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  • Frank Rizzi manages Bos Commercial in West Covina and has been in real estate since 1988. Since then, he has made millions for his investors over the last decade.

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Undesirable Neighbors in Condo or HOA

Someone next door is bringing in the homeless – is that a problem with a solution? I get many questions about neighborhood issues. The rights of owners in a Condo or HOA are different than those in a subdivision without a homeowners association. There are more options in an HOA or Condo than the regular old subdivision – so there … there are some good things about being in an association! (Some people wonder because there is a disturbing amount of “bad press” out there.)

Here’s the email I received about homeless trouble makers. It’s not a crime or necessarily a bad thing if you want to take in a homeless person to help them out, but it can create problems. Read on.

“We live in [city eliminated to protect the writer], CA in a complex.We have a neighbor that has been disturbing the peace and quiet as well as bringing “friends” that are homeless .One of the neighbors saw him destroying property from common area. He has a record with the police who seem to be unable to do anything. Cars have been vandalized, property from porches has been stolen but no proof can be gathered.The only thing we can pin him for is disturbing the peace and quiet. Is there something the HOA can do ?”

I am not sure how the “homeless” contingent fits in here – maybe it’s the homeless person’s unfortunate luck to be associated with a “trouble maker” but to make sure I cover the question to best I can (addressing troublemakers and homeless hanging around HOAs), I will keep both topics in mind.

For people who violate rules, check the association documents for all the rights and remedies. Boards usually can consider disciplinary action (which could include fines, penalties, reimbursement assessments, suspension of rights, etc.) upon the owner of a unit for actions of any of the residents or guests allowed in the unit (whether the homeless, their friends on probation, the problem child, the senile great aunt, etc.) if they have “enough” proof, which may even include only “circumstantial evidence”. The law requires various forms of “due process” including notice of the problem and a hearing, circulation of (fine) penalty schedules to the members and the like. Some attorneys even say that there has to be a witness and the accused must have the opportunity to “cross examine” the witness.

I don’t go that far. If there are a number of problems surrounding a unit that begin when new residents move into the neighborhood, suspicion about those residents and their “guests” or visitors might be justified and so additional “investigative” measures might be smart. Calling them to a hearing might elicit further information – in fact – many “guilty” parties cannot wait to tell the Board why they have a right to do what they are doing or why the Board can’t do anything about it. Who needs a witness for that?

For people who are homeless and “hang around” – the police can be called and yes, people in HOAs and Condos have the same right to police protection as those who do not live in the HOA or Condo, as we all pay taxes for police protection and anyone who hangs around who does not belong on the property is trespassing.

So what is better about being in an HOA or Condo? (1) There are usually specific rules, (2) there is an association that has enforcement powers, (3) the Board usually can do something to address a nuisance, and, last but not least, (4) owners can also enforce the rules!

Yes, cities can do code enforcement in a subdivision; however, the (1) rules and boundaries are not generally as clear between code violations and CC&Rs (as the recorded regulations are called in California) and rules, (2) there may not be enough teeth in codes regarding nuisance situations, and (3) many municipalities lack the resources to address code violations.

So there you have it. In an HOA or Condo you have two possible layers of enforcement, i.e., code ordinance by municipality (yes, code ordinance enforcement applies in HOAs too), and board or neighbor for neighbor nuisance situations.

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Pros and Cons of “Good Standing” Qualifications

What does “good standing” mean and why would anyone like it?

These are my thoughts on the subject. “Good standing” means current with regard to payments of assessments and not in violation of any governing document provisions, including the CC&Rs and Rules. I believe having a “good standing” requirement is great – for board member service. If the Bylaws or CC&Rs provide for it, it assures that the Board sets a good example for the membership, and respects the obligations of the governing documents. If the documents provide, a board member who does not qualify or falls out of “good standing” can be “ousted”.

As to voting, it is my belief that requiring members to be in “good standing” to be allowed to vote complicates elections and due process procedures within the community. Generally, my experience indicates that members who violate the regulations or fail to pay assessments don’t care if their voting privileges are revoked (and generally don’t even bother to return proxies – although they may attend meetings just to stir up issues).

As for use of the Association facilities, it may work well as a deterrent to poor conduct in the case of pool or clubhouse use. In other words, if a member must be in “good standing” to use the association facilities (or to allow the tenant to use the facilities), bad conduct may be minimized. A violation of the pool rules is a violation of the governing documents.

In associations with documents that do require owners be in “good standing” to vote at elections, I find that some Boards tend to apply the “good standing” requirement only sporadically or with regard to controversial issues (often just to keep members from voting who they don’t like or keep people out of the pool that they do not like). In the course of using it, boards often fail to provide owners with adequate notice and a hearing (arguably required for such disciplinary actions) that voting or facilities privileges will be revoked because of an outstanding violation or non-payment of assessments. That conduct could be found to be improper on the part of the Board.

Borrowing from Reserves – Not Contributing? What’s the Difference?

Maybe this goes on in your association? It apparently happens alot, without too much worry.

