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2017-2018 Legislative Session Hot Bills

Below are links to more information on bills of interest to CAI-CLAC in the 2017-2018 Legislative Session.  Last updated June 23, 2017

  • AB 534 (Gallagher) – Common interest developments: mechanics liens.
The California Constitution establishes a lien upon the property upon which mechanics, persons furnishing materials, artisans, and laborers of every class have bestowed labor or furnished material for the value of the labor done and materials furnished. The Legislature is required to provide for the speedy and efficient enforcement of these liens. The Davis-Stirling Common Interest Development Act and the Commercial and Industrial Common Interest Development Act provide for the creation and regulation of common interest developments. These acts define a common interest development to include a condominium project, planned development, and stock cooperative. The acts also define, for purposes of the acts, a separate interest in a condominium project, planned development, and stock cooperative. These acts prohibit, in a condominium project, a mechanics lien from being filed against any other property of an owner in the condominium project unless that owner has expressly consented to or requested the performance of the labor or furnishing of the materials or services, except in the case of emergency repairs to the condominium. This bill would instead prohibit, in a common interest development, a mechanics lien from being filed against an other owner in the common interest development unless that consent was provided or that request was made, except in the case of emergency repairs. Existing law authorizes the owner of a condominium to remove that owner’s condominium from a lien filed against 2 or more condominiums or any part thereof by payment to the holder of the lien the fraction of the total sum secured by lien that is attributable to the owner’s condominium. Existing law also provides that an owner of real property or an owner of any interest in real property subject to a recorded claim of lien, or a direct contractor or subcontractor affected by the claim of lien, that disputes the correctness or validity of the claim may obtain release of the real property from the claim of lien by recording a lien release bond. This bill would authorize the owner of a separate interest in a common interest development to remove the separate interest from a lien against 2 or more separate interests by either paying to the holder of the lien the fraction of the total sum secured by lien that is attributable to the owner’s separate interest or recording a lien release bond, as specified. This bill would also deem the governing association of a common interest development to be an agent of the owners of separate interests in the common interest development with respect to a work of improvement on a common area for all notices and claims required pursuant to existing law relating to works of improvement.
  • AB 634 (Eggman) – Real property: solar energy systems

Existing property law prohibits any covenant, restriction, or condition contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale of, or any interest in, and any provision of a governing document from effectively prohibiting or restricting the installation or use of a solar energy system. Existing law also exempts from that prohibition provisions that impose reasonable restrictions on solar energy systems that do not significantly increase the cost of the system or significantly decrease its efficiency or specified performance. Existing law specifies that whenever approval is required for the installation or use of a solar energy system, the application for approval must be processed and approved by the appropriate approving entity in the same manner as an application for approval of an architectural modification to the property. Existing property law permits an association to impose reasonable provisions that restrict the installation of solar energy systems installed in common areas, as defined, to those systems approved by the association. This bill additionally would permit an association to impose reasonable provisions that require an applicant to notify each owner of a unit in the building on which a solar installation will be located of the application to install a solar energy system, to require the applicant to submit a solar suitability survey to determine usable solar roof area, and to require equitable allocation of usable solar space, as specified. The bill would specify that an association may not establish a general policy prohibiting the installation or use of a rooftop solar energy system for household purposes on the roof of the building in which the owner resides and also may not require approval by a vote of members owning separate interests in the common interest development in those circumstances. The bill also would specify that any action by an association that contravenes these provisions is void and unenforceable, and would make nonsubstantive and clarifying changes. The Davis-Stirling Common Interest Development Act defines and regulates common interest developments. The act requires an affirmative vote of members owning at least 67% of the separate interests in the common interest development before the board may grant exclusive use of a portion of the common interest development to a member, unless the governing documents specify a different percentage. Existing law exempts from this requirement certain actions, including, among others, a grant of exclusive use to eliminate or correct engineering errors in recorded documents, to accommodate a disability, and to install and use an electric vehicle charging station through a license granted by the association. This bill also would exempt from that vote requirement an action to install and use a solar energy system on the common roof of a residence that meets specified requirements.

