Lorena Sterling, CAFM Community Association Financial Services (CAFS)
Brenda Hendricks, CCAM The Helsing Group Inc., ACMC
Shanne Ho, CCAM-HR.ND ProActive Professional Management
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The CACM Law Journal is a digital publication distributed four times per year to all members, in addition to supporters of the California Association of Community Managers.
DISCLAIMER: CACM does not assume responsibility for the accuracy of articles, events or announcements listed. Please be advised that the opinions of the authors who contribute to the Law Journal are those of the author only, and do not necessarily reflect the opinions of CACM and other industry attorneys. Please note that in a constantly evolving industry there are frequently multiple interpretations of the controlling statutes and case law. The information contained in these articles is of a general nature and not intended as legal advice. If you have any questions, please discuss them with your association’s legal counsel.
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Guest Editor’s Note
Community association law is generally a decade behind modern technology, with some governing documents still referencing telegraphs. In 2024 and 2025, there has been a sudden leap into the world of bulk internet and cable services, artificial intelligence (AI), concerns about cyber security and privacy and continuing to struggle with security cameras. Law Journal articles are centered on mastering the foundational areas of expertise applicable to community managers found in Business and Professions Code section 11502 and are the subjects that a certified common interest development manager must complete at least 30 hours of coursework in as part of the certification process. Community managers must be equipped to respond to proposals for bulk internet or cable services, including advising their boards how to consider them with the assistance of legal counsel. Community managers are now receiving emails from residents written by AI, and management companies are using AI in their daily work. Privacy and security are growing concerns as our technology expands and more information is stored digitally. Security cameras are smaller and sharper, and people are growing more concerned about being watched. This issue will cover these topics in a way that equips managers to deal with these expanding technologies and guide their boards in how to manage them. There is always more to learn and ways we can sharpen one another.
Privacy and security are growing concerns as our technology expands and more information is stored digitally.
John D. Hansen, Esq. Baydaline & Jacobsen LLP General Counsel to
Community Associations Sacramento, California 16 Years in the Industry
WHAT ARE THE BENEFITS OR RISKS OF AI?
Combatting AI
Protecting Communities from Misinformation, Deepfakes and Data Leaks
Over the last few years, artificial intelligence (“AI”) has become almost ubiquitous in daily life: AI answers at the top of Google search results, AI assistant notifications, AI-generated social media content and news stories about the latest advancements of Large Language Models like ChatGPT. As these AI tools progress, it is important to understand how AI can be used, the benefits and risks of AI-generated content, how to identify it and how to educate communities about its use.
By John F. Baumgardner, Esq.
If you believe the hype, the benefits of AI as a universal, multi-tool are endless. Although many people think of AI as a new type of search engine, it has many other potential applications for associations, including summarization of documents, preparing charts and presentations, revising email responses and providing quick, concise information. These AI tools can be used to make the management of these associations more efficient if used correctly.
However, there are risks to be aware of when dealing with AI-generated materials or information. As with everything on the internet, AI is not always one hundred percent right, and can result in a phenomenon called “hallucinations.” According to IBM, “AI hallucination is a phenomenon where, in a large language model (LLM) often a generative AI chatbot or computer vision tool, perceives patterns or objects that are nonexistent or imperceptible to human observers, creating outputs that are nonsensical or altogether inaccurate.” (https://www.ibm.com/think/topics/ ai-hallucinations.) AI can hallucinate fake case law, scientific research or historical events. Even when used correctly, AI-generated content should be reviewed and verified by other sources.
There are also privacy risks to be aware of when using AI. Unless the AI system collects zero data, it may retain your chats and system inputs. This could potentially jeopardize confidential, identifying, and private information retained in numerous association documents, including financial records, legal opinions, and homeowner records. The user should redact any confidential, identifying or private information before inputting records into AI for any purpose. Some built-in AI systems, like Zoom note takers, should also be turned off before executive meetings, as they could potentially disclose privileged attorney-client communications, confidential contract negotiations, or other confidential information.
Associations and managers must also be aware of the growing risk related to the use of “deep fakes.” The Department of Homeland Security defines “deep fakes” as the utilization of AI “to create believable, realistic videos, pictures, audio and text of events which never happened.” (Department of Homeland Security, Increasing Threat of DeepFake Identities.)
Deep fake technology has been used to scam unsuspecting victims, create disinformation and as a form of harassment. Recently, it has been reported that deep fake technology has been used to impersonate Marco Rubio in conversations with foreign dignitaries and state governors. Associations and managers must follow the same protocols adopted for financial transactions, harassment investigations and operating procedures to protect themselves from these growing risks.
SPOTTING
Despite its promise, there are still some ways to identify when something is real or AI-generated. For example, pictures generated by AI may include people with too many fingers, while AI-generated text may overuse em dashes ( – ) or bullet point lists. However, as the technology advances, these “easy” tells are becoming increasingly absent. Recently, a researcher published a paper claiming to show that more people identified a response from ChatGPT 4.5 as human when compared to an actual human respondent. (Mei, Q., et al. (2024). A Turing test of whether AI chatbots are behaviorally similar to humans. Proceedings of the National Academy of Sciences, 121(9).)
While the thought of AI becoming unrecognizable is worrisome, there are available tools to protect associations and managers from AI’s potential dangers and abuses. The easiest means of combating these issues is through discussions with an association’s general counsel, trusted vendors or senior community managers. The expertise and experience derived from working in this industry may be all that is needed to recognize or research errors in arguments presented by owners.
