As you may know, I am the current General
Manager of the Heritage Ranch Owners'
Association, located in Paso Robles,
California.
I have been following you for many years and
have an interest in any legal advice you
provide as I believe it has a trickle effect
on all homeowners associations in
California.
Recently, I became aware of a website
associated with one of the clients you
represent, the Hidden Valley Lake
Homeowners' Association which I bookmarked
on my old computer. While searching for
this site again with my new computer, I
stumbled onto a second website, www.hvlcc.com
apparently put together by a group
of homeowners who are against certain
actions of the Hidden Valley Lake
Homeowner's Association you represent.
I was stunned to realize that many of
the issues these homeowners seem to be upset
about parallel many of the issues
that Heritage Ranch has wrestled with in the
past and the fact the www.hvlcc.com website
even make reference to a lawsuit the
Heritage Ranch Owners' Association filed
involving the current general manager of
Hidden Valley Lake Homeowners' Association
peaked my interest further.
Therefore, I researched both websites in
detail to gleam as much information as I
could which lead me to read with great
interest your opinion letter dated April 2,
2007 published on the hvlcc website
regarding the members right to vote on
capital improvements.
Frankly, when I read that opinion I was
surprised. Had I been involved with this
issue, I would have asked you all of the
following:
1) Whether there was any case law involving
homeowners associations to back up most of
your opinions
2) I would be concerned about an argument
regarding how the Reserve Studies have been
handled, voted on, disclosed, etc. and
the potential legal argument of the
definition of "capital improvements" vs.
funds accumulated in the reserve fund
3) I would be concerned about the fact a
loan is being proposed and question whether
the courts might look at this separately
from the 5% and 20% cap
4) I would be concerned if the association
plans on keeping any of the existing
amenities for any purposes vs. complete
demolition because if so, would it be
possible to justify the association's
position on this
5) I would point out that the HVL Bylaws do
not say "for any lawful purpose", they say
"for any purpose or purposes whatsoever"
(Article V, Section 5.03)
6) I would want clarification on the members
request to call a Special
Membership Meeting (not a
Special Meeting)
7) I would be concerned if any of the
proposed replacement amenities are either
being re-located or being used for any
additional or different purposes in whole or
in part than what they were established to
be used for originally
8) And, most importantly, I would ask you
wouldn't it be prudent to have the members
vote because the association and board
members are supposed to represent the
members interests, not their own.
I could not justify in my mind how it would
be conceivable to promote the position that
members have no rights to decide what method
to go about maintaining, restoring,
replacing the amenities they pay for on a
day-to-day basis that are there for their
enjoyment and pleasure to begin with.
In the state of California I could get a
petition to place something on a ballot, but
not in a homeowners association according to
your April 2, 2007 legal opinion, and I
cannot completely accept your conclusions
that the members right to petition is solely
to vote on something that is required for
them to vote on in the first place.
This sort of issue is the very thing that
drives property owners into recalls and the
like, and ultimate divides
communities instead of bringing them
together. If the goal is to create a
healthy association, I would suggest more
time is spent looking at the association's
interests as a whole, not the individuals
that run them.
Linda Richey
General Manager
805-238-9641
|
I want to both
thank you for your thoughtful email and for the
issues you have raised, and I also want to express
some level of disappointment in what I perceive,
between the lines, to be an element of hostility
towards the positions I took on behalf of the HVLA
that have evidently been published on an unofficial
HVLA website. If that perception on my part is
misplaced or mistaken, then forget that I even made
the comment.
I
actually come to this discussion from a detached and
dispassionate perspective, namely as a lawyer who
has focused his practice and his academic work
almost exclusively on the laws that govern
corporations, generally, and, as a sub-set of that
broad universe, the laws that govern nonprofit
corporations and Davis-Stirling property owner
associations.
