Category: Pending legislation

LEGISLATIVE ALERT – Governor Brown signs AB 596

131754-gov-jerry-brown_1Governor Brown has signed AB 596 which, beginning July 1, 2016, requires the annual budget report of a condominium project to also include a separate statement describing the status of the association as a Federal Housing Administration (FHA) approved condominium project and as a federal Department of Veterans Affairs (VA) approved condominium project.
The statement as to the FHA certification status of the association must be in at least 10-point font on a separate piece of paper and in the following form:
“Certification by the Federal Housing Administration may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest.
This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the Federal Housing Administration.”
Similarly, the statement on the VA certification status of the association must also be in at least a 10 point font, on a separate piece of paper and in the following form:
“Certification by the federal Department of Veterans Affairs may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest.
This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the federal Department of Veterans Affairs.”
There is no requirement that the disclosure document be revised mid-year should the association’s certification status change. However, as part of the disclosure form, associations should consider including a statement indicating the date as of which the status identified on the form is accurate, and including information on the form that those interested can obtain the most currently available information by
checking the association’s certification status on-line at the FHA and VA websites.
FHA status can be checked online at U.S. Department of Housing and Urban Development website, or:
VA status can be checked at the Department of Veterans Affairs web site or:

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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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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A Guide to the Revised Davis-Stirling Act (AB 805)

There will no doubt be some adjustment period to the new revised Davis-Stirling Act. However, the reality that the revision to the Davis-Stirling Act was really simply rewritten rather than changed in any significant way. This should provide comfort to managers and board members anticipating the new law and its implementation coming in January 2014.

I recently spoke to the Inland Empire Chapter of CAI regarding the upcoming changes to California’s Common Interest Development Act, or the Davis-Stirling Act, which takes effect on January 1, 2014. In preparation for that presentation, it became clear that despite the numerous resources available regarding the revised Act, many people are still concerned and wonder how the new law will impact their community association. The good news is that there is no reason to panic. The revisions to the Davis-Stirling Act were designed to be non-controversial. As a result, the substantive changes to the law are relative few in number and small in impact. In addition, there are some advantages to revising the Davis-Stirling Act. The current version of the Act has several “issues.” Sections which are logically related to each other are not located near each other in the Act making locating all the relevant sections difficult and confusing. Also, several sections are excessively long and complicated making them hard to read. The revisions to the Act make several changes which address the current version’s short comings. These include changes which group related provisions in a more logical order, long sections are divided into shorter, easier to read sections, more consistent terminology is used throughout the Act, and governance procedures are standardized. That does not mean there aren’t some disadvantages, however. The most significant of which is that those of us who deal with the Davis-Stirling Act will have to learn all over again what code sections contain various provisions due to the complete renumbering of the Act.

While a board may want to consider amending the governing documents, there is no legal requirement to do so. However, the new law (Civil Code section 4235) allows a board to amend the governing documents to update references to various sections of the Davis-Stirling Act by a board vote, allowing boards to avoid a member vote to amend the CC&Rs in this limited circumstance.

The following highlights the changes to the Act which we find to be the most significant. There are some additional changes which are not addressed in this article because few will ever come across them (such as the change in who can sign an amendment to a condo plan), but the changes you are most likely to encounter are covered.

  1. Notice and Delivery – One of the most significant changes in the Davis-Stirling Act is how an association can give “notice” to its members. New Civil Code section 4045 allows for “general notice” to be given by (1) first class mail; (2) email, facsimile, or other electronic means upon receipt of written consent to receive notice in that fashion; (3) inclusion in a billing statement, newsletter or other document Continue reading “A Guide to the Revised Davis-Stirling Act (AB 805)”

AB 2273 Signed into Law. Associations Should Record “Request for Notification” to be Notified of Foreclosure Sales within Association

AB 2273 was signed into law by Governor Jerry Brown. The bill requires foreclosing parties to record a sale within 30 days of the sale. This will benefit associations since it now requires public notice as to who owns the property, and where they may be contacted so that associations can properly invoice all owners for assessments.

AB 2273 has been signed into law by Governor Jerry Brown. The bill requires foreclosing parties to record a sale within 30 days of the sale. This will benefit associations since it now requires public notice as to who owns the property, and where they may be contacted so that associations can properly invoice all owners for assessments.

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 will have to have recorded 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.

All California community associations should contact their legal counsel to make sure that a proper “Request for Notification” has been recorded so that the association can receive the benefits that the new law provides. 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.

Congratulations to CAI, who sponsored the bill, and worked hard to get it passed for the benefit of all California community associations!