Davis-Stirling Act—Explained
1350. This title shall be known and may be cited as the
Davis-Stirling Common Interest Development Act.
1350.5. Division, part, title, chapter, and section headings do not
in any manner affect the scope, meaning, or intent of this title.
1350.7. (a) This section applies to delivery of a document to the
extent the section is made applicable by another provision of this
title.
(b) A document shall be delivered by one or more of the following
methods:
(1) Personal delivery.
(2) First-class mail, postage prepaid, addressed to a member at
the address last shown on the books of the association or otherwise
provided by the member. Delivery is deemed to be complete on deposit
into the United States mail.
(3) E-mail, facsimile, or other electronic means, if the recipient
has agreed to that method of delivery. If a document is delivered
by electronic means, delivery is complete at the time of
transmission.
(4) By publication in a periodical that is circulated primarily to
members of the association.
(5) If the association broadcasts television programming for the
purpose of distributing information on association business to its
members, by inclusion in the programming.
(6) A method of delivery provided in a recorded provision of the
governing documents.
(7) Any other method of delivery, provided that the recipient has
agreed to that method of delivery.
(c) A document may be included in or delivered with a billing
statement, newsletter, or other document that is delivered by one of
the methods provided in subdivision (b).
(d) For the purposes of this section, an unrecorded provision of
the governing documents providing for a particular method of delivery
does not constitute agreement by a member of the association to that
method of delivery.
1351. As used in this title, the following terms have the following
meanings:
(a) "Association" means a nonprofit corporation or unincorporated
association created for the purpose of managing a common interest
development.
(b) "Common area" means the entire common interest development
except the separate interests therein. The estate in the common area
may be a fee, a life estate, an estate for years, or any combination
of the foregoing. However, the common area for a planned
development specified in paragraph (2) of subdivision (k) may consist
of mutual or reciprocal easement rights appurtenant to the separate
interests.
(c) "Common interest development" means any of the following:
(1) A community apartment project.
(2) A condominium project.
(3) A planned development.
(4) A stock cooperative.
(d) "Community apartment project" means a development in which an
undivided interest in land is coupled with the right of exclusive
occupancy of any apartment located thereon.
(e) "Condominium plan" means a plan consisting of (1) a
description or survey map of a condominium project, which shall refer
to or show monumentation on the ground, (2) a three-dimensional
description of a condominium project, one or more dimensions of which
may extend for an indefinite distance upwards or downwards, in
sufficient detail to identify the common areas and each separate
interest, and (3) a certificate consenting to the recordation of the
condominium plan pursuant to this title signed and acknowledged by
the following:
(A) The record owner of fee title to that property included in the
condominium project.
(B) In the case of a condominium project which will terminate upon
the termination of an estate for years, the certificate shall be
signed and acknowledged by all lessors and lessees of the estate for
years.
(C) In the case of a condominium project subject to a life estate,
the certificate shall be signed and acknowledged by all life tenants
and remainder interests.
(D) The certificate shall also be signed and acknowledged by
either the trustee or the beneficiary of each recorded deed of trust,
and the mortgagee of each recorded mortgage encumbering the
property.
Owners of mineral rights, easements, rights-of-way, and other
nonpossessory interests do not need to sign the condominium plan.
Further, in the event a conversion to condominiums of a community
apartment project or stock cooperative has been approved by the
required number of owners, trustees, beneficiaries, and mortgagees
pursuant to Section 66452.10 of the Government Code, the certificate
need only be signed by those owners, trustees, beneficiaries, and
mortgagees approving the conversion.
A condominium plan may be amended or revoked by a subsequently
acknowledged recorded instrument executed by all the persons whose
signatures would be required pursuant to this subdivision.
(f) A "condominium project" means a development consisting of
condominiums. A condominium consists of an undivided interest in
common in a portion of real property coupled with a separate interest
in space called a unit, the boundaries of which are described on a
recorded final map, parcel map, or condominium plan in sufficient
detail to locate all boundaries thereof. The area within these
boundaries may be filled with air, earth, or water, or any
combination thereof, and need not be physically attached to land
except by easements for access and, if necessary, support. The
description of the unit may refer to (1) boundaries described in the
recorded final map, parcel map, or condominium plan, (2) physical
boundaries, either in existence, or to be constructed, such as walls,
floors, and ceilings of a structure or any portion thereof, (3) an
entire structure containing one or more units, or (4) any combination
thereof. The portion or portions of the real property held in
undivided interest may be all of the real property, except for the
separate interests, or may include a particular three-dimensional
portion thereof, the boundaries of which are described on a recorded
final map, parcel map, or condominium plan. The area within these
boundaries may be filled with air, earth, or water, or any
combination thereof, and need not be physically attached to land
except by easements for access and, if necessary, support. An
individual condominium within a condominium project may include, in
addition, a separate interest in other portions of the real property.
(g) "Declarant" means the person or group of persons designated in
the declaration as declarant, or if no declarant is designated, the
person or group of persons who sign the original declaration or who
succeed to special rights, preferences, or privileges designated in
the declaration as belonging to the signator of the original
declaration.
(h) "Declaration" means the document, however denominated, which
contains the information required by Section 1353.
(i) "Exclusive use common area" means a portion of the common
areas designated by the declaration for the exclusive use of one or
more, but fewer than all, of the owners of the separate interests and
which is or will be appurtenant to the separate interest or
interests.
(1) Unless the declaration otherwise provides, any shutters,
awnings, window boxes, doorsteps, stoops, porches, balconies, patios,
exterior doors, doorframes, and hardware incident thereto, screens
and windows or other fixtures designed to serve a single separate
interest, but located outside the boundaries of the separate
interest, are exclusive use common areas allocated exclusively to
that separate interest.
(2) Notwithstanding the provisions of the declaration, internal
and external telephone wiring designed to serve a single separate
interest, but located outside the boundaries of the separate
interest, are exclusive use common areas allocated exclusively to
that separate interest.
(j) "Governing documents" means the declaration and any other
documents, such as bylaws, operating rules of the association,
articles of incorporation, or articles of association, which govern
the operation of the common interest development or association.
(k) "Planned development" means a development (other than a
community apartment project, a condominium project, or a stock
cooperative) having either or both of the following features:
(1) The common area is owned either by an association or in common
by the owners of the separate interests who possess appurtenant
rights to the beneficial use and enjoyment of the common area.
(2) A power exists in the association to enforce an obligation of
an owner of a separate interest with respect to the beneficial use
and enjoyment of the common area by means of an assessment which may
become a lien upon the separate interests in accordance with Section
1367 or 1367.1.
(l) "Separate interest" has the following meanings:
(1) In a community apartment project, "separate interest" means
the exclusive right to occupy an apartment, as specified in
subdivision (d).
(2) In a condominium project, "separate interest" means an
individual unit, as specified in subdivision (f).
(3) In a planned development, "separate interest" means a
separately owned lot, parcel, area, or space.
(4) In a stock cooperative, "separate interest" means the
exclusive right to occupy a portion of the real property, as
specified in subdivision (m).
Unless the declaration or condominium plan, if any exists,
otherwise provides, if walls, floors, or ceilings are designated as
boundaries of a separate interest, the interior surfaces of the
perimeter walls, floors, ceilings, windows, doors, and outlets
located within the separate interest are part of the separate
interest and any other portions of the walls, floors, or ceilings are
part of the common areas.
The estate in a separate interest may be a fee, a life estate, an
estate for years, or any combination of the foregoing.
(m) "Stock cooperative" means a development in which a corporation
is formed or availed of, primarily for the purpose of holding title
to, either in fee simple or for a term of years, improved real
property, and all or substantially all of the shareholders of the
corporation receive a right of exclusive occupancy in a portion of
the real property, title to which is held by the corporation. The
owners' interest in the corporation, whether evidenced by a share of
stock, a certificate of membership, or otherwise, shall be deemed to
be an interest in a common interest development and a real estate
development for purposes of subdivision (f) of Section 25100 of the
Corporations Code.
A "stock cooperative" includes a limited equity housing
cooperative which is a stock cooperative that meets the criteria of
Section 33007.5 of the Health and Safety Code.
1352. This title applies and a common interest development is
created whenever a separate interest coupled with an interest in the
common area or membership in the association is, or has been,
conveyed, provided, all of the following are recorded:
(a) A declaration.
(b) A condominium plan, if any exists.
(c) A final map or parcel map, if Division 2 (commencing with
Section 66410) of Title 7 of the Government Code requires the
recording of either a final map or parcel map for the common interest
development.
1352.5. (a) No declaration or other governing document shall
include a restrictive covenant in violation of Section 12955 of the
Government Code.
(b) Notwithstanding any other provision of law or provision of the
governing documents, the board of directors of an association,
without approval of the owners, shall amend any declaration or other
governing document that includes a restrictive covenant prohibited by
this section to delete the restrictive covenant, and shall restate
the declaration or other governing document without the restrictive
covenant but with no other change to the declaration or governing
document.
(c) If after providing written notice to an association requesting
that the association delete a restrictive covenant that violates
subdivision (a), and the association fails to delete the restrictive
covenant within 30 days of receiving the notice, the Department of
Fair Employment and Housing, a city or county in which a common
interest development is located, or any person may bring an action
against the association for injunctive relief to enforce subdivision
(a). The court may award attorney's fees to the prevailing party.
1353. (a) (1) A declaration, recorded on or after January 1, 1986,
shall contain a legal description of the common interest development,
and a statement that the common interest development is a community
apartment project, condominium project, planned development, stock
cooperative, or combination thereof. The declaration shall
additionally set forth the name of the association and the
restrictions on the use or enjoyment of any portion of the common
interest development that are intended to be enforceable equitable
servitudes. If the property is located within an airport influence
area, a declaration, recorded after January 1, 2004, shall contain
the following statement:
NOTICE OF AIRPORT IN VICINITY
This property is presently located in the vicinity of an
airport, within what is known as an airport influence area.
For that reason, the property may be subject to some of the
annoyances or inconveniences associated with proximity to
airport operations (for example: noise, vibration, or odors).
Individual sensitivities to those annoyances can vary from
person to person. You may wish to consider what airport
annoyances, if any, are associated with the property before
you complete your purchase and determine whether they are
acceptable to you.
(2) For purposes of this section, an "airport influence area,"
also known as an "airport referral area," is the area in which
current or future airport-related noise, overflight, safety, or
airspace protection factors may significantly affect land uses or
necessitate restrictions on those uses as determined by an airport
land use commission.
(3) If the property is within the San Francisco Bay Conservation
and Development Commission jurisdiction, as described in Section
66610 of the Government Code, a declaration recorded on or after
January 1, 2006, shall contain the following notice:
NOTICE OF SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT
COMMISSION JURISDICTION
This property is located within the jurisdiction of the San
Francisco Bay Conservation and Development Commission. Use and
development of property within the commission's jurisdiction may be
subject to special regulations, restrictions, and permit
requirements. You may wish to investigate and determine whether they
are acceptable to you and your intended use of the property before
you complete your transaction.
(4) The statement in a declaration acknowledging that a property
is located in an airport influence area or within the jurisdiction of
the San Francisco Bay Conservation and Development Commission does
not constitute a title defect, lien, or encumbrance.
(b) The declaration may contain any other matters the original
signator of the declaration or the owners consider appropriate.
1353.5. (a) Except as required for the protection of the public
health or safety, no declaration or other governing document shall
limit or prohibit, or be construed to limit or prohibit, the display
of the flag of the United States by an owner on or in the owner's
separate interest or within the owner's exclusive use common area, as
defined in Section 1351.
