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Key 2024 California HOA Law Changes: What Homeowners Need to Know

LS Carlson Law December 29th, 2023

Introduction
2024 brings significant changes to the California HOA landscape with the introduction of eight new bills. As an HOA law firm that exclusively represents homeowners, LS Carlson Law is here to guide you through these changes. Understanding these laws is crucial for homeownersto ensure compliance and make informed decisions.

AB-1033: Separate Sale of Accessory Dwelling Units (ADUs)
One of the most impactful changes comes with AB-1033, which now permits the sale of Accessory Dwelling Units (ADUs) separately from the primary residence. This change addresses the growing need for affordable housing options and opens new avenues for property investment. Homeowners considering adding ADUs can now explore more flexible options in property management and sales.

AB-976: Eliminating Owner-Occupancy Requirement for ADUs
AB-976 further liberalizes ADU regulations by removing the owner-occupancy requirement. This change broadens the scope for rental and investment opportunities, allowing property owners to utilize their ADUs without the constraint of residing in the primary dwelling. It's a progressive step towards addressing housing shortages and rental market flexibility.

AB-648: Virtual HOA Meetings
The adaptation to digital platforms is evident with AB-648, authorizing HOA board meetings to be conducted entirely by teleconference. This law reflects a post-pandemic shift towards remote connectivity, offering more accessibility and convenience for board members and homeowners alike.

AB-1458: Adjusted Quorum Requirements
AB-1458 addresses the issue of quorum in HOA meetings. By reducing the quorum requirement to the number of persons actually present, this law aims to streamline decision-making processes in HOA meetings, preventing the stalling of important decisions due to attendance issues.

SB-71: Increased Limits for Small Claims
For those looking to sue HOA, SB-71 is particularly relevant. It raises the limit for small claims actions to $12,500 per claim. This increase empowers homeowners to seek justice in small claims court for higher amounts without the need for an attorney, making legal action more accessible in disputes with HOAs.

AB-1764: Standardizing HOA Board Member Qualifications
AB-1764 ensures fairness in HOA board elections by requiring associations that have adopted candidate disqualifications to apply the same standards to director disqualifications. This law promotes consistency and transparency in the election process, a crucial aspect for homeowners and board members alike.

AB-572: Capping Assessment Increases on Affordable Housing Units
AB-572 puts a limit on regular assessment increases for affordable housing units, capping it at 5% of the previous year. This change is a stride towards maintaining affordability and protecting the interests of homeowners in affordable housing sectors.

AB-1572: Mandatory Use of Recycled Water for Irrigation
Lastly, AB-1572 mandates the use of recycled water for irrigation in non-recreational landscape areas of HOAs. This environmentally conscious move aligns with California’s sustainability goals and promotes responsible water usage in HOAs.

Conclusion
The 2024 changes to California HOA laws reflect a growing adaptation to modern challenges in housing, environmental sustainability, and digital communication. As your dedicated HOA lawyers, LS Carlson Law is committed to helping you navigate these changes. Whether you’re considering to sue an HOA, need advice on homeowner association laws, or require assistance in understanding these new regulations, our team is here to provide guidance.

Video Transcript

HOA Attorney, Luke Carlson, Esq.
Hi, I'm Luke Carlson from LS Carlson Law. Welcome to the show. LS Carlson Law is a law firm that exclusively represents homeowners against bad HOAs. We operate in California. We operate in Florida. Today, I have my wife, Jenny, on the show. Welcome.

Homeowner, Jenny Carlson
Hi. Thanks for having me.

HOA Attorney, Luke Carlson, Esq.
Thanks for being here. And I also have our producer, Marty. Marty, welcome. He's behind the scenes.

Homeowner & Producer, Marty Vasquez
Hello there.

HOA Attorney, Luke Carlson, Esq.
Hello there. So today's show, we are really focusing on California law that is changing in 24 that specifically deals with homeowner rights. And we thought it'd be a great idea just to go over the new laws, identify how they may impact the homeowner, it's relevancy and it could impact your life. So here we are. Great. Let's go. All right. Let's dive right in. So first one is AB 1033. So this involves ADUs. So that's an accessory dwelling unit. Just think of the separate granny pad on the side of your house.

