Why Governing Documents Matter

Why Governing Documents Matter

Governing documents are critical for HOA communities and are literally the legal glue which holds the association together. Civil Code Section 4150 defines “governing documents” as articles of incorporation, CC&Rs, bylaws, and operating rules, but I think subdivision maps and condominium plans also should be regarded as governing documents. Each has a distinct purpose and function, and every HOA member should have copies. Subdivision map and condominium plan This document breaks up land into separate pieces of land or airspace sold to homeowners in planned development (“lots”) or condominium (“units”) projects. This document is recorded (i.e. filed) with the County Recorder, is easily retrieved, and defines the “common area” as well as the “separate interest” (i.e., the lot or unit). Sometimes it also delineates exclusive use common areas or maintenance easement areas. It establishes the real estate interests owned, so any amendment requires agreement of 100% of association members and their mortgage holders, and consequently amendment is highly unlikely. Articles of incorporation Articles of Incorporation establish the legal “person” of the association. Filed with the Secretary of State, this document can be retrieved from that office. Older Articles sometimes contain important information about limits on the association or board’s powers. The Articles list the association’s legal name and can be amended by membership vote, although amending is rarely necessary. Check the association’s corporate status at https://businesssearch.sos.ca.gov. CC&Rs The CC&Rs document is recorded (amendments also must be recorded), and therefore is also a public document. Associations often use unrecorded, unofficial copies, but official copies can be retrieved from the County Recorder. CC&Rs are a long contract automatically binding all owners,...
Short Term Rentals: Both Sides

Short Term Rentals: Both Sides

Hello Mr. Richardson, We have a guest house on our half acre lot that we have rented out (using a short-term rental service). We are always home in the main house when guests are present, therefore, there has never been any issue with noise or nuisances over the many times we have rented it out. It has been a nice source of income that has allowed us to pay our utilities, some college tuition for our children and HOA dues. The HOA sent a letter to us stating that we were running a commercial business from our home which is forbidden. Is there anything that protects the ability of a homeowner to rent out a room or, in our case, a spare guest house short of changing our listing to a monthly only rental? Thanks for any help on this! K.A., San Diego Dear Mr. Richardson, Is it legal for one of the other owners in my association to use a unit as a short-term rental without input from the other owners? Privately it was discussed among those of us who vehemently oppose this callous disregard for our concerns. Is this owner acting within legal parameters?  Your input will be greatly appreciated. Thank you. I anxiously await your reply. L.H., South Pasadena Dear K.A. and L.H., While you are on opposite sides of this issue, the basic response is the same. Short-term rentals are considered by many as a commercial and therefore non-residential use of the property. While many web-based companies offer convenient advertising of such rentals, it is closer to a hotel-type operation than a tenancy. An increasing...
A Proactive Approach to Controlling Short-Term Rentals in Your Community

A Proactive Approach to Controlling Short-Term Rentals in Your Community

Whether through the Courts, the Legislature or human nature, from drought restrictions to email prohibitions, community associations are often forced to adapt quickly to change in order to govern effectively. In the case of the short-term rental craze, this change seems harder to tackle. Indeed, the short-term rental market is having an increasing impact on community associations. Residents often complain that short-term renters – who are transient by definition – do not treat association common areas with the same regard as resident owners. Most are unaware of association rules and contribute to mounting security, trash removal, parking, and noise related concerns, not to mention the increased common area expenses that come with the increased burden of handling short-term renters. On an emotional level, residents are often uncomfortable with the fact that their neighborhoods are filled with unfamiliar faces, many of whom are on-site for only a few days at a time. The idea of transient rentals in our communities seems at odds with the objective of maintaining the residential character of our neighborhoods. We all have seen provisions in our communities’ documents that prohibit “non-residential” use of a unit, or that restrict use of property for “private single-family residential purposes.” While many associations have adjusted to an increase in tenant occupied residences in their communities, this “business” use of a residence, where unfamiliar groups of people share the common area and facilities for brief periods of time, never to be seen again, is incompatible with everything we’ve come to know and understand about community associations. The short-term use of a residence only adds to the resentment towards tenants who...
Boards Elections [Part 1]

Boards Elections [Part 1]

Mr. Richardson, What recourse does a member have if the board refuses to abide by the governing documents or state law? Our president refuses to hold the annual election in an apparent attempt to stay in power. C.S., Poway Dear C.S., 5% of the members may under Corporations Code 7511(c) send a written petition demanding a membership meeting. However, most likely the board will ignore it. I have seen members announce their own membership meeting, but this is a bad idea because it is too easy to make an error in the very technical election procedures required by Civil Code 5100-5135. A better option may be to file a court petition under Corporations Code 7510(c) for an order compelling an election. This involves legal expense, and is a last resort, but judges are normally sympathetic to these petitions and are willing to order an election. Before going to all the effort and expense of filing a court petition, make sure you have member support (and a few candidates). Best regards, Kelly Dear Kelly, Our association did not make quorum, so our election was postponed a month. Each homeowner gets 1 vote, but there were couples at this meeting so some homeowners got 2 votes. Some homeowners returned a handful of ballots they had collected. I was told each homeowner must mail or bring their ballot in themselves. Is this legal? D.P., Aliso Viejo Dear D.P., Civil Code 5115(a)(2) says that ballots may be mailed or delivered by hand to a location specified by the inspector of elections but does not specify who does that. Election rules could avoid a...