In the beginning
(and for nonprofits and owner associations in
California the true beginning of separate laws for
such organizations begins in 1980) there were very
few laws specifically addressing the unique needs
and qualities of nonprofit organizations of any
kind. With a few minor exceptions the law that
applied to nonprofit corporations prior to 1980 was
the General Corporation Law of the State. When the
current Nonprofit Corporation Law was adopted in
1980, there was pressure by the Attorney General
representatives on the drafting committee to make
the fiduciary obligations of nonprofit boards more
stringent than the standards that apply to directors
of business corporations, but that point of view
did not carry the day and in many respects the two
laws are quite similar -- particularly insofar as
the fiduciary obligations of directors and officers
are concerned.
HERE is where the
applicable corporate law principles diverge from
the vision of those (apparently including yourself)
who want to see owner associations managed "from the
ground up", with more government and decision-making
being vested in the people and for the people:
corporations, under the current legal structure, are
more akin to oligarchies, than democracies. You may
not like that truth, but that is the structure of
our State's corporate laws. Under those laws, all
power is vested in the Board of Directors UNLESS the
state law or the governing documents give some
specific approval or veto authority to the members
(see Generally Corporations Code sections 300, 5210,
7210).
What is the check
and balance to rein in those who are elected as
directors? The answer has four elements: (i) the
power reserved to the members to elect good
directors in the first place; (ii) the power to
recall the board or individual directors if they
fail to perform properly or if they pursue programs
or make decisions that run strongly counter to their
constituency; (iii) the power of members (5% or
more) to demand that a special meeting be called by
the directors to discuss important events or
decisions facing the corporation; and (iv) perhaps
most importantly, the obligation imposed by law, on
directors to act in good faith, after reasonable
inquiry, and in a manner the directors believe to be
in the best interests of the members and the
corporation as whole. Individual members who are
pushing individual or group agendas owe no similar
duty of loyalty or good faith and they are under no
obligation to take into consideration the best
interests of everyone. Golfers can champion solely
the interests of fellow golfers; those who hate the
expense of the golf course can push to shut it down
or to charge higher greens fees, etc.
Many
HOA activists do not want to hear this, but in my
30+ years of practicing in this field I have found
most directors (or at least the majority of those
directors who are serving on the board at any given
time) to be thoughtful individuals who are truly
endeavoring to take actions and to make decisions
that are in the best interests of the community they
serve -- the interests of the community as a whole.
Conversely, I have seen a handful of instances in
which the virulent critics of the community, who
have traditionally been content to serve as "stone
throwers" from the side-lines, have managed to get
into a majority position on the board and in almost
every instance they have run their association into
the ground while implementing their slash and burn
programs, with costly and protracted litigation
(typically over firings of personnel) often being
the outcome.
Many banks will not
make loans to an association based on a pledge of
future assessment revenues as security unless and
until the Association has received a member vote to
approve a special assessment to fund the project,
with the proceeds of the assessment (sometimes
collected over a period of several years)
being dedicated to repayment of the loan. That is a
matter of policy that varies from one bank to
another, but it is often a requirement in lending to
owner associations.
Thanks again for
taking the time to get in touch.
CURTIS C. SPROUL
Attorney at Law
Sproul Trost LLP
2424 Professional Drive
Roseville, CA
95661
(916) 783-7074 direct
(916) 783-6262 main
(916) 783-6252 fax
csproul@sproullaw.com
http://www.sproullaw.com
Privileged/Confidential Information may be contained in
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-------Original Message-------
From: Linda Richey [mailto:generalmanager@hroa.us]
Sent: Monday, April 23, 2007 3:51 PM
To: Curtis C. Sproul
Subject: RE: Opinion on capital improvements
I
appreciate your response, and as you can imagine live
the life every day of misguided agendas that you
describe.
For the
very reason that I work every day at keeping the inmates
from running the asylum, is why I get frustrated when I
see the methods others use to perpetuate problems
instead of solving them. That is when "normal"
people get unfairly labeled, when in fact they are just
people trying to exercise their legitimate points of
view, which is exactly what I believe is happening at
HVL.
