Mastering Advanced Commercial CID Legal and Management Issues. Session Sponsor

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Session Sponsor With our longevity in the HOA Insurance industry and over 50 years of experience, Bay Area Insurance is able to offer insurance programs custom made to fit all your HOA needs

1 Session Sponsor With our longevity in the HOA Insurance industry and over 50 years of experience, Bay Area Insurance is able to offer insurance programs custom made to fit all your HOA needs including: Master Policies, Common Area Liability, Earthquake, Umbrella, Directors and Officers, Fidelity Bonds, HOA Workers Compensation and Flood policies CACM Law Seminar

2 Session Coordinator Margaret G. "Gen" Wangler, Esq., Fiore Racobs & Powers Presented by Tom Freeley, CAMEx, CCAM and Janet L.S. Powers, Esq. This session will focus on some of the complex and cutting edge legal and management issues facing the experienced commercial CID manager. The session coordinator will facilitate an interactive discussion and evaluation of the hot topics in this area by an attorney and a manager with extensive commercial CID expertise. Presented through a series of scenarios, the panel will provide an in-depth evaluation and round tabling of: nuisance issues, problematic CC&R provisions, insurance challenges, and enforcement and governance issues. Join us to share your experience and advice with other senior commercial CID managers. Dealing with Nuisances Scenario No. 1: The Ick Factor in the Hallways In a 15 unit commercial condominium building with common hallways and restrooms, one of the suites has a new tenant, Turn a New Leaf, that advertises itself as a drug treatment center using herbal and homeopathic treatments. The treatments include intravenous injections taking several hours. The patients like to walk the halls talking on their cell phones or go outside and smoke cigarettes in the parking lot during their IV treatments. The patients also leave needles and bloody trash in the common area bathroom trash. Another tenant, Serena Calm, is a therapist offering counseling services primarily to victims of traumatic events. Serena claims that there are numerous health code violations with the drug treatment center and seeing bloody trash can trigger PTSD in her clients. When receiving complaints between owners or tenants, board needs to investigate to determine if violations of the governing documents are occurring. If so, board has an obligation to attempt to enforce governing documents Is the use allowed by the CC&Rs? Most CC&Rs have a general prohibition on nuisances and many list allowed and/or prohibited uses Does the use violate the development permit for the project? The permit may also contain limits on uses Does the business have the proper city or county permits for the type of business? Even if it does, is it violating the permit requirements? Does the use violate applicable city or county codes? This includes health code violations Getting the city or county involved can sometimes save the association the expense of its own enforcement actions What enforcement actions can the association take if there is a violation of the governing documents? 2017 CACM Law Seminar. All rights reserved. 1 P a g e

3 Scenario No. 2: Everybody Must Get High In a similar small commercial building, Mary Jane Blunt recently opened a medical marijuana dispensary. There is no express prohibition in the CC&Rs but some owners and tenants believe the dispensary violates the nuisance provisions of the CC&Rs. Sally Straightlace is an owner who has a tutoring service for high school students and is especially upset by the presence of armed guards, the general appearance of the people going in and out of the dispensary, and the people who don t leave the property before sampling their purchases. She has lost business from parents who fear for the safety of their children. Dexter Morgan, another owner who is a private crime scene investigator, doesn t mind the increased flow of people in and out of the building and thinks Sally should mind her own business. The board feels caught in the middle. The discussion points raised above apply here Some cities and counties do not allow a dispensary near a school Security is an issue here. Is an association obligated to provide security in this scenario? Is there a known and foreseeable risk? Dealing with Unusual Restrictions Scenario No. 3: Veto Mom and Pop? In Lake Park Forest Shopping Center, a commercial common interest development, the largest business is Megaplex Cinema, which has 47 theatres. The Lake Park Forest manager, Morty Meek, just received an escrow demand for a potential sale of one of the smaller buildings to Mom and Pop Ice Cream Shop. Morty knows that the CC&Rs give Megaplex the right to veto any new uses in the shopping center. The CC&Rs do not place any restrictions or limitations on Megaplex s power and do not have any process or procedures for obtaining Megaplex s approval. Morty has heard Megaplex s management talking about all the buckets of money they make from concessions so is pretty sure Megaplex will be against allowing Mom and Pop Ice Cream Shop to move in but isn t sure how to handle the situation. What should Morty do? Reply to the escrow demand advising of the requirement in the CC&Rs and leave it to Mom and Pop to contact Megaplex? Notify Megaplex first and ask for approval or denial? Send a written notice to Megaplex with a timeline for a response? What best protects the association? There may not be a right or wrong answer to this one Scenario No. 4: Is School Out Forever? At another association Morty manages, Forest Park Lake Business Center, (he frequently gets them confused) he is trying to figure out what to do about a small private school that wants to lease one of the offices for class room space. The CC&Rs don t prohibit a school but one of the other tenants told Morty that the City won t allow a school in the office park. Morty isn t sure what the tenant is talking about and can t figure out what could possibly prevent a school in the office park if it isn t in the CC&Rs. What else should Morty be looking at? City zoning codes might address this use 2017 CACM Law Seminar. All rights reserved. 2 P a g e

