ECHO is Sponsoring AB 968 on behalf of California HOAs. Unless your governing documents are very clear, the Davis-Stirling Act exposes associations and their members to expensive legal battles, major safety concerns, and confusion over the repair and replacement of exclusive use common area (EUCA). AB 968 improves the law, and benefits both individual owners and associations.
Update: The Govenor signed the bill on 9/18.
Clearer Laws, Safer Communities, Lower Costs
Unless your governing documents are very clear, the Davis-Stirling Act exposes associations and their members to expensive legal battles, major safety concerns, and confusion over the repair and replacement of exclusive use common area (EUCA). AB 968 improves the law, and benefits both individual owners and associations.
Learn more about how exclusive use common area affects the maintenance responsibility of HOAs
ECHO sponsered AB 968 on behalf of California HOAs.
What AB 968 Says
Originally a bill dealing with elections in small associations, AB 968 was amended this year to change what the law says about exclusive use common area. The current, poorly-worded law (see Civil Code Section 4775) fails to assign responsibility for the “repair and replacement” of exclusive use common area. According to some interpretations, that responsibility can fall on individual owners. From the Legislative Council’s Digest:
The Davis-Stirling Common Interest Development Act governs the management and operation of common interest developments. These provisions require that a common interest development be managed by an association and also set 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 responsible for maintaining, repairing, or replacing the common area, other than the exclusive use common area, and the owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common area appurtenant to the interest.This bill would, beginning January 1, 2017, instead provide that, unless otherwise provided in the declaration, the association is responsible for maintaining, repairing, and replacing the common area, the owner of each separate interest is responsible for maintaining, repairing, and replacing the separate interest, and the owner of the separate interest is responsible for maintaining the exclusive use common area appurtenant to the separate interest while the association is responsible for repairing and replacing the exclusive use common area.
What is Exclusive Use Common Area?
In a condominium complex, property is typically divided between two groups: association property (common area), and owner property (the separate interest). Common area could include the pool, clubhouse, roof, or any other component that serves the whole community. The separate interest typically includes anything within the space inside the unit.
But some parts of common area, such as patios, balconies, and certain pipes, serve only one owner or “separate interest.”
The elements of common area that serve only one owner are often called exclusive use common area.
Why is AB 968 Important?
AB 968 reduces costs for owners. Every owner is already required to maintain the exclusive use common area next to their units. But unless the CC&Rs are clear, they may also be required to repair and replace those components.
AB 968 improves safety. EUCA such as decks, piping, and landscaping can be dangerous and expensive to replace, exposing associations to major liability. Unless the CC&Rs say otherwise, AB 968 ensures that the appropriate party, the association, repairs and replaces EUCA.
AB 968 simplifies and clarifies the law. AB 968 corrects a drafting error in the Davis-Stirling Act – one that has left “repair and replacement” of EUCA unassigned, opening a confusing void in the law. AB 968 eliminates the confusion, and only applies when the governing documents are silent.
ECHO supports both HOA boards and owners. We strongly believe that AB 968 will reduce confusion in the law, and help to reduce litigation and conflict in California HOA communities.
What Does AB 968 Change?
AB 968 answers the question “who repairs and replaces exclusive use common area?” when the governing documents are silent. This question is not answered in current law. The table below illustrates the major changes to the text of Civil Code Section 4775:
NOW – Civil Code 4775 |
AFTER – Civil Code 4775 |
|---|---|
|
Association Responsibilities Owner Responsibilities Who “repairs and replaces” exclusive use common area? When the CC&Rs are unclear, homeowners are at risk. |
Association Responsibilities “[T]he association is responsible for repairing and replacing the exclusive use common area.” Owner Responsibilities “[T]he owner of each separate interest is responsible for maintaining the exclusive use common area appurtenant to that separate interest[.]” Who “repairs and replaces” exclusive use common area? Unless the CC&Rs say otherwise, associations. |
When Does AB 968 Go Into Effect?
AB 968 will go into effect on January 1, 2017. Your HOA should examine its CC&Rs to ensure that new Civil Code language does not change how your association assigns maintenance responsibility (an unlikely scenario). ECHO will provide information to help your HOA adjust to the new law before it goes into effect.