Bill Text: CA AB21 | 2025-2026 | Regular Session | Amended
Bill Title: Common interest developments: association management and meeting procedures.
Sponsorship: Partisan Bill (Republican 1)
Status: (Failed) 2025-04-28 - From committee: Without further action pursuant to Joint Rule 62(a). [AB21 Detail]
Download: California-2025-AB21-Amended.html
|
Amended
IN
Assembly
March 24, 2025 |
CALIFORNIA LEGISLATURE—
2025–2026 REGULAR SESSION
Assembly Bill
No. 21
| Introduced by Assembly Member DeMaio |
December 02, 2024 |
An act relating to taxation. to amend Sections 4360, 4910, 4920, 4935, 4950, 4955, 5100, 5105, 5120, 5145, 5200, 5205, 5230, and 5235 of, and to add Sections 4921 and 4941 to, the Civil Code, relating to common interest developments.
LEGISLATIVE COUNSEL'S DIGEST
AB 21, as amended, DeMaio.
Taxpayer Protection Act of 2025. Common interest developments: association management and meeting procedures.
Existing law, the Davis-Stirling Common Interest Development Act, governs the management and operation of common interest by an association. If a provision of that act requires an association to deliver a document by “individual delivery” or “individual notice,” the act requires the association to deliver that document in accordance with the preferred delivery method specified by the member. Existing law also requires the board of an association to provide general notice of a proposed rule change at least 28 days before making the rule change, in accordance with certain procedures.
This bill would revise the above-described rule change
provision to require the board to provide individual notice pursuant to the above-described provision governing document delivery.
Existing law prohibits the board of a common interest development from taking action on any item of business outside of a board meeting. Existing law also prohibits the board from conducting a meeting via a series of electronic transmissions, except in specified emergency circumstances.
This bill would prohibit a majority of the members of the board, outside an authorized meeting, from conducting communications of any kind, directly or through intermediaries, to discuss, deliberate, or take action on any item of business within the board’s subject matter jurisdiction.
Existing law requires a common interest development’s association to generally give notice of the time and place of a board meeting at least 4 days before the meeting and requires the notice to contain the agenda for the meeting.
This bill would also require the notice containing the agenda to have instructions on how a member may get a copy of the agenda packet for the open session portion of the meeting and would establish procedures for the board to follow in responding to those requests.
Existing law authorizes the board to adjourn to, or meet solely in, executive session to consider litigation and other specified matters. Existing law requires any matter discussed in executive session to be generally noted in the minutes of the immediately following meeting that is open to the entire membership.
This bill would require the board, if the association becomes involved in litigation, to announce the litigation at its subsequent meeting, including stating the name of the court and case number in the meeting minutes. The bill would also require the board, if the association files an insurance claim or has an insurance policy change, to announce the claim or policy change at its subsequent meeting, as specified. The bill would further require discussions regarding ongoing litigation to have the case name included as part of the executive session meeting minute notes.
This bill would require open session meetings of the board to be electronically recorded using audio, or audio and video, and would consider the recordings to be a record of the association and to be available to members on the same basis as written meeting minutes. The bill would require notice to be given at the beginning of every open session of the board
that the meeting is being recorded.
Existing law requires the minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes of a board meeting, other than an executive session, to be available to members within 30 days of the meeting and distributed to a member upon request and upon reimbursement of the association’s cost for making that distribution.
This bill would require that there is no charge for minutes distributed electronically. The bill would require the minutes, or proposed minutes, to include specified information, including the date and time of the meeting and whether a quorum of directors was established.
Existing law authorizes a member to bring a civil action for declaratory or equitable relief for a violation by
the association of specified provisions governing board meetings within one year of the date the cause of action accrues. Existing law entitles a member who prevails in a civil action under these provisions to reasonable attorney’s fees and court costs.
This bill would require a court to void any action taken by the board at a meeting shown to be conducted in violation of the above-described provisions. The bill would authorize a cause of action under those provisions to be brought in either superior court or small claims court. The bill would also require a member who prevails in a civil action brought in small claims court to be awarded court costs and reasonable attorney’s fees incurred.
