2020 Community Association Law LEGAL SYMPOSIUM

2020 Epsten, APC Community Association Legal Symposium2020 Epsten, APC Community Association Legal Symposium

2020 Community Association LawLEGAL SYMPOSIUM

The year the laws changed so frequently, they were seemingly written in chalk!

2020 Epsten, APC Community Association Legal Symposium

New LegislationPrepared and Moderated by Susan M. Hawks McClintic, Esq.Presented by David A. Kline, Esq., Rhonda R. Adato, Esq.,Jacquelyn E. Quinn, Esq., Emily A. Long, Esq., & Carrie M. Timko, Esq.


AB 3182: Rental Restrictions

Civil Code §§ 4740, 4741


Rental Cap

The new law will state:

“A common interest development shall not adopt or enforce a provisionin a governing document or amendment to a governing document thatrestricts the rental or lease of separate interests within a common interestdevelopment to less than 25 percent of the separate interests. Nothing inthis subdivision prohibits a common interest development from adoptingor enforcing a provision authorizing a higher percentage of separateinterests to be rented or leased.”


Rental Cap

• Cannot prohibit rentals (only number of rentals)

• Can cap separate interest rentals to 25%


Rental Cap

Section 4740(a) already says:

“An owner of a separate interest in a common interest development shallnot be subject to a provision in a governing document or an amendmentto a governing document that prohibits the rental or leasing of any of theseparate interests in that common interest development to a renter,lessee, or tenant unless that governing document, or amendmentthereto, was effective prior to the date the owner acquired title tohis or her separate interest.”


Short-term Rentals

§4741(c) states:

“This section does not prohibit a common interest development from adopting and enforcing a provision in a governing document that prohibits transient or short-term rental of a separate interest for a period of 30 days or less.”


4741(c) – Let’s Break it Down!

This section:

• Does not prohibit a common interest development

• from adopting and enforcing a provision in a governing document

• that prohibits transient or short-term rental of a separate property interest

• for a period of 30 days or less.


Short-term Rentals

• AB 3182 does not preclude common interest developments from prohibiting transient or short-term rentals.

• Applies to rentals lasting 30 days or less.

• Minimum rental periods longer than 30 days?


ADUs & JADUs: Overview

• Reminder: Civil Code Section 4751• Still applies to only planned developments• Can’t prohibit or unreasonably restrict construction or use of ADU or JADU• Can impose “reasonable restrictions”

• What is an ADU/JADU

• What is a “reasonable restriction”


ADUs & JADUs: Rental

• Association may restrict short term rentals (e.g., 30 days or less)of ADUs/JADUs

• ADUs/ JADUs not treated as separate interests for purposes of rental caps

• Owners permitted to build one ADU and one JADU per lot(Previously, one ADU or one JADU per lot)


ADUs & JADUsADU:

New Build in Backyard(Rented)

JADU: Garage Conversion(Owner Lives Here)

PrimaryResidence(Rented)


Examples of Prohibitions & Unreasonable Restrictions: ADUs and JADUs• Owner may rent out no less than the entire separate interest• Owner may not convert a garage into a living space• Owners must park cars in garages• Owners who rent out their lots may no longer use common area

facilities


Examples of Prohibitions & Unreasonable Restrictions: Separate Interests• Owner must reside on lot/unit for one year prior to renting it out• Owner may only rent out a certain number of lots/units within

community• Board approval must be obtained of a rental agreement prior to

renting out lot/unit


Allowable Leasing Provisions

• Copies of leases must be provided to management• Provision in lease states that tenant must follow governing

documents• Tenants must age qualify in 55+ senior housing communities


Penalties for Noncompliance

• Association that “willfully violates” = Penalty not to exceed $1,000• PLUS actual damages

$1,000 + …


What Do You Need to Do?


What MUST you Amend?

• Rental caps more restrictive than 25%

• Rental term limits over 30 days

• Ownership or residency requirement before renting

• Restrictions prohibiting rental for less than the entire dwelling/lot


What SHOULD you Amend?

