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END OF SESSION UPDATE
September 8, 2011
The first half of the biennial legislative session will have ended before you read this. Nevertheless, there are a few important bills for you to be aware of and plan to implement.
Perhaps most important are two bills that directly effect HOA operations. The first is Senate Bill 563 (by Mark DeSaulnier, Chairman of the Senate Transportation and Housing Committee). Essentially the bill, which takes effect January 1, 2012, prevents boards from meeting without notice to members. It was asserted in the hearings that some boards met without notifying the members of the time, place and agenda items and were therefor deemed to be less than transparent. Initially, the bill even prevented directors from even speaking to one another about association matters outside of a noticed meeting. However, CAI-CLAC lobbied the bill for months and it was finally changed to not only delete that provision but to allow for electronic consent on matters brought up in emergency meetings. While this measure is of concern to some, the larger issue of âsecret meetings vs. transparent operationsâ prevailed. All boards should take notice!
Assembly Bill 771 (Betsy Butler) was sponsored by the California Association of Realtors and initially capped fees that may be charged by parties which provide documents upon sale or transfer of a separate interest. This bill was lobbied heavily as well and it was ultimately revised to remove the cap. In addition, the bill enumerates the items which are to be provided as well as an estimated fee for each. This bill improves existing law because it provides for better disclosures to all parties in a transaction. As finally amended, there was no opposition and the Governor quickly signed it.
Two bills have limited application but you need to know about them. Senate Bill 209 (Ellen Corbett) strongly encourages associations to allow and install electric vehicle charging stations upon a memberâs request. There are numerous conditions which must be adhered to by the member including insurance covering the associationâs common areas and damages to other property, electric bills to be paid by the member, and the member must disclose these conditions to buyers who shall also be responsible for them. As such, I expect few applications for such installations. (The bill, although signed, has serious flaws because it violates the constitutionâs provisions regarding a âtakingâ of real property as well as a conflict with existing law which requires a â
vote of the members to grant an exclusive use common area for such installations. We made these flaws known to the Governor who agreed and while signing SB 209 also penned a âsigning messageâ intending to fix these flaws. SB 880 was amended on September 7 to do just that, but as I write this it is still pending a hearing.)
Senate Bill 561 (Corbett) requires delinquent ownersâ payments to be credited to the HOA prior to the debt collector. This would essentially curtail the ability of the HOA to ever get the money it is owed because associations are not debt collectors and licensed collectors will not work for free which may happen if their fees are last to be paid. We opposed the bill and it has been made a âtwo yearâ bill meaning that it will be held in committee until January.
Senate Bill 150 (Lou Correa) deals with associations that attempt to limit the number of rental units. As signed into law, it is imperfect and associations may wish to review their governing documents in order to amend them to lawfully avoid some portions of SB 150; this should be done before January 1, 2012.
CAI-CLAC is continually on guard for you, helping to save you money, keeping your association liability minimal, and in general, helping your communitiesâ market value remain as high as it can be while fostering harmonious communities. More next month.
Skip Daum
CAI-CLAC Legislative Advocate Since 1994
â
Capitol Communications Group
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Sunday, August 14, 2011
Tomorrow, Monday, marks the reconvening of the Legislature from its summer break. Session goes through September 9 and the Governor shall have 30 days to act on bills reaching his desk by that date. Several hundred bills are in the balance including a few important ones for us.
AB 771 initially capped fees for producing transfer documents but as amended is now essentially a disclosure bill that identifies which docs are to be gathered and at what estimated fee. As amended, we dropped our "Oppose Unless Amended" position to a "Support" position. The bill is currently awaiting a floor vote.
SB 563 bans all board actions (including conversations among board members about HOA matters!) outside of regular noticed meetings. Through its journey in the lawmaking process CLAC succeeded in amending it to allow some actions including emergency meetings to be conducted via electronic transmissions. The bill could not be stopped altogether; the bill's author chairs the Housing Committee and each member of the Committee were co-authors. As it has been marketed as a "transparency vs. secret meetings" bill I expect it to pass to the Governor by month's end and that he will sign it into law. It will become effective January 1, 2012.
