HOA, condo state laws change homeowner rights (Nov. 2019)

By Deborah Goonan, Independent American Communities

California provides increased protection against housing discrimination for military families; Florida considers bill to rein in power of CDDs to create new bond obligations for homeowners; Hawaii reverses course on condo owner protection from nonjudicial foreclosure.



Housing providers cannot discriminate due to Veteran, military status

SB 222 makes it a violation of civil rights to engage in housing discrimination based upon Veteran or military status, offering residents of California even greater protection than federal fair housing laws.

Specifically, landlords and association-governed communities must not deny an application for housing, simply because the resident’s source of income includes HUD Veterans Affairs Supportive Housing vouchers.

SB-222 Discrimination: veteran or military status.(2019-2020)

Senate Bill No. 222
CHAPTER 601 An act to amend Sections 12920, 12921, 12927, 12930, 12931, 12955, 12955.8, 12956.1, and 12956.2 of the Government Code, relating to discrimination.[ Approved by Governor  October 08, 2019. Filed with Secretary of State October 08, 2019. ]

Read full text of SB 222

Reference: FAIR EMPLOYMENT & HOUSING COUNCIL Fair Housing Regulations


Here’s a “heads up” notice for all owners of property within a Community Development District.

This session, the Legislature briefly considered changing the way a CDD board approves resolutions to issue new bonds. Currently, such resolutions must be approved by a simple majority of the 5-member CDD board.

SB 641 would rein in the power of CDDs to create new financial obligations of homeowners and taxpayers. CDDs are governed by FL statute 190. CDD board have broad power to issue three types of bonds to fund infrastructure and services of a planned community: general obligation, revenue, and benefit bonds.

(See this analysis for an explanation of types of bonds.)

Issuance of new bonds inevitably increases the cost of homeownership in CDD-governed communities.

SB 641 proposed making it harder to for a CDD board to pass resolutions authorizing new bonds, by increasing the required board vote of approval from a majority to two-thirds.

The bill passed in the House by a vote of 109-3. However, as of May 3, 2019, SB 641 died in the Community Affairs Committee in the Senate.

Watch for a resurrection of this bill in the next session.

HB 641: Community Development District Bond Financing

Legislative Analysis of HB 641

Read HB641


Condo associations regain power of non-judicial foreclosure, with conditions

Following a 2018 appeals court decision in Sakal v. Association of Apartment Owners of Hawaiian Monarch, 143 Haw. 219, 426 P.3d 443 a community association trade group lobbied for passage of SB551 to effectively reverse the court’s decision.

In Sakal, the court ruled that a condominium association could only use non-judicial foreclosure if the association’s governing document gave it explicit authority for “power of sale.”

SB 551 amends condominium statute to permit an association to proceed with non-judicial foreclosure, regardless of the language contained in its governing documents.

However, before a condo association can conduct a non-judicial foreclosure, they must meet a few conditions:

  • The unit owner must be given the opportunity to request mediation within 30 days of notice of lien and intent to foreclose. The parties have 60 days to settle the dispute and/or come to an agreement on payment terms.
  • The association can only foreclose on delinquent maintenance fees and assessments. Fines and legal fees cannot be included in the lien filed for foreclosure.

Importantly, in SB 551, a condo association’s power of non-judicial foreclosure is retroactive, meaning that the new law applies to thousands of past foreclosures, many of which have been challenged in court.

After SB551 was passed by both chambers of the Hawaii Legislature, Governor David Ige filed his intent to veto the bill. However, both houses of the legislature voted to override the veto, allowing the bill to be enacted as law, without the Governor’s signature.

Reversing course on protection from HOA foreclosure

SB551 is a typical example of a trade group-sponsored law enacted to reverse case law in favor of stronger consumer protections.

The mediation requirement offers a unit owner a very small window of opportunity to stall or avoid foreclosure, but ultimately allows a non-judicial foreclosure to proceed, even if the dispute remains unresolved after 60 days.

If the condo association’s lien derives “solely from fines, penalties, legal fees, or late fees” must proceed by way of judicial foreclosure.

The troublesome word in the amended statute is “solely.” It implies that if a condo owner’s lien consists of past due common assessments and “fines, penalties, legal fee, or late fees,” the association can legally proceed with non-judicial foreclosure, unless the owner can pay the full amount of common assessments due prior to the foreclosure sale.

If the owner is able to pay all past due common expenses, then the condo association’s foreclosure on remaining liens must be decided by a judge.

Therefore, it’s important to make sure that a unit owner’s payments reduce delinquent common expenses first.

Application of payment/priority of payment

Also amended in 2019, SB 61 clarifies priority of payment to condo associations, when the unit owner makes payments in excess of regular monthly common expenses

The law gets very specific:

Any payments made by or on behalf of a unit owner shall first be applied to outstanding common expenses that are assessed to all unit owners in proportion to the common interest appurtenant to their respective units. Only after said outstanding common expenses have been paid in full may the payments be applied to other charges owed to the association, including assessed charges to the unit such as ground lease rent, utility sub-metering, storage lockers, parking stalls, boat slips, insurance deductibles, and cable. After these charges are paid, other charges, including unpaid late fees, legal fees, fines, and interest, may be assessed in accordance with an application of payment policy adopted by the board; provided that if a unit owner has designated that any payment is for a specific charge that is not a common expense as described in this subsection, the payment may be applied in accordance with the unit owner’s designation even if common expenses remain outstanding.”

View details of both bills on the Hawaii Legislature’s website at these links:

SB551 SD1 HD2 CD1   

Report Title: Associations; Nonjudicial Foreclosure; Power of Sale
Requires associations to offer mediation with a notice of default and intention to foreclose. Clarifies that the explicit grant of power of sale to associations is not required for the purposes of enforcing association liens under the association alternate power of sale foreclosure process. Applies retroactively to pending matters that arose prior to the effective date. (CD1)

Read the full text of SB 551

HB61 HD1 SD1 CD1   

Report Title:
Condominium Associations; Common Expense Payments; Excess Amounts
Clarifies the allocation of payments made by a condominium owner that are in excess of any common expenses owed. (HB61 CD1)

Read the full text of SB 61 ♦♦

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