What’s on Your Agenda?

By Jon H. Epsten, Esq., CCAL

Over the last several months, several questions concerning agendas have resurfaced. For ease of reading, I have listed some of these questions below with a shortened version of my responses.

Please be on the lookout for practice tips on preparing agendas in future publications.


Why do we need an agenda?

If the Board intends to discuss a matter at a board meeting, the topic must be on the agenda. No worries. A procedure exists for adding certain items to the agenda (discussed below).


How much topic detail is necessary on the Open Meeting agenda?

The purpose of the agenda is to place attendees on notice as to what is going to be discussed during the meeting. It is beneficial to have a well-thought-out agenda. Boilerplate agendas are discouraged. Look at your agenda objectively from an uninformed owner’s perspective. If you read your agenda, you would know what the Board discussed at the meeting. Think of the agenda as a legal document that can be used as a tool to defend the Association. An agenda is also a tool to reference historical matters, such as when the Board approved or considered an item.


Should the Executive Session Agenda have the exact details as the Open Meeting Agenda?

The Board needs to have a clear understanding of what can be discussed in Executive Session (ref. Civil Code section 4935). The Executive Session agenda should tie into what is allowed to be addressed in the Executive Session (e.g., legal matters, personnel matters, member discipline, assessment payment plans, etc.) The Executive Session agenda will have less detail than other meeting agendas, as the items to be discussed may be deemed privileged. For example, if the Executive Session discussion covers collection matters, the owner’s name should be omitted. Similarly, discussions of ongoing or anticipated litigation should be noted in the agenda in general terms. It is a good practice to briefly consult with legal counsel if you have any questions on the description of items to be placed on the Executive Session agenda.


Who should prepare the agenda?

Oddly enough, the law contains little guidance in this matter. While “the board” is ultimately responsible for deciding what goes on the agenda, the law does not state that any particular director or officer may determine what goes on the agenda. Unless there are rational and substantive reasons for rejecting a request from a director to add an item to the agenda, a requested agenda item should be included. Note that the Board determines what to include on the agenda, and there is no procedure for owners to dictate to the Board the agenda for board meetings. In smaller communities, the agenda is typically prepared by the association manager. In larger communities, the agenda is generally prepared by the General Manager in conjunction with a designated board member. In either event, we suggest that a board member (typically the Board Secretary) be appointed to work with the association manager on agenda topics.


What do we do if an owner raises a topic outside the agenda at an Open Board Meeting?

The law allows the Board, among other things, to briefly respond to statements or questions posed by a person speaking at a meeting, ask a question for clarification, make brief announcements, and make a brief report on the Board’s activities. However, unless the item falls into one of the categories listed below, it cannot be added to the agenda for that board meeting.


Can we add items to the agenda after it has been published to the Owners?

Yes, under certain circumstances (Civil Code section 4930(d)(1)(2)(3)] such as an emergency, where immediate action is needed or where the item appeared on the agenda 30 calendar days before the action is taken and at a prior meeting the item was continued. A board motion and vote must be taken to add the item under the conditions mentioned above to the agenda, and we recommend the minutes of that meeting reflect the motion to add the item and the particular statutory provision that would allow the addition of the item.


If you have any questions, please contact a member of our Community Associations legal team.

Court Rules Email Exchanges Without Board Action Are Not Board Meetings – Updated 2/12/24

*Updated 2/12/24

LNSU #1, LLC v. Alta Del Mar Coastal Collection Community Association, 2023 Cal. App. LEXIS 646.


Previously, we shared the ruling of the Court of Appeals for the Fourth Appellate District in LNSU#1 v. Alta Del Mar Coastal Collection Community Association (2023) 94 Cal. App. 5th 1050.  In that case, the court held that an email discussion among board members regarding items of association business did not violate the Open Meeting Act, because such email exchanges are not considered “board meetings” as that term is defined in Civil Code section 4090(a).

As a reminder, the case involved two homeowners who sued their homeowners association arguing, among other things, that the board violated the Open Meeting Act by conducting board meetings through a series of emails. The trial court found in favor of Alta Del Mar. The homeowners appealed and the Court of Appeals upheld the trial court’s decision.

