California Governor Jerry Brown recently signed SB 745 into law. The bill is a multi-issue omnibus bill, and as to community associations primarily acts to “clean up” some issues related to the reorganizing of the Davis-Stirling Common Interest Development Act, which becomes effective on Jan. 1, 2014. As enacted in 2012, AB 805 reorganized and rewrote the Davis-Stirling Act in a new part of the California Civil Code. As often happens with such a significant undertaking, items are inadvertently omitted, or changes in the law are not incorporated in time to be included in the bill. SB 745 serves to rectify those types of issues.

One of the inadvertent omissions in AB 805 dealt with how a document could be delivered to an association. As enacted by AB 805, new Civil Code section 4035 allowed for documents to be delivered to an association in a wide variety of ways, including email, fax or other electronic means, or personal delivery if the association had agreed to such methods of delivery. However, mail was omitted as an acceptable way to deliver documents to an association. SB 745 amends section 4035 to also allow for delivery of documents to an association via “first-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service center.”

In addition, two bills were enacted in 2012 which amended three provisions of the former Davis-Stirling Act (which is still current until the end of 2013).  As both bills were enacted after AB 805, the provisions of those bills were not included in the new Davis-Stirling Act. SB 745 corrects this problem.

One of the issues addressed by this correction is the requirement to have a person present at a physical location where members of an association can listen to the board transact business if a board meeting is held telephonically. As enacted, AB 805 required that at least one director be present at such a location. SB 745 amends Civil Code section 4090 to restore the option of allowing the person required to be present to be a director “or a person designated by the board.” This gives boards some flexibility with respect to telephonic meetings, and allows for the board to designate someone, such as the association’s manager, to be present at a physical location for members to listen to the board meeting rather than requiring that at least one director be present at the location.

SB 745 also clarifies several of the new provisions in the “new” Davis Stirling Act. New Civil Code section 4205 provides guidance as to which of an association’s governing documents controls if there is a conflict among the documents. As enacted in AB 805, there is some ambiguity as to whether section 4205 also defines when a conflict exists. As that was not the intention of the legislature when it enacted AB 805, SB 745 amends the language of section 4205 to avoid any misunderstanding regarding the purpose and intention of the statute.

New Civil Code section 4070 is also amended by SB 745 to authorize an action that is required to be approved by a majority of a quorum of the members at a duly held meeting at which a quorum is present to, instead, be approved by a majority in a duly held election in which a quorum is represented, thereby also applying the statute to elections conducted by written ballot.

Lastly, SB 745 amends the form for billing disclosures, and prohibits cancellation fees for requests for documents, as specified.

This is a guest post by Robert M. DeNichilo of DeNichilo & Lindsley, LLP.  Mr. DeNichilo is a member of the CAI-CLAC PR Committee.