common assessment - spring 2011

C O M M O N A S S E S S M E N T M A G A Z I N E • S P R I N G 2 0 1 1 1

Common

Recap of the 2010 LegisLative season

SPRING 2011

FIGHT the blight – Senate Bill 1427 page 10

2010 Annual Awards LUNCHEON & TRADESHOW page 20

LAMDEN does not provide carte blanche protection to associations page 34

The professional provider of education, advocacy and resources for Community Associations

S P R I N G 2 0 1 1 • C O M M O N A S S E S S M E N T M A G A Z I N E2

2 0 1 1 E V E N T C A L E N D A R All dates, times and locations subject to change. Please visit our website, www.cai-sd.org, for an updated calendar.

JANUARY

13-15 Community Association Law Seminar

Las Vegas, NV

20-22 PMDP M-100 Course The Essentials

of Community Association Management

February 4 Trade Show Legal Update 2011 DoubleTree Hotel,

Mission Valley

26 Essentials of Community Association Volunteer Leadership – Courtyard by Marriott

MARCH 2 Morning Educational

Program: Earthquake Preparedness

Courtyard by Marriott

2 Afternoon

Educational Program: Earthquake Preparedness Sheraton, Carlsbad

11 Bowling Tournament

Mira Mesa Bowl

25 CID Law Course Courtyard by Marriott

31-April 1 PMDP M-206 Course – Financial Management

APRIL

1 0-11 Legislative Day at the Capitol

Sacramento, CA

TBA Annual Educational Conference

DoubleTree Hotel Mission Valley TopicsTBA

MAY 4-7 CAI National

Conference Boca Raton, FL

11 Morning Educational Program:

ADR/IDR Courtyard by

Marriott

TBA Monte Carlo Night Location TBA JUNE 10 Trade Show Going Green in

HOAs DoubleTree Hotel

Mission Valley

23-25 CEO-MC Retreat Salt Lake City, UT

JULY 15 Morning

Educational Program:

Getting the Most Out of Your CAI Membership

Courtyard By Marriott

AUGUST TBA Day at the Races

Del Mar Race Track

26 Trade Show Cybercrime and

Embezzlement

SEPTEMBER TBA CAI San Diego Golf Classic Location TBA

14-18 Large Scale Managers Workshop

Seattle, WA

23 Morning Educational Program

Employment Law This course is

part of a series of programs for experienced managers and management company CEOs


28 Morning Educational Program

Hilton Garden Inn Carlsbad

30 CID Law Course Courtyard by

Marriott

OCTOBER 7 Trade Show New Technology:

There’s an App for That!

DoubleTree Hotel, Mission Valley

22 Essentials of

Community Association Volunteer Leadership


NOVEMBER 4 Morning Educational

Program : Almost Free Legal Advice


TBA Morning Educational Program: Almost Free Legal Advice

North County location TBA

DECEMBER

1-2 PMDP Course: M-201 Facilities Management

9 Holiday Award Banquet Luncheon & Trade Show

DoubleTree Hotel Mission Valley


Features 6 SB 1427 and Maintenance of Foreclosed Properties BY JEFF FRENCH, ESQ. AND HOLLY AMAYA, ESQ.

12 SB 1221: Facilitating the Non-Judicial Foreclosure Process by

Reducing the Potential for Delay BY RICHARD SALPIETRA, ESQ. AND JEAN-MARIE SALVIA, PCAM

17 CLAC Success Story BY KIMBERLY LILLEY, CMCA, CIRMS

22 Would You Like E-Mail Addresses With That Membership List? BY CARRIE TIMKO, ESQ.

30 Do I Really Have to Shrink My House? BY JAMES R. MCCORMICK, JR.

34 Lamden Does Not Provide Carte Blanche

Protection to Associations BY LAURI CROCE, ESQ.

Departments 2 ChapterEventCalendar 4 President’sMessage BY CYNDI KOESTER, PCAM

16 CLACDonationsHonorRoll24 Newsstand26 RenewingMembers27 HomeownersCorner:ACaseStudy–AnotherPerspective BY SAM DOLNICK

29 NewMembers37 AroundSanDiego40 ServiceDirectoryBackCover 2011MarketingPlanMembers

ChapterNews16 October8TradeShow20 December3AnnualAwardsLuncheon23 October9VistansROC33 November5MorningProgram


EXECUTIVE COMMITTEECYNDIKOESTER,PCAM...................................... PRESIDENT Mutual of Omaha Bank

LOUISESTETTLER.....................................PRESIDENTELECT Epsten Grinnell & Howell, APC

TINAROZYCKI,CMCA........................................ TREASURER Curtis Management

MARIEDONOVAN............................................... SECRETARY Homeowner

CHRISHODGE,PCAM........................................ EX-OFFICIO Elite Community Management

DIRECTORS

KERRY BEATTY, PCAM .....................Packard Management Group

JIM FRAKER, PCAM .........Professional Community Management

ELIZABETH FRENCH, ESQ. ..............Green, Bryant & French, LLP

ELAINE GOWER ........................................................... Homeowner

BECKY GROENEWOLD ...............................................................PCM

CO-LEE GREV ........................ Pacific Rim Property Management

JASON PAYNE .....................................Payne Pest Management

RICK SALPIETRA, ESQ ............ Law Offices of Richard Salpietra

KARINA TATUM ..........................SD Preferred Property Managers

CHAPTER EXECUTIVE DIRECTORBARBARA OZENBAUGH, CMP

619-299-1376

MANAGING EDITORBARBARA OZENBAUGH, CMP

619-299-1376, [email protected]

NEW & RENEWING ADVERTISING SALESBARBARA OZENBAUGH, CMP

619-299-1376 / [email protected]

DESIGN & PRODUCTIONKRISTINE GAITAN

REY ADVERTISING & DESIGN / THE CREATIVE DEPT.760-746-8700

MAGAZINE EDITORIAL COMMITTEELAURIE POOLE, ESQ. (CHAIR) ............ Peters & Freedman, LLPSAM DOLNICK .........................................................HomeownerANY FERRELL ....................................................... N.N. JaeschkeLESLEY FINCH ...........................................Lindsay ManagementJEFF FRENCH, ESQ. ..................... Green, Bryant & French, LLPCYNDI KOESTER, PCAM .... Mutual of Omaha Bank/CondoCertsJENNIFER LANDON .......................... Allure Total ManagementKIMBERLY LILLEY, CIRMS .......................Berg Insurance AgencyBARBARA OZENBAUGH, CMP ...... Chapter Executive DirectorTINA ROZYCKI ............................................ Curtis ManagementJEAN-MARIE SALVIA.................................... Walters ManagementLOUISE STETTLER ........................ Epsten Grinnell & Howell, APC

All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Common Assessment Magazine or the Community Associations Institute – San Diego Chapter. Information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting or other professional services and should not be relied upon without the consultation of your accountant or attorney.

Common Assessment Magazine is the official quarterly publication of the San Diego Chapter of the Community Associations Institute. CAI San Diego Chapter encourages submission of news and articles subject to space limitation and editing. Signed letters to the editor are welcome. All articles submitted for publication become the property of CAI San Diego Chapter. Reproduction of articles or columns published permitted with the following acknowledgement: “Reprinted with permission from Common Assessment Magazine, a publication of the Community Associations Institute San Diego Chapter.”

© 2011 CAI - San Diego Chapter

ADVERTISING & CORRESPONDENCE SHOULD BE SENT TO:Common Assessment Magazine

CAI - San Diego Chapter1081 Camino Del Rio South, Suite 207, San Diego, CA 92108

619-299-1376 / fax 619-299-1377 / www.cai-sd.org

President’s Message

Full Steam Ahead!2011 is here and I am pleased to

introduce myself as your new Chapter

President. I would like to extend

my gratitude to Chris Hodge for his

leadership this past year. Like Chris,

I too have been an active member

of CAI since 1980, as an association

manager and, for the past 10 years,

as a Business Partner. It is this

experience that will help me, together

with our Board of Directors, lead this

organization in the coming months.

We have a very active year planned

and our committee chairs are diligently

working with committee members on

fun and exciting events. There are a few changes that have been

made this year as well. It has been decided by the board to have a

Bowling Tournament on March 11, instead of our Annual Billiards

event. In addition, we have added several North County Breakfast/

Education programs.

The theme selected for this year is “Unity and Community.” With

that thought in mind, our Public Relations Committee is working

on outreach projects that we can help to make our own community

better. The Chapter has become members of the North San Diego

County Association of Realtors to promote a better relationship

between homeowner associations and Realtors.

We have recently updated our Manager Scholarship Program to

promote CAI Designations and Education for Community Managers.

We are a very strong Chapter for CLAC and this year – as always – we

must stay focused on what they are doing in Sacramento. Watch for

the CLAC Quarterly Newsletters and E-Alerts when we need your

support.

I look forward to serving the membership of the chapter and

welcome your involvement and continued support. Here’s to a

successful 2011!

Common

Cyndi Koester, PCAM, is the Assistant Vice President, Southern California Regional Account Executive for Mutual of Omaha Bank/CondoCerts. She is the 2011 CAI San Diego Chapter President.