• Provisions restricting garage use

• Architectural restrictions


When Must You Comply?


Compliance Dates

By 1/1/2021: Unreasonable Rental Restrictions Prohibited

By 12/31/2021: Amend Governing Documents to Conform


Other Legislation


COVID-19&

Employees and Employment


Debt Collection


Wildfires &

Residential Property Insurance


Balcony Bill Reminder


Inspection of Elevated Elements

• Buildings with 3 or more multi-family dwellings

• Once every 9 years by licensed inspector

• First inspection completed by Dec. 31, 2024

• Must include report to the board and in reserve study


Case LawPrepared by Dea C. Franck, Esq.Presented by William S. Budd, Esq., Pejman D. Kharrazian, Esq., Dea C. Franck, Esq., & Rian W. Jones, Esq.


Insurance

Auburn Woods I Homeowners Assn.v. State Farm General Insurance Co.

(Sep. 29, 2020, No. C085749) Ordered for partial publication only.


TakeawayUnderstand Insurance Policies

Request an Annual Summary

Meet with Insurance Expert

Annual Letter from Expert to Membership

Auburn Woods I v. State Farm


Director Liability

Coley v. Eskaton(2020) 51 Cal.App.5th 943


Coley v. Eskaton

• Developer “stacked” the Board with its employees• Lodge wasn’t profitable• Developer/Directors:

• Had a clear conflict (incentivized to shift costs to Owners)• Shifted security costs to Owner without any justification• Divulged privileged information to their private counsel

• Developer and its employeesliable for damages and over $600k in attorney’s fees and costs


Takeaway

Coley v. Eskaton

Be Mindful of Conflicts

Disclose or Recuse


Fair Housing

Hill v. River Run Homeowners Ass’n(D.Idaho 2020) 438 F. Supp. 3d 1155


Hill v. River Run Homeowners Ass’n

“Adult Use Only”


Hill v. River Run Homeowners Ass’n


Takeaway

Hill v. River Run

Review Governing Documents

Make Amendments as Necessary

Consult with your Attorney!


Fair Housing

Sanzarov. Ardiente Homeowners Ass’n, LLC

(D.Nev. 2019) 364 F. Supp. 3d 1158


Sanzaro v. Ardiente Homeowners Ass’n

Las Vegas, NV

Permanently Disabled Resident

Adopts Angel, the Chihuahua

and…


Takeaway

Sanzara v. Ardiente

No magic words

Know the kind of information you can request

Understand difference between service vs. emotional support animal

Act promptly when accommodation request received

Keep information regarding the request private


Review Online Resources

• Reasonable Accommodations (HUD & DOJ Joint Statementhttps://www.justice.gov/sites/default/files/crt/legacy/2010/12/14/joint_statement_ra.pdf

• Reasonable Modifications (HUD & DOJ Joint Statement)https://www.hud.gov/sites/documents/reasonable_modifications_mar08.pdf

• Animals as a Reasonable Accommodation (HUD Notice) https://www.hud.gov/sites/dfiles/PA/documents/HUDAsstAnimalNC1-28-2020.pdf

https://www.justice.gov/sites/default/files/crt/legacy/2010/12/14/joint_statement_ra.pdf

https://www.hud.gov/sites/documents/reasonable_modifications_mar08.pdf

https://www.hud.gov/sites/dfiles/PA/documents/HUDAsstAnimalNC1-28-2020.pdf


Closing RemarksBy Kieran J. Purcell, Esq.


ClosingRemarksPresented by Kieran J. Purcell, Esq.

COVID-19 in 2021

Q&A

MUST take survey for CEU’s

…and, attend both Part I & II

How did we do?

See You Next Week!


THANK YOU!

See You Next Week

Tuesday, December 8th

10:00 a.m.

2020 Community Association Law LEGAL SYMPOSIUM

Documents

Transcript of 2020 Community Association Law LEGAL SYMPOSIUM