AB 1738, as introduced, Chau. Common interest developments: dispute resolution.
The Davis-Stirling Common Interest Development Act defines a common interest development and requires it to be managed by an association. The act requires an association to provide a fair, reasonable, and expeditious procedure for resolving a dispute between an association and a member involving their rights, duties, or liabilities under the act, the Nonprofit Mutual Benefit Corporation Law, or the association’s governing documents. The act authorizes an association to develop its own procedure for these purposes and requires this procedure to satisfy specified minimum standards, including, among others, providing a means by which the member and the association may explain their positions.
This bill would additionally require that an association’s dispute resolution procedure include a means by which the counsel for a member or an association may explain their position.
The act also establishes an alternative procedure applicable to an association that does not otherwise provide a fair, reasonable, and expeditious dispute resolution procedure as described above. Under these provisions a procedure that, among other things, authorizes either party to request, in writing, the other party to meet and confer, prohibits the association from refusing a request to meet and confer, and requires the parties to meet and confer in good faith in an effort to resolve the dispute is deemed a fair, reasonable, and expeditious dispute resolution procedure.
This bill would additionally require the procedure to provide either party the right to be represented by counsel when meeting and conferring.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 5910 of the Civil Code is amended to
2read:
A fair, reasonable, and expeditious dispute resolution
4procedure shall at a minimum satisfy all of the following
5requirements:
6(a) The procedure may be invoked by either party to the dispute.
7A request invoking the procedure shall be in writing.
8(b) The procedure shall provide for prompt deadlines. The
9procedure shall state the maximum time for the association to act
10on a request invoking the procedure.
11(c) If the procedure is invoked by a member, the association
12shall participate in the procedure.
13(d) If the procedure is invoked by the association, the member
14may elect not to participate in the
procedure. If the member
15participates but the dispute is resolved other than by agreement of
16the member, the member shall have a right of appeal to the board.
17(e) A resolution of a dispute pursuant to the procedure, which
18is not in conflict with the law or the governing documents, binds
19the association and is judicially enforceable. An agreement reached
20pursuant to the procedure, which is not in conflict with the law or
21the governing documents, binds the parties and is judicially
22enforceable.
23(f) The procedure shall provide a means by which the member
24and the associationbegin insert, or their counsel,end insert may explain their positions.
25(g) A member of the association shall not be charged a fee to
26participate in the
process.
Section 5915 of the Civil Code is amended to read:
(a) This section applies to an association that does not
2otherwise provide a fair, reasonable, and expeditious dispute
3resolution procedure. The procedure provided in this section is
4fair, reasonable, and expeditious, within the meaning of this article.
5(b) Either party to a dispute within the scope of this article may
6invoke the following procedure:
7(1) The party may request the other party to meet and confer in
8an effort to resolve the dispute. The request shall be in writing.
9(2) A member of an association may refuse a request to meet
10and confer. The association may not refuse a request to meet and
11confer.
12(3) The board shall designate a director to meet and confer.
13(4) The parties shall meet promptly at a mutually convenient
14time and place, explain their positions to each other, and confer
15in good faith in an effort to resolve the dispute.begin insert The parties shall
16have the right to be represented by counsel when meeting and
17conferring.end insert
18(5) A resolution of the dispute agreed to by the parties shall be
19memorialized in writing and signed by the parties, including the
20board designee on behalf of the association.
21(c) An agreement reached under this section binds the parties
22and is judicially enforceable if both of the following conditions
23are satisfied:
24(1) The agreement is not in conflict with law or the governing
25documents of the common interest development or association.
26(2) The agreement is either consistent with the authority granted
27by the board to its designee or the agreement is ratified by the
28board.
29(d) A member may not be charged a fee to participate in the
30process.
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