Homeowner, Jenny Carlson
Yes. What comes to mind is all of our friends that have the mother-in-law sweet in the back.

HOA Attorney, Luke Carlson, Esq.
Yeah. The mother-in-law lives there or the grandmother. And so what California has done is really laid a foundation to make it easier for homeowners to put in ADUs. They want to encourage it. There's a housing crisis. So AB 1033 really keeps that momentum up. So the first thing it does is it allows an individual to sell the ADU separately from their primary residence. residents. That's a huge change in the law because now you can actually bifurcate out the ADU if you want to, treat it separately and sell it as a secondary property.

Homeowner, Jenny Carlson
Which potentially could be a lot more investment opportunities.

HOA Attorney, Luke Carlson, Esq.
Correct. It's more enticing to investors. So I actually applaud the legislation for doing this. I think it was a very well-intended law and I think it's going to have a positive impact, especially with ADUs.

Homeowner, Jenny Carlson
Nice.

HOA Attorney, Luke Carlson, Esq.
So that was the first one. Second one, AB 976. It's sort of going in that same vein, but essentially what this does is it bars a city or county from disallowing someone to set up an

HOA Attorney, Luke Carlson, Esq.
ADU if they don't intend to occupy it, right? So it removes that barrier. So if a city wanted to say, hey, you can establish an ADU, but you have to occupy it yourself, this law does away with that.

Homeowner, Jenny Carlson
So just to clarify, prior to this, it did have to be owner-occupied?

HOA Attorney, Luke Carlson, Esq.
It didn't have to be, but if a city or county wanted it to be, they could. Okay. So this short-circuits their ability to do that. So I think that's a good thing.

Homeowner & Producer, Marty Vasquez
So it introduces state law at this point, which supersedes any local laws at this point.

HOA Attorney, Luke Carlson, Esq.
Correct. So state law, well, what it's saying is no local law can conflict with this. So AB 976 is going to trump it.

Homeowner & Producer, Marty Vasquez
Yeah, understood.

HOA Attorney, Luke Carlson, Esq.
All right. All right. So the next one, AB648, this is a byproduct of the pandemic. As everyone knows, Zoom has been embraced by corporate culture.

Homeowner, Jenny Carlson
Everyone.

HOA Attorney, Luke Carlson, Esq.
Just everybody. Before the pandemic, we didn't talk about Zoom, but now everyone talks about Zoom.

Homeowner & Producer, Marty Vasquez
I'm surprised we're not doing this by Zoom.

HOA Attorney, Luke Carlson, Esq.
Seriously. Your grandparents now want to Zoom you, right? It's so prevalent. And so what this is essentially saying is that board meetings in HOAs can be conducted by way of teleconference. It's permitted. I mean, there's certain rules and regulations that that surround that implementation, but it's modernizing how board meetings are run. So, so far, so good. AB 1458. All right. So this deals with quorums. So let me explain quorums. It's actually very simple. A quorum is, it really looks at a meeting. And a quorum is a certain amount of people have to be present at a meeting to vote. So what's happened historically with a quorum is boards, let's say, have been on for year year one. And at the end of the year, they do an election, but there's not a sufficient quorum to hold an election.

Homeowner, Jenny Carlson
So could you say a quorum is like a group of people?

HOA Attorney, Luke Carlson, Esq.
Yeah, it's supposed to two-thirds be a majority. It's typically like two thirds. So when the quorum isn't met, what happens is there's no election. It rolls over to the next year. And if the quorum isn't met that year, it rolls over again and again and again. So the byproduct of that though, is if you have a bad HOA and quorum isn't being met, that could go on in perpetuity.

Homeowner, Jenny Carlson
Oh, interesting. Okay.

