California HOA Laws: A Comprehensive Guide

Forming and operating a homeowners' association (HOA) in California may seem like a daunting task. There are a plethora of laws, rules, and regulations that HOAs must follow, so it's easy to feel overwhelmed.

We have drawn up this comprehensive guide to help you navigate complex federal and state laws. In this article, we'll provide an overview of the applicable laws, the rights and responsibilities of an HOA and its board members, how to join or leave such an organization, and more.

What Is a Homeowners' Association?

A homeowners' association, also referred to as a property owners' or community association, is an organization designed to carry maintenance on shared areas in a neighborhood, community, condominium, or apartment complex.

HOAs in California are governed by the Davis Stirling Act, which we will get to in a minute. It also has a set of governing documents that define its roles, responsibilities, rules, and regulations. The following are typically included in an HOA's governing documents:

• Articles of Incorporation
• Bylaws
• Declaration of Covenants, Conditions, and Restrictions (CC&Rs)

An Overview of California HOA Laws

Although it's probably impossible to discuss all the laws that may apply to homeowners' associations in California, we have compiled a list of the most important ones to give you a good idea of how community associations must be run.

The Davis Stirling Act

This act governs HOAs in California and is also applicable to community apartments, condominiums, cooperatives, and other planned developments. The Davis-Stirling Act is subdivided into 11 chapters, each of which is further broken down into sections.

These provisions manage and regulate different aspects of planned developments, such as budgeting, increases in assessments, and the requirements for elections. It also establishes the jurisdiction and constraints on the powers of HOA boards and is designed to safeguard the rights of homeowners.

California Civil Code Section 4080

The preparation of governing documents, which include the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), Articles of Incorporation, and Bylaws, is required for the formation of an HOA.

HOAs that are considered common interest developments can be created as a non-profit or unincorporated association, as defined in Civil Code Section 4080. However, if the association wishes to incorporate, it will need to file its Articles of Incorporation directly with the California Secretary of State, as described in Civil Code Section 4280.

Fair Housing Laws

The federal Fair Housing Act applies to all homeowners associations, but a number of states in the US have their own Fair Housing statutes, and California is one such state.

While the federal Fair Housing Act protects people from discriminating against homeowners based on race, color, gender, sexual orientation, faith, disabilities, familial status, and national origin, California's Fair Housing laws go even further.

Housing providers are likewise prohibited by California law from discriminating against persons on the basis of their marital status, gender identity, source of income, sexual orientation, and more. Discrimination based on age has also been considered by the courts as a sort of familial status discrimination.

California Corporations Code

The California Corporations Code grants HOAs non-profit mutual benefit association rights. According to this legislature, associations can, among other things, establish and change bylaws, charge fees and charges, and enter into agreements.

While the Davis-Stirling Act covers all California HOA legislation, organizations might turn to the California Corporations Code if the former does not address specific matters explicitly.

The Rights and Responsibilities of an HOA in California

As a board member, manager, or HOA executive, it's important that you have a good understanding of the rights and responsibilities of a homeowners' association.

Rights

Here are the rights that community associations have in California:

HOAs Have the Right to Impose Reasonable Restrictions

Homeowners' associations are responsible for maintaining certain common areas in the neighborhood, and they have the right to enforce certain rules and regulations to ensure that certain standards are upheld. These bylaws are included in the association records.

Collect Assessments

HOAs are permitted to collect assessments or dues to fund their operations. These funds are used for the maintenance of common spaces.

Charge Homeowners Fines for Unpaid Dues and Violations

Homeowners' associations are allowed to levy certain fines and penalties for unpaid assessments or violations of their bylaws.

Foreclose on a Home When Assessments Remain Unpaid

In California, community associations are allowed to place a lien on a property for unpaid dues. If the lien is not addressed, the association can foreclose the property to secure the unpaid fees.

Responsibilities

In addition, HOAs in California also have certain responsibilities:

Maintaining Common Areas

Community associations are responsible for conducting certain maintenance on shared spaces. They must ensure that these areas are kept clean and safe for members.

Remaining Compliant with Laws

HOAs also have a responsibility to remain compliant with relevant laws and statutes. This includes complying with federal, state, and local laws, in addition to the rules and regulations set out in the company's governing documents.

Property Management Companies' Accountability

When there is a third party managing the HOA, this company is accountable to its members and must execute its responsibilities as promised. They have a fiduciary responsibility to ensure that the funds are managed with transparency.

Levying Fines for Violations and Unpaid Dues

In California, a community association is authorized to impose penalties and other reasonable charges on property owners for failing to pay their dues on time. Fees are considered to be late if they are not paid within 15 days of the due date.

