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TinoS (California)
Posts: 85
Posted:
I have mentioned in the last few weeks that we are considering trying to do a rental restriction amendment to our CC&Rs. We have an attorney who has written an 11 paragraph amendment. I think it is full of holes and mistakes, but I am not an attorney.

I am going to try to convince the other two board members to pay for another more HOA experienced attorney to critique it. But I would also like to post it here to get other people's opinions on this forum.

Is it legal and/or ethical to post the proposed rental restriction amendment here to let you guys read it?
TimB4 (Tennessee)
Posts: 21,059
Posted:
Remove the name of the Association and I don't see an issue with it. This is because the attorney knew you were going to release it to the membership, so it's not necessarily attorney client stuff.
TinoS (California)
Posts: 85
Posted:
Before I post his amendment proposal and my comments about it:

Could the attorney say that he owns what he has written and that I can't do so? I believe he has billed us for his time writing the proposal but we have not yet paid the bill - we intend to at the next billing cycle. I understand your point that the attorney knows that what he has written will be viewed by the membership, but he does not that I would be posting it to the general public for review. This is sort of basic question as it must come up every so often. Is it legitimate to post contracts and other attorney generated stuff for discussion and review?

DonnaS (Tennessee)
Posts: 5,671
Posted:

Tino,

Well, you really need to hire another attorney if you feel that the proposed amendment is full of holes and mistakes. But is it?

What qualifications do you have in order to see all of these holes and mistakes? Tell the guy, after all, you are hiring him to write what YOU want. Have a conversation with him, telling him of your concerns. Why hire another lawyer unless this one refuses to fix what you are concerned about.
DonnaS (Tennessee)
Posts: 5,671
Posted:

Tino,

Was it not a "Hardship Clause" that you wanted? Many of us posted our negative opinions on use of that word as being enforceable.
TinoS (California)
Posts: 85
Posted:
--I am asking whether it is okay to post what the attorney has written along with my review of it.
If it is okay I will post his writings verbatim so that you see what I am concerned about.

- Yes, I am the guy who posted about the hardship clause. I understand that a hardship clause is problematic and you will see when I post what he has written that it may be a lousy idea to include one.

- Yes, I am not a lawyer so I am not qualified to decide on my own whether what he has written is good or bad. But my opinion is that it is full of holes and logistical problems. We have already paid for about 6 hours of his time and I am so disappointed that I don't want to spend more time fixing what we could have got from an experienced HOA and well respected attorney for half the price.

I respectfully ask you people who might be experienced with the policy of this forum whether it is okay to post attorney generated documents for review. If the answer is Yes I would like to post it and THEN we can discuss the whole strategy of what I should do after we get some comments about the documents. -- If you guys haven't run out of patience with my approach.
DanielH1 (California)
Posts: 482
Posted:
It depends on your contract with the lawyer.

It is a work for hire so, UNLESS EXPLICITLY STATED OTHERWISE IN THE CONTRACT, the client (meaning the HOA) is the copyright owner when the contract is finished.

For commonly used and repurposed documents, the lawyer will put a clause in his contract that says that he owns the copyrights to all his work.

So, if you have a standard work-for-hire contract with the lawyer, you probably should get your Board's approval since the HOA owns it.

If your lawyer owns it, you should get your lawyer's approval which he probably won't give.
DonnaS (Tennessee)
Posts: 5,671
Posted:

Tino,
I am NOT a lawyer but IMHO, if he has sent the amendment as a proposal, then it should be open for review to all. That may include us. If a million of us review it, what is the difference if 5 of you in the HOA review it. Once it leaves his desk as a proposal, then it should be open to anyone. Just my opinion. Where are all of the legals here? (You said that the HOA has not paid his bill yet?) Wonder if that matters?
TinoS (California)
Posts: 85
Posted:
Okay. How about instead of me posting the 11 paragraph contract word for word I instead reword the contract expressign the essential stuff, which really is quite basic. Would that be legal?
TinoS (California)
Posts: 85
Posted:
Here's what he wrote for the first paragraph:
1. No more than three units at any time may be leased to non-owners of the units. The board of Directors will maintain a waiting list of owners who wish to lease their units. When the number of units being leased is less than three, the next owner on said list shall be entitled to lease his or her unit. If the owner of the unit does not inform the board that it will lease the unit within 10 days of being notified of his or her eligibility to rent, that owner will lose the right to rent and the next owner on the list shall then be given the right to rent.

Here's my thoughts: My understanding is that there is a real and legal distinction between Leasing and Renting. The rule starts by making a statement about leasing and gives conditions relating to renting. Maybe that is acceptable but legalese is usually much more tightly written and we would hate to have someone think they can break the rules because they say they are renting, not leasing - there is a difference.

He mentions that the board will keep a list. But he doesn't describe how it will be determined. I would prefer that the system was spelled out so that people voting for or against the amendment would know how that list is determined. And much more important, when courts determine whether a rental restriction is legitimate the judge looks at whether the rental restriction is equitable, reasonable and non-discriminatory. The list would have to meet those criteria and it would be helpful for defending the validity of the list to define how it works. Without the system spelled out we would be at a disadvantage if it was contested.