(b) For purposes of this section, "display of the flag of the
United States" means a flag of the United States made of fabric,
cloth, or paper displayed from a staff or pole or in a window, and
does not mean a depiction or emblem of the flag of the United States
made of lights, paint, roofing, siding, paving materials, flora, or
balloons, or any other similar building, landscaping, or decorative
component.
(c) In any action to enforce this section, the prevailing party
shall be awarded reasonable attorneys' fees and costs.
1353.6. (a) The governing documents, including the operating rules,
may not prohibit posting or displaying of noncommercial signs,
posters, flags, or banners on or in an owner's separate interest,
except as required for the protection of public health or safety or
if the posting or display would violate a local, state, or federal
law.
(b) For purposes of this section, a noncommercial sign, poster,
flag, or banner may be made of paper, cardboard, cloth, plastic, or
fabric, and may be posted or displayed from the yard, window, door,
balcony, or outside wall of the separate interest, but may not be
made of lights, roofing, siding, paving materials, flora, or
balloons, or any other similar building, landscaping, or decorative
component, or include the painting of architectural surfaces.
(c) An association may prohibit noncommercial signs and posters
that are more than 9 square feet in size and noncommercial flags or
banners that are more than 15 square feet in size.
1353.7. (a) No common interest development may require a homeowner
to install or repair a roof in a manner that is in violation of
Section 13132.7 of the Health and Safety Code.
(b) Governing documents of a common interest development located
within a very high fire severity zone, as designated by the Director
of Forestry and Fire Protection pursuant to Article 9 (commencing
with Section 4201) of Chapter 1 of Part 2 of Division 4 of the Public
Resources Code or by a local agency pursuant to Chapter 6.8
(commencing with Section 51175) of Part 1 of Division 1 of Title 5 of
the Government Code, shall allow for at least one type of fire
retardant roof covering material that meets the requirements of
Section 13132.7 of the Health and Safety Code.
1353.8. The architectural guidelines of a common interest
development shall not prohibit or include conditions that have the
effect of prohibiting the use of low water-using plants as a group.
1354. (a) The covenants and restrictions in the declaration shall
be enforceable equitable servitudes, unless unreasonable, and shall
inure to the benefit of and bind all owners of separate interests in
the development. Unless the declaration states otherwise, these
servitudes may be enforced by any owner of a separate interest or by
the association, or by both.
(b) A governing document other than the declaration may be
enforced by the association against an owner of a separate interest
or by an owner of a separate interest against the association.
(c) In an action to enforce the governing documents, the
prevailing party shall be awarded reasonable attorney's fees and
costs.
1355. (a) The declaration may be amended pursuant to the governing
documents or this title. Except as provided in Section 1356, an
amendment is effective after (1) the approval of the percentage of
owners required by the governing documents has been given, (2) that
fact has been certified in a writing executed and acknowledged by the
officer designated in the declaration or by the association for that
purpose, or if no one is designated, by the president of the
association, and (3) that writing has been recorded in each county in
which a portion of the common interest development is located.
(b) Except to the extent that a declaration provides by its
express terms that it is not amendable, in whole or in part, a
declaration which fails to include provisions permitting its
amendment at all times during its existence may be amended at any
time. For purposes of this subdivision, an amendment is only
effective after (1) the proposed amendment has been distributed to
all of the owners of separate interests in the common interest
development by first-class mail postage prepaid or personal delivery
not less than 15 days and not more than 60 days prior to any approval
being solicited; (2) the approval of owners representing more than
50 percent, or any higher percentage required by the declaration for
the approval of an amendment to the declaration, of the separate
interests in the common interest development has been given, and that
fact has been certified in a writing, executed and acknowledged by
an officer of the association; and (3) the amendment has been
recorded in each county in which a portion of the common interest
development is located. A copy of any amendment adopted pursuant to
this subdivision shall be distributed by first-class mail postage
prepaid or personal delivery to all of the owners of separate
interest immediately upon its recordation.
1355.5. (a) Notwithstanding any provision of the governing
documents of a common interest development to the contrary, the board
of directors of the association may, after the developer of the
common interest development has completed construction of the
development, has terminated construction activities, and has
terminated his or her marketing activities for the sale, lease, or
other disposition of separate interests within the development, adopt
an amendment deleting from any of the governing documents any
provision which is unequivocally designed and intended, or which by
its nature can only have been designed or intended, to facilitate the
developer in completing the construction or marketing of the
development. However, provisions of the governing documents relative
to a particular construction or marketing phase of the development
may not be deleted under the authorization of this subdivision until
that construction or marketing phase has been completed.
(b) The provisions which may be deleted by action of the board
shall be limited to those which provide for access by the developer
over or across the common area for the purposes of (a) completion of
construction of the development, and (b) the erection, construction,
or maintenance of structures or other facilities designed to
facilitate the completion of construction or marketing of separate
interests.
(c) At least 30 days prior to taking action pursuant to
subdivision (a), the board of directors of the association shall mail
to all owners of the separate interests, by first-class mail, (1) a
copy of all amendments to the governing documents proposed to be
adopted under subdivision (a) and (2) a notice of the time, date, and
place the board of directors will consider adoption of the
amendments. The board of directors of an association may consider
adoption of amendments to the governing documents pursuant to
subdivision (a) only at a meeting which is open to all owners of the
separate interests in the common interest development, who shall be
given opportunity to make comments thereon. All deliberations of the
board of directors on any action proposed under subdivision (a)
shall only be conducted in such an open meeting.
(d) The board of directors of the association may not amend the
governing documents pursuant to this section without the approval of
the owners, casting a majority of the votes at a meeting or election
of the association constituting a quorum and conducted in accordance
with Chapter 5 (commencing with Section 7510) of Part 3 of Division 2
of Title 1 of, and Section 7613 of, the Corporations Code. For the
purposes of this section, "quorum" means more than 50 percent of the
owners who own no more than two separate interests in the
development.
1356. (a) If in order to amend a declaration, the declaration
requires owners having more than 50 percent of the votes in the
association, in a single class voting structure, or owners having
more than 50 percent of the votes in more than one class in a voting
structure with more than one class, to vote in favor of the
amendment, the association, or any owner of a separate interest, may
petition the superior court of the county in which the common
interest development is located for an order reducing the percentage
of the affirmative votes necessary for such an amendment. The
petition shall describe the effort that has been made to solicit
approval of the association members in the manner provided in the
declaration, the number of affirmative and negative votes actually
received, the number or percentage of affirmative votes required to
effect the amendment in accordance with the existing declaration, and
other matters the petitioner considers relevant to the court's
determination. The petition shall also contain, as exhibits thereto,
copies of all of the following:
(1) The governing documents.
(2) A complete text of the amendment.
(3) Copies of any notice and solicitation materials utilized in
the solicitation of owner approvals.
(4) A short explanation of the reason for the amendment.
(5) Any other documentation relevant to the court's determination.
(b) Upon filing the petition, the court shall set the matter for
hearing and issue an ex parte order setting forth the manner in
which notice shall be given.
(c) The court may, but shall not be required to, grant the
petition if it finds all of the following:
(1) The petitioner has given not less than 15 days written notice
of the court hearing to all members of the association, to any
mortgagee of a mortgage or beneficiary of a deed of trust who is
entitled to notice under the terms of the declaration, and to the
city, county, or city and county in which the common interest
development is located that is entitled to notice under the terms of
the declaration.
(2) Balloting on the proposed amendment was conducted in
accordance with all applicable provisions of the governing documents.
(3) A reasonably diligent effort was made to permit all eligible
members to vote on the proposed amendment.
(4) Owners having more than 50 percent of the votes, in a single
class voting structure, voted in favor of the amendment. In a voting
structure with more than one class, where the declaration requires a
majority of more than one class to vote in favor of the amendment,
owners having more than 50 percent of the votes of each class
required by the declaration to vote in favor of the amendment voted
in favor of the amendment.
(5) The amendment is reasonable.
(6) Granting the petition is not improper for any reason stated in
subdivision (e).
(d) If the court makes the findings required by subdivision (c),
any order issued pursuant to this section may confirm the amendment
as being validly approved on the basis of the affirmative votes
actually received during the balloting period or the order may
dispense with any requirement relating to quorums or to the number or
percentage of votes needed for approval of the amendment that would
otherwise exist under the governing documents.
(e) Subdivisions (a) to (d), inclusive, notwithstanding, the court
shall not be empowered by this section to approve any amendment to
the declaration that:
(1) Would change provisions in the declaration requiring the
approval of owners having more than 50 percent of the votes in more
than one class to vote in favor of an amendment, unless owners having
more than 50 percent of the votes in each affected class approved
the amendment.
(2) Would eliminate any special rights, preferences, or privileges
designated in the declaration as belonging to the declarant, without
the consent of the declarant.
(3) Would impair the security interest of a mortgagee of a
mortgage or the beneficiary of a deed of trust without the approval
of the percentage of the mortgagees and beneficiaries specified in
the declaration, if the declaration requires the approval of a
specified percentage of the mortgagees and beneficiaries.
(f) An amendment is not effective pursuant to this section until
the court order and amendment have been recorded in every county in
which a portion of the common interest development is located. The
amendment may be acknowledged by, and the court order and amendment
may be recorded by, any person designated in the declaration or by
the association for that purpose, or if no one is designated for that
purpose, by the president of the association. Upon recordation of
the amendment and court order, the declaration, as amended in
accordance with this section, shall have the same force and effect
as if the amendment were adopted in compliance with every requirement
imposed by the governing documents.
(g) Within a reasonable time after the amendment is recorded the
association shall mail a copy of the amendment to each member of the
association, together with a statement that the amendment has been
recorded.
1357. (a) The Legislature finds that there are common interest
developments that have been created with deed restrictions which do
not provide a means for the property owners to extend the term of the
declaration. The Legislature further finds that covenants and
restrictions, contained in the declaration, are an appropriate method
for protecting the common plan of developments and to provide for a
mechanism for financial support for the upkeep of common areas
including, but not limited to, roofs, roads, heating systems, and
recreational facilities. If declarations terminate prematurely,
common interest developments may deteriorate and the housing supply
of affordable units could be impacted adversely.
The Legislature further finds and declares that it is in the
public interest to provide a vehicle for extending the term of the
declaration if owners having more than 50 percent of the votes in
the association choose to do so.
(b) A declaration which specifies a termination date, but which
contains no provision for extension of the termination date, may be
extended by the approval of owners having more than 50 percent of the
votes in the association or any greater percentage specified in the
declaration for an amendment thereto. If the approval of owners
having more than 50 percent of the votes in the association is
required to amend the declaration, the term of the declaration may be
extended in accordance with Section 1356.
(c) Any amendment to a declaration made in accordance with
subdivision (b) shall become effective upon recordation in
accordance with Section 1355.
(d) No single extension of the terms of the declaration made
pursuant to this section shall exceed the initial term of the
declaration or 20 years, whichever is less. However, more than one
extension may occur pursuant to this section.
1357.100. As used in this article:
(a) "Operating rule" means a regulation adopted by the board of
directors of the association that applies generally to the management
and operation of the common interest development or the conduct of
the business and affairs of the association.
(b) "Rule change" means the adoption, amendment, or repeal of an
operating rule by the board of directors of the association.
1357.110. An operating rule is valid and enforceable only if all of
the following requirements are satisfied:
(a) The rule is in writing.
(b) The rule is within the authority of the board of directors of
the association conferred by law or by the declaration, articles of
incorporation or association, or bylaws of the association.
(c) The rule is not inconsistent with governing law and the
declaration, articles of incorporation or association, and bylaws of
the association.
(d) The rule is adopted, amended, or repealed in good faith and in
substantial compliance with the requirements of this article.
(e) The rule is reasonable.
