New Laws Coming For HOAs in 2025 – Part II

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

Governor Newsom in late September signed three bills into law helping HOAs and their residents: AB2159, AB2460, and SB900. Last week’s column addressed AB2159, and this week’s column will review Assembly Bill 2460 and Senate Bill 900, also effective January 1, 2025.

SB900 greatly expands Civil Code Section 4775, which mainly addresses how maintenance and repair obligations are allocated between homeowners and the HOA if the CC&Rs are silent.

A new subpart (a)(2) is inserted into Section 4775, stating that, unless the CC&Rs state otherwise or a utility provider is responsible, the HOA must maintain, repair, and replace utility services (gas, water, electricity, or heat) to individual homes. The HOA is expressly required to make repairs extending into the Unit or Lot affected, if that is what it takes to restore the utility service.

Additionally, a new subpart (b) is added to the statute, requiring HOAs to start repairs to restore utility services within 14 days of the service interruption. If there is not enough money in the reserve account designated for utility restoration to pay for the work, the board may without a member vote borrow money and impose an emergency assessment upon the membership. This may override some HOA governing documents that limit or prohibit boards from borrowing without membership votes.

One interesting part of these amendments is a new subpart (b)(3), which provides that if the HOA board cannot meet quorum within 14 days after the service interruption, the board can schedule a meeting with the quorum reduced to the number of directors attending the meeting. This could mean that if the rest of the board cannot attend, one director might make the decisions necessary to restore utility services. Alternatively, a new subpart (b)(4) allows boards to vote electronically or by email to authorize the work to restore utility services. This is the first non-emergency matter allowed for boards to vote by email. 

A new subpart (c) is added to Civil Code Section 5550, the reserve study requirement statute, which adds as a “major component” to be studied the “gas, water, and electrical service to the extent” the HOA is responsible. So, reserve study preparers will now be expected to predict the useful remaining life of electrical service elements, and water and gas plumbing.

AB2460 makes a variety of amendments to the Davis-Stirling Act in 2025. These changes are clarifications of the reduced quorum provisions of Civil Code 5115, which starting in 2024 allows quorum for board elections to be reduced to 20% on the second try. The amendments for 2025 clarify that HOAs with governing documents providing for a quorum lower than 20% on second attempt board elections may use that lower quorum. 

The amendment to the statute clarifies that the 20% quorum figure is 20% of all members, whether they participated or not. The bill also makes a number of textual clarifications to accommodate the fact of electronic voting which becomes available to California HOAs in 2025 (AB2159, discussed in Part I)

The official site to view California statutes and pending legislation is www.leginfo.legislature.ca.gov. Click on “California Law” to view statutes and click on “Bill Information” to view pending bills which are not yet law. All other websites are not officially recognized by the state.