TL;DR — Key Takeaways
- Civil Code section 5986 makes void any governing-document provision that requires a membership vote, or gives the developer a veto, before an HOA board can pursue a construction defect claim against the developer or builder.
- It applies retroactively, to CC&Rs recorded before it took effect on January 1, 2020, and to claims already underway unless they were resolved by an executed settlement, a final arbitration decision, or a final judgment on the merits.
- The Court of Appeal applied it that way in 2021, reversing a developer’s judgment that rested on an association’s failure to hold a pre-suit vote.
- Section 5986 removes a barrier. It does not remove the member notice and meeting required before suing, the Calderon pre-litigation process, or the ten-year statute of repose.
- A board that no longer needs a vote still owes the association a reasoned decision about whether suing is worth it.
Civil Code section 5986 makes unenforceable any provision in an HOA’s governing documents that conditions the board’s ability to pursue a construction defect claim against the developer or builder, including a requirement that the members vote to approve the claim or that the developer consent to it. The statute applies retroactively, so it reaches CC&Rs written by developers years before it took effect. The practical effect is that a newly independent board is not bound by voting hurdles the developer wrote into the documents to protect itself.
The problem section 5986 solved
A developer writes the CC&Rs. It records them before the first unit sells, and it controls the association until enough units have sold to hand control to the owners.
For years, some developers used that drafting position to protect themselves from the association they were creating. CC&Rs would require that before the board could sue the developer for construction defects, a supermajority of the members, sometimes two-thirds or more of the total voting power, had to approve the claim at a meeting, sometimes after receiving a developer-prepared disclosure about the costs and risks of litigation. In a project where many owners are absentee landlords, reaching that threshold could be close to impossible.
Courts had enforced those provisions. A 2018 Court of Appeal decision upheld a CC&R clause requiring a member vote before suit and affirmed judgment for the builder where the association had not held one.
The Legislature responded in SB 326 (2019–2020), enacted in 2019 and effective January 1, 2020, which added section 5986 to the Davis-Stirling Act.
What section 5986 does
The statute voids any limitation or precondition on the board’s commencement and pursuit of a claim, civil action, arbitration, pre-litigation process, or other legal proceeding against the declarant, developer, or builder. It names two common devices expressly: a requirement of a membership vote, and a provision giving the developer veto authority over the board’s decision. Both are declared unenforceable, null, and void.
It also covers the process, not only the lawsuit. The prohibition reaches preconditions on arbitration and on pre-litigation procedures, so a developer cannot relocate the vote requirement to an earlier stage of the dispute.
Whose claims, against whom
The statute’s scope is specific, and reading it precisely avoids two common mistakes.
It protects the board’s pursuit of a claim. Section 5986 is directed at conditions on the board’s commencement and pursuit of a proceeding. It is the association’s decision to sue, made through its board, that the statute frees from member-vote and developer-consent conditions.
It applies to claims against the declarant, developer, or builder. Those are the parties the statute names. A precondition in the governing documents that relates to a claim against someone else is outside its terms, and whether such a provision is enforceable is a separate question.
It does not create a claim. Section 5986 removes an obstacle to pursuing a claim the association already has. It says nothing about whether the defects exist, whether they are the developer’s responsibility, or whether the claim is timely.
It does not affect individual owners’ own claims. An owner with a claim for damage inside their own unit pursues it on their own, and the association’s standing to bring claims on behalf of separate interests is governed by other rules. Who an HOA can sue for construction defects covers standing.
Retroactivity
This is what gives the statute its force.
Section 5986 applies to all governing documents, whether recorded before or after its effective date. A CC&R recorded in 2008 with a supermajority vote requirement is just as void as one recorded today.
It also applies to claims initiated before January 1, 2020, with three exceptions: claims already resolved through an executed settlement, a final arbitration decision, or a final judicial decision on the merits.
In Smart Corner Owners Association v. CJUF Smart Corner LLC (2021), the Court of Appeal applied that retroactivity to a case the developer had already won. The trial court had granted summary judgment to the developer because the association had not obtained the required member vote before suing. The appeal was pending when section 5986 took effect. The Court of Appeal held that a judgment still on appeal was not a “final judicial decision on the merits,” applied the statute, and reversed. As an independent ground, it held that the pre-suit vote requirement violated fundamental public policy. The court also rejected the reasoning of the 2018 decision that had enforced such clauses.
As of September 2026, Smart Corner remains the principal published appellate decision construing section 5986’s retroactivity, and no published decision has limited it.
