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Electronic Voting, Insurance and Maintenance Bills Await Hearings or Approvals
By Jennifer Wada, Esq.
The deadline is approaching for the legislature to move all bills out of their house of origin. The next step is for bills to go through the second house policy and fiscal committees before heading to the Governor’s desk. The bills CACM is tracking have undergone many changes and some new bills are now on the list.
AB 2114
Irwin: Balcony Inspections
Current law requires the board of a condominium project to conduct a visual inspection, by January 1, 2025, and at least every nine years thereafter, of the exterior elevated elements for which the association has maintenance or repair responsibility. Current law requires a licensed structural engineer or architect to conduct the inspection. This bill would additionally authorize a licensed civil engineer to conduct the inspection. CAI-CLAC is sponsoring the bill. It flew through the Assembly unanimously and is now awaiting hearings in the Senate.
AB 2159
Maienschein: Electronic Voting
This bill would authorize an association to conduct an election by electronic secret ballot unless the association’s governing documents provide otherwise, under certain conditions. Several changes were made to the bill since the last update. As it stands now, the bill provides that the association, should it choose to allow electronic voting, may do so through operating rules provided they comply with the bill’s requirements. The policy committees requested additional privacy safeguards, including that the online voting system can authenticate the member’s identity, authenticate the validity of each electronic vote, and transmit a receipt to the member after voting. Amendments also tighten up notice requirements to ensure that members are given notice of an election being conducted by electronic means. They also exclude special and regular assessments matters from electronic voting. CAI-CLAC is sponsoring the bill and CACM has been working with them on amendments to address implementation.
AB 2460
Ta: Quorum Bill Cleanup
Last year, AB 1458 was enacted allowing for a 20% quorum in the event an association failed to get quorum upon its first attempt. However, it wasn’t clear whether governing documents with a lower quorum requirement were still valid. AB 2460 would amend the statutory notice provisions to clarify that upon failure to achieve quorum on the first attempt, the association may reconvene a subsequent meeting at which time the quorum will be 20%, unless the governing documents of the association provide for a lower quorum. CAI-CLAC is sponsoring the bill, which awaits approval on the Assembly floor.
AB 2996
Alvarez: FAIR Plan and CIDs
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate in administering basic property insurance for persons unable to obtain coverage through normal channels. This bill originally contained provisions that required the FAIR plan to develop, maintain, and offer to sell common interest development policies with limits of up to $20 million per structure. CACM worked closely with the California Building Industry Association and was in strong support of the bill. Unfortunately, the bill was amended to simply authorize the FAIR Plan Association to request the California Infrastructure and Economic Development Bank issue bonds and authorize the bank to issue those bonds. While the bill no longer has CID-specific provisions, it does have language to ensure that the FAIR plan remains solvent in the event of a catastrophic event. CACM continues to support the bill since the FAIR plan is the only insurance many can get, and CACM supports efforts to alleviate the current crisis. This bill is awaiting approval on the Assembly floor.
SB 900
Umberg: CID Repair and Maintenance
This bill was a “gut and amend” and responds to a situation in the senator’s district. According to the senator’s office, the La Veta Monterey condominium complex in Orange, CA, notified SoCalGas of a possible natural gas leak. The company sent technicians to conduct an inspection, which resulted in an emergency shut-off of gas service at the master meter over health and safety concerns. It was eventually determined that the complex’s entire 51-year-old gas pipeline needed to be replaced at an estimated cost of more than $1 million. Because there was confusion over who was responsible for repairing and replacing the gas line, and there were no reserves to fund it, the shutoff of gas service left more than 600 residents without gas for four months.
The bill provides that, unless otherwise stated in the declaration, the association is responsible for repairs and replacements for matters relating to the interruption of utility services (i.e., gas, heat, water or electrical) that begin in the common area, even if the matter extends into a separate interest. The bill originally required associations to make repairs and replacements within 30 days. CACM strongly opposed the bill, arguing against any strict liability imposed on associations and explaining that repairs or replacement of major items like gas lines could not practically be done within 30 days. Getting emergency approval alone would require 30 days, not to mention the time it would take to assess the extent of the damage and make appropriate repairs.
After extensive discussions with the author, CACM was able to obtain amendments that now only require an association to commence the process of making repairs within 10 days. If a vote does not take place within this period, and there aren’t sufficient reserves, the association may obtain financing without a membership vote. The amendments also require that a utility worker address the association in person to present a description of the problem and suggest solutions and timelines. Finally, the bill expands emergency assessments to include situations where there is a threat to “personal health” in addition to safety. The bill is in the Senate awaiting policy committee hearings.
SB 1470
Glazer: Construction Defects
This bill would have turned existing construction defect law on its head, as it would have removed the strict liability imposed on builders and shifted the burden to associations and their members. The builder would have only been liable if “habitability” was impacted and would have provided them with numerous defenses. CACM strongly opposed the bill, and after numerous negotiations, the author agreed to pull it. An early success in the session!
Heading into the last three months of the legislative session, CACM will continue its advocacy on bills affecting community managers and management companies. The session adjourns on August 31st and then the focus will shift to the Governor.