There are also tools available online to help identify AI writings or images. Many of these online tools were developed to assist educational institutions in identifying potential issues with plagiarism. However, they may also help associations recognize AIgenerated videos, recordings or pictures. While these online tools claim to identify AI-generated content, they should not be an association’s final referee of what is or is not AI-generated.
HOW TO PROTECT ASSOCIATIONS
DEEP FAKES: The utilization of AI “to create believable, realistic videos, pictures, audio and text of events which never happened.
As much as some want to argue that the coming AI revolution is hyperbole, it is clear that the use of AI-generated content is ubiquitous across social media platforms, newsrooms and even our emails. AI-generated content will continue to creep into many more aspects of society, and neither associations nor managers can bury their heads in the sand to its potential implications. Managers and associations should be educated on the benefits and risks related to the use of AIgenerated content. Associations or management companies can also adopt AI use policies to help limit the potential risks associated with the creation or use of AI-generated content. Associations and management companies likely also have existing policies related to financial transactions, investigations and disciplinary proceedings that can help reduce potential risks, just like phishing scams or false homeowner complaints. Lastly, continue to rely on trusted vendors, general counsel and senior community managers to provide competent advice based on their experience and expertise.
John F. Baumgardner, Esq. is the primary attorney with Chapman & Intrieri, LLP in their Roseville, California office. With 11 years of experience, his practice focuses on representing Homeowners Associations in complex construction defect disputes, general counsel matters, general civil litigation and revision of governing documents.
CAMERAS IN THE COMMUNITY: Navigating the Tension Between PRIVACY and SECURITY
By David F. Feingold, Esq.
Security cameras are everywhere. To many they are simply a prudent security tool. To others, they are the digital equivalent of peeping Toms. For community managers, the challenge is not whether cameras should be permitted or operated by their associations, but how to regulate and use cameras without violating the law or the real (or perceived) privacy rights of residents.
Community Cameras
The number of associations operating surveillance camera systems continues to rise, as the types and capabilities of these systems evolve exponentially. Not long ago, these systems were limited to a few clumsy cameras using an analog closed-circuit television network to capture grainy video, which was stored on VHS tapes. Today we have sleek, easy-to-install, high-definition cameras linked to cloudbased systems that can be monitored and accessed remotely. Of course, it is not only associations operating these
systems. Doorbell style security cameras are becoming the norm, as are vehicles with sentry mode features that record in 360 degrees and can be monitored in real time.
Let’s not forget the drones. While the primary concern was once privately operated drones, community associations are increasingly exploring the use of drones to patrol and document violations.
The Tension
Security cameras serve an important role: they can both deter crime and ensure that offenders can be identified and held accountable. While many people have become desensitized to surveillance systems, there are just as many who find them intrusive and highly invasive – especially when used in their own communities.
Residents in one San Jose community recently made headlines after cameras were installed and used to launch an aggressive enforcement campaign. The backlash was swift, with residents rising in revolt. Other
associations have faced claims of failing to prevent residents from using cameras to stalk neighbors, or for turning doorbell cameras into harassment tools—recording children, monitoring conversations and making neighbors feel watched. Often, there is also suspicion from residents that community leaders are accessing and using the system for improper purposes.
Applicable Laws
The California Constitution promises every citizen a right to privacy, and multiple laws have been enacted to define and protect that right. The most relevant for community managers is the California Invasion of Privacy Act (CIPA), enacted in 1966 to regulate the then-new “miniature recording devices.” It prohibits the recording of images or conversations in private settings—or any situation where a person has a reasonable expectation of privacy—without consent. At the time, the Legislature warned that these devices had “created a serious threat to the free exercise of personal liberties and
Without strong policies and some restraints, associations may find themselves on the wrong side of both the law and community trust.
cannot be tolerated in a free and civilized society.” If only they knew what was coming.
While our society has become quite tolerant, the right to privacy remains a hot button topic. California has passed sweeping digital privacy laws, including the California Consumer Privacy Act (CCPA) in 2020 and the California Privacy Rights Act (CPRA) in 2023. These laws regulate how our personal data (including images, video, voice recordings and biometric information) is collected, used and shared. Among other things, these laws are responsible for the ubiquitous, and sometimes annoying, privacy notices and optout pop ups you see when opening a website.
Here is the bottom line: there are multiple legal frameworks that protect individual privacy rights, and community managers should assist their communities to ensure that the privacy rights of residents are acknowledged and respected.
Best Practices
In my view, compliance with privacy laws can be best achieved through the adoption of, and regular updates to a well-designed security camera policy as part of the operating rules. For association-controlled cameras, the policy should inform residents that:
• the cameras only record common areas, and to the maximum extent practicable, are not directed at private areas;
• the system only records video, not audio;
• the recordings will be accessed only in certain situations, and only by certain authorized persons; and
• the existence of the camera system is not a guarantee of security or safety.
For cameras installed by residents, the policy should clearly state that their use must comply with applicable architectural restrictions, and the CIPA. The policy should provide that complying with the CIPA
may require disabling the audio recording function, depending on the location; that the camera(s) must not be concealed or directed at private areas of residences such as windows, patios or balconies of neighboring units; and that the camera and any recording must not be used for improper purposes such as harassment, stalking or interfering with the quiet enjoyment of others.
