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AI Tools in CIDS: User Beware

Jillian M. Wright, Esq.

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Practice: Community Association Counsel

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AI Tools in CIDs: User Beware

For better or worse, artificial intelligence has arrived in our industry. Both board members and homeowners alike across California are turning to large language models (LLMs) like ChatGPT and Claude to navigate the complicated world of community association governance. While convenient for some, the risks are real. If used carelessly, AI can expose confidential information, generate legally inaccurate advice and information, and arm adversarial homeowners with enough inaccurate (and lengthy) ammunition to keep a board busy and asking for legal intervention and interpretation. In this article we highlight the pitfalls of AI and provide tips on how to avoid them.

Preserving Executive Session Confidentiality and Attorney-Client Privilege

Boards members must exercise serious cautious when using AI. The California Civil Code allows boards to hold executive sessions, also known as closed session, meetings to discuss specific sensitive matters like litigation, the formation of contracts, member discipline, personnel matters, and delinquencies. These sessions exist precisely because the California legislature recognized that the topics should remain confidential. What a board discusses in executive session cannot be disclosed to the general membership without board authority.

In light of that, when a board member copies and pastes executive session notes or details of pending litigation, for example, into a commercial AI tool to get a summary or draft a response, they may be unwittingly pushing that information into a system they do not control. Most consumer-facing LLMs retain conversation data to some degree and use inputs for training unless users opt out. The LLMs store information on servers governed by terms of service, not California law. As such, using LLMs for association purposes may unwittingly breach the confidentiality of executive session without board authorization.

This exposure is not hypothetical. Indeed, in the federal case of United States v. Heppner (2026), the court ruled that documents generated using a publicly available AI tool are not shielded by attorney-client privilege or the work product doctrine. In the case, Heppner used an AI tool for guidance on his legal case. Heppner created documents through the AI tools and shared them with his legal counsel. The court ruled that the documents created were not protected by attorney-client privilege. While the court limited the ruling, acknowledging that the outcome may differ with alternative facts – for example, if the attorney had used the AI tool – and this case is not direct precedence in California, this case is a warning for all boards. If you share what you consider confidential information with an LLM, there is little protection for the work product that results. Exposing confidential information and waiving attorney-client privilege without board authority could be seen as a breach of fiduciary duty to the association.

 

PRACTICE TIP:

Never input names, addresses, account balances, legal strategy, personnel matters, or any information discussed in executive session into a commercial AI tool. Use AI for structure and language – not processing content or asking for specific legal advice.

 

When Owners Use AI Against the Board

 We have recently seen in our practice an uptick in homeowners using AI tools strategically against the association. Homeowners who believe the board has violated their rights are armed with open-source summaries that have boards working overtime. Being informed about the applicable law is not inherently problematic. Informed homeowners will hopefully make for healthier communities. However, AI-generated content is not always accurate. This is because many AI tools are designed in a sycophantic nature; meaning these tools are designed to generate responses the system thinks the prompter wants, as to opposed to providing the most accurate and correct response.  The results produced are produced with such clarity that homeowners have been known to use legal misinformation with confidence and stubbornness. When boards attempt to correct the record or provide the necessary context, the perception of bad faith can spiral quickly.

In this upswing in AI usage, we have also received lengthy association record demands as the AI tools dramatically lower the effort required to generate formal-sounding demand letters and Public Records Act-style document requests. A single motivated homeowner can now produce a volume of written demands that would previously have required legal representation. Management companies are flooded with correspondence that is time-consuming to answer, even when meritless.

Conclusion

While it is unlikely that boards or owners will abandon AI tools, both sides should use them with clear-eyed awareness of the limitations. Boards may want to consider adopting an AI policy determining which tools are approved and how. Owners should treat AI output as a starting point for research, not a final legal opinion. For both owners and boards, when a dispute may have serious consequences, reach out to legal counsel. It is worth the cost to double check the advice from AI and to be able to rely on attorney-client privilege to protect the advice given to the board.

The Hidden Cost of ‘Free’ Help

Hannah I. Hughes, Esq.

Attorney

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Practice: Civil Litigation

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The Hidden Cost of 'Free' Help

Community associations frequently rely on volunteers—committee members, resident helpers, and board members—to function effectively. Though often times, this volunteer position is a thankless job. However, labeling someone a “volunteer” under a new California employment law case does not necessarily make them a volunteer.