HOA Attorney, Luke Carlson, Esq.
So this is saying that by law, and I won't get too technical on it, a quorum can be reduced. So if a certain amount of people show up and it's a less than quorum, an election could possibly move forward.

Homeowner, Jenny Carlson
Okay.

HOA Attorney, Luke Carlson, Esq.
So it's just to really break the log jam that could happen if you're not meeting quorum.

Homeowner, Jenny Carlson
Gotcha.

HOA Attorney, Luke Carlson, Esq.
So, you know, again, if you have a bad HOA, a bad board, this could be a remedy to get them removed if even quorum isn't met.

Homeowner, Jenny Carlson
Okay.

HOA Attorney, Luke Carlson, Esq.
All right. SB 71, I'll focus on the impact for the homeowner because small claims can be an exceptional way to enforce your rights against a bad HOA without using a lawyer. So small claims really...

Homeowner, Jenny Carlson
It's a good option, right?

HOA Attorney, Luke Carlson, Esq.
It can be in certain circumstances, but what it allows for is the homeowner to get a case or a dispute in front of a judge, small claims judge, often a commissioner, and it increases the limit. So right now it's $10,000. SB 71 brings that up to $12,500.

Homeowner, Jenny Carlson
Okay. So it increases $2,500 per claim.

HOA Attorney, Luke Carlson, Esq.
Correct. Which a lot of small claims, those types of suits tend to be smaller in nature. It just kind of gives you a bit of a larger buffer to bring that case before a commissioner or small claims. Byproduct of that, what you might see is you might see a lot more small claims actions being filed. So I don't know if that's going to impact the wheels of justice. I don't know if it's going to log jam the small claims courts, but it'll be interesting to see what happens with this new legislation.

Homeowner, Jenny Carlson
Yeah, we'll have to keep watching and update ourselves.

Homeowner & Producer, Marty Vasquez
When is it appropriate? I think that's a topic for a bigger conversation, but maybe we could just touch on it for a second. When is it appropriate to bring it to small claims court versus hiring attorney and going the civil route?

Homeowner & Producer, Marty Vasquez
Yeah. So let's take a dispute where you have, again, a bad HOA, they're failing to maintain a common area element and let's say water damage results, but the water damage isn't very severe. Maybe you have to repair it. It's 12,500 in damage.

Homeowner & Producer, Marty Vasquez
In your head, would you think, oh, it's probably under 10 grand. So small claims would it'd be a good option.

HOA Attorney, Luke Carlson, Esq.
It could be because once you get a lawyer involved, lawyers can get expensive, right? And sometimes you could spend $10,000 chasing $10,000. That doesn't make any sense. The lawyer wins in that sense. So, you know, with those types of lower dollar amount cases, small claims becomes a great option. And what's neat about small claims is, you know, the commissioner, the small claims judge, they don't expect you to be represented by a lawyer. You actually can't bring a lawyer to small claims.

Homeowner, Jenny Carlson
Oh, I didn't realize that.

HOA Attorney, Luke Carlson, Esq.
So it neutralizes the field and it really forces the HOA's hand in the sense that they have to show up, they have to defend their action. And so it tends to be very efficient too. It's an efficient way to get something in the courthouse. You don't have all the procedures that you have to deal with with big boy court. So I think it can be a good option.

Homeowner & Producer, Marty Vasquez
Can't you sue for attorney's fees as well and get those back potentially so you're not backed into a corner?

HOA Attorney, Luke Carlson, Esq.
Yeah. So, you know, Davis Stirling, CC&R's governing documents often contemplate attorney's fees. So let me back out a little bit. So small claims, let's say it's a contained issue. Your damages are $12,500. And if you get compensated, you can live your life. Small claims makes a lot of sense. But let's say it's a $5,000 issue. It's a water intrusion issue and your damages are $5,000, but the issue is open and it's outstanding. Meaning if you pay the $5,000, you fix your property, it's only going to happen again next time the rains come. Then you may want to escalate the dispute. Typically with a dispute like that, you know, it'd be failure to maintain a common area element that's resulting in ongoing damage. If you brought a claim, it would likely start with ADR, which is alternative dispute resolution, which is a pre-litigation step. So that might be a better way to fix the problem permanently. Now, small claims could address the $5,000, but will it actually create change within the HOA? You see what I'm saying? When you go to a mediation, when you're negotiating with opposing counsel or the association's attorney, at that point, really you're looking for compensation of the $5,000. You'll likely be demanding attorney's fees as well because you've had to spend money on a lawyer because of their misconduct. But in addition to that, you're looking for some sort of permanent change in the community.

