Villa Marbella Homeowners Association

CA Laws important to Villa Marbella

CA Civil Code (Laws) That We Refer to Most Frequently (Part I)

CIVIL CODE SECTION 1350-1376 (Edited for Villa Marbella HOA by Secretary, Bert Donaldson, Feb 23, 2001. Complete and current text is available at "http://www.ca.gov")
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Most Frequently Used Sections (page numbers might be off):
(Page 3) 1354. Alternative Dispute Resolution (Note the "Request for Resolution in para (b)).
(Page 9) 1363 (d) & (e). Association Meetings
(Page 9) 1363 (f). Access to Records
(Page 9) 1363 (g) & (h) Monetary Penalties (current references for CC&R amendment #1)
(Page 10) 1363.05 Open Meeting Act
(Page 14) 1364. Repairs & Maintenance
(Page 15) 1365. HOA-Distributed Documents
(Page 17) 1365.5 HOA Board Review of Finances & Reserves
(Page 20) 1366. Assessments (e.g., monthly HOA fees)
(Page 22) 1367. Late Fees and Liens
(Page 23) 1368. Information to Prospective Buyers
(Page 26) 1376. Satellite Antennas (contact HOA Mgr for detailed procedures and application).
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1350. This title shall be known and may be cited as the
Davis-Stirling Common Interest Development Act.

1351. As used in this title, the following terms have the following meanings:
(a) "Association" means a nonprofit corporation or unincorporated
association created for the purpose of managing a common interest
development.
(b) "Common area" means the entire common interest development except the separate interests therein. The estate in the common area may be a fee, a life estate, an estate for years, or any combination of the foregoing. However, the common area for a planned development specified in paragraph (2) of subdivision (k) may consist of mutual or reciprocal easement rights appurtenant to the separate interests.
(c) "Common interest development" means any of the following:
(1) A community apartment project.
(2) A condominium project.
(3) A planned development.
(4) A stock cooperative.
(d) "Community apartment project" means a development in which an
undivided interest in land is coupled with the right of exclusive
occupancy of any apartment located thereon.
(e) "Condominium plan" means a plan consisting of (1) a
description or survey map of a condominium project, which shall refer
to or show monumentation on the ground, (2) a three-dimensional
description of a condominium project, one or more dimensions of which
may extend for an indefinite distance upwards or downwards, in
sufficient detail to identify the common areas and each separate
interest, and (3) a certificate consenting to the recordation of the
condominium plan pursuant to this title signed and acknowledged by
the following: (I deleted descriptions of who signs certificate - BD)

A condominium plan may be amended or revoked by a subsequently
acknowledged recorded instrument executed by all the persons whose
signatures would be required pursuant to this subdivision.
(f) A "condominium project" means a development consisting of
condominiums. A condominium consists of an undivided interest in
common in a portion of real property coupled with a separate interest
in space called a unit, the boundaries of which are described on a
recorded final map, parcel map, or condominium plan in sufficient
detail to locate all boundaries thereof. The area within these
boundaries may be filled with air, earth, or water, or any
combination thereof, and need not be physically attached to land
except by easements for access and, if necessary, support. The
description of the unit may refer to (1) boundaries described in the
recorded final map, parcel map, or condominium plan, (2) physical
boundaries, either in existence, or to be constructed, such as walls,
floors, and ceilings of a structure or any portion thereof, (3) an
entire structure containing one or more units, or (4) any combination
thereof. The portion or portions of the real property held in
undivided interest may be all of the real property, except for the
separate interests, or may include a particular three-dimensional
portion thereof, the boundaries of which are described on a recorded
final map, parcel map, or condominium plan. The area within these
boundaries may be filled with air, earth, or water, or any
combination thereof, and need not be physically attached to land
except by easements for access and, if necessary, support. An
individual condominium within a condominium project may include, in
addition, a separate interest in other portions of the real property.

(g) "Declarant" means the person or group of persons designated in
the declaration as declarant, or if no declarant is designated, the
person or group of persons who sign the original declaration or who
succeed to special rights, preferences, or privileges designated in
the declaration as belonging to the signator of the original
declaration.
(h) "Declaration" means the document, however denominated, which
contains the information required by Section 1353.
(i) "Exclusive use common area" means a portion of the common
areas designated by the declaration for the exclusive use of one or
more, but fewer than all, of the owners of the separate interests and
which is or will be appurtenant to the separate interest or
interests.
(1) Unless the declaration otherwise provides, any shutters,
awnings, window boxes, doorsteps, stoops, porches, balconies, patios,
exterior doors, door frames, and hardware incident thereto, screens
and windows or other fixtures designed to serve a single separate
interest, but located outside the boundaries of the separate
interest, are exclusive use common areas allocated exclusively to
that separate interest.
(2) Notwithstanding the provisions of the declaration, internal
and external telephone wiring designed to serve a single separate
interest, but located outside the boundaries of the separate
interest, are exclusive use common areas allocated exclusively to
that separate interest.
(j) "Governing documents" means the declaration and any other
documents, such as bylaws, operating rules of the association,
articles of incorporation, or articles of association, which govern
the operation of the common interest development or association.
(k) "Planned development" means a development (other than a
community apartment project, a condominium project, or a stock
cooperative) having either or both of the following features:
(1) The common area is owned either by an the association or in
common by the owners of the separate interests who possess
appurtenant rights to the beneficial use and enjoyment of the common
area.
(2) A power exists in the association to enforce an obligation of
an owner of a separate interest with respect to the beneficial use
and enjoyment of the common area by means of an assessment which may
become a lien upon the separate interests in accordance with Section
1367.
(l) "Separate interest" has the following meanings:
(1) In a community apartment project, "separate interest" means
the exclusive right to occupy an apartment, as specified in
subdivision (d).
(2) In a condominium project, "separate interest" means an
individual unit, as specified in subdivision (f).
(3) In a planned development, "separate interest" means a
separately owned lot, parcel, area, or space.
(4) In a stock cooperative, "separate interest" means the
exclusive right to occupy a portion of the real property, as
specified in subdivision (m).
Unless the declaration or condominium plan, if any exists,
otherwise provides, if walls, floors, or ceilings are designated as
boundaries of a separate interest, the interior surfaces of the
perimeter walls, floors, ceilings, windows, doors, and outlets
located within the separate interest are part of the separate
interest and any other portions of the walls, floors, or ceilings are
part of the common areas.
The estate in a separate interest may be a fee, a life estate, an
estate for years, or any combination of the foregoing.
(m) "Stock cooperative" means (definition deleted - BD).

1352. This title applies and a common interest development is
created whenever a separate interest coupled with an interest in the
common area or membership in the association is, or has been,
conveyed, provided, all of the following are recorded:
(a) A declaration.
(b) A condominium plan, if any exists.
(c) A final map or parcel map, if Division 2 (commencing with
Section 66410) of Title 7 of the Government Code requires the
recording of either a final map or parcel map for the common interest
development.

1352.5. (a) No declaration or other governing document shall
include a restrictive covenant in violation of Section 12955 of the
Government Code. (I deleted remainder of 1352.5 - not applicable - BD)

1353. (a) A declaration, recorded on or after January 1, 1986,
shall contain a legal description of the common interest development,
and a statement that the common interest development is a community
apartment project, condominium project, planned development, stock
cooperative, or combination thereof. The declaration shall
additionally set forth the name of the association and the
restrictions on the use or enjoyment of any portion of the common
interest development that are intended to be enforceable equitable
servitudes.
(b) The declaration may contain any other matters the original
signator of the declaration or the owners consider appropriate.