What Makes a Volunteer a Volunteer?
In Spilman v. The Salvation Army, a California Court examined whether an individual classified as a volunteer could instead be considered an employee entitled to legal protections. The court emphasized that the key issue is not the title given to the individual, but the nature of the relationship. As a result, the court created a two prong test in determining whether an a worker is an unpaid volunteer or an employee: 1) whether the worker freely agreed to work for the nonprofit to obtain a personal or charitable benefit other than compensation, and 2) whether the nonprofit’s use of the volunteer labor was a subterfuge to evade wage laws.

How Might This Effect Community Associations?
In the community association context, risk regarding the “volunteer” label may arise when board or committee members take on ongoing operational roles such as on-site management tasks, maintenance, or administrative duties that resemble the work of paid employees. To avoid this risk, a community association will want to work with its legal counsel to define volunteer roles narrowly, not fill operational gaps with volunteers, and/or using written volunteer acknowledgements. Although a paper trail will not necessarily make an individual a volunteer, these items help satisfy prong one of the above test, that the worker freely agreed to work for a personal or charitable compensation rather than monetary compensation. Not clarifying volunteer roles may blur the lines of employment, subjecting the community association to employment laws, insurance issues, and increased litigation from those volunteers turned employees.

Even if these volunteers are not formal employees, community associations should also confer with a qualified insurance broker about obtaining an “If-Any” (also referred to as “no-payroll”) workers compensation policy. These policies can provide protection if a volunteer is later determined to qualify as an employees for workers compensation purposes.

If you need assistance with volunteer documentation or ensuring your community is complying with the law, reach out to us today.

Understanding Privacy Policies

Gabriel P. Huerta, Esq.

Attorney at Law

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Practices: Civil Litigation & Appeals

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Understanding Privacy Policies

From membership lists to financial records, virtual board meetings to security footage – handling sensitive association data is all in a day’s work for managers and directors. Any software that handles data should have an accessible privacy policy. Understanding privacy policies, and its effect on managing and directing, further adds to the ongoing “Best Practices” discussion.

First, become acquainted with the mechanics of a privacy policy to make issue-spotting easier. Reviewing a policy is a simple process, though admittedly, the majority of software users skim through or skip reading altogether. A robust policy will address (1) encryption, (2) data collection and retention, (3) security management, and (4) breach notification procedure, to name a few. These terms are well defined in privacy policies for common programs, such as Google and Microsoft. Other programs used by managers and directors likely have similar policies with different phrasing or organization. But take note of ones that do not address or adequately define these terms. A general rule to follow is vague language signals increased risk exposure.

Privacy awareness and compliance is becoming more important as its laws become ubiquitous to more businesses. Even Automated License Plate Recognition (ALPR) operators are now encouraged to publicize its privacy policy or risk litigation, given a recent ruling from the California Court of Appeal. In Bartholomew v. Parking Concepts, Inc., the court held that collection and use of license plate information without publishing a statutorily required privacy policy regarding such collection caused the requisite harm to sue under Civil Code sections 1798.90.5-1798.90.55. Thus, gated communities using cameras should make its ALPR privacy policy easily accessible to all members.

Next, require clear exit terms when a subscription ends to maintain control of association data. A privacy policy should state whether data is returned, deleted, or retained. For example, attorneys are instructed to retain client files for at least 5 years after the attorney-client relationship has terminated before mass shredding. Data sanitization destroys electronic files like shredding destroys hard files. Similarly, managers and directors are encouraged to consider a reasonable retention period and a reliable sanitization method of electronic association records. If not, then personally identifiable information (PII), including full names, addresses, dates of births, and even license plate numbers can be sold to data brokers, potentially leading to imprudent results.

While the Davis-Stirling Common Interest Development Act facilitates a homeowner’s access to association records, the California Consumer Privacy Act gives California residents the right to access and delete their PII from businesses. This right is bolstered for common interest developments under the Safe at Home Program, to which associations must redact the PII of a program participant from association records, e.g., membership lists. Though a task that generative artificial intelligence (GAI) software can handle, users should know when GAI collects data to train its Language Learning Models (LLMs) through prompting. LLM training is how a lot of companies improve its GAI. Which is fine, so long as the privacy policy explicitly states that prompting is anonymized or aggregated, or the user affirmatively opts in.

