DAVIS‑STIRLING COMMON INTEREST DEVELOPMENT ACT

 

 

AND

 

 

RELATED LAWS

 

 

 

2010 EDITION

 

 

 

Compliments of Angius & Terry llp

 

 

 

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e-mail: law@angius-terry.com

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                                    WHAT IS IN THIS BOOKLET?

 

The Davis-Stirling Common Interest Development Act (“the Davis-Stirling Act”) was passed into law by the California Legislature in 1985.  By this Act, the Legislature sought to provide statutory guidance to Community Associations throughout the State.  Coupled with the pertinent Covenants, Conditions and Restrictions (“CC&Rs”), Bylaws, and Rules and Regulations, the provisions of the Davis-Stirling Act, and related laws and Court decisions, set out the legal principles that govern the management and operation of Community Associations in California.  In addition, the Davis-Stirling Act sets forth certain of the legal guidelines that define the relationship between the Community Association, its members and third persons.

 

The Davis-Stirling Act was drafted by a committee of individuals representing a broad array of interests, including developers, managers, owners, academics and lawyers.  The purpose initially was to gather in one place all of the laws affecting Common Interest Developments.  However, because of the divergent interests of the participants and in order to produce some kind of legislation, the purpose changed to include in the Davis-Stirling Act only those provisions on which all of the committee agreed.  Thus, not all statutes governing the operation of Common Interest Developments are located in the Davis-Stirling Act.

 

This booklet contains the text of the Davis-Stirling Act in its entirety.  We have also  included certain other California and Federal statutes that are either incorporated by reference in the Davis-Stirling Act or which we, at Angius & Terry LLP, have found to be relevant to the management and operation of Community Associations.

 

It is important to note that the Davis-Stirling Act is continually being amended as the Legislature attempts to create, in piecemeal fashion, a more comprehensive body of law governing Common Interest Developments.  We have included in bold type the changes that became effective as of January 1, 2010.  Amendments that became effective after January 1, 2010, are not reflected in this booklet.

 

 

                                    WHO IS Angius & Terry llp ?

 

Angius & Terry llp has over twenty years of experience helping Community Associations and property owners protect their rights.

 

Angius & Terry llp prides itself on the service and commitment that it offers to its clients.

 

Angius & Terry llp possesses extensive experience handling the corporate and business affairs of its Community Association clients.  This experience includes:

 

·          Drafting and amending CC&Rs, Bylaws, Articles of Incorporation and other governing documents;

 

·          Interpretation and enforcement of governing documents;

 

·          Interpretation of statutes and ordinances as they relate to the management and operation of the Association;

 

·          Assessment collection and lien procedures;

 

·          Architectural control committees and compliance;

 

·          Contract drafting and review;

 

·          Claims by and against Association vendors, contractors and suppliers.

 

Angius & Terry llp has raised hundreds of millions of dollars in Community Association construction defect lawsuits. These lawsuits include two of the largest condominium association construction defect settlements in the history of Northern California and the only Community Association construction defect lawsuit that resulted in the demolition and rebuilding of an entire Community Association development.

 

Angius & Terry llp’s objective is to use the knowledge gained during the litigation process to work with our Community Association clients and their management companies after the lawsuit is concluded.  This will ensure that the reconstruction process satisfactorily addresses the Community Association’s construction problems.  Conclusion of a Community Association’s lawsuit does not end our commitment to that Community Association.

 

Angius & Terry llp offers free initial consultations to Community Association Boards of Directors faced with potential construction defects. In many instances, there are alternatives which, when properly used, can resolve construction defect problems short of litigation.

 

Angius & Terry llp has been awarded an “A-V” rating by Martindale-Hubbell, the highest rating given to any law firm in the United States.  We are active participants and sponsors of California Association of Community Managers (CACM), Community Associations Institute (CAI), Executive Council of Homeowners (ECHO) and other trade organizations.  In addition, we are regularly called upon to advise legislative committees and testify before the California Legislature in connection with bills that impact Community Associations throughout the State.  We have also been called upon to provide consulting services to the State Bar of California.

 

MR. ANGIUS

has specialized in community association and construction law since 1977. His experience over the years in dealing with the legal problems that confront community associations has helped position Angius & Terry LLP as one of the premier firms representing community associations in the western United States. A dynamic and animated speaker, he is frequently asked to lecture with respect to legal issues which relate to common interest developments. He has, likewise, written numerous articles on a wide range of topics pertaining to common interest developments.

 

Among his many professional accomplishments, Mr. Angius was the lead attorney in the landmark Willow Park Marina Homeowners Association suit which resulted in the complete demolition and reconstruction of a common interest development. He was also the lead attorney in a homeowners association construction defect suit which resulted in a recovery approaching $19,000,000 for only 155 condominium units.

 

Mr. Angius graduated from Columbia University in 1974 with a Bachelor of Arts degree and received his law degree in 1977 from the University of the Pacific, McGeorge School of Law. He is a member of the California State Bar Association, Nevada State Bar Association, Colorado State Bar Association, Bar Association of San Francisco, Clark County Bar Association and the litigation and construction sections of the American Bar Association. He is also a member of the Community Association Institute, Executive Council of Home Owners, and the California Association of Community Managers.

 

 

 

 

MR. TERRY

specializes in construction, community association and insurance law. In addition to his extensive handling of construction defect cases, he works closely with association management companies and boards of directors in providing both legal and practical advice regarding the day‑to‑day affairs of their associations, enforcement and revision of governing documents, and delinquent assessment collection.

 

His unique combination of knowledge and experience enabled him to secure the largest condominium construction defect settlement in Northern California history for a firm client.

 

He graduated from the University of California at Irvine in 1980 with degrees in Literature and Economics and received his law degree in 1984 from the University of California, Hastings College of the Law, where he served on the editorial board of the Hastings Constitutional Law Quarterly.

 

He is an active member of the Executive Council of Homeowners (ECHO), where he served on the Legislative Committee; the California Association of Community Managers (CACM), where he served on the Legal Advisory Committee; and the Consumer Attorneys of California, where he served on the Construction Defect Litigation Committee. In addition, he is an active member of the Community Associations Institute (CAI) and the Sacramento Area Condominium Associations (SACA).

 

Mr. Terry served on the California Senate Housing and Land Use Committee’s task force studying changes to the Davis‑Stirling Common Interest Development Act.

 

Mr. Terry frequently lectures on topics relevant to common interest developments, including new and pending legislation, mediation, effective assessment collection and construction defect litigation.

 

                                             Table of Contents

I.      DAVIS-STIRLING COMMON INTEREST DEVELOPMENT ACT

 

§1350.7.      Delivery of Documents

§1351.         Definitions       

§1352.         Application of Title; Creation of Common Interest Development      

§1352.5.      Restrictive Covenant; Deletion From Declaration or Other Governing Document     

§1353.         Declaration; Contents; Notice of Airport in Vicinity

§1353.5       Display of the United States Flag by Owner On or In Owner’s Separate Interest or Within Exclusive Use Common Area

§1353.6       Display of Noncommercial Signs, Posters, Flags, and Banners

§1353.7.      Common interest developments; roof installation and repair; governing documents. 

§1353.8.      Architectural guidelines; use of low water-using plants as a group           

§1354.         Covenants and Restrictions in Declaration as Equitable Servitudes; Enforcement;  Alternative Dispute Resolution       

§1355.         Amendment of Declaration      

§1355.5.      Amendment of Governing Documents to Delete Construction or Marketing  Provisions After Completion by Developer; Requirements 

§1356.         Amendment of Declaration; Petition; Contents; Filing; Findings by Court; Power of Court to Approve Amendment; Recording Amendment; Mailing         

§1357.         Extension of Term of Declaration        

§1357.100.  Operating Rules; Defined        

§1357.110.  Validity of Operating Rules; Requirements     

§1357.120.  Rule Changes Subject to Reversal by Members           

§1357.130.  Notice of Proposed Rule Change to Members 

§1357.140.  Member Right to Reverse Rule Change; Special Meeting       

§1357.150.  Rule Changes; Applicable Dates          

§1358.         Interests Included in Conveyance, Judicial Sale or Transfer of Separate Interests; Transfers of Exclusive Use Areas; Restrictions Upon Severability of Component Interests           

§1359.         Restrictions on Partition           

§1360.         Modification of Unit By Owner; Facilitation of Access for Handicapped; Approval by Project Association       

§1360.5.      Pets in Common Interest Developments          

§1361.         Rights and Easements of Ingress, Egress, and Support           

§1361.5.      Physical Access to Owner or Occupant’s Separate Interest    

§1362.         Ownership of Common Areas  

§1363.         Community Association Management; Schedule of Monetary Penalties for Violations         

§1363.001.  Board of Director On-Line Education 

§1363.005.  Disclosure Documents Index 

§1363.03.    Association Rules; Elections; Equal Access; Common Area Access; Qualifications; Procedures; Elections Inspector; Ballots; Proxies   

§1363.04.    Use of Association Funds; Campaign Purposes Prohibited     

§1363.05.    Open Meetings; Executive Session Exception; Minutes; Notice; Emergency Meeting           

§1363.07.    Common Area; Exclusive Use Grant; Member Vote; Exceptions; Phased Development; Correction of Errors; Monetary Compensation

§1363.09.    Election Remedy; Civil Action; Costs; Penalty; Small Claims

§1363.1.      Prospective Managing Agent; Written Disclosures      

§1363.2.      Managing Agent; Deposit of Funds Received; Requirements; Separate Record; Commingling of Funds           

§1363.5.      Articles of Incorporation; Required Statement

§1363.6.      Assistance with Identification of Common Interest Developments; Submission of Information by Each Association; Time; Notice of Change of Address; Penalty for Violation of Filing Requirements; Availability of Information      

ARTICLE  5.    DISPUTE RESOLUTION PROCEDURE          

§1363.810.  Application of Article  

§1363.820.  Fair, Reasonable and Expeditious Procedure to Resolve Disputes; Use of Local Dispute Resolution Programs    

§1363.830.  Requirements of Fair, Reasonable, and Expeditious Dispute Resolution Program     

§1363.840.  Application of Section; Use of Procedures; Dispute Resolution Agreements; Conditions; Fees  

§1363.850.  Notice; Description of Internal Dispute Resolution Process    

§1364.         Responsibility for Repair, Replacement, or Maintenance; Damage by Wood-Destroying Pests or Organisms; Cost Allocation; Notice of Repair Requirements; Access for Maintenance of Telephone Wiring         

§1365.         Documents Prepared and Distributed by Associations

§1365.1       Notice to Members of Association Prior to Beginning of Fiscal Year 

§1365.2.      Disclosure of Records  

§1365.2.5.   Form for Summarizing Disclosures; Form to Accompany Pro Forma Operating Budgets or Summaries; Supplementation or Modification; Calculating Amount of Reserves      

§1365.3.      Community Service Organization, Disclosure Requirement    

§1365.5.      Board of Directors; Duties       

§1365.6.      Contracts or other transactions authorized, approved, or ratified by the board          

§1365.7.      Tortious Act or Omission of Volunteer Officer or Director of Association Managing Residential Development; Liability; Criteria; Limitations  

§1365.9.      Tort Actions Against Owner of Separate Interest; Tenant in Common in Common Area; Association Liability; Insurance Requirements

§1366.         Levy of Assessments; Limitation on Increases; Delinquent Assessments; Interest     

§1366.1.      Imposition or Collection of Assessments or Fees; Limit on Amount  

§1366.2.      Statements for Collection of Regular and Special Assessments, Transfer Fees, and Other Charges 

§1366.4.      Levy of Assessments Based on Taxable Value of Separate Interests         

§1367.         Assessments; Debt of Owner; Lien; Notice; Enforcement of Lien; Application of Section   

§1367.1.      Assessments; Debt of Owner; Payments; Disputes as to Debt; Procedure; Enforcement of Lien; Penalty; Priority of Lien; Assignment or Pledge of Right to Collect Payments; Action Under Code of Civil Procedure; Correction of Errors; Application of Section          

§1367.4.      Assessments; Collection; Small Claims; Judgment; Enforcement of Lien; Foreclosure; Procedure; Notice; Right of Redemption; Application of Section      

§1367.5.      Assessments; Lien; Error; Costs           

§1367.6.      Existing dispute between owner of separate interest and the association; authority to bring small claims actions; delinquent assessments

§1368.         Sale or Title Transfer; Provision of Specified Items to Prospective Purchasers; Copies; Fees; Violations; Penalty and Attorney Fees; Validity of Title Transferred in Violation; Additional Requirements    

§1368.1       Prohibition Against Association Rule or Regulation that Arbitrarily or Unnecessarily Restricts Owner’s Ability to Market His or Her Interest in a Common Development; Other Enumerated Restrictions       

§1368.3.      Associations Established to Manage Common Interest Development; Standing        

§1368.4.      Reduction of Damages Awarded; Comparative Fault of Association

§1368.5.      Written Notice to Members Prior to Filing Civil Action; Contents     

§1369.         Liens for Labor and Materials  

ARTICLE 2.  ALTERNATIVE DISPUTE RESOLUTION         

§1369.510.  Definitions       

§1369.520.  Filing Enforcement Actions; Application of Section   

§1369.530.  Initiation of Process; Serving a Request for Resolution; Personal Delivery; Acceptance or Rejection of Request    

§1369.540. Timeline for Completion of Dispute Resolution          

§1369.550.  Tolling of Statute of Limitations          

§1369.560.  Certificates Filed With Initial Pleading; Grounds for Demurrer or Motion to Strike  

§1369.570.  Referral of Actions to Alternative Dispute Resolution; Stay of Referral Action        

§1369.580.  Award of Fees and Costs         

§1369.590.  Annual Summary of Provisions of Article; Contents of Summary      

§1370.         Liberal Construction of Instruments    

§1371.         Boundaries of Units; Presumption       

§1372.         Construction of Zoning Ordinances     

§1373.         Developments Expressly Zoned as Industrial or Commercial and Limited to Such Purposes; Exclusions        

§1374.         Developments with No Common Area; Application of Title; Standing          

§1375.         Action for Damages Against Common Interest Development Builders, Developers, or General Contractors   

§1375.05.    Complaint; Trial Priority; Additional Inspection or Testing; Facilitated Dispute Resolution; Procedural Deficiencies

§1375.1.      Settlement Agreements regarding Alleged Defects; Notice of Resolution to Members on Record; Disclosures      

§1376.         Restrictions on Installation or Use of Video or Television Antenna; Enforceability Based on Size; Reasonable Restrictions; Application for Approval; Attorneys Fees      

§1378          Application of Section; Requirements to Approve or Disapprove Proposed Changes; Notice of Requirements    

 

II.     RELATED BUSINESS & PROFESSIONS CODE PROVISIONS

§11500.       Definitions        

§11501.       “Common Interest Development Manager” Defined; Construction with Other Statutory and Contractual Obligations           

§11502.       Requirements to be Called a Certified Common Interest Development Manager      

§11502.5.    Standards and Requirements for Development and Administration of the Course Related Competency Examination or Examinations and Education Provided to a Certified Common Interest Development Manager

§11503.       Management Firms       

§11504.       Annual Report to Board of Directors; Report Contents          

§11505.       Managers, Management Companies and Parent Companies; Prohibited Activities    

§11506.       Duration of Part           

 

III.   RELATED CIVIL CODE PROVISIONS

CONSTRUCTION DEFECT LIABILITY     

§43.99.        Immunity From Monetary Liability; Building and Other Inspectors; Independent Quality Review of Plans, Specification or Work on Residential Buildings Under the State Housing Law; Exceptions           

DISCRIMINATION    

§51.             Unruh Civil Rights Act; Equal Rights; Business Establishments; Violation   

SENIOR CITIZEN HOUSING           

§51.2.          Age Discrimination in Housing Prohibited; Exception; Intent

§51.3.          Housing; Age Limitations; Necessity for Senior Citizen Housing       

§51.4.          Exemption From Special Design Requirement

DISCRIMINATION AND DISABILITY      

§51.5.          Discrimination, Boycott, Blacklist, Etc.; Business Requirements; Equal Rights         

CONSTRUCTION-RELATED ACCESSIBILITY CLAIMS           

§55.54.        Service of summons and complaint in construction-related accessibility claim action; simultaneous service of specified notice and application for early evaluation conference; actions following service; construction and application of provisions       

“FOR SALE” SIGNS   

§711.           Conditions in Restraint of Alienation  

§712.           Conditions Restraining Right to Display Sign Advertising Property for Sale, Lease or Exchange  

§713.           Local Regulations; Signs Advertising Property for Sale, Lease or Exchange 

SOLAR ENERGY SYSTEMS

§714.           Unenforceability of Deeds, Contracts or Instruments Prohibiting or Restricting Installation or Use of Solar Energy Systems   

§714.1.        Solar Energy Systems; Common Interest Developments; Approval; Maintenance; Indemnification or Reimbursement      

§784.           Restriction Defined      

§801.5.        Solar Easement and Solar Energy System Defined; Minimum Description in Instrument      

REQUIREMENTS FOR ACTIONS FOR CONSTRUCTION DEFECTS   

§895.           Definitions        

§896.           Building Standards for Original Construction Intended to be Sold as an Individual Dwelling Unit      

