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The Echo Legislation Tracker: June 2023 Update
by Echo
Echo regularly gives its members updates on state legislation that could affect HOAs. A description of current bills that may be of interest is as follows:
AB-572;
HANEY – IMPOSITION OF ASSESSMENT
SUBJECT: Regular assessment increases limited to 5% of preceding year for deed-restricted affordable housing units.
STATUS: Introduced February 8, 2023. Since then, a slight modification has been made. If this bill passes, it will apply only to prospective associations and not those already in existence. Passed Assembly June 1, 2023, read first time in Senate, sent to Committee on Rules for assignment.
POSITION: Echo opposes this bill. This change would mean an accounting impossibility and unworkable financial circumstances for associations. An association would be obligated to keep separate bookkeeping if it had any BMR (below market rate) units.
AB-648; VALENCIA – VIRTUAL OR TELECONFERENCE BOARD MEETINGS
SUBJECT: Virtual and teleconference board meetings.
STATUS: Read for the first time in Senate on May 9, 2023, and referred to the Committee on Housing. Passed. Passed Assembly. In Senate Housing Committee. Hearing date June 6, 2023.
POSITION: Echo supports this bill. It will increase homeowner participation at meetings. This bill seeks to do away with the pre-pandemic physical location requirements for a teleconference or virtual meeting. If signed into law, the convenience and accessibility of virtual and teleconference board meetings will be allowed permanently. In the most recently amended version, the Assembly members amended and removed language related to counting ballots.
SB-71; UMBERG – CLASSIFICATION CHANGES TO THE COURTS IMPACT ASSOCIATION COLLECTIONS
SUBJECT: Mostly changes to court filing classifications. The limits for small claims increased to $15,000 and the limits for limited courts increased to $50,000.
STATUS: Assembly Passed. Senate, May 24, 2023 –Motion to reconsider.
POSITION: Echo opposes this bill. It increases the jurisdiction for small claims and limited courts. Since the prior draft, the limits have been reduced; however, this only makes it easier to sue associations. This access to the courts was reduced for individuals, but it did not provide for the same access for associations. Associations are corporate entities and subject to more restrictive rules. The bill is having trouble in the Senate.
AB-1458; TA – ELECTION CHANGES
SUBJECT: Adjournment of membership meeting dates shall be no less than 5 and no more than 30 days after adjourned proceedings. Quorum reduces to those present in person, by proxy or by ballot at the adjourned meeting date.
STATUS: Introduced February 17, 2023. Passed Assembly. First reading in Senate June 1, 2023. To Senate Rules Committee for assignment.
POSITION: Echo supports this bill. It creates efficiencies for elections. By statute, there would be a way to open ballots after at least one attempt to meet quorum. Notice requirements must be met, and the ballots received must be at least 20% of the association’s membership.
SB-505; RUBIO – FIRE INSURANCE, FAIR PLAN
SUBJECT: This bill expands the insurance
“clearinghouse” program of the California FAIR Plan. The FAIR Plan is normally considered the last resort for insurance. The bill would allow commercial insurance policies under the FAIR Plan to move back to the admitted commercial market. The primary purpose of this bill is to reduce FAIR Plan policyholders.
STATUS: Passed Senate May 8, 2023. May 18, 2023, referred to Assembly Committee on Insurance.
POSITION: Echo supports this bill. It may allow for more access to insurance by associations. It is unknown right now whether this bill will encourage a more competitive insurance market.
Maria Kao, Esq. has served as litigation and transactional counsel since 2009. She has represented community associations of all sizes and has dealt with a broad spectrum of real estate and land use issues including review and interpretation of governing documents (e.g., voting, maintenance and repair, and insurance), contract review and vendor negotiations, disciplinary proceedings, and litigation. Ms. Kao is currently a partner with the firm of Briscoe Ivester & Bazel LLP.