Privacy law continues to evolve, so treat privacy policies as living documents. For further suggestions and tailored recommendations, managers and directors are encouraged to consult with their community association’s legal counsel, or a certified information privacy professional. Over time, comprehension and repetitive review of privacy policies will contribute to well-rounded governance.

He Can’t Say That Here, Can He?? The First Amendment and Community Associations

Mary M. Howell, Esq., CCAL

Of Counsel

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Practices: Community Association Counsel | Commercial CID | Senior & Fair Housing

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He Can’t Say That Here, Can He??
The First Amendment and Community Associations

In 1990, a homeowner in Ladue, Missouri put a sign in her front yard that said, “Say No to War in the Persian Gulf, Call Congress Now.”  The sign was vandalized.  The homeowner reported the problem to the police, who told her the posting of all signs (with limited exceptions such as identifying the property) was prohibited by a local ordinance.  Not surprisingly, the homeowner claimed such restrictions ran afoul of the First Amendment.  She took her case to the US Supreme Court, and won.
 
At first blush, that case suggests the association might run into problems trying to regulate signage on an owner’s lot (or other forms of speech.)1   But—isn’t the law fun?—it’s not that simple.  In the first place, the First Amendment by its language only limits actions by the federal government, although case law (and many state constitutions) make it clear the First Amendment also applies to local governments.
 
The difficulty here is that community associations aren’t governments.  Nevertheless, they look a lot like governments, and many cases (and legal commentary) characterize them as “quasi-municipal” in nature—that is, functioning in a manner mighty like a government… The sticking point remains they aren’t really governments (if they were, they’d be entitled to broad immunity for actions they take as governments).  And, some non-governmental entities such as “company towns” have been held to be subject to First Amendment protections.  A “company town” is a type of employee housing where all homes are owned by the employer, and all aspects of community life are regulated by the employer.  But California case law holds that community associations are NOT “company towns.”2  
 
So if they AREN’T true governments, and they are not “company towns”, does the First Amendment protect speech and expressive speech such as signs within the community association?  Does that next-door-neighbor really have an unbridled, First Amendment-protected right to erect a sign saying, for example, “The Manager is a Vile Human Being and Should be Fired?”  
 
Questions like this have plagued California courts (and the legislature) for decades.  In Laguna Woods Publishing v. Golden Rain Foundation (1982) 131 Cal.App.3d 816 (disapproved on other grounds in Katzberg v. Regents of Univ. of Cal. (2002) 29 Cal.4th 300, 357), the publisher of a commercial newspaper challenged the association’s refusal to allow it access to its gated community for purposes of delivering the newspaper to residents.  The association DID allow its self-published commercial newspaper to be distributed to residents.  The publisher alleged the exclusion violated its First Amendment rights.   The court found the association functioned in a governmental fashion, and therefore could not discriminate between the association-approved newspapers and those of a competitor:
 
… While the public is not invited into Leisure World, Leisure World in many respects does display many of the attributes of a municipality.  That is to say, although the public generally is not invited, there is substantial traffic into Leisure World of a variety of vendors and service persons whom the residents of Leisure World do invite in daily to accommodate the living needs of a community this large.  By this we mean to refer to plumbers, electricians, refrigeration repairment, painters, United Parcel deliverymen, to name a few, plus the carriers of newspapers to which the residents have subscribed…”
 
Some twenty years later, however, the California Supreme Court put the validity of Laguna Woods Publishing in question.  In Golden Gateway Ctr. v. Golden Gateway Tenants Association (2001) 26 Cal.4th 1013, the owner of an apartment complex sought to control the right of tenants to pass out literature critical of management.  The Court held that the owner’s actions did not rise to the level of state action and thus did not violate First Amendment guarantees.  The court went on to point out that if the owner of private property is the functional equivalent of a government (emphasizing the situation where the owner’s private property is open to the public), then Constitutional protections might pertain.
 
This more recent decision suggests (but does not specifically state) that a gated community might have greater rights to restrict the speech of its residents than a community which is open to the public.  But surely that cannot be!  Are we confused yet?
 