What’s Next
Security firms area already busy perfecting and marketing systems that are no longer simply recording - they are also thinking. Artificial Intelligence is ushering in a shift from passive, labor-intensive monitoring systems to active, predictive and behaviorrecognizing systems. These systems are able to recognize individuals and track them through each camera zone, recognize specific actions or behaviors (loitering, trespassing, package theft), recognize objects (e.g., garbage cans, cars, etc.), and send smart alerts when predefined events occur. These silent algorithmic gatekeepers will only get more powerful, and will soon decide who belongs, what’s suspicious, and when to raise the alarm – all without human intervention. Without strong policies and some restraints, associations may find themselves on the wrong side of both the law and community trust.
David F. Feingold, Esq. is a partner at the San Rafael law firm of Ragghianti Freitas LLP, and has represented common interest developments in the Bay Area since 1986.
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SETAGLAT CYBERSECUR
I T Y R I S SK
By Krista E. Kamper, Esq. and Douglas P. Bickham, Esq.
CYBERSECURITY DEFENSES ARE ONLY AS GOOD AS THE WEAKEST LINK, WHICH IS TYPICALLY THE PERSONNEL WITH ACCESS TO THE INFORMATION.
aware of their responsibilities under applicable law and take proactive measures to minimize the risk of cyberattacks and their resulting liability.
The CCPA establishes causes of action that California residents may assert against businesses, including management companies, for data breaches resulting from a failure to implement “reasonable security measures and practices.” Types of information considered sensitive and personal under the CCPA include financial records; home address; the contents of mail, email, and text messages; social security numbers; driver’s license numbers; or information about a person’s health, sexual orientation, racial or ethnic origin, citizenship or immigration status, religious or philosophical beliefs or union membership. Even though not all management companies may be subject to the CCPA,[1] they all certainly collect and store some of the above-listed personal information of residents in the communities they manage. Thus, all management companies should consider the requirements of the CCPA as good guidance in how they safeguard such information.
Examples of “reasonable security measures and practices” could include using secure data storage solutions, such as keeping software up to date, filing data in secure cloud storage services, and/or using dependable backup solutions. Other helpful procedures are encrypting personal data as well as restricting access of private data to only authorized personnel. One key method for safeguarding personal information is also mandating good password hygiene, such as requiring unique passwords with a combination of letters, numbers and characters.
As the nation prepares to celebrate 250 years of independence, one of our most precious freedoms, privacy, is under constant threat. The right to autonomy and control over personal information is a core value protected by, among other state and federal laws, the California Consumer Privacy Act (“CCPA”). However, that right to privacy is being eroded by the rapid growth of cybercrime. Thus, community associations, and especially the management companies that collect and store residents’ personal data, must be
It would be a good practice to memorialize the procedures described above into a written policy for handling personal data. Such a policy would be useful to train personnel in the management company and on association boards or committees about the best ways to deal with and dispose of personal data and develop a plan to nimbly and appropriately respond to cyberattacks. Management companies should implement such measures to shield their community residents’ personal information as well as protect themselves from liability.
Associations and management companies should also be aware of the mandatory notification requirements that they must follow in the event of a data breach. Specifically, Civil Code § 1798.82(a) obligates businesses to notify
any California resident whose unencrypted personal information was acquired, or reasonably was believed to have been acquired, by an unauthorized person.
To help mitigate the consequences of cybercrime, associations and management companies should also consult their insurance brokers about the benefits and limitations of obtaining and maintaining cybersecurity insurance coverage. Even though it is not required by law, such insurance coverage may help reduce the risk from cyberattacks, including costs of notifying members, restoring data, business interruption, and lawsuits, although such coverage has become more limited and expensive to obtain.
Associations and management companies can also help balance the risk of cyberattack by including appropriate confidentiality, data protection, obligation to notify of data breach and indemnification provisions in their management agreements. It bears
repeating that management companies should train their personnel to practice good cyberhygiene, preferably established in a written policy, because their cybersecurity defenses are only as good as the weakest link, which is typically the personnel with access to the information.
In conclusion, associations and management companies must stand guard against the ever-growing threat of cyberattacks, take all measures required by California law to limit the likelihood of such attacks, and have a plan ready in the event that they are the victim of cybercrime. Associations and management companies should also consult their legal counsel to help navigate the complexities of how to comply with the law and protect their residents’ personal data. You do not want your association or management company to become the industry example of what not to do when a cyberattack occurs!
Although the CCPA applies primarily to for-profit businesses, and, thus, community associations themselves are typically exempt, the management companies that act as agents for associations are for-profit business that may be subject to the CCPA. Specifically, the CCPA applies to for-profit businesses that meet any of the following criteria: (1) have a gross annual revenue of $25.625 million or more (effective January 1, 2025) for the preceding calendar year; (2) buy, sell, or share the personal information of 100,000 or more California residents or households; or (3) derive 50% or more of their annual revenue from selling or sharing California residents’ personal information.
a combined 30 years exclusively representing community associations throughout California as corporate and litigation counsel.
Krista E. Kamper, Of Counsel, and Douglas P. Bickham, Senior Counsel, at DeNichilo Law, APC, have
The HOA Manager’s Guide to
TRACKING CONTACT PREFERENCES
By Frederick T. Whitney, Esq.
§ 4041 Solicitations
California Civil Code § 4041 mandates that homeowners associations (“HOAs”) annually solicit contact information from each of its member. This requirement serves as the foundation for ensuring members receive required communications in a legally compliant and efficient manner.
Under § 4041(a), the solicitation must request:
• The Member’s Preferred Delivery Method
Members may choose the method whereby they receive notices, which can be at a physical mailing address, a valid email address or both.
