Friday, February 24, 2017

Ballot Tampering

QUESTION: We have a director who was caught alone with ballots, shredding envelopes and making identifying marks on the inner envelopes. Can you shed some light on ballot tampering and what we can do if the director is elected to the board?

 
ANSWER: It’s appropriate that your question falls on the 40th anniversary of Watergate.
Election Standards. The California Legislature set clear election standards for tamper-free elections. It did so by requiring double sealed-envelopes (Civ. Code §5115), independent inspectors of election (Civ. Code §5110), and public opening of  ballots and tabulation of votes (Civ. Code §5120). Associations are also required to adopt election rules to meet these (and other) standards. (Civ. Code §5105.)
RECOMMENDATION: If election shenanigans are discovered and the director gets himself elected, the membership has four options:
1. The easiest is to sit on their hands and do nothing. This is popular in many associations but tends to be costly–a director without ethical standards running the association.
2.  The next option is to demand a recount and an inspection of the ballots. (Civ. Code §5125.)
3. A third option is to initiate a recall. If the evidence is clear, the membership can vote the scoundrel out of office. This requires a lot of energy, especially if you have cumulative voting.
4. Assuming the evidence is strong, members can bring a civil action for injunctive relief to void the election and order a new one. (Civ. Code §5145.) This requires a lot of money. However, it may be possible to take it to small claims court. If so, the cost would be minimal.

Wednesday, February 15, 2017

Citizen's Arrest

Source: Adrian J. Adams Esq.

QUESTION: Our highrise building looks onto another highrise where a resident regularly watches porn on his big screen TV. We asked the neighboring building manager to encourage him to lower his shades. This had the opposite effect. He now leaves his shades completely open, watching in the nude and single-handedly participating. Do we have any recourse?
ANSWER: That is an ugly visual. If the porn junkie is in a building that is not part of your association, your options are limited.
Police. The police can be notified. They will talk to the resident but not arrest him unless they witnessed the illicit activity. To arrest him, you would have to accompany the police to the building and make a citizen’s arrest. Penal Code §837 states, “A private person may arrest another: (1) For a public offense committed or attempted in his presence…” 
Public Offense. A “public offense” is defined as a felony, misdemeanor or infraction. (Penal Code §16). Is your neighbor’s behavior a public offense? According to California Penal Code §647(a), engaging in lewd conduct in a public place is a misdemeanor.
The catch is the “public place” part of the statute. Lewd conduct by a lone adult in the privacy of his home wouldn’t normally interest the police or the courts. In your situation, your neighbor is knowingly making his conduct visible to his neighbors. Accordingly, action can be taken.
RECOMMENDATION: Before you rush over and make a citizen’s arrest, you should consider the possibility of retaliation. It’s clear your lewd neighbor does not have any boundaries. If a visit by the police does not resolve the problem, your best bet may be a strongly worded lawyer letter to the miscreant.

Monday, February 6, 2017

Spouse Eligible to Serve on Board?


Source: Adrian J. Adams Esq.

QUESTION: If a single person buys a unit and then later marries but does not have the deed to the property 
changed to include the spouse, is the spouse eligible to serve on the board of directors?
 
ANSWER: Whether the spouse can serve on the board depends on director qualifications contained in your bylaws. If your bylaws require that all directors be members of the association, then the spouse is not eligible to serve on the board because she is not an owner. 
Percent Ownership. Although not true in all cases, a great deal of mischief can be done by those who get around membership requirements by transferring a 1% interest or even half of 1% to a spouse so that person can serve on board. They often have a personal agenda and can be disruptive and unreasonable until they get what they want. Hence, our firm (i) includes a minimum ownership requirement of 10% when we amend bylaws to add director qualifications and (ii) disallows co-owners from serving on the board at the same time.
FEEDBACK
Free Speech #1. I love reading your newsletter please don’t stop. -Denise E.
Free Speech #2. You failed to mention that the First Amendment is a check on governmental censorship and not private action. The reason the HOA cannot regulate possession or viewing of porn in private is the right to privacy under the California Constitution, not the First Amendment. I agree that when the viewing of porn spills over into the common area or interferes with another’s right to quiet enjoyment, the HOA can regulate it. -Bill R.
Free Speech #3. “Do members have the right to watch porn in the privacy of their units? Of course.” However, this in-home porn watching does not extend to child porn. Under federal law, 18 USC 2252 and 2252A, the mere possession of child pornography–book, magazine, periodical, film, videotape, computer disk, or any other material that contains an image of child pornography–could land the possessor in prison for up to 10 years (first offense) and 40 years (if prior sex-related conviction). -Barry P.

