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Saturday, May 28, 2022

HOA Homefront: Almost time to lift illegal rent ban

The first version of Section 4741 of the Civil Code, banning “unfair” rentals, became law in 2021, and originally required the HOA to amend its governing documents to remove such provisions in 2021. .

The most common restrictions clearly violate the statute that the rental unit caps less than 25% and the required period after purchase (usually a year or two) for the rental to take place. Since the law isn’t very clear about what is “unfair,” it’s hard to draw a clear line between permitted and illegal rental restrictions.

Most HOAs have a very difficult time obtaining voting participation to amend their governing documents. Therefore, it was also difficult to try to comply with the law and to amend the CC and Rs.

An unknown number of HOAs made futile attempts to pass CC&R amendments in 2021. Others amended their rules, which are also “governing documents,” to note certain CC&R sections may have been presented illegally.

However, the California Legislature corrected this problem by amending Section 4741(f), extending the deadline for CC&Rs corrections to July 1, 2022. More importantly, the law opens a six-month window from January 1 to July 1, 2022. Those HOA boards without a membership vote can amend the CC&Rs to remove sanctions that violate the law.

The Board meeting must take place in an open session, and the proposed amendment must be announced to membership at least 28 days before the Board approves the amendment. At the meeting approving the amendment, the board must allow the comments of the members on the proposed amendment.

After July 1, 2022, it will take a membership vote to remove any rental restrictions that violate Section 4741 of the Civil Code. Unless already done, the HOA should seek the advice of its legal advisor to determine if there are any restrictions that violate Section 4741 and to help remove such illegal rental restrictions. Draft proposed amendments for

Some HOAs may require you to increase the rental cap to less than 25%. Others may have to remove the rental waiting period. Still others may need to remove CC&R rental restrictions that appear to be “unfair” (meaning their main purpose is to discourage rentals).

The 28-day advance notice requirement means, as a practical matter, the last day for making the general announcement of such proposed amendment is June 3 (28 days prior to July 1, 2022), before the Board meeting on July 1. will be taken. 2022. If a board announces a proposed amendment on June 3, 2022, and holds its meeting on July 1 to approve the amendment, it can barely meet the deadline.

Unions should not wait until the last minute and risk missing out on this rare opportunity for the Legislature to seek to lift illegal rental restrictions at a relatively low cost and low level of effort.

Not all CC&R provisions regarding rentals are illegal, and most HOAs do not have restrictions that violate Section 4741. Still, it’s a good idea to check whether your HOA requires you to use this unique opportunity before the opportunity expires.

If the board pursues an amendment, make sure it only removes or rectifies the illegal language – nothing else specifically prohibited by that same statute.

There’s a few weeks left to get it done, don’t wait!

Kelly G. Richardson, Esq. He is a Fellow of the Community Association College of Lawyers, and Richardson is a partner of Ober Denicillo LLP, a California law firm best known for community association advice. Submit questions at kelly@rodllp.com.

World Nation News Deskhttps://www.worldnationnews.com
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