President
Audio may be found at: www.scshca.com/podcast269
Below is a synopsis of this episode.
Waivers and Rules
Short version:
- The HOA may require waivers.
- Current rules require waivers only for fitness center/outdoor sports activities.
- Current rules do not require waivers for Clubs/Groups.
- Owners are responsible for their guests even without a waiver.
- Committee of 4 lawyers (I Board member, 1 member from the FAC, and two from the law firm representing the HOA) disagrees with Bob Israel’s assumptions and conclusions.
- Board will evaluate possible new rule about Waivers for Clubs/Groups.
- Board will be distributing new waiver for resident comment.
- Process for new waiver will take about 60 days.
- If you sign a waiver you do not become the insurer of the HOA.
Why Waivers: The Board is trying to prevent the Association from being sued for frivolous claims. We want to protect all the assets of the HOA, which protects all residents, which in turns help to maintain property values. One affects the other. Waivers explain a person is responsible for their own actions and that there are risks to any activity. Each person must be responsible for those risks.
Mr. Israel claims: The Board is exceeding its authority by requiring members to sign an informed consent document (Waiver). We disagree, this is not true.
Section 3.6.1 of the CC&Rs states ….the Association shall have the responsibility of owning, managing, and maintaining the Common Areas…
Section 3.7 of the CC&Rs gives the Board rule-making authority. The Board may enact and amend rules which may concern matters pertaining to the use of the Common Area and Common Facilities . . .”
Association’s original rules and regulations (from 2005) have contained a provision which requires all Residents and Guests eighteen years of age and older are to sign a Waiver before participating in fitness center/outdoor sports activities.
Signing a Waiver does not make you the insurer of the HOA. The four attorneys reviewing Mr. Israel’s comments do not know why he made such a statement.
Claims and the threat of claims will increase insurance rates as we have already experienced. Mr. Israel will remember when he was on the Board, because of threats of a lawsuit against the HOA, that list of lawsuit threats increased our insurance rate by $20,000 in one year. Claims matter, so everything we can do for risk and claims management will help all of us in lower insurance rates. I have said on many occasions please don’t threaten a lawsuit, it can increase our insurance rates.
CC&R’s:
- Mr. Israel cites 2.4 Rights of Owners in Common Area: The interest to use Common Areas goes with the lot. The Owner can’t separately sell those interests. That interest stays with ownership in the lot. This does not mean owners have unrestricted rights to common areas whenever they like. Example: hours of operations.
- Mr. Israel cites 2.5 Owners' Nonexclusive Easements of Enjoyment. Every Owner shall have a nonexclusive right and easement of enjoyment in and to the Common Area. Israel left off ‘subject to the following provisions’: Residents do not have unrestricted rights to use Common Areas.
- 2.5.1 Right of Association to Regulate Common Area Uses. Rules about guests, membership cards, RV’s, who qualifies to use facilities, etc.
- 2.5.2 Right of Association to Adopt Rules. This section allows for rules for use of Common areas. This section allows the Association to adopt Community Rules about the use of Common Areas by a majority vote of the Board. See 3.7.
- 3.7 Community Rules. Allows for rules of Common Area by majority vote of the Board. The Community Rules may concern (i) matters pertaining to use of the Common Area and Common Facilities. Example of rules: Golf, dress code. Swimming, reservation. No Skateboarding on the tennis courts. Lots of rules for use of Common areas. Rules are implemented by due process and 28 day resident comment before Rules can be imposed.
- 13.6.1 Rights and Remedies of the Association (Governing Document Enforcement). ..the Board, may enforce the obligations of each Owner to obey such Rules,
- Mr. Israel cites 13.6.4 (a) Limitations of Disciplinary Rights. Israel quotes this as a basis an owner has access to Common Areas. This section does not apply to Common Areas at all. It says The Association shall have no power to cause a forfeiture of an Owner's right to the full use and enjoyment of his or her Lot…. So, his reliance on Section 13.6.4 is misplaced. This section applies to actions on the homeowner’s private lot and does not have any application for the use of Common Areas.