Wednesday, February 1, 2017

FHA Loan a Civil Right?

Source: Adrian J. Adams Esq.


Ken Harney writes an award-winning, nationally syndicated column for the Washington Post on “The Nation’s Housing.” On January 27, he interviewed me for an article he was writing about the vulnerability of associations to discrimination claims related to FHA certification.
His interest was triggered in part by an article I wrote last November about an Ohio Civil Rights Commission investigation of alleged familial discrimination when a condo board declined a single mother’s request to certify the development for FHA financing (so she could buy a unit).
After a six-month investigation, Ohio’s CRC found insufficient evidence the association had violated the law. However, they left open the door that the buyer could file an action in federal court for disparate impact discrimination. If that were to happen, the Department of Justice could pursue the matter against the association.
Ken Harney noted that the current administration has already aggressively pursued disparate impact discrimination against mortgage companies. In other words, condominium associations could be open to civil rights claims for not seeking FHA certification because their decision has the practical effect of discriminating against minorities. To read the article, see “Condo Boards Could Face Discrimination Claims.”
RECOMMENDATION: As I noted in last year’s article, any decision not to seek FHA certification must be based on non-discriminatory reasons, which should then be recorded in the board’s meeting minutes. Boards should seek legal assistance drafting the board resolution before it is recorded in the minutes.

Friday, January 27, 2017

Airbnb Rentals Along the Coast



Airbnb is an online service that connects short-term renters (STRs) with people who 
have rooms or homes to rent on a daily or weekly basis.
Hotels & Cities. The site has grown spectacularly since its founding in 2008 so much so that 50,000 renters per night are using Airbnb. This is costing hotels $450 million per year, depriving cities of $226 million in tax revenues per year, and removing tens of thousands of homes from the long-term rental market.
Impact on Associations. HOA owners and investors have jumped into the lucrative market and are using Airbnb to create a steady stream of weekend rentals in violation of their CC&Rs. Such rentals significantly burden associations, some of which resulted in litigation. The court of appeals  recognized the burden created by STRs:
That short-term renters cost the Association more than long-term renters or permanent residents is not only supported by the evidence but experience and common sense places the matter beyond debate. Short-term renters use the common facilities more intensely; they take more staff time in giving directions and information and enforcing the rules; and they are less careful in using the common facilities because they are not concerned with the long-term consequences of abuse. (Watts v. Oak Shores.)
Other problems include security breaches, vandalism, litter and higher maintenance costs.
Typical CC&R Restrictions. STR restrictions are understandable since associations are intended to be stable communities with homeowners occupying units. To that end, almost all CC&Rs prohibit STRs. They often contain language prohibiting hotel-like use of residences as well as requirements that rentals be for at least 30 days, six months or one year.
Coastal Commission. The enforcement of STR restrictions has taken a twist for associations along the coast. The hyperactive California Coastal Commission has taken steps to prevent associations from enforcing their CC&Rs by threatening large, punitive fines.
The Coastal Commission argues that its heavy-handed approach increases the public’s access to the water. My firm obtained documents from the Coastal Commission where they cite tenuous authorizing language under the California Coastal Act for their actions. We reviewed the law and flatly disagree with their interpretation.
RECOMMENDATION. If your association gets a “cease and desist” letter from the Commission, you should immediately contact legal counsel. If you have questions about restricting short-term rentals, contact me.

Wednesday, January 18, 2017

Condo Board President Makes History



Here is an interesting bit of trivia. We can credit (or blame) a condo board president for making Donald Trump President of the United States.
Kellyanne Conway is a campaign manager, strategist, and pollster. Trump met Conway when she served on the condominium board at the Trump World Tower in Manhattan.
According to a Washington Post interview, Trump would show up at board meetings to hear residents’ concerns. He liked how Conway handled board meetings and followed her career managing political campaigns.
When the time was right, Trump convinced Ms. Conway to run his campaign. Thanks to her steady hand, Mr. Trump is now choosing his cabinet and meeting world leaders.
NOTE: I’ve known for years that if you can successfully run a condo board, you can do anything.