Under the act, the operating rules are a part of the governing documents of a common interest development. The act requires an
amendment to the governing documents of the development, among other actions, to be held by secret ballot in accordance with specified procedures.
This bill would exclude an amendment to the operating rules from the requirement that the amendment be held by secret ballot. The bill would also prohibit a member from being denied a ballot for any reason other than not being a member at the time when the ballots are distributed. The bill would update definitions and would make various other related and conforming changes to the act.
The California Constitution requires a state statute that would result in any taxpayer paying a higher tax to be imposed by an act passed by
The California Constitution also provides that all taxes imposed by a local government are either general taxes or special taxes, as defined, and requires that taxes imposed, extended, or increased by a local government be submitted to the electorate and approved by a majority vote, in the case of general taxes, or a
Existing law
imposes specified requirements on state and local ballots, including, among other things, on the contents of the ballot label, ballot title, and summary.
This bill would declare the intent of the Legislature to enact a constitutional amendment to limit the ability of state and local governments to raise taxes, restore a
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
This act shall be known, and may be cited, as the Homeowner Association Accountability and Transparency Act of 2025.SEC. 2.
Section 4360 of the Civil Code is amended to read:4360.
(a) The board shall provide(b) A decision on a proposed rule change shall be made at a board meeting, after consideration of any comments made by association members.
(c) As soon as possible after making a rule change, but not more than 15 days after making the rule change, the board shall deliver general individual notice pursuant to Section 4045
4040
of the rule change. If the rule change was an emergency rule change made under subdivision (d), the notice shall include the text of the rule change, a description of the purpose and effect of the rule change, and the date that the rule change expires.
(d) If the board determines that an immediate rule change is required to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the association, it may make an emergency rule change, and no association predecision notice is required, as specified in subdivision (a). An emergency rule change is effective for 120 days, unless the rule change provides for a shorter effective period. A rule change made under this subdivision may not be readopted
under this subdivision.
(e) If an emergency rule change is made under subdivision (d), the individual notice about the rule change shall include the text of the rule change, a description of the purpose and effect of the rule change, and the date when the rule change will expire.
SEC. 3.
Section 4910 of the Civil Code is amended to read:4910.
(a) The board shall not take action on any item of business outside of a board meeting.(b) (1) Notwithstanding Section 7211 of the Corporations Code, the board shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail, except as specified in paragraph (2).
(2) Electronic transmissions may be used as a method of conducting an emergency board meeting if all directors, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the board meeting. These written consents may be transmitted electronically.
(c) A majority of the members of the board shall not, outside a meeting authorized by this article, conduct communications of any kind, directly or through intermediaries, to discuss, deliberate, or take action on any item of business that is within the subject matter jurisdiction of the board.
SEC. 4.
Section 4920 of the Civil Code is amended to read:4920.
(a) Except as provided in subdivision (b), the association shall give notice of the time and place of a board meeting at least four days before the meeting.(b) (1) If a board meeting is an emergency meeting held pursuant to Section 4923, the association is not required to give notice of the time and place of the meeting.
(2) If a nonemergency board meeting is held solely in executive session, the association shall give notice of the time and place of the meeting at least two days prior to the meeting.
(3) If the association’s governing documents require a longer period of notice than is required by this section, the
association shall comply with the period stated in its governing documents. For the purposes of this paragraph, a governing document provision does not apply to a notice of an emergency meeting or a meeting held solely in executive session unless it specifically states that it applies to those types of meetings.
(c) Notice of a board meeting shall be given by general delivery pursuant to Section 4045.
(d) Notice of a board meeting shall contain the agenda for the meeting. meeting, with instructions on how a member may get a copy of the agenda packet for the open session portion of the meeting.
(e) The agenda for any open meeting shall include the wording of the proposed motions and resolutions.
