2021 was essentially the most constructive legislative 12 months for California HOAs in a really very long time. This column summarizes 4 useful adjustments to California legislation, one which is already in impact.
Senate Invoice 391 took impact as an urgency statute instantly as soon as the Gov. Gavin Newsom permitted it on Sept. 23. It permits HOAs throughout occasions of declared emergency to carry purely digital conferences (with out the conventional requirement of a bodily location the place members can select to watch). Discover of the primary digital assembly should be introduced to all members by mail, together with the contact data of somebody who may help with log-in difficulties, and all votes in purely digital conferences should be by roll name.
Meeting Invoice 1101 was sponsored by the Neighborhood Associations Institute. It makes a number of adjustments relating to the safekeeping of HOA funds. The present Civil Code Part 5380(b)(6) requirement of board approval for fund transfers (together with funds) now varies primarily based upon the HOA’s measurement. HOAs of fifty or much less members should have board approval for transfers of both $5,000 or 5% of the HOA estimated annual earnings (whichever is much less), and HOAs of over 50 members should have board approval will increase beginning on the lesser of $10,000 or 5% of the HOA estimated annual earnings. A number of prior exceptions to the rule towards commingling HOA funds have been deleted, and the requirement of dishonesty insurance coverage has been clarified to be extra per insurance coverage terminology.
SB 392 was sponsored by the California Affiliation of Realtors and continues to maneuver towards digital communication. Beginning in 2023, homeowners might select whether or not they want to obtain particular person notifications from the HOA by postal and/or piece of email. If they don’t select, the default technique of communication remains to be postal mail. The rest of the invoice is efficient in 2022. A brand new 4045(a)(5) is created, allowing HOAs to make normal notices on the HOA’s website online. New subparts (c) and (d) are added to Civil Code Part 5230, barring the HOA or its administration from promoting member data to a 3rd get together with out member consent (some administration firms have been doing this underneath their contracts, with out full disclosure to the membership).
Associations and their administration corporations ought to encourage members to simply accept communications electronically. The price, materials, and time expended in sending postal mail might be substantial for bigger HOAs. As of late, the place everybody not solely has electronic mail however accesses it on their smartphones, electronic mail ought to turn into the first mode of HOA communication.
AB 1584 helps right an issue relating to the correction of unlawful rental restrictions. Final 12 months’s SB 3182 added Civil Code Part 4741, barring “unreasonable” restrictions towards HOA leases and requiring HOAs to amend their governing paperwork earlier than 2022 to right any unreasonable restrictions.
Many attorneys incorrectly instructed their shoppers that the legislation required HOAs to amend their CC&Rs though guidelines are additionally “governing paperwork.” That is costly and sometimes inconceivable on account of member disinterest. AB 1584 opens a six-month window beginning Jan. 1, 2023 and concluding July 1, 2023, wherein HOA boards can amend CC&Rs with no membership vote solely to take away provisions violating Part 4741. This shouldn’t be tried with out competent authorized recommendation.
Pricey Legislators: Thanks for the assistance this 12 months. Now, how about letting HOAs vote electronically?
My previous column addresses different new legal guidelines.
Kelly G. Richardson, Esq. is a Fellow of the Faculty of Neighborhood Affiliation Legal professionals and Associate of Richardson Ober DeNichilo LLP, a legislation agency identified for neighborhood affiliation recommendation. Submit inquiries to Kelly@rodllp.com. Previous columns at www.HOAHomefront.com. All rights reserved®.