What is the easiest way to find information on your website?

Go directly to the Search Bar which can always be found on the home page, and type in any unique key words. You should be directed to the page that contains the information you are seeking. Some of these pages are cross-referenced to other relevant pages.

 

How often do you add to your frequently asked questions and articles?

We add to our FAQ and Articles several times each month and we update as needed. This is a top priority for our company.

 

What exactly are CC&Rs and how are they different from Bylaws and Operating Rules?

CC&Rs or Covenants, Conditions, and Restrictions; Bylaws; and Operating Rules are all governing documents with distinct legal definitions. See: CC&Rs, Bylaws, and Operating Rules.

 

Our condominium association management company was just shut down leaving us with a serious situation. They were treating their HOA managers as independent contractors instead of employees and not paying payroll taxes or providing the proper insurance the IRS and FTB now want the taxes paid and they are looking to our association in addition to the closed down management company for all of the back taxes, penalties, and interest. Can you assist us?

Any community association that hires an HOA management company that treats their managers as independent contractors is asking for huge legal problems. Call us. We can assist your association.

 

What options do members of an association have if they are dealing with a bad board?

You have several options. See: Dealing With Bad Boards. After reviewing the linked information, you can contact us for a no-cost initial consultation.

 

Will the California Attorney General's Office help our HOA members in dealing with a board that is violating our CC&Rs?

You can inform them, but we have determined that the California Attorney General is worthless when it comes to HOA matters.

 

Unenforceable Rules

Unenforceable rules are rules that were not approved by the HOA board using the procedure required by law or they may violate laws, infringe on homeowner rights, or be vague and/or arbitrary. They may conflict with federal , state, or local laws, violate the Fair Housing Act, or infringe on rights such as freedom of speech, freedom of assembly, religious freedom, or the right to bear arms. See: Unenforceable Rules, Rules Targeting Children, and Operating Rules Available.

 

What are the most common ways unethical board members tend to take unfair advantage of their associations and association members?

There are many ways, but following are the most common: (1) Steering contracts to vendors and contractors who pay kickbacks in return for the business they receive which is usually priced above market, (2) Submitting and then approving false invoices for payments. Such payments are usually sent to a P.O. Box or the address of a conspirator, (3) Rigging board elections so that only inactive or friendly board members will be serving who provide no oversight, and (4) Paying friendly vendors and/or contractors for work not done and then splitting the money paid. There are many others, but these are the most common.

 

When is it appropriate for a member of our homeowner association board to recuse himself?

A board member should recuse or disqualify himself or herself because of self interest, bias or prejudice. If a board member does not recuse himself or herself when required, he or she will have a conflict of interest. If a board member votes on a matter where he or she has a conflict of interest, he or she violates his or her fiduciary duty.

 

It appears that the president of the board of directors of our association may have said something that will result in a defamation suit being filed against the association. If the association is sued and a judgment is entered against it, can the individual homeowners be held personally liable for the judgment?

No. However, this should not give you great comfort. If the association has a judgment against it, the judgment creditor can force the association to special assess every member to pay the judgment. Homeowners need to elect directors carefully in order to protect the association and its members.

 

What can happen if I classify an employee as an independent contractor in order to save money?

Misclassifying an employee as an independent contractor can easily lead to expensive and extensive litigation for your HOA. See: HOAs - Say Goodbye to Independent Contractors.

 

When an HOA board knowingly hires a management company that intentionally misclassifies its managers as independent contractors, instead of employees, can the association and the individual board members be held liable?

Absolutely. Board members breach their fiduciary duty when they conspire with a management company to violate the law. This is a serious violation of the law that can result in personal liability for each board member.

 

I represent a group of homeowners who believe our HOA board is highly negligent. We would like to circulate a petition before we take other action. Can you help us design a petition?

Yes. Following are some sample petitions you may want to consider: Petitions for Homeowners.

 

Is it negligent for a board to take no action against a developer for obvious construction defects?

Probably yes. A board has the duty to investigate all issues brought to their attention by members of the association. They also have the duty to reasonably maintain the common areas of the association. Construction defects are serious matters requiring at least a complete investigation by a construction defect attorney and construction experts.

