California Senate Bill 900 (SB 900), effective January 1, 2025, introduces significant changes to the responsibilities of homeowners associations (HOAs) in common interest developments, particularly condominiums. The legislation mandates that HOAs take immediate action to repair utility service interruptions originating in the project’s common area, such as gas, heat, water or electrical service, even if the issue extends into individual units. Repairs must commence within 14 days of the disruption. Key Provisions Impacting Condo Owners and HOAs Expanded Repair Responsibilities. SB 900 amends Civil Code Section 4775, part of the Davis-Stirling Common Interest Development Act, to require HOAs to repair or replace utility services that begin in the common area of the project, even if the issue extends into individual units – unless otherwise provided in the project’s declaration, or unless the utility service that failed is required to be maintained, repaired, or replaced by a public, private, or other utility service provider. This includes utilities like gas, heat, water or electrical service. The HOA must commence repairs within 14 days of the service interruption. Emergency Assessments and Loans. If an HOA lacks sufficient funds in its reserve account to cover these repairs, SB 900 allows the HOA board of directors to levy emergency assessments without a vote of the HOA members. Additionally, HOAs can secure loans for necessary repairs without member approval. Reserve Study Requirements. SB 900 also amends Civil Code Section 5550 to require that utility lines be explicitly listed as line-item components in future HOA reserve studies. This requirement ensures proper financial planning for maintenance and replacement of utility infrastructure. Controversial Aspects of SB 900 One concern with the new law is the potential financial burden on homeowners. The ability of HOA boards to levy emergency assessments without a membership vote means that individual homeowners could face significant costs for repairs. The legislation grants HOA boards the authority to declare an emergency and initiate repairs without a membership vote, raising concerns about the concentration of decision-making power and the potential for misuse. Steps HOAs Can Take in Response to SB 900 HOAs should examine their governing documents to determine the extent of their responsibility for utility repairs. If the documents are silent on this matter, SB 900’s provisions will apply. HOAs must ensure that utility lines are included as line-item components in their reserve studies. This will facilitate proper financial planning for maintenance and replacement of utility infrastructure. HOAs should develop clear protocols for responding to utility service interruptions, including timelines for initiating repairs and procedures for levying emergency assessments or securing loans if needed. SB 900 represents a shift in the responsibilities of homeowners associations in California, particularly concerning the maintenance and repair of utility services. While the intent is to ensure timely repairs and minimize disruptions for residents, the law has introduced concerns regarding financial burdens on homeowners and the authority of HOA boards. Condominium owners and HOAs should closely examine the implications of SB 900 to understand how it affects their rights and obligations. Authored by Reuben, Junius & Rose, LLP Partner, 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.