Continued on page 8

Since 2008, the Civil Code has

required property owners to

maintain vacant residential

property purchased at a

foreclosure sale or acquired through

foreclosure of a mortgage or deed of

trust. However, in the recent real estate

downturn, the volume of foreclosures

has been so great that maintenance of

foreclosed properties languished and

blighted areas started to appear. In

response, cities started to go after the

owners with fines and assessments aimed

at getting properties cleaned up.

Civil Code Section 2929.3 permits a

governmental entity to impose fines of

up to $1,000 per day for a maintenance

violation, but requires that the entity give

proper notice, provide the owner of the

property with an opportunity to be heard,

and allow an opportunity to correct the

violation within thirty days unless a specific

condition of the property endangers

public health or safety. However, Civil

Code Section 2929.3(c) also provides that

these provisions could not preempt any

local ordinance. In other words, cities and

other local government entities could

elect to fine property owners pursuant to

either local ordinances or by tapping into

the $1,000 per day mechanism set forth

in the Civil Code. Armed with the Civil

Code and local ordinances, cities started

to aggressively pursue monetary penalties

and fines against owners that failed to

maintain the foreclosure properties (mainly

banks).

Senate Bill 1427 (Price), which

BY JEFF FRENCH, ESQ. & HOLLY AMAYA, ESQ.

Senate Bill 1427 and Maintenance of Foreclosed Properties


passed the Legislature earlier this year

and was signed into law by Governor

Schwarzenegger on September 30, 2010,

sought to provide some uniformity to the

due process procedures afforded among

local governments, even if the period

to correct is not the thirty-day period

mandated by state law. It establishes that

as a matter of state law, a local entity

must provide notice and an opportunity

to correct maintenance violations.

Specifically, the legislation provides that

prior to imposing a fine or penalty for

failure to maintain a vacant property that

is subject to a notice of default, purchased

at a foreclosure sale, or acquired through

foreclosure of a mortgage or deed of trust,

a governmental entity must provide the

owner of the property with a notice of,

and opportunity to correct, a maintenance

violation. In contrast to prior law, SB

1427 does not impose a time frame on

the period in which violations must be

corrected. However, it still provides that

notice is not required if the governmental

entity determines that a specific condition

of the property threatens public health or

safety.

The legislation further provides that

an assessment or lien to recover the

costs of nuisance abatement taken by a

governmental entity shall not exceed the

actual and reasonable costs of nuisance

abatement, and states that a government

entity may not impose an assessment or

lien to recover nuisance abatement costs

unless those costs are adopted by a body of

elected officials at a public hearing. Arguing

in support of the legislation, Senator Price

noted that many local ordinances fail to

provide adequate notice of violations

to owners, and maintained that some

local government entities may impose

assessments that exceed the actual costs of

abatement.

Early versions of SB 1427 would have

required cities to adopt a schedule of

nuisance abatement costs so property

owners will know the potential cost of failing

to maintain properties. It also sought to

prohibit cities from imposing liens against

properties for nuisance abatement prior

to the adoption of this cost schedule at a

public hearing. The League of California

Cities opposed the inclusion of these

provisions, arguing that abatement

measures may take a variety of forms, and

thus it would not be feasible for cities to

develop a schedule that contemplates every

potential cost. In the face of this opposition,

Senator Price agreed to remove those

provisions.

In a position statement regarding

the finalized legislation, the California

Association of Realtors (CAR) stated

that the bill provides necessary clarity

and due process regarding assessment

and collection of nuisance abatement

costs, and noted that “selling the home

to an individual that will maintain the

property is the best solution to the blight

problem which can devalue homes in a

neighborhood.” The net effect of this

legislation is to cause cities to jump

through a few more hoops when going

after nuisance-type properties. As to

Continued on page 10

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association efforts to control these same

issues, there is no impact on associations

other than to slow down some of the cities

that have been working hand in hand with

associations to go after derelict owners.

The new legislation, which was

sponsored by CAR and the California

Association of Retired People, has been

chaptered as new sections 2929.4 and

2929.45 to the Civil Code.

Jeff French, Esq. and Holly Amaya, Esq., are attorneys at Green, Bryant and French, a firm that specializes in homeowner asso-ciation law.

FIGHTING BLIGHT Continued from page 8

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Senate Bill 1221Facilitating the Non-Judicial Foreclosure Process by Reducing the Potential for Delay

BY RICHARD SALPIETRA, ESQ., CCAL AND JEAN-MARIE SALVIA, PCAM, CCAM

Boards of directors are spending an increased amount

of time and money to collect the assessments

needed to maintain their communities. When all else

fails, boards must consider foreclosing on a property

in order to remove a non-paying member and capture the funds

needed to keep the lights on. This process is lengthy and leaves

little room for error. With one missed deadline, the association

may be required to start the process over again, further delaying

the collection of assessments from an owner of a distressed

property. Fortunately, with the passing of Senate Bill 1221, the

risk of missing the deadline associated with recording the Notice

of Sale is reduced. However, it is important to keep in mind that

the total period of time associated with the foreclosure process

does not change.

The Non-Judicial Foreclosure ProcessAs is commonly known, a non-judicial foreclosure is the

preferred method used by associations to foreclose on a

property when the assessments are not paid. The procedural

requirements for non-judicial foreclosures are set forth in the

law and are very specific. After specific notices and the filing

of a lien, if the homeowner continues to fail to pay his or her

assessments, the association files a Notice of Default. For the

next three months, there is a redemption period in which the

homeowner may attempt to pay the late assessments. If the

homeowner is unsuccessful, then a Notice of Sale is recorded

and the process culminates in a Trustee’s Sale where the

property is sold to the highest bidder. An auctioneer conducts

this sale as instructed by the association and reports the results

back to the association.

The Impact of SB 1221Existing law requires that when a homeowner fails to pay

his or her common-interest development assessments, the


association must record a Notice of Default

and mail it to the owner. In the case of a

non-judicial foreclosure, the association

is then required to record a Notice of

Sale not less than three months after the

Notice of Default is filed, stating the time

and place of the sale. The purpose of SB

1221 is to alleviate a potential unintended

consequence arising from the current

law, specifically, a possible delay of the

foreclosure sale that could arise from

innocent delays in the recording of the

Notice of Sale. This is especially important

if those delays create technical violations of

the non-judicial foreclosure law. This new

bill permits the Notice of Sale to be filed

up to five days earlier than allowed under

current law; however, it does not move

the actual sale date of the property or

otherwise shorten the foreclosure process.

The author of the bill states that prior

to the enactment of the current law, SB

306, Notices of Sale were required to be

published in newspapers with general

circulation at least 20 days prior to the

sale of the property and recorded with

the County Recorder at least 14 days

prior to the sale. SB 306 conformed these

dates so that Notices of Sale must now

be published and recorded at least 20

days prior to the sale, but not less than

90 days from the recording of the Notice

of Default. The change is intended to

give the public and those relying on the

recording process as much advance notice

of sales as possible.

The problem is that while publication

dates can be coordinated very precisely

between the association and the

newspapers, the recording process is

subject to greater opportunity for error. If

the recorder closes early on a given day

due to budget cutbacks, or if the Notice

of Sale document is delivered to the

Recorder’s Office the next day, and not

actually recorded until the following day,

at no fault of the association, a technical

violation of the law can occur. If this

happens, the homeowner may successfully

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challenge the foreclosure process, and the

association may have to start the process

over. Existing law prohibits the recording

of the Notice of Sale until at least three

months have passed since the recordation

of the Notice of Default. The interaction of

these two rules leaves the association no

room for error. It must record the Notice

of Sale no less than 20 days before the

sale, and no less than three months after

the recording of the Notice of Default.

Therefore, if there is a one- or two-day

delay in the recording of the Notice of

Sale, the foreclosure sale may also have to

be delayed or a violation of the law may

occur. To address this issue, SB 1221 would

permit a Notice of Sale to be recorded five

days earlier in the process— 85 days after

the recording of the Notice of Default—

rather than the existing 90 days. According

to the author, those extra five days seek

to account for any delays in the recording

process. However, the actual sale date

may not occur any sooner than allowed by

existing law— to be precise, three months

and 20 days after the Notice of Default is

filed.

Continued Challenges for AssociationsWhile SB 1221 should help reduce

timing errors associated with the

recording of a Notice of Sale, it does not

address a significant problem associated

with delinquent owners. There are

homeowners who choose to simply give

up and walk away prior to the initiation

of a foreclosure. These owners have

the misunderstanding that they are not

responsible for assessments once they

move out of the property. Moreover, they

do not understand that they are personally

responsible for their debt; it does not go

away when they turn their backs on it.

