Author: Mary Howell Archives - Page 2 of 2

SB 269: ADA Issues Revisited

In 2012, the California legislature was incensed by unprovoked attacks on small commercial operations by drive-by “disability activists” who, after eye-balling the complex for ADA violations would sue, and then settle for attorney fees and a few dollars more…In response, the legislature enacted a defense for such businesses, Civil Code 55.3, 55.53. . In relevant part, these provisions required a potential plaintiff to give notice to the owner, before a suit is filed, of the owner’s rights and obligations under the disability protection laws. The legislation further allowed the owner a chance to reduce damages by using the services of a “CAsp”, a California certified access specialist. (A list of CAsp’s is found at www.apps2.dgs.ca.gov/dsa/casp/casp_certified_list.aspx) The specialist could inspect the premises, prescribe changes to comply with the law, and if done within 30 days of any complaint, the owner could stay the action, and limit damages for each claim. Civil Code 55.54.

SB 269 expands the defenses available to the property owner. It lists certain technical violations (e.g., interior signage, lack of some types of exterior signage, such as location of accessible pathways, and the color and condition of parking lots and striping…) of the act and establishes a presumption that these violations do not result in damage to the plaintiff-disabled person. The bill also protects small business (as defined) from statutory damages if changes are made during the 120 day period after the owner obtains an inspection of its premises by a CAsp.

The impact for associations? Probably little for wholly residential associations which do not open their facilities to the public at large. The ADA (and its state analog, Cal. Civil Code 54) do not, as a rule apply to residential associations, unless and until they open their facilities to the public. But commercial associations need to be aware of these defenses, and most particularly, of the favorable effect of consulting with CAsp’s and taking regular, pre-litigation steps to assure that the premises comply with accessibility guidelines (as those owners have a continuing duty under the law to comply with current guidelines, including a duty to upgrade and improve premises.)

Sadly, the CAsp defense is not generally recognized in federal courts. The 2012 enactment led to a virtual stampede headed in the direction of federal courts. While the possibility of recognizing the defense continues to be debated at the federal trial court level, for the most part these statutes will protect against state law claims only. Stay posted!

No Fun in the Sun: Swimming Pool Specifics

By Mary M. Howell, Esq.

What kinds of pool rules may an association have?

How may “health and safety” issues be
legally addressed?

In US v. Plaza Mobile Estates (2003 U.S. Dist. Ct. Cal.) 273 F. Supp.2d 1084, the government sued operators of several mobilehome communities, alleging their recreational use rules violated the federal Fair Housing Amendments Act of 1988. The rules fell into 3 categories: they either absolutely denied access to facilities to children, imposed an “adult supervision” requirement, or limited the hours children could use the facilities. The park owners argued that the rules were intended to guard the health and safety of the children. The court was not persuaded: “As with [] absolute prohibitions [based on age], these adult supervision requirements are [] not the least restrictive means to achieve [] health and safety objectives… [T]here is nothing magical about the age of 18 or 14 years old if defendants’ concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with the use of rules. Moreover, rather than being connected to such ages, bicycle and pool safety would be better served with a proficiency requirement…”

To most of us, it is simply not feasible to administer swimming proficiency tests to all children wishing to use the pool, and even if an association were to do so, it would invite suits against the association should a “certified proficient swimmer” come to harm.

So how to approach the valid concern of “health and safety”? What IS the “least restrictive” way to approach the problem? You might also require the parent of the child to confirm in writing that the child is proficient in terms of swimming (which seems to accord with the judge’s suggestion, above.) And if the real concern is less “safety” than noise and boisterous behavior, have a rule which focuses on behavior, not on age. (Even octogenarians can be disruptive: shocker!)

Is the Association required to alter common areas in response to a disability-based claim?

