2018 California Legislative Update: Is Your HOA Prepared?

Posted on Friday December 08, 2017




Starting January 1, a number of new California laws will go into effect, which may have a major impact on your HOA. As a board member, it’s important to stay updated on the latest legislation by consulting with your association attorney and community management company. To help equip you with this knowledge, we’ve provided a quick rundown of some of the key legislative changes for 2018:
  As the law stands now, HOAs cannot prohibit owners from installing a solar energy system, though they may impose reasonable restrictions on the systems. The new bill prevents associations from prohibiting members from installing rooftop solar energy systems for household purposes on the common area roof of the building where the owner resides or on the roof of their adjacent carport or garage over which they have been granted exclusive use. Additionally, associations cannot require approval by a vote of the members in order to approve the installation if it is for household purposes. However, associations my impose provisions that (a) restrict the type of systems approved for installation and use, (b) provide for the maintenance, repair or replacement of roofs or other building components, and (c) require the installer of the system to indemnify and defend the association and members for loss or damage caused by installation or use of the system. Additionally, the board may impose reasonable requirements, including submitting a solar site survey that shows placement of the system. FirstService Residential recommends that associations with common area roofs that serve more than one member work with counsel to update or create a solar energy system policy so that members will know what to expect when applying to install these systems.
  Current law requires that a common interest development manager or management firm provide specified disclosures to the association. That list now includes additional disclosures: any company or business in which the manager has any ownership interest, profit-sharing arrangements or other monetary incentives; (whether the manager receives a referral fee or other monetary benefit from third parties for distributing documents in response to an escrow demand or for annual budget reports; and an affirmative written acknowledgement that specifies documents provided to the member or potential member are the property of the association and not the manager. Associations must also include a document disclosure form in the annual budget report listing the fee for each document, and a seller may not be required to purchase all documents listed on the form.
  Current law requires owners to annually update the associations with certain written information, including an address for receiving notices from the association. Associations are required to seek this information annually, and if an owner does not provide their address, notices are to be delivered to the property address. This new law states that the default address clause of the current law is amended to state that the default address is now the last address provided in writing by the owner. If no address has been provided, the property address is the address to which notices are to be sent. Additionally, the new law expands protection for volunteer directors of associations from personal liability if the association is a residential or mixed-use CID and the volunteer acted within their duties as an officer, performed the act in good faith and was not willful or grossly negligent, and as long as the association has the required insurance coverage.
  Currently the Davis-Stirling Act allows members and residents of a CID association to utilize association common areas for the purposes of advocating a point of view during an association-related election. This bill adds a new Section 4515 to the Act that expands the rights of members and residents to allow any member or resident to use common area meeting space to peacefully assemble during reasonable hours for purposes related to “common interest development living, association elections, legislation, election to public office or the initiative, referendum or recall processes. They may also invite public officials, candidates for public office and other representatives of homeowner organizations to meet with members, residents and their invitees or guests and speak on matters of public interest. This is greatly expanded over what the Davis-Stirling Act currently allows. Also, in contrast to other events held in common area meeting rooms, members and residents using meeting rooms for purposes under this new law cannot be required to make a deposit or acquire insurance for an event, which may increase liability for associations. Additionally, members and residents may freely distribute materials to the members, board, and other residents for the purposes of their event because the new law allows for canvassing and circulating information during reasonable hours and in a reasonable manner. Some things associations can do to protect themselves: enact policies regarding how many guests each member/resident can have on site, define what is a reasonable time and manner and identify what is a matter related to common interest development living. Associations will also need to watch out for potential ADA complaints if the common area event is opened to the public, which associations want to avoid at all costs.
  This new law imposes a $75 fee on real estate transaction documents with fees directed to funding for affordable housing. The fee applies to most documents that associations attempt to record (excluding documents associated with the purchase or sale of property), including license, maintenance and indemnity agreements, notice of default, release of lien, CC&Rs, and documents related to assessment collection.

Next steps for your HOA
At first glance, these new laws may appear overwhelming to implement in your association. Before you do anything else, consult with your association general counsel regarding best practices and policy changes. An experienced community management company can provide additional guidance concerning new legislation. For example, FirstService Residential educates managers on the latest legislation by hosting trainings as soon as an important law passes. Kelly Lee, vice president of legal and risk for the West region at FirstService Residential said, “We are very attuned to the legislative process. We follow the laws and updates, stay on top of them, and ultimately, educate managers with the most timely and important information.” To learn more, contact FirstService Residential, California’s leader in community association management.
 

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