• A Secondary Delivery Method
Members may also choose an alternative method for additional notices, which can also be at a physical mailing address, a valid email address or both.
• Legal Representative Information
If applicable, the member may provide contact information for a legal representative, such as someone with power of attorney, which can also be at a physical mailing address, a valid email address or both.
• Occupancy Status
Members are also asked to indicate if the property is:
• Owner-occupied,
• Rented out,
• Developed but vacant, or
• Undeveloped land.
Additionally, § 4041(c) requires that the solicitation must clearly
state that members are not required to provide an email address and must provide a simple method for updating preferences, such as a reply email or member portal link.
If a member fails to respond, § 4041(b) designates the most recently provided mailing address as the default. If none exists, the property address is used.
As a practice, most management companies include the 4041 solicitations in the association’s annual budget package or year-end financial distribution. The solicitation form itself can be a simple, clearly worded form that includes instructions regarding how to return it (e.g. mail it to a pre-printed address), or it might direct members to an online portal for where the member can update his or her preferences and information online.
Civil Code § 4040 defines individual notice (also referred to as individual delivery) as a method of communication directed specifically to a member’s designated contact. Some examples of notices that require individual delivery include:
As of January 1, 2023, individual delivery must be made using the delivery method chosen by the member, whether by email, mail, or both (§ 4040(a)). Prior to this, the Association could either send the notice to an email designated by the member, or the Association could choose to mail notice to meet its individual notice obligation. Since January 1, 2023, an Association must deliver a document that requires “individual delivery” through the member’s chosen method, or the notice is not valid. (See Civil Code section 4040(a).)
Civil Code § 4040(b) requires delivery of certain financial and collection documents to any secondary address identified
General Notice
General notices or general delivery methods are defined in Civil Code § 4045. If a provision of the Davis-Stirling Act requires general notice, the HOA must deliver it by one of the following means:
1. Any method used for individual notice,
2. Inclusion in billing statements, newsletters, or similar documents,
3. Posting in a prominent location accessible to all members (must be designated in the annual policy statement),
4. Broadcasting on HOA-run TV programming,
5. Posting on the association’s website (if designated in the annual policy statement).
under Civil Code § 5260, including the annual budget mailer, and documents related to collection and foreclosure. Calling out specific documents that must be delivered to a secondary address suggests that an association does not have to forward anything to a secondary address other than those documents specified. (The documents specified above relate to the annual budget report, collection charges & foreclosure.) It is unclear how Section 4040(b) reconciles with the language in Section 4041 confirming the right of a member to select a secondary delivery “method” without qualification. Moreover, there is no specific reference in the code to what must be sent to an agent’s address(es) identified pursuant to Section 4041(a)(3) (suggesting that there may be no obligation to copy the agent at all?)
A conservative approach (and, perhaps a simpler company policy) is for anything requiring individual notice to be sent to all of the addresses provided in any member’s response to a 4041 solicitation.
Civil Code § 4045(c) also allows members to request to receive general notices by individual delivery. HOAs are required to inform members of this right in its annual budget mailer.
As a best practice, management companies should consider updating their software to include a field in each member’s file that captures the member’s preferred voting preference. Moreover, management companies should consider developing reports containing information related specifically to an election (e.g. a report includes voting preferences, address, names and emails as of specified record date) to streamline providing all of the information an inspector of election will need to conduct any particular election.
Election Related Preferences
Some common notices requiring general delivery include: Beginning January 1, 2025, California law allows HOAs to conduct elections via electronic voting However, to do so, associations must:
1. Track each member’s preferred voting method (written or electronic).
2. Track the email(s) to be used for voting.
Moreover, Civil Code § 5105(i)(3)(A) mandates that electronic ballots must be individually delivered, which means that ballots must be physically mailed to each member except for those members who have specifically consented to receive them via email.
Although there is no statutory requirement that voting emails be the same emails as those provided by a member in response to a 4041 solicitation, there does seem to be a clear consensus that utilizing the existing system for
collecting and tracking emails is most costeffective; using the system the members are already familiar with is also simpler and less confusing.
Some associations are identifying a specific email (e.g. the “primary” email) to use for elections, while others will allow any of the member’s specified emails to be used for voting. At this point, many, if not most, of the inspectors of election have software that allows for multiple emails to be associated with an address (the software only allows the first electronic ballot to be cast and shuts down the additional emails once the first is received.) Allowing any of the emails provided by an owner is simpler for the owner and avoids the need for management to explain why the secondary email is not working to allow a vote to be cast.
By integrating these practices into your management workflow, HOAs can ensure compliance with the Davis-Stirling Act while also improving communication transparency and member engagement.
Frederick T. Whitney, Esq. has been part of the industry for three decades and is a founder at Whitney | Petchul APC. He presently serves as counsel to some of the largest master planned communities in California and is Chief Editor of the CACM Law Journal.
BULK INTERNET DEALS What to Know Before You Commit
Internet service providers (“Providers”) are increasingly approaching associations with offers of lower-cost community-wide internet service. However, before signing on the dotted line, there are issues boards should consider.
By Karyn A. Larko, Esq.
Does the board have authority to enter the bulk service agreement?
The boards of many associations do not have the authority to enter into a bulk internet service agreement (“Bulk Agreement”) without member approval.
Governing documents frequently limit the board’s power to enter multi-year contracts for goods and services without member approval. While some newer documents carve out an exception for internet service, others do not.
