The reorganized Davis-Stirling Act takes effect January 1, 2014. In addition to renumbering all sections of the Act, the rewrite does the following:
- Groups provisions by subject matter in a logical order;
- Divides longer sections into shorter, simpler sections;
- Clarifies the meaning of provisions;
- Standardizes terminology; and
- Replaces outdated references to the Corporations Code.
Following are significant changes to the Act:
Civil Code §4045
. Giving General Notice
. Since not all associations have an area for posting notices, notice for board meetings (and other general notice requirements) has been expanded to include:
- First-class mail,
- Electronic notice (with consent),
- Inclusion in a billing statement or newsletter, and
- Television broadcasts.
2. Civil Code §4202
. Commercial & Industrial CIDs
. Commercial and industrial associations are no longer exempt from emergency assessment provisions in the Act.
Civil Code §4205
. Hierarchy of Documents
. When conflicts exist between documents and between documents and the law, the following hierarchy will be used: law, CC&Rs, articles of incorporation, bylaws, rules & regulations.
Civil Code §4235
. Update Reference in Documents
. Boards can update statutory references without need for membership vote.
Civil Code §4600
. Granting Exclusive Use
. Exempts 67% requirement to:
- Accommodate disability,
- Comply with governing law,
- Assign parking space, storage unit designated in CC&Rs but not assigned to a specific unit.
6. Civil Code §5115
. Amendments with Ballots
. Previously, a proposed amendment could be distributed to all owners not less than 15 days and not more than 60 days prior to voting on the amendment. Now the text of the proposed amendment shall be delivered to the members with the ballot.
Civil Code §5125
. Custody of Ballots
. Custody by the Inspector of Elections was extended to one year (from nine months in current Code).
Civil Code §5200
. Inspection of Governing Docs
. Governing documents added to inspection rights.
Civil Code §5260
. Written Requests
. The following requests by members must be in writing to:
- Change info in membership list,
- Add or remove 2nd address for delivery of notices to the member,
- Request individual delivery of general notices (or cancel prior request),
- Opt out of the membership list or to cancel prior request, and
- Receive all reports in full or to cancel a prior request for same.
Civil Code §5300
. Annual Budget Report
. Consolidates financial disclosure requirements under this new term:
- Reserve summary,
- Reserve funding plan,
- Statement of deferral or non-repair major components,
- Statement as to whether special assessment anticipated,
- Procedures used to calculate reserves,
- Outstanding loans longer than one year, and
- Summary of insurance.
Civil Code §5310
. Annual Policy Statement
. Consolidates policy disclosures:
- Name & address of designated person to receive notices,
- Right to request to have notices sent to 2 different addresses,
- Posting locations for general notices,
- Right to receive general notices individually,
- Right to receive minutes,
- Assessment collection policies,
- Policies in enforcing lien rights,
- Discipline policies including schedule of fines,
- Summary of dispute resolution procedures,
- Summary of architectural application procedure,
- Mailing address for overnight payment of assessments, and
- Any other information required by law or the governing documents.
Civil Code §5350
. Conflicts of Interest
. Forbids directors from voting on matters affecting their own:
- Damage assessments
- Payment plans
- Remodel applications
- Exclusive use application
Civil Code §5850
. Fine Schedule
. The new Davis-Stirling Act requires annual distribution of the association’s fine schedule as part of its annual policy statement. Previously, notice was required only upon adoption or revision.
Civil Code §5855
. Reimbursement Assessments
. Boards must give notice of a hearing and an opportunity to be heard before imposing reimbursement assessments on an owner.