(f) A member may request in writing that a copy of the documents constituting the agenda packet of the board meetings be mailed either by postal mail or electronically to that member. Upon receipt of the written request, the association shall cause the requested materials to be mailed when the agenda is posted or distributed to all or a majority of the directors, whichever occurs first. The association may not charge more than the actual costs of copying and mailing the documentation.
SEC. 5.
Section 4921 is added to the Civil Code, to read:4921.
(a) If an association becomes involved in litigation, the board shall announce the litigation at its subsequent meeting. The meeting minutes shall state the name of the court and the case number.(b) If an association files a claim on one of its insurance policies, the board shall announce the claim at its subsequent meeting. The meeting minutes shall state the type of insurance, the insurance carrier, and the policy number.
(c) If a change to an insurance policy has occurred, as described in Section 5810, the board shall announce the change at its subsequent meeting. The meeting minutes shall state the type of insurance, the insurance carrier, the policy number, and describe the
change.
SEC. 6.
Section 4935 of the Civil Code is amended to read:4935.
(a) The board may adjourn to, or meet solely in, executive session to consider litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member, upon the member’s request, regarding the member’s payment of assessments, as specified in Section 5665.(b) The board shall adjourn to, or meet solely in, executive session to discuss member discipline, if requested by the member who is the subject of the discussion. That member shall be entitled to attend the executive session.
(c) The board shall adjourn to, or meet solely in, executive session to discuss a payment plan pursuant to Section 5665.
(d) The board shall adjourn to, or meet solely in, executive session to decide whether to foreclose on a lien pursuant to subdivision (b) of Section 5705.
(e) Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership. Discussions regarding ongoing litigation shall have the case name included as part of the executive session meeting minutes notes.
SEC. 7.
Section 4941 is added to the Civil Code, to read:4941.
(a) Open session meetings of the board shall be electronically recorded using audio, or audio and video, and the recordings shall be considered a record of the association, which shall be made available to members on the same basis as written meeting minutes.(b) Notice shall be given at the beginning of every open session of the board that the meeting is being recorded.
SEC. 8.
Section 4950 of the Civil Code is amended to read:4950.
(a) The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any board meeting, other than an executive session, shall be available to members within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be distributed to any member upon request and upon reimbursement of the association’s costs for making that distribution. There shall be no charge for minutes distributed electronically.(b) The minutes, or proposed minutes, shall include, but not be limited to, all of the following:
(1) Date of the meeting.
(2) Time of the meeting.
(3) Location of the meeting.
(4) The type of meeting, such as regular, special, emergency, executive, or committee.
(5) Whether notice and an agenda of the meeting was given to the membership.
(6) Names of directors present.
(7) Names of absent directors.
(8) Whether members are also present, and names and titles of any guest speakers. Members names are not required, and no member may be compelled to give their name in order to attend an open meeting
of an association, unless the member speaks at the meeting.
(9) Whether a quorum of directors was established.
(10) Whether the board directors left early or reentered the meeting.
(11) The wording of any approvals, resolutions, acceptance of any reports, or motion adopted by the board, and including who moved, who seconded, and how each director voted.
(12) Rationale for board actions and decisions.
(13) Summary of major arguments.
(14) Statements that support board directors following fiduciary duties.
(b)
(c) The annual policy statement, prepared pursuant to Section 5310, shall inform the members of their right to obtain copies of board meeting minutes and of how and where to do so.
SEC. 9.
Section 4955 of the Civil Code is amended to read:4955.
(a) A member of an association may bring a civil action for relief, including, but not limited to, declaratory or equitable relief or a combination thereof, for a violation of this article by the association,(b) A member who prevails in a civil action to enforce the member’s rights pursuant to this article shall be entitled to reasonable attorney’s fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation. If a member prevails in a civil action brought in small claims court, the
member shall be awarded court costs and reasonable attorney’s fees incurred for consulting an attorney in connection with this civil action.
