One of the more interesting bills that came out of a relatively quiet year from a legislative standpoint for California’s community associations is SB 918. This law, which goes into effect on January 1, 2017, does two main things:
One, it requires an owner to provide their association with all of the following information:
(1) The address or addresses to which notices from the association are to be delivered.
(2) An alternate or secondary address to which notices from the association are to be delivered.
(3) The name and address of his or her legal representative, if any, including any person with power of attorney or other person who can be contacted in the event of the owner’s extended absence from the separate interest.
(4) Whether the separate interest is owner-occupied, is rented out, if the parcel is developed but vacant, or if the parcel is undeveloped land.
Second, the bill requires associations to “solicit” these annual notices of each owner, and enter the date into the association’s books and records at least thirty days prior to making its annual disclosures required by Civil Code 5300.
If an owner fails to respond and provide the required notices, the property address is deemed to be the address to which all notices are to be delivered. While the information as to the rental status of the property could prove useful, and for certain associations may help in obtaining FHA certification, there is no indication as to what occurs if the owner fails to provide any information as to whether the property is owner-occupied, rented, or whether the property is vacant or undeveloped land. In addition, there has been no requirement in the past for an association to track the number of rental units or vacant or undeveloped property within the association. Given that the new law now requires associations to “solicit” that information, it is unclear if the law also now requires the association to track that information or if it only needs to update the address information in the association’s books and records. While there is no apparent penalty for failing to track the status of the property as rented, vacant or undeveloped land, it may be the best practice to include that information in the association’s records to the extent it receives responses from the owners to the annual solicitation.
So what does this mean for managers and board members? A new annual requirement to send out a request to all owners asking them to provide the information listed above. The request, which can be included in another mailing and is not required to be mailed separately, must be sent out early enough to allow the association to update its books and records with any information provided in response to the request no later than thirty days prior to the date it sends out its annual disclosures. Boards and managers should take time now to prepare an appropriate form to use to solicit the required information, and update their annual calendars and schedule when to send out the annual solicitation to the owners so that there is sufficient time to update the associations records each year at least thirty days prior to the mailing of the annual disclosures. For some associations, they may also need to consider the budgetary impact of not only the mailing of the form, but the time necessary to update the association’s records on an annual basis.
Mr. DeNichilo is partner in the law firm Nordberg|DeNichilo, LLP, and specializes in representing homeowners associations throughout Southern California. He is an active member of CAI, and serves on the Legislative Support Committee of the Greater Inland Empire Chapter, acts as co-chair of the Orange County Chapter’s Legislative Support Committee and is the chapter’s liaison to CLAC. He is a frequent speaker at industry and management company educational events. Mr. DeNichilo publishes a blog on association related topics at HOABrief.com. For more information, please visit NDHOALaw.com