BILL NUMBER: AB 771 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 20, 2011
AMENDED IN ASSEMBLY MAY 23, 2011
AMENDED IN ASSEMBLY MAY 10, 2011
AMENDED IN ASSEMBLY APRIL 25, 2011
AMENDED IN ASSEMBLY APRIL 15, 2011
INTRODUCED BY Assembly Member Butler
FEBRUARY 17, 2011
An act to amend Section 1368 of, and to add Section 1368.2 to, the
Civil Code, relating to common interest developments.
LEGISLATIVE COUNSEL'S DIGEST
AB 771, as amended, Butler. Common interest developments: requests
for documents: fees.
The Davis-Stirling Common Interest Development Act requires an
owner of a separate interest in a common interest development to
provide specified documents to a prospective purchaser of that
interest. Existing law requires a homeowners' association to provide
these documents to the owner of the separate interest within 10 days
of the mailing or delivery of the request, and limits the amount of
fees charged for the provision of the documents to the association's
actual costs to procure, prepare, and reproduce the requested
documents.
This bill would require that the seller also provide a copy of
specified minutes of the meetings of the association's board of
directors , if requested by the prospective purchaser .
This bill would also require an association to provide to the seller
a written or electronic estimate of the fees that will be assessed to
provide the specified documents. The bill would permit the
association to collect a reasonable fee based on the association'
s actual cost for procuring, preparing, reproducing, and
delivering the requested documents and would prohibit charging
additional fees for electronic delivery of documents. The bill would
permit the association to contract with any person or entity to
provide the documents on behalf of the association , subject
to the same standards required of the association . The
bill would require the owner of a separate interest to also provide a
form for billing disclosures, as specified, to a prospective
purchaser, and would also require the association to provide this
form to a recipient authorized by the owner of the separate interest.
This bill would incorporate additional changes to Section 1368 of
the Civil Code proposed by SB 150 that would become operative only if
both this bill and SB 150 are chaptered and become effective on or
before January 1, 2012, and this bill is chaptered last.
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 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 to the separate interest or execution of a real property sales
contract therefor, as defined in Section 2985, 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.
(9) A copy of the most recent 12 months of
If requested by the prospective purchaser, a copy of the
minutes of the regular meetings of the association's board of
directors , conducted over the previous 12 months, that
were approved by the association's board of directors.
(b) (1) Upon written request, the association shall, within 10
days of the mailing or delivery of the request, provide the owner of
a separate interest, or any other recipient authorized by the owner,
with a copy of the requested documents specified in paragraphs (1) to
(9), inclusive, of subdivision (a). Upon receipt of a written
request, the association shall provide a written or electronic
estimate of the fees that will be assessed for providing the
requested documents. The documents required to be made available
pursuant to this section may be maintained in electronic form, and
may be posted on the association's Internet Web site. Requesting
parties shall have the option of receiving the documents by
electronic transmission if the association maintains the documents in
electronic form. The association may collect a reasonable fee
based upon the association's actual cost for the procurement,
preparation, reproduction, and delivery of the documents requested
pursuant to the provisions of this section.
(2) No additional fees may be charged by the association for the
electronic delivery of the documents requested.
(3) Fees for any documents required by this section shall be
distinguished from other fees, fines, or assessments billed as part
of the transfer or sales transaction. Delivery of the documents
required by this section shall not be conditioned upon, or
required to be combined with, any other documents, items, or
services. withheld for any reason nor subject to any
condition except the payment of the fee allowed pursuant to paragraph
(1).
(4) An association may contract with any person or entity to
facilitate compliance with the requirements of this subdivision on
behalf of the association, subject to the same standards
required behalf of the association.
(5) The association shall also provide a recipient authorized by
the owner of a separate interest with a copy of the completed form
specified in Section 1368.2 at the time the required documents are
delivered.
