Senior Attorney
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While the primary focus of the residential community association management industry is AB 2159, which permits electronic voting, several other bills were signed into law in 2024 that managers should be aware of.
SB 900
SB 900, which went into effect January 1, 2025, significantly amends Civil Code (“CC”) § 4775 to address the maintenance and repair of utility services in common interest developments. SB 900 also makes minor revisions to CC § 5550 and 5610. Specifically, SB 900 makes an association responsible for the repairs and replacement needed to restore interrupted utility services (i.e., gas, heat, water or electrical services) that begin in the common area even when the issue extends into a separate interest or exclusive use common area, unless the association’s CC&Rs expressly provide for a different allocation, or the utility provider or local government is required to perform the work.
SB 900 requires an association to commence the repair process necessary to restore utility service within 14 days of service interruption.
If an association has insufficient reserve funds to cover the needed utility work, SB 900 permits an association’s board to obtain a loan to cover these costs without a member vote. The board may also levy an emergency assessment to repay the loan. Like a board’s existing right to impose an emergency assessment under CC § 5610, before obtaining a loan, a board must pass a resolution containing written findings regarding the nature of the expenses and the insufficiency of reserve funding. This resolution must be distributed to the members via individual delivery with the notice of the emergency assessment. The association must also provide any other notices required by law or the association’s governing documents.
If a quorum of the board cannot meet within 14 days to address the repair process, then at the next duly noticed board meeting, the total number of directors in attendance shall constitute a quorum. If applicable, the meeting notice shall state that the board may meet with a reduced quorum.
The board may also vote to approve the work needed to restore the utility service by electronic means, including email. All records of the electronic vote constitute association records and are subject to member inspection for three years.
In the event an association fails to meet these SB 900 requirements, the association may be held liable for that failure, but individual board members may not be found liable.
An association is exempt from complying with SB 900 requirements if the association is located in an area affected by a federal, state or local state of disaster or emergency, provided the disaster or emergency materially affects the association’s ability to perform its utility repair responsibilities.
The legislature amended CC § 5550 to designate utility services as “major components” to the extent an association is obligated to repair or replace those lines by CC § 4775.
The legislature amended CC § 5610(b) to add operating costs as an extraordinary expense if health or safety hazards are discovered on site.
AB 2114
SB 326 (“The Balcony Bill”) established CC § 5551 as of January 1, 2020. Under CC § 5551, an association is, among other things, required to have a reasonably competent and diligent visual inspection of a random and statistically significant sample of the exterior elevated elements for which the association is responsible for maintaining or repairing at least once every nine years. Previously, only licensed architects and structural engineers were permitted to perform these inspections.
Effective immediately, AB 2114 amended CC § 5551 to permit licensed civil engineers to perform these inspections rather than limiting the inspections to architects and structural engineers.
AB 2460
AB 2460 amends 2023’s AB 1458, which provided that if an association requires a quorum for director and/or recall elections, the association must provide the membership with general notice of the date, time and location of the meeting at which the quorum will be determined, and a statement that the board may adjourn the meeting for at least 20 days if the association fails to achieve quorum. If an association does not reach quorum for a director election, the association may adjourn the meeting to tabulate the votes for a minimum of 20 days. Unless the association’s governing documents authorize a lower quorum, the quorum for the adjourned meeting drops to twenty percent (20%). General notice of the adjourned meeting must contain the following: (1) the date, time and location of the adjourned meeting, (2) the list of candidates, (3) a statement that the quorum requirement is reduced to 20% and (4) that the ballots will be opened if the 20% quorum requirement is reached. The association must provide this notice to members not less than 15 days prior to the adjourned meeting.
AB 2460, which went into effect January 1, 2025, does not substantively change the law. Rather, it clarifies the changes to CC § 5115 and Corporations Code § 7512 made last year by AB 1458. Specifically, AB 2460 further clarifies that the 20% quorum for board elections and the related notice requirements only apply to incorporated and unincorporated associations with governing documents that impose a quorum requirement of more than 20% for reconvened meetings to elect directors, that members can call for a reconvened meeting, and that the notice that must be provided to the members at least 15 days in advance of the meeting date refers to the reconvened meeting date. Finally, AB 2460 clarifies that 20% of an association’s members, voting in person, by proxy, or secret ballot will satisfy quorum for the election of directors at a reconvened meeting and that the ballots will be counted if quorum is reached.
