FHA certification is not mandatory for condominium associations. Associations tend to go through the certification process so that there is a larger pool of potential homebuyers, which theoretically increases the value and marketability of units. Further, FHA will only insure mortgages used to purchase a primary residence. As a result, a board can potentially increase the number of owner-occupied homes by certifying the association. In theory, being FHA certified is a signal to all potential buyers that the association is in good financial health, even if the buyer will not be using an FHA-insured loan.

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AB 690 includes a few changes to the law that are unrelated to one another.

Currently a manager must provide certain disclosures to a prospective association client prior to entering into a management contract. With those disclosures, a manager or management company must now disclose whether the manager will receive a referral fee or other monetary benefit from a third-party hired to distribute documents required as part of the association’s annual budget report.

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Existing law allows various required fees to be included in the price of a residential real estate transfer. These include public fees, such as transfer taxes and document recording fees as well as private fees, such as those charged by a homeowner association. Private transfer fees (PTFs) are fees required by the developer and are paid by each homebuyer as part of each sale. The money generated from each sale is usually earmarked for some specific cause, like environmental mitigation or the development of affordable housing in the locality. In some cases, the homeowners association is the recipient of the money.

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The law of mechanic’s liens has always been a complex, technical and confusing world for homeowners and contractors alike.  Under the California Constitution, contractors, material suppliers, equipment suppliers and laborers all have the right to place a foreclosable lien upon real property if they have not been paid for their services. In order to properly record and foreclose such a lien, the claimant must jump over a number of difficult hurdles including providing proper notice to the owners of the property the contractor wishes to lien. In the common interest development context, this notice hurdle has been very high and confusing to navigate. The California legislature has recently attempted to make things a bit clearer with the adoption of Assembly Bill (AB) 534, which will go into effect on January 1, 2018.

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Video surveillance systems are commonplace in homeowners associations. They are primarily used to allow after-the-fact investigation of crimes or violations of the governing documents. Video surveillance cameras are generally not used where residents and guests would have an expectation of privacy, such as the interior of homes or bathrooms. They are also not normally used to “spy” on association employees, because of the legal implications.

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