BILL NUMBER: AB 1738	CHAPTERED
	BILL TEXT

	CHAPTER  411
	FILED WITH SECRETARY OF STATE  SEPTEMBER 18, 2014
	APPROVED BY GOVERNOR  SEPTEMBER 18, 2014
	PASSED THE SENATE  AUGUST 14, 2014
	PASSED THE ASSEMBLY  AUGUST 18, 2014
	AMENDED IN SENATE  JULY 3, 2014
	AMENDED IN SENATE  JUNE 16, 2014
	AMENDED IN ASSEMBLY  MAY 1, 2014
	AMENDED IN ASSEMBLY  APRIL 22, 2014

INTRODUCED BY   Assembly Member Chau

                        FEBRUARY 14, 2014

   An act to amend Sections 5910 and 5915 of the Civil Code, relating
to common interest developments.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1738, Chau. Common interest developments: dispute resolution.
   The Davis-Stirling Common Interest Development Act defines a
common interest development and requires it to be managed by an
association. The act requires an association to provide a fair,
reasonable, and expeditious procedure for resolving a dispute between
an association and a member involving their rights, duties, or
liabilities under the act, the Nonprofit Mutual Benefit Corporation
Law, or the association's governing documents. The act authorizes an
association to develop its own procedure for these purposes and
requires this procedure to satisfy specified minimum standards,
including, among others, that a resolution of a dispute, pursuant to
the procedure, binds the association and is judicially enforceable,
and that an agreement, pursuant to the procedure, binds the parties
and is judicially enforceable, as specified. The act also requires
that the procedure provide a means by which the member and the
association may explain their positions.
   This bill would additionally require the resolution or agreement
under an association's procedure for resolving these disputes between
an association and a member to be in writing and signed by both
parties. The bill would authorize a member and an association to be
assisted by an attorney or another person in explaining their
positions at their own cost.
   The act also establishes an alternative procedure applicable to an
association that does not otherwise provide a fair, reasonable, and
expeditious dispute resolution procedure as described above. Under
these provisions a procedure that, among other things, authorizes
either party to request, in writing, the other party to meet and
confer, prohibits the association from refusing a request to meet and
confer, and requires the parties to meet and confer in good faith in
an effort to resolve the dispute, is deemed a fair, reasonable, and
expeditious dispute resolution procedure. The act provides that an
agreement reached under this procedure binds the parties and is
judicially enforceable if specified conditions are satisfied.
   This bill would additionally require the alternative procedure to
provide either party the right to have an attorney or another person
participate when meeting and conferring provided at their own cost.
The bill would require an agreement reached under the alternative
procedure that binds the parties and is judicially enforceable to be
in writing and signed by both parties, as specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 5910 of the Civil Code is amended to read:
   5910.  A fair, reasonable, and expeditious dispute resolution
procedure shall at a minimum satisfy all of the following
requirements:
   (a) The procedure may be invoked by either party to the dispute. A
request invoking the procedure shall be in writing.
   (b) The procedure shall provide for prompt deadlines. The
procedure shall state the maximum time for the association to act on
a request invoking the procedure.
   (c) If the procedure is invoked by a member, the association shall
participate in the procedure.
   (d) If the procedure is invoked by the association, the member may
elect not to participate in the procedure. If the member
participates but the dispute is resolved other than by agreement of
the member, the member shall have a right of appeal to the board.
   (e) A written resolution, signed by both parties, of a dispute
pursuant to the procedure that is not in conflict with the law or the
governing documents binds the association and is judicially
enforceable. A written agreement, signed by both parties, reached
pursuant to the procedure that is not in conflict with the law or the
governing documents binds the parties and is judicially enforceable.

   (f) The procedure shall provide a means by which the member and
the association may explain their positions. The member and
association may be assisted by an attorney or another person in
explaining their positions at their own cost.
   (g) A member of the association shall not be charged a fee to
participate in the process.
  SEC. 2.  Section 5915 of the Civil Code is amended to read:
   5915.  (a) This section applies to an association that does not
otherwise provide a fair, reasonable, and expeditious dispute
resolution procedure. The procedure provided in this section is fair,
reasonable, and expeditious, within the meaning of this article.
   (b) Either party to a dispute within the scope of this article may
invoke the following procedure:
   (1) The party may request the other party to meet and confer in an
effort to resolve the dispute. The request shall be in writing.
   (2) A member of an association may refuse a request to meet and
confer. The association may not refuse a request to meet and confer.
   (3) The board shall designate a director to meet and confer.
   (4) The parties shall meet promptly at a mutually convenient time
and place, explain their positions to each other, and confer in good
faith in an effort to resolve the dispute. The parties may be
assisted by an attorney or another person at their own cost when
conferring.
   (5) A resolution of the dispute agreed to by the parties shall be
memorialized in writing and signed by the parties, including the
board designee on behalf of the association.
   (c) A written agreement reached under this section binds the
parties and is judicially enforceable if it is signed by both parties
and both of the following conditions are satisfied:
   (1) The agreement is not in conflict with law or the governing
documents of the common interest development or association.
   (2) The agreement is either consistent with the authority granted
by the board to its designee or the agreement is ratified by the
board.
   (d) A member shall not be charged a fee to participate in the
process.