Political Rallies in the Clubhouse? SB 407 is Now Law

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Editors Note: California's legislative session is not yet over, and more bills may be signed by the governor. Please watch the ECHO Journal, this website, and future events for more guidance on new laws for 2018.

SB 407 is somewhat mind-boggling, both in terms of what it requires of associations and the breadth of governmental intrusion into private property principles. The full text of the law is available on California's Legislative Information website.

Public Access Must Be Allowed

As of January 1, 2018, any member or resident in a CID with a clubhouse or other common area space suitable for gatherings will be permitted to sponsor meetings and invite the public to assemble inside the development to discuss “common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes.” This can include, but is not limited to, inviting public officials, candidates for public office, or representatives of homeowner organizations to meet with members, residents, and those they invite in, to speak on matters of public interest.

HOA May Not Require Insurance Deposit

SB 407 will prohibit the association from charging for such use of the clubhouse or common area, demanding any deposit, requiring any insurance from the owner or resident inviting the public in, or require any payment of the association’s insurance premium or deductible. (The last item – the deductible – suggests that even if there is damage to the common area or other property that the association is obligated to maintain, or even if someone is injured as a result of the event, the owner or resident sponsoring the event will not have financial liability and that the association’s insurance policies – or the members, if a loss is uninsured – will have to bear the brunt.)

HOA Must Allow Door-to-Door Solicitation for Political Purposes

SB 407 further provides that owners and residents are free to go door to door soliciting their neighbors and distributing pamphlets and other material involving all of the permitted subjects.

There are provisions in SB 407 that will allow associations to require these permitted activities “during reasonable hours and in a reasonable manner.” Moreover, the gatherings must involve “peacefully assembling.” In today’s very troubled times, where political polarization is paramount, one can see serious problems in the future for associations and their management of common areas and their duties to ensure peaceful use and enjoyment to owners of their property within a CID. The insertion of “residents” – i.e., non-owners – within this broad trampling of private property rights for political goals is unprecedented.

Fines for Violations

Violations of the new law can be enforced judicially, including in small claims court, with injunctions available to aggrieved owners or residents, and civil penalties of up to $500 for each violation. Beneficially, an association can also use a claim made against it to demonstrate that its decision with respect to any particular use request was reasonable under the circumstances.

As more is considered about how this new law will apply, associations will, we believe, need to develop policies for compliance, while considering what is permitted under the requirement that assemblies be peaceful and held within reasonable parameters. There is also the potential for legal challenges to the enforceability of some portions of this new law.

Sandra Bonato, Esq. is a partner at law the firm of Berding | Weil. She is a member of the ECHO Board and the ECHO Legislative Committee. She is a frequent speaker at ECHO seminars, and articles written by her are a regular feature in ECHO's Journal.

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This new SB407, I understand that it pertains to meetings of a political nature.  My question is how does this affect the HOA from requiring deposits or umbrella insurance from HOA members who reserve the club house for personal venues that include non-member participants, such as family and friends, for events like birthday parties, family reunions, baby showers etc.  One of our common areas is a large campsite on the Klamath River and sometimes a member will reserve 1/2 dozen camp sites for their friends and family and reserve our Lodge as well.  Can the Associate require a deposit and unbrella insurance from them because they have so many non-member guests?  Is there a limit on how many non-member guests would trigger the requirement of an unbrella liability insurance from the sponsoring member?   My neighbor says this new SB407 forbids the HOA from charging members cleaning deposits  for any event and/or unbrella liability insurance for large events.  I'm not finding that information in this new SB407 law.
Thank you for your reply
Diana Gwaltney

Hi Diana - I'm not an attorney but I agree that the law only addresses gatherings held for the purposes laid out in the text: e.g. discussing matters relating to common interest development living, politics, etc. Other types of gatherings would be subject to your usual rules. There is some concern that people will frame their "birthdays and camping trips" as political or public interest gatherings which would trigger SB 407. The law presents a number of real concerns for associations.

Hi Tyler,
Another aspect of misrepesenting a family outing as an SB 407 type meeting could result in lack of insurance coverage should the insurance company become aware of the fraud. 
For example, someone trips and falls becoming injured, or someone forgets what's on the campstove and causes a fire..  If it is a legitimate SB407 meeting, the HOA's insurance would likely cover it.
But if an investigation reveals the claim of an SB407 meeting is actually a sham, that it was actually a famly outing, the insurance company can deny coverage claiming fraud.  The organizer would now be personally liable for damages.
Hope this helps,
Jeff Klopotic

Does this mean any none profit can use our club house and common areas??

No - only the "member or resident" has a right to the space. But that member or resident could host their non-profit's meeting in your clubhouse or common areas if that meeting is related to the subjects covered by this statute.

This is a very interesting article. Though I somewhat agree with Tyler, in that there raises an issue of relativeism within each persons perspective of the law. I think the the idea of what is subjective to one person may be different to another and should be brought into consideration.
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The information is in line with the constitution but the sad the thing is that it is not followed by out politicians. Companies like Pool cleanings (click here) has faced notable challenges due to this. 

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The chance for a change of law is not rife as in the past. The political rallies are necessary but not at this time.  Companies in commercial roofing service are bound to suffer.

Are HOA's considered state actors for purposes of federal law, viz, under jurisdiction of 14th Amendment?
Or are they private entities exempt from such requirements?
Any help appreciated,
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Any insights appreciated.

I agree that public access must be allowed and others that followed. 

There will really be challenges in the implementation of this new SB 407 but I'm seeing a great chance to improve California with this new law.
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This must be an annoying piece of legislation for those that have to pay those hefty HOA fees, only to be solicited by politicians.. unless that's your thing 

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Not too much to ask I guess, good points here. If I was a politician I'd be rooting for this most likely. does seem a bit intense to include fines though

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This is something to look forward to. Hope this will help our country big time.
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Our Board is updating our rules for our clubhouse usage based on SB407.
Our rules currently prohibit religious, work-related and fundraising events (in addition to political events). I can’t find any information in support of or otherwise on these restrictions and wondered if there is any reason to have them. I would appreciate some feedback.  Thanks 

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As a part owner of numerous businesses, I'm always amazed at the kinds of laws that are passed. It seems that today we are getting inundated with all kinds of laws and rules that can take over our privacy. I'm not saying that all laws and rules are bad but I think we all have to be careful as to what we allow in our lives and the politicians that are elected.
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