Monday, January 9, 2017

Missing Board Resolution



QUESTION: We have a board resolution dated April 17, 2013, signed by the secretary. But there is no 

mention of this resolution either in the agenda or the approved minutes for this date. I am curious if the resolution is in force nonetheless.
ANSWER: Yes, the resolution is likely in force. The fact that it was signed by the secretary and is part of your corporate records indicates it was authorized by the board. Another indicator of authenticity is if the resolution has been enforced by prior boards.
If you wish, you can reaffirm the resolution at your next board meeting and include it in the minutes. If you do, you should add background information about it being passed in 2013 and the board is simply correcting the record. If, on the other hand the current board is unhappy with the resolution, it can vote to rescind it.

Friday, January 6, 2017

Board Meeting Agendas



QUESTION:

Section 4930 of the Civil Code provides for an agenda to be included with notices but it does not provide a definition of agenda or what the bare bones requirements for one are. I hope your firm will be able to expound an answer.
ANSWER: There are two statutes that refer to agendas:
Notice of a board meeting shall contain the agenda for the meeting. (Civ. Code §4920(d).)
[T]he board may not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was distributed…” (Civ. Code §4930(a).)
Legislators often leave a lot unsaid when they enact laws. They either assume we know what they are talking about or they misjudged things. If nobody can agree on what a statute means, the courts sometimes weigh in. In this case, I don’t think we need a judge to tell us what an agenda means.
Definition. Black’s Law Dictionary defines “agenda” as “items of business or discussion to be brought up at a meeting.” I checked Robert’s Rules of Order but didn’t find anything useful. I then checked the Complete Idiot’s Guide to Parliamentary Procedure and found the following:
If you really want to manage your meeting, you need an agenda. With an agenda, the specific items that are expected to come up at a meeting are placed into the order of business.
How detailed should an open meeting agenda be? It needs to contain enough information so members can easily understand what will be discussed at the board meeting.
Maintenance Issues. For example, if the board intends to discuss installation of a new landscape sprinkler system, reroofing a building, and repainting the clubhouse, a generic agenda item called “Maintenance” is not enough. No one reading the posted agenda will have any idea what that means. The agenda should list each item of business. That way, members can decide if they want to attend and give their opinions during open forum. See sample agenda for open meetings.
Executive Session. Notice of executive session meetings must also contain an agenda. (Civ. Code §4920(d).) Because executive sessions are confidential and topics are generally noted in open meeting minutes (Civ. Code §4935(e)), agenda descriptions are more circumspect. See sample agenda for executive sessions.
RECOMMENDATION. To learn more about parliamentary procedure, I don’t recommend buying the unabridged Robert’s Rules of Order. All you need is a simplified version that covers the basics. Amazon.com has a variety of materials you can purchase.

Wednesday, December 28, 2016

Election Apathy & Quorum Requirements

QUESTION:

We have spent a countless amount of money in the election process trying to meet quorum. How many attempts does the HOA need to make before the current board just continues/rolls over as the board?
ANSWER: There is no required number of attempts to meet quorum. If it is clear the membership is not interested in participating, the board can stop. For example, if you have 100 units and only 9 send in their ballots, it’s pretty clear no one is interested, which means reaching a 50% or even 30% quorum may not be achievable.
I had a large association with a 15% quorum requirement that could not get more that 12% participation no matter how hard they tried. We sought and received court approval of the 12% so they could open and count ballots.
If quorum is within striking distance, directors should put in the effort to round up more votes. If not, the board does not need to waste time, money, and energy trying to get members to participate. The existing board can continue in office and appoint replacements if they are anxious to step down.

RECOMMENDATION: Associations should amend their bylaws to eliminate cumulative voting and quorum requirements for the election of directors. Apathy will make it difficult to get the amendment passed but it’s worth the effort. 

Monday, December 19, 2016

Illegal & Unethical





QUESTION:
Our association recently recovered funds from a lawsuit which the homeowners were charged a special assessment. The board opted to place the funds in the reserve account rather than reimburse the homeowners for their payments. Is this ethical or legal?
ANSWER: Unless the board promised to reimburse owners or somehow made it a condition of the special assessment, it is neither illegal nor unethical to put the money in the reserve account.
Reserve Funding. In fact, not doing so may be imprudent if your reserves are badly underfunded. Failing to fund the reserve account now could result in special assessments later when large repairs are needed and reserves are insufficient. Then everyone would rail against the board for not funding the reserves.
Who Gets the Money? Also, for those units sold after the special assessment but before the recovery, who gets the money? Does it go to the ones who paid it but no longer have a legal interest in the association or the ones who bought units and lay claim to the reimbursement? That could get messy.
RECOMMENDATION: Prudent fiscal management is one of the duties of the board. If you disagree with how they are handling the association’s money, you should consider running for the board.