Homeowner & Producer, Marty Vasquez
Is small claims a venue for that, or does it have to have a financial tie to it?

HOA Attorney, Luke Carlson, Esq.
So in certain circumstances, the jurisdiction of the small claims court allows for equitable relief. Generally though, the matters that we see, it doesn't really make sense to bring to small claims. And the other issue with small claims, and I say this as nicely as I can, it's a bit of a Mickey Mouse court. You get odd rulings out of small claims. You know, sometimes that small claims is just overloaded. They have a huge caseload. You don't always get the right decision. so by moving in the small claims court, I think it's always a risk. So if you're dealing with a common area element that is just an ongoing issue, you know, a roof leak, landscaping that isn't properly maintained, I would argue that you probably wouldn't want to put that in the jurisdiction of the small claims court.

Homeowner, Jenny Carlson
The more you know.

HOA Attorney, Luke Carlson, Esq.
The more you know. All right. So that's SB 71. Let's move on. AB 1764. Okay. This is an interesting one. So I don't want to get too technical on it but essentially what this is saying is and this is true so an association can isolate certain things that would disqualify a potential candidate and i'll give you an example they could say if you have a felony you you can't get on the board it disqualifies you why would you want that well if you had a felon on the board you might bar the association from uh procuring loans right so it could it could serve as a disadvantage for the association right so the disqualification element of an association can be very beneficial. What this is saying though is if you have this disqualification, it needs to apply to everybody. So that's it in a nutshell. It's simplifying it in a very large sense, but generally that's what it's saying.

Homeowner & Producer, Marty Vasquez
So in other words, it applies to everyone, there's no discrimination for any sort of...

HOA Attorney, Luke Carlson, Esq.
It equalizes the standard. Yeah. So it could be very impactful. So that's 1764. for, let's see, AB572. So this really focuses on the affordable housing. And essentially what it's saying is that on any fiscal year, they can't increase assessments over the 5%, right? They can't raise dues over the 5 % mark. And I think that's just to bring more equality in fair housing in affordable housing.

Homeowner & Producer, Marty Vasquez
When you have an HOA, they don't split it between, okay, this side of the neighborhood is affordable housing or this unit is considered affordable housing. It's the entire development is in a zoned affordable housing.

HOA Attorney, Luke Carlson, Esq.
That's a good question. I've only seen it apply to an entire community. I've never seen a bifurcated or split community. I don't know. I suppose, could you segment it out? I'm not sure offhand, honestly.

Homeowner & Producer, Marty Vasquez
The reason I was saying is because it's basically saying five percent each each year. So there's no way to split that realistically, because it's like, OK, well, you're in affordable housing. So it can't go more than five percent. But you next door neighbor are not in the affordable housing. And we can go to whatever to the extent of what the law will allow.

HOA Attorney, Luke Carlson, Esq.
Yeah, there's statutory limits on increases in general but I would, for the majority, for what I've seen at our desk, affordable housing typically applies to an entire community. It's typically not split out into two kingdoms, so to speak.

Homeowner & Producer, Marty Vasquez
Yeah. Makes sense.

HOA Attorney, Luke Carlson, Esq.
All right. AB 1572. Let's see. Oh, this, okay. This one's interesting. So this is a result of the water issues California sees. Interesting. We've had a lot of rain recently. So it's kind an ironic time to discuss this one. But really, it's looking towards water conservation. And what it's saying is non drinkable water or water that

Homeowner, Jenny Carlson
Recycled.