(c) A cause of action under this section may be brought in either the superior court or, if the amount of the demand does not exceed the jurisdictional amount of the small claims court, in small claims court, which court shall have jurisdiction to order declaratory, injunctive, equitable relief, and civil penalties, as specified in subdivisions (a) and (b).
SEC. 10.
Section 5100 of the Civil Code is amended to read:5100.
(a) (1) Notwithstanding any other law or provision of the governing documents, elections regarding assessments legally requiring a vote, election and removal of directors, amendments to the governing documents, or the grant of exclusive use of common area pursuant to Section 4600 shall be held by secret ballot in accordance with the procedures set forth in this article.(2) An amendment to the governing documents, as described in paragraph (1), shall not include an amendment to the operating rules.
(2)
(3) An association shall hold an election for a seat on the board of directors in accordance with the procedures set forth in this article at the expiration of the corresponding director’s term and at least once every four years.
(b) This article also governs an election on any topic that is expressly identified in the operating rules as being governed by this article.
(c) The provisions of this article apply to both incorporated and unincorporated associations, notwithstanding any contrary provision of the governing documents.
(d) The procedures set forth in this article shall apply to votes cast directly by the membership, but do not apply to votes
cast by delegates or other elected representatives.
(e) In the event of a conflict between this article and the provisions of the Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code) relating to elections, the provisions of this article shall prevail.
(f) Directors shall not be required to be elected pursuant to this article if the governing documents provide that one member from each separate interest is a director.
(g) No member shall be denied a ballot for any reason other than not being a member at the time when the ballots are distributed.
SEC. 11.
Section 5105 of the Civil Code is amended to read:5105.
(a) An association shall adopt operating rules in accordance with the procedures prescribed by Article 5 (commencing with Section 4340) of Chapter 3, that do all of the following:(1) Ensure that if any candidate or member advocating a point of view is provided access to association media, newsletters, or internet websites during a campaign, for purposes that are reasonably related to that election, equal access shall be provided to all candidates and members advocating a point of view, including those not endorsed by the board, for purposes that are reasonably related to the election. The association shall not edit or redact any content from these communications, but may include a statement specifying that the candidate or member, and not the association, is
responsible for that content.
(2) Ensure access to the common area meeting space, if any exists, during a campaign, at no cost, to all candidates, including those who are not incumbents, and to all members advocating a point of view, including those not endorsed by the board, for purposes reasonably related to the election.
(3) Specify the qualifications for candidates for the board and any other elected position, subject to subdivision (b), and procedures for the nomination of candidates, consistent with the governing documents. A nomination or election procedure shall not be deemed reasonable if it disallows any member from nominating themself for election to the board.
(4) Specify the voting power of each membership, the authenticity, validity, and effect of proxies, and the voting period for elections, including
the times at which polls will open and close, consistent with the governing documents.
(5) Specify a method of selecting one or three independent third parties as inspector or inspectors of elections utilizing one of the following methods:
(A) Appointment of the inspector or inspectors by the board.
(B) Election of the inspector or inspectors by the members of the association.
(C) Any other method for selecting the inspector or inspectors.
(6) Allow the inspector or inspectors to appoint and oversee additional persons to verify signatures and to count and tabulate votes as the inspector or inspectors deem appropriate, provided that the persons are independent third parties who meet the
requirements in subdivision (b) of Section 5110.
(7) Require retention of, as association election materials, both a candidate registration list and a voter list. The candidate list shall include names and addresses of individuals nominated as a candidate for election to the board of directors. The voter list shall include the name, voting power, and either the physical address of the voter’s separate interest, the parcel number, or both. The mailing address for the ballot shall be listed on the voter list if it differs from the physical address of the voter’s separate interest or if only the parcel number is used. The association shall permit members to verify the accuracy of their individual information on both lists at least 30 days before the ballots are distributed. The association or member shall report any errors or omissions to either list to the inspector or inspectors who shall make the corrections within two business days.