§897.           Function or Component of a Structure; Scope of Standards Within Chapter 

§900.           Fit and Finish; Limited Warranty; Scope         

§901.           Enhanced Protection Agreement; Length of Time; Minimum Standards        

§902.           Enhanced Protection Agreement; Determination of Enforceability    

§903.           Enhanced Protection Agreement; Time to Elect Agreement; Standards Where Provisions are Unenforceable  

§904.           Enhanced Protection Agreement; Disputed Terms; Notice of Claim Against Builder

§905.           Enhanced Protection Agreement; Binding Determination of Applicable Building Standards; Waiver; Privity with Nonoriginal Homeowners           

§906.           Prelitigation procedures; governing law           

§907.           Homeowner Maintenance Obligations, Schedules and Practices        

§910.           Written Notice of Claim           

§911.           “Builder” Defined        

§912.           Document Disclosure by Builder; Designated Agent to Accept Claims and Act on Builder’s Behalf; Notice to Homeowners and Purchasers           

§913.           Written Acknowledgment of Claim; Time to Respond; Contents       

§914.           Election to Pursue Other Nonadversarial Contractual Procedures; Affect of Title 7 Upon Existing Statutory or Decisional Law  

§915.           Application of Prelitigation Provisions Upon Certain Failures to Act by Builder       

§916.           Builder’s Election to Inspect  

§917.           Written Offer to Repair

§918.           Homeowner Response Repair Offer    

§919.           Mediation by Mutual Agreement; Unresolved Disputes; Repairs       

§920.           Claimant Right to File Action  

§921.           Repair Work; Time and Date Scheduled; Completion Date    

§922.           Electronic Recordation, Video Recording or Photographs During Work

§923.           Documentation Relating to Repair Work; Requests for Copies          

§924.           Partial Repair of Claims; Statement of Reasons          

§925.           Failure to Repair Within Time Allowed           

§926.           Release or Waiver in Exchange for Repair Work         

§927.           Claims for Violation of Statutory Process or Inadequate Repair; Limitation of Action; Extension of Time        

§928.           Mediation After Repair Completion    

§929.           Cash Offer in Lieu of Repair; Release 

§930.           Failure to Act Within Mandated Timeframes and Other Requirements; Right to File Action; Motion to Stay Proceedings     

§931.           Cause of Action or Damages Exceeding Scope of Actionable Defects; Applicability of Standards         

§932.           Subsequently Discovered Claims of Unmet Standards           

§933.           Evidence of Repair Efforts      

§934.           Evidence of Conduct During Enforcement Process    

§935.           Construction of Chapter With Similar Provisions in the Civil Code   

§936.           Parties Subject to Application of Title; Determination; Defenses Available; Joint and Several Liability; Strict Liability           

§937.           Construction With Professional Negligence Actions   

§938.           Application of Title 7 to Certain Residences   

§941.           Limitation of Action; Tolling   

§942.           Sufficiency of Claim for Violation of Chapter 2 Standards    

§943.           No Other Causes of Action; Exceptions.         

§944.           Damages; Determination of Amount   

§945.           Binding Effect Upon Original Purchasers and Their Successors-In-Interest   

§945.5.        Affirmative Defenses   

INSTALLATION OF WATER USE EFFICIENCY IMPROVEMENTS     

§1101.2.      Application of article to specified properties

§1101.3.      Definitions       

§1101.4.      Single-family residential real property; non-compliant plumbing fixtures; replacement with water-conserving plumbing fixtures     

§1101.5.      Multifamily residential real property and commercial real property; noncompliant plumbing fixtures; replacement with water-conserving plumbing fixtures          

§1101.6.      Demolition permit; one-year postponement of article requirements          

§1101.7.      Excluded properties   

REAL ESTATE DISCLOSURE REQUIREMENTS 

§1102.6.      Disclosure Form          

§1102.6a.     Additional Disclosures 

§1102.6b.    Disclosure to Prospective Purchaser of Continuing Lien Securing Special Tax Levy; Satisfaction of Disclosure Notice Requirements      

§1103.4.      Errors, Inaccuracies, or Omissions in Any Information Delivered Under Article; Liability  

§1133.         Property Subject to Blanket Encumbrance But Exempt from Compliance with Section 11013.2; Notice to Prospective Purchaser or Lessee; Civil and Criminal Liability         

§1134.         Statement of Defects or Disclaimer; Termination of Purchase Agreement; Definition           

TRANSFER OF PROPERTY BY FORECLOSURE 

§2924.         Transfer as Security Deemed Mortgage or Pledge; Power of Sale; Restriction on Exercise; Notice of Default and Election to Sell; Recordation; Waiting Period; Notice of Sale; Evidence of Compliance  

§2924b.       Notice of Default and of Sale; Mailing Upon Request for Copies and to Certain Interested Persons 

§2924c.        Cure of Default; Payment of Arrearages, Costs and Fees; Effect on Acceleration; Notice of Default; Trustee’s or Attorney Fees; Reinstatement Period    

§2924d.       Costs and Expenses of Enforcement; Trustee's or Attorney's Fees; Rebates and Kickbacks  

§2924e.        Junior Lienholder Requests for Written Notice of Delinquencies; Duration; Liability for Failure to Give Notice; Satisfaction of Obligations Secured by Junior Liens 

§2934a.        Substitution of Trustee; Mailing; Recording; Contents of Substitution; New Notice of Sale 

SALE OF REAL PROPERTY 

§2985.         Real Property Sales Contract; Definition         

 

IV.   RELATED CORPORATIONS CODE PROVISIONS

§20.             Electronic Transmission by the Corporation Defined  

§21.             Electronic Transmission to the Corporation Defined   

§1502.         Statement of Information; Timing and Contents of Filing; Agent for Service of Process; Updated Information; Public Inspection; Certification           

VOTING - DEFINITIONS      

§5033.         Approval By a Majority of All Members         

§5034.         Approval By the Members       

§5069.         Proxy    

§5070.         Proxyholder      

§5077.         Vote      

§5079.         “Written” or “in Writing”         

§5080.         Written Ballot   

DIRECTOR TRANSACTIONS          

§5233.         Self-Dealing Transactions; Interested Director; Actions; Burden of Proof; Limitations; Remedies          

GENERAL  PROVISIONS     

§7140.         Powers of Corporation 

§7141.         Restrictions; Methods of Asserting      

§7151.         Bylaws; Contents; Directors; Meetings; Committees; Members    

§7160.         Articles and Bylaws; Location; Inspection; Furnishing to Members   

§7210.         Exercise of Powers; Delegation of Management         

§7211.         Board Meetings; Notice; Participation; Use of Specified Electronic Equipment; Quorum; Waiver of Meeting Requirement       

§7212.         Committees      

§7213.         Officers

§7215.         Documents as Evidence           

DIRECTORS AND OFFICERS          

§7220.         Election; Term

§7221.         Declaration of Vacancy; Grounds        

§7222.         Removal; Reduction in Number       

§7223.         Removal by Court Order; Powers of Attorney General          

§7224.         Filling Vacancies on Board of Directors; Resignation; Successors to Take Office at Effective Date of Resignation     

§7225.         Provisional Directors    

§7231.         Performance of Duties; Degree of Care; Reliance on Reports, Etc.; Good Faith; Exemption From Liability     

§7233.         Conflicts of Interest; Disclosure; Common Directorships; Just and Reasonable Contracts    

§7234.         Quorum; Counting Interested or Common Directors  

§7237.         Indemnification of Corporate Agents; Grounds; Approval; Advancement of Expenses; Liability Insurance          

MEMBERSHIP

§7310.         Admission to Membership; Powers of Directors         

§7313.         Membership Certificates; Transfer       

§7341.         Expulsion, Suspension, or Termination; Procedures    

MEETINGS AND VOTING   

§7510.         Annual Meetings; Place; Written Ballot; Court Order for Meeting; Special Meetings

§7511.         Notice of Meeting        

§7512.         Determination of Quorum        

§7513.         Acts without Meeting; Written Ballot; Number of Ballots and Approvals; Solicitation; Revocation of Ballots; Election of Directors   

§7514.         Form of Proxy or Written Ballot          

§7515.         Direction by Court Order That Meeting Be Called; Powers of Court; Validity of Meeting   

§7516.         Action Without Meeting by Written Consent  

§7517.         Acceptance or Rejection of a Ballot, Consent, Waiver or Proxy Appointment           

§7520.         Nomination and Election Procedures   

§7521.         Nomination Procedures; Corporations with 500 or More Members    

§7522.         Election of Directors; Corporations with 5,000 or More Members; Nominations       

§7523.         Equal Access to Corporate Publications; Vote Solicitations in Corporate Publications          

§7524.         Election Material; Mailings; Requests by Nominees; Payment of Costs         

§7525.         Refusal by Corporation to Publish or Mail Material; Prohibitions; Liability of Corporation or Officers for Material Supplied by Nominee; Actions to Relieve Corporation from Publication and Mailing Obligations           

§7526.         Use of Corporate Funds to Support Candidate           

§7527.         Limitation of Actions; Validity of Election, Appointment or Removal of Director   

§7610.         One vote for each membership; exceptions      

§7611.         Record Date; Right to Vote; Notice; Adjournment     

§7612.         Membership in Names of Two or More Persons          

§7613.         Proxies  

§7614.         Inspectors of Election  

§7615.         Cumulative Voting       

§7616.         Judicial Determination of Validity of Election or Appointment.        

AMENDMENT AND OTHER CORPORATE ACTS           

§7812.         Approval Required for Various Types of Amendments.        

§7911.         Sale, lease or other disposal; approval; abandonment of transaction; terms and conditions    

§8012.         Principal Terms; Approvals.     

§8015.         Amendment of Agreement.     

BIENNIAL CORPORATE STATEMENT    

§8210.         Statement of Names and Addresses of Officers and of Agent for Service of Process      

ASSOCIATION RECORDS AND RIGHT TO INSPECT    

§8310.         Records; Availability in Written Form.

§8311.         Inspections; Persons Authorized; Copies        

§8313.         Prohibited Limitation on Rights          

§8320.         Books and Records      

§8321.         Annual Report  

§8322.         Annual Statement to Members of Insider Transactions          

§8325.         Voting Results in Meetings; Information to Members Upon Written Request           

§8330.         Demand; Persons Authorized; Reason; Alternative Proposal  

§8331.         Petition to Set Aside Demand; Petition for Protective Orders; Time; Order;  Costs; Mandamus; Damages.          

§8332.         Limitations to Protect the Constitutional Rights of Other Members.  

§8333.         Accounting Books; Minutes; Demand; Purpose.         

§8334.         Directors' Rights           

§8336.         Enforcement of Right; Court Appointed Inspections or Auditors; Expenses.

§8337.         Costs, Expenses and Attorney Fees     

§8338.         Membership List; Authorized and Prohibited Uses; Damages; Injunction; Costs, Expenses and Attorneys Fees.

DISSOLUTION           

§8610.         Status of Corporations Authorized to Wind Up and Dissolve       

§8618.         Claim Against a Corporation    

§8719.         Adoption of Distribution Plan Not in Accordance with Liquidation Rights of Membership Classes; Notice 

 

V.     RELATED CODE OF CIVIL PROCEDURE PROVISIONS

STATUTES OF LIMITATION

§335.           Periods of Limitation   

§335.1.        Two Years; Actions for Assault, Battery, or Injury to, or for Death of, Individual Caused by Wrongful Act or Neglect        

§336.           Five Years; Mesne Profits        

§337.           Four Years; Written Contract; Exception; Book Account; Account Stated Upon Account in Writing; Balance of Mutual Open and Current Account In Writing; Rescission of Writen Contract

§337.15.      Ten Years; Developer, Contractor, Architect, etc. of Real Property; Latent Deficiency in Design, Supervision, etc., Injury To Property  

§338.           Three Years; Time for Commencing Actions Other than for the Recovery of Real Property

SERVICE OF MATERIALS   

§415.10.      Personal Delivery of Copy of Summons and Complaint; Date           

§415.20.      Leaving Copy of Summons and Complaint at Office, Dwelling House, Usual Place of Abode or Business or Usual Mailing Address; Mailing Copy 

CONSTRUCTION DEFECTS 

§664.7.        Construction Defect Action; Entry of Judgement Pursuant to Terms of Stipulation for Settlement        

FORECLOSURE OF MORTGAGES 

§726.           Form of Action; Procedure; Action for Borrower Fraud         

§729.035.    Right of Redemption; 90 Days

SMALL CLAIMS COURT HEARINGS        

§116.540.    Appearance by Person Other Than Plaintiff or Defendant; Personal Appearance by Plaintiff of Defendant        

 

VI.   RELATED GOVERNMENT CODE PROVISIONS

AMERICAN FLAGS   

§434.5.        Right to Display Flag   

HOUSING DISCRIMINATION        

§12955.       Unlawful Practices       

§12956.1.    Restrictive Covenants Based on Race, Sex, or Other Discriminatory Grounds; Notice; Exception; Determination that Covenant is Void; Criminal Penalty; Recordation of Modified Documents       

§12956.2.    Unlawfully Restrictive Covenant; Recordation of a Restrictive Covenant Modification; Procedure; County Recorder    

 

VII.  RELATED HEALTH AND SAFETY CODE PROVISIONS

DEFINITIONS 

§1502.         Definitions        

CARE FACILITIES     

§1596.775.  Child Care        

§1596.78.    Family Day Care Home

§1597.40.    Exclusion of Municipal Zoning, Building and Fire Codes and Regulations; Invalidity of Restrictive Covenants  

§1597.43.    Congregate Care Facilities       

§1597.44.    Conditions for a Small Family Day Care Home          

§1597.45.    Small Family Day Care Homes

§1597.46.    Large Family Day Care Homes

§1597.465.  Conditions for a Large Family Day Care Home          

§1597.531.  Mandatory Liability Insurance or Bond           

CONTROLLED SUBSTANCES: NUISANCE ABATEMENT        

§11570.       Nuisance           

§11571.       Nuisance; Action to Abate; Injunction

§11573.       Temporary Injunction   

§11581.       Removal and Sale of Property; Closing of Building or Place; Civil Penalty   

BUILDING STANDARDS AND APPROVAL        

§18907.       Approval           

§18949.6.    Adoption of Building Standards         

TOXIC MOLD 

§26100.       Citation 

§26101.       Definitions        

§26101.5.    Standards; Compliance with Administrative Law Procedures

§26101.7.    Task Force        

§26102.       Permissible Exposure Limits to Mold in Indoor Environments; Feasibility of Adoption        

§26103.       Adoption of Permissible Exposure Limits to Mold in Indoor Environments; Duties of Department; Criteria; Alternative Exposure Limits     

§26104.       Notice of Work Initiated on Permissible Exposure Limits to Mold; Amendment of Permissible Exposure Limits; Periodic Review       

§26105.       Assessment Standards; Adoption; Criteria      

§26106.       Alternative Assessment Standards       

§26107.       Notice of Work Initiated on Assessment Standards; Review and Adoption by Reference of Information Prepared by Other Authoritative Bodies Regarding National Assessment Standards; Review of Standards         

§26120.       Adoption of Guidelines           

§26121.       Contents of Guidelines

§26122.       Criteria for Guidelines; Building Tests and Inspection Procedures     

§26123.       Review of and Adoption by Reference of Information by Other Authoritative Bodies Regarding National Identification Standards for Molds         

§26124.       Notice of Work Initiated on Identification Guidelines           

§26125.       Review of Guidelines   

§26130        Development and Dissemination of Guidelines           

§26131.       Contents and Function of Guidelines; Criteria

§26132.       Notice of Work Initiated on Remediation Guidelines 

§26133.       Review and Adoption by Reference of Information Prepared by Other Authoritative Bodies Regarding National Remediation Standards for Molds          

§26134.       Information Regarding Removal of Mold in Buildings or Surrounding Environments; Dissemination to Public; Review of Remediation Guidelines; Public Education Materials    

§26140.       Commercial or Industrial Real Properties; Sellers or Transferors; Disclosure to Prospective Buyers; Exemption; Air or Surface Tests         

§26141.       Disclosure to Prospective and Current Tenants; Exemptions; Air or Surface Tests    

§26142.       Notice of Presence of Mold by Tenants of Commercial or Industrial Real Properties

§26143.       Commercial or Industrial Landlords with Knowledge or Notice of Presence of Mold; Duties  

§26144.       Application of Article to Properties Whose Tenants Are Contractually Responsible for Maintenance and Remedial Actions    

§26145.       Tenants of Commercial or Industrial Real Properties with Responsibility for Maintenance of the Property and Who Have Knowledge or Notice of Presence of Mold; Duties 

§26146.       Public Entities that Own, Lease or Operate Buildings; Disclosure to Building Occupants and Prospective Tenants; Exemptions         

§26147.       Residential Landlords with Knowledge or Notice of the Presence of Mold; Disclosure to Prospective and Current Tenants; Air and Surface Tests; Exemptions

§26148.       Residential Landlords Duty to Provide Written Disclosures Regarding Potential Health Risks and Health Impact Resulting from Exposure to Mold to Prospective Tenants           