- Mr. Israel cites 13.6.4 (c) Hearings and Summary Enforcement Rights. This section states the enforcement hearing process in applying fines and suspension. The HOA may suspend privileges and impose fines. Explains the process and what is allowed.
By-laws Article 6, 6.1, 6.3, 6.4:
ARTICLE 6 - MEMBERSHIP RIGHTS
- 6.1 Use and Enjoyment of Common Areas by Members and Family. Use of Common Area is subject to Association rules and regulations regarding occupancy and subject to 6.4. It does not state residents have unrestricted access.
- 6.3 Invitees and Guests. Guests may use Common areas but are subject to all rules regarding guests. Again, no unrestricted access.
- 6.4 Association Rules and Regulations. The right of any person to use and enjoy the Common Areas and Common Facilities shall at all times be subject to the rules, ……and regulations as promulgated by the Board.
This section also explains the HOA cannot cause an absolute forfeiture of Common area use. In other words, the HOA cannot take Common Area rights away for all time. The HOA may suspend use once due process is followed, but it cannot be permanent.
Rules and Regulations:
4.13.3
Informed Consent – Release and Waiver: All Residents and Guests eighteen (18) years of age and older are required to sign an Informed Consent, Release and Waiver before participating in fitness center/outdoor sports activities.
4.13.8
Cardiovascular and Strength Training Areas:…………. Neither the Association nor its employees shall be responsible for injuries or accidents. All Residents and Guests eighteen (18) years of age and older must sign an Informed Consent, Release and Waiver before participating in any fitness center activity.
Guests:
Sections 4.4.1(a) and 7.3.1 of the CC&Rs provides Owners are financially responsible for their guests. Even if we don’t have a waiver, all Owners are responsible for their guests.
Rule 2.4 of the Association’s rules and regulations; Resident is responsible for the behavior and actions of their invited Guests.
Mr. Israel supports a waiver for certain activities if done in a certain way. Hopefully after a new waiver is presented most residents will agree to its implementation. We will see after the 28 day comments period. This will take a little time, about 60 days.
So where do we go from here:
Given these two rules I do not see how at this time the HOA can require a waiver for Clubhouse use, for Clubs or Groups, or any other activity outside the listed rules. History: Waivers have been used since 2005. First communication of waivers for Clubs and Groups I found in 2014. I don’t see anywhere where they added the rules to require a waiver for other activities. If we are going to require Clubs and Groups to sign a waiver, we must first have a rule in place to require that process. For now, I have instructed staff the waivers are not required for Clubs and Groups, so if you are a member of a Club or Group you don’t have to fill out the waiver. You may if you like, but there is no current requirement. If the Board wants to add such a rule it will need to go before the residents for 28 day comment. That issue will be discussed at the next Board meeting. This will take some time to do it right, and we all know how long lawyers take.
Another question came up in review of the documents, does a change to the waiver require 28 day comment by the residents? We currently have a rule about requiring a waiver for certain activities. So, does a change in the waiver also require 28 day comment. Grey area for which we are not sure, but the Board has already said they we will put out a new waiver for 28 day comment so everyone will be able to respond.
As I stated at the last Board meeting, we felt there were already many comments about the waiver that needed to be reviewed. Clubs/Groups need to be protected, and there needs to be more clarity on who is responsible based on fault. These concerns are being reviewed by the same four attorneys and hopefully by the next Board meeting we can have a new waiver for review.
In the meantime, Clubs/Groups do not need to sign a waiver. If you want to use the fitness facilities or outside activities a waiver is required which is already part of the rules. To sign up for such activities requires a reservation and that process is mostly in place so when you sign up to make a reservation you will be automatically agreeing to the waiver terms.
We will have more information by the next Board meeting and hopefully a new draft of the Waiver for everyone’s review.
Kim Fuller
President