  • AB 690 (Quirk-Silva) – Common interest developments: managers: conflicts of interest.
Existing law requires that a person or firm who will act as a common interest development manager provide specified disclosures to the board of directors of the homeowners association, including whether the prospective manager is certified, holds an active real estate license, and the manager’s name and address. This bill would require a manager or a common interest development management firm to disclose specified information before entering into a management agreement. The bill would require a disclosure on whether the manager receives a referral fee from 3rd parties for distributing required documents and an affirmative written acknowledgment that specified documents provided to the manager are the property of the association and not the manager. The Davis-Stirling Common Interest Development Act defines and regulates common interest developments. The act requires a common interest development to be managed by an association. The act requires the association to distribute an annual budget report 30 to 90 days before the end of its fiscal year. Existing law requires the annual budget report to include specified information. This bill would additionally require the annual budget report to contain specified information relating to charges for requesting copies of certain documents from the association. The act requires a prospective managing agent of a common interest development to provide a written statement to the board of the association containing specified information concerning the managing agent. The act also requires the association to provide to the owner of a separate interest, upon request, specified documents. This bill would require that the manager, common interest development management firm, or its contracted agent facilitate the delivery of the documents requested, if this responsibility is required by the management contract.  The bill would modify the specified form used to identify the charges for requesting copies of documents held by the association by requiring the form to inform a seller that he or she is not required to purchase all of the documents listed on the form and may purchase some or all of the documents as desired. The bill would also require a prospective manager or prospective management firm of a common interest development when presenting a bid for services to the board to include a disclosure of any conflict of interest, as defined.
  • AB 731 (Chen) – Personal income taxes: deductions: homeowners’ association assessments.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by that law. This bill, for taxable years beginning on or after January 1, 2017, and before January 1, 2022, would allow a deduction in computing adjusted gross income for an amount paid or incurred by the qualified taxpayer during the taxable year, not to exceed ($1,500), for qualified homeowners’ association assessments, as defined. This bill would take effect immediately as a tax levy.
  • AB 1412 (Choi) – Common interest developments: volunteer officers: liability.
The Davis-Stirling Common Interest Development Act defines and regulates residential common interest developments. Existing law requires a common interest development to be managed by an association, which is incorporated or unincorporated. Existing law requires the owner of a separate interest in a common interest development to annually provide the association with specified written information, including an address for the purpose of receiving notices from the association. Existing law authorizes the association to use the property address when the owner fails to provide an address. Existing law also limits the personal liability of a volunteer officer or director of an association that manages a common development that is exclusively residential for tortious acts or omissions, if certain criteria are met, including that the act or omission be made in good faith and within the scope of duty. This bill would authorize the association, when an owner fails to provide the required notice, to use the last address provided in writing by the owner, except as specified. The bill would also extend the limitation on the personal liability, as described above, to a volunteer officer or director of a development that is mixed use when the volunteer officer or volunteer director is a tenant of a residential separate interest or is an owner of no more than 2 separate interests and whose ownership in the common interest development consists exclusively of residential separate interests.
  • AB 1426 (Irwin) – Common interest developments: association governance: elections.
The Davis-Stirling Common Interest Development Act defines and regulates common interest developments that are not a commercial or industrial common interest development. The act requires a common interest development to be managed by an association, requires the association to select one or 3 independent 3rd parties as an inspector or inspectors of elections, and generally requires the association’s elections regarding assessments legally requiring a vote, the election and removal of directors, amendments to the governing documents, or the grant of exclusive use of common area, to be conducted by the inspector or inspectors of elections in accordance with specified rules and procedures. The act excepts from these election requirements an election of directors if the governing documents of the association provide that one member from each separate interest is a director. This bill would additionally except from those election requirements an election of directors if the election is uncontested, as defined, and would provide a procedure for an election to be declared as uncontested. The bill adds 2 additional election requirements that would ensure an announcement of an election and notification of nomination procedures is provided in a specific manner and would ensure a member who meets specified qualification requirements is not denied the right to vote or the right to be a candidate for director. The bill would authorize a cause of action alleging a violation of these election requirements to be brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court.
  • SB 2 (Atkins) – Building Homes and Jobs Act.

