LAGUNA HILLS, CALIF. – Beginning January 1, 2014, an estimated 368,000 San Bernardino County homeowners, about 20 percent of the county’s population, and 1.36 million Riverside County homeowners, more than 60 percent of the county’s population, will be affected by updates to the Davis-Stirling Act, a broad section of the California Civil Code which governs condominium, cooperative, and planned unit development communities in California. In preparation for the deadline, the California Association of Community Managers (CACM), the state’s only California-specific community management organization, has provided a clear explanation of the changes and developed a Recodification Table to ensure a smooth transition of the overhauled legislation.
“The Davis-Stirling Act is an industry-changing body of law that over the years has been amended and added to and as a result, has become increasingly difficult to navigate,” said Karen Conlon, president and CEO of CACM. “The goal for updating the Act was to not make a lot of major changes, but rather to simplify the codification so that it was easier to use and understand. Homeowners, in particular, will have easy access to the information and a better understanding of the Act, as well as their own responsibilities as an owner living in a homeowners association.”
In addition to homeowners, CACM’s Davis-Stirling Recodification Table will help community association managers, attorneys, and other advisors become familiar with the new format of the updated legislation. It will also enable users to reference the new code sections by either finding the existing code or searching by the new chapter topics. CACM’s Recodification Table can be found at cacm.org under the Resources section, or by clicking this link: http://bit.ly/15Krl9N .
While the Davis-Stirling update was designed to simplify a complicated and lengthy piece of legislation, there are some substantive changes that will affect HOA residents. Among them are new definitions in the revised Act that help clarify inconsistencies or potential conflicts with other California laws including:
Delivery of Notice – Any document to be delivered to the association shall be delivered to the person designated in the Annual Policy Statement to receive official communications to the association. The name and address of the person should be included in the document. Examples of “delivered to the association” are as follows:
1) Individual Notice – A notice that an association provides to a specific homeowner. This notice can be provided by first class mail, registered or certified mail, express mail or overnight mail by an express service carrier with the document being addressed to the recipient at the address last shown on the association’s books. It can also be delivered via fax or other electronic means (such as email) if the recipient has consented in writing to that method of delivery. Individual Notices must also be sent to a secondary address if a member has requested.
2) General Notice – A notice by the association to the entire membership. It can be delivered in a billing statement, newsletter or by one of the following methods:
- Inclusion in broadcast television (if the association has its own programming)
- Posting a printed document in a prominent location that is accessible to all members
3) Annual Budget Report – This is what was formerly referred to as the pro forma operating budget.
4) Annual Policy Statement – The various notices and disclosures that community associations previously provided with the pro forma operating budget. The Annual Policy Statement adds to the required annual disclosures the name and address of the person designated to receive official communications to the association and the location for posting General Notices.
Examples of more specific changes to the Act include:
- CC§4920 (a)(2): Board Meetings: If a non-emergency board meeting is held solely in executive session the association shall give notice of the time and place of the meeting at least two days prior to the meeting.
- CC§5120: Ballot Custody: Ballots collected after an election must be retained by the Inspector of Elections for 12 months as opposed to nine months previously. At the 12 month time the Inspector may then turn the ballots over to the association.
- California Law Controls over Inconsistent Provisions in the Governing Documents: The revised Act provides guidance on two fundamental aspects of Common Interest Development governance that are not clearly addressed in the existing statute. Specifically, new Civil Code §4205 provides that the Governing Documents may not include a provision that is inconsistent with California law. To the extent of any inconsistency between the Governing Documents and the law, the law controls.
- Document Authority: The revised Act also includes a hierarchy of the Governing Documents. Specifically, if there is any inconsistency between the Articles of Incorporation and the CC&Rs, the CC&Rs control. If there is any inconsistency between the Bylaws and the Articles of Incorporation, the Articles of Incorporation will control. Finally, the operating rules cannot include a provision that is inconsistent with the Declaration, Articles of Incorporation, or Bylaws.
Other updates to the Davis-Stirling Act involve the grouping together of related topics in logical order, and clarification and reorganization of complicated sections of the Civil Code into more concise, shorter sections. Also, standardized terms and definitions have been added to make the legislations easier to follow.
The Davis-Stirling Common Interest Development Act was put into effect in 1986 by the California State Legislature. The Act is part of the California Civil Code beginning with section 1350 which governs condominium, cooperative, and planned unit development communities throughout California. Under Davis-Stirling, a developer of a common interest development is able to create an HOA to govern the development. As part of creating the HOA, the developer records a document known as the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) against the units or parcels within the HOA with the county recorder. In August 2012, AB 805 and AB 806 were signed into law by Governor Brown and will become operative January 1, 2014. These revisions were aimed at making the Act more user-friendly for HOA residents, HOA boards, and community managers.
Note: Should your readers want to view and/or download the complete revised Davis-Stirling Act which was prepared by CACM affiliate member, Fiore Racobs & Powers, visitwww.cacm.org and go the Resources section, Revised Davis-Stirling Act or click here: http://bit.ly/14Gsv62
Based in Laguna Hills, Calif., CACM is the only community association management organization in
the nation to offer a California-only educational program leading to the designation of Certified
Community Association Manager (CCAM) for industry professionals. CACM’s membership is
comprised of nearly 3,000 California-based professionals from the community association
management industry. California is home to more than 48,000 associations. For more information on
CACM, please visit www.cacm.org.