Published in the CAI-Channel Islands Chapter’s Channels of Communication
2016 2nd Quarter Magazine
Boards are continually faced with trying to turn lemons into lemonade. The most common “lemons” boards are faced with are neighbor-to neighbor disputes. What should boards do when faced with these types of owner disputes which are never pleasant and almost always adversarial? Does the Board of Directors have a duty to step in and, if so, what authority does it have to act in such situations? How does the Board make lemonade from these lemons?
Many neighbor-to-neighbor disputes arise from smoking complaints and noise violations. Owners often complain when smoke, loud music or other noise emanates into their units from a neighbor, either through the interior of the units, common areas, or exclusive use common areas, such as patios and balconies. The board’s duty to act in these types of situations depends on the specific provisions contained in the association’s governing documents and the specific facts regarding each violation. Each is unique, and each should be analyzed separately. If these matters are not resolved at the inception, they can escalate exposing the association to liability.
The board should, at a minimum investigate a complaint and confirm a smoking or noise violation, as such action comes under the auspices of the nuisance provisions in the association’s CC&Rs. Most CC&Rs contain a restriction that prohibits owners from engaging in any “noxious or offensive activity,” as well as “anything which might become a danger, annoyance or nuisance to occupants within the project, or which shall interfere with the rights of quiet enjoyment within the project.” Arguably, this provision is the source of not only the board’s right but also the affirmative duty to act in specific instances of smoking and noise complaints. While it is not always pleasant to get involved with a complaint that in essence only involves two parties, boards need to evaluate association exposure and take reasonable steps to reestablish peace and harmony in its community.
Cigarette smoke, in particular, raises additional complexities as there has been a trend by municipalities to enact city-wide bans on smoking in light of the documented health issues. In associations that are not subject to these bans, the owners should look to the CC&Rs and Rules and Regulations to determine where smoking is permissible. For instance, smoking is sometimes banned in common areas, but not always within the exclusive use common areas. Therefore, it must be determined where the smoke has originated, whether it is banned in that particular component of the project or whether it has interfered with the quiet enjoyment of another.
Courts have been split, however, on the reasonableness of smoking prohibitions in units. Since many units share common air vents, ducts and pipes, smoke in one unit can substantially impact other units. If the board is considering prohibiting smoking inside individual units, it should do so by way of an amendment to the CC&Rs, and through legal counsel. A Rule prohibiting smoking in the association’s common areas or exclusive use common areas will likely be deemed reasonable and enforceable as a direct extension of the nuisance provisions set forth in the CC&Rs, so long as it was properly adopted pursuant to Civil Code Section 4340, et seq. However, a rule prohibiting smoking in units will likely be deemed unreasonable unless such invasive restriction is set forth in the CC&Rs, which are recorded, thereby providing owners and prospective buyers with legal notice of the prohibition. Courts have ruled there is no fundamental right to smoke; however, restricting or prohibiting smoking must be done carefully and consistently.
In addition to the board’s duty to handle these types of neighbor- to- neighbor disputes as CC&R violations, remember that owners also have the right to enforce the governing documents against one another. As such, nothing prevents the owners from informally meeting to discuss a resolution or pursuing claims in court against one another for violations of the governing documents. Whether owner and association enforcement is permissive or mandatory will be set forth in the association’s CC&Rs; therefore, it is imperative to review the association’s governing documents before a course of action is determined by the board.
Other remedies that often prove to be cost effective and efficient include Internal Dispute Resolution (“IDR”) and Alternative Dispute Resolution (“ADR”). IDR and ADR are voluntary processes, but the Association must participate if properly requested by an owner. The IDR process is governed by Civil Code Section 5900 et seq. and all parties are given an opportunity to explain their positions and confer in good faith in an effort to resolve the matter informally. In neighbor-to-neighbor disputes, the Board of Directors should act as a facilitator, as opposed to a participant, and work with parties to reach an agreement without the imposition of discipline. In ADR, the parties participate in mediation or arbitration in front of a neutral third party who attempts to help the parties reach a voluntary agreement. ADR requires the parties to hire a third party neutral, the cost of which is split amongst the parties, as set forth in Civil Code Section 5925, et seq. Both IDR and ADR are effective ways to help turn lemons into lemonade by resolving neighbor-to-neighbor disputes without expending significant of association resources.
Lastly, it is important to note that when the board plans to take affirmative action on neighbor to neighbor disputes which are not clearly defined in the governing documents, any policy resolution should be approved and adopted by the Board and all restrictions properly noticed and uniformly enforced as to all members. Policy resolutions, duly adopted by boards create the justification and paper trail necessary to protect the board’s actions if ever the subject of a liability claim.
Ultimately, the board does have certain duties when it comes to neighbor-to-neighbor disputes and should investigate and determine whether a nuisance or other violation has occurred under the association’s governing documents. As smoking complaints have become prevalent, boards can adopt reasonable Rules and Regulations or seek to amend the CC&Rs to impose restrictions. Although boards bear certain responsibilities, owners should be reminded that when these disputes arise, they have the right to enforce the governing documents against their neighbors, and also have the IDR and ADR processes at their disposal. The board, therefore, has a role in turning lemons (neighbor-to-neighbor disputes) into lemonade, but the extent of this role largely depends on the specific facts of the complaint and the provisions in the governing documents.