Q. Can our HOA charge interest on owners’ accounts that have both unpaid assessments and unpaid fines? 

A. California law is silent on an association’s ability to charge interest on unpaid fines.  Unless the Association’s governing documents contain a provision that allows it to charge interest on unpaid fines, the Association would only be able to charge interest on past due assessments and related charges according to Civil Code section 5650(b)(3).  That provision allows the Association to charge an annual interest rate of up to 12% on past due assessments, reasonable fees and costs of collection, and any reasonable attorney fees the Association has incurred in trying to collect on the account. To avoid unlawful interest charges, the Association can either keep fines on an account separate from assessments, or make sure that any amounts owed in fines are not factored in to the interest charged on the account. – Elisa M. Perez, Esq.

Q&A.  How do you collect fines? What options do you have legally?

A. Civil Code prohibits an association from characterizing a fine as an assessment that may become a lien against the property. Therefore, the only way to collect would be to sue an owner. We recommend a lawsuit to recover fines be brought while the amount is within the jurisdiction of small claims court (max $5,000 per claim for associations) to minimize legal costs. Before suing, make sure the association has afforded the owner due process in accordance with Civil Code section 5855 (i.e. a properly noticed hearing and hearing results letter).  – Jillian M. Wright, Esq.

Q&A. Please review Anti-SLAPP… What is it? How to use/do it?

A. The acronym SLAPP stands for “Strategic Lawsuit Against Public Participation.”  In 1993, the California Legislature enacted Code of Civil Procedure §425.16 after finding a “disturbing increase” in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition.  The statute’s express aim is to provide a quick and inexpensive method of “nipping SLAPP litigation in the bud” by disposing of unmeritorious cases at the outset of a case where the litigant has misused the legal system to challenge the valid exercise of another party’s effort to petition a court for redress.  In the association context anti-slapp motions are not uncommon.  An example of a classic Association-related SLAPP suit (i.e. subject to being dismissed by an Anti-SLAPP motion) arises in the following scenario: An Association sues an Owner over a CC&R violation.  In response, the Owner files their own lawsuit claiming damages for the “emotional distress” caused by the Association’s lawsuit.  Since the Association has a constitutional right to file a lawsuit (right of petition), the Owner’s lawsuit is subject to an Anti-Slapp motion to strike.  Another example can arise in an election context.  Here an Owner may publicly criticize a candidate’s qualifications or motives (free speech).  If the candidate sues the commenting Owner for libel or slander, the Defendant-Owner can probably file an Anti-Slapp motion.  A defendant who believes they have been improperly sued for merely exercising their constitutional rights may file an Anti-SLAPP motion.  If the Defendant can demonstrate that the allegations arise from protected activity, the Plaintiff must then submit admissible evidence to the Court that demonstrates a likelihood of prevailing at trial.  If the motion is granted, the causes of action (possibly entire lawsuit) must be dismissed, and the court must award the Defendant attorney’s fees and costs.  This is a complicated and nusanced area of the law, and should only be litigated by a lawyer experienced in this area of law.  Joyce J. Kapsal, Esq. & William S. Budd, Esq.

Q&A. Re: Balcony Inspections. Homeowner has extended their balcony. Board of Directors believes they are responsible for maintenance up to the point of original construction?

A. In most condominium communities, the common area is defined as the entire community other than the units.  Typically, balconies are depicted on the condominium plan as a three-dimensional air space that is either a separate element of the living unit or exclusive use common area appurtenant to the unit.  The structural components of the balcony (just below and outside of the balcony airspace) are typically common area.  Because any extension of the balcony would not likely be described in the CC&Rs or depicted in the condominium plan, the extension would typically be common area.  And, since most CC&Rs generally obligate the association to maintain the common area, if there is no language in the CC&Rs to the contrary, the association would likely be responsible for maintaining, repairing, and replacing the balcony extension.  Associations that are considering allowing an owner to extend their unit into the common area should first consider whether membership approval is required under Civil Code section 4600 and whether an amendment to the Condominium Plan is necessary.  If approval is granted, the association should enter into a recorded agreement with the owner that shifts maintenance responsibility to the owner and his or her successors, and that requires the owner and all successors to indemnify the association against any claims relating to the association’s approval of the extension and the owner’s construction and maintenance of the extension. – David A. Kline, Esq.

