BILL NUMBER: SB 127 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 27, 2007
AMENDED IN ASSEMBLY JULY 10, 2007
AMENDED IN ASSEMBLY JUNE 28, 2007
AMENDED IN ASSEMBLY JUNE 18, 2007
AMENDED IN SENATE MAY 1, 2007
AMENDED IN SENATE APRIL 18, 2007
INTRODUCED BY Senator Kuehl
JANUARY 23, 2007
An act to amend Sections 1102.3, 1102.3a, 1103.3, and 1368 of the
Civil Code, relating to property disclosures.
LEGISLATIVE COUNSEL'S DIGEST
SB 127, as amended, Kuehl. Property transfers: disclosures.
Existing law requires certain transferors of real property,
mobilehomes, manufactured homes, and separate interests in common
interest developments to make specified disclosures to transferees as
part of their respective transactions. These disclosures concern
characteristics affecting the property and hazards to which the
property may be subject. Existing law requires, in the case of a sale
of real property, that these disclosures be made as soon as
practicable before transfer of title. In the case of a sale or a
lease with an option to purchase of a mobilehome or manufactured home
involving an agent, existing law requires these disclosures be made
as soon as practicable, but no later than the close of escrow. In the
case of a transfer of a separate interest in a common interest
development, existing law requires that the disclosures be made as
soon as practicable before transfer of title to the separate interest
or execution of a real property sales contract.
This bill would require, in the case of a sale of real property,
or a sale or a lease with an option to purchase of a mobilehome or
manufactured home involving an agent, that the disclosures described
above be made as soon as practicable before transfer of title but no
later than 10 calendar days after the execution of the purchase
agreement. The bill would require, in the case of a sale of a
separate interest in a common interest development, that the
necessary disclosures be made as soon as practicable before transfer
of title but no later than 20 calendar days after the execution of
the purchase agreement to purchase title to the separate interest or
execution of a real property sales contract or the opening of escrow,
whichever is later. The bill would also allow the parties to a
transfer to waive defer certain
disclosure requirements described above pursuant to a written
agreement, as specified.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1102.3 of the Civil Code is amended to read:
1102.3. Unless the parties otherwise agree in writing,
the The transferor of any real property subject
to this article shall deliver to the prospective transferee the
written statement required by this article, as follows:
(a) (1) In the case of a sale, except
as provided in paragraph (2), as soon as practicable before
transfer of title but no later than 10 calendar days after the
execution of the purchase agreement.
(2) Notwithstanding paragraph (1), the parties may negotiate, by a
written agreement separate from the standard written agreement, that
the transferor deliver the written statement required by this
article later than the 10 "calendar" day requirement, but the written
statement shall be delivered as soon as practicable before transfer
of title.
(b) In the case of transfer by a real property sales contract, as
defined in Section 2985, or by a lease together with an option to
purchase, or a ground lease coupled with improvements, as soon as
practicable before execution of the contract. For the purpose of this
subdivision, "execution" means the making or acceptance of an offer.
With respect to any transfer subject to subdivision (a) or (b),
the transferor shall indicate compliance with this article either on
the receipt for deposit, the real property sales contract, the lease,
or any addendum attached thereto or on a separate document.
If any disclosure, or any material amendment of any disclosure,
required to be made by this article, is delivered after the execution
of an offer to purchase, the transferee shall have three days after
delivery in person or five days after delivery by deposit in the
mail, to terminate his or her offer by delivery of a written notice
of termination to the transferor or the transferor's agent.
SEC. 2. Section 1102.3a of the Civil Code is amended to read:
1102.3a. (a) Unless the parties otherwise agree in
writing, the The transferor of any manufactured
home or mobilehome subject to this article shall deliver to the
prospective transferee the written statement required by this
article, as follows:
(1) (A) In the case of a sale, or a lease
with an option to purchase, of a manufactured home or mobilehome,
involving an agent, as defined in Section 18046 of the Health and
Safety Code, except as provided in subparagraph (B), as
soon as practicable before the close of escrow but no later than 10
calendar days after the execution of the purchase agreement to
purchase the manufactured home or mobilehome.
