BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 805|
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THIRD READING
Bill No: AB 805
Author: Torres (D)
Amended: 6/11/12 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 1/10/12
AYES: DeSaulnier, Gaines, Harman, Huff, Kehoe, Lowenthal,
Pavley, Rubio, Simitian
SENATE JUDICIARY COMMITTEE : 5-0, 6/19/12
AYES: Evans, Harman, Blakeslee, Corbett, Leno
ASSEMBLY FLOOR : 73-0, 5/2/11 (Consent) - See last page for
vote
SUBJECT : Common interest developments
SOURCE : California Law Revision Commission
DIGEST : This bill revises and recasts the Davis-Stirling
Common Interest Development Act (Davis-Stirling Act), and
makes minor substantive changes relating to (1) governing
documents; (2) property use, ownership, and transfer; (3)
board of directors; (4) member elections; (5) records and
notices; (6) assessments; and (7) enforcement and dispute
resolution.
ANALYSIS : Existing law, the Davis-Stirling Act,
establishes the rules and regulations governing the
operation of a common interest development (CID) and the
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respective rights and duties of a homeowners association
and its members. (Civil (CIV) Code Section 1350 et seq.)
This bill, on and after January 1, 2014, will
comprehensively reorganize and recodify the Davis-Stirling
Act. That reorganization will group related provisions
together, clarify certain sections without changing
substantive effect, divide longer sections into shorter
sections, and standardize terminology.
This bill also makes substantive changes relating to (1)
governing documents; (2) property use, ownership, and
transfer; (3) board of directors; (4) member elections; (5)
records and notices; (6) assessments; and (7) enforcement
and dispute resolution.
Background
In California, CIDs are governed by the Davis-Stirling Act
(Davis-Stirling Act). Owners of separate property in CIDs
have an undivided interest in the common property of the
development and are subject to the CIDs covenants,
conditions, and restrictions. CIDs are also governed by a
homeowners association, which is run by volunteer directors
that may or may not have prior experience managing an
association. The Court of Appeal, Fourth Appellate
District, previously observed that:
Ýt]he homeowners associations function almost "as a
second municipal government, regulating many aspects of
Ýthe homeowners'] daily lives." "ÝU]pon analysis of
the association's functions, one clearly sees the
association as a quasi-government entity paralleling in
almost every case the powers, duties, and
responsibilities of a municipal government. As a
'mini-government,' the association provides to its
members, in almost every case, utility services, road
maintenance, street and common area lighting, and
refuse removal. In many cases, it also provides
security services and various forms of communication
within the community. There is, moreover, a clear
analogy to the municipal police and public safety
functions. . . ." In short, homeowners associations,
via their enforcement of the CC&R's, provide many
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beneficial and desirable services that permit a common
interest development to flourish. Villa Milano
Homeowners Ass'n v. Il Davorge (2000) 84 Cal.App.4th
819, 836 (citations omitted).
In response to concerns that the Davis-Stirling Act is not
well organized or easy to use, the California Law Revision
Commission (CLRC) recommended that the existing
Davis-Stirling Act be repealed and replaced with a revised
version that would continue the substance of existing law
in a more logical and user-friendly form. CLRC's original
recommendation for recodification was introduced in 2008,
but was held in the Senate Transportation and Housing
Committee. The CLRC revisited the issue and formulated a
subsequent recommendation, which was introduced in this
bill and AB 806 (Torres, 2012). Specifically, this bill
revises and recasts the Davis-Stirling Act and makes
noncontroversial substantive improvements to its text.
Brief summary of proposed changes . Considering the length
of the proposed revision, the following brief summaries
provide an overview of how the CLRC addressed the issues
found during the review of the Davis-Stirling Act. With
respect to general issues found throughout the
Davis-Stirling Act, the CLRC's recommendation notes that
the following organizational and drafting improvements were
made:
Provisions are grouped by subject matter, in a "coherent
and logical order."
Longer sections were divided into shorter, simpler
sections.
Provisions were revised to clarify meaning without
changing substantive effect.
Terminology was standardized, to the extent practical.
The CLRC notes that the proposed revision would make a
number of minor substantive improvements, but that
"Ýb]ecause of the magnitude and mostly technical character
of the proposed law, the ÝCLRC] adopted a conservative
approach in deciding which substantive reforms would be
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included. If a possible substantive change was found to be
significantly controversial, it was not included.
Substantive changes that were not included in the proposed
law were noted by the ÝCLRC] for possible future study."
Accordingly, the substantive changes made by this bill
include the following:
Providing guidance on the supremacy of the law over a
CID's governing documents, and the relative authority of
different types of governing documents.
Requiring an association to provide members with the text
of a proposed amendment to a governing document when
holding an election to approve that amendment.
Permitting a successor-in-interest to the "original
signator" of the CID's recorded declaration to add
material to the declaration.
Creating a general procedure for amending the
declaration.
In order for a court to approve an amendment of a
declaration under specified circumstances, require the
court to additionally find that the election was
conducted in accordance with the election provisions of
the Davis-Stirling Act.
Clarifying that the persons who currently hold specified
interests in the property, as opposed to those who held
such positions at the creation of the CID, may execute an
amendment or revocation of the condominium plan.
Clarifying that an association may not prohibit physical
access to an occupant of a separate interest occupied by
that person.
Applying the existing provision that guarantees the right
of an owner in a condominium project to make changes to
his or her unit to any type of CID.
Removing exception that allows an association to not give
advance notice of a board meeting if the time and place
is fixed in the government documents.
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Modifying the definition of "board meeting" to require
the presence of a number of directors sufficient to
establish a quorum.
Providing greater flexibility in posting board meeting
notices.
Prohibiting a self-interested director from voting on
specified types of matters.
Requiring the election inspector to retain custody of
ballots for 12 months.
Clarifying that governing documents are association
records, thereby, allowing members to inspect those
documents.
Reorganizing the budget and other financial information
that a CID must distribute to members into three annual
reports, based on subject matter.
Clarifying that the rule concerning application of
payments for assessments applies regardless of whether or
when the member received a notice of delinquency.
Requiring an association to release a lien, and reverse
all costs, fees, and interest associated with the error,
whenever the association has recorded an easement lien in
error.
Requiring a schedule of monetary penalties to be included
in the policy statement that is delivered to members
annually.
Requiring a CID, when attempting to impose a monetary
charge for damage to common area and facilities caused by
a member or the member's guest or tenant, to provide the
member with notice of the alleged violation and an
opportunity to be heard by the board. and
Broadening a court's ability to weigh a party's refusal
to participate in alternative dispute resolution when
determining awards of fees and costs.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/21/12)
California Law Revision Commission (source)
Executive Council of Homeowners
ASSEMBLY FLOOR : 73-0, 5/2/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Campos, Carter, Cedillo,
Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Furutani, Garrick, Gatto, Gordon,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel Pérez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Charles Calderon, Fuentes, Galgiani,
Gorell, Roger Hernández, Mendoza, Vacancy
RJG:d 6/21/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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