Real Estate & Property Law

Should an HOA Delay an Update Project Because There Might Be A New Davis Stirling Act?

I recently received a question from an association board interested in amending, restating and updating their governing documents. This is what they said:

"The committee & the Board has one major concern: The Davis-Stirling revision & its impact on the CC&Rs.

The committee chair has researched that timeline (www.clrc.ca.gov/H855.html & www.clrc.ca.gov/pub/2011/MM11-05.pdf ) & it doesn?t appear that the new regulations will go into effect until January 1, 2014. If that?s true, it?s certainly worthwhile to complete our process now & update in 3 years, as necessary.

But, our question is this: Do you have any ?insider? information re: the D.S. update timeline?"

My answer is as follows:

My information is very similar to what this board has heard. If a bill is introduced with the proposed new statutory scheme, which is anticipated, the date indicated is probably the earliest the new body of law would go into effect, assuming the new Act makes it through both legislative bodies (House and Senate) and the (new) Governor signs it.

However, if the association is concerned that a rewrite may be necessary if/when the "new and improved" Davis Stirling Act becomes law, it will not be. Although the new law if it passes will double or triple the number of actual statutes, most of what now exists in each individual statute will be carried into 2 or 3 or more statutes and attorneys like me will be preparing cross-reference charts for clients. The way the documents should be written now (in my opinion) is to keep fairly minimal on detailing the exact words of the statutes, stick to the more conceptual aspects - in most cases - and refer to the current statute - and that way the "crossover chart" will assist boards in navigating statute number changes. The changes are per the CLRC's stated purpose are for the most part clarification and improvement in comprehension and understanding and not to change the DS Act provisions materially.

Of course, there will likely be considerable debate over this in the coming years, i.e., whether the CLRC has limited itself to those plans. In past years the proposed DS Act revisions were met with strong opposition because material changes were made.

The bottom line is that the fact there may be a whole new Davis Stirling Act located in a whole other area of the Civil Code should not keep associations from updating and restating their documents at the earliest convenience if they are outdated.

The CLRC is even looking at allowing boards to restate the documents just to make the statutory changes - but in the opinion of most HOA attorneys, letting boards loose with the ability to restate documents without required oversight could be disastrous.

On the document amendment/update/restatement process, I have prepared an extremely explanatory proposal which outlines how the process should work and what the cost will be if the Board follows my process and I can send it out upon request.

This association has a committee working on a draft of new documents. They asked if I could just "add the legal updates."

This is my answer to that question: "What I do with drafts of Boards or committees is look to see what is in there that is pertinent and apparently important to the Board and incorporate it into my own set of documents which covers the most up to date laws. I, as well as many other attorneys with whom I have spoken about the amendment processes, find it unduly difficult to work with documents written by others, especially lay persons or (maybe even worse) attorneys who have no experience in HOA law. It usually takes inordinantly more time to "rewrite" docs which are drafted by a committee or lay persons than to work with our own documents and incorporate whatever the association wants covered with regard to maintenance, parking, use restrictions, architectural controls, maintenance responsibilities, insurance and the like, the kind of things that are unique to each association.

Full post as published by California Condo & HOA Law on February 20, 2011 (boomark / email).