§26149.       Other Compliance Requirements; Other Remedies     

§26150.       Other Disclosure Obligations Relating to Real Estate Contracts Regarding Facts Materially Affecting the Value and Desirability of the Property; Other Inspection and Disclosure Duties of Real Estate Brokers and Salespersons         

§26151.       Fraud, Misrepresentation, or Deceit in Transfer Transactions; Other Obligations       

§26152.       Enforcement of Disclosure Requirements        

§26153.       Erroneous, Inaccurate, or Omitted Information; Liability of Transferors or Listing or Selling Agents  

§26154.       Complaints Regarding Mold; Enforcement of Standards and Disclosure Requirements        

§26155.       Standards for Mold Testing Professionals and Mold Remediation Specialists; Considerations Regarding Need for Standards; Report           

§26156.       Implementation of Chapter      

§26200.       Study and Publication of Findings Regarding Fungal Contamination Affecting Indoor Environments   

§26201.       Examination by Review Panel 

§26202.       Findings and Recommendations          

§26203.       Submission of Published Findings; Use of Findings   

PLAYGROUNDS AND “TOT LOTS”           

§115730.     Playground Safety Compliance and Inspections         

§115735.     Definitions        

SWIMMING POOLS   

§116025.     Public Swimming Pool 

§116040.     Operation and Maintenance in Sanitary, Healthful and Safe Manner 

§116043.     Sanitary, Healthful and Safe Condition of Pool          

§116045.     Lifeguard Services       

§116048.     Public Swimming Pools in Certain Common Interest Developments; Requirement to Keep Certain Records

§116049.     Light Fixtures in Public Swimming Pools        

§116049.1.  Ground Fault Protection in Public Swimming Pools   

§116064.     Prevention of Suction Injuries  

§116064.1.  Public swimming pools; entrapment dangers; legislative findings and declarations regarding uniform statewide health and safety standards 

§116064.2.  Anti-entrapment devices for public swimming pools          

 

VIII.     RELATED INSURANCE CODE PROVISIONS

DEFINITIONS 

§1621.         Insurance Agent           

§1623.         Insurance Broker          

 

IX.   RELATED PENAL CODE PROVISIONS

§290.4.        Sex Offender Registration; Compilation of Information for Specified Offenses; "900" Telephone Number; Income Deposit; Violations; Penalties; Report to Legislature     

§11226.       Abatement Action; Plaintiff; Relief Demanded; Verification of Complaint         

§11227.       Temporary Restraining Order or Injunction     

§11230.       Order of Abatement; Removal and Sale of Personal Property; Building in Custody of Court; Damages; Civil Penalty

 

X.     RELATED VEHICLE CODE PROVISIONS

TOWING OF VEHICLES       

§21107.       Private Roads   

§21107.5.    Private Roads Open for Public Use     

§21107.7.    Private Roads Not Open to Public Use

§22658.       Removal from Private Property; Liability; Towing and Storage Charges; Authorization  

§22658.2.    Removal of Vehicle From Common Interest Development     

§22853.       Notice to Department of Justice, Stolen Vehicle System        

 

XI.   RELATED CALIFORNIA CODE OF REGULATIONS PROVISIONS

Title 22, §65501. Definitions

Title 22, §65521. Pool Supervision Responsibility   

Title 22, §65523. Operation Records           

Title 22, §65533. Cleanliness of Pool           

Title 22, §65539. Lifesaving, First Aid and Control of Bathers      

Title 22, §65551. Shower, Toilet and Dressing Facilities     

CALIFORNIA FIRE CODE   

Title 24, §308.3.1.Open-flame cooking devices.      

Title 24, §308.3.1.1.Liquefied-petroleum-gas-fueled cooking devices.       

 

XII.  RELATED CODE OF FEDERAL REGULATIONS PROVISIONS

Title 47, §1.4000.Restrictions impairing reception of television broadcast signals, direct broadcast satellite services or multichannel multipoint distribution services         

VIRGINIA GRAEME BAKER POOL & SPA SAFETY ACT         

Title 14, § 8002.Definitions  

Title 14, §8003.Federal swimming pool and spa drain cover standard        

Title 14, § 8008. Applicability          

 

XIII.     U.S. CONSUMER PRODUCT SAFETY COMMISSION

#327.           Public Playground Safety Checklist     

 

 

I.                DAVIS‑STIRLING COMMON INTEREST DEVELOPMENT ACT

 

§1350.       Citation

 

This title shall be known and may be cited as the Davis‑Stirling Common Interest Development Act.

 

§1350.7.    Delivery of Documents

 

(a)              This section applies to delivery of a document listed in Section 1363.005 or to the extent the section is made applicable by another provision of this title.

 

(b)              A document shall be delivered by one or more of the following methods:

 

(1)              Personal delivery.

 

(2)              First‑class mail, postage prepaid, addressed to a member at the address last shown on the books of the association or otherwise provided by the member. Delivery is deemed to be complete on deposit into the United States mail.

 

(3)              E‑mail, facsimile, or other electronic means, if the recipient has agreed to that method of delivery. The agreement obtained by the association shall be consistent with the conditions for obtaining consumer consent described in Section 20 of the Corporations Code. If a document is delivered by electronic means, delivery is complete at the time of transmission.

 

(4)              By publication in a periodical that is circulated primarily to members of the association.

 

(5)              If the association broadcasts television programming for the purpose of distributing information on association business to its members, by inclusion in the programming.

 

(6)              A method of delivery provided in a recorded provision of the governing documents.

 

(7)              Any other method of delivery, provided that the recipient has agreed to that method of delivery.

 

(c)              A document may be included in or delivered with a billing statement, newsletter, or other document that is delivered by one of the methods provided in subdivision (b).

 

(d)             For the purposes of this section, an unrecorded provision of the governing documents providing for a particular method of delivery does not constitute agreement by a member of the association to that method of delivery.

 

§1351.       Definitions

 

As used in this title, the following terms have the following meanings:

 

(a)              "Association" means a nonprofit corporation or unincorporated association created for the purpose of managing a common interest development.

 

(b)              "Common area" means the entire common interest development except the separate interests therein. The estate in the common area may be a fee, a life estate, an estate for years, or any combination of the foregoing. However, the common area for a planned development specified in paragraph (2) of subdivision (k) may consist of mutual or reciprocal easement rights appurtenant to the separate interests.

 

(c)              "Common interest development" means any of the following:

 

(1)              A community apartment project.

 

(2)              A condominium project.

 

(3)              A planned development.

 

(4)              A stock cooperative.

 

(d)             "Community apartment project" means a development in which an undivided interest in land is coupled with the right of exclusive occupancy of any apartment located thereon.

 

(e)              "Condominium plan" means a plan consisting of (1) a description or survey map of a condominium project, which shall refer to or show monumentation on the ground, (2) a three-dimensional description of a condominium project, one or more dimensions of which may extend for an indefinite distance upwards or downwards, in sufficient detail to identify the common areas and each separate interest, and (3) a certificate consenting to the recordation of the condominium plan pursuant to this title signed and acknowledged by the following:

 

(A)             The record owner of fee title to that property included in the condominium project.

 

(B)             In the case of a condominium project which will terminate upon the termination of an estate for years, the certificate shall be signed and acknowledged by all lessors and lessees of the estate for years.

 

(C)             In the case of a condominium project subject to a life estate, the certificate shall be signed and acknowledged by all life tenants and remainder interests.

 

(D)             The certificate shall also be signed and acknowledged by either the trustee or the beneficiary of each recorded deed of trust, and the mortgagee of each recorded mortgage encumbering the property.

 

Owners of mineral rights, easements, rights-of-way, and other nonpossessory interests do not need to sign the condominium plan. Further, in the event a conversion to condominiums of a community apartment project or stock cooperative has been approved by the required number of owners, trustees, beneficiaries, and mortgagees pursuant to Section 66452.10 of the Government Code, the certificate need only be signed by those owners, trustees, beneficiaries, and mortgagees approving the conversion.

 

A condominium plan may be amended or revoked by a subsequently acknowledged recorded instrument executed by all the persons whose signatures would be required pursuant to this subdivision.

 

(f)              A "condominium project" means a development consisting of condominiums. A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof. The area within these boundaries may be filled with air, earth, or water, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support. The description of the unit may refer to (1) boundaries described in the recorded final map, parcel map, or condominium plan, (2) physical boundaries, either in existence, or to be constructed, such as walls, floors, and ceilings of a structure or any portion thereof, (3) an entire structure containing one or more units, or (4) any combination thereof. The portion or portions of the real property held in undivided interest may be all of the real property, except for the separate interests, or may include a particular three-dimensional portion thereof, the boundaries of which are described on a recorded final map, parcel map, or condominium plan. The area within these boundaries may be filled with air, earth, or water, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support. An individual condominium within a condominium project may include, in addition, a separate interest in other portions of the real property.

 

(g)              "Declarant" means the person or group of persons designated in the declaration as declarant, or if no declarant is designated, the person or group of persons who sign the original declaration or who succeed to special rights, preferences, or privileges designated in the declaration as belonging to the signator of the original declaration.

 

(h)              "Declaration" means the document, however denominated, which contains the information required by Section 1353.

 

(i)               "Exclusive use common area" means a portion of the common areas designated by the declaration for the exclusive use of one or more, but fewer than all, of the owners of the separate interests and which is or will be appurtenant to the separate interest or interests.

 

(1)              Unless the declaration otherwise provides, any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patios, exterior doors, doorframes, and hardware incident thereto, screens and windows or other fixtures designed to serve a single separate interest, but located outside the boundaries of the separate interest, are exclusive use common areas allocated exclusively to that separate interest.

 

(2)              Notwithstanding the provisions of the declaration, internal and external telephone wiring designed to serve a single separate interest, but located outside the boundaries of the separate interest, are exclusive use common areas allocated exclusively to that separate interest.

 

(j)               "Governing documents" means the declaration and any other documents, such as bylaws, operating rules of the association, articles of incorporation, or articles of association, which govern the operation of the common interest development or association.

 

(k)              "Planned development" means a development (other than a community apartment project, a condominium project, or a stock cooperative) having either or both of the following features:

 

(1)              The common area is owned either by an association or in common by the owners of the separate interests who possess appurtenant rights to the beneficial use and enjoyment of the common area.

 

(2)              A power exists in the association to enforce an obligation of an owner of a separate interest with respect to the beneficial use and enjoyment of the common area by means of an assessment which may become a lien upon the separate interests in accordance with Section 1367 or 1367.1.

 

( l )             "Separate interest" has the following meanings:

 

(1)              In a community apartment project, "separate interest" means the exclusive right to occupy an apartment, as specified in subdivision (d).

 

(2)              In a condominium project, "separate interest" means an individual unit, as specified in subdivision (f).

 

(3)              In a planned development, "separate interest" means a separately owned lot, parcel, area, or space.

 

(4)              In a stock cooperative, "separate interest" means the exclusive right to occupy a portion of the real property, as specified in subdivision (m).

 

Unless the declaration or condominium plan, if any exists, otherwise provides, if walls, floors, or ceilings are designated as boundaries of a separate interest, the interior surfaces of the perimeter walls, floors, ceilings, windows, doors, and outlets located within the separate interest are part of the separate interest and any other portions of the walls, floors, or ceilings are part of the common areas.

 

The estate in a separate interest may be a fee, a life estate, an estate for years, or any combination of the foregoing.

 

(m)             "Stock cooperative" means a development in which a corporation is formed or availed of, primarily for the purpose of holding title to, either in fee simple or for a term of years, improved real property, and all or substantially all of the shareholders of the corporation receive a right of exclusive occupancy in a portion of the real property, title to which is held by the corporation. The owners' interest in the corporation, whether evidenced by a share of stock, a certificate of membership, or otherwise, shall be deemed to be an interest in a common interest development and a real estate development for purposes of subdivision (f) of Section 25100 of the Corporations Code.

 

A "stock cooperative" includes a limited equity housing cooperative which is a stock cooperative that meets the criteria of Section 817.

 

§1352.       Application of Title; Creation of Common Interest Development

 

This title applies and a common interest development is created whenever a separate interest coupled with an interest in the common area or membership in the association is, or has been, conveyed, provided all of the following are recorded:

 

(a)              A declaration.

 

(b)              A condominium plan, if any exists.

 

(c)              A final map or parcel map, if Division 2 (commencing with Section 66410) of Title 7 of the Government Code requires the recording of either a final map or parcel map for the common interest development.

 

§1352.5.    Restrictive Covenant; Deletion From Declaration or Other Governing Document

 

(a)              No declaration or other governing document shall include a restrictive covenant in violation of Section 12955 of the Government Code.

 

(b)              Notwithstanding any other provision of law or provision of the governing documents, the board of directors of an association, without approval of the owners, shall amend any declaration or other governing document that includes a restrictive covenant prohibited by this section to delete the restrictive covenant, and shall restate the declaration or other governing document without the restrictive covenant but with no other change to the declaration or governing document.

 

(c)              If after providing written notice to an association requesting that the association delete a restrictive covenant that violates subdivision (a), and the association fails to delete the restrictive covenant within 30 days of receiving the notice, the Department of Fair Employment and Housing, a city or county in which a common interest development is located, or any person may bring an action against the association for injunctive relief to enforce subdivision (a). The court may award attorney's fees to the prevailing party.

 

§1353.       Declaration; Contents; Notice of Airport in Vicinity

 

(a)(1)         A declaration, recorded on or after January 1, 1986, shall contain a legal description of the common interest development, and a statement that the common interest development is a community apartment project, condominium project, planned development, stock cooperative, or combination thereof. The declaration shall additionally set forth the name of the association and the restrictions on the use or enjoyment of any portion of the common interest development that are intended to be enforceable equitable servitudes.  If the property is located within an airport influence area, a declaration, recorded after January 1, 2004 shall contain the following statement:

 

“NOTICE OF AIRPORT IN VICINITY

 

This property is presently located in the vicinity of an airport, within what is known as an airport influence area.  For that reason, the property may be subject to some of the annoyances or inconveniences associated with proximity to airport operations (for example: noise, vibration, or odors).  Individual sensitivities to those annoyances can vary from person to person.  You may wish to consider what airport annoyances, if any, are associated with the property before you complete your purchase and determine whether they are acceptable to you.”

 

(2)              For purposes of this section, an “airport influence area,” also known as an  “airport referral area,” is the area in which current or future airport-related noise, overflight, safety, or airspace protection factors may significantly affect land uses or necessitate restrictions on those uses as determined by an airport land use commission.

 

(3)              If the property is within the San Francisco Bay Conservation and Development Commission jurisdiction, as described in Section 66610 of the Government Code, a declaration recorded on or after January 1, 2006, shall contain the following notice:

 

“NOTICE OF SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSION JURISDICTION

 

This property is located within the jurisdiction of the San Francisco Bay Conservation and Development Commission. Use and development of property within the commission's jurisdiction may be subject to special regulations, restrictions, and permit requirements. You may wish to investigate and determine whether they are acceptable to you and your intended use of the property before you complete your transaction.”

 

(4)              The statement in a declaration acknowledging that a property is located in an airport influence area or within the jurisdiction of the San Francisco Bay Conservation and Development Commission does not constitute a title defect, lien, or encumbrance.

 

(b)              The declaration may contain any other matters the original signator of the declaration or the owners consider appropriate.

 

§1353.5     Display of the United States Flag by Owner On or In Owner’s Separate Interest or Within Exclusive Use Common Area

 

(a)              Except as required for the protection of the public health or safety, no declaration or other governing document shall limit or prohibit, or be construed to limit or prohibit, the display of the flag of the United States by an owner on or in the owner's separate interest or within the owner's exclusive use common area, as defined in Section 1351.

 

(b)              For purposes of this section, "display of the flag of the United States" means a flag of the United States made of fabric, cloth, or paper displayed from a staff or pole or in a window, and does not mean a depiction or emblem of the flag of the United States made of lights, paint, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component.

 

(c)              In any action to enforce this section, the prevailing party shall be awarded reasonable attorneys' fees and costs.   

 

§1353.6     Display of Noncommercial Signs, Posters, Flags, and Banners

 

(a)              The governing documents, including the operating rules, may not prohibit posting or displaying of noncommercial signs, posters, flags, or banners on or in an owner's separate interest, except as required for the protection of public health or safety or if the posting or display would violate a local, state, or federal law.

 

(b)              For purposes of this section, a noncommercial sign, poster, flag, or banner may be made of paper, cardboard, cloth, plastic, or fabric, and may be posted or displayed from the yard, window, door, balcony, or outside wall of the separate interest, but may not be made of lights, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component, or include the painting of architectural surfaces.

 

(c)              An association may prohibit noncommercial signs and posters that are more than 9 square feet in size and noncommercial flags or banners that are more than 15 square feet in size.

 

§1353.7.    Common interest developments; roof installation and repair; governing documents.

 

(a)              No common interest development may require a homeowner to install or repair a roof in a manner that is in violation of Section 13132.7 of the Health and Safety Code.

 

(b)              Governing documents of a common interest development located within a very high fire severity zone, as designated by the Director of Forestry and Fire Protection pursuant to Article 9 (commencing with Section 4201) of Chapter 1 of Part 2 of Division 4 of the Public Resources Code or by a local agency pursuant to Chapter 6.8 (commencing with Section 51175) of Part 1 of Division 1 of Title 5 of the Government Code, shall allow for at least one type of fire retardant roof covering material that meets the requirements of Section 13132.7 of the Health and Safety Code.