Depending upon the total delinquency

in assessments at the time the homeowner

vacates the property, foreclosure may not

be a viable option. The process could take

too long for the association and has no

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Rick Salpietra is an attorney whose firm is located in Rancho Santa Fe, California. His firm’s empha-sis is community association law. He was the President of the San Diego Chapter of CAI in 2003 and 2009, and is currently a board member. He is also a member of

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SAN DIEGO 2010 CAI-CLAC HONOR ROLLBy Sam Dolnick, CAI-CLAC Delegate-at-Large

This is the second year that the CAI-CLAC Honor Roll is being presented. All individuals involved in common interest communities, whether they are associations, homeowners, professionals, managers or business partners who have contributed funds to CAI-CLAC in 2010 on behalf of common interest communities to assure that our voice is heard in the halls of the California legislature are to be congratulated. CAI-CLAC monitors legislation regarding common interest developments (condominiums, planned developments, stock cooperatives and community apartment projects) that the legislators are asked to deliberate and vote upon each year. The San Diego Chapter reached its 2010 goal of $28,528. Thanks to all contributors.

Each issue of Common Assessment features the names of the contributors and those individuals responsible for obtaining the contribution.

ABSOLUTELY NO FUNDS are given to any political party or to any candidate. All funds are used solely for issue oriented legislation affecting CIDs. However, our legislative advocate must be paid and items like stamps, stationery, phone calls, rent, maintenance of web site and other similar expenses must be paid.

Our congratulations and thanks to the following contributors from January 1 to December 3, 2010.2010 Goal = $28,528 CONGRATULATIONS: GOAL REACHED!!!

Andalucia Townhomes HOA Lisa Isaacson AMS CCAM

Anderson & Kriger, Joel Kriger

Association Reserves San Diego LLC Matthew Swain

Brookfield HOA, Jim Martin

CAI San Diego Chapter Barbara Ozenbaugh, CMP

Clean Earth Restorations

Victoria Cohen

Community Association of Bernardo Heights Becky Groenwold

Coronado Shores Condo Assn #6 Jim Liese CMCA AMS CCAM CMI

Sam Dolnick

Epsten, Grinnell & Howell, APC

Emergency Services Restoration Heather Flores Padron

Fenton Grant Mayfield Kaneda & Litt, LLP

Genesee Highlands Richard Harman

il Palio HOA Lisa Isaacson AMS CCAM

Interiors by Design, Geri Musser

La Jolla Soledad West HOA Lisa Isaacson AMS CCAM

La Mesa Colony HOA, Alicia Lloyd

Lake Park Condominium Assn Zelma Hall CMCA

Law Offices of Richard Salpietra

MC Painting, Lisa Isaacson, AMS, CCAM

Nautilus General Contractors

Ocean Hills Summit HOA Mike Mazur

Ocean Terrace/Spinnaker Ridge Frank Lombard

O’Connell Landscape Main Eric Shephard

Pacific Green Landscape Inc.

Pacific Western Bank, Ken Carteron

Payne Pest Management, Willie Payne

Popular Association Banking

Restoration Management Company

Riviera Del Mar Arch. Comm. Corp. Betty-Ray Wilson

Rock Springs East COA, Dawn Walters

SBS Lien Services, Mitch Willet

Seven Oaks Mgmt Corp #4, Gerie Vellios

The Missions @ Ivey Ranch, Connie Cain

Vermont Villas Condo HOA, Dawn Walters

Villa Marbelle HOA, Robert Donaldson

Villa Trieste at Del Oro Hills MA

Villa Trieste Master

Village Park Townhome Corp #3

Walters Management

Wells Fargo Bank, Mark Durazo

West Park Owners Assn, S. Dale Hess

Westturf Landscape Mgmt

Wild Rose Ranch CA

Woodbridge Estates HOA Lisa Isaacson AMS CCAM

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Premier Roofing CA, Inc.


Payne Pest Management

Pacific Western Bank

O’Connell Landscape Maintenance

New Way Landscape & Tree Service

Nautilus General Contractors, Inc.

Mutual of Omaha Bank/Condo Certs

Mt. Helix Pest & Termite Control, Inc.

Master Plumbing and Leak Detection

Mailboxes ‘R’ Us

Landsystems

LaBahn’s Landscaping

Interiors: By Design

Hersum Construction, Inc.

Haney Accountants, Inc.

Feinberg Grant Mayfield Kaneda & Litt LLP

Epsten Grinnell & Howell APC

Empire Community Painting

Emercon Construction, Inc.

Dunn Edwards Paints

Del Mar Pacific General Contractors

California West Patrol

California Sub-Meters

Brinks Services

Bob Piva Roofing

Bald Eagle Security Services

AV Builder Corp

Arborwell

Animal Pest Management

Advanced Painting and Wood Repair

You Made a Difference in 2010!

CALIFORNIA LEGISLATIVE ACTION SUCCESS STORY

By Kimberly Lilley, CMCA, CIRMS

I don’t know if you’ve heard, but in 2010 Community Associations

Institute (CAI) members from all over California made a huge

difference in the legislative process, including the impact some

legislation has (or could have had) on associations throughout the

state.

Let me take you back to a bill called AB 2502 authored by

Brownley. This was initially set up as legislation that would help

out homeowners who were in need of payment plans. It also had

the goal of preventing unethical collections procedures. Not a bad

plan, right? The reality of the bill hit, however, when we discovered

that not only would these “payment plans” have to be discussed

in open session (most likely embarrassing the homeowner who

needed the plan), but the amount of the payment could be anything

the homeowner chose. Anything! As the treasurer on my board I

practically fainted when I found that out. It is hard enough to budget

for the current water cost increase, but to add onto that a law that

would allow a homeowner who owed thousands of dollars to the

association (i.e., all of their neighbors), to decide that they would pay

$5 toward their obligation, and then be done… that was a bit too

much. I was not alone in my angst, however, as the Legislative Action

arms of all eight chapters of California’s CAI worked together to send

over 900 letters to Brownley to let her know that this kind of bill was

not a help at all, but a major financial fiasco for associations state-

wide. Brownley heard us and gutted the bill; and eventually the bill

died. AB 2502 is the perfect example of how we can (and did!) make

a difference in how the state of California governs associations.

AB 2016 (authored by Torres) was a bill that CAI sponsored.

In other words, we realized there was a need for the bill, got the

language for the bill drafted, found an “author” in the legislature,

and then helped in any way we could as the bill made its way

through both houses of the legislature (attended hearings, educated

other legislators about the bill’s

impact, etc.). AB 2016 allows

Homeowners’ Associations to

record a single “blanket”

request (covering all

parcels within the

association) to be

notified within


17C O M M O N A S S E S S M E N T M A G A Z I N E • S P R I N G 2 0 1 1


15 days of foreclosures. This allows

the association to begin collecting

assessments much more quickly than in

the past, because the association is able

to identify where to send the bill, and to

whom they should be directing it. The

“blanket” aspect was added with AB

2016 as a “clean up” to last years’ bill.

Some county recorders offices had been

demanding that a form be filed for EACH

parcel or lot within an association (and that

meant a fee for each parcel or lot within

the association), creating a strategic (and

financial) nightmare for associations. The

“blanket” adjustment to the law allows

associations to file just once for all of their

parcels or lots, saving time, money and

some sanity as well. AB 2016 passed both

houses and was signed into law by the

governor. It took effect in January 2011.

Once again, with AB 2016, CAI (i.e., you)

stepped in and made a difference in how

an association functions on a day-to-day

basis – for the better.

Some other bills that CAI spent time

tracking, and discussing with legislators,

were AB 1793 (Saldana) Mandatory

Artificial Turf Approval, AB 1927 (Knight)

Limitations on Rental Restrictions and

AB 1975 (Fong) Water Sub-Metering.

With AB 1793 (Saldana), this was an

attempt to expand upon AB 1061 from

the year before. AB 1061 provided that

an association cannot disallow low-water-

using plants as an entire class. While the

association can determine which plants to

allow through their architectural guidelines,

they must allow SOME low-water-using

plant life in the association. AB 1793

wanted to make approval for artificial

turf mandatory. Since each association

determines its own “look” (which is part

of the reason that unit owners buy into

that association) to have the state require

mandatory approval of something that is

addressed in the association's architectural

guidelines seemed to over-step the

state’s authority. It was discovered in our

investigations that in addition to the initial

problems we had with the bill, there were

quite a few artificial turf products with

unhealthy levels of lead, which made

mandatory approval of these products

a liability nightmare. There was also a

question regarding the impact of run-off

from artificial turf that has yet to be fully

explored, and the case was made. This bill

was vetoed by the governor.

AB 1927 (Knight) placed limitations on

rental restrictions. It proposed that if an

association wanted to limit rentals within

their complex they would have to meet

some very high quorum requirements that,

given today’s apathy at voting time, would

be practically impossible to meet. As we

are all discovering, high owner-occupancy

rates are important in getting loans for

the association (among other things),

so there is a financially-sound reason to

limit rentals. This law would have made

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PETERS FREEDMAN,L.L.P.

YOU MADE A DIFFERENCE...Continued from page 17


it practically impossible. Our team of

advocates explained this to the legislators

in Sacramento. Our opposition made it

necessary for the sponsors of the bill to

change the language to such an extent

that any common interest development

that currently existed would no longer be

affected by the bill, even if it had passed.

While it did pass through both houses, it

was vetoed by the governor.

