ECHO Journal - July 2018 by Echo

Recruiting New Board Members p.10

Recreational Use Immunity for Common Interest Developments p.18

Serving Community Associations

Does Your Board Need Volunteers and Fresh Ideas? p. 10

When are HOAs Allowed to Tow?

p.24

A Checklist for Construction Contracts p.30

SB 721: An Important Update p.35

July /August 2018 echo-ca.org

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news from ECHO

News From ECHO July 2018 Although a couple of weeks have gone by, I’m still excited about our 46th Annual Seminar and Trade Show! This event is one of the highlights of our year, and I appreciate the hundreds of board members, exhibitors, speakers, and volunteers who made this year so memorable. The new presentations, great new speakers, and the growth of this year’s audience make me excited for the future of the Annual Seminar. If you were in Santa Clara on June 16th, I know you had a great time and I hope you learned as much as I did. And if you missed it, don’t miss it again! The Annual Seminar is worth the trip, and we’ll be back in 2019. We’re already working on ways to make next year bigger, even more fun and (of course) informative. I particularly want to recognize and thank our Volunteer of the Year, Stephany Charles; our Board Member of the Year, Karen Losee; and our Homeowner Association of the Year, The Oaks at Fountaingrove. These award winners are some of the best among us, and their dedication to their communities is inspiring. You can read more about them on page 8, and enjoy some pictures from the event. Thank you for stepping up and volunteering in your community. I hope your neighbors recognize the important work that you do. And now, with a little summer left, take some time to relax before budget season arrives. Sincerely,

Tyler Coffin Executive Director

July/August 2018 | ECHO Journal

CONTENTS 30

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Recruiting New Board Members Do you need new volunteers and fresh ideas on your board of directors? Don’t settle for the first hand in the air at your annual meeting. Finding the right people takes time and effort. Communities who set up a system to identify, engage, train, and honor volunteers are far more likely to have their choice of great candidates for the board.

Recreational Use Immunity for Common Interest Developments If your community has facilities or common areas that are used by people outside of the association, it’s common to be concerned about liability. If a non-resident were to injure themselves on the playground, skateboarding, or swimming in the pool, what would that mean for the HOA? This articles has answers.

When Are HOAs Allowed to Tow? California’s towing rules are complicated and mistakes can be costly for the association. If your parking rules include towing vehicles from your community for safety or enforcement reasons, make sure you’re doing it right: location, signage, notice, and authorization are all key elements of any towing policy and process.

A Checklist for Construction Contracts Dry months often mean big projects. If your board is considering major construction, make sure your contract addresses 12 key areas, including indemnity, scope of work, warranty, termination, attorney’s fees, and more. With your attorney’s help, your contract can protect the association and help to ensure a successful project.

SB 721: An Important Update Important amendments have changed how SB 721 relates to associations, and its requirement that associations inspect and repair decks.

The ECHO Journal is published bi-monthly by the Educational Community for Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy. Copyright 2018 Educational Community for Homeowners. All rights reserved. Reproduction, except by written permission of ECHO is prohibited. The ECHO membership list is never released to any outside individual or organization. ECHO 1960 The Alameda, Suite 195 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org Office Hours Monday-Friday 9:00am to 5:00pm BOARD OF DIRECTORS AND OFFICERS President David Hughes Vice President Adam Haney Treasurer Diane Rossi

DEPARTMENTS

3 6 7 8 29 36 37 38 40 41 42

News from ECHO 2018 ECHO Educational Calendar 2018 HOA University Graduates ECHO 46th Annual Seminar — Wrap-up Monterey Seminar — Saturday, October 27th, 2018 ECHO Volunteers ECHO Event Calendar ECHO Bookstore New Professional Members Advertiser Index Legislation at a Glimpse

Directors Sandra Bonato David Levy Jerry L. Bowles Karl Lofthouse Rolf Crocker Sandra Long Sarah Dunia Wanden Treanor John Gill Executive Director Tyler Coffin Marketing Communications Specialist Priscilla Ann Ornido Design and Production Design Site ECHO Mission Statement Fostering a better quality of life in community associations through education, advocacy, and networking.

July/August 2018 | ECHO Journal

2018 ECHO educational calendar

2018 ECHO Educational Seminars If you’ve ever wished that ECHO would hold a seminar closer to your association, chances are that we’ll be nearby during 2018. Don’t miss an opportunity to get the education you need with guidance from some of California’s top HOA attorneys and professionals. Take a look and mark your calendar. We can’t wait to see you there!

Oct. 27 Monterey Educational Seminar (see page 29) Embassy Suites Seaside, CA

San Rafael

San Francisco

2018 HOA UNIVERSITY GRADUATES We award certificates to the dedicated board members who complete all four sessions of our HOA University program. These board members have demonstrated a commitment to education and to their communities. This year, we recognize the following volunteers: Angela Allberry

Charmele Magruder

Elizabeth Bestul

Patrick McHugh

Danielle Chavanon

Rune Moller

Cecily Chun

Rosemarie Monday

Carla Crane

Diane Nakamura

Michael Darnall

Christine Pfendt

Carolyn Estrada

Tom Preston

Urszula Frydman

Richard Probst

Jim Goell

Jim Reill

Donald Hanson

Lauren Richey

Barbara Jones

Rosemary Selby

Mai Kling

Jere Wilson

Joe Lucas

John Wilson

Thank you for your service to your communities! July/August 2018 | ECHO Journal

ECHO’s 46th Annual Seminar Wrap-up Hundreds of volunteers turned out for our Annual Seminar in Santa Clara to learn, meet other ECHO members, enjoy the food, and to honor our new award winners. This is a special community, and we enjoyed meeting each of you. See you next year!

Karen Losee

Stephany Charles

Homeowner Association of the Year The Oaks at Fountaingrove On the evening of the Tubbs fire in Santa Rosa, the entire community at The Oaks at Fountaingrove was quickly destroyed. However, wise decisions by previous boards meant that the association was well insured, and all current board members took action to rebuild the association as quickly as possible. After accounting for each resident, they quickly moved on to the complicated task of rebuilding the association. The Oaks at Fountaingrove joined ECHO in 2007. We are honored to have this extraordinary community among our members.

Board Member of the Year Karen Losee

Karen Losee joined the board of directors at Scottsdale Lake HOA in 2015. Knowing almost nothing about homeowner associations Karen consulted association experts and attended educational programs. Facing a concerned

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community who had never undergone a large special assessment, Karen lead the effort to communicate the needs of the association, to answer questions, and ultimately to pass a critical special assessment. Karen’s extraordinary efforts continue to this day. ECHO is delighted to name her the 2018 Board Member of the Year.

Volunteer of the Year Stephany Charles At Charles Property Services, Stephany has made board education a core priority of her business philosophy. By signing up each of her clients as ECHO members and promoting independent education, Stephany has consistently demonstrated her support of ECHO’s mission. Stephany currently serves as the co-chair of the North Bay Panel, where she has volunteered since 2005. We are grateful for Stephany’s incredible enthusiasm and eagerness to support ECHO’s educational work and delighted to honor her as ECHO’s 2018 Volunteer of the Year.

July/August 2018 | ECHO Journal

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Recruiting

NEW Board Members

Finding Great Candidates

ome homeowners run for the community association board because they're upset about an assessment hike. Others want to overturn what they consider unfair architectural rules. It is not unusual for personal agendas to be strong motivators for homeowners to seek office.

By Carra Clampitt, CCAM

July/August 2018 | ECHO Journal

FINDING GREAT CANDIDATES

ut more often, it seems, homeowners are too busy to serve on the board or don't want to take on the responsibility. The same people remain stuck on the board because others aren't willing to step up. If your association is lucky, homeowners with good intentions will volunteer to run for the board. They will be sincerely committed to doing the best they can for their neighbors and the community at large. But why leave it to chance?

