Congratulations to New Epsten, APC Shareholder, Pejman D. Kharrazian

Epsten, APC is pleased to announce Pejman D. Kharrazian as the firm’s newest shareholder effective October 1, 2021.

“We are happy to promote from within our firm and Pejman’s dedication to our clients, hard work, and proven leadership have earned him the position of shareholder,” says Managing Shareholder Susan Hawks McClintic. “We look forward to Pejman’s continued service to our clients.”

“What an honor to become a shareholder at Epsten, APC alongside some of the best community association attorneys in the country” says Pejman. “I look forward to being an integral part of the firm’s future success and serving our clients’ needs.”

Since joining Epsten, APC in 2012, Pejman’s contributions to the firm and leadership exemplify the key attributes necessary to be a shareholder at Epsten, APC. Pejman has maintained and established numerous key relationships with clients and community association managers. He is well-known throughout the community association industry and frequently provides educational programs for community association board members and managers.

Pejman maintains active memberships in the San Diego Chapter of Community Associations Institute (CAI) and the California Association of Community Managers (CACM). He has also proudly served as an adjunct law professor at Thomas Jefferson School of Law.

New Civil Code Section 5450 Provides Requirements for Teleconference Board and Member Meetings During Government Declared States of Emergency

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By Dea C. Franck, Esq.

On September 23, 2021, Governor Gavin Newsom signed Senate Bill No. 391 (“SB 391”) into law as urgency legislation. SB 391 adds Section 5450 to the Civil Code, which allows California common interest developments (“CIDs”) to conduct board and member meetings via teleconference if gathering in person is unsafe or impossible because the CID is in an area affected by a declared federal, state, or local emergency.

Under current law, a board meeting can be conducted via teleconference (audio or video, or both) as long as all of the directors participating in the meeting are able to hear one another. (Civil Code section 4090(b).) For open board meetings conducted via teleconference, current Section 4090(b) requires that the notice of the teleconference meeting identify at least “one physical location where members of the association may attend and at least one director or a person designated by the board… be present at that location.” As we are all well aware, this in-person requirement proved difficult during the COVID-19 pandemic as gathering with persons outside of one’s immediate household could lead to the spread/transmission of the virus. Consequently, Civil Code section 4090(b) made it impossible for CID boards to simultaneously comply with State and local no-gathering orders and the Section 4090 requirement of providing a physical location where members could attend a board teleconference meeting in person.

The California Legislature recognized that the Civil Code did not effectively provide CID boards with a way to conduct business during a disaster or emergency so it passed SB 391 to add Section 5450 to the Civil Code in order to address this problem.

If your association is continuing to conduct board and/or membership meetings solely via telephone or web-conference platforms because of the ongoing pandemic, your association must immediately comply with the requirements of Civil Code section 5450(b). Be sure to note the notice requirements of (b)(1) and (b)(2) below.

Civil Code section 5450 provides as follows:

(a) This section only applies to a common interest development if gathering in person is unsafe or impossible because the common interest development is in an area affected by one or more of the following conditions:

(1) A state of disaster or emergency declared by the federal government.

(2) A state of emergency proclaimed by the Governor under Section 8625 of the Government Code.

(3) A local emergency proclaimed by a local governing body or official under Section 8630 of the Government Code.

(b) Notwithstanding any other law or the association’s governing documents, and except as provided in subdivision (d), a board meeting or meeting of the members may be conducted entirely by teleconference, without any physical location being held open for the attendance of any director or member, if all of the following conditions are satisfied:

(1) Notice of the first meeting that is conducted under this section for a particular disaster or emergency affecting the association is delivered to members by individual delivery.

(2) The notice for each meeting conducted under this section includes, in addition to other required content for meeting notices, all of the following:

(A) Clear technical instructions on how to participate by teleconference.

(B) The telephone number and electronic mail address of a person who can provide technical assistance with the teleconference process, both before and during the meeting.

(C) A reminder that a member may request individual delivery of meeting notices, with instructions on how to do so.

(3) Every director and member has the same ability to participate in the meeting that would exist if the meeting were held in person.

(4) Any vote of the directors shall be conducted by a roll call vote.

(5) Any person who is entitled to participate in the meeting shall be given the option of participating by telephone.

(c) If, as a result of the disaster or emergency, mail delivery or retrieval is not possible at any association onsite address and the address on file with the association for that member is the same association onsite address, then the association shall send the notice of the first meeting referenced in paragraph (1) of subdivision (b) to any email address provided to the association by that member, in writing, pursuant to paragraph (2) of subdivision (a) of Section 4040 or subdivision (b) of Section 4041.

(d) Subdivision (b) does not apply to a meeting at which ballots are counted and tabulated pursuant to Section 5120, unless both of the following conditions are met:

(1) The meeting at which ballots are to be counted and tabulated is conducted by video conference.

(2) The camera is placed in a location such that members can witness the inspector of elections counting and tabulating the votes.