Further complicating the question of whether (and if so, to what extent) First Amendment protections apply to homeowners speaking within their communities are cases arising from California’s “anti-SLAPP” statute.  “SLAPP” stands for “strategic lawsuit against public participation.”  The statute allows the defendant in a lawsuit to try to have the court dismiss the lawsuit if it finds the lawsuit to have been filed in order to limit protected speech.  While the statute allows the motion for language occurring in legislative and judicial proceedings, it also allows the motion to be made where the objectionable statement was made in a public forum, on an issue of public interest.  The statute doesn’t reference the First Amendment, but the type of language it seeks to protect is often the same language sought to be protected by the First Amendment.  And, case law makes clear that language critical of the association (or its residents) is, depending on the precise facts, “statements made in a public forum on an issue of public interest.”  In Damon v. Ocean Hills Journalism Club et al. (2000) 84 Cal.App.4th 468, plaintiff—a former manager—sued the association and various persons within the association, based on allegedly defamatory statements made about him and his service as a manager.  The association succeeded in having the suit stricken pursuant to anti-SLAPP motion.  The court noted that the owners of a common interest development “comprise a little democratic subsociety…” and that a homeowners association board is in effect “a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government…” quoting from Nahrstedt v. Lakeside Village Condominium Ass’n. (1994) 8 Cal.4th 361.   In Ruiz v. Harbor View Community Association (2005) 134 Cal.App.4th 1456, the situation was reversed, when an owner sued the association for statements made by the association regarding the owner’s proposed architectural changes, as well as statements made by the association’s attorney which referenced the homeowner was an attorney, and alleged he had violated his professional ethics in connection with the application consideration process.  The association succeeded on its anti-SLAPP motion.  The court noted the association’s speech was part of an ongoing discussion and contributed to public debate on the issues presented by the discussion.  As to statements made after the association had denied the application (which might mean there was no ongoing dispute, and therefore the statements would not be protected by the anti-SLAPP statute), the court stated they nevertheless were covered by the anti-SLAPP statute because they “concern[ed] [association] governance and enforcement of its architectural guidelines…” which continued to be issues of concern for homeowners.  Ibid at 1470.3 
 
Further refining the notion of what constitutes protected speech in a community association, the court in Golden Eagle v. Rancho Santa Fe Association (2018) 19 Cal.App.5th 399, 418-419 held that the anti-SLAPP statute protects “private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity … In cases where the issue is not of interest to the public at large, but rather to a limited, but definable portion of the public (a private group, organization, or community), the constitutionally protected activity must, at a minimum occur in the contact of an ongoing controversy, dispute- or discussion, such that it warrants protection by a statute that embodies the public policy of encouraging participation in matters of public significance…”  (In Golden Eagle, the speech in question was statements made by the association to its members and to a local government regarding an application for approval of proposed development.  Its significance for our purposes is its broad-reaching definition of language protected by the anti-SLAPP statute.)
 
So, while statements made by a homeowner about association issues may not be directly protected by the First Amendment (because the association is not a true governmental entity), a resident’s right to make statements to his fellow residents—or post those pesky signs—may nonetheless be protected pursuant to the anti-SLAPP statute, if a court deems the speech/expression is “private conduct that … affects a community in a manner similar to that of a governmental entity…”
 
Confused?  So was the legislature.  Thus, in order to protect the resident’s rights of free speech, and in light of the confusion as to the extent of protection conferred by the First Amendment, California added two sections to the Davis-Stirling Act, Civil Code sections 4710 (in 2012) and 4515 (in 2018).  Section 4710 provides that the governing documents may not prohibit posting or display of noncommercial signs, posters, flags or banners on or in a member’s separate interest, except as required for the protection of public health or safety, or if the posting or display would violate a local, state, or federal law.  (The statute does provide for certain permissible types of material to make the sign, and a maximum square footage for such signs.)  Section 4515 addresses the owner’s right to use common areas or use community-published media for the purpose of comment on a broad range of issues of public import, both as to the community and issues of public interest outside the community.  The statute specifically provides that an owner may not be charged a fee, or required to obtain a special insurance policy, in order to use the common areas for such purposes (though the use by owner must be at a reasonable hour and in a reasonable manner.)
 
