BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1838| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1838 Author: Charles Calderon (D) Amended: 8/7/12 in Senate Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 6/26/12 AYES: DeSaulnier, Gaines, Harman, Kehoe, Lowenthal, Pavley, Rubio, Simitian, Wyland SENATE JUDICIARY COMMITTEE : 4-0, 7/3/12 AYES: Evans, Blakeslee, Corbett, Leno NO VOTE RECORDED: Harman ASSEMBLY FLOOR : 74-1, 5/17/12 - See last page for vote SUBJECT : Common interest developments: association records SOURCE : Author DIGEST : This bill prohibits a common interest development (CID) from charging a cancellation fee related to the provision of sale-related documents in specified situations, and requires a CID refund any fee related to the sale-related documents, as specified. ANALYSIS : A CID is a form of real estate in which each homeowner has an exclusive interest in a unit or lot and a shared or undivided interest in common area property. Condominiums, planned unit developments, stock CONTINUED AB 1838 Page 2 cooperatives, community apartments, and many resident-owned mobilehome parks all fall under the umbrella of common interest developments. A homeowners' association with an elected board of directors governs each CID. The Davis-Stirling Common Interest Development Act provides the legal framework under which common interest developments are established and operate. Existing law requires the seller of a unit in a CID to provide a prospective purchaser with various documents related to the CID, including: The CID's governing documents. A statement regarding any age restrictions in the CID. The CID's most recent budget, financial audit, reserve funding plan, and insurance summary. The amount of the CID's current regular and special assessments and fees, as well as any unpaid assessments, fees, or fines related to the unit. Notice of any change in the CID's current regular and special assessments and fees that the board has approved but which have not yet become due. A summary of any pending rule violations related to the unit. The preliminary list of any construction defects that is the subject of potential or actual litigation against the developer and, if applicable, a summary of any settlement. A statement, if applicable, describing any provision in the governing documents that prohibits the rental or leasing of a unit. If requested by the purchaser, a copy of the minutes of the association's meetings conducted over the previous 12 months. Because the CID, rather than the unit owner, maintains CONTINUED AB 1838 Page 3 these documents, existing law requires the CID to provide the selling owner with a copy of these documents within ten days of a request. The CID may collect a reasonable fee based upon its actual cost to procure, prepare, reproduce, and deliver the documents. In addition, upon request, the CID must provide on a specified form a written estimate of fees for the provision of these documents. This bill: 1. Prohibits a CID from charging of a cancellation fee related to the provision of sale-related documents if either of the following applies: A. The request was cancelled in writing by the same party that placed the order and work had not yet been performed on the order; and B. The request was cancelled in writing and any work that had been performed on the order was compensated. 2. Requires a CID refund all fees collected related to the provision of sale-related documents if the request was canceled in writing and the work has not yet been performed on the order. If work has been performed on the order, a refund of the share of the fee that represents the portion of the work not performed. 3. Requires the statutory billing disclosure to be in at least 10-point font. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 8/7/12) Associa California Association of Realtors Community Associations Institute Executive Council of Homeowners ASSEMBLY FLOOR : 74-1, 5/17/12 CONTINUED AB 1838 Page 4 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, V. Manuel Pérez, Portantino, Silva, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, John A. Pérez NOES: Harkey NO VOTE RECORDED: Fletcher, Bonnie Lowenthal, Perea, Skinner, Yamada JJA:d 8/8/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED