2019 New Laws
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2019 NEW LAWS

TERMINOLOGY
Statutory Law. Bills (proposed changes to the law) are introduced into the legislature in Sacramento. Once a bill has been approved by both houses of the legislature (the Assembly and Senate) and signed by the Governor, a bill becomes a statute or "statutory law." The Davis-Stirling Act (Civ. Code §§4000-6150) is an example of statutory law. Regulatory laws are adopted by executive agencies based on statutes. Ordinances are passed by counties and cities.

Enrolled. A bill that passes both houses is sent for proofreading for consistency before being sent to the Governor for approval.

Transmitted to Governor. The governor must sign or veto legislation within 10 days after transmittal, or it becomes law without his/her signature. For bills transmitted after session adjournment, the governor must act within 30 days after the end of the session, or the legislation becomes law without being signed.

Chaptered. A bill is "chaptered" once it is signed by the Governor. It becomes law January 1 of the following year unless it contains an urgency clause (takes effect immediately) or specifies an effective date.

2019 BILLS

AB 446. Discrimination: Victims of Domestic Violence. This bill requires the inclusion of “victim of abuse” disclosure/stamp on the first/cover page of CC&Rs:

If this document contains any restriction based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, victim of abuse status, disability, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void, and may be removed pursuant to Section 12956.2 of the Government Code. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

AB 670. Accessory Dwelling Units. This bill would make a provision in a common interest development’s governing document void and unenforceable if it prohibits the construction of accessory dwelling units or junior accessory dwelling units. An “accessory dwelling unit” is a second unit on a lot, either detached or contained within the walls of the house on the lot, up to 1,200 square feet, and including cooking, sleeping, and bathroom facilities. Accessory dwelling units may also have relaxed setback and parking requirements. A “junior accessory dwelling unit” may be up to 500 square feet and must have an outside entrance and cooking facilities, but may share bathroom facilities with the main house on the lot.

AB 885. Natural Disaster Property Tax Relief. Where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of “newly constructed” and “new construction” any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction, base year property taxes do not change.

SB 222: Discrimination: Veteran or Military Status.  Existing law declares that housing discrimination on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information is against public policy.  This bill would declare that housing discrimination on the basis of veteran or military status is against public policy. Existing law requires a county recorder who provides a copy of a declaration, governing document, or deed to any person to place a cover page or stamp on the first page of the previously recorded document stating that if the document contains any restriction based on certain characteristics, that the restriction violates state and federal fair housing laws and is void, and may be removed. This bill would require the specified language in the cover page or stamp to include the characteristic of veteran or military status.

SB 323. Elections & Director Qualifications. A variation of this bill was vetoed last year by Governor Brown. This bill requires election rules:

  • elections must be held at the end of each director's expiring term, but at least every four years.
  • specify candidate qualifications, subject to the following:
    • must disqualify anyone not a member at the time of nomination (except developer nominations if otherwise permitted in the documents);
    • entity owners may appoint a natural person for nomination or service as a director;
    • if stated in the bylaws or election rules, may disqualify:
      • persons delinquent in the payment of regular or special assessments, except if assessments are paid under protest or pursuant to a payment plan;
      • joint owners from serving on the board at the same time; or
      • someone who has been a member for less than a year.
    • may not disqualify anyone for nonpayment of fines, fines characterized as assessments, collection charges, late charges or costs levied by a third party (management companies e.g.).
  • require retention of, as election materials, a candidate registration list and voter list. The voter list must the name, voting power, and physical address or parcel number or both, and the mailing address in some cases;
  • must make candidate registration list and voter list available to members to verify accuracy the member's information at least 30 days before ballots are distributed;
  • provide general notice (or individual notice if requested) at least 30 days before nomination deadline of the procedure and deadline for submitting a nomination;
  • provide general notice (or individual notice if requested) at least 30 days before ballot distribution of the following:
    • date, time and physical address to return ballots; 
    • date time and location of ballot counting meeting;
    • a list of candidates’ names that will appear on the ballot.
  • mandate the inspector of elections deliver to each member by individual delivery (or website posting when specified wording regarding website posting is state on the ballot) the ballots and a copy of the election operating rules at least 30 days before an election;
  • prohibit the denial of a ballot to a member for any reason and to a person with general power of attorney for a member;
  • require the sealed ballots, signed voter envelopes, voter list, proxies, and candidate registration list to be in the custody of the inspector of elections or at a designated location until after vote tabulation and would, with certain exceptions, require these association election materials to be considered association records, as defined, subject to inspection and copying;
  • allow someone with a general power of attorney to vote for a member.
  • may not be amended less than 90 days before an election.

The bill makes members' email addresses part of the membership list available to all members. It requires elections to be held at minimum every four years. It provides that when a court finds that election procedures were not adopted or adhered to, it shall void the election results unless the association established that its noncompliance did not affect the election results. It allows a member to be awarded attorneys' fees for consulting an attorney for small claims court.

