Who’s the Boss? The National Labor Relations Board’s new standard for determining joint employment may make community associations and management companies responsible for contractors’ pay, benefits and legal liability. Review your agreements with business partners now.

By Robert M. DeNichilo, Esq., and Greg Coulter, Esq.

Reprinted with permission from CAI’s Common Ground TM magazine, September/October 2016

whos_the_boss_250_250A BOARD MEMBER OR MANAGER tells a landscape company’s employee that he or she can only work during certain hours on particular days of the week or directs the employee to plant flowers in a specific way or location. Or, if a board believes the association isn’t receiving the level of service it expects, it may try to require its management company to fire a manager or replace him or her on the account. These situations aren’t all that uncommon.

Since the association is contracting for these services, the board (and maybe its manager) probably believes the contractor—and not the association—employs those individuals. However, under certain circumstances, the association could be found to be a “joint employer” of a contractor’s employees, which means a lot more fiscal responsibility and legal liability.

In a 2015 case known as Browning-Ferris Industries of California (# 32-RC-109684), the National Labor Relations Board (NLRB) overturned a long series of cases in the collective bargaining arena. With the decision, the circumstances expanded under which an entity that contracts for services can be found to be a joint employer. The decision could have far-reaching implications for both community associations and management companies, making them responsible for the employees of landscapers, painters, managers and others who provide services to an association.

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The ABC’s of IDR & ADR

ADRDisputes between owners and associations can easily spin out of control. When those disputes result in a lawsuit, the costs, both in terms of time and money, can be significant. That is why attorneys often encourage parties to first meet and try to resolve those issues through some form of dispute resolution process before a lawsuit is filed. In fact, the law often requires that parties at least offer to meet in some form of alternative dispute resolution setting before they file a lawsuit, or they may lose the right to recover attorney’s fees even if they win the suit.

California’s Davis-Stirling Act contains several sections that address, and sometimes require, the use of the dispute resolution process before litigation can be filed. The statutory process includes (1) Internal Dispute Resolution and (2) Alternative Dispute Resolution.

Internal Dispute Resolution or “IDR” is an informal process where one or two representatives of the association (typically a board member and the association’s community manager) meet with the owner of the property at issue and try to resolve the issue informally. Civil Code section 5905 requires that associations provide a “fair, reasonable, and expeditious procedure for resolving a dispute” with members.

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LEGISLATIVE ALERT – Governor Brown signs AB 349 Banning Prohibitions on Artificial Turf

Art turfGovernor Brown has signed AB 349, an urgency statute which takes effect immediately. AB 349 amends Section 4735 of the Civil Code, and prevents associations from prohibiting the installation of artificial turf, or “any other synthetic surface that resembles grass.”

This bill also prohibits any requirement that an owner remove or reverse water-efficient landscaping measures, installed in response to a declaration of a state of emergency, upon the conclusion of the state of emergency.

As anyone who has looked into replacing natural grass with artificial turf can tell you, there are different types and quality of artificial turf available in the market. AB 349 does not prevent an association from developing and applying reasonable landscape standards, including standards regarding the installation of artificial turf, so long as the standards do not restrict or prevent the installation of artificial turf, any other synthetic surface that resembles grass, or other drought tolerant landscape.

In light of AB 349 and its immediate impact, associations which have not already done so should work quickly to develop architectural standards which allow for installation of artificial turf and “any other synthetic surface that resembles grass.” This can often best be done by working with a landscape architect who can advise the board of directors with regard to the different types of products available, and how those different products may look in community. Failure to have such standards in place may result in an association not being able to require owners seeking to install such items to install the type and quality materials which the association deems consistent with the aesthetics of the community.

LEGISLATIVE ALERT – Governor Brown signs AB 596

131754-gov-jerry-brown_1Governor Brown has signed AB 596 which, beginning July 1, 2016, requires the annual budget report of a condominium project to also include a separate statement describing the status of the association as a Federal Housing Administration (FHA) approved condominium project and as a federal Department of Veterans Affairs (VA) approved condominium project.
The statement as to the FHA certification status of the association must be in at least 10-point font on a separate piece of paper and in the following form:
“Certification by the Federal Housing Administration may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest.
This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the Federal Housing Administration.”
Similarly, the statement on the VA certification status of the association must also be in at least a 10 point font, on a separate piece of paper and in the following form:
“Certification by the federal Department of Veterans Affairs may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest.
This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the federal Department of Veterans Affairs.”
There is no requirement that the disclosure document be revised mid-year should the association’s certification status change. However, as part of the disclosure form, associations should consider including a statement indicating the date as of which the status identified on the form is accurate, and including information on the form that those interested can obtain the most currently available information by
checking the association’s certification status on-line at the FHA and VA websites.
FHA status can be checked online at U.S. Department of Housing and Urban Development website, or:
VA status can be checked at the Department of Veterans Affairs web site or:

California Regulations Mandate Stricter Maintenance Requirements for Community Association Pools

HOA PoolThis article was published in the CAI Orange County Regional Chapter’s OC View Magazine. Click Here to view the published version.

Community pools provide welcome relief from summer heat. They also impose certain obligations on operators of those pools, including community associations. Recent regulations adopted by the California Department of Health define “public pools” to include pools maintained by community associations. The most dramatic changes are set forth in Title 22 of the California Code of Regulations (the “Regulations”) which were amended effective January of 2015. Others are contained in the California Building Code contained in the California Code of Regulations, Title 24, which also were amended, effective January 2014. Associations should know that local health agencies are starting the process of enforcing these new standards. Because some of these changes significantly impact the way associations must service, monitor, and track activity at community pools, associations would be well-advised to note the requirements and implement any necessary changes to ensure compliance now and down the road.

Specifically, there are several amendments to the Regulations that affect association management of community pools, including (1) new parameters for water characteristics; (2) strict daily monitoring of public pool facilities and requirements for written records; (3) enforcement of specific safety and first aid equipment; (4) requirements that a public pool have at least one keyless exit and self-closing latches; and (5) imposition of health restrictions for employees or pool users.

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