“Group Homes” – Not in my neighborhood!

If you have not heard of a “group home,” chances are that you will at some time or another.

Simply stated, a “group home” is a living arrangement that serves the disabled by allowing them to live together, undergo therapy and simply provide support for one another (a group of unrelated, disabled, individuals living together in a dwelling).

The concern that frequently arises is that a “group home” is proposed either inside your HOA’s boundaries or right ‘next door.’  Without minimizing the importance and social need for group homes, the question that we hear quite frequently is “can we stop a group home” from coming into our neighborhood?”

CASE STUDY – WE WERE LUCKY:  After advising a HOA client of ours about the legal issues involved, the HOA still wanted to challenge a group home from operating inside the HOA on the basis of it being a “commercial activity” which was prohibited by the CCRs.

The owners of the group home were represented by the Utah Disability Law Center and we took them to court to stop their “commercial” activities.

I knew we were on shaky ground, I had detailed discussions with the Board about my concerns, but the HOA wanted to raise some issues that did have merit and, in the end, we filed suit to stop the group home from operating.

The District Court, did rule that the group home was conducting a commercial activity in violation of the CCRs and required them to stop.  Opposing counsel, when the ruling was announced, literally jumped out of his chair in disbelief and yelled “…but the Fair Housing Act, the Fair Housing Act!”

I too was surprised at the ruling, to be honest.  I’ll explain why below – and I knew that if appealed, the ruling could very likely be overturned.  It was not appealed, the group home was in financial distress (it turned out) and they sold the property and the issue was over.  WE WERE LUCKY.

The Federal Fair Housing Act Amendments (1988) expanded protections to individuals with all types of disabilities which, in effect, made it unlawful to enforce a “prohibition” against group homes in HOAs.  As you likely know from other Fair Housing issues you have dealt with, not every challenge, however, is a “disability” within the meaning of the Act.

If an owner of a proposed group home approaches your HOA, you can request documentation that verifies the existence of a disability related need for the home.  If it is legitimate, your HOA is now subject to the Fair Housing Act (“FHA”) and will MOST LIKLEY be required to grant a reasonable accommodation deviating from your CCRs and allowing the home (please contact us for a detailed analysis if this issue arises).

PLEASE NOTE that note all alleged group homes are protected under the FHA.

The following are NOT considered disabilities under the FHA (pay special attention to the word “current” below):

  1.  Current drug addicts (as opposed to recovering addicts);
  2.  Current substance abusers;
  3.  Current alcoholics;
  4.  Criminals;
  5.  People with bad credit; and
  6.  Sex offenders.

Please remember that standards and laws change, so the above is just a guide to encourage you to contact our office but the above categories of individuals are not deemed disabled under the FHA.

However, you can see that if the program offered by the group is NOT on the above list, then the group home will be exempt from your CCRs (“no commercial activity” restriction for example) and you will most likely be required to grant a REASONABLE ACCOMMODATION.

In my case, the District Court Judge took the plain meaning from the CCRs and said the group home was a commercial activity (for recovering addicts) and opposing counsel could not believe the ruling because the use of the home was not for one of the categories listed above.  THE RULING MOST LIKLEY WOULD HAVE BEEN OVERTURNED IF APPEALED (there were many more facts involved and my point is simply to point out the risks of challenging a group home).

A reasonable accommodation for a group home does not mean that the home is permitted and thus ‘anything goes.’

There still cannot be unreasonable behavior, etc., but the point of this entry is to let you know that a group home in a HOA presents unique issues and implicates federal law – the Fair Housing Act and must be taken very seriously.

Be very careful when a group home is proposed in your community and contact our office immediately for a thorough discussion.

We hope that all of your HOAs have started off 2018 well. I appreciate all of our valuable clients and readers of this blog.  Please contact us at any time with any issue or suggested topics to discuss.  Please check our website for upcoming “HOA University” classes or call to get on our e-mail list.   http://www.richardshoalaw.com

Thanks again to all of you – John Richards, Esq, CCAL    801-274-6800

(john@richardshoalaw.com)

New Year – New HOA?

I’m excited to create this blog first entry for 2018. The title of this entry – New Year, New HOA? – is somewhat misleading. I do not believe that any of you will be dissolving your current HOA and forming a new HOA in 2018. However, just like setting personal goals and resolutions, the new year is the perfect time for an Association to review all its operations to make sure that it is using correct practices and habits, and staying educated in the current law. In the essence, by doing this, the HOA is acting like a “new” HOA in 2018.

