LEGISLATIVE COUNSEL'S DIGEST 

SB 326, Hill. Common interest developments. The Davis-Stirling Common Interest Development Act governs the management and operation of common interest developments. 

Existing law also sets forth the duties and responsibilities of the association and the owners of the separate interests with regard to maintenance and repair of common and exclusive use areas, as defined. 

Unless otherwise provided in the common interest development declaration, 
the association is generally responsible for maintaining, repairing, and replacing the common area, and the owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common area appurtenant to that interest. 

This bill would require the association of a condominium project to cause a reasonably competent and diligent visual inspection of exterior elevated elements, defined as the load-bearing components and associated waterproofing systems, as specified, to determine whether the exterior elevated elements are in a generally safe condition and performing in compliance with applicable standards. 

The bill would require the inspector to submit a report to the board of the association providing specified information, including the current physical condition and remaining useful life of the loadbearing components and associated waterproofing systems. 

The bill would require the inspector to provide a copy of the inspection report to the association immediately upon completion of the report, and to the local code enforcement agency within 15 days of completion of the report, if, after inspection of any exterior elevated element, the inspector advises that the exterior elevated element poses an immediate threat to the safety of the occupants. 

The bill would require the association to take preventive measures immediately upon receiving the report, including preventing occupant access to the exterior elevated element until repairs have been inspected and approved by the local enforcement agency. 

The bill would authorize local enforcement agencies to recover enforcement costs associated with these requirements from the association. 

The bill would authorize the association board to enact rules or bylaws imposing requirements greater than those imposed by these provisions. The act provides that an association has standing to institute, defend, settle, or intervene in litigation, arbitration, mediation, or administrative proceedings in its own name as the real party in interest and without joining with its members in specified matters, including enforcement of the governing documents. 

The bill would provide that, subject to compliance with other specified provisions described below, and notwithstanding any provision to the contrary in the governing documents, a board has the authority to commence legal proceedings against a declarant, developer, or builder of a common interest development, except as specified. 

The bill would, with certain exceptions, prohibit an association’s governing documents from limiting a board’s authority to commence legal proceedings against a declarant, developer, or builder of a common interest development. The bill would make these provisions applicable to governing documents, irrespective of when they were recorded, and claims initiated before the effective date of this bill, except if those claims have been resolved through an executed settlement, a final arbitration decision, or a final judicial decision on the merits. 

The act requires the board, prior to the filing of certain civil actions by the association against the declarant or developer, or within 30 days of filing the civil action if the association has reason to believe that the applicable statute of limitations will expire before the association files the civil action, to provide members of the association a written notice specifying, among other things, that a meeting will take place to discuss problems that may lead to the filing of a civil action. 

This bill would require that notice to inform members that the potential impacts of filing a civil action, including financial, to the association and its members will also be discussed. 

DIGEST KEY Vote: majority Appropriation: no Fiscal Committee: no Local Program: no

BILL TEXT 
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS 
FOLLOWS: 

SECTION 1.
 (a)  For purposes of this section, the following definitions apply:
(1) “Associated waterproofing systems” include flashings, membranes, coatings, and sealants that protect  the load-bearing components of exterior elevated elements from exposure to water.(2) “Exterior elevated elements” mean the load-bearing components together with their associated waterproofing system.(3) “Load-bearing components” means those components that extend beyond the exterior walls of the building to deliver structural loads to the building from decks, balconies, stairways, walkways, and their railings, that have a walking surface elevated more than six feet above ground level, that are designed for human occupancy or use, and that are supported in whole or in substantial part by wood or wood-based products.(4) “Statistically significant sample” means a sufficient number of units inspected to provide 95 percent confidence that the results from the sample are reflective of the whole, with a margin of error of no greater than plus or minus 5 percent.(5) “Visual inspection” means inspection through the least intrusive method necessary to inspect load-bearing components, including visual observation only or visual observation in conjunction with, for example, the use of moisture meters, borescopes, or infrared technology.(b) 
(1) At least once every nine years, the board of an association of a condominium project shall cause a reasonably competent and diligent visual inspection to be conducted by a licensed structural engineer or architect of a random and statistically significant sample of exterior elevated elements for which the association has maintenance or repair responsibility.(2) The inspection shall determine whether the exterior elevated elements are in a generally safe condition and performing in accordance with applicable standards.(c)
 Prior to conducting the first visual inspection, the inspector shall generate a random list of the locations of each type of exterior elevated element. The list shall include all exterior elevated elements for which the association has maintenance or repair responsibility. The list shall be provided to the association for future use.(d) 
The inspector shall perform the visual inspections in accordance with the random list generated pursuant to subdivision (c). If during the visual inspection the inspector observes building conditions indicating that unintended water or water vapor has passed into the associated waterproofing system, thereby creating the potential for damage to the load-bearing components, then the inspector may conduct a further inspection. The inspector shall exercise their best professional judgment in determining the necessity, scope, and breadth of any further inspection.(e) 
Based upon the inspector’s visual inspections, further inspection, and construction and materials expertise, the inspector shall issue a written report containing the following information:(1) The identification of the building components comprising the load-bearing components and associated waterproofing system.(2) The current physical condition of the load-bearing components and associated waterproofing system, including whether the condition presents an immediate threat to the health and safety of the residents.(3) The expected future performance and remaining useful life of the load-bearing components and associated waterproofing system.(4) Recommendations for any necessary repair or replacement of the load-bearing components and associated waterproofing system.(f) 
The report issued pursuant to subdivision (e) shall be stamped or signed by the inspector, presented to the board, and incorporated into the study required by Section 5550.(g)
 (1) If, after inspection of any exterior elevated element, the inspector advises that the exterior elevated element poses an immediate threat to the safety of the occupants, the inspector shall provide a copy of the inspection report to the association immediately upon completion of the report, and to the local code enforcement agency within 15 days of completion of the report. Upon receiving thereport, the association shall take preventive measures immediately, including preventing occupant access to the exterior elevated element until repairs have been inspected and approved by the local enforcement agency.(2) Local enforcement agencies shall have the ability to recover enforcement costs associated with the requirements of this section from the association.(h) 
Each subsequent visual inspection conducted under this section shall commence with the next exterior elevated element identified on the random list and shall proceed in order through the list.(i)
 The first inspection shall be completed by January 1, 2025, and then every nine years thereafter in coordination with the reserve study inspection pursuant to Section 5550. All written reports shall be maintained for two inspection cycles as records of the association.(j) 
(1) The association shall be responsible for complying with the requirements of this section.(2) The continued and ongoing maintenance and repair of the load-bearing components and associated waterproofing systems in a safe, functional, and sanitary condition shall be the responsibility of the association as required by the association’s governing documents.(k) 
The inspection of buildings for which a building permit application has been submitted on or after January 1, 2020, shall occur no later than six years following the issuance of a certificate of occupancy. The inspection shall otherwise comply with the provisions of this section.(l) 
This section shall only apply to buildings containing three or more multifamily dwelling units.(m) 
The association board may enact rules or bylaws imposing requirements greater than those imposed by this section.(n) 
A local government or local enforcement agency may enact an ordinance or other rule imposing requirements greater than those imposed by this section.


