CALIFORNIA HOMEOWNER’S ASSOCIATIONS
FREQUENTLY ASKED QUESTIONS AND ANSWERS
Many issues arise while living in a Homeowners Association in California. The following are questions that frequently arise with brief answers about rights and obligations relating to homeowner associations.
Q. What is proper notice for a Board meeting?
A. For a regular open board meeting, notice must be provided four days in advance, unless the Association’s governing documents provide for a longer period of time. If a meeting is executive session and not in conjunction with a regular open board meeting, then notice is two days in advance, unless the Association’s governing documents provide for a longer period of time.
Q. Can a board discuss issues or items that are not on its agenda for an open board meeting?
A. Boards may not discuss (except for limited circumstances such as to briefly answer questions posed by homeowners in the open forum or to continue from a prior meeting if circumstances set forth in Civil Code section 4930(d)(3) are met) or act upon any non-emergency items unless that item was on a published agenda at least four calendar days before the meeting, unless the Association’s governing documents provide for a longer period of time.
Q. Can an Association borrow from reserves to cover operating expenses not for proper reserve expenses?
A. Yes. An Association can borrow from reserves but it has special notice rules to follow. Unless the board complies with these notice rules, the board may not borrow funds from reserves. The special provisions are set forth at Civil Code section 5515. A “borrowing” notice consists of the following: At least four days before the meeting at which the board is going to make the decision to borrow, a meeting notice needs to be posted in the common area. The notice needs to include date, place and time information about the meeting, of course, but also notice that this particular decision will be on the agenda. The notice is special as it must also explain why the money needs to be borrowed, discuss options for repaying the reserves, and whether a special assessment might be considered. Calendaring the initial decision and one year out is very important as well as written findings in the minutes of the meeting.
Q. If the Association borrows from reserves, when do the monies have to be paid back?
A. The board has one year from the time it decides to borrow money from reserves (or to delay making a scheduled transfer) to restore the money back into the reserve fund. The board can vote to delay restoring the reserves for longer than one year, but only if the board believes a delay is in the association's best interest. However, if the board is delaying the repayment , the board must give notice for the meeting at which a decision is being made to delay restoring reserve funds. The notice needs to be posted at least four days before the meeting, including information that the decision will be on the board's agenda, explaining the reasons for delaying the restoration of the funds, and what options could be considered in the future, including a possible special assessment.
Q: If a homeowner is sued by the Association for a breach of the governing documents, will the Association recover its attorneys’ fees and costs if it wins?
A: Yes. The Davis-Stirling Act (Civil Code §5975(c)) provides that “in an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorneys’ fees and cost.” Thus, if the Association prevails in the lawsuit it will request that the court award its attorneys’ fees and costs but if the homeowner prevails in defending the action brought by the Association, the homeowner can recover the costs and fees incurred. The trial judge will decide what are reasonable attorneys’ fees and costs and which side “prevailed.”. An important thing to remember is that Civil Code section 5960 provides that the court in determining the amount of the award, “may consider whether a party's refusal to participate in alternative dispute resolution before commencement of the action was reasonable.” So, if a homeowner or a prevailing Association does not want the court to cut or eliminate a prevailing party’s right to fees, engage in ADR before filing the lawsuit. Also, under a law that went into effect on January 1, 2020, a homeowner is now entitled to their attorneys’ fees if they consulted with an attorney regarding a small claims matter and they win.
Q: Can an Association ban sober living/drug treatment homes?
A: No. Associations cannot ban owners from operating or renting their homes out as alcohol or drug abuse treatment/recovery facilities if there are no more than 6 people living in a given home. However, there are things an Association can do to minimize the impact of such facilities, or even to discourage them from setting up shop in a neighborhood.
Q: Can an Association prevent a homeowner from operating a day care center?
A: No. An Association cannot prevent a homeowner from operating a day care center. The Association can, however, adopt reasonable rules and regulations regarding the manner in which a homeowner operates the day care. For example, the Association can require that a homeowner be licensed by the State, or that a homeowner either carry insurance, or notify parents that a homeowner does not have such insurance.