Current board members can play a key role in developing new leaders for the community, welcoming and encouraging the participation of newcomers and guiding them in governance procedures and policies. They should be constantly searching for the community's next group of leaders. And what are you looking for in a candidate? Search for volunteers with the following qualities:

• Analytical ability, incisiveness, and an ability to ask discerning questions. • A constructive rather than critical approach to new ideas. • Willingness to address overall board goals and responsibilities rather than personal interests.

• Successful record of accomplishments in business and personal activities.

• Ability to work well with other board members, staff, and committees to achieve objectives.

• Integrity and high moral responsibility, and an absence of self-interest.

• Willingness to make a sincere commitment to assignments or tasks.

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It is in the best interest of every association to make recruitment of new volunteer leaders an ongoing process. After all, these individuals will be responsible for fostering and maintaining the fiscal health, property values, vitality and livability of the communities they serve. Whether an association is developer controlled, recently transitioned or has been under homeowner control for a long time—it's never too late to create a recruitment and training plan to ensure a responsible and effective association board for years to come.

MAKE IT PERSONAL: TALK TO RESIDENTS "Getting to know you. Getting to know all about you." Those lyrics from the Rodgers

& Hammerstein musical, "The King and I," drive home the importance of personal relationships in recruiting volunteers. The first step in any recruitment program should be to get to know the homeowners living in the community. Current board members should try to learn homeowners' interests, occupations, talents and willingness and ability to serve. This can be accomplished informally by talking with homeowners at association meetings, the mailbox, the pool or the grocery store.

Use Your Manager Managers can play a pivotal role in identifying potential volunteers when homeowners call to ask questions, lodge a complaint or obtain information. When someone asks thoughtful questions or shows concern for the community, managers can put on their recruiting hats. They might say: "I have enjoyed speaking with you and strongly encourage you to consider serving on a committee or running for the open board position at the next annual meeting in November. I would enjoy working with you and feel that you would make a positive contribution."

Board members are the stewards of their neighbors' money. Their volunteer time is dedicated to preserving, maintaining and enhancing property values and fostering a sense of community. Appeal to their sense of self-interest. If they want to make sure their money is being spent wisely, they should get involved.

Encourage Their Ideas Gather their views on current issues the association is facing. Let them know how much their help is needed.

Be Positive If board members are bickering and complaining, no one will want to join. Current board members should set a good example in their words and actions.

Send a Letter or Survey While a personal approach is always more effective, board members can learn more about residents and their interests through questionnaires, surveys or suggestion boxes. A regular survey of new homeowners may alert the board to someone who has a financial background and might be tapped to serve as treasurer in the future. Or perhaps there's a lawyer or engineer in the community who could lend his or her expertise to the board. New homeowners are often the most enthusiastic about helping their communities. An annual membership survey also can help the board stay up-to-date on changes in longtime homeowners' interests and work schedules. For example, parents who have just sent their last child off to college may now have time to volunteer.

Plan Social Events Plan a community event and reserve time for residents to ask questions about the association and its operations. Besides building a sense of community, such events can give board members a chance to meet people who care about the community and to make an appeal for their assistance in governing the association. Any gathering of membersâ&#x20AC;&#x201D;from a formal membership meeting to a holiday partyâ&#x20AC;&#x201D;provides an opportunity for board members and managers to update homeowners on issues before the board and give a 30-second pitch on the importance of community involvement. Explain how important it is for the association to have responsible, committed board members. Serving as a board member is a worthy undertaking. It's a chance to give back to the community.

July/August 2018 | ECHO Journal

Advertise Don't overlook the obvious. Run an advertisement in the newsletter, post information on the community website and distribute fliers. That way, no one can say they didn't have the opportunity to become involved or that they were excluded. The board should avoid even the appearance of being exclusive and unwelcoming. It won't serve the longrange future of the community.

ENGAGE YOUR CANDIDATES Involve Potential Board Candidates Once you have a good feel for the knowledge and talents of homeowners in your community who may be interested in serving as volunteer leaders, get them involved by asking them to serve on a committee or task force. This provides a great training ground for future board

members and will also give you a better feel for their effectiveness in a group setting and the contributions they can make to the association. In fact, in many communities, serving in such a role is a prerequisite to serving on the board. If your association doesn't use committees or task forces as a training ground, encourage potential volunteer leaders to attend board meetings and invite their input on important issues.

Create a Job Description After identifying potential volunteer leaders and engaging them in community affairs, prepare these individuals for the possibility of board service. At a minimum, you should be able to provide interested homeowners with a job description for board members. This gives them valuable information they need to decide whether to pursue a position on the board while simultaneously communicating the level of commitment expected from board members. Job descriptions should include an outline of the qualifications necessary to be

elected to a position on the board and a general description of the responsibilities. The qualifications listed in the job description should mirror the qualifications required by the association's governing documents and state law. Don't change or create additional qualifications for board membership without discussing the proposed changes with legal counsel.

Hold an Informational Meeting Plan a meeting for interested candidates prior to the formal nomination process. While it may seem counterintuitive, your job at this meeting is to talk prospective candidates out of running for a position on the board. At the meeting with potential candidates, review the job description for board members. Give a realistic picture of how much time must be devoted to the association each month. Discuss the fiduciary and legal responsibilities of board members to make decisions that are in the best interests of the association even when they may not be popular with some homeowners. Give recent examples. Talk about the importance of working together as a team, being open to different points of view and leaving personal agendas behind. Be open with candidates about your experiences as board members. What is the greatest challenge? What are the rewards? Answer their questions honestly. You want board members who are committed to doing the best job possible and who have the fortitude to act in the best interests of the association. As a result, it's important to be honest with these individuals about the work required and the legal responsibilities involved. If they don't get a clear picture of what is required before they are elected, the association may end up with resentful, uncommitted or ineffective board members. After the meeting and before the formal nominating process, build in time for prospective candidates to consider the job requirements and decide whether they are willing and committed to serve.

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KEEPING GREAT BOARD MEMBERS You’ve found some great board members. But how do you keep them? Board service should be rewarding, but board members can easily become disenchanted if they feel isolated, confused, and unappreciated. Don’t let that happen!

EDUCATE NEW BOARD MEMBERS The educational process should continue after the election. Would you fly a plane without first taking lessons? Hopefully the answer is no. Make sure the new board members are provided the training and tools they need to do their job. It also doesn't hurt for longtime board members to take a refresher course. The training should cover the following areas:

• Governing documents. Each new board member should receive copies of the governing documents, including the articles of incorporation, the bylaws, the covenants, conditions and restrictions, rules, policies and architectural guidelines for the association. Explain the general content, the hierarchy of the documents and the purpose and importance of compliance. • Board member duties. Board members have a legal duty to their associations and members collectively. If they breach this duty, they and the association may be held liable. Every board should receive training each year on the duty of board members as defined by their state. The 16 echo-ca.org

board should consider asking an attorney specializing in community association law to conduct this training. • State and federal laws. Since laws are constantly changing, boards should be aware of state and federal laws and regulations that enable and regulate their communities. While board members don't need to be attorneys or legal experts to serve on a board, they should be able to spot potential legal issues and know when they need to seek legal advice. • Good governance principles. Good governance techniques can be the key to creating a vibrant and livable community. Board members should review written materials and attend training in key areas such as conducting meetings, making decisions, communicating with members and building community, to name but a few. • The manager's role. If the association employs a manager, board members should learn the manager's role to help prevent confusion, duplication of efforts and micromanagement. • The management contract. Board members should read the terms of the management contract so they have reasonable expectations of the manager and they can ensure the association is receiving all the services in the contract. The association's management contract should outline the manager's job responsibilities regarding property inspections, covenant enforcement and website administration.

