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Associations with rental provisions rendered unenforceable by Civil Code § 4741(a) face a July 1, 2022, deadline for amending their governing documents to remove the unenforceable provisions. As many of you are aware, AB 1584 amended Civil Code § 4741(f) such that it is now easier for associations and their Boards to amend their governing documents to remove prohibited rental provisions. AB 1584 also extended the deadline from January 1, 2022, to July 1, 2022, for completing that amendment process. That deadline is quickly approaching.
Specifically, if an association's governing documents contain a provision that:
- Prohibits the rental or leasing of any of the separate interests, accessory dwelling units, or junior accessory dwelling units; or
- Unreasonably restricts the rental or leasing of any of the separate interests, accessory dwelling units, or junior accessory dwelling units
Then the prohibition or unreasonable restriction must be amended out of the governing documents by July 1, 2022. (Notably, a governing document provision that restricts the rental or lease of separate interests to less than 25% of the separate interests is deemed to be "unreasonable" and thus in violation of the statute. On the other hand, the legislation creates a safe harbor for a governing document provision imposing a minimum 30 day rental term.)
AB 1584 granted boards the power to delete a problematic rental provision from the CC&Rs without membership approval. This will make it much easier for most associations to delete CC&R provisions that run afoul of Civil Code § 4741. But, the process does require general notice to the members at least 28 days before approving such a CC&R amendment at an open session Board meeting. The notice must include the text of the proposed amendment and a description of the purpose and effect of the amendment. This 28 day general notice requirement needs to be factored in when considering the July 1, 2022, amendment deadline.
With the deadline to comply with Civil Code § 4741(f) quickly approaching, associations that have not already done so should consult with legal counsel to see if their governing documents contain provisions that need to be amended.
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