Q&A. Re: Balcony Railings. Over the years, building codes keep reducing the allowable space between verticals. If legal spacing between verticals met the legal requirements in place at time of construction, do they have to be redone every time the code changes? (Insurance companies differ on Yes vs. No)

A. While all new construction is required to be in accordance with the Building Code in effect at the time of construction, there is no requirement that building owners upgrade existing construction to comply with changing codes.  That said, it is our opinion that even if a component in the community does not need to be brought to code, there are reasons it should be brought to code, i.e., safety. The primary reason building codes change is to enhance safety of persons.  In the balcony railing context, even if the balcony railings were built to code at the time of construction and thus are not required to be modified to comply with current code, an injured party could argue that an association should be liable for negligence under case law if someone is injured due to the widely spaced railings – even though the railings were “to code.”  Each case rests on its own facts, so it is difficult to speculate how a court will ultimately rule without  knowing the facts surrounding the event causing the injury.  Case law  (Jacobs Farm/Del Cabo, Inc. v. Western Farm Service, Inc. (2010) 190 Cal.App.4th 1502 and Amos v. Alpha Property Management (1999) 73 Cal.App.4th 895) essentially states that mere compliance with building codes is not sufficient to establish due care by a property owner.  If an owner requests to narrow their balcony railings or add protective barriers to the railings for safety reasons, the Board should consider this request in light of the above. Also as noted in the question, some insurance companies will require community associations to modify the railings or at least develop a plan and timeline for doing so.

Q&A. Can management companies do anything about bad yelp reviews? Such as former employees posing/posting as a home owner?

A. Unfortunately, you cannot get rid of a negative Yelp review just because it does not represent your business in the best light. The only way to remove a review is if the review itself is deemed inappropriate by Yelp Terms of Service. (The review is flagged and awaits a determination by the reviewing platform itself). That said, there are certainly actions that can be taken for “damage control.” As a general rule of thumb, monitor all reviews (good, bad or ugly) and, if possible, respond in a positive manner. This will allow you to give context to the comments and also exhibit a level of concern, which goes a long way with other readers. If you suspect the review has been fabricated, respond in a way that makes the fabrication obvious. For example, ask for specific information or for more detail. The reviewer will have a hard time concealing the true facts if you engage in this type of dialogue, offering to remedy the situation if one truly exists. – Trinette S. Sachrison, Esq.

Q&A. Most roofing companies void their warranties if another contractor penetrates the roof. How does solar panel installation affect existing roof warranties?

A. To use everyone’s favorite word from an attorney, it depends.  Initially its important to determine who holds the warranty(ies). For example, the contractor who installed the roofing system may offer a one year warranty on labor and materials, while the manufacturer of the roofing system offers a much longer warranty.  The best approach is to contact the warranty holder(s) and determine what needs to be done to maintain the warranty prior to any work being done. Oftentimes the warrantyholder(s) will want to inspect the solar energy system installation to make sure the roofing system was not damaged and all penetrations of it are sealed.  Please recall Civil Code section 714.1(a) allows an association to impose reasonable restrictions that: (1) provide for maintenance or repair of roofs & building components and (2) require installers to indemnify or reimburse the association for damage caused by installation or maintenance  of a solar energy system. – Kieran J. Purcell, Esq.

Q&A. Is the association required to have Worker’s Comp insurance if there are no employees?

A. No, the association is not required by law to have a workers’ compensation policy if the Association does not have any employees unless the Association’s governing documents specifically require the Association to have workers’ compensation insurance. However, if the Association utilizes any vendors or independent contractors, it is best to have a workers’ compensation policy in place to cover these independent contractors and employees of the vendors in situations where their own insurance is lacking or has lapsed.  The Association should always confirm with the independent contractors and vendors that they have workers compensation insurance prior to commencement of the work, but sometimes this important step is overlooked, especially for smaller projects.  Another reason to have a workers’ compensation policy is to cover the Association volunteers, including Board members. What if a Board member was driving someone to drop off paperwork at the manager’s office and was injured in a car accident? A workers’ compensation policy could provide coverage for this claim. The Association should consult with their insurance agent that has experience in association insurance policies to discuss the options available for the Association to obtain a workers’ compensation policy and what individuals can be covered under these policies. – Mandy D. Hexom, Esq.

1 Year CAI Membership Winner!

Congratulations to…Linda E. of Banning Estates HOA who won 1-year membership to CAI for her entire Board of Directors!
“I would like to re-join the CAI program. 
I feel it is worth while as a homeowner or a board member to continue to learn the rules and regulations that you (CAI & EG&H) continue to provide us with.