In addition to ensuring board members have information and training in these important areas, the board might consider pairing a new board member with

a seasoned one. Creating a mentoring system gives new board members an opportunity to ask questions and seek advice outside of the board room. These relationships can help new board members become comfortable, confident and productive. However, make sure the new board members are paired with experienced board members who are good role models.

RECOGNIZE AND HONOR VOLUNTEERS Despite the inherent satisfaction board members and other volunteers get from serving their communities, they also deserve recognition for their efforts. Encourage associations to get creative and have fun expressing their appreciation. The following are just a few examples of how communities can say "thank you" to volunteers:

Make Them a Matter of Record When a board member's term is up, make the association's gratitude part of the permanent record with a motion at a board or annual meeting: "On behalf of the members of the association, the board of ABC Community Association hereby conveys its sincere gratitude to [name] for the valuable contribution of time and expertise given to this community."

Showcase Board Members at the Annual Meeting The annual meeting offers a great opportunity to recognize board members for their hard work. Make a short statement about what they have accomplished during the past year or term, and make the statement a part of the meeting's minutes.

Talk About Them Newsletters, websites—and now social networks—provide opportunities to pub-

licly recognize and thank board members and spotlight their accomplishments. Report regularly what the board is doing on the association website and in the newsletter, and include photos. Announce an important motion that just passed on the association's Facebook page.

Print Certificates Certificates provide board members with tangible recognition of a job well done. They are lasting mementos that many people like to display; they're also inexpensive and easy to produce. Preprinted certificates are available at any office supply store, and most word processing packages include certificate templates. Even if a board member is re-elected to another term, provide a certificate— framed if possible—for his or her completed term.

Engrave Plaques When a board makes a significant contribution to the association or the larger community, a permanent plaque displayed in a common area may be appropriate. For example, the association may mount a plaque in a new children's play area acknowledging the efforts of the board that spearheaded its development. Plaques are easily available from local trophy shops.

Prepare a Press Release If the board's accomplishments merit a plaque, write a press release about their achievements and send it to the local papers. Include contact information, including a number and e-mail address, where a reporter can reach one board member—usually the president—for comment or details. And prepare the board member who will receive the call in advance.

Have a Party Invite association residents to a boardappreciation event: a gala banquet, a picnic, a tour of a local winery or historical site, a musical evening under the stars, maybe even a "board roast." Invite a VIP guest speaker—the mayor or a county representative. Present awards, certificates and plenty of gratitude. People are motivated in a variety of ways: They may seek to learn a new skill, enhance their resume, alleviate their boredom or just enjoy social interaction with their neighbors. And while they may gain personal satisfaction from making a contribution to the association and helping the community, everyone likes to hear "thank you" for their time and efforts.

Public recognition of board service affects more than just the board members. It can make an impression on all residents that volunteer service is highly valued, which may motivate new recruits and re-energize those who are already involved. There is no magic pill for ensuring that every association board member will be responsible and committed to doing the best job possible for the community. However, a little extra planning while recruiting and training potential new leaders can greatly increase the odds that the association will have strong leaders to carry it into the future. Carra Clampitt, CCAM, is the Senior Vice President of Eugene Burger Management Corporation’s Northern California operations, and Regional Manager for the Rohnert Park office. She is a frequent speaker at ECHO events, and was ECHO’s Volunteer of the Year in 2016. July/August 2018 | ECHO Journal

By Pat Wendleton, Esq., and Sharon Glenn Pratt, Esq.

Recreational FOR COMMON INTEREST 18 echo-ca.org

Use Immunity DEVELOPMENTS July/August 2018 | ECHO Journal

o you worry about liability when you see people, who are neither owners nor residents, using your property for recreation? Are they using the common area walking or hiking paths? Playing on your lawns and playground? Skateboarding on your streets? Taking a short-cut to the beach? Here’s some good news from attorneys, for a change, which should put your mind at ease.

Immunity from liability for Recreational Use of Association Property The California Legislature, in its desire to promote and encourage owners of private property to allow the public to access their land for recreation purposes, has enacted statutes which give you, the property owner, immunity from liability.

In 1963, the Legislature enacted Civil Code section 846 1, which provides that landowners are not required to and/or have no duty “to keep the premises safe for entry or use by others for any recreational purpose.” Neither is it required “to give any warning of hazardous conditions, uses of structures, or activities” to those entering for recreation purposes. Sure, it is true that “a landowner owes a duty of reasonable care to persons coming upon his land . . . .” 2 But, Civil Code Section 846 provides an important exception to this rule, when the use is for recreational purposes. The exception applies even when the Association has been negligent. Section 846 allows and encourages owners or persons with an

1 Civil Code Section 846 provides:

An owner of any estate or any other interest in real property, whether possessory or nonpossessory, owes no duty of care to keep the premises safe for entry or use by others for any recreational purpose or to give any warning of hazardous conditions, uses of, structures, or activities on such premises to persons entering for such purpose, except as provided in this section. A "recreational purpose," as used in this section, includes such activities as fishing, hunting, camping, water sports, hiking, spelunking, sport parachuting, riding, including animal riding, snowmobiling, and all other types of vehicular riding, rock collecting, sightseeing, picnicking, nature study, nature contacting, recreational gardening, gleaning, hang gliding, winter sports, and viewing or enjoying historical, archaeological, scenic, natural, or scientific sites. An owner of any estate or any other interest in real property, whether possessory or nonpossessory, who gives permission to another for entry or use for the above purpose upon the premises does not thereby (a) extend any assurance that the premises are safe for such purpose, or (b) constitute the person to whom permission has been granted the legal status of an invitee or licensee to whom a duty of care is owed, or (c) assume responsibility for or 20 echo-ca.org

interest in property “to permit people to use their property for recreational use without fear of reprisal in the form of lawsuits.” 3 Section 846 specifically provides that giving permission or allowing persons to use one’s property for recreational purposes does not extend to the users any assurance that the premises are safe for recreational purposes. In other words, the owner is not liable when it allows strangers to the association to use the property for recreational purposes. If this sounds too good to be true, it is probably because there is a common misconception that owners of property are always liable to someone who gets hurt on their property. Not true. How-

incur liability for any injury to person or property caused by any act of such person to whom permission has been granted except as provided in this section. This section does not limit the liability which otherwise exists (a) for willful or malicious failure to guard or warn against a dangerous condition, use, structure or activity; or (b) for injury suffered in any case where permission to enter for the above purpose was granted for a consideration other than the consideration, if any, paid to said landowner by the state, or where consideration has been received from others for the same purpose; or (c) to any persons who are expressly invited rather than merely permitted to come upon the premises by the landowner. Nothing in this section creates a duty of care or ground of liability for injury to person or property. All further statutory references are to the Civil Code unless otherwise specified. 2 Civil Code section 1714. 3 Johnson v. Unocal (1993) 21 Cal.App.4th 310, 315.

ever, there are some parameters which apply to this immunity. As you probably understand by now, it is key that the property is being used for recreational purposes. Section 846 provides a list of illustrative activities which qualify as recreational. The list includes hiking, camping, water sports, horse back riding and even use of vehicles, such as snowmobiles and motorcycles, for recreational purposes. In 1978, the Legislature revised Section 846 to broaden recreational activities and changed the wording to “any recreational purpose.” 4 Since that time, the courts have applied a very loose standard, finding even that children playing on farm equipment constituted a “recreational activity.” Other examples of recreational use findings in California case law include kite flying, tree climbing, picnicking, and skateboarding. 5 With the possible exception of property which is an active construction site, immunity extends whether or not the land is of a type suitable for recreational activities. Neither is Section 846 immunity limited to land in its natural condition. No distinction between natural and artificial conditions is made in applying this statute. 6 Yes, this immunity does apply to your swimming pool! However, it does not override the state and local ordinances requiring fences around pools. There are only three instances in which the immunity provided by Section 846 does not shield from liability. The situations are:

