AB 3182 - Rent Restrictions
Adams Stirling PLC
  California's Leader in Community Association LawJuly 26, 2020
STOP AB 3182

We need your help to tell the Senate Housing Committee to VOTE NO on AB 3182 (Ting) before their hearing on July 30, 2020. AB 3182 will prohibit associations from including rental or lease restrictions in their governing documents, jeopardizing the ability for associations to access financing when needed to address needed improvements and to maintain property values.

AB 3182 will also make it more difficult for first-time home buyers, seniors and veterans who need Federal lending programs, like FHA, to purchase condominiums. Here’s what you need to know:

• Generally, rentals are not an issue in common interest developments (CIDs), and the current law is more than adequate to provide the flexibility needed for an association to address the issue locally. Rentals become a problem in a common interest development when there are too many, which leads to issues with obtaining financing, either for the common interest development itself or the prospective owner.

• AB 3182 will exacerbate the issue by prohibiting a common interest development from imposing a cap of fewer than 25 percent rentals, even if it’s necessary to obtain financing. While Federal loan programs generally allow for a lower owner occupancy rate to secure financing, many private lenders require a much lower rate.

• AB 3182 will require many associations to amend their governing documents to address the change in law. This is a cost many associations cannot afford, especially while dealing with the impact of COVID-19. These costs will be passed onto owners through additional assessments, which is the exact opposite of what we should be doing in California.

• Condominiums in common interest developments offer first-time home buyers an affordable way to invest in home ownership, especially in vibrant urban environments. They also provide a sense of community not always present in other communities. Condominiums are answering the call from the State when it comes to affordable housing. Unfortunately, AB 3182 will only make condos more expensive, at a time when we can least afford it.

• AB 3182 will increase housing costs, exacerbating the affordable housing crisis, by discouraging home ownership by encouraging investor-buyers.

Take action by sending our sample email to the legislators listed. You can include all email addresses in the BCC line of the email to save time.


Zoom Meeting Violation? Your newsletter states Zoom meeting are permitted; however, I am concerned that Section 4925 of the California Civil Code would require ALL association members have Zoom capability. If they don't, they cannot attend the meeting and the association would be in violation of the Civil Code. -Tom S.

RESPONSE: Video capability is not required for members to participate in a video conference. They can use a smart phone, flip phone or landline to call into the meeting. It allows them to hear the meeting and participate during open forum. When it comes to different platforms, most have that capability of video and/or telephone participation. Some don't. Boards should only use video conferencing platforms that allow people without computers or smart phones (hard to believe they exist) to call into the meeting. For example, Zoom, GoToMeeting, RingCentral and GoToWebinar all have the feature. WebEx has the feature but I found it difficult to use. Other platforms that offer the feature have recently come online. In my experience, most seem to be using Zoom, followed by GoToMeeting and GoToWebinar.

Annual Meeting Quorum. Do annual meeting attendees via Zoom count toward quorum? -A.J.

RESPONSE: If attendees have not already mailed in a ballot and attend a virtual membership meeting, they can be counted toward quorum.

The authority for virtual membership meetings is found in Corporations Code §7511(a): "Whenever members are required or permitted to take any action at a meeting, a written notice of the meeting shall... state the place, date and time of the meeting, the means of electronic transmission by and to the corporation ... or electronic video screen communication, if any, by which members may participate in that meeting...."

Outrageously Expensive. Our HOA is 6 units. Four of us are on the board and the other two are disinterested. This election inspector position seems outrageously expensive for us. Is there anyway around this for a very very small HOA? Thank you! -Karen D.

RESPONSE: You can thank Marjorie Murray's organization for the increased costs and long election cycle. They sponsored SB 323 and she lobbied for it in the Capitol.
As a result, associations will now spend one-third of each year conducting elections. Associations of your size are dismayed by the heavy election burdens placed on small associations. Due to the added burdens and potential liability, volunteers are increasingly difficult to find to serve as inspectors. If you can find a volunteer, you don't need to hire an inspector.

Opening Ballots. Our inspector of elections has asked for volunteers from our association to help count the ballots. Can a board member assist with the opening and counting of ballots? -Phyllis R.

RESPONSE: No. Directors and candidates are not independent third parties and are specifically excluded from opening ballots and tabulating votes. (Civil Code §5110(b).)

Resignations & Appointments. With resignations caused by election delays, and worries about meeting in person, can a sole remaining board member appoint a new board members? Thank you for your newsletter, my wife and enjoy the levity you bring to often droll matters. -Ross S.

RESPONSE: If enough seats become vacant (through death, resignation or disqualification) such that there are not enough directors to meet quorum, the remaining directors are allowed to appoint up to three directors to fill empty seats. There are two exceptions to the power of the remaining directors to appointment replacements: (1) the bylaws do not allow for appointments and require that all seats be filled by special election of the membership; or (2) the vacancies were caused by action of the membership (a recall), rather than by death or resignation of directors.