I’ll present this entry in the form of a checklist of issues than an HOA should think about as it heads into 2018 in order to be adequately prepared for the many types of issues your community will face. This list is not exhaustive, is for educational purposes only, and I encourage any of you to contact our office for a follow-up.

  1. Recently Turned Over From a Developer:
    • If your Association has recently been turned over from a developer, we advise that you promptly have an expert review the structural components of your buildings, common areas, amenities, roads, roofs, etc., to make sure that you have identified any potential concerns with the construction. There may not be any, but if there are, we need to know and identify them now so that we can begin a remedial course, instead of being surprised five years from now with catastrophic expenses.
    • Also, make sure that you have received adequate records from the developer. This would include contracts, receipts, banking information, governing documents, tax  ID numbers, insurance policies, previous tax filings, reserve studies, etc.
  2. Reserve Analysis:
    • Irrespective of turnover, review your reserve analysis to see if it is time for an update or a new study. The Board will be held to a standard of having a reasonable and prudent amount of money saved up to repair or replace assets via a funded reserve account. You should take every effort to review this study regularly at your Board meetings.  This is a somewhat detailed discussion which should be had in more detail.
  3. Governing Documents:
    • Most communities’ governing documents do not contain the latest statutory provisions and requirements as both the Condominium Ownership Act and the Community Association Act are drastically amended each year. It may be time for your community to update your CC&Rs and Bylaws in their entirety. Please contact our office for a bid of this process – the typical price range is between $3,700 and $4,200 for a full rewrite. Some exceptions apply.
    • If a full re-write is not necessary, there may be provisions in your governing documents that need to be amended to better conform to the desired use restrictions and policies of your community. If any amendments are desired, please contact us with the topics of any potential amendments for a consultation.   
    • Your rules and regulations should be reviewed to make sure that they are compliant with fair housing standards, applicable Utah law, and are not inconsistent with your Covenants and By-laws.
  4. Resolutions:
    • The Association should consider several key policies or resolutions that govern the activities of the Board and owners. For example, every Association should have these documents:
      • Collection Resolution
      • Document Retention Policy
      • Schedule of Fines
      • Fine Enforcement Policy
      • Covenant Enforcement Policy
      • Code of Conduct amongst members and the Board (if necessary). 
  5. Maintenance Responsibilities:
    • Irrespective of the age of the property, the Board should walk the property and note any areas over which the Association has maintenance responsibilities that may be of concern. The objective here is to identify problems as early as possible so that you are not deferring maintenance only to incur greater expenses down the road.
    • If you have any common amenity (tennis court, pool, hot tub, stream bed, clubhouse, etc.) that is not functioning, contact this office about your obligation to make sure those amenities are in working order.
  6. Insurance:
    • Carefully review your insurance policy. Utah law regarding condominium insurance drastically changed in 2014 and to this day, many condominiums are unaware of these changes. The condominium insurance covers the common property, the unit, and improvements within a unit. This can be complicated. Owners are entitled to know the Association’s master policy deductive, and if an owner experiences a loss, irrespective of fault, they are to pay the deductive and thereafter the Association policy takes over. 
    • If your community does not consist of attached roofs, and the Association has no ownership interest in the roofs, different rules apply regarding insurance. If you have any questions whatsoever, contact our office to have your policy reviewed for appropriate coverage, Directors-and-Officer insurance, and compliance with Utah code.
  7. Fining Policy:
    • As mentioned above, every Association should have a fining procedure policy. Fines have recently been addressed more clearly by statute and are divided into two categories: repeat violations and continuous violations.
    • If you have a fine policy in place and adequately give the owner notice, you only need to give notice of a violation one time, and for every violation thereafter you may directly levy a fine without further warning. There are several rules which apply to this process, but it is now much easier to levy a fine consistent with your schedule of fines. It is critical that a Board understands the correct process to levy a fine.
  8. Fair Housing Laws:
    • Every Board should take an opportunity to meet with our office to discuss current trends in fair housing laws, whether it be familial discrimination, national origin discrimination, or disability discrimination, these are topics that all Boards should be familiar with. As you can imagine, this conversation leads into discussions of companion animals, assistance animals, and so forth. Nevertheless, the Board is obligated to have a basic working knowledge of some of these key legal principles.
  9. Professional Team:
    • Surround yourself with a professional team. You are not required to be an expert in Association law. However, Board members are fiduciaries owing a duty to your members to act in the best interests of the community. This can be done by surrounding yourself with a professional team: a lawyer (on-call), an accountant, an insurance agent, and a professional property manager.
  10. Production of Records:
    • Much litigation has ensued about the keeping and production of records when an owner makes a request. You should have a document retention policy so that you know what records you need to keep, what records you need to produce, and when you can withhold certain information from your members (which is a rare occasion).
  11. Existing Violations:
    • The Association should be very conscious of existing violations in the community. Whether its related to too many renters based on a rental cap, too many large pets based on a pet policy, parking violations, or architectural and aesthetic violations. In time, an Association will lose its ability to enforce covenants if they do not consistently and uniformly enforce against others (called abandonment). The line has not been drawn in the sand as to when you will no longer be able to enforce a covenant, but you will not know if you are potentially in jeopardy of losing your ability to enforce a covenant if you are not monitoring violations.
    • As an example, I once had a case where we had to file a lawsuit to have an owner lower his shed, which was too high per the Association’s rules. In their defense, the defendant presented hundreds of pictures of other violations throughout the community – unsightly articles, unkempt conditions on balconies and decks – which were contrary to the covenants. The defendant had an argument stating that the Association was biased – they were enforcing against this specific owner about a shed height, but letting countless other owners be in violation of another covenant. These are issues the Board must be affirmatively aware of.
  12. Collections Policy:
    • The Association needs have collections policy, which will provide the Board with a uniform timeline and procedure to collect against those who are delinquent. This policy must treat every delinquent owner the same way. We suggest that Board members be educated on the collection remedies available to them: HOA lien foreclosures, demanding rent from tenants, terminating common utility services, or filing a complaint for collections.
  13. Non-Profit Status:
    • Make sure the Association’s non-profit status is current, its registered agent is currently living in the community or a professional associated with the Association, and that it is registered at the Department of Commerce on Utah’s HOA registry.
  14. Transfer or Reinvestment Fee:
    • Finally, if your Association is collecting a transfer fee or reinvestment fee, please contact this office for a discussion about what is legally required in order to impose such a fee. Some Associations are presently incorrectly collecting this fee.

