Law and Legislation

Los Angeles County Courthouse (1891)
Los Angeles County Courthouse (1891)

Homeowner associations ["common interest development" or CID is the term used in California law] are governed by a web of laws drawn primarily from the Civil Code, the Corporations Code, the Subdivided Lands Act of the Business and Professions Code and by sections of the Government Code, Code of Civil Procedure, and the Vehicle Code.  In 1985 the Legislature consolidated laws governing associations into the Davis-Stirling Common Interest Development Act [beginning with Civil Code 1350.]

As currently structured, California law concentrates decision-making power, rulemaking authority, and control over association resources -- money and assets -- in the association board.  State law assigns homeowners only a minimal role in the political structure of the association. 

However, changes to state law -- creating limited consumer protection for homeowners -- have been occurring slowly over the past decade for several reasons. 

§         Since 1997, the number of California associations has increased from 30,923 to 41,000.  Another 1000 CIDs are built each year.  Now, close to 25% of the state's population lives in an association, and the number of homeowner complaints has increased along with the homeowners.  Complaints arise largely from the legal structure of the association in which all power -- legislative, executive, judicial --- is vested in the board.

§         Homeowner consumer complaints have illuminated for legislators some of the defects of existing state laws governing associations, whether incorporated or not.  For example: California law does not demand true financial accountability by associations.  Consumers hand over more than $200 million in assessments annually to association boards, but they often have a difficult time finding out how boards are spending the money they have entrusted to them.  Some associations are required to have financial records audited, but the auditor is chosen by the board, which controls the money.  This inherent conflict-of-interest does not necessarily result in a true audit for homeowner consumers.  Current state law even allows associations to violate constitutionally guaranteed rights of due process when it forecloses on a CID home.

§         More complaints are reaching the ears of legislators in Sacramento.  Senator Jim Battin [R-Riverside], for example, authored two pieces of legislation [SB 61 and SB 1560] on association elections, because of complaints lodged by homeowners from some of the 1800 associations in his own district.  Senator Alan Lowenthal [D-Long Beach] and Assembly Member Dave Jones [D-Sacramento] both carried bills on homeowner access to records, because of homeowner complaints  from their own districts.

§         Five years ago the Legislature directed the California Law Revision Commission [http://www.clrc.ca.gov] to study the set of laws governing associations and to recommend legislative changes.  The CLRC has been holding public hearings ever since.  Though the CLRC initially named foreclosure as one of the most serious problems facing the homeowner-consumer, the commission has so far declined to tackle the intractable foreclosure laws. 

§         Homeowner and consumer advocates have organized into Sacramento-based coalitions to take homeowner issues directly to legislators and to ask lawmakers  to carry bills to provide consumer protection to homeowners.   The senior coalition comprising the California Alliance for Retired Americans (http://www.californiaalliance.org), Gray Panthers, the Older Women's League (OWL), and the Congress of California Seniors (http://www.seniors.org) formed five years ago in Sacramento.  It has been a consistent voice at the Capitol, not only for seniors but for all homeowners.   The coalition has sponsored several pieces of legislation and monitored legislation introduced by others.  It has consistently analyzed CID bills, testified at policy hearings, CLRC hearings, and lobbied lawmakers and the Governor's office for corrective legislation to protect homeowners.

§         Consumer organizations, including Consumers Union, nonprofit publisher of Consumer Reports, has supported the campaign to change state law on nonjudicial foreclosure.  CU now has a page on its national website dedicated to the California association foreclosure issue.

Of special concern to the homeowner consumer is the power that the state of California has granted to associations to seize a home through foreclosure in order to force payment of homeowner assessments, no matter how small.  

Until five years ago, when Senator Christine Kehoe [D-San Diego] carried AB 2289, state law allowed associations to foreclose with minimal  -- or no -- disclosure to the homeowner of the association's collection policies; minimal notice of the association's intention to lien the property; and no opportunity even to discuss a payment plan with the board.

To view the list of bills signed into law (or vetoed) in the past several years, please go to the FREE online membership page.  After you sign up and create a password, you will be returned to this page.


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