1) Where an individual is “expressly invited, rather than merely permitted” to come on the premises, the immunity provided by Section 846 does not apply. The invitation need not specifically be for recreational purposes. 7 2) Where there is a consideration (fee) charged in exchange for permission to enter the property. Typically, the consideration is in the form of an entrance fee. 8 3) Where there is “willful or malicious failure to guard or warn against a

dangerous condition, use, structure or activity . . . .” So, if you charge outsiders a fee to use the common area property for recreation, you will no longer have the protection of this California statute. And if you expressly invite people to an event or to otherwise use your property, (such as guests who are invited to swim at the pool) you will similarly give up this immunity. The third exception, for “willful or malicious failure to guard or warn against a dangerous condition, use, structure or activity” must be more than negligence. ‘‘[I]n the context of tort liability . . . the usual meaning assigned to ‘willful,’ as well as to ‘wanton’ and to other similar terms is that ‘the [person] has intentionally done an act of unreasonable character in disregard of a risk known to him or so obvious that he must be taken to have been aware of it, and so great as to make it highly probable that harm would follow.’” This same description has been used “to explain when a failure to guard or warn against a dangerous condition has been ‘willful or malicious’ for the purposes of the recreational immunity statute . . . .” 9 Liability can be established only when the injured person proves that the owner had (1) actual or constructive (should have known) knowledge of the danger, and (2) actual or constructive knowledge that injury is probable, not just possible, as a result of the danger, and (3) that the owner intentionally failed to do something about the danger. Thus, if it is known by an association board, whether because of past accidents at a particular spot, or based on expert advice, that something on its property is unreasonably dangerous, and the board

nevertheless knowingly fails to protect against the risk, then the immunity is lost.

An Easement Does Not Result from the Use for Recreational Purposes by the Public An easement is an interest in the land of another which entitles the owner of the easement to a limited use and enjoyment of the owner’s land. An easement may

4 Ornelas v. Randolph (1993) 4 Cal.4th 1095.

6 Ornelas v. Randolph (1993) 4 Cal.4th 1095.

5 Ornelas v. Randolph (1993) 4 Cal.4th 1095,

7 Calhoon v. Lewis (2000) 81 Cal.App.4th 108.

Jackson v. Pacific Gas & Elec. Co. (2001) 94 Cal.app.4th 1110, Valladares v. Stone (1990) 218 Cal.App.3d 363, Johnson v. Unocal (1993) 21 Cal.App.4th 310, Calhoon v. Lewis (2000) 81 Cal.App.4th 108.

8 Miller v. Weitzen (2005) 133 Cal.App.4th 732. 9 Manuel v. Pacific Gas and Electric Co. (2009)

173 Cal.App.4th 927, 939.

July/August 2018 | ECHO Journal

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arise without the owner’s permission, and without any written and recorded paperwork, when a property is adversely used by the public for at least five years. However, you do not have to worry about an easement being created when the public is traipsing across your association property to photograph your beautiful view of the city, launching its hanggliders from your highest peak, or using your lovely paths & trees for bird watching. Not only has the Legislature acted to shield a landowner from liability when it allows its property to be used for recreational purposes, in 1971 it enacted Civil Code section 1009 for the purpose of eliminating the threat that owners of real property will lose rights in their property if they allow or continue to allow members of the public to use, enjoy or pass over their property for recreational purposes. 10 As a result, allowing the public to use property for recreational purposes does not create an easement, whereby the public can continue the use even after the owner wishes the public to discontinue using the property. Beware, however, that as a result of the strong public policy of allowing public access to shoreline areas, there is an exception for ocean front and beach properties. The protections of Section 1009 do not apply to property which lies within 1,000 yards inland of the mean high tide line of the Pacific Ocean and its harbors, estuaries, bays and inlets.12 Public easements to access the beach through private property are often upheld by California courts. Likewise, if a “governmental entity” is using private lands by an expenditure of public funds to make visible improvements, including cleaning and maintenance related to public use, after five years a vested right will be conferred on the public entity to continue such use. This does not mean that the landowner gives up the recreational use immunity and becomes liable for injuries occurring on the property, but it does mean that an easement may develop. It goes without saying (but we’ll say it anyway) that your common area land should always be kept properly insured against liability risks as well as property

damage. We should also note that it is often up to your attorney to raise this defense of recreational use immunity when the association is sued, as some personal injury attorneys are not aware of it and will bring a lawsuit for injuries occurring during recreational use of land. Your association board can sleep easier knowing that it need not attempt to prevent non-owners or non-residents from using common area property for recreational purposes, in order to protect the Association from liability. As set forth above, an Association is shielded from liability, and from the loss of its property rights, when allowing the public access to its common area property for recreational purposes.

Sharon Glenn Pratt is founder of the law firm of Pratt & Associates, an ECHO member firm. She specializes in civil litigation, with extensive experience in community association law, including creation, amendment and enforcement of governing documents. Pat Wendleton also specializes in civil litigation, with substantial experience in community association construction defects and transactional law.

10 Civil Code section 1009 provides: (a) The Legislature finds that:

(1) It is in the best interests of the state to encourage owners of private real property to continue to make their lands available for public recreational use to supplement opportunities available on tax-supported publicly owned facilities. (2) Owners of private real property are confronted with the threat of loss of rights in their property if they allow or continue to allow members of the public to use, enjoy or pass over their property for recreational purposes. (3) The stability and marketability of record titles is clouded by such public use, thereby compelling the owner to exclude the public from his property. (b) Regardless of whether or not a private owner of real property has recorded a notice of consent to use of any particular property pursuant to Section 813 of the Civil Code or has posted signs on such property pursuant to Section 1008 of the Civil Code, except as otherwise provided in subdivision (d), no use of such property by the public after the effective date of this section shall ever ripen to confer upon the public or any governmental body or unit a vested right to continue to make such use permanently, in the absence of an express written irrevocable offer of dedication of such property to such use, made by the owner thereof in the manner prescribed in subdivision (c) of this section, which has been accepted by the county, city, or other public body to which the offer of dedication was made, in the manner set forth in subdivision (c). 11 Civil Code section 1009 (e), Gion v. City of Santa Cruz (1970) 2 Cal.3d 465.

July/August 2018 | ECHO Journal

When Are HOAs Allowed to Tow? By Andrea L. O'Toole, Esq., and Burt Dean

By Kevin Boland

24 echo-ca.org

Parki

Rule Righ

ing Enforcement

es and hts

July/August 2018 | ECHO Journal

ll board members know, whether they’ve served for a month or a decade, the troublesome trio for HOAs: people, pets, and parking. Parking enforcement by the HOA can be an especially frustrating problem for both boards and members, because it concerns one of the most valuable items in a homeowner’s possession: their vehicle. This makes homeowners particularly sensitive when the board takes action against wrongfully parked vehicles, and can result in an angry reaction or, in the worst cases, a lawsuit.

Most HOAs have rules for parking laid out in their CC&Rs and rules, typically covering restrictions such as:

• What types of vehicles are allowed (commercial, recreational, etc.)

• Where members may park • How long a vehicle may be parked in one spot Different types of HOAs generally offer different parking rules to better suit both the association and the membership’s needs. Whether an HOA is a condominium project or a single-family planned development, in an urban or rural area, or has an abundant or scarce available parking space will affect the specific parking restrictions an association has in place. State laws and local ordinances also govern the type of rules an HOA can enforce, which can sometimes be a mess to figure out. This article discusses the difference between private and public street parking as well as the steps to take for a lawfully authorized tow to help your HOA better understand its parking rules and rights.

HOA Parking Regulations: Private vs. Public Streets In 2007, the California code regulating towing was re-written to make towing safer for the public, reduce the need for police involvement, and allow local gov-

ernment to regulate towing (CVC 22658 (link is external)). This code establishes separate laws for the type of street being regulated for parking (public vs. private). When reviewing your HOA’s current parking rules or drafting new ones, it’s important to understand the different authority given to associations for private and public roads. Typically, an HOA has the authority to regulate the private streets within its development, but has no authority to enforce parking restrictions on public streets (whether they’re in the development or not).

