|
News & Info For Community Association Boards of Directors |
|
Pay HOA Dues On-Line - With a Credit Card!
HMC is proud to announce another service enhancement available to our clients via our website. Members may now visit HMC's home page and register with Paylease, LLC to make their HOA dues payment on-line using either a credit card or an e-check. This service can be used once, to make a last-minute payment, to avoid a late fee or it can be used to set-up any number of regular monthly, quarterly or annual payments. The service can be cancelled at any time and fees are only charged when a payment is processed. Funds are deposited directly into the HOA's operating account. Processing fees are paid by the member and in most cases will be less than a late payment fee. No fees are incurred by the association. Check out this new service here. |
|
Legal Issues
In this issue we highlight two important court cases which will likely affect all HOA's at some point.
First, we review a recent court case decided in December pertaining to maintenance and repair obligations for exclusive use areas. It's not always a matter of what's included in your CC&R's - sometimes it's what's NOT included. This case illustrates the importance of reviewing and updating the association's governing documents from time to time. Many updated CC&R's now include a quick reference maintenance matrix which illustrates on one or two pages who is responsible for each component, with reference to the specific section of the CC&R's. The association's reserve study component list should agree with the maintenance obligations in your governing documents. Also consider that as our communities age, some components previously excluded from the reserve study, like common area lateral sewer lines, may now have a remaining life expectancy of less than 30 years.
Next, we refer to a recent Court of Appeals decision involving a member's right to request a membership list and what information must be disclosed to the requestor. As an increasing number of individuals use email to communicate with the association and management, this issue becomes quite relevant. If you think your HOA members would want an opportunity to "opt-out" of having their email address shared with other members, you'll want to discuss this case with your community manager and decide how to address this proactively. |
|
EXCLUSIVE USE SEWER LINE LAWSUIT
In December, the courts decided another sewer line case that will impact many associations.
Line Replaced. Patrick Jennison had a leaky sewer pipe two feet beneath his condominium's concrete slab that vented sewage into his unit. The Dover Village Association cut through Jennison's floor, jack hammered the concrete slab underneath, and replaced 50 feet of sewer pipe that connected his condo to the main sewer line.
Owner Billed. Because the damaged line exclusively serviced Jennison's condo, the Association properly deemed it exclusive use common area. As provided for in the Davis-Stirling Act, HOAs are responsible for repairs to common areas while homeowners are responsible for their units and exclusive use common areas appurtenant to their units. Civil Code §1364(a). Accordingly, the Association billed Jennison for the $15,000 it spent repairing the line. Jennison refused to pay and the Association sued.
Court Review. The court examined the entire text Civil Code 1364(a), which states that owners are responsible for exclusive use common areas "unless otherwise provided in the declaration." Because the statute defers to an association's CC&Rs, the court turned to the Dover Village governing documents. It found that the CC&Rs were silent as to maintenance duties involving exclusive use sewer lines. The CC&Rs did, however, specifically designate patios and garages as exclusive use common areas to be maintained by owners. By expressly assigning maintenance duties for these exclusive use areas, the court concluded that all other exclusive use areas were the responsibility of the Association. Accordingly, the court found for Jennison and against Dover Village. Dover Village v. Jennison.
RECOMMENDATION: Most associations have outdated governing documents when it comes to maintenance duties. To avoid costly litigation, associations should update their documentsto clearly define maintenance responsibilities. Some associations make the HOA responsible for all maintenance. This usually results in higher monthly dues and occasional special assessments but spreads the cost across all owners. Other associations prefer to keep dues as low as possible and make individual owners responsible for their maintenance expenses as if they lived in a single family home. Both are legitimate policies but whichever one is selected must be clearly defined in the CC&Rs.
|
|
MEMBER RIGHTS TO E-MAIL LIST
The Court of Appeals recently decided a non-HOA case which will likely affect homeowner associations. The issue was the interpretation of a member's "address" in Corp. Code §8330(a). Until now, a member's address was his postal mailing address. The Court expanded the definition to include e-mail addresses for purposes of inspection and copying of membership lists. Worldmark v. Wyndham Resort.
HOA Membership Lists. HOAs are governed by a similar provision in Civil Code §1365.2(a)(1)(I)(1) which allows members to inspect and copy "Membership lists, including name, property address, and mailing address." Based on the court's broad interpretation of "address," we could expect a similar decision involving HOA mailing addresses. That means when a member requests a copy of the association's membership list, any e-mail addresses kept by the association should be included, except for those members who opt out.
Opt Out Rights. Because of e-mail overload, many owners do not want their e-mail addresses distributed to their neighbors. Fortunately, the Davis-Stirling Act allows owners to opt out of the sharing of such information:
"A member of the association may opt out of the sharing of his or her name, property address, and mailing address by notifying the association in writing that he or she prefers to be contacted via the alternative process described in subdivision (c) of Section 8330 of the Corporations Code. This opt-out shall remain in effect until changed by the member." Civil Code §1365.2(a)(1)(I)(2)(iii).
RECOMMENDATION: Unless associations wish to litigate the matter, boards should assume the court's ruling applies to HOAs. Accordingly, except for those owners who opt out, associations should disclose e-mail addresses to members who properly request a copy of the membership list. To avoid problems associated with the release of e-mail addresses, boards should have legal counsel prepare an opt-out form and circulate it to all owners.
Reprinted from Davis-Stirling.com by Adams Kessler PLC |
