Unless the governing documents require greater coverage amounts, the association shall maintain crime insurance, employee dishonesty coverage, fidelity bond coverage, or their equivalent, for its directors, officers, and employees in an amount that is equal to or more than the combined amount of the reserves of the association and total assessments for three months. The coverage maintained by the association shall also include protection in an equal amount against computer fraud and funds transfer fraud. If the association uses a managing agent or management company, the association’s crime insurance, employee dishonesty coverage, fidelity bond coverage, or their equivalent, shall additionally include coverage for, or otherwise be endorsed to provide coverage for, dishonest acts by that person or entity and its employees. Self-insurance does not meet the requirements of this section.
Related Links
AB 2912 Signed! Significant Changes to HOA Financial Review and Insurance Requirements
Published on HOA Lawyer Blog (September 20, 2018)
Civil Code Section 5502. Board Authorization of Financial Transfers.
(a) Notwithstanding any other law, transfers shall not be authorized from the association’s reserve or operating accounts without prior written approval from the board of the association unless the amount of the transfer is less than the following:
(1) The lesser of five thousand dollars ($5,000) or 5 percent of the estimated income in the annual operating budget, for associations with 50 or less separate interests.
(2) The lesser of ten thousand dollars ($10,000) or 5 percent of the estimated income in the annual operating budget, for associations with 51 or more separate interests.
(b) This section applies in addition to any other applicable requirements of this part.
Related Links
AB 2912 Signed! Significant Changes to HOA Financial Review and Insurance Requirements
Published on HOA Lawyer Blog (September 20, 2018)
AB 1101 Signed! Welcome Clarity to HOA Financial Protection Requirements – Published on HOA Lawyer Blog (October 2021)
Civil Code Section 5501. Financial Review Between Board Meetings.
The review requirements of Section 5500 may be met when every individual member of the board, or a subcommittee of the board consisting of the treasurer and at least one other board member, reviews the documents and statements described in Section 5500 independent of a board meeting, so long as the review is ratified at the board meeting subsequent to the review and that ratification is reflected in the minutes of that meeting.
Related Links
AB 2912 Signed! Significant Changes to HOA Financial Review and Insurance Requirements
Published on HOA Lawyer Blog (September 20, 2018)
Civil Code Section 4745.1. Electric Vehicle Dedicated TOU Meters.
(a) Any covenant, restriction, or condition contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale of any interest in a common interest development, and any provision of a governing document, as defined in Section 4150, that either effectively prohibits or unreasonably restricts the installation or use of an EV-dedicated TOU meter or is in conflict with this section is void and unenforceable.
(b)
(1) This section does not apply to provisions that impose reasonable restrictions on the installation of an EV-dedicated TOU meter. However, it is the policy of the state to promote, encourage, and remove obstacles to the effective installation of EV-dedicated TOU meters.
(2) For purposes of this section, “reasonable restrictions” are restrictions based upon space, aesthetics, structural integrity, and equal access to these services for all homeowners, but an association shall attempt to find a reasonable way to accommodate the installation request, unless the association would need to incur an expense.
(c) An EV-dedicated TOU meter shall meet applicable health and safety standards and requirements imposed by state and local authorities, and all other applicable zoning, land use, or other ordinances, or land use permits.
(d) For purposes of this section, an “EV-dedicated TOU meter” means an electric meter supplied and installed by an electric utility, that is separate from, and in addition to, any other electric meter and is devoted exclusively to the charging of electric vehicles, and that tracks the time of use (TOU) when charging occurs. An “EV-dedicated TOU meter” includes any wiring or conduit necessary to connect the electric meter to an electric vehicle charging station, as defined in Section 4745, regardless of whether it is supplied or installed by an electric utility.
(e) If approval is required for the installation or use of an EV-dedicated TOU meter, the application for approval shall be processed and approved by the association in the same manner as an application for approval of an architectural modification to the property, and shall not be willfully avoided or delayed. The approval or denial of an application shall be in writing. If an application is not denied in writing within 60 days from the date of receipt of the application, the application shall be deemed approved, unless that delay is the result of a reasonable request for additional information.
(f) If the EV-dedicated TOU meter is to be placed in a common area or an exclusive use common area, as designated in the common interest development’s declaration, the following provisions apply:
(1) The owner first shall obtain approval from the association to install the EV-dedicated TOU meter and the association shall approve the installation if the owner agrees in writing to do both of the following:
(A) Comply with the association’s architectural standards for the installation of the EV-dedicated TOU meter.
(B) Engage the relevant electric utility to install the EV-dedicated TOU meter and, if necessary, a licensed contractor to install wiring or conduit necessary to connect the electric meter to an EV charging station.
(2) The owner and each successive owner of an EV-dedicated TOU meter shall be responsible for all of the following:
(A) Costs for damage to the EV-dedicated TOU meter, common area, exclusive use common area, or separate interests resulting from the installation, maintenance, repair, removal, or replacement of the EV-dedicated TOU meter.
(B) Costs for the maintenance, repair, and replacement of the EV-dedicated TOU meter until it has been removed and for the restoration of the common area after removal.