Since I
have been on all sides of the
fence I think it provides me the unique perspective of
seeing the "whole picture": 1) frustrated homeowner; 2)
board member; and 3) general manager. I am NOT
proposing the members run the Association, only
participate in it, and a petition circulated
representing a large number of members is a good
measurement as to when the members should have the right
to vote (which I believe is the true intent of the way
the law is written, in contrast to your opinion). Had
I been the general manager in this situation, I would
have invited you as the Association's attorney to come
to a meeting and explain your position on a more
friendly note to the community directly. Our attorneys
have done this on occasion and it works great. I would
have also advised the Board, what's the harm, let them
vote -- that would eliminate the flame that is obviously
feeding the fire at HVL. A vote would give the HVL
Board the true point of view of the "majority" of the
community and a "YES" vote would bring the support I
believe would be necessary to ultimately see these
projects through to their successful completion. I say
this because my prediction of what will end up happening
at HVL is a recall which will eventually result in
new board members coming in; then both the general
manager and you will eventually be fired. The ousted
will lash back and threats of more recalls will follow.
In the meantime, nothing will get done. (The common
excuse that the "members will never vote for anything
that costs money" doesn't fly with me either. I believe
a no vote most always signifies a lack of confidence in
those leaders who represent a community, nothing more.)
Regarding your legal opinion more specifically, it
bothered me so much that I spoke with one of our
attorneys, John Linford this morning (whom you know) and
even faxed him your opinion to review. Sorry, he agrees
with me on the interpretation of "any lawful purpose" to
mean any purpose related to the interests of a
homeowners' association, not the narrow scope you have
defined. He agrees the Bylaws for HVL are more
restrictive than you are alluding to, and, he
also discussed the Bear Valley lawsuit with me at some
length (you are familiar with) regarding limitations on
use of reserve funds that parallel many of my points to
you -- that the appellate court also apparently agreed
with also.
If you
are playing the odds that the complainers will not put
up enough money to challenge you legally that is
probably a good bet, but I will take you at your word
that is not your intent.
Wouldn't it be better if we could all spend more
time working with California legislature to make things
more clear by helping them understand "real life"
experiences from all perspectives. That way they
can write and adopt laws we can all embrace, respect,
and protect, and which will ultimately serve the needs
and desires of everyone involved. The way I believe
things are going now, the legislature is simply trying
to curtail the amount of lawsuits initiated as a result
of homeowner association issues instead of looking more
deeply at what's causing all the turmoil to begin with.
-------Original Message-------
Here are my comments in
response to your most recent email:
MEMORANDUM
To: Linda Richey
From: Curt Sproul
Date: April 23, 2007
Re: Responses and thoughts on your latest email to me (below –
my comments are in bold).
_______________________________________________________________________
I appreciate your response, and as you can imagine I live the
life every day of misguided agendas that you describe.
For the very reason that I work every day at keeping the inmates
from running the asylum, is why I get frustrated when I see the
methods others use to perpetuate problems instead of solving
them. That is when "normal" people get unfairly labeled, when
in fact they are just people trying to exercise their legitimate
points of view, which is exactly what I believe is happening at
HVL. INSTEAD OF INITIATING A RECALL, THOSE FOLKS SHOULD DECLARE
THEIR CANDIDACY (AS THEY NOW HAVE A RIGHT TO DO UNDER CIVIL CODE
SECTION 1363.03
Since I have been on all sides of the
fence I think it provides me the unique perspective of seeing
the "whole picture": 1) frustrated homeowner; 2) board member;
and 3) general manager. I am NOT proposing the members run the
Association, only participate in it, and a petition circulated
representing a large number of members is a good measurement as
to when the members should have the right to vote (which I
believe is the true intent of the way the law is written, in
contrast to your opinion). Had I been the general manager in
this situation, I would have invited you as the Association's
attorney to come to a meeting and explain your position on a
more friendly note to the community directly. Our attorneys
have done this on occasion and it works great. I would have
also advised the Board, what's the harm, let them vote --
that would eliminate the flame that is obviously feeding the
fire at HVL.
