Licenses

A license is an authorization given by the owner of land to another to perform an act or acts on the owner’s property. The owner’s permission may be expressed or implied. The license is a personal privilege; it is not an interest or right in the land. Generally, licenses are revocable at will by the land owner. The classic license is personal to the license holder and cannot be transferred, assigned, conveyed, or inherited. Written license agreements frequently blur the line between easements and licenses.

Legal Fees

Pursuant to Civil Code section 5975, the prevailing party in a legal action to enforce the governing documents shall be awarded reasonable attorney’s fees and costs. What is deemed “reasonable” is left to the discretion of the court upon a motion by the prevailing party.

Liability, Limiting

More and more contracts, especially those of design professionals, contain language that tries to limit the liability of the service vendor. These enforceable provisions should be deleted whenever possible, as they serve to transfer the risk of loss to the association rather than the service vendor. Service vendors should remain responsible for any damage or loss their work causes.

License Status of Contractors

The California Contractors State Licensing Board (“CSLB”) issues and regulates contractor’s licenses. A contractor’s license can be suspended or revoked by the CSLB. An association should always verify that the contractor is properly licensed (and insured) before entering into a contract or using the contractor’s services. The CSLB website provides a license status check for consumers. See Contractors and Unlicensed Contractors.

Liens

Delinquent assessments often lead to an association placing a lien against a delinquent owner’s property. Once recorded, the lien acts to secure the assessment debt and allows the association to foreclose on the owner’s property if the assessments alone reach a threshold of $1,800.00 or are more than 12 months delinquent.

Limited-Equity Housing Cooperative or “LEHC”

LEHCs are a special type of stock cooperative that are created to provide affordable housing. There are typically maximum annual increases permitted on the cost and resale value of the stock or membership interest of resident owners, and the property must be held for public or charitable purposes and must revert to a public or charitable entity or charitable corporation when the LEHC is dissolved. See Civil Code section 817 and Business and Professions Code section 11003.4.

Litigation

The act or process of bringing a legal action in court. It entails filing a lawsuit, defending against a lawsuit, conducting discovery, filing motions, a trial before a judge and/or jury, any post-trial motions and appeals.

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.

Late Fees

Assessments are generally considered delinquent 15 days after they become due. Once an assessment is delinquent, an association may impose a late fee of $10.00 or up to 10% of the delinquent assessment, unless otherwise stated in the CC&Rs. Since assessment payments are generally applied to the oldest assessment due, late fees may accrue on an owner’s assessment account until the account is paid in full