Association Must Answer Requests
QUESTION: When I served as treasurer of our community association, I often completed questionnaires from Realtors and lenders who requested information about the association prior to the sale or refinancing of a unit.
The new board of directors has decided that answering such forms is beyond the scope of its duties and refuses to perform this task. Does the board have the right to refuse to respond?
For the record:
12:00 a.m. May 10, 1998 For the Record
Los Angeles Times Sunday May 10, 1998 Home Edition Real Estate Part K Page 5 Real Estate Desk 6 inches; 194 words Type of Material: Correction
An editing error in the May 3 “Condo Q&A;” column may have confused some readers. Here are the question and correct answer:
Many Condos Allow Nonresidents on Board
Q: I live in an 18-unit condominium complex. One of the owners has two units, but he does not live in these units. The occupants are members of his family. He has expressed interest in buying a third unit, and he is also interested in serving on the board of directors. Can we stop him from purchasing another unit? Is it legal for him to serve on the board if he is a nonresident owner?
A: Unless there is some restriction in the governing documents that limits the number of units an individual can own, you have no means of stopping another purchase. In my opinion, it is unlikely that such a restriction will be found in your association’s documents.
Information about the qualifications for serving on the board can usually be found in your association’s bylaws, but you should carefully review the articles of incorporation and the CC&Rs; also.
Many associations have governing documents that allow any owner, either resident or nonresident, to serve on the board. Some association documents allow the elected directors to elect non-owners to serve as officers.
If a majority of the owners want to change the CC&Rs; or bylaws, the change must be accomplished according to the amendment process that is stated in the governing documents.
ANSWER: No. When the association receives a written request for information, a timely response is mandatory. Your board should seek legal advice to ensure that it is in compliance with the law.
The seller of a separate interest (unit or lot) in a community association has the obligation to provide certain documents and information to the buyer as stated in Civil Code Section 1368.
However, if the association receives a written request for this information, the association must respond within 10 days, or it may be subject to liability for damages and a civil penalty of $500.
The information that must be supplied includes all governing documents; the Articles of Incorporation (if the association is incorporated), the Declaration of Covenants, Conditions and Restrictions (CC&Rs;), bylaws, and Rules and Regulations.
If there are any age or occupancy restrictions in the governing documents, a statement must be attached that clarifies the enforceability of the age restrictions to the extent permitted by the Unruh Civil Rights Act, Civil Code Sections 51 through 53. The Federal Fair Housing Amendments Act also nullifies age restrictions unless your association qualifies as senior housing.
The association must provide a copy of the most recent annual financial report if the annual income for your association is greater than $75,000. The amount of the regular assessment, any special assessment or emergency assessment that is currently due on the unit--including late charges and other fees that could result in a lien--must be disclosed.
If this information is not provided correctly, the association may not be able to collect delinquent assessments and fees owed to the association.
In addition, any changes in the assessment amount or special assessment that has been approved by the association for future implementation must be disclosed.
If your association is aware of any construction defects, consult the attorney who is advising the association regarding the matter and include the information that is required by Civil Code 1375.
As you can see, there are many parts of the disclosure that the association is required to provide upon request. The association is allowed to charge a reasonable fee for the provision of documents and transfer fees. If you have a management company, the contract will usually specify its fee for this service.
To protect your association from liability, the board should consult an attorney who specializes in the representation of community associations and discuss all of the ramifications of disclosure information to lenders and buyers.
Many Condos Allow Nonresidents on Board
Q: I live in an 18-unit condominium complex. One of the owners has two units, but he does not live in these units. The occupants are members of his family. He has expressed interest in buying a third unit, and he is also interested in serving on the board of directors. Can we stop him from purchasing another unit? Is it legal for him to serve on the board if he is a nonresident owner?
A: Unless there is some restriction in the governing documents that limits the number of units an individual can own, you have no means of stopping another purchase. In my opinion, it is likely that such a restriction be found in your association’s documents.
Information about the qualifications for serving on the board can usually be found in your association’s bylaws, but you should carefully review the Articles of Incorporation and the CC&Rs; also.
Many associations have governing documents that allow any owner, either resident or nonresident, to serve on the board. Some association documents allow the elected directors to elect nonowners to serve as officers.
If a majority of the owners want to change the CC&Rs; or bylaws, the change must be accomplished according to the amendment process that is stated in the governing documents.
Hickenbottom is a community association management consultant and a founding director of the California Assn. of Community Managers. She selects questions of general interest for the column and regrets that she cannot respond to all questions received. Send questions to: Condo Q&A;, Box 5068, Thousand Oaks, CA 91360.
