2008 - YES! It's here! What do we have to talk about? Lots and Lots...



FYI ­ MAY 2008 - LEASE LIMITATION PROVISIONS ­ WHAT IS THE CALIFORNIA LEGISLATURE DOING? 

AB 2259, introduced by Assembly Member Mullin, most recently amended the ASSEMBLY on MARCH 28, 2008, places limitations on enforcing lease limitation restrictions. The bill, if approved by the Assembly and Senate and signed into law, would amend Section 1368 of the Civil Code (which relates to disclosures upon sale) and would add Section 1360.2 to the Civil Code which would provide protection to owners who are in opposition to leasing restrictions by giving them vested rights (explained below) that except them from approval of rental limitation restrictions by the necessary percentage of members.

The legislature put this language right in the bill: "SECTION 1. The Legislature finds and declares that the rights of common interest development owners to rent or lease their properties, as the rights existed at the time they acquired them, should be protected by the State of California, and the rights of subsequent owners should be governed by the status of those rights at the time they acquire them." Of course, they are talking about lease limitation restrictions in this bill, but this wording signifies many lawmakers' mindset, i.e., that restrictions in the documents should be frozen in time for each owner, which is in direct opposition to a long string of appellate case findings that uphold amendments to the documents based on the premise that when an owner purchases in an HOA, they do so with the understanding that the documents can be revised and changed by a majority or supermajority of owners.

More specifically on the issue of each Owner's rights, the bill says: The right of an owner in a common interest development to rent or lease his or her separate interest, as vested at the time the ownership began, shall not be restricted  during the duration of ownership, except as provided in subdivision (b)." Do you see what this means? The word "vesting" means that each Owner would be protected as their rights to lease cannot be changed after purchase.

The only exception would be that an owner could waive their "vested right" described above, under Section (b) of the statute, which says: "(b) An owner of an interest in a common interest development may waive the right related to the renting or leasing of an ownership interest vested in the owner at the time ownership commenced, pursuant to procedures established by the common interest development to facilitate the a waiver."

This means that the HOA could adopt procedures giving owners the option to waive their rights. Such a waiver could be written in as a "grandfathering" of all current owners which is sometimes done, though not all attorneys agree that it should be done. It would seem to resolve the issue of any owner who does not want to be subject to the restriction. Watch the bill, it may change. At this time it is not an outright prohibition on leasing restrictions but that could change. There are many that oppose the bill, including the CAI California Legislative Action Committee. Others are proposing amendments. This is a controversial bill, on a controversial topic. Watch my website for updates on the blog. Also, I will be doing an E-Newsletter on the subject so sign up to receive it ­ its free! And it might be an indicator that if a Board is considering proposing such an amendment, now might be a good time. The bill if signed into law will change things.

 

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  FYI - APRIL 2008 - EARTHQUAKE COUNTRY - Do You Know Where You Live? 

How many of you think you don't live in earthquake country? Well, it is scary to think about "the big one". But if it happens, you will wish that you had been more prepared. An article in the works about "The Hayward Fault" suggests that it might be "America's Most Dangerous" [fault]. To see the preview news article, go here: http://www.usgs.gov/newsroom/article.asp?ID=1899. The final article will be released soon at http://www.cat-risk.com. So is it time to prepare yet? I would say that is a definite yes. If you visit the website address above and read the entire article, you will see what kinds of things need to be done to prepare. And, maybe its time again to think about earthquake insurance(?). You may be the judge of that. On that subject, visit the article section for many articles on earthquake insurance - and whether to buy or not to buy it. Here are excerpts from the news article about the Bigger Article coming soon. 

"An earthquake of M6.8 or greater on the Hayward Fault, in the heart of the San Francisco Bay area, is increasingly likely. The last major earthquake on the Hayward Fault was in 1868, 140 years ago: research by the U.S. Geological Survey (USGS) and others indicate the past five such earthquakes have been 140 years apart on average." "In marked contrast to Hurricane Katrina where uninsured losses were approximately 60 to 70 percent of total economic losses, more than 95 percent of projected Hayward Fault earthquake residential losses and 85 percent of commercial losses will be uninsured." 

