Handling Legal Issues During a Pandemic
It seems like, in this time of uncertainty, there is a lot of conflicting information being circulated about how associations and their boards of directors should approach the day-to-day issues presented during this pandemic. Some of the information we have heard is good, and some of it not so good. Below are several common questions our firm has been fielding recently, and the advice that we are providing to our clients in dealing with them. Please note, this is the best advice available to us as of the time this article was written, but things are changing on a daily basis. Please check with one of our attorneys or your own independent legal counsel before implementing any new policies or procedures.
Question: How are we supposed to handle architectural applications during this time?
Architectural applications are a potential minefield issue because many governing documents contain a provision which requires the board or committee to approve or deny the application within a certain number of days otherwise the application is deemed approved. Similarly, regardless of what your governing documents have to say, applications for the installation of solar panels must be denied in writing within 45 days or they are deemed approved (Civil Code 714) and applications for the installation of electric vehicle charging stations must be denied in writing within 60 days or they are deemed approved (Civil Code 4745). This creates a great risk to the association where otherwise non-conforming architectural applications can possibly be deemed to have been approved simply because the board was not able to adequately meet and consider them in time during the Coronavirus pandemic. One option for resolving this issue is to ensure that your boards appoint an architectural review committee that consists of less than a quorum of the board. This way the committee can meet informally and make decisions without having to comply with all of the requirements of the Open Meeting Act which applies to board meetings. Of course, you will need to review your governing documents first to ensure that architectural decisions can be delegated to such a committee.
Question: Can our HOA still enforce parking rules, including towing vehicles?
Absolutely. There is nothing in the Governor’s order which would impact an association’s ability to enforce its parking restrictions. Whether your towing company is an exempt “essential service” still able to conduct business during the lockdown is up for that company to decide on their own. That is not a decision the board needs to make. If your tow company is up and operating then they can be called for service. Additionally, residents can always request an accommodation if they are unable to comply with the association’s parking rules due to COVID-19 or any other reason, and the board should consider those requests on a case-by-case basis as usual.
Question: Our annual meeting is around the corner, but we are supposed to be on lockdown. What should we do about that?
The current social distancing rules would prevent all but the smallest associations from holding an annual membership meeting at this time. For now, our recommendation is to suspend the membership meeting until those rules are able to be relaxed. According to Corporations Code section 7510, if the board fails to hold an annual membership meeting within 60 days after the date designated in the governing documents or within 15 months of the association’s last annual meeting then the remedy is that a court can order the meeting to be held. There is nothing in the statute which would expose the association or its board to damages or civil penalties, and we seriously doubt a judge would penalize the association for responding appropriately to a state of emergency. Postpone the meeting for now and talk to your legal counsel to evaluate the situation when those first 60 days are nearly up.
Question: Do you have any tips for handling regular board meetings?
Of course! Similar to the membership meetings, we should consider postponing any non-essential board meetings, if possible. With that said, there is an alternative built into Civil Code section 4090(b) which allows for video or teleconference board meetings to be held subject to certain criteria. Meetings can also be held solely in executive session via conference call when appropriate. Finally, California Civil Code section 4360(d) allows an association’s board to adopt emergency rules to address “an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the association” such as with the current COVID-19 pandemic. These emergency rules are effective immediately, without prior notice to the membership, and stay in effect for up to 120 days. An emergency rule can be enacted to close certain common area amenities, appoint architectural and other committees, and establish a policy for holding meetings virtually or telephonically.
Question: We have vendors and contractors who want to resume work. Can they come back yet?
Most construction activities are likely to be considered exempt as an “essential service” under the Governor’s executive order. The State’s Public Health Officer has identified workers “such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences” as essential and exempt from the stay-at-home order. With that said, the goal is to limit the number of people we come into direct or indirect contact with during this crisis. How to best effectuate that will depend on the layout of the community and whether such work can be completed without potentially impacting other residents. Owners must be responsible for staying inside to protect themselves during this time, and we cannot let the association fall into disrepair. For the most part, a contractor working in the common area will not come within six feet of a resident who is properly inside their home, however every community is different and so boards should consult with their legal counsel to address the issue. Similarly, with respect to work individual homeowners have contracted for within their homes, associations should be very careful when attempting to regulate those activities. Imposing restrictions that could, in effect, prevent the contractor from performing the work they have been contracted for could have legal consequences. Again, since any advice will depend on the underlying facts of each particular situation, boards should consult with their legal counsel to address the issue in advance.
