2022 Legislative Update - Room Rentals, Social Media and ADUs

Assembly Bill 1410 (AB 1410) (Rodriguez) loses steam at the finish line and becomes law with a lessened impact on community associations.  

AB 1410 Amends Section 4515, and adds Sections 4739 and 5875 to the Civil Code. As introduced, the proposed legislation sought to ensure that homeowners associations were “ethical, working toward the best interest of the property owners and not going out of their way to harass, fine, or limit the enjoyment of the homeowners’ property.”

It targeted community leaders, to address what its author described as “increases in lawsuits, harassment, public safety calls, and a host of other unforeseen issues that will increase the cost to the public that is unnecessary.”

Despite the author’s benevolent objectives, the proposed legislation micromanaged how a community’s leaders would govern the communities they were elected to serve and threatened to restrict a board’s ability to effectively operate, maintain or manage the community; to govern.

This bill quickly caught the attention of CAI-CLAC, which spent the better part of the legislative session educating and advocating the Legislature to successfully pair down AB 1410 to the less harmful version of the bill that was ultimately signed into law and takes effect in January 2023.

As introduced, AB 1410 sought to do the following:

• Prohibit the governing documents from restricting an owner from leasing, without regard to whether a lease restriction existed when the owner acquired their property;
• Allow an owner to use their entire separate interest for personal agriculture, not just their rear yard;
• Prohibit any restrictions on discussions critical of the association;
• Require every director and full-time employee to complete an ethics and harassment prevention course;
• Prohibit an association from taking any landscape enforcement action during a declared emergency, or on days where the air quality is unhealthy, as determined by the State Air Resources Board;
• Prohibit an association from taking any enforcement actions for the violation of governing documents during, and for 30 days after, a declared emergency, evacuation, shelter in place order, or quarantine.
• Require physical evidence used in determining if a violation of the governing documents occurred to be made available to the accused member;
• Require that any photographs that are used to determine a violation of the governing documents occurred to contain the time and date the photo was taken. 

The version of the legislation signed into law, removes much of the most onerous micromanagement and overregulation,  leaving a scaled down bill focused on social media use and room rentals, as follows:

Protection of Owner/Resident Use of Social Media

AB 1410 amends Civil Code Section 4515 (Assembly for Political Purposes; Flyers, Social Media) the 2018 law which protects members and residents’ right to petition residents, distribute flyers and other materials, and gather in common area. This amendment focuses on protecting a resident’s right to use online media sources, including social media, to discuss any of the following, even if the content is critical of the association or its governance:

• Development living.
• Association elections.
• Legislation 
• Election to public office.
• The initiative, referendum, or recall processes.
• Any other issues of concern to members and residents.

This amendment specifies that an association is not required to provide online or social media resources to members; nor must an association allow members to post content on the association’s internet website.

This amendment also states the obvious—that an association shall not retaliate against a member or a resident for exercising any of the rights contained in this section.

Room Rentals Allowed

AB 1410 next adds Civil Code Section 4739 to allow room rentals for more than 30 days.  The law bans enforcement of any governing document lease prohibition of a portion of the owner’s residence for more than 30 days, provided the owner also reside in the home. This allows an owner to take on boarders, or caregivers who lease a room in the owner’s residence while occupied by the owner.

Civil Code 4739 does make it clear that owners and tenants alike must comply with the governing documents as they relate to conduct in the community, membership rights and privileges such as parking and access to amenities.

Limits Governing Document Enforcement in an Emergency

Finally, AB 1410 limits governing document enforcement in times of an emergency. The legislation adds Civil Code 5875, addressing enforcement in times of a declared emergency to prohibit enforcement of the governing documents, other than for nonpayment of assessments, during a declared state or local emergency if the nature of the emergency makes it unsafe or impossible for the owner to repair or address the violation. 

ACCESSORY DWELLING UNITS (ADUs) REVISITED
New Limits on local government authority over ADUs

SB 897 (Wieckowski) Accessory dwelling units (ADU); Junior Accessory Dwelling Units (JADU).

Senate Bill 897 (SB 897) seems to have slipped in the back door of 2022 without much fanfare to make what appears to be sweeping adjustments to the design and approval of ADUs and JADUs by local governing agencies.

SB 897 amends sections of the Government Code covering local agency approval of ADUs and JADUs.  It  instructs local agencies to “ministerially” approve these housing units (meaning without regard to judgment or discretion).