Also the system described in the proposal says that if an owner decides not to rent when the opportunity is given to them they lose that right. Since the proposal doesn't say how that right is given back that would mean the owner loses it permanently. Is that what he intended? It is possible that everyone would lose their right to rent. Where would that association? I have no idea why he worded it that way.
TinoS (California)
Posts: 85
Posted:
Here's the second paragraph (paraphrased)

2. No unit which has a lien recorded against it by the HOA can be on the list until that lien is removed by the HOA.

My comments:
Keep in mind that an owner that was breaking many other rules would not necessarily have a lien against his property. So you could have an owner that parks eight cars in the lot, paints his place purple, has broken windows, but he pays his dues on time, and the board might not necessarily sue and he might not have a lien on his property. Reading this forum and reading our CC&Rs I see "in good standing" used. I don't know whether that is a better way of achieving the same goal here. Is there a legal definition of good standing?

Also the rule is written only to remove eligibility to be listed on a waiting list. It's not clear to me whether an owner that is leasing their unit will have to stop leasing if a lien is placed against their property while they are leasing.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Tino,

The problem with paraphrasing is that you lose the legalese and we only see what you understand it to read, not necessarily what it does say. In legalese, each word and how it is used means something and changing one word can make the whole paragraph mean something else.

If it's a word document you may just want to attach it to a response using the "message attachments" section above the submit button. All you need to do is select the browse button and locate the document on your computer.

Tim
MaryA1 (Arizona)
Posts: 7,043
Posted:
Tino,

Frankly, I think it would be much better to pose all these questions to the attorney. The board hired him to write and amendment. If they have questions about what he has written they should be asked of him.
TinoS (California)
Posts: 85
Posted:
Mary,

My understanding of our relationship with our attorney is that we have to pay for his time for him to answer our questions and concerns. We have already spent more money than we should have, compared to other more HOA specialized attorneys.

I don't know the laws or how to write a CC&R amendment as well as an attorney but my knowledge of human nature is that if I go back to the attorney to question what he is has written and suggest that I might be right and that he might be wrong I will be wasting my time and paying a lot to do so. I am hoping to get some other opinions here on this forum from people who may or may not be attorneys but have lots more experience in HOA issues and maybe have seen more amendments and contracts than I have.
TinoS (California)
Posts: 85
Posted:
3) No unit can be leased during the first two years of ownership.

My thoughts: Not needed if a prioritized list is in place. In fact if we have a situation where two units are being rented and the third owner that was renting decides to sell, and at the same time no other owners want to lease or rent their unit, do we tell the third owner that is selling to tell the potential buyer that the new owner can't lease it? I don't know the answer to this.
SusanW1 (Michigan)
Posts: 5,202
Posted:
The newly adopted amendments would come into effect when adopted, so yes, new owners would be told that they cannot rent for 2 years.

It would be interesting to see how you are going to handle renewal of rental leases and/or grandfathering in of current rental properties.
TinoS (California)
Posts: 85
Posted:
Here's my thinking about why the 2 year waiting period and a waiting list don't work together: If a new buyer is told that he can't lease his place immediately for two years but he can get on the waiting list to be able to do so when a slot opens up, what happens when none of the other owners on the waiting list want to lease their units yet. Then the new owner at the bottom of the waiting list has moved up to the top of the waiting list, but he could not do so because he has to wait for two years. Maybe this is a good thing as it gives a two year period for someone higher on the waiting list to decide if they want to do so. I just changed my opinion about this.... the waiting list works with the 2 year period.

I will post the grandfathering stuff next.
TinoS (California)
Posts: 85
Posted:
Attorney's grandfather clause: Any unit that was being rented as of [end of last month in this case], shall be grandfathered and shall continue to be allowed to rent to the existing tenants until there is a change of ownership of the unit or until the present tenant vacates the unit. If the owner wishes to rent the unit again after the existing tenant vacates, the unit will be placed on the waiting list maintained by the Board, as described in #1 above.

My thoughts: The attorney has written it so that the grandfathering expires when the existing tenant moves out. This is going to ensure that at least those three people who are currently leasing their units are not going to vote for the amendment. My estimate of whether a rental amendment would pass our 51% level needed for approval is that it will fail without those three people.

I also think that if by some chance it does pass, those people would soon be fighting us in court. (By the way, one of them is a congress person in Washington DC.)

Note that attorney starts the amendment stating a three limit for "leasing" but uses renting and leasing interchangeably throughout the document. Is that okay to do?
DanielH1 (California)
Posts: 482
Posted:
I'd say that you should re-write the document to your own liking and level of specificity and then have your lawyer (or a different one) review it.

Some lawyers are no good at authoring legal documents; they do much better at reviewing them.

He shouldn't be charging you when you ask questions about his schlock work. Sure, he should charge you his full rate for researching and authoring the document but his time isn't so valuable that he should nickel-and-dime you when you have legitimate questions.

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