Happy New Year! As we enter 2014, there have been some significant changes in community association laws in California (Click Here for our 2013 Legislative Update). Not the least of which is the restating of the Davis-Stirling Act. While we have already addressed the most significant changes in the new Davis-Stirling Act (Click Here for our Guide to the New Davis-Stirling Act), now that the revision has taken effect, and we are dealing with the new law on a day-to-day basis, new issues are being discovered which were not anticipated. As these issues pop-up, we will be writing on them to bring them to light, and provide some guidance on how to address these new issues.
Of course we couldn’t get far into the new year without the first of these “unforeseen” issues already coming to our attention. This one courtesy of Cathy Acquazzino of Progressive Community Management. Cathy noticed that under the “old version of the Davis-Stirling Act, when an association used funds from reserves to pay for litigation, the association was required to give notice of that decision to its members in the “next available mailing.” (Old Civil Code section 1365.5(d)). This language set the time period within which the board had to notify its members of the use of reserve funds to pay for litigation.
Under the new Davis-Stirling Act, 1365.5(d) is restated in Civil Code section 5520. One of the changes from the old language in this section is the elimination of the phrase that notice of the board’s decision to use reserve funds to pay for litigation must be given in the “next available mailing.” Instead, section 5520 simply states that the association “shall provide general notice pursuant to Section 4045 of that decision, and of the availability of an accounting of those expenses.”