AB 1975 (Fong) was a bill that you

probably never heard about. It was

proposed legislation that would require

that all associations be sub-metered. Not

such a big deal, right? Many associations

who aren’t sub-metered WANT to be

sub-metered. But here, as Shakespeare

might say, is the rub: the association

would not be able to recoup the costs of

sub-metering from the members of the

association. Homeowners are the only

possible source of funds to do the sub-

metering! CAI was the ONLY opponent to

this bill when it went to hearing. We spoke

against it, explained that in the “real”

world it would not work as proposed,

and it died in the Senate Appropriations

Committee. Yet ANOTHER wonderful

example of why CAI works so hard to

write, track and educate about legislation

that impacts associations.

So imagine a world without the

Legislative Action Committee of the

Community Associations Institute… an

association would be forced to record 280

separate forms with the county recorder to

be notified of foreclosures, forced to pay

280 fees, forced to re-file (and re-pay) 280

times if any of our information changed,

it would never be able to get a loan, it

would be required to approve any artificial

turf requests (on the roof… really?), and it

would be having perpetual bake sales to

try to pay the sub-metering company for

all of the work we were required by law to

have them do… Sounds like a nightmare.

While living in an association may not

be “heaven,” it is still “home” and we will

do everything we can to keep that home

Professional. Capable. Friendly.

Year after year our list of satisfied, well-managed communities grows. Our team of accredited, certified community managers offers unparalleled credibility and integrity. Call Curtis Management today for the highest caliber, hardest working professionals to manage your community. Toll Free 877.587.9844.

Just what you’ve been looking for in professional community management.

www.curtismanagement.com

happy. Thanks to all of the associations who contributed to the California Legislative Action

Committee in 2010 to help us do this amazing work. You are making a difference.

Thanks to all who help make associations in California better places to live!

Kimberly Lilley is the Chair of the California Legislative Action Committee Roundtable in San

Diego, a Delegate to the state-wide Legislative Action Committee and serves on the Executive

Committee for state-wide CLAC. She can be reached at [email protected].

Thank you to our Award Banquet Exhibitors Able Restoration

Animal Pest Management

Antac Pest Control

Artistic Maintenance

Association Reserves San Diego LLC

AV Builder Corp


Berg Insurance Agency

Bob Piva Roofing

California Sub-Meters


Easyturf, Inc.

Emercon Construction Inc.

Epsten Grinnell & Howell APC

Green Valley Landscape & Maintenance

Interiors: By Design

Jon Wayne Construction & Consulting

JW Cleaning & Restoration


Landsystems

Mt. Helix Pest & Termite Control, Inc.

Mutual of Omaha Bank/CondoCerts


O’Connell Landscape

Pacific Green Landscape, Inc.

Pacific Western Bank



Premier Roofing CA, Inc.

PrimeCo Painting, Inc.

Pro-Tech Painting

Reconstruction Experts

ResCom Services, Inc.


RSI Roofing

S.B.S. Lien Services

San Carlos Cleaning Services, Inc.

Service Master by Rapid Response

Servpro of La Jolla

Sky Security Services

Summit Security

Transport Data Systems

Urban Tree Care, Inc.

US Bank

Valley Crest Landscape Maintenance

Wells Fargo

Westturf Landscape Management

Annual Awards Luncheon & Trade Show

Emerald SponsorsBald Eagle Security ServicesEpsten Grinnell & Howell, APCJW Cleaning & RestorationRestoration Mangagement CompanyValleyCrest Landscape Maintenance

Sapphire SponsorsAnderson & Kriger, LLPFrazee Paint Green Valley Landscape & Maintenance, Inc.Paul Davis Restoration & RemodelingPeters & Freedman, LLP


OUTSTANDING COMMITTEE PERSON OF THE YEAR

Public Relations Matthew Swain

Membership Marie Vasilieff

Magazine Tina Rozycki

Education Services Shannon Smith

Monte Carlo Night Louise Stettler

Golf Classic Chris DiNino

Billiards Karina Tatum

CLAC Lisa Isaacson

2010 CHAPTER AWARD WINNERS

RECRUITER OF THE YEAR

Tina Rozycki, CMCA

Curtis Management

COMMITTEE MEMBER

OF THE YEAR

Jim Fraker, PCAM

Billiards Tournament, Public Relations

PCM

BUSINESS PARTNER OF THE YEAR

Shannon Smith


COMMUNITY MANAGER

OF THE YEAR

Karina Tatum

SD Preferred Property Managers

HOA OF THE YEAR

Canyon Woods HOA

PRESIDENT’S AWARD

Barbara Ozenbaugh, CMP

Annual Awards Luncheon & Trade Show

Sapphire SponsorsAnderson & Kriger, LLPFrazee Paint Green Valley Landscape & Maintenance, Inc.Paul Davis Restoration & RemodelingPeters & Freedman, LLP



In Worldmark v. Wyndham

Resort Development

Corporation (2010) 187 Cal.

App.4th 1017, the Third

District Court of Appeal held

that a California non-profit

mutual benefit corporation

is required to provide e-mail

addresses maintained by

the corporation in response

to a member’s request for a

membership list.

Worldmark is a California non-

profit mutual benefit corporation

owned by over 260,000 members. The

corporation owns timeshares across the country.

One of Worldmark’s members, Robin Miller, requested that

Worldmark provide the corporation’s membership with petition

to amend its bylaws. Worldmark refused Miller’s request, and in

response Miller demanded that Worldmark allow him to inspect

and copy the corporation’s membership records, including e-mail

addresses, so he could distribute his own petition. Worldmark told

Miller that he could not have access to the e-mail addresses, and

then petitioned the court to set aside Miller’s demand.

Worldmark claimed that Miller was not entitled to the

membership’s e-mail addresses because there was no statutory

authority requiring it to provide such information. Further,

Worldmark was concerned with protecting the privacy of its

membership, and considered its e-mail roster to have “tremendous

commercial value.” California Corporations Code section 8330(a)

(1) provides that unless the corporation provides a “reasonable

alternative,” it must allow a member to “inspect and copy the

record of all members’ names, addresses and voting rights…”

so long as the proper procedures are complied with. Worldmark

contended that the term “members’ addresses” did not

encompass e-mail addresses. The Court of Appeal disagreed,

holding that the language of Corporations Code section 8330 was

broad enough to include e-mail addresses.

Worldmark also claimed that it complied with Corporations

Code section 8330 because it provided Miller with a “reasonable

alternative” to producing the membership list. Worldmark would

have allowed Miller to submit a copy of the documents he wished

to distribute to the membership, and if Worldmark determined the

material to be appropriate, it would have forwarded the documents

to a mailing house for mailing at Miller’s expense. Worldmark

later agreed to cover 50% of the cost of mailing. The court found

this alternative to be unreasonable, since the cost to Miller would

have totaled around $1 per member, or $260,000. Moreover, Miller

requested the membership’s e-mail addresses so that his materials

could be distributed in time for the annual meeting. Mailing would

have taken much longer.

Corporations Code section 8330 also governs common interest

developments (see Civil Code section 1363(f)), so the Worldmark

decision is controlling with regard to homeowner requests for

membership lists from an association. However, there are options

under the Davis-Stirling Act that would restrict homeowners’ access

to member e-mail addresses. Civil Code section 1365.2(a)(1)(I)(iii)

allows a homeowner to “opt out” of sharing his name, property

and mailing address if he notifies the association in writing that he

would prefer to be contacted by an alternative mailing process that

would qualify as “reasonable” under Corporations Code section

8330. Additionally, there is no statutory requirement that member

e-mail addresses be maintained by the association. Nevertheless,

where e-mail addresses are maintained, they are subject to

membership inspection.

So, what’s the bottom line for homeowners associations? Where

an association maintains e-mail addresses to communicate with

its members, such information must be provided to homeowners

requesting a membership list unless the addressee specifically

requests to “opt out.” Associations may also consider offering a

“reasonable alternative” for mailing owners’ messages, such as

sending the e-mail itself.

Carrie M. Timko, Esq. is an associate attorney with the law firm of Epsten Grinnell & Howell, APC.

Would You Like E-Mail Addresses With That Membership List?BY CARRIE M. TIMKO, ESQ.


©2010 Union Bank, N.A.

HOAbankers.com

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Community Association Management isn’t learned overnight. That’s why our

relationship managers study the ins and outs of your industry and with that,

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CAI ROCKS!

CAI volunteers were proud to

participate in Vistans ROC, an annual event

in Vista, where homes are painted and

re-landscaped by volunteers. This year’s

Vistans ROC (Restore Our Community) was

held on Saturday, October 9th, and over

30 homes received an exterior makeover.

CAI sponsored one home, and Jim Fraker

coordinated the makeover for this house.

CAI volunteers included Christy Gramann

of Four Season Tree Care, Lisa Sandie and

staff from Silverado Management, Shaun

Marie Daly and two landscapers of KR

Landscape Services, and Dmitriy Todorov of

Bald Eagle Security Services, Inc..


NewsStandN E W S F R O M C A I N AT I O N A L

Find it FastWhile our website, www.caionline.org, has a search function

and site map, a new web page, Find It Fast should help members

and others locate top pages on our website, e.g., designations,

events, G&PA, specific periodicals, member logos, PMDP courses,

address changes and so on. The page also includes hyperlinks for

the staff members who are the contacts for the content on those

pages, e.g., Sondra Frank for Chapter Contacts. The page is linked

on the homepage under Quick Links.