(B) Notwithstanding subparagraph (A), the parties may negotiate,
by a written agreement separate from the standard written agreement,
that the transferor deliver the written statement required by this
article later than the 10 "calendar" day requirement, but the written
statement shall be delivered as soon as practicable before close of
escrow.
(2) In the case of a sale, or lease with an option to purchase, of
a manufactured home or mobilehome, not involving an agent, as
defined in Section 18046 of the Health and Safety Code, at the time
of execution of any document by the prospective transferee with the
transferor for the purchase of the manufactured home or mobilehome.
(b) With respect to any transfer subject to this section, the
transferor shall indicate compliance with this article either on the
transfer disclosure statement, any addendum thereto, or on a separate
document.
(c) If any disclosure, or any material amendment of any
disclosure, required to be made pursuant to subdivision (b) of
Section 1102, is delivered after the execution of an offer to
purchase, the transferee shall have three days after delivery in
person or five days after delivery by deposit in the mail, to
terminate his or her offer by delivery of a written notice of
termination to the transferor.
SEC. 3. Section 1103.3 of the Civil Code is amended to read:
1103.3. (a) Unless the parties otherwise agree in
writing, the The transferor of any real property
subject to this article shall deliver to the prospective transferee
the written statement required by this article, as follows:
(1) (A) In the case of a sale, except
as provided in subparagraph (B), as soon as practicable before
transfer of title but no later than 10 calendar days after the
execution of the purchase agreement.
(B) Notwithstanding subparagraph (A), the parties may negotiate,
by a written agreement separate from the standard written agreement,
that the transferor deliver the written statement required by this
article later than the 10 "calendar" day requirement, but the written
statement shall be delivered as soon as practicable before transfer
of title.
(2) In the case of transfer by a real property sales contract, as
defined in Section 2985, or by a lease together with an option to
purchase, or a ground lease coupled with improvements, as soon as
practicable before execution of the contract. For the purpose of this
subdivision, "execution" means the making or acceptance of an offer.
(b) The transferor shall indicate compliance with this article
either on the receipt for deposit, the real property sales contract,
the lease, any addendum attached thereto, or on a separate document.
(c) If any disclosure, or any material amendment of any
disclosure, required to be made pursuant to this article is delivered
after the execution of an offer to purchase, the transferee shall
have three days after delivery in person or five days after delivery
by deposit in the mail to terminate his or her offer by delivery of a
written notice of termination to the transferor or the transferor's
agent.
SEC. 4. Section 1368 of the Civil Code is amended to read:
1368. (a) The owner of a separate interest, other than an owner
subject to the requirements of Section 11018.6 of the Business and
Professions Code, shall, as soon as practicable before transfer of
title but no later than 20 calendar days after either the execution
of the purchase agreement to purchase title to the separate interest
or execution of a real property sales contract therefor, as defined
in Section 2985, or the opening of escrow, whichever is later,
provide the following to the prospective purchaser:
(1) A copy of the governing documents of the common interest
development, including any operating rules, and including a copy of
the association's articles of incorporation, or, if not incorporated,
a statement in writing from an authorized representative of the
association that the association is not incorporated.
(2) If there is a restriction in the governing documents limiting
the occupancy, residency, or use of a separate interest on the basis
of age in a manner different from that provided in Section 51.3, a
statement that the restriction is only enforceable to the extent
permitted by Section 51.3 and a statement specifying the applicable
provisions of Section 51.3.
(3) A copy of the most recent documents distributed pursuant to
Section 1365.
(4) A true statement in writing obtained from an authorized
representative of the association as to the amount of the association'
s current regular and special assessments and fees, any assessments
levied upon the owner's interest in the common interest development
that are unpaid on the date of the statement, and any monetary fines
or penalties levied upon the owner's interest and unpaid on the date
of the statement. The statement obtained from an authorized
representative shall also include true information on late charges,
interest, and costs of collection which, as of the date of the
statement, are or may be made a lien upon the owner's interest in a
common interest development pursuant to Section 1367 or 1367.1.