Homeowners' associations can levy fines on homeowners in a variety of ways. Interest on the outstanding amount, attorney's fees, and penalties for late payments of no more than 10 percent of the fine owed or $10, whichever is more, may be added to fines. It's important to remember that the yearly interest rate cannot be more than 12 percent.

When HOAs Are Not Permitted to Charge Fines

There are certain things that federal or state laws prohibit HOAs from banning or levying fines for. They are as follows:

• Placing religious objects on the front door or the frame of the door
• Restricting or regulating the use of water, as described in the California Water Code
• Exhibiting the US national flag as long as it is done in accordance with the federal flag display law
• Installing a fire-resistant roof covering
• Putting in a charging station for electric vehicles
• Using non-commercial signage, banners, flags, or posters
• Setting up antennas and satellite dishes
• Making alterations to the property in order to meet the needs of a disability
• Pressure washing the outside of a single unit
• Renting or leasing a section of a single dwelling
• Having at least one pet
• Adding an EV-specific TOU meter
• Putting in a solar energy system
• Running a family daycare center

It's important to note here that HOAs may regulate the placement and display of the abovementioned items.

Foreclosure and Evicting Tenants

In California, homeowners' associations can foreclose on a property that is located within the boundaries of its community. When a homeowner fails to make payments on time, the association will place a lien on the owner's home. If a lien is not addressed, the HOA may foreclose on the property.

Moreover, California law does not permit HOAs to evict homeowners. If the owner of the property is leasing it to a renter, however, the homeowners' association may be allowed to remove the tenant.

How to Join or Leave Homeowners' Associations in California

HOA membership is not optional in California. This means that if you move to a neighborhood that is governed by a homeowners' association, you are obligated to join. To leave the association, you will need to sell your property.

However, they may be able to have their property removed from the bounds of the association by filing a petition. It's important to remember that the petition may not be granted, in which case the homeowner can only exit the HOA upon selling his or her property.

Dissolving a California HOA

In California, the steps required for the dissolution of a homeowners' association can be found in the organization's governing documents. If it is not, the dissolution of the association must be approved by a unanimous vote of the members.

Suppose the dissolution is approved by 100 percent of the HOA members. In that case, the organization must hand over all of its assets and submit a written notice of dissolution to the Secretary of State.

Knowing How to Deal with Complaints

When running an HOA, it's important to know how to handle complaints. Homeowners may hire a private attorney to pursue legal action against a common interest development for a number of reasons. This could be for unfair fees, discrimination, written document production requests, and more. Fortunately, we have drawn up a guide to help you deal with such complaints. You can find it here.

About DoorLoop's HOA Tools

The truth is that running a homeowners' association in California is no easy task. There are a plethora of tasks that need to be tracked and managed. Without the proper tools and resources, operating such an organization can be overwhelming.

Fortunately, property management software is designed to help board members, executives, and managers run an HOA well. While there are a number of companies out there that claim to have efficient software, not many live up to these claims.

However, when you choose DoorLoop, you can rest assured that you are getting powerful features, world-class support, and an easy-to-use interface that's suitable for just about anyone, regardless of their skill level.

DoorLoop lets you create and manage work orders, communicate with members, complete important accounting functions, and store enhanced association records. The best part is that you can try it out for yourself before making an investment. Simply get in touch with us if you would like to learn more about our software or get a free demo.

Final Thoughts

Well, there you have it - an overview of HOA laws, rules, and regulations. If you are looking for the right tools to help you run a community association successfully, be sure to give DoorLoop a try! Contact us today to sign up for a free demo to try the software out for yourself - risk-free!

Frequently Asked Questions

1. What happens if an HOA doesn't have a board?

In the absence of a board, a member of the association will need to apply to the superior court for the appointment of an external third party to run the organization under California Code of Civil Procedure § 564(b)(9). When selected to run the HOA, the third party has the authority to manage the association and collect monthly assessments.

2. Who regulates homeowners' associations in California?

The Davis-Stirling Common Interest Interest Development Act, located in California Civil Code section 4000-6150, governs HOAs in California. This statute covers all common interest developments with individual units and common elements, as well as association memberships.

These associations are also governed by governing papers. Keep in mind that each HOA differs in terms of which governing documents they use.

3. Are California HOA governing documents available to the public?

In California, the paperwork governing homeowners' associations is not readily available to the general public. Homeowners must seek HOA governing documents, which must be filed with the County Recorder for them to be enforceable.

Keep in mind that anyone can see governing documents submitted to the California Secretary of State online. Alternatively, the California Uniform Commercial Code can be used to keep company records that contain financial statements, changes, or other business alterations.

4. Can an HOA impose a fine for displaying a national flag?

No, a homeowners' association in California may not ban or fine a homeowner for displaying the national flag. However, they can include regulations on how it may be displayed.