New Year, and New HOA Laws (in 2017)

2016 was a relatively quiet year for HOAs in Sacramento, with only three bills passing to become law in 2017, and another law taking effect in 2017 from a 2014 bill. Another significant new HOA law actually came from Washington D.C. – the Department of Housing and Urban Development.

SB 918

Senate Bill (SB) 918 adds a new Civil Code section 4041(a), and at first glance appears to be innocuous. It requires all common interest development owners to annually and in writing provide the HOA their contact information for sending HOA notices, and to inform the association whether the residence is owner-occupied or rented. Associations are required to solicit these notices at least 30 days prior to the annual association disclosures. If an owner does not annually provide this notification, the association must deem the residence address as the address for notifications. There are at least two major issues here – HOAs and their managers now have an additional annual notification to owners which cannot be lumped in with the Annual Budget Report and Annual Policy Statement; and off-site owners now need to tell the HOA each year of the off site address or their notices will be sent to the tenant’s address. Thousands of future notices to landlords will be sent to the wrong location, because they do not annually notify their association as required.

AB 2362

Assembly Bill (AB) 2362 adds a new Civil Code section 4777. Under this new section HOAs intending to have pesticides applied (without using a licensed pest control operator) in common area or a residence must post notice of the impending pesticide treatment and notify adjacent residents at least 48 hours in advance. So, for example before the HOA handyman sprays an area for ants, the notice must be given. Landlords (as of 2015) and pest control operators already had a similar requirement in place, so the law now applies the requirement to common interest developments.

AB 1963

AB 1963 extends the current pre-litigation requirements applicable to HOA construction defect claims. Those requirements, found at Civil Code 6000, had been scheduled to expire on July 1, 2017, but the expiration date has been extended to 2024.

AB 968

One law takes effect in 2017 from AB 968, a bill passed in 2014. It amends Civil 4775 to clarify something already implicitly in the statute – that, unless CC&Rs say otherwise, the HOA repairs exclusive use common area. The law takes effect, finally, in 2017, but it changes nothing. Associations desiring to allocate repair or maintenance responsibility differently than Section 4775 can amend their CC&Rs to tailor the situation to their community – thereby rendering Section 4775 inapplicable.. (“unless otherwise provided in the declaration…”).

Code of Federal Regulations 100.600 and 100.7

The most significant legal change for HOAs in 2017 actually became effective on October 14, 2016, as the Department of Housing and Urban Development adopted final regulations banning unwanted sexual advances or hostile environments in common interest developments – by managers or by residents against residents. How HOA boards will prevent a resident from inappropriate remarks or actions by another resident remains to be seen. The regulation is 24 Code of Federal Regulations 100.600 and 100.7, and will be addressed very soon in the HOA Homefront column.

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®.