Epsten, APC

Depending on the provisions of an association’s governing documents, an association can enter into cable contracts without membership approval. Bulk cable contracts provide a reduced rate for cable services. Even if the board has authority to enter into a cable contract for the entire community, member approval may be required if the term of the contract exceeds any service contract term limits in the governing documents.

Generally speaking, association funds that are representative of different financial accounts should be kept separate and distinct. For example, the general operating fund should be kept in a separate bank account from reserve funds. This procedure creates clear paper trails and may reduce the chances for embezzlement. The Civil Code specifically states that managers for associations may never commingle funds from difference associations.

Most construction or repair work with a value over $500 must be performed by a contractor that is properly licensed (Bus & Prof. Code 7028 and 7048). A summary of the licenses issued by the State of California, and the work that can be performed by a person holding each type of license can be found at www.cslb.ca.gov. A check of this website should be made before any contract is signed to ensure that the Association is working with a person or company lawfully entitled to do the work and that the license is active and valid.

Used by some associations to help deter crime and identify perpetrators of crime. Use of cameras can create additional liability for an association, especially if members misconstrue the cameras to be a guaranty or assumption of responsibility by the association for their safety. Cameras may only be used in portions of the common area where there is no reasonable expectation of privacy.

In the association context, a committee refers to (a) a group of individuals convened by the board of directors to investigate and advise the board on an ad hoc basis; (b) a group of individuals created within the governing documents to perform specific tasks for the association (such as an architectural review committee or a nominating committee); or, (c) a “committee of the board,” which is a subset of the board consisting of at least two directors (and populated only by directors), convened for a particular purpose, such as an executive committee or a litigation committee.

A contract is an agreement that defines the rights, duties and obligations of the parties to whatever service is being performed. The content of a contract will often determine the outcome of any dispute that might arise, so it is important that all contracts be written or reviewed by counsel before they are signed by the board.

Carbon monoxide is a toxic, colorless, odorless gas, produced by the use of fossil-based fuels in areas without adequate ventilation. As of July 1, 2011 the Carbon Monoxide Poisoning Prevention Act required owners of all single-family homes with an attached garage or a fossil fuel source to install carbon monoxide detectors within the home by July 1, 2011. Owners of multi-family leased or rental dwellings, such as apartment buildings, had until January 1, 2013 to comply with the law. (Health & Safety Code §17926) Operable smoke alarms have been required as far back as January 1, 1986. (Health & Safety Code §13113.8)

Common areas are the portions of a development in which the owners have some collective interest. It is typically all of the development except for the property interests that are owned by the homeowners. Common area can consist of one or more of the following types of interests. It can be owned: (1) by an association; (2) by a group of owners or all owners collectively (also called “tenants in common”); (3) as mutual easements; or, (4) reciprocal easements. See Civil Code section 4095.

At their most basic root, associations are nonprofit corporations and thus must adhere to the Corporations Code. Oftentimes, procedures and rules missing from the Davis-Stirling Act can be found in the Corporations Code.

A recorded document (generically referred to as the “declaration” of “conditions, covenants and restrictions” or “CC&Rs”) setting forth use restrictions governing the common interest development, making membership in the association, and payment of assessments, mandatory. “CC&Rs” may also refer to recorded amendments of the original CC&Rs. For CC&Rs first recorded after January 1, 1996, the declaration has to contain a legal description of the development, a statement identifying the development as one of four types of common interest developments, the name of the association, the use restrictions, and (occasionally) other statutorily-mandated items. Civ. Code §§4250, 4255.