The above is just a sampling of the issues a Board should be looking at in 2018. Having these fundamental issues under control puts your community in good standing for this upcoming year. Contact this office to be part of our regular HOA University course for legal updates and training on hot topics that confront all of us. Best wishes for 2018 – I look forward to working with all of you, and I appreciate the relationships we have established over the years.

Best Regards, John Richards

 

COLLECTING ………… FINES VERSUS ASSESSMENTS

I believe the following topic is one of the most important entries that I have made to date.

(By the way – my next entry will be “Defining Board Members’ Fiduciary Duties” – another extremely important topic.  If a Board is sued, a claim of Breach of Fiduciary Duty is almost always made.  STAY TUNED)

If we receive a new collections account from an association which, on the delinquent owner’s ledger, it contains fines mixed in with unpaid assessments, I become extremely concerned.

My concern, and the issue our Collections Team is prepared to review, is whether or not the association followed the statutory requirements for properly levying and collecting fines.   See Utah Code Ann. 57-8-37 (condominium fines); and 57-8a-208 (non-condominium fines).

Rest assured that our office contacts the association promptly and runs through the following checklist BEFORE we take legal action regarding a fine.  Here is our preferred order for determining whether a fine was properly levied:

  1. Determine that a legitimate ALLEGATION regarding a CCR, Bylaw or rule has been made based on receiving (1) a written complaint from an owner/member; (2) information from your management company; or (3) from personal observation of any interested party.
  2. Require that the complaining party, even if it is a Board/Committee member to certify in writing that they were a witness to the violation or have reliable information of a violation.  This has 2 practical effects:  (a)  it will keep those neighbors who just want to complain from filing a compliant unless they are serious about backing it up in writing; and (b) you now have a witness in case the matter proceeds further.
  3. Make sure that in advance of threatening an actual dollar amount for a fine, that you have both (a) fining authority in your CCRs, Bylaws or rules; and (2) that you have previously adopted a SCHEDULE OF FINES that articulates which type of behavior is subject to what fine.  Remember that a schedule of fines is required before you can levy a fine in the first place.  Contact our office promptly if you have questions about your schedule of fines – if the violation is not listed, then it not one that can be the subject of a fine.  There are ways to create a “catch all” violation and fining structure, however, so it is critical that you get this document drafted properly.
  4. Send notice to the alleged offender of the nature of the violation, the time and date it took place, evidence you have in your possession (compliant, pictures, etc.).  In this FIRST notice, you must state that the owner/tenant has 48 hours to cure the violation or fines will be levied.  You must also state that fines may be levied for continuing or repeat violations continue without any further notice.  NOTE – if the violation is a repeat violation of the same or substantially similar type, you do not need to send another notice and opportunity to cure for the next 12 months from the first notice, you simply levy a fine the next occurrence.  If the behavior is repeated again, you fine again, without the need for notice and opportunity to cure.  If the violation is a continuing violation (for example, someone covers their window in tinfoil and does not remove it after notice and a chance to cure (48 hours), then a fine may be levied every 10 days that the violation continues.  These are very new Utah laws regarding fines and notice requirements.   Feel free to contact us if you have any questions.  The procedure of noticing and levying fines, must be done strictly according to statute.
  5. In the “notice and opportunity to cure letter” you are not required to invite the owner/tenant to a hearing on the matter but you would be wise to do so.  The owner/tenant, however, may request a hearing within 30 days of receiving notice of a violation.  I suggest that you remind them of this right from the outset because, the more due process you offer someone, the greater the chance of your fine being proper.