"'Bay Area residents, businesses and local governments need to take action now to reduce future losses. ... Public and private organizations have already invested over $30 billion to retrofit or replace vulnerable buildings and infrastructure, but more needs to be done,' said Tom Brocher, seismologist with the USGS. Until the Bay Bridge and BART undergo major retrofits, they remain vulnerable to earthquakes and more than 180,000 daily commuters who currently use them could face having to take overtaxed alternate routes for months. Similarly, until the Hetch Hetchy aqueduct system upgrade is complete, earthquake-related activity could cut off water for 2.4 million Bay Area residents, according to a recent report by the Bay Area Economic Forum. ... 'People should realize there is a possibility that they won't be able to drive home from work or pick up their children from school,' ... A Hayward Fault earthquake could close 1,100 roads, including 900 in Alameda County alone ... Oakland and San Francisco international airports and nearly all the region's port facilities are built on materials prone to earthquake damage. As a result, the capacity to deliver the goods needed to support recovery would be significantly diminished." 

You should definitely read the Article. 




  WHAT'S NOT TO LOVE ABOUT YOUR NEW CONDO! 

  So you are in your new condo! What do you do now?  Š EnjoyŠ  and if you understand a just a few simple things about what you bought, it make things even better. 

  A Different Type of Ownership: You probably own what is commonly described as a "unit" which is often further defined as airspace within walls, a floor and a ceiling. It's similar to owning an apartment but there is much more to it than that. In most cases, you share with your neighbors ownership of everything else, including any pools, clubhouses, all the amenities, and the buildings that house all of the units. Thus, while it may seem strange at first, there can be some real comfort in this. You share the benefits of amenities that would otherwise be quite expensive. And you have others that share in the burdens of decision making and responsibility. You have a group to share maintenance costs, replacement of roofs, insurance, pool repairs, and economy of scale in almost all things. Take heart, owners of single family homes are on their own. 

  Other Good Things:   

  "Lock and Go": When you leave for work every day, or on a vacation for a week or a month, there is still activity ("life") going on all around your unit while you are gone. It's usually much more protected than a home sitting vacant, newspapers piling up, no car in the driveway, no lights. It can reduce the risks considerably. 

Running the "Ranch". You have the opportunity to help make decisions by participating in the association governance (as opposed to being under the thumb of a landlord). As an owner, you can serve on the Board, all you have to do is "show up" and you probably will be get the opportunity to serve. 

No Lawn To Mow, Weekend Maintenance to Do: You will probably find that you have more time on your hands because your weekends won't be eaten up by the need to mow the lawn, trim the bushes, or clean the gutters. Yay! Plan that day trip. 

Stress Relief.  If you do not want to exercise your brain and acumen in helping to make big decisions about the property, you can sit back, relax, and leave it to someone else. Of course, your association is served volunteers so you should take your turn. 

You Belong to Something! You are part of a community when you own a condo, a community that is as good as its owners. Meet your neighbors. Talk "across the proverbial fence". Get involved and be a good pillar. 

  How To Stay Happy, and Get The Most Out Of Your New Community! 

  Being a good neighbor will help you enjoy your home and your community. Keeping the noise down to a reasonable level, using your garage for your vehicles instead of storage, lining your drapes with neutral colored liners, keeping your pets inside or on leashes, picking up after them, exercising common courtesies, and safe driving through the complex are things that you can do to set a good example and to engender like behavior from your neighbors. And there is value in having rules and regulations and honoring them. When you live in a condo, it's true that there are some regulations and restrictions that you would see in a single family home. But if you need help "encouraging" others to be good neighbors, these restrictions and rules can come in handy. The Association can often be more effective than waiting for the fiscally-strapped Cities to enforce ordinances. 

  Beth A. Grimm is a California attorney, as well as an author, speaker and "condoguru" . Her mission is to promote and circulate "good" information about homeowner associations, to help solve problems, and find answers, and to use the advantages of technology to do it. If you want to learn more, check out her website, her blog (California Condo & HOA Law, and her publications including her newest book THE CONDO ANSWER BOOK, available through Sourcebooks, Inc., Barnes and Noble and Amazon websites. 

 



FYI ­ MARCH 2008 - STOP THAT INFERNAL WALKING!

Hardwood and laminate wood-look floors are very popular. They are reputed to increase the value of a home. They clean up easily, and "float". They are the in thing.

