Many laws are changing for California HOAs this year, and here’s a recap of the most significant changes.
Longer time for the requested members’ assembly: If at least 5% of the membership requests a special membership meeting, the meeting must now take place within 35-150 days of the HOA receiving the petition. (Company code, article 7511 (c)).
Time limits again authorized: For HOAs with board term limits, the new Civil Code section 5103 (d) (2) confirms term limits can be an eligibility condition with the four optional eligibility requirements in section 5105 ( c) of the Civil Code.
Election by acclamation: If there are only enough candidates for open seats, the new Civil Code Section 5103 allows the board to declare the candidates elected if the HOA has sent the required notices and the HOA has had at least one election with of the votes counted during the previous three years. HOAs may wish to update their electoral rules and require that necessary notices be sent to preserve this cost saving option.
Dissemination of personal data: The new Civil Code 5230 (c) prohibits the HOA or its management from selling or transferring personal member information to third parties. Previously, some management companies provided in their contracts to sell or pass on member data to outside bodies, but this is now prohibited.
Websites in the form of bulletin boards: New Civil Code section 4045 (a) (5) allows HOAs to use their websites for general notices as long as the annual policy statement says so.
Rental restrictions: HOAs are required to remove illegal rental restrictions from governing documents under Section 4741 of the Civil Code by July 1. A revision of Article 4741 (f) of the Civil Code opens a six-month period starting January 1 and ending July 1, 2022, during which rental restrictions in CC&R can be removed by a council vote of directors without a vote of the members.
An announcement must be published to members at least 28 days before the board vote to approve the amendment. Most CC&R HOAs do not contain illegal “unreasonable” rental restrictions, but if they do, legal counsel should be involved to ensure that the change is necessary and remains within the narrow limits of section 4741 (f ) revised.
Financial controls: For HOAs of 50 or fewer members, a new Civil Code Section 5502 (a) (1) lowers the threshold triggering the requirement for written board approval for financial transfers of $ 10,000 or 5% of budget to 5 $ 000.
Purely virtual meetings: Under an emergency law in effect since September 2021, during declared local, state or federal emergencies preventing meetings, a new section 5450 of the Civil Code allows meetings of the board of directors or members to be 100 % electronic (without physical presence) as long as a prescribed initial announcement is made to all members, and posts other required announcements prior to each fully virtual meeting.
All council votes must be by roll call, and at member meetings where votes are counted, the inspector’s count must be done in camera. HOAs can still have “hybrid” meetings, as long as the normal requirements of the Open Meeting Act are met.
Home Safety Program: For HOA members participating in the relatively new Safe at Home program, a new Section 5216 of the Civil Code requires HOAs to use the address designated by the California Secretary of State for that owner and cannot share their name, address or email address with other HOA members.
Kelly G. Richardson, Esq. is a member of the College of Community Association Lawyers and a partner of Richardson Ober DeNichilo LLP, a law firm known for providing advice to community associations. Submit your questions to [email protected]