  6. The hearing is to be conducted in accordance with the standards provided in the CCRS, Bylaws or HOA rules.  If you have no current rules for a hearing procedure, please contact us as soon as you can.  If certain procedures are not followed, you give the violator a basis to challenge the fine.  The following is a sample of what should be adopted:    (a) as mentioned above, I advise that when you send the letter informing the owner/tenant of the fine, you also invite them to a Board meeting for the hearing we’ve discussed.  That way, you can feel comfortable moving forward with the collection or enforcement of the fine knowing you offered due process.  If the violator does not show up; they have waived their hearing; (b) with respect to the meeting itself, you should welcome those who have attended, especially the offending owner (please note that this hearing can be held in executive session – with no other members present if the situation warrants it).  The minutes should reflect all those present and you must have at least a quorum of your Board in attendance (remember there are various ways to be “in attendance”).
  7. If the meeting is only to conduct a hearing (that is, it is not part of a scheduled Board meeting), simply explain that the purpose of the meeting is to determine whether or not there has been a violation of the CCRs, Bylaws or rules.
  8. The Board should have the following present at the outset of the hearing:  (a)  any witnesses or witness statements of the violation; (b) a copy of any letters of complaint or any formal complaints filed (at this juncture, you may want to redact the names of those who have filed the complaint but you may not be able to shelter names forever);’ (c) a copy of the relevant section of the governing documents that were violated.   You should point to “chapter and verse” of the provision that was violated.
  9. Once the above is met, the following question should be asked of the offending owner:  “As you know, we are conducting this hearing in order to determine whether or not there has been a violation and whether the fines should stand.  You have been notified of the allegation(s) and you now have an opportunity to explain why the association’s policies and requirements do not apply to you.”  (that is the way I ask the question – but you can obviously state it your own way – but I do encourage the idea of requiring the offending owner to explain why the fine is improper.)
  10. You then hear his or her version of the facts.   If any witnesses are present, you should ask them what they experienced.  Show pictures, letters, recordings, etc., if you have them. BOTTOM LINE:  your decision needs to be made on EVIDENCE presented not just on feelings or allegations or assumptions.
  11. I advise that you DO NOT make a decision regarding the fine at this meeting unless it is plainly obvious.  Avoid confrontation if you can; hear everyone out; and render a written decision later.  But you should commit to provide a decision by a date certain.
  12. Do not be afraid to admit that there may be mitigating circumstances or other reasons that may justify NO ENFORCEMENT of a particular violation – but be careful as you do not want to waive your ability to enforce the same type of violation in the future.
  13. Excuse the offending owner and thank him or her for their attendance.  Reiterate that you are fiduciaries for the community and you are simply trying to keep your community a desirable place to live and to help solve community problems.
  14. The Board can then deliberate then and there or set up a future meeting to discuss the issue (I advise that this be in executive session).  If the behavior is deemed, in fact, to be a violation then follow your procedures and the statue to implement the fine.
  15. You should also be prepared to discuss what to do if the fine is not paid – at some point will you file a lawsuit?  Will you just let the fine sit?  Will you record a lien?  These are all issues to be discussed with your attorney.  BE VERY CAREFUL – AND THIS IS WHERE WE SEE PROBLEMS – A FINE DOES NOT BECOME A LIEN UNTIL 180 DAYS HAVE PASSED FROM A FINAL DECISON BEING MADE THAT THE FINE WAS PROPER.
  16. AS YOU CAN SEE, THE PROBLEM WE FACE WHEN A COLLECTIONS ACCOUNT IS TURNED OVER TO OUR OFFICE AND THE LEDGER CONTAINS BOTH FINES AND UNPAID ASSESSMENTS, WE HAVE TO BE VERY CAREFUL TO ONLY LIEN FOR THE AMOUNT OF THE ASSESSMENT (WHICH CAN BE FILED IMMEDIATELY FOR AN UNPAID ASSESSMNET) UNLESS 180 DAYS HAVE PASSED SINCE THE HEARING/DECISION HAVE PASSED REGARDING THE FINE.
  17. In short, remember that fines can become liens but not as easily as unpaid assessments.  Fines are only proper after due process is given to the offending owner.  Certain procedures must be followed in the hearing and we strongly advise that you have a “Hearing Procedures Resolution” in place.  Also, do not forget the absolutely critical schedule of fines.
  18. Simply understand that when we lien the property it may not contain the amount of the fine because the above-described 180 days has not expired.  But, do not worry, you are in good hands with a firm that knows how to properly discern the amount that can be part of the lien and how to prepare the proper demand letter when a ledger contains both unpaid fines and assessments.
  19. (This is a side issue – but you need express authority to charge late fees or interest.  If you do not have that in your governing documents (for either assessments or fines) such penalties may be adopted by rule.

