WARNING – Big Changes are Coming to the Davis-Stirling Act for 2012


Davis-Stirling Act Amendments Effective January 1, 2012

Following is a straightforward summary of the most important new amendments to the Davis-Stirling Common Interest Development Act which will become operative January 1, 2012.

1.         Civil Code Section 1353.9.

Under this provision, an association’s governing documents may not prohibit the use or installation of electric vehicle charging stations.  Any provision in the CC&Rs or the Rules which purports to prohibit such charging stations will be void.  Reasonable restrictions are permissible, which are defined as limitations that “do not significantly increase the cost of the station or significantly decrease its efficiency for specified performance.”  The term “electric vehicle charging station” means a station that is designed in compliance with all applicable building standards and delivers electricity from a source outside an electric vehicle into one or more such vehicles.

The association’s governing documents may require prior approval by the board or architectural committee.  The approval or denial shall be in writing and if not denied within 60 days the application will be deemed approved unless the delay is the result of a reasonable request for additional information.

The owner has a right to put the electric vehicle charging station in the common area or exclusive use common area.  The association must approve that installation if the owner agrees to the following conditions:  (i) to comply with the architectural standards for the installation of the station, (ii) engage a licensed contractor to install the station, (iii) within 14 days of approval, provide a certificate of insurance that names the association as an additional insured under the owner’s liability policy which shall be for not less than $1,000,000, and (iv) pay for the electricity usage.

The owner, and all future owners of the parking space where the charging station is located, are responsible for all damages caused by the station, for the cost of maintaining, repairing and replacing the station, the cost of electricity, and for disclosing to prospective buyers of his or her unit the existence of the station and of the duties related to such station.

An association that violates these restrictions is liable for a civil penalty in an amount not to exceed $1,000.  In any legal action to enforce the provisions the “prevailing plaintiff” shall be awarded reasonable attorneys’ fees.

2.         Civil Code Section 1360.2.

Effective January 1, 2012, owners will not be bound by any restriction in the governing documents which “prohibits the rental or leasing” of any unit, unless the restriction was in effect “prior to the date the owner acquired title to his or her separate interest.”  In effect, if such a provision exists in governing documents prior to January 1, 2012 it is binding on all owners in the development.  If such a restriction is adopted after January 1, 2012, it is only binding on those owners who purchase their units after the restriction is adopted.

It is not entirely clear how broadly courts will interpret the term “prohibit.”  However, the following popular restrictions could arguably be interpreted as a prohibition:  (i) no leasing permitted during first year of ownership, (ii) no owner may lease more than one of his or her units at a time (assuming that member owns multiple units), and (iii) no more than a certain number of units in the development can be leased at any one time (e.g., 20%).

3.         Civil Code Section 1363.05.

This section is known as the “Open Meeting Act.”  It has been amended in the following respects.

First, at the present time the board need not give any notice to the members of an upcoming executive session meeting.  Effective January 1, 2012, the owners must be given at least two days’ notice of any executive session meeting (except in emergency circumstances).  Parenthetically, the law has also been clarified.  The statute used to say the board could “adjourn” into executive session which some argued meant the board could only meet in executive session when a regular open meeting was “adjourned” to commence an executive session.  The law now provides that an executive session may be held “when the board adjourns to, or meets solely in, executive session.”

Also with reference to executive sessions, the new law will provide that owners be given upon request a copy of the agenda for any executive session meeting.

If an owner consents, notice of any meeting can be provided to him or her electronically.  To save costs and promote efficiency, management may want to obtain such consents from all owners as a routine matter so a master email mailing list can be generated and all notices can be sent by email rather than byU.S.mail.

Under the new law, board meetings may be conducted by teleconference.  The owners must be so notified and there must be one location designated where the homeowners can appear in order to observe the telephonic meeting.  At least one board member must be present at that location.

The new law expressly prohibits the board from conducting meetings through a series of emails, except in the case of an emergency.  Specifically, the statute states:  “The board of directors shall not conduct a meeting via a series of electronic transmissions [email].”  This generally means the board may not “discuss or deliberate upon any item of business that is within the authority of the board” if done by email.  There is one exception:  “Electronic transmissions may be used as a method of conducting an emergency meeting if all the members of the board . . . consent in writing to that action and if the written consent or consents are filed with the minutes of the meeting of the board.  Written consent to conduct an emergency meeting may be transmitting electronically.”

4.         Civil Code Section 1368:

Section 1368 describes the information and documentation that must be provided to a prospective buyer when a unit is sold.  Under the new law, if requested by a prospective buyer, the association shall provide to a buyer at the seller’s direction “a copy of the minutes of the meetings, excluding meetings held in executive session, of the association’s board of directors, conducted over the previous 12 months.”  The association is required to provide information to the buyer on a special form that is reflected in Section 1368.2 of the Civil Code, including among other things “a written or electronic estimate of the fees that will be assessed for providing the requested documents.”  The documents required under Section 1368 may be provided electronically or posted on an association website (if agreed by the owner).  The association may collect a reasonable fee “based upon the association’s actual cost for the procurement, preparation, reproduction and delivery of the documents.”  No other fee is permissible.

* This information provided by Kulik, Gottesman, Mouton & Seigel, LLP