(b) An association shall disqualify a person from a nomination as a candidate for not being a member of the association at the time of the nomination. An association shall disqualify a nominee if that person has served the maximum number of terms or sequential terms allowed by the association. A director who ceases to be a member shall be disqualified from continuing to serve as a director.
(1) This subdivision does not restrict a developer from making a nomination of a nonmember candidate consistent with the voting power of the developer as set forth in the regulations of the Department of Real Estate and the association’s governing documents.
(2) If title to a separate interest parcel is held by a legal entity that is not a natural person, the governing authority of that legal entity shall have the power to appoint a
natural person to be a member for purposes of this article.
(c) Through its bylaws or election operating rules adopted pursuant to subdivision (a) only, an association may disqualify a person from nomination as a candidate pursuant to any of the following:
(1) Subject to paragraph (2) of subdivision (d), an association may require a nominee for a board seat, and a director during their board tenure, to be current in the payment of regular and special assessments, which are consumer debts subject to validation. If an association requires a nominee to be current in the payment of regular and special assessments, it shall also require a director to be current in the payment of regular and special assessments.
(2) An association may disqualify a person from nomination as a candidate if the person, if elected, would be
serving on the board at the same time as another person who holds a joint ownership interest in the same separate interest parcel as the person and the other person is either properly nominated for the current election or an incumbent director.
(3) An association may disqualify a nominee if that person has been a member of the association for less than one year.
(4) An association may disqualify a nominee if that person discloses, or if the association is aware or becomes aware of, a past criminal conviction that would, if the person was elected, either prevent the association from purchasing the insurance required by Section 5806 or terminate the association’s existing insurance coverage required by Section 5806 as to that person should the person be elected.
(d) An association may disqualify a person from
nomination for nonpayment of regular and special assessments, but may not disqualify a nominee for nonpayment of fines, fines renamed as assessments, collection charges, late charges, or costs levied by a third party. The person shall not be disqualified for failure to be current in payment of regular and special assessments if either of the following circumstances is true:
(1) The person has paid the regular or special assessment under protest pursuant to Section 5658.
(2) The person has entered into and is in compliance with a payment plan pursuant to Section 5665.
(e) An association shall not disqualify a person from nomination if the person has not been provided the opportunity to engage in internal dispute resolution pursuant to Article 2 (commencing with Section 5900) of Chapter 10.
(f) If an association disqualifies a nominee pursuant to this section, an association in its election rules shall also require a director to comply with the same requirements.
(g) Except as provided in subdivision (i), (j), notwithstanding any other law, the rules adopted pursuant to this section may provide for the nomination of candidates from the floor of membership meetings or nomination by any other manner. Those rules may permit write-in candidates for ballots.
(h) Notwithstanding any other law, the rules adopted pursuant to this section shall do
include all of the following:
(1) Prohibit the denial of A rule that states: “The Association shall not deny a ballot to a member for any reason other than not being a member at the time when ballots are distributed. distributed.”
(2) Prohibit the denial of A
rule that states: “The Association shall not deny a ballot to a person with general power of attorney for a member. member.”
(3) Require A rule that states: “The Association shall include the ballot of a person with general power of attorney for a member to be counted if the ballot is returned in a timely manner.
manner.”
(4) A Require the rule that states: “The inspector or inspectors of elections to shall deliver, or cause to be delivered, at least 30 days before an election, to each member both of the following documents:
(A) The ballot or ballots.
(B) A copy of the election operating rules. Delivery
of the election operating rules may be accomplished by any
either of the following methods:
(i) Posting the election operating rules to an internet website and including the corresponding internet website address on the ballot together with the phrase, in at least 12-point type: “The ‘The rules governing this election may be found here:” here:’
(ii) Individual delivery.
delivery.”
(iii)
(i) Election operating rules adopted pursuant to this section shall not be amended less than 90 days prior to an election.
(i)
(j) Notwithstanding an association’s governing
documents, the association may adopt an election operating rule that allows an association to utilize an inspector or inspectors of elections, as specified in Section 5110, to conduct an election by electronic secret ballot, except for an election regarding regular or special assessments, as provided for in Chapter 8 (commencing with Section 5600).