 

We have complained several times in writing to our HOA board that the common area lights in our parking areas are not working and that the darkness invites crime. Other people have also complained. Nothing has been done for several weeks. Last night my 16 year old daughter was seriously assaulted by a man requiring her to be hospitalized. It was very traumatic. Do we have a case against the HOA?

It sounds like a classic case of negligence. We have more questions, but it looks like you have a case and the association has a huge liability. Hopefully, they have a large insurance policy.

 

Our six year old child was attacked by a Pit Bull Terrier that is owned by one of the owners in our condominium complex. Our son had to be hospitalized and could have died. The attack required over one-hundred stitches. He will never look or be the same. Do we have a case against the owner and the association?

You definitely have a case against the owner based on strict liability. If the dog has previously demonstrated a tendency to be vicious and the board knew about it and took no action, you probably have a case against the HOA as well. See: Dangerous Animals - Strict Liability. Hopefully, they both have lots of insurance. Contact us for a no cost initial consultation.

 

Is it possible for a homeowner association to be sued for inadequate security and negligent security?

Absolutely. Homeowner associations, apartment building owners, and owners of office and retail properties can all be held liable for inadequate security and negligent security. See: Don't Let This Happen to You for some sobering examples of real cases, verdicts, and risks.

 

The condominium above ours has a defective shower pan that leaks into our home. Our management company insists that we must deal directly with the person above us and will offer no assistance. Their position is that the association has no power to act. Are they correct, or should they take action to force the owner with the leaking pan to repair it?

Your association has the power to act whenever common area property is being damaged by a member of the association. If the defective shower pan is allowing water to wet the internal structure of the building (common area), it may cause dry rot, electrical problems, or other damage. Thus, the association has the power to act.

If your management company and association will not provide you with assistance, you may take legal action yourself. Before filing a suit against your neighbor or the association, your attorney should review your CC&Rs. If a claim can be brought for the enforcement of the CC&Rs, you may be entitled to recovery of legal fees.

 

My roof has been leaking for two years, my ceilings are severely damaged, and I smell mold, but I don't want to sue my condominium association. Isn't that like suing yourself?

No. Suing the association is suing a corporation that has insurance. If you own one condominium in a 25 unit building, you own a 4% undivided interest in the condominium project. You can pay the damages yourself or the association can accept responsibility for failing to maintain the roof. The damage you have described will likely exceed $25,000. Your neighbors should not expect you to pay for the damages caused by the board's failure to maintain the common area.

 

I live in a condominium association in Pasadena. The roof started leaking more than two years ago. The board just decided that it is the association's responsibility to repair it and the repair has now started. In the meantime, the interior of my unit has be severely damaged by multiple rains. The board's excuse for not making the roof repair earlier is that the association's reserves were low. Is the association liable for delaying the repair of the roof, thus causing me to suffer damages? They are refusing to repair the interior of my unit and replace my destroyed personal property based on a provision in the CC&Rs.

Based on the information provided, it appears that you have an excellent case against the association. Contact us for a no-cost consultation. Delaying maintenance and repairs for which the HOA is responsible for more than two years is not excusable. It is board negligence.

 

Does a board's duty to enforce the association's CC&Rs require it to file a lawsuit against a member who is in violation of the CC&Rs?

No. Boards have discretion whether to litigate in order to enforce the governing documents of a homeowner association. Boards should weigh the financial cost of litigation, the seriousness of the violation, and the likely outcome before making a good-faith determination to litigate or not. Litigation costs are direct and indirect. Boards should keep in mind that the failure to enforce their association's CC&Rs can result in a lawsuit by members against the association for its failure to do so.

 

Is it possible to sue for emotional distress?

Yes, but it is not easy to prove all the elements of either "negligent infliction of emotional distress" or "intentional infliction of emotional distress," See: Emotional Distress Claims.

 

Is it possible for an HOA board member to sexually harass a homeowner, vendor, or contractor, thus creating a liability for the association?

