Blog

By Steven J. Tinnelly, Esq.

The two cases covered here are unique in that they both involve colorful scenarios in which an association’s board of directors sought to perpetuate their own power by failing to hold required elections and circumventing the will of their membership.

LAKE LINDERO HOA V. BARONE

In Lake Lindero Homeowners Association, Inc. v. Barone, (2023) 89 Cal.App.5th 834, ("Lake Lindero"), the association was properly served with a petition signed by more than 5% of its 459 members to conduct a recall election to remove the entire sitting board. After the board refused to act on the petition within the required statutory timeframe, the petitioning members exercised their rights to conduct the meeting themselves. They sent notice of the recall election to the association’s members, retained a third-party inspector of elections, and prepared/distributed the election materials to the association’s membership.

The special meeting was...

By Nicholas A. Rogers, Esq.

California Appellate Courts issued several important opinions addressing issues in community association law in 2022, including whether to award prevailing party attorney fees in an election challenge, affirming rules relating to Strategic Lawsuits Against Public Participation (SLAPP), the importance of complying with the pre-litigation Alternative Dispute Resolution (ADR) requirements, the consequence of failing to accurately complete an application for association insurance, and the role of equity in enforcement disputes.

PREVAILING PARTY ATTORNEY FEES

Artus v. Gramercy Towers Condominium Association (2022) 76 Cal.App.5th 1043

The Davis-Stirling Common Interest Development Act (CID Act) provides that in an action to enforce the governing documents, the prevailing party is awarded reasonable attorney fees and costs. A long line of published appellate opinions have affirmed a prevailing party’s right to such fees is mandatory....

By D.W. Haney, CPA (Retired)

Most HOA disputes, dysfunctions, and disruptions are due to financial and standard of care stewardship issues. Who pays what, when, and why? And unfortunately, HOA financial statements produced today are misleading and fail to reflect the community’s economic reality.

In general, HOA directors, managers, and advisors do not have the skill sets necessary to understand, analyze, and respond to the financial statement stories contained in GAAP (Generally Accepted Accounting Principles) compliant financial statements. These statements are a foreign language to most, who oftentimes do not seek the advice of financial translators and guides to help them on this important piece of the HOA journey.

One big piece in this puzzle is the Statement of Financial Position (balance sheet). Here we will examine the three different methods to tell the financial strength story: cash basis, full accrual, equity designation. (There is a fourth method on the scene...

By Stephen T. Brindle, Esq.

This article first appeared in the Winter 2022 Issue of The Communicator here.

RENTAL RESTRICTIONS

Brown v. Montage at Mission Hills, Inc.

Background: Brown bought a condominium unit to use as a vacation rental. At the time of the purchase, the association’s governing documents did not contain any restrictions regarding shortterm rentals. Sixteen years after Brown purchased the unit, the association amended its governing documents to include a 30-day minimum rental period restriction. After the association told Brown that it intended to enforce the restriction against her unless she stopped use of her unit for short-term rentals, Brown sued the association, claiming that the restriction did not apply to her because she purchased the unit prior to the effective date of the amendment. In its defense, the association claimed that the restriction was in fact a regulation, not a restriction, and also that shortterm rentals violated the...