Susan M. Hawks McClintic, Esq., Author at Epsten, APC

Diversity, Equity and Inclusion in Community Associations

Susan M. Hawks McClintic, Esq., CCAL

Shareholder

858.527.0111
Email
Practices: Community Association Counsel | Commercial CID

Share this article:

DEI is a term you might be hearing and reading about in the news lately. DEI stands for diversity, equity and inclusion. DEI is tied to civil rights laws and preventing discrimination in employment and housing based on someone’s characteristics. In California, the characteristics protected by law include:

Race, color, ancestry, national origin, citizenship, immigration status, primary language, religion, disability (mental or physical), sex and gender, sexual orientation, gender identity or expression, genetic information, age, familial status, source of income, medical condition, marital status, military or veteran status, or citizenship.

At its core, DEI is about providing equal housing opportunities without harassment or discrimination based on these characteristics.

In California housing, including community associations, harassment of someone because of these protected characteristics is prohibited by the law. Harassment includes verbal, written, or physical conduct that belittles or shows hostility toward an individual on the basis of these characteristics. If a community association receives allegations of behavior that might constitute harassment the association is obligated to investigate and address any behavior which may be unlawful to the extent the association has the authority to do so in its governing documents. The behavior may be subtle, rather than overt, and may be an accumulation of seemingly small events that result in someone feeling unwelcome in the community.

If any incidents between community members, residents and guests are reported to the community association, they may not specifically refer to harassment or discrimination. The person reporting an incident or incidents may not use those specific terms or even be aware they might have harassment or discrimination claims. Whether the report raises those concerns or not, the association should be aware of the potential for harassment or discrimination to be the basis for the behavior described in the allegations.

When the association receives a claim of an incident between community members, residents and/or guests, the board should determine whether the alleged behavior, if true, is behavior that might violate the association’s governing documents and/or which may be unlawful harassment or discrimination. If there is insufficient information to make this determination, more investigation may be needed to attempt to verify what occurred and to evaluate whether any enforcement action against the alleged offender is needed.

It is understandable that if faced with allegations of harassment, board members may not feel qualified to investigate and determine whether a neighbor’s alleged harassing conduct was based on discriminationatory factors. Remember that in many cases, the board may not need to definitively determine whether the alleged conduct was based on discriminatory behavior. Harassing behavior can be a violation of the governing documents regardless of the reasons for the behavior.

Any investigation should be fair and impartial and appropriate in scope to the allegations made. This process is similar to any other investigation of violations of the governing documents but the subject matter is likely to be more sensitive and personal than other types of potential violation investigations. The board and management need to be sensitive to the nature of the complaint and in some situations may want to bring in a third party to perform the investigation particularly if the allegations are made against a board member or manager.

If the allegations are made against a board member or manager, that person should not be part of the group investigating the allegations or be involved in making any decisions as a result of the investigation. The association’s investigation should be as fair and impartial as possible and, in some situations may be best handled by a third party to try to avoid any claims of bias or favoritism in the investigation process.

At the conclusion of the investigation, the board or committee created by the board to investigate the reported incident(s) will determine what they believe occurred, whether what occurred violates the governing documents and whether to take any disciplinary action or other steps. (Generally, any unlawful harassment based on the characteristics protected by the law will be a violation of the association’s governing documents. This should be addressed by the association with its legal counsel.)

The association’s objective is to provide an environment free from harassment and discrimination. It is important for community association leaders to be able to recognize when a situation might involve unlawful harassment and discrimination and understand the potential role of the community association when situations arise within the community association which may constitute unlawful harassment. Community association leaders are not expected to be experts in identifying and evaluating unlawful harassment but rather to be aware of circumstances where investigation and expert assistance may be needed.

Association Loans?

Share this article

Susan M. Hawks McClintic, Esq,. CCAL
Shareholder

Jon H. Epsten, Esq., CCAL
Shareholder

You may have heard that the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27, 2020 includes the Paycheck Protection Program (“PPP”) to help businesses keep operating during this pandemic.

The PPP gives small businesses access to short-term cash flow assistance to help cover operating expenses, including payroll. Loans received under the PPP are forgivable under certain circumstances, meaning all or a portion may not be required to be prepaid. A primary goal of the PPP loan program is to help businesses keep or rehire employees once businesses can return to normal operations.

It is uncertain whether community associations or property owner associations are considered businesses which are eligible to receive loans under the PPP.

