Agenda Summary – Common Interest Development CommitteeThursday, January 24, 2008 10:00 am – 12:00 pm Hyatt Grand Champions Indian Wells, CaliforniaPresiding: Susan Tilling, Chair Gwynne Hodge, Vice Chair Michael Riley, Vice Chair Malcolm Bennett, Committee LiaisonC.A.R. Staff: Dave Milton Natalie CardenasI. Opening CommentsII. Self-Introduction of 2008 Committee MembersIII. LegislationA. C.A.R. - Sponsored LegislationAB __?__ As directed by the Board of Directors at the October, 2007 meetings, C.A.R. is sponsoring legislationin 2008 to protect the right of a CID property owner to rent or lease his or her CID unit if the right to do so existed at the time the unit was purchased. The draft of the bill approved by the Legislature’s Legislative Counsel, to be introduced inJanuary in a bill authored by Assemblyman Mullin, reads as follows: SECTION1. The Legislature finds and declares that the rights of common interest development owners to rent or lease their properties, as the rights existed at the time they acquired them, should be protected by the State of California, and the rights of subsequent owners should be governed by the status of those rights at the time they acquire them.SEC.2. Section 1360.2 is added to the Civil Code, to read:1360.2. (a)The rights of an owner in a common interest development to rent or lease his or her ownership interest, as vested at the time the ownership began, shall not be impaired during the duration of ownership, except as provided in subdivision (b).(b) An owner of an interestin a common interest development may consent in writing to impairment of a right related to rental or leasing of a separate interest vested in the owner at the time ownership commenced.(c) The separate interest of an owner shall not be deemed to have terminated if the transfer by the owner of all or part of the separate interest meets at least one of the following conditions:
(1) Pursuant to sections 62 or 480.3, or both, of the Revenue and Taxation Code, the transfer is exempt, for purposes of reassessment by the county tax assessor.(2) Pursuant to Section 1102.2, the transfer is exempt from the requirements to prepare and deliver a Transfer Disclosure Statement, as set forth in Section 1102.6.
B. California Law Revision Commission (Commission) “Tentative Recommendation for the Statutory Clarification and Simplification of Common Interest Development (CID) Law” Status -A bill sponsored by the Commission will be authored and introduced by Assemblywoman Saldana, Chair of the Assembly Housing & Community Development Committee, in 2008. The Commission purports that this recodification of the Davis-Stirling Act (California’s CID Law) is intended to do the following:The new statute will continue the substance of existing law in a more user-friendly form, and is intended to provide the following advantages for homeowners who must read, understand, and apply the law governing CIDs:(1) Related provisions would be grouped together in a logical order. This would make relevant laweasier to find and use. It would also provide a logical organization for any future changes in the law.(2) Where there is significant overlap between the Corporations Code and the Davis-Stirling Act, the substance of the Corporations Code would be added to the Davis-Stirling Act and the Corporations Code provision would be made expressly inapplicable. This would consolidate relevant law in one location and minimize inconsistencies between the two sources of law.(3) Sections that are excessively long or complex would be restated in simpler and shorter sections. (4) Consistent terminology would be used throughout. (5) Some governance procedures would be standardized so as to simplify routine matters. (6) Various minor substantive improvements would be made.C. 2007 Bills of Interest That Must Pass House of Origin by January 31, 2008 to “stay alive” in 2008.1. AB 567 (Saldana) Common Interest Development Bureau-This bill proposes to create a CID Bureau within the State Department of Consumer Affairs. To be funded by a $5 annual fee on every CID unit in the state, the Bureau would provide three primary services:- Education of homeowners and association officers, through an Internet Website, toll-free telephone call center, and training classes.
- Empirical data collection, intended to provide policy makers with reliable information about the nature and incidence of problems occurring within California’s 41,000 common interest developments.
- Provide a neutral, non-judicial forum for the resolution of common interest development disputes. The goal would be to informally resolve as many disputeswithin CIDs as possible, through the Bureau auspices. As a last resort, the Bureau would be authorized to issue a citation for violation of the law. The bill is being held in the Assembly Housing & Community Development Committee. C.A.R. Position:Watch. Status: Assembly Housing & Community Development Committee2. AB 952 (Mullin) Cap on Assessments for Low/Moderate Income CID Residents-AB 952 prevents a CID from imposing aregular assessment that exceeds 20 percent of the association's preceding year’s budget, or special assessments that exceed 5 percent of the association’s gross expenses, without obtaining the approval of 50 percent plus one of the market-rate unit owners, as well as requiring approval of a majority of the low- or moderate-income unit owners. This voting requirement would give a small minority of owners veto power over the vote of a majority of unit owners. C.A.R. opposes AB 952 because the proposed voting process could block needed maintenance and property improvement actions by a CID Board of Directors and create safety issues as well as negatively impact property values in the impacted CID. C.A.R. Position:Oppose. Status: Senate Floor3. SB 948 (Harman) Education Requirements for Common Interest Development Association Board Members-This bill, as amended on May 25th, would, as of January 1, 2009, requireevery member of the board of directors of a CID association to complete at least one course during the first 12 monthsofhis or her first full term of office, and at least one course every 4 calendar years after becoming a member of the board. Such a course shall cover decisional and statutory law regarding common interest developments, and the cost of sucha course cannot exceed$25. SB 948 proposes to require the course to be approved by the Department of Real Estateand establish uniformguidelines for the course. The billwould exempt the developer of a common interest development from this requirement until the board of directors governing that development is formed. It also exempts real estate licensees and attorneys who take such courses during the maintenance of their respective licenses, as well as common interest development managers. C.A.R. Position:Watch Status: Senate FloorD. Bills of Interest Enacted in 20071. AB 691 (Silva) Certified Common Interest Development Managers(Chapter 236, 2007 Statutes) -Sponsored by the California Association of Community Managers (CACM), this bill extends the sunset date on the voluntary certification program for professional managers to January 1, 2012.2. SB 528 (Aanestad) CIDMeetings Agenda Posting Requirements(Chapter 250, 2007 Statutes) -The bill provides as follows:1) It prohibits a CID board of directors from discussing and taking action on an item in a non-emergency meeting unless the item was placed on theagenda when the meeting was noticed pursuant to current law.2) It clarifies that the requirement in paragraph 1 does NOT prohibit a resident who is not a member of the board from speaking on issues not on the agenda.3) It requires meeting notices to include the agenda for the noticed meeting.4) It provides several exceptions to the requirements in paragraphs 1-3, providing latitude to a CID board of directors regarding responding to, or clarifying, comments made bymembers, as well as taking emergency actions.IV. Issues Raised at October 2007 Committee Meeting for Discussion by 2008 CommitteeA. Voting process in CIDs- Are the Davis-Stirling Act provisions governing voting in CIDs too complicated and cumbersome and in need of statutory modification?B. Prohibition of Anti-smoking ordinances or CC&Rs.-There is increasing public outcry for limitations on smoking in both public and private venues. Should C.A.R. consider seeking ways to prohibit such restrictions in CIDs?C. Cap on costs to provide HOA documents- CID management companies are known to impose extraordinarily high fees on the duplication of HOA documents needed to close property transfer transactions. Should efforts be made to cap such fees?V. Other
A. Create subcommittee to review the C.A.R. HOA Form?VI. Adjournment