BILL ANALYSIS
AB 2376
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Date of Hearing: March 24, 2004
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Alan Lowenthal, Chair
AB 2376 (Bates) - As Introduced: February 19, 2004
SUBJECT : Common interest developments: architectural review.
SUMMARY : Requires a homeowner association to provide a fair
and reasonable process for reviewing a request by a homeowner
for a physical alteration to their unit or the common area.
Specifically, this bill :
1)Requires that a homeowner association provide within their
governing documents a fair, reasonable and expeditious process
for reviewing proposed physical design alterations by a
member.
2)Requires that a decision on the proposal be made in a good
faith manner.
3)Requires a decision to be made in writing and if denying a
request to include a description of why the proposal was
disapproved and the process for seeking reconsideration by the
board.
4)Provides for the right of appeal at an open meeting of the
board of directors unless the denial was by the board during
an open meeting.
EXISTING LAW
1)Requires meetings of the association to be conducted in a
recognized parliamentary procedure and 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
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meeting. (Civil Code Section 1363.05)
FISCAL EFFECT : Unknown.
COMMENTS : The governing documents of many homeowner
association require approval of the community association before
a homeowner can make a physical change to the homeowner's
separate interest property. For example, a homeowner might be
required to obtain association approval before adding a room,
choosing a color of exterior paint, or planting flowers in a
front yard.
This bill addresses the impression by many homeowners that the
process for approval may be capricious or arbitrary.
Minimally, associations should be required to provide their
decision in writing and allow reconsideration of denials at an
open meeting of the association.
Appeal rights
The California Association of Community Managers (CACM) has
submitted a letter of support if amended requesting that the
procedure for appeal be clarified. According to CACM some
boards will adjourn and immediately meet in name only as the
architectural committee but with the exact same members of the
board comprising that committee. They have asked that in the
case where the board of directors meets in name only as the
architectural review body, but there is no difference in the
membership of that committee, that the right of appeal be
excluded.
The point of CACM's request seems to provide the most
expeditious and efficient means for hearing proposals but it may
also prevent a homeowner from obtaining an open hearing on their
appeal. The provisions of the Davis-Stirling Act regarding open
meetings apply to the board but not to special committees.
Therefore, an association could use this loophole to circumvent
the intent of the law. Again, this does not appear to be the
intent of CACM but the committee may wish to consider how much
of a burden it really is for a board to possibly hear an issue
twice.
Opposition
The Congress of California Seniors raises various concerns
including the general lack of enforcement options regarding the
laws governing common interest developments and that nothing in
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this bill will change associations that choose to act in an
unfair manner. As it stands if an association is actively
violating the laws or merely acting out of ignorance the
homeowner has no remedy except judicial action or requesting
alternative dispute resolution. The Congress also objects to
the fact that the board, which makes the rules, is deciding if a
homeowner has violated the rules.
The commission has responded that the lack of practical
enforcement is a general problem with the laws governing common
interest developments. This bill does not change that but it at
least provides some structure and guidelines that can be used by
associations looking to act in a fair manner or by homeowners
that want to argue that their association is violating the law.
Homeowners always have the right of taking their dispute to the
courts. The creation of an enforcement agency or another level
of governance would not change the fact that homeowner's
sometimes have to go to court.
Lastly, the Congress has raised concerns regarding the lack of
specified timelines or requirements for timely responses by the
association. Last year Assembly Member Bates carried AB 512
(Chapter 557, Statutes of 2003) establishing fairness in
rulemaking, which originally included very specific timelines
for architectural review. The Congress has pointed to this as
valuable and necessary to protect homeowners from associations
that may attempt to wait out a request for alteration.
The problem with requiring specific days and timeframes is that
associations come in all shapes and sizes and meet on varying
schedules. One possibility is to require that associations
specify in their rules a timeframe for review thereby allowing
homeowners to know the rules up front but not dictating a one
size fits all approach. In addition, the committee may wish to
consider requiring that any processes be adopted through and
subject to the formal rulemaking procedures provided for last
year in AB 512. This would ensure homeowners of notification,
participation and the right to hold a referendum.
Double referred : The Assembly Committee on Rules referred AB
2376 to Housing and Community Development Committee and
Judiciary Committee. If AB 2376 passes this committee, the bill
must be referred to the Assembly Committee on Judiciary.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Community Managers (if amended)
Opposition
Congress of California Seniors (unless amended)
Analysis Prepared by : Jay Barkman / H. & C.D. / (916)
319-2085