2020 New Laws
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2020 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.

2020 BILLS
AB 685. Covid-19 Notice to Exposed Employees. If an employer receives notice of potential exposure to COVID-19 in the workplace, the employer must provide written notice to all employees as well as the employers of subcontracted employees who were on the premises at the same time as the employee who was diagnosed with COVID-19, ordered to isolate, or died of the virus. In addition, employers must provide exposed employees with information about benefits to which the employee may be entitled including, but not limited to, workers’ compensation and COVID-19-related leave, including company sick leave, state-mandated leave, federal sick leave, as well as anti-retaliation and anti-discrimination protections available. [CHAPTERED]

AB 828Temporary Moratorium on Foreclosures. This bill would prohibit a person from taking any action to foreclose on a residential real property while a state or locally declared state of emergency related to the COVID-19 virus is in effect and until 91 days after the state of emergency has ended. [DIED IN COMMITTEE]

AB 1795. Unlawful Detainer Records. This bill would restrict access to court records on unlawful detainer actions. [DIED IN COMMITTEE]

AB 2227. Common Interest Developments: Funds: Insurance. This bill would require association funds deposited by a managing agent pursuant to Civil Code Section 5380(b) to be put into a bank, savings association, or credit union in the state if specified requirements are met.  It would also prohibit transfers of $10,000 or greater without prior written approval from the board (compared with existing law which prohibits transfers of greater than $10,000 or 5% of an association’s total combined reserve and operating account deposits, whichever is lower). This bill would also specifically require the association to maintain crime insurance, employee dishonesty coverage, and fidelity bond coverage, or their equivalent, for the association and the association’s managing agent or management company and would require the protection against computer and funds transfer fraud to be in an equal amount. [DIED IN COMMITTEE]

AB 2503Qualified Permanent Resident as Roommate. In addition to the existing requirements regarding qualified permanent residents for senior communities operating under the Unruh Act, this bill would (1) additionally require the covenants, conditions, and restrictions or other documents or written policy of a senior citizen housing development to permit a qualifying resident, as defined, to share their dwelling unit with a qualified roommate, as specified, pursuant to a lease or other written agreement with the qualified roommate and (2) authorize a qualified roommate to be entitled to continue their occupancy, residency, or use of a dwelling unit in these circumstances if that qualified roommate is 55 years of age or older. [DIED IN COMMITTEE]

AB 3182. Rental Prohibitions. This bill would provide that an owner of a separate interest in a common interest development is not subject to a provision in a governing document or an amendment to a governing document that prohibits, has the effect of prohibiting, or unreasonably restricts the rental or leasing of any of the separate interests, accessory dwelling units, or junior accessory dwelling units in that common interest development to a renter, lessee, or tenant, except as otherwise provided. The bill would specify that the bill’s provisions do not prohibit a common interest development from adopting a provision in a governing document that prohibits transient or short-term rentals of 30 days or less or adopting reasonable rental restrictions that have the effect of limiting the total number of rentals to 25% of the separate interests in the common interest development, or a higher percentage, subject to certain conditions. [CHAPTERED]

AB 3219Construction Defects; Nonadversarial Inspection. This bill would require that the inspection for purposes of the nonadversarial procedure in construction defect cases be conducted by a person who is licensed as a contractor with a license that applies to the field and scope in which the person is conducting the inspection and issuing inspection findings or a report. [DIED IN COMMITTEE]

SB 908. Collections; Debt Collection Licensing Act. This bill would establish the Debt Collection Licensing Act effective  January 1, 2022 and would prohibit a person from engaging in the business of debt collecting in this state without a license and would also require the person to comply with reporting, examination, and other governmental oversight. The bill would also modify the Rosenthal Fair Debt Collection Practices Act. [CHAPTERED]

SB 969. Common Interest Developments; Term Limits. This bill would allow term limits as grounds to disqualify a candidate for the board. It would permit disqualification of a nominee if the person has served the maximum number of terms or sequential terms allowed by the association. It would also require that persons appointed and overseen by inspectors of election to verify signatures and tabulate votes meet the same "independent third party" criteria as inspectors. [RESCINDED]

SB 981. Delivery of Documents by Email and Posting. This bill would require, on and after January 1, 2022, an association to deliver required documents by email unless the member has not provided a valid email address to the association or has revoked consent to receiving documents by email, in which case the association would be required to deliver the documents by traditional mail.  [DIED IN COMMITTEE]