(1) An election operating rule adopted pursuant to this subdivision shall include, but not be limited to, all of the following purposes:
(A) Permitting a member to change their preferred method of voting from electronic secret ballot to written ballot or written ballot to electronic secret ballot no later than 90 days before an election.
(B) Requiring an electronic secret ballot and a written ballot to contain the same list of items being voted on.
(C) (i) For an election operating rule where a member is permitted to opt out of voting by electronic secret ballot to vote by written ballot, requiring the association to mail a written ballot only to a member who has opted out of voting by electronic secret ballot or for whom the association does not have an email address required to vote by electronic secret ballot.
(ii) For an election operating rule where a member who is permitted to opt into voting by electronic secret ballot, requiring the association to send an electronic secret ballot only to a member who has opted into voting by electronic secret ballot.
(D) Requiring the association to maintain a voting list identifying which members will vote by electronic secret ballot and which members will vote by written ballot, and include
information on the procedures to either opt out of or opt into voting by electronic secret ballot, as applicable, in the annual statement prepared pursuant to Section 5310.
(E) Requiring a member who votes by electronic secret ballot to provide a valid email address to the association.
(F) Prohibiting nomination of candidates from the floor of membership meetings, notwithstanding subdivision (g).
(2) An electronic secret ballot may be accompanied by or contained in an electronic individual notice in accordance with paragraph (2) of subdivision (a) of Section 4040.
(3) (A) The association shall deliver individual notice of the electronic secret ballot to each member 30 days before the election and shall contain instructions on both
of the following:
(i) How to obtain access to that internet-based voting system.
(ii) How to vote by electronic secret ballot.
(B) Delivery of the individual notice described in subparagraph (A) may be accomplished by electronic submission to an address, location, or system designated by the member.
(4) For an election operating rule where members are permitted to opt out of voting by electronic secret ballot to vote by written ballot, the association shall provide individual notice, delivered pursuant to Section 4040, at least 30 days before the deadline to opt out of voting by electronic secret ballot, of all of the following:
(A) The member’s current voting method.
(B) If the member’s voting method is by electronic secret ballot and the association has an email address for the member, the email address of the member that will be used for voting by electronic secret ballot.
(C) An explanation that the member is required to opt out of voting by electronic secret ballot if the member elects to vote by written secret ballot.
(D) An explanation of how a member may opt out of voting by electronic secret ballot.
(E) The deadline by which the member is required to opt out of voting by electronic secret ballot if the member elects to exercise that right.
(5) A vote made by electronic secret ballot is effective when it is electronically transmitted to an address,
location, or system designated by an inspector or inspectors of elections.
(6) A vote made by electronic secret ballot shall not be revoked.
(7) If the association does not have a member’s email address required to vote by electronic secret ballot by the time at which ballots are to be distributed, the association shall send the member a written secret ballot.
(8) For purposes of determining a quorum, a member voting electronically pursuant to this subdivision shall be counted as a member in attendance at the meeting. Once the quorum is established, a substantive vote of the members shall not be taken on any issue other than the issues specifically identified in the electronic vote.
(9) As used in this subdivision, “electronic secret ballot” means a
ballot conducted by an electronic voting system that ensures the secrecy and integrity of a ballot pursuant to the requirements of this article.
SEC. 12.
Section 5120 of the Civil Code is amended to read:5120.
(a) All votes shall be counted and tabulated by the inspector or inspectors of elections, or the designee of the inspector or inspectors of elections, in public at a properly noticed open meeting of the board or members. Any candidate or other member of the association may witness the counting and tabulation of the votes. A person, including a member of the association or an employee of the management company, shall not open either the first or second ballot envelope or otherwise review any ballot before the time and place at which the ballots are counted and tabulated. The inspector or inspectors of elections, or the designee of the inspector or inspectors of elections, may verify the member’s information and signature on the outer envelope prior to the meeting at which ballots are tabulated. Once a secret ballot is received by the inspector or inspectors of elections, it shall be irrevocable.(b) The tabulated results of the election shall be promptly reported to the board and shall be recorded in the minutes of the next meeting of the board and shall be available for review by members of the association. Within For the election results for director positions, the meeting minutes shall state the term for each elected director.
