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SB-392 Common interest developments: document delivery.(2021-2022)

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Date Published: 04/29/2021 09:00 PM
SB392:v98#DOCUMENT

Amended  IN  Senate  April 29, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 392


Introduced by Senator Archuleta
(Coauthor: Senator Hueso)

February 11, 2021


An act to amend Sections 4041, 4045, 4055, 5220, 5230, 5260, 5310, and 5320 of, and to amend, add, and repeal Section 4040 of, and to add Section 4801 to, the Civil Code, relating to common interest developments.


LEGISLATIVE COUNSEL'S DIGEST


SB 392, as amended, Archuleta. Common interest developments: document delivery.
Existing law, the Davis-Stirling Common Interest Development Act, requires an association to deliver documents to members of a common interest development, if those documents are required to be delivered by individual delivery or notice, by either first-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service carrier or by email, facsimile, or other electronic means, if the recipient has consented, in writing or by email, to receive documents by that electronic means.
This bill would instead require, on and after January 1, 2023, an association to deliver those documents by email unless the member has not provided a valid email address to the association or has revoked consent to receiving documents by email, in which case the association would be required to deliver the documents by traditional mail, as described above. The bill would require an association to deliver those documents either by email or traditional mail, at its discretion, require, if 2/3 of the members approve. The bill would require an association to annually notify each member that by providing an email address to the association, the member agrees that communication between the member and the association shall be conducted by email. The bill would also require an association to make a good faith effort to obtain an email address for each member on or before June 1, 2022. approve, the association to deliver those documents by traditional mail, as described above, unless the recipient has consented in writing or by email to receive documents from the association by email, in which case the association would be required to deliver the documents by email.

The act also requires an association to provide, by specified means, documents to members that are required to be delivered by general delivery or notice.

This bill would require an association that manages a common interest development of at least 50 separate interests to maintain an internet website to provide general information to members and would authorize an association to satisfy the general delivery requirement described above by posting the document on that internet website. The bill would exempt an association from the requirement to maintain an internet website if 23 of the members approve.

The act requires an owner of a separate interest to annually provide certain written notice to the association, including notice of the address or addresses to which notices from the association are to be delivered, and requires the association to solicit that notice, as provided.
This bill would require an association to include certain items in the required solicitation of notice described above, including that the member does not have to provide an email address to the association.
The act prohibits association records, and any information from them, from being sold, used for a commercial purpose, or used for any other purpose not reasonably related to a member’s interest as a member.
This bill would prohibit an association or its managing agent from transmitting a member’s personal information to a third party without the consent of the member unless required to do so by law, as specified.
This bill would also make conforming and nonsubstantive changes.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 4040 of the Civil Code is amended to read:

4040.
 (a) If a provision of this act requires that an association deliver a document by “individual delivery” or “individual notice,” the document shall be delivered by one of the following methods:
(1) First-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service carrier. The document shall be addressed to the recipient at the address last shown on the books of the association.
(2) (A)Email, facsimile, or other electronic means, if the recipient has consented, in writing or by email, to that method of delivery. The consent may be revoked, in writing or by email, by the recipient.

(B)On or before June 1, 2022, an association shall make a good faith effort to obtain an email address for each member.

(b) Upon receipt of a request by a member, pursuant to Section 5260, identifying a secondary address for delivery of notices of the following types, the association shall deliver an additional copy of those notices to the secondary address identified in the request:
(1) The documents to be delivered to the member pursuant to Article 7 (commencing with Section 5300) of Chapter 6.
(2) The documents to be delivered to the member pursuant to Article 2 (commencing with Section 5650) of Chapter 8, and Section 5710.
(c) For the purposes of this section, an unrecorded provision of the governing documents providing for a particular method of delivery does not constitute agreement by a member to that method of delivery.
(d) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

SEC. 2.

