If CC&Rs; Work, No Need to Redo

QUESTION: The board of directors of our homeowners association wants to hire an attorney to amend our legal documents. The board feels that since state law supersedes some of the outdated wording in the CC&Rs;, the legal documents should be revised to conform with the current state laws. Should the entire declaration and bylaws be rewritten?

ANSWER: In my opinion, it is seldom necessary to completely rewrite the CC&Rs.; I have seen several legal documents that needed to be amended to clarify the meaning of certain phrases or to correct contradicting portions of the declaration or the bylaws. Even a minor change requires careful thought, planning and the assistance of an attorney.

If you have restrictions in your CC&Rs; that are discriminatory about age or familial status, then I recommend that you discuss these with an attorney. Not all attorneys agree on this issue of amending documents to bring them into conformance with the current law. I have asked attorney David Swedelson, who specializes in representing community associations, to respond to your question. Here is Swedelson’s response:

“I have heard this question time and time again. It appears that some lawyers are telling associations that they must amend their governing documents to conform with California law. In some cases, these attorneys are preparing lengthy documents such as “Restated Declaration of Covenants, Conditions and Restrictions.” I do not believe this is what the legislature intended when they revamped community association laws through the Davis-Stirling Act. Most associations cannot spend the money, time and effort that is needed to amend or restate the governing documents, nor is it necessary under most circumstances.

“The Civil Code merely states that under certain circumstances it will take precedence over the CC&Rs.; Though it would be nice to have CC&Rs; that absolutely conform to be California law, it is not a legal requirement.

“Let’s suppose that the association does not obtain the required number of votes to amend the documents; the Civil Code would still supersede those portions of the CC&Rs; on such matters as the authority to increase assessments up to 20% of the previous year’s amount. Even though the owners might be opposed to the amendment, state law still supersedes the outdated CC&Rs; that provide for a lower assessment increase.

“If the association believes there is a problem with having CC&Rs; that are not in conformance with current laws, I suggest that the association pay a lawyer to restate them informally and distribute a document that advises the homeowners of those instances where the law supersedes their CC&Rs.;

“It is expensive to amend or restate the CC&Rs.; A lawyer must prepare the wording of the amendment, the ballot form, and all documents that need to be transmitted to the homeowners. The project could easily cost thousands of dollars. Some associations can afford the cost, while others cannot. In my opinion, associations do not necessarily have to incur this expense.

“One of the most pragmatic recommendations I can make to community association leaders is that they communicate with the homeowners. If there is a particular section of the governing documents that is superseded by the law, then advise the homeowners. If you are increasing your annual budget by 20%, even though the association’s documents provide for only 10% increases, advise the homeowners that the Civil Code grants the association board with that authority.

“In conclusion, if it works, you do not need to fix it!”

Dealing With Deadbeat

Q: I own a condominium in a small association. One of the unit owners will not pay the monthly association dues and has not paid for years. We do have a management company, but they seem unable to collect the money. We have charged the owner with penalties and attorney fees for liens, but still no payment. Is there any other legal recourse?

A: Absolutely. The next move the association can take is to send notice of foreclosure of the lien. If the owner still refuses to pay, the association can foreclose on the unit. If the management company is ineffective, there are several trustee services that specialize in the collection of delinquent community association assessments. The collection fees are added to the late charges and other fees that must be paid by the delinquent owner.

Delinquent accounts should be corrected quickly before an owner gets so far behind that it becomes impossible to pay. The board has an obligation to collect fees from everyone. When one owner is allowed to take advantage of the association in this way, it causes resentment and creates a situation where every other owner is forced to make up the difference. A large delinquency obviously has a negative impact on a small association’s cash flow.

Boards of directors should consistently enforce the association’s collection policies against every delinquent owner without exception. Otherwise, other owners have the right to criticize the board for failure to carry out this very basic responsibility.