement re: State masking mandate in place until June 15.

Tehama County moved to the Orange Tier and issued a 5/19/21 Press Release re: Move to Orange Tier.

Tulare County issued a 5/21/21 Press Release re: Pop Up Vaccination Clinics.  

Southern California. Los Angeles County revised its Health Order for professional services, such as legal, payroll, and accounting, when providing services that are legally mandated, should follow protocols for informal social gatherings and social distancing. Protocols for: Reopening of shared residential swimming pools updated to allow indoor pools, hot tubs, saunas, steam rooms, restrooms, showers, and locker rooms to reopen at 50% capacity. Also updated cleaning requirements to align with the CDC. Live Events and Performances (Outdoor Seated) and Live Events and Performances (Indoor Seated)

City of Los Angeles updated its Safer LA order to align with the County’s move to the yellow tier.

Orange County revised Health Order to align with move to yellow tier. Press Release from OC Health Care Agency regarding continuing to follow the State’s guidance for facial coverings. Press Release regarding County’s move to yellow tier.

Riverside County Press Release regarding clinics in Menifee and Beaumont closed as the County shifts focus on mobile teams to deliver vaccinations. Press Release regarding the County has contracted with United Lab Services to provide vaccinations to residents that are homebound.

San Diego County Press Release regarding more than half of the County's eligible residents are fully vaccinated and the County continues to add more mobile vaccine events. Press Release local teens discussing getting their vaccine shots at newly opened Jacobs Center Site and plans once fully vaccinated. Press Release County will continue to follow state guidelines for facial coverings until the expected reopening of the state on June 15th.

San Luis Obispo County Press Release County will continue to follow the State’s guidance for facial coverings. 

San Bernardino County Press Release regarding current facial covering requirements.

Santa Barbara revised Health Order to align with orange tier and expanded some capacities for family entertainment centers and skating rinks. Is it normal to feel anxious easing back into life after COVID-19?


 
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 from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score 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. Keep in mind we are corporate counsel to California associations only. Request a proposal to represent your association. It's okay, we're friendly.

PAST NEWSLETTERS. Readers can find current and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's internal "Google Search" feature.


Larry Stirling authored The Noblest Motive about how to bring about fundamental change for the public good. (Available at Amazon)
To schedule in-house training of managers on how to safely reopen association facilities, contact Miranda Ward for NorCal presentations and Candace Schwartz for SoCal presentations.

I join Adrian in inviting you to contact us for your association's legal needs.

Hon. Lawrence W. Stirling, Senior Partner and author of the Davis-Stirling Act

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