SB 1030. Accessory Dwelling Units City Approvals. The bill would requires ministerial approval of an application for a building permit within a residential or mixed-use zone to create one accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing single-family dwelling if certain requirements are met. [CHAPTERED]

SB 1049. Short-Term Rental Fines. Cities and counties can significantly increase fines for short-term rental violations. [INACTIVE]

SB 1159. Workers’ Compensation. Expands workers’ compensation coverage for COVID-19 illness for employees who leave their homes to perform work. Employers with 5 or more employees are required to report all known employee positive tests to their workers' compensation claims administrator. This applies even if the employee is not claiming workplace exposure. If an employee claims they contracted the virus while performing their job, the new law creates a rebuttable presumption the employee contracted it at work. The burden is on the employer to prove otherwise. [CHAPTERED]

SB 1340Building Standards: Decks and Balconies: Inspection. Existing law (SB 326) established requirements for condominium associations, starting in 2025, to inspect exterior elevated elements and associated waterproofing elements. This bill would modify existing law by eliminating the prohibition against the contractor performing the inspection from bidding on the repair work. [RESCINDED]

2020 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.

Aldea Dos Vientos v. Calatlantic Group. A condominium association sued the developer alleging construction defects. The association’s governing documents require arbitration of such disputes and a vote of at least 51 percent of the association’s membership prior to beginning arbitration.  The association began arbitration without obtaining a vote of its members. Later, the members overwhelmingly voted to pursue the arbitration. The arbitrator dismissed the arbitration for lack of a membership vote prior to its commencement. The trial court confirmed the award and entered judgment for the developer. We reverse. We disagree with Branches Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 26 Cal.App.5th 743 which holds otherwise.

Bennett v. Cielo HOA. Plaintiffs brought suit in Federal Court against their HOA and the HOA’s legal counsel for violations of the Fair Debt Collections Practices Act. The allegations arose from a state court lawsuit that the HOA brought against Plaintiff Pamela Bennett for judicial foreclosure and breach of covenant. The FDCPA claims were all dismissed. Notably, the District Court held that the HOA was not a “debt collector” under the FDCPA since it was a creditor. The Court also held that the HOA could not be vicariously liable for alleged FDCPA violations of its attorneys since both parties would need to be debt collectors.

Coley v. Eskaton. A director acting with a material conflict of interest is not protected from personal liability by the business judgment rule (BJR). The defendant directors are employees of a company which owns a majority of units and thus always holds a board majority. Their employee compensation is partly based on employer performance, so they were incentivized to shift responsibility for certain costs to the other unit owners, resulting in a material conflict of interest. The directors were found personally liable for various breaches of fiduciary duties. It is only necessary to establish the existence of a fiduciary relationship, breach of fiduciary duty, and damages for the owner to be entitled to damages absent some applicable affirmative defense.

Davis v. Echo Valley Condominium Association, 945 F.3d 483 (6th Cir. Dec. 19, 2019) Davis suffered from asthma and alleged that the association's refusal to ban smoking in her building discriminated against her because of her health issues and was in violation of the federal Fair Housing Act (FHA). The Association submitted a smoking ban amendment to the membership for approval but it failed. The court determined that a smoking ban would amount to a fundamental alteration of the association's policies and would intrude on the rights of other residents to smoke within their units. The court ruled that a smoking ban is not a reasonable accommodation.

Jeppson v. Ley (2020) 44 Cal App.5th 845. Although this case does not directly relate to HOAs, it concerned postings on Nextdoor.com. In this case, a settlement agreement was signed by feuding neighbors arising from one neighbor’s dog killing the other’s cat. The settlement agreement contained a provision where the parties agreed to not disparage each other. One neighbor (Ley) then posted a hostile message on Nextdoor.com about Jeppson. Jeppson sued Ley for breach of contract among other actions. Ley filed an Anti-SLAPP motion that was denied by the trial court. The Appellate Court affirmed, holding the posting on Nextdoor.com was not considered a protected activity (defined generally as a written statement made in a public forum in connection with an issue of public interest). The court determined that there was no public interest in the post on Nextdoor.com stating: “Despite the medium of the internet, the topic was not of widespread public interest. There is no issue of public interest when the speaker’s words are merely an effort to gather ammunition for another round in the speaker’s neighborhood wrangle.”