Wednesday, December 14, 2016

Seating Arrangement




QUESTION: Is there a seating protocol for board members on the dais? Is it appropriate for the manager and attorney to be seated on the dais? What is common practice?
ANSWER: There is no seating protocol that I’m aware of. I checked Robert’s Rules of Order and found nothing on the subject.
Seating Arrangements. I’ve been in meetings where the board, manager and attorney were (i) on an elevated dais with everyone facing the audience, (ii) seated at tables in a “u” shape (common with larger boards), (iii) seated at a round table with the backs of some directors to the audience, (iv)  seated randomly in comfy chairs in someone’s living room, and (v) seated in folding chairs on one side of a pool and the audience on the other side (a quasi separation of church and state–if you could walk on water, you could join the board). My favorite is where the board met in the alley next to a dumpster and everyone stood (it made for very short meetings).
On A Dais. When the board meets on a dais facing the audience, the most common position for the manager and attorney is at the end of the table. The second most common is for the attorney to be seated next to the president so he/she can consult with the attorney as-needed during the course of the meeting.

RECOMMENDATION: Generally, the larger the association, the more formal the seating arrangements. Boards should pick one that is comfortable for them.

Friday, December 9, 2016

Election Confidential


QUESTION:For Christmas, I gave out gag gifts to my fellow board members–a condom for the men and an early pregnancy test kit for the ladies. The recipients are all over 65; most are in their 70s. A week later I received a letter from our HOA attorney accusing me of sexual harassment. At a meet the candidates forum, a shareholder asked a question that referenced the content of the letter. Do I have any protection from this confidential letter being shared?
ANSWER: If there is one thing I’ve learned, it’s that people like to talk–especially when directors behave badly. Your options are quite limited. No court is going to order people to stop talking about you. Can you sue for defamation? If members truthfully describe what you did, you would spend a lot of money and lose. Moreover, your litigation would alienate everyone and they would talk about you, your prank, and your lawsuit endlessly.
RECOMMENDATION: If you want to run for the board and win, you should own-up to your gag and apologize for it. If members believe your apology is sincere, you have a better chance of winning their votes.

Wednesday, November 30, 2016

Absentee Half-Owner on the Board


QUESTION: Does a member have to hold 100% title in the unit to be eligible for the
board of directors? If the candidate shares 50% title with another and does not reside in the unit but leases it, is the member eligible to run for board?
ANSWER: Unless your governing documents state otherwise, directors do not need to be members. That means someone not on title can serve on the board.
Ownership Interest. If your governing documents require directors to be members but don’t set an percentage ownership interest, someone with a 1% interest can serve on the board. When I restate documents for associations, I set a minimum ownership interest of 10%. That way, directors have more of a stake in keeping the development in good shape.
Residency Requirement. If your governing documents are silent, then residency is not a requirement for someone to serve on the board. I include this as an option when restating bylaws. Some associations want it. For others, it may be an impossible requirement if the development is a resort with few if any permanent residents.

RECOMMENDATION: Most associations lack sufficient director qualifications and need to update their bylaws to meet current Davis-Stirling election requirements. Contact me if you need assistance.

Monday, November 21, 2016

Commercial CID Rule Change

Source: Adrian J. Adams Esq.
QUESTION
: If the board of a commercial CID changes their collection policy, does it require 30-day review and comment period like residential associations?
ANSWER: For commercial and industrial common interest developments there is no notice or 30-day review requirement for adopting and revising operating rules.
In the Commercial CID Act, the procedure for adopting rules is determined by the development’s governing documents. If your documents require advance notice to the membership and a 30-day review period, then you must do so. If your governing documents are silent, the board may adopt rules by a motion at a board meeting. The rules immediately become effective upon notice to the membership.
RECOMMENDATION: Even if not required by your governing documents, it is still a good idea to notify the membership of any proposed rule change. Members like to stay informed and it gives the board a chance to find out if there are any serious problems with the rule change.
Thank you to attorney Wayne D. Louvier for researching this issue. Wayne works out of our Orange County office.

