Hot Topics with Jon Epsten
Some legislation concerning Associations have changed in the state of California; as an association manager it is important to stay up-to-date and understand the current legislation affecting the properties you manage. Jon Epsten shared what the hot topics are surrounding new laws and took time to discuss what they mean for Associations.
Maintenance and Repair of Exclusive Use Common Areas
New legislation tries to define where the obligation and responsibility lies to maintain and repair exclusive use common areas in a common interest development. In some cases your community CC&Rs can help define the responsibilities. If the CC&R says that homeowners are responsible for maintenance, then the Association may become obligated to take on any repairs to exclusive use common areas. Association managers should carefully review their CC&Rs so that the responsibilities are properly distributed and guidelines are clearly defined.
SB 328 outlines new regulations for Associations and the use of pesticides on the property. The new regulations state that unless the application of pesticides is done by a licensed pest control company, the association is obligated to meet a set of requirements to notify homeowners. Those requirements include:
- Anyone impacted by that application should be notified of:
- Pest or pests to be controlled
- Name and brand of pesticide
- Approximate date, time and frequency of application
- Notice must be given at least 48 hours before application
Some instances of application, such as a landscaper using products to get rid of snails can cause an association to give required notice of its pesticide use. An association is better off getting out of the business of pest control and avoid issues by hiring a licensed pest control company and leaving it to them to handle any regulation requirements.
A new statute requires managers to solicit information thirty (30) days prior to annual disclosures from the homeowners. If owner does not respond, property address is deemed as the contact address for CC&R violations, rules and regulation notices, notice of delinquent assessments, and any billing.
Any common interest development with a fully staffed gate should become aware of the changes to access. As the regulation stood before the change, anyone with a driver’s license and a sheriff or marshal badge or a registered private investigator/process server can gain access to community as long as they offered the aforementioned. What is new this year is the added access to anyone that can provide a driver’s license and is employed by office of the Attorney General, City Attorney, District Attorney, or public defender
Current FHA restrictions prohibit renting inside an HOA community to anyone for less than thirty days. Some contest the validity and legality of these restrictions, but Associations that want to get ahead of this issue should amend their CC&Rs to include transient occupancy restrictions; CC&Rs always prevail in matters of restriction validity because they are the rules that the homeowner agreed to in order to be a community member.
Associations that choose to participate or allow transient occupancy risk:
- Losing non-profit status
- Becoming subject to ADA requirements as community has been opened up to public accommodations
- Consideration as a condominium hotel
- CC&R and nuisance violations
Association managers that want to get ahead of this issue should:
- Monitor the Airbnb site or sites similar to it
- Investigate if someone is paying transient tax to the city
Insurance Certifications (Proof of Insurance)
Insurance certificates provided by contractors as proof of insurance and to name an association as additionally insured under their policy had provided ease of mind in the past, but now that piece of paper is not worth much to an association manager today. Insurance certificates shouldn’t be taken at face value because there are many caveats to contractor insurance.
- Insurance companies are not required to notify the Association of a cancelled or non-renewed policy.
- They do not outline the details of what the coverage is for an association
- No waiver of subrogation for workmans comp
- Many have condominium exclusions that policyholder may be unaware of
Some ways that an association manager can confirm or verify that the insurance information is up-to-date and adequate for work on an HOA property are:
- Send insurance certificate or policy to your own insurance agent for review
- Obtain a letter from the contractor’s insurance broker verifying the coverage outlined in the policy.
Association managers who are unclear on new laws or regulations should always consult with their legal counsel to understand how they will affect their properties. Building a relationship with your lawyer is a good practice to avoid violations and to better manage your HOAs.