It’s important to keep in mind that this ruling is limited to email discussions among board members.  It probably would not extend to a discussion among a quorum of the board physically present at the same time and place, because that likely would constitute a “board meeting” under Civil Code section 4090(a), even if the board took no action at that meeting.

It’s also important to remember that the purpose of the Open Meeting Act is to foster transparency.  Although email discussions might not violate the Open Meeting Act, those email exchanges could be discoverable in future litigation.  Certainly, discussions of agendas, date, time and place of meetings, and dissemination of necessary new information would appear to be (both before and after the Alta Del Mar decision) appropriate, wisdom dictates that the less a director uses email to discuss board business, homeowner personalities and conflicts, vendor qualifications and the like, the better.



The Court of Appeals for the Fourth Appellate District just held that an email discussion among board members regarding items of association business did not violate the Open Meeting Act, because such email exchanges are not considered “board meetings” as that term is defined in Civil Code section 4090(a).

Two homeowners sued their homeowners association Alta Del Mar Coastal Collection Community Association arguing, among other things, that the board violated the Open Meeting Act by conducting board meetings through a series of emails. The trial court found in favor of Alta Del Mar. The homeowners appealed and the Court of Appeals upheld the trial court’s decision.

The Court of Appeals explained that the definition of “board meeting” in Civil Code section 4090(a) refers to “a gathering of a quorum of the directors … at the same time and in the same physical location….” Consequently, the appellate court reasoned that emails sent by board members at different times from different physical locations did not constitute a “board meeting” within the meaning of Section 4090(a).

The Court of Appeals went on to explain that “[b]y discussing items of Association business in e-mails …, the directors did nothing contrary to the purpose of the [Open Meeting Act], because they took no action on those items in the e-mails. Although the [Open Meeting Act] prohibits the board from acting on items of Association business outside a board meeting…, it does not prohibit the board from discussing the items outside a meeting.” (Emphasis in original.)

Therefore, the appellate court concluded that the phrase, “board meeting,” as defined by Civil Code section 4090(a), refers to “an in-person gathering of a quorum of the directors of a homeowners association at the same time and in the same physical location for the purpose of talking about and taking action on items of association business. E-mail exchanges among directors on those items that occur before a board meeting and in which no action is taken on the items…do not constitute board meetings within the meaning of that provision.”

As momentous as this case is, caution must be exercised for the moment because it is possible that this decision may yet be altered, withdrawn from publication, or further appealed. Once the time to take any of these actions has expired, we will immediately issue an update. Please consult with your own legal counsel, if you have questions concerning the interpretation of this case.

The Corporate Transparency Act (Updated 2/1/2024)

*This article was updated on February 1, 2024.

By Kieran J. Purcell, Esq.

In an effort to enhance corporate transparency and combat money laundering, tax fraud, and other illicit activity, Congress passed The Corporate Transparency Act (CTA) in 2021.  The CTA will be enforced by the Financial Crimes Enforcement Network (FinCEN) of the United States Treasury. FinCEN published the Small Entity Compliance Guide (Guide)[1] to help small entities comply with the requirements of the Beneficial Ownership Information Reporting Rule (Reporting Rule) issued on September 30, 2022.[2]  Although the CTA applies to many types of small business entities, this article addresses some of the most frequently asked questions about how the CTA may apply to common interest developments (CIDs) after it goes into effect on January 1, 2024.

Who must file a Beneficial Ownership Information (BOI) Report?

The CTA requires certain entities to file beneficial ownership information (BOI) reports to FinCEN. These reports contain information about the entity itself and two categories of individuals: (1) beneficial owners and for domestic reporting companies created or registered after January 1, 2024,  (2) company applicants.  Generally, a beneficial owner is an individual who owns or controls at least 25 percent of a company or has substantial control over the company. A company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company.

When will initial BOI Reports be required?

