URGENT LEGISLATIVE ALERT – Governor Brown Signs Emergency Executive Order Banning HOAs.

California Governor Jerry Brown today signed an emergency executive order banning homeowners associations in California. The order, which took effect at noon on 4/1/2015, declares all CC&Rs to be void, and all associations immediately dissolved. “I am taking this action to address all the homeowners whose property values are artificially inflated because they have an association taking care to maintain the common area in nice, neat and attractive conditions and forcing people to keep their homes neatly painted and maintained. It’s not fair to people who don’t have the advantages of those living in an HOA, so I’m eliminating them,” Brown said as he signed the order.

Immediately after signing the order Brown tore it up, exclaiming “April fools!”

2014 Legislative and Case Law Update for California Community Associations

legislative-update_original_cropLegislative Update

 One could say that 2014 was a “dry” year for legislation affecting community associations because some of the most important legislation this year affecting associations addressed an association’s ability to enforce governing documents in times of government-declared drought. However, the year also brought new legislation clarifying who is responsible for repair and replacement of exclusive use common area, new rules regarding Internal Dispute Resolution (IDR), and solar energy installations by owners.

1.      AB 968 – Repair and Replacement of Exclusive Use Common Area

What started out as a bill designed to relieve small associations from the expensive burden of dual envelope, secret ballot elections, was amended this year to instead address an ambiguity in the Davis-Stirling Act with respect to maintenance responsibility of exclusive use common area.

Common area is area within an association that is generally owned by the association. Examples of common area include a community pool, roofs in a condominium project, or a community clubhouse. This is as opposed to the separate interest owned by the members, such as the interior of an owner’s unit where the members live in a condominium project. There are, however, some areas that are owned by the association, but which are designated for the exclusive use of a particular unit. These areas typically include balconies or patios. These areas may be defined in the association’s governing documents as “exclusive use common area” because they are owned by the association (and, thus, common area), but are used exclusively by the residents of a particular unit.

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There is a New Day Care Home in the Association. What can the Board Do?

While they cannot be prohibited, Day Care homes are subject to reasonable regulations. Such regulations can include the following:

Day careAssociations cannot prevent the running of a day care at a residence in the Association. As a matter of public policy, under Health and Safety code section 1597.40(a), children in a day care home are to be provided the same environment as is provided in a traditional home setting. As a result, the California legislature has declared day care centers in residential single-family homes cannot be prohibited, and determined than any restrictions that directly or indirectly limit the acquisition, use, or occupancy of property for a family day care home for children are invalid and unenforceable. H&S §1597.40(c). A “day care home” is defined as one that regularly provides care, protection, and supervision for 14 or fewer children for periods of less than 24 hours per day.” H&S §1596.78(a).

While they cannot be prohibited, Day Care homes are subject to reasonable regulations. Such regulations can include the following:

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Are you Giving Proper Notice When Using Reserves to Pay for Litigation?

NoticeHappy 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.”

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2013 Legislative Update for California Community Associations

Photo-Legislative-Update-22013 Proved to be a relatively quiet year for legislation for community associations. However, that does not mean that 2014 does not bring some drastic changes.  

1. AB 805 – Restated Davis-Stirling Act

AB 805 enacted in 2012 reorganized and restated the Davis-Stirling Act and moved it to a new part of the California Civil Code. While there are some changes to the Davis-Stirling act as a result of AB 805, most of the changes are relatively benign as this was designed to be a non-controversial matter. We have already written about the more significant changes coming with the restated Davis-Stirling act, and you can find our detailed article, “Guide to the Davis-Stirling Act Reorganization (AB 805)“, or click here to download a PDF version of that article.

2. SB 745 – Davis-Stirling Restatement Clean-up Legislation

SB 745 is a multi-issue omnibus bill, and as it relates to community associations primarily acts to “clean up” some issues related to the reorganizing of the Davis-Stirling Common Interest Development Act, which becomes effective on Jan. 1, 2014. As enacted in 2012, AB 805 reorganized and rewrote the Davis-Stirling Act in a new part of the California Civil Code. As often happens with such a significant undertaking, items are inadvertently omitted, or changes in the law are not incorporated in time to be included in the bill. SB 745 serves to rectify those types of issues.

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