BILL NUMBER: SB 948 INTRODUCED BILL TEXT INTRODUCED BY Senator Wyland FEBRUARY 23, 2007 An act to add Section 1363.002 to the Civil Code, relating to common interest developments. LEGISLATIVE COUNSEL'S DIGEST SB 948, as introduced, Wyland. Common interest developments: board member education. The Davis-Stirling Common Interest Development Act provides for the creation and regulation of common interest developments. Existing law requires the Department of Consumer Affairs and the Department of Real Estate, to the extent existing funds are available, to develop an online education course for the board of directors of an association regarding the role, duties, laws, and responsibilities of board members and prospective board members, and the nonjudicial foreclosure process. This bill would, in addition, as of January 1, 2009, require every member of the board of directors of an association to complete at least one 3-hour course during every term of office relating to decisional and statutory law regarding common interest developments. The bill would require such a course to be approved by the Department of Real Estate. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) There are more than 35,000 common interest developments in California, comprising more than 4,300,000 dwellings. Dwellings in those common interest developments comprise approximately 1/4 of the state's housing stock. (b) Common interest developments are governed by associations. Managing an association is a complex responsibility. Association members elect volunteer boards of directors and those directors may have little or no experience serving in that capacity. In order to properly discharge their duties, directors must comply with many laws and, in so doing, must interpret and enforce those laws. Directors must also interpret and apply the provisions of the association's governing documents and rules. Additionally, board members may not fully understand their rights and obligations under the law. Mistakes and misunderstandings are inevitable and may lead to serious, costly, and divisive problems. (c) While litigation is one form of dispute resolution, the principal remedy for disputes should be based on a policy of prevention. Litigation is not a positive means of resolving association issues when the disputants are neighbors and must maintain ongoing relationships. The adversarial nature of litigation can disrupt these relationships, creating animosity that degrades the quality of life within an association, shifts the focus of the board, and increases the likelihood of future disputes. Litigation may increase the expenses of an association, which must be paid by its members through increased assessments. In some cases, homeowners cannot personally afford to file or defend a lawsuit. (d) Anecdotal accounts of conflicts and alleged abuses within associations create continuing public demand for reform of common interest development law. This results in frequent legal changes, making the law more difficult to understand and apply while imposing significant additional costs on associations. (e) Education will provide association directors with substantial knowledge and increased proficiency in understanding the law, and will provide a proactive, responsible, and nonjudicial approach to preventing the frequency and severity of disputes within an association. SEC. 2. Section 1363.002 is added to the Civil Code, to read: 1363.002. (a) Every member of the board of directors of an association shall complete at least one three-hour course during every term of office relating to decisional and statutory law regarding common interest developments. (b) A course shall not satisfy the requirement imposed by subdivision (a) unless it has been approved by the Department of Real Estate. The Department of Real Estate shall require such a course to provide instruction, at a minimum, in applicable provisions of this code, the Business and Professions Code, the Corporations Code, the Government Code, and the Vehicle Code pertaining to common interest developments, as well as court decisions relating to those provisions. (c) Each association shall annually disclose, in writing, the following information to the association members: (1) That board members are required to comply with subdivision (a). (2) Whether current board members have complied with subdivision (a). (d) This section shall become operative on January 1, 2009.