Pending Legislation

AB 1726:  Voting Quorums & Meetings

• Automatically reduces the quorum requirement in the event there is no quorum for purposes of an election of directors.
• Reduces the quorum requirement to 40% of the members entitled to vote for a second election in the event there was no quorum in the first election; additional elections would be 33%, if a quorum is still not satisfied; if the association governing documents establish a lower quorum requirement, then that would apply.
• Would allow the board of directors to participate in a meeting through the use of conference telephone or electronic video screen, if all participating board members are able to hear one another and members of the association speaking before the board.

AB 1793:  Artificial Turf

• Voids any provision in the governing documents that restricts an owner from installing synthetic ground cover that resembles grass. 
• Allows associations to adopt rules relating to the design and quality of the synthetic ground cover.

AB 1927:  Rental Rights    

• Provides that any provision that is added to or included in a governing document initially recorded on or after January 1, 2011 that prohibits the rental or lease of a separate interest is void, unless the provision is approved by the owners.
• Requires that if there is such a restriction, that a statement describing the prohibition be included in the required disclosures to be given by the owner prior to transfer of title.

AB 1975:  Water Meters

• Requires water service providers to multi-unit residential complexes adopt a general policy to require the installation of submeters for each individual unit within a newly constructed multiunit residential structure or a newly constructed mixed-use residential/commercial structure.
• Will allow for exemptions for certain types of residential structures and where installation is deemed infeasible.

AB 2016:  Deed Requests

• Existing law allows an association, with respect to separate interests governed by the association, to record a single request that a mortgagee, trustee, or other person authorized to record a notice of default mail to the association a copy of any trustee’s deed upon sale.
• Clarifies that a request by an association for notification of a trustee’s deed of sale does not constitute a request for a document that either effects or evidences a transfer or encumbrance of an interest in real property or that releases or terminates any interest, right or encumbrance of an interest in real property.

AB 2502:  Delinquency Collection

• Clarifies that statutory provisions that set forth the order in which payments are to be allocated on delinquent assessments (assessment owed first, then fees, costs, etc.) also apply to any agent of the association and to any third party assigned to collect payment.
• Regulates the formation of payment plans between the association and delinquent members.
• Allows members to have an attorney present when discussing a payment plan, so long as they give at least 48 hours notice to the association

SB 1427: Foreclosures: Property Maintenance

• Existing law requires a legal owner to maintain vacant residential property purchased at a foreclosure sale, and authorizes a governmental entity to impose civil fines for failure to maintain the property of up to $1,000 per day for a violation.
• Requires a governmental entity, prior to imposing a fine, to provide the owner of that property with a notice of the violation and opportunity to correct the violation (wouldn’t apply if there’s a threat to public health or safety).
• Cost of nuisance abatement shall not exceed the actual costs of the abatement.
• Prohibits a governmental entity from imposing an assessment or lien for the costs of nuisance abatement prior to adoption of those costs by the governmental entity at a public hearing.

The California Legislature made relatively few changes to the Davis-Stirling Act in 2009.  Of particular interest are the following amendments:

Annual Disclosures

California Civil Code Section 1350.7 of the Davis-Stirling Act requires an association to provide specified disclosure documents to its members.  The required disclosure documents may be delivered electronically, if the recipient has agreed to that method of delivery.  Section 1350.7 was amended as follows:

•  A document that uses an electronic record to provide or make available the required documents now satisfies the writing requirement, so long as the agreement is consistent with the condition for obtaining consumer consent described California Corporations Code Section 20;
• The Assessment and Reserve Funding Disclosure Summary is to include a specified statement regarding the interest rate earned on reserve funds and the assumed inflation rate applied to major component repair and replacement costs.   

 California Civil Code Section 1363.005 was added to the Davis-Stirling Act.  It requires the association, at the request of a member, to provide to the member a Disclosure Documents Index that sets forth a description of the documents that are to be disclosed annually and the corresponding reference to the code section in the Davis-Stirling Act.  The 14 documents listed in the index are:  Assessment and Reserve Funding Disclosure Summary (form); Pro Forma Operating Budget or Pro Forma Operating Budget Summary; Assessment Collection Policy; Notice/Assessments and Foreclosure (form); Insurance Coverage Summary; Board Minutes Access; Alternative Dispute Resolution (ADR) Rights (summary); Internal Dispute (IDR) Rights (summary); Architectural Changes Notice; Secondary Address Notification Request; Monetary Penalties Schedule; Reserve Funding Plan (summary); and Review of Financial Statement; Annual Update of Reserve Study.