The loan applications are being administered by some FDIC banks so we encourage any associations with employees to discuss the PPP program with their bankers as soon as possible, as it is expected that funds will be depleted soon.

Other loan programs may be available to community associations and property owner associations through the Small Business Administration (SBA) or the association’s bank. In addition to the PPP loan program, the Economic Injury Disaster Loan (EIDL) program is gaining attention. These loan programs, including the qualifications and applications, can be found on the SBA website (www.sba.gov).

Emergency Rules – Discretionary or Not Discretionary? That is the Question

Susan M. Hawks McClintic, Esq., CCAL

Shareholder

858.527.0111
Email
Practices: Community Association Counsel | Commercial CID

Share this article:

We are all being forced to address issues and make decisions that even a month ago, we did not imagine. Boards of directors and managers are put in the position of responding to Federal, state and local government orders that impact their communities while trying to make decisions for the overall well-being of the residents of their communities.

In responding to these government orders and the COVID-19 pandemic, does the board need to adopt rules to address changes in common area use, conduct of meetings and other related issues? We believe the answer depends on whether the board is responding to mandatory government orders or taking discretionary actions.

Since the shelter-in-place order from Governor Newsom went into effect on Thursday, March 19, 2020 and the various orders from counties and cities have been issued, some California community associations have either elected or been ordered to close some or all of their common area amenities during this pandemic.

If your county has ordered your community association to close some or even all of your association’s common area amenities, then we do not believe that your community association is required to adopt emergency rules to comply with these closures because they are required by law and the board has no discretion regarding those closures. (Civil Code section 4355(b)(4)). Note that if the board wants to adopt rules to address the closures, the board can do so under Civil Code section 4360(d) without following the usual process of notifying the owners of the proposed rules and allowing a comment period.

If your community association has taken a proactive approach and closed common area facilities that are not required to be closed under a government order or made other changes in use of the common area in an attempt to protect the health and well-being of the community’s residents, then we recommend adopting an emergency rule regarding those discretionary common area closures or changes in use. This same approach should be applied to any other discretionary emergency rules your board makes in response to this COVID-19 pandemic.

Civil Code section 4360(d) of the Davis Stirling Common Interest Development Act allows community associations to adopt emergency rules without first receiving member comments if “an immediate rule change is required to address an imminent threat to public health or safety or an imminent risk of substantial economic loss to the association.” The caveat is that an emergency rule is only effective for 120 days (unless the rule provides for a shorter period) AND the emergency rule cannot be readopted under the same procedure.

If your community association is contemplating adopting such a discretionary emergency rule, then the board should meet (via emergency meeting procedures, if necessary) to determine whether the proposed rule must be adopted to address an imminent threat to public health and safety. If the answer is “yes”, then the rule must be drafted and the community notified of the new emergency rule. If the board anticipates that the emergency rule must be effective for longer than 120 days, then during that 120-day period, the association should readopt the emergency rule using the rule-making procedures outlined in Civil Code section 4360(a)-(c). (See below.)

Civil Code §4360. Rule-Making Procedures

(a) The board shall provide general notice pursuant to Section 4045 of a proposed rule change at least 28 days before making the rule change. The notice shall include the text of the proposed rule change and a description of the purpose and effect of the proposed rule change. Notice is not required under this subdivision if the board determines that an immediate rule change is necessary to address an imminent threat to public health or safety or imminent risk of substantial economic loss to the association.

(b) A decision on a proposed rule change shall be made at a board meeting, after consideration of any comments made by association members.

(c) As soon as possible after making a rule change, but not more than 15 days after making the rule change, the board shall deliver general notice pursuant to Section 4045 of the rule change. If the rule change was an emergency rule change made under subdivision (d), the notice shall include the text of the rule change, a description of the purpose and effect of the rule change, and the date that the rule change expires.

(d) If the board determines that an immediate rule change is required to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the association, it may make an emergency rule change, and no notice is required, as specified in subdivision (a). An emergency rule change is effective for 120 days, unless the rule change provides for a shorter effective period. A rule change made under this subdivision may not be readopted under this subdivision.

AB 2912: Fraud & Embezzlement Prevention Adds New Requirements for Community Associations and Management

By Susan M. Hawks McClintic, Esq.

The new law effective January 1, 2019, which will likely have the greatest impact on most community associations is AB 2912 addressing association finances.

