LEGISLATIVE ACTION PICKS UP AT THE STATE CAPITOL

CID BILLS BACK IN THE CUE.

By Jennifer Wada, Esq.

Getting “back to normal” may mean in-person gatherings and summer travel, but it also means Sacramento getting back to pushing an overwhelming number of bills. There have been quite a number of changes to CID bills since the last legislative update. Here are some key updates:

AB 502 (Davies) would apply elections by acclamation to all associations. In the last update, the Chair of the Assembly Housing committee was questioning whether to even give the bill a hearing. We are proud to say that after our advocacy efforts in favor of the bill, including a long discussion with the Chair on the merits, AB 502 was not only allowed to proceed, but it was approved unanimously in committee despite opposition from various homeowner groups. CACM’s CEO, Tom Freeley, was the key witness at the hearing. Amendments were taken that would require a regular election to be held at least once every three years and would add a 90-day notice of the nomination process. It has now moved over to the Senate and we are awaiting a hearing in both the Senate Housing and Judiciary committees. We anticipate a more difficult time in the Senate but will be working the bill hard.

AB 1101 (Irwin) is CAI-CLAC’s clean up measure to AB 2912 (Irwin, 2018) and would clarify the types of financial institutions an association may use to hold its funds and modify when board approval is needed for electronic transfers–$10,000 or greater for associations with 50+ units and $5,000 or greater for associations with less than 50 units. AB 1101 would also clarify the types of insurance an association must maintain. This bill is currently awaiting a hearing in both Senate Housing and Judiciary committees and has proceeded despite accusations from the opposition that it would allow managers to set up bank accounts in their own name and commingle funds–accusations we have debunked.

AB 1410 (Rodriguez) was the bill that threw in the “kitchen sink” against associations. It proposed to eliminate all rental restrictions, to allow personal agriculture anywhere on a separate interest, to prohibit associations from imposing fines or enforcing any violation during a state of emergency, among other things. CACM strongly advocated against the measure, including a discussion with the Chair of the Assembly Housing committee who was interested in CACM’s perspective of the measure. After much discussion, the Chair decided to hold the bill and not allow it to proceed this year. It was a great victory for CACM but we must remain vigilant because it could come back next year. We understand that there is interest in exploring the bill’s prohibition of restrictions on speech that is critical of the association. We are happy to engage in these discussions but will continue to oppose such extreme measures that tie the hands of associations.

AB 1584 (Committee on Housing) is the housing omnibus bill, which is intended to contain noncontroversial proposals. As last reported, we were working on inserting cleanup to last year’s AB 3182 (Ting) regarding rental restrictions. This bill now contains language that would allow the governing document amendment requirement to be done through a board vote only and would push the compliance date to July 1, 2022. The bill also continues to contain cleanup to the CID ADU law (AB 670, Friedman, 2019) by clarifying it applies to all CIDs since some associations were construing it as not applying if they did not have undivided interests in common area.

SB 391 (Min) is the vehicle for the California Law Revision Commission’s study on emergency measures in CIDs. This bill would allow, during a state of emergency, meetings to be conducted entirely by teleconference (this is defined to include videoconference) without any physical location needed as long as certain requirements are met. This bill has been opposed by various homeowners groups who claim concerns about homeowner notice and access, the need to record meetings and the potential for fraud when ballots are being counted. In response, amendments have been inserted that: 1) require the first notice of a meeting held by teleconference in an emergency to be done through individual notice and that if mail notice is impossible, notice can be sent to an email address provided by the member; 2) require that at a teleconference meeting where ballots are to be counted, the camera is placed in a location that enables members to witness the counting; and 3) specify that civil remedies available under existing law shall also be available to address violations of this bill. The author has wisely refused to accept an amendment that would require meetings to be recorded.

SB 392 (Archuleta) is the bill sponsored by the California Association of Realtors that would have changed notices sent by email to be opt-out, instead of opt-in, and would have required associations with 50 units or more to have websites. This bill was opposed by homeowner groups due to concerns about privacy with respect to emails and homeowners not knowing they are consenting to email delivery, among other things. Amendments have been inserted that prohibit associations from transmitting or selling a homeowner’s personal information. Amendments also completely eliminate the website requirement. SB 392 is set for hearing in the Assembly Housing committee and amendments will be taken that eliminate the opt-in/opt-out approach and simply ask all members to provide their email, mailing address, secondary email, and secondary mailing address. It then requires homeowners to provide their first and second preferred methods of delivery, which can be both email and mail. Amendments also clarify that if email bounces back or is invalid, notices can be sent to another email or mailing address provided by the owner.

We are now in the “second house” policy committees and things will start moving even faster. The Legislature breaks for summer recess on July 16 and when they return on August 16, we will have until September 10 before the Legislature adjourns. The Governor will have until October 10 to sign or veto bills.

Jennifer Wada, Esq., is an attorney, CACM’s legislative advocate and principal of Wada Government Relations in Sacramento.