Make 2020 a Year of Gratitude: A Time to Give Back and Serve Your Community

Make 2020 a Year of Gratitude: A Time to Give Back and Serve Your Community

There’s no denying 2020 has been a challenging year. However, even during these difficult times, there is still much to be thankful for.  At Richardson | Ober | DeNichilo, we are thankful for the opportunity to serve our clients. We are grateful for our outstanding team that is committed to providing timely counsel during a global pandemic, prolonged wildfire season and an unprecedented legislative session. We are humbled to see how committed our staff remains to giving back to their communities – not only professionally, but personally.  At this time of year, we want to wish you and your families a happy Thanksgiving and better times ahead. We are proud to share with you our passion for serving others, especially during these difficult times.  Daniel Heaton Certain sections of the population have without doubt had a more difficult time adjusting to and overcoming the current health climate. This year, I’ve worked tirelessly to organize and lead a particular group in my religious congregation to help meet the temporal, health, and subsistence needs of such individuals in the Hacienda Heights community. Working closely with church leaders, I helped organize a focused effort to ensure that necessities like toilet paper, hygiene and cleaning supplies, and basic food staples, were made available and often times delivered directly to the homes of those in need, including elderly individuals, single parent or low income families, or those with newborn children. It has been amazing to witness the outpouring of kindness as those in this small area of the world rallied together to assist and support those around them. Through what has been a very...
Is AB 3182 a Disaster or an Inconvenience?

Is AB 3182 a Disaster or an Inconvenience?

[Spoiler Alert: Community Associations Will Survive.] It was a tumultuous year in Sacramento due to the pandemic. Only one major HOA bill made it to the Governor’s desk, and that was Assembly Bill 3182. The Bill was signed into law by the Governor and will take effect January 1, 2021. Promoted as part of the effort to ease California’s housing shortage, the bill creates a new Civil Code Section 4741, which bans “unreasonable” restrictions on rentals in HOAs. The new law creates some uncertainties, but for the most part is manageable. The Facts The new Section 4741(a) prohibits HOA governing documents from containing anything which prohibits, has the effect of prohibiting, or unreasonably restricts rentals of homes, accessory dwelling units (“ADU’s”), or junior ADU’s (“JADUs”). It is clear that “prohibiting” means – HOAs cannot completely ban rentals. However, it may be harder to define the “effect of prohibiting” or “unreasonably restricting” rentals. Most likely, the two issues (effect of prohibiting or unreasonably restricting) are close to synonymous. Is a rental provision in the governing documents a thinly veiled effort to halt rentals, or is there a legitimate explanation showing a reasonable restriction that many owners can meet? This will be the critical question when evaluating present and future clauses in governing documents relating to rental restrictions. Associations may wish to be conservative regarding rental restrictions. If the HOA is found to have unreasonable restrictions, it could be liable for a $1,000 civil penalty as well as attorney fees to the complaining party. The Good News One positive result of the new Section 4741 is its specific approval of rental...
The Pathway to Successfully Amending Your CC&Rs

The Pathway to Successfully Amending Your CC&Rs

5 Tips to Court Approval of Your CC&Rs Amendment By all accounts, amending your association’s CC&Rs is one of the most important, yet potentially difficult, challenges for California community associations. The need to amend CC&Rs was placed at the top of many communities’ 2021 agendas with the passage of Assembly Bill 3182, which generally voids rental bans in Associations below 25% of the members. This is because AB 3182 also includes a requirement that all California associations amend their Governing Documents to conform to the new law “no later than December 31, 2021.” (Civ. Code § 4741(f).) An association that refuses to comply could face a civil penalty of up to $1,000, as well as pay attorney fees to the complaining party. (Id. § 4741(g).) Most associations have a very hard time obtaining sufficient participation from their members to amend CC&Rs and Bylaws. The problem of “voter apathy” is often compounded by CC&Rs that require that amendments be approved by a “supermajority” (i.e., 67% or 75%) of the membership. This can make it very difficult, if not impossible, for an association to make important and necessary changes to the CC&Rs through the regular voting process. Fortunately, the Civil Code provides a method to obtain CC&Rs amendment approval when an association is unable to garner the percentage of votes required by the CC&Rs themselves. Civil Code section 4275 allows an Association to “petition the superior court … for an order reducing the percentage of affirmative votes necessary for such an amendment.” This provides “a safety valve for those situations where the need for a supermajority vote would hamstring the association.”...
Richardson | Ober | DeNichilo Welcomes New Associate: Amanda M. Fisher, Esq.

Richardson | Ober | DeNichilo Welcomes New Associate: Amanda M. Fisher, Esq.

