Homeowners associations in the Golden State must understand the different California HOA laws. These laws are specifically designed to govern HOA communities and ensure harmonious association living. They are essential to both homeowners and board members.
What are the State of California HOA Laws?
California HOA laws govern how homeowners associations operate and manage communities. These laws establish guidelines for board governance, homeowner rights, financial management, and more. California’s HOA laws aim to protect individual homeowners and the integrity of the community.
The primary set of laws governing HOAs in California falls under the Davis-Stirling Common Interest Development Act. However, additional laws, such as the Fair Employment and Housing Act, also impact HOAs. These regulations ensure that homeowners are treated fairly and that HOAs run smoothly.
Understanding these laws is crucial for HOA board members, as noncompliance can lead to legal issues and penalties. Homeowners should also familiarize themselves with these laws to understand their community rights and obligations.
The Importance of Understanding California HOA Laws
Both HOA boards and homeowners need to understand California HOA laws. Board members must ensure their actions comply with state requirements, while homeowners should know their rights to avoid violations.
California HOA laws cover everything from board election procedures and financial transparency to architectural guidelines and homeowner rights. Knowing these regulations allows HOAs to function without legal complications and helps maintain a fair and equitable living environment.
Failure to comply with these laws can result in fines, lawsuits, or the invalidation of board decisions. Therefore, understanding the legal framework is essential for preserving community harmony and protecting the interests of both the HOA and its members.
The Davis-Stirling Common Interest Development Act
The Davis-Stirling Common Interest Development Act is the cornerstone of California HOA laws. This act governs the creation, management, and dissolution of HOAs in common interest developments (CIDs), such as condominiums, townhomes, and planned unit developments.
The Davis-Stirling Act outlines rules for operating HOAs, including meeting requirements, voting, and maintaining financial records. It also covers homeowners’ rights to access association documents, dispute resolution processes, and guidelines for assessing and collecting dues.
One key provision of the Davis-Stirling Act requires HOAs to adopt open meeting policies. This ensures transparency and allows homeowners to participate in decision-making processes. The act also mandates annual budget disclosures, reserve fund planning, and election procedures.
The Fair Employment and Housing Act
The Fair Employment and Housing Act (FEHA) applies to HOAs regarding discrimination. FEHA prohibits discrimination in housing based on race, color, religion, sex, gender, national origin, disability, familial status, or other protected categories.
Homeowners associations must ensure that their rules and policies comply with FEHA. This includes rules related to renting units, selling properties, and accommodating disabled residents. Failure to adhere to FEHA’s requirements can result in legal action and penalties for the HOA.
For example, if an HOA denies a homeowner’s request to modify their unit for disability access, the HOA may face legal challenges under FEHA. As such, boards should review their policies regularly to ensure they align with this law.
California Corporations Code
Many California HOAs are incorporated as nonprofit mutual benefit corporations. Therefore, they must also comply with the California Corporations Code. This code governs the conduct of nonprofit corporations, including how HOAs hold meetings, elect directors, and maintain financial records.
The Corporations Code outlines the responsibilities of the board of directors, including fiduciary duties. All HOA boards must act in the community’s best interest and make decisions that benefit all members. The code also addresses procedures for amending governing documents and handling disputes within the association.
Specific HOA-Related Laws in California
The Davis-Stirling Act and Corporations Code cover a wide range of topics. However, some are more discussed than others. Here are the laws that board members commonly look up.
Solar Rights in California
California law protects homeowners’ rights to install solar energy systems on their properties. Civil Code Section 714 states that HOAs cannot prohibit or unreasonably restrict homeowners from installing solar panels. This law is designed to promote the use of renewable energy and reduce the state’s carbon footprint.
While HOAs can establish guidelines for the placement of solar panels, these guidelines must not increase the cost or reduce the system’s efficiency. Associations should ensure that their architectural review processes comply with this law to avoid disputes with homeowners.
Pet Rights in California
California law limits how much HOAs can restrict pets in residential communities. HOAs can impose reasonable rules regarding the number, size, and type of pets allowed. However, they cannot ban pets altogether (Civil Code Section 4715).