LINDA, WHAT YOU ARE RECOMMENDING IS A VERY SLIPPERY SLOPE,
INDEED. ONCE THE BOARD CAPITULATES TO UN-ELECTED FACTIONS AND
CALLS FOR A MEMBER VOTE ON AN ISSUE THAT IS CLEARLY WITHIN THE
BOARD’S PREROGATIVE, THERE IS, AT THE VERY LEAST, A CAPITULATION
OF THE BOARD’S OBLIGATION UNDER THE LAW TO MAKE INFORMED AND
REASONED DECISIONS ON BEHALF OF ALL THE MEMBERS. AT THE WORST,
THE BOARD IS ABDICATING ITS MORE INFORMED JUDGMENT ON THE MATTER
TO MEMBERS WHO ARE LIKELY TO HAVE A WIDE RANGE OF INDIVIDUAL
FOCUS AND ATTENTION TO THE ISSUES AT HAND, NOT TO MENTION
PERSONAL AGENDAS. I RECOMMEND THAT YOU READ THE CALIFORNIA
SUPREME COURT’S DECISION IN THE LAMDEN CASE WHICH I WILL
PDF TO YOU. THE BOARD IN THAT CASE WAS FACED WITH A DECISION ON
HOW TO BEST DEAL WITH A TERMITE PROBLEM – SPOT TREATMENT OR TENT
ALL THE BUILDINGS AND RELOCATE THE RESIDENTS AT GREAT EXPENSE.
MRS. LAMDEN (THE PLAINTIFF AND A NON-RESIDENT WHO ACTUALLY LIVED
ON THE EAST COAST) WANTED THE ENTIRE DEVELOPMENT TENTED AND THE
BOARD DISAGREED. THE CALIFORNIA SUPREME COURT BACKED UP THE
BOARD’S JUDGMENT CALL ON THE ISSUE. WHERE DO YOU DRAW THE LINE
ON WHAT MATTERS GO TO THE MEMBERS FOR APPROVAL OR A MANDATE? IF
THE GOLF COURSE IN A COMMON INTEREST COMMUNITY REQUIRES MAJOR
WORK TO RE-SOD AND RE-SEED THE FAIRWAYS AND TO INSTALL NEW
IRRIGATION EQUIPMENT AND THE NUMBER OF OWNERS WHO ARE REGULAR
GOLFERS HOVERS AROUND 30 % TO 40% OF ALL OWNERS (THAT IS THE
TYPICAL STATISTIC IN GOLF COMMUNITIES), SHOULD THE BOARD PUT THE
REHABILITATION PROJECT TO A VOTE OF THE MEMBERS AND FOLLOW THE
WILL OF THE "MAJORITY"? REMEMBER THAT EVERYONE – GOLFERS AND
NON-GOLFERS ALIKE – VOLUNTARILY ELECTED TO BECOME PROPERTY
OWNERS AND ASSOCIATION MEMBERS.
A vote would give the HVL Board the true point of view of the
"majority" of the community HOW DO YOU KNOW THAT IT WOULD BE A
CLEAR MANDATE? MY GUESS IS THAT THOSE WHO OPPOSE THE PROJECT
WOULD TURN OUT IN DROVES AND THE REST OF THE COMMUNITY WOULD GO
ABOUT THEIR BUSINESS. ALSO THE ISSUE OR PROJECT THAT IS PUT TO
A VOTE MAY HAVE HAD ONLY MINORITY SUPPORT FROM THE INCEPTION OF
THE PROJECT -- SUCH AS GOLF, EQUESTRIAN FACILITIES, RESTAURANTS
IN THE COMMUNITY LODGE --- AND YET THEY HAVE ALWAYS BEEN PART OF
THE VERY FABRIC OF THE COMMUNITY. IF EVERY PROPOSAL TO FUND
PUBLIC LIBRARIES HAD TO BE APPROVED BY THE ELECTORATE, HOW MANY
LIBRARIES DO YOU THINK YOU WOULD HAVE IN THE UNITED STATES THESE
DAYS?