HOAs Can Regulate Private Streets Many HOA developments contain private roads that are not open for use by the public and are owned or maintained by the association. Generally, under state law and the governing documents, HOAs may regulate parking for both members and non-members on these roads. Typical parking regulations do the following:

• Restrict the number of allowable vehicles • Prohibit or limit commercial or recreational vehicles • Require that vehicles be parked in garages HOAs can enforce these regulations by levying fines, suspending member rights, and towing. While CVC 22658 authorizes fines for parking violations, these can only be enforced on members of the association. An HOA cannot investigate and enforce a fine on the public, or lookup a vehicle by the VIN or license number through the CA DMV. In order to legally enforce parking rules, the HOA must first have the appropriate signage in place, which is established within local city laws. Read this article to learn more about different California cities’ parking ordinances.

26 echo-ca.org

HOAs Cannot Regulate Public Streets... Usually While an HOA can enforce parking rules on its private streets, violations on public streets are typically the realm of police officers. A public street is any road that is publicly maintained, open to the public, and under the responsibility of the government. An HOA may not interfere with that regulation, except to the extent authorized by law. However, some attorneys believe that the HOA may enforce parking restrictions contained in the governing documents. For example, some HOA governing documents prohibit the parking of recreational vehicles (RVs) or work vehicles on public streets within the community. Case law in other states (not California) has upheld these restrictions as reasonable and enforceable. Because only homeowners are bound by the "covenant" of the governing documents, enforcement against non-owners may be difficult or impossible.

If the HOA is struggling with illegal parking on public streets, board or parking committee members may wish to learn local parking ordinances and call the local authorities when they observe a violation. An HOA that wishes to exercise authority over parking on public streets should ask an attorney to review the governing documents and determine what enforcement actions are legal. The answer may change depending on the association.

Call the Tow Truck: Three Steps to Enforce Parking Rules As with any use restriction, the real challenge is in enforcement, but there are ways to make it easier. First, the HOA should adopt fair and reasonable parking restrictions that are consistent with the governing documents and the law. Then, it should ensure that the members are aware of the restrictions. And lastly, it should enforce those restrictions fairly. Where applicable and authorized, an association can tow an improperly parked vehiJuly/August 2018 | ECHO Journal

person requesting the tow has the authority to have the particular vehicle removed. A general authorization permits a towing operator to monitor the development and tow vehicles without having to obtain a specific authorization. Keep in mind that the circumstances under which a tow operator may remove a vehicle under a general authorization are extremely limited (e.g. blocked fire lanes). Most tows will occur under a specific authorization by an authorized person after witnessing the violation.

Report the Tow The HOA is also required to make certain reports to the owner and local traffic law enforcement agency. Specifically, the HOA must notify their local agency by telephone within one hour after authorizing the tow.

Do You Know Your Parking Rights?

cle. Towing falls under the California Vehicle Code, and in most cases, requires an association to follow the three-step procedure in order for the tow to be legal:

• Give prior notice of parking restrictions on the property • Provide written authorization for the tow • Report the tow

Give Notice 28 echo-ca.org

The notice requirement can be met either by posting signs at all entrances to the development or by issuing a parking violation notice at least 96 hours before towing the vehicle. The statute provides specific size and content requirements for the signs that must be met where that form of notice is used by the association.

Provide Authorization Valid authorization for the tow can be achieved by a general or specific towing authorization. A specific authorization is a request by the association to remove a specific unauthorized vehicle from the development. This type of request further verifies to the towing operator that the

Now that we’ve discussed the most important elements in parking restriction, you can review (and maybe update!) your HOA’s current CC&Rs. While these statutes are complex, they are not insurmountable. With a little time, your association can create reasonable and clear parking policies and apply those policies in a fair manner, all while staying within the requirements of the law.

Andrea O’Toole, Esq. is a principal with Berding & Weil LLP. Berding & Weil is a longstanding member of ECHO and has been advising community associations for 30 years. Ms. O’Toole can be reached at 925/838-2090; aotoole@berdingweil.com.

FREE Attendance for ECHO HOA Members!

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Event Link: bit.ly/echoMonterey18 Promo code: 9CJY6D As an ECHO member, you may register for free when you apply the promotional code.

How to apply the promo code to you order 1. Type the above link into your browser and select “Register” located in the top right. 2. Click the “Enter Promotional Code,” link in the top-right of the Register window. 3. Find “Enter Code,” type in the code and click “Apply Code.” 4. Confirm your entry was successful. You should see the “Price” and “Fee” update to reflect the discounted amount.

Visit echo-ca.org/events for the latest information and online registration. ADDRESS

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30 echo-ca.org

Checklist for Construction CONTRACTS By Jeffrey A. Barnett, Esq.

July/August 2018 | ECHO Journal

here are essential clauses that should be part of every construction contract between a homeowners association and its contractors. These key terms give the association substantial legal advantages in the event of a dispute, mediation, arbitration or lawsuit arising from the construction project. These protections can only be secured by using a properly drafted agreement supplied by the association, or by negotiating with the contractor to include these clauses in the form of contract that the contractor provides. Sadly, many associations routinely sign the contractor’s contract form without change, placing themselves at a strategic disadvantage.

Key Contract Provisions

Type I Indemnity

Indemnity is the concept of shifting the risk of a loss from one party to another. There are many forms of indemnity. One common form is referred to as “Type I.” A Type I indemnity protects the association and construction manager from liability against any claim, liability, lawsuit, loss, damage, or expense, including attorney’s fees, arising out of the contract, including personal injury, death or economic loss. The key aspect of a Type I indemnity is that the legal protection applies whether or not the association or its agent is alleged to have contributed to the damages. It excludes only damages or injury caused by the sole negligence or willful misconduct of the indemnitee. It shifts 32 echo-ca.org

the risk of a lawsuit to the contractor and its insurance carrier.

2 Insurance Contractors should be required to maintain proper levels of workers compensation insurance and comprehensive general liability insurance. The contract must require that the association be named as an additional insured on the policy, and that evidence of such insurance be provided throughout the performance of the agreement. As some liability insurance companies prohibit contractors from performing work for common interest developments without a special endorsement, it is important for the contract to require, and for the association to verify, that the insurance is applicable for the planned work. The endorsements under which associations are named on the contractor’s policy vary. The association should consult with its insurance professional or attorney to assure that the association’s rights under the contractor’s insurance are maximized. A mere certificate of insurance is insufficient.

3 Licensure Work on a project for which the combined value of labor, materials and all other costs on one or more contracts is more than $500 is required to be performed by a licensed contractor. [Business & Professions Code Section 7030.5] The contract should state the contractor’s license number and the license categories held. It is easy to verify that the contractor has the appropriate category of license, and that the license is current and active, at the website maintained by the Contractors State License Board, which is www.cslb.ca.gov. The association is deemed to be the employer of an unlicensed contractor for purposes of workers compensation liability and certain tax filing responsibilities. For example, if an employee of an unlicensed contractor is injured while working in an association, the association may be sued for the employee’s lost income, medical treatment and rehabilitation expenses. The hiring of an unlicensed contractor also is below the standard of care required of community association directors and therefore could

give rise to a claim by the corporation against the directors for any damages that result. The potential risk here is enormous. Directors must only engage licensed contractors for any project or series of projects costing more than $500.

Entity Status

The true legal name of the contractor must be stated in the contract. That name must correspond with the contractor’s license. A routine check should be made to determine whether the contractor is in good standing with the California Secretary of State. Corporations or limited liability companies that are suspended cannot legally enter into contracts. Both issues can be researched quickly at the website of the Secretary of State, which is http://kepler.ss.ca.gov. It should be noted that limited liability companies cannot hold a contractor’s license.