Friday, November 18, 2016

Re-mailing The Budget Package

QUESTION: We invariably receive budget packages and other disclosure information back in the mail due to member address changes. Are we obligated to resend this information to the new addresses, or are they considered “delivered” per the Mailbox Rule?
ANSWER: Under the “mailbox rule,” when a letter “properly directed is proved to have been either put into the post-office or delivered to the postman, it is presumed . . . that it reached its destination at the regular time, and was received by the person to whom it was addressed.” (Rosenthal v. Walker, 111 U.S. 185, 193 (1884); Civ. Code §4050(b).)
Negligence. In your case, the presumption is lost because you know the annual budget report was not received–it was returned to you. The reason for the failed mailing was the owner’s negligence in not keeping you informed of his/her address change. Members who fail to keep their contact information updated still have a right to the budget report but you can charge them for the additional cost of re-mailing it.
RECOMMENDATION: If you have the budget package in digital form and the owner authorizes it, you can email it. That avoids any disputes over extra mailing costs.

Wednesday, November 9, 2016

Ham Radio Towers

Source: Adrian J. Adams Esq.
One of the purposes of an association is to protect property values. In addition to maintenance, HOAs 
regulate what people do with their property, i.e., no boats parked on the front lawn, paint your house, don’t install large unsightly antennas, etc.
Bills in Congress. Unfortunately, there are bills in congress that would eliminate HOA restrictions on ham radio masts and towers.
Negative ImpactRobert Browning, a radio enthusiast with a General Class Amateur Radio license, examined the impact of the bills and believes voiding HOA restrictions would be detrimental to communities. He made the following observations:
  1. Electronics Interference. Ham operators can use either small towers or large ones. Small towers are less unsightly but require higher wattage to be effective. This can interfere with the electronics of neighbors up to several hundred feet away.

  2. Property Values. If the ham operator installs a large tower so as to avoid interfering with his neighbor’s electronics, he creates an eyesore. The bigger the tower, the more unsightly it becomes, both from size and from all the cables needed for stability. The bigger the eyesore, the more it drives down property values.
  3. Safety Issues. Large towers, if not properly secured, can topple onto neighboring properties causing injuries and damage. Safety concerns by neighbors would further depress property values.
Public Interest. Some believe the public interest requires radio towers in HOAs for emergencies. Mr. Browning argues to the contrary. He points out that emergencies (wildfires, earthquakes, hurricanes, tornadoes) require ham operator to report to a particular location. Licensees who volunteer have ready-to-go radio kits called “go-bags” with portable radios, batteries, generators, portable masts and antennas. Thus, there is no need for radio towers in homeowners associations.
Needless Burden. Mr. Browning further observed that other emergency responders do not burden their neighbors with the tools of their trades. For example, paramedics and EMTs do not drive ambulances home, nor do police officers or tow truck drivers. In conclusion, the legislation is unduly burdensome and produces no true public benefit. To read Robert Browning’s report in its entirety, see his White Paper.
RECOMMENDATION: To protect their property values, readers should urge federal legislators to oppose ham radio legislation. CAI has made it easy to send an email to legislators by providing a link with prepared language. It takes only seconds to send. Click here to send an email.

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Monday, October 31, 2016

Declarant Language In Documents

QUESTION: Our CC&Rs and bylaws have never been revised. In a number of provisions, powers are given to the “Declarant.” Since the builder has been gone for over 20 years, should these provisions be removed from our documents?
ANSWER: Yes they should.
Declarant Defined. As defined by the Davis-Stirling Act, a “declarant” is one who creates the original documents that govern the association. (Civ. Code §4130.) Declarants normally give themselves a great deal of power and voting rights so they can complete the development and sell units without interference from homeowners.
Confusing. Declarant language can be very confusing to directors and members alike. Is the association a successor to the declarant? Does the association have the powers of the declarant? Is the association allowed to modify or delete declarant language? In short, the association is not a successor to the developer and does not have a declarant’s powers. And yes, associations can delete declarant provisions once the builder no longer has an interest in the development.
RECOMMENDATION. Associations should, at some point, updatetheir documents. When they do, declarant language should be deleted along with all the legalese that goes with it. It gives you the opportunity to clarify maintenance issues (always a source of conflict and potential liability), add director qualifications, incorporate changes in the law, and make the documents easier to read.

Tuesday, October 25, 2016

Inspecting Garbage

Source: Adrian J. Adams Esq. 