1357.120. (a) Sections 1357.130 and 1357.140 only apply to an
operating rule that relates to one or more of the following subjects:
(1) Use of the common area or of an exclusive use common area.
(2) Use of a separate interest, including any aesthetic or
architectural standards that govern alteration of a separate
interest.
(3) Member discipline, including any schedule of monetary
penalties for violation of the governing documents and any procedure
for the imposition of penalties.
(4) Any standards for delinquent assessment payment plans.
(5) Any procedures adopted by the association for resolution of
disputes.
(6) Any procedures for reviewing and approving or disapproving a
proposed physical change to a member's separate interest or to the
common area.
(7) Procedures for elections.
(b) Sections 1357.130 and 1357.140 do not apply to the following
actions by the board of directors of an association:
(1) A decision regarding maintenance of the common area.
(2) A decision on a specific matter that is not intended to apply
generally.
(3) A decision setting the amount of a regular or special
assessment.
(4) A rule change that is required by law, if the board of
directors has no discretion as to the substantive effect of the rule
change.
(5) Issuance of a document that merely repeats existing law or the
governing documents.
1357.130. (a) The board of directors shall provide written notice
of a proposed rule change to the members at least 30 days before
making the rule change. The notice shall include the text of the
proposed rule change and a description of the purpose and effect of
the proposed rule change. Notice is not required under this
subdivision if the board of directors determines that an immediate
rule change is necessary to address an imminent threat to public
health or safety or imminent risk of substantial economic loss to the
association.
(b) A decision on a proposed rule change shall be made at a
meeting of the board of directors, after consideration of any
comments made by association members.
(c) As soon as possible after making a rule change, but not more
than 15 days after making the rule change, the board of directors
shall deliver notice of the rule change to every association member.
If the rule change was an emergency rule change made under
subdivision (d), the notice shall include the text of the rule
change, a description of the purpose and effect of the rule change,
and the date that the rule change expires.
(d) If the board of directors determines that an immediate rule
change is required to address an imminent threat to public health or
safety, or an imminent risk of substantial economic loss to the
association, it may make an emergency rule change; and no notice is
required, as specified in subdivision (a). An emergency rule change
is effective for 120 days, unless the rule change provides for a
shorter effective period. A rule change made under this subdivision
may not be readopted under this subdivision.
(e) A notice required by this section is subject to Section
1350.7.
1357.140. (a) Members of an association owning 5 percent or more of
the separate interests may call a special meeting of the members to
reverse a rule change.
(b) A special meeting of the members may be called by delivering a
written request to the president or secretary of the board of
directors, after which the board shall deliver notice of the meeting
to the association's members and hold the meeting in conformity with
Section 7511 of the Corporations Code. The written request may not
be delivered more than 30 days after the members of the association
are notified of the rule change. Members are deemed to have been
notified of a rule change on delivery of notice of the rule change,
or on enforcement of the resulting rule, whichever is sooner. For
the purposes of Section 8330 of the Corporations Code, collection of
signatures to call a special meeting under this section is a purpose
reasonably related to the interests of the members of the
association. A member request to copy or inspect the membership list
solely for that purpose may not be denied on the grounds that the
purpose is not reasonably related to the member's interests as a
member.
(c) The rule change may be reversed by the affirmative vote of a
majority of the votes represented and voting at a duly held meeting
at which a quorum is present (which affirmative votes also constitute
a majority of the required quorum), or if the declaration or bylaws
require a greater proportion, by the affirmative vote or written
ballot of the proportion required. In lieu of calling the meeting
described in this section, the board may distribute a written ballot
to every member of the association in conformity with the
requirements of Section 7513 of the Corporations Code.
(d) Unless otherwise provided in the declaration or bylaws, for
the purposes of this section, a member may cast one vote per separate
interest owned.
(e) A meeting called under this section is governed by Chapter 5
(commencing with Section 7510) of Part 3 of Division 2 of Title 1 of,
and Sections 7612 and 7613 of, the Corporations Code.
(f) A rule change reversed under this section may not be readopted
for one year after the date of the meeting reversing the rule
change. Nothing in this section precludes the board of directors
from adopting a different rule on the same subject as the rule change
that has been reversed.
(g) As soon as possible after the close of voting, but not more
than 15 days after the close of voting, the board of directors shall
provide notice of the results of a member vote held pursuant to this
section to every association member. Delivery of notice under this
subdivision is subject to Section 1350.7.
(h) This section does not apply to an emergency rule change made
under subdivision (d) of Section 1357.130.
1357.150. (a) This article applies to a rule change commenced on or
after January 1, 2004.
(b) Nothing in this article affects the validity of a rule change
commenced before January 1, 2004.
(c) For the purposes of this section, a rule change is commenced
when the board of directors of the association takes its first
official action leading to adoption of the rule change.
1358. (a) In a community apartment project, any conveyance,
judicial sale, or other voluntary or involuntary transfer of the
separate interest includes the undivided interest in the community
apartment project. Any conveyance, judicial sale, or other voluntary
or involuntary transfer of the owner's entire estate also includes
the owner's membership interest in the association.
(b) In a condominium project the common areas are not subject to
partition, except as provided in Section 1359. Any conveyance,
judicial sale, or other voluntary or involuntary transfer of the
separate interest includes the undivided interest in the common
areas. Any conveyance, judicial sale, or other voluntary or
involuntary transfer of the owner's entire estate also includes the
owner's membership interest in the association.
(c) In a planned development, any conveyance, judicial sale, or
other voluntary or involuntary transfer of the separate interest
includes the undivided interest in the common areas, if any exist.
Any conveyance, judicial sale, or other voluntary or involuntary
transfer of the owner's entire estate also includes the owner's
membership interest in the association.
(d) In a stock cooperative, any conveyance, judicial sale, or
other voluntary or involuntary transfer of the separate interest
includes the ownership interest in the corporation, however
evidenced. Any conveyance, judicial sale, or other voluntary or
involuntary transfer of the owner's entire estate also includes the
owner's membership interest in the association.
Nothing in this section prohibits the transfer of exclusive use
areas, independent of any other interest in a common interest
subdivision, if authorization to separately transfer exclusive use
areas is expressly stated in the declaration and the transfer occurs
in accordance with the terms of the declaration.
Any restrictions upon the severability of the component interests
in real property which are contained in the declaration shall not be
deemed conditions repugnant to the interest created within the
meaning of Section 711 of the Civil Code. However, these
restrictions shall not extend beyond the period in which the right to
partition a project is suspended under Section 1359.
1359. (a) Except as provided in this section, the common areas in a
condominium project shall remain undivided, and there shall be no
judicial partition thereof. Nothing in this section shall be deemed
to prohibit partition of a cotenancy in a condominium.
(b) The owner of a separate interest in a condominium project may
maintain a partition action as to the entire project as if the owners
of all of the separate interests in the project were tenants in
common in the entire project in the same proportion as their
interests in the common areas. The court shall order partition under
this subdivision only by sale of the entire condominium project and
only upon a showing of one of the following:
(1) More than three years before the filing of the action, the
condominium project was damaged or destroyed, so that a material part
was rendered unfit for its prior use, and the condominium project
has not been rebuilt or repaired substantially to its state prior to
the damage or destruction.
(2) Three-fourths or more of the project is destroyed or
substantially damaged and owners of separate interests holding in the
aggregate more than a 50-percent interest in the common areas oppose
repair or restoration of the project.
(3) The project has been in existence more than 50 years, is
obsolete and uneconomic, and owners of separate interests holding in
the aggregate more than a 50-percent interest in the common area
oppose repair or restoration of the project.
(4) The conditions for such a sale, set forth in the declaration,
have been met.
1360. (a) Subject to the provisions of the governing documents and
other applicable provisions of law, if the boundaries of the separate
interest are contained within a building, the owner of the separate
interest may do the following:
(1) Make any improvements or alterations within the boundaries of
his or her separate interest that do not impair the structural
integrity or mechanical systems or lessen the support of any portions
of the common interest development.
(2) Modify a unit in a condominium project, at the owner's
expense, to facilitate access for persons who are blind, visually
handicapped, deaf, or physically disabled, or to alter conditions
which could be hazardous to these persons. These modifications may
also include modifications of the route from the public way to the
door of the unit for the purposes of this paragraph if the unit is on
the ground floor or already accessible by an existing ramp or
elevator. The right granted by this paragraph is subject to the
following conditions:
(A) The modifications shall be consistent with applicable building
code requirements.
(B) The modifications shall be consistent with the intent of
otherwise applicable provisions of the governing documents pertaining
to safety or aesthetics.
(C) Modifications external to the dwelling shall not prevent
reasonable passage by other residents, and shall be removed by the
owner when the unit is no longer occupied by persons requiring those
modifications who are blind, visually handicapped, deaf, or
physically disabled.
(D) Any owner who intends to modify a unit pursuant to this
paragraph shall submit his or her plans and specifications to the
association of the condominium project for review to determine
whether the modifications will comply with the provisions of this
paragraph. The association shall not deny approval of the proposed
modifications under this paragraph without good cause.
(b) Any change in the exterior appearance of a separate interest
shall be in accordance with the governing documents and applicable
provisions of law.
1360.5. (a) No governing documents shall prohibit the owner of a
separate interest within a common interest development from keeping
at least one pet within the common interest development, subject to
reasonable rules and regulations of the association. This section
may not be construed to affect any other rights provided by law to an
owner of a separate interest to keep a pet within the development.
(b) For purposes of this section, "pet" means any domesticated
bird, cat, dog, aquatic animal kept within an aquarium, or other
animal as agreed to between the association and the homeowner.
(c) If the association implements a rule or regulation restricting
the number of pets an owner may keep, the new rule or regulation
shall not apply to prohibit an owner from continuing to keep any pet
that the owner currently keeps in his or her separate interest if the
pet otherwise conforms with the previous rules or regulations
relating to pets.
(d) For the purposes of this section, "governing documents" shall
include, but are not limited to, the conditions, covenants, and
restrictions of the common interest development, and the bylaws,
rules, and regulations of the association.
(e) This section shall become operative on January 1, 2001, and
shall only apply to governing documents entered into, amended, or
otherwise modified on or after that date.
1361. Unless the declaration otherwise provides:
(a) In a community apartment project and condominium project, and
in those planned developments with common areas owned in common by
the owners of the separate interests, there are appurtenant to each
separate interest nonexclusive rights of ingress, egress, and
support, if necessary, through the common areas. The common areas
are subject to these rights.
(b) In a stock cooperative, and in a planned development with
common areas owned by the association, there is an easement for
ingress, egress, and support, if necessary, appurtenant to each
separate interest. The common areas are subject to these easements.
1361.5. Except as otherwise provided in law, an order of the court,
or an order pursuant to a final and binding arbitration decision, an
association may not deny an owner or occupant physical access to his
or her separate interest, either by restricting access through the
common areas to the owner's separate interest, or by restricting
access solely to the owner's separate interest.
1362. Unless the declaration otherwise provides, in a condominium
project, or in a planned development in which the common areas are
owned by the owners of the separate interests, the common areas are
owned as tenants in common, in equal shares, one for each unit or
lot.
1363. (a) A common interest development shall be managed by an
association that may be incorporated or unincorporated. The
association may be referred to as a community association.
(b) An association, whether incorporated or unincorporated, shall
prepare a budget pursuant to Section 1365 and disclose information,
if requested, in accordance with Section 1368.
(c) Unless the governing documents provide otherwise, and
regardless of whether the association is incorporated or
unincorporated, the association may exercise the powers granted to a
nonprofit mutual benefit corporation, as enumerated in Section 7140
of the Corporations Code, except that an unincorporated association
may not adopt or use a corporate seal or issue membership
certificates in accordance with Section 7313 of the Corporations
Code.
