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  California's Leader in Community Association Law February 5, 2022
DISCLOSING
SUSPENDED CORPORATION

QUESTION: My HOA's corporate status was suspended for not filing proper paperwork. Since this information is available on a public website, should this be disclosed to the membership? –Bob

ANSWER: If you say anything, I would wait until the suspension has been corrected. The oversight of not filing forms biennially with the Secretary of State is easily resolved and the suspension lifted.

Similar Situation. The reason for not broadcasting the temporary suspension is that your corporation's name can be snatched by a disgruntled homeowner.
It happened to one of our clients when management failed to file required forms and the association's corporate status was suspended. I notified the board of the consequences of the suspension and how to cure it.

Loss of Name. One of the board members repeated my warnings to his wife. This director's breach of confidential information set things in motion. His wife was chair of the decorating committee and her plan for the clubhouse had been rejected by the board. When she learned the association's name was up for grabs, she immediately went online and reserved it. She then held the name hostage and would only release it once the board agreed to her decorating scheme for the clubhouse.

The Board's Options. The board had three options: (i) give in to her demands and decorate the clubhouse as she wanted; (ii) notify the membership of her misdeed, hoping public pressure would cause her to relinquish the association's name; or (iii) adopt a new corporate name. Option one was rejected — the board was not going to give in to extortion. Option two could split the community between those who supported the board member's wife and those who supported the board. To avoid a fight, the board chose option three.

Unfortunately, a fight ensued anyway. The wife went around the community falsely claiming the association could not collect assessments or pay its bills because it was suspended and, therefore, everyone should stop paying their assessments (which some did). She also circulated a petition to recall the board. The board stood its ground but had to endure the chaos created by the director's wife — all because someone forgot to file routine forms with the Secretary of State.

RECOMMENDATION: Boards should go online to check their corporate status. If they find their association has been suspended, they should immediately take steps to revive their corporation. For more information, see "Suspended Corporations."

 
WHEN CAN WE HOLD
IN-PERSON MEETINGS?

QUESTION: At our annual meeting in March we want to meet in person. Do you see any problem requiring members to show proof of vaccinations to attend? We have plenty of members older than 65. -Ron

ANSWER
: Everything we have been told about the virus is changing. We were told lockdowns were necessary and saved millions of lives. A Johns Hopkins study released this week found that lockdowns did little to stop COVID deaths. Despite their enormous economic and social costs, lockdowns only reduced deaths by a negligible 0.2%. We were told that getting vaccinated would keep us from getting the virus. While vaccines are good (I got both shots plus the booster), experience has shown they don't stop people from getting the virus. Authorities are now talking about a fourth shot. We were told masks would stop the virus. Health experts are now telling us that cloth masks are useless against Omicron because the variant is highly transmissible, even through fabric face masks. In light of the above information, showing proof of vaccination to attend a membership meeting seems to be a useless gesture—people can still catch the virus.

RECOMMENDATION. The mixed messaging from State and Federal politicians and health authorities is frustrating. If your board wants to be safe, hold your March meeting via Zoom and wait for authorities to declare the pandemic over. Hopefully, they are paying attention to the spreading unrest related to COVID restrictions and will soon lift their mandates.
 
MORE QUESTIONS ABOUT
BALCONY REPAIRS

QUESTION: We had our wood decks replaced in 2016. At that time our local building department did not require our railings be brought up to code. Does SB 326 [Civ. Code § 5551] require we do so now even though our local building department says no? We are concerned about liability if any railings were to fail. -Sherri B.

ANSWER: If you know a railing is unsafe, you are obligated to repair or replace it as quickly as possible. If railings in your complex are safe but simply out of step with current building codes (usually related to the spacing of rails), you are not always required to replace them. Even so, your board should add them to your reserve study for future replacement with code-compliant railings. Safety should always be a priority. A child slipping through the rails and falling to her death would undoubtedly result in a lawsuit against the association.

QUESTION: Our governing documents specify that balconies are the responsibility of the owner. The text of SB 326 states "The list shall include all exterior elevated elements for which the association has maintenance or repair responsibility." If the HOA does not have responsibility, do we still have to perform inspections? –Cheryl V.

ANSWER: You should have legal counsel review your governing documents. It is not unusual for condo owners to be responsible for maintaining their balcony decks, e.g., the waterproofing elements. However, the structural members supporting balconies are common area which the association is obligated to inspect and repair unless the governing documents clearly state otherwise. I am not aware of any documents that state otherwise. For more information, see Elevated Structure Inspections and Balcony Maintenance & Repairs.

 
 
BOARD CANDIDATE
QUALIFICATIONS
 

Next in our series of 2-Minute Videos, we describe one mandatory and four discretionary candidate qualifications associations are allowed to adopt under the Davis-Stirling Act. The video covers company and family trust representatives on boards and describes how boards can vacate seats of directors who subsequently become unqualified.

  Watch: Director Qualifications

 

Welcome back! My inbox has been so sad during your absence and the screen brightened when it saw you; flashing on and off since it can’t wag its tail. BTW Amazon is a great source for Gossip Collars, and provides a volume discount; a real advantage for HOAs. -Leland

Love the Gossip Collars. Enjoy your humor. –George B.


Thank you, thank you for the unexpected comment regarding shock collars, I barked with laughter. –Dena P.

Gossip collars! Absolutely fantastic!! –Geoffrey L.

I must have missed some newsletters in my inbox. This is the first one I've seen in a while. Excellent as always! Love the gossip collar idea. I definitely need to order some up for our community!! -Debbie V.

We LOVE your humor in "Gossip Regarding Vaccinations" which is so refreshing with all the negatives going on every day!!! THANK YOU!!!!!!!!!!!!!!!!!!!!!!!!!!!! –A.H.

Gossip Collars — a good idea! Dang! I went on Amazon Prime. . .but. . .LOL -Kit C.

RESPONSE: I cornered the market and bought everything Amazon had. I plan to sell them through our website at a handsome profit.

Thank you! –Renee B.

I thoroughly enjoy your light letters and your wealth of information. -Ed A.

Thank you for your email it's the first one I've received for sometime. Thank you again for keeping me on your email list; it's appreciated very much as your newsletter keeps me up on all HOA happenings. Love reading them. -Al H.

Gossip collar — thank you for that response. I laughed out loud. There is a resident in this community who needs one!! –Gigi M.

Thank you for all the great information you provide. Will you be updating the election calculator to reflect the new notice requirements? –Eva L.

RESPONSE: Our website tech, Eugene, is on it and should have the calculator updated shortly.


 
Boards can contact us for friendly,
professional advice.


Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC
DISCLAIMER. Our newsletter provides commentary, not legal advice. Boards need to retain an attorney to review all the facts and give a legal opinion on the issues they face. We serve as corporate counsel to California associations only. Request a proposal to represent your association.

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.

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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