1354. (a) The covenants and restrictions in the declaration shall
be enforceable equitable servitudes, unless unreasonable, and shall
inure to the benefit of and bind all owners of separate interests in
the development. Unless the declaration states otherwise, these
servitudes may be enforced by any owner of a separate interest or by
the association, or by both.
(b) Unless the applicable time limitation for commencing the
action would run within 120 days, prior to the filing of a civil
action by either an association or an owner or a member of a common
interest development solely for declaratory relief or injunctive
relief, or for declaratory relief or injunctive relief in conjunction
with a claim for monetary damages, other than association
assessments, not in excess of five thousand dollars ($5,000), related
to the enforcement of the governing documents, the parties shall
endeavor, as provided in this subdivision, to submit their dispute to
a form of alternative dispute resolution such as mediation or
arbitration. The form of alternative dispute resolution chosen may
be binding or nonbinding at the option of the parties. Any party to
such a dispute may initiate this process by serving on another party
to the dispute a Request for Resolution. The Request for Resolution
shall include (1) a brief description of the dispute between the
parties, (2) a request for alternative dispute resolution, and (3) a
notice that the party receiving the Request for Resolution is
required to respond thereto within 30 days of receipt or it will be
deemed rejected. Service of the Request for Resolution shall be in
the same manner as prescribed for service in a small claims action as
provided in Section 116.340 of the Code of Civil Procedure. Parties
receiving a Request for Resolution shall have 30 days following
service of the Request for Resolution to accept or reject alternative
dispute resolution and, if not accepted within the 30-day period by
a party, shall be deemed rejected by that party. If alternative
dispute resolution is accepted by the party upon whom the Request for
Resolution is served, the alternative dispute resolution shall be
completed within 90 days of receipt of the acceptance by the party
initiating the Request for Resolution, unless extended by written
stipulation signed by both parties. The costs of the alternative
dispute resolution shall be borne by the parties.
(c) At the time of filing a civil action by either an association
or an owner or a member of a common interest development solely for
declaratory relief or injunctive relief, or for declaratory relief or
injunctive relief in conjunction with a claim for monetary damages
not in excess of five thousand dollars ($5,000), related to the
enforcement of the governing documents, the party filing the action
shall file with the complaint a certificate stating that alternative
dispute resolution has been completed in compliance with subdivision
(b). The failure to file a certificate as required by subdivision
(b) shall be grounds for a demurrer pursuant to Section 430.10 of the
Code of Civil Procedure or a motion to strike pursuant to Section
435 of the Code of Civil Procedure unless the filing party certifies
in writing that one of the other parties to the dispute refused
alternative dispute resolution prior to the filing of the complaint,
that preliminary or temporary injunctive relief is necessary, or that
alternative dispute resolution is not required by subdivision (b),
because the limitation period for bringing the action would have run
within the 120-day period next following the filing of the action, or
the court finds that dismissal of the action for failure to comply
with subdivision (b) would result in substantial prejudice to one of
the parties.
(d) Once a civil action specified in subdivision (a) to enforce
the governing documents has been filed by either an association or an
owner or member of a common interest development, upon written
stipulation of the parties the matter may be referred to alternative
dispute resolution and stayed. The costs of the alternative dispute
resolution shall be borne by the parties. During this referral, the
action shall not be subject to the rules implementing subdivision (c)
of Section 68603 of the Government Code.
(e) The requirements of subdivisions (b) and (c) shall not apply
to the filing of a cross-complaint.
(f) In any action specified in subdivision (a) to enforce the
governing documents, the prevailing party shall be awarded reasonable
attorney's fees and costs. Upon motion by any party for attorney's
fees and costs to be awarded to the prevailing party in these
actions, the court, in determining the amount of the award, may
consider a party's refusal to participate in alternative dispute
resolution prior to the filing of the action.
(g) Unless consented to by both parties to alternative dispute
resolution that is initiated by a Request for Resolution under
subdivision (b), evidence of anything said or of admissions made in
the course of the alternative dispute resolution process shall not be
admissible in evidence, and testimony or disclosure of such a
statement or admission may not be compelled, in any civil action in
which, pursuant to law, testimony can be compelled to be given.
(h) Unless consented to by both parties to alternative dispute
resolution that is initiated by a Request for Resolution under
subdivision (b), documents prepared for the purpose or in the course
of, or pursuant to, the alternative dispute resolution shall not be
admissible in evidence, and disclosure of these documents may not be
compelled, in any civil action in which, pursuant to law, testimony
can be compelled to be given.
(i) Members of the association shall annually be provided a
summary of the provisions of this section, which specifically
references this section. The summary shall include the following
language:
"Failure by any member of the association to comply with the
prefiling requirements of Section 1354 of the Civil Code may result
in the loss of your rights to sue the association or another member
of the association regarding enforcement of the governing documents."

The summary shall be provided either at the time the pro forma
budget required by Section 1365 is distributed or in the manner
specified in Section 5016 of the Corporations Code.
(j) Any Request for Resolution sent to the owner of a separate
interest pursuant to subdivision (b) shall include a copy of this
section.

1355. (a) The declaration may be amended pursuant to the governing
documents or this title. Except as provided in Section 1356, an
amendment is effective after (1) the approval of the percentage of
owners required by the governing documents has been given, (2) that
fact has been certified in a writing executed and acknowledged by the
officer designated in the declaration or by the association for that
purpose, or if no one is designated, by the president of the
association, and (3) that writing has been recorded in each county in
which a portion of the common interest development is located.
(b) Except to the extent that a declaration provides by its
express terms that it is not amendable, in whole or in part, a
declaration which fails to include provisions permitting its
amendment at all times during its existence may be amended at any
time. For purposes of this subdivision, an amendment is only
effective after (1) the proposed amendment has been distributed to
all of the owners of separate interests in the common interest
development by first-class mail postage prepaid or personal delivery
not less than 15 days and not more than 60 days prior to any approval
being solicited; (2) the approval of owners representing more than
50 percent, or any higher percentage required by the declaration for
the approval of an amendment to the declaration, of the separate
interests in the common interest development has been given, and that
fact has been certified in a writing, executed and acknowledged by
an officer of the association; and (3) the amendment has been
recorded in each county in which a portion of the common interest
development is located. A copy of any amendment adopted pursuant to
this subdivision shall be distributed by first-class mail postage
prepaid or personal delivery to all of the owners of separate
interest immediately upon its recordation.

1355.5. I deleted because this applies to CC&R provisions regarding developers. - BD

1356. (a) If in order to amend a declaration, the declaration
requires owners having more than 50 percent of the votes in the
association, in a single class voting structure, or owners having
more than 50 percent of the votes in more than one class in a voting
structure with more than one class, to vote in favor of the
amendment, the association, or any owner of a separate interest, may
petition the superior court of the county in which the common
interest development is located for an order reducing the percentage
of the affirmative votes necessary for such an amendment. The
petition shall describe the effort that has been made to solicit
approval of the association members in the manner provided in the
declaration, the number of affirmative and negative votes actually
received, the number or percentage of affirmative votes required to
effect the amendment in accordance with the existing declaration, and
other matters the petitioner considers relevant to the court's
determination. The petition shall also contain, as exhibits thereto,
copies of all of the following:
(1) The governing documents.
(2) A complete text of the amendment.
(3) Copies of any notice and solicitation materials utilized in
the solicitation of owner approvals.
(4) A short explanation of the reason for the amendment.
(5) Any other documentation relevant to the court's determination.