 

§1353.8.    Architectural guidelines; use of low water-using plants as a group

 

(a)              Notwithstanding any other law, a provision of any of the governing documents of a common interest development shall be void and unenforceable if it does any of the following:

 

(1)              Prohibits, or includes conditions that have the effect of prohibiting, the use of low water‑using plants as a group.

 

(2)              Has the effect of prohibiting or restricting compliance with either of the following:

 

(A)             A water‑efficient landscape ordinance adopted or in effect pursuant to subdivision (c) of Section 65595 of the Government Code.

 

(B)             Any regulation or restriction on the use of water adopted pursuant to Section 353 or 375 of the Water Code.

 

(b)              This section shall not prohibit an association from applying landscaping rules and regulations established in the governing documents, to the extent the rules and regulations fully conform with the requirements of subdivision (a).

 

§1354.       Covenants and Restrictions in Declaration as Equitable Servitudes; Enforcement;  Alternative Dispute Resolution

 

(a)              The covenants and restrictions in the declaration shall be enforceable equitable servitudes, unless unreasonable, and shall inure to the benefit of and bind all owners of separate interests in the development. Unless the declaration states otherwise, these servitudes may be enforced by any owner of a separate interest or by the association, or by both.

 

(b)              A governing document other than the declaration may be enforced by the association against an owner of a separate interest or by an owner of a separate interest against the association.

 

(c)              In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney's fees and costs.

 

§1355.       Amendment of Declaration

 

(a)              The declaration may be amended pursuant to the governing documents or this title. Except as provided in Section 1356, an amendment is effective after (1) the approval of the percentage of owners required by the governing documents has been given, (2) that fact has been certified in a writing executed and acknowledged by the officer designated in the declaration or by the association for that purpose, or if no one is designated, by the president of the association, and (3) that writing has been recorded in each county in which a portion of the common interest development is located.

 

(b)              Except to the extent that a declaration provides by its express terms that it is not amendable, in whole or in part, a declaration which fails to include provisions permitting its amendment at all times during its existence may be amended at any time. For purposes of this subdivision, an amendment is only effective after (1) the proposed amendment has been distributed to all of the owners of separate interests in the common interest development by first‑class mail postage prepaid or personal delivery not less than 15 days and not more than 60 days prior to any approval being solicited; (2) the approval of owners representing more than 50 percent, or any higher percentage required by the declaration for the approval of an amendment to the declaration, of the separate interests in the common interest development has been given, and that fact has been certified in a writing, executed and acknowledged by an officer of the association; and (3) the amendment has been recorded in each county in which a portion of the common interest development is located. A copy of any amendment adopted pursuant to this subdivision shall be distributed by first‑class mail postage prepaid or personal delivery to all of the owners of separate interest immediately upon its recordation.

 

§1355.5.    Amendment of Governing Documents to Delete Construction or Marketing  Provisions After Completion by Developer; Requirements

 

(a)              Notwithstanding any provisions of the governing documents of a common interest development to the contrary, the board of directors of the association may, after the developer of the common interest development has completed construction of the development, has terminated construction activities, and has terminated his or her marketing activities for the sale, lease, or other disposition of separate interests within the development, adopt an amendment deleting from any of the governing documents any provision which is unequivocally designed and intended, or which by its nature can only have been designed or intended, to facilitate the developer in completing the construction or marketing of the development. However, provisions of the governing documents relative to a particular construction or marketing phase of the development may not be deleted under the authorization of this subdivision until that construction or marketing phase has been completed.

 

(b)              The provisions which may be deleted by action of the board shall be limited to those which provide for access by the developer over or across the common area for the purposes of (a) completion of construction of the development, and (b) the erection, construction, or maintenance of structures or other facilities designed to facilitate the completion of construction or marketing of separate interests.

 

(c)              At least 30 days prior to taking action pursuant to subdivision (a), the board of directors of the association shall mail to all owners of the separate interests, by first class mail, (1) a copy of all amendments to the governing documents proposed to be adopted under subdivision (a) and (2) a notice of the time, date, and place the board of directors will consider adoption of the amendments. The board of directors of an association may consider adoption of amendments to the governing documents pursuant to subdivision (a) only at a meeting which is open to all owners of the separate interests in the common interest development, who shall be given opportunity to make comments thereon. All deliberations of the board of directors on any action proposed under subdivision (a) shall only be conducted in such an open meeting.

 

(d)             The board of directors of the association may not amend the governing documents pursuant to this section without the approval of the owners, casting a majority of the votes at a meeting or election of the association constituting a quorum and conducted in accordance with Chapter 5 (commencing with Section 7510) of Part 3 of Division 2, of Title 1 of, and Section 7613 of, the Corporations Code. For the purposes of this section, "quorum" means more than 50 percent of the owners who own no more than two separate interests in the development.

 

§1356.       Amendment of Declaration; Petition; Contents; Filing; Findings by Court; Power of Court to Approve Amendment; Recording Amendment; Mailing

 

(a)              If in order to amend a declaration, the declaration requires owners having more than 50 percent of the votes in the association, in a single class voting structure, or owners having more than 50 percent of the votes in more than one class in a voting structure with more than one class, to vote in favor of the amendment, the association, or any owner of a separate interest, may petition the superior court of the county in which the common interest development is located for an order reducing the percentage of the affirmative votes necessary for such an amendment. The petition shall describe the effort that has been made to solicit approval of the association members in the manner provided in the declaration, the number of affirmative and negative votes actually received, the number or percentage of affirmative votes required to effect the amendment in accordance with the existing declaration, and other matters the petitioner considers relevant to the court's determination. The petition shall also contain, as exhibits thereto, copies of all of the following:

 

(1)              The governing documents.

 

(2)              A complete text of the amendment.

 

(3)              Copies of any notice and solicitation materials utilized in the solicitation of owner approvals.

 

(4)              A short explanation of the reason for the amendment.

 

(5)              Any other documentation relevant to the court's determination.

 

(b)              Upon filing the petition, the court shall set the matter for hearing and issue an ex parte order setting forth the manner in which notice shall be given.

 

(c)              The court may, but shall not be required to, grant the petition if it finds all of the following:

 

(1)              The petitioner has given not less than 15 days written notice of the court hearing to all members of the association, to any mortgagee of a mortgage or beneficiary of a deed of trust who is entitled to notice under the terms of the declaration, and to the city, county, or city and county in which the common interest development is located that is entitled to notice under the terms of the declaration.

 

(2)              Balloting on the proposed amendment was conducted in accordance with all applicable provisions of the governing documents.

 

(3)              A reasonably diligent effort was made to permit all eligible members to vote on the proposed amendment.

 

(4)              Owners having more than 50 percent of the votes, in a single class voting structure, voted in favor of the amendment. In a voting structure with more than one class, where the declaration requires a majority of more than one class to vote in favor of the amendment, owners having more than 50 percent of the votes of each class required by the declaration to vote in favor of the amendment voted in favor of the amendment.

 

(5)              The amendment is reasonable.

 

(6)              Granting the petition is not improper for any reason stated in subdivision (e).

 

(d)             If the court makes the findings required by subdivision (c), any order issued pursuant to this section may confirm the amendment as being validly approved on the basis of the affirmative votes actually received during the balloting period or the order may dispense with any requirement relating to quorums or to the number or percentage of votes needed for approval of the amendment that would otherwise exist under the governing documents.

 

(e)              Subdivisions (a) to (d), inclusive, notwithstanding, the court shall not be empowered by this section to approve any amendment to the declaration that:

 

(1)              Would change provisions in the declaration requiring the approval of owners having more than 50 percent of the votes in more than one class to vote in favor of an amendment, unless owners having more than 50 percent of the votes in each affected class approved the amendment.

 

(2)              Would eliminate any special rights, preferences, or privileges designated in the declaration as belonging to the declarant, without the consent of the declarant.

 

(3)              Would impair the security interest of a mortgagee of a mortgage or the beneficiary of a deed of trust without the approval of the percentage of the mortgagees and beneficiaries specified in the declaration, if the declaration requires the approval of a specified percentage of the mortgagees and beneficiaries.

 

(f)              An amendment is not effective pursuant to this section until the court order and amendment have been recorded in every county in which a portion of the common interest development is located. The amendment may be acknowledged by, and the court order and amendment may be recorded by, any person designated in the declaration or by the association for that purpose, or if no one is designated for that purpose, by the president of the association. Upon recordation of the amendment and court order, the declaration, as amended in accordance with this section, shall have the same force and effect as if the amendment were adopted in compliance with every requirement imposed by the governing documents.

 

(g)              Within a reasonable time after the amendment is recorded the association shall  mail a copy of the amendment to each member of the association, together with a statement that the amendment has been recorded.

 

§1357.       Extension of Term of Declaration

 

(a)              The Legislature finds that there are common interest developments that have been created with deed restrictions which do not provide a means for the property owners to extend the term of the declaration. The Legislature further finds that covenants and restrictions, contained in the declaration, are an appropriate method for protecting the common plan of developments and to provide for a mechanism for financial support for the upkeep of common areas including, but not limited to, roofs, roads, heating systems, and recreational facilities. If declarations terminate prematurely, common interest developments may deteriorate and the housing supply of affordable units could be impacted adversely.

 

The Legislature further finds and declares that it is in the public interest to provide a vehicle for extending the term of the declaration if owners having more than 50 percent of the votes in the association choose to do so.

 

(b)              A declaration which specifies a termination date, but which contains no provision for extension of the termination date, may be extended by the approval of owners having more than 50 percent of the votes in the association or any greater percentage specified in the declaration for an amendment thereto. If the approval of owners having more than 50 percent of the votes in the association is required to amend the declaration, the term of the declaration may be extended in accordance with Section 1356.

 

(c)              Any amendment to a declaration made in accordance with subdivision (b) shall become effective upon recordation in accordance with Section 1355.

 

(d)             No single extension of the terms of the declaration made pursuant to this section shall exceed the initial term of the declaration or 20 years, whichever is less. However, more than one extension may occur pursuant to this section.

 

§1357.100.                  Operating Rules; Defined

 

As used in this article:

 

(a)              "Operating rule" means a regulation adopted by the board of directors of the association that applies generally to the management and operation of the common interest development or the conduct of the business and affairs of the association.

 

(b)              "Rule change" means the adoption, amendment, or repeal of an operating rule by the board of directors of the association.

 

§1357.110.                  Validity of Operating Rules; Requirements

 

An operating rule is valid and enforceable only if all of the following requirements are satisfied:

 

(a)              The rule is in writing.

 

(b)              The rule is within the authority of the board of directors of the association conferred by law or by the declaration, articles of incorporation or association, or bylaws of the association.

 

(c)              The rule is not inconsistent with governing law and the declaration, articles of incorporation or association, and bylaws of the association.

 

(d)             The rule is adopted, amended, or repealed in good faith and in substantial compliance with the requirements of this article.

 

(e)              The rule is reasonable.

 

§1357.120.                  Rule Changes Subject to Reversal by Members

 

(a)              Sections 1357.130 and 1357.140 only apply to an operating rule that relates to one or more of the following subjects:

 

(1)              Use of the common area or of an exclusive use common area.

 

(2)              Use of a separate interest, including any aesthetic or architectural standards that govern alteration of a separate interest.

 

(3)              Member discipline, including any schedule of monetary penalties for violation of the governing documents and any procedure for the imposition of penalties.

 

(4)              Any standards for delinquent assessment payment plans.

 

(5)              Any procedures adopted by the association for resolution of disputes.

(6)              Any procedures for reviewing and approving or disapproving a proposed physical change to a member's separate interest or to the common area.

 

(7)              Procedures for elections.

 

(b)              Sections 1357.130 and 1357.140 do not apply to the following actions by the board of directors of an association:

 

(1)              A decision regarding maintenance of the common area.

 

(2)              A decision on a specific matter that is not intended to apply generally.

 

(3)              A decision setting the amount of a regular or special assessment.

 

(4)              A rule change that is required by law, if the board of directors has no discretion as to the substantive effect of the rule change.

 

(5)              Issuance of a document that merely repeats existing law or the governing documents.

 

§1357.130.                  Notice of Proposed Rule Change to Members

 

(a)              The board of directors shall provide written notice of a proposed rule change to the members at least 30 days before making the rule change. The notice shall include the text of the proposed rule change and a description of the purpose and effect of the proposed rule change. Notice is not required under this subdivision if the board of directors determines that an immediate rule change is necessary to address an imminent threat to public health or safety or imminent risk of substantial economic loss to the association.

 

(b)              A decision on a proposed rule change shall be made at a meeting of the board of directors, after consideration of any comments made by association members.

 

(c)              As soon as possible after making a rule change, but not more than 15 days after making the rule change, the board of directors shall deliver notice of the rule change to every association member. If the rule change was an emergency rule change made under subdivision (d), the notice shall include the text of the rule change, a description of the purpose and effect of the rule change, and the date that the rule change expires.

 

(d)             If the board of directors determines that an immediate rule change is required to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the association, it may make an emergency rule change; and no notice is required, as specified in subdivision (a). An emergency rule change is effective for 120 days, unless the rule change provides for a shorter effective period. A rule change made under this subdivision may not be readopted under this subdivision.

 

(e)              A notice required by this section is subject to Section 1350.7.

 

§1357.140.                  Member Right to Reverse Rule Change; Special Meeting

 

(a)              Members of an association owning 5 percent or more of the separate interests may call a special meeting of the members to reverse a rule change.

 

(b)              A special meeting of the members may be called by delivering a written request to the president or secretary of the board of directors, after which the board shall deliver notice of the meeting to the association's members and hold the meeting in conformity with Section 7511 of the Corporations Code. The written request may not be delivered more than 30 days after the members of the association are notified of the rule change. Members are deemed to have been notified of a rule change on delivery of notice of the rule change, or on enforcement of the resulting rule, whichever is sooner. For the purposes of Section 8330 of the Corporations Code, collection of signatures to call a special meeting under this section is a purpose reasonably related to the interests of the members of the association. A member request to copy or inspect the membership list solely for that purpose may not be denied on the grounds that the purpose is not reasonably related to the member's interests as a member.

 

(c)              The rule change may be reversed by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum), or if the declaration or bylaws require a greater proportion, by the affirmative vote or written ballot of the proportion required. In lieu of calling the meeting described in this section, the board may distribute a written ballot to every member of the association in conformity with the requirements of Section 7513 of the Corporations Code.

 

(d)             Unless otherwise provided in the declaration or bylaws, for the purposes of this section, a member may cast one vote per separate interest owned.

 

(e)              A meeting called under this section is governed by Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of, and Sections 7612 and 7613 of, the Corporations Code.

 

(f)              A rule change reversed under this section may not be readopted for one year after the date of the meeting reversing the rule change. Nothing in this section precludes the board of directors from adopting a different rule on the same subject as the rule change that has been reversed.

 

(g)              As soon as possible after the close of voting, but not more than 15 days after the close of voting, the board of directors shall provide notice of the results of a member vote held pursuant to this section to every association member. Delivery of notice under this subdivision is subject to Section 1350.7.

 

(h)              This section does not apply to an emergency rule change made under subdivision (d) of Section 1357.130.

 

§1357.150.                  Rule Changes; Applicable Dates

 

(a)              This article applies to a rule change commenced on or after January 1, 2004.

(b)              Nothing in this article affects the validity of a rule change commenced before January 1, 2004.

 

(c)              For the purposes of this section, a rule change is commenced when the board of directors of the association takes its first official action leading to adoption of the rule change.

 

§1358.       Interests Included in Conveyance, Judicial Sale or Transfer of Separate Interests; Transfers of Exclusive Use Areas; Restrictions Upon Severability of Component Interests

 

(a)              In a community apartment project, any conveyance, judicial sale, or other voluntary or involuntary transfer of the separate interest includes the undivided interest in the community apartment project. Any conveyance, judicial sale, or other voluntary or involuntary transfer of the owner's entire estate also includes the owner's membership interest in the association.

 

(b)              In a condominium project the common areas are not subject to partition, except as provided in Section 1359. Any conveyance, judicial sale, or other voluntary or involuntary transfer of the separate interest includes the undivided interest in the common areas. Any conveyance, judicial sale, or other voluntary or involuntary transfer of the owner's entire estate also includes the owner's membership interest in the association.

 

(c)              In a planned development, any conveyance, judicial sale, or other voluntary or involuntary transfer of the separate interest includes the undivided interest in the common areas, if any exist. Any conveyance, judicial sale, or other voluntary or involuntary transfer of the owner's entire estate also includes the owner's membership interest in the association.

 

(d)             In a stock cooperative, any conveyance, judicial sale, or other voluntary or involuntary transfer of the separate interest includes the ownership interest in the corporation, however evidenced. Any conveyance, judicial sale, or other voluntary or involuntary transfer of the owner's entire estate also includes the owner's membership interest in the association.

 

Nothing in this section prohibits the transfer of exclusive use areas, independent of any other interest in a common interest subdivision, if authorization to separately transfer exclusive use areas is expressly stated in the declaration and the transfer occurs in accordance with the terms of the declaration.

