BILL ANALYSIS
AB 512
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Date of Hearing: April 9, 2003
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Alan Lowenthal, Chair
AB 512 (Bates) - As Introduced: February 18, 2003
SUBJECT : Common Interest Developments
SUMMARY : Requires that operating rules and proposals for the
alteration of a members separate interest be treated and
reviewed by the board of an association in a fair and reasonable
manner. Specifically, this bill :
1)OPERATING RULES
a) Requires that the board of directors notify and provide
members of an association the opportunity for comment on a
proposal to adopt, amend or repeal an operating rule.
b) Establishes an optional procedure that an association
may adopt to govern the notification and comment process
for making a rule change. Specifically, the optional
procedure provides that:
i) The board deliver to every member the text of the
proposed rule change, a description of the purpose and
effect of the proposed rule change and a deadline for
comment.
ii) The board allow for 15 days following delivery of
the proposed rule change to the members to receive and
consider written comments prior to making a decision at a
hearing of the board.
iii) The board, after making a decision, notify members
of the text of the rule change and the date it is to take
effect. However, the effective date shall not be less
than 15 days after notice of the rule change is delivered
to the members.
c) Establishes an optional emergency procedure that an
association may adopt to govern the immediate adoption of a
rule change to address a threat to public safety or the
imminent risk of substantial economic loss to the
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association. A rule change adopted under this optional
procedure is subject to the following:
i) Within 15 days of the rule change the board shall
notify members of the reason for the immediate rule
change and include a text of the rule change.
ii) An emergency rule change adopted under this optional
procedure is effective only for 120 days and may not be
re-adopted under the same emergency process.
d) Provides that members of an association owning 10
percent or more of the separate interests may call a
special meeting to reverse a rule change by delivering a
written request to the chair or secretary of the board of
directors and subject to the following:
i) The request for a special meeting must be made no
more than 30 days following the rule change.
ii) The rule change may be reversed by the affirmative
vote of a majority of those present or if the governing
documents require a higher proportion then by an
affirmative vote of the proportion required.
e) Prohibits the board of directors from readopting a rule
within one year of that rule having been reversed by a
referendum of the membership.
f) Provides that the above requirements and restrictions
shall apply to operating rules affecting the use of the
common area, exclusive use common area, separate interest
or affecting member discipline and assessment collection
procedures.
g) Excludes board decisions related to specific cases
intended not to apply generally, the setting of regular or
special assessments, rule changes required by law and the
issuance of documents restating the exist law or governing
documents.
h) Requires that members of the association have access to
the operating rules and that the operating rules be
provided to a prospective owner prior to transfer of title.
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2)ALTERATION OF SEPARATE INTEREST
a) Provides that any review by the board of directors of a
proposed alteration by a member of the association be
reviewed in a fair and reasonable matter.
b) Establishes an optional procedure deemed as fair and
reasonable that the board of directors may adopt when
reviewing a proposal for alteration and specifically
provides the following:
i) A member seeking to alter their separate interest
shall submit a written application in a form specified by
the association to be heard by the reviewing body.
ii) The reviewing body shall notify all members if the
alteration would affect the common area or if the
association publishes a monthly newsletter or billing
statement or to members within 500 feet of the separate
interest if the alteration would not affect the common
area and the association does not publish a monthly
newsletter or billing statement.
iii) The reviewing body shall include the address of the
separate interest or location within the common area
proposed for alteration and the date after which a
decision shall be made.
iv) The reviewing body shall deliver a written decision
to the applicant and any participating member, defined as
any person that submits a comment opposed to the
alteration, within 20 to 45 days after application or it
shall be deemed disapproved on the 45th day if no
decision is delivered.
v) That a written decision approving the alteration
state whether any opposing comments were received.
vi) An applicant or participating member may appeal to
the board of directors the approval or disapproval by the
reviewing body of a proposed alteration within 30 days of
the decision. However, an applicant may not commence
work during that 30 day period if any opposition was
submitted during the review process.
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vii) Provides that the board of directors shall within 30
days of receiving the appeal notify members in the same
manner as required above during the original application
including the time and place where the appeal will be
heard and that within 45 days of that notice the board
shall meet and review "de novo" the appeal.
viii) The board shall deliver a written decision
explaining the decision within 15 days of hearing the
appeal.
3)Establishes procedures for the delivery of documents via
personal delivery, first class mail, e-mail, facsimile, other
electronic means or through attachment to a billing statement,
newsletter or other document delivered by any of these means.
4)Adds chapter and article headings to the Davis Stirling Act.
EXISTING LAW
1)Requires meetings of the association to be conducted in a
recognized parliamentary procedure and to provide notice to
members of an action that will be presented for action by the
membership. (Civil Code Section 1363)
2)Requires all meetings to be open to the membership unless the
board meets in executive session to consider litigation,
member discipline, personnel matters or matters relating to
the formation of contracts with third parties. (Civil Code
Section 1363.05)
3)Requires the minutes, draft minutes or summary of the minutes
of a board meeting to be distributed within 30 days of the
meeting. (Civil Code Section 1363.05)
FISCAL EFFECT : Unknown.
COMMENTS : This bill enacts recommendations made by the
California Law Revision Commission, which for the last few years
has been conducting an ongoing review of those laws affecting
common interest developments. The goal of this review is to
clarify and eliminate obsolete references, establish a
consistent policy for the management and formation of
associations and to consolidate existing codes.
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This bill enacts the first substantial recommendations by the
commission to ensure fair and reasonable procedures are in place
for adopting or amending operating rules and for the review of
proposed alterations to a common area or separate interest. The
guidelines and timeframes established in this bill are optional
and serve as a model for associations to implement the required
portions of this bill that a fair and reasonable process exist.
** While the commission does not take official positions on
legislation it does serve a consulting function on bills seeking
to implement their recommendations and has done so on this
bill.**
Double Referred: The Assembly Committee on Rules referred AB
512 to Housing and Community Development Committee and Judiciary
Committee. If AB 512 passes this committee, the bill must be
referred to the Assembly Committee on Judiciary.
REGISTERED SUPPORT / OPPOSITION :
Support
Community Associations Institute (if amended)
Opposition
None on file.
Analysis Prepared by : Jay Barkman / H. & C.D. / (916)
319-2085