BILL NUMBER: AB 1738	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 16, 2014
	AMENDED IN ASSEMBLY  MAY 1, 2014
	AMENDED IN ASSEMBLY  APRIL 22, 2014

INTRODUCED BY   Assembly Member Chau

                        FEBRUARY 14, 2014

   An act to amend Sections 5910 and 5915 of the Civil Code, relating
to common interest developments.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1738, as amended, Chau. Common interest developments: dispute
resolution.
   The Davis-Stirling Common Interest Development Act defines a
common interest development and requires it to be managed by an
association. The act requires an association to provide a fair,
reasonable, and expeditious procedure for resolving a dispute between
an association and a member involving their rights, duties, or
liabilities under the act, the Nonprofit Mutual Benefit Corporation
Law, or the association's governing documents. The act authorizes an
association to develop its own procedure for these purposes and
requires this procedure to satisfy specified minimum standards,
including, among others,  providing   that a
resolution of a dispute, pursuant to the procedure, binds the
association and is judicially   enforceable, and that an
agreement, pursuant to the procedure, binds the parties and is
judicially enforceable, as specified. The act also requires that the
procedure provide  a means by which the member and the
association may explain their positions.
   This bill would additionally require  that an association'
s dispute resolution procedure include a means by which the attorney
for a member or an association or another person may explain their
position if advance written notice is provided, as specified. The
bill would require the parties to bear their own costs for an
attorney.   the resolution or agreement under an
association's procedure for resolving these disputes between an
association and a member to be in writing. The bill would authorize a
member and an association to be assisted by an attorney or another
person in explaining their positions at their own cost   .

   The act also establishes an alternative procedure applicable to an
association that does not otherwise provide a fair, reasonable, and
expeditious dispute resolution procedure as described above. Under
these provisions a procedure that, among other things, authorizes
either party to request, in writing, the other party to meet and
confer, prohibits the association from refusing a request to meet and
confer, and requires the parties to meet and confer in good faith in
an effort to resolve the  dispute   dispute,
 is deemed a fair, reasonable, and expeditious dispute
resolution procedure.  The act provides that an agreement reached
under this procedure binds the parties and is judicially enforceable
if specified conditions are satisfied. 
   This bill would additionally require the alternative procedure to
provide either party the right to have an attorney or another person
participate when meeting and conferring  if advance written
notice is provided, as specified. The bill would require the parties
to bear   provided at  their own  costs for
an attorney.   cost. This bill would require an
agreement reached under the alternative procedure that binds the
parties and is judicially enforceable to be in writing, as specified.

   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 5910 of the Civil Code is amended to read:
   5910.  A fair, reasonable, and expeditious dispute resolution
procedure shall at a minimum satisfy all of the following
requirements:
   (a) The procedure may be invoked by either party to the dispute. A
request invoking the procedure shall be in writing.
   (b) The procedure shall provide for prompt deadlines. The
procedure shall state the maximum time for the association to act on
a request invoking the procedure.
   (c) If the procedure is invoked by a member, the association shall
participate in the procedure.
   (d) If the procedure is invoked by the association, the member may
elect not to participate in the procedure. If the member
participates but the dispute is resolved other than by agreement of
the member, the member shall have a right of appeal to the board.

   (e) A resolution of a dispute pursuant to the procedure, which is
not in conflict with the law or the governing documents, binds the
association and is judicially enforceable. An agreement reached
pursuant to the procedure, which is not in conflict with the law or
the governing documents, binds the parties and is judicially
enforceable if the agreement is in writing.  
   (f) (1) The procedure shall provide a means by which the member
and the association, with the assistance of an attorney or another
person, if they so choose, may explain their respective positions and
seek to negotiate a mutually satisfactory resolution. 

   (2) If either a member, an association, or both, intends to have
an attorney or another person participate in the procedure, the
procedure shall require the member, the association, or both, to
provide 10 days' written notice of this intent to be given to the
other party pursuant to the methods identified in subdivision (b) of
Section 4035 and subdivision (a) of Section 4040. If notice is not
provided, the party not receiving the required notice shall have the
election of postponing the procedure until the notice requirement is
met.  
   (e) A written resolution of a dispute pursuant to the procedure
that is not in conflict with the law or the governing documents binds
the association and is judicially enforceable. A written agreement
reached pursuant to the procedure that is not in conflict with the
law or the governing documents binds the parties and is judicially
enforceable.  
   (f) The procedure shall provide a means by which the member and
the association may explain their positions. The member and
association may be assisted by an attorney or another person in
explaining their positions at their own cost. 
   (g) A member of the association shall not be charged a fee to
participate in the process.  Each party shall bear the cost
of the party's own attorney fees, if any. 
  SEC. 2.  Section 5915 of the Civil Code is amended to read:
   5915.  (a) This section applies to an association that does not
otherwise provide a fair, reasonable, and expeditious dispute
resolution procedure. The procedure provided in this section is fair,
reasonable, and expeditious, within the meaning of this article.
   (b) Either party to a dispute within the scope of this article may
invoke the following procedure:
   (1) The party may request the other party to meet and confer in an
effort to resolve the dispute. The request shall be in writing.
   (2) A member of an association may refuse a request to meet and
confer. The association may not refuse a request to meet and confer.
   (3) The board shall designate a director to meet and confer.

   (4) (A) The parties shall meet promptly at a mutually convenient
time and place, explain their positions to each other, and confer in
good faith in an effort to resolve the dispute. Each party shall have
the right to have an attorney or another person participate when
meeting and conferring to explain their respective positions and seek
to negotiate a mutually satisfactory resolution.  
   (B) If either a member, an association, or both, intends to have
an attorney or another person participate in the procedure, the
procedure shall require the member, the association, or both, to
provide 10 days' written notice of this intent to be given to the
other party pursuant to the methods identified in subdivision (b) of
Section 4035 and subdivision (a) of Section 4040. If notice is not
provided, the party not receiving the required notice shall have the
election of postponing the procedure until the notice requirement is
met.  
   (4) The parties shall meet promptly at a mutually convenient time
and place, explain their positions to each other, and confer in good
faith in an effort to resolve the dispute. The parties may be
assisted by an attorney or another person at their own cost when
conferring. 
   (5) A resolution of the dispute agreed to by the parties shall be
memorialized in writing and signed by the parties, including the
board designee on behalf of the association.
   (c)  An   A written   
agreement reached under this section binds the parties and is
judicially enforceable if both of the following conditions are
satisfied:
   (1) The agreement is not in conflict with law or the governing
documents of the common interest development or association.
   (2) The agreement is either consistent with the authority granted
by the board to its designee or the agreement is ratified by the
board.
   (d) A member shall not be charged a fee to participate in the
process.  Each party shall bear the cost of the party's own
attorney fees, if any.