BILL ANALYSIS
SENATE HOUSING & COMMUNITY DEVELOPMENT COMMITTEE
Senator Denise Moreno Ducheny, Chair
Bill No: AB 2376Hearing:June
21, 2004
Author: BatesFiscal:No
Version: June 15,
2004Consultant:Michelle Rubalcava
COMMON INTEREST DEVELOPMENTS AND ARCHITECTURAL REVIEW
Background and Existing Law :
A common-interest development (CID) is a form of real
estate where each homeowner has an exclusive interest in a
unit or lot and a shared or undivided interest in common
area property. Condominiums, planned unit developments,
stock cooperatives, and community apartments all fall under
the umbrella of common interest developments. The
Davis-Stirling Common Interest Development Act provides the
legal framework under which homeowner associations operate
in common interest developments. 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.
Existing law requires that board association meetings be
conducted in accordance with a recognized system of
parliamentary procedure or any parliamentary procedures the
association may adopt. The Davis Stirling Act also
contains the Common Interest Development Open Meeting Act
(CIDOA). The CIDOA requires that all board association
meetings be open to homeowners except when the board
adjourns to executive session in order to consider
litigation, matters relating to the formation of contracts
with third parties, member discipline, personnel matters,
or to meet with a member, upon the member's request,
regarding the member's payment of assessments. It also
requires that the
association provide members notice of the time and place of
association meetings, unless the time and place of these
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meetings is set in the bylaws or the association holds an
emergency meeting.
Proposed Law :
Assembly Bill 2376 would create statewide standards for
common interest developments and architectural review. The
bill would require a homeowners association to provide
within their governing documents a fair, reasonable and
expeditious process for reviewing a homeonwer's proposed
physical alterations to the common area or his or her
separate interest. AB 2376 requires that a decision by the
association regarding the proposed physical alterations be
made in good faith. AB 2376 also requires that the
association give their decision regarding the proposed
physical alterations in writing, and if the association
disapproves the proposed physical alterations, to also
include an explanation of why the alterations were
disapproved and the process the homeowner must follow if
they wish to seek reconsideration by the board. Finally,
AB 2376 provides a homeowner with a right of appeal at an
open board meeting unless the disapproval of a proposed
physical alteration was made by the board during an open
board meeting.
Comments :
1. Purpose of the bill. The governing documents of many
homeowner associations 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.
There are currently no guidelines for associations to
follow in reviewing such modification requests. As a
result, the current approval process may be or appear to be
unreasonable, arbitrary, capricious, and leading to costly
legal disputes that might otherwise be avoided.
Assembly Bill 2376 would incorporate the California Law
Revision Commission's recommendations for statewide
standards for architectural review in common interest
developments. This bill would provide that if a homeowner
association's governing documents require association
approval before an owner may make a physical change to his
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or her separate interest or to the common area, the
association must provide the homeowner with a fair,
reasonable and expeditious procedure for making its
decision.
In addition, Assembly Bill 2376 would require that a
disapproval of a proposed physical alteration be made in
writing, with an explanation of the association's reason
for disapproving the proposed change. A homeowner whose
proposed physical alteration is disapproved would have the
right to seek reconsideration of the dispproval at an open
meeting of the board of directors. These requirements
would improve the fairness of the process, without imposing
significant costs on the association.
2. "Prompt Deadline" requirement in bill. The current
language of the bill requires that the association's
procedure for approving or disapproving proposed physical
alterations provide for "prompt deadlines." Protection and
Advocacy, Inc., has argued that this language should be
amended to require a deadline of 10 days. This timeline
they argue is consistent with the deadlines imposed by the
fair housing laws. The sponsor of the bill has argued that
10 days may be an unworkably short period, especially if a
board decision is required. Although the sponsor may be
correct in that 10 days might be an unworkable deadline,
the requirement of "prompt deadlines" is also problematic.
This language could provide for inconsistency amongst the
different associations. The committee may wish to consider
amending the bill to require that an association give a
homeowner a response within 30 days and that timeline may
be extended if agreed to by both parties.
3. Recent amendments to bill address fair housing
concerns. There is a substantive issue relating to
architectural review and fair housing law. These concerns
have been raised by several organizations such as,
Protection and Advocacy, Inc., California Federation for
Independent Living Centers, California Alliance for
Retired Americans, and Congress of California Seniors.
These organizations suggested amending AB 2376 to make
clear that a homeowners association must comply with fair
housing law when making a decision in regards to proposed
physical alterations of a separate interest. Advising
California Common Interest Communities 8.53 makes clear
that "Although community associations may require the
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disabled person to request a board approval before making
changes to the common area, the board may not withhold its
approval unreasonably." The sponsor of the bill agrees
with these arguments and has amended the bill to make clear
that a homeowners association must comply with fair housing
law when making a decision in regards to proposed physical
alterations of a separate interest.
4. Chaptering concerns with AB 1836. Assembly Bill 1836
which would implement the California Law Revision
Commission's recommendations with regards to alternative
dispute resolution in common interest developments was
heard and passed out of this committee on June 7, 2004.
There is a potential chaptering out problem between this
bill and Assembly Bill 1836, as a result, this bill has
been amended to prevent potential chaptering out problems.
Previous Actions
Assembly Floor:
76-0
Assembly Judiciary:
11-0
Assembly Housing and Community Development: 9-0
Support and Opposition : (6/16/04)
Support : none received
Opposition : none received