5 minute read
Two Key Wins This Year in HOA Legislation
Some Bills Await Governor Newsom's Signature to Become Law.
By Jennifer Wada, Esq.
The Legislature returned from its summer recess on August 14 and after a whirlwind last month, we have finally wrapped up the final stretch of the 2023 legislative session. The Legislature adjourned on September 14, but the Governor still has 30 days to sign or veto legislation. Around 1,770 Assembly bills and 890 Senate bills were introduced this session. Many did not make it through the process this year, but because we are in the first year of a two-year session, they can live on into next year.
CACM has been advocating in support of two major bills that would be a big relief to the industry.
AB 648
Valencia: CIDs: Meetings by Teleconference
This bill is co-sponsored by CAI-CLAC and CACM and would authorize a board meeting or a meeting of the members to be conducted entirely by teleconference, except a meeting where ballots will be counted. This latter exception was a sacrifice we had to make in order to get the bill through policy committee, but we believe this one concession was worth getting all other meetings eligible for teleconference. The bill was approved by the Senate 39-0 and was recently signed by the Governor. Starting January 1, the ability to save costs and increase participation by holding virtual meetings will be permanent.
AB 1458
Ta: CIDs: Association governance: member election
This bill is supported by CACM and states that for election or recall of directors, if an association fails to attain quorum as required in the governing documents, then the association can hold a subsequent meeting, at which time the quorum required for purposes of a membership meeting shall be 20% of owners present in person, by proxy or by secret written ballot. Notice provisions were added to the bill that require a general notice sent 30 days prior to sending out ballots must include a statement that if quorum is not achieved, the board may call a subsequent meeting and quorum will be a reduced threshold of 20%. No less than 15 days prior to the subsequent election, a general notice must be sent out that includes the date, time, location, list of candidates, and a statement that 20% of the association present or voting by proxy or secret ballot will satisfy the quorum requirements. This bill was concurred in by the Assembly 78-1 and is awaiting the Governor’s signature.
CACM has also been busy fighting bills that negatively impact the industry. We were able to get important amendments to these bills to prevent what were originally very negative consequences.
AB 572
Haney: CIDs: Imposition of Assessments
This bill would prohibit an association that records its original declaration on or after January 1, 2025, from imposing a regular assessment increase on the owner of a deed-restricted affordable housing unit that is more than 5% plus the percentage change in the cost of living, not to exceed 10% greater than the preceding year’s assessment.
CACM opposed this bill because it would impose disproportionate financial burdens on homeowners who cannot afford to subsidize others, create inequities and division within the community, and undermine the ability of associations to raise the necessary funds to maintain the community. The bill has been flying through the Legislature, but we were able to build momentum behind the argument that there would be a “bait and switch” on homeowners that bought into a community with the expectation of certain assessment amount, only to have that amount significantly increase under this new policy. This would undermine the affordability goals of the bill since many homeowners would be unable to pay.
In response, CACM was able to get the bill amended to apply to new developments only. This means that the assessment cap would only impact HOAs that record their original declaration on or after January 1, 2025. While not ideal, this was a necessary compromise to prevent the bill from applying to all associations retroactively. The amendments at least give managers and associations a better ability to plan and budget. They also give homeowners the upfront knowledge of what assessment scheme they are buying into. This bill is on the Governor’s desk awaiting action.
AB 1033
Ting – ADUs: Separate sale or conveyance
This bill would allow a local agency to adopt a local ordinance to allow the separate conveyance of an ADU or ADUs as condominiums. This means that ADUs could be separately conveyed from the primary dwelling, which would result in mini condominium complexes forming upon a former single unit lot. The objective of the bill is to increase density and expand home ownership opportunities for lowincome owners.
CACM has been negotiating with the author and sponsors of this bill throughout the year. We expressed great concern that there were no provisions that govern how this bill would work in a CID and how these new condo complexes would be managed and regulated in the context of the larger existing association. Upon an aggressive advocacy effort, and the technical assistance of CACM members that participated in multiple Zoom meetings, we finally got the author and sponsors to agree to language that would require express written approval of the existing association. This means approval by the board, as well as membership approval if required by existing governing documents. This bill is on the Governor’s desk awaiting action.
We will continue to work hard to protect manager interests. We are now lobbying the Governor to achieve our desired outcomes for this session. It’s not over until it’s over and we will be working hard to cross the finish line successfully.