New CAI Leaders Take Office January 1Steven Y. Brumfield, CMCA, AMS, PCAM, vice president

of operations for the National Lifestyle Division of Wentworth

Property Management, will begin his one-year term as the 38th

national president of Community Associations Institute (CAI)

January 1. Headquartered in Eatontown, NJ, Wentworth operates

in 14 states.

This will be Brumfield’s sixth year on the CAI Board of Trustees.

He has also served on the board of directors for CAI’s Pennsylvania

and Delaware Valley chapter. His professional experience includes

serving as the assistant director of community associations for a

nationwide home builder and working for property management

firms in Virginia and Florida.

Prior to his career in association management, Brumfield spent

several years as vice president of a family-owned, custom-home

building company. He is a veteran of the United States Marine

Corps, having served in Operations Desert Shield and Desert

Storm.

Kathryn C. Danella, CMCA, LSM, PCAM, manager of Boca

Pointe Community Association, Inc., in Boca Raton, FL, will serve as

CAI’s 2011 president-elect.

Brumfield and Danella will be joined by 12 new or reelected

members of the Board of Trustees and 15 newly elected or

reelected members of CAI’s three Membership Representation

Groups (MRGs).

“I’m honored and excited to serve as CAI president, especially

during this time of growth and opportunity,” says Brumfield.

“There’s much that the board and I are eager to accomplish,

and I’m confident we will reach these goals with the help of our

dedicated member volunteers and our national and chapter staff.

Working together as a team, there is nothing we can’t accomplish

on behalf of our members and those who serve and make their

homes in common-interest communities.”

“We’re happy to have someone as knowledgeable and

passionate as Steven leading our Board of Trustees as we continue

to build on past successes,” says CAI Chief Executive Officer

Thomas M. Skiba, CAE. “Beyond his extensive industry experience

and great insight, Steven brings people together to achieve

common goals. His leadership will prove invaluable to CAI and our

30,000-plus members.”

CAI’s 2011 Board of Trustees includes five new members:

Victoria A. Cohen, Lake Murray Terrace, San Diego, CA

Henry A. Goodman, Esq., Goodman & Shapiro, LLC, Dedham, MA

Cathy S. Kelly, CMCA, AMS, PCAM, Ocean Ridge Management,

Boynton Beach, FL

Lori Loch-Lee, CMCA, AMS, PCAM, Brown Community

Management, Mesa, AZ

Kelly G. Richardson, Esq., Richardson & Harman, PC, Pasadena, CA

The following members return to the 14-member board

(*appointed to an additional two-year term):

Dennis C. Abbott, CMCA, AMS, PCAM, Abbott Enterprises, Inc.,

Charlotte, NC

Ted S. Herrle, CMCA, AMS, LSM, PCAM, Admiral’s Cove Master

Property Owners Association, Jupiter, FL

*Julie McGhee Howard, Esq., Weissman, Nowack, Curry & Wilco,

PC, Atlanta, GA

John McInerney, AMS, LSM, PCAM, Talis Management Group, Inc.,

AAMC, Raleigh, NC

Drew Regitz, AssociationVoice, LLC, Denver, CO

Richard Salpietra, Esq., Law Office of Richard Salpietra, Rancho

Santa Fe, CA


Michael Wm. Shiflett, InterNeighborhood

Council of Durham, Durham, NC

CAI’s three primary member

constituencies are represented by the

Association of Professional Community

Managers (APCM) Board, Business Partners

Council (BPC) and Community Association

Volunteers Committee (CAVC). Members of

each MRG are elected by CAI members of

that corresponding membership group.

The 2011 APCM Board (*newly elected

or reelected):

Dennis C. Abbott (chair), CMCA, AMS,

PCAM, Abbott Enterprises, Inc., AAMC,

Charlotte, NC

*Lori Loch-Lee (chair-elect), CMCA, AMS,

PCAM, Brown Community Management,

Mesa, AZ

Pamela D. Bailey, CMCA, AMS, PCAM,

Chaparral Management, AAMC, Spring, TX

*Kara Cermak, CMCA, AMS, PCAM,

Rowell, Inc., Elgin, IL

*Michael A. Feltenberger, CMCA, AMS,

PCAM, Legum & Norman, Inc., Alexandria,

VA

Staci M. Gelfound, CMCA, AMS, PCAM,

Association Integrated Management

Services, LLC, Gaithersburg, MD

*Barbara Barron Herndon, CMCA,

AMS, PCAM, Professional Community

Management, San Antonio, TX

Ted S. Herrle, CMCA, AMS, LSM, PCAM,

Admiral’s Cove Master Property Owners

Association, Jupiter, FL

*Marge Imfeld, PCAM, I & I Property

Management, Fresno, CA

Cathy S. Kelly, CMCA, AMS, PCAM, Ocean

Ridge Management, Boynton Beach, FL

Jared McNabb, CMCA, PCAM,

Crowninshield Management Corporation,

AMO, Peabody, MA

Steven Shuey, PCAM, Personalized

Property Management, Cathedral City, CA

*Gregory G. Smith, CMCA, AMS, PCAM,

Colorado Association Services, Colorado

Springs, CO

Robin Steinkritz, CMCA, AMS, PCAM,

Heritage Property Management Services,

Inc., Atlanta, GA

The 2011 BPC (*newly elected or

reelected):

Drew Regitz (chair), AssociationVoice, LLC,

Denver, CO

Henry A. Goodman (chair-elect), Esq.,

Goodman & Shapiro, LLC, Dedham, MA

*Robin L. Barlow, CIRMS, ADP Barlow

Insurance, Easton, PA

Jennifer Brick, Stark & Stark, Lawrenceville,

NJ

*Heather L. Cozby, CPA, Cozby & Bruno,

LLC, Plymouth, MA

*Thomas C. Engblom, CMCA, AMS, PCAM,

Community Association Banc/CondoCerts,

Oak Lawn, IL

Mickel Graham, PCAM, Union Bank – HOA

Banking Services, Atlanta, GA

*Bruce R. Gran, CMCA, AMS, PCAM,

HomeWiseDocs.com, Scottsdale, AZ

*Thomas W. Larson, RS, Facility


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Equal Housing Lender

26

Thank you to our chapter members that have renewed their CAI membership. We appreciate your continued support and participation in our chapter.

4-Points Management Agency .............. 20047 Oaks Mgmt Corp #4 ............................ 2005A. McKibbin & Co. ..................................1997Alante/MCS Insurance Services ............2009Alliance Association Financial Services ................................................2008Andrew Jager ..........................................2007Angelic Luna ............................................2009Aquaspecs, Inc. .......................................2001Arborwell ..................................................2008Artistic Maintenance, Inc. .......................2005Association Reserves San Diego, LLC .2008Bald Eagle Security Services, Inc. .........2009Berg Insurance Agency ..........................2003Bill Greenlee, CMCA ..............................2009Bob Piva Roofing ....................................2009Bonita Vista Community Association ...1982Bruce Becker, CCAM, CMCA, AMS ............1980Byron Mettler, CMCA .............................2009California West Patrol .............................2010CertaPro Painters .................................... 2003Christy Gonzales .....................................2010Clean Earth Restorations .......................2008Coral Tree Plaza Owners Association ...2008Daniel Goodrich, CCAM, CMCA, AMS .............2004DAPA Janitorial Service ..........................2007David Abrams ..........................................2005Debra Weikel, CMCA, AMS, PCAM ............2005Del Mar Pacific General Contractors, Inc. ......................................1997Donald Michaels .....................................2006Dunn-Edwards Corporation ...................2002Equity Management ...............................2010First California Bank ................................2000Frazee Paints ...........................................2009G.R.G. Management Inc. .......................2009Green Valley Landscape & Maintenance, Inc. ................................2008Hidden Ridge at Carlsbad .....................2001HOA Elections of California, Inc. ............2009Hugh Maynard, CMCA ........................... 2005Ian H. Graham Insurance .......................2009Janet Wagner, CCAM, CMCA ...............2006Jessica McKenzie ....................................2010Jill Bronk ...................................................2005Jon Wayne Construction & Consulting 1990Julie Bigelow, PCAM ..............................2009Karina Tatum ............................................ 2006Katy Camp, CCAM .................................2008Kimberly Johnson, CMCA .....................2005La Mesa Colony Homeowner Assn .......2007LaBarre/Oksnee Insurance Agency ......2001Lakeridge Park Condo Association ......2006Landscapes USA, Inc. .............................2010Law Office of Laura Kwiatkowski ...........1993Le Parc Chateau ......................................1999Linda Strom, PCAM ................................2005

