Prior Law. If the number of director nominees is not more than the number of vacancies to be filled (if the election is “uncontested”), the law still required the HOA to go through the election/secret balloting process and incur the time and expense associated therewith. The only exception to this requirement was limited to HOAs consisting of 6,000 or more units; those HOAs were able to forego the balloting requirement in an uncontested election and declare the director nominees elected by “acclamation.”

New Law. AB 502 adds new Civil Code § 5103 to expand the ability to conduct uncontested elections by acclamation to all HOAs regardless of their size. Section 5103 does, however, impose new procedural pre-balloting requirements that must be satisfied in order for the acclamation process to be utilized.

HOAs should ensure that their election rules are updated to satisfy these new requirements in order to preserve the ability to conduct an uncontested election by acclamation.

The Safe at Home Program allows for victims of domestic violence, sexual assault, stalking, human trafficking, or elder or dependent adult abuse to designate the Secretary of State as their agent for service of process and receipt of mail. The person’s actual address is kept confidential.

New Law. AB 611 adds new Civil Code § 5216 to clarify that HOAs must, upon request by a person who is an active participant in the program: use the Secretary of State’s address for HOA communications to that person; withhold or redact the person’s information from membership lists, HOA websites, etc. that would reveal the person’s name, community property address, or email address; and keep the person’s participation in the program confidential.

Prior Law. The Civil Code was amended a couple of years ago to require written board approval each time an HOA makes a monetary transfer of $10,0000 or five percent (5%)—whichever is lower—of its total combined and reserve operating account deposits.

New Law. AB 1101 amends several provisions of the Civil Code to clarify how the threshold calculations apply in response to confusion that often surfaced under the law’s prior language. Now, for HOAs with 50 or fewer units, board approval is required for transfers greater than $5,000 or five percent (5%) of the HOA's estimated annual income (whichever is lower); for HOAs with more than 50 units, board approval is required for transfers greater than $10,000 or five percent (5%) of the HOA's estimated annual income, whichever is lower.

AB 1101 also clarifies the types of federally insured accounts that HOA funds must be kept in, as well as clarifies the types of mandated dishonesty insurance and crime coverage that may be kept by an HOA to comply with previously enacted law.

Existing Law. Recent changes to the law significantly limited the types of rental restrictions HOAs were able to enforce (e.g., prohibiting rental caps stricter than 25% of the separate interests), as well as required HOAs to amend their governing documents (such as their CC&Rs) to remove any unlawful rental restrictions before January 1, 2022.

New Law. AB 1584 extends the deadline for amending documents to remove unlawful rental restrictions to July 1, 2022. It also provides an easier avenue to amend CC&Rs in this regard by allowing the board to amend the CC&Rs, without membership approval, by following a notification process similar to that which is utilized for making changes to the HOA's operating rules.

HOAs should consult with legal counsel to ensure compliance with the law’s mandate that (a) unlawful rental restrictions are not being enforced and (b) unlawful restrictions are removed from the HOA's governing documents before July 1, 2022.

**For a thorough breakdown of types of rent restrictions that an HOA may now adopt and enforce, click here to read our FindHOALaw page entitled "Limitations on Rental Prohibitions."

Existing Law. Under existing law, property owners are not permitted to split their lots and/or build multi-unit projects on residential lots that are already zoned for single-family use.

New Law. SB 9 is a controversial bill that was enacted to help combat California’s housing crisis. Effective January 1, 2022, property owners will be permitted to either add a second home on their existing single-family lot or construct a duplex, as well as to split their lot into two (2) separate lots and then construct up to two homes on each lot.

While SB 9 does not explicitly override CC&R restrictions that would prohibit SB 9 developments (e.g., those that prohibit subdividing or partitioning lots, constructing additional residences, etc.), HOAs may not already have these types of CC&R restrictions in place. We strongly recommend that HOAs consult with their legal counsel to determine what, if any, amendments need to be made to their CC&Rs to preserve the single-family character of their communities

Existing Law. When conducting a board meeting by teleconference, an HOA is required to designate a physical location where at least one director or person designated by the board is present and where members can attend in person. When conducting an election entirely by mail, ballots must be counted and tabulated in public at a properly noticed board or membership meeting, requiring a physical location where members may attend and observe the inspector of elections.

New Law.  SB 391 removes the physical location requirements for such meetings where there is a federal, state or local government-declared emergency that renders physical meetings unsafe, so long as the HOA satisfies certain notice and procedural requirements set forth in new Civil Code § 5450.

