Judge: Edward B. Moreton, Jr., Case: 24SMCP00265, Date: 2024-08-07 Tentative Ruling
Case Number: 24SMCP00265 Hearing Date: August 7, 2024 Dept: 205
Superior Court of California
County of Los Angeles – West District
Beverly Hills Courthouse / Department 205
In the Matter of
VILLA VELLETRI HOMEOWNERS ASSOCIATION,
Defendants. |
Case No.: 24SMCV00265
Hearing Date: August 7, 2024
[TENTATIVE] ORDER RE: PETITION SEEKING ORDER APPROVING AMENDMENT TO ASSOCIATION’S CC&Rs OR, IN THE ALTERNATIVE, TO REDUCE THE NUMBER OF VOTES FOR APPROVAL OF AMENDMENTS
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BACKGROUND
Petitioner Villa Velletri Homeowners Association (the “Association”) is a homeowners’ association responsible for the management and maintenance of a 231 condominium project located in the Marina Del Rey area. The Association seeks a Court order approving an amendment to the Association’s Declaration of Covenants, Conditions and Restrictions (“CC&Rs”). The proposed amendment seeks to reduce the current 75% amendment approval percentage to a simple majority requirement (the “Amendment”).
The Association attempted to obtain the required number of votes to approve the Amendment but failed to reach 75% approval due to insufficient homeowner participation, as only 144 of 231 ballots were submitted, meaning 38% of homeowners did not cast a vote. (Hess Decl. ¶ 4.) After various attempts to urge voters to submit ballots, 144 ballots were received, with 121 in favor of amending the CC&R’s and 23 against. (Id.) Thus, only 52% of the membership voted in favor of the Amendment. (Id.)¿ This rendered the Amendment to the CC&Rs disapproved and unadopted. (Id.)
This hearing is on the Association’s petition for a court order to approve the Amendment. The Association argues that the supermajority requirement is overly burdensome, not consistent with current legal standards and practices, and prevents the Association from exploring beneficial changes to the CC&Rs in the interest of the community.
DISCUSSION
If the CC&R’s require members having more than 50 percent of the votes to approve amendments thereto, Civil Code section 4275, subdivision (a), allows the homeowners’ association or any member to “petition the superior court of the county in which the common interest development is located for an order reducing the percentage of the affirmative votes necessary for such an amendment.”
The purpose of the statute “is to give a property owners’ association the ability to amend its governing documents when, because of voter apathy or other reasons, important amendments cannot be approved by the normal procedures authorized by the declaration.” (Blue Lagoon Community Assn. v. Mitchell (1997) 55 Cal.App.4th 472, 477.) The statute essentially “provides the association with a safety valve for those situations where the need for a supermajority vote would hamstring the association.”¿ (Id.)¿
Specifically, Civil Code section 4275, subdivision (c), provides that the Court may grant a petition to authorize amendments to a homeowners’ association’s CC&R’s if it finds all of the following:¿
(1) The petitioner has given not less than 15 days written notice of the court hearing to all members of the association, to any mortgagee of a mortgage or beneficiary of a deed of trust who is entitled to notice under the terms of the declaration, and to the city, county, or city and county in which the common interest development is located that is entitled to notice under the terms of the declaration.¿
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(2) Balloting on the proposed amendment was conducted in accordance with the governing documents, this act, and any other applicable law.¿
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(3) A reasonably diligent effort was made to permit all eligible members to vote on the proposed amendment.¿
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(4) Members having more than 50 percent of the votes, in a single class voting structure, voted in favor of the amendment. In a voting structure with more than one class, where the declaration requires a majority of more than one class to vote in favor of the amendment, members having more than 50 percent of the votes of each class required by the declaration to vote in favor of the amendment voted in favor of the amendment.¿
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(5) The amendment is reasonable.¿
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(6) Granting the petition is not improper for any reason stated in subdivision (e).¿
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If the court makes the findings required by Civil Code section 4275, subdivision (c), it may issue an order to “confirm the amendment as being validly approved on the basis of the affirmative votes actually received during the balloting period,” or, alternatively, “the order may dispense with any requirement relating to quorums or to the number or percentage of votes needed for approval of the amendment that would otherwise exist under the governing documents.” (Civ. Code § 4275, subd. (d).)¿¿¿