Scope of Work

Far too many contracts have an insufficient description of the labor and materials that will be provided under the agreement. The contract should include a detailed specification of the services and materials being purchased so that the performance of the contract can be objectively measured. In construction contracts of any significant magnitude, plans and specifications should be prepared by an architect or engineer. Clarifying the scope of work is a good way of confirming the parties expectations about exactly what their respective duties and rights are under the contract.

Warranty

The specific terms of all labor and material warranties must be included in the contract. The agreement must state the duration and scope of the warranty. For example, the roofing contractor’s warranty can protect against defective materials only or may also cover the cost of repair of damages from leaks to the building and residence interiors.

Retention

Construction contracts should provide that the progress payments to the contractor are subject to a retention, typically ten percent of the amount due. The retention is held until a defined date after completion of the contract, as security for the contractor’s obligation to assure that all subcontractors and material suppliers have been paid. Without such payment, these “strangers” can record and enforce mechanics liens against the common area

and/or the separate interests, even if the association had no agreement with them.

Completion

The contract should set a start and completion date. Consideration should be given to a liquidated damages clause, establishing a daily penalty for late completion. In the absence of a completion date, the law imposes only a requirement of completion within a “reasonable” time. July/August 2018 | ECHO Journal

Labor Code Section 2810

Labor Code Section 2810 requires that construction contracts between property owners and contractors include certain disclosures which are intended to protect the employees of the contractor. The information is required to be supplemented if there is material change to the agreement, and the owner and contractor are required to keep the written contract for four (4) years. Among the information mandated for inclusion are the employer identification number of the contractor, workers’ compensation information, specification of vehicles to be used by the contractor, the number of workers to be employed, the number of independent contractors who will be used, and their license numbers. The association can incur material financial liabilities if this Section 2810 is violated.

Termination

An association may terminate a contract if the contract permits it or if the contractor materially breaches the agreement. Proving a material breach of the contract is often difficult. Therefore, to protect the association’s right to terminate a contractor at any time, it is necessary to include a clause permitting termination without the necessity of proving “cause” (a provision sometimes called termination for “owner convenience”). These clauses are reciprocal, 34 echo-ca.org

however. There are contracts where the association does not want the contractor to have the right to terminate without cause, however; so careful consideration is necessary with regard to termination for convenience. Further, even if the association has the right to terminate without cause, it may still be held responsible for payment of some portion of the contract, including profit earned to the effective termination date.

Attorney’s Fees

Under California law, the party to a contract must bear its own attorney’s fees in enforcing it unless there is a special statute providing for the recovery or a provision in the contract providing for the recovery of attorney’s fees. Generally, the association will be the party enforcing a contract; so an attorney’s fees clause should always be considered in a contract with contractors. By law, attorney’s fees clauses are always reciprocal; therefore a board should consider whether the clause may be used against it. The association may be able to improve its right to recover all litigation expenses if it includes in this clause the right to recover not only attorney’s fees and costs but also the fees and expenses of expert witnesses, whether or not those experts’ fees are otherwise recoverable by statute.

Dispute Resolution

The construction contract can require that the parties meet and confer in good faith prior to the filing of any dispute resolution process (mediation, arbitration or litigation). Construction contracts frequently contain a binding arbitration clause. Consideration should be given as to whether or not binding arbitration is in fact in the interests of the association. This clause waives the right to trial by court and trial by jury, the right to have the decision determined in accordance with California law, and the right of appeal, among other important rights. In addition, there are reports of certain arbitrations that have been longer and more expensive than a trial in court. Another drawback to binding arbitration is that all of the parties who are potentially responsible for the claim, damage or injury, cannot be brought together to resolve the issues at one time. An alternative to binding arbitration is non-binding arbitration. The main disadvantage of this procedure is that the parties may spend considerable time and money presenting their case and then have to re-litigate it in court, if the arbitration award is rejected. Mediation is a procedure whereby a neutral party endeavors to broker an agreement between the two sides. Knowledgeable and experienced mediators can be very effective in resolving disputes without the necessity of litigation. Consideration should be given in construction contracts to a clause requiring that an effort be made to mediate.

Conclusion A checklist of key construction contract terms will assist boards in negotiating better contracts. Legal review of construction contracts is prudent to assure that the agreement is complete and to customize the agreement to an association’s advantage based on the specific materials and services being provided. Jeffrey A. Barnett is an association attorney with legal offices in San Jose. He is a member of the Legal, Central Coast and South Bay Resource Panels, the ECHO Legislative Committee and a past member of ECHO's board of directors. He also frequently speaks at various ECHO seminars and writes for the ECHO Journal.

Legislative Update: By John P. Gill, Esq. CONDOMINIUM ASSOCIATIONS REMOVED FROM SB 721 On July 3, 2018, in a significant victory for condominium associations, a California Assembly committee revised SB 721 to remove condominium associations from the bill altogether. SB 721 would have required all condominium associations with three or more separate interests to perform inspections (including destructive testing every 6 years) of balconies, elevated walkways, stair landings, and other exterior elevated elements with wood or wood-based structural components to verify the safe condition and good working order of all such exterior elevated elements. The bill was introduced in response to the tragic

2015 collapse of a fifth-floor balcony in a Berkeley apartment complex. The bill, as applied to condominiums, was controversial due to the significant financial burden it would have imposed on condominium associations and the resulting impact on the affordability of condominiums. CID industry advocates have argued that California law already requires condominium associations to perform frequent reserve studies and periodic maintenance and repair of exterior components which, when coupled with the fiduciary duty of boards of directors to protect the membership, results in significant protection against catastrophic events.

SB 721 still applies to apartments and is expected to be signed into law by the Governor later this year. In addition, we expect the Legislature to continue evaluating the need for common interest developments to take additional steps to protect against catastrophic failures, and would not be surprised to see some variation of the SB 721 requirements proposed in a new bill in the near future. John P. Gill, Esq. is a principal with Hughes Gill Cochrane Tinetti LLP in Walnut Creek. He is a frequent speaker and writer on CID issues, and a current member of the ECHO Board of Directors. July/August 2018 | ECHO Journal

ECHO honor roll

ECHO HONORS VOLUNTEERS Resource Panel Chairs

Seminar Speakers

Recent Contributing Authors

Accountant Panel Adam Haney, CPA 888-786-6000 x317

Annual Seminar Lisa Black, Esq. Jeffrey Cereghino, Esq. Rolf Crocker, CCAM Lisa Esposito David Feingold, Esq. John Garvic, Esq. John Gill, Esq. Sandra Gottlieb, Esq. Adam Haney, CPA Matt Haulk, Esq. Susan Hoffman, PCAM Michael Kennedy, Esq. Cindy Koester, PCAM David Levy, CPA Julie Mouser, Esq. Rob Rosenberg Amy Tinetti, Esq. Wanden Treanor, Esq. Wendy Weber Steve Weil, Esq.

July/August 2017 David Kuivanen, AIA Pat Crosscombe Sandra M. Bonato, Esq. Steven S. Weil, Esq. Steven T. O’Brien

Central Coast Panel John Allanson 831-685-0101 East Bay Panel Ann Marquis-Fisher amarquisfisher@yahoo.com Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Cassidy Rajkovich cassidy@brookcm.com North Bay Panel Stephanie Charles & Diane Kay (415) 458-3537 South Bay Panel Tyler Coffin 408-297-3246 x4 Wine Country Panel Pam Marsh 415-686-9342 Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Oliver Burford Joelyn Carr-Fingerle, CPA Chet Fitzell, CCAM John Garvic, Esq., Chair Roy Helsing Geri Kennedy, CCAM Wanden Treanor, Esq.

