New Year Means New Laws for Property Owners in California in 2019
Part II: Common Interest Developments

New Year Means New Laws for Property Owners in California in 2019 - Part II: Common Interest Developments

As we touched upon in our previous post, 2018 legislation brought about many new changes to California property laws. Some important ones to note are in the area of common interest developments.

SB 261 (Civil Code §§ 4040 and 4360) deals with community association governance. This bill requires the board of a community association to provide general notice of a proposed rule change to its members at least 28 days (no longer 30 days) prior to making the rule change. It allows for members of a community association to authorize delivery of “individual notice” or “individual delivery” via e-mail and also to revoke such consent via e-mail.

SB 1016 (Civil Code §§ 4745 and 4745.1) revises requirements for charging stations for electric vehicles. The bill requires:

    • Homeowners in a common interest development to agree to pay the installation costs for any electronic charging station the homeowner wishes to place in a common area or an exclusive use common area.
    • Owners of electronic vehicle charging stations, wherever located within a common interest development, to maintain a liability coverage policy and to provide the certificate of insurance to the community association as specified.
    • Any covenant, restriction, or condition in any deed, contract, security instrument, or other instrument affecting the transfer or sale of any interest in a common interest development, or any provision of the governing documents, that prohibits or restricts the installation or use of an electronic vehicle charging station within an owner’s unit or designated parking space, to be void and unenforceable.
    • The award of reasonable attorney’s fees to a prevailing plaintiff in an action by a homeowner in a common interest development requesting to have an electronic vehicle charging station installed and seeking to enforce compliance with those requirements.

AB 2912 (Civil Code §§ 5380, 5500, 5501, 5502 and 5806) deals with association finances. The bill requires that community associations maintain fidelity bond coverage for its directors, officers, and employees in a specified amount unless the community association’s governing documents specify greater coverage amounts. The fidelity bond must also include coverage for computer fraud and funds transfer fraud. If a managing agent or management company is retained by the community association, the fidelity bond coverage must include dishonest acts by the managing agent or the management company and its employees.

This bill implemented provisions to protect owners from fraudulent activity related to the management of community association finances. These safeguards include the following:

      • For funds deposited by a managing agent for a community association into an interest-bearing bank account, savings association, or credit union, the bill prohibits the transfer of association funds in an amount greater than $10,000 or 5% of a community association’s total combined reserve and operating account deposits, whichever is lower, without prior approval by the board; and
      • The board of a community association is required to review various financial documents and statements at least on a monthly basis, including the check register, the monthly general ledger and delinquent assessment receivable reports.

Watch for our third installment on 2019 real estate law changes concerning environmental law and land use regulations. Contact the attorneys at Khashayar Law Group and LOKK Legal for more information.

Khashayar Law Group
(760) 806-4388

LOKK Legal
(858) 472-9700

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