The association, whether incorporated or unincorporated, may
exercise the powers granted to an association in this title.
(d) Meetings of the membership of the association shall be
conducted in accordance with a recognized system of parliamentary
procedure or any parliamentary procedures the association may adopt.
(e) Notwithstanding any other provision of law, notice of meetings
of the members shall specify those matters the board intends to
present for action by the members, but, except as otherwise provided
by law, any proper matter may be presented at the meeting for action.
(f) Members of the association shall have access to association
records, including accounting books and records and membership lists,
in accordance with Article 3 (commencing with Section 8330) of
Chapter 13 of Part 3 of Division 2 of Title 1 of the Corporations
Code. The members of the association shall have the same access to
the operating rules of the association as they have to the accounting
books and records of the association.
(g) If an association adopts or has adopted a policy imposing any
monetary penalty, including any fee, on any association member for a
violation of the governing documents or rules of the association,
including any monetary penalty relating to the activities of a guest
or invitee of a member, the board of directors shall adopt and
distribute to each member, by personal delivery or first-class mail,
a schedule of the monetary penalties that may be assessed for those
violations, which shall be in accordance with authorization for
member discipline contained in the governing documents. The board of
directors shall not be required to distribute any additional
schedules of monetary penalties unless there are changes from the
schedule that was adopted and distributed to the members pursuant to
this subdivision.
(h) When the board of directors is to meet to consider or impose
discipline upon a member, the board shall notify the member in
writing, by either personal delivery or first-class mail, at least 10
days prior to the meeting. The notification shall contain, at a
minimum, the date, time, and place of the meeting, the nature of the
alleged violation for which a member may be disciplined, and a
statement that the member has a right to attend and may address the
board at the meeting. The board of directors of the association shall
meet in executive session if requested by the member being
disciplined.
If the board imposes discipline on a member, the board shall
provide the member a written notification of the disciplinary action,
by either personal delivery or first-class mail, within 15 days
following the action. A disciplinary action shall not be effective
against a member unless the board fulfills the requirements of this
subdivision.
(i) Whenever two or more associations have consolidated any of
their functions under a joint neighborhood association or similar
organization, members of each participating association shall be (1)
entitled to attend all meetings of the joint association other than
executive sessions, (2) given reasonable opportunity for
participation in those meetings, and (3) entitled to the same access
to the joint association's records as they are to the participating
association's records.
(j) Nothing in this section shall be construed to create, expand,
or reduce the authority of the board of directors of an association
to impose monetary penalties on an association member for a violation
of the governing documents or rules of the association.
1363.001. To the extent existing funds are available, the
Department of Consumer Affairs and the Department of Real Estate
shall develop an on-line education course for the board of directors
of an association regarding the role, duties, laws, and
responsibilities of board members and prospective board members, and
the nonjudicial foreclosure process.
1363.03. (a) An association shall adopt rules, in accordance with
the procedures prescribed by Article 4 (commencing with Section
1357.100) of Chapter 2, that do all of the following:
(1) 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
reasonably related to that election, equal access shall be provided
to all candidates and members advocating a point of view, including
those not endorsed by the board, for purposes that are reasonably
related to the election. The association shall not edit or redact any
content from these communications, but may include a statement
specifying that the candidate or member, and not the association, is
responsible for that content.
(2) Ensure access to the common area meeting space, if any exists,
during a campaign, at no cost, to all candidates, including those
who are not incumbents, and to all members advocating a point of
view, including those not endorsed by the board, for purposes
reasonably related to the election.
(3) Specify the qualifications for candidates for the board of
directors and any other elected position, and procedures for the
nomination of candidates, consistent with the governing documents. A
nomination or election procedure shall not be deemed reasonable if it
disallows any member of the association from nominating himself or
herself for election to the board of directors.
(4) Specify the qualifications for voting, the voting power of
each membership, the authenticity, validity, and effect of proxies,
and the voting period for elections, including the times at which
polls will open and close, consistent with the governing documents.
(5) Specify a method of selecting one or three independent third
parties as inspector, or inspectors, of election utilizing one of the
following methods:
(A) Appointment of the inspector or inspectors by the board.
(B) Election of the inspector or inspectors by the members of the
association.
(C) Any other method for selecting the inspector or inspectors.
(6) Allow the inspector, or inspectors, to appoint and oversee
additional persons to verify signatures and to count and tabulate
votes as the inspector or inspectors deem appropriate, provided that
the persons are independent third parties.
(b) Notwithstanding any other law or provision of the governing
documents, elections regarding assessments legally requiring a vote,
election and removal of members of the association board of
directors, amendments to the governing documents, or the grant of
exclusive use of common area property pursuant to Section 1363.07
shall be held by secret ballot in accordance with the procedures set
forth in this section. A quorum shall be required only if so stated
in the governing documents of the association or other provisions of
law. If a quorum is required by the governing documents, each ballot
received by the inspector of elections shall be treated as a member
present at a meeting for purposes of establishing a quorum. An
association shall allow for cumulative voting using the secret ballot
procedures provided in this section, if cumulative voting is
provided for in the governing documents.
(c) (1) The association shall select an independent third party or
parties as an inspector of election. The number of inspectors of
election shall be one or three.
(2) For the purposes of this section, an independent third party
includes, but is not limited to, a volunteer poll worker with the
county registrar of voters, a licensee of the California Board of
Accountancy, or a notary public. An independent third party may be a
member of the association, but may not be a member of the board of
directors or a candidate for the board of directors or related to a
member of the board of directors or a candidate for the board of
directors. An independent third party may not be a person, business
entity, or subdivision of a business entity who is currently employed
or under contract to the association for any compensable services
unless expressly authorized by rules of the association adopted
pursuant to paragraph (5) of subdivision (a).
(3) The inspector or inspectors of election shall do all of the
following:
(A) Determine the number of memberships entitled to vote and the
voting power of each.
(B) Determine the authenticity, validity, and effect of proxies,
if any.
(C) Receive ballots.
(D) Hear and determine all challenges and questions in any way
arising out of or in connection with the right to vote.
(E) Count and tabulate all votes.
(F) Determine when the polls shall close, consistent with the
governing documents.
(G) Determine the tabulated results of the election.
(H) Perform any acts as may be proper to conduct the election with
fairness to all members in accordance with this section, the
Corporations Code, and all applicable rules of the association
regarding the conduct of the election that are not in conflict with
this section.
(4) An inspector of election shall perform his or her duties
impartially, in good faith, to the best of his or her ability, and as
expeditiously as is practical. If there are three inspectors of
election, the decision or act of a majority shall be effective in all
respects as the decision or act of all. Any report made by the
inspector or inspectors of election is prima facie evidence of the
facts stated in the report.
(d) (1) For purposes of this section, the following definitions
shall apply:
(A) "Proxy" means a written authorization signed by a member or
the authorized representative of the member that gives another member
or members the power to vote on behalf of that member.
(B) "Signed" means the placing of the member's name on the proxy
(whether by manual signature, typewriting, telegraphic transmission,
or otherwise) by the member or authorized representative of the
member.
(2) Proxies shall not be construed or used in lieu of a ballot. An
association may use proxies if permitted or required by the bylaws
of the association and if those proxies meet the requirements of this
article, other laws, and the association's governing documents, but
the association shall not be required to prepare or distribute
proxies pursuant to this section.
(3) Any instruction given in a proxy issued for an election that
directs the manner in which the proxyholder is to cast the vote shall
be set forth on a separate page of the proxy that can be detached
and given to the proxyholder to retain. The proxyholder shall cast
the member's vote by secret ballot. The proxy may be revoked by the
member prior to the receipt of the ballot by the inspector of
elections as described in Section 7613 of the Corporations Code.
(e) Ballots and two preaddressed envelopes with instructions on
how to return ballots shall be mailed by first-class mail or
delivered by the association to every member not less than 30 days
prior to the deadline for voting. In order to preserve
confidentiality, a voter may not be identified by name, address, or
lot, parcel, or unit number on the ballot. The association shall use
as a model those procedures used by California counties for ensuring
confidentiality of voter absentee ballots, including all of the
following:
(1) The ballot itself is not signed by the voter, but is inserted
into an envelope that is sealed. This envelope is inserted into a
second envelope that is sealed. In the upper left hand corner of the
second envelope, the voter shall sign his or her name, indicate his
or her name, and indicate the address or separate interest identifier
that entitles him or her to vote.
(2) The second envelope is addressed to the inspector or
inspectors of election, who will be tallying the votes. The envelope
may be mailed or delivered by hand to a location specified by the
inspector or inspectors of election. The member may request a receipt
for delivery.
(f) All votes shall be counted and tabulated by the inspector or
inspectors of election or his or her designee in public at a properly
noticed open meeting of the board of directors or members. Any
candidate or other member of the association may witness the counting
and tabulation of the votes. No person, including a member of the
association or an employee of the management company, shall open or
otherwise review any ballot prior to the time and place at which the
ballots are counted and tabulated. The inspector of election, or his
or her designee, may verify the member's information and signature on
the outer envelope prior to the meeting at which ballots are
tabulated. Once a secret ballot is received by the inspector of
elections, it shall be irrevocable.
(g) The tabulated results of the election shall be promptly
reported to the board of directors of the association and shall be
recorded in the minutes of the next meeting of the board of directors
and shall be available for review by members of the association.
Within 15 days of the election, the board shall publicize the
tabulated results of the election in a communication directed to all
members.
(h) The sealed ballots at all times shall be in the custody of the
inspector or inspectors of election or at a location designated by
the inspector or inspectors until after the tabulation of the vote,
and until the time allowed by Section 7527 of the Corporations Code
for challenging the election has expired, at which time custody shall
be transferred to the association. If there is a recount or other
challenge to the election process, the inspector or inspectors of
election shall, upon written request, make the ballots available for
inspection and review by an association member or his or her
authorized representative. Any recount shall be conducted in a manner
that preserves the confidentiality of the vote.
(i) After the transfer of the ballots to the association, the
ballots shall be stored by the association in a secure place for no
less than one year after the date of the election.
(j) Notwithstanding any other provision of law, the rules adopted
pursuant to this section may provide for the nomination of candidates
from the floor of membership meetings or nomination by any other
manner. Those rules may permit write-in candidates for ballots.
(k) Except for the meeting to count the votes required in
subdivision (f), an election may be conducted entirely by mail unless
otherwise specified in the governing documents.
(l) The provisions of this section apply to both incorporated and
unincorporated associations, notwithstanding any contrary provision
of the governing documents.
(m) The procedures set forth in this section shall apply to votes
cast directly by the membership, but do not apply to votes cast by
delegates or other elected representatives.
(n) In the event of a conflict between this section and the
provisions of the Nonprofit Mutual Benefit Corporation Law (Part 3
(commencing with Section 7110) of Division 2 of Title 1 of the
Corporations Code) relating to elections, the provisions of this
section shall prevail.
(o) The amendments made to this section by the act adding this
subdivision shall become operative on July 1, 2006.
1363.04. (a) Association funds shall not be used for campaign
purposes in connection with any association board election. Funds of
the association shall not be used for campaign purposes in connection
with any other association election except to the extent necessary
to comply with duties of the association imposed by law.
(b) For the purposes of this section, "campaign purposes"
includes, but is not limited to, the following:
(1) Expressly advocating the election or defeat of any candidate
that is on the association election ballot.
(2) Including the photograph or prominently featuring the name of
any candidate on a communication from the association or its board,
excepting the ballot and ballot materials, within 30 days of an
election. This is not a campaign purpose if the communication is one
for which subdivision (a) of Section 1363.03 requires that equal
access be provided to another candidate or advocate.