AB 2912 adds or amends Civil Code sections 5380, 5500, 5501, 5502 and 5806. These new laws add the following requirements:

Associations must maintain fidelity bond/insurance coverage in a minimum amount equal to or exceeding current reserves, plus three months of assessments. The association’s fidelity bond/insurance must include computer fraud and funds transfer fraud. If the association uses a managing agent or management company, the association’s fidelity bond coverage shall additionally include dishonest acts by that person or entity and its employees.
Any transfers greater than $10,000 or 5% of an association’s total combined reserve and operating account deposits, whichever is lower, are prohibited without prior written approval from the board.
The board must review various financial documents and statements on at least a monthly basis rather than quarterly. These documents and statements include the check register, monthly general ledger, and delinquent assessment receivable reports. This review requirement may be met when every member of the board, or a subcommittee of the board including the treasurer and at least one other board member, reviews these documents and statements independent of a board meeting if the review is ratified at the board meeting subsequent to the review and that ratification is reflected in the minutes of that meeting.

As a result of this new law, the board may need to take the following actions:

Include fidelity coverage in the budget and be sure any existing coverage meets the minimum requirements.
Address fund transfer limitations in any management agreement and in other instructions and authorizations to management.
Set up a board subcommittee to review financials monthly.

Creating Community: From Developers to Community Associations

By Susan M. Hawks McClintic, Esq.

If you are looking for a newly built home in San Diego County, the odds are that home will be in a community association. When done right, community associations provide an immediate sense of community for new homeowners.

Community associations are typically found in condominiums or planned developments where the homeowners share common amenities such as pools, clubhouses, parks and playgrounds. According to a 2016 study by the Community Associations Institute, there are approximately 45,400 community associations in California, with an estimated 9.16 million residents.

In San Diego County, the vast majority of new homes are located in developments with community associations. Community associations are usually set up as a nonprofit corporation with a board of directors. While the development is being built, the board of directors consists of representatives of the developer and some homeowners.

Eventually, the association is turned over to the homeowners. This usually occurs after a certain number of properties have been sold. It’s important to have a good transition team, not only for the handover but also to set up long-term goals and success for the association.

“Strong, focused leadership at the outset of a community sets the tone for the future of the community,” said attorney Susan Hawks McClintic, co-managing shareholder at Epsten. “Developer representatives on the board of directors can play an important role in transitioning from constructing buildings to building relationships and a sense of community.”

The board of directors guides the community association. By serving on the board during the development, the developer is able to continue the vision of the original development plan. As the transition continues, that vision is passed on to the new homeowner board members.

“You may have heard some grumblings about someone monitoring whether you mow your lawn or paint your house the right color, but community associations offer many positives. Besides, do you want your neighbors to paint their house bright purple?” McClintic said. “In the 2016 study by the Community Associations Institute, 87 percent of the responding residents in community associations rated their experiences with the association as positive or neutral.”

It’s important for homeowners to get involved. Serving on the board is not for everyone, but all homeowners can attend meetings. Anyone interested in becoming a board member can learn the statutes and laws and get training on how to lead an effective association.

Homeowners need to share their vision of community from the start. Should it be a place with social events so neighbors can meet one another? Is a community garden important? What about quiet time? Planning some long-term goals is a great way to get the conversation started about the vision for the community.

Don’t hesitate to bring your ideas to the table. Working with the developer representatives on the board of directors is the best way to create a welcoming community and lay the groundwork for preserving the value of that community’s properties.

[1] This article was originally published by the San Diego Union-Tribune on August 16, 2017

It’s Short Term Rental Season. Do You Know What Your Governing Documents Allow?

By Susan M. Hawks McClintic, Esq.

*As published in Quorum Magazine, March 2017

Attorney Susan Hawks McClintic from the law firm of Epsten, APC presented “What You Need to Know About Short Term Rentals” at CAI-CV’s February 10, 2017 Educational Program Luncheon and Mini Trade Show. The following is a summary of the portion of the presentation regarding what to consider about short term rentals and your community association’s governing documents.

Do you know your community and what it wants?

The Los Angeles Times reported in “Coachella by the numbers: a breakdown of the festival’s $700-million impact” (April 22, 2016) that an estimated 9,000 renters were expected to stay in Airbnb homes during the 2016 Coachella and Stagecoach Music Festivals, which was double the amount of people from 2015. Consequently, real estate sales outlets are marketing to investment home buyers the profitability of renting out their residences as short term rental properties. Promotions include the lucrative rental income possibilities during the Coachella Valley festival season. And more and more of those investment home buyers are purchasing real estate here for the very purpose of increasing income by renting out their residences as short term rental properties. An impact of this trend is that long term single family rental properties are becoming more and more scarce.