HOA Attorney, Luke Carlson, Esq.
Recycled water, really, is now going to be used to water areas that are non-recreational. So think of green belts that people don't play on or walk on.

Homeowner & Producer, Marty Vasquez
And we see that in California quite a bit. The infamous purple pipes are recycled. It's throughout parks and other areas. So it's not something totally new.

HOA Attorney, Luke Carlson, Esq.
Correct. And it's an effort to conserve water in California. And essentially what they're doing is they're mandating that to the extent that you have a non-recreational greenbelt or plants or vegetation, you have to use recycled water. It's a mandate. But it actually doesn't come out or compliance, I believe, is in 2029. So associations will have time to re-engineer their communities to hit that mark. So they have some breathing room on it.

Homeowner & Producer, Marty Vasquez
So it's up to the HOA to facilitate the change there.

HOA Attorney, Luke Carlson, Esq.
The association is mandated to comply with this law. And I believe I saw that it's going to require a certificate of compliance. So that'll be interesting to see how that actually shakes out logistically.

Homeowner & Producer, Marty Vasquez
Pull out the shovels. It's going to get messy around here in neighborhoods.

Homeowner, Jenny Carlson
It might.

HOA Attorney, Luke Carlson, Esq.
It could, yeah. It could be a whole reengineering of the water system. What's interesting, though, what you might see, I was thinking that potentially you're going to see a lot more recreational areas in your community to sidestep the regulation.

Homeowner, Jenny Carlson
Interesting.

HOA Attorney, Luke Carlson, Esq.
Right. Your green belt is now recreational.

Homeowner & Producer, Marty Vasquez
Yeah.

HOA Attorney, Luke Carlson, Esq.
There's going to be a lot of soccer fields and backgammon.

Homeowner & Producer, Marty Vasquez
Community farming initiatives.

HOA Attorney, Luke Carlson, Esq.
Right, right.

Homeowner, Jenny Carlson
I love that.

HOA Attorney, Luke Carlson, Esq.
And, you know, typically, you know, the cause I'm imagining this is going to come by way of some sort of assessment on the community to fund it.

Homeowner & Producer, Marty Vasquez
Yeah. It's interesting because like I said, they already have the infamous purple pipes everywhere. It's a matter of can we get a hold of the same water? Is it piped in near where we can just tap into it and then change some of the plumbing underneath?

HOA Attorney, Luke Carlson, Esq.
Yeah, I think to your point, Marty, I mean, it could be a logistical nightmare. So I would imagine good HOAs are thinking about the problem now, as opposed to in 2028, where they are going to be left scrambling.

Homeowner & Producer, Marty Vasquez
So that's an interesting question that you probably don't have an answer for, but what is the punishment? What's the consequence if they don't follow through? Especially it's 2030 now and you're supposed to be in compliance.

HOA Attorney, Luke Carlson, Esq.
I would imagine fines against the community if you don't have a certificate of compliance.

Homeowner & Producer, Marty Vasquez
Which is terrible for the homeowners in the first place because you're paying into this and now you're going to have to – if your community isn't –

Homeowner, Jenny Carlson
Potentially get hit on the back end. Yeah.

HOA Attorney, Luke Carlson, Esq.
Yeah, it could be. So it could turn into a dumpster fire. So we'll see. But they have time. I think they do have – A few years. They have a good, uh, launch ramp on this one. All right. Uh, that was the last one. Again, this was high level. We really wanted to draw homeowners' attentions to these new laws that may impact them. I encourage everyone to, you know, dig in because there's a lot of good information, but we appreciate your time. Uh, Jenny, thanks for being on the show.

Homeowner, Jenny Carlson
Thank you for having me and Marty.

HOA Attorney, Luke Carlson, Esq.
And thank you, Marty.

Homeowner & Producer, Marty Vasquez
Thank you.

HOA Attorney, Luke Carlson, Esq.
You're always a pleasure.

Homeowner & Producer, Marty Vasquez
I do my best.

HOA Attorney, Luke Carlson, Esq.
Thank you.

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