 

Any restrictions upon the severability of the component interests in real property which are contained in the declaration shall not be deemed conditions repugnant to the interest created within the meaning of Section 711 of the Civil Code. However, these restrictions shall not extend beyond the period in which the right to partition a project is suspended under Section 1359.

 

§1359.       Restrictions on Partition

 

(a)              Except as provided in this section, the common areas in a condominium project shall remain undivided, and there shall be no judicial partition thereof. Nothing in this section shall be deemed to prohibit partition of a cotenancy in a condominium.

 

(b)              The owner of a separate interest in a condominium project may maintain a partition action as to the entire project as if the owners of all of the separate interests in the project were tenants in common in the entire project in the same proportion as their interests in the common areas. The court shall order partition under this subdivision only by sale of the entire condominium project and only upon a showing of one of the following:

 

(1)              More than three years before the filing of the action, the condominium project was damaged or destroyed, so that a material part was rendered unfit for its prior use, and the condominium project has not been rebuilt or repaired substantially to its state prior to the damage or destruction.

 

(2)              Three‑fourths or more of the project is destroyed or substantially damaged and owners of separate interests holding in the aggregate more than a 50‑percent interest in the common areas oppose repair or restoration of the project.

 

(3)              The project has been in existence more than 50 years, is obsolete and uneconomic, and owners of separate interests holding in the aggregate more than a 50‑percent interest in the common area oppose repair or restoration of the project.

 

(4)              The conditions for such a sale, set forth in the declaration, have been met.

 

§1360.       Modification of Unit By Owner; Facilitation of Access for Handicapped; Approval by Project Association

 

(a)              Subject to the provisions of the governing documents and other applicable provisions of law, if the boundaries of the separate interest are contained within a building, the owner of the separate interest may do the following:

 

(1)              Make any improvements or alterations within the boundaries of his or her separate interest that do not impair the structural integrity or mechanical systems or lessen the  support of any portions of the common interest development.

 

(2)              Modify a unit in a condominium project, at the owner's expense, to facilitate access for persons who are blind, visually handicapped, deaf, or physically disabled, or to alter conditions which could be hazardous to these persons. These modifications may also include modifications of the route from the public way to the door of the unit for the purposes of this paragraph if the unit is on the ground floor or already accessible by an existing ramp or elevator. The right granted by this paragraph is subject to the following conditions:

 

(A)             The modifications shall be consistent with applicable building code requirements.

 

(B)             The modifications shall be consistent with the intent of otherwise applicable provisions of the governing documents pertaining to safety or aesthetics.

 

(C)             Modifications external to the dwelling shall not prevent reasonable passage by other residents, and shall be removed by the owner when the unit is no longer occupied by persons requiring those modifications who are blind, visually handicapped, deaf, or physically disabled.

 

(D)             Any owner who intends to modify a unit pursuant to this paragraph shall submit his or her plans and specifications to the association of the condominium project for review to determine whether the modifications will comply with the provisions of this paragraph. The association shall not deny approval of the proposed modifications under this paragraph without good cause.

 

(b)              Any change in the exterior appearance of a separate interest shall be in accordance with the governing documents and applicable provisions of law.

 

§1360.5.    Pets in Common Interest Developments

 

(a)              No governing documents shall prohibit the owner of a separate interest within a common interest development from keeping at least one pet within the common interest development, subject to reasonable rules and regulations of the association.  This section

may not be construed to affect any other rights provided by law to an owner of a separate interest to keep a pet within the development.

 

(b)              For purposes of this section, "pet" means any domesticated bird, cat, dog, aquatic animal kept within an aquarium, or other animal as agreed to between the association and the homeowner.

 

(c)              If the association implements a rule or regulation restricting the number of pets an owner may keep, the new rule or regulation shall not apply to prohibit an owner from continuing to keep any pet that the owner currently keeps in his or her separate interest if the pet otherwise conforms with the previous rules or regulations relating to pets.

 

(d)             For the purposes of this section, "governing documents" shall include, but are not limited to, the conditions, covenants, and restrictions of the common interest development, and the bylaws, rules, and regulations of the association.

 

(e)              This section shall become operative on January 1, 2001, and shall only apply to governing documents entered into, amended, or otherwise modified on or after that date.

 

§1361.       Rights and Easements of Ingress, Egress, and Support

 

Unless the declaration otherwise provides:

 

(a)              In a community apartment project and condominium project, and in those planned developments with common areas owned in common by the owners of the separate interests, there are appurtenant to each separate interest nonexclusive rights of ingress, egress, and support, if necessary, through the common areas. The common areas are subject to these rights.

 

(b)              In a stock cooperative, and in a planned development with common areas owned by the association, there is an easement for ingress, egress, and support, if necessary, appurtenant to each separate interest. The common areas are subject to these easements.

 

§1361.5.    Physical Access to Owner or Occupant’s Separate Interest

 

Except as otherwise provided in law, an order of the court, or an order pursuant to a final and binding arbitration decision, an association may not deny an owner or occupant physical access to his or her separate interest, either by restricting access through the common areas to the owner's separate interest, or by restricting access solely to the owner's separate interest.

 

§1362.       Ownership of Common Areas

 

Unless the declaration otherwise provides, in a condominium project, or in a planned development in which the common areas are owned by the owners of the separate interests, the common areas are owned as tenants in common, in equal shares, one for each unit or lot.

 

§1363.       Community Association Management; Schedule of Monetary Penalties for Violations

 

(a)              A common interest development shall be managed by an association that may be incorporated or unincorporated. The association may be referred to as a community association.

 

(b)              An association, whether incorporated or unincorporated, shall prepare a budget pursuant to Section 1365 and disclose information, if requested, in accordance with Section 1368.

 

(c)              Unless the governing documents provide otherwise, and regardless of whether the association is incorporated or unincorporated, the association may exercise the powers granted to a nonprofit mutual benefit corporation, as enumerated in Section 7140 of the Corporations Code, except that an unincorporated association may not adopt or use a corporate seal or issue membership certificates in accordance with Section 7313 of the Corporations Code.

 

The association, whether incorporated or unincorporated, may exercise the powers granted to an association by Section 383 of the Code of Civil Procedure and the powers granted to the association in this title.

 

(d)             Meetings of the membership of the association shall be conducted in accordance with a recognized system of parliamentary procedure or any parliamentary procedures the association may adopt.

 

(e)              Notwithstanding any other provision of law, notice of meetings of the members shall specify those matters the board intends to present for action by the members, but, except as otherwise provided by law, any proper matter may be presented at the meeting for action.

 

(f)              Members of the association shall have access to association records, including accounting books and records and membership lists, in accordance with Article 3 (commencing with Section 8330) of Chapter 13 of Part 3 of Division 2 of Title 1 of the Corporations Code.  The members of the association shall have the same access to the operating rules of the Association as they have to the accounting books and records of the association.

 

(g)              If an association adopts or has adopted a policy imposing any monetary penalty, including any fee, on any association member for a violation of the governing documents or rules of the association, including any monetary penalty relating to the activities of a guest or invitee of a member, the board of directors shall adopt and distribute to each member, by personal delivery or first‑class mail, a schedule of the monetary penalties that may be assessed for those violations, which shall be in accordance with authorization for member discipline contained in the governing documents. The board of directors shall not be required to distribute any additional schedules of monetary penalties unless there are changes from the schedule that was adopted and distributed to the members pursuant to this subdivision.

(h)              When the board of directors is to meet to consider or impose discipline upon a member, the board shall notify the member in writing, by either personal delivery or first-class mail, at least 10 days prior to the meeting.  The notification shall contain, at a minimum, the date, time, and place of the meeting, the nature of the alleged violation for which a member may be disciplined, and a statement that the member has a right to attend and may address the board at the meeting.  The board of directors of the association shall meet in executive session if requested by the member being disciplined.

 

If the board imposes discipline on a member, the board shall provide the member a written notification of the disciplinary action, by either personal delivery or first-class mail, within 15 days following the action.  A disciplinary action shall not be effective against a member unless the board fulfills the requirements of this subdivision.

 

(i)               Whenever two or more associations have consolidated any of their functions under a joint neighborhood association or similar organization, members of each participating association shall be (1) entitled to attend all meetings of the joint association other than executive sessions, (2) given reasonable opportunity for participation in those meetings, and (3) entitled to the same access to the joint association's records as they are to the participating association's records.

 

(j)               Nothing in this section shall be construed to create, expand, or reduce the authority of the board of directors of an association to impose monetary penalties on an association member for a violation of the governing documents or rules of the association.

 

§1363.001.                  Board of Director On-Line Education

 

To the extent existing funds are available, the Department of Consumer Affairs and the Department of Real Estate shall develop an on-line education course for the board of directors of an association regarding the role, duties, laws, and responsibilities of board members and prospective board members, and the nonjudicial foreclosure process.

 

§1363.005.                  Disclosure Documents Index

 

The association shall, at the request of any member, distribute to the member, in the manner described in Section 1350.7, the following Disclosure Documents Index:

 

 

§1363.03.  Association Rules; Elections; Equal Access; Common Area Access; Qualifications; Procedures; Elections Inspector; Ballots; Proxies

 

(a)              An association shall adopt rules, in accordance with the procedures prescribed by Article 4 (commencing with Section 1357.100) of Chapter 2, that do all of the following:

 

(1)              Ensure that if any candidate or member advocating a point of view is provided access to association media, newsletters, or Internet Web sites during a campaign, for purposes that are reasonably related to that election, equal access shall be provided to all candidates and members advocating a point of view, including those not endorsed by the board, for purposes that are reasonably related to the election. The association shall not edit or redact any content from these communications, but may include a statement specifying that the candidate or member, and not the association, is responsible for that content.

 

(2)              Ensure access to the common area meeting space, if any exists, during a campaign, at no cost, to all candidates, including those who are not incumbents, and to all members advocating a point of view, including those not endorsed by the board, for purposes reasonably related to the election.

 

(3)              Specify the qualifications for candidates for the board of directors and any other elected position, and procedures for the nomination of candidates, consistent with the governing documents. A nomination or election procedure shall not be deemed reasonable if it disallows any member of the association from nominating himself or herself for election to the board of directors.

 

(4)              Specify the qualifications for voting, the voting power of each membership, the authenticity, validity, and effect of proxies, and the voting period for elections, including the times at which polls will open and close, consistent with the governing documents.

 

(5)              Specify a method of selecting one or three independent third parties as inspector, or inspectors, of election utilizing one of the following methods:

 

(A)             Appointment of the inspector or inspectors by the board.

 

(B)             Election of the inspector or inspectors by the members of the association.

 

(C)             Any other method for selecting the inspector or inspectors.

 

(6)              Allow the inspector, or inspectors, to appoint and oversee additional persons to verify signatures and to count and tabulate votes as the inspector or inspectors deem appropriate, provided that the persons are independent third parties.

 

(b)              Notwithstanding any other law or provision of the governing documents, elections regarding assessments legally requiring a vote, election and removal of members of the association board of directors, amendments to the governing documents, or the grant of exclusive use of common area property pursuant to Section 1363.07 shall be held by secret ballot in accordance with the procedures set forth in this section.  A quorum shall be required only if so stated in the governing documents of the association or other provisions of law. If a quorum is required by the governing documents, each ballot received by the inspector of elections shall be treated as a member present at a meeting for purposes of establishing a quorum. An association shall allow for cumulative voting using the secret ballot procedures provided in this section, if cumulative voting is provided for in the governing documents.

 

(c)(1)         The association shall select an independent third party or parties as an inspector of election. The number of inspectors of election shall be one or three.

 

(2)              For the purposes of this section, an independent third party includes, but is not limited to, a volunteer poll worker with the county registrar of voters, a licensee of the California Board of Accountancy, or a notary public. An independent third party may be a member of the association, but may not be a member of the board of directors or a candidate for the board of directors or related to a member of the board of directors or a candidate for the board of directors. An independent third party may not be a person, business entity, or subdivision of a business entity who is currently employed or under contract to the association for any compensable services unless expressly authorized by rules of the association adopted pursuant to paragraph (5) of subdivision (a).

 

(3)              The inspector or inspectors of election shall do all of the following:

 

(A)             Determine the number of memberships entitled to vote and the voting power of each.

 

(B)             Determine the authenticity, validity, and effect of proxies, if any.

 

(C)             Receive ballots.

 

(D)             Hear and determine all challenges and questions in any way arising out of or in connection with the right to vote.

 

(E)             Count and tabulate all votes.

 

(F)             Determine when the polls shall close, consistent with the governing documents.

 

(G)             Determine the tabulated results of the election.

 

(H)             Perform any acts as may be proper to conduct the election with fairness to all members in accordance with this section, the Corporations Code, and all applicable rules of the association regarding the conduct of the election that are not in conflict with this section.

 

(4)              An inspector of election shall perform his or her duties impartially, in good faith, to the best of his or her ability, and as expeditiously as is practical. If there are three inspectors of election, the decision or act of a majority shall be effective in all respects as the decision or act of all. Any report made by the inspector or inspectors of election is prima facie evidence of the facts stated in the report.

 

(d) (1)        For purposes of this section, the following definitions shall apply:

 

(A)             "Proxy" means a written authorization signed by a member or the authorized representative of the member that gives another member or members the power to vote on behalf of that member.

 

(B)             "Signed" means the placing of the member's name on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the member or authorized representative of the member.

 

(2)              Proxies shall not be construed or used in lieu of a ballot. An association may use proxies if permitted or required by the bylaws of the association and if those proxies meet the requirements of this article, other laws, and the association's governing documents, but the association shall not be required to prepare or distribute proxies pursuant to this section.

 

(3)              Any instruction given in a proxy issued for an election that directs the manner in which the proxyholder is to cast the vote shall be set forth on a separate page of the proxy that can be detached and given to the proxyholder to retain. The proxyholder shall cast the member's vote by secret ballot. The proxy may be revoked by the member prior to the receipt of the ballot by the inspector of elections as described in Section 7613 of the Corporations Code.

 

(e)              Ballots and two preaddressed envelopes with instructions on how to return ballots shall be mailed by first-class mail or delivered by the association to every member not less than 30 days prior to the deadline for voting. In order to preserve confidentiality, a voter may not be identified by name, address, or lot, parcel, or unit number on the ballot. The association shall use as a model those procedures used by California counties for ensuring confidentiality of vote by mail ballots, including all of the following:

 

(1)              The ballot itself is not signed by the voter, but is inserted into an envelope that is sealed. This envelope is inserted into a second envelope that is sealed. In the upper left-hand corner of the second envelope, the voter shall sign his or her name, indicate his or her name, and indicate the address or separate interest identifier that entitles him or her to vote.

 

(2)              The second envelope is addressed to the inspector or inspectors of election, who will be tallying the votes. The envelope may be mailed or delivered by hand to a location specified by the inspector or inspectors of election. The member may request a receipt for delivery.

 

(f)              All votes shall be counted and tabulated by the inspector or inspectors of election or his or her designee in public at a properly noticed open meeting of the board of directors or members. Any candidate or other member of the association may witness the counting and tabulation of the votes. No person, including a member of the association or an employee of the management company, shall open or otherwise review any ballot prior to the time and place at which the ballots are counted and tabulated. The inspector of election, or his or her designee, may verify the member's information and signature on the outer envelope prior to the meeting at which ballots are tabulated. Once a secret ballot is received by the inspector of elections, it shall be irrevocable.

 

(g)              The tabulated results of the election shall be promptly reported to the board of directors of the association and shall be recorded in the minutes of the next meeting of the board of directors and shall be available for review by members of the association. Within 15 days of the election, the board shall publicize the tabulated results of the election in a communication directed to all members.

 

(h)              The sealed ballots at all times shall be in the custody of the inspector or inspectors of election or at a location designated by the inspector or inspectors until after the tabulation of the vote, and until the time allowed by Section 7527 of the Corporations Code for challenging the election has expired, at which time custody shall be transferred to the association. If there is a recount or other challenge to the election process, the inspector or inspectors of election shall, upon written request, make the ballots available for inspection and review by an association member or his or her authorized representative. Any recount shall be conducted in a manner that preserves the confidentiality of the vote.

 

(i)               After the transfer of the ballots to the association, the ballots shall be stored by the association in a secure place for no less than one year after the date of the election.

 

(j)               Notwithstanding any other provision of law, the rules adopted pursuant to this section may provide for the nomination of candidates from the floor of membership meetings or nomination by any other manner. Those rules may permit write-in candidates for ballots.

 

(k)              Except for the meeting to count the votes required in subdivision (f), an election may be conducted entirely by mail unless otherwise specified in the governing documents.

 

(l)               The provisions of this section apply to both incorporated and unincorporated associations, notwithstanding any contrary provision of the governing documents.

 

(m)             The procedures set forth in this section shall apply to votes cast directly by the membership, but do not apply to votes cast by delegates or other elected representatives.

 

(n)              In the event of a conflict between this section and the provisions of the Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code) relating to elections, the provisions of this section shall prevail.

 

(o)              The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2006.

 

§1363.04.  Use of Association Funds; Campaign Purposes Prohibited.