California Civil Code Section 1365.2.5 of the Davis-Stirling Act was amended to specify that the required disclosure form pertaining to the Assessment and Reserve Funding Disclosure Summary is to state “the fiscal year ending date” and that the assessments referenced are for “regular” assessments.  Added to item number 4 of the form is “or year” in the column which states the amount per ownership interest per month.  Added to item number 5 of the form is the word “reserve” in order to clarify that the required amount to be put in the reserve fund is, in fact, to be a reserve and not something else.  Added to item 7 of the form is language which states that at the time the summary was prepared, the assumed long-term before-tax interest rate earned on reserve funds was at a certain percentage per year, and that the assumed long-term inflation rate to be applied to major component repair and replacement costs was a certain percentage per year.

Assessments Based on Taxable Value

 California Civil Code Section 1366.4 was added to the Davis-Stirling Act.  This new section establishes limits on the percentage by which an association may increase regular and special assessments based on the amounts of those assessments in the preceding fiscal year.

•  This new section prohibits an association from levying assessments on separate interests within the common interest development  based on the taxable value of the separate interests unless the association, on or before 12/31/09, in accordance with its governing documents, levied assessments on those separate interests based on their taxable value.  There is an exception for an association that is responsible for paying taxes on the separate interests within the development.  In that case, the association may levy that portion of assessments on separate interests that is related to the payment of taxes based on the taxable value of the interest, as determined by the tax assessor.

 Water Efficient Landscaping

Former California Civil Code Section 1353.8 was repealed, and a new section 1353.8 was added to the Davis-Stirling Act.  Section 1353.8 now provides that any provision in a governing document of an association which purports to prohibit the use of low water-using plants as a group, or if it has the effect of prohibiting or restricting compliance with a local water-efficient landscape ordinance or water conservation measure is void and unenforceable. 

If you were a condo owner in a community governed by a homeowners association (HOA) and your condo was sold at a foreclosure auction, you might think you’re off the hook for any delinquent payments to your HOA. Unfortunately, the fact that the bank, your lender, did go through with a foreclosure doesn’t necessarily mean your HOA received the delinquent association dues through the sale.

Today, as the market value for many properties has fallen, there often isn’t enough money “left over” to pay your HOA. Most associations have governing documents that allow them to collect from a property owner personally, after the home has been lost to a foreclosure.

Bottom line – don’t just ignore your association fees because you’re in active foreclosure. You could pay for it later.

If you would like to stay up to date with the new laws applicable to community associations, meet other association board members, and get some free legal advice, please contact Sharon Glenn Pratt at (408) 369-0800 or spratt@prattattorneys.com to be put on our invitation list.

Our annual roundtable will allow your directors to stay knowledgeable about new laws, and give you an opportunity to ask questions and get free legal advice in an informal setting. (more…)

Do you worry about liability when you see people, who are neither owners nor residents, using your property for recreation?  Are they using the common area walking or hiking paths?  Playing on your lawns and playground?  Skateboarding on your streets?  Taking a short-cut to the beach?  Here’s some good news from attorneys, for a change, which should put your mind at ease.

Immunity from liability for Recreational Use of Association Property

The California Legislature, in its desire to promote and encourage owners of private property to allow the public to access their land for recreation purposes, has enacted statutes which give you, the property owner, immunity from liability.

In 1963, the Legislature enacted Civil Code section 8461, which provides that landowners are not required to and/or have no duty “to keep the premises safe for entry or use by others for any recreational purpose.”  Neither is it required “to give any warning of hazardous conditions, uses of structures, or activities” to those entering for recreation purposes.

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If you would like to speak to one of our attorneys specializing in this area of law, please call us at 408-369-0800 or click on “contact” to send us an email message. We look forward to hearing from you.