(e) The remedies available pursuant to Section 4955 shall also be available to address violations of this section.

Again, please note that Civil Code section 5450 only applies if gathering in person is unsafe or impossible because your CID is in an area affected by a federal, state or local disaster or emergency declaration or proclamation.

Also, please note for purposes of Section 5450(b)(4) a “roll call” vote means the names of directors voting and how they voted are recorded in the minutes. For the purposes of Section 5450(c), Civil Code section 4040 defines “individual delivery” as the association delivering a document(s) to an owner or owners via personal delivery, certain specified methods of mail delivery, or by email (if the recipient has consented in writing or by email to receive association notices via email).

Finally, Section 5450(d) is instructive as to how members may witness the counting and tabulation of ballots as required by Civil Code section 5120 should that process need to be conducted by teleconference pursuant to Section 5450.

Your board of directors should reach out to your association’s legal counsel for advice should the board have any questions regarding the application or mechanics of Civil Code section 5450.

Enforcement of Short-term Rental Bans: Brown v. Montage at Mission Hills

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By Jillian M. Wright, Esq.

Enforcement of short-term rental bans for common interest developments (“CID”) just got more complicated thanks to a recent California Court of Appeals decision.

In the recent case of Brown v. Montage at Mission Hills (Aug. 20, 2021, Nos. E074341, E075762) ___Cal.App.5th___ [2021 Cal. App. LEXIS 694].), the California Court of Appeal, Fourth District found that a CID cannot require a rental to be for a minimum term for homeowners who owned prior to the CID adopting that requirement pursuant to Civil Code section 4740. In this case, Brown purchased a unit for the express purpose of renting it out as a short-term rental. Montage at Mission Hills later adopted a 30-day minimum rental period. Brown sued on the basis that she was exempt from that requirement because Civil Code section 4740 provides that homeowners are not subject to governing document provisions that “prohibit[ ] the rental or leasing of any of the separate interests … unless that governing document, or amendment thereto, was effective prior to the date the owner acquired title to their separate interest.”

The appellate court sided with Brown and found that minimum rental terms are rental prohibitions and not rental restrictions. Therefore, a short-term rental ban would not apply to homeowners who purchased prior to the ban’s adoption. The appellate court noted that “[t]he legislative history indicates that the Legislature’s intention was to ensure that owners maintained all rental and leasing rights they had at the time of purchase.”

What does this mean for your association?

If you have a minimum rental term in your governing documents it may not be enforceable against all homeowners, depending on the language of the provision and when it was adopted. If you have questions about the enforceability of your association’s minimum rental term, please contact us or your association’s legal counsel for further guidance.

2021 Legal Symposium Registration is Now Open

Registration is open for our 2021 Annual Legal Symposium. Due to the Covid-19 pandemic, this year’s program will once again be a two-part webinar.

To register click here.

Part I – December 3rd
10:00 a.m. – 12:00 p.m.
New legal updates affecting common interest developments
Opportunity to submit questions for discussion on 12/10

Part II will –December 10th
10:00 a.m. – 12:00 p.m.
Hot Topics (including aging infrastructure, balcony inspections, ADUs/JADUs, and more)
and our ever-popular Attorney Q&A

Epsten, APC Announces its New Leadership Team Effective September 1, 2021

FOR IMMEDIATE RELEASE
August 18, 2021

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San Diego, California – Epsten, APC, one of the oldest and largest Southern California community association law firms, announces its new officers and leadership team effective September 1, 2021.

Epsten, APC, has one of the strongest teams of common interest development attorneys in the industry with 21 attorneys and three offices in Southern California. The firm is known for its professionalism and quality as well as the reliable legal services it provides to its more than 1700 residential and commercial common interest development clients.

It continues to be the firm’s goal to foster a culture based on traditional professional values and service to its clients. The firm practices law in an industry where trust, relationships, and excellence define success for its clients and itself.  The firm will continue to provide the same continuity and stability as it has for more than 35 years.

These changes and additions to the Epsten, APC management structure will lead us into the future with a strong team of attorneys and dedicated staff. Managing Shareholders, Jon H. Epsten, Esq., CCAL and Susan M. Hawks McClintic, Esq., together, with fellow shareholders Kieran J. Purcell, Esq., Anne L. Rauch, Esq., Rian W. Jones, Esq., Dea C. Franck, Esq. and William S. Budd, Esq., agree these changes in officers and new roles will position the firm for its next decade of growth.

Effective September 1, 2021, the new leadership team for Epsten, APC is as follows:

  • President/CEO/Managing Shareholder: Susan M. Hawks McClintic, Esq.
  • Vice President/Client Relations: Jon H. Epsten, Esq., CCAL
  • Vice President/CFO: Kieran J. Purcell, Esq.
  • Secretary: Anne L. Rauch, Esq.
  • Chief Operations Officer: Carolyn D. Decker
  • Transactional Department Chairs: Susan M. Hawks McClintic, Esq., and Kieran J. Purcell, Esq.
  • Litigation/Appellate Department Chairs: Anne L. Rauch, Esq., and Rian W. Jones, Esq.
  • Indian Wells Office Managing Shareholder: Dea C. Franck, Esq.
  • Complex Litigation Attorney Mentor: William S. Budd, Esq.