1363.05. (a) This section shall be known and may be cited as the
Common Interest Development Open Meeting Act.
(b) Any member of the association may attend meetings of the board
of directors of the association, except when the board adjourns to
executive session to consider litigation, matters relating to the
formation of contracts with third parties, member discipline,
personnel matters, or to meet with a member, upon the member's
request, regarding the member's payment of assessments, as specified
in Section 1367 or 1367.1. The board of directors of the association
shall meet in executive session, if requested by a member who may be
subject to a fine, penalty, or other form of discipline, and the
member shall be entitled to attend the executive session.
(c) Any matter discussed in executive session shall be generally
noted in the minutes of the immediately following meeting that is
open to the entire membership.
(d) The minutes, minutes proposed for adoption that are marked to
indicate draft status, or a summary of the minutes, of any meeting of
the board of directors of an association, other than an executive
session, shall be available to members within 30 days of the meeting.
The minutes, proposed minutes, or summary minutes shall be
distributed to any member of the association upon request and upon
reimbursement of the association's costs for making that
distribution.
(e) Members of the association shall be notified in writing at the
time that the pro forma budget required in Section 1365 is
distributed, or at the time of any general mailing to the entire
membership of the association, of their right to have copies of the
minutes of meetings of the board of directors, and how and where
those minutes may be obtained.
(f) Unless the time and place of meeting is fixed by the bylaws,
or unless the bylaws provide for a longer period of notice, members
shall be given notice of the time and place of a meeting as defined
in subdivision (j), except for an emergency meeting, at least four
days prior to the meeting. Notice shall be given by posting the
notice in a prominent place or places within the common area and by
mail to any owner who had requested notification of board meetings by
mail, at the address requested by the owner. Notice may also be
given, by mail or delivery of the notice to each unit in the
development or by newsletter or similar means of communication. The
notice shall contain the agenda for the meeting.
(g) An emergency meeting of the board may be called by the
president of the association, or by any two members of the governing
body other than the president, if there are circumstances that could
not have been reasonably foreseen which require immediate attention
and possible action by the board, and which of necessity make it
impracticable to provide notice as required by this section.
(h) The board of directors of the association shall permit any
member of the association to speak at any meeting of the association
or the board of directors, except for meetings of the board held in
executive session. A reasonable time limit for all members of the
association to speak to the board of directors or before a meeting of
the association shall be established by the board of directors.
(i) (1) Except as described in paragraphs (2) to (4), inclusive,
the board of directors of the association may not discuss or take
action on any item at a nonemergency meeting unless the item was
placed on the agenda included in the notice that was posted and
distributed pursuant to subdivision (f). This subdivision does not
prohibit a resident who is not a member of the board from speaking on
issues not on the agenda.
(2) Notwithstanding paragraph (1), a member of the board of
directors, a managing agent or other agent of the board of directors,
or a member of the staff of the board of directors, may do any of
the following:
(A) Briefly respond to statements made or questions posed by a
person speaking at a meeting as described in subdivision (h).
(B) Ask a question for clarification, make a brief announcement,
or make a brief report on his or her own activities, whether in
response to questions posed by a member of the association or based
upon his or her own initiative.
(3) Notwithstanding paragraph (1), the board of directors or a
member of the board of directors, subject to rules or procedures of
the board of directors, may do any of the following:
(A) Provide a reference to, or provide other resources for factual
information to, its managing agent or other agents or staff.
(B) Request its managing agent or other agents or staff to report
back to the board of directors at a subsequent meeting concerning any
matter, or take action to direct its managing agent or other agents
or staff to place a matter of business on a future agenda.
(C) Direct its managing agent or other agents or staff to perform
administrative tasks that are necessary to carry out this
subdivision.
(4) (A) Notwithstanding paragraph (1), the board of directors may
take action on any item of business not appearing on the agenda
posted and distributed pursuant to subdivision (f) under any of the
following conditions:
(i) Upon a determination made by a majority of the board of
directors present at the meeting that an emergency situation exists.
An emergency situation exists if there are circumstances that could
not have been reasonably foreseen by the board, that require
immediate attention and possible action by the board, and that, of
necessity, make it impracticable to provide notice.
(ii) Upon a determination made by the board by a vote of
two-thirds of the members present at the meeting, or, if less than
two-thirds of total membership of the board is present at the
meeting, by a unanimous vote of the members present, that there is a
need to take immediate action and that the need for action came to
the attention of the board after the agenda was posted and
distributed pursuant to subdivision (f).
(iii) The item appeared on an agenda that was posted and
distributed pursuant to subdivision (f) for a prior meeting of the
board of directors that occurred not more than 30 calendar days
before the date that action is taken on the item and, at the prior
meeting, action on the item was continued to the meeting at which the
action is taken.
(B) Before discussing any item pursuant to this paragraph, the
board of directors shall openly identify the item to the members in
attendance at the meeting.
(j) As used in this section, "meeting" includes any congregation
of a majority of the members of the board at the same time and place
to hear, discuss, or deliberate upon any item of business scheduled
to be heard by the board, except those matters that may be discussed
in executive session.
1363.07. (a) After an association acquires fee title to, or any
easement right over, a common area, unless the association's
governing documents specify a different percentage, the affirmative
vote of members owning at least 67 percent of the separate interests
in the common interest development shall be required before the board
of directors may grant exclusive use of any portion of that common
area to any member, except for any of the following:
(1) A reconveyance of all or any portion of that common area to
the subdivider to enable the continuation of development that is in
substantial conformance with a detailed plan of phased development
submitted to the Real Estate Commissioner with the application for a
public report.
(2) Any grant of exclusive use that is in substantial conformance
with a detailed plan of phased development submitted to the Real
Estate Commissioner with the application for a public report or in
accordance with the governing documents approved by the Real Estate
Commissioner.
(3) Any grant of exclusive use that is for any of the following
reasons:
(A) To eliminate or correct engineering errors in documents
recorded with the county recorder or on file with a public agency or
utility company.
(B) To eliminate or correct encroachments due to errors in
construction of any improvements.
(C) To permit changes in the plan of development submitted to the
Real Estate Commissioner in circumstances where the changes are the
result of topography, obstruction, hardship, aesthetic
considerations, or environmental conditions.
(D) To fulfill the requirement of a public agency.
(E) To transfer the burden of management and maintenance of any
common area that is generally inaccessible and not of general use to
the membership at large of the association.
(F) Any grant in connection with an expressly zoned industrial or
commercial development, or any grant within a subdivision of the type
defined in Section 1373.
(b) Any measure placed before the members requesting that the
board of directors grant exclusive use of any portion of the common
area shall specify whether the association will receive any monetary
consideration for the grant and whether the association or the
transferee will be responsible for providing any insurance coverage
for exclusive use of the common area.
1363.09. (a) A member of an association may bring a civil action
for declaratory or equitable relief for a violation of this article
by an association of which he or she is a member, including, but not
limited to, injunctive relief, restitution, or a combination thereof,
within one year of the date the cause of action accrues. Upon a
finding that the election procedures of this article, or the adoption
of and adherence to rules provided by Article 4 (commencing with
Section 1357.100) of Chapter 2, were not followed, a court may void
any results of the election.
(b) A member who prevails in a civil action to enforce his or her
rights pursuant to this article shall be entitled to reasonable
attorney's fees and court costs, and the court may impose a civil
penalty of up to five hundred dollars ($500) for each violation,
except that each identical violation shall be subject to only one
penalty if the violation affects each member of the association
equally. A prevailing association shall not recover any costs, unless
the court finds the action to be frivolous, unreasonable, or without
foundation.
(c) A cause of action under Section 1363.03 with respect to access
to association resources by a candidate or member advocating a point
of view, the receipt of a ballot by a member, or the counting,
tabulation, or reporting of, or access to, ballots for inspection and
review after tabulation may be brought in small claims court if the
amount of the demand does not exceed the jurisdiction of that court.
1363.1. (a) A prospective managing agent of a common interest
development shall provide a written statement to the board of
directors of the association of a common interest development as soon
as practicable, but in no event more than 90 days, before entering
into a management agreement which shall contain all of the following
information concerning the managing agent:
(1) The names and business addresses of the owners or general
partners of the managing agent. If the managing agent is a
corporation, the written statement shall include the names and
business addresses of the directors and officers and shareholders
holding greater than 10 percent of the shares of the corporation.
(2) Whether or not any relevant licenses such as architectural
design, construction, engineering, real estate, or accounting have
been issued by this state and are currently held by the persons
specified in paragraph (1). If a license is currently held by any of
those persons, the statement shall contain the following
information:
(A) What license is held.
(B) The dates the license is valid.
(C) The name of the licensee appearing on that license.
(3) Whether or not any relevant professional certifications or
designations such as architectural design, construction, engineering,
real property management, or accounting are currently held by any of
the persons specified in paragraph (1), including, but not limited
to, a professional common interest development manager. If any
certification or designation is held, the statement shall include the
following information:
(A) What the certification or designation is and what entity
issued it.
(B) The dates the certification or designation is valid.
(C) The names in which the certification or designation is held.
(b) As used in this section, a "managing agent" is a person or
entity who, for compensation or in expectation of compensation,
exercises control over the assets of a common interest development.
A "managing agent" does not include either of the following:
(1) A full-time employee of the association.
(2) Any regulated financial institution operating within the
normal course of its regulated business practice.
1363.2. (a) A managing agent of a common interest development who
accepts or receives funds belonging to the association shall deposit
all such funds that are not placed into an escrow account with a
bank, savings association, or credit union or into an account under
the control of the association, into a trust fund account maintained
by the managing agent in a bank, savings association, or credit union
in this state. All funds deposited by the managing agent in the
trust fund account shall be kept in this state in a financial
institution, as defined in Section 31041 of the Financial Code, which
is insured by the federal government, and shall be maintained there
until disbursed in accordance with written instructions from the
association entitled to the funds.
(b) At the written request of the board of directors of the
association, the funds the managing agent accepts or receives on
behalf of the association shall be deposited into an interest-bearing
account in a bank, savings association, or credit union in this
state, provided all of the following requirements are met:
(1) The account is in the name of the managing agent as trustee
for the association or in the name of the association.
(2) All of the funds in the account are covered by insurance
provided by an agency of the federal government.
(3) The funds in the account are kept separate, distinct, and
apart from the funds belonging to the managing agent or to any other
person or entity for whom the managing agent holds funds in trust
except that the funds of various associations may be commingled as
permitted pursuant to subdivision (d).
(4) The managing agent discloses to the board of directors of the
association the nature of the account, how interest will be
calculated and paid, whether service charges will be paid to the
depository and by whom, and any notice requirements or penalties for
withdrawal of funds from the account.
(5) No interest earned on funds in the account shall inure
directly or indirectly to the benefit of the managing agent or his or
her employees.
(c) The managing agent shall maintain a separate record of the
receipt and disposition of all funds described in this section,
including any interest earned on the funds.
(d) The managing agent shall not commingle the funds of the
association with his or her own money or with the money of others
that he or she receives or accepts, unless all of the following
requirements are met:
(1) The managing agent commingled the funds of various
associations on or before February 26, 1990, and has obtained a
written agreement with the board of directors of each association
that he or she will maintain a fidelity and surety bond in an amount
that provides adequate protection to the associations as agreed upon
by the managing agent and the board of directors of each association.
(2) The managing agent discloses in the written agreement whether
he or she is deriving benefits from the commingled account or the
bank, credit union, or savings institution where the moneys will be
on deposit.
(3) The written agreement provided pursuant to this subdivision
includes, but is not limited to, the name and address of the bonding
companies, the amount of the bonds, and the expiration dates of the
bonds.
