BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 968
          Author:   Gordon (D)
          Amended:  6/23/14 in Senate
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  : 10-0, 6/17/14
          AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,  
            Lara, Liu, Pavley, Wyland
          NO VOTE RECORDED: Roth
           
          ASSEMBLY FLOOR  :  73-1, 5/9/13 - See last page for vote


            SUBJECT  :    Common-interest developments:  repair and  
                      replacement responsibilities

           SOURCE  :     Educational Community for Homeowners


           DIGEST  :    This bill, beginning January 1, 2016, establishes the  
          general rule that a common-interest development (CID)  
          association is responsible for repairing and replacing  
          exclusive-use common area and the individual owners are  
          responsible for repairing and replacing their separate  
          interests.  

           ANALYSIS  :    A CID is a real property development that includes  
          all of the following:  (1) separate ownership of a lot or unit  
          coupled with an undivided interest in common property; (2)  
          covenants, conditions, and restrictions that limit use of both  
          the common area and separate ownership interests; and (3)  
          management of common property and enforcement of restrictions by  
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          a community association, which a board of directors, generally  
          elected, governs.  Condominiums, planned-unit developments,  
          stock cooperatives, community apartments, and many  
          resident-owned mobile home parks all fall under the CID  
          umbrella.    

          The property of a CID falls into three categories:  (1) common  
          area owned by all which the association administers; (2)  
          separate interests that each member owns and controls; and (3)  
          exclusive-use common area, which is common area designated for  
          the exclusive-use of one or a few owners (e.g., patios and  
          decks).  

          The Davis-Stirling Common Interest Development Act is the  
          principal law that governs CIDs in California.  Among other  
          things, the Davis-Stirling Act provides that, unless the  
          governing documents state otherwise, the association is  
          responsible for repairing, replacing, and maintaining the common  
          area, other than exclusive-use common area, and the owner of  
          each separate interest is responsible for maintaining his/her  
          separate interest and any exclusive-use common area belonging to  
          the separate interest.

          This bill, beginning January 1, 2016, establishes, unless the  
          governing documents state otherwise, that the association is  
          responsible for repairing and replacing exclusive-use common  
          area and the owner is responsible for repairing and replacing  
          his/her separate interest.  This bill further provides that the  
          governing documents may define which items or actions constitute  
          maintenance and which constitute repair and replacement.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  
           No

           SUPPORT  :   (Verified  6/24/14)

          Educational Community for Homeowners (source)
          California Association of Community Managers
          Community Associations Institute

           OPPOSITION  :    (Verified  6/24/14)

          California Alliance for Retired Americans
          Center for California Homeowner Association Law

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           ARGUMENTS IN SUPPORT  :    According to the bill's sponsor,  
          Educational Community for Homeowners, existing law establishes  
          that the owner of a CID unit is responsible for maintenance of  
          the exclusive-use common area, but does not specify if the owner  
          or the association is responsible for repair and replacement of  
          these areas.  By establishing a general rule that repair and  
          replacement of exclusive-use common areas are the responsibility  
          of the association and not the owner, this bill will help  
          associations better budget to address these duties and will  
          provide clarity to associations whose governing documents do not  
          address the issue.

           ARGUMENTS IN OPPOSITION  :    Opponents believe that this bill's  
          lack of definitions for maintenance, repair, and replacement  
          does a huge disservice to associations and residents by forcing  
          associations to devise definitions when even this bill's sponsor  
          cannot.  In addition, opponents argue that this bill imposes  
          significant new financial obligations on homeowners.  First,  
          this bill newly assigns the repair and replacement of separate  
          interests to homeowners.  Second, having associations define  
          this bill's terms creates an opportunity to foist new  
          maintenance duties onto homeowners.  These issues are  
          exacerbated by the lack of clarity in some governing documents  
          over what is considered exclusive-use common area.  
           

           ASSEMBLY FLOOR  :  73-1, 5/9/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,  
            Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,  
            Hagman, Hall, Harkey, Roger Hernández, Jones, Jones-Sawyer,  
            Levine, Linder, Lowenthal, Maienschein, Mansoor, Medina,  
            Melendez, Mitchell, Morrell, Mullin, Nazarian, Nestande,  
            Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk,  
            Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Torres,  
            Wagner, Weber, Wieckowski, Wilk, Williams, Yamada, John A.  
            Pérez
          NOES:  Muratsuchi
          NO VOTE RECORDED:  Donnelly, Grove, Holden, Logue, Waldron,  
            Vacancy


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          JA:k  6/16/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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