hoarders, board member hostility & controlling rental tenants
TRANSCRIPT
CAI – GREATER LOS ANGELES CHAPTER LUNCHEON
January 15, 2014
Trends UpdateHoarders, Board Member Hostility,
& Controlling Rental Tenants
What is a Hoarder, Exactly?
• Accumulation of “excessive” material in home without the ability to discard and let things go
• Must constitute a nuisance or hazard in order to enforce
• “Organic” materials (garbage, food, pets)• Combustibles or chemicals? Ammunition?
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Hoarders – Where is the “line”?• Fountain Valley Chateau Blanc HOA v. Dept.
of Veterans Affairs: – Senior citizen, disabled– Papers, books, clothing, boxes, debris in yard etc.– HOA’s roofing contractor: “Can’t move thru yard!”
– Fire department: “No fire hazard”
– HOA demanded removal of items from hallways, living rooms, bathroom, stairwells, etc.
– HOA sued for nuisance (fire hazard); owner countersued for “right to privacy” & CC&Rs
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Fountain Valley, cont’d:• “Virtually impossible to say Association acted
reasonably”• “Cannot dictate amount of clutter” or
“micromanage housekeeping”• ENFORCEMENT = HAZARD OR NUISANCE• Examples:
– Vermin or mold infestation (contractor confirms)
– Offensive to smell / view (documented written complaints)
– Fire hazard (fire department confirms, nearly impossible)
– Health hazard (health department confirms)
3
Hoarders – Enforcement Options
• Discipline• Involve authorities!
– Fire, health, family
– Rely on outside authority = lower liability
• Right of Entry / Abate Nuisance– Costs? Unless common area is damaged will be
deemed a penalty unless allowed by CC&Rs
• Legal Action– Permission to enter, or else TRO… do not just rely
on access rights in the CC&Rs
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Bottom Line
• Enforcement requires clear, documented nuisance or hazard
• More than “micromanaging housekeeping”• Involve professionals, authorities for
determination• Follow governing documents, with an eye
towards safety • In difficult cases, seek legal counsel ASAP
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Hostile Board Members -
• Negative effects:– Meetings– Community– Management/Vendors
– Other Board members
– Liability
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Board Member Conduct
• Code of Conduct– Disruption– Personal agendas– Maintaining order– Right to be heard
– Confidentiality
– Are the statutory requirements enough?– Is D&O coverage enhanced or impaired by the
Code of Conduct?
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TYPES OF HOSTILE BEHAVIOR
• Conflict of interest – New Davis-Stirling: “Interested Director” provisions:– Civil Code Section 5350 - January 1, 2014
• Verbal Abuse• Breach of Confidentiality• Anger management
8
Hostile Board Members -• How to control/reduce informally:
– Rely on procedures and protocols
– Firm but polite– Counseling (with or without attorney)
• Executive Session (“personnel matter”)• Document in minutes
• Letter from attorney
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Protocols: Preserve Order
• Who Runs the Meeting?– Chair/President must be in control– Problem director is President? Board may remove
as terms are fluid
• Parliamentary Procedure– Roberts Rules of Order
– Format• Discussion is through the chair• Follow Agenda• Keep on Point
• Use timer10
Counseling Board Member
• Educate Board re Fiduciary Obligations• Concept of “One Voice”
– Power resides with the Board as a whole, not individual directors
– All directors take part in healthy debate
• Each director has one vote - no veto power• Vote taken and that becomes Board’s decision• All directors must accept / support decision• Manager/attorney roles in facilitation
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Counseling/Principles
• Duty of Care – Business Judgment Rule/Corp Code 7321(a)
• Duty of Loyalty• Conflicts of Interest• Confidentiality
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Counseling Board Members
• Emphasize potential liability, effect on others– Hostile working environment claims from
employees/vendors
• Emphasize law and required protocols• Educate re Fiduciary obligations• Request Resignation• Warn of disciplinary / legal consequences
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Hostile Board Members -• Taking formal action:
– Censure/Official Reprimand• Adopt a motion or resolution
• Open or executive session? Board’s discretion
– Remove from officer position (if any)– Terminate Board Member? What do the
documents say? For cause or no cause?
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Terminating Board members• For Cause:
– Board may “declare vacant the seat” if• A court has found director of unsound mind,
convicted of felony, or if Bylaws allow for missed meetings or fail to meet qualifications Corp. Code 7221
– Any director, or certain # of members, sue to remove if:
• Fraud, dishonesty, gross abuse of authority/discretion
• Amending By-laws: Clear Qualifications!• “Good Standing,” not delinquent, Owner,• No action or litigation against association 15
Terminating Board members
• Without Cause:– Membership recall action only
• Board members can only act as individuals– Control communications – “Board” does not
initiate recall only 5% of membership
• Association-corporation has no official power to recall a director!
• Use of association media/funds: – EQUAL ACCESS– Watch expenditure of Association funds!
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Bottom Line
• Protocols and order• Counseling (with/without attorney)
– Role as Director
– Emphasize law and consequences
– Executive Session – Minutes, and/or Letter
• Action if counseling fails– Discipline, Censure, Remove from Office
– Create Executive Committee without the problem Board Member, with legal counsel only
– Terminate - Board qualifications or recall– -Legal Action = Last Resort
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Duties to Rental Tenants –
• In matters of safety/repair, etc., must act on info from tenants
• Cannot refuse to act on safety/repair issues• Association and Board duties re: safety/repair
owed to all residents alike – identity irrelevant• This includes water leaks, security, dealing
with “nuisances,” violence, harassment, etc.
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Duties to Rental Tenants –
• “Civil rights” issues apply to all occupants– Disability accommodations
• Civil Code 4760: only “member” may modify property to allow access for disabled persons
– Service animals
– Non-commercial signs
– What about pets? Civil Code 4715: “owner”– EVCS – only if “owner” accepts responsibility
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Tenants Are Subject to All Governing Documents!
• CC&Rs govern all use of the property• CC&Rs usually require leases to be subject to
the governing docs.• Bylaws relate to corporate protocols, not
usually applicable to tenants.• Rules usually apply to all residents (relate to
common areas/amenities).• Ultimately Owner responsible for Tenant’s
actions. 20
Who is a “Tenant”– Special Issues
• Definition in governing documents• Family members not on title? Is there a
lease?• Trusts/LLC’s – who is the “Owner”?• Generally no right to participate in corporation
– Meetings and vote - NO– Demanding IDR/ADR - NO
• Exceptions: – Unless qualifications prevent, tenants on Board!– Owner designates “representative” for doc review– Attend hearing by Board (or Owner, if allowed)
invitation re: tenant violations/discipline21
Tenants – Discipline
• Governing documents should specifically address– Security deposit for common area damage
• Suspension of privileges affects all residents• Sue for breach of CC&Rs?• Only recourse against Owner?
– Can CC&Rs require tenants to pay fines?
– When/how can Association evict directly?
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Rental Tenants – Bottom Line:
• In matters of safety/repair, etc., must act on info from tenants
• Owners must be informed of all communications
• Tenants are subject to governing docs!• Tenants have no right to participate in
corporation activities (with some exceptions)• OWNER ULTIMATELY RESPONSIBLE
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