BOI Reports can be filed electronically through FinCEN’s secure filing system beginning January 1, 2024. Reporting companies created or registered to do business before January 1, 2024, have until January 1, 2025, to file their initial BOI reports. Reporting companies created or registered after January 1, 2024, but before January 1, 2025, will have 90 calendar days from their creation/registration to file their initial reports. Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports. Additional information about the Reporting Rule and guidance materials are available at www.fincen.gov/boi.

Is my CID a Reporting Company?

“A reporting company is any entity that meets the ‘reporting company’ definition and does not qualify for an exemption. There are two categories of reporting companies: a ‘domestic reporting company’ and a ‘foreign reporting company.’”[3] This article only addresses domestic reporting companies. If your CID is a corporation created under United States laws, including laws of the individual states or Indian tribes, it is a domestic reporting company unless it meets one of twenty-three (23) exemptions.  For many CIDs, the most likely possible exemption is the large company exemption.

Is my CID eligible for a Large Company Exemption?

A CID qualifies for this exemption if it meets all of the following criteria.[4] It has more than twenty (20) full-time employees employed in the United States, the CID regularly conducts its business at a physical location in the United States, the CID filed a Federal income tax or information return in the United States for the previous year demonstrating more than $5,000,000 in gross receipts or sales.

My non-exempt CID is a Reporting Company; What do I do next?

If your CID is a reporting company, your next step is to identify its beneficial owners. “A  beneficial owner is any individual who, directly or indirectly: (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company.”[5] FinCEN expects that every reporting company will be able to identify and report one or more beneficial owner to FinCEN. If an individual qualifies as a beneficial owner, information about that individual must be reported to FinCEN in a reporting company’s BOI report.

“A reporting company can have multiple beneficial owners. For example, a reporting company could have several beneficial owners who exercise substantial control over the reporting company and may have no beneficial owners who own or control at least 25 percent of the ownership interests of the reporting company. There is no maximum number of beneficial owners who must be reported.”[6]

Which individuals exercise substantial control over the CID?

“Reporting companies are required to identify all individuals who exercise substantial control over the company. There is no limit to the number of individuals who can be reported for exercising substantial control. “[7]

While the Reporting Rules lists four (4) Substantial Control Indicators (SCIs) for determining the individual(s) who exercise(s) substantial control over a reporting company[8], we will focus on the two (2) SCI categories which may most commonly apply to CIDs, Senior Officers, and Important Decision Makers.

Senior Officers are defined as an individual holding the position of President, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, or General Counsel who perform similar functions as these corporate officers.  Senior Officers are considered Beneficial Owners.

Important Decision Makers are any individuals who direct, determine, or have substantial influence over important decisions made by the reporting company, such as business or financial decisions. Please note managing agents and employees may be exempt from being beneficial owners. Managing agents, such as community association managers, may qualify for an agency exemption to the definition of beneficial owner if they perform ordinary advisory or contractual services. Employees of the reporting company who are not senior officers and whose substantial control is derived solely from their employment status may qualify for an employee exemption.[9]

What specific information does my CID need to report about each beneficial owner?

  • Full Legal Business name and any trade name or doing business as (DBA) name of the reporting company.
  • Complete current United States address of the reporting company.
  • Each Beneficial Owners must provide:
    • Full legal names
    • Date of birth
    • Complete current addresses
    • Unique identifying number/issuing jurisdiction/image (government issued photo identification, such as a driver’s license or passport)

When must reporting company provide updates or corrected BOI Reports?

An updated BOI Report containing updates, corrections, and additions are to be made within 30 days of the reporting company becoming aware of the change.  CIDs should calendar this date when planning election timelines to make sure updates are reported in a timely manner.  However, as the makeup of the CID Board of Directors may shift throughout the year as seats are vacated and filled through appointment, CIDs should keep the 30-day requirement in mind even outside of normal election cycles.

Consequences of failing to provide timely or accurate BOI Reports

The willful failure to provide timely, complete or updated BOI Reports to FinCEN, or the willful submission or attempt to submit a false or fraudulent BOI report may also result in a civil or criminal penalty, including civil penalties of up to $500 for each day the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may also be held accountable for that failure.

Is my reporting company required to report its company applicants?

A domestic reporting company is required to report its company applicants if it is created on or after January 1, 2024.

