Volunteer HOA directors are  fiduciaries  who are held to high standards of conduct when making decisions or taking actions on behalf of the communities they represent. Sometimes those decisions, which may seem reasonable at the time, ultimately lead to problems for the HOA or its members. If volunteer HOA directors were made personally liable for the consequences of their erroneous decisions, it would be virtually impossible for any HOA to recruit individuals to serve on its board. For this reason, HOA directors are afforded several liability protections under California law. One of those protections is a legal doctrine known as the "  Business Judgment Rule ."

On August 27, 2015, the National Labor Relations Board ("NLRB") published its decision in the   Browning-Ferris Industries of California, Inc. case ("BFI Case"). In that case, Browning-Ferris Industries of California, Inc. ("BFI") retained the services of Leadpoint Business Services ("LBS") to provide staff to one of BFI's recycling facilities. The contract between BFI and LBS recognized, and the parties understood, that the personnel staffed by LBS were the employees of LBS. Nevertheless, given the fact that the contract granted BFI with some control over the employees of LBS, the NLRB concluded that BFI was a joint-employer of LBS thereby obligating BFI to comply with federal labor laws.

In adopting a new legal standard for determining joint-employer status, the NLRB emphasized that such a determination should not be based solely on actual control over the employees of another, but the "existence, extent, and object of the putative joint employer's control." ( Browning-Ferris Industries of California, Inc. (2015) 2015 NLRB No. 672, *12.) Otherwise, employers would be able to insulate themselves from their responsibility to comply with federal labor laws. (Id. at p. *21) Accordingly, as long as a company retains (e.g., through the execution of a contract) the authority to control the employees of another, said company shall be given joint employer status. (Id. at p. *2.) This is true even if control is exercised indirectly (e.g., through an intermediary). (Id.)

Many HOAs retain a community management firm for the purpose of executing the duties of the HOA. These community management firms in turn employ community managers and support staff to manage these HOAs. While historically recognized as the employee of the community management firm (and an independent contractor of the HOA), the BFI Case raises some questions with respect to the nature of the relationship between the employees of a community management firm and the HOA...

A bi-partisan group of the House of Representatives would like to think so.  According to the Community Associations Institute (CAI), more than 66 million Americans live in homeowners associations across the country, with an estimated 13 million of them living in California.  These homeowners pay assessments to cover the costs of road maintenance, street lighting, street cleaning, snow removal and other municipal services.  However, they also pay for these services through their local, county, or state property taxes.  U.S. Representatives Anna G. Eschoo (D-CA) and Mike Thompson (D-CA) have introduced H. R. 4696, the " Helping Our Middle-Income Earners (HOME) Act" to correct this double-taxation.  The bill is co-sponsored by US Representative Barbara Comstock (R-VA).

Under the  Home Act, association members with annual incomes of $115,000 or less (or $150,000 in the case of joint returns) would be eligible for a tax deduction of up to $5,000 for qualifying assessments.  To qualify, assessments must be mandatory and regularly occurring, apply to the taxpayer's principle residence, and benefit the taxpayer's principle residence.  The obligation to pay assessments must also arise out of the taxpayer's automatic membership in the association.  Under these provisions, special assessments and rental properties would not qualify for the deduction.

In April of last year Governor Brown  ordered mandatory water use reductions for the first time in California's history in order to address the prolonged California drought crisis. That order directed the State Water Resources Control Board ( SWRCB) to impose a twenty-five percent (25%) reduction on the state's 400+ local water supply agencies. Complying with these mandated reductions caused communities throughout the state to immediately and drastically address their water usage and conservation practices, and to incur significant expense in doing so. This order was issued amidst a string of legislative and regulatory changes aimed at addressing the historic drought. For example, legislation was enacted to prohibit homeowners associations (HOAs) from fining homeowners for  failing to water their lawns during the drought, and the SWRCB adopted  emergency regulations that subject HOAs to fines of $500 per day for failing to comply with the SWRCB's restrictions on potable water use.

In an apparent policy reversal, on May 18th the Governor lifted the 25% mandated statewide water reduction. The Governor's  new executive order directs the SWRCB and the Department of Water Resources ( DWR) to work with water suppliers to develop rules and water use targets that are tailored to the unique conditions of their respective regions.