Summary of New State Condo Laws


The California state legislature recently passed a number of new laws pertaining to California common interest developments and homeowners associations.  Below is a brief summary of a few of the new laws.

SB 432 – This is a follow-up to our Update on July 9, 2021, which described proposed SB 432.  This bill has now been approved and will become effective January 1, 2022.  The law makes several changes to HOA election procedures, including HOA director qualifications and term limits, retention of election materials and election notice requirements.

AB 1101 – This bill was approved on September 23, 2021, and makes changes aimed at preventing fraud and financial malfeasance in HOAs, and furthers the changes made by AB 2912 in 2018 which implemented basic protections for HOA finances.  This bill requires (i) HOAs’ accounts to be in financial institutions insured by the FDIC, National Credit Union Administration Insurance Fund, or a guaranty corporation, (ii) imposes requirements on HOAs to obtain fidelity bond insurance covering acts by HOA directors, officers and managing agents, (iii) requires written HOA board approval for withdrawals of specified large amounts from HOA accounts, and (iv) prohibits HOA managing agents from comingling funds of the HOA with the managing agent’s own funds.

AB 1584 – This is a follow-up to our Update on March 11, 2021 regarding AB 3182 which added new Civil Code 4741 that limits rental restrictions in condo projects.  That bill required HOAs to amend their governing documents to comply with Civil Code 4741 by December 31, 2021.  AB 1584, approved on September 28, 2021, modifies Civil Code 4741 by (i) allowing the HOA board of directors to unilaterally amend the HOA’s governing documents to comply with Civil Code 4741, without the approval of the HOA members, and (ii) gives the board of directors until July 1, 2022, to complete such amendment.


Authored by Reuben, Junius & Rose, LLP Attorney Jay Drake.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient.  Readers should consult with legal counsel before relying on any of the information contained herein.  Reuben, Junius & Rose, LLP is a full service real estate law firm.  We specialize in land use, development and entitlement law.  We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.