Legislative Updates

Richardson Harman Ober provides this update to keep our clients apprised of pending legislation affecting Common Interest Developments.

News from The Capitol: New Bill Prohibits Fines for Reducing or Eliminating Watering of Lawns During Drought

July 23, 2014

The California Legislature recently signed into effect AB 2100 which prohibits an association from imposing a fine or assessment against a member for reducing or eliminating watering of vegetation or lawns during any period the Governor or any local government has declared a state of emergency due to drought. Read more.

Appellate Court Rejects Class Action Claims Against HOA Management Companies Over Transfer Fees

November 13, 2013

On October 28, 2013, the California Court of Appeal issued a key decision further clarifying a community association manager's ability to charge transfer fees upon a change of ownership. In Fowler vs. M&C Association Management Services, Inc., the Court of Appeal rejected potential class action claims against a management company for charging transfer fees to update homeowner records. The plaintiff claimed that unless the company filed a notice of the fee with the County Recorder (i.e., "recording"), charging such fees violated Civil Code Section 1098.5. That statute requires the recording of prior notice of "transfer fees," as defined in Civil Code Section 1098, before such fees can be collected. However, the Court of Appeal concluded that the fees charged by the management company for its services were not transfer fees as defined in Section 1098, noting that the statute contains an express exception for any transaction "authorized by the Davis-Stirling Common Interest Development Act." Richardson Harman Ober PC filed an Amicus Brief in support of the Respondents/Defendants in Fowler which raised many legal and policy arguments reflected in the Court of Appeal's decision. Read the Amicus Brief on behalf of CAI, as well as the full decision in Fowler. Again, for an article summarizing the Fowler decision, click here.

SB 822: Managers Are Not Contractors

September 23, 2013

Governor Brown provided a degree of certainty to community association managers by signing Senate Bill (SB) 822 into law, excluding community association managers from the definition of construction consultants for purposes of Section 7026.1 of the Business and Professions Code (regarding construction contractors). SB 822 adds the following language to Section 7026.1 of the Business and Professions (B&P) Code relating to contractors: “(b) The term "contractor" or "consultant" does not include a common interest development manager, as defined in Section 11501, and a common interest development manager is not required to have a contractor's license when performing management services, as defined in subdivision (d) of Section 11500.” By way of background, last year Section 7026.1 of the B&P Code was amended by the passage of AB 2237 mandating that a consultant overseeing home improvement construction projects have a contractor’s license. This amendment caused concern among some community association managers who were involved in common area maintenance and repair projects or bid compilation for their communities. If community association managers were considered “consultants,” then they too would have to have a contractor’s license under Section 7026.1. The Contractor’s State Licensing Board (CSLB) responded to the community manager concerns raised by clarifying that the intent of last year’s amendment (AB 2237) was not to include community association managers within the definition of a “consultant.” The CSLB accepted the proposed amendment to Section 7026.1, leading to its inclusion into SB 822. SB 822 does not become law until January 1, 2014. Therefore, community managers still should exercise caution in any construction project oversight, involvement or undertaking.

The New Davis-Stirling Act Conversion Chart

August 27, 2013

Richardson Harman Ober provides this conversion chart of the new Davis-Stirling Act (effective January 1, 2014) as a resource to clients. The conversion chart displays the existing code sections and the new section numbers. Please contact us at 626.449.5577 if you have any questions. Click here for the conversion chart.

Update on AB 1360

July 10, 2013

This bill has been taken off the active calendar for 2013 and is a “two year bill”. It is anticipated to resume Senate Committee hearings in January 2014.