Q: What is the difference between the CC&Rs and the rules?
A: Association’s CC&Rs represent the official “laws” for a homeowner association. It is recorded with the county and may only be amended by the members of the association. The rules, on the other hand, can be established by the Board of Directors if they are consistent with the CC&Rs. Rules must be reasonable, cannot be arbitrary, and any burden imposed must be outweighed by their benefit.
Q: How can a Board change the Association’s rules and regulations?
A: Before instituting a rule change or a new rule (other than in an emergency situation), the Association’s board must vote to make the change or adopt the new rule at an open meeting. After that, the board must provide homeowners with at least 28 days’ written notice to comment or object to the proposed change/new rule. The notice must include the exact text of the new rule, as well as a description of the purpose and effect of the rule change. After that 28 day period has expired, at the next open board meeting, the board votes to adopt such rule. Subsequent to that, the Association, within 15 days of the rule change, deliver notice to all homeowners that the new rule/change is in effect.
Q: The Association recently adopted new rules. Can homeowners reverse a rule change voted on by the Board of Directors?
A: Yes. If a homeowner acts quickly and in strict compliance with Civil Code section 4365. To start the process of reversing a rule change, a homeowner will need the support of at least 5% of the members of the Association—the minimum number required to call a special election of the homeowners (same requirement as a recall election). So, if an Association has 100 members (e.g., there are 100 homes or condos in a homeowner Association), a homeowner and 4 other owners can force a special election. A homeowner will also need to act within 30 calendar days from the time that a homeowner is notified of the rule change. If a quorum is reached in that election, and if a majority of the votes cast are in favor of reversing the rule change, the homeowner will be successful.
Q. A homeowner is violating the Rules and Regulations of the Association, can the Association fine the homeowner?
A. That depends on the Association’s fine policy. Many Associations’ fine policies provide that a warning letter is sent for a first violation. However, if the violation continues, the Association must follow the proper procedure. First, the board must send a written notification to the homeowner. This notification should include the homeowner’s alleged offense and the corresponding fine amount or other disciplinary action (loss of use of common area etc.) and specify the date, time and place of hearing. The board must send this notification at least 10 days before a board hearing on the violation. This notice should also inform the homeowner that they have an opportunity to defend themselves during the disciplinary hearing. The board will then make its final decision and send a written notification of their decision and fine, if any, to the homeowner within 15 days following the ruling. Many Associations inform the homeowner in the notice of hearing, that if the homeowner cures the violation before the hearing, that the hearing will not take place.
Q: Does a homeowner have the right to record Association board meetings?
A: No. A homeowner does not have a right to record board meetings as they are private meetings (for homeowners of record only and any guests invited by the board), so an Association may adopt rules prohibiting a homeowner from doing so. But even if a board has not adopted such a rule, if an owner wants to record a meeting, the owner must do so in compliance with California’s other laws regarding privacy and recording conversations (provide notice to those in attendance that they are recording and if someone objects, then they are not to record).
Q: Can non-association members serve on the board?
A: No, not since 2020. Non-members are no longer permitted to serve on an Association’s board of directors. This prohibition doesn’t apply to board positions being held by a developer prior to turning control of the Association over to the homeowners.
Q: If a homeowner is delinquent in paying monthly assessments, can the Association prevent the individual from running for the board?
A: Generally speaking, homeowners who are not current on paying their regular or special assessments can be prevented from running for a board seat. That disqualification, however, does not apply to homeowners who are making payments under an established payment plan, nor does it apply to fines, collection fees, or late fees, even when those are labeled as “assessments.”
Q: Can an Association suspend a homeowner’s voting rights if the homeowner is not current on paying regular assessments?
A: No. While an Association can prevent homeowners who are delinquent in payment of their assessments from serving on the board, such delinquency cannot serve as a basis to ban a member from voting. This supersedes many Association’s rules that state a member must be in good standing to vote.
Q: Can an Association ban a homeowner from hanging a cross on a front door during lent/Easter?