(b) Upon filing the petition, the court shall set the matter for
hearing and issue an ex parte order setting forth the manner in
which notice shall be given.
(c) The court may, but shall not be required to, grant the
petition if it finds all of the following:
(1) The petitioner has given not less than 15 days written notice
of the court hearing to all members of the association, to any
mortgagee of a mortgage or beneficiary of a deed of trust who is
entitled to notice under the terms of the declaration, and to the
city, county, or city and county in which the common interest
development is located that is entitled to notice under the terms of
the declaration.
(2) Balloting on the proposed amendment was conducted in
accordance with all applicable provisions of the governing documents.

(3) A reasonably diligent effort was made to permit all eligible
members to vote on the proposed amendment.
(4) Owners having more than 50 percent of the votes, in a single
class voting structure, voted in favor of the amendment. In a voting
structure with more than one class, where the declaration requires a
majority of more than one class to vote in favor of the amendment,
owners having more than 50 percent of the votes of each class
required by the declaration to vote in favor of the amendment voted
in favor of the amendment.
(5) The amendment is reasonable.
(6) Granting the petition is not improper for any reason stated in
subdivision (e).
(d) If the court makes the findings required by subdivision (c),
any order issued pursuant to this section may confirm the amendment
as being validly approved on the basis of the affirmative votes
actually received during the balloting period or the order may
dispense with any requirement relating to quorums or to the number or
percentage of votes needed for approval of the amendment that would
otherwise exist under the governing documents.
(e) Subdivisions (a) to (d), inclusive, notwithstanding, the court
shall not be empowered by this section to approve any amendment to
the declaration that:
(1) Would change provisions in the declaration requiring the
approval of owners having more than 50 percent of the votes in more
than one class to vote in favor of an amendment, unless owners having
more than 50 percent of the votes in each affected class approved
the amendment.
(2) Would eliminate any special rights, preferences, or privileges
designated in the declaration as belonging to the declarant, without
the consent of the declarant.
(3) Would impair the security interest of a mortgagee of a
mortgage or the beneficiary of a deed of trust without the approval
of the percentage of the mortgagees and beneficiaries specified in
the declaration, if the declaration requires the approval of a
specified percentage of the mortgagees and beneficiaries.
(f) An amendment is not effective pursuant to this section until
the court order and amendment have been recorded in every county in
which a portion of the common interest development is located. The
amendment may be acknowledged by, and the court order and amendment
may be recorded by, any person designated in the declaration or by
the association for that purpose, or if no one is designated for that
purpose, by the president of the association. Upon recordation of
the amendment and court order, the declaration, as amended in
accordance with this section, shall have the same force and effect
as if the amendment were adopted in compliance with every requirement
imposed by the governing documents.
(g) Within a reasonable time after the amendment is recorded the
association shall mail a copy of the amendment to each member of the
association, together with a statement that the amendment has been
recorded.

1357. Extending Term of Declarations. (I deleted - not applicable - BD)

1358. Severability of the Component Interests (I deleted - rarely comes up - BD)

1359. I deleted this section - It applies to separation, obsolete common areas, aged property, and other rarely discussed topics. - BD

1360. (a) Subject to the provisions of the governing documents and
other applicable provisions of law, if the boundaries of the separate
interest are contained within a building, the owner of the separate
interest may do the following:
(1) Make any improvements or alterations within the boundaries of
his or her separate interest that do not impair the structural
integrity or mechanical systems or lessen the support of any portions
of the common interest development.
(2) Modify a unit in a condominium project, at the owner's
expense, to facilitate access for persons who are blind, visually
handicapped, deaf, or physically disabled, or to alter conditions
which could be hazardous to these persons. These modifications may
also include modifications of the route from the public way to the
door of the unit for the purposes of this paragraph if the unit is on
the ground floor or already accessible by an existing ramp or
elevator. The right granted by this paragraph is subject to the
following conditions:
(A) The modifications shall be consistent with applicable building
code requirements.
(B) The modifications shall be consistent with the intent of
otherwise applicable provisions of the governing documents pertaining
to safety or aesthetics.
(C) Modifications external to the dwelling shall not prevent
reasonable passage by other residents, and shall be removed by the
owner when the unit is no longer occupied by persons requiring those
modifications who are blind, visually handicapped, deaf, or
physically disabled.
(D) Any owner who intends to modify a unit pursuant to this
paragraph shall submit his or her plans and specifications to the
association of the condominium project for review to determine
whether the modifications will comply with the provisions of this
paragraph. The association shall not deny approval of the proposed
modifications under this paragraph without good cause.
(b) Any change in the exterior appearance of a separate interest
shall be in accordance with the governing documents and applicable
provisions of law.

1360.5. (a) No governing documents shall prohibit the owner of a
separate interest within a common interest development from keeping
at least one pet within the common interest development, subject to
reasonable rules and regulations of the association. This section
may not be construed to affect any other rights provided by law to an
owner of a separate interest to keep a pet within the development.
(b) For purposes of this section, "pet" means any domesticated
bird, cat, dog, aquatic animal kept within an aquarium, or other
animal as agreed to between the association and the homeowner.
(d) If the association implements a rule or regulation restricting
the number of pets an owner may keep, the new rule or regulation
shall not apply to prohibit an owner from continuing to keep any pet
that the owner currently keeps in his or her separate interest if the
pet otherwise conforms with the previous rules or regulations
relating to pets.
(e) For the purposes of this section, "governing documents" shall
include, but are not limited to, the conditions, covenants, and
restrictions of the common interest development, and the bylaws,
rules, and regulations of the association.
(f) This section shall become operative on January 1, 2001, and
shall only apply to governing documents entered into, amended, or
otherwise modified on or after that date.

1361. Unless the declaration otherwise provides:
(a) In a community apartment project and condominium project, and
in those planned developments with common areas owned in common by
the owners of the separate interests, there are appurtenant to each
separate interest nonexclusive rights of ingress, egress, and
support, if necessary, through the common areas. The common areas
are subject to these rights.
(b) In a stock cooperative, and in a planned development with
common areas owned by the association, there is an easement for
ingress, egress, and support, if necessary, appurtenant to each
separate interest. The common areas are subject to these easements.

1362. Unless the declaration otherwise provides, in a condominium
project, or in a planned development in which the common areas are
owned by the owners of the separate interests, the common areas are
owned as tenants in common, in equal shares, one for each unit or lot.

CA Civil Code (Laws) That We Refer to Most Frequently (Part II)

