BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 512|
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THIRD READING
Bill No: AB 512
Author: Bates (R), et al
Amended: 8/29/03 in Senate
Vote: 21
SENATE HOUSING & COMM. DEV. COMMITTEE : 8-0, 7/7/03
AYES: Ducheny, Hollingsworth, Ackerman, Alarcon, Cedillo,
Dunn, Florez, Torlakson
SENATE JUDICIARY COMMITTEE : 7-0, 8/19/03
AYES: Escutia, Morrow, Ackerman, Cedillo, Ducheny, Kuehl,
Sher
ASSEMBLY FLOOR : 77-0, 5/19/03 - See last page for vote
SUBJECT : Common interest developments
SOURCE : California Law Revision Commission
DIGEST : This bill sets forth a process by which common
interest development associations may adopt and change
their operating rules, while giving notice and an
opportunity to comment to association members.
Senate Floor Amendments of 8/29/03 fix inadvertent
omissions and resolve chaptering conflicts.
ANALYSIS : Existing law, the Davis-Stirling Act, allows
common interest development (CID) associations to be
managed in accordance with "governing documents,"
consisting of the articles of incorporation, initial
CONTINUED
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declaration of covenants and restrictions, and any bylaws
or operating rules adopted by an association.
Existing law requires association meetings to be conducted
in accordance with a recognized parliamentary procedure,
and requires members to be given notice of the time and
place of the meeting, and of matters to be presented for
action at the meeting.
Existing law further requires association meetings to be
open to the membership, except when the board meets in
executive session to consider litigation, member
discipline, personnel matters, or matters relating to the
formation of contracts with third parties.
Existing law further requires the minutes, draft minutes or
summary of the minutes of a board meeting to be distributed
within 30 days of the meeting.
This bill adds chapter and title headings to the
Davis-Stirling Act, and declares that the headings do not
affect the scope, meaning, or intent of its provisions.
This bill defines "operating rule," explains what makes an
operating rule enforceable, and provides procedures for
adopting, amending, or repealing operating rules.
This bill provides that its provisions shall apply to rule
changes commenced on or after January 1, 2004, and shall
not affect the validity of prior rule changes.
This bill requires that notice of a proposed rule change,
or notice of adoption of an emergency rule, include the
text of the change and a description of the rule's purpose
and effect.
Existing law provides that association members shall have
access to association records in accordance with Article 3
of the Corporations Code (which allows corporate
shareholders to inspect and copy the record of members'
names, addresses, and voting rights, and specifies that the
corporation's accounting books and records and shall be
open to inspection by members).
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This bil l specifies that association members shall have
access to association records, "including accounting books
and records and membership lists," and that members shall
have the same access to operating rules as they do to
accounting books and records.
This bill provides that a copy of the operating rules,
along with copies of other governing documents, shall be
provided by the seller of any separate interest to the
prospective purchaser.
The bill requires an association's biennial registration
with the Secretary of State to include the name of the
association president.
The bill is double-jointed to AB 1086 (Laird) to resolve
chaptering conflicts.
Comments
Stated Need for Legislation . At the request of the
Legislature, the California Law Revision Commission is
examining ways in which to minimize reliance on the courts
to resolve disputes between a CID association and its
members. The Commission now sponsors AB 512 as its initial
effort to reform various aspects of CID law.
A CID is a form of real estate in which each homeowner has
an exclusive interest in a unit or lot and a shared or
undivided interest in common areas. Condominiums, planned
unit developments, stock cooperatives, and community
apartments all fall under the umbrella of CIDs. Currently,
there are an estimated six million residents living in
approximately 30,000 CIDs in California.
The Davis-Stirling Common Interest Development Act provides
the legal framework for the establishment and operation of
CIDs. In addition to the requirements of the Act, each CID
is governed by a homeowner association according to the
recorded declarations, bylaws, and operating rules of the
association.
In general, CID homeowner associations have wide discretion
to regulate the maintenance, operation, and general
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appearance of the property, and the conduct of association
members. However, current law does not provide a process
for the adoption of association operating rules, nor does
it provide guidance on the proper scope of such rules.
This bill provides procedural guidelines for the adoption
and revision of CID association operating rules, including
provisions for notice and an opportunity to comment to
association members, as specified below.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/19/03)
California Law Revision Commission (source)
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Campbell, Canciamilla, Chan, Chavez, Chu, Cogdill, Cohn,
Corbett, Correa, Cox, Diaz, Dutra, Dutton, Dymally,
Firebaugh, Frommer, Goldberg, Hancock, Harman, Haynes,
Jerome Horton, Shirley Horton, Houston, Jackson, Keene,
Kehoe, Koretz, La Malfa, La Suer, Laird, Leno, Leslie,
Levine, Lieber, Liu, Longville, Lowenthal, Maddox,
Maldonado, Matthews, Maze, McCarthy, Montanez, Mountjoy,
Mullin, Nakanishi, Nakano, Nation, Negrete McLeod, Nunez,
Oropeza, Pacheco, Parra, Pavley, Plescia, Reyes, Richman,
Ridley-Thomas, Runner, Salinas, Samuelian, Simitian,
Spitzer, Steinberg, Strickland, Vargas, Wiggins, Wolk,
Wyland, Yee, Wesson
NC:cm 9/1/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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