A domestic reporting company is not required to report its company applicants if it was created before January 1, 2024.

Efforts are being made to exempt CIDs and/or extend the reporting deadline

In late 2023, the U.S. House of Representatives passed the Protect Small Business and Prevent Illicit Financial Activity Act (H.R. 5119) by a vote of 400-1. This bill would delay the Corporate Transparency Act reporting requirements for one year. Currently, a companion bill is before the Senate.  How the Senate will vote on this issue is unclear at the time this article is being written. However, some industry commentators have stated they believe the Senate will approve a 1-year hold on all Corporate Transparency Acts reporting requirements.  In addition, they have stated it is less likely a CID exemption will be approved.

[1] FinCEN’s Small Entity Compliance Guide, December 2023, Version 1.1 can be found at: https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf

[2] Beneficial Ownership Information Reporting Rule, Title 31, Section 1010.380 of the Code of Federal Regulations.

[3] FinCEN’s Small Entity Compliance Guide, December 2023, Version 1.1, at 2.

[4] Id. at 12.

[5] Id. at 16.

[6] Id.

[7] Id. at 17.

[8] Id. at 17.

[9] Id. at 30.


CHRO or WVRO? So Many Letters, so Little Understanding

Restraining Orders in a Nutshell

By Hannah I. Hughes, Esq.

Concerned about the behavior of a board member towards other members during meetings? Has a homeowner been harassing your association’s management? In this article, we discuss the two types of restraining orders available in California for these situations and the process for obtaining one.

What is a CHRO?

A Civil Harassment Restraining Order (“CHRO”) provides protection to a person who has suffered harassment from someone who is not a close family member or of domestic relation. (Code of Civil Procedure 527.6). This means the person can be a director, volunteer, or other committee member. The conduct must cause a reasonable person to suffer substantial emotional distress and must also cause the victim to suffer substantial emotional distress.

This restraining order is filed in civil court, however, the evidentiary standard is quasi criminal in nature, meaning the petitioner must prove the harassment under the higher standard of clear and convincing evidence. (Code of Civil Procedure 527.6(i)). The general civil evidentiary standard is a preponderance of the evidence, which is anything that tips the scale to 51% probability whereas clear and convincing is closer to 75% probability. In other words, strong evidence will be required, and a “he said, she said” situation will not generally suffice.

What is a WVRO?

A Workplace Violence Restraining Order (“WVRO”) protects employees who have suffered unlawful violence or a credible threat of violence from any individual, that can reasonably be construed to be carried out or to have been carried out at the workplace. (Code of Civil Procedure 527.8). The association, as an employer, can apply for the WVRO to protect its employee(s) against an individual. This restraining order is also filed in civil court and requires the same heightened “clear and convincing” evidentiary standard.

Which restraining order should I apply for?

Whether you obtain a CHRO or WVRO, your situation will differ

Although both the restraining orders listed above prevent unwanted contact, they differ based on the relationship between the parties.

For example, the following situations may apply to a CHRO:

  • An owner is harassing a director on the association’s board,
  • A director on the board is harassing management.

Generally, an association may be able to hire its own legal counsel to file a CHRO on behalf of a director, volunteer (such as a committee member), management, or even an independent contractor. But you should consult your legal counsel to determine if this will be feasible in your particular circumstance.

The following situations may apply to a WVRO:

  • A homeowner has threatened violence or been violent towards all board members,
  • A board member has repeated outbursts and exhibited violent behaviors towards other board members and management personnel during meetings.

The main difference between a CHRO and the WVRO is that the association is named as the petitioner for a WVRO and the individual is named as a petitioner for a CHRO. Additionally, a CHRO has an attorney’s fee provision, meaning the petitioner could possibly recover their attorney’s fees for the CHRO while a WVRO does not contain any such provision.

In both cases, you will apply to the court for a restraining order, serve the other side (personal service is required), and attend a hearing to put on evidence and have the court determine whether a restraining order has been granted. While the case is pending, the judge may find that the facts support entering a temporary restraining order to protect the party until the hearing. When a temporary restraining order is in place, or once a permanent restraining order has been granted, the other side may face criminal charges if they violate the order. The police may also be called when an order is violated.