Richardson | Ober | DeNichilo is thrilled to welcome Amanda M. Fisher, Esq., as the newest Associate to our expanding general counsel team.  Amanda comes to R|O|D with a diverse background in legal writing, analysis, and complex litigation.  In addition to her work as a Ph.D. Candidate at the University of California, Irvine, Amanda is a Visiting Professor at WMU-Cooley Law School in Florida where she teaches advanced legal writing and Introduction to Law, helping new law students learn to write and to analyze the law.  In her spare time, Amanda mentors law students through their state bar exam preparation. When she is not immersed in the law, Amanda can be found running, reading, or relaxing at the beach.  Amanda is devoted to a client-centered practice with a focus on compassion and communication. Amanda is actively engaged in promoting diversity and inclusion in legal education and in the legal profession.   Among Amanda’s unique qualities is her creative approach to answering a broad range of legal questions.  Her litigation experience and her academic foundation blend for a unique perspective on complex legal issues.  R|O|D is fortunate to have Amanda on our team.   We look forward to introducing her to our clients and Industry...
AB 3182 Signed and the Impact on California Community Associations

AB 3182 Signed and the Impact on California Community Associations

Despite fierce opposition, including over 5,000 constituents personally expressing opposition to the bill, Governor Newsom signed Assembly Bill 3182 into law on September 29, 2020. Under the new law, any provision in a governing document “that prohibits, has the effect of prohibiting, or unreasonably restricts” the rental of any of the separate interests, accessory dwelling units (“ADU”), or junior accessory dwelling units (“JADU”) in a community association is rendered unenforceable.  While there is uncertainty and disagreement over the impact of this language on minimum rental terms, the law specifically allows associations to prohibit short term and transient rentals, defined as rentals of 30 days or less, and also allows associations to place a rental cap of twenty-five percent (25%) of the separate interests (or greater) in the association. However, AB 3182 also states that if the owner lives in either the main residence or an ADU or JADU on the property, then the property does not count as a rental unit. AB 3182 also requires any associations with provisions in their governing documents that conflict with the new requirements to amend their governing documents no later than December 31, 2021. Associations must comply with the prohibition on rental restrictions specified in the new law starting on January 1, 2021, regardless of whether the association has revised their governing documents to comply with the new requirements. Any association that willfully violates the new law is subject to a civil penalty to the applicant or other party in an amount not to exceed one thousand dollars ($1,000). AB 3182 also amends the government code to require quick approval of applications to...
State Sets Protocols for Reopening Outdoor Playground Facilities

State Sets Protocols for Reopening Outdoor Playground Facilities

For those who need a break from guiding your children through home schooling or distance learning, your community association playground may soon be open.  On September 28, 2020, the California Department of Public Health issued new guidelines for outdoor playgrounds and recreational facilities. By State definition, the guidance applies to publicly accessible outdoor locations including play structures, slides, and swings, but does not include indoor playgrounds.    All visitors to playgrounds (2 years or older) must wear a facemask. Members of different households must maintain a minimum physical distance of 6 feet. Caregivers must monitor use to ensure minimum physical distance. Eating and drinking in playground area is prohibited.  Wash hands before and after use.  Elderly and persons with underlying medical conditions should avoid the playground area.  In an effort to comply with the above recommendations in your community, as with pool reopening rules, we recommend adopting rules on use, limiting playtime (i.e. 30 minutes per household when others are present), and perhaps implement playground reservations to avoid overcrowding the facility.  For community leaders (managers and directors), adherence to the State Guidelines is similar to previous amenities reopening. To ensure the safety of your residents and reduce risk to you’re association, we recommend posting and complying with the following: Adult supervision of children is required to ensure social distancing and proper facemask use. Children supervised by the same adult must remain together in same play area. Post instructions on rules for waiting to use the playground and advise residents to remain 6 feet away from the equipment while they wait.  Increase cleaning of frequently touched surfaces (recommended daily). Provide handwashing...
Prepare Now to Welcome the Accessory Dwelling Unit into your Community Association

Prepare Now to Welcome the Accessory Dwelling Unit into your Community Association

Proactive rule adoption and enforcement will ease the growing pains of ADU/JADUs in your community. Formally termed the Accessory Dwelling Unit (ADU), this ever-popular form of housing is a legal and regulatory term for a secondary house that shares the building lot of a larger, primary house.  The ADU is a self-contained housing unit that provides for living, sleeping, cooking, and sanitation. ADUs are either attached to or detached from the primary residence but provide independent living facilities for its occupant. The junior ADU “JADU” are no more than a 500 square foot residence in a single-family home with an entrance from the main dwelling unit and an entrance to the outside.  The JADU may share a bathroom with the main residence. The ADU is cloaked with the good intentions to address California’s extreme housing shortage and increasing housing density (and modeled after similar laws addressing solar energy systems, electric vehicle charging stations, drought tolerant plants and artificial turf). However, Civil Code Section 4751 Civil Code renders void or unenforceable any CC&Rs provision or deed restriction in a planned development that either effectively prohibits or unreasonably restricts the installation of an ADU or JADU on a lot.  The Legislature’s original intent was to encourage construction of affordable accessory dwelling units that were owner occupied and used for rentals of 30 days or longer; however, such requirements did not make it into the final legislation. A community can impose reasonable restrictions Like similar laws aimed at forcing community associations to accept legislatively mandated modifications, Civil Code Section 4751, allows an association to enforce reasonable restrictions that do not unreasonably increase the cost to...
Assembly Bill 3182 (Ting) Means Less Independence for Community Associations if Governor Newsom Signs it Into Law