Absolutely. Boards of directors are required to address members' claims of harassment based on sex, race, color, religion, national origin, familial status, and disability. This includes harassment by other residents, board members, managers, and vendors. The law requires that boards take prompt steps to investigate and end harassment. The law also applies to the harassment of vendors and contractors by board members.

 

Do HOA board members have a general duty to investigate issues brought to their attention by members of their association?

Yes, HOA boards have a fiduciary duty to investigate any issues brought to their attention, including common area problems, construction defects, rule violations, and CC&R violations. This duty is commonly referred to due diligence or the duty to investigate. This duty requires board members to make reasonable inquiries to ensure they are well-informed before making decisions. Boards can rely on the opinions and information provided by experts including accountants, attorneys, and consultants in order to become better informed.

 

One of our condominium owners guests just claimed he tripped on a common area walkway that was lifted due to a tree root. The incident took place in the middle of the day when it was light and the small lift was obvious to anyone on the walkway. Are we at risk of a lawsuit?

Sidewalk trip hazards can be huge legal liabilities so it's wise to repair them immediately. The ADA (Americans with Disability Act) defines a trip hazard as a vertical change over 1/4 inch at any crack or joint. The fact that the defect was obvious is not a strong defense.

 

What is the duty to mitigate damages and what is the significance of this duty?

The duty to mitigate damages in California requires a plaintiff who has suffered a loss or damage to take reasonable steps to minimize their damage. This applies "to both tort and breach of contract damages. In short, the injured party cannot recover damages that could have been reasonably avoided by taking reasonable steps to mitigate the damages. The duty to mitigate does not require the plaintiff to take actions that are overly burdensome, risky, or unreasonable. Failure to mitigate does not negate the defendant's liability for the initial wrong. It only affects the amount of damages the injured party can recover.

 

Our small HOA in San Bernardino has a spa that is almost never used. Can the board vote to fill it with soil and turn it into a planter? It would save the association and our members money every month which we could certainly use.

If you ask multiple law firms this question, you are likely to receive multiple answers. One thing is certain and that is you must consider your governing documents and the business judgment rule. We strongly recommend that before eliminating any amenity such as a spa, the association permit all members to vote on the matter using the secret ballot, two envelope process. This will not prevent an owner from filing a lawsuit but it will clearly establish a reasonable rationale for the board's decision.

 

Can you provide us with a guideline for how long we should keep HOA corporate records?

Yes. See: Records Retention Policy for Homeowner Associations.

 

Do HOA boards have a duty to disclose lawsuits to members of their homeowner association?

Boards have a general duty to disclose facts that materially affect the rights and interests of HOA members. Whether something is material depends on the facts of the situation and its possible impact on the association and its members. Lawsuits that are being defended by the association's insurance company are material. Routine collection lawsuits are not material.

 

What is the purpose and significance of lender's questionnaires?

The complete and accurate completion of lender's questionnaires is of great importance. See: Lender's Questionnaire - Purpose and Reasons HOAs Get Sued.

 

What normally happens when a mortgage lender requests a copy of an association reserve study as part of their loan approval process and the management company is required to advise them that the association did not obtain one within the last three years as required by law?

The lender is forced to assume that deferred maintenance exists and that funds may not be available to make important repairs. While every lender is different, most will not offer the mortgage applicant their best interest rate and loan terms because the loan will be more difficult to sell in the secondary mortgage market. Lenders sell 95% of their loans they originate so not obtaining a reserve study as required by law is significant.

 

Can not having a current budget lead to litigation?

Yes. See: No Current Budget - What Can Happen? and Reasons HOAs Get Sued.

 

What can happen if an HOA board fails to obtain reserve studies as required by law?

The failure of an HOA board to obtain reserve studies as required by law can have many negative consequences, including litigation. See: Reserve Studies Required - Reserve Funds and Summary of Reserve Study Laws.

 

What can happen if an HOA uses someone like a notary who is not experienced with the many laws that apply to HOA elections and they fail to hold the election strictly according to the law?