and a "YES" vote would bring the support I believe would be
necessary to ultimately see these projects through to their
successful completion. AT TAHOE DONNER, THERE WAS A MEMBER VOTE
THAT DEFEATED A VERY COSTLY COMMON FACILITIES EXPANSION PLAN –
THE VOTE WAS REQUIRED BY THE LENDERS WHO WOULD ONLY FINANCE THE
MULTI-YEAR FUNDING PLAN WITH A MEMBER VOTE.
I say this because my prediction of what will end up happening
at HVL is a recall which will eventually result in new board
members coming in; then both the general manager and you will
eventually be fired. THAT IS EXACTLY THE SCENARIO THAT I ALSO
ANTICIPATE IN MANY INSTANCES. IT IS THE REFORMIST BOARD THAT
RIDES INTO OFFICE AND FIRES THE MANAGER THAT GENERATES THE LAW
SUITS THAT END UP COSTING THE ASSOCIATION MORE THAN THE PROJECT
WOULD HAVE COST. THAT IS WHAT HAPPENED AT PINE MOUNTAIN LAKE AND
YOU ARE CORRECT THAT I WAS TERMINATED AS THEIR COUNSEL OF 18
YEARS. THE NEW LAWYERS RAN UP LEGAL FEES OF SEVERAL HUNDRED
THOUSAND DOLLARS DEFENDING TERMINATION SUITS, AND I AM ONCE
AGAIN COUNSEL TO THE ASSOCIATION.
The ousted will lash back and threats of more recalls will
follow. SO WHY IS THAT A GOOD REASON TO CAPITULATE TO THE MOB?
THE BOARD HAS A FIDUCIARY OBLIGATION TO GOVERN
In the meantime, nothing will get done. (The common excuse that
the "members will never vote for anything that costs money"
doesn't fly with me either. I believe a no vote most
always signifies a lack of confidence in those leaders who
represent a community, nothing more.)
Regarding your legal opinion more specifically, it bothered me
so much that I spoke with one of our attorneys, John Linford
this morning (whom you know) and even faxed him your opinion to
review. Sorry, he agrees with me on the interpretation of "any
lawful purpose" to mean any purpose related to the interests of
a homeowners' association, not the narrow scope you have
defined. I AM NOT SURE THAT JOHN AND I DISAGREE AT ALL ON THAT
ISSUE. WITH THIS RESPONSE I AM SENDING YOU SOME PAGES FROM THE
CHAPTER I WROTE IN THE BOOK ADVISING CALIFORNIA
NONPROFIT CORPORATIONS ON THIS VERY ISSUE. BEFORE I WROTE
THE TEXT THAT IS IN THE BOOK (THAT I WILL SEND TO YOU) I
CONSULTED WITH R. BRADBURY CLARK, WHOM JOHN WILL NO DOUBT
RECOGNIZE AS THE DEAN OF THE LIVING EXPERTS ON NONPROFIT
CORPORATION LAW IN THIS STATE.
I ASKED BRAD (WHO, ALONG WITH ME, SERVED ON THE COMMITTEE OF THE
STATE BAR THAT WROTE THE LAW): "WHY WASN’T THE SPECIAL MEETING
PROVISION WRITTEN TO SAY THAT FIVE PERCENT OF THE MEMBERS COULD
CALL A MEETING TO DEMAND A VOTE ON MATTERS THAT ARE SUBJECT TO
APPROVAL OR ACTION BY THE MEMBERS UNDER THE CORPORATIONS CODE OR
THE BYLAWS OF THE ORGANIZATION?" BRAD’S REPLY WAS THAT THE
SECTION WAS WRITTEN MORE BROADLY TO PERMIT FIVE PERCENT OF THE
MEMBERS TO DEMAND THAT A SPECIAL MEETING BE HELD "FOR ANY LAWFUL
PURPOSE" BECAUSE THE MEMBERS HAVE A RIGHT TO COMPEL THEIR
DIRECTORS TO ATTEND A MEETING CALLED TO DISCUSS OTHER MATTERS OF
INTEREST OR IMPORTANCE TO THE CORPORATION THAT MAY NOT INVOLVE
OR REQUIRE MEMBER ACTION. THAT SCENARIO IS NOT UNLIKE WHAT IS
HAPPENING TODAY ON THE RADIO AND TELEVISION IN THE HEARINGS AND
QUESTIONING OF ATTORNEY GENERAL ALBERTO GONZALEZ: THE "PEOPLE OF
THE UNTIED STATES" HAVE NO RIGHT TO RECALL OR REMOVE MR.
GONZALEZ, BUT THEY HAVE A RIGHT, THROUGH THEIR ELECTED
REPRESENTATIVES IN CONGRESS, TO DEMAND THAT HE EXPLAIN HIS
ACTIONS.
He agrees the Bylaws for HVL are more restrictive than you are
alluding to, and, he also discussed the Bear Valley lawsuit with
me at some length (you are familiar
with) regarding limitations on use of reserve funds
that parallel many of my points to you -- that the appellate
court also apparently agreed with also. I THOUGHT THAT THE BEAR
VALLEY SUIT WAS VERY POORLY DECIDED AND ACTUALLY GOES AGAINST
THE SUPREME COURT’S RULING IN LAMDEN. HOW CAN IT POSSIBLY
BE THAT A BOARD OF DIRECTORS, FACED WITH A FACILITY THAT WAS
UNDERSIZED TO BEGIN WITH, POORLY DESIGNED, AND AT THE END OF ITS
USEFUL LIFE, ONLY HAS THE DISCRETION AND AUTHORITY TO REPLACE
THAT FACILITY WITH SUBSTANTIALLY THE SAME FACILITY? THAT MAKES
ABSOLUTELY NO SENSE TO ME. IF YOU WERE RE-MODELING YOUR OWN
KITCHEN AND IT WAS 40 YEARS OLD AND SOME JUDGE SAID YOU COULD
ONLY REPLACE THE KITCHEN IN EXACTLY THE WAY IT WAS ORIGINALLY
CONSTRUCTED, YOU WOULD PROBABLY MOVE TO AFGHANISTAN. THE BEAR
VALLEY CASE ALSO HAD SOME UNIQUE FACTS, SUCH AS THE FACT THAT
THE RESTAURANT FACILITY IN QUESTION WAS NOT IN A COMMON FACILITY
PROPERTY OWNED BY THE ASSOCIATION.
If you are playing the odds that the complainers will not put up
enough money to challenge you legally that is probably a good
bet, but I will take you at your word that is not your intent.
Wouldn't it be better if we could all spend more time working
with California legislature to make things more clear by helping
them understand "real life" experiences from all perspectives.
That way they can write and adopt laws we can all embrace,
respect, and protect, and which will ultimately serve the needs
and desires of everyone involved. LINDA – ON THIS WE AGREE
WHOLEHEARTEDLY. BUT I BET I COME TO THIS DISCUSSION WITH A
DIFFERENT PERSPECTIVE THAN YOU DO. MANY OF THE PROVISIONS THAT
HAVE BEEN ADDED TO DAVIS-STIRLING SINCE ITS ORIGINAL PASSAGE IN
1985 HAVE BEEN WELL-INTENTIONED, BUT WRONG HEADED OR VERY POORLY
DRAFTED, IN MY OPINION. THE NEW ELECTION RULES (1363.03) FOR
EXAMPLE ARE VERY BURDENSOME FOR SMALLER ASSOCIATIONS AND TOTALLY
UNNECESSARY FOR MOST COMMERCIAL CIDs (WHO ARE NOT EXEMPT FROM
THOSE ELECTION RULES).
