BILL ANALYSIS Ó
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Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
David Chiu, Chair
SB
918 (Vidak) - As Amended June 16, 2016
SENATE VOTE: 37-0
SUBJECT: Common interest developments
SUMMARY: Requires the owner of a separate interest and the
homeowner association (HOA) in a common interest development
(CID) to annually verify the mailing address or addresses to
which notices from the HOA are to be delivered. Specifically,
this bill:
1)Requires an owner of a separate interest to, on an annual
basis, provide written notice to the association of all of the
following:
a) The mailing address or addresses to which notices from
the HOA are to be delivered;
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b) An alternate or secondary address to which notices from
the HOA are to be delivered;
c) The name and address of an owner's legal representative,
if any, including any person with power of attorney or
other person who can be contacted in the event of the
owner's extended absence from the separate interest; and
d) Whether the separate interest is owner-occupied, is
rented out, if the parcel is developed but vacant, or if
the parcel is undeveloped land.
1)Requires an HOA to solicit these annual disclosures of each
owner and enter the data into its books and records at least
30 days prior to making its own required annual disclosures to
members.
2)Specifies that if an owner fails to provide the information
specified in the above provision, the property address shall
be deemed to be the mailing address to which notices are to be
delivered.
EXISTING LAW:
1)Defines and regulates residential CIDs, including the ability
of a CID's HOA to levy regular and special assessments
sufficient to perform its obligations.
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2)Requires an association to send the owner of record a notice
by certified mail at least 30 days prior to recording a lien
to collect the debt. That notice must include a general
description of the collection and lien enforcement procedures,
an itemized statement of charges, the right to inspect the
association's records, and the right to dispute the debt, as
specified.
3)Authorizes an association to record a lien against an owner's
separate interest in the amount of any delinquent assessment,
plus any costs of collection, late charges, and interest
assessed, as specified. Existing law requires a copy of a
recorded notice of delinquent assessment to be mailed by
certified mail to the owner of the separate interest no later
than 10 calendar days after recordation.
4)Authorizes an association that seeks to collect delinquent
assessments of an amount of $1,800, or more, or assessments
that are delinquent by more than 12 months and secured by a
lien, to use judicial or non-judicial foreclosure, subject to
specified requirements.
5)Requires a decision to initiate foreclosure to be made only by
the board of directors of the association, and, if the board
votes to foreclose on the separate interest, requires the
board to provide notice by personal service in accordance with
the manner of service of summons. (Civ. Code Sec. 5705.)
Existing law similarly requires any Notice of Default (the
first step in the nonjudicial foreclosure process) to be
served by the association on the owner's legal representative
in accordance with the manner of the service of summons.
FISCAL EFFECT: None
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COMMENTS:
Background: There are over 50,220 CIDs in the state that
comprise over 4.8 million housing units, or approximately one
quarter of the state's housing stock. CIDs include
condominiums, community apartment projects, housing
cooperatives, and planned unit developments. They are
characterized by a separate ownership of dwelling space coupled
with an undivided interest in a common property, restricted by
covenants and conditions that limit the use of the common area
and separate ownership interests, and the management of common
property and enforcement of restrictions by a HOA. CIDs are
governed by the Davis Stirling Act (the Act) as well as the
governing documents of the HOA, including bylaws, declaration,
and operating rules.
This bill requires the owner of a separate interest and a HOA to
annually verify the mailing address or addresses to which
notices from the association are to be delivered.
Purpose of this bill : According to the author, "currently HOA
unit owners are supposed to provide the association with the
best known mailing address for the association to mail required
disclosures and other documents that current law requires to be
shared with unit owners. There may be a situation where mailing
address previously provided, if any was ever provided, may not
be current and the owner is not receiving any of the required
documents."
Previous Legislation:
SB 290 (Vidak, 2015) would have allowed the board of directors
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of an association formed under the Davis-Stirling Act to provide
notice by personal service or by substitute service to an owner
of a separate interest who occupies the separate interest, or to
the owner's legal representative, if the board votes to
foreclose upon the separate interest. The bill died in the
Senate Judiciary Committee.
SB 1026 (Vidak, 2014) would have permitted associations subject
to the Commercial and Industrial Common Interest Development Act
and the Davis-Stirling Act to serve an owner with a Notice of
Default, the first step in the non-judicial foreclosure process,
for failure to pay required assessments through posting,
mailing, and publishing the notices, as specified, when those
notices cannot be personally served after reasonable diligence,
as specified. The bill died in the Senate Judiciary Committee.
SB 1244 (Harman, 2012) would have allowed an owner in a CID to
be served certain notices in the non-judicial foreclosure
process by both posting and mailing the notices, as specified,
when those notices cannot be personally served after reasonable
diligence. The bill died in the Senate Judiciary Committee.
SB 137 (Ducheny, Chapter 452, Statutes of 2005), among other
things, permits an association of a CID seeking to collect
delinquent regular or special assessments of $1,800 or more, or
any assessments that are more than 12 months delinquent, to use
foreclosure subject to specified conditions. These conditions
include requiring the board of directors of an association to
make the decision to foreclose upon an assessment lien at an
executive meeting of the board, by a majority vote, at least 30
days prior to any public sale, to record the results of the
vote, and to provide notice of the decision to foreclose.
AB 1317 (Speier, Chapter 1101, Statutes of 1996) imposed
specified requirements with respect to the collection of debts
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based on assessments of owners by a CID, and removed a
requirement that an association, prior to a sale by a trustee,
make at least one bona fide attempt to serve the owner with a
notice of sale by trustee.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by:Lisa Engel / H. & C.D. / (961) 319-2085
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