(5) A copy or a summary of any notice previously sent to the owner
pursuant to subdivision (h) of Section 1363 that sets forth any
alleged violation of the governing documents that remains unresolved
at the time of the request. The notice shall not be deemed a waiver
of the association's right to enforce the governing documents against
the owner or the prospective purchaser of the separate interest with
respect to any violation. This paragraph shall not be construed to
require an association to inspect an owner's separate interest.
(6) A copy of the preliminary list of defects provided to each
member of the association pursuant to Section 1375, unless the
association and the builder subsequently enter into a settlement
agreement or otherwise resolve the matter and the association
complies with Section 1375.1. Disclosure of the preliminary list of
defects pursuant to this paragraph does not waive any privilege
attached to the document. The preliminary list of defects shall also
include a statement that a final determination as to whether the list
of defects is accurate and complete has not been made.
(7) A copy of the latest information provided for in Section
1375.1.
(8) Any change in the association's current regular and special
assessments and fees which have been approved by the association's
board of directors, but have not become due and payable as of the
date disclosure is provided pursuant to this subdivision.
(b) Upon written request, an association shall, within 10 days of
the mailing or delivery of the request, provide the owner of a
separate interest with a copy of the requested items specified in
paragraphs (1) to (8), inclusive, of subdivision (a). The items
required to be made available pursuant to this section may be
maintained in electronic form and requesting parties shall have the
option of receiving them by electronic transmission or machine
readable storage media if the association maintains these items in
electronic form. The association may charge a reasonable fee for this
service based upon the association's actual cost to procure,
prepare, and reproduce the requested items.
(c) (1) Subject to the provisions of paragraph (2), neither an
association nor a community service organization or similar entity
may impose or collect any assessment, penalty, or fee in connection
with a transfer of title or any other interest except for the
following:
(A) An amount not to exceed the association's actual costs to
change its records.
(B) An amount authorized by subdivision (b).
(2) The amendments made to this subdivision by the act adding this
paragraph do not apply to a community service organization or
similar entity that is described in subparagraph (A) or (B):
(A) The community service organization or similar entity satisfies
both of the following requirements:
(i) The community service organization or similar entity was
established prior to February 20, 2003.
(ii) The community service organization or similar entity exists
and operates, in whole or in part, to fund or perform environmental
mitigation or to restore or maintain wetlands or native habitat, as
required by the state or local government as an express written
condition of development.
(B) The community service organization or similar entity satisfies
all of the following requirements:
(i) The community service organization or similar entity is not an
organization or entity described in subparagraph (A).
(ii) The community service organization or similar entity was
established and received a transfer fee prior to January 1, 2004.
(iii) On and after January 1, 2006, the community service
organization or similar entity offers a purchaser the following
payment options for the fee or charge it collects at time of
transfer:
(I) Paying the fee or charge at the time of transfer.
(II) Paying the fee or charge pursuant to an installment payment
plan for a period of not less than seven years. If the purchaser
elects to pay the fee or charge in installment payments, the
community service organization or similar entity may also collect
additional amounts that do not exceed the actual costs for billing
and financing on the amount owed. If the purchaser sells the separate
interest before the end of the installment payment plan period, he
or she shall pay the remaining balance prior to transfer.
(3) For the purposes of this subdivision, a "community service
organization or similar entity" means a nonprofit entity, other than
an association, that is organized to provide services to residents of
the common interest development or to the public in addition to the
residents, to the extent community common areas or facilities are
available to the public. A "community service organization or similar
entity" does not include an entity that has been organized solely to
raise moneys and contribute to other nonprofit organizations that
are qualified as tax exempt under Section 501(c)(3) of the Internal
Revenue Code and that provide housing or housing assistance.
(d) Any person or entity who willfully violates this section is
liable to the purchaser of a separate interest that is subject to
this section for actual damages occasioned thereby and, in addition,
shall pay a civil penalty in an amount not to exceed five hundred
dollars ($500). In an action to enforce this liability, the
prevailing party shall be awarded reasonable attorney's fees.
(e) Nothing in this section affects the validity of title to real
property transferred in violation of this section.
(f) In addition to the requirements of this section, an owner
transferring title to a separate interest shall comply with
applicable requirements of Sections 1133 and 1134.
(g) For the purposes of this section, a person who acts as a
community association manager is an agent, as defined in Section
2297, of the association.