Ranch at the Falls v. O’Neal. The trial court ruled in favor of plaintiff, finding it was entitled to an express easement (or in the alternative a prescriptive easement) and an equitable easement over all private streets in a gated community and express and equitable easements over a homeowners lot in an adjacent community. The appellate court found the trial court erred on several points. One was that the individual homeowners within the gated community who owned the private streets were indispensable parties to the lawsuit. Another was that plaintiff did not establish the requirements for prescriptive easement over the private streets. The trial court also failed to make the necessary findings to support equitable easement.

Third Laguna Hills Mutual v. Joslin. The HOA brought an enforcement lawsuit against Owner Joslin and Michael Cohan for allowing underage people to live in their home (it is a senior community) and for nuisance violations. Joslin filed a cross-complaint against the HOA claiming the HOA unlawfully prevented him from renting his home. The HOA filed an anti-SLAPP motion, claiming the cross-complaint was brought just because the HOA initiated legal action and, therefore, was protected activity. The trial court denied the anti-SLAPP motion and the appellate court affirmed. The Appellate Court determined the tort claims alleged in Joslin's cross-complaint arose from the HOA's decisions and actions, not from the HOA's filing of the complaint or its oral or written communications to the Owners. The decision also noted that the litigation privilege (Civil Code §47 ) is a related concept, but is separate and distinct from the anti-SLAPP statute (Code of Civil Procedure §425.16). The court also rejected the HOA’s argument that enforcement of the CC&Rs is a public issue and an issue of public interest from which protective activity arises under the anti-SLAPP statute.

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.

Alexander v. Singletary. This case interprets Civil Code §5975(c) which awards attorneys’ fees to the prevailing party seeking to enforce the governing documents of a common interest development. Alexander filed a lawsuit seeking a declaration that covenants recorded in 1955 were unenforceable against him so that he could partition his lot out of the subdivision. The trial court granted defendants’ summary judgment motion, finding that the 1955 covenants established a common interest development and the documents were binding and enforceable. The trial court denied defendants’ motion for attorneys fees, saying that Civil Code §5975(c) did not apply because plaintiff’s actions did not seek “to enforce” the governing documents. The trial court concluded “the statute's language limits awards to ‘actions to enforce governing documents,’ which is narrower language than for instance ‘actions involving the enforcement of governing documents.’ The appellate court disagreed. Relying on the California Supreme Court case of Tract 19051 Homeowners Assn. v. Kemp (2015) 60 Cal.4th 1135 and Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, the court determined that the gist of Alexander's lawsuit placed the question of the enforceability of the documents squarely before the court.

Club Acacia v. Professional Community Management. Contract between Association and management company required disputes to be decided by binding arbitration and the arbitrator could award reasonable attorneys fees to the prevailing party. Litigation was brought in Superior Court against the management company and a contractor relating to the installation of a fire alarm system. Neither the Association or the management company moved to compel arbitration. The Association was deemed the prevailing party and the Superior Court awarded attorneys fees against the management company in the amount of $628,587.50. The appellate court reversed, determining that attorneys fees were only awarded in an arbitration under the terms of the contract. Because the dispute was not decided in arbitration, the Association was not entitled to its attorneys’ fees.

Cross Creek Village Homeowners Association v. Brunner.  The HOA filed a lawsuit against Brunner alleging he made false and disparaging remarks about the HOA to its bank and financial management company. Brunner filed a cross-complaint against the HOA, alleging negligence, breach of fiduciary duty, breach of contract, declaratory relief, and an accounting. The HOA filed an Anti-SLAPP motion under Code of Civil Procedure §425.16, claiming that Brunner’s cross-complaint was due to the HOA’s lawsuit filed against him. The HOA also argued that Brunner could not show a probability of prevailing on the merits of his causes of action. The trial court denied the Anti-SLAPP motion and the HOA appealed. One argument Brunner raised is that the Anti-SLAPP motion does not apply because Civil Code §5975 authorizes a homeowner to bring an action to enforce the governing documents against an HOA. The appellate court rejected this argument, noting that the Anti-SLAPP statute does not have an exception for cases brought under Civil Code §5975. The Appellate Court determined that Brunner’s allegations claiming the HOA filed the lawsuit to harass, humiliate and silence him and wasting association funds on meritless lawsuits was protected activity under the Anti-SLAPP statute. The burden then shifted to Brunner to show he had a probability of prevailing on those claims. Brunner’s declaration filed in opposition to the motion was devoid of facts to support his allegations. The Appellate Court reversed the trial court’s denial of the Anti-SLAPP motion pertaining to those allegations.

