All posts by Steve Tinnelly

CC&R Reference Absent from Deed

An association’s “Declaration of Covenants, Conditions and Restrictions” (“declaration” or “CC&Rs”) is a recorded document setting forth the majority of the powers, rights and responsibilities of the association and its members. A developer creates and records CC&Rs as “equitable servitudes” against each of the separate interests within the association’s development. Equitable servitudes are essentially contractual restrictions on the use of land which are legally binding on current and future property owners. (Civ. Code § 5975.) The restrictions contained in  CC&Rs are “clothed with a very strong presumption of validity which arises from the fact that each individual unit owner purchases his unit knowing of and accepting the restrictions to be imposed.” (Villa de Las Palmas HOA v. Terifaj (2004) 33 Cal.4th 73, 90.)

Even where an owner’s deed to his lot or unit within the association’s development does not contain a specific statement that the owner’s property is subject to the CC&Rs, the owner may nevertheless be bound by the CC&Rs and obligated to comply with the restrictions contained therein. Some relevant California case law addressing this issue includes the following:

  • A nonspecific reference in a deed (subject to “all restrictions of record”) was held sufficient to create mutually enforceable equitable servitudes and the deeds need not contain a statement that they are subject to a “common plan” as long as the restrictions demonstrate the existence of such a plan. (Fig Garden Park No. 1 Homeowners Ass’n. v. Assemi Corp. (1991) 233 Cal. 3d 1704.)
  • The California Supreme Court has held that a prior recorded declaration bound the lots encumbered by the declaration, even though the deeds to the encumbered lots did not refer to the declaration. (Citizens for Covenant Compliance v. Anderson (1995) 12 Cal. 4th 345.)

SB 721 (Hill). Contractors: decks and balconies: inspection.

Would require the inspection of any load-bearing components and associated waterproofing elements of the buildings by a licensed inspector. The bill would require the inspections and any repairs to be completed by January 1, 2022, along with subsequent inspections every 5 years. On July 3, 2018, the proposed text of SB 721 was amended to exclude CIDs.

Current Status: Dead

FindHOALaw Quick Summary:

This bill would add Business and Professions Code Section 7071.20 Article 2.2 (commencing with Section 17973) to Chapter 5 of Part 1.5 of Division 13 of the Health & Safety Code to require a property owner to conduct an inspection of decks, balconies, and elevated walkways more than six feet above ground level in a building containing three or more multifamily units by a licensed general contractor, structural pest control licensee, licensed architect, licensed engineer, a certified construction inspector, or building officialor other licensee as approved by the Department of Consumer Affairs. The purpose of the inspection is to verify that all of the balconies and other elevated walking surfaces are in generally safe condition, adequate working order, and free from any hazardous dry rot, fungus, deterioration, decay, or improper alteration to the extent that the life, limb, health, property, safety, or welfare of the public or the occupants is not endangered.  The bill would require the inspections and any necessary repairs to be completed by January 1, 2024, and would require subsequent inspections every 5 years.

The bill would require a copy of the initial inspection report that states the condition of the building features and recommendations for repair, along with the final report indicating that all of the required repairs have been completed, to be filed with the county recorder. 

Building elements, including the walking surface, structural frame and connector hardware, weatherproofing, landings, stairway systems, guardrails, handrails, and any other elements critical to the safety of the balcony or elevated walking surface, found to be in need of repair or replacement, hazardous, structurally deficient, or noncompliant shall, upon determination by the licensed professional, be immediately corrected by the property owner or individual person or company responsible for management or operation of the building.  The property owner must apply for any permits within 60 days of receipt of the inspection report, and the repairs must be completed within 90 days of obtaining the permits. The continued and ongoing maintenance of balconies and elevated walking surfaces and parts thereof, in a safe, and sanitary condition, shall be the responsibility of the property owner or the owner’s designated agent.

The repairs made under these provisions would be required to comply with the latest edition of the California Building Standards Code and all local jurisdictional requirements. The bill would authorize local enforcing agencies to recover enforcement costs associated with these requirements.

Multifamily buildings of three units or more for which a building permit application has been submitted on or after January 1, 2019, are exempt from the inspection certification requirements for a period of five years following issuance of a certificate of occupancy from the local jurisdiction.