 

(a)              Association funds shall not be used for campaign purposes in connection with any association board election. Funds of the association shall not be used for campaign purposes in connection with any other association election except to the extent necessary to comply with duties of the association imposed by law.

 

(b)              For the purposes of this section, "campaign purposes" includes, but is not limited to, the following:

 

(1)              Expressly advocating the election or defeat of any candidate that is on the association election ballot.

 

(2)              Including the photograph or prominently featuring the name of any candidate on a communication from the association or its board, excepting the ballot and ballot materials, within 30 days of an election. This is not a campaign purpose if the communication is one for which subdivision (a) of Section 1363.03 requires that equal access be provided to another candidate or advocate.

 

§1363.05.  Open Meetings; Executive Session Exception; Minutes; Notice; Emergency Meeting

 

(a)              This section shall be known and may be cited as the Common Interest Development Open Meeting Act.

 

(b)              Any member of the association may attend meetings of the board of directors of the association, except when the board adjourns to executive session to consider litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member, upon the member's request, regarding the member's payment of assessments, as specified in Section 1367 or 1367.1. The board of directors of the association shall meet in executive session, if requested by a member who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session.

 

(c)              Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership.

 

(d)             The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of an association, other than an executive session, shall be available to members within 30 days of the meeting.  The minutes, proposed minutes, or summary minutes shall be distributed to any member of the association upon request and upon reimbursement of the association's costs for making that distribution.

 

(e)              Members of the association shall be notified in writing at the time that the pro forma budget required in Section 1365 is distributed, or at the time of any general mailing to the entire membership of the association, of their right to have copies of the minutes of meetings of the board of directors, and how and where those minutes may be obtained.

 

(f)              Unless the time and place of meeting is fixed by the bylaws, or unless the bylaws provide for a longer period of notice, members shall be given notice of the time and place of a meeting as defined in subdivision (j), except for an emergency meeting, at least four days prior to the meeting. Notice shall be given by posting the notice in a prominent place or places within the common area and by mail to any owner who had requested notification of board meetings by mail, at the address requested by the owner. Notice may also be given, by mail or delivery of the notice to each unit in the development or by newsletter or similar means of communication. The notice shall contain the agenda for the meeting.

 

(g)              An emergency meeting of the board may be called by the president of the association, or by any two members of the governing body other than the president, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by this section.

 

(h)              The board of directors of the association shall permit any member of the association to speak at any meeting of the association or the board of directors, except for meetings of the board held in executive session. A reasonable time limit for all members of the association to speak to the board of directors or before a meeting of the association shall be established by the board of directors.

 

(i)(1)          Except as described in paragraphs (2) to (4), inclusive, the board of directors of the association may not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit a resident who is not a member of the board from speaking on issues not on the agenda.

 

(2)              Notwithstanding paragraph (1), a member of the board of directors, a managing agent or other agent of the board of directors, or a member of the staff of the board of directors, may do any of the following:

 

(A)             Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).

 

(B)             Ask a question for clarification, make a brief announcement, or make a brief report on his or her own activities, whether in response to questions posed by a member of the association or based upon his or her own initiative.

 

(3)              Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:

 

(A)             Provide a reference to, or provide other resources for factual information to, its managing agent or other agents or staff.

 

(B)             Request its managing agent or other agents or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct its managing agent or other agents or staff to place a matter of business on a future agenda.

 

(C)             Direct its managing agent or other agents or staff to perform administrative tasks that are necessary to carry out this subdivision.

 

(4)(A)        Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:

 

(i)               Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.

 

(ii)              Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).

 

(iii)             The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.

 

(B)             Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting.

 

(j)               As used in this section, "meeting" includes any congregation of a majority of the members of the board at the same time and place to hear, discuss, or deliberate upon any item of business scheduled to be heard by the board, except those matters that may be discussed in executive session.

§1363.07.  Common Area; Exclusive Use Grant; Member Vote; Exceptions; Phased Development; Correction of Errors; Monetary Compensationtc \l3 "§1363.07. Common Area; Exclusive Use Grant; Member Vote; Exceptions; Phased Development; Correction of Errors; Monetary Compensation

 

(a)              After an association acquires fee title to, or any easement right over, a common area, unless the association's governing documents specify a different percentage, the affirmative vote of members owning at least 67 percent of the separate interests in the common interest development shall be required before the board of directors may grant exclusive use of any portion of that common area to any member, except for any of the following:

 

(1)              A reconveyance of all or any portion of that common area to the subdivider to enable the continuation of development that is in substantial conformance with a detailed plan of phased development submitted to the Real Estate Commissioner with the application for a public report.

 

(2)              Any grant of exclusive use that is in substantial conformance with a detailed plan of phased development submitted to the Real Estate Commissioner with the application for a public report or in accordance with the governing documents approved by the Real Estate Commissioner.

 

(3)              Any grant of exclusive use that is for any of the following reasons:

 

(A)             To eliminate or correct engineering errors in documents recorded with the county recorder or on file with a public agency or utility company.

 

(B)             To eliminate or correct encroachments due to errors in construction of any improvements.

 

(C)             To permit changes in the plan of development submitted to the Real Estate Commissioner in circumstances where the changes are the result of topography, obstruction, hardship, aesthetic considerations, or environmental conditions.

 

(D)             To fulfill the requirement of a public agency.

 

(E)             To transfer the burden of management and maintenance of any common area that is generally inaccessible and not of general use to the membership at large of the association.

 

(F)             Any grant in connection with an expressly zoned industrial or commercial development, or any grant within a subdivision of the type defined in Section 1373.

 

(b)              Any measure placed before the members requesting that the board of directors grant exclusive use of any portion of the common area shall specify whether the association will receive any monetary consideration for the grant and whether the association or the transferee will be responsible for providing any insurance coverage for exclusive use of the common area.

 

§1363.09.  Election Remedy; Civil Action; Costs; Penalty; Small Claims

 

(a)              A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by an association of which he or she is a member, including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues. Upon a finding that the election procedures of this article, or the adoption of and adherence to rules provided by Article 4 (commencing with Section 1357.100) of Chapter 2, were not followed, a court may void any results of the election.

 

(b)              A member who prevails in a civil action to enforce his or her rights pursuant to this article shall be entitled to reasonable attorney's fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member of the association equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.

 

(c)              A cause of action under Section 1363.03 with respect to access to association resources by a candidate or member advocating a point of view, the receipt of a ballot by a member, or the counting, tabulation, or reporting of, or access to, ballots for inspection and review after tabulation may be brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court.

 

§1363.1.    Prospective Managing Agent; Written Disclosures

 

(a)              A prospective managing agent of a common interest development shall provide a written statement to the board of directors of the association of a common interest development as soon as practicable, but in no event more than 90 days, before entering into a management agreement which shall contain all of the following information concerning the managing agent:

 

(1)              The names and business addresses of the owners or general partners of the managing agent. If the managing agent is a corporation, the written statement shall include the names and business addresses of the directors and officers and shareholders holding greater than 10 percent of the shares of the corporation.

 

(2)              Whether or not any relevant licenses such as architectural design, construction, engineering, real estate, or accounting have been issued by this state and are currently held by the persons specified in paragraph (1). If a license is currently held by any of those persons, the statement shall contain the following information:

 

(A)             What license is held.

 

(B)             The dates the license is valid.

 

(C)             The name of the licensee appearing on that license.

 

(3)              Whether or not any relevant professional certifications or designations such as architectural design, construction, engineering, real property management, or accounting are currently held by any of the persons specified in paragraph (1), including, but not limited to, professional common interest development manager. If any certification or designation is held, the statement shall include the following information:

 

(A)             What the certification or designation is and what entity issued it.

 

(B)             The dates the certification or designation is valid.

 

(C)             The names in which the certification or designation is held.

 

(b)              As used in this section, a "managing agent" is a person or entity who, for compensation or in expectation of compensation, exercises control over the assets of a common interest development. A "managing agent" does not include any of the following:

 

(1)              A full‑time employee of the association.

 

(2)              Any regulated financial institution operating within the normal course of its regulated business practice.

 

§1363.2.    Managing Agent; Deposit of Funds Received; Requirements; Separate Record; Commingling of Fundst

 

(a)              A managing agent of a common interest development who accepts or receives funds belonging to the association shall deposit all such funds that are not placed into an escrow account with a bank, savings association, or credit union or into an account under the control of the association, into a trust fund account maintained by the managing agent in a bank, savings association, or credit union in this state. All funds deposited by the managing agent in the trust fund account shall be kept in this state in a financial institution, as defined in Section 31041 of the Financial Code, which is insured by the federal government, and shall be maintained there until disbursed in accordance with written instructions from the association entitled to the funds.

 

(b)              At the written request of the board of directors of the association, the funds the  managing agent accepts or receives on behalf of the association shall be deposited into an interest‑bearing account in a bank, savings association, or credit union in this state, provided all of the following requirements are met:

 

(1)              The account is in the name of the managing agent as trustee for the association or in the name of the association.

 

(2)              All of the funds in the account are covered by insurance provided by an agency of the federal government.

 

(3)              The funds in the account are kept separate, distinct, and apart from the funds belonging to the managing agent or to any other person or entity for whom the managing agent holds funds in trust except that the funds of various associations may be commingled as permitted pursuant to subdivision (d).

 

(4)              The managing agent discloses to the board of directors of the association the nature of the account, how interest will be calculated and paid, whether service charges will be paid to the depository and by whom, and any notice requirements or penalties for withdrawal of funds from the account.

 

(5)              No interest earned on funds in the account shall inure directly or indirectly to the benefit of the managing agent or his or her employees.

 

(c)              The managing agent shall maintain a separate record of the receipt and disposition of all funds described in this section, including any interest earned on the funds.

 

(d)             The managing agent shall not commingle the funds of the association with his or her own money or with the money of others that he or she receives or accepts, unless all of the following requirements are met:

 

(1)              The managing agent commingled the funds of various associations on or before February 26, 1990, and has obtained a written agreement with the board of directors of each association that he or she will maintain a fidelity and surety bond in an amount that provides adequate protection to the associations as agreed upon by the managing agent and the board of directors of each association.

 

(2)              The managing agent discloses in the written agreement whether he or she is deriving benefits from the commingled account or the bank, credit union, or savings institution where the moneys will be on deposit.

 

(3)              The written agreement provided pursuant to this subdivision includes, but is not limited to, the name and address of the bonding companies, the amount of the bonds, and the expiration dates of the bonds.

 

(4)              If there are any changes in the bond coverage or the companies providing the coverage, the managing agent discloses that fact to the board of directors of each affected association as soon as practical, but in no event more than 10 days after the change.

 

(5)              The bonds assure the protection of the association and provide the association at least 10 days' notice prior to cancellation.

 

(6)              Completed payments on the behalf of the association are deposited within 24 hours or the next business day and do not remain commingled for more than 10 calendar days.

 

(e)              The prevailing party in an action to enforce this section shall be entitled to recover reasonable legal fees and court costs.

 

(f)              As used in this section, a "managing agent" is a person or entity, who for compensation or, in expectation of compensation, exercises control over the assets of the association. However, a "managing agent" does not include a full‑time employee of the association or a regulated financial institution operating within the normal course of business, or an attorney at law acting within the scope of his or her license.

 

(g)              As used in this section, "completed payment" means funds received which clearly identify the account to which the funds are to be credited.

 

§1363.5.    Articles of Incorporation; Required Statement

 

(a)              The articles of incorporation of a common interest development association filed with the Secretary of State on or after January 1, 1995, shall include a statement which shall be in addition to the statement of purposes of the corporation, that does all of the following:

 

(1)              Identifies the corporation as an association formed to manage a common interest development under the Davis‑Stirling Common Interest Development Act.

 

(2)              States the business or corporate office of the association, if any, and, if the office is not on the site of the common interest development, states the nine‑digit ZIP Code, front street, and nearest cross street for the physical location of the common interest development.

 

(3)              States the name and address of the association's managing agent, as defined in Section 1363.1, if any.

 

(b)              The statement of principal business activity contained in the annual statement filed by an incorporated association with the Secretary of State pursuant to Section 1502 of the Corporations Code shall also contain the statement specified in subdivision (a).

§1363.6.    Assistance with Identification of Common Interest Developments; Submission of Information by Each Association; Time; Notice of Change of Address; Penalty for Violation of Filing Requirements; Availability of Information

 

(a)              To assist with the identification of common interest developments, each association, whether incorporated or unincorporated, shall submit to the Secretary of State, on a form and for a fee not to exceed thirty dollars ($30) that the Secretary of State shall prescribe, the following information concerning the association and the development that it manages:

 

(1)              A statement that the association is formed to manage a common interest development under the Davis-Stirling Common Interest Development Act.

 

(2)              The name of the association.

 

(3)              The street address of the association's onsite office, or, if none, of the responsible officer or managing agent of the association.

 

(4)              The name, address, and either the daytime telephone number or e-mail address of the president of the association, other than the address, telephone number, or e-mail address of the association's onsite office or managing agent of the association.

 

(5)              The name, street address, and daytime telephone number of the association's managing agent, if any.

 

(6)              The county, and if in an incorporated area, the city in which the development is physically located. If the boundaries of the development are physically located in more than one county, each of the counties in which it is located.

 

(7)              If the development is in an unincorporated area, the city closest in proximity to the development.

 

(8)              The nine-digit ZIP Code, front street, and nearest cross street of the physical location of the development.

 

(9)              The type of common interest development, as defined in subdivision (c) of Section 1351, managed by the association.

 

(10)            The number of separate interests, as defined in subdivision (l) of Section 1351, in the development.

(b)              The association shall submit the information required by this section as follows:

 

(1)              By incorporated associations, within 90 days after the filing of its original articles of incorporation, and thereafter at the time the association files its biennial statement of principal business activity with the Secretary of State pursuant to Section 8210 of the Corporations Code.

 

(2)              By unincorporated associations, in July of 2003, and in that same month biennially thereafter. Upon changing its status to that of a corporation, the association shall comply with the filing deadlines in paragraph (1).

 

(c)              The association shall notify the Secretary of State of any change in the street address of the association's onsite office or of the responsible officer or managing agent of the association in the form and for a fee prescribed by the Secretary of State, within 60 days of the change.

 

(d)             On and after January 1, 2006, the penalty for an incorporated association's noncompliance with the initial or biennial filing requirements of this section shall be suspension of the association's rights, privileges, and powers as a corporation and monetary penalties, to the same extent and in the same manner as suspension and monetary penalties imposed pursuant to Section 8810 of the Corporations Code.

 

(e)              The Secretary of State shall make the information submitted pursuant to paragraph (4) of subdivision (a) available only for governmental purposes and only to Members of the Legislature and the Business, Transportation and Housing Agency, upon written request. All other information submitted pursuant to this section shall be subject to public inspection pursuant to the California Public Records Act, Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code. The information submitted pursuant to this section shall be made available for governmental or public inspection, as the case may be, on or before July 1, 2004, and thereafter.

 

ARTICLE  5.            DISPUTE RESOLUTION PROCEDURE

 

§1363.810.                  Application of Article

 

(a)              This article applies to a dispute between an association and a member involving their rights, duties, or liabilities under this title, under the Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code), or under the governing documents of the common interest development or association.

 

(b)              This article supplements, and does not replace, Article 2 (commencing with Section 1369.510) of Chapter 7, relating to alternative dispute resolution as a prerequisite to an enforcement action.

 

§1363.820.                  Fair, Reasonable and Expeditious Procedure to Resolve Disputes; Use of Local Dispute Resolution Programs

 

(a)              An association shall provide a fair, reasonable, and expeditious procedure for resolving a dispute within the scope of this article.

 

(b)              In developing a procedure pursuant to this article, an association shall make maximum, reasonable use of available local dispute resolution programs involving a neutral third party, including low‑cost mediation programs such as those listed on the Internet Web sites of the Department of Consumer Affairs and the United States Department of Housing and Urban Development.

 

(c)              If an association does not provide a fair, reasonable, and expeditious procedure for resolving a dispute within the scope of this article, the procedure provided in Section 1363.840 applies and satisfies the requirement of subdivision (a).

§1363.830.                  Requirements of Fair, Reasonable, and Expeditious Dispute Resolution Program

 

A fair, reasonable, and expeditious dispute resolution procedure shall at a minimum satisfy all of the following requirements:

 

(a)              The procedure may be invoked by either party to the dispute.  A request invoking the procedure shall be in writing.

 

(b)              The procedure shall provide for prompt deadlines.  The procedure shall state the maximum time for the association to act on a request invoking the procedure.

 

(c)              If the procedure is invoked by a member, the association shall participate in the procedure.

 

(d)             If the procedure is invoked by the association, the member may elect not to participate in the procedure.  If the member participates but the dispute is resolved other than by agreement of the member, the member shall have a right of appeal to the association's board of directors.

 

(e)              A resolution of a dispute pursuant to the procedure, that is not in conflict with the law or the governing documents, binds the association and is judicially enforceable.  An agreement reached pursuant to the procedure, that is not in conflict with the law or the governing documents, binds the parties and is judicially enforceable.

 

(f)              The procedure shall provide a means by which the member and the association may explain their positions.

 

(g)              A member of the association shall not be charged a fee to participate in the process.