QUESTION: Our condos have an ongoing problem with residents not placing their garbage bags properly into the bins. This creates a mess when workers move the bins because bags break and spread garbage around. Can the board inspect the bag’s contents for the purpose of identifying who is causing the problem?
ANSWER: Yes you can. People have no reasonable expectation of privacy when they put their trash in a public area. (California v. Greenwood, 486 U.S. 35 (1988).) Trash collectors, the homeless, neighbors, the police, anyone can go through garbage once an owner puts it in a trash bin. Therefore, a board can go through the trash to identify who is causing the problem.

RECOMMENDATION: Board members or staff digging through trash is unsanitary and unseemly. If you want to catch scofflaws, you should install a camera in the trash area. Don’t use hidden cameras. Highly visible cameras help deter bad behavior. Hidden cameras not only offend people, they reveal things you may not want to know.

Friday, October 21, 2016

Motions At Membership Meeting

Source: Adrian J. Adams Esq.

QUESTION: I am under the impression that homeowners can make motions at their annual meeting; am I
 correct?

ANSWER:
 Pre-2006, you could make motions but that effectively ended with changes to the Davis-Stirling Act.

Robert’s Rules
. Under Civil Code §5000(a) membership meetings must be conducted using parliamentary procedures. The most common procedure is Robert’s Rules of Order, which allows members to make motions from the floor. In the “old days” a member could make a motion at the annual meeting. Once it was seconded and debated, it could be put to a vote. I chaired many a meeting where motions were made and votes taken by a voice vote (ayes and nays) or a show of hands.
Davis-Stirling Act. Everything changed in 2006 with Civil Code §1363.03 (now §§5000-5145) which established procedures for elections. Under Civil Code §5100(a), significant votes such as approval of special assessments, election and removal of directors, governing document amendments and the grant of exclusive use common areas requires an Inspector of Elections (Civ. Code §5110) and secret balloting for not less than 30 days (Civ. Code §5115). This procedure effectively precludes all but incidental matters from floor votes. Even incidental matters are problematic.
Color Change. With the advent of mail-in ballots, few members attend meetings any more. In a 100-unit association, sixty members might send in ballots, thereby establishing quorum for the meeting, but only nine members might actually attend. If one person makes a motion to change the color of all buildings from earth tones to navy blue and five vote for the change and four against, does the motion pass? I don’t believe it does.
No Prior Notice. How can the other sixty members whose ballots established quorum vote on the color change since they were not present to hear the motion? I don’t believe the matter can be raised at the meeting without prior notice to the membership. Moreover, I don’t believe approval is a majority of nine (those physically present) but rather a majority of those present in person and by ballot, i.e., a majority of sixty-nine members (60 by ballot and 9 in person). 
Assuming that approval can be accomplished by those physically present at the meeting, allowing five members to change the color scheme of the entire development would create an uproar. Members would be properly outraged since there was no prior notice of the vote.

RECOMMENDATION: Any matters of significance should be put to a vote of the entire membership via written notice and ballot rather than from the floor of an annual meeting.

Wednesday, October 12, 2016

No Due Process

Source: Adrian J. Adams Esq.

QUESTIONOur pool usage was revoked without any due process and nothing in writing. I went to use the pool one day and couldn’t get in. The president said we were banned as long as he was president and we were lucky we weren’t fined. I asked for a fine schedule but he couldn’t produce one. He said it depended on what the board saw fit for the offense. I mentioned the Davis-Stirling Act and he said it was nothing but a guideline. He said our CC&Rs are the law. Help!
ANSWER: Ah, where to start?
The Law. First, the Davis-Stirling Act is not just a guideline, it’s the law. It encompasses Civil Code sections 4000 through 6150. Violations by the board can result in lawsuits, fines, court orders and an award of attorneys’ fees. Second, your CC&Rs are not the law, they are recorded restrictions known as equitable servitudes. CC&Rs are high on the food chain but they’re a full step below the law.
Due Process. It’s entirely possible your family violated the rules, are a pain in everyone’s rear end, and deserve to have their privileges suspended. However, before any penalties can be imposed, the law requires that you first be given 10 days written notice of the violation and a hearing date so you can defend yourselves. Once the board hears the evidence and makes a decision, it has 15 days to give you its written decision.
Fine Policy. Finally, the board cannot create penalties on the fly. The board must comply with the association’s written fine policy (which must be published annually). If they don’t have a fine schedule, they can’t levy fines or suspend privileges.
RECOMMENDATION: If you’re violating the rules, you should stop. If your board is not following the law, they should start.