(4) If there are any changes in the bond coverage or the companies
providing the coverage, the managing agent discloses that fact to
the board of directors of each affected association as soon as
practical, but in no event more than 10 days after the change.
(5) The bonds assure the protection of the association and provide
the association at least 10 days' notice prior to cancellation.
(6) Completed payments on the behalf of the association are
deposited within 24 hours or the next business day and do not remain
commingled for more than 10 calendar days.
(e) The prevailing party in an action to enforce this section
shall be entitled to recover reasonable legal fees and court costs.
(f) As used in this section, a "managing agent" is a person or
entity, who for compensation or, in expectation of compensation,
exercises control over the assets of the association. However, a
"managing agent" does not include a full-time employee of the
association or a regulated financial institution operating within the
normal course of business, or an attorney at law acting within the
scope of his or her license.
(g) As used in this section, "completed payment" means funds
received which clearly identify the account to which the funds are to
be credited.
1363.5. (a) The articles of incorporation of a common interest
development association filed with the Secretary of State on or after
January 1, 1995, shall include a statement, which shall be in
addition to the statement of purposes of the corporation, that does
all of the following:
(1) Identifies the corporation as an association formed to manage
a common interest development under the Davis-Stirling Common
Interest Development Act.
(2) States the business or corporate office of the association, if
any, and, if the office is not on the site of the common interest
development, states the nine-digit ZIP Code, front street, and
nearest cross street for the physical location of the common interest
development.
(3) States the name and address of the association's managing
agent, as defined in Section 1363.1, if any.
(b) The statement of principal business activity contained in the
annual statement filed by an incorporated association with the
Secretary of State pursuant to Section 1502 of the Corporations Code
shall also contain the statement specified in subdivision (a).
1363.6. (a) To assist with the identification of common interest
developments, each association, whether incorporated or
unincorporated, shall submit to the Secretary of State, on a form and
for a fee not to exceed thirty dollars ($30) that the Secretary of
State shall prescribe, the following information concerning the
association and the development that it manages:
(1) A statement that the association is formed to manage a common
interest development under the Davis-Stirling Common Interest
Development Act.
(2) The name of the association.
(3) The street address of the association's onsite office, or, if
none, of the responsible officer or managing agent of the
association.
(4) The name, address, and either the daytime telephone number or
e-mail address of the president of the association, other than the
address, telephone number, or e-mail address of the association's
onsite office or managing agent of the association.
(5) The name, street address, and daytime telephone number of the
association's managing agent, if any.
(6) The county, and if in an incorporated area, the city in which
the development is physically located. If the boundaries of the
development are physically located in more than one county, each of
the counties in which it is located.
(7) If the development is in an unincorporated area, the city
closest in proximity to the development.
(8) The nine-digit ZIP Code, front street, and nearest cross
street of the physical location of the development.
(9) The type of common interest development, as defined in
subdivision (c) of Section 1351, managed by the association.
(10) The number of separate interests, as defined in subdivision
(l) of Section 1351, in the development.
(b) The association shall submit the information required by this
section as follows:
(1) By incorporated associations, within 90 days after the filing
of its original articles of incorporation, and thereafter at the time
the association files its biennial statement of principal business
activity with the Secretary of State pursuant to Section 8210 of the
Corporations Code.
(2) By unincorporated associations, in July of 2003, and in that
same month biennially thereafter. Upon changing its status to that
of a corporation, the association shall comply with the filing
deadlines in paragraph (1).
(c) The association shall notify the Secretary of State of any
change in the street address of the association's onsite office or of
the responsible officer or managing agent of the association in the
form and for a fee prescribed by the Secretary of State, within 60
days of the change.
(d) On and after January 1, 2006, the penalty for an incorporated
association's noncompliance with the initial or biennial filing
requirements of this section shall be suspension of the association's
rights, privileges, and powers as a corporation and monetary
penalties, to the same extent and in the same manner as suspension
and monetary penalties imposed pursuant to Section 8810 of the
Corporations Code.
(e) The Secretary of State shall make the information submitted
pursuant to paragraph (4) of subdivision (a) available only for
governmental purposes and only to Members of the Legislature and the
Business, Transportation and Housing Agency, upon written request.
All other information submitted pursuant to this section shall be
subject to public inspection pursuant to the California Public
Records Act, Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code. The information submitted
pursuant to this section shall be made available for governmental or
public inspection, as the case may be, on or before July 1, 2004, and
thereafter.
1363.810. (a) This article applies to a dispute between an
association and a member involving their rights, duties, or
liabilities under this title, under the Nonprofit Mutual Benefit
Corporation Law (Part 3 (commencing with Section 7110) of Division 2
of Title 1 of the Corporations Code), or under the governing
documents of the common interest development or association.
(b) This article supplements, and does not replace, Article 2
(commencing with Section 1369.510) of Chapter 7, relating to
alternative dispute resolution as a prerequisite to an enforcement
action.
1363.820. (a) An association shall provide a fair, reasonable, and
expeditious procedure for resolving a dispute within the scope of
this article.
(b) In developing a procedure pursuant to this article, an
association shall make maximum, reasonable use of available local
dispute resolution programs involving a neutral third party,
including low-cost mediation programs such as those listed on the
Internet Web sites of the Department of Consumer Affairs and the
United States Department of Housing and Urban Development.
(c) If an association does not provide a fair, reasonable, and
expeditious procedure for resolving a dispute within the scope of
this article, the procedure provided in Section 1363.840 applies and
satisfies the requirement of subdivision (a).
1363.830. A fair, reasonable, and expeditious dispute resolution
procedure shall at a minimum satisfy all of the following
requirements:
(a) The procedure may be invoked by either party to the dispute.
A request invoking the procedure shall be in writing.
(b) The procedure shall provide for prompt deadlines. The
procedure shall state the maximum time for the association to act on
a request invoking the procedure.
(c) If the procedure is invoked by a member, the association shall
participate in the procedure.
(d) If the procedure is invoked by the association, the member may
elect not to participate in the procedure. If the member
participates but the dispute is resolved other than by agreement of
the member, the member shall have a right of appeal to the
association's board of directors.
(e) A resolution of a dispute pursuant to the procedure, that is
not in conflict with the law or the governing documents, binds the
association and is judicially enforceable. An agreement reached
pursuant to the procedure, that is not in conflict with the law or
the governing documents, binds the parties and is judicially
enforceable.
(f) The procedure shall provide a means by which the member and
the association may explain their positions.
(g) A member of the association shall not be charged a fee to
participate in the process.
1363.840. (a) This section applies in an association that does not
otherwise provide a fair, reasonable, and expeditious dispute
resolution procedure. The procedure provided in this section is
fair, reasonable, and expeditious, within the meaning of this
article.
(b) Either party to a dispute within the scope of this article may
invoke the following procedure:
(1) The party may request the other party to meet and confer in an
effort to resolve the dispute. The request shall be in writing.
(2) A member of an association may refuse a request to meet and
confer. The association may not refuse a request to meet and confer.
(3) The association's board of directors shall designate a member
of the board to meet and confer.
(4) The parties shall meet promptly at a mutually convenient time
and place, explain their positions to each other, and confer in good
faith in an effort to resolve the dispute.
(5) A resolution of the dispute agreed to by the parties shall be
memorialized in writing and signed by the parties, including the
board designee on behalf of the association.
(c) An agreement reached under this section binds the parties and
is judicially enforceable if both of the following conditions are
satisfied:
(1) The agreement is not in conflict with law or the governing
documents of the common interest development or association.
(2) The agreement is either consistent with the authority granted
by the board of directors to its designee or the agreement is
ratified by the board of directors.
(d) A member of the association may not be charged a fee to
participate in the process.
1363.850. The notice provided pursuant to Section 1369.590 shall
include a description of the internal dispute resolution process
provided pursuant to this article.
1364. (a) Unless otherwise provided in the declaration of a common
interest development, the association is responsible for repairing,
replacing, or maintaining the common areas, other than exclusive use
common areas, and the owner of each separate interest is responsible
for maintaining that separate interest and any exclusive use common
area appurtenant to the separate interest.
(b) (1) In a community apartment project, condominium project, or
stock cooperative, as defined in Section 1351, unless otherwise
provided in the declaration, the association is responsible for the
repair and maintenance of the common area occasioned by the presence
of wood-destroying pests or organisms.
(2) In a planned development as defined in Section 1351, unless a
different maintenance scheme is provided in the declaration, each
owner of a separate interest is responsible for the repair and
maintenance of that separate interest as may be occasioned by the
presence of wood-destroying pests or organisms. Upon approval of the
majority of all members of the association, the responsibility for
such repair and maintenance may be delegated to the association,
which shall be entitled to recover the cost thereof as a special
assessment.
(c) The costs of temporary relocation during the repair and
maintenance of the areas within the responsibility of the association
shall be borne by the owner of the separate interest affected.
(d) (1) The association may cause the temporary, summary removal
of any occupant of a common interest development for such periods and
at such times as may be necessary for prompt, effective treatment of
wood-destroying pests or organisms.
(2) The association shall give notice of the need to temporarily
vacate a separate interest to the occupants and to the owners, not
less than 15 days nor more than 30 days prior to the date of the
temporary relocation. The notice shall state the reason for the
temporary relocation, the date and time of the beginning of
treatment, the anticipated date and time of termination of treatment,
and that the occupants will be responsible for their own
accommodations during the temporary relocation.
(3) Notice by the association shall be deemed complete upon
either:
(A) Personal delivery of a copy of the notice to the occupants,
and sending a copy of the notice to the owners, if different than
the occupants, by first-class mail, postage prepaid at the most
current address shown on the books of the association.
(B) By sending a copy of the notice to the occupants at the
separate interest address and a copy of the notice to the owners, if
different than the occupants, by first-class mail, postage prepaid,
at the most current address shown on the books of the association.
(e) For purposes of this section, "occupant" means an owner,
resident, guest, invitee, tenant, lessee, sublessee, or other person
in possession on the separate interest.
(f) Notwithstanding the provisions of the declaration, the owner
of a separate interest is entitled to reasonable access to the common
areas for the purpose of maintaining the internal and external
telephone wiring made part of the exclusive use common areas of a
separate interest pursuant to paragraph (2) of subdivision (i) of
Section 1351. The access shall be subject to the consent of the
association, whose approval shall not be unreasonably withheld, and
which may include the association's approval of telephone wiring upon
the exterior of the common areas, and other conditions as the
association determines reasonable.
1365. Unless the governing documents impose more stringent
standards, the association shall prepare and distribute to all of its
members the following documents:
(a) A pro forma operating budget, which shall include all of the
following:
(1) The estimated revenue and expenses on an accrual basis.
(2) A summary of the association's reserves based upon the most
recent review or study conducted pursuant to Section 1365.5, based
only on assets held in cash or cash equivalents, which shall be
printed in boldface type and include all of the following:
(A) The current estimated replacement cost, estimated remaining
life, and estimated useful life of each major component.
(B) As of the end of the fiscal year for which the study is
prepared:
(i) The current estimate of the amount of cash reserves necessary
to repair, replace, restore, or maintain the major components.
(ii) The current amount of accumulated cash reserves actually set
aside to repair, replace, restore, or maintain major components.
(iii) If applicable, the amount of funds received from either a
compensatory damage award or settlement to an association from any
person or entity for injuries to property, real or personal, arising
out of any construction or design defects, and the expenditure or
disposition of funds, including the amounts expended for the direct
and indirect costs of repair of construction or design defects. These
amounts shall be reported at the end of the fiscal year for which
the study is prepared as separate line items under cash reserves
pursuant to clause (ii). Instead of complying with the requirements
set forth in this clause, an association that is obligated to issue a
review of their financial statement pursuant to subdivision (b) may
include in the review a statement containing all of the information
required by this clause.