(C) Disclosing to prospective buyers the existence of any EV-dedicated TOU meter of the owner and the related responsibilities of the owner under this section.
(g) The association or owners may install an EV-dedicated TOU meter in the common area for the use of all members of the association and, in that case, the association shall develop appropriate terms of use for the EV-dedicated TOU meter.
(h) An association that willfully violates this section shall be liable to the applicant or other party for actual damages, and shall pay a civil penalty to the applicant or other party in an amount not to exceed one thousand dollars ($1,000).
(i) In any action by a homeowner requesting to have an EV-dedicated TOU meter installed and seeking to enforce compliance with this section, the prevailing plaintiff shall be awarded reasonable attorney’s fees.
Related Links
New Law Expands Rights to Use EV Charging Stations in HOAs
Published on HOA Lawyer Blog (September 14, 2018)
Civil Code Section 1098.6. Transfer Fees Prohibited.
*Note – This Section shall not become operative until January 1, 2019. For more information, see AB 3041.
(a)
(1) On or after January 1, 2019, a transfer fee shall not be created.
(2) This subdivision does not apply to excepted transfer fee covenants as defined by Section 1228.1 of Title 12 of the Code of Federal Regulations. Excepted transfer fee covenants are not required to comply with subparagraph (H) of paragraph (2) of subdivision (b) of Section 1098.5.
(b) Any transfer fee created in violation of subdivision (a) is void as against public policy.
(c) For purposes of this section, “transfer fee” has the same meaning as that term is defined in Section 1098.
Related Links
AB 1139 Imposes New Notice Requirements on Deed-Based Transfer Fees – Published on HOA Lawyer Blog (August 2, 2017)
Civil Code Section 4746. Solar Energy Systems on Common Area Roofs.
(a) When reviewing a request to install a solar energy system on a multifamily common area roof shared by more than one homeowner pursuant to Sections 714 and 714.1, an association shall require both of the following:
(1) An applicant to notify each owner of a unit in the building on which the installation will be located of the application to install a solar energy system.
(2) The owner and each successive owner to maintain a homeowner liability coverage policy at all times and provide the association with the corresponding certificate of insurance within 14 days of approval of the application and annually thereafter.
(b) When reviewing a request to install a solar energy system on a multifamily common area roof shared by more than one homeowner pursuant to Sections 714 and 714.1, an association may impose additional reasonable provisions that:
(1)
(A) Require the applicant to submit a solar site survey showing the placement of the solar energy system prepared by a licensed contractor or the contractor’s registered salesperson knowledgeable in the installation of solar energy systems to determine usable solar roof area. This survey or the costs to determine useable space shall not be deemed as part of the cost of the system as used in Section 714.
(B) The solar site survey shall also include a determination of an equitable allocation of the usable solar roof area among all owners sharing the same roof, garage, or carport.
(2) Require the owner and each successive owner of the solar energy system to be responsible for all of the following:
(A) Costs for damage to the common area, exclusive use common area, or separate interests resulting from the installation, maintenance, repair, removal, or replacement of the solar energy system.
(B) Costs for the maintenance, repair, and replacement of solar energy system until it has been removed and for the restoration of the common area, exclusive use common area, or separate interests after removal.
(C) Disclosing to prospective buyers the existence of any solar energy system of the owner and the related responsibilities of the owner under this section.
(c) For purposes of this section:
(1) “Association” has the same meaning as defined in Section 4080 or 6528.
(2) “Common area” has the same meaning as defined in Section 4095 or 6532.
(3) “Separate interest” has the same meaning as defined in Section 4185 or 6564.
(d) This section imposes additional requirements for any proposed installation of a solar energy system on a multifamily common area roof shared by more than one homeowner.
(e) This section does not diminish the authority of an association to impose reasonable provisions pursuant to Section 714.1.
Related Links
AB 634 Signed! Reduced HOA Control of Solar Energy System Installations – Published on HOA Lawyer Blog (October 16, 2017)
Solar Panels on Common Area Roofs; Have a Policy Yet? – Published on HOA Lawyer Blog (March, 2018)
Civil Code Section 4515. Rights of Assembly and Non-Commercial Speech.
(a) It is the intent of the Legislature to ensure that members and residents of common interest developments have the ability to exercise their rights under law to peacefully assemble and freely communicate with one another and with others with respect to common interest development living or for social, political, or educational purposes.
(b) The governing documents, including bylaws and operating rules, shall not prohibit a member or resident of a common interest development from doing any of the following:
(1) Peacefully assembling or meeting with members, residents, and their invitees or guests during reasonable hours and in a reasonable manner for purposes relating to common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes.
(2) Inviting public officials, candidates for public office, or representatives of homeowner organizations to meet with members, residents, and their invitees or guests and speak on matters of public interest.
(3) Using the common area, including the community or recreation hall or clubhouse, or, with the consent of the member, the area of a separate interest, for an assembly or meeting described in paragraph (1) or (2) when that facility or separate interest is not otherwise in use.
(4) Canvassing and petitioning the members, the association board, and residents for the activities described in paragraphs (1) and (2) at reasonable hours and in a reasonable manner.
