Newsletter, 2014-11
Annual Disclosures – Update Your Forms!
In 2014, the Davis-Stirling Act was moved to a different section of the Civil Code and reorganized and renumbered. If any of your annual disclosure forms were prepared in 2013 or earlier and if they include Civil Code cites, those cites are outdated and you should update your forms. Also, starting in 2014, while the disclosures have not changed, they must now be sent with an “Annual Policy Statement.” The updated disclosure forms and the Annual Policy Statement form can be downloaded from www.jhmlawoffice.com, or you can email a request to jmcdonald@jhmlawoffice.com.
Legal Updates
Several statutory revisions and one recent case could affect your HOA’s procedures and policies. Here is a brief summary of the new requirements or changes. Unless otherwise stated, the revisions or additions to statute will all take effect on January 1, 2015.
California Cases
HOAs Must Accept Partial Payments From Delinquent Owners
In Huntington Continental v. Miner, a California appellate court recently ruled that homeowners associations must accept partial payments from delinquent owners, including payments made after a lien is recorded, after a payment plan has fallen through, after a nonjudicial foreclosure is commenced, and during a judicial foreclosure, as well as partial payments that would reduce the delinquency to under $1,800, stopping a foreclosure.
California Statutes
AB 569 – Board Elections for Stock Co-Ops
Civil Code Section 5100 was amended to simplify elections for some stock co-ops. If their governing documents provide that one owner from each separate interest is on the Board of Directors, the stock co¬op is exempt from the requirement of holding director elections by secret mail-in ballot. Again, this only applies to stock co-ops; condominiums, planned developments and own-your-owns are not mentioned.
AB 968 – Repairs to Exclusive Use Common Area and Separate Interests
Civil Code Section 4775 was amended to clarify that owners must repair and replace their separate interest and that HOAs repair and replace exclusive use common area. This revision, which clarifies existing law, does not take effect until 2017. This will give associations time to adjust their procedures if necessary.
AB 1738 – Attorneys Can Attend “Meet And Confers”
Civil Code Sections 5910 and 5915, the IDR (meet and confer) process, were amended so that either party can bring their attorney or other representative to a meet and confer.” The revisions also clarify that if the meet and conferresults in an agreement, it must be put in writing and signed.
AB 2104 – Landscaping Restrictions Void During Droughts
Two changes were made to Civil Code Section 4735, which bars HOAs from prohibiting the use of low waterusing plants. HOAs are also barred from prohibiting these plants’ use as a replacement for turf. Also, HOAS are barred from fining owners for not watering their plants or lawns during a drought state of emergency, as declared by state or local government.
AB 2188 -Solar Energy
Civil Code Section 714 requires HOAs to allow owners to install solar energy panels as long as the installation would not increase the cost by more than 2,000 or decrease its efficiency by more than 20%. An amendment to that statute changes that to a cost increase of more than 1,000 or a 10% reduction in efficiency. Also, certain solar energy systems and solar collectors must now be certified.
AB 2430 – Transfer Disclosure Fees
Several changes were made to Civil Code Section 4528, which contains the requirements for providing documents for owners who are selling their units. The cost for providing those documents must be billed separately from other charges. The HOA can charge the seller for its actual costs (such as the management companys fee). The seller is responsible for paying those costs, and for providing certain documents to the buyer free of charge. Also, sellers are now prohibited from bundling the documents required to be provided under Civil Code Sections 4525 and 4528 with other documents.
AB 2561 – Personal Food Gardens
New Civil Code Section 4750, effective January 2015, bans HOAs from prohibiting or unreasonably” restricting owners from planting edible plant crops” for personal use in their backyard. (This only applies to yards for which the owner has exclusive use). A restriction is reasonable” if it does not significantly increase the owners cost or reduce the gardens efficiency.
AB 2565 – Electric Vehicle Charging Stations
This bill added Civil Code Sections 1947.6 and 1952.7 to statute. Starting with any leases signed after July 1, 2015, landlords must agree to allow their tenants to install electric vehicle charging stations in their parking spaces. The new statutes contain details such as insurance, cost of installation, etc., and it also has some exceptions, such as residential rental properties with less than five parking spaces. It is not clear how these new requirements interact with tenant requests in a CID.