SB 209, which the Governor signed, authorizes association members to install electric vehicle charging devices in garages and exclusive use common areas. CLAC remains integrally involved in amendments to this law which are going to be put into another bill before session ends; the amendments will cover issues that we raised to the Governor's attention such as its unconstitutional "taking" of property, liability for damages, and which should remove the conflict in existing law regarding members' right to approve or disapprove such uses by a 2/3 vote. The Governor has made energy conservation a priority and he signed the bill acknowledging its defects and while issuing a "signing message" that directs the author to fix its deficiencies immediately.
SB 759, artificial turf, was vetoed. This is the second time CLAC succeeded in killing this measure.
SB 150, signed and effective January 1, 2012, establishes rights of owners and associations regarding rental restrictions. HOAs wishing to alter their CC&Rs before then may avert trouble by doing so before then.
AB 561 is also a 2 year bill. It requires that delinquent payments be paid to the association before the collection agent. CLAC opposes it and numerous discussions occurred a few months ago after which the author pulled it ... for now.
I will keep you informed.
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Legislative Updates
Governor Brown Signs Electric Vehicle Bill, Senate Bill 209 - CAI-CLAC Continues Work Toward Further Protection of Property Rights
âTo the Members of the California State Senate:
Senate Bill 209 advances the important state interests of lowering vehicle emissions and decreasing dependency on foreign oil. These interests are advanced statutorily by removing unreasonable burdens in common interest developments to the installation of plug-in vehicle charging stations. Charging stations are part of the infrastructure that must be built to integrate electric vehicles into our daily lives by allowing plug-in vehicles to be recharged faster and to minimize impact to the electrical grid. I enthusiastically support this bill.
This bill, unfortunately, contains language that could permit individual homeowners to unreasonably use or occupy common areas. The author has assured me that she will pursue legislation that clearly protects the right of the common interest developments to establish reasonable rules for any use of common areas for charging stations.â
SB 150 (rental restrictions) and SB 221 (small claims court) were both signed by the Governor; each takes effect Jan 1, 2012.
SB 563 (actions between meetings) and AB 771 (doc fees & disclosures) are on the Senate concurrence/consent calendars for next week.
SB 759 (artificial turf) was vetoed by the Governor.
To the Members of the California State Senate:
I am returning Senate Bill 759 without my signature.
Under this bill, homeowners associations that govern Common Interest
Developments would be forced to approve the installation of Astro
Turf. The decision about choosing synthetic turf instead of natural
vegetation should be left to individual homeowners associations, not
mandated by state law. For this reason, I am returning this bill.
Sincerely, Edmund G. Brown Jr.
CLAC Bill Status Report
as of 7/1/2011
Prepared by Skip Daum
Capitol Communications Group
As the July 4th holiday approaches I wanted to inform you of the most recent activity on, and status of these major legislative measures. While there are hearings next week as well, most of the bills will move ahead, except as I noted. Also, keep this statute in mind this weekend as flags will surely be flying⌠mine will!
1353.5. (a) Except as required for the protection of the public health or safety, no declaration or other governing document shall limit or prohibit, or be construed to limit or prohibit, the display of the flag of the United States by an owner on or in the owner's separate interest or within the owner's exclusive use common area, as defined in Section 1351.
(b) For purposes of this section, "display of the flag of the United States" means a flag of the United States made of fabric, cloth, or paper displayed from a staff or pole or in a window, and does not mean a depiction or emblem of the flag of the United States made of lights, paint, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component.
(c) In any action to enforce this section, the prevailing party shall be awarded reasonable attorneys' fees and costs.
ASSESSMENTS & FORECLOSURES
SB 561(Corbett) Common interest developments: delinquent assessments.
Location: THIS IS NOW A 2 YEAR BILL...NO HEARING UNTIL JANUARY 2012.
Summary: Would prohibit an association from assigning or pledging the association's right to collect payments or assessments to a 3rd party , or to contract with a 3rd party to collect delinquent payments or assessments, unless the 3rd party agrees to comply with the same requirements imposed on the association. The bill would specify that a waiver by an owner of his or her rights and a waiver by an association of the association's responsibilities under the act is void as contrary to public policy, and would prohibit a foreclosure proceeding from being initiated or proceeding if it is based on an agreement that is void. The bill would prohibit a 3rd party from acting as a trustee in a foreclosure proceeding. The bill would make a related statement of legislative intent.
Position: Oppose
CAL LAW REVISION COMM
AB 805(Torres) Common interest developments.
Location: THE BILL WILL SIT FOR A WHILE GIVING THE SENATE STAFF TIME TO DIGEST IT. PROBABLY A 2 YEAR BILL.
