AB 1738, as amended, 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 thebegin delete legal counsel end deletebegin insert
attorney end insertfor a member or an associationbegin insert or another personend insert may explain their position if advance written notice is provided, as specified.begin delete The bill would require this procedure to allow another person who is not legal counsel to assist the member or the association without prior notice.end delete The bill would require the parties to bear their own costs forbegin delete legal counselend deletebegin insert an attorneyend insert.
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 alternative procedure to provide either party the right to havebegin delete legal counsel presentend deletebegin insert an attorney or another person participateend insert when meeting and conferring if advance written notice is provided, as specified.begin delete The bill would allow another person who is not legal counsel to assist the member or the association without prior notice.end delete
The bill would require the parties to bear their own costs forbegin delete legal counselend deletebegin insert an attorneyend insert.
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.
P3 1(e) A resolution of a dispute pursuant to the procedure, which
2is not in conflict with the law or the governing documents, binds
3the association and is judicially enforceable. An agreement reached
4pursuant to the procedure, which is not in conflict with the law or
5the governing documents, binds the parties and is judicially
6enforceable if the agreement is in writing.
7(f) (1) The procedure shall provide a means by which the
8member and the association, with the assistance ofbegin delete legal counselend delete
9begin insert
an attorney or another personend insert, if they so choose, may explain their
10respective positions and seek to negotiate a mutually satisfactory
11resolution.begin delete If either or both parties intend to have legal counsel
12participate in the procedure, the procedure shall require at least
13five days written notice of this intent to be given to the other party.
14If this notice is not provided, the party not receiving the required
15notice shall have the election of postponing the procedure until
16the notice requirement is met.end delete
17(2) The procedure shall allow another person who is not legal
18counsel to assist the member or the association in the procedure
19without prior notice.
20(2) If either a member, an association, or both, intends to have
21an attorney or another person participate in the procedure, the
22procedure shall require the member, the association, or both, to
23provide 10 days’ written notice of this intent to be given to the
24other party pursuant to the methods identified in subdivision (b)
25of Section 4035 and subdivision (a) of Section 4040. If notice is
26not provided, the party not receiving the required notice shall have
27the election of postponing the procedure until the notice
28requirement is met.
29(g) A member of the association shall not be charged a fee to
30participate in the process. Each party shall bearbegin insert the cost ofend insert the
31party’s ownbegin delete costsend deletebegin insert
attorney feesend insert, ifbegin delete any, for legal counselend deletebegin insert anyend insert.
Section 5915 of the Civil Code is amended to read:
(a) This section applies to an association that does not
34otherwise provide a fair, reasonable, and expeditious dispute
35resolution procedure. The procedure provided in this section is
36fair, reasonable, and expeditious, within the meaning of this article.
37(b) Either party to a dispute within the scope of this article may
38invoke the following procedure:
39(1) The party may request the other party to meet and confer in
40an effort to resolve the dispute. The request shall be in writing.
P4 1(2) A member of an association may refuse a request to meet
2and confer. The association may
not refuse a request to meet and
3confer.
4(3) The board shall designate a director to meet and confer.
5(4) (A) The parties shall meet promptly at a mutually convenient
6time and place, explain their positions to each other, and confer
7in good faith in an effort to resolve the dispute. Each party shall
8have the right
to havebegin delete legal counsel presentend deletebegin insert an attorney or another
9person participateend insert when meeting and conferring to explain their
10respective positions and seek to negotiate a mutually satisfactory
11resolution. begin deleteA party wishing to have counsel present when meeting
12and conferring must provide written notice to the other party of
13its intent to be represented. If this notice is not provided, the party
14not receiving the required notice shall have the election of
15postponing the meeting until the notice requirement is met.end delete
16(B) A member or association may have another
person who
17is not legal counsel present to assist the member or the association
18in the procedure without prior notice.
19(B) If either a member, an association, or both, intends to have
20an attorney or another person participate in the procedure, the
21procedure shall require the member, the association, or both, to
22provide 10 days’ written notice of this intent to be given to the
23other party pursuant to the methods identified in subdivision (b)
24of Section 4035 and subdivision (a) of Section 4040. If notice is
25not provided, the party not receiving the required notice shall have
26the election of postponing the procedure until the notice
27requirement is met.
28(5) A resolution of the dispute agreed to by the parties shall be
29memorialized
in writing and signed by the parties, including the
30board designee on behalf of the association.
31(c) An agreement reached under this section binds the parties
32and is judicially enforceable if both of the following conditions
33are satisfied:
34(1) The agreement is not in conflict with law or the governing
35documents of the common interest development or association.
36(2) The agreement is either consistent with the authority granted
37by the board to its designee or the agreement is ratified by the
38board.
P5 1(d) A member shall not be charged a fee to participate in the
2process. Each party shall bearbegin insert
the cost ofend insert the party’s ownbegin delete costsend delete
3begin insert
attorney feesend insert, ifbegin delete any,end deletebegin deletefor legal counsel.end deletebegin insert any.end insert
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