Bulk Agreements have minimum multi-year terms. Providers are loath to offer shorter terms because they incur equipment and other costs to establish communitywide service that they want to recoup.
Similarly, governing documents frequently limit the board’s power to grant easements or licenses without member approval. Bulk Agreements include a license. Generally, this license is very broad -- encompassing the separate interests and all of the common area.
Depending on how the governing documents identify the purposes for which assessments can be used, member approval may be required to assess for bulk internet service and pay the Provider.
For these reasons, it is important that an association’s legal counsel review the governing documents a Bulk Agreement is signed.
ASSESSMENTS
Bulk Agreements generally require the association to pay for a certain level of service for all of the separate interests –even those that elect not to use the service. Thus, it is important to confirm that the association has sufficient operating income (i.e., assessment income) to cover this expense.
On a related note, unless the governing documents contain language that permits the association to levy an assessment to cover the cost of bulk internet just against the owners who utilize the service, all members must fund this service regardless of whether they use it.
TERMS
Some Bulk Agreements make the Provider the exclusive internet provider for the community. Such language should be removed before the Bulk Agreement is signed as members have the right to contract with other internet providers.
Bulk Agreements include language wherein the association is required to provide broad access to the community, including the separate interests. If the governing documents do not give the association the right to provide access to the separate interests for this purpose, this language should be stricken. Additionally, language should be added to the Agreement prohibiting the Provider from exercising its rights in a way that interferes with the easement rights of other parties, including other utility companies.
The locations within the community where the Provider’s equipment will be located and the impact this equipment will have on the appearance of the community and use of the impacted common area are not addressed in Provider prepared Bulk Agreements. It is important to research these matters before the Bulk Agreement is signed. It may be possible to negotiate Bulk Agreement terms that restrict the locations equipment is installed and help preserve the appearance of the community – but only if this negotiation takes place before the Bulk Agreement is signed.
With increasing frequency, Bulk Agreements contain language that empower the Provider to install equipment within the community for the purpose of expanding its services outside of the community (think cell tower), but do not provide for any compensation to the association for using its common area for this purpose. If the Provider will benefit financially by installing such equipment within the association, the association should benefit as well. Having said this, if this equipment will impact the appearance of the community or hinder the intended use of the common area, perhaps the better option is to revise the Bulk Agreement to prohibit the installation of equipment for this purpose.
Similarly, we are seeing more Bulk Agreements that empower the Provider to grant other parties the right to piggyback on its access rights, but do not compensate the association for its ability to do so.
Bulk Agreements rarely address the Provider’s responsibilities and liability for damage to the association’s common area or other property caused by the installation, maintenance, or repair of the Provider’s equipment. Likewise, Bulk Agreements rarely address the Provider’s obligation to remove its equipment when the Bulk Agreement is terminated and its responsibility for any resulting damage. If possible, revisions to the Bulk Agreement should be negotiated to protect the association against such losses.
PRACTICE TIPS
Often, Bulk Agreements require the association to facilitate and, in some cases, perform marketing activities on behalf of the Provider. If the association is being required to perform marketing services or to allow marketing services that are unacceptable, these requirements should be eliminated from the agreement. On a related note, any requirement that the public be permitted to attend onsite marketing events should be stricken.
Bulk Agreements often include language making the association responsible for internet equipment located within separate interests. Language requiring the association to collect and return to the Provider any equipment when the Bulk Agreement is terminated or when an owner or resident terminates service should be deleted. Likewise, any term that makes the association liable for collecting money owed the Provider by individual owners or residents should be stricken. The Provider can enter into individual agreements with owners and residents wherein they assume responsibility and liability for service upgrades and equipment.
It may not be possible for a board and the association’s legal counsel to negotiate revisions to a Bulk Agreement that will resolve all the issues touched on above, but every issue resolved makes that agreement less one-sided in favor of the Provider. Plus, knowing the issues that cannot be resolved enable a board to make an informed decision on whether the agreement is in the best interest of the association.
• Bulk Agreements benefit Providers as much if not more than association owners and residents. Do not be shy about asking for revisions to a Bulk Agreement. The worst that can happen is the Provider will say no.
• Unless negotiated revisions to a Bulk Agreement are expressly and clearly included in the agreement, they will not be enforceable against the Provider.
• Add an exhibit to the Bulk Agreement containing a diagram or map that identifies the locations where the equipment will be installed to better avoid unanticipated impact to the appearance and use of the common area.
Karyn A. Larko, Esq. is an attorney at Epsten APC based out of San Diego, California. Larko specializes in community association counsel with 17 years of experience in the industry.
AI in Community Management
By Dyanne L. Peters, Esq. Financial Strategies for Community Associations in Times
of Crisis
It seems like just a couple of years ago whenever the topic of artificial intelligence (“AI”) was brought up, it evoked thoughts of something out of a sci-fi movie like The Matrix or Skynet from Terminator. But recently, AI has grown tremendously, and its use has become integrated into our everyday lives. While it is becoming a more widespread and useful technology, it is still in the beginning stages and there are many issues to navigate and consider when using AI.
In the context of use for everyday functions by a community manager, AI is certainly convenient, but it should be considered just one tool in a manager’s toolkit. It should not replace a manager’s critical thinking, problem solving, experience and due diligence. While AI can do many things well, it cannot do it all!
