BILL NUMBER: SB 948 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 25, 2007
AMENDED IN SENATE MAY 1, 2007
AMENDED IN SENATE APRIL 18, 2007
AMENDED IN SENATE APRIL 11, 2007
INTRODUCED BY Senator Harman
(Coauthor: Senator Lowenthal)
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 amended, Harman. 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 that is comprised
solely of residential separate interests to complete at least one
course during the first 12 months of his or her first full
term of office, and at least one course every 3
4 calendar years after becoming a member of the board,
relating to decisional and statutory law regarding common interest
developments , subject to a requirement that
. The bill would prohibit the cost of the course
not exceed from exceeding $25. The bill
would require such a course to be approved by the Department of Real
Estate , and would require the department to establish uniform
guidelines for the courses, as specified . The bill would
require an association to include an item for board member education
in its budget and would allow an association to pay for or
reimburse board members for expenses associated with this
requirement, as specified , and . The bill
would exempt the declarant and the developer of a common
interest development from this requirement until the board of
directors governing that development is composed of a majority of
separate interest owners , and would also exempt specified real
estate licensees, attorneys, and common interest development managers
.
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 result in 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) Frequent changes in law make the law more difficult to
understand and apply while imposing significant additional costs on
associations.
(e) Education will provide association directors with a
significantly greater awareness of the laws that prescribe
association operational procedures and will better equip them to
govern an association more efficiently and prudently. Board members'
increased knowledge and proficiency in understanding the law will
provide them with the means to proactively and responsibly use a
nonjudicial approach to limiting resolve
disputes and to limit the frequency and severity of
disputes within an association.
(f) In order to decrease litigation and to promote a nonjudicial
approach to resolving common interest development disputes and, in
turn, benefit the state as a whole, California community colleges are
encouraged to offer courses on common interest development
management and governance.
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 that is comprised solely of residential separate
interests shall complete at least one course during the first 12
mo nths of his or her first full term of office,
and at least one course every three four
calendar years after first becoming a member of the
board, relating to decisional and statutory law regarding common
interest developments. The course may be offered by
correspondence, on-line, or in person. An approved course may
not be offered at a cost higher than twenty-five dollars ($25) per
participant.
(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 establish uniform
guidelines that 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. on the provisions of this title, on court
decisions relating to this title, and on common interest development
activities, governance, and operations.
(c) Each association shall annually disclose, in writing, the
following information to the association members:
(1) That board members serving a full term are required
to comply with subdivision (a).
(2) Whether current board members who are serving a full term
have complied with subdivision (a).
(d) An Beginning in its fiscal
year 2008-09, or its calendar year 2009, and each year following, an
association shall include a line item for board member
education in its budget, and may pay for or reimburse all
or a portion of a board members' reasonable expenses to
participate in the education required by this section. That payment
or reimbursement shall not exceed twenty-five dollars ($25) for
course fees and one hundred dollars ($100) for travel expenses for
each board member.
(e) The following parties are exempt from the requirements of
subdivision (a):
(e)
(1) The declarant and the developer of a common
interest development shall be exempt from the requirement
imposed by subdivision (a) development until the
board of directors governing that development is composed of a
majority of separate interest owners.
(2) A real estate licensee who has renewed his or her license, has
satisfied the requirements of Section 10170.5 of the Business and
Professions Code, and whose continuing education hours credited
include instruction in common interest development activities,
governance, and operations, and legal issues relating to this title.
(3) An attorney who has received mandatory continuing legal
education credit related to the provisions of this title, on court
decisions relating to this title, and on common interest development
activities, governance, and operations.
(4) A certified common interest development manager, as defined in
Section 11502 of the Business and Professions Code.
(f) Nothing in this section shall in any way operate to remove or
abrogate the board member immunities contained in Section 1365.7, or
in Section 7231.5 of the Corporations Code, and the immunities
contained in those sections shall apply whether or not an officer or
director has taken the educational course required by this section.
(g) This section shall become operative on January 1, 2009.