As these music festivals and other events grow in popularity and frequency and the market of available short term rental properties increases, the frequency and variety of issues/problems for local community associations related to short term rentals will surge. Consequently, the time is now for Coachella Valley community associations to “take the temperature” of their community to determine whether prohibiting or allowing short term rentals is in the best interests of their community as a whole. Some fundamental questions to ask to arrive at an answer are: What is the make-up of the membership in the community? – Long term residents, Snowbirds, Rentalpreneurs? What are the common complaints the board of directors or the community manager are hearing from your membership? What do the majority of the homeowners in the community want?

Once the will of the community is known, the next step is to review the association’s governing documents to confirm that the language in these documents gives the community the ability to effectuate the community’s goals regarding short term rentals. No matter whether the community wants to eliminate, restrict, or allow short term rentals, the governing documents should at a minimum contain language which gives the association the needed tools to lessen any negative impacts of short term rentals upon the community. If your own association’s governing documents are lacking in this department it may be time to amend them.

Do your CC&Rs allow, prohibit or restrict short term rentals?

Community associations need the authority to allow, restrict, or prohibit short term rentals. The document which grants the association this authority is the CC&Rs. CC&Rs can allow short term rentals either by express language or silence. Conversely, prohibitions or restrictions of short term rentals must be expressly written into the CC&Rs. Unfortunately, not all CC&Rs contain clear, express language (i.e. “no owner shall rent their unit/lot/dwelling for less than thirty (30) consecutive days). Most commonly associations are forced to rely on older documents containing broad prohibitions such as “each separate interest shall be used for residential purposes only” or “the separate interests shall not be used for transient or hotel occupancy purposes.” But what does “residential purposes” or “transient or hotel occupancy purposes” mean? The first place to look for a definition is the rules and regulations. If the rules and regulations fail to offer any guidance, the association can adopt a rule that provides a definition. Another option is to define what a transient use is or what a residential purpose isn’t by looking at the city’s municipal code regarding short term rentals and occupancy. A strong argument can be made that if a homeowner needs to obtain a business license or permit from the city and/or pay transient occupancy tax to the city, then the residence is not being used for a residential purpose and is actually being used in a manner that is akin to a hotel or business use.

Do your CC&Rs Have Sufficient Nuisance Provisions?

Nuisance and/or harassment CC&Rs provisions are important tools an association has to lessen the negative impacts short term rentals can have in a community. Be sure, however, that the language of these provisions is broad enough to cover those impacts. To make this determination you need to examine the typical issues/problems your association experiences with short term rentals. For example, noise complaints, trash issues, or trespassing problems. Next, does the language of your CC&Rs nuisance and harassment provisions cast a wide enough net to cover these common complaints? If the answer is “no,” then amending your nuisance and/or harassment provisions is in order. An example of a broad nuisance provision is: “No one may engage in any type of harassment, illegal, noxious or offensive activity towards any owners, residents, association representatives, management representative, board members and/or vendors working in the community.”

Do you know your rules and regulations?

If your CC&Rs do not outright prohibit short term rentals, but rather allow them with or without restrictions , then your association needs to determine whether it should adopt rules to further regulate them. However, there is a caveat. Rules and regulations do not have the same presumption of reasonableness that is accorded to recorded covenants. You are probably thinking, “Ok, so what?” If rules and regulations are unreasonable that means they are not valid and, therefore, unenforceable. In order to have a chance of overcoming judicial challenge, the association must adopt rules that are reasonable and not arbitrary and capricious. What is “reasonable” you ask? Who knows? We do know what is considered “unreasonable.” A rule is unreasonable if it is (1) wholly arbitrary; (2) a violation of fundamental public policy; and (3) imposes a burden on the use of the affected land that far outweighs the benefit. Sui v. Price (2011) 196 CA4th 933. Besides making sure that the rules and regulations you adopt are reasonable, you also need to make sure that the CC&Rs give the association the authority to implement rules over the entire community and not just the common area. If your association’s CC&Rs contain limited rule making authority, any rule the association adopts regulating an owner’s use of their residence will be unenforceable.

Does your fine schedule contain appropriate fine amounts?

