BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 752|
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CONSENT
Bill No: SB 752
Author: Roth (D)
Amended: 4/18/13
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 10-0, 4/16/13
AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,
Lara, Liu, Roth, Wyland
NO VOTE RECORDED: Pavley
SENATE JUDICIARY COMMITTEE : 6-0, 5/7/13
AYES: Evans, Anderson, Corbett, Jackson, Leno, Monning
NO VOTE RECORDED: Walters
SUBJECT : Commercial and industrial common interest
developments
SOURCE : California Law Revision Commission
DIGEST : This bill separates the laws governing commercial and
industrial common interest developments (CIDs) from the laws
governing residential CIDs and generally makes the operational
provisions of current law inapplicable to commercial and
industrial CIDs.
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)
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management of common property and enforcement of restrictions by
a community association. Condominiums, planned unit
developments, stock cooperatives, community apartments, and many
resident-owned mobilehome parks all fall under
the CID umbrella. While most CIDs are residential, CIDs can
also comprise industrial or commercial properties.
The Davis-Stirling Common Interest Development Act is the main
body of statutory law that governs CIDs in California. The law
includes both foundational provisions that relate to the
establishment and definition of the CID property form and
operational provisions that regulate the ongoing operation of
the managing association. Existing law exempts commercial and
industrial CIDs from a few specific provisions of the Act but
generally treats commercial and industrial CIDs the same as
residential CIDs.
This bill separates the laws governing commercial and industrial
CIDs from the laws governing residential CIDs and generally
makes the operational provisions of current CID law inapplicable
to commercial and industrial CIDs. Specifically, the bill:
1. Makes the Davis-Stirling Act inapplicable to industrial and
commercial CIDs.
2. Establishes the Commercial and Industrial Common Interest
Development Act (Act), provides rules and regulations
governing the creation and operation of an industrial or
commercial CID, and carries over the foundational provisions
of the Davis-Stirling Act, but no longer requires industrial
and commercial CIDs to be subject to the operational
requirements of residential CIDs.
3. Allows an industrial or commercial CID association to amend
its governing documents, without the approval of owners,
solely to correct any cross-references to the Davis-Stirling
Act.
4. Provides that the new act shall not invalidate a document,
other than a governing document, or action taken before
January 1, 2014, if the document or action was proper under
the law governing CIDs at the time the document was prepared
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or the action taken.
5. Updates numerous cross-references to the Davis-Stirling Act
in other codes and provides cross-references to the new Act.
Comments
According to the sponsor, the California Law Revision Commission
(CLRC), the available legislative history indicates that the
Davis-Stirling Act originally was
intended to govern only residential property, with no
expectation that it would apply to commercial or industrial
property. When it later became apparent that the act also
applied to nonresidential developments, AB 2484 (Hauser),
Chapter 123, Statutes of 1988, limited that application by
generally preserving the foundational provisions of the act
(i.e., those that relate to the establishment and definition of
the CID property form) while making inapplicable to commercial
and industrial CIDs the operational provisions (i.e., those that
regulated the ongoing operation of the managing association).
Since then, the Davis-Stirling Act has more than tripled in
size, mostly through the addition of numerous new operational
provisions. Many of those provisions appear to have been
designed specifically for homeowners. For the most part, the
Legislature does not appear to have considered whether those new
provisions were necessary or beneficial to commercial or
industrial property owners.
Based on the same policy of preserving foundational provisions
and exempting commercial and industrial CIDs from operational
provisions that guided AB 2484, the CLRC completed an analysis
of the Davis-Stirling Act and made three general
recommendations:
The law governing commercial and industrial CIDs should be
separated from the law governing residential CIDs. This will
prevent any new laws enacted to benefit residential owners
from being inadvertently applied to commercial and industrial
developments.
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The existing foundational provisions of the Davis-Stirling Act
should continue to apply to commercial and industrial CIDs.
These provisions are necessary for any CID, regardless of
type.
Most of the existing operational provisions of the
Davis-Stirling Act should be made inapplicable to commercial
and industrial CIDs. These provisions are not strictly
necessary for all CIDs. They appear to have been added to the
Davis-Stirling Act to benefit residential property owners
without separate consideration of their effect on commercial
or industrial property owners.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 5/9/13)
California Law Revision Commission (source)
California Association of Community Managers
California Business Properties Association
Mar West Real Estate
JJA:d 5/9/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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