Bottom line: while the First Amendment may (or may not) apply to community associations when they seek to limit a resident’s speech, because the association is not actually a governmental entity, such limitations are not favored in the law. The Davis-Stirling Act provides some specific protections for political speech, and the anti-SLAPP statute may take up the slack in case of speech or expressions not specifically covered by Davis-Stirling.  An association may be able to justify limiting residents’ speech rights for reasons of public health or safety, but the burden will be on the association to demonstrate the validity of such claims.

1 It should be noted that even if it applies to associations, the First Amendment would not protect the utterer from certain types of speech, such as defamation, “fighting words”, or incitement to commit unlawful acts.
2 On “company towns” see Marsh v. Alabama (1946) 326 U.S. 501. For a case holding that community associations are NOT “company towns,” see Laguna Woods Publishing v. Golden Rain Foundation, infrat.
3 And while the statements regarding the homeowner’s unprofessional conduct might not be protected by the anti-SLAPP statute, the court noted the statements did not legally constitute defamation, because they were contained a letter to the attorney-homeowner himself, and were not published to third parties (an element of the cause of action for defamation.)

Woodbridge and Bird Rock: Two 2025 Cases with Major Association Implications

Karyn A. Larko, Esq.

Shareholder
Transactional Department Co-Chair

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Practices: Community Association Counsel 

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Woodbridge and Bird Rock: Two 2025 Cases with Major Association Implications

*Article originally published in CACM The Law Journal, Spring 2026

 
A number of California court cases were decided in 2025 that managers and their boards should be aware of.  Among these cases are 11640 Woodbridge Condominium Homeowners’ Assn. v. Farmers Ins. Exchange (“Woodbridge”) and Bird Rock Home Mortgage, LLC v. Breaking Ground, LP (“Bird Rock”).
 
Woodbridge
In Woodbridge, the association hired a contractor to replace the complex’s roof. While approximately 80% of the roof membrane was removed, a rainstorm hit, damaging the exposed insulation and plywood, and allowing water to enter some of the units. The roofer subsequently removed and replaced the damaged insulation and plywood, added a layer of base paper and base felt, and hot-mopped and tarred most of the roof.  The roofer also covered the roof with tarps in anticipation of another rainstorm. The second rainstorm dislodged the tarps, and rainwater penetrated the exposed felt layer and entered all of the units.
 
The Association had an “all risks” policy with Farmers Insurance Exchange (“Farmers”).  The association tendered a claim to Farmers for both the water damage to the units and the roofing work after the first storm and again after the second storm.
 
Farmers hired an expert to inspect the roof.  The expert opined that the tarps that had been used were too small and that the roofer had violated industry standards by removing 80% of the roof at the same time.
 
Farmers denied the associations’ claims, citing the “water damage” and “faulty workmanship” exclusions contained in the policy.
 
The association sued Farmers for breach of contract and breach of the implied covenant of good faith and fair dealing (i.e., for the bad faith denial of the claim).  The association also sued the contractor.
 
The Superior Court granted summary judgment in favor of Farmers (i.e., the court ruled in favor of Farmers based on motion papers, before the trial), concluding that the association’s losses were not covered under the policy because of the water damage and faulty workmanship exclusions contained therein. The association appealed the court’s decision.
 
The California Court of Appeal (“Court”) reviewed the case and reversed the ruling on the summary judgment motion.
 
The Court held that there was always a roof on the building because “roof” was not a defined term in the policy, and only certain layers of roofing material had been removed when the damage occurred; so the rain damage was covered. Accordingly, the water exclusion did not bar coverage.
As to the “faulty workmanship” exclusion, the Court found the term to be ambiguous because it could refer to faulty or negligent work and/or a faulty or negligent process. Accordingly, the Court found that coverage was not unambiguously excluded and, therefore, there were triable issues of material fact.
 
Because the Court found that there was a reasonable interpretation of the policy language under which the association had coverage, the Court reversed the summary judgment and sent the case back to the original trial judge so that a full trial could be conducted.
 
Prior to Woodbridge, there has only been one “all-risk” insurance case decided in California arising out of damage during roof repairs (Diep v. California Fair Plan Assn.). In the Diep case, the insurance company prevailed on summary judgment. The Court looked at the Diep case, but also looked to other states’ decisions on all-risk insurance coverage. Ultimately, the Court decided to follow the cases from New York, New Jersey, and Oregon.
 
This case is under review by the California Supreme Court, so the outcome of this case could change.
 
