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, that a resolution of a dispute, pursuant to the procedure, binds the association and is judicially enforceable, and that an agreement, pursuant to the procedure, binds the parties and is judicially enforceable, as specified. The act also requires that the procedure provide a means by which the member and the association may explain their positions.
This bill would additionally require the resolution or agreement under an association’s procedure for resolving these disputes between an association and a member to be in writingbegin insert and signed by both partiesend insert. The bill would authorize a member and an association to be assisted by an attorney or another person in explaining their positions at their own cost.
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. The act provides that an agreement reached under this procedure binds the parties and is judicially enforceable if specified conditions are satisfied.
This bill would additionally require the alternative procedure to provide either party the right to have an attorney or another person participate when meeting and conferring provided at their own cost.begin delete Thisend deletebegin insert Theend insert bill would require an agreement reached under the alternative procedure that binds the parties and is judicially enforceable to be inbegin delete writing,end deletebegin insert
writing and signed by both parties,end insert as specified.
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.
P3 1(c) If the procedure is invoked by a member, the association
2shall participate in the procedure.
3(d) If the procedure is
invoked by the association, the member
4may elect not to participate in the procedure. If the member
5participates but the dispute is resolved other than by agreement of
6the member, the member shall have a right of appeal to the board.
7(e) A writtenbegin delete resolutionend deletebegin insert resolution, signed by both parties,end insert of a
8dispute pursuant to the procedure that is not in conflict with the
9law or the governing documents binds the association and is
10judicially enforceable. A writtenbegin delete agreementend deletebegin insert agreement, signed by
11both parties,end insert reached
pursuant to the procedure that is not in
12conflict with the law or the governing documents binds the parties
13and is judicially enforceable.
14(f) The procedure shall provide a means by which the member
15and the association may explain their positions. The member and
16association may be assisted by an attorney or another person in
17explaining their positions at their own cost.
18(g) A member of the association shall not be charged a fee to
19participate in the process.
Section 5915 of the Civil Code is amended to read:
(a) This section applies to an association that does not
22otherwise provide a fair, reasonable, and expeditious dispute
23resolution procedure. The procedure provided in this section is
24fair, reasonable, and expeditious, within the meaning of this article.
25(b) Either party to a dispute within the scope of this article may
26invoke the following procedure:
27(1) The party may request the other party to meet and confer in
28an effort to resolve the dispute. The request shall be in writing.
29(2) A member of an association may refuse a request to meet
30and confer. The association may not
refuse a request to meet and
31confer.
32(3) The board shall designate a director to meet and confer.
33(4) The parties shall meet promptly at a mutually convenient
34time and place, explain their positions to each other, and confer
35in good faith in an effort to resolve the dispute. The parties may
36be assisted by an attorney or another person at their own cost when
37conferring.
38(5) A resolution of the dispute agreed to by the parties shall be
39memorialized in writing and signed by the parties, including the
40board designee on behalf of the association.
P4 1(c) A written agreement reached under this section binds the
2parties and is judicially enforceable ifbegin insert
it is signed by both parties
3andend insert both of the following conditions are satisfied:
4(1) The agreement is not in conflict with law or the governing
5documents of the common interest development or association.
6(2) The agreement is either consistent with the authority granted
7by the board to its designee or the agreement is ratified by the
8board.
9(d) A member shall not be charged a fee to participate in the
10process.
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