BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 952|
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THIRD READING
Bill No: AB 952
Author: Mullin (D)
Amended: 7/5/07 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM. : 6-2, 7/3/07
AYES: Lowenthal, Cedillo, Corbett, Kehoe, Simitian,
Torlakson
NOES: McClintock, Ashburn
NO VOTE RECORDED: Dutton, Harman, Yee
SENATE JUDICIARY COMMITTEE : 3-2, 7/10/07
AYES: Corbett, Kuehl, Steinberg
NOES: Harman, Ackerman
ASSEMBLY FLOOR : 45-32, 5/21/07 - See last page for vote
SUBJECT : Common interest developments: assessments and
affordable
housing units
SOURCE : Author
DIGEST : This bill provides that a regular or special
assessment that is subject to a vote within a Common
Interest Development must be approved both by a majority of
all residents and a majority of owner-occupants of
affordable units and requires an association to establish a
payment plan for all regular and special assessment imposed
on affordable units for those owner occupants who request
CONTINUED
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one.
ANALYSIS : Existing law, the Davis-Stirling Common
Interest Development Act, defines and regulates common
interest developments (CIDs), including their ability to
levy regular and special assessments.
Existing law allows the association to levy regular and
special assessments sufficient to perform their required
obligations. Annual increases in assessments shall not be
imposed unless the board has prepared and distributed an
operating budget, as specified, or obtained the approval of
owners, constituting a quorum, casting a majority of votes.
Existing law provides that the board of directors may not
impose a regular assessment that is more than 20 percent
greater than the regular assessment for the association's
preceding fiscal year or impose special assessments which
in the aggregate exceed 5 percent of the budgeted gross
expenses of the association without the approval of owners,
constituting a quorum, casting a majority of the votes.
This bill, instead, requires approval of the owners,
constituting a quorum, casting a majority of the votes at a
meeting or election of the association, and the approval of
owner-occupants of affordable units, constituting a quorum,
casting a majority of the votes of those owner-occupants at
the same meeting or election.
This bill defines "affordable units" as units that are
required to be provided to low- or moderate-income
purchasers pursuant to a recorded document, or document
referenced in a recorded document. This bill would define
"quorum" of owner-occupants of affordable units as more
than 50 percent of the owner-occupants of those units.
This bill further states that its provisions do not limit
the imposition of emergency assessments.
Existing law permits an owner to submit a written request
for the board to consider a payment plan for an assessment
debt, but does not require the board to approve that
request.
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This bill requires an association to establish a payment
plan for owner-occupants of affordable units with respect
to regular or special assessments that were approved by a
quorum of owners and a quorum of owner-occupants of
affordable units.
This bill requires the payment plan to not assess interest
or late charges if the assessments are fully paid within 12
months of the commencement of the plan.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/11/07)
American Federation of State, County, and Municipal
Employees
California Alliance for Retired Americans
California Rural Legal Assistance Foundation
Golden State Manufactured-Home Owners League
Gray Panthers
League of California Cities
Western Center on Law and Poverty
OPPOSITION : (Verified 7/11/07)
California Association of Community Managers
California Association of Realtors
Community Associations Institute
Executive Council of Homeowners
Sun City Roseville Community Association
ARGUMENTS IN SUPPORT : According to the author's office,
assessment fees and the process used to implement them can
be excessive and unfair for individuals in low and moderate
income units, resulting in people on the margin being
needlessly priced out of their units. The author's office
cites a press article describing the case of a homeowner
who bought an affordable studio in a condominium
development. Two years later, she received notice of a
$4,000 special assessment and, shortly thereafter, notice
of an increase in the monthly assessment from $355 to $630.
Ultimately, she was able to work out a payment plan for
the special assessment and make sacrifices to cover the
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additional monthly dues, but if there are further increases
she will be forced to sell. (San Francisco Chronicle,
January 17, 2007). The author states that protections from
excessive fee increases are necessary to maintain the
affordability of housing located in common interest
developments.
ARGUMENTS IN OPPOSITION : Opponents argue that this bill
will give veto power over assessments to affordable unit
owners and reduce the value of homes in CIDs by making it
more difficult to pass assessments generally. They also
point out that while the owners of affordable units met the
income restrictions at the time of purchase, they could
have higher incomes than their neighbors now. Opponents
believe that this bill will pierce the vale of privacy
currently enjoyed by affordable unit owners and create two
classes of owners.
ASSEMBLY FLOOR : 45-32, 5/21/07
AYES: Arambula, Bass, Beall, Berg, Brownley, Caballero,
Charles Calderon, Carter, Coto, Davis, De La Torre, De
Leon, DeSaulnier, Dymally, Evans, Feuer, Garcia, Hancock,
Hayashi, Hernandez, Huffman, Jones, Karnette, Krekorian,
Laird, Leno, Levine, Lieber, Lieu, Ma, Mendoza, Mullin,
Nava, Parra, Portantino, Price, Richardson, Ruskin,
Salas, Saldana, Solorio, Swanson, Torrico, Wolk, Nunez
NOES: Adams, Aghazarian, Anderson, Benoit, Berryhill,
Blakeslee, Cook, DeVore, Duvall, Emmerson, Fuller,
Gaines, Galgiani, Garrick, Horton, Houston, Huff,
Jeffries, Keene, La Malfa, Maze, Nakanishi, Niello,
Plescia, Sharon Runner, Silva, Smyth, Spitzer,
Strickland, Tran, Villines, Walters
NO VOTE RECORDED: Eng, Soto, Vacancy
JJA:nl 7/11/07 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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