In typical years, the Legislature considers a handful of bills concerning HOAs, but 2021 is an unusually heavy year for lawmakers with at least 20 bills pending that reference or directly affect common interest developments.
Many of the proposed laws are technical, but a handful of bills propose making significant changes (some good, and some bad) to California associations. This column addresses five bills in which their current form would help HOAs. Next week’s column will cover some unhelpful proposals.
Senate Bill 392 is sponsored by the California Association of Realtors and authored by Sens. Bob Archuleta and Ben Hueso. It would help HOAs by amending Civil Code Section 4040(a) so that starting in 2023, HOAs could use email as the default method of sending documents or notices to members.
Members could still opt for postal mail, but most, presumably, would accept electronic mail, thereby saving association time, resources and cost. The bill also would require HOAs of more than 49 members to have websites providing general information to members unless two third of the members voted otherwise.
Assembly Bill 502 by Assemblymember Laurie Davies would modify Civil Code Section 5100 to allow HOAs of any size to forego sending out ballots if, at the end of the nominations period, the number of eligible candidates matched the number of open seats. In that situation, the bill would allow the HOA to declare the nominees elected to the open seats, saving the HOA the money and time of an election, which is a foregone conclusion.
Presently, for reasons this writer does not understand, the current Civil Code Section 5100(a) allows only HOAs of 6,000-plus members to use this very sensible approach to uncontested elections. The current draft bill has some overlap between Civil Code Sections 5100 and 5105, but hopefully, that will be cleaned up in the committee process.
AB 1101 is authored by Assemblymember Jacqui Irwin and sponsored by the Community Associations Institute. The bill would simplify some important terminology problems regarding the HOA banking and insurance requirements found in Civil Code Sections 5502, 5806 and 5380.
The bill also would simplify the board’s oversight of expenditures from the current “$10,000 or 5% of the HOA’s deposits total to simply $10,000 or greater.
SB 432’s author is Sen. Bob Wieckowski, who was also the author of 2019’s SB 323, which reformed election laws and took effect in 2020. SB 323 narrowed HOA board candidate eligibility standards to five possible requirements and omitted term limits, a common eligibility factor. This bill would correct that omission by creating a new Civil Code Section 5100(g)(3)(B)(v), allowing HOAs to disqualify candidates who have served the maximum consecutive or total allowed terms. So, HOAs may next year again be allowed to have board term limits.
SB 391, authored by Sen. Dave Min, would add a new Civil Code 5450(a) allowing HOAs during times of declared emergency to hold meetings entirely by telephone or video conferences. As an urgency statute, if it passes, it would become law immediately when signed by the governor.
Our state legislators have come up with five good legislative ideas for HOAs this year. You can review these bills, compliment their authors at leginfo.legislature.ca.gov, and consider asking your own representatives to support these helpful proposals.
Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober DeNichilo LLP, a California law firm known for community association advice. Submit questions to Kelly@rodllp.com.