UNDERSTANDING AI, ITS SCOPE, AND ITS LIMITATIONS
The first step to using a new technological tool like AI is to have an understanding of how it works. There are two types of AI tools that are most commonly used: “extractive AI” and “generative AI.” Extractive AI is where the program will find what the user is looking for,
such as a simple Google search. Generative AI, on the other hand, is where the AI system will review and analyze information and generate an answer to a query. An example of generative AI is ChatGPT.
Next, a user should understand what type of system the AI program employs: a “closed-loop system” or “open-loop system.” These systems refer to what the AI is trained on, or in other words, the resources the AI program will utilize or pull information from. A closed loop system only pulls from a specific set of information, while an open loop system utilizes publicly available information. When a user enters information or makes a query in an open-loop system, that system may integrate the user’s input into the public dataset. This means that open-loop systems are likely not secure and may pose risks to the security and confidentiality of information.
It is also important for an AI user to understand “hallucinations.” Hallucinations are fabricated content produced by generative AI platforms that are presented as if it were true and factual.
Continues on page 16
AI in Community Management
Continued from page 15
Generative AI is designed to help or assist the user and thereby wants to produce the “correct” answer in response to your query. This may result in ambiguous, contradictory, false or even “made up” information. This is because the AI is designed to give a plausible answer, not necessarily the correct one.
USE OF AI IN COMMUNITY MANAGEMENT
There are a number of ways that managers can integrate AI into their everyday tasks. One of the first uses that comes to mind is AI for board meetings. AI can be very helpful with notetaking and summarizing board meetings, and this material can then be used to assist the manager when creating notes, preparing to-do lists and following up on board directives.
Another way managers can utilize AI is by getting assistance with communications. AI can help generate a first draft of an email or create the right “tone” for an email or letter. A creative use of AI is to help managers create newsletters for their communities. Managers can also use AI to assist in crafting more formal letters to homeowners, such as violation letters, delinquency letters or demand letters.
AI may also be useful for managers to review and summarize complicated documents like CC&Rs or other governing documents and contracts. AI may be able to review and identify certain provisions in a set of CC&Rs or provide a summary of the insurance or maintenance provisions, for example. This can assist a manager in reviewing complicated information and presenting to the board or membership.
POTENTIAL PITFALLS AND BEST PRACTICES
All of the potential uses of AI described above can certainly streamline a community manager’s work by giving them the ability to accomplish every day and routine tasks more quickly and efficiently. There are many benefits to using AI for these tasks; however, it is important to remember that there are also pitfalls when using AI. At the end of the day the manager, not the AI tool, will be responsible for the work produced. This means managers should carefully review all AI produced material to make sure to identify AI hallucinations, and make sure that it is factually accurate.
If using AI for meeting notetaking, the manager should review the summary right away to check for any misstatement of fact or inaccuracies. This means checking that motions, decisions, votes and recitation of board investigations
AI aims to give a plausible answer, not necessarily a correct one, which can lead to ambiguity, contradictions, or false information.
are correct. This is important for the accuracy of association records, and to protect the association and the board members for their decisions under the business judgment rule. It is also important that managers proceed with caution if they want to record video conference meetings. These recordings may become part of the association’s records and be discoverable in a lawsuit. Therefore, it is generally advised that board meetings should not be recorded. Additionally, before using AI tolls for recording or notetaking, it is always a good idea to inform the board and obtain their prior approval. Along the same lines, any summaries of documents or letters generated by AI should also be reviewed for accuracy by the manager.
Additionally, managers should be wary about the information they are putting into AI systems, especially if the system is an open loop system. Managers have a duty (and usually a contractual obligation) to keep client information secure and confidential. This means that managers and management companies should exercise caution when inputting board members’ personal information, confidential contracts or other sensitive documents into AI systems that are not secure.
At the end of the day the buck stops with the manager. The manager has a fiduciary duty to their clients and there is no “AI exception” if the AI system makes a mistake or produces a hallucination. Management companies should consider adopting company AI policies that can address security and confidentiality issues, establish procedures to ensure that managers are adequately informed, trained and monitored in AI use, and ensure that clients are informed about how their information is being used and consent is obtained for that use.
enforcement and risk management.
Dyanne L. Peters, Esq. is an attorney with Tinnelly Law Group and has been serving the community association industry for over eight years. She provides legal counsel to homeowner associations throughout California, with a focus on governance,
2025-2026 LEGAL DIRECTORY
ASSESSMENT COLLECTION SERVICES
ALLIED TRUSTEE SERVICES
Assessment Collections
Stefan Murphy
Serving All of California for Over 30 Years 1601 Response Rd., Ste. 390 Sacramento, CA 95815 (800) 220-5454 smurphy@alliedtrustee.com www.alliedtrustee.com
ALTERRA ASSESSMENT RECOVERY
Assessment Collection Services
Steven J. Tinnelly Esq., President Advanced, Efficient, Effective HOA Assessment Recovery 27101 Puerta Real, Ste. 250 Mission Viejo, CA 92691 (888) 818-5949 ramona@tinnellylaw.com www.alterracollections.com
AXELA TECHNOLOGIES
Ethical HOA Collections Technology
Martin Urruela, Chief Executive Officer A Better Way to Collect 7215 NE 4th Ave., Unit 101 Miami, FL 33138 (305) 392-0389 info@axela-tech.com www.axela.com
COMMUNITY LEGAL ADVISORS, INC.
General Counsel & Assessment Collections
Mark Guithues, Esq., Laurie Masotto, Esq., Jeffrey Speights, Esq., Jay J. Brown, Esq.
