By: Michael W. Rabkin, Esq. 

October 08, 2021 

Governor Newsom recently signed SB 9 (Atkins) into law. This new law, which goes into effect on January 1, 2022, changes the possible housing density in existing single family neighborhoods in an attempt to address California’s affordable housing crisis. At its core, subject to certain limited exceptions, the new law will permit owners of single family homes to construct a second home on their lot, or to split their lot into two lots and construct up to two residential units on each of those lots. Practically, this means that a 5,000 square foot lot with one home, may be subdivided into two lots each containing 2 homes. Instead of one neighbor, a lot owner could now have four neighbors. With regard to Common Interest Developments, this new law would affect only planned developments (where owners’ homes are on lots) and not condominium projects. premium investment llc

The potential quadrupling of homes in a homeowners association would likely have a devastating impact on the common areas and facilities as well as the quality of life for its members. Fortunately, the author of the new law, Toni Atkins, has expressly confirmed that “[T]he bill contains no provisions that supersede HOA or CID governing documents.” Accordingly, a planned development’s governing documents shall prevail if its governing documents prohibit further subdivision or multiple units on a lot.[1] If a planned development’s governing documents do not prohibit such activity, there would be nothing to prevent a lot owner from creating a duplex on such owner’s lot and/or subdividing such owner’s lot and constructing two dwelling units on each lot.

We STRONGLY recommend that every planned development review their governing documents as soon as possible to confirm whether it has the appropriate restrictions in place that would supersede the new law and prevent lot splits/additional units from being built (other than ADUs). If not, associations should take immediate steps to add such restrictions. Amending the association’s CC&Rs with the vote of the owners using the secret ballot process is required to add such a restriction to the association’s governing documents. In the interim, while the secret ballot voting process runs its course, we strongly encourage planned developments to amend their rules and regulations to prohibit such activity so that there is a rule in place before January 1, 2022. Rules may be adopted on 28-days’ notice in accordance with Civil Code Section 4360.

CC&Rs are enforceable equitable servitudes and generally carry more weight with the courts (than rules) because, among other things, they are approved by a vote of the members, as opposed to rules and regulations, which are approved by only a majority of the board members. If an association proceeds to adopt rules related to SB 9 only (and does not amend its CC&Rs), we do not believe that a court would find that a rule alone is sufficient to prevent an owner’s subdivision of his or her lot and/or the adding of additional units.

We are available to our clients to answer any questions related to SB 9’s application to their community.

Michael W. Rabkin

310.478.4100 ext. 6617