Despite fierce opposition, including over 5,000 constituents personally expressing opposition to the bill, Governor Newsom signed Assembly Bill 3182 into law on September 29, 2020. Under the new law, any provision in a governing document “that prohibits, has the effect of prohibiting, or unreasonably restricts” the rental of any of the separate interests, accessory dwelling units (“ADU”), or junior accessory dwelling units (“JADU”) in a community association is rendered unenforceable.
While there is uncertainty and disagreement over the impact of this language on minimum rental terms, the law specifically allows associations to prohibit short term and transient rentals, defined as rentals of 30 days or less, and also allows associations to place a rental cap of twenty-five percent (25%) of the separate interests (or greater) in the association. However, AB 3182 also states that if the owner lives in either the main residence or an ADU or JADU on the property, then the property does not count as a rental unit.
AB 3182 also requires any associations with provisions in their governing documents that conflict with the new requirements to amend their governing documents no later than December 31, 2021. Associations must comply with the prohibition on rental restrictions specified in the new law starting on January 1, 2021, regardless of whether the association has revised their governing documents to comply with the new requirements. Any association that willfully violates the new law is subject to a civil penalty to the applicant or other party in an amount not to exceed one thousand dollars ($1,000).
AB 3182 also amends the government code to require quick approval of applications to cities and counties for construction of ADUs and JADUs, deeming all such applications approved if not acted upon within 60 days (this applies to governmental agencies, not associations). Last, the new bill also requires that properties which meet the minimum requirements be allowed to construct one ADU and one JADU on the same property.
Associations with rental restrictions or rental caps in their governing documents should discuss the impact of AB 3182 and how to address the new limitations on rental restrictions with legal counsel to avoid compliance issues and any civil penalties.
Please contact us for assistance in navigating your community through this new law and for more information.