Inland Empire, Orange County, San Diego County 509 N. Coast Hwy. Oceanside, CA 92054 (760) 529-5211 • Fax (760) 453-2194 mark@attorneyforhoa.com www.attorneyforhoa.com
FELDSOTT, LEE & NICHTER, ATTORNEYS AT LAW
General Counsel, Community Association Law
Stanley Feldsott, Martin Lee, and Austin Nichter
Laguna Hills, California
23161 Mill Creek Dr., Ste. 300 Laguna Hills, CA 92653 (949) 729-8002 • Fax (949) 729-8012 feldsott@gmail.com www.cahoalaw.com
THE JUDGE LAW FIRM
HOA Law, General Counsel, Assessment Collections Services
James Judge, Esq.
Providing General Counsel & Collection Services Throughout CA for Over 20 Years 9245 Laguna Springs Dr., Ste. 200 Elk Grove, CA 95758 (949) 833-8633 • Fax (949) 833-0154 info@thejudgefirm.com www.thejudgefirm.com
UNITED TRUSTEE SERVICES
Trusted Partners in Assessment Collections
Lisa E. Chapman
HOA Assessment Collection Services 696 San Ramon Valley Blvd., Ste. 353 Danville, CA 94526 (925) 855-8554 • Fax (925) 855-8559 lisa@unitedtrusteeservices.com www.unitedtrusteeservices.com
WITKIN & NEAL, INC.
Assessment Collection Services
Susan Paquette, Esq. Assessment Collections Made Simple 5805 Sepulveda Blvd., Ste. 670 Sherman Oaks, CA 91411 (818) 845-8808 • Fax (818) 845-8844 susanp@witkinandneal.com www.witkinandneal.com
ATTORNEYS
ADAMS | STIRLING PLC
Community Association Law, General Counsel
Adrian Adams, Esq & Laurie S. Poole, Esq. California’s Premier Law Firm Dedicated to Residential & Commercial Associations 2566 Overland Ave., Ste. 730 Los Angeles, CA 90064 (800) 464-2817 info@adamsstirling.com www.adamsstirling.com
BERDING | WEIL
Construction Defect Attorneys
Serving All of California and Hawaii Offices in Walnut Creek, San Diego, Orange County, Los Angeles, Sacramento & Hawaii Walnut Creek, CA 94596 (662) 832-3030
spowell@berdingweil.com www.berding-weil.com
BRISCOE IVESTER & BAZEL LLP
Corporate Counsel and Enforcement Litigator
Maria C. Kao, Esq. All of California 235 Montgomery St., Ste. 935 San Francisco, CA 94104 (415) 402-2712
mkao@briscoelaw.net www.briscoelaw.ne/
COMMUNITY LEGAL ADVISORS, INC.
General Counsel & Assessment Collections
Mark Guithues, Esq., Laurie Masotto, Esq., Jeffrey Speights, Esq., Jay J. Brown, Esq. Inland Empire, Orange County, San Diego County 509 N. Coast Hwy. Oceanside, CA 92054 (760) 529-5211 • Fax (760) 453-2194 mark@attorneyforhoa.com www.attorneyforhoa.com
DELPHI LAW GROUP, LLP
Community Association Law
Christina Baine DeJardin, James McCormick, Jr., Kyle Lakin, Zachary Smith Carlsbad & Indian Wells CA 5868 Owens Ave., Ste. 200 Carlsbad, CA 92008 (844) 433-5744 • Fax (760) 820-2696 info@delphillp.com www.delphillp.com
EPSTEN, APC
Association Counsel, Civil Litigation, Construction Defect Litigation
Jon Epsten, Esq. & Susan Hawks McClintic, Esq. San Diego | Coachella Valley | Inland Empire 3111 Camino del Rio North, Ste. 560 San Diego, CA 92108 (858) 527-0111 • Fax (858) 527-1531 info@epsten.com www.epsten.com
FIORE RACOBS & POWERS, A PLC
Community Association Law and Assessment Collections
Jacqueline D. Foster, Esq., Peter E. Racobs, Esq., and John R. MacDowell, Esq. The Recognized Authority in Community Association Law
Orange County | Inland Empire | Coachella Valley l San Diego County (877) 31-FIORE • Fax (949) 727-3311 dweissberg@fiorelaw.com www.fiorelaw.com
GURALNICK, GILLILAND & GARCIA
Association Law, Assessment Collections, General Counsel
Wayne S. Guralnick, Robert J. Gilliland Jr., Ryan Garcia Serving Community Associations for Over 30 Years 36-917 Cook St., Ste. 102 Palm Desert, CA 92211 (760) 340-1515 • Fax (760) 568-3053 wayneg@gghoalaw.com www.gghoalaw.com
HICKEY & ASSOCIATES, P.C. Community Association Law
David E. Hickey, Esq. 27261 Las Ramblas, Ste. 120 Mission Viejo, CA 92691 (949) 614-1550 • Fax (949) 748-3990 dhickey@hickeyassociates.net www.hickeyassociates.net
HUGHES GILL COCHRANE TINETTI, PC Community Association & Construction Defect Law
John P. Gill, Esq. l Amy K. Tinetti, Esq. 1350 Treat Blvd., Ste. 550 Walnut Creek, CA 94597 (925) 926-1200 • Fax (925) 926-1202 atinetti@hughes-gill.com www.hughes-gill.com
THE JUDGE LAW FIRM
HOA Law, General Counsel, Assessment Collection Services
James Judge, Esq. I Terry Dall, Esq. I Stephen M. Levine, Esq.