 **UPDATE: On June 20, 2018, the proposed text of SB 721 was amended to remove Civil Code Section 4776 pertaining to common interest developments.
SEC. 2.Section 4776 is added to the Civil Code, to read:
**UPDATE: On July 3, 2018, the proposed text of SB 721 was amended to exclude CIDs from the proposed Health & Safety Code.
(m) This section shall not apply to a common interest development, as defined in Section 4100 of the Civil Code.
To read the current text of SB 721, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track SB 721 as it progresses through the Legislature. 
View more info on SB 721
from the California Legislature's website

Related Links

AB 968 Signed: Clarifying Repair/Replacement of Exclusive Use Common Area - Published on HOA Lawyer Blog (November 7, 2014) HOA's Ability to Impose Assessments for Maintaining Exclusive Use Common Areas? - Published on HOA Lawyer Blog (August 10, 2012)

AB 1569 (Caballero). Disability rights: reasonable accommodations: animals.

If a prospective or current tenant requests a disability-related reasonable accommodation to keep an animal on the property and the disability or disability-related need is not readily apparent, this bill would authorize a person renting, leasing, or otherwise providing real property for compensation to request that a third party provide verification of the disability and disability-related need for the animal.

Current Status: Dead

FindHOALaw Quick Summary:

The Unruh Civil Rights Act generally prohibits discrimination on the basis of various personal characteristics, including disability.  Individuals with disabilities are entitled to full and equal access to all housing accommodations offered for rent, lease, or compensation, and prohibits a person renting, leasing, or otherwise providing real property for compensation from refusing to make reasonable accommodations for an individual with a disability.  This bill would amend Civil Code Section 54.1 to authorize a person renting, leasing, or otherwise providing real property for compensation to request that a third party provide verification of the disability and disability-related need need for an animal, if a prospective or current tenant requests a disability-related reasonable accommodation to keep an animal on the property and the disability is not readily apparent or the disability-related need for an animal is not apparent.

The bill would require that the third party be located in the United States and have specific knowledge of the requester’s medical condition based on an individualized examination, which shall include an in-person meeting.  The third party may not operate primarily as a business to provide certifications for persons requesting verification of animals requested as reasonable accommodations.

The bill would specify that certain types of documentation would not be in and of themselves sufficient third-party verification, including an identification card or certificate for a registered service animal, an emotional support animal prescription letter, any certificate, letter of prescription, or doctor’s note obtained from an online source, or documentation that does not indicate that the provider of the documentation ever met with the requester or performed an individualized examination. The person providing real property for compensation would be authorized to request additional third-party verification from a reliable source if the requester only presents any of those types of documentation.

The bill would exclude guide dogs, signal dogs, service dogs, and service animals, as defined in Health and Safety Code Section 113903.

**UPDATE: On March 23, 2017, the proposed text of AB 1569 was amended to allow a person providing real property for compensation to request that a prospective or current tenant provide both reliable verification of the disability and reliable third-party verification of the disability-related need for the animal:

(C) (i) A person renting, leasing, or otherwise providing real property for compensation may, if a prospective or current tenant requests a disability-related reasonable accommodation to keep an animal on the real property and the disability is not readily apparent or the disability-related need for an animal is not apparent, request that a third party provide verification of the disability and disability-related need for the animal from the prospective or current tenant. prospective or current tenant provide both (I) reliable third-party verification or other reliable verification of the disability and (II) reliable third-party verification of the disability-related need for the animal. The third party verifying the disability and the disability-related need for the animal shall be located in the United States and have specific knowledge of the prospective or current tenant’s medical condition based on an individualized examination. That examination shall include an in-person meeting with the prospective or current tenant. The third party shall not be operating primarily as a business to provide certifications for persons requesting verification of animals requested as reasonable accommodations. The third-party verification shall include the third party’s name, address, and telephone number or email address.
(ii) The following types of documentation shall not be in and of themselves sufficient or reliable third-party verification that a prospective or current tenant requires an animal as a reasonable accommodation, and the person renting, leasing, or otherwise providing real property for compensation may request additional third-party verification from a reliable source if the prospective or current tenant only presents any of those types of documentation:
(I) An identification card or certificate for a registered service animal. card, registration, or certificate for an animal presented without additional third-party verification from a reliable source.

(II)An emotional support animal prescription letter.

(II) Any certificate, registration, emotional support animal letter, letter of prescription, doctor’s or any other kind of note or letter obtained from an online source.

To read the current text of AB 1569, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 1569 as it progresses through the Legislature. 

View more info on AB 1569
from the California Legislature's website

Related Links

Responding to Requests for Accommodation - Published on HOA Lawyer Blog (February 7, 2013) HOA Accommodations for Disabled Residents - Published on HOA Lawyer Blog (May 1, 2012)

AB 1139 (Reyes). Real property: transfer fees: notices.

