Due Process

When applied in the context of associations for common interest developments, due process refers to procedural due process, which mean using procedures that are fundamentally fair by following established laws and adopted operating rules and procedures, and by affording reasonable notice and an opportunity to be heard when provided for by either.

Delegates

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.

D&O Insurance

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.

Derivative Actions

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.

Disclosures for Owners & Purchasers

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.

Developer

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.