(c) (1) Except as provided in 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 prohibition in paragraph (1) does not apply to a community
service organization or similar entity, or to a nonprofit entity
that provides services to a common interest development under a
declaration of trust, 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, or a
nonprofit entity that provides services to a common interest
development under a declaration of trust, satisfies all of the
following requirements:
(i) The organization or entity is not an organization or entity
described in subparagraph (A).
(ii) The organization or entity was established and received a
transfer fee prior to January 1, 2004.
(iii) On and after January 1, 2006, the organization or 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
organization or 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 attorneys' 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.
SEC. 1.5. 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 to the separate interest or execution of a real property sales
contract therefor, as defined in Section 2985, 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 initial
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 initial
list of defects pursuant to this paragraph does not waive any
privilege attached to the document. The preliminary
initial 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.
(9) If there is a provision in the governing documents that
prohibits the rental or leasing of any of the separate interests in
the common interest development to a renter, lessee, or tenant, a
statement describing the prohibition and its applicability.
(10) If requested by the prospective purchaser, a copy of the
minutes of the regular meetings of the association's board of
directors, conducted over the previous 12 months, that were approved
by the association's board of directors.
(b) (1) Upon written request, an
the association shall, within 10 days of the
mailing or delivery of the request, provide the owner of a separate
interest , or any other recipient authorized by the owner,
with a copy of the requested items documents
specified in paragraphs (1) to (8)
(10) , inclusive, of subdivision (a). The items
Upon receipt of a written request, the association
shall provide a written or electronic estimate of the fees that will
be assessed for providing the requested documents. The documents
required to be made available pursuant to this section may be
maintained in electronic form , and requesting
may be posted on the association's Internet Web site.
Requesting parties shall have the option of receiving
them the documents by electronic transmission
or machine readable storage media if the
association maintains these items the
documents in electronic form. The association may
charge collect a reasonable fee for
this service based upon the association's actual cost
to procure, prepare, and reproduce for
the procurement, preparation, reproduction, and delivery of the
documents requested items pursuant to
the provisions of this section .
(2) No additional fees may be charged by the association for the
electronic delivery of the documents requested.
(3) Fees for any documents required by this section shall be
distinguished from other fees, fines, or assessments billed as part
of the transfer or sales transaction. Delivery of the documents
required by this section shall not be withheld for any reason nor
subject to any condition except the payment of the fee allowed
pursuant to paragraph (1).
(4) An association may contract with any person or entity to
facilitate compliance with the requirements of this subdivision on
behalf of the association.
(5) The association shall also provide a recipient authorized by
the owner of a separate interest with a copy of the completed form
specified in Section 1368.2 at the time the required documents are
delivered.
(c) (1) Except as provided in 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 prohibition in paragraph (1) does not apply to a community
service organization or similar entity, or to a nonprofit entity
that provides services to a common interest development under a
declaration of trust, 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, or a
nonprofit entity that provides services to a common interest
development under a declaration of trust, satisfies all of the
following requirements:
(i) The organization or entity is not an organization or entity
described in subparagraph (A).
(ii) The organization or entity was established and received a
transfer fee prior to January 1, 2004.
(iii) On and after January 1, 2006, the organization or 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
organization or 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 attorneys' 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.
SEC. 2. Section 1368.2 is added to the Civil Code, to read:
1368.2. The form for billing disclosures required by Section 1368
shall be in substantially the following form:
CHARGES FOR DOCUMENTS PROVIDED AS REQUIRED BY
SECTION 1368*
Property Address __________________________________
Owner of Property _________________________________
Owner's Mailing Address ______________________
(If known or different
_______________________
from property address.)