A disaster may result. Members of an association who were not lawfully elected, but who make decisions as though they were lawfully elected , allow homeowners to challenge or object to every decision made by the so called board. They can challenge every expenditure of money authorized, assessments approved, and much more. In short, litigation is almost certain to result. The lesson is clear. Associations should hire only knowledgeable, experienced inspectors of elections. See: HOAlnspectorofElections.org.

 

 

Do owners of units in a condominium have the right to inspect records?

Yes. This right applies to owners of condominium units, lot owners in a planned development, and owners of cooperatives and TIC units. See: Right to Inspect HOA Records.

 

How are the rights and powers of homeowner associations and individual owners divided?

This is an extremely important question. See: Rights and Powers of HOAs and HOA Board Members.

 

When a sewer line leaks or breaks, who is responsible for the repair? Given that many sewer lines are located under concrete slabs and mature landscaping that may include several mature trees, the cost can be huge.

The CC&Rs of every common interest development should address this subject, but unfortunately, many older documents are ambiguous, leading to disputes and even litigation. While disputes and litigation are never good, the timing could not be worse when a sewer line or lines are leaking or broken. It is for this reason that board members are encouraged to make certain that the responsibility for such repairs is clearly and unambiguously set forth in the association's CC&Rs before a break or leak takes place.

 

Can you represent an association or owner in a Small Claims Court appeal?

Yes. Attorneys can represent clients in Small Claims Court appeals but not in original cases. In addition, attorneys are permitted to advise a party before or after a small claims action is commenced. See: Small Claims Court - Limitations.

 

When homeowners fail to pay their HOA assessments, how does it affect the other owners?

(1) Reserves cannot be funded as planned leading to possible special assessments and the deferral of necessary maintenance, repairs, and improvements; (2) Insurance companies consider delinquencies to be a risk factor and something to consider when evaluating whether to increase the premiums they charge; (3) Lenders that are considering whether to make a loan secured by a unit, consider delinquencies to be a risk factor and something to consider when quoting an interest rate and terms, and (4) Potential buyers of condominiums consider delinquencies as a risk factor and something to consider when evaluating whether to make an offer and how much to offer.

 

If a homeowner in our condominium association fails to pay his assessments, can the HOA foreclose on his property in order to collect what is owed?

Yes, but there are several conditions and limitations. For more information on HOA assessment collections and foreclosures, see: Pacific-AssociationColiections.com

 

Our community association has found it very difficult to get a board member to assume the responsibility of being our corporate secretary. Likewise, we have not found a firstrate HOA management company that is agreeable to taking the minutes of our meetings. What do you recommend?

Many board members don't fully appreciate the fact that the position of corporate secretary is one of the most important and responsible positions on the board of an association. See: Duties of an HOA Secretary and Minutes of Board Meetings. If, after pointing out the importance of the position, you are still not able to get a board member to serve as secretary, you can hire a recording secretary. See: HOA Recording Secretary Services. The majority of management companies do not provide the service of taking meeting minutes because (1) They usually don't attend every meeting of the board, and (2) Taking minutes usually interferes with their ability to fully participate in board meetings they do attend.

 

I own a condominium unit surrounded by other units. My water heater leaked and severely damaged my neighbor's drywall, wood flooring, and several items of expensive clothing and furniture. My current insurance agent told me I am not covered under my homeowner's policy. Is this normal?

You should have purchased Water Damage Legal Liability Insurance which is either a separate policy or an endorsement to your home owner's policy. This type of policy generally provides coverage for leaking water heaters, condensation lines, shower pans, water lines to refrigerators, angle stop valves, and more.

 

What are HOA insurance carriers looking for?

They want assurance that the board has been faithfully meeting or exceeding their duties as board members. See: What Do Condominium Association Insurance Companies Care About?

 

Our HOA recently sent a letter to one of our members demanding that she cease using her condominium as a day care center. The owner refused and told us that we cannot stop her from running a day care center as long as the number of children does not exceed 14. Is this correct?

Yes, however there are some additional conditions. The California State Legislature has determined that day care centers may be operated in residential communities so long as the number of children does not exceed 14 and do not stay over 24 hours at a time. Other conditions include licensing, insurance, proper supervision of the children, indemnification of the homeowner association, and following certain regulations and operating procedures.

