BILL NUMBER: SB 563 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Transportation and Housing (Senators
DeSaulnier (Chair), Gaines, Harman, Huff, Kehoe, Lowenthal, Pavley,
Rubio, and Simitian)
FEBRUARY 17, 2011
An act to amend Sections 1363 and 1363.05 of the Civil Code,
relating to common interest developments.
LEGISLATIVE COUNSEL'S DIGEST
SB 563, as introduced, Committee on Transportation and Housing.
Common interest developments: meetings.
Existing law provides for the creation of common interest
developments and requires that a common interest development be
managed by an association that may or may not be incorporated.
Existing law prescribes requirements for meetings of the board of
directors of the association that manages the development.
This bill would permit meetings of the board of directors of a
common interest development association to be conducted by
teleconference, as specified, by revising the definition of a meeting
for these purposes. The bill would require that a teleconference
meeting be conducted in a manner that protects the rights of members
of the association and otherwise complies with other requirements
governing common interest developments. The bill would also require
that the notice of a teleconference meeting identify at least one
physical location so that members of the association may attend and
would require that at least one member of the board of directors be
present at that location. The bill would prohibit the board of
directors from hearing, discussing, deliberating, or taking action on
any item of business outside of a meeting or an emergency meeting,
and would provide that a meeting is not a series of electronic
transmissions, such as electronic mail, except to conduct an
emergency meeting. The bill would repeal provisions that generally
allow the board of directors to consider any proper matter at a
meeting even if it has not been noticed as an action item for the
meeting.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1363 of the Civil Code is amended to read:
1363. (a) A common interest development shall be managed by an
association that may be incorporated or unincorporated. The
association may be referred to as a community association.
(b) An association, whether incorporated or unincorporated, shall
prepare a budget pursuant to Section 1365 and disclose information,
if requested, in accordance with Section 1368.
(c) Unless the governing documents provide otherwise, and
regardless of whether the association is incorporated or
unincorporated, the association may exercise the powers granted to a
nonprofit mutual benefit corporation, as enumerated in Section 7140
of the Corporations Code, except that an unincorporated association
may not adopt or use a corporate seal or issue membership
certificates in accordance with Section 7313 of the Corporations
Code.
The association, whether incorporated or unincorporated, may
exercise the powers granted to an association in this title.
(d) Meetings of the membership of the association shall be
conducted in accordance with a recognized system of parliamentary
procedure or any parliamentary procedures the association may adopt.
(e) Notwithstanding any other provision of law, notice of meetings
of the members shall specify those matters the board intends to
present for action by the members, but, except as otherwise provided
by law, any proper matter may be presented at the meeting for action.
(f)
(e) Members of the association shall have access to
association records, including accounting books and records and
membership lists, in accordance with Article 3 (commencing with
Section 8330) of Chapter 13 of Part 3 of Division 2 of Title 1 of the
Corporations Code. The members of the association shall have the
same access to the operating rules of the association as they have to
the accounting books and records of the association.
(g)
(f) If an association adopts or has adopted a policy
imposing any monetary penalty, including any fee, on any association
member for a violation of the governing documents or rules of the
association, including any monetary penalty relating to the
activities of a guest or invitee of a member, the board of directors
shall adopt and distribute to each member, by personal delivery or
first-class mail, a schedule of the monetary penalties that may be
assessed for those violations, which shall be in accordance with
authorization for member discipline contained in the governing
documents. The board of directors shall not be required to distribute
any additional schedules of monetary penalties unless there are
changes from the schedule that was adopted and distributed to the
members pursuant to this subdivision.
(h)
(g) When the board of directors is to meet to consider
or impose discipline upon a member, the board shall notify the member
in writing, by either personal delivery or first-class mail, at
least 10 days prior to the meeting. The notification shall contain,
at a minimum, the date, time, and place of the meeting, the nature of
the alleged violation for which a member may be disciplined, and a
statement that the member has a right to attend and may address the
board at the meeting. The board of directors of the association shall
meet in executive session if requested by the member being
disciplined.
If the board imposes discipline on a member, the board shall
provide the member a written notification of the disciplinary action,
by either personal delivery or first-class mail, within 15 days
following the action. A disciplinary action shall not be effective
against a member unless the board fulfills the requirements of this
subdivision.
(i)
(h) Whenever two or more associations have consolidated
any of their functions under a joint neighborhood association or
similar organization, members of each participating association shall
be (1) entitled to attend all meetings of the joint association
other than executive sessions, (2) given reasonable opportunity for
participation in those meetings, and (3) entitled to the same access
to the joint association's records as they are to the participating
association's records.
(j)
(i) Nothing in this section shall be construed to
create, expand, or reduce the authority of the board of directors of
an association to impose monetary penalties on an association member
for a violation of the governing documents or rules of the
association.
SEC. 2. Section 1363.05 of the Civil Code is amended to read:
1363.05. (a) This section shall be known and may be cited as the
Common Interest Development Open Meeting Act.
(b) Any member of the association may attend meetings of the board
of directors of the association, except when the board adjourns to
executive session to consider litigation, matters relating to the
formation of contracts with third parties, member discipline,
personnel matters, or to meet with a member, upon the member's
request, regarding the member's payment of assessments, as specified
in Section 1367 or 1367.1. The board of directors of the association
shall meet in executive session, if requested by a member who may be
subject to a fine, penalty, or other form of discipline, and the
member shall be entitled to attend the executive session. A
member of the association shall be permitted to participate in the
portion of a teleconference meeting that is open to members, and that
portion of the meeting shall be audible to the members in a location
specified in the notice of the meeting.