SB 326. Waterproofing Inspections; Construction PlansThis bill would require the following:

  • Starting in 2025, condominium associations must have visual inspections of load-bearing components (six feet above ground, supported entirely or substantially by wood) and associated waterproofing systems every nine years. An inspector must submit a report to the board providing the current physical condition and remaining useful life of the load-bearing components and associated waterproofing systems.
  • Inspection obligations apply only to buildings with three or more multifamily dwelling units.
  • The declarant or developer of a condominium project must submit a complete set of architectural and structural plans and specifications to an association for any buildings containing exterior elevated elements, as specified.
  • Changes rights and duties of an association regarding construction defect cases.

SB 434. Managing Agent Production Records upon Termination. This bill would require a managing agent whose management agreement has been terminated to produce client property and client records within a specified period of time pursuant to a written request by a common interest development association, except as specified. The bill would define “client property” and “client records” for purposes of those provisions.

SB 652. Entry doors: Display of Religious Items. This bill would, with certain exceptions, prohibit restrictions on the display of religious items on an entry door or entry door frame of a dwelling.

SB 754. Board Members: Election by Acclamation. This bill would amend Section 5100 of the Civil Code and Section 7522 of the Corporations Code to require, for associations including 6,000 or more units, when the number of director nominees at the close of the nomination period is not more than the number of vacant director positions on the board, that the director nominees be considered elected by acclamation, subject to board's satisfaction of specified notice requirements to provide individual notice of the election and the procedure for nominating candidates at least 30 days before the close of nominations.

2019 CASE LAW
Case Law. Case law is created by judicial decisions in California's appellate courts and supreme court. Statutory law demands or prohibits certain acts. Case law interprets statutory law. The cases also explain how the justices arrived at their particular conclusions. If published, their rulings serve as precedence for cases that follow.

Black Sky Capital v. Cobb. The California Supreme Court held that the plain wording of CCP 580d barring a deficiency judgment after a nonjudicial foreclosure sale applied only to the lien being foreclosed and no others.

Curto v. Country Place. Associations cannot segregate pool swim times based on gender since it amounts to sex discrimination in violation of the Federal Fair Housing Act.

Eisen v. Tavangarian. A view obstruction dispute between neighbors.

Obduskey v. McCarthy Holthus. A law firm that sends a letter in connection with a nonjudicial foreclosure proceeding isnot acting as a "debt collector" under the Fair Debt Collection Practices Act (FDCPA). "... but for §1692f(6), those who engage in only nonjudicial foreclosure proceedings are not debt collectors within the meaning of the [Fair Debt Collection Practices] Act." On judicial foreclosures the Court stated: "And whether those who judicially enforce mortgages fall within the scope of the primary definition is a question we can leave for another day. See 879 F. 3d, at 1221–1222 (noting that the availability of a deficiency judgment is a potentially relevant distinction between judicial and nonjudicial foreclosures)."

Orchard Homes v. Orchard Alliance. Voter apathy is not a requirement for a petition seeking court approval of CC&Rs under Civil Code §4275.

Sands v. Walnut Gardens. Plaintiffs sued the association for a pipe on the roof that broke causing water damage to their bedroom. The trial court granted a nonsuit in favor of the association. The appellate court reversed. The CC&Rs required the association to keep the project in a “first class condition.” Witnesses testified the association failed to perform preventative maintenance and roof pipes had not been inspected or maintained in years.

UNPUBLISHED OPINIONS
The following cases are unpublished opinions and are not binding precedent. However, they give insight on how future courts might deal with similar issues.

Adams v. Newport Crest. The opinion involves the 5th appeal between the owner, Kristine Adams, and the association regarding  an action to enforce a settlement agreement between the owner and association. The only good nugget from this case is the statement that an action to enforce a settlement agreement does not involve breach of fiduciary claims since the relationship between the parties is as two parties in a contract.

Baldwin v. Woodside 05S, LP. Where an arbitration agreement is silent on what can be arbitrated, the court will decide the scope of the agreement. Any conditions precedent and other prerequisites to arbitration are decided by the arbitrator.

Benlloch v. Johnson. The association paid the legal fees to obtain a restraining order to protect a director from a homeowner who was harassing the director. The court issed a restraining order and awarded attorney's fees to the director. The homeowner appealed claiming the association was not legally authorized to cover the cost of the director's litigation. The court of appeals disagreed and upheld the award.

Bertoli v. Dennis.  This is a covenant interpretation case. In this case, certain owners argued that the recorded covenants didn’t give voting rights to owners of undeveloped parcels. The court rejected that argument and concluded the recorded covenants the correct interpretation was each owner had one vote for each parcel it owned, regardless of whether the parcel was developed or not.