(C) The percentage that the amount determined for purposes of
clause (ii) of subparagraph (B) equals the amount determined for
purposes of clause (i) of subparagraph (B).
(D) The current deficiency in reserve funding expressed on a per
unit basis. The figure shall be calculated by subtracting the amount
determined for purposes of clause (ii) of subparagraph (B) from the
amount determined for purposes of clause (i) of subparagraph (B) and
then dividing the result by the number of separate interests within
the association, except that if assessments vary by the size or type
of ownership interest, then the association shall calculate the
current deficiency in a manner that reflects the variation.
(3) A statement as to all of the following:
(A) Whether the board of directors of the association has
determined to defer or not undertake repairs or replacement of any
major component with a remaining life of 30 years or less, including
a justification for the deferral or decision not to undertake the
repairs or replacement.
(B) Whether the board of directors of the association, consistent
with the reserve funding plan adopted pursuant to subdivision (e) of
Section 1365.5, has determined or anticipates that the levy of one or
more special assessments will be required to repair, replace, or
restore any major component or to provide adequate reserves therefore.
If so, the statement shall also set out the estimated amount,
commencement date, and duration of the assessment.
(C) The mechanism or mechanisms by which the board of directors
will fund reserves to repair or replace major components, including
assessments, borrowing, use of other assets, deferral of selected
replacements or repairs, or alternative mechanisms.
(D) Whether the association has any outstanding loans with an
original term of more than one year, including the payee, interest
rate, amount outstanding, annual payment, and when the loan is
scheduled to be retired.
(4) A general statement addressing the procedures used for the
calculation and establishment of those reserves to defray the future
repair, replacement, or additions to those major components that the
association is obligated to maintain. The report shall include, but
need not be limited to, reserve calculations made using the formula
described in paragraph (4) of subdivision (b) of Section 1365.2.5,
and may not assume a rate of return on cash reserves in excess of 2
percent above the discount rate published by the Federal Reserve Bank
of San Francisco at the time the calculation was made.
The summary of the association's reserves disclosed pursuant to
paragraph (2) shall not be admissible in evidence to show improper
financial management of an association, provided that other relevant
and competent evidence of the financial condition of the association
is not made inadmissible by this provision.
Notwithstanding a contrary provision in the governing documents, a
copy of the operating budget shall be annually distributed not less
than 30 days nor more than 90 days prior to the beginning of the
association's fiscal year.
(b) Commencing January 1, 2009, a summary of the reserve funding
plan adopted by the board of directors of the association, as
specified in paragraph (4) of subdivision (e) of Section 1365.5. The
summary shall include notice to members that the full reserve study
plan is available upon request, and the association shall provide the
full reserve plan to any member upon request.
(c) A review of the financial statement of the association shall
be prepared in accordance with generally accepted accounting
principles by a licensee of the California Board of Accountancy for
any fiscal year in which the gross income to the association exceeds
seventy-five thousand dollars ($75,000). A copy of the review of the
financial statement shall be distributed within 120 days after the
close of each fiscal year.
(d) Instead of the distribution of the pro forma operating budget
required by subdivision (a), the board of directors may elect to
distribute a summary of the pro forma operating budget to all of its
members with a written notice that the pro forma operating budget is
available at the business office of the association or at another
suitable location within the boundaries of the development, and that
copies will be provided upon request and at the expense of the
association. If any member requests that a copy of the pro forma
operating budget required by subdivision (a) be mailed to the member,
the association shall provide the copy to the member by first-class
United States mail at the expense of the association and delivered
within five days. The written notice that is distributed to each of
the association members shall be in at least 10-point boldface type
on the front page of the summary of the budget.
(e) A statement describing the association's policies and
practices in enforcing lien rights or other legal remedies for
default in payment of its assessments against its members shall be
annually delivered to the members not less than 30 days nor more than
90 days immediately preceding the beginning of the association's
fiscal year.
(f) (1) A summary of the association's property, general
liability, earthquake, flood, and fidelity insurance policies, which
shall be distributed not less than 30 days nor more than 90 days
preceding the beginning of the association's fiscal year, that
includes all of the following information about each policy:
(A) The name of the insurer.
(B) The type of insurance.
(C) The policy limits of the insurance.
(D) The amount of deductibles, if any.
(2) The association shall, as soon as reasonably practicable,
notify its members by first-class mail if any of the policies
described in paragraph (1) have lapsed, been canceled, and are not
immediately renewed, restored, or replaced, or if there is a
significant change, such as a reduction in coverage or limits or an
increase in the deductible, as to any of those policies. If the
association receives any notice of nonrenewal of a policy described
in paragraph (1), the association shall immediately notify its
members if replacement coverage will not be in effect by the date the
existing coverage will lapse.
(3) To the extent that any of the information required to be
disclosed pursuant to paragraph (1) is specified in the insurance
policy declaration page, the association may meet its obligation to
disclose that information by making copies of that page and
distributing it to all of its members.
(4) The summary distributed pursuant to paragraph (1) shall
contain, in at least 10-point boldface type, the following statement:
"This summary of the association's policies of insurance provides
only certain information, as required by subdivision (f) of Section
1365 of the Civil Code, and should not be considered a substitute for
the complete policy terms and conditions contained in the actual
policies of insurance. Any association member may, upon request and
provision of reasonable notice, review the association's insurance
policies and, upon request and payment of reasonable duplication
charges, obtain copies of those policies. Although the association
maintains the policies of insurance specified in this summary, the
association's policies of insurance may not cover your property,
including personal property or, real property improvements to or
around your dwelling, or personal injuries or other losses that occur
within or around your dwelling. Even if a loss is covered, you may
nevertheless be responsible for paying all or a portion of any
deductible that applies. Association members should consult with
their individual insurance broker or agent for appropriate additional
coverage."
1365.1. (a) The association shall distribute the written notice
described in subdivision (b) to each member of the association during
the 60-day period immediately preceding the beginning of the
association's fiscal year. The notice shall be printed in at least
12-point type. An association distributing the notice to an owner of
an interest that is described in Section 11212 of the Business and
Professions Code that is not otherwise exempt from this section
pursuant to subdivision (a) of Section 11211.7, may delete from the
notice described in subdivision (b) the portion regarding meetings
and payment plans.
(b) The notice required by this section shall read as follows:
"NOTICE ASSESSMENTS AND FORECLOSURE
This notice outlines some of the rights and responsibilities of
owners of property in common interest developments and the
associations that manage them. Please refer to the sections of the
Civil Code indicated for further information. A portion of the
information in this notice applies only to liens recorded on or after
January 1, 2003. You may wish to consult a lawyer if you dispute an
assessment.
ASSESSMENTS AND FORECLOSURE
Assessments become delinquent 15 days after they are due, unless
the governing documents provide for a longer time. The failure to
pay association assessments may result in the loss of an owner's
property through foreclosure. Foreclosure may occur either as a
result of a court action, known as judicial foreclosure or without
court action, often referred to as nonjudicial foreclosure. For liens
recorded on and after January 1, 2006, an association may not use
judicial or nonjudicial foreclosure to enforce that lien if the
amount of the delinquent assessments or dues, exclusive of any
accelerated assessments, late charges, fees, attorney's fees,
interest, and costs of collection, is less than one thousand eight
hundred dollars ($1,800). For delinquent assessments or dues in
excess of one thousand eight hundred dollars ($1,800) or more than 12
months delinquent, an association may use judicial or nonjudicial
foreclosure subject to the conditions set forth in Section 1367.4 of
the Civil Code. When using judicial or nonjudicial foreclosure, the
association records a lien on the owner's property. The owner's
property may be sold to satisfy the lien if the amounts secured by
the lien are not paid. (Sections 1366, 1367.1, and 1367.4 of the
Civil Code)
In a judicial or nonjudicial foreclosure, the association may
recover assessments, reasonable costs of collection, reasonable
attorney's fees, late charges, and interest. The association may not
use nonjudicial foreclosure to collect fines or penalties, except for
costs to repair common areas damaged by a member or a member's
guests, if the governing documents provide for this. (Sections 1366
and 1367.1 of the Civil Code)
The association must comply with the requirements of Section
1367.1 of the Civil Code when collecting delinquent assessments. If
the association fails to follow these requirements, it may not record
a lien on the owner's property until it has satisfied those
requirements. Any additional costs that result from satisfying the
requirements are the responsibility of the association. (Section
1367.1 of the Civil Code)
At least 30 days prior to recording a lien on an owner's separate
interest, the association must provide the owner of record with
certain documents by certified mail, including a description of its
collection and lien enforcement procedures and the method of
calculating the amount. It must also provide an itemized statement of
the charges owed by the owner. An owner has a right to review the
association's records to verify the debt. (Section 1367.1 of the
Civil Code)
If a lien is recorded against an owner's property in error, the
person who recorded the lien is required to record a lien release
within 21 days, and to provide an owner certain documents in this
regard. (Section 1367.1 of the Civil Code)
The collection practices of the association may be governed by
state and federal laws regarding fair debt collection. Penalties can
be imposed for debt collection practices that violate these laws.
PAYMENTS
When an owner makes a payment, he or she may request a receipt,
and the association is required to provide it. On the receipt, the
association must indicate the date of payment and the person who
received it. The association must inform owners of a mailing address
for overnight payments. (Section 1367.1 of the Civil Code)
An owner may dispute an assessment debt by submitting a written
request for dispute resolution to the association as set forth in
Article 5 (commencing with Section 1368.810) of Chapter 4 of Title 6
of Division 2 of the Civil Code. In addition, an association may not
initiate a foreclosure without participating in alternative dispute
resolution with a neutral third party as set forth in Article 2
(commencing with Section 1369.510) of Chapter 7 of Title 6 of
Division 2 of the Civil Code, if so requested by the owner. Binding
arbitration shall not be available if the association intends to
initiate a judicial foreclosure.
An owner is not liable for charges, interest, and costs of
collection, if it is established that the assessment was paid
properly on time. (Section 1367.1 of the Civil Code)
MEETINGS AND PAYMENT PLANS
An owner of a separate interest that is not a timeshare may
request the association to consider a payment plan to satisfy a
delinquent assessment. The association must inform owners of the
standards for payment plans, if any exist. (Section 1367.1 of the
Civil Code)
The board of directors must meet with an owner who makes a proper
written request for a meeting to discuss a payment plan when the
owner has received a notice of a delinquent assessment. These payment
plans must conform with the payment plan standards of the
association, if they exist. (Section 1367.1 of the Civil Code)"
(c) A member of an association may provide written notice by
facsimile transmission or United States mail to the association of a
secondary address. If a secondary address is provided, the
association shall send any and all correspondence and legal notices
required pursuant to this article to both the primary and the
secondary address.
1365.2. (a) For the purposes of this section, the following
definitions shall apply:
(1) "Association records" means all of the following:
(A) Any financial document required to be provided to a member in
Section 1365.
(B) Any financial document or statement required to be provided in
Section 1368.
(C) Interim financial statements, periodic or as compiled,
containing any of the following:
(i) Balance sheet.
(ii) Income and expense statement.
(iii) Budget comparison.
(iv) General ledger. A "general ledger" is a report that shows all
transactions that occurred in an association account over a
specified period of time.
The records described in this subparagraph shall be prepared in
accordance with an accrual or modified accrual basis of accounting.
(D) Executed contracts not otherwise privileged under law.
(E) Written board approval of vendor or contractor proposals or
invoices.
(F) State and federal tax returns.
(G) Reserve account balances and records of payments made from
reserve accounts.
