Epsten, APC

Delegate systems are found mostly in larger CIDs in which it may be difficult for an association to obtain quorums for annual meetings or the necessary votes to obtain approval of governing document amendments. Delegates typically represent a given geographical area encompassing specified separate interests. When there is a board election or document amendment vote planned, there may be meetings of the members from each delegate district in which the owners cast their votes to direct their delegate how to vote in the board election or on the document amendment. Depending on an association’s governing documents, the delegate will probably get to cast the votes of all the owners who reside in the delegate district. However, under some governing documents, the votes of the entire district are split in proportion to the way the votes were cast by the owners who actually voted. Under other governing documents, all the votes may be cast the way a majority of the owners cast their votes.

This stands for Directors and Officers Liability Insurance. D&O insurance is intended to defend and indemnify the directors and officers of an association and often the association itself, usually against claims made by other persons arising out of alleged losses or damage other than bodily injury or property damage and possibly other personal (non-bodily) injury losses, such as libel or slander, that are covered under the typical commercial general liability (“CGL”) insurance policy. For directors and officers to obtain the limitations against liability offered by Civil Code section 5800, associations must have D&O insurance in the amounts specified in the statute. See the Article, Insurance for Community Associations, for more information.

A lawsuit brought by a shareholder of a corporation on behalf of the corporation to enforce or defend a legal right or claim, which the corporation has failed to do. Derivative actions in the context of homeowners associations are lawsuits brought by a member of the association, typically against a member of the board of directors or the entire board of directors, to enforce a legal right of the members of the Association that the board has failed to do or for malfeasance against the board or board member. The person bringing the derivative action cannot allege or recover damages on behalf of him or herself.

California Civil Code section 4525 provides that the owner of a separate interest, other than an owner subject to the requirements of section 11018.6 of the California Business and Professions Code, shall, as soon as practicable before transfer of title to the separate interest or execution of a real property sales contract therefor, as described in Business and Professions Code section 2985, provide the following to a prospective purchaser. See Section 4525 for the list of documents.

A Developer is an individual or entity who develops or builds a residential or commercial project. A developer may purchase land and obtain entitlements from government agencies with jurisdiction over the project (including obtaining a map in accordance with the Subdivision Map Act) that will allow a developer to build and/or sell its intended project. A developer may either (i) sell the land to another developer or a builder or (ii) build improvements on the land for sale to the public (e.g., residential housing). Depending on the nature of the project, a developer may be required to obtain a Public Report from the Bureau of Real Estate in accordance with the Subdivided Lands Law.

Directors are elected by the members to the board of an association. An association’s bylaws generally dictate the number of required directors, whether directors must be members of the association and other director qualifications. Directors vote on association matters and can only be removed by a recall election or by specified reasons in the governing documents or Corporations Code.

A physical and/or mental condition which interferes with a life function. The definition of disability differs slightly under state and federal law. A person suffering from a disability may be entitled to a reasonable accommodation (or the right to make a modification at the applicant’s cost) under state and/or federal law, generally by reference to California’s Fair Employment and Housing Act (Gov. Code 12900 et seq.) or the federal Fair Housing Act (42 USC 3601 et seq.)

Discipline of a member is largely controlled by Civil Code section 5855. The most basic requirements follow the 10/15 rule. Members must be notified of a hearing at least 10 days prior to the meeting and notified of the outcome within 15 days following the meeting (governing documents may require a longer notice period). If your association does not have a fine policy, the association should draft and adopt one pursuant to Civil Code section 4360. Ensure that all disciplinary measures are well documented with hard copy letters and consistent application of the association’s fine policy.

See Annual Policy Statement

California Civil Code section 4525 provides that the owner of a separate interest, other than an owner subject to the requirements of section 11018.6 of the California Business and Professions Code, shall, as soon as practicable before transfer of title to the separate interest or execution of a real property sales contract therefor, as described in Business and Professions Code section 2985, provide the following to a prospective purchaser. See Section 4525 for the list of documents.