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  California's Leader in Community Association Law April 11, 2021
IS IT LEGAL FOR AN HOA TO INSURE
WHAT IT DOESN'T OWN?

QUESTION: One board member keeps insisting it is illegal for the association to insure something it does not own. Is he right? –Pat Davis

ANSWER: It's not illegal. In a condominium association, common areas are owned by homeowners, each of whom owns an undivided fractional interest, yet the common areas are insured by an entity (the association) that does not have an ownership interest in the common areas.

Insurable Interest. An insurable interest can be established either through direct ownership or contractually, such as a lease or an easement. For associations, an insurable interest is established in the CC&Rs, which obligates the board of directors to insure the common areas. It can sometimes require insurance of structures which are owned by members individually (as with townhouses).

Insurance Trustee. In addition, governing documents often make the board an insurance trustee. As such, it can negotiate and settle claims and receive and distribute insurance proceeds. Depending on the nature of the claim, the board can be authorized to develop bid criteria for repairs, receive proposals from qualified contractors, and award contracts for repairs and reconstruction.

RECOMMENDATION: Boards should have an experienced HOA insurance agent review the insurance provisions in their governing documents to make sure their policies meet the association's needs.

Many thanks to Tim Cline of the Cline Agency Insurance Brokers for his assistance with this question.

 
THE BALCONY BILL
AND STOCK COOPERATIVES

QUESTION. Does Civil Code §5551 apply to co-ops? -Maury J.

RESPONSE: Good question. A stock cooperative is a
common interest development governed by the Davis-Stirling Act. Section 5551(l) of the Civil Code states that inspections of elevated wooden structures apply to multi-family structures with three or more units. If a co-op's buildings are multi-family structures with three or more units, it would seem to apply.

However,
the statute also states, "At least once every nine years, the board of an association of a condominium project shall cause a reasonably competent and diligent visual inspection to be conducted..." (Civ. Code §5551(b)(1).)

That language appears to let co-ops off the hook even though they own and are responsible for maintaining and repairing balconies and other elevated wooden structures.

If a balcony collapses and persons are injured or killed, the co-op would undoubtedly be sued. If the court decides the board violated the statute
by not inspecting their balconies, the co-op will automatically be deemed negligent (negligent per se) for not conducting inspections. At that point, all that's left is determining the size of the judgment against the association.

RECOMMENDATION: The statute's clear intent is to increase the safety of residents in associations with elevated wooden structures. If it were me, I would voluntarily follow the statute's requirements to inspect and repair all elevated wooden structures. Doing so protects residents and minimizes any potential for lawsuits.

 
WHAT IS AN
EMERGENCY MEETING?
 

The next in our series of 2-Minute Videos describes emergency board meetings. When and how can boards of directors conduct emergency meetings? How is an emergency defined?  

To learn about this form of meeting, watch:

  Emergency Board Meetings

 

Geckos. I appreciate your humor! You always make me laugh! I could just imagine my board members having a gecko on their shoulder! You make the issues light while delivering matter-of-fact answers. Thank you!!! -Lorna L.

Enjoy your newsletters and usually get your jokes. Keep up the good work. –Anonymous

Thanks so much for everything you do for homeowners associations. Been reading ALL your articles over the years which makes me more well informed of the "do's and don'ts" Keep up the good work! ‑Traude‑Sophia S.

Another informative newsletter along with a great video. Wish I could talk our board into heeding your advice. –Rita D.


Snakes. Non-venomous snakes are harmless (except to mice and rats), and most cities have ordinances against keeping venomous snakes. As for pythons or boa constrictors large enough to kill a human, you'll find those in zoos, not in condo settings! -Elsie B.

RESPONSE: They're not just in zoos. Some people like to keep pythons as pets and give them cute names like "Monty." Incidents involving them are not uncommon.

In 2009, a python crushed a two-year-old girl while she slept in her crib. In 2013, two young boys were strangled in their sleep by a python. The snake crawled through an air duct and entered the room where the brothers were sleeping.

In 2015, one nearly crushed a pet store owner before police were able to pry it off him. It was wrapped around his head, neck, and torso. Last year, a Florida woman screamed her lungs out after discovering a python in her washing machine. She didn't realize it was a snake until she reached inside and felt it slither. Personally, I don't think snakes and condos are compatible. For a surprisingly long list of constrictor snake incidents, see HumaneSociety.org.


Science Teacher. Hello! Love the newsletter. I’m a science teacher and I’d like to tell you that your statement that “there are only five classes of animals” is incorrect. There are five classes of animals with backbones. Those are referred to as chordates. -Valerie T.

