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Please note that the following article is strictly to provide information and neither the content nor transmissions through this website
are intended to provide legal or other advice or to create an attorney-client relationship.
Yet again, the legislature has enacted a slew of new laws and statutory amendments affecting the operation of common interest development homeowner associations in our state. Implementation of these changes may warrant a revision to an association’s governing documents (including election rules) and most of the changes become effective on January 1, 2022. Our summary and analysis is as follows.
Amendment to Civil Code section 5100 and addition of new Section 5103. This law authorizes elections by acclamation for all homeowner associations but imposes a very specific procedure for holding them commencing 150 days before an election.
Amendments to Civil Code sections 5380, 5502, and 5806. These changes relate to withdrawal and investment of association funds and fidelity insurance. Confirms that all funds must be deposited in institutions with FDIC insurance, National Credit Union Insurance, or a special type of guaranty corporation.
Amends Civil Code section 4741(f) which deals with the enforceability of rental restrictions. This law extends the deadline to eliminate certain unreasonable or unenforceable rental restrictions (as defined in Civil Code section 4741) from January 1, 2022 to July 1, 2022. The new law permits Boards to unilaterally amend governing documents (including CC&Rs) to make the required conforming amendments following a specific process akin to adoption of an operating rule.
Amendment to Government Code section 66452.6 and addition of new Sections 65852.21 and 66411.7 to the Government Code. This law authorizes lot splits and construction of duplexes on lots, The law does not say whether it does or does not apply to common interest developments.
Amendment to Government Code sections 25132 and 36900. These laws allow local governments to adopt ordinances that establish increased fines and penalties for health, safety and violations of local laws relating to short term rentals.
Amendment to Civil Code section 4090 and addition of new Civil Code section 5450. These changes allow for wholly remote (e.g., telephonic or Zoom) Board meetings when a local, state, or federal declaration of disaster or emergency has been declared and conditions make it unsafe or impossible to meet in person if certain procedural requirements are followed.
Amendment to Civil Code sections 4041, 4045, 4055, 5200, 5220, 5230, 5260, 5310, and 5320, and repeal and replacement of Civil Code section 4040 (effective Jan. 1, 2023). These changes revise how an association provides “individual notice” to its members and also requires owners to provide their desired communication preferences, including via email, and other important information.
Amendment to Civil Code sections 5100, 5105, 5115 and 5200, and amendment to Corporations Code section 7511. These changes address some of the questions left unanswered after the passage of voting laws contained in SB 323 in 2019. The new laws confirm that candidates and directors are subject to the same qualifications, and such qualifications are limited to those outlined in the Civil Code which now also includes term limits as an allowable qualification. The new law also limits the sending of the 60-day pre-ballot notice to director and recall elections only.
We are happy to provide counsel, recommendations, and policies where needed and appropriate to assist in a community’s compliance with the new laws.
Please let us know if you would like a complimentary proposal for updating the association’s governing documents to meet any of the above new law requirements or for any other matter regarding the association’s governing documents. We have a dedicated governing document update team that will be happy to assist you. Please feel free to contact Jill Jackson at jjackson@berdingweil.com if you would like to request a proposal.
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