SEC. 2.
 Section 5986 is added to the Civil Code, immediately following Section 5985, to read:
5986.
 (a) 
Subject to compliance with Section 6150, which requires the board to provide notice of a meeting with the members to discuss, among other things, problems that may lead to the filing of a civil action, before the board files a civil action against a declarant or other developer, or within 30 days after it files the action, if the association has reason to believe that the applicable statute of limitations will expire, and notwithstanding any provision to the contrary in the governing documents, the board shall have the authority to commence and pursue a claim, civil action, arbitration, prelitigation process pursuant to Section 6000 or Title 7 (commencing with Section 895) of Part 2 of Division 2, or other legal proceeding against a declarant, developer, or builder of a common interest development. If the board includes members appointed by, or affiliated with, the declarant, developer, or builder, the decision and authority to commence and pursue legal proceedings shall be vested solely in the nonaffiliated board members.(b) 
The governing documents shall not impose any preconditions or limitations on the board’s authority to commence and pursue any claim, civil action, arbitration, prelitigation process pursuant to Section 6000 or Title 7 (commencing with Section 895) of Part 2 of Division 2, or other legal proceeding against a declarant, developer, or builder of a common interest development. Any limitation or precondition, including, but not limited to, requiring a membership vote as a prerequisite to, or otherwise providing the declarant, developer, or builder with veto authority over, the board’s commencement and pursuit of a claim, civil action, arbitration, prelitigation process, or legal proceeding against the declarant, developer, or builder, or any incidental decision of the board, including, but not limited to, retaining legal counsel or incurring costs or expenses, is unenforceable, null, and void. The failure to comply with those limitations or preconditions, if only, shall not be asserted as a defense to any claim or action described in this section.(c) 
Notwithstanding subdivision (a) or (b), any provision in the governing documents imposing limitations or preconditions on the board’s authority to commence and pursue claims shall be valid and enforceable if the provision is adopted solely by the non declarant affiliated members of the association and the provision is adopted in accordance with the requirements necessary to amend the governing documents of the association.(d)
 This section applies to all governing documents, whether recorded before or after the effective date of this section, and applies retroactively to claims initiated before the effective date of this section, except if those claims have been resolved through an executed settlement, a final arbitration decision, or a final judicial decision on the merits.(e)
 Nothing in this section extends any applicable statute of limitation or repose to file or initiate any claim, civil action, arbitration, prelitigation process, or other legal proceeding. Nothing in this section shall affect any other obligations of an association contained in Title 7 (commencing with Section895) of Part 2 of Division 2, or any other provision in the covenants, conditions, and restrictions of the association related to arbitration or other alternative dispute resolution procedures.


SEC. 3.
 Section 6150 of the Civil Code is amended to read:
6150.
 (a)
Not later than 30 days before filing of any civil action by the association against the declarant or other developer of a common interest development for alleged damage to the common areas, alleged damage to the separate interests that the association is obligated to maintain or repair, or alleged damage to the separate interests that arises out of, or is integrally related to, damage to the common areas or separate interests that the association is obligated to maintain or repair, the board shall provide a written notice to each member of the association who appears on the records of the association when the notice is provided. This notice shall specify all of the following:(1) That a meeting will take place to discuss problems that may lead to the filing of a civil action, in addition to the potential impacts thereof to the association and its members, including any financial impacts.(2) The options, including civil actions, that are available to address the problems.(3) The time and place of the meeting.(b) 
Notwithstanding subdivision (a), if the association has reason to believe that the applicable statute of limitations will expire before the association files the civil action, the association may give the notice, as described above, within 30 days after the filing of the action.

Senate Bill No. 326

LEGISLATIVE COUNSEL'S DIGEST

BILL TEXT THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: