Accell 2013 Fall Advisor

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Accell Advisor

Save the Date!

Board Member AppreciationNight

October 30, 2013

Accell Property Management

appreciates the time and energy

our volunteer Board members

put toward bettering their

communities. To say Thank

You, we would like to invite

you to our third annual Board

Member Appreciation Night.

Join us on October 30thfor hors

doeuvres, refreshments, expert

advice and prizes.

Fall Landscape PrioritiesOctober is the time to aerate turf areas. At mid-month, fertilize cool

season lawns and reseed.

Clean out v-ditches to prepare for winter rains. Avoid needless water run-

off and remove debris from drainage areas.

Summer has gone, and more moisture is in the air. Adjust the irrigation

schedules to reflect the current changes in the weather. Be water smart!

Remove diseased plant material, and cut back the native landscapes forfire safety. Make sure fuel modification zones have been cut back.

Multiply plant material in the landscape. October is the time to propagate

clumping perennials and bulbs (e.g. agapanthus, day lilies, and iris).

Bait snails in planters to rid them from planter beds.

Fall is the best time to plant trees. Trees establish roots during the winter

and start their life strong in spring with new growth above ground.

Rainy weather can bring new weeds to surface. Remove broadleaf weeds

in turf areas and spray with post emergent.

F A L L 2 0 1 3

The

By Tierra Verde Landscape, Inc.

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THE ACCELL ADVISOR FALL 2013

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Membership rights with regard to the attendance andparticipation in Board meetings is an important

component of the laws governing homeowners

associations (HOAs). Civil Code Section 1363.05,

known as the Common Interest Development Open

Meeting Act, states that any member of the [HOA]

may attend meetings of the board of directors This

right is central to keeping HOA members apprised of

the issues affecting their community and the ways in

which the Board is discharging its duties under the

HOAs governing documents.

However, one issue that surfaces from time to time

deals with the extent to which a HOA is required to

allow a member to attend a Board meeting with her

attorney, or to allow the members attorney or agent to

attend the Board meeting on the members behalf. This

issue may be complicated further if the owner of a

property (the member under the HOAs governing

documents) is an entity (i.e., a business organization or

family trust).

Fortunately, the recent case of SB Liberty, LLC v. Isla

Verde Association, Inc. (SB Liberty), will help resolve

this issue and will provide valuable guidance for HOAs

moving forward

In SB Liberty, members of the HOA, the Shorts, held

their property in a family trust and eventually in a

wholly owned LLC, SB Liberty LLC, which named the

owners as a the designation managers and officers of the

LLC.

In relation to an ongoing architectural dispute between

the Shorts and the HOA, the Shorts requested that their

attorney attend a scheduled Board meeting on their

behalves. Upon being notified by the Shorts attorney of

his anticipated attendance at the upcoming Board

meeting, the attorney for the HOA informed him that

he was not entitled to attend Board meetings, and that

his attendance at the same would violate certain ethical

rules prohibiting communications with represented

parties without the permission of their counsel. Despite

the HOAs denial, the attorney for the Shorts reiterated

his intent to attend the meeting as the representative

of his clients. On the day of the meeting, the Shorts

attorney showed up as indicated, and refused to leave,

forcing the Board to adjourn the meeting to another

location.

In response to the Boards denial, the Shorts executed a

Specific Power of Attorney granting their attorney the

right to attend board meetings on their behalf. Upon

the Boards continued refusal to allow the Shorts

attorney to attend the Board meetings, the Shorts filed

the lawsuit in question, seeking an injunction against

the HOAs refusal to grant their attorney representative

access to the meeting. The lower court found in favor of

the HOA, and Shorts appealed.

On appeal, the court found again for the HOA, noting

that under Civil Code Section 1363.05, only members

of the HOA are granted the right to attend Board

(Continued on page 4)

By Kai MacDonald, The Tinnelly Law Group

Who is Entitled to Attend Board Meetings on anOwners Behalf?