Assembly Bill 3182 (Ting) Means Less Independence for Community Associations if Governor Newsom Signs it Into Law

Assembly Member Ting from San Francisco authored Assembly Bill 3182. After multiple rounds of amendments, it was approved on September 1, 2020 by the California State Legislature and awaits the Governor’s signature before becoming law on January 1, 2021. The bill was promoted as a solution to help California’s growing housing shortage, but it is certain to create several problems for HOAs. AB 3182 will outlaw rental bans in HOAs. It creates a new Civil Code Section 4741 which voids rental limits below 25% of the members. Therefore, any governing documents with rental caps of less than 25%, will become unenforceable next year. HOAs will be permitted to amend their CC&Rs to add rental caps of 25% or more, provided the homeowners approve them. AB 3182 still allows HOAs to ban rentals of 30 days or less (aka short term or transient rentals), but the law prohibits “unreasonable” restrictions on rentals of homes, accessory dwelling units (ADUs), or junior accessory dwelling units (JADUs). AB 3182 does not define, or give examples, of what would be considered unreasonable. But, if the HOA is found to have an unreasonable restriction, it could be liable for a $1,000 civil penalty as well as attorney fees to the complaining party. There are many different rental requirements HOA memberships often approve by a majority vote. For example, a one-year minimum lease term, or a waiting period of one year before a new owner can rent a home, or the requirement that the tenant promise to abide by the HOA rules. Are any of these requirements “unreasonable?” We do not know. The issue of “unreasonably...
COVID-19 and Assessments: The Impact of the Pandemic on Community Finances

COVID-19 and Assessments: The Impact of the Pandemic on Community Finances

By Matthew A. Gardner, Esq. The current pandemic is presenting similar warning signs that many community associations experienced during the housing crisis in 2007. With the ‘Stay at Home’ order in place to slow the spread of the virus, we recognize that people who cannot work have to start making hard decisions. As it relates to community funding through assessments, people will prioritize where their money is going and which bills to pay. A recent report from a financial services company focusing on real estate and mortgages confirmed what many had already suspected: the financial impact of a shut down economy would be felt months (if not years) after the ‘Stay at Home’ orders took effect. Results from May 2020 indicate that almost 4.5 million homeowners were late on mortgage payments. That surpasses the 3.6 million homeowners from the end of April, which then represented the largest number since 2015. There is some neutral news in those awful numbers. Those figures include homeowners who are in approved payment arrangements with their lenders. It also reflects decisions made by some lenders to allow individuals to defer payments and add months to their mortgages. We won’t know when or if any of those accounts will reverse into positive territory now that some states are re-opening, but we do know that we should prepare our communities for similar results. We know that homeowners tend to pay their mortgages before they pay their assessments. Therefore, communities who have not already experienced missed payments need to be ready for delinquencies. The national offices of the Community Associations Institute (CAI) have provided valuable reminders about...
State Releases New Guidance to Help Counties Plan for Reopening Based on Decisions by Local Public Health Officials

State Releases New Guidance to Help Counties Plan for Reopening Based on Decisions by Local Public Health Officials

By Robert M. DeNichilo, Esq., CCAL Last Friday, the California Department of Public Health issued new guidelines for reopening additional sectors of the economy. The new guidance contains two main points of interest to community associations including Fitness Facilities and Outdoor Recreation. While neither document specifically referenced HOAs, both documents provide guidance for reopening pool areas, and the Fitness Facility Guidance includes information for associations that have gyms. It is important to note that these go into effect no sooner than June 12, 2020, and only after county health officer approval following review of specific criteria related to the spread of coronavirus infection. While much of the California Department of Public Health Guidance is similar to what was previously issued by local counties, we now have specific guidance documents that local counties can adopt once the local health official approves reopening facilities, which include: Physical distancing guidelines Cleaning and disinfection protocols Considerations for communal restrooms and shower facilities, systems for cleaning and disinfecting furniture and equipment, Providing physical cues or guides (e.g., lane lines in the water or chairs and tables on the deck) Visual cues (e.g., tape on the decks, floors, or sidewalks) and signs to ensure that patrons and swimmers stay at least six feet apart from one another, both in and out of the water. The complete list of new guidance from the California department of public health are provided below: Campgrounds, RV Parks, and Outdoor Recreation (PDF) Hotels (PDF) Cardrooms, Satellite Wagering Facilities and Racetracks (PDF)  Family Entertainment Centers (PDF) Restaurants, Bars, and Wineries  (PDF) Fitness Facilities (PDF) Museums, Galleries, Zoos, and Aquariums (PDF) More information about the state’s COVID-19 guidance...