 Section 4040 is added to the Civil Code, to read:

4040.
 (a) Subject to subdivisions (b) and (d), if If a provision of this act requires an association to deliver a document by “individual delivery” or “individual notice,” the association shall deliver that document by email. pursuant to both of the following:

(b)If a provision of this act requires an association to deliver a document by “individual delivery” or “individual notice,” an association shall, instead of complying with subdivision (a), deliver the document by first-class mail, registered or certified mail, express mail, or overnight delivery by an express service carrier if either of the following is true:

(1)The member has not provided a valid email address to the association.

(2)The member has revoked the member’s consent to receiving documents by email.

(c)Upon receipt of a request by a member, pursuant to Section 5260, identifying a secondary email or mailing address for delivery of notices of the following types, the association shall deliver an additional copy of those notices to the secondary address identified in the request:

(1)The documents to be delivered to the member pursuant to Article 7 (commencing with Section 5300) of Chapter 6.

(2)The documents to be delivered to the member pursuant to Article 2 (commencing with Section 5650) of Chapter 8, and Section 5710.

(d)If two-thirds of the members approve, an association shall deliver a document subject to this section by any means described in subdivision (a) or (b), at its discretion.

(1) If the member has provided a valid email address to the association pursuant to Section 4041, the association shall deliver the document to that email unless the member has revoked consent to receiving documents by email.
(2) If the member has not provided a valid email address to the association, or if the member has revoked the member’s consent to receiving documents by email, the association shall deliver the document by first-class mail, registered or certified mail, express mail, or overnight delivery by an express service carrier addressed to the recipient at the address last shown on the books of the association.
(b) Upon receipt of a request by a member identifying a secondary email or mailing address for delivery of notices, pursuant to Section 5260, the association shall deliver an additional copy of both of the following to the secondary address identified in that request:
(1) The documents to be delivered to the member pursuant to Article 7 (commencing with Section 5300) of Chapter 6.
(2) The documents to be delivered to the member pursuant to Article 2 (commencing with Section 5650) of Chapter 8 and Section 5710.
(c) Notwithstanding subdivision (a), if two-thirds of all members of the association so approve as part of an election pursuant to Article 4 (commencing with Section 5100) of Chapter 6, then, whenever a provision of this act requires an association to deliver a document by individual delivery or individual notice, the association shall deliver the document as follows:
(1) By first-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service carrier addressed to the recipient at the address last shown on the books of the association unless the recipient has consented in writing or by email to receive documents from the association by email, and the recipient has not revoked that consent in writing or by email.
(2) By email, if the recipient has consented in writing or by email to receive documents from the association by email, and the recipient has not subsequently revoked that consent.
(d) For the purposes of this section, an unrecorded provision of the governing documents providing for a particular method of delivery does not constitute agreement by a member to that method of delivery.
(e) This section shall become operative on January 1, 2023.

SEC. 3.

 Section 4041 of the Civil Code is amended to read:

4041.
 (a) A member shall, on an annual basis, provide written notice to the association of all of the following:
(1) The email or mailing address or addresses to which notices from the association are to be delivered.
(2) An alternate or secondary email or mailing address to which notices from the association are to be delivered.
(3) The name and email or mailing address of the owner’s legal representative, if any, including any person with power of attorney or other person who can be contacted in the event of the member’s extended absence from the separate interest.
(4) Whether the separate interest is owner-occupied, is rented out, if the parcel is developed but vacant, or if the parcel is undeveloped land.
(b) (1) The association shall solicit the annual notices described in subdivision (a) of each owner and, at least 30 days before making its own required disclosure under Section 5300, shall enter the data into its books and records.

(2)The association shall annually notify each member that by providing an email address to the association, the member agrees that communication between the member and the association shall be conducted by email.