Summary: Would revise and recast provisions regarding notices and their delivery, standardize terminology, establish guidelines on the relative authority of governing documents, and establish a single procedure for amendment of a common interest declaration, among other things. CAI-CLAC PLAYED A MAJOR ROLE IN THIS REVISION AT THE CA LAW REVIEW COMMISSION OVER THE LAST 3 YEARS.
Position: Support
AB 806(Torres) Common interest developments.
Location: THE BILL WILL SIT FOR A WHILE GIVING THE SENATE STAFF TIME TO DIGEST IT. PROBABLY A 2 YEAR BILL.
Summary: Would Enact AB 805.
Position: Support
DISPUTE RESOLUTION
SB 221(Simitian) Small claims court: jurisdiction.
Location: ENROLLED TO THE GOVERNOR FOR HIS SIGNATURE OR VETO
Summary: Would increase the jurisdiction of the small claims court by increasing that amount to $10,000, except as specified. The bill, until January 1, 2015, would confer jurisdiction on the small claims court in an action brought for damages for bodily injuries resulting from an automobile accident if the demand does not exceed $7,500, and the defendant is covered by an insurance policy that includes a duty to defend.
Position: Support_if_amended; WE REQUESTED THAT ALL NON-PROFITS OR AT LEAST HOAs BE ALLOWED TO CLAIM UP TO $10,000 BUT THE AUTHOR DECLINED THE SUGGESTION. THE BILL DELICATELY BALANCED SEVERAL LOBBYING INTERESTS. EXPECT GOVERNOR TO SIGN IT.
ENVIRONMENT & CONSERVATION
AB 19(Fong) Building standards: water meters: multiunit structures.
Location: A 2 YEAR BILL
Summary: Would require a water purveyor that provides water service to a newly constructed multiunit residential structure or newly constructed mixed-use residential and commercial structure , including a structure that is part of a common interest development, that submits an application for a water connection after January 1, 2014, to require the installation of a water meter or submeter to measure the water supplied to each individual dwelling unit as a condition of new water service . The bill would require the owner of the structure to ensure that a water submeter installed for these purposes complies with laws and regulations governing installation, approval of meter type, maintenance, reading, billing, and testing of water submeters. The bill would exempt certain buildings from these requirements. This bill contains other related provisions and other existing laws.
Position: Oppose_unless_amended; DISCUSSIONS ON APPLICABILITY TO HOAs CONTINUE.
AB 818(Blumenfield) Solid waste: multifamily dwellings:
Location: IN SENATE
Summary: Would enact the Renters' Right to Recycle Act, to require an owner of a multifamily dwelling, defined as a residential facility that consists of 5 or more living units, to arrange for recycling services that are appropriate and available for the multifamily dwelling, consistent with state or local laws or requirements applicable to the collection, handling, or recycling of solid waste, except as provided.
Position: Pending; DISCUSSIONS UNDERWAY REGARDING APPLICABILITY TO HOAs.
SB 209(Corbett) Common interest developments: electric vehicle charging stations.
Location: ASSEMBLY FLOOR
Summary: Would provide that any covenant, restriction, or condition contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale of any interest in a common interest development, or any provision of the governing documents of a common interest development, that effectively prohibits or restricts the installation or use of an electrical vehicle charging station is void and unenforceable. The bill would authorize an association, as defined, to impose reasonable restrictions on those stations, as specified, and would impose requirements with respect to an association's approval process for those stations. If the station is to be placed in a common interest area or an exclusive use common area, the homeowner would be responsible for various costs associated with maintaining and repairing the station, as well as costs for damage to common areas and adjacent units resulting from installation and maintenance of the station. The bill would impose other responsibilities on the homeowner , including maintaining an umbrella liability coverage policy of $1,000,000 that names the common interest development as an additional insured. An association that violates the bill's provisions would be liable for damages and a civil penalty, as specified.
Position: Oppose_unless_amended; CLAC HAS PROVIDED SEVERAL AMENDMENTS TO THE BILL SOME OF WHICH ARE STILL PENDING.
SB 759(Lieu) Common interest developments: artificial turf.
