As most of you probably already know, a new law went into effect in January regarding rental restrictions. In general terms, the new law only allows associations to prohibit short term rentals of thirty days or less, and to enforce a cap on rentals of twenty-five percent or more of the units in the association, and that’s about it.
As for the timing, all associations were required to fully comply with this new law as of January 1, 2021, and to add further burden, any associations with conflicting provisions in their governing documents were required to amend those documents by no later than the end of the year. There was no shortcut built into the new statute for complying with this requirement, meaning associations who need to amend their documents to conform to the new law were still required to go through the regular membership approval process to do so.
Now for some good news! While the above limitations on rental restrictions are still in effect, the Legislature finally gave us a bit of breathing room for bringing our governing documents into compliance. Earlier this month, Assembly Bill 1584 was passed and signed into law.
Part of what AB1584 does is make it easier to amend CC&Rs to bring them into compliance with these limitations on rental restrictions. It amended Civil Code section 4741(f) as follows:
- We are still bound by the new restrictions on rentals effective earlier this year.
- The deadline to amend the governing documents has been extended to July 1,2022, instead of December 31st of this year.
- And, notwithstanding any other provision of law or provision of the governing documents which might say otherwise, the board can (and is required to) amend the CC&Rs to bring them into compliance with the 25% cap and 30-day lease term by either deleting or restating the restrictive covenant to be compliant with the law — and with no other changes made — without membership approval.
- The process to do so is very similar to the process for enacting a rule change. The board must provide general notice of the amendment at least 28 days before approving the amendment. The notice must include the text of the amendment and a description of the purpose and effect of the amendment. Finally, the decision to enact the amendment must be made at a board meeting, after consideration of any comments made by the association’s members.
Thus, so long as we are solely amending the CC&Rs to comply with the new rental restrictions law and no other changes are being made, then the Board can enact that amendment itself, without having to send the amendment out to vote. While we wish the Legislature had worked a little faster to get this cleanup done sooner than two months before the original deadline, this should still be a bit of relief for any associations still scrambling to amend their documents before the end of the year. Our office can prepare everything your association needs to be in compliance for one low, flat fee. Please don’t hesitate to contact us for more information.