BILL NUMBER: AB 2273 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 16, 2012
INTRODUCED BY Assembly Member Wieckowski
FEBRUARY 24, 2012
An act to amend Section 1368 of , and to add Section 2924.1
to, the Civil Code, relating to common interest developments.
LEGISLATIVE COUNSEL'S DIGEST
AB 2273, as amended, Wieckowski. Common interest developments:
required documents.
The
(1) 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 additionally provide that an acquiring
owner of a separate interest shall, within 30 days of
transferring receiving title, provide to the
association's board secretary, agent, manager, or designated
representative, a copy of the owner's deed or other document
transferring title to the purchaser acquiring
owner of the separate interest and a written notice of the
purchaser's acquiring owner's mailing
address, except as specified.
(2) Existing law imposes various requirements that must be
satisfied prior to exercising a power of sale under a mortgage or
deed of trust.
This bill would, notwithstanding any other law, impose certain
requirements on the sale of a property in a common interest
development, as defined, executed under a power of sale contained in
any deed of trust or mortgage. Among other things, the bill would
require the sale to take place in the county where the property or a
portion of the property is located, and would also require the sale
to be recorded within 30 days, as specified. The bill would also make
the acquiring owner liable for certain unpaid liens recorded on the
property if the sale is not recorded according to the provisions
above.
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 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 initial list of defects pursuant to
this paragraph does not waive any privilege attached to the
document. The 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 meetings, excluding meetings held in executive
session, 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
(10), inclusive, of subdivision (a). Upon receipt of a written
request, the association shall provide, on the form described in
Section 1368.2, 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 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) Unless the association notifies the acquiring
owner of a separate interest that the association acknowledges a
transfer of title, the acquiring owner shall, within 30
days of transferring receiving title,
provide both of the following to the association's board secretary,
agent, manager, or designated representative:
(A) A copy of the owner's deed or other document transferring
title to the purchaser acquiring owner
of the separate interest.
(B) Written notice of the purchaser's
acquiring owner's mailing address.
(2) This subdivision shall not apply to an owner, subdivider, or
agent subject to the requirements of Section 11018.6 of the Business
and Professions Code.
(d) (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.
(e) 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.
(f) Nothing in this section affects the validity of title to real
property transferred in violation of this section.
(g) 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.
(h) 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 2924.1 is added to the
Civil Code , to read:
2924.1. (a) Notwithstanding any other law, a sale of property in
a common interest development, as defined by Section 1351, executed
under the power of sale contained in any deed of trust or mortgage
shall meet all of the following requirements:
(1) Take place in the county where the property or a portion of
the property is located.
(2) The sale shall be made to the highest bidder at an auction to
be held Monday through Friday, between the hours of 9 a.m. and 5 p.m.
(3) The sale shall be recorded within 30 days after the date of
sale in the office of the county recorder where the property or a
portion of the property is located.
(b) In the event that the trustee of a deed of trust or mortgage
fails to record a trustee's deed pursuant to paragraph (3) of
subdivision (a), the acquiring owner shall be liable for all liens
recorded pursuant to Section 1367 or 1367.1 that remain unpaid on the
foreclosed property.
(c) Any failure to comply with the provisions of this section
shall not affect the validity of a sale in favor of a bona fide
purchaser.