(5) Distributing or circulating, without prior permission, information about common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes, or other issues of concern to members and residents at reasonable hours and in a reasonable manner.
(6)
(A) Using social media or other online resources to discuss any of the following, even if the content is critical of the association or its governance:
(i) Development living.
(ii) Association elections.
(iii) Legislation.
(iv) Election to public office.
(v) The initiative, referendum, or recall processes.
(vi) Any other issues of concern to members and residents.
(B) This paragraph does not require an association to provide social media or other online resources to members.
(C) This paragraph does not require an association to allow members to post content on the association’s internet website.
(c) A member or resident of a common interest development shall not be required to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy, in order to use a common area for the activities described in paragraphs (1), (2), and (3) of subdivision (b).
(d) A member or resident of a common interest development who is prevented by the association or its agents from engaging in any of the activities described in this section may bring a civil or small claims court action to enjoin the enforcement of a governing document, including a bylaw and operating rule, that violates this section. The court may assess a civil penalty of not more than five hundred dollars ($500) for each violation.
Related Links
Who’s Yard is it Anyway? Part I: Homeowner’s Speech
– Published on HOA Lawyer Blog (March 2025)
Civil Code Section 1098. Deed-based Transfer Fees.
(a) A “transfer fee” is any fee payment requirement imposed within a covenant, restriction, or condition contained in any deed, contract, security instrument, or other document affecting the transfer or sale of, or any interest in, real property that requires a fee be paid as a result of transfer of the real property. A transfer fee does not include any of the following:
(1) Fees or taxes imposed by a governmental entity.
(2) Fees pursuant to mechanics’ liens.
(3) Fees pursuant to court-ordered transfers, payments, or judgments.
(4) Fees pursuant to property agreements in connection with a legal separation or dissolution of marriage.
(5) Fees, charges, or payments in connection with the administration of estates or trusts pursuant to Division 7 (commencing with Section 7000), Division 8 (commencing with Section 13000), or Division 9 (commencing with Section 15000) of the Probate Code.
(6) Fees, charges, or payments imposed by lenders or purchasers of loans, as these entities are described in subdivision (c) of Section 10232 of the Business and Professions Code.
(7) Assessments, charges, penalties, or fees authorized by the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4) or by the Commercial and Industrial Common Interest Development Act (Part 5.3 (commencing with Section 6500) of Division 4).
(8) Fees, charges, or payments for failing to comply with, or for transferring the real property prior to satisfying, an obligation to construct residential improvements on the real property.
(9)
(A) Any fee reflected in a document recorded against the property on or before December 31, 2007, that is separate from any covenants, conditions, and restrictions, and that substantially complies with subdivision (a) of Section 1098.5 by providing a prospective transferee notice of the following:
(i) Payment of a transfer fee is required.
(ii) The amount or method of calculation of the fee.
(iii) The date or circumstances under which the transfer fee payment requirement expires, if any.
(iv) The entity to which the fee will be paid.
(v) The general purposes for which the fee will be used.
(B) A fee reflected in a document recorded against the property on or before December 31, 2007, that is not separate from any covenants, conditions, and restrictions, or that incorporates by reference from another document, is a “transfer fee” for purposes of Section 1098.5. A transfer fee recorded against the property on or before December 31, 2007, that complies with subparagraph (A) and incorporates by reference from another document is unenforceable unless recorded against the property on or before December 31, 2016, in a single document that complies with subdivision (b) and with Section 1098.5.
(b) The information in paragraph (9) of subdivision (a) shall be set forth in a single document and shall not be incorporated by reference from any other document.
Related Links
AB 1139 Imposes New Notice Requirements on Deed-Based Transfer Fees – Published on HOA Lawyer Blog (August 2, 2017)
Civil Code Section 8119. Association as Agent of CID Owners.
*Note- This section shall become operative on January 1, 2018. For more information, see AB 534.
(a) With respect to a work of improvement on a common area within a common interest development: (1) The association is deemed to be an agent of the owners of separate interests in the common interest development for all notices and claims required by this part. (2) If any provision of this part requires the delivery or service of a notice or claim to or on the owner of common area property, the notice or claim may be delivered to or served on the association.
(b) For the purposes of this section, the terms “association,” “common area,” “common interest development,” and “separate interest” have the meanings provided in Article 2 (commencing with Section 4075) of Chapter 1 of Part 5 and Article 2 (commencing with Section 6526) of Chapter 1 of Part 5.3.
Related Links
AB 534 Signed: Associations to Provide Notice to Members of Lien Claims – Published on HOA Lawyer Blog (July 10, 2017)
Civil Code Section 5376. Manager Delivery of Escrow Documents.
The common interest development manager, common interest development management firm, or its contracted third-party agent shall facilitate the delivery of disclosures required pursuant to paragraph (1) of subdivision (a), paragraph (2) of subdivision (b), and subdivision (d), of Section 4530 if the common interest development manager, or common interest development management firm, is contractually responsible for delivering those documents.
Related Links
AB 690 Signed! New Management Disclosures and changes to the Escrow Document Disclosure Form – Published on HOA Lawyer Blog (July, 2017)