Another pool issue revolves around disability-based requests. How should the Association handle requests to install pool lifts, or (for example) to allow pool flotation when rules prohibit it? With regard to the pool lift, remember an association is not subject to the Americans with Disabilities Act (“ADA”) unless its facilities are open to the public at large. Instead, the association is governed by the Fair Housing Amendments Act (“FHAA”) which has similar but not identical requirements. The FHAA provides the cost of a disability-based modification is to be borne by the applicant, not the association. With regard to the pool flotation device example, the Act requires the association to suspend enforcement of rules where necessary to afford a disabled resident an equal opportunity to use and enjoy the premises. Many similar questions are answered by HUD, in two documents available online: the 2004 “Joint Statement on Reasonable Accommodations” and the 2008 “Joint Statement on Reasonable Modifications.”

What happens if the association (or its manager) are accused of unlawful discrimination? Can the association be liable for discrimination by its manager?

Since many D&O policies exclude defense of claims based on discrimination, the association may have to pay the cost of defending the claim, and is likely to be required to defend the accused manager also. Because an association can be liable for discriminatory acts by a manager, promptly investigate complaints about questionable behavior. Check your D&O policy carefully, and try to select a policy which does not exclude such claims. And, if the manager is accused, the association may have to consider a further agreement with the management company, allowing for defense of the claim, but reserving the right to seek reimbursement from the manager and management company if the manager is ultimately found to have intentionally discriminated.

Reprinted with permission from California Association of Community Managers, Inc. (CACM) Law Journal (Copyright, 2015, CACM). For additional information on CACM visit http://www.cacm.org.

Fair Housing: ADA or FHA? Why It Matters & What HOAs Need to Know to Address Disability Accommodation Claims

Mary M. Howell, Esq., CCAL

Of Counsel

858.527.0111
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Practices: Community Association Counsel | Commercial CID | Senior & Fair Housing

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Associations frequently must address claims for disability accommodation from owners, residents, their families and friends. While some aspects of the law have been “on the books” for more than 20 years, a surprising amount of misinformation still circulates. The questions usually arise from a misunderstanding of the two federal laws providing disability protections, the Federal Fair Housing Act of 1988 (“FHA”) and the Americans with Disabilities Act (“ADA”). This article discusses how the two laws interact, and what aspects of community association operation may be affected.

Which Law Applies?

ADA or FHA (or both)? Is an association covered by either, or both, of these federal disability protection acts? Usually the answer is “FHA, not ADA.” Both the FHA and the ADA require the objects of those statutes to provide “reasonable accommodations” to the disabled. However, there are significant differences in how they deal with the issue, including who must pay the cost of an accommodation.

The ADA applies only to a “public accommodation;” that is, a certain type of business or facility, which is open to the public. To be subject to the ADA, the facility must both be of a category listed in the ADA and open to the public.

There are 12 categories of business or facility covered by the ADA, and if the business/facility is not within those categories, the ADA does not apply to that facility or business. Many of the listed facilities are commonly found in homeowners associations, e.g., an establishment serving food or drink, a stadium “or other place of entertainment,” an auditorium “or other place of public gathering,” a library or “place of recreation,” a “senior citizen center,” a gymnasium, golf course, “or other place of exercise or recreation.” However, in the vast majority of cases, those facilities, when located within an association, are not open to the public. Thus, the ADA most often does not apply (although the FHA does).

Case Law – Public Accommodations

In Carolyn v. Orange Park Community Ass’n. (2009) 177 Cal.App.4th 1090, a portion of a county-wide bridle trail was both open to the public and located on association common area. When a disabled person sought access to the trails by means of a reasonable accommodation under the ADA, the court rejected the notion that the trail system was “public.” In so doing, it focused on several factors:

“We agree with the premise that recreational common areas within common interest developments can be classified as public accommodations in appropriate circumstances. But we think it clear OPCA’s trails would not be a public accommodation if OPCA actively excluded the general public from using the trails. Moreover, we do not think OPCA’s private trails transform into public accommodations merely because OPCA does not actively exclude members of the public from using the trails. …

Each of the examples listed in the ADA and the Health and Safety Code illustrates the broader concept that places of public accommodation are places designed and intended to provide services, goods, privileges, and advantages to members of the public, usually in exchange for payment (and when not requiring payment, often motivated by some other advantage to the entity providing the accommodation, such as promoting its good will to the community).” [Emphasis added]

The court noted that the trails had been built for the use of association members, there was no evidence the association encouraged public use of the trails, and the association charged no fee for use by the public. The court therefore concluded that the trails were not a “public” accommodation.²

Suppose the association does solicit members of the public, and charge them, for the use of the common area facilities—what does that mean in terms of the ADA? If the association opens its facilities to the public, and those facilities fall into one of the 12 categories set out in the ADA, the association runs the risk that the portion of the facility open to the public may be held to be subject to the ADA. If the association charges for that use, the risk increases. If the use is sufficiently “public,” then the association would be required to comply with the ADA.

