NEW LAW FUNDAMENTALLY CHANGING RENTAL RESTRICTIONS IN GOVERNING DOCUMENTS
Governor Newsom has signed AB 3182 (Ting) into law, which modifies Civil Code Section 4740, and adds a new Civil Code Section 4741. The stated goal of AB 3182 is to “bring many more rental units to the state at virtually no cost.” However, this new law will have significant impacts on the ability of homeowner associations to regulate the rental of separate interests and accessory dwelling units and junior accessory dwelling units (collectively “ADU(s)1”). As explained below, the new law will severely hamper the ability of homeowner associations to effectively manage and operate their communities, maintain a stable quality of life and protect their residents from frequent turnovers in occupancy of separate interests and from an overburdening of resources.
Existing law states that an owner is not subject to a provision in a governing document or an amendment to a governing document that prohibits the rental or leasing of the owner’s separate interest adopted after the owner purchased his or her separate interest. AB 3182 further restricts the ability of associations to regulate rentals. As of January 1, 2021, no owner shall be subject to a provision in a governing document or an amendment to a governing document that prohibits, has the effect of prohibiting, or unreasonably restricts the rental or leasing of such owner’s separate interests or such owner’s ADU. Associations must amend their governing documents if necessary to conform to the new law on or before December 31, 2021, and may be held liable for certain damages and penalties if they willfully violates the new law.
As of January 1, 2020, planned unit developments must permit the construction of ADUs (also known as mother-in-law units, granny flats, backyard cottages, or secondary units), subject to reasonable restrictions.