What are the key takeaways from this case?  You should tender insurance claims early and often, as it is not always easy to tell whether there might be coverage.  Your boards should also hire qualified experts to advise them on matters that are of great importance to their associations, including experts on evaluating denied insurance claims.
 
Bird Rock
In Bird Rock, homeowners defaulted on the payment of their assessments, leading the association’s trustee to record a lien and initiate a foreclosure sale under the Davis-Stirling Common Interest Development Act and the association’s CC&Rs.  At the initial trustee’s sale, Bird Rock Home Mortgage, LLC (“BRHM”) submitted the highest bid and tendered payment.  However, the trustee kept the bidding open after the sale pursuant to Civil Code § 2924m, which extends the bidding period for up to 45 days for certain residential foreclosure sales to allow “eligible bidders” to match or exceed the highest bid.  During this extended period, Breaking Ground, LP (“BGLP”) (an eligible bidder through its nonprofit partner) submitted a larger bid and received the trustee’s deed.
 
BRHM sued, arguing that Civil Code § 2924m does not apply to association lien foreclosures because such liens are not “mortgages” or “deeds of trust” under the statute.
 
The trial court ruled against BRHM, and BRHM appealed.
 
The California Court of Appeal affirmed the trial court’s holding, finding that the association’s CC&Rs, which created a contractual lien for unpaid assessments enforceable via nonjudicial foreclosure under Civil Code § 2924 et seq., met the statutory definition of a “mortgage” as a security interest in property for performance of an obligation (e.g., the payment of assessments), regardless of whether such liens constitute traditional home loans.
 
What are the key takeaways from this case?  Assessment liens can be treated as mortgages for foreclosure purposes if the CC&Rs grant the association the power to lien for unpaid assessments and the power to sell the separate interest to enforce the lien.  Winning bids at association foreclosure sales may not be final for up to 45 days.  The commencement of the 90-day redemption period will be delayed if the bidding period is extended. The initial high bid may not determine the final sale proceeds if the bidding period is extended.
 
Practice Tips:
 
  • Obtain and keep a complete copy of your associations’ insurance policies, including any exclusions and riders so they are readily available for review.
  • When tendering a claim, be sure you are complying with all requirements imposed under the policy for tendering claims.  Tender the claim in writing and retain a copy for the association’s records.
  • Because the laws pertaining to assessment collection are continually evolving and the potential liability for violating these laws can be significant, your boards should not attempt to perform any assessment collection activities themselves beyond conducting the votes needed to lien and foreclose against delinquent properties.

AB 130…Here to Stay

Jacquelyn E. Quinn, Esq.

Senior Attorney

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Practices: Community Association Counsel | Commercial CID

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California Assembly Bill 130, enacted on June 30, 2025, was revised at the very last minute to include amendments to Civil Code Sections 714.3, 5850 and 5855, which address association fines and enforcement procedures. The changes were added just days before the bill was signed into law without any committee hearings or opportunity for feedback. Leaving those most impacted by it, associations, with bad law and more questions than answers.

Most notably, AB 130 caps fines for many governing document violations at $100 per violation. The major takeaways regarding changes to permissible fines include:

      • Fines for violations are now capped at $100 per violation or a lesser amount adopted by fine schedule. As of June 30, 2025, associations are prohibited from imposing fines over $100 unless the exception discussed below applies.
      • The exception to the $100 fine cap is for violations that may result in an adverse health or safety impact on the common area or another association member’s property. To invoke this exception, a board must make a written finding at an open board meeting specifying the adverse health or safety impact of such violation. One way a board may satisfy this requirement is by making a finding in an open meeting a specific violation is adverse to health or safety on a violation by violation basis. Alternatively, an association could amend its rules to provide a general category of violations are adverse to health or safety (i.e., speeding, glass at the pool, off leash dogs in common areas) and therefore, subject to fines in excess of $100 without having to re-vote on the same violations over and over again.
      • Board shall not impose discipline on a member when the member cures the violation prior to the hearing and, in situations where curing the violation would take longer than the notice period before the hearing, when the member provides “financial commitment” to cure the violation. AB 130 does not define or provide an example of what a “financial commitment” is, but one option may be to impose a fine and hold it in abeyance subject to the member curing the violation by a reasonable deadline.
      • No late charges or interest may be charged for a fine.
      • Fines Imposed Prior to June 30, 2025, are not impacted. While AB 130 alters how associations may impose fines going forward, it does not invalidate previously imposed fines.

