On use of common area space 
California Condo Law
Beth A. Grimm, HOA– Condo Attorney
December 2017  

Use of common area meeting spaces—Part 1
I've been on an elections kick lately and want to point out that there's a new law taking effect on January 1 that speaks to elections and campaigning, but that also takes inquiries about use of common area space and politicizing events to a new level.

Okay, HOAs and owners, brace yourselves. I specifically held off until the day after Christmas to pass on some tough news for HOAs in California. You can thank me now. I could've held off until after the new year, but I want boards to start to get prepared for some important changes in the law and this is a big one.

The California legislators passed a law in 2017 that exposes HOAs to some problems around use of common area spaces. The bill is SB 407 and it becomes effective January 1, 2018.

I don't think we need to go overboard in our grief, because that won't accomplish anything. What we need to do is focus on what can be done to prevent overburdening any HOA with a public or political meeting that creates risk to persons and property without requiring some reasonable protections from the party arranging the meeting.

Most commonly, homeowners and residents want to use common area space for parties, celebrations, weddings, reunions, and sometimes commercial activities like classes and home goods presentations, and sometimes HOA elections get heated.

In past years, I have provided readers in December with the gift of a sample clubhouse agreement that would protect the Association. Past agreements need to be scrapped and pay attention, and the next edition of the newsletter, I am providing you with a new one that takes into account the new law found in Civil Code section 4515.

This bill requires HOAs to allow use by owners and residents of common area spaces, clubhouses, gathering areas, etc. while at the same time taking away the right to require that the resident assume responsibility in the form of procuring a liability insurance policy or paying a security deposit to cover potential damage and cleanup.
 
I know, life is not always fair, right? Of course, I'm going to get an email from an owner who says what's wrong with me, why do I always favor the associations, and why can I sympathize with owners? That will come from someone who feels slighted at the suggestion that he or she might be denied use of any space or have to provide protection for the other HOa members if they want to use the common area space.

My point here is to not only to provide guidance for boards of HOAs, but to provide ideas that will help protect all owners who might end up paying if any meeting, rally, or other arranged event in a common area space gets out of control, or creates damages, loss, or cost to the HOA.

Remember, the HOA is all of the owners and thus when the HOA takes a hit, so do all of the owners. In presenting options, a lawyer and resource person like me should take into account the best and worst possible scenarios. I don't want to expect that this new law is going to cause great distress or lead to excessive losses, but I do want to provide you with some tools that might help with the cleanup or aftermath if there is a worst-case scenario in any HOA.

The new law
Here are the basic problems with the new law and you can find it at www.CA.gov in the section on legislation under SB 407 or in the section on new laws, after January 1, under Civil Code section 4515. I went there the day I prepared this newsletter but the California state website in these areas is under construction and I assume that is to update the laws and legislation pages. Anyway, here is what the bill basically does as taken directly from the summary of it:
 
"This bill would provide that the governing documents, including bylaws and operating rules, of a residential common interest development may not prohibit a member or resident of a common interest development from engaging in certain activities, including peacefully assembling or meeting during reasonable hours and in a reasonable manner for purposes relating to common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes.

The bill would prohibit a member or resident of a common interest development from being required to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association's insurance policy to use the association's common area for these activities.

The bill would authorize a member or resident of a common interest development who is prevented by the association or its agents from engaging in any of these activities to bring a civil or small claims court action to enjoin the enforcement of a governing document that violates this bill. The bill would authorize a court to assess a civil penalty of not more than $500 per violation."
 
And, don't cry yet, hold it ... the summary does not give you all of the "activities" the new law allows. They include, verbatim:
1.)
 Peacefully assembling or meeting with members, residents, and their invitees or guests during reasonable hours and in a reasonable manner for purposes relating to common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes.
2.)
 Inviting public officials, candidates for public office, or representatives of homeowner organizations to meet with members, residents, and others their invitees or guests and speak on matters of public interest.
3.)
 Using the common area, including the community or recreation hall or clubhouse, or, with the consent of the member, the area of a separate interest, for an assembly or meeting described in paragraph (1) or (2) when that facility or separate interest is not otherwise in use.
4.)
 Canvassing and petitioning the members, the association board, and residents for the activities described in paragraphs (1) and (2) at reasonable hours and in a reasonable manner.
5.)
 Distributing or circulating, without prior permission, information about common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes, or other issues of concern to members and residents at reasonable hours and in a reasonable manner.

The lawmakers declared this, in approving this new law.
"(a) It is the intent of the Legislature to ensure that members and residents of common interest developments have the ability to exercise their rights under law to peacefully assemble and freely communicate with one another and with others with respect to common interest development living or for social, political, or educational purposes."
 
Seems a bit self-serving, doesn't it? In trying to explain purpose, the lawmakers discussed existing California law which requires associations to provide equal time and space for people in the Association that had opposing views on any election in the HOA.

