OVERVIEW
As is always the case, 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.
REMINDERS
AB 572. I wrote about this in my article last year about the new HOA laws for 2024. As I stated last year, starting on January 1, 2025, new associations (those formed after 1/1/25) 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.
SB 326. The balcony inspections mandated by SB 326 have to be completed before January 1, 2025. You can read my article on the balcony law here.
2025’S NEW HOA-RELATED LAWS FOR CALIFORNIA HOMEOWNERS
With the reminders out of the way, here are some of the more important HOA-related laws set to go into effect on January 1, 2025 in California:
AB 2159. Existing law does not permit the use of electronic voting. The new law will add a new section 5116 to the Civil Code and will allow HOAs to use electronic voting for electing or recalling directors, or for amending the governing documents. The law does not, however, permit the use of electronic voting for any other things—e.g., approving special assessments, etc. Under the new law, HOA’s must first amend their election rules to permit owners to opt in or opt out of participating in electronic voting—meaning that any HOAs who want to implement electronic voting in their 2025 election must be sure to amend the rules accordingly within 90 days of the election as required by Civil Code section 5105(h). For those who want to opt out—i.e., don’t want to vote via electronic means—the HOA must still prepare, send out, and count traditional paper ballots. And while the new law does give homeowners the right to change their voting preferences, they must notify the HOA at least 90 days before the election. In addition, HOAs who start using electronic voting may no longer allow nomination of candidates from the floor (while HOAs who don’t amend their election rules to allow for electronic voting may continue to do so).
SB 900. The new law expands Civil Code section 4775 and adds a new sub-section “c” to Civil Code section 5550 and states that unless an HOA’s governing documents state otherwise, HOAs will be responsible for necessary maintenance, repairs, or replacement following any gas, heat, water, or electrical service interruption emanating from the common area. HOAs will be required to commence such repairs/replacements at least 14 days from the date of interruption. And to facilitate such requirements, if there is insufficient money in an HOA’s reserve account (designated for utility repairs) to pay for the work, HOAs will have the power to impose an emergency assessment or obtain a loan without a membership vote. In addition, while this is already the case in many HOAs, the new law requires the applicable utility lines to be included as line-item components in future reserve studies.
AB 2460. Under existing law, in any member elections, a quorum is required only where the law requires it—e.g., to approve special assessments under Civil Code section 5605(b)—or the HOA’s governing documents require it. If a required quorum is not reached, an HOA may adjourn the election meeting for at least 20 days, at which time the quorum requirement drops to 20% of the members who are present (in person, by secret ballot, or by proxy). Also under the existing law, HOAs are required to provide notice at least 15 days before the initial meeting, but no notice as to the reconvened meeting. AB 2460 amends Civil Code section 5115 and Corporations Code section 7512 in stating that if a quorum isn’t reached at the initial meeting, the same 20-day prior remains, but then regardless of what the governing documents state, the new quorum requirement is 20% of the members voting in person, by ballot, or by proxy (unless the governing documents have a lower threshold, in which case the lower threshold will prevail). The new law also requires the HOA to provide at least 15 days’ notice of the reconvened meeting.