Barrier Removal & Reasonable Accommodations

ADA compliance usually concerns one of two issues: removal of barriers where “readily achievable” and “accommodations” involving provision of services. In both cases, the cost of such compliance under the ADA is borne by the “public accommodation” (in our case, the association) and not by the disabled person.

Whether a proposed barrier removal is “readily achievable” changes from case to case. The Act says barrier removal is “readily achievable” where it is “easily accomplishable and can be carried out without much difficulty or expense.” In addition to the cost of the project, a court may also consider factors such as zoning implications, whether the building is an historical landmark, and the financial ability of the entity to remove the barriers. Examples of “barrier removal” which are generally considered “readily achievable” include installing ramps, making curb cuts, rearranging tables and chairs, widening doors, installing grab bars in toilets, and reworking toilets and lavatories for wheelchair access.

If the association isn’t subject to the ADA, can it refuse to pay for a requested alteration? Yes. If an association is subject only to the FHA, a homeowner can request permission to make changes to the common area, and to his own unit, but the cost of such alterations is borne by the homeowner, not the association.³ However, per HUD (the federal agency charged with enforcing the FHA), the association may not demand as a condition of approval for the alteration that the homeowner pay for special insurance or use particular contractors.

Suppose the request comes from a tenant rather than an owner—is the association still required to permit the alteration? Yes. Even though the tenant may not be expected to reside in the community indefinitely, the association must still allow the accommodation, whether pursuant to the FHA or the ADA. Further, if the alteration is to common areas, HUD takes the position that the FHA does not allow the association to condition approval of the alteration on its removal when the tenant moves out.

If the association doesn’t believe an applicant is disabled, can it request proof? If the disability and the need for the requested accommodation is obvious, no. But if there’s nothing obvious about the connection between a claimed disability and the requested accommodation or modification, then the association may ask for evidence to support the request.

Is the association required to grant every request? No. The association may suggest other accommodations if the requested one is somehow objectionable (e.g., unsafe, not necessary to afford the applicant an equal opportunity to use and enjoy the premises, application not disabled). But, if the matter cannot be resolved by negotiation, the association should be very wary of rejecting an application without thorough investigation and consideration of the request. Consulting with counsel is strongly suggested, as most D&O insurance policies contain exclusions for damages arising from fair housing claims.

We keep getting threatening letters from a “fair housing council.” What’s that? A number of private, nonprofit entities, generally self-labeled as “fair housing councils,” have been established to serve as unofficial “watchdogs” for FHA compliance. Usually they provide free legal advice to disabled applicants, and attempt to resolve any conflicts before a claim is filed with HUD (or DFEH, the state equivalent of HUD), or an action is filed in court.

Additional Resources

Readers are encouraged to read two summaries of frequently asked questions about the FHA which can be found on the internet: the “Joint Statement of HUD and DOJ on Reasonable Accommodations under the FHA” [http://www.justice.gov/crt/about/hce/joint_statement_ra.pdf] and the “Joint Statement of HUD and DOJ on Reasonable Modifications under the FHA” [http://www.justice.gov/crt/about/hce/documents/reasonable_modifications_mar08.pdf].

^₁ The author wishes to acknowledge that the original version of this article was published in Connect magazine, a publication of the Community Associations Institute – Greater Inland Empire chapter, 2010, issue 3.
² In the Carolyn case, the court also quoted from a 1992 HUD letter ruling which held that an association’s clubhouse was not a “public accommodation” if the use of the clubhouse was restricted to the use of residents and their guests.
³ There is a minor exception to this statement. If the developer failed to comply with the disability access guidelines which were in effect at the tine of construction, a homeowner can demand the association reconstruct for compliance, at the association’s cost.