1363. (a) A common interest development shall be managed by an
association which may be incorporated or unincorporated. The
association may be referred to as a community association.
(b) An association, whether incorporated or unincorporated, shall
prepare a budget pursuant to Section 1365 and disclose information,
if requested, in accordance with Section 1368.
(c) Unless the governing documents provide otherwise, and
regardless of whether the association is incorporated or
unincorporated, the association may exercise the powers granted to a
nonprofit mutual benefit corporation, as enumerated in Section 7140
of the Corporations Code, except that an unincorporated association
may not adopt or use a corporate seal or issue membership
certificates in accordance with Section 7313 of the Corporations Code.
The association, whether incorporated or unincorporated, may exercise the powers granted to an association by Section 383 of the Code of Civil Procedure and the powers granted to the association in this title.
(d) Meetings of the membership of the association shall be
conducted in accordance with a recognized system of parliamentary
procedure or any parliamentary procedures the association may adopt.
(e) Notwithstanding any other provision of law, notice of meetings
of the members shall specify those matters the board intends to
present for action by the members, but, except as otherwise provided
by law, any proper matter may be presented at the meeting for action.
(f) Members of the association shall have access to association records in accordance with Article 3 (commencing with Section 8330) of Chapter 13 of Part 3 of Division 2 of Title 1 of the Corporations Code.
(g) If an association adopts or has adopted a policy imposing any
monetary penalty, including any fee, on any association member for a
violation of the governing documents or rules of the association,
including any monetary penalty relating to the activities of a guest
or invitee of a member, the board of directors shall adopt and
distribute to each member, by personal delivery or first-class mail,
a schedule of the monetary penalties that may be assessed for those
violations, which shall be in accordance with authorization for member discipline contained in the governing documents. The board of directors shall not be required to distribute any additional schedules of monetary penalties unless there are changes from the schedule that was adopted and distributed to the members pursuant to this subdivision.
(h) When the board of directors is to meet to consider or impose
discipline upon a member, the board shall notify the member in writing, by either personal delivery or first-class mail, at least 10 days prior to the meeting. The notification shall contain, at a minimum, the date, time, and place of the meeting, the nature of the alleged violation for which a member may be disciplined, and a statement that the member has a right to attend and may address the board at the meeting. The board of directors of the association
shall meet in executive session if requested by the member being disciplined.
If the board imposes discipline on a member, the board shall provide the member a written notification of the disciplinary action, by either personal delivery or first-class mail, within 15 days following the action. A disciplinary action shall not be effective against a member unless the board fulfills the requirements of this subdivision.
(i) Whenever two or more associations have consolidated any of
their functions under a joint neighborhood association or similar
organization, members of each participating association shall be
entitled to attend all meetings of the joint association other than
executive sessions, (1) shall be given reasonable opportunity for
participation in those meetings and (2) shall be entitled to the same
access to the joint association's records as they are to the
participating association's records.
(j) Nothing in this section shall be construed to create, expand,
or reduce the authority of the board of directors of an association
to impose monetary penalties on an association member for a violation
of the governing documents or rules of the association.

1363.05. (a) This section shall be known and may be cited as the
Common Interest Development Open Meeting Act.
(b) Any member of the association may attend meetings of the board
of directors of the association, except when the board adjourns to
executive session to consider litigation, matters relating to the
formation of contracts with third parties, member discipline, or
personnel matters. The board of directors of the association shall
meet in executive session, if requested by a member who may be
subject to a fine, penalty, or other form of discipline, and the
member shall be entitled to attend the executive session.
(c) Any matter discussed in executive session shall be generally
noted in the minutes of the board of directors.
(d) The minutes, minutes proposed for adoption that are marked to
indicate draft status, or a summary of the minutes, of any meeting of
the board of directors of an association, 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 of the association upon request and upon
reimbursement of the association's costs for making that distribution.
(e) Members of the association shall be notified in writing at the
time that the pro forma budget required in Section 1365 is
distributed, or at the time of any general mailing to the entire
membership of the association, of their right to have copies of the
minutes of meetings of the board of directors, and how and where
those minutes may be obtained.
(f) As used in this section, "meeting" includes any congregation
of a majority of the members of the board at the same time and place
to hear, discuss, or deliberate upon any item of business scheduled
to be heard by the board, except those matters that may be discussed
in executive session.
(g) Unless the time and place of meeting is fixed by the bylaws,
or unless by bylaws provide for a longer period of notice, members
shall be given notice of the time and place of a meeting as defined
in subdivision (f), except for an emergency meeting, at least four
days prior to the meeting. Notice may be given by posting the notice
in a prominent place or places within the common area, by mail or
delivery of the notice to each unit in the development, or by
newsletter or similar means of communication.
(h) An emergency meeting of the board may be called by the
president of the association, or by any two members of the governing
body other than the president, if there are circumstances that could
not have been reasonably foreseen which require immediate attention
and possible action by the board, and which of necessity make it
impracticable to provide notice as required by this section.
(i) The board of directors of the association shall permit any
member of the association to speak at any meeting of the association
or the board of directors, except for meetings of the board held in
executive session. A reasonable time limit for all members of the
association to speak to the board of directors or before a meeting of
the association shall be established by the board of directors.

1363.1. (a) A prospective managing agent of a common interest
development shall provide a written statement to the board of
directors of the association of a common interest development as soon
as practicable, but in no event more than 90 days, before entering
into a management agreement which shall contain all of the following
information concerning the managing agent:
(1) The names and business addresses of the owners or general
partners of the managing agent. If the managing agent is a
corporation, the written statement shall include the names and
business addresses of the directors and officers and shareholders
holding greater than 10 percent of the shares of the corporation.
(2) Whether or not any relevant licenses such as architectural
design, construction, engineering, real estate, or accounting have
been issued by this state and are currently held by the persons
specified in paragraph (1). If a license is currently held by any of
those persons, the statement shall contain the following
information:
(A) What license is held.
(B) The dates the license is valid.
(C) The name of the licensee appearing on that license.
(3) Whether or not any relevant professional certifications or
designations such as architectural design, construction, engineering,
real property management, or accounting are currently held by any of
the persons specified in paragraph (1), including, but not limited
to, a professional common interest development manager. If any
certification or designation is held, the statement shall include the
following information:
(A) What the certification or designation is and what entity
issued it.
(B) The dates the certification or designation is valid.
(C) The names in which the certification or designation is held.
(b) As used in this section, a "managing agent" is a person or
entity who, for compensation or in expectation of compensation,
exercises control over the assets of a common interest development.
A "managing agent" does not include either of the following:
(1) A full-time employee of the association.
(2) Any regulated financial institution operating within the
normal course of its regulated business practice.

1363.2. (a) A managing agent of a common interest development who
accepts or receives funds belonging to the association shall deposit
all such funds that are not placed into an escrow account with a
bank, savings association, or credit union or into an account under
the control of the association, into a trust fund account maintained
by the managing agent in a bank, savings association, or credit union
in this state. All funds deposited by the managing agent in the
trust fund account shall be kept in this state in a financial
institution, as defined in Section 31041 of the Financial Code, which
is insured by the federal government, and shall be maintained there
until disbursed in accordance with written instructions from the
association entitled to the funds.
(b) At the written request of the board of directors of the
association, the funds the managing agent accepts or receives on
behalf of the association shall be deposited into an interest-bearing
account in a bank, savings association, or credit union in this
state, provided all of the following requirements are met:
(1) The account is in the name of the managing agent as trustee
for the association or in the name of the association.
(2) All of the funds in the account are covered by insurance
provided by an agency of the federal government.
(3) The funds in the account are kept separate, distinct, and
apart from the funds belonging to the managing agent or to any other
person or entity for whom the managing agent holds funds in trust
except that the funds of various associations may be commingled as
permitted pursuant to subdivision (d).
(4) The managing agent discloses to the board of directors of the
association the nature of the account, how interest will be
calculated and paid, whether service charges will be paid to the
depository and by whom, and any notice requirements or penalties for
withdrawal of funds from the account.
(5) No interest earned on funds in the account shall inure
directly or indirectly to the benefit of the managing agent or his or
her employees.
(c) The managing agent shall maintain a separate record of the
receipt and disposition of all funds described in this section,
including any interest earned on the funds.
(d) The managing agent shall not commingle the funds of the
association with his or her own money or with the money of others
that he or she receives or accepts, unless all of the following
requirements are met:
(1) The managing agent commingled the funds of various
associations on or before February 26, 1990, and has obtained a
written agreement with the board of directors of each association
that he or she will maintain a fidelity and surety bond in an amount
that provides adequate protection to the associations as agreed upon
by the managing agent and the board of directors of each association.
(2) The managing agent discloses in the written agreement whether
he or she is deriving benefits from the commingled account or the
bank, credit union, or savings institution where the moneys will be
on deposit.
(3) The written agreement provided pursuant to this subdivision
includes, but is not limited to, the name and address of the bonding
companies, the amount of the bonds, and the expiration dates of the
bonds.
(4) If there are any changes in the bond coverage or the companies
providing the coverage, the managing agent discloses that fact to
the board of directors of each affected association as soon as
practical, but in no event more than 10 days after the change.
(5) The bonds assure the protection of the association and provide
the association at least 10 days' notice prior to cancellation.
(6) Completed payments on the behalf of the association are
deposited within 24 hours or the next business day and do not remain
commingled for more than 10 calendar days.
(e) The prevailing party in an action to enforce this section
shall be entitled to recover reasonable legal fees and court costs.
(f) As used in this section, a "managing agent" is a person or
entity, who for compensation or, in expectation of compensation,
exercises control over the assets of the association. However, a
"managing agent" does not include a full-time employee of the
association or a regulated financial institution operating within the
normal course of business, or an attorney at law acting within the
scope of his or her license.
(g) As used in this section, "completed payment" means funds
received which clearly identify the account to which the funds are to
be credited.