If you are experiencing threats of violence, or are concerned for your safety, call 911. If you would like more information on how to best protect your association, please contact us.

Using Common Area Facilities for Private or Group Lessons

By Jacquelyn E. Quinn, Esq.

Many associations have common area amenities and facilities available to their residents and their guests.  Such amenities and facilities may include fitness centers, pools, tennis, and other sport courts.  From time to time, associations may receive a request from a resident to use a common area facility for private or group lessons with their personal instructors.  While it might seem like a simple request and boards may be eager to allow such use of the common area facilities, associations should be aware of potential issues that can accompany such use.  Whether a resident wishes to perfect their backstroke, backhand, or back swat, below are a few issues to consider when deliberating on whether to allow a resident to use a common area facility for private lessons with a personal instructor:

  1. Liability: Since the association typically operates, manages, and controls the common area facilities, it is responsible for ensuring the facilities are properly maintained and safe for use. The association could be held liable for damage or injury to an instructor or participant during a private lesson caused by missed repairs or poor maintenance of the facilities.  While similar concerns may arise when a resident chooses to use the common area facilities without an instructor, boards should consult their association’s legal counsel prior to allowing common area facilities to be used for private lessons.
  2. Americans with Disabilities Act (“ADA”): Generally, an association’s common areas are not subject to the ADA unless they are open to the general public. Allowing non-residents to take group lessons at the association’s common area facilities may open the association to an argument that the facilities are “public accommodations” subject to the ADA.  If the facilities are deemed to be subject to the ADA, an association could be required to make costly modifications to the facilities in order to comply with ADA requirements and an association could open itself to claims it violated the ADA.
  3. Insurance & Licensing: Consult with the association’s qualified insurance expert on the risks and insurance implications of allowing private instruction in common area facilities. Does the association have adequate coverage in the event of any incidents? Will permitting this type of use of the common area facilities be considered a commercial use and affect the association’s coverage?  Also, consider requiring any instructor to provide proof of any necessary licensing or certification, adequate liability insurance coverage, and requiring the association and management be named as an additional insured on the instructor’s policies.
  4. Waivers/Releases: Consider requiring instructors and participants to sign agreements releasing the association, its directors, officers, management, etc. from liability arising from any injury that may occur in a common area facility during private lessons. If minors are receiving the lessons, a special waiver signed by a parent or guardian may also be necessary.  Associations might also consider requiring an instructor to indemnify the association and board against any claims or lawsuits filed against them resulting from use of the common area facilities.  While these types of agreements may not provide complete protection for associations in all situations, they may be better than nothing if the association allows certain private lessons.
  5. Register/Rules: The right to use common area facilities is generally subject to reasonable rules and regulations adopted by the board. Boards may consider adopting reasonable rules and regulations regarding private lessons at common area facilities.  Such rules might include requiring the insurance coverage and waivers discussed above, prohibiting instructors from using association facilities without a resident sponsor, requiring all participants be residents of the community, requiring reservations, and clarifying that private lessons may not hinder other residents and their guests from using the facilities at any time.  Adopting reasonable rules pertaining to the use of common area facilities for private lessons gives a board something to enforce in the event a resident or resident’s instructor fails to comply.

In light of the potential for liability and other serious considerations discussed above, a board may find it prudent to simply prohibit owners from using the community’s common area facilities for certain private or group lessons.  However, the decision is ultimately up to the board.


** This article was published on CAI-Coachella Valley – 2024 HOA Living Magazine (February Issue).



Notice of Hearing Part Two

Providing an Effective Post-Hearing Notice of Discipline


This article is part two in the two-part series on holding effective disciplinary hearings.  You noticed the hearing following the procedures in part one of this series, the board held the hearing, and “If the board imposes discipline on a member or imposes a monetary charge on the member for damage to common area and facilities,” you must now send a post-hearing notice of disciplinary action to ensure effective enforcement.  (Civil Code section 5855(c).)  Note, section 5585(c) does not require that the association send a post-hearing notice if the board imposes no disciplinary action, but it may nevertheless be a good idea for record-keeping purposes and as a simple courtesy to the member.