The Association has complied with the filing requirements necessary to make such a petition, as the petition includes, as exhibits thereto, copies of the governing documents, the complete text of the Restatement, copies of the notice and solicitation materials utilized in the solicitation of member approvals, an explanation of the reason for the amendment, and other documents relevant to the Court’s determination on the petition. (Civ. Code § 4275, subd. (a).)¿¿
Next, the Court finds that balloting on the Amendment was conducted in accordance with the governing documents, Civ. Code § 4275, and any other applicable law. Among other procedures, the Association mailed ballots and two preaddressed envelopes with instructions on how to return ballots to every member not less than 30 days prior to the deadline for voting, pursuant to Civ. Code § 5115. (Ex. 4 to Hess Decl.) The Association also complied with the secret balloting requirements of Civ. Code § 5115(a) (Exs. 3-4 to Hess Decl.), as well as the requirement for an independent third party as an inspector of elections pursuant to Civ. Code § 5110(a) who tabulated the results of the vote as required under Civ. Code § 5110(c). (Hess Decl. ¶¶ 5, 9.) ¿¿
Furthermore, the Court finds that a reasonably diligent effort was made to permit all eligible members to vote on the Amendment. (Civ. Code, § 4275, subd. (c)(3).) The Association sent out a letter to the members explaining the importance of the Amendment. (Ex. 3 to Hess Decl.) From at least January 2022 to present, the Board of Directors regularly held Board meetings, including members of the Association, to discuss the importance of the Amendment to the CC&Rs and to address and respond to any questions about the Amendment. (Id. ¶ 6.)¿ The Association’s Board members personally went door-to-door to remind members of the Association to submit a ballot. The Association obtained multiple sets of blank ballots and distributed them to homeowners to encourage voter participation. (Id. ¶ 7.)¿ The Association also sent reminder e-mails to homeowners who had not voted and encouraged them to submit their ballot for the Amendment. (Id. ¶ 8.)¿
In addition, the Court finds that members having more than 50 percent of the votes, in a single class voting structure, voted in favor of the Amendment. (Civ. Code, § 4275, subd. (c)(4).) Specifically, when the ballots were tabulated on February 13, 2024, a majority of total homeowners voted to approve the Amendment; out of 231 members, 144 members voted, with 121 voting in favor of the Amendment and 23 voting against. Thus, of the members that did vote, 84% voted to approve the Amendment to the CC&R’s. (Hess Decl. ¶ 9.)¿
The Court also concludes that granting the petition is not improper for any reason stated in Civ. Code 4275(e). Pursuant to subdivision (e) it would be improper for the Court to approve an amendment to governing documents that:
(1) Would change provisions in the declaration requiring the approval of members having more than 50 percent of the votes in more than one class to vote in favor of an amendment, unless members having more than 50 percent of the votes in each affected class approved the amendment.
(2) Would eliminate any special rights, preferences, or privileges designated in the declaration as belonging to the declarant, without the consent of the declarant.
(3) Would impair the security interest of a mortgagee of a mortgage or the beneficiary of a deed of trust without the approval of the percentage of the mortgagees and beneficiaries specified in the declaration, if the declaration requires the approval of a specified percentage of the mortgagees and beneficiaries.
Here, over 50 percent of the votes approved the Amendment. Furthermore, there is no voting class issue; the Amendment does not propose to eliminate any special rights, preferences, or privileges designated to the developer in the current CC&Rs, and the Amendment does not seek to impair any lender security interests. Therefore, the granting of this petition is not improper.
While the Association has complied with these requirements of the code, Civil Code section 4275, subdivision (c)(1), requires the Association to give more “than 15 days written notice of the court hearing to all members of the association, to any mortgagee of a mortgage or beneficiary of a deed of trust who is entitled to notice under the terms of the declaration, and to the city, county, or city and county in which the common interest development is located that is entitled to notice under the terms of the declaration.”¿¿The Association has not provided proof of more than15 days written notice of the hearing date to all required parties as of the date of hearing on this petition.¿¿
As such, the hearing on the petition is continued to September 15, 2024 at 9:00 a.m. On or before August 26, 2024, the Association shall file proof of more than 15 days written notice of the hearing date to all required parties as of the date of hearing on this petition.
IT IS SO ORDERED.
DATED: August 7, 2024 ___________________________
Edward B. Moreton, Jr.
Judge of the Superior Court