Attempt to simplify California condo laws ends in confusion

Question: I’m older than 80 and after two decades have finally just learned to maneuver my way through the Davis-Stirling Act, Civil Code sections 1350-1378. Now I’m told these codes I finally understand have all been changed. I am despondent over this. How and why did this happen, and where are these new codes supposed to be?

Answer: When the California Legislature passed the Davis-Stirling Act in 1985, the law was hailed as an advancement in governing condominiums and other common-interest developments. In the state’s civil code, the act became sections 1350 through 1378.

But as of Jan. 1, those sections of the code will be repealed and replaced with a new Part 5, starting with section 4000, because of Assembly Bill 805, Common Interest Development Reorganization Rules and Regulations.

The legislation reorganizes and recodifies the act and, among other things:

•revises provisions regarding notices and their delivery

•standardizes terminology

•establishes guidelines on the relative authority of governing documents

•establishes a single procedure for amendment of a common-interest declaration

•guarantees the right of an owner of a separate interest to make changes in that separate interest, as specified, in a common interest development other than a condominium project, in which that right currently exists

•establishes a list of conflicts of interest that may disqualify association board directors that manage a common-interest development from voting on certain matters

•revises provisions related to elections and voting

•establishes standards for the retention of records

•broadens the requirement that liens recorded by the association in error be released.

The code-change process began more than five years ago as the California Law Revision Commission undertook a project to clarify and simplify common-interest development law. The commission invited public comment, but most titleholders were woefully unaware of the commission, let alone its comment process and procedures, the gravity of the laws at stake and how those changes would affect owners and their assets.

As its members explained, the “commission recommends … the existing Davis-Stirling Common Interest Development Act be repealed and replaced with a new statute that continues the substance of existing law in a more user-friendly form.�

But that’s not exactly what happened.

Some scholars have criticized the commission for undertaking this massive reorganization, calling it a disorganized mess resulting in the disruption of entire sections of code the public has come to rely upon over time. The rewrite should not have been allowed, critics say.

The rewrite is not without its defenders, most notably lawyers representing homeowner associations who are excited about the unnecessary confusion. Others have referred to it as a pedestrian approach and sloppy analysis that could predictably result in serious consequences, if not countless dollars needlessly spent by associations and their titleholders. Still others refer to it as the attorneys full employment act.

The graveyards of repealed code sections caused by the commission’s and the Legislature’s chain-saw approach have created inconsistencies and mass confusion for California consumers where none need exist.

This changeover makes it difficult for owners to pursue small claims actions effectively or to personally enforce their rights in general. What the commission identifies as “friendly� actually tends to be a circuitous morass of vague and/or complicated language with poorly defined or undefined terminology.

Confusion created by the so-called simplification is indefensible. Some statutory language appears to shift the burden from associations onto titleholders. Such changes could end up costing owners and their associations millions of dollars in the long run, influencing sales and property rights.

Owners citing these new provisions will be required to educate their audience on the meaning of the law and will probably be met with frequent challenges on interpretation. As in the past, we can expect the commission to be missing in action when consumers or their lawyers are before the bench struggling for statutory answers let alone interpretations, while at the same time attempting to respond to rapid-fire questioning by short-tempered judges demanding: “But where does it say that?�

The money allocated to the commission would be better directed to compensate titleholders in homeowner associations and be placed in a type of victim’s fund to assist owners who are adversely affected by such statutory incompetence.

These statutes are subject to change at any time, but here are examples of the confusion to expect: Civil Code section 1353(a)(1) (first and second sentence) is found in Civil Code section 4250(a), Civil Code section1353(a)(1)-(4) (except the first and second sentence) is found in Civil Code section 4255, Civil Code section 1367.1(g) (fourth sentence) is found in Civil Code section 5710(c) (intro), and Civil Code section 1365(f)(1) (except the second clause of the first sentence) is found in Civil Code section 5300(b)(9) (first and second sentences). The new text is not always identical to the old.

For a free conversion chart of how the changed statutes relate to the original Davis-Stirling Act, send a first-class-stamped, self-addressed No. 10 envelope to Box 10490, Marina del Rey, CA 90295. Requests must be received no later than Feb. 28, 2014, to be honored.

For a copy of the code section itself, write to: Legislative Bill Room, State Capitol, Room B-32, Sacramento, CA 95814. The request must reference: “Chapter 180, Statutes of 2012, AB-805, Torres.�

Zachary Levine, partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian JD, Box 10490, Marina del Rey, CA 90295 or [email protected].