FALL 2021 | CAI SAN DIEGO CHAPTER
Thank You to Our Sponsors
An Overview of New Community Association Legislation
Here are the laws which passed this year and what you need to do:

AB 502 (Davies) – Election by Acclamation. Election by acclamation occurs when there are the same or fewer number of candidates than open seats on the board. The association can declare the candidates who did run will be the board members – without sending the ballot mailings, reconvening the meeting multiple times for lack of quorum, or even holding the election itself. Under AB 502, election by acclamation can occur if: (a) the association does not use delegate voting; (b) the association has held a regular election within the last 3 years; (c) the association has provided individual notice of the election and procedures for nominating candidates at least 90 days before the deadline for submitting nominations; (d) the association has distributed a reminder notice between 7 and 30 days before the deadline for submitting candidate nominations; and (e) the association board votes for acclamation at a meeting. Each of the above notices has specific statutory required language. 

What Does This Mean? In order to meet these new acclamation requirements, an association must begin sending their election notice 6 months before the actual date of the election. Make sure to add in additional time for mailing and mail houses and don’t forget to arrange the independent inspector of election. 


AB 611 (Silva) – Safe at Home. Existing law requires every association to create a membership list, and to distribute the list under certain circumstances. Associations are also authorized to withhold or redact information from association records in specified instances, including, but not limited to, when the release of the information is reasonably likely to compromise the privacy of an individual member of the association. Under California law, victims of domestic abuse, sexual assault and other specified persons may apply for participation in an address confidentiality program, Safe at Home, which designates the person’s actual address as confidential. AB 611 adds new Civil Code Section 5216 requiring an association, upon request of an association member who is an active participant in the Safe at Home program, to: (a) use the provided Safe at Home designated substitute offsite address for all association communications; and (b) not include any information that would reveal the name, community property address or email address of the Safe at Home participant to members of the association.

What Does This Mean? Upon request of a member who is an active participant in the Safe at Home program, you need to redact the participant’s personal information from membership lists, mailbox bank listings, resident directories, electronic keypads, unit property numbers, and internet web portal accounts. You will use the address designated by the Secretary of State as a substitute address.


AB 1101 (Irwin) – Financial Controls and Insurance. Existing law requires managers, at the written request of the Board, to deposit funds into a California bank, savings association, or credit union which is insured by the federal government (e.g.: FDIC). AB 1101 expands the types of government insurance to include the National Credit Union Administration Insurance Fund (NCUAIF) or a guaranty corporation meeting specified requirements, in addition to the FDIC. Existing law requires written board approval for transfers of greater than $10,000 or 5%, whichever is lower, of an association’s total deposits. AB 1101 requires written board approval for all (reserves or operating) transfers over $5,000 or 5%, whichever is less, of the estimated income in the budget for associations of 50 separate interests or less, or the lesser of $10,000 or 5% of the estimated income in the budget for associations with 51 or more separate interests. AB 1101 also prohibits, without qualification, the commingling of association funds with the managing agent’s funds or with other funds. Current law requires fidelity bond coverage for directors, officers and employees, including dishonesty and computer fraud. AB 1101 allows the use of insurance for such purposes and adds a requirement that crime insurance, employee dishonesty coverage, computer fraud, funds transfer fraud and fidelity coverage be endorsed to include the association’s manager in addition to an association’s directors and officers. 

What Does This Mean? Association funds need to be deposited in FDIC insured accounts, which now include guaranty corporations and the NCUAIF. Regardless of whether funds are being transferred from reserves or operating accounts, if an association is 50 units or less, written board approval is necessary to pay bills larger than $5,000 or 5% of the association’s estimated annual income, and if an association is 51 units or more, you need to have written board approval to pay bills larger than $10,000 or 5% of the association’s estimated annual income. Do this by annual motion at the start of the year for budgeted recurring large bills like landscape, irrigation and insurance, while making approval of nonrecurring bills part of your monthly financial report at meetings. Associations may also use insurance, instead of bonds, to cover the enhanced list of covered perils and parties identified by the legislature. Be sure you work with insurance professionals who are intimately familiar with these enhanced insurance requirements.