CLAC CORNER September 8, 2011 END of SESSION UPDATE – Update by Skip Daum CAI-CLAC Legislative Advocate

Update by Skip Daum CAI-CLAC Legislative Advocate

The first half of the biennial legislative session will have ended before you read this. Nevertheless, there are a few important bills for you to be aware of and plan to implement.

Perhaps most important are two bills that directly effect HOA operations. The first is Senate Bill 563 (by Mark DeSaulnier, Chairman of the Senate Transportation and Housing Committee). Essentially the bill, which takes effect January 1, 2012, prevents boards from meeting without notice to members. It was asserted in the hearings that some boards met without notifying the members of the time, place and agenda items and were therefor deemed to be less than transparent. Initially, the bill even prevented directors from even speaking to one another about association matters outside of a noticed meeting. However, CAI-CLAC lobbied the bill for months and it was finally changed to not only delete that provision but to allow for electronic consent on matters brought up in emergency meetings. While this measure is of concern to some, the larger issue of “secret meetings vs. transparent operations” prevailed. All boards should take notice!

Assembly Bill 771 (Betsy Butler) was sponsored by the California Association of Realtors and initially capped fees that may be charged by parties which provide documents upon sale or transfer of a separate interest. This bill was lobbied heavily as well and it was ultimately revised to remove the cap. In addition, the bill enumerates the items which are to be provided as well as an estimated fee for each. This bill improves existing law because it provides for better disclosures to all parties in a transaction. As finally amended, there was no opposition and the Governor quickly signed it.

Two bills have limited application but you need to know about them. Senate Bill 209 (Ellen Corbett) strongly encourages associations to allow and install electric vehicle charging stations upon a member’s request. There are numerous conditions which must be adhered to by the member including insurance covering the association’s common areas and damages to other property, electric bills to be paid by the member, and the member must disclose these conditions to buyers who shall also be responsible for them. As such, I expect few applications for such installations. (The bill, although signed, has serious flaws because it violates the constitution’s provisions regarding a “taking” of real property as well as a conflict with existing law which requires a ⅔ vote of the members to grant an exclusive use common area for such installations. We made these flaws known to the Governor who agreed and while signing SB 209 also penned a “signing message” intending to fix these flaws. SB 880 was amended on September 7 to do just that, but as I write this it is still pending a hearing.)

Senate Bill 561 (Corbett) requires delinquent owners’ payments to be credited to the HOA prior to the debt collector. This would essentially curtail the ability of the HOA to ever get the money it is owed because associations are not debt collectors and licensed collectors will not work for free which may happen if their fees are last to be paid. We opposed the bill and it has been made a “two year” bill meaning that it will be held in committee until January.

Senate Bill 150 (Lou Correa) deals with associations that attempt to limit the number of rental units. As signed into law, it is imperfect and associations may wish to review their governing documents in order to amend them to lawfully avoid some portions of SB 150; this should be done before January 1, 2012.

CAI-CLAC is continually on guard for you, helping to save you money, keeping your association liability minimal, and in general, helping your communities‘ market value remain as high as it can be while fostering harmonious communities. More next month.

– Click here to read more about CAI California Legislative Action Committee

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