(H) Agendas and minutes of meetings of the members, the board of
directors and any committees appointed by the board of directors
pursuant to Section 7212 of the Corporations Code; excluding,
however, agendas, minutes, and other information from executive
sessions of the board of directors as described in Section 1363.05.
(I) (i) Membership lists, including name, property address, and
mailing address, if the conditions set forth in clause (ii) are met
and except as otherwise provided in clause (iii).
(ii) The member requesting the list shall state the purpose for
which the list is requested which purpose shall be reasonably related
to the requester's interest as a member. If the association
reasonably believes that the information in the list will be used for
another purpose, it may deny the member access to the list. If the
request is denied, in any subsequent action brought by the member
under subdivision (f), the association shall have the burden to prove
that the member would have allowed use of the information for
purposes unrelated to his or her interest as a member.
(iii) A member of the association may opt out of the sharing of
his or her name, property address, and mailing address by notifying
the association in writing that he or she prefers to be contacted via
the alternative process described in subdivision (c) of Section 8330
of the Corporations Code. This opt-out shall remain in effect until
changed by the member.
(J) Check registers.
(2) "Enhanced association records" means invoices, receipts and
canceled checks for payments made by the association, purchase orders
approved by the association, credit card statements for credit cards
issued in the name of the association, statements for services
rendered, and reimbursement requests submitted to the association,
provided that the person submitting the reimbursement request shall
be solely responsible for removing all personal identification
information from the request.
(b) (1) The association shall make available association records
and enhanced association records for the time periods and within the
timeframes provided in subdivisions (i) and (j) for inspection and
copying by a member of the association, or the member's designated
representative. The association may bill the requesting member for
the direct and actual cost of copying requested documents. The
association shall inform the member of the amount of the copying
costs before copying the requested documents.
(2) A member of the association may designate another person to
inspect and copy the specified association records on the member's
behalf. The member shall make this designation in writing.
(c) (1) The association shall make the specified association
records available for inspection and copying in the association's
business office within the common interest development.
(2) If the association does not have a business office within the
development, the association shall make the specified association
records available for inspection and copying at a place that the
requesting member and the association agree upon.
(3) If the association and the requesting member cannot agree upon
a place for inspection and copying pursuant to paragraph (2), or if
the requesting member submits a written request directly to the
association for copies of specifically identified records, the
association may satisfy the requirement to make the association
records available for inspection and copying by mailing copies of the
specifically identified records to the member by first-class mail
within the timeframes set forth in subdivision (j).
(4) The association may bill the requesting member for the direct
and actual cost of copying and mailing requested documents. The
association shall inform the member of the amount of the copying and
mailing costs, and the member shall agree to pay those costs, before
copying and sending the requested documents.
(5) In addition to the direct and actual costs of copying and
mailing, the association may bill the requesting member an amount not
in excess of ten dollars ($10) per hour, and not to exceed two
hundred dollars ($200) total per written request, for the time
actually and reasonably involved in redacting the enhanced
association records as provided in paragraph (2) of subdivision (a).
The association shall inform the member of the estimated costs, and
the member shall agree to pay those costs, before retrieving the
requested documents.
(d) (1) Except as provided in paragraph (2), the association may
withhold or redact information from the association records for any
of the following reasons:
(A) The release of the information is reasonably likely to lead to
identity theft. For the purposes of this section, "identity theft"
means the unauthorized use of another person's personal identifying
information to obtain credit, goods, services, money, or property.
Examples of information that may be withheld or redacted pursuant to
this paragraph include bank account numbers of members or vendors,
social security or tax identification numbers, and check, stock, and
credit card numbers.
(B) The release of the information is reasonably likely to lead to
fraud in connection with the association.
(C) The information is privileged under law. Examples include
documents subject to attorney-client privilege or relating to
litigation in which the association is or may become involved, and
confidential settlement agreements.
(D) The release of the information is reasonably likely to
compromise the privacy of an individual member of the association.
(E) The information contains any of the following:
(i) Records of a-la-carte goods or services provided to individual
members of the association for which the association received
monetary consideration other than assessments.
(ii) Records of disciplinary actions, collection activities, or
payment plans of members other than the member requesting the
records.
(iii) Any person's personal identification information, including,
without limitation, social security number, tax identification
number, driver's license number, credit card account numbers, bank
account number, and bank routing number.
(iv) Agendas, minutes, and other information from executive
sessions of the board of directors as described in Section 1363.05,
except for executed contracts not otherwise privileged. Privileged
contracts shall not include contracts for maintenance, management, or
legal services.
(v) Personnel records other than the payroll records required to
be provided under paragraph (2).
(vi) Interior architectural plans, including security features,
for individual homes.
(2) Except as provided by the attorney-client privilege, the
association may not withhold or redact information concerning the
compensation paid to employees, vendors, or contractors. Compensation
information for individual employees shall be set forth by job
classification or title, not by the employee's name, social security
number, or other personal information.
(3) No association, officer, director, employee, agent or
volunteer of an association shall be liable for damages to a member
of the association or any third party as the result of identity theft
or other breach of privacy because of the failure to withhold or
redact that member's information under this subdivision unless the
failure to withhold or redact the information was intentional,
willful, or negligent.
(4) If requested by the requesting member, an association that
denies or redacts records shall provide a written explanation
specifying the legal basis for withholding or redacting the requested
records.
(e) (1) The association records, and any information from them,
may not be sold, used for a commercial purpose, or used for any other
purpose not reasonably related to a member's interest as a member.
An association may bring an action against any person who violates
this section for injunctive relief and for actual damages to the
association caused by the violation.
(2) This section may not be construed to limit the right of an
association to damages for misuse of information obtained from the
association records pursuant to this section or to limit the right of
an association to injunctive relief to stop the misuse of this
information.
(3) An association shall be entitled to recover reasonable costs
and expenses, including reasonable attorney's fees, in a successful
action to enforce its rights under this section.
(f) A member of an association may bring an action to enforce the
member's right to inspect and copy the association records. If a
court finds that the association unreasonably withheld access to the
association records, the court shall award the member reasonable
costs and expenses, including reasonable attorney's fees, and may
assess a civil penalty of up to five hundred dollars ($500) for the
denial of each separate written request. A cause of action under this
section may be brought in small claims court if the amount of the
demand does not exceed the jurisdiction of that court. A prevailing
association may recover any costs if the court finds the action to be
frivolous, unreasonable, or without foundation.
(g) The provisions of this section apply to any community service
organization or similar entity, as defined in paragraph (3) of
subdivision (c) of Section 1368, that is related to the association,
and this section shall operate to give a member of the community
service organization or similar entity a right to inspect and copy
the records of that organization or entity equivalent to that granted
to association members by this section.
(h) Requesting parties shall have the option of receiving
specifically identified records by electronic transmission or
machine-readable storage media as long as those records can be
transmitted in a redacted format that does not allow the records to
be altered. The cost of duplication shall be limited to the direct
cost of producing the copy of a record in that electronic format. The
association may deliver specifically identified records by
electronic transmission or machine-readable storage media as long as
those records can be transmitted in a redacted format that prevents
the records from being altered.
(i) The time periods for which specified records shall be provided
is as follows:
(1) Association records shall be made available for the current
fiscal year and for each of the previous two fiscal years.
(2) Minutes of member and board meetings shall be permanently made
available. If a committee has decisionmaking authority, minutes of
the meetings of that committee shall be made available commencing
January 1, 2007, and shall thereafter be permanently made available.
(j) The timeframes in which access to specified records shall be
provided to a requesting member are as follows:
(1) Association records prepared during the current fiscal year,
within 10 business days following the association's receipt of the
request.
(2) Association records prepared during the previous two fiscal
years, within 30 calendar days following the association's receipt of
the request.
(3) Any record or statement available pursuant to Section 1365 or
1368, within the timeframe specified therein.
(4) Minutes of member and board meetings, within the timeframe
specified in subdivision (d) of Section 1363.05.
(5) Minutes of meetings of committees with decisionmaking
authority for meetings commencing on or after January 1, 2007, within
15 calendar days following approval.
(6) Membership list, within the timeframe specified in Section
8330 of the Corporations Code.
(k) There shall be no liability pursuant to this section for an
association that fails to retain records for the periods specified in
subdivision (i) that were created prior to January 1, 2006.
(l) As applied to an association and its members, the provisions
of this section are intended to supersede the provisions of Sections
8330 and 8333 of the Corporations Code to the extent those sections
are inconsistent.
(m) The provisions of this section shall not apply to any common
interest development in which separate interests are being offered
for sale by a subdivider under the authority of a public report
issued by the Department of Real Estate so long as the subdivider or
all subdividers offering those separate interests for sale, or any
employees of those subdividers or any other person who receives
direct or indirect compensation from any of those subdividers,
comprise a majority of the members of the board of directors of the
association. Notwithstanding the foregoing, this section shall apply
to that common interest development no later than 10 years after the
close of escrow for the first sale of a separate interest to a member
of the general public pursuant to the public report issued for the
first phase of the development.
(n) This section shall become operative on July 1, 2006.
1365.2.5. (a) The disclosures required by this article with regard
to an association or a property shall be summarized on the following
form:
Assessment and Reserve Funding Disclosure Summary
(1) The current regular assessment per ownership interest is
$_____ per ____. Note: If assessments vary by the size or type of
ownership interest, the assessment applicable to this ownership
interest may be found on page _____ of the attached summary.
(2) Additional regular or special assessments that have already
been scheduled to be imposed or charged, regardless of the purpose,
if they have been approved by the board and/or members:
+---------------+----------------+-----------------+
| | Amount per | |
| | ownership | |
| | interest per | |
| | month or year | |
| | (If assessments| |
| | are variable, | |
| | see note | |
| Date | | |
| assessment | immediately | Purpose of the |
| will be due: | below): | assessment: |
+---------------+----------------+-----------------+
| | | |
+---------------+----------------+-----------------+
| | | |
+---------------+----------------+-----------------+
| | | |
+---------------+----------------+-----------------+
| |Total: | |
+---------------+----------------+-----------------+
Note: If assessments vary by the size or type of ownership
interest, the assessment applicable to this ownership interest may be
found on page ____ of the attached report.
(3) Based upon the most recent reserve study and other information
available to the board of directors, will currently projected
reserve account balances be sufficient at the end of each year to
meet the association's obligation for repair and/or replacement of
major components during the next 30 years
Yes _____ No _____
(4) If the answer to (3) is no, what additional assessments or
other contributions to reserves would be necessary to ensure that
sufficient reserve funds will be available each year during the next
30 years that have not yet been approved by the board or the members
+------------------+-------------+
| | Amount per |
| Approximate date | ownership |
| assessment | interest |
| | per month or|
| will be due: | year: |
+------------------+-------------+
| | |
+------------------+-------------+
| | |
+------------------+-------------+
| | |
+------------------+-------------+
| | |
+------------------+-------------+
| |Total: |
+------------------+-------------+
(5) All major components are included in the reserve study and
are included in its calculations.
(6) Based on the method of calculation in paragraph (4) of
subdivision (b) of Section 1365.2.5, the estimated amount required in
the reserve fund at the end of the current fiscal year is $____,
based in whole or in part on the last reserve study or update
prepared by ____ as of ____ (month), ____ (year). The projected
reserve fund cash balance at the end of the current fiscal year is
$____, resulting in reserves being ____ percent funded at this date.
If an alternate, but generally accepted, method of calculation is
also used, the required reserve amount is $____. (See attached
explanation)
(7) Based on the method of calculation in
paragraph (4) of
subdivision (b) of Section 1365.2.5 of the
Civil Code, the estimated
amount required in the reserve fund at the
end of each of the next
five bu 