AB 596 Signed! New FHA and VA Disclosures Required Beginning July 1, 2016
New Legislation
Civil Code Section 5300 requires a HOA to prepare and distribute to its members an annual budget report. The annual budget report serves as a consolidated disclosure statement which must include numerous items of information, such as information pertaining to the HOA's reserve funds, operating budget, and insurance policies.
In June of this year, we blogged about AB 596 (Daly), a bill proposed by the California Legislature that would require additional statements of information to be distributed with the annual budget report for condominium HOAs. Those statements would disclose the status of the condominium development as being a Federal Housing Administration ( FHA) approved condominium project or a Department of Veterans Affairs ( VA) approved condominium project...
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Modifying Enforcement Policies; Avoiding Claims of 'Selective Enforcement'
One problem that arises in the context of enforcing homeowners association ("HOA") governing documents pertains to how consistently certain use restrictions in the governing documents are enforced over time. For example, if a HOA has historically failed to enforce a particular restriction, a decision to enforce that restriction against a particular owner may subject the HOA to claims of "selective enforcement" and/or that the HOA's enforcement efforts are being exercised in an arbitrary and capricious fashion. These claims not only hinder the cost-efficient resolution of disputes, but could significantly undermine the HOA's enforcement authority.
It is therefore difficult for a HOA's Board of Directors to modify the HOA's enforcement policies over time, especially when it desires to enforce a use restriction that was either never enforced or enforced inconsistently by the HOA in the past. However, the recent unpublished opinion in The Villas in Whispering Palms v. Tempkin (Cal. App. 2015) 2015 WL 2395151 ("Villas") demonstrates that this difficulty may be overcome through providing proper notice to the HOA's members and through enforcing the restriction consistently thereafter...
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Occupancy Limitations and Homeowners Associations
On January 20, 2015, a tragic fire ripped through a condominium complex in the city of San Juan Capistrano, killing three, injuring six, and displacing eighty residents living in eight units. The decedents were three of seventeen individuals living in a four-bedroom condominium. In light of the deaths and their relation to the number of occupants living in the unit, efforts are now underway to examine state and local occupancy restrictions with an eye towards preventing an incident like this from occurring in the future. To that end, questions have surfaced with respect to an association's ability to adopt and enforce state and local occupancy standards, as well as to promulgate operating rules regulating the number of occupants living within a unit.
An association's "operating rules" are regulations adopted by the board that apply "generally to the management and operation of the common interest development or the conduct of the business and affairs of the association." (Civ. Code � 4340(a)) They relate to things such as the use of common area and separate interests, member discipline, and procedures for elections. (Civ. Code � 4355(a)(1)-(7)) In order to be valid and enforceable, the operating rule must meet several requirements: the rule must be (1) in writing, (2) within the authority of the Board of Directors conferred by law or the governing documents, (3) not in conflict with governing law and the governing documents, (4) adopted in good faith and in compliance with the procedural requirements set forth in Civil Code section 4360, and (5) reasonable. (Civ. Code � 4350) Accordingly, presuming that an occupancy rule is adopted by an association's board of directors pursuant to the powers granted to it under the governing documents, the primary focus is whether the occupancy rule conflicts with governing law (i.e., California law)...
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Increased Maintenance Requirements for HOA Pools in California
The requirements for operating and maintaining "public pools" have been subject to various regulatory changes in recent years. Those changes have impacted pools within private homeowners associations (HOAs), as the California Legislature and Department of Health have defined the term "public pools" to include pools located within private HOAs and residential developments. (Health & Safety Code �� 116049.1(a), 116064.2(a)(4)(B); 22 CCR � 65503(a)(9).) The more notable changes include those which mandate (1) new parameters for water characteristics, (2) strict monitoring of pool facilities and requirements for written records, (3) enforcement of specific safety and first aid equipment, (4) requirements that newly constructed public pool enclosures have at least one keyless exit and self closing latches, and (5) the imposition of health restrictions for employees or pool users...
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