De Groot v. Essex House. Defines what is subject to an anti-SLAPP motion.

Gallian v. Gragnano. The Huntington Beach Gables Homeowners Association brought suit against owner Gallian for architectural violations and nuisance. The owner cross-complained against the individual directors asserting causes of action for indemnification, apportionment of fault and declaratory relief. The directors demurred to the cross-complaint and the owner filed a voluntary dismissal with prejudice as to the individual directors. Subsequently, the HOA and owner attempted to settle the case that would have involved releases by all parties, including the individual directors. The release included a waiver of attorneys’ fees. However, the settlement was ineffective as there was no meeting of the minds. The individual directors then filed a motion for attorneys’ fees that was granted in the amount of $46,138.00. The issues on appeal were whether the trial court abused its discretion in finding good cause to allow the motion for attorneys fees to be filed late and whether the cross-complaint for indemnification against the directors was an action to enforce the governing documents under Civil Code section 5975. The appellate court found the trial court did not abuse its discretion for the late motion for attorneys fees. It also found that since the HOA’s complaint sought enforcement of the governing documents, the cross-complaint seeking indemnification for liability arising from the same complaint was therefore an action to enforce the governing documents.

Maravich v. Dover Shores Community Association. Homeowners brought suit against their HOA contending the HOA failed in its duty to prevent other owners from obstructing the view from their home. The court reviewed relevant provisions of the CC&Rs and Rules and determined the HOA discretion to allow tall trees, even if they impede an owner’s view. The issue was whether a rule adopted regarding trees and views was inconsistent with the CC&R provision on the same subject. The Appellate Court noted that while the rule was different than the CC&R provision, “merely being different does not render them inconsistent.” The CC&R provision confers discretion on the Landscape Committee to require trimming and removal of tall trees or not. The court determined the rule was a policy statement with regard to the discretion about the tall trees.

Parnell v. Shih. The Parnells, tenants in a homeowners association, obtained a restraining order against a homeowner (Shih) due in part to what the trial court determined were Shih’s numerous unwanted emails about the Parnells (approximately 300 in a 7 month period of time) “on issues that were mundane and designed to simply inflict distress/harassment upon [the Parnells].” The emails were sent not only to the Parnells, but also to their landlord, Mr. Parnell’s employer, and the association. The trial court also found credible evidence of other unreasonable and unwarranted conduct toward the Parnells. Shih was ordered not to harass or contact the Parnells and to stay five yards away from them and their son, and 100 yards away from their dog. Shih was also ordered not to contact Mr. Parnell’s employer, the U.S. Marine Corps. The appellate court affirmed the order nearly in its entirety, sending back only one item with directions that the trial court re-word a portion of the order to limit the prohibition on contacting the Marine Corps (a large and public entity engaging in many activities beyond employing Mr. Parnell) to matters concerning the Parnells.

Vanderkallen v. Glen Ivy Recreational Vehicle Park. Plaintiffs were members of the association – a stock cooperative. After an incident involving plaintiffs, the association held hearings and ultimately served plaintiffs with a notice to vacate. Plaintiffs sued, claiming the association didn’t have a basis to expel plaintiffs. The association filed an Anti-SLAPP motion which was denied by the trial court. The appellate court affirmed, finding that the plaintiff’s claims were based on the association’s decision to expel plaintiffs and did not fall under the Anti-SLAPP statute. Further, the court found that the association failed to show that the board meetings where the hearings on the expulsion were held were not a public forum under the Anti-SLAPP statute.

Violette v. Chapman Townhomes. Plaintiff tenant in a condominium association could not bring a claim for breach of implied warranty of habitability against the HOA. The court sustained the Association’s demurrer to the complaint on the cause of action for breach of implied warranty of habitability. The court noted that while an HOA can indeed be treated like a “landlord” under traditional tort principals where it is expected to exercise due care in the maintenance of common areas under its control, it is not obligated to ensure that a common area is “habitable.” Further, the HOA is not responsible to ensure the “habitability” of a separate dwelling unit that it does not own or lease to a tenant.

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