Plenty New in 2022Jan 03, 2022
By Kelly G. Richardson, Esq. CCAL
Many laws are changing for California HOAs this year, and here is a recap of the most important changes.
Longer deadline for petitioned membership meeting. If at least 5% of members petition for a special membership meeting, the meeting must now be held within 35 to 150 days after the HOA receives the petition. (Corporations Code Section 7511(c)).
Term limits again allowed. For HOAs with board term limits, new Civil Code Section 5103(d)(2) confirms that term limits can be an eligibility requirement along with the four optional eligibility requirements of Civil Code Section 5105(c).
Election by acclamation. If there are only enough candidates for the open seats, new Civil Code Section 5103 allows the board to declare the candidates elected if the HOA has sent the required notices and if the HOA has had at least one election with votes counted in the prior three years. HOAs may wish to update their election rules and require the necessary notices to be sent to preserve this cost-saving option.
Disseminating personal data. New Civil Code 5230(c) prohibits either the HOA or its management to sell or transfer personal information on members to third parties. Previously, some management firms under their contracts provide that they sell or transmit member data to outside organizations, but this is now prohibited.
Websites as bulletin boards. New Civil Code Section 4045(a)(5) allows HOAs to use their websites for general notices so long as the Annual Policy Statement says so.
Rental restrictions. HOAs are required to remove illegal rental restrictions from governing documents per Civil Code Section 4741 by July 1, 2022. A revision to Civil Code Section 4741(f) opens a six-month period beginning January 1 and ending July 1, 2022, in which illegal rental restrictions in CC&Rs may be removed by board vote without a membership vote. An announcement must be published to the membership at least 28 days before the board vote to approve the amendment. Most HOA CC&Rs do not contain illegal “unreasonable” rental restrictions, but if they do, legal counsel should be involved to ensure the amendment is necessary and stays within the narrow limits of the revised Section 4741(f).
Financial Controls. For HOAs of 50 or less memberships, a new Civil Code Section 5502(a)(1) lowers the threshold triggering the requirement of written board approval for financial transfers from $10,000 or 5% of budget to $5,000.
Purely virtual HOA meetings. Under an urgency statute in effect since September 2021, during local, state or federally declared emergencies preventing meetings, a new Civil Code Section 5450 allows board or membership meetings to be 100% electronic (with no physical attendance) so long as a prescribed initial announcement is made to all members, and issues further required announcements prior to each fully virtual meeting. All board votes must be by roll call vote, and in membership meetings at which votes are counted the Inspector’s counting must be on camera. HOAs still may have “hybrid” meetings, so long as normal Open Meeting Act requirements are met.
Safe At Home program. For HOA members participating in the relatively new “Safe At Home” program, a new Civil Code Section 5216 requires that HOAs use the address designated by the Secretary of State for that owner and may not share their name, address, or email address with other HOA members.
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