Providing General Counsel & Collection Services Throughout CA for Over 20 Years
300 Spectrum Center Dr., Ste. 100 Irvine, CA 92618 (949) 833-8633 • Fax (949) 833-0154 info@thejudgefirm.com www.thejudgefirm.com
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LOEWENTHAL, HILLSHAFER & CARTER, LLP
Community Association Law I Construction Defect Litigation
David A. Loewenthal I Robert P. Hillshafer
Los Angeles, Ventura & Surrounding Counties
5700 Canoga Ave., Ste. 160 Woodland Hills, CA 91367 (866) 474-5529 Fax (818) 905-6372 info@lhclawyers.net www.lhclawyers.net
MCGLINCHEY STAFFORD
Community Association Law & Litigation, Arbitration-Mediation, HOA Expert
Michelle M. McCliman Irvine, CA
2050 Main St., Ste. 550 Irvine, CA 92614 (949) 381-5924
mmccliman@mcglinchey.com www.mcglinchey.com
PRATT & ASSOCIATES, APC
Community Association Law
Sharon Glenn Pratt Los Gatos, CA 634 North Santa Cruz Ave, Ste. 204 Los Gatos, CA 95030 (408) 369-0800 Fax (408) 369-0752 spratt@prattattorneys.com www.prattattorneys.com
RAGGHIANTI FREITAS LLP
General Counsel and Mediation
David F. Feingold, Esq. Serving Bay Area Communities Since 1986 1101 Fifth Ave., Ste. 100 San Rafael, CA 94901 (415) 999-7635 dfeingold@rflawllp.com www.rflawllp.com
RICHARDSON | OBER LLP
Community Association Law, Assessment Collection
Kelly G. Richardson | Matt D. Ober Throughout California (877) 446-2529 info@roattorneys.com www.roattorneys.com
SWEDELSONGOTTLIEB
Community Association Law, Construction Defect, Assessment Collection
David C. Swedelson, Esq., Sandra L. Gottlieb, Esq., Cyrus Koochek, Esq. Los Angeles | Orange County | Palm Desert | San Francisco l Ventura 11900 W. Olympic Blvd., Ste. 580 Los Angeles, CA 90064 (800) 372-2207 Fax (310) 207-2115
slg@sghoalaw.com www.lawforhoas.com
TINNELLY LAW GROUP
Community Association Law
Steven J. Tinnelly, Managing Partner & Richard A. Tinnelly, Senior Partner Orange County | Los Angeles | San Diego | Coachella Valley | Northern CA 27101 Puerta Real, Ste. 250 Mission Viejo, CA 92691 (949) 588-0866
ramona@tinnellylaw.com www.tinnellylaw.com
WOLF, RIFKIN, SHAPIRO, SCHULMAN & RABKIN, LLP
Community Association Law
Michael W. Rabkin, Esq. 11400 W. Olympic Blvd., 9th Fl. Los Angeles, CA 90064 (310) 744-4100 Fax (310) 479-1422 mrabkin@wrslawyers.com www.wrslawyers.com
ZIMMERMAN PAVONE LLP
Community Association Law, General Counsel and Litigation
Barbara Zimmerman and Daniella Pavone Providing Legal Services to the Bay Area for Over 20 Years 6010 Commerce Blvd., Ste. 148 Rohnert Park, CA 94928 (707) 578-7555 info@zp-law.net zp-law.net
CONSTRUCTION DEFECT ANALYSIS
BERDING | WEIL
Construction Defect Attorneys Serving All of California and Hawaii Offices in Walnut Creek, San Diego, Orange County, Los Angeles, Sacramento & Hawaii Walnut Creek, CA 94596 (662) 832-3030
spowell@berdingweil.com www.berding-weil.com
FENTON GRANT KANEDA & LITT, LLP
Construction Defect Litigation & CID Education
Charles R. Fenton, Esq. & Joseph Kaneda, Esq. Servicing California & Nevada Communities for Over 25 Years 2030 Main Street, Ste. 550 Irvine, CA 92614 (949) 435-3800 Fax (949) 435-3801
cfenton@fentongrant.com www.fentongrant.com
HENNIGH LAW CORPORATION
Construction Defect Litigators & Trial Attorneys
Aaron Ehrlich, Esq., Scott Hennigh, Esq., Garrett Mott, Esq.
Winning the Highest Stakes Defect Claims Across California 700 Flower St., Ste. 1000 Los Angeles, CA 90017 (213) 277-7226
The Authority in California Construction Defect Claims for 40 Years 19 Corporate Plaza Dr. Newport Beach, CA, 92660 (800) 403-3332 • Fax (929) 442-0646
Los Angeles, Orange County, San Diego, Inland Empire, Coachella Valley, California Statewide 10890 Thornmint Rd. Ste. 200 San Diego, CA 92127 (619) 980-3281 elaine@naumannlegal.com www.naumannlegal.com
RILEY I PASEK I CANTY I SELTZER LLP
Construction Defect Resolution & Construction Defect Analysis Attorneys
Rick Riley, Melissa Pasek, Kevin Canty, Joe Seltzer
Danville, Irvine, San Diego, Temecula, Woodland Hills & Throughout California 780 San Ramon Valley Blvd. Danville, CA 94526 (844) 775-5000
Ryan Leptien, President Serving All of California 6101 Bollinger Canyon Rd., Ste. 200 San Ramon, CA 94583 (925) 355-2100 • Fax (925) 355-9600 reservestudies@helsing.com www.helsing.com
