California Common Interest Development

1.

An association cannot record a lien for unpaid assessments against a delinquent owner’s property until the amount owed reaches $1,800 or the amount has been delinquent for at least 12 months.

A.

True
B.

False

Correct Answer
B. False

Explanation
The above statement is a common misconception. Civil Code Section 1367.4 only places these limits on the foreclosure action itself, not on liens that are recorded to secure an interest in the owner’s debt.

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2.

Secret ballot voting is required when the members of an association vote to:

A.

Amend the governing documents.
B.

Elect or remove directors.
C.

Grant exclusive use common area.
D.

Approve new assessments above certain limits.
E.

(All of the above)

Correct Answer
E. (All of the above)

Explanation
Since July 2006, Civil Code Section 1363.03 has required secret ballot voting whenever members vote on these matters, and that same Section requires Election Rules and Regulations to be adopted by the association for any such votes to be valid. That said, there are very limited exceptions to obtaining an owner vote on granting exclusive use common area.

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3.

An association created for the purpose of managing a common interest development is subject to the provisions of the Davis-Stirling Common Interest Development Act even if it is unincorporated.

A.

True
B.

False

Correct Answer
A. True

Explanation
Civil Code Section 1351(a) defines an “Association” subject to the Act as “…a nonprofit corporation or unincorporated association created for the purpose of managing a common interest development.”

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4.

At an annual meeting of members, the vote to elect the Board of Directors is tabulated by the Inspector of Elections, who announces the three winners of the election. One of the winners was a write-in candidate who was not present and did not previously nominate herself as a candidate. Nevertheless, she must automatically be seated as a Director.

A.

True
B.

False

Correct Answer
B. False

Explanation
Candidates must accept their nomination and election to the Board of Directors. If the winner does not accept the seat on the Board, the person with the next highest number of votes must be seated. If there is no such person, then there is a vacancy on the Board, and the association's governing documents should be consulted regarding vacancies.

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5.

In budgeting for the next fiscal year, an association anticipates that it must raise regular assessments by twenty percent (20%) to cover rising costs. The association’s Declaration of Covenants, Conditions and Restrictions contains a restriction that limits increases in regular assessments to fifteen percent (15%) greater than the regular assessment for the association’s preceding fiscal year. Which of the following statements is true?

A.

The association must follow its Declaration, and it cannot raise regular assessments by more than 15%. Costs must be cut accordingly.
B.

The association does not need to follow outdated provisions of the governing documents, and it can raise assessments by any amount.
C.

The association can raise regular assessments up to 20%, but higher amounts are subject to approval by secret ballot vote of the members.
D.

All assessment increases must be approved by secret ballot vote of the members, regardless of provisions in the governing documents.

Correct Answer
C. The association can raise regular assessments up to 20%, but higher amounts are subject to approval by secret ballot vote of the members.

Explanation
Civil Code Section 1366 controls the limits of increases in assessments, and any more restrictive governing document provisions are subject to its terms. The Section sets forth a limit of a 20% increase in regular assessments before greater amounts must be approved by a secret ballot vote of the members. Exceptions are made for certain extraordinary expenses.

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6.

If an owner makes a request to install a satellite dish, the association has the option to simply deny that request if the Board of Directors determines the dish is unsightly.

A.

True
B.

False

Correct Answer
B. False

Explanation
Pursuant to the Federal Telecommunications Act and State Statute, owners have certain rights to install satellite dishes on their separate interests and exclusive use common area. While the association cannot ban satellite dishes and antennas, it can adopt Rules and Regulations to establish standards for installation and ensure that the association’s common area and residences are not compromised (e.g. the installation doesn’t pierce or attach to the common area wall, the installation is not on a balcony ledge, etc.). Aesthetic reasons alone are not a sufficient basis to deny a satellite dish request.

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7.

An owner of a unit on a lower level (“Unit A”) complains of regularly hearing loud television noise from the unit immediately above his unit (“Unit B”). The owner demands that the association intervene on his behalf. However, no other owners have complained about the alleged noise. The association should:

A.

Ignore the demand.
B.

Call the two owners to a hearing and fine the owner of Unit B if appropriate.
C.

Ask the owner of Unit A to record the noise he hears.
D.

Immediately demand the owner of Unit B cease causing the nuisance or legal action will be taken by the association.
E.

Inform the owner of Unit A that this is a neighbor-to-neighbor issue and the Board will not intervene.

Correct Answer
E. Inform the owner of Unit A that this is a neighbor-to-neighbor issue and the Board will not intervene.

Explanation
Each owner has the power to individually enforce the nuisance provisions in the association’s declaration against other owners. Generally, the board of directors should resolve to stay out of matters that do not affect the community at large and are instead best categorized as neighbor-to-neighbor issues. However, note that resolving not to get involved and informing the owner of Unit A of same is different than simply doing nothing. That said, the association can try to help resolve the dispute as the Board deems appropriate.

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8.

Prior to an open board meeting, proper notice is given along with an agenda of what the board plans to address at the meeting. On the day of the meeting, an issue arises that requires immediate action by the board. The board may identify the issue to the members in attendance at the meeting and vote whether to address the issue at the meeting.

A.

True
B.

False

Correct Answer
A. True

Explanation
Among other exceptions to the requirement that all agenda items must be contained in the notice of the board meeting, Civil Code Section 1363.05(i)(4)(ii) allows the board to hold such a vote, and if two thirds of the board vote in favor, the board may address the issue at the meeting.

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