2008 was remarkable for the fact that the California Legislature did not pass much in the way of new legislation impacting or affecting California Community Associations. We are providing a summary of two changes to the California Civil Code regarding fines/assessments and solar energy that became effective as of January 1, 2009.
1. PAYMENT OF ASSESSMENTS UNDER PROTEST – California Civil Code sections 1365.1, 1367.6 (Effective January 1, 2009)
AB 2846 signed into law by the governor is now included as a new Civil Code § 1367.6. This Section reads as follows:
1367.6 (a) If a dispute exists between the owner of a separate interest and the association regarding any disputed charge or sum levied by the Association, including, but not limited to, an assessment, fine, penalty, late fee, collection cost, or monetary penalty imposed as a disciplinary measure, and the amount in dispute does not exceed the jurisdictional limits stated in Sections 116.220 and 116.221 of the Code of Civil Procedure, the owner of the separate interest may, in addition to pursuing dispute resolution pursuant to Article 5 (commencing with Section 1363.810) of Chapter 4, pay under protest the disputed amount and all other amounts levied, including any fees and reasonable costs of collection, reasonable attorney’s fees, late charges, and interest, if any, pursuant to subdivision (e) of Section 1366, and commence an action in mall claims court pursuant to Chapter 5.5 (commencing with Section 116.110) of Title 1 of the code of Civil Procedure.
(b) Nothing in this section shall impede an association’s ability to collect delinquent assessments as provided in Sections 1367.1 and 1367.4.
Additionally, California Civil Code §1365.1(b), which establishes the text of the required annual disclosure to homeowners regarding assessments, foreclosure and payments, has been amended correspondingly to summarize the provisions of the above Civil Code §1367.6, as follows:
1365.1(b) …An owner may, but is not obligated to, pay under protest any disputed charge or sum levied by the association, including but not limited to, an assessment, fine, penalty, late fee, collection cost, or monetary penalty imposed as a disciplinary measure, and by so doing, specifically reserves the right to contest the disputed charge or sum in court or otherwise…
This new law does not significantly change prior law or practice. If a dispute exists between a homeowner and their association regarding any levied assessment, and the amount being disputed does not exceed the monetary limits of small claims court ($7,500 for individuals), the homeowner may, but is not obligated to, pay under protest any disputed amount, and all other sums levied (e.g., any late fees, fines, collection costs, etc.). By paying the sum “under protest”, the homeowner is reserving the right to contest the disputed charge in small claims court. In reality, this law was unnecessary as a homeowner could have done this despite the fact that the law did not say so. It is doubtful that many (if any) owners will take advantage of this procedure; only time will tell.
2. SOLAR ENERGY
- California Civil Code § 714
California provides perhaps the most comprehensive set of state laws designed to encourage solar access and prevent restrictions on solar energy systems. These laws address municipal restrictions, residential landscaping, and homeowner association restrictions. California’s solar access laws appear in the state’s Civil, Government, Health and Safety, and Public Resources Codes. California’s Civil Code ensures that solar easements may be created to ensure that proper sunlight is available to those who operate solar energy systems, including passive solar design.
Civil Code § 714 currently provides that restrictions contained in any deed, contract, security instrument or other instrument regarding real property that effectively prohibit or restrict the installation or use of a solar energy system are void and unenforceable, except as specified in the Civil Code. Whenever an association requires approval for the installation or use of a solar energy system, the application for approval must be processed and approved in the same manner as an application for architectural modifications. Applications for solar energy systems must not be willfully avoided or delayed, as failure to comply can result in civil penalties up to $1,000.00.
Effective January 1, 2009, Civil Code section 714 is amended to specifically include restrictions contained in the “governing documents” of an association, as defined in Civil Code section 1351. This means that if an association’s CC&Rs, architectural guidelines, rules and regulations or other documents governing the operation of the association, contain a provision restricting or banning the installation of solar energy systems, the provision will be deemed void and unenforceable. Additionally, applications for approval of architectural modifications regarding solar energy systems that are not denied in writing within 60 days from the date of receipt of the application shall be deemed approved, unless that delay is the result of a reasonable request for additional information.