 

How can we determine whether a registered sex offender lives within a certain area?

California has a database of registered sex offenders available for public viewing on the internet. Searches can be made by an offender's name, or by city, zip code, or within a specified radius of a selected park, school, or address. See: Megan's Law - Sex Offenders.

 

What is insurance bad faith?

In every insurance policy (contract) there is an implied covenant of good faith and fair dealing that must be honored by every insurance company. An insurance company commits an act of bad faith when it violates this implied covenant.

 

What are Hold Harmless and Indemnity provisions and agreements?

These are important provisions or agreements used to shift risk from one party to another. They are commonly found in contracts and governing documents. See: Hold Harmless and Indemnity Provisions and Agreements.

 

Our management company told us they could save us a great deal of money by paying our HOA manager as an independent contractor instead of as an employee. They told us they could avoid paying employment taxes and Workers' Compensation Insurance. Is this a problem?

This is a huge problem especially for them. HOA managers must be classified as employees and the appropriate taxes paid. They are also required to protect their employees with Workers' Compensation Insurance. See: HOAs - Say Goodbye to Independent Contractors. You should immediately check with your insurance broker and HOA attorney to determine how this will affect your HOA.

 

Our HOA board is aware that the laws pertaining to community associations not static. How do HOA management companies stay current on the laws an court cases that affect associations?

First-rate homeowner association have either an in-house HOA attorney or a qualified attorney on retainer in order to keep the managers and staff up-to-date on all relevant statutes and court cases.

 

What are the statutes of limitation (SOl) that apply to homeowner associations?

While there are some exceptions, and laws are always subject to change, the general limitations on bringing legal actions are: (1) CC&R violations: 5 years from when the board discovers the violation, or through the exercise of reasonable diligence, should have discovered the violation; (2) Breach of contract: 4 years; (3) Breach of fiduciary duty: 3 years from discovery of the wrongful act; (4) Challenging an election: 1 year; (5) Property damage: 3 years; and (6) Construction defects: The SOL varies depending on many factors.

 

What governing documents apply to condominiums, planned developments, and cooperatives?

Governing documents are terms defined by California law. See: GoverningDocs.org.

 

Our HOA in Glendale pays one of the board members who is president of the association a monthly fee. Our financial reports do not identify her as receiving any money, but she most definitely receives a check every month. Our current management company does not provide her with a 1099 or W2 as a condition of their employment. Can our HOA get into trouble given what is taking place?

Absolutely. Your homeowner association, the entire board, the management company, and this individual are involved in tax fraud which is a serious crime. As a homeowner, you should be aware that the consequences of tax fraud are severe. Whether you are a board member or not, you should immediately consult with your attorney.

 

Is it true that HOA boards cannot increase an association's assessments by 20% per year without a vote of the membership if they fail to distribute the annual budget on time?

Yes. This is a common mistake that boards make. See: Budget Required and Budgets for Homeowner Associations.

 

What can happen if the board of directors of a homeowner association fails to take or maintain minutes of their board meetings?

The board of directors of all corporations in California, including the non-profit mutual benefit corporations utilized by California homeowner associations, are required by law to take and maintain minutes of all board meetings. Minutes are the official records of the proceedings of a corporation's actions. See: Board's Failure to Take and Maintain Minutes.

 

What is the effect of having a suspended HOA?

A suspended HOA means trouble. Suspension of an association's corporate status is very serious. See: Has Your HOA Been Suspended?

 

What is the definition of a board meeting?

The definition of board meeting is defined in the Davis-Stirling Act. It is a legal term. See: Board Meeting Definition.

 

Can you recommend a good mediator that has extensive experience?

Yes. See: SouthernCaliforniaMediator.net.

 

What functions can our management company perform in connection with board elections or other secret ballot elections?

Only two. The management company may mail Nomination Applications to the owners, but they should be returned directly to the inspector of elections in order to reduce the possibility that the management company might be drawn into any dispute regarding the election process. A better practice would be to have the inspector of elections mail out the Nomination Applications. The management company can also mail a copy of the Election Rules to every member of the association. Owners are entitled to a copy of the Election Rules by mail or by means of their being posted on the association's website.