Lloyd Pest Control ..................................2006Loren Fisk, CMCA, CCAM .....................2009Lori Graham, CMCA, AMS, CACM ........2006Management Resource Center .............2009Marie Donovan ........................................2000Mario Trejo, AMS ....................................2005Mary-Anne Monck ..................................2003MC Builders Corporation .......................2010Melanie Hudson ......................................2010Mike Lutz ..................................................2006Ned Heiskell, PCAM ...............................2009Nicholas Brennan ....................................2009Nina Stanley .............................................2008Orange Coast Building Services, Inc. ...1999Pacific Green Landscape, Inc. ...............1988Patricia Ginger ......................................... 2006Patrick Morrisey, CMCA ......................... 2009Park West Landscape Maintenance, Inc. ..2010Prater Architects, Inc. ..............................1998R&D Pest Services, Inc. ...........................2009Rancho Del Mar Association .................2009Renaissance La Jolla Community Assn ..2002Richard Johnson ......................................2005Robin Fennell, CMCA .............................2009Rolling Hills Ranch Community Assn .....1999Ronald Phipps, CMCA, AMS, LSM, PCAM .............2011Roy Palacios Insurance Agency, Inc. ......2005S.D. Preferred Property Managers ........1995Sabrina Afkhami, CCAM, PCAM ............2006SCT Reserve Consultants, Inc. ............... 1994Seabreeze Management Company, Inc. ..2009Shannon McMurray, CMCA, AMS ............2008SHE Manages Properties .......................2005Silverado Community Management Service ........................1996Site Plan Advantage ...............................1993Sky Security Services ............................... 2008SmartStreet a Division of RBC Bank ....2004Summit Security Guard & Patrol ...........2003Sunrise Pointe Homeowners Assn ........2008Sunset Hills Terrace HOA .......................2003Susan Fakhouri ........................................2009Susan Thrasher ........................................2009The Golden Girls at MPM Realty ..........2004Three Phase Electric, Inc. .......................2007Traci Mays ................................................2010Tracy McGuffin, CMCA, AMS ................2010Treebeard Landscape .............................2010Varsity Painting ........................................2009Victoria Cohen .........................................2005Westwood Townhomes 11-12 Corp. .....2009WICR .........................................................2000William Cozza ..........................................2010William Stewart, PCAM ..........................2005Zelma Hall, CMCA ..................................2005

October/November/December 2010

Renewing MembersEngineering Associates, P.C., Fairfax, VA

*Hayden Miller-Luczka, CMCA, PCAM,

Community Association Banc/CondoCerts,

Vienna, VA

*Caroline Record, Esq., Berman, Sauter,

Record & Jardim, P.C., Morristown, NJ

*Jeffrey Van Grack, Esq., Lerch, Early &

Brewer, Chartered, Bethesda, MD

The 2011 CAVC (*newly elected or

reelected):

Michael Wm. Shiflett (chair),

InterNeighborhood Council of Durham,

Durham, NC

Victoria A. Cohen (chair-elect), Lake Murray

Terrace, San Diego, CA

Marilyn Brainard, Wingfield Springs

Community Association, Sparks, NV

*Julie Hardy Cramer, Westmont, IL

Fred Mellenbruch, Lake Mission Viejo

Association, Mission Viejo, CA

*Robert Riddick, Moreno Valley, CA

*Robert Rothwell, Henderson, NV

NEWSSTANDContinued from page 26

S P R I N G 2 0 1 1 • C O M M O N A S S E S S M E N T M A G A Z I N E


Case Study: Another Perspective

The Fall 2010 issue of Common

Assessment, in the Homeowners’

Column, was about a case study

of an association that violated many of

the precepts of its governing documents

and state statutes.

It is interesting to note that

homeowners from six different

associations called stating that the

article must have referred to their

association and wanted verification.

These homeowners were wrong, the

article did not refer to their associations.

However, no calls were received from

the homeowners that were members

of the association that the case study

described. Is there a lesson to be

learned from this?

But there is another perspective on

the original case study — an association

that attempts to its best ability to

do everything correctly, to follow

the governing documents and state

statutes; and the board, when notified of

errors or misinterpretations, makes every

attempt to take corrective action.

The format of this article will follow

that of the previous case study.

Items 1, 2, 3 & 4 (Audit/Review):

The association’s governing documents

called for a mandatory external audit of

the financial statements by a certified

public accountant for each fiscal year

with copies going to the owners. The

members received copies of a “review”

of the financial statements. When this

error, (an “audit” was needed and not a

“review”) was brought to the attention

of the management firm and the board

of directors, an “audit” of the financial

statements was immediately made and

this new “audit” was mailed to each

member.

Effect: The management firm and

board of directors took their fiduciary

duties seriously and when notified of an

error took corrective action.

Items 5 & 6 (Membership

Meetings): The governing documents

stated that annual membership

meetings shall be held between seven

days prior to seven days after the date

of the first annual meeting called by the

Declarant.

Effect: In the over twenty years that

this association has been in existence,

the annual membership meetings

were always held within the time limits

stated. The owners have the satisfaction

of knowing that their attendance was

desired and welcomed.

Item 7 (Conflict of Interest): The

board members sign a code of conduct

which prohibits conflict of interest

between vendors and employees. The

management contract has some clauses

that prohibit a conflict of interest by the

manager as an agent of the association.

So far, to anyone’s knowledge, there has

never been a violation of the conflict

of interest portion of the governing

documents.

Effect: The owners have the

confidence that neither the board of

directors nor the management firm are

hiring contractors, professionals, friends

or relatives to obtain compensation

improperly.

Item 8 (Federal/State Income

Taxes): Federal and State income taxes

are always filed in a timely manner. In

addition FICA taxes are also filed in a

timely manner.

Effect: The homeowners know that

penalties and interest are not charged

by the governmental agencies and

therefore their assessments are used

wisely.


Homeowners’ Corner

Readers of this column are encouraged to send their opinions on the above and suggestions for future columns to samdolnick@

juno.com or by phone, 619-697-4854. Sam Dolnick has served as president of his association, is a former homeowner representative of the San Diego Chapter Board of Directors, former homeowner trustee of CAI National, and former director of the CAI Foundation for Community Association Research. He is currently homeowners’ delegate on the California Legislative Action Committee, and president of the Baker/Dolnick Education Foundation.

Guest articles are always welcome!


Item 9 (Water Damage/Laundry

Machines): Whenever water damage or

water stains on ceilings and walls are

reported to management, a work order

is immediately filled out. An employee

comes to the unit, assesses the amount

of damage and whether or not it is the

association’s or owner’s responsibility

to take corrective action. If it is the

association’s responsibility, repairs are

undertaken.

The governing documents do not allow

laundry machines in the units. Separate

rooms are provided which contain laundry

machines and dryers. Whenever an owner

requests permission from the board for the

installation of washing machines in the unit,

the request is always denied.

Effect: The owners are aware that

everyone is being treated equally and

the governing documents apply to all

consistently.

Item 10 (Corporate Status): Civil

Code 1363.6 Required Filing of Biennial

Statement has always been filed in a timely

manner with the Secretary of State and

thus the corporate status of the association

has never been suspended. As fees were

also paid no penalties were ever assessed.

Effect: Since the corporate status

remains valid the homeowners are

protected and not placed in jeopardy.

Conclusion: This “A Case Study:

Another Perspective” is presented to

show that although there are some

associations that continually violate their

governing documents and state statutes,

there are also many associations that are

run efficiently and honestly. These board

members are aware of their fiduciary

responsibilities and make every effort to

uphold the integrity of their associations.

Homeowners should be alert to the actions

their board members are taking and should

be vigilant in confronting them when the

governing documents are not adhered to.

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Do I Really Haveto SHRINK My House?BY JAMES R. MCCORMICK, JR.

Clear Lake Riviera Community

Association has architectural

guidelines in place that limits the

heights of homes within the development.

In March 2005, homeowner Robert Cramer,

a general contractor, submitted plans to

the association’s architectural committee

for construction of a new home. The plans

were approved subject to the height

restriction, and on each page of the plans

the following statement was stamped:

“structure height not to exceed 17 feet

from control point of lot.” The Cramers

were notified of this height restriction

several times during the course of their

construction and they acknowledged the

limitation on the approved plans.

During the construction of their home,

the Cramers were further notified by the

architectural committee that their house

deviated from the approved plans and

that the completed building would violate

the height restriction. Despite this notice,

the Cramers proceeded with construction

and when the house was completed it

exceeded the 17-foot height restriction by

nine feet, impinging severely on the views

from at least two neighboring homes.

Thereafter, the Cramers unsuccessfully

requested a variance from the committee

seeking a ratification of their violation of

the height restriction.

In June 2006, the association filed suit

against the Cramers requesting declaratory

relief of violation of the guidelines and the

approved construction plans, an injunction

to require compliance with the approved


plans and the height restriction, and

monetary damages. The trial court found

for the association, rejecting the Cramers’

various arguments that the height

restriction was invalid or unenforceable,

and ordered them to bring the house

into compliance with the guidelines. The

Cramers appealed.

On appeal, the Cramers challenged

the validity of the height guideline, the

validity of the architectural committee, and

the grant of injunctive relief. The Appellate

Court affirmed the injunctive relief,

ultimately determining that the trial court

applied appropriate standards of review

and that its decision to require compliance

with the height restrictions was proper.