Chen v. Summitpointe. The issue in this case is largely procedural, whether an interlocutory order granting permanent injunctive relief is appealable. The appellate court recognized the authority is split, but determined the interlocutory orders were appealable and could also be treated as a writ of mandate. The underlying issue was a dispute about the homeowner’s planned landscaping project. At a court ordered settlement, the parties reached an agreement regarding the landscaping of the homeowner’s lot. However, the agreement was based on an incorrect assumption on both parties’ parts as to the location of the property line. When it was subsequently discovered that the property line between the homeowner’s lot and the common area was much closer to the homeowner’s residence, the court granted a non-exclusive, equitable landscaping easement in favor of the homeowners. The easement was limited to ground cover and bushes and prohibited trees and hardscape. The easement was not to run with the land and was personal to the homeowners. The appellate court upheld the order granting the non-exclusive equitable landscaping easement. The opinion has a good discussion of equitable easements.

Cootes v. Wyman.  Common area repairs affecting only a few homeowners are not matters of public interest for anti-SLAPP purposes. Statements made in homeowners association meetings fall outside the scope of official proceedings” for purposes of the anti-SLAPP statute.

Durant Towers v. Winchester. Appellate court affirmed award of attorneys fees to HOA who filed an action for TRO and injunctive relief to compel defendant to allow entry into her unit for the purpose of assessing and repairing a water leak that affected the downstairs unit. Defendant Winchester evaded the HOA’s attempts to gain entry into her unit to investigate the source of the leak. When the HOA filed a lawsuit, it indicated that ADR was not required because it sought preliminary injunctive relief. The court agreed and upheld the award of attorneys’ fees. The HOA had obtained the injunction and then dismissed the case stating that the primary purpose of the litigation was achieved by gaining entry into defendant’s unit and assessing/repairing the leak.

Forte v. The Village Green Owners Association. Appellate court upheld HOA’s motion for summary judgment in plaintiff’s slip and fall case because she did not know what caused her fall. After she fell, her right foot slid into a sprinkler but she had no proof the sprinkler caused or contributed to her injuries.

Harbour Island v. Alexander. The court upheld an injunction requiring tenants to install noise mitigating measures in their unit, cease recording or photographing the board president while at the pool, and cease allowing their dog to urinate and defecate in the common area where no pets are allowed. Even though the CC&Rs did not have language to address the dog issues, the court found that the nuisance restriction was broad enough to allow the association to exclude dogs from specified common areas for health and safety reasons. The court also determined that the association was not required to perform a physical inspection of the noise complaints--testimony from the neighboring owners was sufficient. The court also ruled that tenants lack standing to assert the rights of their landlord.

Kim v. Kim. Plaintiff claims members represented they would support his run to be president but ended up not supporting him. Plaintiff alleged the association was negligent in failing to exercise reasonable care due to defendant’s alleged misrepresentations about supporting plaintiff’s efforts to become president. He also alleged the association was negligent by publishing defamatory statements in the newsletter. The trial court granted defendants’ demurrers to the complaint and the appellate court affirmed. Association owes no duty to protect candidate's interest in serving as president.

Lewis v. County of Monterey. The issue was whether fines imposed by the County of Monterey on plaintiff for using his property as a short-term rental were valid. The property is located in the coastal zone. The court acknowledged the Greenfield case but stated that plaintiff’s claims were unripe because he had not applied for a permit to allow short-term rentals and had not requested a formal administrative interpretation of whether short-term rentals are allowed on their property.

Lumetta v. Arborlake. In this case, the 9th Circuit court of appeals determined the bankruptcy court did not abuse its discretion in denying the owner’s motion to impose sanctions against the HOA for violating the bankruptcy discharge order. The Association had resumed its state court collection action against the debtor’s husband for pre-discharge debt. The opinion does not describe how the HOA’s actions violated the discharge injunction but stated it was a technical violation and the bankruptcy court has discretion to not impose sanctions.

Schuchmacher v. McDermott. The underlying issue had to do with allocating proceeds from insurance due to a fire in plaintiff’s unit. Directors prevailed on a summary judgment motion re civil conspiracy because they were not on the board at the time insurance proceeds were distributed so they could not be parties to civil conspiracy. The court denied their motion for attorneys’ fees under CC Section 5975(c) and the CC&Rs saying that the cause of action for civil conspiracy was not an action to enforce the governing documents.

Windham v. Lacher. Affirmed the trial court’s granting of a preliminary injunction against owners who were obstructing termite tenting of the building (at first refused to sign the form, refusing to give her key, calling the police when the fumigation company showed up). The Association was deemed the prevailing party and received its attorneys’ fees for the trial court and appellate actions.

Yu v. Broadway Hollywood Homeowners Association. A letter sent by HOA attorney to owners reporting litigation between plaintiff owner and the Association was protected under anti-SLAPP. The court also determined Lamden is narrow in its interpretation and upheld judgment for plaintiff’s against the HOA for failing to provide valet parking  as a violation of the governing documents.

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