The new language of the statute also modifies part of the enforcement process, including:

      • If the board and owner are not in agreement following a hearing, the owner may request IDR. This is not a change to current law since an owner could always request IDR regarding an association dispute.
      • If the board and owner reach an agreement after the hearing, the board must prepare a written resolution to be signed by the board and the owner. The resolution will be judicially enforceable.
      • Written notice of a Board’s decision to impose disciplinary action is now due within 14 days of the hearing. Previously, notice within 15 days was required.

In summary, associations must immediately comply with AB 130, including generally no longer imposing fines in amounts more than $100 after June 30, 2025, unless a written finding is made by the Board at an open meeting the violation will have an adverse health or safety impact. AB 130 also does not necessarily require an association to suspend any enforcement actions until it amends its rules or fine policy, but boards will need to review and revise these policies to bring them into compliance with AB 130 before they are distributed with their annual policy statement. Associations should consult with their community association legal counsel regarding how to best integrate and comply with the new requirements of AB 130 for their specific community.

Automated License Plate Reader Cameras and Mandatory Policies

Emily A. Long, Esq.

Coachella Valley Office Managing Shareholder

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Practices: Community Association Counsel | Civil Litigation

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Flock cameras and other Automated License Plate Reader (“ALPR”) cameras have been used for 10 years or more by cities and law enforcement. More recently, ALPR cameras have become popular in community associations due to the cameras becoming more affordable, smaller, and easier to install. As to community associations, ALPRs allow for easy entry into gated communities by capturing still images of a vehicle’s license plate, not video, that are extracted by artificial intelligence for cataloging and retrieval purposes and allow access to residents if on an approved list. Pictures also may include the make, year, model, and color of a vehicle. Depending on the angle of the camera, the vehicle’s occupants also may be discernible.

In California, the use of ALPRs is governed by Civil Code sections 1798.90.5-1798.90.55, which require that all persons operating an ALPR system maintain reasonable security procedures and practices to protect ALPR information from unauthorized access, destruction, use, modification, or disclosure. “Persons” include an “association” or “corporation” under the statute, meaning that community associations are required to maintain these security procedures required under law.

Civil Code section 1798.90.51(b)(2) also requires community associations and other ALPR operators to implement a usage and privacy policy in order to ensure that the collection, use, maintenance, sharing, and dissemination of ALPR information is consistent with respect for individuals’ privacy and civil liberties. This policy must address various enumerated subjects, including the authorized purposes for using the ALPR system and collecting ALPR information; a description of how the ALPR system will be monitored to ensure the security of the information and compliance with applicable privacy laws; the purposes of, process for, and restrictions on, the sale, sharing, or transfer of ALPR information to other persons; and the length of time ALPR information will be retained. The policy must be made available to the public in writing, and, if the ALPR operator has a website, the usage and privacy policy shall be posted conspicuously on the community association’s or other operator’s website.

In the 1st District Court of Appeal case, Bartholomew v. Parking Concepts, Inc., 118 Cal. App. 5th 438, Brendan Bartholomew sued Parking Concepts, Inc. alleging that it automatically collected his license plate information when Bartholomew parked his vehicle in its parking garage without implementing and making publicly available a policy regarding the collection and use of the data collected in violation of Civil Code §§ 1798.90.5-1798.90.55.

The Court agreed that the collection and use of Bartholomew’s license plate data without implementing a statutorily required privacy policy, constituted harm in and of itself. There was no need for Bartholomew to prove damages in that Parking Concepts illegally shared Bartholomew’s license plate data or used it for any particular purpose.As a result, if your community uses ALPR cameras and does not have a privacy policy that is accessible to community residents on your website, the association should work with its ALPR vendor and/or community association legal counsel to prepare and adopt such a privacy policy.

Former Board Member Duties

Jillian M. Wright, Esq.

Shareholder

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Practice: Community Association Counsel

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What happens when a board member’s term ends or they step down? Serving on the board of a homeowners’ association is a big responsibility. Board members act as fiduciaries for their communities, making decisions that affect the financial health and harmony of the association. While former board members no longer have decision-making authority, they continue to hold certain duties and ethical responsibilities that protect themselves and the association.
 