Developer Transition

By: Mary M. Howell, Esq.

One of the most critical periods in the life of a community association occurs when the developer’s involvement is about to end. Many significant events arise within a very short period of time. Following are some of the more common issues with which an association will need to deal:

Securing Completion and Turnover of the Common Areas

The Board must confirm that all common area promised by the developer has been conveyed to the association and needs to inspect those common areas to determine whether they have been appropriately completed, and whether the workmanship is adequate. Poor workmanship may not delay the transfer of the property from developer to association, but may give rise to claims for construction defects. On the other hand, failure to complete construction may require the association to call on “on site completion” bonds (copies of which may be lodged in the Bureau of Real Estate’s files for the project).

Obtaining Copies of Important Documents

While there are few documents the developer is required by law to relinquish to the new association, there are many documents which would be helpful and should at least be requested: corporate records (such as the articles of incorporation, corporate minute book, originals of bylaws and CC&Rs, and annexation documents); real property records (deeds, tract maps, condominium plans, easements and licenses); bank statements; tax records; contracts with vendors and service providers; “as built” plans for recreational facilities, irrigation systems, etc.; grading plans; Bureau of Real Estate (BRE) final subdivision reports (“white papers”) for each phase; BRE budgets for each phase; copies of completion and assessment bonds; warranties for equipment; maintenance manuals; legal correspondence; insurance policies; subsidy agreements; records of architectural review applications and decisions.

Arrange for Education of Homeowner Directors and Committee Members

The administration of common interest developments is a highly regulated area. Obtaining education, via Community Associations Institute or other classes, or by reference to texts on the subject, will vastly improve director performance and homeowner satisfaction.

Confirm Payment of Real Property Taxes on Common Areas

While the real property which will be “common area” is still owned by the developer, it is subject to property tax. When the common area is transferred to the association, there should be no regular property tax due thereafter. Unfortunately, several things can go wrong: if the Assessor’s office is not properly notified of the change in ownership, the lots continue to be taxed; if tax is assessed and not paid, the property may be sold by foreclosure of a tax lien. It is therefore essential to have a complete list of the common areas, and to confirm when the transfer to the association was recorded, and whether there were outstanding taxes at that time, or at present.

Bring Developer Current on Unpaid Assessments

Often a developer will fail to bring assessments current in the last stages of sales. Because the developer will no longer have a significant presence in the community at this stage, it is particularly important to either obtain full payment or lien the unpaid homes prior to the sale to a third party. While it is important to timely collect all unpaid assessments, sale of the units without a lien in place will make collection against a developer much more difficult.

Determine What Easements the Developer Will Retain

Most CC&Rs contain easements in favor of the developer to allow it to continue to market and sell within the community, even after construction is completed. Some developers claim a right to continue to occupy recreational facilities, even after completion of construction, on the basis of such retained rights. The Board needs to review these provisions to see what specific rights were retained, and whether the developer has the right to continue to occupy common area buildings without paying rent to the association.

Determine Developer Voting Rights

After construction is completed, but before sales are done, the developer will typically retain rights to appoint some of the Board. It is important to determine how many developer-appointees are permitted, so that the Board may correctly conduct the election of homeowner directors.

Inspect Common Area Improvements for Possible Defects

While both developer and association desire to avoid litigation to resolve allegations of defective construction, it is important to note that housing constructed after January 1, 2003 is subject to a relatively short period wherein the Board must advance its claims, under the law commonly referred to as “SB 800.” Old law allowed a board up to 10 years in some cases to pursue defects; current law shortens that period substantially in many cases (in some cases, to one year). Accordingly, the Board needs to be vigilant in investigating claims of poor construction or landscaping. Furthermore, some CC&Rs impose on the association an annual inspection requirement, and may further require the use of specified maintenance manuals prepared by the developer.

This is a short list of typical problems. In a bad economic market, the turnover process may be complicated by developer failure, sales to successor developers, lender foreclosures, and insolvency proceedings. Any of these will force the association to obtain legal advice specifically addressing these problems.