It is important for associations to consistently enforce the key provisions in their Governing Documents. This does not always happen and some restrictions may be ignored for years without any negative effects on the community. Suddenly, new leadership is elected, and it is felt that these restrictions now need to be enforced. In extreme cases, where the restrictions have been ignored for years and violations are prevalent throughout the community, it may be impossible to revive these restrictions. In other cases, it is possible to revive the restrictions. The best process to follow is providing notice to the community that restrictions will now be enforced. A grace period should be provided where no fines are imposed for violations but only warnings. Once the grace period ends then consistent and uniform enforcement must follow. Owners who have detrimentally relied on the failure of previous leadership to enforce the restriction should be handled on a case-by-case basis. For example, if the Association had a weight limit on pets and the owner purchased a large dog, the individual should not be required to remove the pet from the community.
Joel M. Kriger, Esq.
In California, homeowner associations generally have a duty to purchase and maintain insurance policies to protect against a variety of risks. Most if not all insurance policies require their insureds to give prompt notice of a potential or actual claim. The language of the insurance policy typically places a contractual obligation on the homeowner association to “immediately” or “promptly” notify the insurance carrier. The concern is that if a potential or actual claim is not promptly tendered that the homeowner association will face a risk of loss of coverage under the insurance policy. As a general rule, it is the best practice to tender potential and actual claims as soon as possible.
However, it is also important to note that a failure to promptly notify an insurance carrier of a potential or actual claim is not necessarily fatal to obtaining coverage. Moreover, the meaning typically given to “immediate” or “prompt” notification is that notice must be given within a reasonable amount of time under the circumstances. In addition, if the insurance policy is an “occurrence” or a “claims-made” policy, then California courts have generally required the insurance carrier to demonstrate that they have suffered actual prejudice in order to avoid their contractual duties under the insurance policy.
If your homeowner association is facing a potential or actual claim triggering insurance, then we recommend consulting with the homeowner association’s legal counsel and insurance broker (or agent) promptly to assist in tendering the claim.
Bradley Schuber, Esq.
Civil Code section 5658 creates a process where disputed fines or other charges can be resolved in small claims court. Before an owner can challenge a disputed fine or charge imposed by the Association they are required to make a payment under protest. The law provides that when a dispute exists between an owner and the Association regarding any disputed charge including assessments, fines, penalties, late fees, collection costs or other monetary penalty imposed as a disciplinary measure, the owner may pay under protest the disputed amount including costs of collection, attorney fees, late charges and interest, if any, and commence an action in small claims court for its recovery. When this procedure is followed, the small claims court has jurisdiction to determine whether or not the charges were properly imposed by the Association.
Joel Kriger, Esq.