 

§1363.840.                  Application of Section; Use of Procedures; Dispute Resolution Agreements; Conditions; Fees

 

(a)              This section applies in an association that does not otherwise provide a fair, reasonable, and expeditious dispute resolution procedure.  The procedure provided in this section is fair, reasonable, and expeditious, within the meaning of this article.

 

(b)              Either party to a dispute within the scope of this article may invoke the following procedure:

 

(1)              The party may request the other party to meet and confer in an effort to resolve the dispute.  The request shall be in writing.

 

(2)              A member of an association may refuse a request to meet and confer.  The association may not refuse a request to meet and confer.

 

(3)              The association's board of directors shall designate a member of the board to meet and confer.

 

(4)              The parties shall meet promptly at a mutually convenient time and place, explain their positions to each other, and confer in good faith in an effort to resolve the dispute.

 

(5)              A resolution of the dispute agreed to by the parties shall be memorialized in writing and signed by the parties, including the board designee on behalf of the association.

 

(c)              An agreement reached under this section binds the parties and is judicially enforceable if both of the following conditions are satisfied:

 

(1)              The agreement is not in conflict with law or the governing documents of the common interest development or association.

 

(2)              The agreement is either consistent with the authority granted by the board of directors to its designee or the agreement is ratified by the board of directors.

 

(d)             A member of the association may not be charged a fee to participate in the process.

 

§1363.850.                  Notice; Description of Internal Dispute Resolution Process 

 

The notice provided pursuant to Section 1369.590 shall include a description of the internal dispute resolution process provided pursuant to this article.

 

§1364.       Responsibility for Repair, Replacement, or Maintenance; Damage by Wood‑Destroying Pests or Organisms; Cost Allocation; Notice of Repair Requirements; Access for Maintenance of Telephone Wiring

 

(a)              Unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, or maintaining the common areas, other than exclusive use common areas, and the owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common area appurtenant to the separate interest.

 

(b)(1)         In a community apartment project, condominium project, or stock cooperative, as defined in Section 1351, unless otherwise provided in the declaration, the association is responsible for the repair and maintenance of the common area occasioned by the presence of wood‑destroying pests or organisms.

 

(2)              In a planned development as defined in Section 1351, unless a different maintenance scheme is provided in the declaration, each owner of a separate interest is responsible for the repair and maintenance of that separate interest as may be occasioned by the presence of wood‑destroying pests or organisms. Upon approval of the majority of all members of the association, the responsibility for such repair and maintenance may be delegated to the association, which shall be entitled to recover the cost thereof as a special assessment.

 

(c)              The costs of temporary relocation during the repair and maintenance of the areas within the responsibility of the association shall be borne by the owner of the separate interest affected.

 

(d)(1)         The association may cause the temporary, summary removal of any occupant of a common interest development for such periods and at such times as may be necessary for prompt, effective treatment of wood‑destroying pests or organisms.

 

(2)              The association shall give notice of the need to temporarily vacate a separate interest to the occupants and to the owners, not less than 15 days nor more than 30 days prior to the date of the temporary relocation. The notice shall state the reason for the temporary relocation, the date and time of the beginning of treatment, the anticipated date and time of termination of treatment, and that the occupants will be responsible for their own accommodations during the temporary relocation.

 

(3)              Notice by the association shall be deemed complete upon either:

 

(A)             Personal delivery of a copy of the notice to the occupants, and sending a copy of the notice to the owners, if different than the occupants, by first‑class mail, postage prepaid at the most current address shown on the books of the association.

 

(B)             By sending a copy of the notice to the occupants at the separate interest address and a copy of the notice to the owners, if different than the occupants, by first‑class mail, postage prepaid, at the most current address shown on the books of the association.

 

(e)              For purposes of this section, "occupant" means an owner, resident, guest, invitee, tenant, lessee, sublessee, or other person in possession on the separate interest.

 

(f)              Notwithstanding the provisions of the declaration, the owner of a separate interest is entitled to reasonable access to the common areas for the purpose of maintaining the internal and external telephone wiring made part of the exclusive use common areas of a separate interest pursuant to paragraph (2) of subdivision (i) of Section 1351. The access shall be subject to the consent of the association, whose approval shall not be unreasonably withheld, and which may include the association's approval of telephone wiring upon the exterior of the common areas, and other conditions as the association determines reasonable.

 

§1365.       Documents Prepared and Distributed by Associations

 

Unless the governing documents impose more stringent standards, the association shall prepare and distribute to all of its members the following documents:

 

(a)              A pro forma operating budget, which shall include all of the following:

 

(1)              The estimated revenue and expenses on an accrual basis.

 

(2)              A summary of the association's reserves based upon the most recent review or study conducted pursuant to Section 1365.5, based only on assets held in cash or cash equivalents, which shall be printed in boldface type and include all of the following:

 

(A)             The current estimated replacement cost, estimated remaining life, and estimated useful life of each major component.

 

(B)             As of the end of the fiscal year for which the study is prepared:

 

(i)               The current estimate of the amount of cash reserves necessary to repair, replace, restore, or maintain the major components.

 

(ii)              The current amount of accumulated cash reserves actually set aside to repair, replace, restore, or maintain major components.

 

(iii)             If applicable, the amount of funds received from either a compensatory damage award or settlement to an association from any person or entity for injuries to property, real or personal, arising out of any construction or design defects, and the expenditure or disposition of funds, including the amounts expended for the direct and indirect costs of repair of construction or design defects. These amounts shall be reported at the end of the fiscal year for which the study is prepared as separate line items under cash reserves pursuant to clause (ii). Instead of complying with the requirements set forth in this clause, an association that is obligated to issue a review of their financial statement pursuant to subdivision (b) may include in the review a statement containing all of the information required by this clause.

 

(C)             The percentage that the amount determined for purposes of clause (ii) of subparagraph (B) equals the amount determined for purposes of clause (i) of subparagraph (B).

 

(D)             The current deficiency in reserve funding expressed on a per unit basis. The figure shall be calculated by subtracting the amount determined for purposes of clause (ii) of subparagraph (B) from the amount determined for purposes of clause (i) of subparagraph (B) and then dividing the result by the number of separate interests within the association, except that if assessments vary by the size or type of ownership interest, then the association shall calculate the current deficiency in a manner that reflects the variation.

 

(3)              A statement as to all of the following:

 

(A)             Whether the board of directors of the association has determined to defer or not undertake repairs or replacement of any major component with a remaining life of 30 years or less, including a justification for the deferral or decision not to undertake the repairs or replacement.

 

(B)             Whether the board of directors of the association, consistent with the reserve funding plan adopted pursuant to subdivision (e) of Section 1365.5, has determined or anticipates that the levy of one or more special assessments will be required to repair, replace, or restore any major component or to provide adequate reserves therefor. If so, the statement shall also set out the estimated amount, commencement date, and duration of the assessment.

 

(C)             The mechanism or mechanisms by which the board of directors will fund reserves to repair or replace major components, including assessments, borrowing, use of other assets, deferral of selected replacements or repairs, or alternative mechanisms.

 

(D)             Whether the association has any outstanding loans with an original term of more than one year, including the payee, interest rate, amount outstanding, annual payment, and when the loan is scheduled to be retired.

 

(4)              A general statement addressing the procedures used for the calculation and establishment of those reserves to defray the future repair, replacement, or additions to those major components that the association is obligated to maintain. The report shall include, but need not be limited to, reserve calculations made using the formula described in paragraph (4) of subdivision (b) of Section 1365.2.5, and may not assume a rate of return on cash reserves in excess of 2 percent above the discount rate published by the Federal Reserve Bank of San Francisco at the time the calculation was made.

 

The summary of the association's reserves disclosed pursuant to paragraph (2) shall not be admissible in evidence to show improper financial management of an association, provided that other relevant and competent evidence of the financial condition of the association is not made inadmissible by this provision.

 

Notwithstanding a contrary provision in the governing documents, a copy of the operating budget shall be annually distributed not less than 30 days nor more than 90 days prior to the beginning of the association's fiscal year.

 

(b)              Commencing January 1, 2009, a summary of the reserve funding plan adopted by the board of directors of the association, as specified in paragraph (4) of subdivision (e) of Section 1365.5. The summary shall include notice to members that the full reserve study plan is available upon request, and the association shall provide the full reserve plan to any member upon request.

 

(c)              A review of the financial statement of the association shall be prepared in accordance with generally accepted accounting principles by a licensee of the California Board of Accountancy for any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars ($75,000). A copy of the review of the financial statement shall be distributed within 120 days after the close of each fiscal year.

 

(d)             Instead of the distribution of the pro forma operating budget required by subdivision (a), the board of directors may elect to distribute a summary of the pro forma operating budget to all of its members with a written notice that the pro forma operating budget is available at the business office of the association or at another suitable location within the boundaries of the development, and that copies will be provided upon request and at the expense of the association. If any member requests that a copy of the pro forma operating budget required by subdivision (a) be mailed to the member, the association shall provide the copy to the member by first-class United States mail at the expense of the association and delivered within five days. The written notice that is distributed to each of the association members shall be in at least 10-point boldface type on the front page of the summary of the budget.

 

(e)              A statement describing the association's policies and practices in enforcing lien rights or other legal remedies for default in payment of its assessments against its members shall be annually delivered to the members not less than 30 days nor more than 90 days immediately preceding the beginning of the association's fiscal year.

 

(f)(1)          A summary of the association's property, general liability, earthquake, flood, and fidelity insurance policies, which shall be distributed not less than 30 days nor more than 90 days preceding the beginning of the association's fiscal year, that includes all of the following information about each policy:

 

(A)             The name of the insurer.

(B)             The type of insurance.

 

(C)             The policy limits of the insurance.

 

(D)             The amount of deductibles, if any.

 

(2)              The association shall, as soon as reasonably practicable, notify its members by first-class mail if any of the policies described in paragraph (1) have lapsed, been canceled, and are not immediately renewed, restored, or replaced, or if there is a significant change, such as a reduction in coverage or limits or an increase in the deductible, as to any of those policies. If the association receives any notice of nonrenewal of a policy described in paragraph (1), the association shall immediately notify its members if replacement coverage will not be in effect by the date the existing coverage will lapse.

 

(3)              To the extent that any of the information required to be disclosed pursuant to paragraph (1) is specified in the insurance policy declaration page, the association may meet its obligation to disclose that information by making copies of that page and distributing it to all of its members.

 

(4)              The summary distributed pursuant to paragraph (1) shall contain, in at least 10-point boldface type, the following statement: "This summary of the association's policies of insurance provides only certain information, as required by subdivision (f) of Section 1365 of the Civil Code, and should not be considered a substitute for the complete policy terms and conditions contained in the actual policies of insurance. Any association member may, upon request and provision of reasonable notice, review the association's insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies. Although the association maintains the policies of insurance specified in this summary, the association's policies of insurance may not cover your property, including personal property or, real property improvements to or around your dwelling, or personal injuries or other losses that occur within or around your dwelling. Even if a loss is covered, you may nevertheless be responsible for paying all or a portion of any deductible that applies. Association members should consult with their individual insurance broker or agent for appropriate additional coverage."

 

§1365.1     Notice to Members of Association Prior to Beginning of Fiscal Year

 

(a)              The association shall distribute the written notice described in subdivision (b) to each member of the association during the 60-day period immediately preceding the beginning of the association's fiscal year. The notice shall be printed in at least 12-point type. An association distributing the notice to an owner of an interest that is described in Section 11212 of the Business and Professions Code that is not otherwise exempt from this section pursuant to subdivision (a) of Section 11211.7 may delete from the notice described in subdivision (b) the portion regarding meetings and payment plans.

 

(b)              The notice required by this section shall read as follows:

 

"NOTICE ASSESSMENTS AND FORECLOSURE

 

This notice outlines some of the rights and responsibilities of owners of property in common interest developments and the associations that manage them. Please refer to the sections of the Civil Code indicated for further information. A portion of the information in this notice applies only to liens recorded on or after January 1, 2003. You may wish to consult a lawyer if you dispute an assessment.

 

ASSESSMENTS AND FORECLOSURE

 

Assessments become delinquent 15 days after they are due, unless the governing documents provide for a longer time. The failure to pay association assessments may result in the loss of an owner's property through foreclosure. Foreclosure may occur either as a result of a court action, known as judicial foreclosure or without court action, often referred to as nonjudicial foreclosure. For liens recorded on and after January 1, 2006, an association may not use judicial or nonjudicial foreclosure to enforce that lien if the amount of the delinquent assessments or dues, exclusive of any accelerated assessments, late charges, fees, attorney's fees, interest, and costs of collection, is less than one thousand eight hundred dollars ($1,800). For delinquent assessments or dues in excess of one thousand eight hundred dollars ($1,800) or more than 12 months delinquent, an association may use judicial or nonjudicial foreclosure subject to the conditions set forth in Section 1367.4 of the Civil Code. When using judicial or nonjudicial foreclosure, the association records a lien on the owner's property. The owner's property may be sold to satisfy the lien if the amounts secured by the lien are not paid. (Sections 1366, 1367.1, and 1367.4 of the Civil Code)

 

In a judicial or nonjudicial foreclosure, the association may recover assessments, reasonable costs of collection, reasonable attorney's fees, late charges, and interest. The association may not use nonjudicial foreclosure to collect fines or penalties, except for costs to repair common areas damaged by a member or a member's guests, if the governing documents provide for this. (Sections 1366 and 1367.1 of the Civil Code)

 

The association must comply with the requirements of Section 1367.1 of the Civil Code when collecting delinquent assessments. If the association fails to follow these requirements, it may not record a lien on the owner's property until it has satisfied those requirements. Any additional costs that result from satisfying the requirements are the responsibility of the association. (Section 1367.1 of the Civil Code)

 

At least 30 days prior to recording a lien on an owner's separate interest, the association must provide the owner of record with certain documents by certified mail, including a description of its collection and lien enforcement procedures and the method of calculating the amount. It must also provide an itemized statement of the charges owed by the owner. An owner has a right to review the association's records to verify the debt. (Section 1367.1 of the Civil Code)

 

If a lien is recorded against an owner's property in error, the person who recorded the lien is required to record a lien release within 21 days, and to provide an owner certain documents in this regard. (Section 1367.1 of the Civil Code)

 

The collection practices of the association may be governed by state and federal laws regarding fair debt collection. Penalties can be imposed for debt collection practices that violate these laws.

 

PAYMENTS

 

When an owner makes a payment, he or she may request a receipt, and the association is required to provide it. On the receipt, the association must indicate the date of payment and the person who received it. The association must inform owners of a mailing address for overnight payments. (Section 1367.1 of the Civil Code)

 

An owner may, but is not obligated to, pay under protest any disputed charge or sum levied by the association, including, but not limited to, an assessment, fine, penalty, late fee, collection cost, or monetary penalty imposed as a disciplinary measure, and by so doing, specifically reserve the right to contest the disputed charge or sum in court or otherwise. An owner may dispute an assessment debt by submitting a written request for dispute resolution to the association as set forth in Article 5 (commencing with Section 1368.810) of Chapter 4 of Title 6 of Division 2 of the Civil Code. In addition, an association may not initiate a foreclosure without participating in alternative dispute resolution with a neutral third party as set forth in Article 2 (commencing with Section 1369.510) of Chapter 7 of Title 6 of Division 2 of the Civil Code, if so requested by the owner. Binding arbitration shall not be available if the association intends to initiate a judicial foreclosure.

 

An owner is not liable for charges, interest, and costs of collection, if it is established that the assessment was paid properly on time. (Section 1367.1 of the Civil Code)

 

MEETINGS AND PAYMENT PLANS

 

An owner of a separate interest that is not a timeshare may request the association to consider a payment plan to satisfy a delinquent assessment. The association must inform owners of the standards for payment plans, if any exist. (Section 1367.1 of the Civil Code)

 

The board of directors must meet with an owner who makes a proper written request for a meeting to discuss a payment plan when the owner has received a notice of a delinquent assessment. These payment plans must conform with the payment plan standards of the association, if they exist. (Section 1367.1 of the Civil Code)"

 

(c)              A member of an association may provide written notice by facsimile transmission or United States mail to the association of a secondary address. If a secondary address is provided, the association shall send any and all correspondence and legal notices required pursuant to this article to both the primary and the secondary address.

 

§1365.2.    Disclosure of Records

 

(a)              For the purposes of this section, the following definitions shall apply:

 

(1)              "Association records" means all of the following:

 

(A)             Any financial document required to be provided to a member in Section 1365.

 

(B)             Any financial document or statement required to be provided in Section 1368.

 

(C)             Interim financial statements, periodic or as compiled, containing any of the following:

 

(i)               Balance sheet.

 

(ii)              Income and expense statement.

 

(iii)             Budget comparison.

 

(iv)             General ledger. A "general ledger" is a report that shows all transactions that occurred in an association account over a specified period of time.

 

The records described in this subparagraph shall be prepared in accordance with an accrual or modified accrual basis of accounting.

 

(D)             Executed contracts not otherwise privileged under law.

 

(E)             Written board approval of vendor or contractor proposals or invoices.

 

(F)             State and federal tax returns.

 

(G)             Reserve account balances and records of payments made from reserve accounts.