A: No. Associations cannot restrict a homeowner/renter from displaying “religious items” on their entry doors or door frames. This would also include things like a reasonably sized Christmas wreath or a mezuzah.
Q: The insurance rates for our Association have tripled and we have insufficient operating funds to pay the premiums, can we pass an emergency assessment?
A: Yes. An emergency assessment may be passed in one of the following situations: a) Court Order – An extraordinary expense required by an order of a court; b) Safety Threat – An extraordinary expense necessary to repair or maintain the development or any part of it for which the association is responsible where a threat to personal safety on the property is discovered; c) Unforeseen Expense – An extraordinary expense necessary to repair or maintain the development or any part of it for which the association is responsible, where such expense “could not have been reasonably foreseen by the board in preparing and distributing the annual budget report under Section 5300.” Although insurance does not repair or maintain the development, most attorneys agree that if the Association is responsible for insurance that to maintain such insurance is necessary that an emergency assessment would be appropriate. However, where a board seeks to impose an emergency assessment for an unforeseen extraordinary expense pursuant to the board must first “pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process.” The resolution must be distributed to the members with the notice of emergency assessment.
Q: When do Associations have to have minutes of its board meetings prepared?
A: Draft minutes must be available to members within 30 days of the meeting.
Q: Do homeowners have a right to receive the minutes of all the Association’s board meetings?
A: As a member of the Association, a homeowner has an absolute right to receive a copy of the minutes of each open meeting. A homeowner does not, however, have a right to inspect the minutes of executive session meetings. Moreover, the right to inspect or have a copy of minutes is not subject to the time constraints of other Association records, which are typically limited to the current fiscal year and the two prior years, rather minutes of the board and Association member meetings must be kept indefinitely.
Q: A homeowner wants to install video cameras, can the Association prevent the installation?
A: No, but permission usually must be sought under the Association’s architectural guidelines. Further, if the homeowner installs the cameras on the homeowner’s property (i.e., not common areas), and the cameras are not pointing at a neighbor’s windows, the Association cannot prevent a homeowner from installing cameras on a homeowner’s property.
Q: I want to see a list of my Association’s members so I can write to them about a rule change that I think my Association needs. Does the Association have to give me that list?
A: Yes. A homeowner has a right to receive a homeowner association’s membership list (i.e., names, addresses, mailing addresses, and beginning January 1, 2020, email addresses) within 5 days of a homeowner request as long as a homeowner cover any actual costs incurred by the Association in copying the list, state the reason a homeowner wants the list, and that reason is reasonably related to a homeowner’s interest as a member of the Association.
Please note that these Frequently Asked Questions and Answers are not all inclusive and, for some subjects, barely touch the surface of the subject matter. When in doubt, board members should contact their property manager or legal counsel for advice.
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These Frequently Asked Questions and Answers is provided as a courtesy to you and does not constitute legal advice. We try to provide complete information but some of the subjects contained herein are given an extremely cursory treatment and this is just an overview of the general subject matter. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this manual. As legal advice must be tailored to the specific circumstances of each case, and laws are constantly changing, nothing provided herein should be used as a substitute for the advice of competent counsel. You should refrain from acting on the basis of anything contained in these Questions and Answers without first seeking the advice of a competent attorney. The information contained in these Questions and Answers is not intended to and shall not be used as legal advice. Your use of the content and information contained in these Questions and Answers is at your own risk. You acknowledge that under no circumstances is The Judge Law Firm providing legal advice or representation through these Questions and Answers, and that nothing in these Questions and Answers is intended as a substitute for advice from an attorney, accountant, tax professional or other business advisor. UNDER NO CIRCUMSTANCE SHALL THE JUDGE LAW FIRM HAVE ANY LIABILITY TO YOU FOR ANY RELIANCE ON INFORMATION CONTAINED ON OR OBTAINED THROUGH THESE QUESTIONS AND ANSWERS. SUCH RELIANCE SHALL BE SOLELY AT YOUR OWN RISK.
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