 

What can happen if a condominium owner installs a washer/dryer in a unit not originally designed to accommodate clothes washers and dryers?

The following can take place: (1) Since most condominium buildings are master metered for water, all other owners will be required to pay for the increased water usage by the unit with the washer; (2) The owner with the washer will not use any common area laundry facilities, thus reducing the laundry income to the association; (3) The chance of flooding will increase because most condominium building plumbing systems are not designed for the extra soap and water that will be flowing through the building's plumbing system. The cost of damage is likely to be paid, at least in part by the HOA which means all owners will pay some of the costs; (4) Vibration of the machines are likely to create a nuisance; (5) Clogged dryer exhaust lines may create a fire hazard; and (6) The insurance premium for the association's master policy may be increased thus affecting all owners.

 

Our HOA board has a provision in its CC&Rs and rules that prohibits owners and their renters from smoking anywhere within the common areas. One owner insists on smoking in the common areas and another owner insists that the board enforce the CC&Rs which they refuse to do. Can the owner that is complaining about the smoke and CC&R violation force the association to enforce the CC&Rs?

The owner who wants the board to enforce the CC&Rs can file a lawsuit against the offending owner and/or the association to force enforcement of the CC&Rs. Boards have a legal duty to enforce the CC&Rs of their community and owners have a duty to comply with their CC&Rs.

 

What must I disclose in writing when I sell my home in California?

You must disclose anything that would reasonably affect the buyer's decision to buy or not buy and how much to offer. This is very broad and it is intended to be so. Examples of things that must be disclosed include: (1) Previous damage including damage from flooding, termites, and fires; (2) Structural defects including roof leaks, plumbing issues, and foundation problems; (3) Environmental hazards such as asbestos, lead paint, mold, and radon gas; (4) Code violations including non-compliance with zoning regulations; and (5) Legal disputes including ongoing litigation, threatened litigation, nuisance claims, and property line disputes. If in doubt about making a disclosure, contact our office for advice. You want to avoid a failure to disclose lawsuit if at all possible. They are expensive and risky.

 

Are Common Interest Developments required to adopt Operating Rules?

No. Homeowner associations may or may not adopt operating rules. Operating rules are intended to supplement CC&Rs and Bylaws not to amend them.

When a board of directors adopts operating rules, there is normally a fine schedule included to help the board enforce the rules. Most professional HOA management companies have a library of attorney approved operating rules that they make available to their community association clients. See: Adopting and Amending Operating Rules.

 

Are homeowner associations required to file tax returns?

Yes. Homeowner associations are required to file both state and federal tax returns. For assistance in filing current or late state and federal tax returns: NationwideAccounting.net

 

Can our community association hold its board meetings by Zoom?

Yes. Board meetings can be held by Zoom as long us every member is given proper notice and link instructions so they can join the meeting whether by phone or by use of a computer. In addition, at least one computer must be made available on site for those who do not have their own access so they can participate during the open meeting forum.

 

Our community association would like to warn all residents that they are responsible for their own security to a substantial degree. Do you have something we can send to them to put them on notice?

Yes. See: Warning and Security Disclaimer. It's a good practice to send this out to all owners and renters annually.

 

Dummy cameras or fake cameras are far less expense than real surveillance cameras. Is there any risk to installing dummy cameras instead of the more expensive real surveillance cameras?

Absolutely. Dummy cameras are never a good idea because they create potential liability for the property owner or homeowner association. See: Dummy Cameras - Fake Cameras

 

How can our homeowner association be more assured that our CC&Rs and Operating Rules will be followed by every member of the association and all renters?

Your board of directors can establish a schedule of fines that will apply to each violation of your association's is CC&Rs and Operating Rules. The schedule of fines can be established by adopting a specific Operating Rule.

 

What does "constructive notice" mean in connection with CC&Rs?