Would require a notice describing potential prohibitions on federal financing (e.g. FHA loans) for properties encumbered by deed-based transfer fees.

Current Status: Chaptered

FindHOALaw Quick Summary:

Existing law requires the receiver of a deed-based transfer fee (e.g. association recreation fees), on and after January 1, 2009, to record specified information in the chain of title.  Existing law also specifies that when a transfer fee is imposed upon real property on or after January 1, 2008, the person or entity imposing the transfer fee, as a condition of payment of the fee, must record a separate document meeting specified requirements. Among other things, that document must contain the title “Payment of Transfer Fee Required” in at least 14-point boldface type and include names of all current owners of the real property subject to the fee, and the legal description and assessor’s parcel number for the affected property, and the fee amount.

This bill would require that document, for private transfer fees created on or after February 8, 2011, to contain a notice in at least 14-point boldface type disclosing certain information, including that federal housing agencies (e.g. FHA) are prohibited from dealing in mortgages on properties encumbered by deed-based transfer fees that do not provide a direct benefit to the real property encumbered, and that if a person purchases such a property, that person may have difficulty obtaining financing.

**UPDATE: AB 1139 was signed by the Governor on July 31, 2017. Its changes to the law will become operative on January 1, 2018. 

View more info on AB 1139
from the California Legislature's website

AB 1079 (Cunningham). Common interest developments: association: annual policy statement.

Would change the time requirements for distribution of the annual policy statement to be within 31 to 91 days before the fiscal year end.

Current Status: Dead

FindHOALaw Quick Summary:

Existing law requires the association to distribute an annual policy statement, containing specified information, to the members within 30 to 90 days before the fiscal year end.  This bill would amend Civil Code Section 5310 to change the time requirements for distribution to be within 31 to 91 days before the fiscal year end.

To read the current text of AB 1079, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 10179 as it progresses through the Legislature. 

View more info on AB 1079
from the California Legislature's website

Related Links

Are You Prepared for the New Annual Disclosures? - Published on HOA Lawyer Blog (September 19, 2014)  

AB 786 (Kiley). Statements of information: common interest development associations: limited liability companies.

Would authorize that the bi-annual statement of information to be submitted online.

Current Status: Dead

FindHOALaw Quick Summary:

To assist with the identification of common interest developments, each association, whether incorporated or unincorporated, shall submit to the Secretary of State certain information concerning the association.  This bill would amend Civil Code Section 5405 to allow the statement of information to be submitted online.

To read the current text of AB 786, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 786 as it progresses through the Legislature. 

View more info on AB 786
from the California Legislature's website

Related Links

   

AB 690 (Quirk-Silva). Common interest developments: managers: conflicts of interest.

Would require specified disclosures regarding any conflicts of interest, referral fees or financial benefits received by a manager or management firm.

Current Status: Chaptered

FindHOALaw Quick Summary:

Existing law requires that a common interest development manager or management firm annually provide specified disclosures to the board of directors, including the manager’s name and address, whether the manager is certified, and whether the manager holds an active real estate license.  This bill would amend Business and Professions Code Section 11504 to require a prospective manager or management firm to disclose to the board of directors whether the manager receives a referral fee or other monetary benefit from a third-party provider for distributing documents pursuant to Civil Code Section 5300.

This bill would also amend Civil Code Section 5300 to require that the Annual Budget Report contain the completed Document Disclosure Form (Civ. Code § 4528), including the costs associated with providing each document listed on the form.  The bill would amend Civil Code Section 4530 to modify the Document Disclosure Form to inform the seller that he or she is not required to purchase all of the documents listed on the form and may purchase some or all of the documents, as desired.

Existing law requires a prospective managing agent to provide a written statement disclosing certain information to the board of directors no more than 90 days before entering into a management agreement. This bill would amend Civil Code Section 5375 to require that the managing agent disclose whether or not the manager or management firm receives a referral fee or monetary benefit from a third-party document provider.

This bill would add Civil Code Section 5375.5 to provide that a manager shall disclose, in writing, any potential conflict of interest when presenting a bid for service.  “Conflict of interest” is defined as a referral fee or other financial benefit that could be derived from a business or company providing products or services to the association or any ownership interests or profit-sharing arrangements with service providers recommended to, or used by, the association.

Finally, this bill would add Civil Code Section 5376 to require the manager, management company, or its third-party agent to facilitate the delivery of escrow documents and disclosures in accordance with Civil Code Section 4530, if the managing agent is contractually responsible for delivering those documents.

**UPDATE: AB 690 was signed by the Governor on July 25, 2017. Its changes to the law will become operative on January 1, 2018. 