I know this was lengthy but we want your ledgers to be accurate and your fines to be upheld because you followed the correct procedures as required by law.

We are here to help.

Best regards, John Richards

 

Board Action Without a Meeting? Is it Legal?

Most of you will know, that those of us in the “HOA” industry have recently included open Board meeting requirements into both the Utah Condominium Ownership Act and Utah’s Community Association Act.  The main point of ‘open meetings’ is to help avoid Board actions being done without any owner participation, knowledge or involvement.  This helps avoid suspicion and sometimes abuse of authority.

As such, all HOA’s in Utah are now subject to ‘open’ Board meetings, with certain topics still allowed to be discussed in private (“executive session”).

For a closer look at the open meeting laws, see Utah Code Ann. 57-8-57 for condominium communities and Utah Code Ann. 57-8a-226.

The purpose of this entry is to discuss whether or not Boards can lawfully take action without holding a meeting at all – such as by phone call or by email?

I trust you can see both sides of this issue:  1) members may want all meetings to be open to any member that wants to attend; and 2) Board members often times need to make prompt decisions and do not have time to call a formal meetings.  How is this dilemma resolved?

Utah Code Ann. 16-6a-813 provides the answer and DOES allow Boards to take action without a meeting.  And, you guessed it, if there is no meeting, there is no owner participation.  Section 813 does not even place limitations on the type of issues that can be discussed in this type of forum or how frequently such meetings can be held.

I want to be as concise as possible, so I will refer you to Utah Code Ann. 16-6a-813 for the full text of the statute.

Here is the bottom line:

  1.  Unless your bylaws state otherwise, the Board may take action without a meeting if all of the Board members consent to the action in writing.  This means that no Board member has revoked their consent to the action; OR
  2. Unless your bylaws state otherwise, action without a meeting may be taken if notice is given in writing to each member of the Board and the notice contains a reply deadline.  Further, by the deadline stated in the notice, each member of the Board has either (a) signed a writing approving the proposed action or signed a writing against the action;  or (b) abstained in writing from voting; or (c) fails to respond or vote.
  3. After step 2 above, you now know your vote count of the Board on a given issue.  Now, we need to see if any Board member has demanded in writing that the action NOT be taken without a meeting.  If this type of demand is made, you may not continue with the action without a meeting.  You must hold a regular “live” meeting.
  4. Assuming no Board member has demanded that action NOT be taken without a meeting, then we have to look at the participation and vote.
    1. If a Board member votes in favor, obviously you count that as a YES vote for the matter;
    2. A NO vote is simply a no vote;
    3. If a Board member dose not respond by the deadline, then the effect is that of abstaining.
    4. So, you then look to your voting approval threshold for a Board vote in your Bylaws.  Let’s assume you have 5 Board members.  Notice of action without a meeting is sent around via email and a vote is requested on a topic by a certain deadline.  Also assume that your quorum for a Board is a majority of Board members, which in this case would be 3 Board members.
    5. Now assume that 2 Board members vote in favor, 1 votes against and 2 do not respond.  Do we have a binding decision?  YES.  A quorum was present (3) and a majority of a quorum (2) can take action.  2 simply abstained and are not counted.  They key is you had a quorum and a majority voted in favor.
    6. The Board is not penalized for an abstention but the entire concept of Board action without a meeting is defeated if by the deadline for a response, a Board member demands that the action be taken in a “live” meeting and not via “action without a meeting.”

