They only belong to owners

By: Helsing Admin 

There is a unique aspect to owning a home in a homeowners association – and that is the simple fact that because you are an owner in an association, you are a member of the association. That membership gives you responsibilities, and it gives you rights. Unlike other organizations where your “membership” can be given to you through a contract, paying a fee, or some other mechanism, your membership in your homeowners association can only be gained through having your name on the grant deed of your property.

This concept was reinforced in a 2009 court case, Martin v. Bridgeport Community Association, 173 Cal.App.4th (April 7, 2009). The Appellate Court upheld the trial court and held that the CC&Rs are equitable servitudes only enforceable as between an owner of a separate interest and the association. In simple language, while tenants, guests, and invitees are required to comply with the association’s governing documents – the association can only bring enforcement proceedings against the owner of a separate interest to whom the violating tenant, guest, or invitee is connected. In like manner, only the member may bring an action against the association or act on membership issues.

That seems reasonable enough, but like most matters some of its subtleties can cause some owners to be upset. Basically, if you have a spouse or significant other and they are not on the title for the property, they are not a member of the association. Likewise, if you are an absentee owner and have given someone a power of attorney or are using a real estate agent, on membership issues that party cannot represent your membership interest. (The Martin case very specifically involved the use of a power of attorney.) If it is a matter of voting, hearings, rules enforcement, delinquent payments, attending meetings, or member comment periods – you get the picture – the association can only deal with the owner. That is inconvenient for some spouses and significant others who live with the member, and for absentee owners that use rental agents.

Recently, a new case was published that is consistent with this ruling. However, this case dealt with companies that own separate interests in common interest subdivisions. The case is SB Liberty LLC v. Isla Verde Association. This case was just published June 18th, but in short it held that a “member” cannot include the member’s lawyer. It further held that while a member can be a legal entity (a company, a corporation, a partnership, etc.) the representative of that company must be internal to that company and not an outside person hired to represent the membership interest. This case is new enough that attorneys are still sorting out how to give some guidance. I am sure this is going to be a challenge for banks who like to hire realtors to represent their membership interest. While certainly it will be in everyone’s best interest to deal with that agent, on membership issues it looks like it will have to at least be a bank employee. That said, this law is pretty new and you should seek legal guidance if you have a corporation (including a lender) in ownership concerning who you can negotiate late fees with, who you need to call to hearings, and other membership matters.

This also reinforces why it is important to keep your association informed on changes in ownership. Often homeowners add or subtract owners from title through quitclaims and fail to notify the association. This can result in significant harm to the member, the association, or both. In the case of Martin v. Bridgeport, over $143,000 in attorney fees were awarded to the association and paid by the Martins, who had sued based upon a power of attorney that gave them full rights (or so they and the homeowner believed).

Articles are for advertising and general information by The Helsing Group, Inc. They are not intended to provide legal advice, but rather reflect our opinions as Community Association managers and Consultants. Readers should not act on issues raised in our newsletters or websites without consulting legal counsel.

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The Helsing Group, Inc.

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