(c) Any matter discussed in executive session shall be generally
noted in the minutes of the immediately following meeting that is
open to the entire membership.
(d) The minutes, minutes proposed for adoption that are marked to
indicate draft status, or a summary of the minutes, of any meeting of
the board of directors of an association, other than an executive
session, shall be available to members within 30 days of the meeting.
The minutes, proposed minutes, or summary minutes shall be
distributed to any member of the association upon request and upon
reimbursement of the association's costs for making that
distribution.
(e) Members of the association shall be notified in writing at the
time that the pro forma budget required in Section 1365 is
distributed, or at the time of any general mailing to the entire
membership of the association, of their right to have copies of the
minutes of meetings of the board of directors, and how and where
those minutes may be obtained.
(f) Unless the time and place of meeting is fixed by the bylaws,
or unless the bylaws provide for a longer period of notice, members
shall be given notice of the time and place of a meeting as defined
in subdivision (j), except for an emergency meeting, at least four
days prior to the meeting. Notice shall be given by posting the
notice in a prominent place or places within the common area and by
mail to any owner who had requested notification of board meetings by
mail, at the address requested by the owner. Notice may also be
given, by mail or delivery of the notice to each unit in the
development or by newsletter or similar means of communication. The
notice shall contain the agenda for the meeting.
(g) An emergency meeting of the board may be called by the
president of the association, or by any two members of the governing
body other than the president, if there are circumstances that could
not have been reasonably foreseen which require immediate attention
and possible action by the board, and which of necessity make it
impracticable to provide notice as required by this section.
(h) The board of directors of the association shall permit any
member of the association to speak at any meeting of the association
or the board of directors, except for meetings of the board held in
executive session. A reasonable time limit for all members of the
association to speak to the board of directors or before a meeting of
the association shall be established by the board of directors.
(i) (1) Except as described in paragraphs (2) to (4), inclusive,
the board of directors of the association may not discuss or take
action on any item at a nonemergency meeting unless the item was
placed on the agenda included in the notice that was posted and
distributed pursuant to subdivision (f). This subdivision does not
prohibit a resident who is not a member of the board from speaking on
issues not on the agenda.
(2) Notwithstanding paragraph (1), a member of the board of
directors, a managing agent or other agent of the board of directors,
or a member of the staff of the board of directors, may do any of
the following:
(A) Briefly respond to statements made or questions posed by a
person speaking at a meeting as described in subdivision (h).
(B) Ask a question for clarification, make a brief announcement,
or make a brief report on his or her own activities, whether in
response to questions posed by a member of the association or based
upon his or her own initiative.
(3) Notwithstanding paragraph (1), the board of directors or a
member of the board of directors, subject to rules or procedures of
the board of directors, may do any of the following:
(A) Provide a reference to, or provide other resources for factual
information to, its managing agent or other agents or staff.
(B) Request its managing agent or other agents or staff to report
back to the board of directors at a subsequent meeting concerning any
matter, or take action to direct its managing agent or other agents
or staff to place a matter of business on a future agenda.
(C) Direct its managing agent or other agents or staff to perform
administrative tasks that are necessary to carry out this
subdivision.
(4) (A) Notwithstanding paragraph (1), the board of directors may
take action on any item of business not appearing on the agenda
posted and distributed pursuant to subdivision (f) under any of the
following conditions:
(i) Upon a determination made by a majority of the board of
directors present at the meeting that an emergency situation exists.
An emergency situation exists if there are circumstances that could
not have been reasonably foreseen by the board, that require
immediate attention and possible action by the board, and that, of
necessity, make it impracticable to provide notice.
(ii) Upon a determination made by the board by a vote of
two-thirds of the members present at the meeting, or, if less than
two-thirds of total membership of the board is present at the
meeting, by a unanimous vote of the members present, that there is a
need to take immediate action and that the need for action came to
the attention of the board after the agenda was posted and
distributed pursuant to subdivision (f).
(iii) The item appeared on an agenda that was posted and
distributed pursuant to subdivision (f) for a prior meeting of the
board of directors that occurred not more than 30 calendar days
before the date that action is taken on the item and, at the prior
meeting, action on the item was continued to the meeting at which the
action is taken.
(B) Before discussing any item pursuant to this paragraph, the
board of directors shall openly identify the item to the members in
attendance at the meeting.
(j) The board of directors shall not hear, discuss, deliberate, or
take action on any item of business outside of a meeting or an
emergency meeting.
(j)
(k) (1) As used in this section,
"meeting" includes any means:
(A) A congregation of a majority
of the members of the board at the same time and place to hear,
discuss, or deliberate upon any item of business scheduled
to be heard by the board, except those matters that may be discussed
in executive session that is within the authority of
the board .
(B) A teleconference in which a majority of the members of the
board, in different locations, are connected by electronic means,
through audio or video or both. A teleconference meeting shall be
conducted in a manner that protects the rights of members of the
association and otherwise complies with the requirements of this
title. The notice of the teleconference meeting shall identify at
least one physical location so that members of the association may
attend and at least one member of the board of directors shall be
present at that location. Participation in a teleconference meeting
constitutes presence at that meeting as long as all board members
participating in the meeting are able to hear one another and members
of the association speaking on matters before the board.
(2) Notwithstanding Section 7211 of the Corporations Code,
"meeting" does not mean a series of electronic transmissions,
including, but not limited to, electronic mail, except that
electronic transmissions may be used as a method of conducting an
emergency meeting.