RENTING YOUR HOA CLUBHOUSE? THINK AGAIN.

RENTING YOUR HOA CLUBHOUSE? THINK AGAIN.

Ok everyone, brace yourself, the California legislators have passed a law that affects homeowner associations throughout the state. You will no longer be able to charge rent, collect a security deposit, or require a person who wants to use the clubhouse to obtain liability insurance policy, if you want to avoid potential legal issues over the use. This is kind of insane, if you think about it, because it wipes out all rights of the HOAs to protect themselves against any kinds of events that might get out of control, and in the current political climate, that seems more possible than ever before. It prevents HOAs from recouping some of the costs of maintaining the clubhouse. It started as an idea that all owners and residents should be able to use the clubhouse or common area to campaign in association elections, equally, giving disadvantage to no one. But morphed into something potentially damaging to HOAs who have facilities worthy of being rented for functions.

I don’t know if the politicians did this on a self-serving basis, to allow constituents to arrange for rallies in their associations, but there have to be some limits. I did a newsletter recently which is archived on my website at www.Californiacondoguru.com on this very subject. In fact, I did 2 E-newsletters, and the second one provided suggestions for clubhouse agreements to conform to the rigidity of this new law but protect the HOA and its members. For associations, the only recourse for damages, injuries, or problems that might occur from an event that gets out of hand in a common area facility is to put provisions in the use agreements that hold the users of the facilities for events accountable.  Restrictions on capacity, parking and use that are allowable and indemnification for loss is the key.  Indemnify is a legal term that means protect and in this context, means that if the Association suffers any losses because of event use of the common area facilities or clubhouse, the owner and resident who arranged it would be jointly and severally liable and have to pay the Association’s expenses. Jointly and severally liable means both would be responsible.

In other words, it’s complicated. Please go visit my website and take a look at the E newsletters, and even pull the statute from the state website. You can find under SB 407 in the legislative section or Civil Code section 4515 in the state laws. The state website is www.CA.gov.

All clubhouse agreements that required rent, security deposits, or liability insurance policies as a condition of using the clubhouse are no longer enforceable and are contrary to the new law, so you should get thee to a lawyer to help make sure you are sufficiently protected without violating the law.

You can gather more information on this by reading the two newsletters I recently did in December 2017. Both are archived on my website. And there is information on services as well as consultations on the website also.

 

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