by Andrew Parslow
AB 572 – Restrictions on Increasing Regular Assessment on Low Income Units (Civil Code § 5605)
Assembly Bill 572 is concerning as it directly impacts an association’s ability to increase regular assessments. Fortunately, this statute only affects associations whose original declarations are recorded on or after January 1, 2025.
This statute amends Civil Code § 5605 to prohibit associations that have recorded their original declaration on or after January 1, 2025, from increasing regular assessments against affordable housing units greater than the five percent plus the percentage change in cost of living. Regardless of the percentage change in cost, the increase in regular assessments may be ten percent greater than the previous year’s regular assessments.
To make this new restriction feasible when there is a need for a large increase in regular assessments, Civil Code § 5605 is amended to allow Associations whose declarations were recorded on or after January 1, 2025, to impose different regular assessments against low-income members than other members of the associations as long as the lower income members have lower regular assessments.
These restrictions do not apply to communities where 30 percent or more of the units are affordable housing units, as defined by Sections 50079.5 and 50052.5, respectively, of the Health and Safety Code.
AB 648 – HOA Option to Provide Purely Virtual Meetings (Civil Code §§ 4090 and 4926)
Perhaps one of the only good things to come out of the COVID-19 pandemic was an increase in society’s interest and demand for efficient remote meetings over mediums such as Zoom. The demand by Homeowners associations for remote meetings had previously led to the passage of Senate Bill 391 on September 23, 2021, which allowed for remote meetings in the advent of an emergency if a physical location was still made available.
Assembly Bill 648 furthers this trend by adding Civil Code § 4926, which allows for both board meetings and meetings of the members to be held entirely via remote meetings without having to make a physical location available. To hold meetings entirely remotely proper notice of the meeting must be provided which includes technical instructions on how to appear on the teleconference; contact information for a person who can provide technical support before and during the meeting; and a reminder that members can request individual delivery of notice of meetings. Additionally, when holding a meeting under § 4926 every director and member must have the same ability to participate; all votes of the directors must be via roll call; and all participants must be given the option to appear via telephone.
AB 976 & 1033 – Further Changes to Accessory Dwelling Units (Government Code §§65852.2 and 65852.26)
Since 2019, there has been a trend by the California Legislature to pass legislation which encourages the construction and use of Accessory Dwelling Units (“ADUs”) on single family lots. Assembly Bills 976 and 1033 are the latest iteration in this trend and amend the Government Code to allow for the sale of an Accessory Dwelling Unit separate from the sale of the primary unit.
This can lead to an interesting distribution of units as the separate sale of an ADU will always result in a single family being divided in ownership by two distinct parties. These single units owned by two parties will vote, pay assessments, and face penalties for violation of CC&Rs as one unit despite the dual ownership.
Fortunately, the amended Government Code § 65852.2 does have some provisions to assist homeowners associations with the prospective of divided ownership of units in single family subdivisions. Prior to selling part of a unit as a separately owned ADU, the unit owner is legally required to receive express written authorization from the Association. To grant this authorization, the Association must hold a special board meeting and vote for approval. An association’s governing documents can require a vote of the members to authorize the sale of an ADU separate from the primary unit.
While an association has no choice but to allow ADUs under Civil Code § 4751, they are not required to ever accept the sale of an ADU. Due to the long term confusion and logistical issues of permanently dividing a single family unit, approval of the sale of an ADU separate from the primary unit may lead to long term issues for an association.
AB 1458 –Reduction of Quorum Requirements (Civil Code §5115 and Corporations Code §7512)
Perhaps the greatest obstacle when an association is seeking to elect new directors is an inability to establish a quorum. To ease this burden Assembly Bill 1458 was signed into law on October 4, 2023.
Assembly Bill 1458 revises Civil Code § 5115 and Corporations Code §7512 to allow homeowners associations and commercial associations which were unable to establish a quorum for the election of directors to hold a follow up meeting with the required quorum reduced to 20% of the association’s membership.
While similar provisions are already common in association governing documents, this can provide much needed relief for associations that have been struggling to elect a board of directors.
SB 1572 – Water Use in the Common Area (Water Code §10608.14)
Senate Bill 1572, which was signed into law on September 10, 2023, establishes a series of restrictions on long term water use for homeowners associations and common interest developments. While it is not slated to go into effect until 2030, an association should be cognizant of these upcoming restrictions.
Senate Bill 1572 amends Water Code §10608.14 (a)(4) to prohibit the use of potable water for the irrigation of nonfunctional turf located on the common area of homeowners association beginning in January 1, 2030. This does not restrict the use of recycled, non-drinkable water.
It further revises Water Code §10608.14 (e)(2) to require that homeowners associations with more than 5,000 square feet of irrigated common area be certified by the State Water Resources Control Board starting on June 30, 2031, which will ensure that the association is in compliance with the above restrictions. Certification will need to be renewed every three years until 2040.