(c) Within
15 days of the election, the board shall give general individual notice pursuant to Section 4045 of the tabulated results of the election.
(c)
(d) A person, including a member of the association or an employee of the management company, shall not open or otherwise review any tally sheet of votes cast by electronic secret ballots before the time and place at which the ballots are counted and tabulated.
For the elections of director positions, the individual notice shall state the term for each elected director.
SEC. 13.
Section 5145 of the Civil Code is amended to read:5145.
(a) A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association, including, but not limited to, injunctive relief, restitution, or a combination thereof,(b) A member who prevails in a civil action to enforce the member’s rights pursuant to this article shall be entitled to reasonable attorney’s
fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member of the association equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation. If a member prevails in a civil action brought in small claims court, the member shall be awarded court costs and reasonable attorney’s fees incurred for consulting an attorney in connection with this civil action.
(c) A cause of action under subdivision (a) may be brought in either the superior court or, if the amount of the demand does not exceed the jurisdictional amount of the small claims court, in small claims court.
SEC. 14.
Section 5200 of the Civil Code is amended to read:5200.
For the purposes of this article, the following definitions shall apply:(a) “Association records” means all of the following:
(1) Any financial document required to be provided to a member in Article 7 (commencing with Section 5300) or in Sections 5565 and 5810.
(2) Any financial document or statement required to be provided in Article 2 (commencing with Section 4525) of Chapter 4.
(3) Interim financial statements, periodic or as compiled, containing any of the following:
(A) Balance sheet.
(B) Income and expense statement.
(C) Budget comparison.
(D) General ledger. A “general ledger” is a report that shows all transactions that occurred in an association account over a specified period of time.
The records described in this paragraph shall be prepared in accordance with an accrual or modified accrual basis of accounting.
(4) Executed contracts not otherwise privileged under law.
(5) Written board approval of vendor or contractor proposals or invoices.
(6) State and federal tax returns.
(7) Reserve account
balances and records of payments made from reserve accounts.
(8) Agendas and minutes and all documents constituting the agenda packet of meetings of the members, the board, and any committees appointed by the board pursuant to Section 7212 of the Corporations Code; excluding, however, minutes and other information from executive sessions of the board as described in Article 2 (commencing with Section 4900).
(9) Membership lists, including name, property address, mailing address, email address, as collected by the association in accordance with Section 4041 where applicable, but not including information for members who have opted out pursuant to Section 5220.
(10) Check registers.
(11) The governing documents.
(12) An accounting prepared pursuant to subdivision (b) of Section 5520.
(13) An “enhanced association record” as defined in subdivision (b).
(14) “Association election materials” as defined in subdivision (c).
(b) “Enhanced association records” means invoices, receipts, and canceled checks for payments made by the association, purchase orders approved by the association, bank account statements for bank accounts in which assessments are deposited or withdrawn, credit card statements for credit cards issued in the name of the association, statements for services rendered, and reimbursement requests submitted to the association.
(c) “Association election materials” means any materials related to an election and includes, but is not limited to, returned ballots, signed voter envelopes, the voter list of names, parcel numbers, and voters to whom ballots were to be sent, sent and from whom received, proxies, signature-redacted copies of voter outer envelopes, the candidate registration list, and the tally sheet of votes cast by electronic secret ballot. Signed
Signed, but unredacted signature voter envelopes may be inspected but may not be copied. An association shall maintain association election materials for one year after the date of the election.
SEC. 15.
Section 5205 of the Civil Code is amended to read:5205.
(a) The association shall make available association(b) A member of the association may designate another person to inspect and copy the specified association records on the member’s behalf. The member shall make this designation in writing.