Comment from reader: “Our Manager pays everything through the operating funds. We feel he must be borrowing from the reserves, but he says it is not borrowing – he just doesn’t put the reserve money into the account because he needs the money for expenses. We’ve questioned the accountability of this, but again he sidesteps just says this is how it is done.”

Is diverting reserve allocations from the reserves the same as borrowing from the reserves? It’s understandable that some would distinguish the two simply because there are no funds removed from the accounts. However, the effect is the same. The action leaves the reserves funds short of what is budgeted, and that means short of the expectation of membes based on the annual budget projections.

And I would venture to say that this practice played a large part in the tightening up of the reserves law in California and lead to requirements to notify the members if the Board is considering borrowing from the reserves, before the decision is made.

Since the health of the reserves accounts is of utmost importance to the members, if action is taken by the Board that diverts funds or results in borrowing from the funds, the members should be made aware of this. As of this year, there is legislation that requires information be disclosed to owners on this kind of thing on an annual basis, including disclosure of loans when the payments are made from reserve allocations. Some of the disclosures are not effectively required until January 1, 2009. Still, the disclosure of events leading to a reserve shortage needs to be made in a more timely fashion if the diversion of reserve funds can be equated to borrowing or taking money out of the reserves for a purpose that is not related to budgeted reserve expenditures.

Can We Save By Drafting Our Own Document Amendments?

This is a question I frequently have to answer: “We put together a CC&R committee last year and came up with a revised set of CC&Rs by taking our old ones and redlining them – can you review it and let us know if it is OK?”

The natural assumption of the Association Board or Committee Member is that it should be a lot cheaper if they do the drafting; at least that seems to be the case in California. So a group of people gather CC&Rs from their HOA friends, go to the library and pull the Davis Stirling Act, and have at it.

Then … I have to tell them that it may cost more to get a good set of updated documents, because now I have at least double everything to review (the original documents, the changes, and often a list of board or committee notes, minutes, thoughts and concerns). I have to expend extra time and energy looking for what is missing and what needs to be written, and trying, in a nice way, to let the bodies that spent their whole last year working on this project that it is quite faulty.

Think about it – if a committee has among its members an HOA expert, they do not need the review of an HOA expert. If they do not, the documents are likely to be inexpertly written, so then I have to spend as much or more energy telling the Board and Committee members why I cannot use many of their provisions as I would just providing well written provisions. I am good at massaging egos but I would always rather preserve my energy for doing the best job possible. I, like many attorneys, have a format for amended or restated governing documents that is user friendly. I do not often find older documents that are in a format that is user friendly. I know the basis things that are in my documents related to current laws (and California seems to be annually prolific on adding new ones) are up to date, accurate and understandable. When I get a committee draft it is like looking for needles in a haystack, and making sure all are found before finishing the review.

And the other problem is of course that the Board and Committee members are sometimes hurt (pride of authorship) if their writing is picked apart. Sometimes they are even too bent out of shape to work with the one who had to tell them their work was inadequate or to keep the steam up on taking the project to fruition, which involves (in successful campaigns) a lot more work on the campaign end of things, like contacting owners and discussing the changes with them. In many cases a telephone calling or door-to-door campaign is necessary to garner enough interest to get enough votes back to pass amendments to the governing documents like the CC&Rs. If the Board or Committee is too frustrated with me for suggesting changes to their work product, the project becomes much more difficult (and it is a challenge to begin with).

I love working with boards and committees to rewrite, update and amend documents. When an attorney has a high level of knowledge of cases, laws, and experiential disasters from solving problems other boards have gotten themselves into, others in the room can be quite impressed, and that is gratifying.

So the answer is “no” – writing CC&Rs, Bylaws and other association documents should be left to the experts. Helping the Association’s expert is the key, and that involves the willingness to answer questions of the attorney, read the drafts and participate in the meeting(s) where feedback and education about the provisions is requested or offered.

Are Board Members Entitled to See HOA Records?

The association records belong to the association, and if records are being withheld from a board member, that is a problem. But the ultimate decision on any request is the responsibility of the Board. The manager would be acting on behalf of the Association in most situations (a look at the contract would disclose this). Thus I believe that the Association would be the proper party to be sued in any action to seek redress for failure to provide the records.

As to rights, Board members have the right to see all corporate (association) records under Corporations Code Section 8334 which says:

“8334. Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the
corporation of which such person is a director.”

There is a cavaet. In a case, King v. Oakmore Homes, a director sued to see proxies from an election, and the court said no. There was some discussion in the case that Mr. King might want to see the proxies to see if people who promised to vote for him did, but the court said since he was elected, he did not need to see the proxies. So there are times when a board might be entitled to withhold records, if there is reason to believe there might be an improper purpose in seeing the records. In some cases where a board believes that a director may disclose confidential records inappropriately, it may be okay to withhold records, but it would be important to get legal advice in a situation like that.