The post-hearing notice of disciplinary action (“Post-Hearing Notice” or “Notice”) includes fewer statutory requirements than the notice of hearing, but there are several important provisions the Notice should include to help ensure its enforceability.

Pursuant to Civil Code section 5855(c), a Post-Hearing Notice must be sent to the member within 15 days of the hearing date.  The Notice must also notify the member of the board’s decision on imposing disciplinary action(s).

The Post-Hearing Notice should also include:

  • Date of the letter (the date should be the same as the date of mailing);
  • Record title owner’s correct name and mailing address;
      • We suggest pulling the deed for the property to confirm title.
  • Property address within the association;
  • The date and location the board held the hearing, along with the specific time the hearing convened;
  • The specific disciplinary action(s) to be imposed by the board after considering the evidence available to it (this is mandatory);
      • Examples: fines in the amount of x dollars, suspension recreational use privileges, removal of unauthorized architectural modifications by a date certain;
      • As with the notice of hearing, we suggest including the name of the document (e.g., Declaration, Rules) and the section(s) violated.
      • If applicable, a statement that fines may increase by x dollars or continue to be levied monthly without further hearings until the violation is remedied (this is only available if the governing documents provide for this and the violation is of an uninterrupted or continuing nature, e.g., an ongoing architectural violation);
      • If the hearing was for damage to common area or association property, state the amount of damages owed to the association and the due date in accordance with the governing documents; and
  • The effective date of any disciplinary action.

Although not required, some boards might find it helpful to also include:

  • A statement confirming who appeared and testified before the board (if no one appeared, state this);
  • A summary of the substance of the testimony of witnesses and the member(s) subject to the hearing; and
  • A list of the documents and other evidence the board reviewed in reaching its decision.

The Post-Hearing Notice must be delivered to the owner by either personal delivery or individual delivery pursuant to Civil Code section 4040.  We suggest sending the Post-Hearing Notice by both first-class mail, postage prepaid and certified mail, return receipt requested.  If the owner has requested the association send his or her notices to a secondary address, then the association must send the Notice by personal delivery or individual delivery to both addresses. (Civil Code sections 4040 and 5260).

The Notice may also include a proof of service. While proof of service is not required to enforce disciplinary measures, a sworn statement on mailing is evidence the notice was, in fact, sent.  Any proof of service should be kept with the association’s copy of the Notice and not sent to the owner.

Following the procedures in our preceding notice of hearing article, along with the above post-hearing procedures, will help ensure effective and proper enforcement of the governing documents.

It’s Budget Time!

By David A. Kline, Esq.

Civil Code sections 5300 and 5310 require common interest developments to distribute their annual budget reports and annual policy statements 30 to 90 days before the end of their fiscal year.  For most community associations, that deadline is fast approaching.

So, let’s take this opportunity to consider some of the issues that community managers and boards of directors sometimes overlook when racing to complete their annual disclosures.

Start Early

To begin, in an ideal world, we would not race to complete the annual disclosures.  It’s a good idea for management to provide the board with a draft budget for its consideration well in advance of the deadline.  It’s particularly important for directors to review that draft budget in advance of the open board meeting where the budget will be discussed.  That way, they will be prepared to approve the budget or propose amendments to the draft budget at the meeting.  The budget meeting should be scheduled sufficiently in advance of the deadline so that the board can adjourn the meeting if necessary to resolve any issues that may arise during the budget meeting or in case the meeting needs to be adjourned for lack of quorum.

Don’t Forget Balcony Inspections

Civil Code section 5551 requires condominium communities to complete their first visual inspection of exterior elevated elements by January 1, 2025.  That means, if your condominium community has not already completed this task, it must budget for it in this next fiscal year.  Also, the law requires the report prepared by the architect or structural engineer to be incorporated into the association’s reserve study, which should be completed before the budget meeting so that the board can properly budget for reserve contributions.