Under this Planning and Zoning Law, a local agency may provide for the ministerial approval of such matters as parking, height, setback, landscape, architectural review, and the maximum size of an ADU. SB 897 imposes an “objective standard” on ADU approval of such factors, prohibiting personal or subjective judgment by any public official.

Among the more significant ADU changes in SB 897 are height limitations and setback requirements. Existing law limits a local agency to ministerially approve an ADU with a  maximum height limitation of 16 feet and a 4-foot side and rear setback requirement. SB 897 increases this maximum height limitation to 18 feet if the accessory dwelling unit is within 12 mile walking distance of a major transit stop or a high-quality transit corridor, or to 25 feet if the accessory dwelling unit is attached to a primary dwelling, while maintaining the 4 foot setback requirement; however, this law would prohibit a local agency from rejecting an application for an accessory dwelling unit because the existing multifamily dwelling exceeds applicable height requirements or has a rear or side setback of less than 4 feet.

The degree to which SB 897 limits  local government agency discretion on approval of ADUs and JADUs underscores how critical it is for associations to adopt architectural rules addressing the application and approval requirements for the community. Fortunately, Civil Code Section 4751 governing ADUs/JADUs in community associations still allows for reasonable restrictions. These architectural restrictions should include specific design elements and reasonable architectural requirements to diminish the impact of the ADU on the aesthetic quality of your community, lessen the impact of the ADU/JADU on the other residents’ quiet enjoyment, and ensure consistency of design throughout the development.  

REMINDER: NEW CIVIL CODE SECTION 4040 Effective January 2023

In January 2022 Civil Code 4041 became effective, requiring members on an annual basis to provide written notice to the association of the member’s preferred method of receiving individual notices from the Association, to include the following:

(1) The member's preferred delivery method for receiving notices from the association, which shall include the option of receiving notices at one or both of the following:

(A) A mailing address.

(B) A valid email address.

(2) An alternate or secondary delivery method for receiving notices from the association, which shall include the option to receive notices at one or both of the following:

(A) A mailing address.

(B) A valid email address.

(3) The name, mailing address, and, if available, valid email address of the owner's legal representative, if any, including any person with power of attorney or other person who can be contacted in the event of the member’s extended absence from the separate interest.

(4) Whether the separate interest is owner-occupied, is rented out, if the parcel is developed but vacant, or if the parcel is undeveloped land.

Along with the above, a new version of Civil Code Section 4040 was passed which makes direct reference to the member’s specific Civil Code 4041 “preferred delivery method” referenced above, but the amended law’s effective date was delayed until January 2023.  New Civil Code Section provides:

(a)

(1)        If a provision of this act requires an association to deliver a document by “individual delivery” or “individual notice,” the association shall deliver that document in accordance with the preferred delivery method specified by the member pursuant to Section 4041.

(2)     If the member has not provided a valid delivery method pursuant to Section 4041, the association shall deliver the document by first-class mail, registered or certified mail, express mail, or overnight delivery by an express service carrier addressed to the recipient at the address last shown on the books of the association.

(b)     Upon receipt of a request by a member identifying a secondary email or mailing address for delivery of notices, pursuant to Section 5260, the association shall deliver an additional copy of both of the following to the secondary address identified in that request:

(1)     The documents to be delivered to the member pursuant to Article 7 (commencing with Section 5300) of Chapter 6.

(2)     The documents to be delivered to the member pursuant to Article 2 (commencing with Section 5650) of Chapter 8 and Section 5710.

(c)      For the purposes of this section, an unrecorded provision of the governing documents providing for a particular method of delivery does not constitute agreement by a member to that method of delivery.

Note that this new version of Civil Code Section 4040 has a perhaps unintended consequence on email delivery of association notice.

Under the prior version of Civil Code Section 4040 (a) (2), once a member consented to email notice, email delivery to that member was permitted unless that member revoked the email consent, in writing. This provided a default email delivery of sorts for those members who previously consented to email delivery, and allowed for associations to develop member valuable email databases for providing notices and certain document delivery. New Section 4040 eliminates this default email delivery by requiring delivery by mail at the member’s last known address, if the member has not provided its preferred method of delivery. In other words, New Civil Code 4040 requires an owner to annual opt into email delivery or otherwise the association must provide notice by mail.