Are the fine amounts in your fine schedule high enough to deter behavior that would violate the short term rental restrictions/prohibitions? Remember that fines should be used as a deterrent rather punitively. The purpose of fines is not to make money for the association. However, to be a deterrent the fine amounts must be reasonably high because if the fine amounts are too low, then a landlord homeowner will consider the payment of a fine as the cost of doing business. So what fine amount is high enough to be considered reasonable, yet also be an effective deterrent? A strong argument can be made to support the idea that the fine amount should be the equivalent amount a homeowner would have received if they rented out their house in violation of the prohibition or restriction. A deterrent is something that discourages or restrains someone from acting. If a fine would prohibit an owner from making any sort of profit from renting out their home in violation of the governing documents, that is a great deterrent. Consequently, if a homeowner can rent out their house during Coachella for $5,000 a weekend, then the association should consider writing into its fine schedule language that states “a violation of the short term rental prohibition [or restriction] may result in a fine of up to $5,000 per violation.”

Do your rules and regulations have adequate lease and leasing requirements?

If your governing documents allow or even restrict short term rentals, then it may be helpful for your association’s rules to have lease and leasing requirements. These requirements provide the association the information it needs from the landlord homeowners regarding their tenants to be able to enforce its governing documents and protect the interests of the other residents.

Some lease and leasing requirements include:

Lease agreement must be in writing
The landlord homeowner must notify the association of the following information in writing at least a certain number of days before the lease begins:
- The names and contact information of all tenants
- The make, model and license plate number of all tenants’ vehicles
Copies of the lease must be provided to the association
The association must be provided with the address and telephone number where the landlord homeowner can be reached
Landlord must provide tenants with copies of the governing documents

Do your governing documents prohibit the advertising of short term rentals?

Does your association want to prohibit homeowners from advertising their homes as short term rentals? Know that unless your governing documents specifically state that short term rental advertising is a violation of the governing documents, then advertising is only circumstantial evidence of a violation. Having a specific fine amount for violating the advertisement prohibition that is high enough to deter homeowner landlords from violating this prohibition is also prudent.

Keep in mind that prohibiting advertising can be an administrative burden as it takes time for community managers to monitor the many various rental websites. However, an association can always request that other homeowners help monitor these websites if they so choose as long as the homeowner can send screen shots or print outs of the prohibited advertisement to the association.

Do your rules and regulations sufficiently address parking issues?

Does your association have parking issues during the festivals? If the answer is “yes,” then your association may want to consider implementing parking restrictions/prohibitions in an effort to combat those issues. Just remember that the parking restrictions/prohibitions must apply to all residents in the community equally and not just the homeowners who are renting their homes out to short term renters. For example, if your community experiences increased traffic congestion and disruptive, late night noise during the music festivals, then adopting a rule which prohibits all parking on the community streets during the music festivals may be in order.

The issues that come with having short term rentals in one’s community are not going away any time soon. Association communities will to continue to have to grapple with the problems that short term rentals bring. However, if your association is pro-active in making sure that the governing documents contain the appropriate definitions, restrictions and requirements, your association should have the tools it needs to address most problems that accompany short term rentals.

Pesticide Applications Made Without Using a Licensed Pest Control AB 2362

By Susan M. Hawks McClintic, Esq.

Beginning January 1, 2017, a common interest development association or its authorized agent must provide notice to an owner and any tenant if a pesticide is to be applied to a separate interest or common area without using a licensed pest control operator. Under certain circumstances, notice will also be required to owners and any tenants of separate interests adjacent to the area of application of the pesticide.

This new law is adopted as part of the Davis-Stirling Common Interest Development Act as Civil Code section 4777. Landlords and licensed pest control operators are already subject to these notice requirements which will be extended to include common interest development associations. The primary purpose of this new law is to apply the same notice requirements to pesticide applications by unlicensed pest control operators.

The definition of what constitutes a pesticide is very broad. “Pesticide” for purposes of this law includes any substance that is intended to be used to control, destroy, repel or mitigate any pest or organism, including antimicrobial pesticides. Spraying a can of pesticide purchased at a local store should be treated as a pesticide application for purposes of these notice requirements.

This law has a list of information that must be included in the notice such as the pests to be controlled, the name and brand of the pesticide and the approximate date, time and frequency of the application. The law also requires specific wording of a cautionary statement regarding pesticides that must be included in the notice.