(2) The association shall include in the solicitation required by paragraph (1) all of the following:
(A) Notification that the member does not have to provide an email address to the association.
(B) Notification that if the member chooses to provide an email address to the association, the member is agreeing that the association may send required documents and notices to the member by email unless the member informs the association in writing that the member prefers to receive required documents and notices from the association in paper form.
(C) A simple method for the member to inform the association in writing that the member prefers to receive required documents and notices from the association on paper and does not want documents and notices from the association sent to the member by email.
(3) (A) As part of any solicitation of annual notices pursuant to paragraph (1) that takes place during the 2022 calendar year, the association shall, in addition to complying with all other provisions of this section, notify each member that if the member already has an email address on file with the association, that email address will be used to deliver all required documents to the member beginning January 1, 2023, unless the member informs the association in writing that the member prefers to receive required documents and notices from the association in paper form.
(B) The solicitation shall be accompanied by a simple method for the member to inform the association in writing that the member prefers to receive required documents and notices from the association on paper and does not want documents and notices from the association sent to the member by email.
(c) If a member fails to provide the notices set forth in paragraphs (1) and (2) of subdivision (a), the last email or mailing address provided in writing by the member or, if none, the property address shall be deemed to be the address to which notices are to be delivered.
(d) (1) To the extent that interests regulated in Chapter 2 (commencing with Section 11210) of Part 2 of Division 4 of the Business and Professions Code are part of a mixed-use project where those interests comprise a portion of a common interest development, the association, as defined in Section 4080, shall be deemed compliant with this section if, at least once annually, it obtains from the time-share plan association a copy of the list described in subdivision (e) of Section 11273 of the Business and Professions Code, and enters the data into its books and records.
(2) Notwithstanding subdivision (e) of Section 11273 of the Business and Professions Code, the time-share plan association shall provide the list required by paragraph (1) to the association at least annually for this purpose.

SEC. 4.

 Section 4045 of the Civil Code is amended to read:

4045.
 (a) If a provision of this act requires “general delivery” or “general notice,” the document shall be provided by one or more of the following methods:
(1) A method provided for delivery of an individual notice pursuant to Section 4040.
(2) Inclusion in a billing statement, newsletter, or other document that is delivered by one of the methods provided in this section.
(3) Posting the printed document in a prominent location that is accessible to all members, if the location has been designated for the posting of general notices by the association in the annual policy statement, prepared pursuant to Section 5310.
(4) If the association broadcasts television programming for the purpose of distributing information on association business to its members, by inclusion in the programming.
(5) Posting the document on an internet website maintained pursuant to Section 4801.
(b) Notwithstanding subdivision (a), if a member requests to receive general notices by individual delivery, all general notices to that member, given under this section, shall be delivered pursuant to Section 4040. The option provided in this subdivision shall be described in the annual policy statement, prepared pursuant to Section 5310.

SEC. 5.

 Section 4055 of the Civil Code is amended to read:

4055.
 If the association or a member receives information by electronic delivery pursuant to Section 4040, and a provision of this act requires that the information be in writing, that requirement is satisfied if the information is provided in an electronic record capable of retention by the recipient at the time of receipt. An electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record.

SEC. 6.Section 4801 is added to the Civil Code, to read:
4801.

(a)(1) Subject to subdivision (b), an association shall maintain an internet website to provide general information to its membership if the common interest development it manages consists of 50 or more separate interests.

(2)The internet website required by this subdivision shall be maintained by a person designated by the association, including, but not limited to, any of the following:

(A)A volunteer member of the association.

(B)A real estate licensee, as defined in Section 10014 of the Business and Professions Code.

(C)A person contracted by the association to provide association management services, as defined in Section 11500 of the Business and Professions Code.

(b)An association may choose not to comply with subdivision (a) if that noncompliance is approved by two-thirds of the members.

SEC. 6.

 Section 5220 of the Civil Code is amended to read:

5220.
 A member of the association may opt out of the sharing of that member’s name, property address, email address, and mailing address by notifying the association in writing that the member prefers to be contacted via the alternative process described in subdivision (c) of Section 8330 of the Corporations Code. This opt out opt-out shall remain in effect until changed by the member.

SEC. 7.