In sum, even with the adoption of the open meeting laws cited above, there was never an intent to NOT allow Boards to take action without a meeting.  However, the more you use this “tool,” the more your Board may be scrutinized.  At Richards HOA Law, we advise that you use Board action without a meeting sparingly; primarily for emergencies or other urgent types of situations.  This will help avoid scrutiny from your members while allowing this important statutory provision to stay in place without someone attempting to modify it.

As always, there are details that are not addressed herein.  Each case may be different.  This blog entry is for general education purposes only and must not be relied upon as legal advice for any specific association or situation.  Please contact our offices at 801-274-6800, or email us at: john@richardshoalaw.com or simply check out our website:  http://www.richardshoalaw.com

We look forward to seeing you at our next HOA University to be noticed and held in late July, 2017.

Thanks everyone – John Richards, Esq.

NEW HOA LAW – SOLAR PANELS!!! WHAT DOES IT MEAN? 57-8a-701

I am grateful for all of my “blog” followers. Please give this website to your fellow Board/Committee members for information that we trust you will find valuable.

I have a few things to discuss for this entry:

  1.  Utah’s legislative session recently ended.  There are several bills that passed which affect all forms of HOAs in Utah.  Though not signed into law yet, all appear to become law in May 2017.
  2. If you are not on our mailing list for our firm’s education arm: “HOA UNIVERSITY” please leave a comment here and we will make sure you are on the notification list or contact our office and ask to be placed on the e-mail list for our free 1 hour educational events. (801-274-6800)
  3. Our next regular HOA University is 4/22/17.  However, with the changes in the law, we may hold a course even earlier.  Stay tuned!
  4. Despite what follows, I fully support exploring alternate energy sources.  What a fascinating state of technology awaits all of us.  I am concerned, however, that EXISTING HOAs don’t get much of a say at all regarding regulating solar panels on a go forward basis, irrespective of when your HOA was created (in other words, your Architectural Control Committee will be essentially powerless on this issue as explained below).  This bill may extremely impact the visual makeup of your community!

THIS ENTRY IS ALL ABOUT SENATE BILL 154 WHICH PASSED AND AFFECTS ALL DETACHED HOUSING COMMUNITIES (NOT CONDOMINIUMS OR ATTACHED HOMES WITH SHARED ROOFS).  TECHINICALLY, THE BILL GETS SIGNED INTO LAW ON OR ABOUT  5/9/17 AND THERE IS ALWAYS A SLIM CHANCE OF A VETO – BUT I AM VERY CONCERNED THAT THE BILL WILL BE SIGNED AND, THERFORE, I WANTED TO GIVE MY READERS A “HEADS UP” YOU CAN BE PREPARED.  (you should know however, that we have many concerns about this bill and if you are interested, there is still a chance to express your concerns to the Governor in hopes of a VETO. Please contact my office for more information)

WHAT DO I NEED TO KNOW ABOUT “SB 154 SOLAR ACCESS AMENDMENTS?”

If this bills gets signed into law (which is most likely will), you need to know (it will become Utah Code 57-8a-701):

a.  The law applies to “detached dwellings” which means a detached dwelling for which the association DOES NOT have an ownership interest in the detached dwelling roof.

b.  Except for a limited circumstance described below, and only if expressly prohibited in your CC&Rs, a governing document (bylaws, rules, etc.) MAY NOT prohibit or restrict an owner of lot with a detached roof.

c.  If the bill is signed into law AND if language is contained in your CC&Rs here is the only  “go forward” regulatory authority your HOA has with respect to solar panels or “solar energy systems:”

1.  Your CC&Rs cannot impose a restriction that (based on location for example) decreases the solar energy system’s production of solar energy by 5% or less.  (As you can see, this really means you can’t impose any meaningful restriction)

2.  Your CC&Rs cannot impose a restriction that would increase the solar energy system’s cost of installation by 5% or less.