About Epsten, APC

Epsten, APC and its attorneys are dedicated to the practice and study of laws and regulations related to California community associations and common interest developments. As a local Southern California law firm with offices in San Diego, Temecula and Indian Wells, Epsten, APC is proud to be a recognized leader in both community association law and construction law since 1986.

Learn more at www.epsten.com.

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CONTACT:
Tiffany Christian
Epsten, APC
800.300.1704
[email protected]
www.epsten.com

Congratulations Joyce J. Kapsal, Esq.

After more than 17 years with our firm, it is bitter-sweet to announce the retirement of Senior Litigation Attorney, Joyce Kapsal. For those who know her and have worked with Joyce over the years, you know Joyce is a fun-loving yet tenacious attorney. She is a true professional that enjoys collaborating with her colleagues, working on challenging and unusual cases, and achieving positive results for her clients. Although Joyce will be sorely missed, we are excited for her to begin the next chapter in her life “traveling, traveling and more traveling” interspersed with other activities Joyce enjoys in between her travel adventures. Joyce’s official retirement will be on Friday, September 10th.

Welcome Jack S. Fischer, Esq.

Epsten, APC is pleased to announce the addition of Jack S. Fischer, Esq., to our team of attorneys. Jack is a 1993 graduate of the California Western School of Law and brings with him nearly thirty years of complex litigation, risk management, risk mitigation and insurance experience. As a member of the firm’s litigation practice area, Jack will focus on civil litigation matters concerning governing document enforcement, directors and officers liability, general liability, and construction defect actions.

New Guidance from the California Department of Fair Employment and Housing on Harassment Prevention

By Mary M. Howell, Esq., CCAL

Some of you may recall HUD’s 2017 regulations indicating associations are responsible for intervening in neighbor v. neighbor disputes predicated on unlawful harassment (e.g., harassment arising from race, ethnicity, sexual expression, religion, etc.)  In June 2021, DFEH (the California agency charged with implementing state and federal anti-discrimination laws), issued its “Harassment Prevention Guide.”

The Guide emphasizes the following points:

  • Unlawful harassment is conduct “sufficiently severe or pervasive as to interfere with a person’s use or enjoyment” of a dwelling or housing-related services or facilities.
  • Harassing behaviors include verbal harassment, physical harassment, and visual harassment, coercion, intimidation, threats. It can also include revealing private information about a person without their consent.
  • Discriminatory harassment can occur either directly by an association, its managers or board members or indirectly, (e.g., by contractors hired by association).
  • Victims of discriminatory harassment include not just owners, but residents, and persons invited to the property, including guests or contractors working for residents.
  • A community association may have the power to correct and end discriminatory harassment under its CC&Rs. NOTE: A typical example of such power includes the nuisance prohibition found in nearly every set of CC&Rs, but occasionally CC&Rs also provide that any violation of state, federal and/or local law constitutes a violation of the CC&Rs, which provides further evidence that the association has the power to correct and end harassment.)

DFEH suggests that a housing provider such as a community association might consider pre-emptive action such as communicating that harassment is unacceptable within the community and training leaders of the community on how to investigate and deal with complaints of harassment.

Most community associations (and management companies) are not regularly trained in these issues.  At a minimum, the board, manager, or person hired by the association for this purpose should conduct a prompt, thorough interview of the complainant, to obtain as much relevant information as possible.  Certainly, the accused harasser should be given an opportunity to respond to the accusations as well.  If the accused harasser is a board member, consideration should be given to forming an executive committee comprised of other directors to investigate the allegations or outsourcing the investigation if that is not an option.  (NOTE:  Put the association’s D&O and CGL insurance providers on notice of claims of harassment, at the earliest possible moment.)

The Guide provides further helpful and detailed suggestions on how the investigation is to be performed, discussing whether an investigation is confidential, how quickly the investigation needs to begin and finish, how the investigator may assess the credibility of the complainant, accused party, and witnesses, and how the investigator should weigh the evidence yielded by the investigation.  See Harassment Prevention Guide, pages 9 and 10.

The Guide also discusses how an association or other housing provider should approach ending and correcting discriminatory harassment.  Depending on the gravity of the behavior, the degree of enforcement (in mild cases, a letter explaining the harassment violates governing documents and, possibly, the law as well, whereas in severe cases, harsher approaches such as imposing fines, issuing cease and desist notices, and where the activity appears to be a criminal act as well, reference to law enforcement). (NOTE:  The Guide does not answer one major question, which is whether the association is required to file an injunctive relief action to control the situation.  This issue should, as a matter of good business judgment, be discussed with association legal counsel early on.)

For questions or more information on this topic, please contact us.