SIMILARLY, THE DISPUTE RESOLUTION MAZE THAT ASSOCIATIONS MUST
NOW NAVIGATE IN ORDER TO RESOLVE EVEN THE MOST MINOR OF
ASSOCIATION/OWNER DISPUTES ARE ALMOST IMPOSSIBLE TO RECONCILE,
ONE TO ANOTHER: READ CIVIL CODE SECTIONS 1363(h), 1363.810
THROUGH 13463.850, 1365.2(f), 1367.1(c) (1)(b), 1369.510 THROUGH
1369.590, AND TELL ME IF YOU KNOW WITH ASSURANCE WHICH OF THOSE
SECTIONS APPLY TO THE EXCLUSION OF THE OTHER SECTIONS?
The way I believe things are going now, the legislature is
simply trying to curtail the amount of lawsuits initiated as a
result of homeowner association issues instead of looking more
deeply at what's causing all the turmoil to begin with. IF HOAs
HAD NEVER COME ON THE LANDSCAPE, MOST LEGISLATORS WOULD BE VERY
HAPPY, INDEED. BUT CHANGES IN COMMUNITIES AND OUR SOCIETY HAPPEN
FOR A REASON AND ONE REASON WHY CIDs AND THEIR OWNER
ASSOCIATIONS DOT THE CALIFORNIA LANDSCAPE IS THE STATE’S
ADOPTION, THROUGH A VOTER INITIATIVE, OF THE VERY POPULAR LIMITS
ON REAL PROPERTY TAXATION (PROPOSITION 13). WITH NO PUBLIC MONEY
AVAILABLE TO FUND PARKS, RECREATION FACILITIES AND NEW
SUBDIVISION INFRASTRUCTURE, PROPOSITION 13 GAVE BIRTH, IN A VERY
REAL SENSE, TO MELLO-ROSS FEES (WHICH BULLET THE COST OF NEW
DEVELOPMENT SOLELY ON THE HOMES AND NEW OWNERS IN THE
DEVELOPMENT) AND PRIVATE COMMUNITIES WHERE THE FACILITIES ARE NO
LONGER PUBLIC AND MUST BE MAINTAINED BY THE PROPERTY OWNERS. THE
"NO NEW TAXES" ADVOCATES SEE PROPOSITION 13 AS THE HOLEY GRAIL
AND HOWARD JARVIS AS THE GREATEST AVENGER OF BIG GOVERNMENT, BUT
MOST OF THESE SAME CONSERVATIVES HATE HOMEOWNER ASSOCIATIONS IN
SPITE OF THE FACT THAT THE INITIATIVE THEY CHAMPION GAVE BIRTH
TO THE RENAISSANCE OF PRIVATE COMMUNITIES.
TODAY ON NATIONAL PUBLIC RADIO THERE WERE SEVERAL REPORTS ON THE
EFFORT INITIATED BY OUR ARMED FORCES TO CONSTRUCT A TWELVE FOOT
HIGH WALL THREE MILES LONG AROUND A PARTICULAR COMMUNITY OF
BAGHDAD WHERE THERE HAS BEEN A LOT OF VIOLENCE . THE PROJECT
PROMPTED CONSIDERABLE LOCAL PROTEST AND RESISTANCE AND, AS A
RESULT, THE PRIME MINISTER CALLED FOR THE PROJECT TO COME TO A
HALT. ONE U.S. PRESS RELEASE ACTUALLY SAID THAT THE PRINCIPAL
IMPETUS FOR THE WALL CONSTRUCTION PROJECT WAS TO CREATE GATED
COMMUNITIES IN IRAQ’S CAPITAL TO REDUCE THE AMOUNTS OF SECTARIAN
VIOLENCE – WE ARE NOW TRYING TO USE THE COMMON INTEREST MODEL IN
THE MIDDLE EAST AS PART OF THE BAGHDAD "CALMING PROJECT". Go
figure.