3.  However, you can by CC&R or a rule require that the solar energy system comply with applicable health, safety and building requirements, and if it is a solar energy system that is used to heat water, you can require that the system is certified by the Solar Rating and Certification Corporation; or a nationally recognized solar certification entity.

4.  Finally, if the solar energy system is used to produce electricity, you can require that it complies with safety and performance standards established by (a) the National Electric Code; (b) the Institute of Electrical and Electronics Engineers; (c) Underwriters Laboratories; (d)  an accredited electrical testing laboratory; or (e) the state or a political subdivision of the state.

5.  Here are some aesthetic protections for the HOA:  A CC&R or rule may be created for a solar energy system that is mounted on a roof as follows:  (a) so it does not extend beyond the roof line; or (b) it can require that it has panel frame, support bracket, or visible piping or wiring that has a color or texture similar to the roof materials; or (c) if the solar energy system is mounted on the ground, you can make it so it is not visible from the street that front other lots.  (there are few more “things” an HOA can do such as review the application to install; and some unique rules applicable to indemnifying the HOA if such installation somehow causes a loss to the HOA but that is about it).

d.  This new section 57-8a-701 will apply to an Association regardless of when the Declaration was recorded (this is what our legislative group fought hard to change and my hat is off to those that tired hard to make this part of the bill).

e.  Strangely, the statute states that “this part does NOT apply to an express prohibition or an express restriction or solar energy installations if it was already in your CC&Rs and recorded before January 1, 2017; or created by official association action taken before January 1, 2017.”  You’ll note that this date has already passed.  I wonder how many CC&Rs already have a prohibition or restriction in the CC&Rs already – not many I would guess.

f.  SO WHAT CAN YOU DO – the statute does allow you to prohibit solar (that is, prohibit it in entirety – this is either an all or nothing proposition – you ban solar outright or you must allow it with very limited controls) but ony if you vote to expressly prohibited solar energy installations by a 67% of your members – so you can amend to prohibit BUT THE CONCERN IS THAT BETWEEN THE TIME WHEN THIS LAW PASSES UNTIL YOU GET A VOTE, YOU WILL HAVE INSTALLATIONS THAT YOU ESSENTIALLY CANNOT STOP.

g.  Like any amendment, an amendment to prohibit solar can be “undone” by an amendment to repeal the prohibition.

TIP:  Depending on when the Governor signs this bill into law (anticipated 5/9/17) your community may want to act NOW by voting on and recording an amendment to your CC&Rs before 5/9/17 if you want to prohibit solar panels at the present time for aesthetic or other community concerns.  You will need to examine your community aesthetics, consistent look, inform appeal, etc., to see how you might want to proceed.  You may welcome solar, or you may want to control it – but to control you are going to have to act immediately.  Contact us ASAP if you are concerned.

FINALLY – as mentioned above, a rally or other events may be organized to get the Governor’s attention.  If we cannot stop the bill, our hope would have been to make it applicable only to communities built AFTER the bill becomes law, but that is not the version that the powerful lobbyists got through.

REMEMBER – there are other bills that passed as well.  Please make sure your are on our HOA University List for all of our education events – the next one in April will be addressing all the legislation that passed.

As always, all of us at The Richards Law Office enjoy working with you, look forward to future assistance we can provide your HOAs, and appreciate our professional relationship.  Contact us at any time.

Best  Regards, John Richards

john@richardshoalaw.com

http://www.richardshoalaw.com

 

 

 

 

 

 

 

HOA Contractors & Proof of a License

I often get asked what should the minimum qualifications be when selecting a contractor.  Of course, the answer depends on the project.  In addition to being competent, and if the project is set out to be a long-term one, a personality “match” is sometimes just as important (landscapers, property managers, etc.).

However, that is not the precise issue I want to address here.

What if you hire a contractor and they are not licensed (under their applicable trade)?

First, the Board has probably breached its fiduciary duty of care in hiring someone without the proper credentials.

Still, that is not what I want to touch on.

Second, let’s assume that “you did not know” they were not licensed due to an oversight (this still does not diminish my concern about breaching your duty as a Board member) but let’s say that is the reason why…

NOW – the contractor comes to your for payment.  The problem is, however, that they have done a poor job, so poor in fact you feel that they have breached their contract with you and you (obviously) do not want to pay until it is done right.

