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Association's Move-In Fees Discriminatory

July 07, 1991|JAN HICKENBOTTOM | Hickenbottom is president of the Greater Los Angeles chapter of the Community Associations Institute (CAI).

QUESTION: Our 48-unit condominium association recently amended the association rules. These new rules give the management company the authority to collect $150 from each new resident for a move-in fee.

Resident owners are charged $150 for the move-in, but $125 is returned if no damage or cleanup costs result from the move. Non-resident owners must pay a non-refundable move-in fee of $150.

We feel that the association is discriminating against non-resident owners because none of the $150 is returned. What is your opinion?

ANSWER: I think the association's new procedure is discriminatory. Rules should always be fair and reasonable.

Many resident owners feel that tenants are just naturally more destructive to the building, but I have seen owners who knocked holes in walls and scratched up the common area furniture also. Of course, some owners regard all tenants as a threat to their happy home and therefore, they want to punish them or treat them differently. This is unwise.

The association board members who adopted this new rule probably feel that it is acceptable to discriminate against the non-resident owner because occupants change more frequently in a rented unit. Another argument often expressed is that the landlord can simply pass the fee along to the tenant. Since the owner is making money off the rental of the unit, the association wants some of the action.

Sometimes move-in fees have a negative effect. For instance, the new resident may think, "Well, I paid $150 for this move-in. What's the big deal if I scratch up the elevator?"

Many condominiums have move-in fees. In my opinion, move-in fees should be charged only when they can be justified because of expenses that the association incurs as a result of the change in occupancy. Examples of legitimate charges: common area keys, adding the new name to the lobby directory or mail box, staff charges for putting the temporary pads into the elevator, or cleaning charges or actual damage to the common area.

Board Can Appoint Temporary Director

Q: Our condominium association has no provision for filling vacancies on the board of directors. The declaration of covenants, conditions and restrictions does not address this matter.

At an annual meeting, the membership passed a resolution giving the board the authority to appoint an interim director to fill a vacancy only until the subsequent annual meeting. Then the appointed person must be confirmed by a majority vote of the homeowners.

Is this legal and binding? If not, what should the procedure be?

A: Most CC&Rs or bylaws give the board of directors the authority to fill vacancies, except when the vacancy occurs because of a recall vote of the owners. In my opinion, the resolution passed by the homeowners is legal.

The resolution passed by the membership can be changed at future membership meetings with a majority vote. If the association wants the resolution to be more binding, then a vote to amend the CC&Rs or the bylaws is necessary. The procedure for amendments can usually be found by reading these legal documents.

Your association board should seek the advice of an attorney who specializes in community association law. In California, the Corporations Code, Section 7224, governs the authority of the board to fill vacancies.

Real Estate Dept. Brochure in Error

Q: You have stated in your column several times that a board may increase regular assessments and levy special assessments without the approval of the owners, citing California Civil Code, Section 1366 (b) which reads, "Notwithstanding more restrictive limitations placed on the board by the governing documents . . . " the board may increase the annual assessments by 20% over the prior year's amount.

I have just noticed a different view taken by the California Department of Real Estate in its "Common Interest Development Brochure" published in June, 1989. On Page 10 of the brochure, it reads, "Unless the governing documents are more restrictive. . . ." This supports my feeling that the code language was a mistake and that the code was not intended to supersede the more stringent rules of the association.

The California Code says one thing and the Department of Real Estate's brochure says another. Which is correct?

A: The Department of Real Estate's "Common Interest Development Brochure" is in error. I have great respect for the individuals who were involved in writing the brochure, but this printing error has created many misunderstandings.

It has been two years since the first printing and nothing has been done to correct this mistake. Our government agencies have a responsibility to ensure that consumers receive accurate information. I hope that the DRE brochure will be corrected soon.

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