One of Cramers’ arguments was that

the architectural guidelines and height

restriction were never adopted by a

properly constituted committee. The

association produced evidence showing

that the height restriction guideline had

been enforced since at least 1995. The

Cramers argued, however, that since

there was no direct evidence presented

(i.e., minutes of meetings, tabulation of

votes, etc.) showing that the guidelines

had been adopted, the association could

not enforce the guidelines. The Appellate

Court found “no legal support” for the

Cramers’ claim that the association was

required to provide direct, rather than

circumstantial, evidence to show that its

use restrictions were properly adopted.

The Appellate Court further stated that

simply because the association was

unable to locate a document reflecting

the adoption of the guidelines does not

necessarily support a finding they were

never properly adopted.

The Cramers further contended that

forcing them to bring their home into

compliance with the height restriction was

effectively ordering them to “tear down

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their house,” and that the court should

have awarded damages instead.

In reviewing whether to uphold

the decision of the trial court, the

Appellate Court applied a three-part

“hardship doctrine” that is applicable to

encroachment cases. Under this doctrine,

to determine whether to grant or deny

an injunction requiring removal of an

encroaching structure, three factors must

be considered:

1. The defendant must be innocent.

That is, his or her encroachment must not

be willful or negligent. The court should

consider the parties’ conduct to determine

who is responsible for the dispute.

2. Irreparable injury. Unless the rights

of the public would be harmed, the court

should grant the injunction if the plaintiff

will suffer irreparable injury regardless of

the injury to defendant.

3. Hardship to defendant. The hardship

to defendant from granting the injunction

must be greatly disproportionate to

the hardship caused plaintiff by the

continuance of the encroachment and this

fact must clearly appear in the evidence

and must be proved by defendant.

The Appellate Court upheld the

injunction order, relying on the trial court’s

findings that Mr. Cramer knowingly violated

the height regulation and that his actions

were not innocent and, at best, negligent.

Furthermore, the evidence supported

a finding of irreparable harm to the

surrounding neighbors such as loss of view,

loss of privacy and diminution in value.

Importantly, the Appellate Court stated:

If the Cramers were permitted to

use the fait accompli of their home’s

completion to avoid enforcement of the

height guideline, the association would

effectively lose the ability to enforce any

of its guidelines. Members could build

their homes in any manner they pleased,

arguing afterward in response to an action

to enforce the guidelines that compliance

What Boards and Managers Can Learn from this Case

Boards and managers should document adoption of architectural guidelines and should document how and when owners are advised of these regulations and requirements. Additionally, owners’ violations of the regulations and requirements should always be documented in writing. Owners living by the adage, “seek forgiveness instead of permission” subject themselves to being compelled to expend significant sums bringing their homes into compliance with an association’s architectural guidelines. Assuming all of the facts support such a determination, owners who build or modify their residences in violation of their association’s architectural guidelines cannot after the fact seek a variance based on a claim that it would be too expensive to bring the home into compliance.

DO I REALLY HAVE TO SHRINK MY HOUSE?Continued from page 31


would be unreasonably expensive.

Evidence presented by the Cramers’

expert showed that the house could be

brought into compliance for approximately

$200,000. The Appellate Court found

that the economic damage to Cramers of

$200,000 was not grossly disproportionate

to the $75,000 in diminished value of one

of the surrounding homes and the loss

of value to the other homes and other

damages difficult to quantify.

On the basis of the record before it,

the Appellate Court determined that the

trial court had not abused its discretion in

directing the Cramers to bring their home

into compliance with the height restriction.

James R. McCormick, Jr. is a partner with the law firm of Peters & Freedman, LLP, with offices in Encinitas and Palm Desert and can be reached at [email protected].

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T he rule of judicial deference announced

by the Supreme Court in Lamden v. La

Jolla Shores Clubdominium Homeowners

Association (1999) 21 Cal.4th 249 (Lamden) has

been used for the past decade by association

boards throughout California as a shield against

liability for negligence and good faith mistakes

detrimentally affecting homeowners. Division

Three (Orange County) of the Fourth Appellate

District of the California Court of Appeal

explains in Affan v. Portofino Cove Homeowners

Association (2010) 189 Cal.App.4th (Portofino

Cove), that Lamden is not the super-shield some

boards would like to believe it to be.

It is necessary to recount the specific facts of

the Portofino Cove case in detail to understand

the decision’s importance. For some ten years

the board ignored its maintenance obligations

with respect to common area plumbing including

sewer and drain lines servicing a three story

stacked condominium building situated over

an underground parking garage. The Affans

purchased their Portofino Cove condominium in

1986 as a vacation home and suffered sewage

back-ups into their kitchen sink and the sink and

bathtub in the master bathroom six times over a

nine-year span. They made a written complaint

to the association and its management company,

but their complaint did not result in a remedy of

the situation.

The Portofino Cove association changed

managing agents in 2004 to Huntington West

Lamden Does Not Provide Carte Blanche Protection to AssociationsBY LAURI CROCE, ESQ.


Properties (Huntington), also a defendant

in the lawsuit. In 2005, the Affans again

complained about the very chronic situation

of sewage backing up into their unit, and

Huntington finally addressed the issue

after gaining the board’s approval to do

so. Unfortunately, the plumber’s attempt

to jet-clean the mainline resulted in a

massive sewage eruption into the Affans’

condominium, rendering it uninhabitable.

The association hired an emergency clean-

up company to perform the necessary

remediation, but the association neglected

to restore the Affans’ unit to an undamaged

condition when the association’s insurers

became embroiled in a coverage battle. The

Affans had enough, and filed suit against the

Portofino Cove Association for negligence,

private nuisance, and breach of the CC&Rs

because of its years-long failure to maintain

the sewer system, and its more recent

failure to restore the damage to the Affans’

unit. The Affans also sued Huntington for

negligence and private nuisance based on

its failure to prevent the sewage eruption

and provide for a complete repair of the

unit.

After a bench trial, the trial court found

in favor of the association without even

making a determination on the elements

of negligence or breach of the CC&Rs,

despite compelling expert testimony of

each. The trial court simply stated that the

judicial deference rule of Lamden meant

the association and Huntington were not

negligent and did not breach the CC&Rs

with respect to their respective duties to

maintain the sewage system. The trial

court also determined, however, that the

association was contractually liable under

the CC&Rs to pay for restoration of the

unit following the sewage eruption. Finally,

the trial court determined there was no

prevailing party, and therefore each party

was to bear its own attorneys’ fees and costs

of suit.

The Court of Appeal reversed the trial Continued on page 36


court on all issues except the issue of the

association’s contractual liability to pay to

restore the Affans’ condominium. The Court

of Appeal emphasized that Lamden is not

an automatic protection against liability, and

analyzed the Portofino Cove association’s

acts and omissions in detail to illustrate its

point. First, the Court of Appeal explained

that Lamden’s judicial deference rule,

under which the court may not substitute

its judgment for that of a board making

a decision in consultation with experts, in

good faith, and in the best interests of the

entire community (even if that decision is

erroneous), applies only when an actual

decision-making process is undertaken and

a conscious decision is made.

The judicial deference doctrine does

not shield an association from liability for

ignoring problems: instead, it protects

the Association’s good faith decisions to

maintain and repair common areas. In

Lamden, the Supreme Court recognized the

essence of an association’s duty to maintain

and repair is a duty to act based on

reasoned decision-making. [189 Cal.App.4th

930, 942. Italics original.]

The Portofino Cove association failed to

act for some ten years demonstrating the

opposite of action required for Lamden to

apply.

Second, the Court of Appeal explained

there must be findings of fact made to

apply the Lamden judicial deference

rule, including findings of a competent

investigation, good faith on the part of the

board, and an analysis of the best interests

of the community. The most important

finding missing in this particular case was

that of a deliberative process of decision-

making on the part of the board. Quoting

from Lamden, the Court of Appeal stated:

Finally, the association did not meet

its burden of proving its decision not to

engage in maintenance was an exercise of

its discretion ... to select among means for

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LAMDEN DOES NOT PROVIDE CARTE BLANCHE PROTECTION TO ASSOCIATIONSContinued from page 35


discharging an obligation to maintain and

repair common areas. (Ibid.) The record

contains no evidence the board selected

Aamong means when it responded to each

of the Affans’ nine sewage eruptions by

simply hiring a plumber to snake their drain.

[189 Cal.App.4th 930, 943.]

In addition to the foregoing, the

Court of Appeal swiftly dispensed with

the erroneous conclusion by the trial

court regarding Huntington by a terse

explanation that Lamden applies only to

associations and not to managing agents.

And the Court of Appeal did not even

discuss the attorneys’ fees issue. It simply

stated that as to the appeal and cross-

appeal challenging the trial court’s decision

not to award attorneys’ fees to either party,

the judgment is reversed. 189 Cal.App.4th

930, 945.

The Portofino Cove case is instructive

for associations, their lawyers, and

community managers. It clarifies the extent

and limits of the Supreme Court’s Lamden

decision. It provides clear guidance for

pleading and proving application of

Lamden’s judicial deference rule as an

affirmative defense. And it illustrates

the judiciary’s intolerance for gross

mismanagement. Throughout the Portofino

Cove decision, the court’s disdain for the

reckless series of Portofino Cove boards

shirking their responsibilities was palpable.