Associations can enforce rules about noise, waste, and leash requirements, but outright bans on pets are generally unenforceable. Homeowners should be aware of their rights regarding pet ownership. Meanwhile, HOAs must ensure their pet policies are consistent with state laws.
Climate-Appropriate Landscaping Rights in California
California promotes water conservation by protecting homeowners’ rights to install drought-tolerant landscaping. According to Civil Code Section 4735, HOAs cannot prohibit or fine homeowners from replacing traditional lawns with climate-appropriate plants, including succulents and native vegetation. Homeowners can also request that HOAs reduce restrictions on irrigation and watering schedules to support water conservation efforts.
Does the Department of Real Estate Regulate HOAs in California?
The California Department of Real Estate (DRE) oversees certain aspects of HOA governance, particularly during the initial development of common interest communities. The DRE ensures that developers provide full disclosure to prospective buyers about the HOA’s governing documents and financial responsibilities.
Once the developer hands control of the HOA over to the homeowners, the DRE’s role diminishes. At this point, the HOA board and its members must adhere to the Davis-Stirling Act and other relevant laws. However, the DRE remains involved in matters concerning real estate transactions and disclosures related to HOAs.
New California HOA Laws 2024
Several new laws affecting California HOAs will go into effect in 2024. These laws address a range of issues, from financial transparency to housing equity. Boards should review and update their governing documents to ensure compliance.
Assembly Bill 648
AB 648 permits board meetings to be held via teleconference under specific conditions that ensure homeowners and board members can participate equally, similar to in-person meetings. Meeting notices must include clear instructions on how participants can join the teleconference.
Assembly Bill 1458
AB 1458 allows homeowners associations to reschedule meetings if a quorum is not reached, with a new date set within 5 to 30 days. During the rescheduled meeting, the quorum requirement is based on the number of members attending in person, by proxy, or through secret ballots.
Assembly Bill 1764
Effective January 1, 2024, AB 1764 enables associations to impose term limits for board members. The bill mandates disqualification for members exceeding these term limits, applying to current and prospective board members. Directors who are no longer HOA members will also be disqualified.
Assembly Bill 1572
AB 1572 extends the emergency rule restricting potable water use for non-functional turf in industrial, commercial, and institutional areas. Exceptions include community-use grass, trees, and residential lawns. Non-functional turf may still be irrigated with recycled water. The rule, initially set to expire in June 2023, was extended by the State Water Resource Control Board.
Assembly Bill 572
AB 572 caps the annual increase in regular assessments on deed-restricted affordable housing units in HOAs. Increases cannot exceed 5% of the previous year’s assessment or the cost-of-living increase, with a maximum of 10%. This applies to HOAs that record their original declaration on or after January 1, 2025.
Senate Bill 721
SB 721 mandates inspections of exterior elevated elements in multifamily residential buildings with three or more units. This regulation was introduced to improve safety following a fatal incident in Berkeley in 2015.
Assembly Bill 1033
Effective January 1, 2024, AB 1033 allows homeowners with an accessory dwelling unit (ADU) to split the lot and sell the ADU separately from the primary residence. The ADU can be converted into a condominium, subject to approval from the HOA, all mortgage holders, and the local government passing an ordinance allowing such sales.
Senate Bill 71
SB 71 raises the small claims limit for entities like HOAs to $6,250.
Senate Bill 428
Effective January 1, 2025, SB 428 expands the grounds for workplace restraining orders to include cases of harassment, unlawful violence, or credible threats of violence against employees.
Protecting Homeowner Rights and Reducing HOA Risk
California HOA laws provide a comprehensive framework for governing homeowners associations and protecting the rights of homeowners. HOAs can operate efficiently and foster harmonious communities by understanding and complying with these laws. Staying updated on new regulations ensures the protection of everyone’s rights and that associations remain in good standing with the law.
Personalized Property Management offers HOA management services around Southern California, including assistance with HOA governance. Call us at 760-325-9500 or email us at info@ppminternet.com for more information!
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