Bills That Made It in Sacramento and Some Which Didn’t

September 30 was the last day for the Governor to sign or veto bills passed by the Legislature in 2018. Many bills affecting HOAs were signed, and two were vetoed.

SB 261

This bill, signed by the Governor on September 27, amends Civil Code 4040 to allow homeowners to use email to request the HOA send communications via email to the homeowner, and amends Civil 4360 to require 28 days (instead of the current 30) notice to homeowners for proposed rule changes.

SB 721

HOAs exempted. SB 721 requires multilevel residential properties to conduct inspections of balconies and other elevated elements every six years. Signed into law by the Governor on September 17, the final version of the bill exempts HOAs from its requirements.

SB 1016

Time of Usage (“TOU”) Meters. SB 1016, signed by the Governor on September 13, adds a new Section 4745.1 to the Civil Code, protecting the installation of TOU meters for electric vehicle charging stations. HOAs may impose reasonable requirements on the requesting owner.

AB 2912

New Association Financial Requirements. AB 2912 requires boards to review the HOA financials monthly instead of the current quarterly requirement. The new law, approved by the Governor on September 14, requires all HOAs to have fidelity (dishonesty) insurance in place. It also requires documentation of board authority for expenditures over $10,000 or 5% of the HOA’s budget, whichever is lower.

SB 1128 and 1265

Vetoed. Two of the most troubling bills for California HOAs this year were Senate Bills 1128 and 1265. SB 1265 would have made it much harder for common interest development associations to preserve elections if technical errors occurred, and would have outlawed the ability of association members to adopt reasonable board eligibility standards. SB 1128 originally made some technical and sensible changes to the Davis-Stirling Act, but late in the legislative process was amended, adding the harmful content of SB 1265.

On Sunday September 30, Governor Brown vetoed both SB 1128 and SB 1265 with identical veto messages stating in part that each bill “takes a once-size-fits-all (sic) approach, but not all homeowner associations are alike” and adding “If changes to an election process are needed, they should be resolved by the members of that specific community.”

The election procedures from Civil Code 5100-5135 are complicated, applying to all HOAs regardless of size, and necessitate guidance from experienced and qualified managers and legal counsel. HOAs still should consider adopting reasonable board eligibility requirements to make sure associations are governed by the best available volunteers.

Others

A few other technical bills were passed correcting typos, addressing housing density requirements, and timeshares, but will not affect most associations already in operation.

To review California law or legislation, the official site is www.leginfo.legislature.ca.gov. Click on “California Law” then “Civil Code” to review the Davis-Stirling Act, which begins at Section 4000. Click on “Bill Information” to review current or past bills. Although many law firms and organizations have web sites offering law and legislation references, this is the official California web site.

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.