Granting Exclusive Use (AB 1098). Starting January 1, 2006, giving individual owners the exclusive right to use any portion of the common areas requires approval of 67% of the membership. Civil Code §1363.07.
Membership List. Starting July 1, 2006, boards can no longer withhold the membership list even if it provides an alternate means for communicating with members. However, individual owners may opt out of the sharing of their name and address by notifying the association in writing that they prefer to be contacted by the alternative process. Civil Code §1365.2(a)(1)(I)
Inspection of Records. Associations must now produce records for inspection by the membership within specific time frames: Civil Code §1363.05(d) and Civil Code §1365.2
Electronic Records. Associations may now deliver records in electronic form, provided the records are in a format that prevents the records from being altered. Civil Code §1365.2
Elections. Elections must be conducted by an Inspector of Election and must be done by secret ballot with ballots mailed 30 days in advance of the meeting. Boards must adopt election rules and the rules must be consistent with the association's governing documents. Ballots count toward quorum. Ballots must be opened and counted by the Inspector in front of the membership.
Proxies. Previously, anyone could act as a proxyholder. Members can only designate other members to attend in their place. Proxies must now be on 2 pages, the first with the authorizing language, the second page with the vote. Civil Code 1363.03(d)
Reserves. Boards must now include in the Association's budget (i) the current deficiency in reserve funding expressed on a per unit basis, (ii) a statement indicating whether the board decided to defer repairs or replacement of a major component, and (iii) a statement indicating whether the association has any outstanding loans. Starting January 1, 2009, a summary of the reserve funding plan must be distributed to all members. Civil Code 1363.5
Assessment Collection. Boards are now required to be actively involved in the collection process. Boards must include with pre-lien letters (by certified mail) a notice of an owner's right to "meet and confer" with the board. Boards must authorize the recording of a lien by a majority vote at an open meeting. The vote must be recorded in the minutes of the meeting. The minutes may not disclose the name of the delinquent owner and can only refer to the address by its lot/tract number or the assessor's parcel number. Boards are allowed to record a lien but may not start foreclosure until the amount is at least $1,800 or the delinquency is at least 12 months old. Foreclosure cannot commence until the board authorizes it in an open meeting and records the decision in the minutes. Civil Code §1367.4(c).
Architectural Committee. Architectural committees must make written decisions and explain why the proposed change was not approved, and provide a description of the procedure for reconsideration of the decision. Associations are now required to annually mail a notice to all homeowners describing the association's architectural application process, including the procedure used to review and approve or deny changes. Civil Code §1378
American Flag. Associations may not restrict members from displaying the U.S. flag on their own property or exclusive use common area.
Towing Vehicles. The previous statute regulating the towing of vehicles was replaced with a new one regulating when and how vehicles may be towed and establishing new signage requirements.
Increase in Minimum Wage. Minimum wage goes to $7.50 per hour, effective January 1, 2007 and increases again on January 1, 2008 to $8.00 per hour.
2006 CASE LAW
Employee Grooming Standards. The U.S. Court of Appeals clarified what may be considered proper workplace grooming standards. Jerspersen v. Harrah's (9th Cir. 2006) 444 F.3d 1104
Voting Requirement for Amendment Approval.A declaration amendment provision that required more than 50 percent of the votes refers to a majority of the total votes in a homeowners' association and not merely the majority of the owners' votes that were cast. Peak Investments v. South Peak Homeowners Association Inc. (2006) 140 Cal. App. 4th 1363.
Healy v. Tuscany Hills Landscape & Recreation Corp. (2006) 137 Cal.App.4th 1. Gloria Healy sued Tuscany Hills claiming the association had defamed her when it informed the membership that her refusal to allow access through her property for weed abatement resulted in increased costs to the Association. Healy alleged she suffered loss of reputation, shame, mortification and hurt feelings in the amount of $250,000. Healy won at the trial level. The Court of Appeals reversed the lower court's decision. The Court determined that the allegedly defamatory statements came within what is known as the "litigation privilege." The litigation privilege is a type of immunity given to statements connected to litigation. The protections are found in Civil Code §47(b) and Code Civ. Proc. § 425.16.
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