Constructive notice is a legal construct or legal fiction where the law assumes a person has knowledge of facts even if they have no actual knowledge of the facts. The legal fiction operates on the principle that certain information is publicly available or accessible in a way that it should have been discovered through a reasonable search. Recorded documents on an owner's property fall into this category. Owners have constructive knowledge of the CC&Rs recorded against their property even if they have not read the document.

 

When is Alternative Dispute Resolution (ADR) required to be offered?

There are several circumstances in which ADR is required to be offered. See: Alternative Dispute Resolution ("ADR").

 

Do most lawsuits against homeowner associations end up in court?

Most require that the homeowner file a lawsuit against the HOA, but most settle in mediation.

 

Is there a reason most HOA management companies don't take board minutes?

Yes. There are several reasons including:

(1) While the Corporate Secretary should sign the minutes, he or she should give their full attention to the conduct of the meeting. It is difficult to pay attention to the meeting while taking minutes. (2) The manager should not take the minutes for exactly the same reasons, (3) Our minutes are clear, concise, accurate, and unbiased, (4) They are delivered within seven days as a Word Document, so you have an opportunity to make changes or additions if needed, and (5) Since board members are unpaid volunteers, most prefer not to spend their valuable time recording, typing , and distributing minutes. See: HOARecordingSecretary.com.

 

What can possibly happen if our homeowner association does not take and retain minutes of meetings?

First it is necessary to define the term meeting under California law. A meeting is a gathering of a quorum of directors at the same time and place to hear, discuss, or deliberate upon any item of business that is within the authority of the board. A meeting can be in person, by phone, or by zoom. The board shall not take action on any item of business outside of a board meeting. Minutes are the official records of the proceedings of an association's actions. Associations are obligated to keep minutes of board and membership meetings. This includes incorporated and unincorporated associations. Minutes are required to be taken at board meetings, membership meetings, meetings of committees with decision making authority, executive committee meetings, and architectural committee meetings.

HOA boards must be aware of the following:

• Banks require corporate resolutions to be reflected in board minutes to open new bank accounts;
• Banks require corporate resolutions to be reflected in board minutes to change the persons authorized to sign on bank accounts;
• The enforcement of operating rules requires that they be adopted in accordance with California law. This requires that the minutes of the association reflect that every step was followed;
• Mortgage lenders may charge borrowers higher rates if they are not provided copies of minutes generally for a two year period;
• Mortgage lenders may refuse to make loans secured by condominiums in associations that do not keep minutes of meetings;
• The IRS and FTB require complete and accurate corporate minutes when they are auditing books and records of an association;
• Any Certification of Election prepared by the Inspector of Elections is required to be incorporated into the minutes of the meeting held to count the ballots;
• Certain actions of the board to collect delinquent assessments are required to be memorialized in board minutes. Failure to do so may provide a delinquent owner a defense to the association's collection action;
• All members of an HOA are legally entitled to copies of all meeting minutes;
• Disciplinary hearings are required to be held in an executive session of the board with certain information reflected in the minutes of the meeting;
• The decision of the board to spend money, outside of budgeted items, must be voted upon and the vote reflected in the minutes of a meeting;
• Any reimbursement made to a board member must be reflected in the minutes of a board meeting;
• Reports of dangerous conditions and the action the board intends to take to address the reported conditions must be reflected in the minutes in order to minimize liability. This also holds true for criminal activity;
• Without minutes, creditors may take the position that certain debts are personal debts of board members and not the debts of the corporation;
• The minutes should always reflect that a current financial report was generated, reviewed by the board, and approved; and
• The minutes of prior board minutes must be approved, if acceptable.
• There are other reasons to maintain corporate minutes, but boards must always keep in mind that they are required by law to be taken and maintained.

 

Do you recommend that homeowner associations carry workers' compensation insurance and earthquake insurance?

Absolutely. Associations that don’t carry these coverages are taking huge risks, including becoming a defendant in one or more lawsuits.

 

Our board of directors refuses to obtain a reserve study for our homeowner association. Can board members be held legally liable for negligence if they won't obtain a reserve study?

