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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