RESPONSE: You are quite right. There are five kinds of animals with backbones, which are classified as chordate subphylum vertebrata. In addition, there is a large category of spineless ones — I've met a few of them. There are also some without higher brain functions. I've met some of those too. They are generally harmless, until we elect them to office.


Zoom Meetings. Thank you for the valuable support you offer through your newsletter. We are experiencing a much higher owner participation of our membership meetings held via Zoom than we ever saw when we held in person meetings. My question is, are we required to go back to live in person meetings? Or, can we continue to meet via Zoom? –Frank S.

RESPONSE: You can and should continue to hold Zoom meetings after restrictions are lifted. Video conferencing via Zoom, Microsoft Teams, Google Meet, and Cisco Webex is the one good thing to come out of the pandemic.

Video conferencing makes it easier for both board members and homeowners to attend meetings. It also makes vendor presentations easier since they can put their presentations on the screen for all to see. Video conferencing also reduces legal expenses by eliminating the cost of drive-time for legal counsel to attend meetings.

RECOMMENDATION. I encourage boards to continue using video conferencing for their board and annual meetings.

 
 
Federal Update. CDC issued an order extending the residential eviction moratorium and updated its guidance on Employer Information for Office Buildings.

Statewide Update. CDPH issued guidance for Commencement and Graduation Ceremonies and updated guidance for gatherings, receptions, conferences and indoor live events.

The State issued a 3/25/21 Press Release re: Availability of Vaccine for those 50+ as of April 1 and 16+ as of April 15.

The State issued a 3/30/21 Press Release re: Vaccine Outreach to Asian American and Pacific Islander Californians. The State issued a 4/8/21 Press Release re: Vaccine Outreach for Black and African American Audiences.

As of April 15, the State will be updating the Blueprint. The State issued a 4/2/21 Press Release re: Updates to Blueprint. The updates will include changes to gathering limits, private events or meeting limits, and indoor live events or performances.

The Governor issued a 4/6/21 Press Release re: Moving Beyond Blueprint. The Governor indicated that the State will fully open its economy as of June 15 if: the vaccine supply is sufficient for those 16+ who want to be vaccinated and hospitalization rates are stable and low.

The CDPH issued a 4/2/21 Travel Advisory.

The following Counties have changed Tiers: Alameda (Red Tier to Orange); Butte (Red Tier to Orange); Colusa (Red Tier to Orange); Contra Costa (Red Tier to Orange); El Dorado (Red Tier to Orange); Fresno (Purple Tier to Red); Glenn (Purple Tier to Red); Humboldt (Red Tier to Orange); Kings (Purple Tier to Red); Madera (Purple Tier to Red); Mendocino (Red Tier to Orange); Modoc (Red Tier to Orange); Monterey (Red Tier to Orange); Napa (Red Tier to Orange); San Benito (Red Tier to Orange); San Joaquin (Purple Tier to Red); Santa Cruz (Red Tier to Orange); Siskiyou (Red Tier to Orange); Sonoma (Red Tier to Orange); Tulare (Red Tier to Orange); Tuolumne (Red Tier to Orange); Yuba (Purple Tier to Red).

Northern California. Alameda County moved to the Orange Tier and issued a 3/30/21 Press Release re: Move to Orange Tier.

Butte County moved to the Orange Tier and issued a 3/30/21 Press Release re: Move to Orange Tier. The County issued a 3/29/21 Press Release re: Vaccination Open to Persons 16+.

Contra Costa County moved to the Orange Tier and issued a 4/6/21 Press Release re: Move to Orange Tier. The County issued a 3/30/21 Press Release re: Those 16+ Eligible for Vaccine.

El Dorado County moved to the Orange Tier and issued a 4/6/21 Press Release re: Move to Orange Tier.

Fresno County moved to the Red Tier and issued a 3/30/21 Press Release re: Move to Red Tier. The County issued a 4/8/21 Press Release re: Expanded Vaccine Eligibility. The County issued 3/25/21 Return to School Guidance.

Lake County issued a 4/2/21 Press Release re: Vaccine Eligibility Quickly Expanding.

Madera County moved to the Red Tier and issued a 3/30/21 Press Release re: Move to Red Tier. The County issued a 4/2/21 Press Release re: Eligibility of Vaccine for Those 16+.

Marin County issued a 3/30/21 Press Release re: Vaccine Eligibility Expanding to Those 16+. The County issued a 4/6/21 Press Release re: COVID-19 Variant Detected.