However, lawmakers opened up the forum to a much broader purpose and in doing so, especially in light of all of the attempts in the state of California and other places across the country to arrange rallies among battling contingents, it seems a potential can of worms has been opened.

I was at a luncheon recently where the law was discussed and there were lots of questions, perhaps the most absurd around whether people could invite the public to a 100 ft.² of common area space for a rally. What about parking? What about part of bodies? We have to provide this? These may or may not be valid questions. I'll discuss this more in the next issue when presenting you with a sample of house agreement. I'll touch on some possible rules an HOA might consider to avoid letting the conversation out of control like this one did. That is, of course, one of those worst possible case scenarios but I think there are some ways to prevent a disaster.
 
You need to get ahead of the curve on this one
But you do have to tread carefully and certainly should seek some legal advice if you are on a board or are an owner in an HOA and you see the potential for a volatile situation erupting in your own common area space. That said, the next newsletter that I provide will give you, at least, a sample clubhouse agreement with some terms that you might consider to protect the Association. So, be sure to watch for this gift. And you might want to forward this newsletter to some friends so they can sign up to get the free sample clubhouse agreement and discussion on possible rules to offset any potential damaging effect of this law.
 
Before you adopt any rules relating to use of common area space or adopt a clubhouse agreement for use in your Association, take heed of the provision that allows a member or resident who is prevented from engaging in any of the activities above to bring a civil or small claims court action to enjoin the enforcement of a governing document, including a bylaw and operating rule, that violates this section. Understand that the court may assess a civil penalty of up to five hundred dollars ($500) for each violation. And note a couple of very technically troubling provisions here.
 
First of all, HOAs do not generally have a legal relationship with tenants are residents; their relationship is with the owner of the home. This law seems to open up a new legal relationship whereby a resident and sue an Association because the board didn't let them sign on for a rally. Not good, something to consider in drafting rules.
 
And understand that the use of the phrase to "enjoin the enforcement of a governing document" is significant. It gives the small claims hearing officer powers that are not always authorized by law. This is the first I have seen this actual language in the Davis Stirling Act.
 
Currently, in the Davis–Stirling act, there are several areas where owners can bring a small claims action and ask for a $500 penalty. But none of the same for residents. You will find similar language in addressing violations of the open meetings act, the records inspection statutes, and the election laws for HOAs. A whole series of laws for HOA elections can be found under Civil Code section 5100 culminating in a JUDICIAL ENFORCEMENT ARTICLE which says:

5145. Judicial enforcement article
a)
 A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association, including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues. Upon a finding that the election procedures of this article, or the adoption of and adherence to rules provided by Article 5 (commencing with Section 4340) of Chapter 3, were not followed, a court may void any results of the election.
b)
 A member who prevails in a civil action to enforce the member's rights pursuant to this article shall be entitled to reasonable attorney's fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member of the association equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.
c)
 A cause of action under Sections 5100 to 5130, inclusive, with respect to access to association resources by a candidate or member advocating a point of view, the receipt of a ballot by a member, or the counting, tabulation, or reporting of, or access to, ballots for inspection and review after tabulation may be brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court.

This provision DOES NOT SAY that the small claims court officer "can enjoin" a board from holding an election or upholding an election that occurred with ignorance or violation of the existing laws. This question has created a plethora of confusion for owners who try to exercise their rights in election challenges in Small Claims Court.

For a Small Claims Court officer to approve an injunction or an order declaring some kind of specific relief, as opposed to monetary damages, the authority needs to be clear and present in the law. Note that authorizing language is present to order injunctions under 4515 (which include orders to prevent some act) but it is located in a completely different section of the Davis–Stirling Act than the actual Elections laws in the 5100 series.

This creates even more confusion and misinformation if one focuses on one particular section or the other. SB 407 did nothing to tie the two laws together, or separate or explain the dichotomy of the two different stated legal remedies.

One might now argue that the new 4515 applies to 5145 at least in the area of a Small Claims Court officer who might be scratching his or her head saying, "Do I or do I not have the right to invalidate this election because of missteps by the board in use of the common area space for the election or any campaigning?"

Or, someone who is dyslexic or tends to transpose numbers might even mix up the two statute numbers and be completely confused. I can see that coming too. One has to ask - what were they thinking? But then one has to move on and ask—so what can we do about it? That's the mode I'm in.
 
Tune in to the next E-newsletter which will come out the week after New Year's and will contain suggestions to offset risks by considering specific provisions to be added to any CLUBHOUSE use agreement or planned rallies in the common areas.

But the best advice of course will be to consult with your legal counsel before formally adopting an agreement or new rules for your specific HOA. Different circumstances may suggest very close specificity in order to avoid legal ramifications.


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