1363.5. "Must Do" for Associations Incorporated After 1994 (deleted - BD)

1363.6. (a) In order to facilitate the collection of regular
assessments, special assessments, transfer fees, and similar charges,
the board of directors of any association is authorized to record a
statement or amended statement identifying relevant information for
the association. This statement may include any or all of the
following information:
(1) The name of the association as shown in the conditions, covenants, and restrictions or the current name of the association, if different.
(2) The name and address of a managing agent or treasurer of the
association or other individual or entity authorized to receive
assessments and fees imposed by the association.
(3) A daytime telephone number of the authorized party identified
in paragraph (2) if a telephone number is available.
(4) A list of separate interests subject to assessment by the
association, showing the assessor's parcel number or legal
description, or both, of the separate interests.
(5) The recording information identifying the declaration or
declarations of covenants, conditions, and restrictions governing the
association.
(6) If an amended statement is being recorded, the recording
information identifying the prior statement or statements which the
amendment is superseding.
(b) The county recorder is authorized to charge a fee for
recording the document described in subdivision (a), which fee shall
be based upon the number of pages in the document and the recorder's
per-page recording fee.

1364. (a) Unless otherwise provided in the declaration of a common
interest development, the association is responsible for repairing,
replacing, or maintaining the common areas, other than exclusive use
common areas, and the owner of each separate interest is responsible
for maintaining that separate interest and any exclusive use common
area appurtenant to the separate interest.
(b) (1) In a community apartment project, condominium project, or
stock cooperative, as defined in Section 1351, unless otherwise
provided in the declaration, the association is responsible for the
repair and maintenance of the common area occasioned by the presence
of wood-destroying pests or organisms.
(2) In a planned development as defined in Section 1351, unless a
different maintenance scheme is provided in the declaration, each
owner of a separate interest is responsible for the repair and
maintenance of that separate interest as may be occasioned by the
presence of wood-destroying pests or organisms. Upon approval of the
majority of all members of the association, the responsibility for
such repair and maintenance may be delegated to the association,
which shall be entitled to recover the cost thereof as a special
assessment.
(c) The costs of temporary relocation during the repair and
maintenance of the areas within the responsibility of the association
shall be borne by the owner of the separate interest affected.
(d) (1) The association may cause the temporary, summary removal
of any occupant of a common interest development for such periods and
at such times as may be necessary for prompt, effective treatment of
wood-destroying pests or organisms.
(2) The association shall give notice of the need to temporarily
vacate a separate interest to the occupants and to the owners, not
less than 15 days nor more than 30 days prior to the date of the
temporary relocation. The notice shall state the reason for the
temporary relocation, the date and time of the beginning of
treatment, the anticipated date and time of termination of treatment,
and that the occupants will be responsible for their own
accommodations during the temporary relocation.
(3) Notice by the association shall be deemed complete upon either:
(A) Personal delivery of a copy of the notice to the occupants,
and sending a copy of the notice to the owners, if different than
the occupants, by first-class mail, postage prepaid at the most
current address shown on the books of the association.
(B) By sending a copy of the notice to the occupants at the
separate interest address and a copy of the notice to the owners, if
different than the occupants, by first-class mail, postage prepaid,
at the most current address shown on the books of the association.
(e) For purposes of this section, "occupant" means an owner,
resident, guest, invitee, tenant, lessee, sublessee, or other person
in possession on the separate interest.
(f) Notwithstanding the provisions of the declaration, the owner
of a separate interest is entitled to reasonable access to the common
areas for the purpose of maintaining the internal and external
telephone wiring made part of the exclusive use common areas of a
separate interest pursuant to paragraph (2) of subdivision (i) of
Section 1351. The access shall be subject to the consent of the
association, whose approval shall not be unreasonably withheld, and
which may include the association's approval of telephone wiring upon
the exterior of the common areas, and other conditions as the
association determines reasonable.

1365. Unless the governing documents impose more stringent
standards, the association shall prepare and distribute to all of its
members the following documents:
(a) A pro forma operating budget, which shall include all of the
following:
(1) The estimated revenue and expenses on an accrual basis.
(2) A summary of the association's reserves based upon the most
recent review or study conducted pursuant to Section 1365.5, which
shall be printed in bold type and include all of the following:
(A) The current estimated replacement cost, estimated remaining
life, and estimated useful life of each major component.
(B) As of the end of the fiscal year for which the study is
prepared:
(i) The current estimate of the amount of cash reserves necessary
to repair, replace, restore, or maintain the major components.
(ii) The current amount of accumulated cash reserves actually set
aside to repair, replace, restore, or maintain major components.
(iii) If applicable, the amount of funds received from either a
compensatory damage award or settlement to an association from any
person or entity for injuries to property, real or personal, arising
out of any construction or design defects, and the expenditure or
disposition of funds, including the amounts expended for the direct
and indirect costs of repair of construction or design defects.
These amounts shall be reported at the end of the fiscal year for
which the study is prepared as separate line items under cash
reserves pursuant to clause (ii). In lieu of complying with the
requirements set forth in this clause, an association that is
obligated to issue a review of their financial statement pursuant to
subdivision (b) may include in the review a statement containing all
of the information required by this clause.
(C) The percentage that the amount determined for purposes of
clause (ii) subparagraph (B) equals the amount determined for
purposes of clause (i) of subparagraph (B).
(3) A statement as to whether the board of directors of the
association has determined or anticipates that the levy of one or
more special assessments will be required to repair, replace, or
restore any major component or to provide adequate reserves therefor.
(4) A general statement addressing the procedures used for the
calculation and establishment of those reserves to defray the future
repair, replacement, or additions to those major components that the
association is obligated to maintain.
The summary of the association's reserves disclosed pursuant to
paragraph (2) shall not be admissible in evidence to show improper
financial management of an association, provided that other relevant
and competent evidence of the financial condition of the association
is not made inadmissible by this provision.
A copy of the operating budget shall be annually distributed not
less than 45 days nor more than 60 days prior to the beginning of the
association's fiscal year.
(b) A review of the financial statement of the association shall
be prepared in accordance with generally accepted accounting
principles by a licensee of the California Board of Accountancy for
any fiscal year in which the gross income to the association exceeds
seventy-five thousand dollars ($75,000). A copy of the review of the
financial statement shall be distributed within 120 days after the
close of each fiscal year.
(c) In lieu of the distribution of the pro forma operating budget
required by subdivision (a), the board of directors may elect to
distribute a summary of the pro forma operating budget to all of its
members with a written notice that the pro forma operating budget is
available at the business office of the association or at another
suitable location within the boundaries of the development, and that
copies will be provided upon request and at the expense of the
association. If any member requests that a copy of the pro forma
operating budget required by subdivision (a) be mailed to the member,
the association shall provide the copy to the member by first-class
United States mail at the expense of the association and delivered
within five days. The written notice that is distributed to each of
the association members shall be in at least 10-point boldface type
on the front page of the summary of the budget.
(d) A statement describing the association's policies and
practices in enforcing lien rights or other legal remedies for
default in payment of its assessments against its members shall be
annually delivered to the members during the 60-day period
immediately preceding the beginning of the association's fiscal year.
(e) (1) A summary of the association's property, general
liability, and earthquake and flood insurance policies, which shall
be distributed within 60 days preceding the beginning of the
association's fiscal year, that includes all of the following
information about each policy:
(A) The name of the insurer.
(B) The type of insurance.
(C) The policy limits of the insurance.
(D) The amount of deductibles, if any.
(2) The association shall, as soon as reasonably practicable,
notify its members by first-class mail if any of the policies
described in paragraph (1) have lapsed, been canceled, and are not
immediately renewed, restored, or replaced, or if there is a
significant change, such as a reduction in coverage or limits or an
increase in the deductible, as to any of those policies. If the
association receives any notice of nonrenewal of a policy described
in paragraph (1), the association shall immediately notify its
members if replacement coverage will not be in effect by the date the
existing coverage will lapse.
(3) To the extent that any of the information required to be
disclosed pursuant to paragraph (1) is specified in the insurance
policy declaration page, the association may meet its obligation to
disclose that information by making copies of that page and
distributing it to all of its members.
(4) The summary distributed pursuant to paragraph (1) shall
contain, in at least 10-point boldface type, the following statement:
"This summary of the association's policies of insurance provides
only certain information, as required by subdivision (e) of Section
1365 of the Civil Code, and should not be considered a substitute for
the complete policy terms and conditions contained in the actual
policies of insurance. Any association member may, upon request and
provision of reasonable notice, review the association's insurance
policies and, upon request and payment of reasonable duplication
charges, obtain copies of those policies. Although the association
maintains the policies of insurance specified in this summary, the
association's policies of insurance may not cover your property,
including personal property or, real property improvements to or
around your dwelling, or personal injuries or other losses that occur
within or around your dwelling. Even if a loss is covered, you may
nevertheless be responsible for paying all or a portion of any
deductible that applies. Association members should consult with
their individual insurance broker or agent for appropriate additional
coverage."