Provider of the Section 1368 Items:
_________________________________________________
Print Name Position or Title Association or Agent
___________________
Date Form Completed
Check or Complete Applicable Column or Columns
Below
Not
Available
Document Civil Code Included (N/A) or Fees
Section Not
Applicable
(N/App)
Articles of
Incorporation Section
or statement 1368(a)(1) ________ __________ ____
that not
incorporated
CC&Rs Section ________ __________ ____
1368(a)(1)
Bylaws Section ________ __________ ____
1368(a)(1)
Operating Section ________ __________ ____
Rules 1368(a)(1)
Age Section
restrictions, 1368(a)(2) ________ __________ ____
if any
Pro forma
operating Sections
budget or 1365 and ________ __________ ____
summary, 1368(a)(3)
including
reserve study
Assessment
and reserve Sections
funding 1365 and ________ __________ ____
disclosure 1368(a)(4)
summary
Financial Sections
statement 1365 and ________ __________ ____
review 1368(a)(3)
Assessment Sections
enforcement 1365 and ________ __________ ____
policy 1368(a)(4)
Insurance Sections
summary 1365 and ________ __________ ____
1368(a)(3)
Regular Section ________ __________ ____
assessment 1368(a)(4)
Special Section ________ __________ ____
assessment 1368(a)(4)
Emergency Section ________ __________ ____
assessment 1368(a)(4)
Other unpaid Sections
obligations 1367.1 and ________ __________ ____
of seller 1368(a)(4)
Approved Section
changes to 1365 and ________ __________ ____
assessments 1368(a)(4),
(8)
Settlement Sections
notice 1368(a)(6),
regarding (7) and ________ __________ ____
common area 1375.1
defects
Preliminary Sections
list of 1368(a)(6), ________ __________ ____
defects 1375, and
1375.1
Notice(s) of Sections
violation 1363 and ________ __________ ____
1368(a)(5)
Required Section
statement of 1368 ________ __________ ____
fees
Most recent Section
12 months of 1368(a)(9) ________ __________ ____
minutes
Total fees
for these ________
documents:
* The information provided by this form may not
include all fees that may be imposed before the
close of escrow. Additional fees that are not
related to the requirements of Section 1368 may be
charged separately.
Not
Available
Document Civil Code Included (N/A) or
Section Not
Applicable
(N/App)
Articles of
Incorporation Section
or statement 1368(a)(1) _________ ___________
that not
incorporated
CC&Rs Section _________ ___________
1368(a)(1)
Bylaws Section _________ ___________
1368(a)(1)
Operating Rules Section _________ ___________
1368(a)(1)
Age Section
restrictions, 1368(a)(2) _________ ___________
if any
Pro forma
operating Sections
budget or 1365 and _________ ___________
summary, 1368(a)(3)
including
reserve study
Assessment and Sections
reserve funding 1365 and _________ ___________
disclosure 1368(a)(4)
summary
Financial Sections
statement review 1365 and _________ ___________
1368(a)(3)
Assessment Sections
enforcement 1365 and _________ ___________
policy 1368(a)(4)
Insurance Sections
summary 1365 and _________ ___________
1368(a)(3)
Regular Section _________ ___________
assessment 1368(a)(4)
Special Section _________ ___________
assessment 1368(a)(4)
Emergency Section _________ ___________
assessment 1368(a)(4)
Other unpaid Sections
obligations of 1367.1 and _________ ___________
seller 1368(a)(4)
Approved Section
changes to 1365 and _________ ___________
assessments 1368(a)(4),
(8)
Settlement Sections
notice 1368(a)(6),
regarding (7) and _________ ___________
common area 1375.1
defects
Sections
Preliminary 1368(a)(6), _________ ___________
list of defects 1375, and
1375.1
Notice(s) of Sections
violation 1363 and _________ ___________
1368(a)(5)
Required
statement of Section 1368 _________ ___________
fees
Minutes of
regular
meetings of the
board of Section
directors 1368(a)(9) _________ ___________
conducted over
the previous 12
months, if
requested
Total fees for _________
these documents:
* The information provided by this form may not
include all fees that may be imposed before the
close of escrow. Additional fees that are not
related to the requirements of Section 1368 may be
charged separately.
SEC. 3. Section 1.5 of this bill incorporates
amendments to Section 1368 of the Civil Code proposed by both this
bill and SB 150. It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2012, (2) each
bill amends Section 1368 of the Civil Code, and (3) this bill is
enacted after SB 150, in which case Section 1 of this bill shall not
become operative.