Speaking at Meetings

Under the Davis-Stirling Common Interest Development Act, an owner (though not the owner’s attorney) has a right to address the board during the period of time set aside by the board for owner comment. See SB Liberty LLC v. Isla Verde Ass’n., Inc. (2013) 217 Cal. App. 4th 272.

Timeshares

A property interest frequently coupled with a membership interest, which provides a timeshare member the right to use and occupy an interest in property for a specific period of time. A seller of a timeshare is typically selling the right of use of a property or a variety of properties for a period of time. The time period that a member has to use the property could be determined by weeks, intervals or points purchased by the member. Timeshares may exist within and be governed by a common interest development laws and are governed by the timeshare laws in California found in Vacation Ownership and Time-share Act.

Vacancy

A vacancy may occur either in a director position or officer position. A vacancy in a director position may occur due to the resignation, removal, death or other event in which the board may declare that a director’s position is vacant (Corp. Code §7221). A vacancy may also occur due to removal of the director without cause by a vote of the members (Corp. Code §7221). When the board declares that a vacancy exists, the board typically has the right to fill the vacant director’s position (Corp. Code §7224). However, unless the articles of incorporation or a bylaw approved by the members provide for the board to fill a vacancy created when the members vote to remove a director, the members have the right to fill the vacancy in an election (Corp. Code §7224). Although the articles or bylaws may provide otherwise, generally officers are chosen by the board, serve at the pleasure of the board, and thus may be removed and appointed by a board vote only (Corp. Code §7213). Caveat: Care is needed when reading the bylaws so as not to confuse the common right of a board to remove and replace an officer with the common obligation requiring a vote of the members to remove and replace a director.

Written Consent

Directors on a CID board may conduct an emergency board meeting (Civ. Code §4923) using electronic transmissions, such as e-mail, under very limited circumstances, if all the board members consent in writing to do so. This is in contrast to Corporations Code section 7211 that permits a non-CID board to conduct business without a meeting, if all the directors consent in writing to the action. Corporations Code section 7516 and most association bylaws also permit a corporation to conduct business without a meeting, if all the members give their written consent to the action. In most cases, this is impractical and impossible to obtain if the corporation has more than a handful of members.

Lump Sum (Fixed Price) Contracts

When the contract price is stated as a lump sum, the contract is referred to as a fixed price contract. Under a fixed price contract, the contractor bears all of the risks associated with the actual cost of completing the project. If the actual construction costs exceed the fixed price, the contractor is responsible for such excess costs and is obligated to complete the work for the fixed price. On the other hand, if the actual construction costs are less than anticipated, the contractor is entitled to the entire fixed price amount. The cost savings accrue to the contractor, increasing the contractor’s profit on the project.

Articles of Incorporation

Articles of Incorporation (“Articles”) are the formation document for incorporated corporations and are a part of an association’s governing documents. Articles are filed with the Secretary of State. Articles spell out the name, basic corporate purposes and powers, and character of the corporation (i.e., common interest developments are nonprofit mutual benefit corporations). Articles can be amended in accordance with the requirements in the Articles and the Corporations Code.

Bonds

A bond is a contract between an obligor (e.g., a developer), obligee (e.g., an association) and a surety (i.e., a bonding company). A bond provides security to the obligee that the obligor will deliver on a promise to perform. A bond will, typically, be in an amount sufficient to compensate the obligee for the obligor’s failure to deliver on its promise. If the obligor fails to perform, then the obligee has the right to request that the surety pay the obligee an amount up to the value of the bond.

Cigarette Smoke

Cigarette smoke is deemed a health hazard by various governmental agencies, and cigarette smoke that emanates from one area of association property to another constitutes a nuisance. Associations are increasingly taking steps, whether by CC&R amendment or rule adoption, to prohibit or restrict smoking in common areas, exclusive use areas and even inside units. The laws establishing smoke-free environments are evolving to support smoke-free condominium associations (at least in common areas).

Condominium Plan

The condominium plan is the underlying document creating condominiums. It is often recorded even before the CC&Rs. The condominium plan should define the various components of an association including unit, common area, exclusive common area, balcony, yard, etc. These documents are often very illuminating when seeking to understand where the association’s maintenance responsibility ends and the owners’ begins. See Article, Condominium Plan: Understanding This Often Overlooked Document.