Location: ASSEMBLY FLOOR
Summary: Would provide that a provision of any of the governing documents of a common interest development shall be void and unenforceable if it prohibits, or includes conditions that have the effect of prohibiting, the use of artificial turf or any other synthetic surface that resembles grass. This prohibition would not prohibit an association from applying landscape rules and regulations established in governing documents that establish design standards and quality standards for the installation of artificial turf, or any other synthetic surface that resembles grass, to the extent the rules and regulations do not prohibit the use of artificial turf or any other synthetic surface that resembles grass.
Position: Oppose_unless_amended; EXPECT THE BILL TO REACH THE GOVERNORâS DESK. WE WILL REGISTER CONCERNS WITH HIM CITING HIS LAWSUITS AGAINST THE MANUFACTURERS FOR TOXIC CONTENTS WHILE HE WAS ATTORNEY GENERAL.
GOVERNING DOCS
SB 150(Correa) Common interest developments.
Location: ENROLLED TO THE GOVERNOR
Summary: Would prohibit the owner of a separate interest in a common interest development from being subject to a provision in a governing document, or a provision in an amendment to a governing document, that prohibits the rental or leasing of all or any of the separate interests in that common interest development to a renter, lessee, or tenant unless that governing document, or amendment thereto, was effective prior to the date the owner acquired title to his or her separate interest. The bill would also authorize that owner to expressly consent to be subject to a governing document or amendment thereto with that specified prohibition. This bill contains other related provisions and other existing laws.
Position: CLAC EXPRESSED CONCERNS ABOUT THE ABILITY TO RENT UNDER CERTAIN CONDITIONS SUCH AS MILITARY DEPLOYMENT, HEALTH CONCERNS, ECONOMIC HARDSHIP, AND FHA/FHFA MORTGAGE LENDING RESTRICTIONS. EXPECT A SIGNATURE.
MANAGEMENT & RESERVES
AB 350(Solorio) Displaced Janitor Opportunity Act.
Location: SENATE APPROPRIATIONS COMMITTEE
Summary: Would rename the act the Displaced Property Service Employee Opportunity Act and make the provisions of the act applicable to property services, which would include licensed security, as defined, window cleaning, and food cafeteria and dietary services in addition to janitorial and building maintenance services. The bill would extend the 60-day period in the act to 90 days. The bill was amended to exempt landscape contractors.
Position: Watch
AB 771(Butler) Common interest developments: requests for documents: fees.
Location: SENATE JUDICIARY COMMITTEE HEARING JULY 5
Summary: Would require that the seller also provide a copy of specified minutes of the meetings of the association's board of directors , if requested by the prospective purchaser . This bill would also require an association to provide to the seller a written or electronic estimate of the fees that will be assessed to provide the specified documents. The bill would permit the association to collect a reasonable fee based on the association' s actual cost for procuring, preparing, reproducing, and delivering the requested documents and would prohibit charging additional fees for electronic delivery of documents. The bill would permit the association to contract with any person or entity to provide the documents on behalf of the association . The bill would require the owner of a separate interest to also provide a form for billing disclosures, as specified, to a prospective purchaser, and would also require the association to provide this form to a recipient authorized by the owner of the separate interest. There will NOT be any cap on third party provider fees in the bill.
Position: Oppose_unless_amended; THUS FAR, THE SEVERAL AMENDMENTS ARE TO OUR LIKING.
SB 337(Kehoe) Tenancy: political signs.
Location: ON ASSEMBLY FLOOR FOR VOTE
Summary: Would prohibit a landlord from prohibiting a tenant from posting or displaying political signs relating to an election or legislative vote, the initiative, referendum, or recall process, or issues before a public body for a vote, except under certain circumstances. The bill would require a tenant to comply with the time period established by the local ordinance for the posting and removal of political signs or, in the absence of those provisions, by reasonable time limits, as specified, established by the landlord.
Position: Neutral, AS AMENDED BY CLAC, IT WILL NOT APPLY TO HOAs.
SB 563(Committee on Transportation and Housing) Common interest developments: meetings.
Location: ASSEMBLY FLOOR FOR VOTE
Summary: Would require notice for a meeting that will be held solely in executive session to be given to members of the association at least 2 days prior to the meeting, except as specified. The bill would provide that, if a member consents, notice may be given to the member electronically, and would also delete provisions that generally allow the board of directors to consider any proper matter at a meeting even if it has not been noticed as an action item for the meeting.
Position: Oppose_unless_amended; NOT ALL OF CLACâS CONCERNS WERE REMEDIED. THE BILL WILL REACH THE GOVERNOR. EXPECT A SIGNATURE. | 
