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Posts Tagged ‘homeowner associations’

Before bringing or defending an enforcement action filed in court involving an HOA, ask, does your state first require ADR or that a request for ADR be made?

Posted on: March 12th, 2019

By: Michael Shepherd

As courts across the country become more congested, many courts now order the parties to participate in some form of alternative dispute resolution, such as mediation or non-binding arbitration. When it comes to Homeowners Associations, many state legislatures have taken the affirmative step of requiring HOAs or owners bringing an enforcement action to at least request ADR before filing a lawsuit in court.

It is important to carefully examine your state’s laws to see (1) whether ADR or a request for ADR is required and (2) under what circumstances. For example, California only requires a request for ADR in civil actions that (1) solely seek declaratory, injunctive, or writ relief; (2) solely seek declaratory, injunctive, or writ relief in conjunction with monetary damages not in excess of the limits for small claims actions; and (3) seek to foreclose on an owner’s interest. Cal. Civil Code §§ 5930(b) and 5705. Moreover, a request for ADR is not required in California if the action is filed in small claims court or if preliminary or injunctive relief is necessary. Cal. Civil Code §§ 5930(c) and 5950(a)(3).

In California, the Davis-Sterling Act prevents associations or owners from filing an enforcement action in court before the parties have attempted to submit their dispute to ADR. An enforcement action is defined as a civil action brought to enforce the Davis-Sterling Act, to enforce the Nonprofit Mutual Benefit Corporation Law, or to enforce the governing documents of the HOA. Cal. Civil Code § 5925(b). ADR can take the form of mediation, arbitration, conciliation, or any other nonjudicial procedure that involves a neutral party in the decision-making process. While there is no requirement that the parties participate in ADR, a party’s unreasonable refusal to participate in ADR may be considered when attorney’s fees and costs are recoverable. Cal. Civil Code § 5960. Furthermore, the parties must file a certificate of compliance with the civil action stating that ADR was requested or that a request is not required under the circumstances. Failure to file the certificate of compliance exposes the complaint to a demurrer or a motion to strike.

In today’s world of congested courts, it is important to be apprised of when ADR is required as it is often implemented as a way to relieve court dockets. This is just as true in enforcement actions involving HOAs. Therefore, before bringing or defending an enforcement action involving an HOA, be sure to learn whether your state requires ADR or a request for ADR.

If you have any questions or would like more information, please contact Michael Shepherd at [email protected].

California Homeowners’ Associations Must Allow Politicking: SB 407 is Now Law

Posted on: November 22nd, 2017

By: Jeffrey R. Cluett

On September 11, 2017, California Governor Edmund G. (“Jerry”) Brown, Jr. signed into law Senate Bill No. 407, which passed the California Senate and the California Assembly unanimously. SB 407 has been codified as California Civil Code Section 4515.

Prior Protections

California Civil Code Section 5105(a)(2) requires an association to ensure access to common area meeting space, during a campaign, at no cost, to candidates and members advocating a point of view, including views not endorsed by the board.

Similarly, Section 5105(a)(1) requires that if any candidate or member is provided access to association media, newsletters, or websites during a campaign, for purposes related to an election, the association shall provide equal access to candidates and members advocating a point of view, including those that are not endorsed by the board.

Section 4515’s Added Protections

Section 4515 adds to Section 5105’s protections. It bars associations’ governing documents from prohibiting members or residents from assembling or meeting in common areas or a member’s separate interest, during reasonable hours, for purposes related to common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes, or for social and educational purposes.  This includes inviting public officials and candidates for office to meet with members, residents, and their invitees, canvassing and petitioning members, and distributing, without prior permission, information about common interest living, association elections, legislation, election to public office, or the initiative, referendum, and recall processes.

It also prohibits a member or resident from being required to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy(ies) to use the common area for these activities.

It also authorizes one prevented by an association or its agent from engaging in these activities to bring a civil or small claims action to enjoin the enforcement of a governing document that violates Section 4015. It also authorizes the court to assess a civil penalty of not more than $500.

This law gives community interest associations attributes of public spaces for members, residents, and invitees. Indeed, the Senate Judiciary Committee analogized common areas to public spaces: “Just as with municipalities, CIDs are marked by common areas, be they streets, sidewalks, park, open courtyards, clubhouses, or common rooms.”  According to its author, “SB 407 would protect the political free speech rights of the 25% of Californians that live in common interest developments by prohibiting HOAs from creating community rules that disallow owners or residents from contacting others for the purpose of informing them about any issue that is the subject of public or association legislation of rule-making.”

Unintended Consequences?

While Section 4515 broadens members’ rights to expression, it may open homeowner associations to disruptive or offensive activities. Under Section 4515, a member or resident could hold demonstrations or marches.  Section 4515 appears to say that common interest associations could not prevent them.  While residents may applaud the increased speech and assembly protections, we foresee disputes arising from activity that association members find troubling or even offensive, but which Section 4515 appears to protect.

Beware of Potential Liability

Common interest development associations should ensure that their governing documents comply with Section 4515. If they do not, they should not enforce those provisions that do not comply with Section 4515.

If you have any questions or would like more information, please contact Jeff Cluett at [email protected].