SB 392 makes numerous changes to existing Civil Code sections pertaining to methods of document delivery, solicitation of member contact information, how notices and other documents may be delivered, and components of an HOA's membership list.

Notable changes include the following:

Existing Law. Existing law allows HOAs to disqualify persons from nomination under specified circumstances. Existing law also permits an inspector of elections to oversee additional persons to verify signatures and tabulate votes, but it does not specify the qualifications for such persons. Finally, existing law frustrates an HOA's ability to comply with timelines set forth in the Corporations Code for holding special meetings of the members called by petition while, at the same time, complying the balloting-requirements and procedures in the Civil Code.

New Law. SB 432 allows HOAs to set term limits for directors and use term limits as a basis for disqualification of a candidate when an election is being conducted by acclamation. SB 432 also imposes the same qualifications for “additional persons” being overseen by the inspector of elections as those which apply to inspectors of elections. Finally, SB 432 extends the timeline for conducting special meetings of the members to align with the Civil Code’s requirements governing HOA elections.

Factual Background. The owner purchased a unit for the express purpose of renting it out as a short-term rental. The HOA later adopted a 30-day minimum rental period. The owner sued on the basis that she was exempt from that requirement because Civil Code § 4740 provides that homeowners are not subject to governing document provisions that “prohibit[ ] the rental or leasing of any of the separate interests … unless that governing document, or amendment thereto, was effective prior to the date the owner acquired title to their separate interest.” The HOA argued that the minimum rental period constituted only a “restriction” (not a “prohibition”) and was therefore binding on the owner. The HOA also argued alternatively that the owner’s conduct violated the HOA's existing restriction on commercial use.

Court’s Ruling. Section 4740 applies to any kind of rental restriction or prohibition that did not exist when the owner bought her unit.

The court saw no distinction between short-term rentals and longer-term rentals that would support the HOA's argument that short-term rentals are commercial use but longer-term rentals are not.

Factual Background. Condominium association in Sun Valley was developed under a 1979 ordinance requiring 34 guest parking spaces. By 2014, only 6 of the 170 spaces were marked as guest parking spaces.

Plaintiff drove to visit a friend in the HOA and was unable to find guest parking. She parked on the far side of a five-lane public street next to the HOA. She jaywalked and was struck by a car, suffering a traumatic brain injury. Plaintiff sued the HOA for negligence and premises liability based on the HOA's failure to maintain the number of guest parking spaces required by the development ordinance. Plaintiff’s claims required her to establish that (a) the HOA owed her a legal duty of care, (b) that it breached that duty, and (c) that it was the main cause of her injury.

Court’s Ruling. A property owner's common law duty of care does not encompass a duty to provide on-site parking for invitees to protect them from traffic accidents occurring offsite as they travel to and from the premises. It is unreasonable to impose a duty on every property owner to provide sufficient on-site parking for every possible guest to avoid injury to those guests trying to access the property from outside the premises.

Factual Background. Plaintiff sued the HOA to stop it from installing a traffic signal adjacent to Plaintiff’s home. Plaintiff obtained a temporary restraining order (“TRO”) enjoining the HOA from constructing the traffic signal next to Plaintiff’s home. The HOA, however, was successful in modifying the TRO to allow it to go forward with constructing the traffic signal provided that it was not constructed on any part of owner’s land. Nevertheless, court issued a preliminary injunction enjoining the HOA from further construction because the owner had demonstrated a likelihood of success on the merits with respect to their breach claim.

The Court subsequently dissolved the injunction allowing the HOA to proceed with the project due to a material change in the facts—the HOA had secured the requisite membership approval thereby correcting the breach. Both parties filed a motion for attorneys' fees claiming to be the “prevailing party.” Trial court concluded that the Plaintiff was the successful party.

Court’s Ruling. Plaintiff was the prevailing party because it achieved its main litigation objective: to get the HOA to comply with the governing documents (i.e., to obtain membership approval to construct the traffic lights). The Court rejected the HOA's argument that Plaintiff was not entitled to its attorneys' fees because Plaintiff voluntarily dismissed the action: “such conduct does not deprive them of prevailing party status.”

This case is helpful in situations where an HOA is forced to file suit against an owner to resolve the owner's violation. If the owner corrects the violation during the pendency of the lawsuit, the HOA will preserve its right to recover its attorney's fees even though the case gets dismissed before final judgment is entered.