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THE ACCELL ADVISOR FALL 2013

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Governor Brown Signs Clean Up Legislation forRevised Davis-Stirling Act

By Robert M. DeNichilo of DeNichilo & Lindsley, LLP for CAI-CLAC

California Governor Jerry Brown recently signedSB 745

into law. The bill is a multi-issue omnibus bill, and as to

community associations primarily acts to clean up

some issues related to the reorganizing of the Davis-

Stirling Common Interest Development Act, which

becomes effective on Jan. 1, 2014. As enacted in 2012,AB

805 reorganized and rewrote the Davis-Stirling Act in a

new part of the California Civil Code. As often happens

with such a significant undertaking, items are

inadvertently omitted, or changes in the law are notincorporated in time to be included in the bill. SB 745

serves to rectify those types of issues.

One of the inadvertent omissions in AB 805 dealt with

how a document could be delivered to an association.

As enacted by AB 805, new Civil Code section 4035

allowed for documents to be delivered to an association

in a wide variety of ways, including email, fax or other

electronic means, or personal delivery if the association

had agreed to such methods of delivery. However, mail

was omitted as an acceptable way to deliver documentsto an association. SB 745 amends section 4035 to also

allow for delivery of documents to an association via

first-class mail, postage prepaid,registered or certifiedmail, express mail, or overnight delivery by an express

service center.

In addition, two bills were enacted in 2012, which

amended three provisions of the former Davis-Stirling

Act (which is still current until the end of 2013). As both

bills were enacted after AB 805, the provisions of those

bills were not included in the new Davis-Stirling Act. SB745 corrects this problem.

One of the issues addressed by this correction is the

requirement to have a person present at a physical

location where members of an association can listen to

the board transact business if a board meeting is held

telephonically. As enacted, AB 805 required that at least

one director be present at such a location. SB 745

amends Civil Code section 4090 to restore the option of

allowing the person required to be present to be a

director or a person designated by the board. This

gives boards some flexibility with respect to telephonic

meetings, and allows for the board to designate

someone, such as the associations manager, to be

present at a physical location for members to listen to

the board meeting rather than requiring that at least

one director be present at the location.

SB 745 also clarifies several of thenew provisions in thenew Davis Stirling Act. New Civil Code section 4205provides guidance as to which of an associations

governing documents controls if there is a conflict

among thedocuments. As enacted in AB 805, there issome ambiguity as to whether section 4205 also defines

whena conflict exists. As that was not the intention of

the legislature when it enacted AB 805, SB 745 amends

the language of section 4205 to avoid any

misunderstanding regarding the purpose and intention

of the statute.

New Civil Code section 4070 is also amended by SB 745to authorize an action that is required to be approved

by a majority of a quorum of the members at a duly held

meeting at which a quorum is present to, instead, be

approved by a majority in a duly held election in which

a quorum is represented, thereby also applying the

statute to elections conducted bywritten ballot.Lastly, SB 745 amends the form for billing disclosures,

and prohibits cancellation fees for requests for

documents, as specified.

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meetings. In relevant part, Section 1363.05 states that, any

member of the association may attend meetings of theboard of directors. Utilizing a combined analysis of 1363.05

and the definition of member set forth in the HOAs

governing documents, the court determined that the right

to attend and participate in Board meetings does not extend

to attorneys, designated representatives, or any other party,

other than the owner of the property.

The court then clarified who may attend Board meetings

where an entity, such as SB Liberty, owns property within a

HOA. Per the terms of the Corporations Code, the court

noted that the business affairs of such entities (LLCs) aremanaged by either (1) the members, or (2) the manager set

forth in the articles of organization. As such, the court

concluded that only those individuals are entitled to

represent the interests of the LLC during Board meetings.

As the Shorts attorney was not an authorized manager or

member of SB Liberty, LLC, the court determined that there

was no basis, either under California statute or the HOAs

governing documents, which supported his right to attend

the Board meetings.

THE ACCELL ADVISOR FALL 2013

Continued from page 2

In closing, the court noted that in light of their finding

that only members have a right to attend Boardmeetings, it logically followed that the Board had the

authority to determine how to conduct its meetings and

thus, the power to prevent a non-member from attending

and participating in those meetings.

lthough the courts ruling in SB Liberty provided much

needed clarification with respect to the issue of whom is

entitled to attend Board meeting, it is important to note

that governing documents vary from HOA to HOA, and

may therefore contain

language granting additionalrights or imposing further

limitations. As such, prior to

denying a non-owner, such as

an owners attorney, access to

a meeting, the Board should

erform a thorough review o

the language contained in the

governing documents, and i

necessary, seek the guidance

of the HOAs legal counsel.