HOA Rules Must Cover Five Required Topics - Does Yours?

By Kelly G. Richardson, Esq. CCAL, HOA Homefront Column

Operating rules are often called “house rules” or “rules and regulations,” and must be written pursuant to Civil Code Section 4350(a).  Rules are modified by HOA boards under the process described in Civil Code Section 4360. In adopting rule changes, boards must follow the procedure prescribed by Civil Code Section 4360.

Most rules are tailored to the needs and desires of a given community, addressing parking, pool use, or other topics. However, there are five mandatory topics that per statute must be addressed by the HOA’s rules.

Election rules: Associations must have election rules, per Civil Code 5105. That statute lists the basic requirements of election rules, including board eligibility standards. These rules apply not only to board elections, but also to any matter on which a topic on which a membership vote is required using the 30-day notice and other voting procedures required by Civil Code Section 5100(a). These rules must conform to statute and the bylaws and are likely out of date, given the addition of the acclamation option in 2022 under Civil Code 5103.

Internal Dispute Resolution (“IDR”) Policies: Associations must adopt fair and reasonable policies to establish an IDR procedure in which a homeowner may meet with another homeowner or the board to try to work things out short of litigation, under Civil Code 5905. If an association fails to create such a policy, Civil Code 5915 prescribes the default procedure.

Architectural Modification Request Procedures: Boards frequently receive requests from homeowners wishing to modify their residence or adjacent common area.  Civil Code Section 4765 requires associations to have a written procedure for the application process.  Without such procedures, homeowners and board alike have no guidance as to how applications are to be processed.

Assessment Delinquency Enforcement Policies: Civil Code Section 5730 requires detailed disclosures regarding association handling of delinquent assessments, and under Civil Code 5310(6) is part of the Annual Policy Statement published annually to members. Civil Code 5310(7) requires that the association policies in enforcing lien rights be annually given to members. Associations might adopt the contents of Civil Code 5730 as rules and then add any lien enforcement policies to satisfy Section 5310(7).

Schedule of Fines: A common disciplinary measure is to impose fines, after a hearing, to discourage members from violating association rules and covenants.  However, many are unaware that the only the fines disclosed in the HOA’s rules can be imposed, because Civil Code 5850(c) restricts fines to those as stated in the written fine schedule in effect at the time of the violation. Without a fine schedule, there aren’t fines. Also, make sure the HOA’s disciplinary policy complies with the revised Civil Code 5850.

All California HOAs must have each of these five rule sets.  The IDR, assessment delinquency, architectural application procedures, and fine schedule must be disclosed in the Annual Policy Statement (Civil Code 5310). Election rules must be sent to members at least 30 days before elections, per Civil Code 5105(g).

Each of these rules must be adopted following the Civil Code 4360 process, which requires the exact text of the proposed rule change to be announced at least 28 days before the board vote on the proposed changes.

Complete and compliant HOA rules provide guidance to board and members.