CA Civil Code (Laws) That We Refer to Most Frequently (Part III)

1365.5. (a) Unless the governing documents impose more stringent
standards, the board of directors of the association shall do all of
the following:
(1) Review a current reconciliation of the association's operating
accounts on at least a quarterly basis.
(2) Review a current reconciliation of the association's reserve
accounts on at least a quarterly basis.
(3) Review, on at least a quarterly basis, the current year's
actual reserve revenues and expenses compared to the current year's
budget.
(4) Review the latest account statements prepared by the financial
institutions where the association has its operating and reserve
accounts.
(5) Review an income and expense statement for the association's
operating and reserve accounts on at least a quarterly basis.
(b) The signatures of at least two persons, who shall be members
of the association's board of directors, or one officer who is not a
member of the board of directors and a member of the board of
directors, shall be required for the withdrawal of moneys from the
association's reserve accounts.
(c) (1) The board of directors shall not expend funds designated
as reserve funds for any purpose other than the repair, restoration,
replacement, or maintenance of, or litigation involving the repair,
restoration, replacement, or maintenance of, major components which
the association is obligated to repair, restore, replace, or maintain
and for which the reserve fund was established.
(2) However, the board may authorize the temporary transfer of
money from a reserve fund to the association's general operating fund
to meet short-term cash-flow requirements or other expenses,
provided the board has made a written finding, recorded in the board'
s minutes, explaining the reasons that the transfer is needed, and
describing when and how the money will be repaid to the reserve fund.
The transferred funds shall be restored to the reserve fund within
one year of the date of the initial transfer, except that the board
may, upon making a finding supported by documentation that a
temporary delay would be in the best interests of the common interest
development, temporarily delay the restoration. The board shall
exercise prudent fiscal management in maintaining the integrity of
the reserve account, and shall, if necessary, levy a special
assessment to recover the full amount of the expended funds within
the time limits required by this section. This special assessment is
subject to the limitation imposed by Section 1366. The board may,
at its discretion, extend the date the payment on the special
assessment is due. Any extension shall not prevent the board from
pursuing any legal remedy to enforce the collection of an unpaid
special assessment.
(d) When the decision is made to use reserve funds or to
temporarily transfer money from the reserve fund to pay for
litigation, the association shall notify the members of the
association of that decision in the next available mailing to all
members pursuant to Section 5016 of the Corporations Code, and of the
availability of an accounting of those expenses. Unless the
governing documents impose more stringent standards, the association
shall make an accounting of expenses related to the litigation on at
least a quarterly basis. The accounting shall be made available for
inspection by members of the association at the association's office.
(e) At least once every three years the board of directors shall
cause to be conducted a reasonably competent and diligent visual
inspection of the accessible areas of the major components which the
association is obligated to repair, replace, restore, or maintain as
part of a study of the reserve account requirements of the common
interest development if the current replacement value of the major
components is equal to or greater than one-half of the gross budget
of the association which excludes the association's reserve account
for that period. The board shall review this study annually and
shall consider and implement necessary adjustments to the board's
analysis of the reserve account requirements as a result of that
review.
The study required by this subdivision shall at a minimum include:
(1) Identification of the major components which the association
is obligated to repair, replace, restore, or maintain which, as of
the date of the study, have a remaining useful life of less than 30 years.
(2) Identification of the probable remaining useful life of the
components identified in paragraph (1) as of the date of the study.
(3) An estimate of the cost of repair, replacement, restoration,
or maintenance of the components identified in paragraph (1) during
and at the end of their useful life.
(4) An estimate of the total annual contribution necessary to
defray the cost to repair, replace, restore, or maintain the
components identified in paragraph (1) during and at the end of their
useful life, after subtracting total reserve funds as of the date of
the study.
(f) As used in this section, "reserve accounts" means both of the
following:
(1) Moneys that the association's board of directors has
identified for use to defray the future repair or replacement of, or
additions to, those major components which the association is
obligated to maintain.
(2) The funds received and not yet expended or disposed from
either a compensatory damage award or settlement to an association
from any person or entity for injuries to property, real or personal,
arising from any construction or design defects. These funds shall
be separately itemized from funds described in paragraph (1).
(g) As used in this section, "reserve account requirements" means
the estimated funds which the association's board of directors has
determined are required to be available at a specified point in time
to repair, replace, or restore those major components which the
association is obligated to maintain.
(h) This section does not apply to an association that does not
have a "common area" as defined in Section 1351.