Make Sure Your Disclosures Are Well-Reasoned

It’s also important for community managers and boards of directors to carefully review the disclosures required by Civil Code sections 5300(b)(3) through (6).  Generally, the law requires an association to share its reserve funding plan, and statements as to whether the board has determined to defer maintenance, whether it anticipates any special assessments, and a description of the mechanisms by which the board plans to fund reserves.  Occasionally, we find annual budget reports that proudly report no increase in regular assessments, but disclose severely underfunded reserves, no intention to defer maintenance, no plan for future special assessments, and no realistic explanation as to how future maintenance needs will be addressed.  Of course, boards of directors have an obligation to levy regular and special assessments sufficient for their association to perform its obligations under the governing documents and Davis-Stirling Act.  (See Civil Code section 5600(a).)  It’s important for the annual budget report to provide evidence to the members that the board has complied with that obligation and explain the board’s reasoning.

Insurance Premiums Are Skyrocketing

Finally, it’s generally a good idea to plan for small budget increases every year due to inflation and increases in the cost of living.  This year though, as you may have heard, many associations are facing significant increases in their insurance premiums.  In some cases, insurance premiums have skyrocketed to multiple times an association’s previous premiums.  We recommend reaching out to your association’s insurance broker at budget time to discuss anticipated increases in premiums.  It’s better to find out the bad news now, so you can plan ahead, rather than wait until the policy is set to renew later in the fiscal year.


If you need help preparing your annual disclosures, contact your association’s legal counsel for assistance.  But, do so well in advance of your deadline so that the board has sufficient time to address any issues that may arise.  As they say, the early bird catches the worm!  Following these recommendations will help avoid a mad scramble at the end of the fiscal year, and help set up your association for a productive new year.


Check It Off Your List

By Jon H. Epsten, Esq., CCAL

There is nothing simple about managing a common interest development (“CIDs”). The statutory duties (e.g., annual disclosures) and annual administrative duties (e.g. insurance) would be burdensome for any corporation; most CIDs are ill-equipped to handle this task without having a structure in place. Unlike most large business organizations, rarely do CIDs have a corporate compliance officer to monitor compliance with the laws and administrative obligations. To assist CID management and boards of directors, boards and management should consider developing checklists to use as tools for fulfilling fiscal and administrative duties, thereby reducing legal exposures.

Recently, I was selected to participate as a contributing author for CAI’s ’Best Practices for Community Association Maintenance‘ (available on our website or through the CAI Research Foundation, at no cost). In this publication, the contributors developed checklists as a tool for maintenance and repair obligations. The development of that publication further confirmed my belief that checklists are essential for the proper operation of any CID. Checklists are nothing new. While not directly equivalent to what I am suggesting, airline pilot’s pre-flight and landing checklists have been proven to reduce airplane accidents, as well as pre and post-surgery checklists have proven to reduce surgical complications – like leaving surgical instruments in body cavities and infection prevention.  (reference: The Checklist Manifesto).

Checklists should be tailored specifically for your CID to cover such things as fiscal responsibilities (e.g., timing of the budget, audit, reserve study, annual financial disclosures) and administrative responsibilities (e.g., insurance reviews and renewals, yearly contract reviews, property inspections, performance reviews, policies and procedure review, board education). Tasks on the checklist should be assigned to a specific person or position. Additionally, each checklist should include calendar dates for task deadlines, which will help not only the CID running efficiently, but help prevent financial losses.

If you do not know where to start regarding the types of checklists needed or what to include on those checklists, do not fret! We have done much of the work for you! Click here to access a compilation of checklists tailored for boards and managers with the most significant statutory duties imposed on community associations. Check the box and get it done!

Codes of Conduct for Association Volunteers

By Emily A. Long, Esq.


Generally, board members of common interest developments are volunteers dedicating their time, skills and energy to serve the communities within which they live. Indeed, without these director volunteers, community associations would be unable to properly function. Similarly, committee members are volunteers who work on specific projects within a community. Often, committee work is a valuable first experience which can entice a member to become more involved and to eventually run for the board. However, there is a steep learning curve upon entering the world of association governance.