 

(H)             Agendas and minutes of meetings of the members, the board of directors and any committees appointed by the board of directors pursuant to Section 7212 of the Corporations Code; excluding, however, agendas, minutes, and other information from executive sessions of the board of directors as described in Section 1363.05.

 

(I)(i)           Membership lists, including name, property address, and mailing address, if the conditions set forth in clause (ii) are met and except as otherwise provided in clause (iii).

 

(ii)              The member requesting the list shall state the purpose for which the list is requested which purpose shall be reasonably related to the requester's interest as a member. If the association reasonably believes that the information in the list will be used for another purpose, it may deny the member access to the list. If the request is denied, in any subsequent action brought by the member under subdivision (f), the association shall have the burden to prove that the member would have allowed use of the information for purposes unrelated to his or her interest as a member.

 

(iii)             A member of the association may opt out of the sharing of his or her name, property address, and mailing address by notifying the association in writing that he or she prefers to be contacted via the alternative process described in subdivision (c) of Section 8330 of the Corporations Code. This opt-out shall remain in effect until changed by the member.

 

(J)              Check registers.

 

(2)              "Enhanced association records" means invoices, receipts and canceled checks for payments made by the association, purchase orders approved by the association, credit card statements for credit cards issued in the name of the association, statements for services rendered, and reimbursement requests submitted to the association, provided that the person submitting the reimbursement request shall be solely responsible for removing all personal identification information from the request.

 

(b)(1)         The association shall make available association records and enhanced association records for the time periods and within the timeframes provided in subdivisions (i) and (j) for inspection and copying by a member of the association, or the member's designated representative. The association may bill the requesting member for the direct and actual cost of copying requested documents. The association shall inform the member of the amount of the copying costs before copying the requested documents.

 

(2)              A member of the association may designate another person to inspect and copy the specified association records on the member's behalf. The member shall make this designation in writing.

 

(c)(1)         The association shall make the specified association records available for inspection and copying in the association's business office within the common interest development.

 

(2)              If the association does not have a business office within the development, the association shall make the specified association records available for inspection and copying at a place that the requesting member and the association agree upon.

 

(3)              If the association and the requesting member cannot agree upon a place for inspection and copying pursuant to paragraph (2), or if the requesting member submits a written request directly to the association for copies of specifically identified records, the association may satisfy the requirement to make the association records available for inspection and copying by mailing copies of the specifically identified records to the member by first-class mail within the timeframes set forth in subdivision (j).

 

(4)              The association may bill the requesting member for the direct and actual cost of copying and mailing requested documents. The association shall inform the member of the amount of the copying and mailing costs, and the member shall agree to pay those costs, before copying and sending the requested documents.

 

(5)              In addition to the direct and actual costs of copying and mailing, the association may bill the requesting member an amount not in excess of ten dollars ($10) per hour, and not to exceed two hundred dollars ($200) total per written request, for the time actually and reasonably involved in redacting the enhanced association records as provided in paragraph (2) of subdivision (a). The association shall inform the member of the estimated costs, and the member shall agree to pay those costs, before retrieving the requested documents.

 

(d)(1)         Except as provided in paragraph (2), the association may withhold or redact information from the association records for any of the following reasons:

 

(A)             The release of the information is reasonably likely to lead to identity theft. For the purposes of this section, "identity theft" means the unauthorized use of another person's personal identifying information to obtain credit, goods, services, money, or property. Examples of information that may be withheld or redacted pursuant to this paragraph include bank account numbers of members or vendors, social security or tax identification numbers, and check, stock, and credit card numbers.

 

(B)             The release of the information is reasonably likely to lead to fraud in connection with the association.

 

(C)             The information is privileged under law. Examples include documents subject to attorney-client privilege or relating to litigation in which the association is or may become involved, and confidential settlement agreements.

 

(D)             The release of the information is reasonably likely to compromise the privacy of an individual member of the association.

 

(E)             The information contains any of the following:

 

(i)               Records of a-la-carte goods or services provided to individual members of the association for which the association received monetary consideration other than assessments.

 

(ii)              Records of disciplinary actions, collection activities, or payment plans of members other than the member requesting the records.

 

(iii)             Any person's personal identification information, including, without limitation, social security number, tax identification number, driver's license number, credit card account numbers, bank account number, and bank routing number.

 

(iv)             Agendas, minutes, and other information from executive sessions of the board of directors as described in Section 1363.05, except for executed contracts not otherwise privileged. Privileged contracts shall not include contracts for maintenance, management, or legal services.

 

(v)              Personnel records other than the payroll records required to be provided under paragraph (2).

 

(vi)             Interior architectural plans, including security features, for individual homes.

(2)              Except as provided by the attorney-client privilege, the association may not withhold or redact information concerning the compensation paid to employees, vendors, or contractors. Compensation information for individual employees shall be set forth by job classification or title, not by the employee's name, social security number, or other personal information.

 

(3)              No association, officer, director, employee, agent or volunteer of an association shall be liable for damages to a member of the association or any third party as the result of identity theft or other breach of privacy because of the failure to withhold or redact that member's information under this subdivision unless the failure to withhold or redact the information was intentional, willful, or negligent.

 

(4)              If requested by the requesting member, an association that denies or redacts records shall provide a written explanation specifying the legal basis for withholding or redacting the requested records.

 

(e)(1)         The association records, and any information from them, may not be sold, used for a commercial purpose, or used for any other purpose not reasonably related to a member's interest as a member. An association may bring an action against any person who violates this section for injunctive relief and for actual damages to the association caused by the violation.

 

(2)              This section may not be construed to limit the right of an association to damages for misuse of information obtained from the association records pursuant to this section or to limit the right of an association to injunctive relief to stop the misuse of this information.

 

(3)              An association shall be entitled to recover reasonable costs and expenses, including reasonable attorney's fees, in a successful action to enforce its rights under this section.

 

(f)              A member of an association may bring an action to enforce the member's right to inspect and copy the association records. If a court finds that the association unreasonably withheld access to the association records, the court shall award the member reasonable costs and expenses, including reasonable attorney's fees, and may assess a civil penalty of up to five hundred dollars ($500) for the denial of each separate written request. A cause of action under this section may be brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court. A prevailing association may recover any costs if the court finds the action to be frivolous, unreasonable, or without foundation.

 

(g)              The provisions of this section apply to any community service organization or similar entity, as defined in paragraph (3) of subdivision (c) of Section 1368, that is related to the association, and this section shall operate to give a member of the community service organization or similar entity a right to inspect and copy the records of that organization or entity equivalent to that granted to association members by this section.

 

(h)              Requesting parties shall have the option of receiving specifically identified records by electronic transmission or machine-readable storage media as long as those records can be transmitted in a redacted format that does not allow the records to be altered. The cost of duplication shall be limited to the direct cost of producing the copy of a record in that electronic format. The association may deliver specifically identified records by electronic transmission or machine-readable storage media as long as those records can be transmitted in a redacted format that prevents the records from being altered.

(i)               The time periods for which specified records shall be provided is as follows:

 

(1)              Association records shall be made available for the current fiscal year and for each of the previous two fiscal years.

 

(2)              Minutes of member and board meetings shall be permanently made available. If a committee has decisionmaking authority, minutes of the meetings of that committee shall be made available commencing January 1, 2007, and shall thereafter be permanently made available.

 

(j)               The timeframes in which access to specified records shall be provided to a requesting member are as follows:

 

(1)              Association records prepared during the current fiscal year, within 10 business days following the association's receipt of the request.

 

(2)              Association records prepared during the previous two fiscal years, within 30 calendar days following the association's receipt of the request.

 

(3)              Any record or statement available pursuant to Section 1365 or 1368, within the timeframe specified therein.

 

(4)              Minutes of member and board meetings, within the timeframe specified in subdivision (d) of Section 1363.05.

 

(5)              Minutes of meetings of committees with decisionmaking authority for meetings commencing on or after January 1, 2007, within 15 calendar days following approval.

 

(6)              Membership list, within the timeframe specified in Section 8330 of the Corporations Code.

 

(k)              There shall be no liability pursuant to this section for an association that fails to retain records for the periods specified in subdivision (i) that were created prior to January 1, 2006.

 

(l)               As applied to an association and its members, the provisions of this section are intended to supersede the provisions of Sections 8330 and 8333 of the Corporations Code to the extent those sections are inconsistent.

 

(m)             The provisions of this section shall not apply to any common interest development in which separate interests are being offered for sale by a subdivider under the authority of a public report issued by the Department of Real Estate so long as the subdivider or all subdividers offering those separate interests for sale, or any employees of those subdividers or any other person who receives direct or indirect compensation from any of those subdividers, comprise a majority of the members of the board of directors of the association. Notwithstanding the foregoing, this section shall apply to that common interest development no later than 10 years after the close of escrow for the first sale of a separate interest to a member of the general public pursuant to the public report issued for the first phase of the development.

 

(n)              This section shall become operative on July 1, 2006.

§1365.2.5. Form for Summarizing Disclosures; Form to Accompany Pro Forma Operating Budgets or Summaries; Supplementation or Modification; Calculating Amount of Reserves

 

(a)              The disclosures required by this article in regard to an association or a property shall be summarized on the following form:   [Note:  Form available upon request.]

 

(b)              For the purposes of preparing a summary pursuant to this section:

 

(1)              "Estimated remaining useful life" means the time reasonably calculated to remain before a major component will require replacement.

 

(2)              "Major component" has the meaning used in Section 1365.5.  Components with an estimated remaining useful life of more than 30 years may be included in a study as a capital asset or disregarded from the reserve calculation, so long as the decision is revealed in the reserve study report and reported in the Assessment and Reserve Funding Disclosure Summary.

 

(3)              The form set out in subdivision (a) shall accompany each pro forma operating budget or summary thereof that is delivered pursuant to this article.  The form may be supplemented or modified to clarify the information delivered, so long as the minimum information set out in subdivision (a) is provided.

 

(4)              For the purpose of the report and summary, the amount of reserves needed to be accumulated for a component at a given time shall be computed as the current cost of replacement or repair multiplied by the number of years the component has been in service divided by the useful life of the component. This shall not be construed to require the board to fund reserves in accordance with this calculation.

 

§1365.3.    Community Service Organization, Disclosure Requirement.

 

Unless the governing documents impose more stringent standards, any community service organization as defined in paragraph (3) of subdivision (c) of Section 1368 whose funding from the association or its members exceeds 10 percent of the organization's annual budget shall prepare and distribute to the association a report that meets the requirements of Section 5012 of the Corporations Code, and that describes in detail administrative costs and identifies the payees of those costs in a manner consistent with the provisions of Section 1365.2.  If the community service organization does not comply with the standards, the report shall disclose the noncompliance in detail.  If a community service organization is responsible for the maintenance of major components for which an association would otherwise be responsible, the community service organization shall supply to the association the information regarding those components that the association would use to complete disclosures and reserve reports required under this article.  An association may rely upon information received from a community service organization, and shall provide access to the information pursuant to the provisions of Section 1365.2.

 

§1365.5.    Board of Directors; Duties.

 

(a)              Unless the governing documents impose more stringent standards, the board of directors of the association shall do all of the following:

(1)              Review a current reconciliation of the association's operating accounts on at least a quarterly basis.

 

(2)              Review a current reconciliation of the association's reserve accounts on at least a quarterly basis.

 

(3)              Review, on at least a quarterly basis, the current year's actual reserve revenues and expenses compared to the current year's budget.

 

(4)              Review the latest account statements prepared by the financial institutions where the association has its operating and reserve accounts.

 

(5)              Review an income and expense statement for the association's operating and reserve accounts on at least a quarterly basis.

 

(b)              The signatures of at least two persons, who shall be members of the association's board of directors, or one officer who is not a member of the board of directors and a member of the board of directors, shall be required for the withdrawal of moneys from the association's reserve accounts.

 

(c)(1)         The board of directors shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established.

 

(2)              However, the board may authorize the temporary transfer of moneys from a reserve fund to the association's general operating fund to meet short-term cashflow requirements or other expenses, if the board has provided notice of the intent to consider the transfer in a notice of meeting, which shall be provided as specified in Section 1363.05. The notice shall include the reasons the transfer is needed, some of the options for repayment, and whether a special assessment may be considered. If the board authorizes the transfer, the board shall issue a written finding, recorded in the board's minutes, explaining the reasons that the transfer is needed, and describing when and how the moneys will be repaid to the reserve fund. The transferred funds shall be restored to the reserve fund within one year of the date of the initial transfer, except that the board may, after giving the same notice required for considering a transfer, and, upon making a finding supported by documentation that a temporary delay would be in the best interests of the common interest development, temporarily delay the restoration. The board shall exercise prudent fiscal management in maintaining the integrity of the reserve account, and shall, if necessary, levy a special assessment to recover the full amount of the expended funds within the time limits required by this section. This special assessment is subject to the limitation imposed by Section 1366. The board may, at its discretion, extend the date the payment on the special assessment is due. Any extension shall not prevent the board from pursuing any legal remedy to enforce the collection of an unpaid special assessment.

 

(d)             When the decision is made to use reserve funds or to temporarily transfer moneys from the reserve fund to pay for litigation, the association shall notify the members of the association of that decision in the next available mailing to all members pursuant to Section 5016 of the Corporations Code, and of the availability of an accounting of those expenses. Unless the governing documents impose more stringent standards, the association shall make an accounting of expenses related to the litigation on at least a quarterly basis. The accounting shall be made available for inspection by members of the association at the association's office.

 

(e)              At least once every three years, the board of directors shall cause to be conducted a reasonably competent and diligent visual inspection of the accessible areas of the major components that the association is obligated to repair, replace, restore, or maintain as part of a study of the reserve account requirements of the common interest development, if the current replacement value of the major components is equal to or greater than one-half of the gross budget of the association, excluding the association's reserve account for that period. The board shall review this study, or cause it to be reviewed, annually and shall consider and implement necessary adjustments to the board's analysis of the reserve account requirements as a result of that review. The study required by this subdivision shall at a minimum include:

 

(1)              Identification of the major components that the association is obligated to repair, replace, restore, or maintain that, as of the date of the study, have a remaining useful life of less than 30 years.

 

(2)              Identification of the probable remaining useful life of the components identified in paragraph (1) as of the date of the study.

 

(3)              An estimate of the cost of repair, replacement, restoration, or maintenance of the components identified in paragraph (1).

 

(4)              An estimate of the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain the components identified in paragraph (1) during and at the end of their useful life, after subtracting total reserve funds as of the date of the study.

 

(5)              A reserve funding plan that indicates how the association plans to fund the contribution identified in paragraph (4) to meet the association's obligation for the repair and replacement of all major components with an expected remaining life of 30 years or less, not including those components that the board has determined will not be replaced or repaired. The plan shall include a schedule of the date and amount of any change in regular or special assessments that would be needed to sufficiently fund the reserve funding plan. The plan shall be adopted by the board of directors at an open meeting before the membership of the association as described in Section 1363.05. If the board of directors determines that an assessment increase is necessary to fund the reserve funding plan, any increase shall be approved in a separate action of the board that is consistent with the procedure described in Section 1366.

 

(f)              As used in this section, "reserve accounts" means both of the following:

 

(1)              Moneys that the association's board of directors has identified for use to defray the future repair or replacement of, or additions to, those major components that the association is obligated to maintain.

 

(2)              The funds received, and not yet expended or disposed of, from either a compensatory damage award or settlement to an association from any person or entity for injuries to property, real or personal, arising from any construction or design defects. These funds shall be separately itemized from funds described in paragraph (1).

 

(g)              As used in this section, "reserve account requirements" means the estimated funds that the association's board of directors has determined are required to be available at a specified point in time to repair, replace, or restore those major components that the association is obligated to maintain.

 

(h)              This section does not apply to an association that does not have a "common area" as defined in Section 1351.

 

§1365.6.    Contracts or other transactions authorized, approved, or ratified by the boardt.

 

Notwithstanding any other law, and regardless of whether an association is a corporation, as defined in Section 162 of the Corporations Code, the provisions of Section 310 of the Corporations Code shall apply to any contract or other transaction authorized, approved, or ratified by the board or a committee of the board.

 

§1365.7.    Tortious Act or Omission of Volunteer Officer or Director of Association Managing Residential Development; Liability; Criteria; Limitations.

 

(a)              A volunteer officer or volunteer director of an association, as defined in subdivision (a) of Section 1351, which manages a common interest development that is exclusively residential, shall not be personally liable in excess of the coverage of insurance specified in paragraph (4) to any person who suffers injury, including, but not limited to, bodily injury, emotional distress, wrongful death, or property damage or loss as a result of the tortious act or omission of the volunteer officer or volunteer director if all of the following criteria are met:

 

(1)              The act or omission was performed within the scope of the officer's or director's association duties.

 

(2)              The act or omission was performed in good faith.

 

(3)              The act or omission was not willful, wanton, or grossly negligent.

 

(4)              The association maintained and had in effect at the time the act or omission occurred and at the time a claim is made one or more policies of insurance which shall include coverage for (A) general liability of the association and (B) individual liability of officers and directors of the association for negligent acts or omissions in that capacity; provided, that both types of coverage are in the following minimum amount:

 

(A)             At least five hundred thousand dollars ($500,000) if the common interest development consists of 100 or fewer separate interests.