Linda
CURTIS C.
SPROUL
Attorney at Law
Sproul Trost LLP
2424 Professional Drive
Roseville, CA 95661
(916) 783-7074 direct
(916) 783-6262 main
(916) 783-6252 fax
csproul@sproullaw.com
http://www.sproullaw.com
Privileged/Confidential Information may be contained in this
message. If you are not the addressee indicated in this message (or
responsible for delivery of the message to such person), you may not
copy or deliver this message to anyone. In such case, you should
destroy this message and kindly notify the sender by reply email.
Please advise immediately if you or your employer does not consent
to Internet email for messages of this kind. Opinions, conclusions
and other information in this message that do not relate to the
official business of my firm shall be understood as neither given
nor endorsed by it.
Thank you for
everything you have sent me. I do have your book and read it from
cover to cover.
Before I sign off
from wasting any more of your time, one last shot at this...
I believe you are
thinking that I have an extreme point of view on issues related to
reserves. I do not.
I do believe the
Board of Directors has a lot of authority and power, but I also
believe in regards to capital improvement projects of the size
described at HVL, that BEGINS with open discussions and
planning before it is funded for. The process does
NOT begin by fiddling around with the
numbers on a Reserve Study in a back-room office. (Planning can
affect both existing and new amenities.)
I also want to be
clear that I have no problem with Boards deciding how to repair,
restore or replace existing amenities with
all the whistles and bells of modern conveniences, including the
right to even make the same bigger and more functional. BUT,
I believe the threshold for when a decision crosses the line, is:
1) when the amenity is moved from its original location, 2) when the
amenity is used in whole or in part for more than it was originally
built for; and/or 3) when the original amenity is also kept to be
used for another purpose.
I don't think you
would deny that the Board has the right to let the membership vote
if they want to. This isn't about the
members taking over the whole association by simply allowing them to
vote and if you are representing an election of this nature as being
unfair, how is it any more fair to elect these oligarchies who
usually never tell you what their real goals are to begin with.
They usually publish their own newspapers, run their own
elections, set up their own in-house judicial systems, hide under
the "business judgment rule" which seems to tolerate almost
anything, and get the added benefit of free legal advice on nearly
any issue -- advice which many times crosses the line between
representation of the association's interests vs. representation of
the desires of the majority of the Board in office.
Now, I am not going
to disagree with you that most Board Members have the interests of
their community at heart, or at least that's what they always tell
their lawyers... But I have rarely met a Board Member who DOESN'T
have an ulterior motive. After all, what "fool" is going to sit on
a Board and take all this abuse for free, just because they care so
much. It's almost always about power or money just like everything
else in life.
Regarding your
interpretation of legal intent, I am particularly struck by the
recent addition of Civil Code 1357.140 and the wording used in
this as it clearly parallels my
thinking: "Members of an association owning 5 percent or more of the
separate interests may call a special meeting of the members to
reverse a rule change... and hold the meeting in conformity with
Section 7511 of the Corporations Code... For the purposes of
Section 8330 of the Corporations Code, collection of signatures to
call a special meeting under this section is a purpose reasonably
related to the interests of the members of the association..."
Lastly, let me say
that the day I move to Afghanistan is the day I believe someone can
come into my kitchen and rip my whole kitchen apart, move it to some
other part of my house and add a green house I don't even want, and
do all this using my money, putting me in debt for 30 years and tell
me I have no say in what they are doing. (Conversely, I do not mind
having a maintenance agreement with someone where I pay them to keep
up my property and make reasonable decisions on my behalf
accordingly.)
Thanks a lot, it
was fun. If you are ever in Paso Robles come by for a visit. You
would be surprised to see how much Heritage Ranch has improved.
Under my watch, we practice "democracy" here every day, and it
works!
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