AB 2429 (Caballero). Common interest developments.

Most likely a spot bill, this bill would make nonsubstantive changes related to director liability. On March 15, 2018, the proposed text of AB 2429 was gutted and amended to no longer apply to common interest developments.

Current Status: Dead

FindHOALaw Quick Summary:

Existing law limits the personal liability of a volunteer officer or director of an association that is residential or mixed-use for tortious acts or omissions, provided that the act or omission be made in good faith and within the scope of the authority of the board.

Most likely a spot bill, this bill would make nonsubstantive changes Civil Code Section 5800.

To read the current text of AB 2429, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 2429 as it progresses through the Legislature. 

**UPDATE: On March 15, 2018, the proposed text of AB 2429 was gutted and amended to no longer apply to common interest developments.

 Common interest developments. Insurance: time-limited demands.
Existing law regulates insurance and the business of insurance in this state. Existing law specifies various acts that are defined as unfair methods of competition and deceptive acts or practices in the business of insurance, including knowingly committing or performing certain acts with such frequency as to indicate a general business practice of unfair claims settlement practices.
This bill would declare that it is the policy of the state that prompt settlements of civil actions and insurance claims are encouraged as beneficial to claimants, policyholders, and insurers. The bill would require a time-limited demand, as defined, to be in writing and to include specified information, including the time period within which the offer remains open, the entire amount of monetary payment requested for a full and final settlement of the claim, and an offer of a full and final unconditional release from all present and future liability arising out of the occurrence giving rise to the claim. The bill would also require the time-limited demand to include specified documentation to support the claim for damages. The bill would authorize an insurer to accept the time-limited demand by providing written acceptance of the material terms within the time period set forth in the demand.

Existing law, the Davis-Stirling Common Interest Development Act, defines and regulates common interest developments. Existing law requires a common interest development to be managed by an association that may be incorporated or unincorporated. Existing law limits the personal liability for tortious acts or omissions of a volunteer officer or director of an association that manages a common development that is residential or mixed use, if certain criteria are met.

 This bill would make a nonsubstantive change to that provision.
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View more info on AB 2429
from the California Legislature's website

Related Topics

Related Statutes

Related Case Law

  • Palm Springs Villas II HOA v. Parth
    (2016) 248 Cal.App.4th 268

    [Fiduciary Duty; Business Judgment Rule] The Business Judgment Rule does not automatically shield a HOA director from liability that may result from the director’s failure to exercise reasonable diligence or failure to act within the scope of the director’s authority under the HOA’s governing documents.

Related Links

Tendering Lawsuits Brought Against the HOA - Published on HOA Lawyer Blog (November 14, 2013) Business Judgment Rule Does Not Protect the Willfully Ignorant - Published on HOA Lawyer Blog (August 17, 2016) AB 1412 Signed: Clarification of Two (2) Existing Code Sections (Member Notification and Director/Officer Liability) - Published on HOA Lawyer Blog (September 27, 2017)