AB 3182: another disaster for California's HOAs

Like Senate Bill 323, Assembly Bill 3182 is a disaster for California’s HOAs. AB 3182:

• voids CC&R and other governing document provisions that require minimum rental terms of longer than 30 days, such as provisions that require minimum six month or one year leases;
  
  
• voids provisions that cap rentals at less than 25% of the homes, with accessory and junior accessory dwelling units exempt from higher caps;
  
  
• voids provisions that prohibit new owners from leasing;
  
  
• voids provisions that “unreasonably restrict” renting or leasing, which could include any provision that interferes with an owner’s ability to exercise those rights; and
  
  
• requires HOAs to amend their CC&Rs and other governing documents to remove voided provisions ASAP or face damages claims and civil penalties of up to $1,000.
  

AB 3182 was adopted to increase California’s stock of rental housing. While this may be a beneficial goal, the bill creates several immediate and serious problems for most HOAs:
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• Voided rental restrictions means no rental restrictions. For example, if a community’s six-month minimum lease term requirement is voided, that means the community has no short-term rental restrictions. This could lead to a flood of AirBnBs. Renters break rules, damage infrastructure, and jeopardize mortgage financing and insurance.
  
  
• Most CC&Rs will require amendments, and that takes time. Boards must retain counsel, counsel must prepare a draft, boards must approve it, and the amendment must be recorded. If a member vote is required, that adds at least two and a half months. Given AB 3182's short deadline to amend, the time to start the update process is now. 
  
  
• AB 670 created broad protections for accessory and junior accessory dwelling unit construction. With ADUs and JADUs now exempt from rental and leasing caps, this means that planned developments may be forced to accommodate far more residents than “planned." This will strain parking, recreational facilities, and utilities, and may force non-renting owners to bear an unfair share of such costs. 

AB 3182 compliance is a two-step process:

• Step one is for boards to work with counsel to determine whether any rental or lease restrictions in their CC&Rs or other governing documents will be voided. If so, those documents must not be enforced and must be amended ASAP.
  
  
• Step two - if desired - is to adopt those limited rental and lease restrictions AB 3182 does permit, such as a ban on short-term rentals of 30 days or less or a cap the rental or leasing of 25% or more of the homes. For many HOAs, this step will require adopting stopgap rental rules until a CC&R amendment can be completed.

My 2024 complete update service covers both steps. For one low flat fee, I provide new AB 3182 compliant CC&Rs, as well as stopgap rules boards can adopt now to ensure continuity of their rental restrictions. My turnaround time is weeks, not months, and I also provide a comprehensive suite of other documents and services, including new Senate Bill 323 compliant bylaws and election rules.

Please contact me today to request an update proposal.