(c) The association
shall make the specified association records available for inspection and copying in the association’s business office within the common interest development.
(d) If the association does not have a business office within the development, the association shall make the specified association records available for inspection and copying at a place agreed to by the requesting member and the association.
(e) If the association and the requesting member cannot agree upon a place for inspection and copying pursuant to subdivision (d) or if the requesting member submits a written request directly to the association for copies of specifically identified records, the association may satisfy the requirement to make the association records available for inspection and copying by delivering copies of the specifically identified records to the member by individual delivery pursuant to Section
4040 within the timeframes set forth in subdivision (b) of Section 5210.
(f) The association may only bill the requesting member for the direct and actual cost of copying and mailing requested documents. The association shall inform the member of the amount of the copying and mailing costs, and the member shall agree to pay those costs, before copying and sending the requested documents. There shall be no charge for the emailing of documents already in electronic format and which do not require any redacting.
(g) In addition to the direct and actual costs of
copying and mailing,
mailing documents, the association may bill the requesting member an amount not in excess of ten dollars ($10) per hour, and not to exceed two hundred dollars ($200) total per written request, for the time actually and reasonably involved in redacting an enhanced association record. If the enhanced association record includes a reimbursement request, the person submitting the reimbursement request shall be solely responsible for removing all personal identification information from the request. The association shall inform the member of the estimated costs, and the member shall agree to pay those costs, before retrieving the requested documents.
(h) Requesting parties shall have the option of receiving specifically identified records by electronic transmission or machine-readable storage media as long as those records can be transmitted in a redacted format that does not allow the records to be altered.
The cost of duplication shall be limited to the direct cost of producing the copy of a record in that electronic format. The association may deliver specifically identified records by electronic transmission or machine-readable storage media as long as those records can be transmitted in a redacted format that prevents the records from being altered.
SEC. 16.
Section 5230 of the Civil Code is amended to read:5230.
(a) The association records, and any information from them, may not be sold, used for a commercial purpose, or used for any other purpose not reasonably related to a member’s interest as a member. An association may bring an action against any person who violates this article for injunctive relief and for actual damages to the association caused by the violation.(b) This article may not be construed to limit the right of an association to damages for misuse of information obtained from the association records pursuant to this article or to limit the right of an association to injunctive relief to stop the misuse of this information.
(c) (1) An association or its managing agent
shall not do either of the following:
(A) Sell a member’s personal information for any purpose without the consent of the member.
(B) Transmit a member’s personal information to a third party without the consent of the member unless required to do so by law, including, but not limited to, Article 5 (commencing with Section 5200).
(2) A member may bring an action against an association that violates this subdivision for injunctive relief and actual damages caused by the violation. A member shall be entitled to recover reasonable costs and expenses, including reasonable attorney’s fees, in a successful action to enforce the member’s rights under this subdivision.
(d) An association shall be entitled to recover reasonable costs and expenses, including
reasonable attorney’s fees, in a successful action to enforce its rights under this article.
section.
SEC. 17.
Section 5235 of the Civil Code is amended to read:5235.
(a) (1) A member may bring an action to enforce that member’s right to inspect and copy the association(2) If a member prevails in a civil action brought in small claims court, the member shall be awarded court costs and reasonable attorney’s fees incurred for consulting an attorney in connection with this civil action.
(b) A cause of action under this section may be brought in small claims court if the
amount of the demand does not exceed the jurisdiction of that court.
In that case, the small claims court shall have jurisdiction to order declaratory, injunctive, equitable relief, and civil penalties, as specified in subdivision (a).
(c)A prevailing association may recover any costs if the court finds the action to be frivolous, unreasonable, or without foundation.
It is the intent of the Legislature to enact a constitutional amendment to limit the ability of state and local governments to raise taxes, restore a two-thirds vote requirement on local special tax increases, impose voter approval requirements on specific categories of new taxes, and regulate the titles on state and local ballot measures relating to tax increases.
