Sacramento, California

June 5, 2008

9:45 a.m. - 11:20 a.m.

Presiding:

Susan Tilling, Chair

Gwynne Hodge, Vice Chair

Mike Reilly, Vice Chair

Malcolm Bennett, Committee Liaison

C.A.R. Staff: Dave Milton

I. Opening Comments
 

II. State Legislation
 

A. C.A.R.-Sponsored Bill

AB 2259 (Mullin) Preservation of Right-to-Rent in CIDs - Over the last few years, C.A.R. members noticed a trend among some homeowner associations to adopt restrictions that limit the number of dwellings that can be rented by unit owners, whether by raw numbers or percentages of owner-occupied versus renter-occupied units. The imposition of rental restrictions diminishes an owner's property rights. C.A.R. argues that property owners should enjoy the same right to rent or lease their unit that existed at the time the CID unit was purchased. C.A.R. is sponsoring AB 2259 to protect just such a right if it existed at the time the owner purchased the unit. The bill passed the Assembly Floor with a 74-0 vote.

Status: Senate Rules Committee Pending Committee Assignment
 
B. 2008 Bills of Interest

AB 567 (Saldana) Common Interest Development Bureau - This bill would establish the Common Interest Development Bureau under the Department of Consumer Affairs. The bureau would be funded biennial fee that would be imposed common interest development (CID) associations that would equal the number of separate interests in the CID multiplied by $10. AB 567 authorizes the bureau to impose fines against associations that fail to comply with state law. The bureau would offer training materials and courses to CID directors, officers, and owners, in subjects relevant to the operation of a common interest development and the rights and duties of an association or owner, as well as maintain a toll-free telephone number and Internet web site for purposes of further providing that information and assistance. Additionally, the bill authorizes the bureau to provide assistance in resolving common interest development disputes. The bureau would sunset January 1, 2014.

Position: Watch as Amended
Status: Senate Transportation and Housing Committee
 

AB 1921 (Saldana) Davis-Stirling Recodification and Simplification by CA Law Revision Commission - This bill is the product of a more than two-year project by the California Law Revision Commission to re-organize and simplify existing laws governing Common Interest Developments (CIDs) under the Davis Stirling Common Interest Development Act. AB 1921, among other things, codifies a Department of Real Estate (DRE) regulation that requires board meetings be held within a CID development unless the available space is too small in which case the meeting must be held as close as practicable. The measure also applies the current open meeting requirements for board meetings to meetings of a committee that exercise the powers of the board. The bill permits the use of teleconferencing in board meetings and provides that a homeowner association member that is subject to a disciplinary action would be given the option to choose whether or not the matter should be considered in executive session of the board. The provisions of AB 1921 would become operative January 1, 2010.

Position: Favor
Status: Assembly Floor
 

AB 2806 (Karnette) Education of CID Board Members - AB 2806 attempts to indirectly force home owner association (HOA) board candidates to take an industry-created course or be shamed out of the ability to run or serve on the board - regardless of the other qualifications that an individual might posses. As introduced, the bill proposed to require the Department of Real Estate (DRE) to create a course outline and to enforce a $25 price cap on the course. C.A.R. opposition to this requirement caused the author and sponsors, the Community Associations Institute (CAI) to remove this mandate. C.A.R. continues to oppose AB 2806 because it encourages HOA leadership to vote themselves funding for annual "education" and travel at HOA expense, and then to "disclose" outside challengers as uneducated. Additionally, the bill may increase HOA director liability by increasing the standard of care. C.A.R. is seeking amendments to ensure that all relevant education of board member candidates must be disclosed by the HOA. The Author and sponsor have assured C.A.R. that amendments will be made before the bill is heard in the Senate that satisfies its concerns.

Position: Oppose Unless Amended
Status: Assembly Floor

AB 2846 (Feuer) Common Interest Development Assessment Dispute Resolution - Allows an owner in a common interest development (CID) to pay a disputed assessment under protest to a homeowners association (HOA) in order to specifically reserve the right to contest the disputed charge in court.

Position: Watch as Amended
Status: Assembly Floor

SB 1511 (Ducheny) Successor in Interest Obligations Following CID Unit Foreclosure - Common interest developments (CIDs) are managed by an association that has the authority to levy regular and special assessments that finance its obligations under the governing documents. Existing law specifies the method for collecting delinquent assessments, including the filing of a lien on the property. As introduced, this bill would have permitted CID associations to require foreclosing lenders to pay up to 6 months of past due homeowner association assessments on the property. C.A.R. opposed SB 1511 because it would have exacerbated the shortage of mortgage funding and drastically reduced the availability of funds for properties in CIDs. The bill could have resulted in lenders requiring CID properties to impound up to 6 months of assessments upon the purchase of the property to protect the lender from liability, and would have made it more difficult for CID owners to market their homes. Due to C.A.R. and lenders representatives' opposition, the author amended SB 1511 to remove this onerous requirement. As amended, SB 1511 requires lenders to notify CID associations of the name and mailing address of the person who has acquired the property's title at a foreclosure sale within 15 business days following a CID request or the date of sale.

Position: Favor
Status: Assembly Rules Committee Pending Committee Assignment
 

V. Other Business

A. HOA Document Processing Fees- Cap Needed? A Discussion
 

B. Other
 

VI. Adjournment