4 The development permit and deeds may also contain restrictions on uses that apply here Dealing with Vague Use Restrictions Scenario No. 5: Feelin' Good All Over At Feel Good Business Park, Long Ass Nail Salon just moved into one of the suites. Susie Stronghands, who operates The PG-Rated Massage Parlor in Feel Good Business Park, complained to the board that Long Ass Nail Salon cannot conduct business there because the CC&Rs only allow two personal service businesses in the Park. In addition to Susie s business, there is the Boiling Hot Yoga Studio so Susie claims there are already two personal service businesses. The board heard that Susie s massage business is struggling so she was thinking of offering mani and pedi services. What does the board need to consider in deciding what to do? What is the definition of a personal service business? The board (or legal counsel) can check zoning codes for a definition If none, try to determine the intent of the restriction. Is it to address parking concerns, to prevent competitors within the same small business park or something else? Does it matter that the board heard a rumor that Susie might want to add mani and pedi services? Does this use fall under her business license? Dealing with Parking Issues The District Upscale Marketplace Paseo Centre Owners Association (DUMPCOA) is a large commercial CID consisting of a retail center with a hotel, restaurants, and shops. The owners own their Lots and buildings. The association owns the Common Area. There is parking on both the Lots and the Common Areas. Scenario No. 6: It's my Lot, and I'll Use It as I Please The RitzyGlam Hotel installs electric vehicle charging stations (EVCS) without approval, since Testy Electric Vehicle Company volunteered to pay for the installation. The EVCSs are all located on the RitzyGlam Hotel's Lot. The association's CC&Rs require that all owners apply before installing anything on their Lots. What insurance coverage, if any, should the association require? Covenant? Power issues? Association approval Other considerations 2017 CACM Law Seminar. All rights reserved. 3 P a g e

5 Scenario No. 7: Rich Doctors Try to Rule Rich Doctors Russ, LLC, is one of the Lot owners in DUMPCOA. Rich Doctors Russ, LLC, owns and is operating a building for use by medical and dental offices. Two new tenants have moved into the building and added seven new doctors. The City's ordinances will now require more parking. The association's CC&Rs provide that owners may request that additional parking spaces be allocated/assigned exclusively to their businesses for patrons. Rich Doctors Russ, LLC, has requested the association allocate an additional 50 parking spaces on the association's common area in order for it to meet the City's requirements. In some CIDs, parking is owned by owner In some CIDs, parking is owned by association In some CIDs, parking is owned by both the owner and association Cities often impose requirements on different types of businesses to have sufficient parking for patrons, customers, clients, patients, etc. The CC&Rs may or may not allow the board to allocate parking on the common areas Some CC&Rs allow rental by the association of common area spaces Some CC&Rs allow the board to grant easements/licenses over the common areas Association may need an agreement with the Lot owner regarding allocation of spaces Will allocation be exclusive or non-exclusive to that business? Will the city require exclusive allocation of a certain number of spaces or can it be nonexclusive? Check the hours of operation of the business some businesses are only open until 5 p.m., and may only require parking during business hours Some developers allocate exclusive use of Common Area spaces in the Lot owner's deeds and not in the CC&Rs See 1101 Dove Street v Dove Street Owners' Association (2016 WL ); unpublished September 23, 2016 Scenario No. 8: We've Got Work to Do Gorgeous Used is a Lot owner who operates a consignment clothing shop. Ms. Used was recently in a major car accident, resulting in her being permanently confined to a wheelchair. Ms. Used has a new Mercedes Sprinter van with wheelchair lifts that she drives with modified hand controls. She has a disabled parking placard and license plate on the van. Ms. Used has now requested that a disabled parking space be provided for her in front of her Lot, on the Common Area, and that it be painted out and signs put up indicating it is reserved exclusively for her. The ADA will apply to most commercial and industrial CIDs 2017 CACM Law Seminar. All rights reserved. 4 P a g e

6 The ADA will require the Association to have disabled parking spaces and to have those spaces meet AADAG guidelines Associations will have to provide the space, paint it out and install signage as a reasonable accommodation to the owner, or any visitors. Ramps, cut corners, bot dots, and other modifications of the Common Areas may also be needed Door ways, restrooms, and elevators may also be needed Scenario No. 9: Midnight in the Common Area Parking Lot Patti O'Knight is the owner of the patio furniture shop. Patti wants to have a midnight tent sale, which would take place at midnight on two consecutive weekends in October on Friday and Saturday nights in a 200 foot by 200 foot tent, which would be located on the Association's Common Area parking Lot. The large tent will be rented by Patti and installed by a tent rental company. It will take up a considerable amount of the Association's Common Area parking, so additional parking may be needed for customers attending the Midnight Sale. This patron parking would need to be in the parking areas located on Lots owned by other businesses. Check the CC&Rs regarding hours of operation and variance requirements Look at city ordinances concerning hours of operation of businesses, and whether a variance may be needed Tents may raise safety and other issues, in addition to parking The association may not have authority to allow certain types of sales or events The association may also lack the authority to address parking on other owners' lots Management may want to consider a fee/charge to owners who want to hold events, so that the time spent by the manager on event and related issues will be billed to that owner and not to the association Owner may have to obtain approval of other owners for parking on their Lots Consider issues with rental companies causing damage to Common Area during installation and/or removal of the tent and equipment 2017 CACM Law Seminar. All rights reserved. 5 P a g e

Rental Guidelines and Policies for the Historic Paramount Theatre, Inc.

Rental Guidelines and Policies for the Historic Paramount Theatre, Inc. 352 Cypress Street www.paramount-abilene.org Phone: 325-676-9620 Abilene, Texas 79601 Fax: 325-676-0642 RENTAL AGREEMENT 1. Contracts