 Section 5230 of the Civil Code is amended to read:

5230.
 (a) The association records, and any information from them, may not be sold, used for a commercial purpose, or used for any other purpose not reasonably related to a member’s interest as a member. An association may bring an action against any person who violates this article for injunctive relief and for actual damages to the association caused by the violation.
(b) This article may not be construed to limit the right of an association to damages for misuse of information obtained from the association records pursuant to this article or to limit the right of an association to injunctive relief to stop the misuse of this information.
(c) (1) An association or its managing agent shall not do either of the following:
(A) Sell a member’s personal information for any purpose without the consent of the member.
(B) Transmit a member’s personal information to a third party without the consent of the member unless required to do so by law, including, but not limited to, Article 5 (commencing with Section 5200).
(2) A member may bring an action against an association that violates this subdivision for injunctive relief and actual damages cause by the violation. A member shall be entitled to recover reasonable costs and expenses, including reasonable attorney’s fees, in a successful action to enforce the member’s rights under this subdivision.

(c)

(d) An association shall be entitled to recover reasonable costs and expenses, including reasonable attorney’s fees, in a successful action to enforce its rights under this article.

SEC. 7.SEC. 8.

 Section 5260 of the Civil Code is amended to read:

5260.
 To be effective, any of the following requests shall be delivered in writing to the association, pursuant to Section 4035:
(a) A request to change the member’s information in the association membership list.
(b) A request to add or remove a second email or mailing address for delivery of individual notices to the member, pursuant to Section 4040.
(c) A request for individual delivery of general notices to the member, pursuant to subdivision (b) of Section 4045, or a request to cancel a prior request for individual delivery of general notices.
(d) A request to opt out of the membership list pursuant to Section 5220, or a request to cancel a prior request to opt out of the membership list.
(e) A request to receive a full copy of a specified annual budget report or annual policy statement pursuant to Section 5320.
(f) A request to receive all reports in full, pursuant to subdivision (b) of Section 5320, or a request to cancel a prior request to receive all reports in full.

SEC. 8.SEC. 9.

 Section 5310 of the Civil Code is amended to read:

5310.
 (a) Within 30 to 90 days before the end of its fiscal year, the board shall distribute an annual policy statement that provides the members with information about association policies. The annual policy statement shall include all of the following information:
(1) The name and address of the person designated to receive official communications to the association, pursuant to Section 4035.
(2) A statement explaining that a member may submit a request to have notices sent to up to two different specified addresses, pursuant to Section 4040.
(3) The location, if any, designated for posting of a general notice, pursuant to paragraph (3) of subdivision (a) of Section 4045.
(4) Notice of a member’s option to receive general notices by individual delivery, pursuant to subdivision (b) of Section 4045.
(5) Notice of a member’s right to receive copies of meeting minutes, pursuant to subdivision (b) of Section 4950.
(6) The statement of assessment collection policies required by Section 5730.
(7) A statement describing the association’s policies and practices in enforcing lien rights or other legal remedies for default in the payment of assessments.
(8) A statement describing the association’s discipline policy, if any, including any schedule of penalties for violations of the governing documents pursuant to Section 5850.
(9) A summary of dispute resolution procedures, pursuant to Sections 5920 and 5965.
(10) A summary of any requirements for association approval of a physical change to property, pursuant to Section 4765.
(11) The mailing address for overnight payment of assessments, pursuant to Section 5655.
(12) Any other information that is required by law or the governing documents or that the board determines to be appropriate for inclusion.
(b) The annual policy statement shall be made available to the members pursuant to Section 5320.

SEC. 9.SEC. 10.

 Section 5320 of the Civil Code is amended to read:

5320.
 (a) When a report is prepared pursuant to Section 5300 or 5310, the association shall deliver one of the following documents to all members by individual delivery pursuant to Section 4040:
(1) The full report.
(2) A summary of the report that includes, on the first page, a general description of the content of the report and instructions, printed in at least 10-point boldface type, regarding how to request a complete copy of the report at no cost to the member.
(b) Notwithstanding subdivision (a), if a member has requested to receive all reports in full, the association shall deliver the full report to that member, rather than a summary of the report.