1365.7. (a) A volunteer officer or volunteer director of an
association, as defined in subdivision (a) of Section 1351, which
manages a common interest development that is exclusively
residential, shall not be personally liable in excess of the coverage
of insurance specified in paragraph (4) to any person who suffers
injury, including, but not limited to, bodily injury, emotional
distress, wrongful death, or property damage or loss as a result of
the tortious act or omission of the volunteer officer or volunteer
director if all of the following criteria are met:
(1) The act or omission was performed within the scope of the
officer's or director's association duties.
(2) The act or omission was performed in good faith.
(3) The act or omission was not willful, wanton, or grossly
negligent.
(4) The association maintained and had in effect at the time the
act or omission occurred and at the time a claim is made one or more
policies of insurance which shall include coverage for (A) general
liability of the association and (B) individual liability of officers
and directors of the association for negligent acts or omissions in
that capacity; provided, that both types of coverage are in the
following minimum amount:
(A) At least five hundred thousand dollars ($500,000) if the
common interest development consists of 100 or fewer separate
interests.
(B) At least one million dollars ($1,000,000) if the common
interest development consists of more than 100 separate interests.
(b) The payment of actual expenses incurred by a director or
officer in the execution of the duties of that position does not
affect the director's or officer's status as a volunteer within the
meaning of this section.
(c) An officer or director who at the time of the act or omission
was a declarant, as defined in subdivision (g) of Section 1351, or
who received either direct or indirect compensation as an employee
from the declarant, or from a financial institution that purchased a
separate interest, as defined in subdivision (l) of Section 1351, at
a judicial or nonjudicial foreclosure of a mortgage or deed of trust
on real property, is not a volunteer for the purposes of this
section.
(d) Nothing in this section shall be construed to limit the
liability of the association for its negligent act or omission or for
any negligent act or omission of an officer or director of the
association.
(e) This section shall only apply to a volunteer officer or
director who is a tenant of a separate interest in the common
interest development or is an owner of no more than two separate
interests in the common interest development.
(f) (1) For purposes of paragraph (1) of subdivision (a), the
scope of the officer's or director's association duties shall
include, but shall not be limited to, both of the following
decisions:
(A) Whether to conduct an investigation of the common interest
development for latent deficiencies prior to the expiration of the
applicable statute of limitations.
(B) Whether to commence a civil action against the builder for
defects in design or construction.
(2) It is the intent of the Legislature that this section clarify
the scope of association duties to which the protections against
personal liability in this section apply. It is not the intent of
the Legislature that these clarifications be construed to expand, or
limit, the fiduciary duties owed by the directors or officers.

1365.9. (a) It is the intent of the Legislature to offer civil
liability protection to owners of the separate interests in a common
interest development that have common areas owned in
tenancy-in-common if the association carries a certain level of
prescribed insurance that covers a cause of action in tort.
(b) Any cause of action in tort against any owner of a separate
interest arising solely by reason of an ownership interest as a
tenant in common in the common area of a common interest development
shall be brought only against the association and not against the
individual owners of the separate interests, as defined in
subdivision (l) of Section 1351, if both of the insurance
requirements in paragraphs (1) and (2) are met:
(1) The association maintained and has in effect for this cause
of action, one or more policies of insurance which include coverage
for general liability of the association.
(2) The coverage described in paragraph (1) is in the following
minimum amounts:
(A) At least two million dollars ($2,000,000) if the common
interest development consists of 100 or fewer separate interests.
(B) At least three million dollars ($3,000,000) if the common
interest development consists of more than 100 separate interests.

1366. (a) Except as provided in this section, the association shall
levy regular and special assessments sufficient to perform its
obligations under the governing documents and this title. However,
annual increases in regular assessments for any fiscal year, as
authorized by subdivision (b), shall not be imposed unless the board
has complied with subdivision (a) of Section 1365 with respect to
that fiscal year, or has obtained the approval of owners,
constituting a quorum, casting a majority of the votes at a meeting
or election of the association conducted in accordance with Chapter 5
(commencing with Section 7510) of Part 3 of Division 2 of Title 1 of
the Corporations Code and Section 7613 of the Corporations Code.
For the purposes of this section, "quorum" means more than 50 percent
of the owners of an association.
(b) Notwithstanding more restrictive limitations placed on the
board by the governing documents, the board of directors may not
impose a regular assessment that is more than 20 percent greater than
the regular assessment for the association's preceding fiscal year
or impose special assessments which in the aggregate exceed 5 percent
of the budgeted gross expenses of the association for that fiscal
year without the approval of owners, constituting a quorum, casting a
majority of the votes at a meeting or election of the association
conducted in accordance with Chapter 5 (commencing with Section 7510)
of Part 3 of Division 2 of Title 1 of the Corporations Code and
Section 7613 of the Corporations Code. For the purposes of this
section, quorum means more than 50 percent of the owners of an
association. This section does not limit assessment increases
necessary for emergency situations. For purposes of this section, an
emergency situation is any one of the following:
(1) An extraordinary expense required by an order of a court.
(2) An extraordinary expense necessary to repair or maintain the
common interest development or any part of it for which the
association is responsible where a threat to personal safety on the
property is discovered.
(3) An extraordinary expense necessary to repair or maintain the
common interest development or any part of it for which the
association is responsible that could not have been reasonably
foreseen by the board in preparing and distributing the pro forma
operating budget under Section 1365. However, prior to the
imposition or collection of an assessment under this subdivision, the
board shall pass a resolution containing written findings as to the
necessity of the extraordinary expense involved and why the expense
was not or could not have been reasonably foreseen in the budgeting
process, and the resolution shall be distributed to the members with
the notice of assessment.
(c) Regular assessments imposed or collected to perform the
obligations of an association under the governing documents or this
title shall be exempt from execution by a judgment creditor of the
association only to the extent necessary for the association to
perform essential services, such as paying for utilities and
insurance. In determining the appropriateness of an exemption, a
court shall ensure that only essential services are protected under
this subdivision.
This exemption shall not apply to any consensual pledges, liens,
or encumbrances that have been approved by the owners of an
association, constituting a quorum, casting a majority of the votes
at a meeting or election of the association, or to any state tax
lien, or to any lien for labor or materials supplied to the common
area.
(d) The association shall provide notice by first-class mail to
the owners of the separate interests of any increase in the regular
or special assessments of the association, not less than 30 nor more
than 60 days prior to the increased assessment becoming due.
(e) Regular and special assessments levied pursuant to the
governing documents are delinquent 15 days after they become due. If
an assessment is delinquent the association may recover all of the
following:
(1) Reasonable costs incurred in collecting the delinquent
assessment, including reasonable attorney's fees.
(2) A late charge not exceeding 10 percent of the delinquent
assessment or ten dollars ($10), whichever is greater, unless the
declaration specifies a late charge in a smaller amount, in which
case any late charge imposed shall not exceed the amount specified in
the declaration.
(3) Interest on all sums imposed in accordance with this section,
including the delinquent assessment, reasonable costs of collection,
and late charges, at an annual percentage rate not to exceed 12
percent interest, commencing 30 days after the assessment becomes
due.
(f) Associations are hereby exempted from interest-rate
limitations imposed by Article XV of the California Constitution,
subject to the limitations of this section.

1366.1. An association shall not impose or collect an assessment or
fee that exceeds the amount necessary to defray the costs for which
it is levied.

1366.3. (a) The exception for disputes related to association
assessments in subdivision (b) of Section 1354 shall not apply if, in
a dispute between the owner of a separate interest and the
association regarding the assessments imposed by the association, the
owner of the separate interest chooses to pay in full to the
association all of the charges listed in paragraphs (1) to (4),
inclusive, and states by written notice that the amount is paid under
protest, and the written notice is mailed by certified mail not more
than 30 days from the recording of a notice of delinquent assessment
in accordance with Section 1367; and in those instances, the
association shall inform the owner that the owner may resolve the
dispute through alternative dispute resolution as set forth in
Section 1354, civil action, and any other procedures to resolve the
dispute that may be available through the association.
(1) The amount of the assessment in dispute.
(2) Late charges.
(3) Interest.
(4) All fees and costs associated with the preparation and filing
of a notice of delinquent assessment, including all mailing costs,
and including attorney's fees not to exceed four hundred twenty-five
dollars ($425).
(b) The right of any owner of a separate interest to utilize
alternative dispute resolution under this section may not be
exercised more than two times in any single calendar year, and not
more than three times within any five calendar years. Nothing within
this section shall preclude any owner of a separate interest and the
association, upon mutual agreement, from entering into alternative
dispute resolution for a number of times in excess of the limits set
forth in this section. The owner of a separate interest may request
and be awarded through alternative dispute resolution reasonable
interest to be paid by the association on the total amount paid under
paragraphs (1) to (4), inclusive, of subdivision (a), if it is
determined through alternative dispute resolution that the assessment
levied by the association was not correctly levied.

