California 2025-2026 Regular Session

California Senate Bill SB546

Introduced
2/20/25  

Caption

Common interest developments: accounting.

Impact

The repeal of Section 5501 is significant as it may impact the governance practices of nonprofit corporations and homeowner associations that oversee common interest developments. Without the ability to conduct document reviews outside formal meetings, board members will need to convene more frequently to ensure compliance with the accounting regulations. This change is expected to lead to increased formalization of the review process, which could enhance oversight but may also strain the resources of smaller associations.

Summary

Senate Bill 546, introduced by Senator Grayson on February 20, 2025, aims to repeal Section 5501 of the California Civil Code, which pertains to accounting practices for common interest developments. Under current law, boards of directors managing these developments are required to review specific documents—such as account statements, reconciliations, and ledgers—on a monthly basis. The bill specifically targets the provisions allowing for review outside of formal board meetings, provided that such reviews are ratified in subsequent meetings and recorded in the minutes. By repealing these provisions, SB 546 aims to enhance accountability and clarity in the governance of common interest developments.

Contention

Notably, the bill may face contention regarding its potential to increase administrative burdens on community associations, especially smaller ones that may struggle with frequent meetings. Advocates for the repeal argue that transparency and accountability are paramount in financial management, while critics may highlight concerns about the practicality of the increased frequency of board meetings. The discourse around this bill may also reflect broader themes in legislative discussions regarding governance reform and the balance between efficient administration and rigorous oversight in the management of communal living arrangements.

Companion Bills

No companion bills found.

Similar Bills

CA AB2912

Association finances.

UT SB0143

Legislative Activities Amendments

FL H1185

Consumer Protection

VA HB2235

Resale Disclosure Act; established.

VA SB1222

Resale Disclosure Act; established.

FL H1021

Community Associations

PA HR21

Adopting permanent rules for the House of Representatives, further providing for questions of order, for supervision of Hall of the House and committee rooms, for members' and employees' expenses, for order of business, for general appropriation bill and non-preferred bills, for consideration of bills, for third consideration and final passage bills, for hospital and home appropriations or acquiring lands of the Commonwealth, for House and concurrent resolutions, for standing committees and subcommittees, for powers and duties of standing committees and subcommittees, for Committee on Rules, for discharge of committees, for lay on the table, for previous question, for members required to be present and vote and for financial interests in gaming entities, providing for vote by designation and further providing for Committee on Ethics.

UT SB0136

Legislative Offices Amendments