Continuing Fiduciary Duties
One of a board member’s fiduciary duties is the duty of loyalty, which includes a duty to maintain confidences, such as information received in executive session meetings. Board members have access to sensitive legal and financial information. A former board member must still protect confidential and privileged information acquired during their tenure to avoid harming the association.
 
The legal and policy reasons for imposing the duty to maintain confidences (despite laws generally favoring transparency) survive a director’s term of office. The duty to maintain such confidences is an outgrowth of the fiduciary duty of an agent to his or her principal. When an agent receives confidential information in the course of that agency, the agent is bound to maintain that confidence even after the agency has terminated.
 
State law echoes these policy concerns in Government Code section 54963, part of the Brown Act, which provides that “[a] person may not disclose confidential information that has been acquired by being present in a closed session…to a person not entitled to receive it, unless the legislative body authorizes disclosure of that confidential information….” While the citations above do not pertain directly to common interest developments, the portion of the Davis-Stirling Common Interest Development Act titled Open Meetings Act was modeled after the Brown Act. As such, this law is instructive as to how a court might ultimately rule on the matter. This law is also instructive as to how a board should address the issues of confidentiality at executive session board meetings.
 
Keeping information confidential also extends to use of the membership list. Board members have access to owners’ personal information, and in some cases, they have more information than owners feel comfortable sharing with the community (i.e., the personal information of owners who have opted out of having their names and contact information included in the membership list; phone numbers, which owners are not entitled to obtain when requesting the membership list). Board members should return this record to management and not use the confidential information contained in this list for their own personal agenda. Practically, this information changes with time anyway, so people who previously allowed their contact information to be included in the membership list may have later opted out. For a former board member to use an old membership list to contact owners or worse, send that old membership list to other people, would be a breach of their fiduciary duty to maintain that confidential information and would render an owner’s choice to opt out meaningless.
 
Practice Tip
Board members must promptly return association property – keys, access cards, laptops, digital files, or email accounts –upon leaving their role. The new board or management should make sure access codes and passwords are changed upon the transfer of power.
 
Conclusion
Stepping down from the board does not erase all of the responsibilities that come with the role. Former board members should maintain confidentiality and assist in the smooth transition of knowledge and records. Responsible stewardship is the key to avoiding liability for the association and themselves personally.

Don’t be Lured into Using the Barnacle to Address Illegal Parking

Karyn A. Larko, Esq.

Shareholder

858.527.0111
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Practices: Community Association Counsel 

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Some security patrol companies are touting the use of the “Barnacle” to combat illegal parking in the common area.  They claim that it is a quicker, easier, and less burdensome method of parking enforcement than towing.
 
The Barnacle is a device that attaches to the front windshield of a vehicle, fully obstructing the driver’s view so the vehicle cannot be driven.  The driver must pay a fine in exchange for obtaining the code needed to remove the device.
 
While this device is certainly effective in immobilizing illegally parked vehicles, its use, as well as the use of boots and other similar devices, is illegal in California.
 
In 2004, the Office of the California Attorney General determined that the use of the boot, which immobilizes a vehicle, constitutes “tampering” in violation of California Vehicle Code section 108522 because it negatively impacts the vehicle owner’s use and enjoyment of their vehicle.  Section 108522 provides that:

“No person shall either individually or in association with one or more other persons, willfully injure or tamper with any vehicle or the contents thereof, or break or remove any part of a vehicle without the consent of the owner.”
 
While the Barnacle immobilizes a vehicle in a different way, it still serves the same purpose as the boot, which is to prevent the vehicle from being driven.  Under the California Attorney General’s analysis, the use of the Barnacle also violates California Vehicle Code section 108522 because it also negatively impacts the vehicle owner’s use and enjoyment of their vehicle.
 
Neither the law nor the Office of the California Attorney General is exempt from section 108522 devices used to enforce legitimate parking restrictions.
 
For now, this means that the only effective way to enforce common area parking restrictions when fines and membership suspensions are not working is to tow, even though towing comes with its own set of risks.
 
PRACTICE TIP
Before towing any vehicles from the common area, make sure the Association has the signage required by California Vehicle Code section 22658 prominently displayed at all entrances to the community.  As an extra precaution, additional signs warning that illegally parked vehicles may be towed should be displayed periodically within the community.