If the pesticide application will be to a separate interest, at least 48 hours’ prior individual notice must be given to the owner and any tenant of that separate interest. If the application will be performed by broadcast applications (spread over an area greater than two square feet) or using total release foggers or aerosol sprays, the owner and any tenant in an adjacent separate interest that could reasonably be impacted by the pesticide must also receive the notice.

If the pesticide application will be to a common area, if practicable, notice must be posted in a conspicuous place in or around the common area in which the pesticide is to be applied. If posting notice isn’t practicable, individual notice must be given to the owner and any tenant of a separate interest that is adjacent to the common area.

After receipt of the notice, an owner or tenant can agree to an immediate pesticide application.

If the pest poses an imminent threat to health and safety, the notice may be posted after the pesticide application.

A copy of the written notice provided to any owner and tenant must be attached to the minutes of the board meeting immediately following the application of the pesticide.

As you can see, these notice requirements are very detailed and must be carefully followed. In my opinion, the simplest and best solution for most associations is to always use licensed pest control operators to apply any pesticides.

Davis-Stirling 2014: Mapping the Changes to Association Governance

By: Susan M. Hawks McClintic, Esq.

Davis-Stirling 2014 is here. Are you ready? While most of the changes to Davis-Stirling are merely reorganization with the language of many sections staying the same, there are some provisions that will change how a community association conducts business. The changes noted below range from notices of board meetings, voting on restated documents, and board member conflicts. Some of the changes may be seem small or not so different from what we’ve all been doing but remember, the devil is in the details!

Continue reading Davis-Stirling 2014: Mapping the Changes to Association Governance →

Condominium Plan: Understanding This Often Overlooked Governing Document

By: Susan Hawks McClintic, Esq.

There are many documents used or referred to in the management of a condominium project. The least understood and consulted is undoubtedly the condominium plan, even though it is referenced in every single deed to a condominium. Virtually every board member, association manager and attorney has read or analyzed the association’s Declaration of Covenants, Conditions and Restrictions, Bylaws and Articles of Incorporation a number of times. These documents are frequently consulted for answers to a multitude of questions regarding the rights and responsibilities of the association and its members. The condominium plan, however, is frequently overlooked. Although the contents and purpose of a condominium plan are limited, it has an important role to play in condominium management.

The term “condominium plan” is defined in Civil Code section 4120 and described in section 4285. It has three elements. First, it contains a description or “map” of the condominium project in reference to ground monuments. This means the location of the project is identified with respect to reference points on the ground, such as streets. The dimensions of the project will also be shown.

Second, the plan contains a three-dimensional description of the project in sufficient detail to identify the common areas and each unit. This means the plan will contain a description of the location, size and boundaries of each unit, the exclusive use common areas, and the common area. For example, the boundaries of each unit might be described as the unfinished interior surfaces of the perimeter walls, floors, ceilings, windows and doors. The location and dimensions of patios, balconies, parking spaces, and storage spaces may also be described in the plan.

Third, the condominium plan contains the consent of the record owner of the property and any lender to recordation of the plan. The original plan only requires the consent of the developer, who at the time the plan is prepared owns all of the property. However, once the project is built and sold, 100% of the members who collectively own the common area and 100% of all lenders on any unit must consent to any modification of the plan.

In terms of its use as a management tool, the condominium plan has two primary functions. The first primary function is the description of units versus common area. This is extremely important in the identification of maintenance responsibilities, which are often assigned according to whether a particular feature is common area, or part of a unit. The plan usually describes the boundaries of the unit (air space), and then lists those physical features which are either exclusive use common area or common area, and not part of the unit. Frequently, such items as bearing walls, pipes, wiring, and other utility installations (except the outlets within the unit) are identified as part of the common area. Garages, parking spaces, balconies, patios and other similar features are often identified on the condominium plan as either part of the unit or exclusive use common areas.

The second primary function of a condominium plan is the identification of exclusive use common areas. Often, parking or storage spaces, not physically connected to a unit, are identified in the plan on a plat map by location and identifying numbers. Then, when their identifying numbers are located on a deed, the plat map can be consulted to determine their exact location. Other condominium plans utilize a list format where each unit is matched up with its respective exclusive use common area, such as a patio, balcony, parking space, or storage space. The list can be consulted to identify the numbers of the exclusive use common areas belonging to any given unit, and then the plat map can be used to find their location. Though a variety of condominium plan formats can be used, the results are usually the same: fixing and identifying the location of units and their assigned exclusive use common areas.

