In Champir, LLC v. Fairbanks Ranch Association, the Plaintiffs owned a home in Fairbanks Ranch, a planned development community in Rancho Santa Fe (“Association”). Fairbanks Ranch had plans to install traffic signals at its entrance gates, one of which would be directly outside Plaintiffs' home.  The Plaintiffs sued the Association and alleged that it failed to request a vote and obtain approval from its members before entering into a contract to install the traffic signals.  The Plaintiffs argued that the CC&Rs required membership approval for any capital expenditure that exceeded five percent of the Association's annual budget for the year.  This is a common requirement found in most association governing documents. The Plaintiffs also argued that assessments that had been approved by the members for a different gate project were improperly being used to fund this project.  Finally, the Association planned to transfer operation and maintenance of the traffic signals after construction to the County of San Diego, which Plaintiffs alleged would be an improper transfer of Association assets to a third party, without a prior vote or majority approval.

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Newly enacted emergency legislation requires that certain conditions be met before an open meeting may be conducted by teleconference or videoconference. If a board chooses to conduct an open meeting during a State of Emergency and without providing a physical location for the members to attend the meeting, the association must follow additional notice requirements, minute requirements, and technical support requirements to avoid potential lawsuits and civil penalties.

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Assembly Bill (AB) 3182 amends Civil Code section 4740 and adds Civil Code section 4741, effective January 1, 2021, to void most prohibitions and “unreasonable” restrictions on leasing. The new law applies to both pre-2012 grandfathered prohibitions, as well as amendments adopted in 2012 or later.

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Many board members are deeply concerned about the impact the stay-at-home order will have on the association’s ability to pay its bills. The Los Angeles Times has reported that there have been 2.3 million new unemployment claims made in California within the last month. But, in that the unemployment checks cap out at $1,050 per week for the highest-paid recipients, the payments may not be enough for all owners to meet all of their obligations. And while federal stimulus packages offer hope for small business owners, it currently appears that the funding will not come over night, there may not be enough for everyone and many will need to pay it back. 

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On October 13, 2019, Governor Newsom signed Senate Bill 323 into law. The new provisions will be effective on January 1, 2020. This new law contains numerous changes to existing election laws and will require that all homeowners associations amend their election rules. Further, because the new law does not allow changes to election rules within ninety (90) days of an election, all boards should be reviewing this issue with legal counsel as quickly as possible to avoid potential problems. This applies especially to associations that hold the annual election between January and April.

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