1367. (a) A regular or special assessment and any late charges,
reasonable costs of collection, and interest, as assessed in
accordance with Section 1366, shall be a debt of the owner of the
separate interest at the time the assessment or other sums are
levied. Before an association may place a lien upon the separate
interest of an owner to collect a debt which is past due under this
subdivision, the association shall notify the owner in writing by
certified mail of the fee and penalty procedures of the association,
provide an itemized statement of the charges owed by the owner,
including items on the statement which indicate the principal owed,
any late charges and the method of calculation, any attorney's fees,
and the collection practices used by the association, including the
right of the association to the reasonable costs of collection. In
addition, any payments toward such a debt shall first be applied to
the principal owed, and only after the principal owed is paid in full
shall such payments be applied to interest or collection expenses.
(b) The amount of the assessment, plus any costs of collection,
late charges, and interest assessed in accordance with Section 1366,
shall be a lien on the owner's interest in the common interest
development from and after the time the association causes to be
recorded with the county recorder of the county in which the separate
interest is located, a notice of delinquent assessment, which shall
state the amount of the assessment and other sums imposed in
accordance with Section 1366, a legal description of the owner's
interest in the common interest development against which the
assessment and other sums are levied, the name of the record owner of
the owner's interest in the common interest development against
which the lien is imposed, and, in order for the lien to be enforced
by nonjudicial foreclosure as provided in subdivision (d) the name
and address of the trustee authorized by the association to enforce
the lien by sale. The notice of delinquent assessment shall be
signed by the person designated in the declaration or by the
association for that purpose, or if no one is designated, by the
president of the association, and mailed in the manner set forth in
Section 2924b, to all record owners of the owner's interest in the
common interest development no later than 10 calendar days after
recordation. Upon payment of the sums specified in the notice of
delinquent assessment, the association shall cause to be recorded a
further notice stating the satisfaction and release of the lien
thereof. A monetary penalty imposed by the association as a means of
reimbursing the association for costs incurred by the association in
the repair of damage to common areas and facilities for which the
member or the member's guests or tenants were responsible may become
a lien against the member's separate interest enforceable by the sale
of the interest under Sections 2924, 2924b, and 2924c, provided the
authority to impose a lien is set forth in the governing documents.
It is the intent of the Legislature not to contravene Section 2792.26
of Title 10 of the California Code of Regulations, as that section
appeared on January 1, 1996, for associations of subdivisions that
are being sold under authority of a subdivision public report,
pursuant to Part 2 (commencing with Section 11000) of Division 4 of
the Business and Professions Code.
(c) Except as indicated in subdivision (b), a monetary penalty
imposed by the association as a disciplinary measure for failure of a
member to comply with the governing instruments, except for the late
payments, may not be characterized nor treated in the governing
instruments as an assessment which may become a lien against the
member's subdivision interest enforceable by the sale of the interest
under Sections 2924, 2924b, and 2924c.
(d) A lien created pursuant to subdivision (b) shall be prior to
all other liens recorded subsequent to the notice of assessment,
except that the declaration may provide for the subordination thereof
to any other liens and encumbrances.
(e) After the expiration of 30 days following the recording of a
lien created pursuant to subdivision (b), the lien may be enforced in
any manner permitted by law, including sale by the court, sale by
the trustee designated in the notice of delinquent assessment, or
sale by a trustee substituted pursuant to Section 2934a. Any sale by
the trustee shall be conducted in accordance with the provisions of
Sections 2924, 2924b, and 2924c applicable to the exercise of powers
of sale in mortgages and deeds of trusts.
(f) Nothing in this section or in subdivision (a) of Section 726
of the Code of Civil Procedure prohibits actions against the owner of
a separate interest to recover sums for which a lien is created
pursuant to this section or prohibits an association from taking a
deed in lieu of foreclosure.
(g) This section only applies to liens recorded on or after
January 1, 1986.

1368. (a) The owner of a separate interest, other than an owner
subject to the requirements of Section 11018.6 of the Business and
Professions Code, shall, as soon as practicable before transfer of
title to the separate interest or execution of a real property sales
contract therefor, as defined in Section 2985, provide the following
to the prospective purchaser:
(1) A copy of the governing documents of the common interest
development.
(2) If there is a restriction in the governing documents limiting
the occupancy, residency, or use of a separate interest on the basis
of age in a manner different from that provided in Section 51.3, a
statement that the restriction is only enforceable to the extent
permitted by Section 51.3 and a statement specifying the applicable
provisions of Section 51.3.
(3) A copy of the most recent documents distributed pursuant to
Section 1365.
(4) A true statement in writing obtained from an authorized
representative of the association as to the amount of the association'
s current regular and special assessments and fees, any assessments
levied upon the owner's interest in the common interest development
that are unpaid on the date of the statement, and any monetary fines
or penalties levied upon the owner's interest and unpaid on the date
of the statement. The statement obtained from an authorized
representative shall also include true information on late charges,
interest, and costs of collection which, as of the date of the
statement, are or may be made a lien upon the owner's interest in a
common interest development pursuant to Section 1367.
(5) A copy or a summary of any notice previously sent to the owner
pursuant to subdivision (h) of Section 1363 that sets forth any
alleged violation of the governing documents that remains unresolved
at the time of the request. The notice shall not be deemed a waiver
of the association's right to enforce the governing documents against
the owner or the prospective purchaser of the separate interest with
respect to any violation. This paragraph shall not be construed to
require an association to inspect an owner's separate interest.
(6) A copy of the preliminary list of defects provided to each
member of the association pursuant to Section 1375, unless the
association and the builder subsequently enter into a settlement
agreement or otherwise resolve the matter and the association
complies with Section 1375.1. Disclosure of the preliminary list of
defects pursuant to this paragraph shall not waive any privilege
attached to the document. The preliminary list of defects shall also
include a statement that a final determination as to whether the
list of defects is accurate and complete has not been made.
(7) A copy of the latest information provided for in Section
1375.1.
(8) Any change in the association's current regular and special
assessments and fees which have been approved by the association's
board of directors, but have not become due and payable as of the
date disclosure is provided pursuant to this subdivision.
(b) Upon written request, an association shall, within 10 days of
the mailing or delivery of the request, provide the owner of a
separate interest with a copy of the requested items specified in
paragraphs (1) to (8), inclusive, of subdivision (a). The
association may charge a fee for this service, which shall not exceed
the association's reasonable cost to prepare and reproduce the
requested items.
(c) An association shall not impose or collect any assessment,
penalty, or fee in connection with a transfer of title or any other
interest except the association's actual costs to change its records
and that authorized by subdivision (b).
(d) Any person or entity who willfully violates this section shall
be liable to the purchaser of a separate interest which is subject
to this section for actual damages occasioned thereby and, in
addition, shall pay a civil penalty in an amount not to exceed five
hundred dollars ($500). In an action to enforce this liability, the
prevailing party shall be awarded reasonable attorneys' fees.
(e) Nothing in this section affects the validity of title to real
property transferred in violation of this section.
(f) In addition to the requirements of this section, an owner
transferring title to a separate interest shall comply with
applicable requirements of Sections 1133 and 1134.

1368.4. Notice of Possible Lawsuit Against Developer. (deleted - BD)

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