Mendocino County moved to the Orange Tier and issued a new Order to comply with the changes and issued a 4/7/21 Press Release re: Move to Orange Tier. The County also issued an Order re: School Protocols. The County issued a 3/25/21 Press Release re: COVID-19 Variants Discovered. The County issued a 4/8/21 Press Release re: Reduction in Vaccine Allocation.

Monterey County moved to the Orange Tier and issued a 4/6/21 Press Release re: Move to Orange Tier.

Napa County moved to the Orange Tier and issued a 4/6/21 Press Release re: Move to Orange Tier.

Nevada County issued a 4/6/21 Press Release re: Moving Back to Purple Tier next week. The County issued a 4/7/21 Press Release re: COVID-19 Variant Detected.

San Francisco issued a 3/24/21 Press Release re: Changes in Orange Tier.

San Joaquin County moved to the Red Tier and issued 4/7/21 Updates.

San Mateo County issued a 3/25/21 Press Release re: Expanded Vaccine Eligibility. The County issued a 4/8/21 Press Release re: New Guidance and Updates.

Santa Clara County issued a 3/23/21 Press Release re: Move to Orange Tier. The County issued a 3/25/21 Press Release re: County Awaiting More Vaccines. The County issued a 4/3/21 Press Release re: Increase in Variants Means Testing Critical.

Santa Cruz County moved to the Orange Tier and issued 3/30/21 Press Release re: Move to Orange Tier. The County issued a 3/22/21 Press Release re: Variant Identified in County.

Shasta County issued a 4/2/21 Press Release re: Vaccine Eligibility Expansion. The County issued a 4/5/21 Press Release re: April 15 Expansion of Blueprint.

Sonoma County moved to the Orange Tier and issued a 4/7/21 Press Release re: Move to Orange Tier. The County issued a 3/26/21 Press Release re: Effort to Vaccinate Those Who Are Homebound for Medical Reasons. The County issued a 4/6/21 Press Release re: Increase in Vaccine Supply.

Stanislaus County issued a 3/23/21 Press Release re: Move to Red Tier. The County issued a 3/30/21 Press Release re: Expanded Vaccine Eligibility. The County issued a 4/8/21 Press Release re: COVID-19 Variant Detected in County.

Tehama County issued a 4/8/21 Press Release re: Vaccine Updates.

Tulare County moved to the Orange Tier and issued a 4/6/21 Press Release re: Move to Orange Tier. The County issued a 3/31/21 Press Release re: Vaccination Expanded to Those 16+. The County issued a 4/2/21 Press Release re: COVID-19 Variant Detected in County.

Tuolumne County moved to the Orange Tier.

Yolo County issued a 3/23/21 Press Release re: Move to Orange Tier. The County issued a 3/31/21 Press Release re: Vaccine Eligibility Expansion.

Yuba County moved to the Red Tier.


Southern California. Imperial County moved to Orange Tier and revised Health Order to align with the move.

Los Angeles County moved to Orange Tier and revised Health Order to align with the move. Gyms and Fitness Center protocols were updated with up to 25% occupancy indoors. Indoor pools are open; however, indoor hot tubs, saunas, and steam rooms still must remain closed.

City of Los Angeles updated its Safer LA Order to align with the County’s move to Orange Tier.

Orange County moved to Orange Tier and issued Press Release

Riverside County moved to Orange Tier and issued Press Release.

Press Release regarding expanding vaccine eligibility to 16 and older for County-run facilities.

San Diego County moved to Orange Tier and updated its Health Order to align with the move. Issued Press Release regarding expanding vaccine eligibility to 50 and older.

San Bernardino County moved to Orange Tier and issued Press Release regarding the move and vaccinations are open to all residents 16 and older.

Ventura County moved to Orange Tier and issued Press Release regarding the move.


READING THE CHART. Because the Coronavirus Update Chart is large and the text small, you can easily make it larger for viewing by holding down the "Ctrl" key on the left side of your keyboard and then using your finger to scroll forward or backwards with the wheel on your mouse. You will see the text grow larger or smaller as you move the wheel. For a list of County restrictions and links to health department orders, see County Chart 4-9-21. The chart is also posted on our website.

 
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.

See our summary of new laws and cases from 2020.

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
2-MINUTE VIDEO LIBRARY
Emergency Meetings
Virtual Meetings
Four Kinds of CIDs
Fiduciary Duties
Origin of Condo Laws
Conflicts of Interest
Reserve Borrowing

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Reprinted from
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