Tendering Insurance Claims

This is the process of submitting a claim or potential claim to an insurance carrier. It is critical to tender insurance claims promptly and following the requirements for doing so as specified in the applicable policy or policies that might cover the claim. It is particularly important to do so regarding claims or potential claims under directors and officers liability policies and other types of “claims-made” policies. Failure to give notice in a timely manner can result in a denial of a claim even though a timely tender would have resulted in coverage. See Article, Insurance Claims, Proper Submission, and your association’s insurance agent(s) or broker(s).

Typeface

Civil Code Section 5320, which advises members of the availability of the complete pro forma budget if a summary budget is distributed, and Section 5300(b)(9), the insurance summary statement, require that an association print these disclosures in at least 10-point boldface type. The first page of certain recorded documents must include a statutory discrimination notice in at least 14-point boldface type.

Term Limits

Refers to limitations established by the governing documents on the number of terms a director may serve. The limits can include a permanent disqualification after a specified number of terms, or limits on serving more than a specified number of consecutive terms. A term limits proposal should make clear whether it will apply to sitting directors or to the terms such directors have already served at time of adoption of the provision, but if the adopted language does not clearly indicate an intent to make the provision retroactive, it should apply prospectively only.

Timeshares

A property interest frequently coupled with a membership interest, which provides a timeshare member the right to use and occupy an interest in property for a specific period of time. A seller of a timeshare is typically selling the right of use of a property or a variety of properties for a period of time. The time period that a member has to use the property could be determined by weeks, intervals or points purchased by the member. Timeshares may exist within and be governed by a common interest development laws and are governed by the timeshare laws in California found in Vacation Ownership and Time-share Act.

Towing

Vehicle Code section 22658 governs towing from association property. An association must either have the statutory signage or provide a citation to the improperly parked vehicle and let 96 hours lapse before towing the vehicle. The association and/or towing company must also comply with numerous post-towing notification requirements. There are penalties for violations of section 22658 requirements.

Town Hall Meetings

A generic term for informational meetings of members, convened by the board, at which meeting no member vote is to be taken. Often used to refer to meetings to discuss proposed document changes, proposed construction/reconstruction projects, or some other issue of general interest to the community. Although no vote is taken at such a town hall meeting, the meeting may be a prerequisite to a required member vote.

Taxation

Associations may have tax issues that arise with respect to taxes claimed to be on common area owned by an association, personal property owned by an association, such as office furniture and equipment, and income taxes. In most cases, but not necessarily all, the common areas of most CIDs are exempt from being taxed separately to an association, because it is usually already being taxed as part of the taxes paid by the individual owners. See Revenue and Taxation Code sections 2188.32188.7.

Transfer Fee

Refers to a fee imposed as a condition of changing occupancy of a separate interest. The amount an association may charge in this regard is limited to the association’s actual costs to change its records in connection with a transfer of title or other interest. See Civ. Code §4575. Note, however, that the association may pass through a transfer fee charged to it by its management company without violating 4575. See Berryman v. Merit Property Management, Inc. (2007) 152 Cal. App. 4th 1544.