View more info on AB 690
from the California Legislature's website

Related Links

SB 407 (Wieckowski). Common interest developments: noncommercial solicitation.

Would prohibit an association from enacting a rule prohibiting a member from contacting another owner or resident for campaign purposes in a public or association election.

Current Status: Chaptered

FindHOALaw Quick Summary:

Existing law prohibits an association from denying a resident physical access to the common area.  This bill would add Civil Code Section 4515 to prohibit an association from enacting a rule prohibiting members from exercising their rights to peacefully assemble and freely communicate with one another for campaign purposes relating to a candidate for public or association office, or on any issue that is the subject of a public or association election, or pending legislation or association rulemaking.  This bill would not apply to commercial solicitation, or to any member who wants to prevent any solicitation on his or her separate interest.

**UPDATE: SB 407 was signed by the Governor on September 11, 2017. Its changes to the law will become operative on January 1, 2018. 

View more info on SB 407
from the California Legislature's website

Related Links

Equal Access to HOA Media Outlets During Election Campaigns - Published on HOA Lawyer Blog (July 29, 2013) SB 407 Signed!  Legislation Broadens Assembly and Speech Rights within HOAs-Published on HOA Lawyer Blog (September 13, 2017)  

SB 451 (Stone). Common interest developments.

Would prohibit an association from being liable to any person because the governing documents of the association do not contain a provision that would authorize the association to stop harassment of a member by another member.

Current Status: Dead

FindHOALaw Quick Summary:

 

In 2016, the U.S. Department of Housing and Urban Development (“HUD”) added new regulations to the Fair Housing Act, including the term “Hostile Environment Harassment.”  It occurs when “unwelcome conduct due to race, color, national origin, religion, sex, disability or familial status, is sufficiently severe or pervasive as to create an environment that unreasonably interferes with the availability, sale, rental, use, or enjoyment of a dwelling, the provision or enjoyment of facilities or services in connection therewith, or the availability or terms of residential real estate-related transactions.”  The new regulations impose direct liability on HOA directors and officers for their own actions as well as for “failing to take prompt action to correct and end a discriminatory housing practice by a third-party, where the person knew or should have known of the discriminatory conduct and had the power to correct it.  The power to take prompt action to correct a discriminatory housing practice by a third-party depends upon the extent of control or any other legal responsibility the person may have with respect to the conduct of such a third-party.”  In some situations, third-parties may include residents of the association.  This bill would add Civil Code Section 5815 to prohibit an association from being liable to any person because the governing documents do not contain a provision authorizing the association to stop harassment of one member by another member.

To read the current text of SB 451, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track SB 451 as it progresses through the Legislature. 

View more info on SB 451
from the California Legislature's website

AB 534 (Gallagher). Common interest developments: mechanics liens.

Would prohibit a mechanics lien from being filed against an other owner in the common interest development unless consent was provided or a request was made, except in the case of emergency repairs. Would deem the association to be an agent of the owners of separate interests in the common interest development with respect to work on a common area.

Current Status: Chaptered

FindHOALaw Quick Summary:

The California Constitution establishes a lien upon a property for the value of labor and materials for work completed on that property.  In a condominium project, the Davis-Stirling Act and the Commercial and Industrial Common Interest Development Act prohibit a mechanics lien for work completed at the request of an owner, from being filed against any other property of any other owner unless that owner expressly consented to or requested the work to be completed, except in the case of emergency repairs.  An owner may remove his or her condominium from a lien against two or more units by paying to the lienholder the prorated share that is attributable to that owner’s  unit, or recording a lien release bond in an amount equal to 125% of the sum secured by the lien that is attributable to that owner’s unit. This bill would amend Civil Code Sections 4615 and 6658 to apply to all common interest developments and their separate interests.

Work performed on the common area, if authorized by the association, would be deemed to have been performed with the express consent of the owners of the separate interests.  This bill would add Civil Code Sections 4620 and 6660 to require the association give individual notice to the membership of a claim of lien within 60 days of service.

Finally, this bill would add Civil Code Section 8119 to provide that the association is deemed to be an agent of the owners of the separate interests for work performed on the common area for purposes of delivery or service of a notice of claim.

**UPDATE: AB 534 was signed by the Governor on July 10, 2017. Its changes to the law will become operative on January 1, 2018. 

View more info on AB 534
from the California Legislature's website

Related Links

AB 534 Signed: Associations to Provide Notice to Members of Lien Claims - Published on HOA Lawyer Blog (July 10, 2017)