OVERVIEW
Each year, the number of California homeowners living in common interest developments communities governed by homeowners associations (HOAs) continues to grow. Since all common interest developments in California are governed by the Davis-Stirling Act, homeowners should have some passing familiarity with the more significant parts of the Act (something that they can get by reading my articles and Guides available on this website). And when changes are made to the Davis-Stirling Act, I typically like to keep people updated as to the nature of those changes.
2024’S NEW HOA-RELATED LAWS FOR CALIFORNIA HOMEOWNERS
Here are some of the more important HOA-related laws set to go into effect on January 1, 2024 (unless otherwise noted below) in California:
AB 1764 (Election Rules). Existing law allows HOA’s to impose various qualifications for individuals running for the board (e.g., disqualifying nominees who have lived in the association for less than a year or been convicted of certain crimes). AB 1764 will require HOAs to apply to the same standards used to disqualify a nominee to the sitting members of the board.
AB 1572 (Potable Water). Starting on January 1, 2029, HOAs will not be permitted to use potable water to irrigate what is typically called non-functional turf (i.e., turf not used for recreational or pet use).
AB 1458 (Adjourning Election Meeting for Lack of Quorum). The current law states that: (i) a quorum is required for election meetings only if required by law or by the governing documents; (ii) the notices for elections for directors (including recall elections) must be sent out at least 30 days before the ballots are distributed and must provide specific information about the election, including the date, time, and location of the meeting where the ballots will be counted. AB 1458 will amend Civil Code section 5115 as follows:
- In the absence of a quorum, an HOA could adjourn the meeting for at least 20 days, at which time the quorum required for such a meeting would automatically drop to 20% of the voting members present in person, by proxy, or by secret ballot already received.
- In cases where the original meeting was postponed for at least 20 days, as permitted in the new law, the HOA is required to provide the members with notice at least 15 days prior to the new date, and the notice will have to include: (a) the date, time, and location of the new meeting; (b) a list of all the candidates; (c) “[a] statement that 20 percent of the association present or voting by proxy or secret ballot will satisfy the quorum requirements for the election of directors and that the ballots will be counted if a quorum is reached, if the association’s governing documents require a quorum.” [Corporations Code § 7512 was amended to add a new sub-section “e” to address the new 20-day postponement period.]
AB 1033 (Turning ADUs into Condos). AB 1033 would allow municipalities to adopt laws permitting property owners, with HOA approval, to convert their ADUs into condos, which could then be sold separately from the main house.
AB 572 (Limitations on Assessments). Starting on January 1, 2025, new associations made up of deed-restricted affordable housing with 20 or fewer units may not increase assessments beyond 5% (plus cost of living), but not to exceed 10% of the prior year’s regular assessment.
AB 648 (Virtual/Electronic Meetings). The current law states that virtual meetings are permissible as long as there is also a physical meeting place attended by at least one board member. A limited exception was made during the COVID pandemic. AB 648 adds a new section to the Davis-Stirling Act (§ 4926) that states that under the following conditions, HOAs can hold purely virtual meetings, other than those where ballots are counted (i.e., doesn’t apply to election meetings):
- The notice for any such meeting must, in addition to the normally required information, also contain: (i) “clear technical instructions on how to participate by teleconference”; (ii) a telephone number AND email address of a “person who can provide technical assistance with the teleconference process, both before and during the meeting”; and (iii) a reminder that any member can ask for individual delivery of meeting notices, with instructions regarding how to do so.
- The ability of any director or member to participate in the meeting is the same as if the meeting were held in person.
- All votes amongst the directors must include a roll call vote.
- Any person entitled to participate in the meeting is also given the option of participating solely via telephone (assuming that the meeting is being conducted by more than phone, such as via Zoom).
The governor also signed a new “transparency” law into place that will take effect on January 1, 2025. Basically, directors serving in HOAs with less than $5 million dollars in gross receipts AND which have less than 20 full-time employees will have to file their names, birth dates, home addresses, and driver’s license numbers with the Dept. of the Treasury. Since those requirements apply to most HOAs in California, this new law stands to create a lot of needless issues that I want to consider further. I will, therefore, address that new law in more detail in a future article.