Expert testimony based on investigation

undertaken some three years after the

Affans filed suit was treated as too little, too

late (not to mention that the expert testified

the association took the wrong steps in

2005 to address the situation when it finally

did do so at Huntington’s urging.) The

Court of Appeal did not appear to blame

Huntington for the years of neglect by the

association preceding its tenure. Rather,

Huntington’s fate in the litigation was simply

left for retrial.

Lauri Croce, Esq., is the Senior Associate with Joel M. Kriger, APC, the Community Association Division of Anderson & Kriger LLP.

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ACCOUNTANTSSonnenberg & CompanyLeonard Sonnenberg ............... 858-457-5252 fax 858-457-2211 [email protected] www.sonnenbergcpas.com

ATTORNEYSAnderson & KrigerJanet Wilcox ............................. 619-589-8800 fax 619-464-2600 [email protected] www.a-khoa.com

Epsten Grinnell & Howell, APCJon Epsten, Esq. ...................... 858-527-0111 fax 858-527-1531 [email protected] www.epsten.com

Fenton Grant Mayfield Kaneda & Litt, LLPKaty Krupp ................................ 949-554-0700 fax 949-554-0707 [email protected] www.fentongrant.com

Greco Traficante Schulz & Brick, APCPeter Schulz .............................. 619-234-3660 fax 619-234-0626 [email protected] www.gtlaw.cc

Peters & Freedman, LLPDavid M. Peters ........................ 760-436-3441 fax 760-436-3442 www.hoalaw.com

Law Offices of Richard SalpietraRick Salpietra ............................ 858-756-2233 fax 858-759-9938 [email protected] www.salpietra.com

Ward & Hagen, LLPKirk Yake .................................... 858-847-0505 fax 858-847-0105 [email protected] www.wardhagen.com

BUILDING MAINTENANCE PROGRAMSProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

COMMUNITY ASSOCIATION MANAGEMENTAssociated Professional ServicesNeal Chazin .....................619-299-6899 x101 fax 619-299-8242 [email protected] www.apsmanagement.com

S.H.E. Manages Properties, Inc.Karen Martinez, CCAM..........................................619-291-6300 x 320 fax 619-291-8300 [email protected] www.shemanages.com

Walters ManagementJoe Farinelli .............................. 858-495-0900 fax 858-495-0909 [email protected] www.waltersmanagement.com

Curtis Management CompanyPatrick S. Campbell, CCAM ...... 877-587-9844 fax 858-587-9972 [email protected] www.curtismanagement.com

CONSULTINGCurtis Management Company Patrick S. Campbell, CCAM ...... 877-587-9844 fax 858-587-9972 [email protected] www.curtismanagement.com

CONSTRUCTION MANAGEMENTSullivan Construction ManagementPat Sullivan ................................ 619-722-7580 fax 866-306-6804 [email protected]

DECKING & DECK COATINGProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

WICR, Inc.Kelly Durham ............................ 760-327-8641 fax 760-327-8642 [email protected] www.WICR.net

EMERGENCY RESTORATION SVCS.Clean Earth RestorationsRachel Roberts ......................... 619-284-4239 fax 619-284-4279 [email protected] www.cleanearthrestorations.com

FACILITIES ENGINEERINGProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

FENCING/GATESFenceworks, Inc. Tom Barrett ............................... 760-724-8131 fax 760-724-2513 [email protected] www.fenceworks.us

ProTec Building Services, Inc.Julie Villelli ................................ 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

FINANCIAL SERVICESCurtis Management Company Patrick S. Campbell, CCAM .... 877-587-9844 fax 858-587-9972 [email protected] www.curtismanagement.com

First BankJan Hickenbottom ................... 800-848-6771 fax 949-477-0255 [email protected] www.FirstBankHOA.com

Mutual of Omaha Bank / CondoCertsCyndi Koester ........................... 949-235-8498 fax 888-493-1973 [email protected] www.cabanc.com

Pacific Western BankKen Carteron ............................ 760-432-1335 fax 760-432-1339 [email protected] www.pwbonline.com

Popular Association BankingLarry Hooper ............................. 714-864-5171 fax 714-864-5190 [email protected] www.bpop.com

Union Bank of CaliforniaMichelle Hill .............................. 800-669-8659 fax 951-281-1449 [email protected] www.unionbank.com

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MAINTENANCE & REPAIRProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

GENERAL CONTRACTORSDel Mar PacificMichael Bruce ........................... 858-792-1500 fax 858-792-0076 [email protected] www.delmarpacific.com

ProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

GRAFFITI REMOVALProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

INSURANCEBerg Insurance AgencyKimberly Lilley, CMCA, CIRMS ...800-989-7990 fax 949-586-9877 [email protected] www.berginsurance.com

JANITORIALProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

LANDSCAPE MAINTENANCE AND/OR CONSTRUCTIONLaBahn’s LandscapingMichael Salsberry ..................... 619-579-9151 fax 619-461-0814 [email protected] www.labahns.com

Pacific Green Landscape, Inc.Stephanie Lundstrom .............. 619-390-9962 fax 619-390-0865 [email protected] www.pacificgreenlandscape.com

Steven Smith LandscapeGigi Golden-Smith ................... 760-745-9916 fax 760-745-1982 [email protected] www.stevensmithlandscape.com

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LIGHTINGProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

PAINTING CONTRACTORSPro-Tech PaintingChris Cena ................................ 858-527-0200 fax 858-527-0220 [email protected] www.pro-techpainting.com

PEST CONTROLPayne Pest ManagementJason Payne .............................. 858-277-2228 fax 858-277-2212 [email protected] www.paynepestmgmt.com

PLAYGROUND AUDITS & INSPECTIONSProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

RAINGUTTER/DOWNSPOUT CLEANINGProTec Building Services, Inc.Julie Villeli ................................. 858-569-1080 fax 858-569-1088 [email protected] www.goprotec.com

RESERVE STUDIESAssociation Reserves San Diego LLCMatthew Swain, RS .................. 619-567-5239 fax 619-568-3564 [email protected] www.reservestudy.com

Sonnenberg & CompanyLeonard Sonnenberg ............... 858-457-5252 fax 858-457-2211 [email protected] www.sonnenbergcpas.com

ROOFINGPremier RoofingBill Capito ................................. 619-667-4565 fax 619-667-1281 [email protected] www.premierroofingca.com

SECURITY SERVICESBald Eagle SecurityDmitriy Todorov ........................ 619-230-0022 fax 619-230-6610 [email protected] www.baldeaglesecurity.com

TOWINGWestern TowingKathy Tighe ............................... 619-297-8697 fax 619-296-2822 [email protected] www.westerntowing.com

WATER SUBMETERINGCalifornia Sub-Meters Robert Anaya ............................ 858-571-8999 fax 858-571-4470 [email protected] www.calsubmeter.com

2011 Annual Educational Conference & Trade ShowWednesday,April6,2011DoubleTreeHotelMissionValley

1081 Camino del Rio SouthSuite 207San Diego, CA 92108

BronzeAnderson & Kriger

Artistic MAintenAnce

AssociAtion reserves sAn diego, LLcAv BuiLder

Berg insurAnce Agency

cLeAn eArth restorAtions

eMercon construction

FeinBerg grAnt MAyFieLd KAnedA & Litt, LLPinteriors: By design

LABAhn’s LAndscAPing

LAndsysteMs, inc.LAw oFFices oF richArd sALPietrA

MAster PLuMBing & LeAK detection

Mt. heLix Pest And terMite controL

new wAy LAndscAPe & tree service

o’conneLL LAndscAPe

PAciFic green LAndscAPe

PAtio guys

reconstruction exPerts

rodent Pest technoLogies

sBs Lien services

serviceMAster By rAPid resPonse

sKy security services

us BAnK

westturF LAndscAPe MAnAgeMent

CAI-SAN DIEGOMarketing Plan MeMbers

BRONZE

Accurate Termite & Pest Control

Arborwell


Association Reserves San Diego, LLC

AV Builder Corp.


Berg Insurance Agency


Emercon Construction

Fenceworks, Inc.

Fenton Grant Mayfield Kanada & Litt, LLP

First Bank Association Services

First California Bank


Law Offices of Richard Salpietra

Master Plumbing & Leak Detection

Mt. Helix Pest & Termite Control


O’Connell Landscape Maintenance


Personal Touch Cleaning & Maintenance, Inc.


ProTec Building Services

Pro-Tech Painting

Reconstruction Experts

SBS Lien Services

ServPro of La Jolla

Sullivan Construction Management

Summit Security

Union Bank

US Bank

Anderson & KrigerAnimal Pest Management

Landsystems, Inc.Mutual of Omaha Bank/CondoCerts

Park West Landscape Maintenance Inc.Premier Roofing CA, Inc.RSI Roofing Services, Inc.

Western Towing

GOLD

PLATINUM

Marketing Plan MeMbers2011

Peters&Freedman, L.L.P.attOrneYs at LaW

common assessment - spring 2011

Documents

afternoon educational

cid law course courtyard

adridr courtyard

cai membership courtyard

tba day

pmdp course

free legal advice courtyard

community associationsspr