On January 1, 2014, the Davis-Stirling Act moves to a more spacious new home, thanks to a major reorganization effort by the California Law Revision Commission. For the past 30 years, the Act was squeezed into Civil Code Sections 1350-1379, and as the Act grew in complexity, the individual sections became more lengthy. Next year, the Davis-Stirling Act will be found at Civil Code 4000-6150, leaving much more space and therefore allowing the Act to be much more readable.
Even though this takes effect next year, homeowners, boards, managers and attorneys should not wait until December 2013 to learn about it, because there are some important substantive changes coming.
Until the Davis-Stirling Act takes effect on January 1, 2014, the new law can be reviewed as 2011’s AB 805, at www.leginfo.ca.gov under “bill information”. Although the Commission’s primary purpose was to reorganize and clarify the law without changing its content, the new law does make some substantive changes. Most of the changes are technical and not controversial. However, here are 9 new sections which in 2014 could affect how your association operates.
Boards can amend CC&Rs without membership vote, to change (any mentions of the outdated Act Section numbers) to the new statute numbers.
A board may grant exclusive use common area rights to a member to: Accommodate a disability, Assign parking or storage, or otherwise comply with the law, without the requirement of a 2/3 membership vote.
The association is not required to pay for a homeowner’s temporary housing if a homeowner is dislocated due to common area repair or maintenance. [This eliminates an ambiguity in current law].
Along with their ballots, members must be provided the exact text of any proposed governing document amendment requiring membership vote.
Associations must keep ballots for 12 months after an election, instead of the current 9 months.
This creates a new disclosure, the “Annual Budget Report”. However, this simply groups various financial disclosures already required by current law, and calls it the “Annual Budget Report”.
This creates a new disclosure, the “Annual Policy Statement”. However, this also mainly groups various disclosures already required by current law into one packet. The Annual Policy Statement includes a few minor new disclosures, but the Statement typically will not change much from year to year.
This section adds director conflict of interest standards. The standards are quite minimal, and associations may adopt stricter standards.
The due process required by current law for HOA disciplinary hearings must also be used for imposition of financial reimbursement assessments. So, advance written notice must be given to the member, who may attend the hearing to present their argument, and the hearing may (and should) be held in closed session.
There are other technical changes, but these 9 are the ones which are most likely to affect your HOA’s operation. Your association must wait until January to begin following Sections 4235, 4600, and 4775(B), but consider getting ready and complying in advance with the other new sections. For example, consider having a 2014 Annual Budget Report and 2014 Annual Policy Statement ready, which probably means they would be prepared this year.
The new laws might also necessitate amending rules, policies, or forms – again, plan ahead!