The series of Corporation Codes allowing for inspection of records AND Civil Code Section 1365.2 which allows for inspection of many association records by an owner both have provisions for recovery of attorney fees for an unlawful refusal to provide or allow inspection of the records covered. Civil Code Section 1365.2 also allows for a $500 fine for each violation.

So it is important for boards and managers to understand what must be provided. There are specific timelines discussed in the laws.

Screaming Babies – Can You Sue Them For Nuisance?

The following is a very difficult set of facts. Some situations are just not conducive to litigation or punishment until it can be established that the parties are not making any compromises or working to find a mutual solution.

Kid noise is the source of many disputes in condominiums and townhomes. It can be a problem in apartments too, but it is easier for a party that is a renter to leave an apartment and find another place to live. And keep in mind that “it takes two to tango” as they say.

Here are the facts as presented to me:

“We are renting a condominium from a friend and have a 1 1/2 year old toddler. On occasion, he has a tendency to scream quite loud, whether it is because he is upset or just wanting to let out steam. To our knowledge, his screaming has never occurred before 9 am. Our neighbors have complained to us about the “noise” coming from our unit since the day we moved in and have now taken the issue up with the HOA.

We got a visit from one of the HOA members yesterday who wants to find a solution before involving the landlord and deciding disciplinary action against them.

We do not understand our rights as renters and what we are supposed to do in this situation. We do not encourage our son to scream, but at his age we do not know what recourse we have. We are doing our best to re-direct his energy into different activities, but we also believe it is a normal phase toddlers go through at his age. We have been in our unit for less than 5 months and have been bothered with this issue on three different occasions.

Do you have any advice? And does the HOA have any legal recourse against us?”

First of all, let me say “kudos” to the board member for seeking some kind of resolution before meting out punishment on the landlord or anyone else.

Let’s say that you are the decision maker in this situation having to mete out the punishment, if there is to be any. Who do you think should “win” if a legal battle ensues? Do you think anyone should be punished in this situation?

If you have kids or grandkids that are hyperactive, easily excitable, colicky or just plain heavy footed or noisy, you will sympathize with the tenants who have the child screamer.

If you are single or a couple without children or with perfect children, work at home, work nights and sleep days, are a senior citizen who has “paid his or her dues” and are looking for a peaceful place to live, or are disturbed by loud and unpleasant noises, you will most certainly side with the complaining neighbor.

If you are an HOA lawyer without compassion you might say that any loud noises of this magnitude are a disturbance and should be punishable by the full extent of the authority of the governing documents. Or you might be inclined just the opposite to say this is not the board’s problem, that it is a neighbor to neighbor dispute and the board should not get involved.

As for legal rights, the board could impose discipline on the owner of the property including fines, suspension of some of the rights of owners (and tenants by delegation) and the like, according to what the governing documents allow, for each incident. And the board could likewise probably opt out of the dispute and refer the parties to a local mediation service. If taking action against the owner for the screaming baby noise, the board would want to be careful to avoid any action that could be perceived as discriminatory, meaning a violation of the constitutional protections for families with children.

So who is right? Everyone? … No One? Here are some things I would recommend that the parties consider:

The Renters With the Screaming Child

Move: If you can move to a new place with better insulation or a home without party walls, life will be simpler. Of course, this may not be possible for financial or other reasons.

Check with a medical doctor, psychologist or behaviorist that works with toddlers to see if there is anything that can be done to help the child cope or hel  you (the parents) deal with the screaming in a manner that minimizes it.Perhaps there is some solution involving a distraction, supplement, food, medication, or something else that can be used to assist in the situation. It would make sense to keep a log of incidents, times, and circumstances surrounding the screaming incidents both for your own use, for informational purposes for any provider, and/or for a documented record in case there are allegations made of noise when it is not your child.

If You Are The Complainer

Remember, every time the child is screaming the parents have a front row seat and so it is at least as disturbing to the parent, and actually doubly so since they have to endure the baby noise, and the neighbors’ wrath. Be glad you are not the parent having to cope with complaints about a condition that seems unresolvable related to children noise.

Get some noise cancelling headphones and be glad that the noise is not caused by a stereo with extra high def base on and surround sound speakers placed on a hardwood, laminate or tile floor.

Get surround sound and when the screaming starts turn on a movie about a car race, something like Thunder Road or a musical, or turn on the stereo and listen to some lively music (not so loud it disturbs the neighbors).

Indicate to the neighbor a willingness to talk about the situation and see if there is something you can do to work things out.

Should the Agenda Law for HOAs and Condos Be Manipulated?

Here is a straighforward question … and a straightforward answer:

“Hi there, our board just began putting the following on the top of each Agenda they send out, “Items may be added to the agenda prior to the meeting called to order. This seems to conflict with the new agenda law – yes – no?”

Yes, this seems to conflict with the California law requiring HOA and Condo Association Boards to provide owners notice of the Agenda before each board meeting, and to limit actions to what is on the agenda, with exceptions for handling emergencies. Maybe this is the Board’s way of preparing for emergencies, but it has the appearance of a misunderstanding of the Agenda law.