Written by Kelly G. Richardson
Operating rules are often called “house rules” or “rules and regulations” by homeowner associations in California. Rules are modified by HOA boards under Civil Code Section 4340 and must be written under Civil Code Section 4350(a). In adopting rule changes, boards must follow the procedure prescribed by Civil Code Section 4360.
Most rules are tailored to the needs and desires of a given community, addressing parking, pool use and other topics. However, there are five rule topics required by statute.
Election rules: Civil Code Section 5105 requires associations to have election rules. The statute lists the basic requirements of election rules, including board eligibility standards. These rules apply not only to board elections, but also to any matter on which a topic on which a membership vote is required using the 30-day notice and other voting procedures required by Civil Code Section 5100(a). These rules must conform to statute and the bylaws and are now likely out of date, with 2022’s new election by acclamation option under Civil Code 5103.
Internal dispute resolution (IDR) policies: Civil Code Section 5905 requires associations to adopt a fair and reasonable policy to establish an IDR procedure, in which a homeowner may meet with another homeowner or the board to try to work things out short of litigation. If an association fails to create such a policy, Civil Code 5915 contains the default procedure.
Architectural modification request procedures: Boards frequently receive requests from homeowners who wish to modify their residence or adjacent common area. Civil Code Section 4765 requires associations to have a written procedure for the application process. Without such procedures, homeowners and board alike have no guidance as to how applications are to be processed.
Assessment delinquency enforcement policies: Civil Code Section 5730 recites detailed disclosures regarding association handling of delinquent assessments, and under Civil Code 5310(6) is part of the Annual Policy Statement to be published to members. Civil Code 5310(7) also requires that the association policies in enforcing lien rights be specified and annually given to members. Associations might adopt the contents of Civil Code 5730 as rules and then add any lien enforcement policies to satisfy Section 5310(7).
Schedule of fines: A common disciplinary measure is to impose fines, after a hearing, to discourage members from violating association rules and covenants. However, many are unaware that only the fines disclosed in the HOA’s rules can be imposed, because Civil Code 5850(c) restricts fines to those as stated in the written fine schedule in effect at the time of the violation. Without a fine schedule, there aren’t fines.
All California all common interest developments, regardless of size, must have each of these five rule sets. The IDR, delinquency, architectural application procedures, and fine schedule must be disclosed annually in the Annual Policy Statement required by Civil Code 5310. Election rules must be sent to all members at least 30 days before an election, per Civil Code 5105(g).
Each of these rules must be adopted following the process in Civil Code Section 4360, which requires the exact text of the proposed rule change to be announced at least 28 days before the board vote on the proposed changes.
Complete your HOA rules and provide the required guidance to the board and members.
Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober DeNichilo LLP, a California law firm known for community association advice. Submit questions to Kelly@rodlllp.com.
Shared from OC Register