By Ann Rankin, Esq. at the Law Offices of Ann Rankin
This article summarizes new homeowner association statutes affecting you and which take effect on January 1, 2013, unless otherwise specified below.
1. Davis-Stirling Restatement (AB 805, 806). These bills would repeal California Civil Code Sections 1350-1378 of the Davis-Stirling Common Interest Development Act (“Act”) and would restate them in new California Civil Code Sections 4000-6150. The law takes effect on January 1, 2013, but does not become operative (enforceable) until January 1, 2014, which gives managers, boards and attorneys one year to familiarize themselves with the reorganized Act. AB 805 would revise and recast provisions regarding notice and delivery, standardize terminology, establish guidelines on the relative authority of governing documents, and establish a single procedure for amendment of the declaration. The bill would establish an express list of conflicts of interest that may disqualify members of a board of directors from voting on certain matters. The bill would also, among other things, revise provisions related to elections and voting, establish standards for the retention of records, and broaden the requirement that liens recorded by the association in error be released. AB 806 updates the many references to the Act in other parts of California statutes to reflect the new correct statute numbers. The new law does not require that associations avoid amending their governing documents until January 2014, and specifically provides for associations to update their existing governing documents (CC&Rs and Bylaws) by a board vote in order to correct the old Civil Code references and insert the new ones. Management firms would be well-advised to learn the new disclosure format of the “Annual Budget Report” (in future Civil Code Section 5300) and the “Annual Policy Statement” (in future Civil Code Section 5310) and begin using that format sooner, to insure full compliance with the new law.
2. Open Meeting Act and Rental Restrictions (AB 2697). This bill amends the Open Meeting Act so that the board of directors only needs unanimous consent on substantive decisions made by email during an emergency situation and the Association’s representative instead of a board member needs to be physically present during the board’s teleconference meeting. This bill also removes the requirement that a seller’s disclosure describe how and to whom a rental restriction would apply.
3. Association Records (AB 1838). This bill would prohibit a cancellation fee for copying association records if the cancellation was requested in writing by the same person who placed the order and if work on the order had not yet been performed or if the work had been Paid for. The bill would require the association to refund all fees for the association records if the request was canceled in writing and work on the order had not yet been performed. Additionally, if the request was canceled in writing, the bill would require the association to refund the share of fees collected for the association documents that represents the portion of the work not performed on the order. The bill would also require that the form be written in at least 10-point type.
4. Notice to Association After Foreclosure (AB 2273). This bill would add California Civil Code Section 2924.1 to require the foreclosing party to record a sale within 30 days of the sale. The recorded sale would provide the associations with public notice as to who now owns the property and where they may be contacted for assessments due. In addition, AB 2273 shortens the time for foreclosing parties to notify associations that they are the new owners. However, in order to take advantage of this aspect of the new law, associations must record a “Request for Notification” prior to the property receiving a notice of default. Where an association has recorded a “Request for Notification,” the foreclosing party must notify the association within 15 days after the date of sale. This will greatly help to ensure that associations receive notice of foreclosure, and the identity of the new owner, as soon as possible so that assessments can be charged to the proper party.
5. Electric Vehicle Charging Stations (SB 880). This bill cleans up SB 209, which was adopted in 2011, to strengthen the association’s authority to regulate the installation of electric vehicle charging stations within the common areas and associated costs. This bill took effect on February 29, 2012.
6. Deficiency Judgments (SB 1069). This bill amends California Code of Civil Procedure Section 580b to provide that no deficiency judgment shall lie on any loan, refinance, or other credit transaction that is used to refinance a purchase money loan or subsequent refinances of a purchase money loan, except to the extent that the lender or creditor advances new principal which is not applied to any obligation owed or to be owed under the purchase money loan, or to fees, costs, or related expenses of the refinance. The bill would provide that any payment of principal for a refinanced purchase money loan would be deemed to be applied first to the principal balance of the purchase money loan and then to the remaining principal balance. The bill’s provisions would apply to a loan, refinance, or other credit transaction used to refinance a purchase money loan which is executed on or after January 1, 2013.
7. Disclosure of Notice of Default (SB 1191). This bill would require every landlord who offers for rent a single family dwelling, or a multifamily dwelling not exceeding 4 units, and who has received a notice of default that has not been rescinded with respect to a mortgage or deed of trust secured by that property to disclose the notice of default in writing to any prospective tenant prior to executing a lease agreement for the property. The bill would provide that a violation of those provisions would allow the tenant to void the lease and entitle the tenant to recovery of twice the monthly rent or twice the amount of actual damages from the landlord, and all prepaid rent, if the tenant voids the lease and vacates the property in addition to any other remedies that are available. The bill would also provide that if the tenant elects not to void the lease and the foreclosure sale has not yet occurred, the tenant may deduct a total amount equal to 2 months’ rent from future rent obligations owed the landlord who received the notice of default. The bill would specify the content of the written disclosure notice and would require the notice to be provided in English and other languages, as specified. The bill would exempt a property manager from liability for failing to provide the written disclosure notice unless the landlord notified the property manager of the notice of default and directed him or her in writing to deliver the written disclosure.
8. Service of Process; Private Investigator (AB 1720). This bill amends California Code of Civil Procedure Section 415.21 to require a person to be granted access to a gated community for service of process upon displaying evidence of licensure as a private investigator. This bill would state that it is not the intent of the Legislature in enacting this act to abrogate or modify the holding of the court in Bein v. Brechtel-Jochim Group, Inc. (1992) 6 Cal.App.4th 1387, relating to service upon a guard in a gated community.
9. Swimming Pool Safety (AB 2114). This bill would require a new, public swimming pool, spa, or public wading pool to have at least 2 circulation suction outlets per pump and be separated by a distance of at least 3 feet in any dimension between the suction outlets, or be designed to use alternatives to suction outlets, including, but not limited to, skimmers or perimeter overflow systems to conduct water to the recirculation pump. The bill would also require the circulation system to have the capacity to provide a complete turnover of pool water. This bill defines a “public swimming pool” as a swimming pool operated for the use of the general public with or without charge, or for the use of the members and guests of a private club. Public swimming pool does not include a swimming pool located on the grounds of a private single-family home.
I hope that this information is helpful. Please be advised that this letter is intended as an update on pertinent California law and is not intended as legal advice. Should you have any questions or concerns regarding specific matters, please call me at 510-653-8886.
This article is general in nature. It is not a substitute for qualified legal advice. Contact an attorney with expertise in common interest development law if you require specific legal advice.