One problem we have encountered is the “reassignment” by either boards of directors or owners themselves, of certain exclusive use common areas. For a variety of reasons, some associations have “rearranged” parking or storage space assignments, and owners are no longer using spaces originally assigned to their units on the condominium plan. Exclusive use common areas which are assigned pursuant to a condominium plan (and appear on the deed as well) are real property interests which cannot be changed without the property owner’s consent and appropriate documentation. Remember, changing the scheme set forth in the condominium plan in any way requires the written consent of 100% of the owners and 100% of the lenders on the units. If a board of directors or group of owners is contemplating action which will result in any deviation from the condominium plan, legal counsel should be consulted before taking that action.

It is likely the condominium plan will remain the least utilized of all the association’s documents. Yet, when maintenance, repair, location, or boundary issues arise, it may well be the document that should be consulted first. A copy should be kept with every association’s governing documents.

Senate Bill 563: Use of a Preauthorization Consent Form to Allow Emergency Decisions by Electronic Transmission

By Susan M. Hawks McClintic, Esq.

As many associations are aware, Senate Bill 563 (SB 563) will become effective on January 1, 2012. SB 563 makes various changes to board meeting requirements. One of these changes is to prohibit community association boards of directors from taking action on any item of business outside of a meeting. Boards should take note that this change prohibits actions by unanimous consent which had previously been allowed by Corporations Code Section 7211 and most community association bylaws.

A community association board of directors may not conduct a meeting via a series of electronic transmissions, such as electronic mail, except to conduct an emergency meeting. If there is an emergency, each board member must first consent in writing to taking an emergency action by electronic transmission. As a practical matter, this change suggests that use of an electronic transmission preauthorization consent form (“Consent Form”) might be helpful in facilitating board decisions in emergency circumstances.

A Consent Form would serve as a pre-approval form for all board members to sign their agreement to conduct emergency business by electronic transmission. This pre-approval could be limited to litigation and assessment collection matters or more broadly cover any emergency business of the community association. The written consent of each board member may be transmitted electronically. A sample Consent Form accompanies this article.

Once each board member consents to conducting an emergency meeting by electronic transmission, a quorum of the board must respond to any request for an emergency decision. Of those responding, a majority must approve the emergency decision unless the association’s governing documents require a higher approval percentage of the board members. Therefore, if all board members consent to using electronic mail for an emergency decision, unanimous consent is not required to approve the action item itself.

For purposes of this new law, emergencies are defined as “circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impractical to provide notice as required” by the statute. (Civil Code Section 1363.05) Before taking action on an emergency item, we recommend that the board create a record in the emergency meeting minutes of the facts which the board believes make the need for action an emergency.

As noted above, the impact of SB 563 is not limited to the areas discussed in this article. Boards of directors are strongly encouraged to consult with their associations’ legal counsel regarding the multiple changes to board meeting requirements and related statutes affected by SB 563.

ELECTRONIC TRANSMISSION PREAUTHORIZATION CONSENT FORM (“Consent Form”)

As of January 1, 2012, California Civil Code section 1363.05 prohibits a Board of Directors from conducting association business via electronic transmission, such as e-mail, except when an emergency exists. In order to conduct business via e-mail, the Board must unanimously consent to conduct emergency business via e-mail. This unanimous written consent to conduct emergency business via e-mail must be filed with the minutes of the next Board meeting every time the Board acts by electronic transmission.

An emergency exists if both of the following conditions apply:

1) There are circumstances that could not have been reasonably foreseen by

the Board; and

2) The circumstances require immediate attention and possible action by the

Board making it impracticable to provide a 4 day notice for an open Board

meeting or a 2 day notice for an executive session Board meeting.

This form serves as your consent for the Board to conduct emergency business, via electronic transmission, such as e-mail, in situations that meet both of the conditions listed above.

All Board members agree that prior to taking any action by electronic transmission, all Board members shall be sent an e-mail or other electronic transmission setting forth the item of business to be considered. Then, at least a quorum of the Board members must consider the facts that may make this item of business an emergency and determine whether an emergency exists.

Emergency action may only be taken if:

1) At least a quorum of the Board responds to the request for emergency action;

2) A majority of those responding agree that an emergency exists; and

3) A majority of those responding approve the item of business, unless the law or

the Association’s governing documents require a greater number of Board