Epsten, APC

The act of altering a governing document. With some exceptions, the amendment of CC&Rs and bylaws requires a member vote, while the board has the authority to amend rules. The percentages of member consent required for amendment are normally set forth in the governing documents themselves. Occasionally the consent of persons or entities other than the members (e.g., lenders) is required as well. The Davis-Stirling Act also contains a procedure for application to the Superior Court for approval of a proposed CC&R amendment when sufficient owner consents cannot be obtained. (Civ. Code §4275)

The American Institute of Architects (“AIA”) publishes more than 120 contracts and administrative forms that are recognized throughout the design and construction industry as documents for managing transactions and relationships involved in construction projects. AIA documents are grouped by family and by series. Documents in the same family are coordinated to tie together the various legal and working relationships on the same project types or delivery methods. They are linked by common terminology and procedures and may also adopt one another by reference. Documents in each series reflect the purpose of the document. For example, owner/contractor agreements are found in the A series.

The governing documents may not limit or prohibit the display of the United States flag on or in the owner’s separate interest or exclusive use common area, except as needed to protect public health or safety. (Civ. Code §4705; Govt. Code §434.5; 4 U.S.C. § 5) Certain noncommercial signs and flags are also permissible in common interest developments. (Civ. Code §4710) See each statute for specific requirements and limitations.

Every year, pursuant to Civil Code section 5310, community associations are required to provide their members with Annual Policy Disclosures. These disclosures range from the association’s discipline policy to their delinquent assessment policy. These disclosures must be provided to members no more than 90 and no less than 30 days prior to the end of the association’s fiscal year.

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Board members should generally not abstain except where they have a conflict of interest. Corporations Code section 7231 calls for directors “to act in the best interest of the corporation…,” not to abstain because they don’t know what to do or to avoid offending one side or another. The Robert’s Rules admonition to abstain except to make or break a tie applies to larger assemblies in which the president’s vote may influence the assembly’s votes, not to a small board or committee. See Robert’s Rules, Newly Revised, 11th Edition, §4, p. 50, Lines 18-23. Typically, presidents and other officers (secretaries, treasurers, etc.) don’t have a vote; board members do, and board members are supposed to act.

SLAPP stands for “Strategic Lawsuit Against Public Participation.” A SLAPP lawsuit is one that is filed against a person or organization to chill their right under the US Constitution to Free Speech and/or Freedom of Petition. An anti-SLAPP Motion is a motion brought under Civil Code §425.16 to dismiss a SLAPP lawsuit.

Common interest developments in California are, at their roots, nonprofit corporations. Many associations may have revenue in the hundreds of thousands and assets in the millions. In order to ensure owners are protected, associations must provide thorough, transparent accounting reports utilizing the accrual method of accounting.

A non-judicial procedure for resolving conflicts. Arbitrations can be binding or non-binding.  Parties to a dispute may mutually agree to submit the case to arbitration rather than a trial. Many contracts and CC&Rs contain mandatory arbitration clauses that require the parties to submit to arbitration. The arbitrator is a neutral third party, typically a retired judge or an attorney, who conducts the arbitration, hears the evidence and makes a decision, in the place of a judge and/or jury. Arbitrations can be less complicated and costly than a trial, but there is no appeal from the decision of an arbitrator unless the agreement specifies the right to an appeal. An arbitration award is entered as a judgment and is enforceable by the courts.

This method of accounting recognizes economic transactions when they occur, regardless of when cash actually changes hands. The goal of this system is the matching principle, wherein revenues are matched to expenses at the time the transaction occurs, as opposed to when the cash receipt or disbursement actually occurs. While slightly more complicated than cash accounting, this method gives a more accurate picture of an association’s fiscal status.