If your association’s documents contain a pre-suit vote requirement or a developer consent provision, it is worth knowing before the board decides how to proceed. Call Bay Legal at (650) 668-8000 in Northern California or (213) 668-8000 in Southern California.
What section 5986 does not do
Boards sometimes read section 5986 as clearing every obstacle between them and the courthouse. It clears one.
Member notice is still required. Civil Code section 6150 requires the board, at least 30 days before filing a civil action against the developer for damage to common areas or to separate interests the association must maintain, to give written notice to every member. The notice must state that a meeting will be held to discuss problems that may lead to a lawsuit, including the potential financial impact on the association and members, the options available, and the time and place of the meeting. That is a notice-and-meeting requirement, not a vote, and section 5986 leaves it in place. Where a limitations period would expire first, the notice may be given within 30 days after filing instead.
The Calderon process still applies. For associations of 20 or more units, Civil Code section 6000 requires a pre-litigation process before suing the builder: a notice of commencement of legal proceedings, document exchange, inspection, and a dispute resolution period. Section 5986 voids developer-written conditions on that process; it does not excuse the process itself.
The Right to Repair Act procedures may still apply to homes sold after January 1, 2003.
The clock still runs. The ten-year statute of repose for latent construction defects runs from substantial completion of the project, not from when the board gained the freedom to sue. Section 5986 does not extend it. A properly served Calderon notice tolls limitations and repose periods; the passage of section 5986 does not.
A separate arbitration clause is a separate question. Section 5986 targets preconditions on the board’s decision to pursue a claim. Whether the governing documents can require that a claim, once pursued, be arbitrated rather than litigated is a different question governed by different rules.
Section 5986 during developer transition
The statute matters most at the moment control passes from the developer to an owner-elected board.
That is when a new board typically begins asking whether the building was built correctly, often prompted by the first reserve study or the first significant repair. It is also when developer-written provisions do their damage, because a board that believes it needs a two-thirds vote before it can even investigate may do nothing while the repose period runs. HOA developer transition covers the transition period in detail.
When the vote question is not the real question
Section 5986 answers whether a board can pursue a claim without member approval. It does not answer whether the board should.
Directors owe the association a duty of care, which includes reasonable inquiry before a significant decision. A construction defect claim is expensive, slow, and uncertain. It can require a special assessment to fund. It can affect owners’ ability to sell or refinance while it is pending, because lenders and buyers ask about litigation. And it may produce a recovery smaller than its cost.
A board that no longer needs a vote should still build the kind of record a vote would have required: an expert assessment of the defects, a realistic estimate of cost and recovery, an explanation to the members at the section 6150 meeting, and a considered decision. Where the members are divided, that record protects the directors as well as the association. HOA board fiduciary duty covers the standard directors are held to.
And some defects are not worth litigating. Warranty claims, negotiated repairs, and insurance can resolve problems a lawsuit would take years to reach.
Bay Legal advises boards on defect claims and on the governance decisions that surround them. Reach us at (650) 668-8000, (213) 668-8000, or through baylegal.com/contact-us.
Frequently Asked Questions
Does an HOA need a membership vote before suing its developer for construction defects?
No. Civil Code section 5986 makes void any governing-document provision requiring a membership vote, or giving the developer veto authority, before the board pursues a claim against the developer or builder. The board must still give members written notice and hold a meeting under Civil Code section 6150, but that is a notice requirement, not a vote.
Does Civil Code 5986 apply to CC&Rs recorded before 2020?
Yes. It applies to all governing documents whether recorded before or after its January 1, 2020 effective date, and to claims initiated before that date unless they were resolved by an executed settlement, a final arbitration decision, or a final judicial decision on the merits.
What did the Smart Corner decision hold? In Smart Corner Owners Association v. CJUF Smart Corner LLC (2021), the Court of Appeal held that a judgment still pending on appeal when section 5986 took effect was not a final judicial decision on the merits, applied the statute retroactively, and reversed a summary judgment the developer had won on the association’s failure to hold a pre-suit vote. It also held that the vote requirement violated fundamental public policy.
Does section 5986 eliminate the Calderon process? No. It voids developer-written conditions on the board’s pursuit of a claim, including conditions on pre-litigation processes, but the Calderon process under Civil Code section 6000 remains a statutory requirement for associations of 20 or more units before suing the builder.
Does section 5986 extend the time to sue? No. The ten-year statute of repose for latent construction defects runs from substantial completion of the project. A properly served Calderon notice tolls limitations and repose periods, but section 5986 itself does not.