GOODBYE TO COMPLETE VIRTUAL MEETINGS; HELLO TO THE HYBRID MEETING

In 2021, California passed SB 391 granting an association limited emergency powers to conduct board or members meetings virtually in the event of a state of emergency that prevents the association from meeting. SB 391 amended Civil Code Section 4090 and added Civil Code Section 5450, to allow an association to meet solely by teleconference, without a physical location if a declared emergency prevented an in-person meeting. Even though the declared Covid-19 State of Emergency is still in effect (and set to expire February 28, 2023) many associations are not in compliance with Civil Code Section 5450 as they continue to meet solely by video teleconference.

Civil Code Section 5450 requires two separate, yet related requirements:

1. The association is in an area affected by a federal, state or local declared state of emergency or disaster; and,
2. Gathering in person is unsafe or impossible because the community is in an area affected by the declared state of emergency or disaster.

SB 391 includes some additional hoops to jump through in order to conduct a meeting solely by teleconference (including special notice requirements and director vote by roll call), assuming the above requirements are met. We include SB 391 here as a reminder that if your community still conducts meetings solely by teleconference, video or audio,  make sure your association meets the two requirements above, along with the other requirements of Civil Code Section 5450.

The Video Teleconference Is Not Dead.

In the absence of a state of emergency, or if it is not impossible or unsafe to meet, associations can continue to make use of the videoconference platforms to conduct board or association meetings. In fact, this hybrid procedure of conducting meetings existed long before Covid-19; however, it took the pandemic to remind us it existed. A board can meet by teleconference (audio or video) provided there also is a physical location provided where members can attend in person if the member so desires. Civil Code Section 4090 defines a board meeting to include a teleconference where there are a sufficient number of directors to establish a quorum of the board, in different locations, connected by electronic means, through audio or video, or both. The notice of the teleconference meeting shall identify at least one physical location so that members may attend, and at least one director or a person designated by the board shall be present at that location. This physical location can be the managing agent’s office with the managing agent as the person designated by the board to be present.

During the pandemic, communities experienced the many benefits of videoconference meetings including greater member participation, more meaningful input and interaction, more effective board meeting protocols and procedures, and greater control over meetings. This led to more efficient meetings. With a little planning, and some creativity, communities should continue to enjoy the ease and efficiency of videoconference meetings while providing a statutorily mandated physical location.

IT’S OFFICIAL. HOA ASSESSMENT COLLECTION DOES NOT REQUIRE LICENSING

In 2020, the Legislature passed SB 908 (Wieckowski) the Debt Collection Licensing Act “Act” which sent chills up the spines of many of us who perform assessment collection services for our communities. Immediately much debate ensued over whether the Act included the collection of assessments within its licensing requirements and whether assessment collection companies or lawyers specializing in assessment collection would have to be licensed. After much prodding, in May 2022, the California Department of Financial Protection and Innovation issued its findings that routine common interest development assessment collection is not a “consumer credit transaction” subject to the Act. As such, assessment debt collection is not “consumer debt collection.” As such, licensing under the Act is not required for association managers and legal counsel involved in pursuing delinquencies.

WORKPLACE AND EMPLOYMENT RELATED LEGISLATION

For communities with employees, 2022 brought us a couple of laws addressing employee benefits and protections in the workplace that may impact your communities and their staff.

Expanded Family Leave

Assembly Bill 1041 Employment, Leave. This bill amends Government Code Section 12945.2 and Labor Code Section 245.5 to expand the class of persons for whom an employee may take leave to care for to include a “designated person,” to mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. An employer may limit an employee to one designated person per 12-month period. In addition, the employee is entitled to use paid sick days for 30 or more days for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member. This law expands the definition of the term “family member” to include a designated person, which, for purposes of these provisions, would mean a person identified by the employee at the time the employee requests paid sick days, subject to limitation by the employer, as prescribed.

Employee Cannabis Protection

Assembly Bill 2188 (Discrimination in employment; use of cannabis). This bill adds Section 12954 to the Government Code to expand protections under the California Fair Employment and Housing Act. Effective January 1, 2024, AB 2188 makes it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalize a person, if the discrimination is based upon the person’s use of cannabis off the job and away from the workplace. Notably, the bill does not impact the use of pre-employment drug screening, or positions requiring a federal background investigation, or clearance and employees in the building and construction trades. The law expressly does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.

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