But they can put people on the "outs". They are a common source of strained relations between neighbors. And these battles often leave boards scurrying for cover. Who is right Š who is wrong? Should owners be free to install hard surface flooring on upper units? Should they not? Should developers be allowed to profit from installation of hard surface flooring in stacked units? Should they not? Should the Board be required to look for solutions, spend money for tests, mediate the fights?

These are always tough questions. Determining fault, options (or lack thereof) and solutions (to the extent there are any) on issues noise related to hard surface flooring is not an easy task.

But I do have something to offer on the subject. I give you some questions to ask that are endemic to considering "fault" and possible solutions. With regard to one single noise issue, there are several potential defendants or culpable parties that might be able to initiate changes that would make a difference if the right "buttons" were pushed.

     
  • Is this a pre-existing condition or did something change, i.e., flooring, neighbors, change in family circumstances, residents (number or age), and if there was a change that is now creating a problem, will it be remedied any time soon?
  • Are the parties the problem, or part of the solution?
  • Did either party do anything to cause or exacerbate the noise issue(s)?
  • Did either party do anything to mitigate or minimize the problems or condition leading to the problems?
  • Did any of the parties violate the governing documents in their actions?
  • Has anyone arranged for an "IIC" or other flooring impact analysis test to be done?
  • Was there any requirement or duty to make disclosures about the potential for problems or the problem itself?
  • If so, were those disclosures made to the right parties?
  • Are there any viable solutions that do not involve expecting the impossible, such as moving when economics or life logistics do not allow it?

In case you do not know, an "IIC" stands for "Impact Insulation Class". It involves a test taken with a specialized piece of equipment referred to as a "tapping" machine (used upstairs) and a reading on another machine (used downstairs) by a specially trained acoustics technician. There is an identified minimum standard for multifamily dwellings. So should you get the "test" to determine acceptable noise levels? There is much more to the inquiry than that. For starters, the minimum standard may not be enough. I for one believe that the standards for condos should be higher than apartments because if someone does not like the upstairs noise in an apartment, they can move.  They have little to lose. When one purchases a condo, the solution is much more complicated. If they remain quiet, they risk having a disclosure issue come up after sale. If they make noise about the noise, they risk creating an issue where one might not be there for the next person. People are a big part of it. Peoples' tolerance levels are all over the map - and when "friends" live upstairs, people are much more tolerant than if they don't like the upstairs neighbors. But tolerance is also not the only inquiry either. If you want to read more on the subject, check out my blog and my most recent 301st entry on this very subject! You can get to it by clicking here. Once on the blog site, you can search the blogs on noise and/or floors and see a lot more on the subject.




FYI FEBRUARY 2008 - UPSETTING SPECIAL ASSESSMENTS WHAT CAN YOU DO?

This is a tough subject. However, sometimes someone else writes something so well that it just does not pay to try and say it any other way. I say this about a recent article of from Adrian Adams, an attorney in Southern California who writes from a site called "Davis-Stirling.com". I think he does an excellent job and I respect very much that he is such a purveyor of information. Between he and others in his firm, and I, and our efficient use of technology and E-News, and willingness to give, I believe we are well poised to educate the masses. That said, the following is his work-product on the issue of Special Assessments, and I agree with it wholeheartedly. I have seen it with my own eyes at many difficult HOA meetings.  

"SPECIAL ASSESSMENTS, DEATH AND DYING

QUESTION: The board recently informed everyone that we are facing a large special assessment to reroof and waterproof our buildings. I don't believe them. What can I do to stop the assessment?