In order to help board and committee members understand the association’s expectations for service, codes of conduct can be particularly helpful.  Not only do codes of conduct codify association expectations, they can also serve to educate board and committee members and help minimize association liability.  Boards might therefore consider adopting codes of conduct that cover the following topics, among others:

  • Prohibiting the acceptance of any gift, gratuity, favor, entertainment, loan, or any other item of monetary value by a board or committee member from a person who is seeking to obtain a contractual or other business or financial relationship with the association.
  • Clarifying that board and committee members may not engage in any writing, publishing, or speech that defames any other member of the board, committee, employee, or resident of the community.
  • Establishing that board and committee members may not knowingly misrepresent facts to the residents for the sole purpose of advancing a personal cause or influencing the residents.
  • Prohibiting board members from discussing sensitive and confidential matters discussed in executive session, outside of executive session, or with anyone who is not on the board (with the exception of management and association counsel).
  • Prohibiting board or committee members from seeking to have a contract implemented that has not been duly approved by the board.
  • Prohibiting board or committee member interference with an association contractor performing work.
  • Clarifying that board and committee members may not harass, threaten, or attempt through any means to control, instill fear or discriminate against any member of the Association, management company, service provider, or community resident.
  • Preventing interference by board and committee members with the system of management established by the board as a whole and the management company.
  • Reminding board members that they must operate as a board and do not have any individual authority unless it is specifically granted to them in writing by the board or the Association’s governing documents.

Often, codes of conduct may be adopted as rules of procedure by way of approval by the board at an open session meeting, rather than by following the rulemaking procedures spelled out in Civil Code section 4360. However, we encourage you to first speak with your association’s legal counsel to review your association’s governing documents and discuss your community’s particular needs prior to adopting such rules.

Enforceability of these codes of conduct is another important issue to consider when preparing draft rules. It is recommended that any code of conduct specifically list the consequences for a violation of the code of conduct.  Reasonable penalties for violation might include: public or private censure by the board, removal of an officer title, and/or removal from committee service by the board.  It is unlikely that violation of a code of conduct may result in unilateral removal of a board member by the board, but speak with your association counsel on this issue.

To Pickleball or Not to Pickleball? That is the Question

By Rhonda R. Goldblatt, Esq.

Pickleball is one of America’s fastest-growing sports.[1] This surge has, in turn, generated professional tournaments, corporate sponsors, and professional players. Many homeowners, eager for a new amenity and a new hobby, have asked their community associations to create pickleball courts. Pickleball courts are relatively easy and cheap to create, especially if an association has an existing tennis court.[2] But while many boards may leap at the chance to buy in to the pickleball craze and give residents a new way to exercise, associations should be wary of potential issues that can accompany the new game. Below are a few issues to consider.


  1. Insurance. Pickleball related injuries are projected to cost Americans up to $500 million this year alone.[3] Given the potential for injuries related to the sport, associations should consider consulting with a qualified insurance expert to confirm they have adequate coverage in the event of any pickleball-related incidents.
  2. Noise. Pickleball can be noisy, and can in turn generate complaints from nearby residents. Therefore, associations may want to consider establishing rules limiting play to certain hours of the day, and consulting with qualified experts regarding sound-mitigating measures.
  3. Authority under the Governing Documents. Depending on the cost of the project, the exact changes to be made, and the terms of the association’s governing documents, creating a pickleball court may constitute a capital improvement requiring membership approval. Boards should confirm they have authority under their governing documents before altering the common area. When in doubt, consult with a qualified community association attorney.
  4. Consider a Trial Run. Associations can consider adopting a rule allowing pickleball play at existing facilities for a set amount of time with a sunset provision – for example, for thirty days – as a trial run, to see how pickleball fits into the community. The board can then review any member feedback received, and decide how to proceed.




[1] https://www.npr.org/2022/02/19/1081257674/americas-fastest-growing-sport-pickleball

[2] https://usapickleball.org/what-is-pickleball/court-diagram/do-it-yourself-guidelines/

[3] https://nbc-2.com/news/sports/2023/07/19/pickleball-injuries-costing-400m-nationally-the-alarming-toll-on-players-health/#:~:text=The%20most%20common%20types%20of,alongside%20the%20game’s%20unprecedented%20growth.