We Don’t Like Non-Resident Directors, or Pot Farms, in Our HOA

c c & rs h o a homefront reader questions Jun 04, 2018

Dear Kelly,

Are board members required have to own and live on site to become a board member? I am not finding any information on this in my CC&Rs or rules and regulations, and was wondering if you could shed some light on this question for me.

Thank you in advance,

K.Y., Downey

Dear K.Y.,

Board eligibility standards under the Corporations Code are minimal – a director cannot be a felon and cannot be declared legally incompetent by a court. HOA eligibility standards are usually found in bylaws but can also be found sometimes in the election rules. The Friars Village v. Hansing case from 2013 confirmed that eligibility standards can be placed in election rules, so long as they do not conflict with the bylaws or CC&Rs.

Some associations amend their bylaws or rules to bar directors from running for the board or serving as director if they are non-residents, have missed several meetings, are suing the HOA, or have a spouse or co-owner already serving on the board, to give some examples.

However, a bill pending in Sacramento may change all that. Senate Bill 1265, authored by Senator Wieckowski, would overturn the Friars Village v. Hansing decision. If SB 1265 becomes law, the only disqualifications for board service will be if the person is not a member, has committed a felony involving financial dishonesty, or is confirmed delinquent after an internal dispute resolution process.

If the bill becomes law, all other bylaw provisions regarding board eligibility will be voided, basically amending all bylaws. SB 1265 passed the Senate on May 30 by 25 to 12, and is now pending in the Assembly. To read the bill or contact your representative, visit www.leginfo.legislature.ca.gov.

Thanks for your question,
Kelly

Dear Mr. Richardson,

I just read your recent article regarding marijuana and HOAs and was curious if the concepts you mention could be applied to my situation: Our small subdivision in Northern California is currently struggling with commercial marijuana cultivation issues in our subdivision and we feel that the state and county are ignoring our desire for a residential-first community. Do you have any suggestions for us?

Thanks,

K.V., Rancho Navarro

Dear K.V.,

Do your association CC&R’s state that properties are only to be used for residential purposes, or is commercial use allowed? I am assuming from your question that the association is residential, and so the covenants probably recite that properties are to be used for residential purposes. CC&R’s by virtue of their recording on the properties become a “covenant running with the land,” automatically binding all owners subject to those covenants. It basically is a binding contract that nobody signed, but it still is a binding contract. CC&R’s are quite similar in their impact to an easement.

If a member of the association is violating the CC&R’s, the association is usually considered as the first option for enforcement, particularly if the violation affects other owners. While Civil Code 5975(a) also authorizes individual owners to enforce the covenants if necessary, in the common interest community, litigation should always be the very last resort. Perhaps the board can set a meeting with the owner to discuss the problem of a commercial enterprise in the association.

Sincerely,
Kelly


Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.