ANSWER: In her 1969 book, On Death and Dying, Swiss-born psychiatrist Elizabeth Kubler-Ross outlined the five stages of grief of someone who is dying. Over the years I've witnessed owners going through the same stages when they face large special assessments. Following are the stages:

  • Denial. "They don't know what they're talking about." "The contractor is just looking for work." "The repairs are not necessary." "The board must be getting a kickback." "Let's recall the board."
  • Anger. "Who can we sue for this disaster?" "Management was incompetent." "Let's recall the board and sue somebody."
  • Bargaining. "Can we defer the repairs?" "Can't we just patch the roof (until I sell my unit)?" "Are there cheaper alternatives?" "Will insurance pay for the repairs?" "The board is being unreasonable; let's circulate a recall petition."
  • Depression. "I can't bear the costs." "This will force me to sell my unit." "I can't put my family through this." "How do we recall the board?"
  • Acceptance. "I'm ready, I don't want to struggle anymore." Recalls. Unfortunately, some associations don't make it to "Acceptance." Instead, a small group of owners will lead a charge to recall the board and stop the repairs. Sitting directors will often throw up their hands and resign or be recalled. The new board then shuts down all work and fires everyone in sight. This usually leads to litigation from owners who are suffering from water intrusion and mold. Finally, after costly litigation, the association is forced to make the repairs originally proposed; only now they have legal fees and the repairs are more expensive. Recommendation: Make the repairs. It's cheaper in the long run."

 



FYI - JANUARY 2008 -   "Sticks and stones may break my bones but words may never hurt me."

Words can actually hurt a person, or an association. I should note that physical violence or threats are never the answer to words that hurt, damage the reputation, or misstate someone's intentions. But a decision does need to be made about whether to do something about such words, or "turn the other cheek."

In our world of HOAs the association generally has better access to legal counsel, and the funds to pay for it (assessments).  Individual owners do not enjoy this kind of access. Most lawyers with considerable HOA knowledge and experience will only represent HOAs and not homeowners. The fact is that this creates a lot of stress for the owners who are not happy with their HOA. And so, owners tend to be a lot more critical of the Board and individual directors, than the board is of the individuals. But that is not to say that Boards are always innocent either. Board members can be the worst offenders. Boards have been known to defame owners and vendors, when frustrated that things are not getting resolved, and some associations have paid dearly for that. So this FYI is simply a cautionary tale, and a notice of help that is available.

In California there are statutes that define defamation and guarantee certain rights. Civil Code Section 43 is one. It says that "every person has, subject to the qualifications and restrictions provided by law, the right of protection from bodily restraint or harm, from personal insult, from defamation, and from injury to his personal relations". "Defamation includes libel (written and published) and slander (oral) (Civil Code Section 44). Civil Code Sections 45 and 45a define and explain libel which is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation." Civil Code Sections 46 and 47 define and explain slander which is "a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which: ...charges any person with crime, or with having been indicted, convicted, or punished for crime; ... Imputes in him the present existence of an infectious, contagious, or loathsome disease; ...Tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits; ...Imputes to him impotence or a want of chastity; or ...Which, by natural consequence, causes actual damage."  Under CC 46 and 47, if a person says or publishes something to another that says (for examples of this) another person is a thief or embezzler, is mentally ill, or incompetent, or is a liar, the subject of the comments may be able to sue for slander and get a monetary damages award without having to prove monetary losses.

Defamation happened in a case in Colorado and an HOA and Board members received a judgment of $10,000 because of an owner's comments published on websites. The Judge also issued an injunction that prevented the owner from publishing further certain derogatory information and also [enjoined] future conduct stating: "Within 15 days of this Order, the Plaintiff shall contact the American Homeowners Resource Center, the Gazette YourHub, and any other internet website or blog on which she has posted contributions and shall request that all postings made by her which identify or name the B Lazy M Ranch Owners Association, the names of its property owners, or the names of its past and present board members, be removed from said website or blog. Within 30 days of this Order, the Plaintiff shall file with the Court and provide copies to opposing counsel proof of compliance with this Order."

The judgment in this case is still subject to appeal, and is not binding law in California, but it is illustrative of what a Judge could find, and do, when someone defames another. The best defense is to publish facts, and not innuendos, accusations, suppositions, hypotheticals, or assumptions. In the past few years in California, there have been judgments against associations for slandering contractors, one in the amount of $7,000,000 which "crippled" the association and its members. There is more about this on my website/blog and the subject will be covered in upcoming publications and classes.

Please send me an email if you want to get on my class list. I already have two classes scheduled in 2008, the middle Wednesdays of January and February, Brown Bag lunch style, on aspects of enforcement in smoking, noise and neighbor-to-neighbor issues, and dispute resolution, diffusing battles, and defamation, in more detail .

  copyright 2008, Beth Grimm, all rights reserved