A Reminder to Solicit owner Information Annually and a Note about a Recent Amendment to Civil Code section 4041 that Makes The Required Annual Solicitation for Membership Information for Common Interest Development Associations that are Partially Comprised of Time-Share Plans Easier
Added to the Davis-Stirling Common Interest Development Act (“DSA”) by the California legislature in 2016, Civil Code section 4041 requires owners to provide written notice of the following information to their common interest development association annually: (1) the address or addresses to which association notices should be sent; (2) an alternative or secondary address for the same purpose; (3) the name and address of the owner’s 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 his/her separate interest; and (4) whether the owner’s separate interest is occupied by the owner, rented, developed but vacant, or undeveloped. Section 4041 also requires common interest development associations to annually solicit these notices from the owners and enter the information received from the owners in the association’s books and records at least 30 days prior to the association making its annual budget report disclosure as required by Civil Code section 5300.
Similarly to Civil Code section 4041, the Vacation Ownership and Time-share Act of 2004 (“VOTA”) requires time-share associations to maintain a complete list of the names and addresses of all owners of time-share interests in the time-share plan, but unlike section 4041 which requires common interest development associations to solicit these notices to their memberships and update the membership information received from its members annually, VOTA requires time-share associations to update their membership information every six (6) months. This biannual update of its membership list requires time-share associations to solicit the submission of this information by its membership at least twice a year. VOTA also provides that to the extent a time-share plan comprises a portion of a condominium or other common interest development, the applicable provisions of the VOTA shall apply to that portion of the project comprised of the time-share plan, and the DSA shall apply to the project as a whole. As a result, associations that include both a time-share plan and a common interest development association are subject to different membership information collection and solicitation requirements, which could be duplicative and costly.
A new amendment to Civil Code section 4041 resolves this issue for association partially comprised of time-share interests by adding subsection (d) to section 4041. Section 4041(d) provides that to the extent time-share plans are a part of a mixed-use project where those time-share interests comprise a portion of a common interest development association, the common interest development association will be deemed compliant with the requirements of Civil Code section 4041 if it annually obtains from the time-share plan a copy of the list of the names and addresses of the time-share plan owners and annually enters that data into its books and records. Section 4041(d) also provides that the time-share plan is required to provide this list to the common interest development association annually.
Subsection (d) of Civil Code section 4041 became effective on January 1, 2019. As a result, common interest development associations that are partially comprised of time-share plans should now have an easier time complying with requirements of Civil Code section 4041.
Also, do not forget that associations may include the annual solicitation for member contact information as required by section 4041 in its annual budget report and policy statement so long as the information received from the membership is entered into the association’s books and records at least 30 days prior to the association sending out the annual budget report and policy statement the following year.