East Bay Charlotte Allen Susana Cendejas, Esq. Andrea O’Toole, Esq. Monterey Sandra Bonato, Esq. Melissa Ward, Esq. Wendy Weber San Rafael David Feingold, Esq. Wanden Treanor, Esq. Glenn Youngling, Esq. Santa Cruz Sharon Pratt, Esq. Diane Rossi, PCAM, CCAM Brian Seifert Jennifer Stearns, CCAM Rosalia Tapia, Esq. Wine Country Carra Clampitt, CCAM Susan Hoffman, PCAM Amy Tinetti, Esq.

36 echo-ca.org

September/October 2017 David C. Swedelson, Esq. Bob Gourley Berding & Weil LLP Cagwin & Dorward Julie Adamen November/December 2017 Debra Warren Joelyn Carr-Fingerle Wendy Weber Sandra L. Gottlieb, Esq., CCAL January/February 2018 Robert DeNichilo, Esq. John P. Gill, Esq. Oliver Diaz Rolf Crocker March/April 2018 Jennifer M. Jacobsen, Esq. Paul W. Windust, Esq. Andrea L. O’Toole, Esq. Derek Eckert John P. Gill, Esq. May/June 2018 Susan L. Hoffman Thomas Connelly Kevin Boland Rolf Crocker, AMS, CCAM

ECHO event calendar

RESOURCE PANEL CALENDAR ECHO Resource Panels meet during lunch on weekdays to enable managers, professionals and board members to hear about important topics presented by experts in the industry, and share experiences and issues. The meetings are open to all ECHO members, and those interested in learning about ECHO, offered in a casual atmosphere where the cost of attendance is the price of your lunch. The sessions last about an hour and a half. Check-in with the ECHO Panel Secretary for details and to register.

Please join us: DATE

INQUIRIES

TOPIC

August 10, 11:30 a.m. East Bay Resource Panel Massimo Restaurant 1604 Locust St., Walnut Creek

Ann Marquis-Fisher amarquisfisher@yahoo.com

TBD

Sept. 6, 11:45 a.m.

North Bay Resource Panel TBD

Denise Wolford, CCAM 415-458-3537

Getting Ready for Inclement Weather

Sept. 11, 12:00 p.m

Central Coast Resource Panel The Back Nine Grill, 555 Hwy 17 (Pasatiempo Exit), Santa Cruz

Tyler Coffin tcoffin@echo-ca.org

CERT & Emergency Training

Sept. 20, 11:45 a.m.

Wine Country Resource Panel Rohnert Park Community Center Meeting Room #2 5401 Snyder Ln., Rohnert Park

Pam Marsh 415-686-9342

TBD

LOCATION

REGULARLY SCHEDULED RESOURCE PANEL MEETINGS PANEL

MEETING

LOCATION

Maintenance

First Wednesday, Even Months

ECHO Office, San Jose

North Bay

First Thursday, Odd Months

TBD

East Bay

Second Friday, Even Months

Massimo Restaurant, Walnut Creek

Accountants

Second Monday, Odd months

Scottâ&#x20AC;&#x2122;s Seafood Restaurant, Oakland

Central Coast

Second Tuesday, Odd months

The Back Nine Grill, Santa Cruz

South Bay

Second Wednesday, Even Months

TBD

Wine Country

Third Thursday, Odd months

Rohnert Park Community Center

Legal

Quarterly

Varies

July/August 2018 | ECHO Journal

BOOKSTORE The ECHO Bookstore is your source for great information on the duties of HOA Board Members. Order online or fill out the form on the facing page. Robert’s Rules of Order Member Price: $7.50 Non-Member Price: $12.50 A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.

2018

2018 Condominium Greenbook Member Price: Non-Member Price:

This companion to the Condominium Bluebook is an in-depth guide to all aspects of association finances, including accounting methods, financial statements, reserves, audits, taxes, investments and much more. Not for the accounting novice, this is a tool for the treasurer or professional looking for specific information about association finances.

Board Member Handbook Member Price: Non-Member Price:

Non-Member Price: $17.95 Construction defect litigation can be confusing, expensive and fraught with legal pitfalls. This eye-opening guide, written by accomplished construction-defect attorneys, is an essential tool for board members who need to understand the legal process.

38 echo-ca.org

$15.00 $25.00

This publication is the essential guidebook for HOA Board members, dealing with governance, finances, insurance and maintenance issues. Revised and updated in June 2012.

Construction Defect Claims Member Price: Non-Member Price:

$19.95 $25.00

New buildings can conceal extensive faults. It’s a board’s worst nightmare—rainstorms damage buildings and bring owner complaints. Is legal action necessary? With this new book, you’ll learn about the resolution process for construction problems, and how to handle complex claims.

Home and Condo Defects Member Price: $12.95

$17.00 $25.00

2018

Condominium Bluebook 2018 Edition Member Price: $17.00 Non-Member Price: $25.00 This well-known compact guide for operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequentlyasked questions about associations, along with succinct answers.

2018 Digital Downloads Free for ECHO Members

ciation o s s A unity Book Comm Statute dition 2014 E

Publications to answer your questions about common interest developments Order Online at www.echo-ca.org

Bookstore Order Form

EDUCATIONAL COMMUNITY FOR HOMEOWNERS 1960 THE ALAMEDA, STE 195, SAN JOSE, CA 95126 PHONE: 408-297-3246, FAX: 408-297-3517

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new professional members

Welcome to our

NEW PROFESSIONAL MEMBERS

Electronic Innovations Inc. Electronic Innovations Inc. (EI) is a small family owned company based in the East Bay. We are a firm of 25 full-time employees that provides Industrial Security Systems. These Industrial Security Systems consist of card access, surveillance cameras, automatic doors and gates, anti- terrorist barricades with other integrated security products. We were founded by Eric Bledsoe on July 15th, 1980. EI is a full service organization and have been engineering contractors specializing in the design, installation and maintenance of automatic entry control systems. We have a dedicated Service Department of technicians who provide after installation support. With our expertise in all areas of physical security, EI is clearly an experienced, proven, local contractor that can provide you the security management system that will fulfill your security needs now and for the future. Our professionalism, expertise, and technical support make the difference.

Dryer Duct Dryer Duct Company, owned and operated by Dennis Justus since 1990 services the South Bay Area & Peninsula with high quality clothes dryer duct cleaning. Using the most effective method to clean dryer ducts we ensure the duct is clean and free of lint and blockage. This speeds up drying times and reduces the risk of dryer related fires. Our company also offers expert chimney cleaning, inspections and repairs and we do professional steam cleaning of carpets & upholstery. Whatever your needs you will find our technicians to be top-notch reliable professionals. Call us whenever you need any of these services. Contact: Dennis Justus • Tel: (408) 265-1051 Email: dryerductco@gmail.com Web: dryerductco.com

Contact: Eric Bledsoe • Tel: (510) 233-2795 Email: info@eigates.com Web: www.electronicinnovations.com

IKO Roofing and Construction

Rayne Plumbing Rayne Plumbing is a full service plumbing company that has been serving the Bay Area since 1964. We provide ourselves in our great reputation amongst Property Managers, Homeowners and Tenants. Majority of our technicians have at least 10 years of experience and are trained to handle anything as basic as a sewer stoppage or as complicated as boiler troubleshooting. Our live answering service is available 24/7 for our customers and our on-call technicians are always ready to remedy any plumbing emergency. Some of our regular services are; boiler repair and replacement, water heater service, backflow device testing/ repair/replacement, hyrdoflushing, camera inspections, gas and water line repairs/replacement and all plumbing preventative maintenance. Contact: Yussef Nejme • Tel: (408) 283-0600 Email: yussef@rayneplumbing.com Web: www.rayneplumbing.com 40 echo-ca.org