Yes. Negligence is a civil wrong (tort) that has the following elements:

• The defendant must owe a legal duty to conform to a certain standard of care for the protection of the plaintiff,
• The defendant must have breached his duty by failing to conform his conduct to the required conduct,
• The breach must be a legal cause of the plaintiff's injury, and
• The plaintiff must have suffered actual harm.

The California Civil Code, with few exceptions, requires the board of directors of an association to obtain or prepare a reserve study at least once every three years. Whenever a board is required by law to do something, it"owes a legal duty to act accordingly. Failing to obtain or prepare a legally required reserve study constitutes a clear breach of duty. If such a breach causes harm to members of the association, the legal elements of negligence have been satisfied and the members may successfully prevail in a suit.

Failure to obtain a serve study can result in anyone or more of the following types of harm:

• It may result in a large special assessment being imposed which some members of the association may find difficult or impossible to pay.
• A member of the association may find it difficult to sell or refinance his or her home which may cost money or even result in a foreclosure. Buyers and lenders are becoming more knowledgeable and are often refusing to become involved with associations that do not comply with the law.
• Owners may suffer the consequences of being a member of an association involved as a defendant in litigation brought by another member.

 

Does your company belong to any professional organizations?

Yes. We are members of the the Channel Islands (Ventura) Chapter of Community Associations Institute (CAI).

 

Can your company help us with the mediation of a dispute between two homeowners?

Yes. Please visit: Southern California Mediations for complete information about mediations.

 

How can I learn more about the mediation process and expert witnesses?

Please visit: ExpertwitnessConsulting.org for information.

 

Can community associations prohibit the displaying of flags of other countries?

No. Foreign flags are protected in California by Civil Code Section 4710. Such flags can be up to 16 square feet in size and may not be displaced in the common area. Owners can be restricted to one flag located on exclusive use or separate property.

 

What exactly is a partition action and does your firm represent clients in partition actions?

A partition is a legal action in which a co-owner of real property files a lawsuit in order to obtain a court order forcing the sale or division of the property or profits from the property. Our firm represents clients anywhere in California in partition actions. See: Partition of Real Estate - Forced Sale.

 

I am an owner in a condominium association and I am behind in paying my assessments. The board has not hired a professional assessment collection company. They are handling the matter themselves and they are in the process of foreclosing on my home. Can your firm determine whether they are in compliance with the law?

Absolutely. When boards decide to handle assessment collections themselves, or hire inexperienced collection companies, they tend to make many mistakes. The legal procedure is complex. Courts insist that the laws be followed perfectly. Being close is not sufficient. One mistake or omission can force an association to start the collection process completely over. See: Wrongful HOA Collections.

 

What are Hold Harmless and Indemnity provisions and agreements?

These are important provisions or agreements used to shift risk from one party to another. They are commonly found in contracts and governing documents. See: Hold Harmless and Indemnity Provisions and Agreements.

 

How long does it take on average to conclude a lawsuit filed against a homeowner association for negligence?

The average is 18 months. Very few take less time and some take over three years. As contingency attorneys, we do everything we reasonably can to minimize the time period, consistent with obtaining a good settlement.

 

What is a Fire Watch Guard Company and when should they be utilized?

A fire watch guard is a guard that is trained and experienced in providing emergency fire watch services whenever a building fire alarm system or sprinkler system is not functioning properly, or there is otherwise a huge risk of fire because of a nearby wildfire emitting embers. Most fire watch guard companies are able to deploy fire watch guards on short notice. Fire watch guards will normally be provided access keys well in advance of being called for duty and will normally have in their possession a portable horn and a high-quality flashlight. They are also expected to wear a uniform identifying themselves as a fire watch guard. Fire watch guard companies must be able to provide services 24/7. See: Fire and Carbon Monoxide Safety Checklist.

 

What hours are you open for business?

Monday through Friday from 9:00 am to Noon and 1:00 pm to 5:30 pm.

 

Your FAQs were very helpful. Can we call if we have additional questions?

Absolutely. Our regular hours are from 9:00 am to Noon and 1:00 pm to 5:30 pm. We can also be available in the evening or on Saturdays by appointment.