I have heard many attorneys tell their clients “…go ahead and pay the balance of the invoice, and then sue for damages because then you have a tangible number for which you can claim as damages….”

Simply stated, be careful when this happens. If you ask them to cure the defect, they are still working without the proper license and you may get in trouble for continuing to work with them.  This is the point in time to contact both our office and Utah’s Department of Professional Licensing (DOPL).

HERE IS THE POINT:  Utah Code 58-55-604 states that a contractor may not commence or maintain any action in any court of the state for collection of compensation for performing any act for which is a license is required…

IN OTHER WORDS, IF THEY ARE NOT LICENSED WHEN THE CONTRACT WAS ENTERED INTO AND THE WORK WAS DONE – THEY CANNOT LAWFULLY SUE YOUR HOA.

Do not fall victim to their threats of court action to collect on the contract.

Contact us immediately if you find yourself in this situation for a full analysis and review of your rights.

This entry was brief but I hope if brings you some comfort if your Association faces this issue so you don’t end up paying just to avoid a suit by an unlicensed contractor.  You have significant rights and the backing of the Sate of Utah if you find yourself in this position.

Hope these entries are informative.

John Richards

http://www.richardshoalaw.com

 

 

 

 

 

Sex Offenders – Not in my HOA – Not so fast

 

I will not sugar-coat it – owners are not comfortable with a sex-offender in their community.  As you can imagine, this causes the question to be asked:  can we ban sex offenders from our community?  This topic is important comes up more than I can believe.  Please review my comments carefully as I take this situation very serious just like you.

 

AMENDING THE CCRS:  There are several factors that should be considered and it is important to note, certain risks that the Association would have to assume before amending governing documents to ban sex offenders.   Every Association that I have studied that have banned sex offenders in the CCRs have ended up in court.  I do not advise a CCR ban.

First of all, if the Association gets involved and notifies its members of the identity and residence of a registered sex offender, then this “lifelong scrutiny” amounts to something close to “double jeopardy” because the offender is being punished, once again, for a sentence already served.  This is not necessarily unlawful, but could lead to unlawful harassment as explained below.

Second, and very importantly, if the Association places a ban on registered sex offenders, it is up to the Association/Board to monitor all those residing (and visiting) within the community.  The Association assumes extreme liability if a sex crime then occurs within community and people assumed that the Association was monitoring/tracking those who moved in.   I do not advise that your Board assume this duty and liability.  Every Association that has tried this approach (no reported cases in Utah) have ended up in court as well.  It just does not appear that a ban will be enforceable as one judge said, “people have to live somewhere….”  I am mostly concerned about the safety of members but also I am concerned about Board liability.  I do not advise that you ban sex offenders as further described in this letter.

Another question you may have is “does the Association have a duty to warn of sex offenders living in the Association.

Utah law states that “members of the public are not allowed to publicize the information [contained in the sex offender registry list] or use it to harass or threaten sex offenders or members of their families; and harassment, stalking, or threats against sex offenders or their families is prohibited and doing so may violate Utah criminal laws.” (Utah Code Ann. §77-27-21.5 (21)(b), (c).

As a Board you may choose to inform your members of the Sex Offender and Kidnap Offender and Registration website.  But to avoid complications, the Board should not single out or identify any individual and should definitely not restrict the individual as a member of the Association in any way.  Our recommendation and advice is to inform members to check the Sex Offender Registration website and advise owners to be cautiously aware of their community.

We always advise the Association not to publish a list of registered sex offenders in their newsletter or post the list in the clubhouse. 

Simply let it be known where the members can get the source of information regarding sex offenders.  Be very careful, because not only can you not publicize the information contained in the registry, you cannot “use it to harass” sex offenders or their family.  The term “harass” is often interpreted broadly by courts.  Merriam-Webster says that to “harass” is “to create an unpleasant or hostile situation.”  We do not believe it will take much to constitute harassment, so the Board must be careful.

 

 The term “cautious awareness” sums up the balance a board must strike between privacy rights and community safety.  Please be cautious of creating hysteria in your community. 

I advise all readers to feel free to contact me any time to discuss this further.  If you would like further clarification or have other questions I have not addressed here I would be happy to talk more with you.

 

John Richards

http://www.richardshoalaw.com