IKO is a worldwide leader in the roofing, waterproofing and insulation industry for residential and commercial markets. A family-owned business established in 1951, the company remains firmly rooted in its founding values of craftsmanship, innovation and a commitment to providing best-in-class products, quality and value. IKO operates more than 25 manufacturing plants throughout North America and Europe, and has grown to be among the world’s largest exporters of asphalt shingles and commercial roofing products. For more information on IKO and its full line of roofing product solutions, visit www.iko.com. Contact: Terrell Torgersen • Tel: (916) 995-3948 Email: terrell.torgersen@iko.com Web: www.iko.com/na/

Find all of ECHO’s Professional Members Online. Visit our Professionals Directory at www.echo-ca.org

advertiser index

about ECHO

WHAT IS ECHO? Ace Property Management..................28 www.acepm.net Affirmative Management Services ....33 www.affirmativemanagement services.com

Cornerstone Community Management.........................................14 www.cornerstonemgt.biz Heritage Bank of Commerce. .............17 www.HeritageBankofCommerce.com

Applied Reserve Analysis....................23 www.appliedreserveanalysis.com

IQV Construction & Roofing................28 www.iqvinc.com

Barcode Automation, inc. ...................15 www.Barcode-Automation.com

Levy, Erlanger & Company..................22 www.hoa-cpa.com

Benjamin Moore Paint & Company...........................................26 www.benjaminmoore.com

R.E. Broocker Co...................................27 www.rebroockerco.com

Berding Weil..........................Back Cover www.berding-weil.com Cascade Building, Inc. .........................21 www.cascadebuildinginc.com Common Interest .................................13 www.commoninterest.com

Rebello’s Towing....... Inside Front Cover www.rebellos.net Statcomm, Inc. .....................................33 www.statcomm.com White and MacDonald.........................34 http://wm-llp.com

Serving Homeowners to Build Strong Community Associations The Educational Community for Homeowners (ECHO) is a nonprofit membership corporation dedicated to assisting California homeowner associations. ECHO provides help to homeowner associations on many fronts: finances, legal issues, insurance, maintenance and management. Members receive help through conferences, trade shows, seminars, online education, a bi-monthly full-color magazine and discounted publications.

Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations.

Benefits of Association Membership • Subscription to bi-monthly magazine • Members-only online education • Updates to the Association Statute Book • Frequent educational seminars • Special prices for CID publications

ECHO Membership Dues Association Membership HOA 2 to 25 units...........................$130 HOA 26 to 50 units.........................$180 HOA 51 to 100 units.......................$275 HOA 101 to 150 units.....................$375 HOA 151 to 200 units.....................$450 HOA 201 or more units..................$575 Professional Membership.................$500 Association Management Membership.......................................$500 Individual Membership.......................$75 Journal Subscription............................$15

How Do You Join ECHO?

Office 1960 The Alameda, Suite 195 San Jose, CA 95126-2308

Over 1,400 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for the membership, sign up online at www. echo-ca.org. For more information about membership and ECHO, call us at 408-297-3246 or visit the ECHO website.

August2014 2013 ||| ECHO ECHO Journal Journal February July/August 2018 ECHO Journal

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legislation at a glimpse

Catch Up On The Legislative Session! The list below features important legislation for California associations. This list, and the impact of each bill, will change as authors amend the language in their bills. The final day for the Governor to sign or veto bills for the 2017-2018 Legislative Session is September 30th. For the most up-to-date information, visit the HOA Advocacy section at the ECHO website: www.echo-ca.org/hoa-advocacy

Current Legislation Bill Information

Summary

AB 1760

Emergency Vehicle Parking

Watch Status: Died

Makes a prohibition or restriction in the governing documents of a common interest development relating to parking, including, but not limited to, onstreet parking, void and unenforceable with respect to an emergency vehicle owned or under the control of a member.

AB 1917

Extension of Declaration

Watch

Allows for extensions to the terms of the declaration, as specified. Prohibits extension of the terms of the declaration from exceeding the initial term of the declaration or 25 years, whichever is less.

Author: Frazier

Author: Steinorth Status: In Assembly Judiciary

AB 1943

Manufactured Housing Title Ownership

Watch Status: Amended. In Senate Appropriations.

Specifies that a registered owner of a manufactured home in a mobilehome park that is converted or proposed to be converted to a resident-owned subdivision, stock cooperative, or condominium project, may submit written evidence of that ownerâ&#x20AC;&#x2122;s resident ownership in order to comply with the requirement that the owner owns or holds title to the property where the home is to be installed.

AB 2141

Annual Statement Deadlines

Watch

Changes the time requirements for the distribution of the annual policy statement to members of a common interest development to be within 31 to 91 days before the end of the fiscal year.

Author: Waldron

Author: Cunningham Status: Introduced

AB 2912

Fidelity Coverage and Electronic Transfers

Watch Status: Passed Assembly. In Senate Judiciary.

Requires an association of a common interest development to maintain fidelity bond coverage, prohibits electronic transfers of funds belonging to the association in and out of the account without prior approval from the board. Also prohibits any electronic transfer from the operating and reserve accounts of the association without prior board approval.

AB 3041

Prohibition of Transfer Fees

Watch

Prohibits the creation of a transfer fee, other than excepted transfer fee covenants, as defined, with respect to real property as a fee payment requirement imposed in any covenant, restriction, or condition contained in any deed, contract, security instrument, or other document affecting the transfer or sale of real property. Excepts certain transfer fee covenants from a notice requirement.

Author: Irwin

Author: Cunningham Status: In Assembly Judiciary

AB 3156

Electric Vehicle Charging Stations

Watch

Clarifies that equipment that meets the definition of "electric vehicle service equipment" is electric vehicle service equipment whether or not it is necessary to tether the equipment to a vehicle to permit the transfer of electric energy.

Author: Mullin Status: In Assembly Transportation

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legislation at a glimpse

Current Legislation (continued) Bill Information

Summary

SB 721

Deck & Balcony Inspection Requirement

Watch

This bill would have required regular inspection and repairs inspection of building assemblies and associated waterproofing elements, including decks and balconies, for buildings with more than a certain number of multifamily dwelling units by a licensed architect, civil or structural engineer, or building inspector or official at certain intervals. Recent amendments have removed common interest developments from the scope of this bill.

Author: Hill Status: Amended. To Assembly Housing.

SB 1016

Electric Vehicle-Dedicated Meters

Watch

This bill would require the homeowner to agree to pay the costs associated with the installation of an electric vehicle charging station placed in a common area or an exclusive use common area. It also provides that any governing document that effectively prohibits or restricts the installation or use of an electric charging station within an ownerâ&#x20AC;&#x2122;s unit or of an EV-dedicated TOU meter, as defined, is void and unenforceable.

Author: Allen Status: Amended. To Assembly Judiciary.

SB 1128

Consent to Email, Election by Acclamation

Watch Status: Amended. In Assembly Judiciary.

Authorizes the recipient of a document sent by a common interest development association to consent to or revoke consent to electronic delivery by email. Requires at least 28 days general notice by an association before making a rule change. Requires the director nominees of an association to be considered elected by acclamation in certain circumstances.

SB 1173

Time Share Exemption from Notifications

Watch

Exempts from notice requirements under the Davis-Stirling Common Interest Development Act, interests regulated in the Vacation Ownership and Time-Share Act of 2004.

Author: Roth

Author: Vidak Status: Passed Legislature. To Governor.

SB 1265

Election Qualifications and Procedures

Oppose Unless Amended

Regulates how association governing documents may specify the qualifications for candidates for a common interest development board and any other elected position, and the qualifications for voting. Deletes exception that allows associations to use a paid third party as inspector of elections. Adds other requirements to election rules.

Author: Wieckowski Status: In Senate Housing

What Do You Think? Read more about HOA legislation on our website or visit our Facebook page and join the discussion. On the web: echo-ca.org/hoa-advocacy, On Facebook: facebook.com/echoorg

July/August 2018 | ECHO Journal