Under existing law, there are programs providing assistance for, among other things, emergency housing, multifamily housing, farmworker housing, home ownership for very low and low-income households, and downpayment assistance for first-time home buyers. Existing law also authorizes the issuance of bonds in specified amounts pursuant to the State General Obligation Bond Law. Existing law requires that proceeds from the sale of these bonds be used to finance various existing housing programs, capital outlay related to infill development, brownfield cleanup that promotes infill development, and housing-related parks. This bill would enact the Building Homes and Jobs Act. The bill would make legislative findings and declarations relating to the need for establishing permanent, ongoing sources of funding dedicated to affordable housing development. The bill would impose a fee, except as provided, of $75 to be paid at the time of the recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, per each single transaction per single parcel of real property, not to exceed $225. By imposing new duties on counties with respect to the imposition of the recording fee, the bill would create a state-mandated local program. The bill would require that a county recorder quarterly send revenues from this fee, after deduction of any actual and necessary administrative costs incurred by the county recorder, to the Controller for deposit in the Building Homes and Jobs Fund, which the bill would create within the State Treasury. The bill would, upon appropriation by the Legislature, require that 20% of the moneys in the fund be expended for affordable owner-occupied workforce housing and 10% of the moneys for housing purposes related to agricultural workers and their families, and would authorize the remainder of the moneys in the fund to be expended to support affordable housing, home ownership opportunities, and other housing-related programs, as specified. The bill would impose certain auditing and reporting requirements and would establish the Building Homes and Jobs Trust Fund Governing Board that would, among other things, review and approve recommendations made by the Department of Housing and Community Development for the distribution of moneys from the fund.

  • SB 407 (Wieckowski) – Common interest developments: noncommercial solicitation.

Existing law, the Davis-Stirling Common Interest Development Act, defines and regulates common interest developments that are managed by homeowners’ associations. The act requires an association to adopt rules that ensure access to the common area meeting space, if any exists, during a campaign, at no cost, to all candidates and to all members advocating a point of view. The act also requires the adoption of rules that ensure that if any candidate or member advocating a point of view is provided access to association media, newsletters, or Internet Web sites during a campaign, for purposes that are related to that election, equal access is provided to all candidates and members advocating a point of view.  This bill would provide that the governing documents, including bylaws and operating rules, of a residential common interest development may not prohibit a member or resident of a common interest development from engaging in certain activities, including peacefully assembling or meeting during reasonable hours and in a reasonable manner for purposes relating to common interest development living, legislation, election to public office, or the initiative, referendum, or recall processes. The bill would prohibit a member or resident of a common interest development from being required to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy to use the association’s common area for these purposes, unless nonresidents are invited to attend as members of the audience and certain conditions are met. The bill would authorize a member or resident of a common interest development who is prevented by the association or its agents from engaging in any of these activities to bring a civil or small claims court action to enjoin the enforcement of a governing document that violates this bill.

  • SB 451 (Stone) – Common interest developments.
Existing law, the Davis-Stirling Common Interest Development Act, defines and regulates common interest developments, which are managed by homeowners’ associations. This bill would prohibit an association from being liable to any person because the governing documents of the association do not contain a provision that would authorize the association to stop harassment of a member by another member.
  • SB 721 (Hill) – Contractors: decks and balconies: inspection.
The Davis-Stirling Common Interest Development Act defines and regulates common interest developments, which include community apartment projects, condominium projects, and stock cooperatives. The act requires the homeowners association to maintain the common areas of the development. This bill would require the board of directors of a common interest development, at least once every 6 years, to have an inspection conducted by a licensed architect, licensed civil or structural engineer, or an individual certified as a building inspector or building official, as specified, of the of building assemblies, as defined, that the association is obligated to repair, replace, restore, or maintain. The bill would require the inspections, including any necessary testing, to be completed by January 1, 2023, with certain exceptions, and would require subsequent inspections every 6 years. The bill would require the inspection reports to contain specified items. The bill would require that the results of the report be used in calculating the reserve study for the development, as specified. The bill would require the inspection report to be presented to the association within 45 days of the completion of the inspection and would require copies of the reports to be permanently maintained in the association’s records. The bill would require that if the inspection reveals conditions that pose an immediate hazard to the safety of the occupants, the inspection report be delivered to the association within 15 days and emergency repairs be undertaken, as specified, with notice given to the local enforcement agency. Nonemergency repairs made under these provisions would be required to be completed within 180 days, unless an extension is granted by the local authorities. The bill would, with regard to a condominium conversion, require an inspection be completed prior to the close of escrow on the first separate interest and would require the disclosure of the results of these inspections to the Bureau of Real Estate prior to the issuance of a final public report. A copy of the report would also be required to be sent to the local jurisdiction in which the property is located prior to the issuing of a final inspection or certificate of occupancy. The bill would authorize a local enforcement agency to recover its costs associated with enforcing these provisions. The bill would authorize a local governing entity to enact stricter requirements than those imposed by these provisions. The bill would provide that its provisions do not apply to those areas constituting an individual owner’s separate interest or to a planned development, as defined.

 

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