Assuming the bylaws allow for it, the sole remaining director should give notice of a board meeting, call it to order, and appoint directors. The action is recorded in the minutes. Once the new directors are seated and quorum is met, the board can proceed with regular business if other business is noted in the meeting agenda.

QUESTION: What constitutes a quorum for board voting? If your CC&Rs state the board shall consist of 5 members, but there are only 3 active members, what is the quorum? Are the empty positions counted? -Dorethia M.

RESPONSE: Unless the articles of incorporation or bylaws state otherwise, "a majority of the number of directors authorized in the bylaws constitutes a quorum of the board for the transaction of business." (Corp. Code §7211(a)(7).) A vacancy on the board does not change the number of directors needed to make a quorum — the board needs a majority of the number authorized in the bylaws, not a majority of actual directors.

NorCal Counties. As of July 23, the following Counties are on the monitoring list, requiring the shutdown of bars and indoor dining: Alameda, Colusa, Contra Costa, Fresno, Glenn, Imperial, Kings, Los Angeles, Madera, Marin, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, Santa Barbara, Santa Clara, Solano, Sonoma, Stanislaus, Sutter, Tulare, Ventura, Yolo, and Yuba.

Fresno has new guidance for hair salons and barbershop and personal care services on their site: Fresno County Department of Health.

Mendocino County has updates that took effect July 24.

Mono County indicated they were on the monitoring list. Prior to this, Mono County issued a new Order with guidelines for restaurants that includes mandatory testing for some employees, as well as the wearing of more protective face coverings by restaurant employees, along with other restrictions. It is unclear if this will still apply given that Mono County is on the monitoring list, but at this time no new Order has been issued.

San Francisco County has new face covering rules.

SoCal Counties. The City of Los Angeles updated what’s open in Los Angeles. Updated golfing protocols for classes: coaches and participants to social-distance and wear face coverings at all times; ratio shall not exceed to 6 to 1. Coaches may not share equipment unless sanitized. Participants cannot rotate coaches during a session. Participants cannot handle range baskets or shag bags. Consecutive sessions must be staggered to sanitize and minimize gathering and cross-traffic of students. 

Riverside County is prohibiting live music events, including at restaurants, bars, and wineries, as well as any event that that would bring together persons from different households. 

San Diego County updated its Health Order to prohibit in-person instruction for K-12 and colleges. The City of San Diego is relaxing parking rules to allow for parking lots to open for personal services, fitness centers and places of worship outdoors.

Santa Barbara County issued a comprehensive facial coverings order.

Updated Chart. For a list of County restrictions and links to Health Department Orders, see County Chart 7-24-20. The chart is also posted on our website. Thank you to readers for sending us information about their counties. If we missed anything, please contact us.

THIS is a great and informative e-mail. Bravo! -Rachel S.

Your reply regarding why a reader hadn't received a daily newsletter was classic! Going out to see the monuments before they're all removed is the best thing that you've ever said. Keep up the good work. -Julian M.

Love your newsletter! -Warren W.

I have a 24-unit community that has had the same board president for all but one year since 1986. I think that is more than 30 years. Keep up the good work. Your newsletter is being read by more and more of my clients. -Michael H.

Thank you again for outstanding newsletters! With all the concentration over the years with ID security, I am still surprised when the pre-stamped ballot return envelope asks for our signature on the outside of it for all to see and scan. Thanks again for all that you do. -Erny P.

Regarding the length of service, this is my 35th year on the board. I spent most of them as president and the last 3 as secretary. My late father told me that when you are a homeowner, you should be involved so you know what’s going on. THANK YOU for all you do. We are just civilians and concerned homeowners. We have depended on your information, interpretations, and guidance for years. Just an unsolicited note to other associations and board members, I am glad that we engaged your firm to help us restate our CC&Rs and bylaws. Okay, that’s enough. -Gary N.

I've been on the board for 27 years. Being a sucker with spare time to do chores does that, but one year I lost. At the close of counting, people said they figured I just automatically got voted in so they cumulated votes for others they wanted to be sure were elected. One of the newly elected immediately resigned and the board appointed me to fill the term. Scary! -John W.

Unfortunately, I've been on the board for 37 years, nearly all of them as president. Remarkably my hair is still dark, but I have a lot more wrinkles. In all that time, we've only had two troublesome neighbors, and both their bad behaviors were related to mental health issues. Thanks for your great newsletter. -W.H.

A master list of signatures ... that is just crazy. -Ann E.

I didn't know they even had condos 30 years ago.... -Mike S.

Boards can contact us for friendly,
professional advice.

Adrian J. Adams, Esq.
Founder & Managing Partner

DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to associations only.

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