BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  AB 2273|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  AB 2273
          Author:   Wieckowski (D), et al.
          Amended:  7/3/12 in Senate
          Vote:     21

           
           SENATE JUDICIARY COMMITTEE  :  3-1, 6/26/12
          AYES:  Evans, Corbett, Leno
          NOES:  Harman
          NO VOTE RECORDED:  Blakeslee
           
          ASSEMBLY FLOOR  :  50-24, 5/21/12 - See last page for vote


           SUBJECT  :    Common interest developments:  required 
          documents

           SOURCE  :     Community Associations Institute
                      Conference of California Bar Associations


           DIGEST  :    This bill, with respect to property located in a 
          common interest development, requires a foreclosure sale to 
          be recorded within 30 days after the date of sale, as 
          specified.

           ANALYSIS  :    Existing law, the Davis-Stirling Common 
          Interest Development Act, defines and regulates common 
          interest developments, including the ability of the 
          association to levy regular and special assessments 
          sufficient to perform its obligations.  (Civil Code (CIV) 
          Section 1350 et seq.)
           
                                                           CONTINUED





                                                               AB 2273
                                                                Page 
          2

          Existing law regulates the non-judicial foreclosure of 
          properties pursuant to the power of sale contained within a 
          mortgage contract.  To commence the process, existing law 
          requires the trustee, mortgagee, or beneficiary to record a 
          Notice of Default and requires three months to lapse before 
          setting a date for sale of the property.  (CIV Sections 
          2924, 2924f.)  Existing law allows a person to record a 
          request to be notified upon the filing of a notice of 
          default or notice of sale and requires the trustee to mail 
          notice to those persons.  (CIV Sections 2924b(a), 
          2924b(b)(1))
           
          Existing law permits an association to record a request 
          that the mortgagee, trustee, or other person authorized to 
          record a notice of default mail the association a copy of 
          the trustee's deed upon sale of a separate interest within 
          the association at foreclosure.  The request must include a 
          legal description or the assessor's parcel number of the 
          separate interests, the name and address of the 
          association, and a statement that it is a homeowners' 
          association.  (CIV Section 2924b(f))
           
          Existing law requires the above request to be recorded 
          before the filing of a notice of default, and requires the 
          mortgagee, trustee, or other authorized person to mail the 
          requested information to the association within 15 business 
          days following the date the trustee's deed is recorded.  
          (CIV Section 2924b(f))

          This bill, instead, requires the mortgagee, trustee, or 
          other authorized person to mail the requested information 
          to the association within 15 business days following the 
          trustee's sale.

          Existing law provides that every grant of an estate in real 
          property is conclusive against the grantor, also against 
          everyone subsequently claiming under him, except a 
          purchaser or incumbrancer who in good faith and for a 
          valuable consideration acquires a title or lien by an 
          instrument that is first duly recorded.  (CIV Section 1107)

          This bill provides that, notwithstanding any other law, the 
          transfer, following the sale of property in a common 
          interest development executed under the power of sale 

                                                           CONTINUED





                                                               AB 2273
                                                                Page 
          3

          contained in any deed of trust or mortgage, 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.

          This bill states that failure to comply with the above 
          recording requirement shall not affect the validity of a 
          trustee sale or a sale in favor of a bona fide purchaser.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  7/3/12)

          Community Associations Institute (co-source)
          Conference of California Bar Associations (co-source)
          California Association of Realtors
          California Building Industry Association 
          Community of Shadowridge Owners' Association
          Congress of California Seniors
          Executive Council of Homeowners
          Garden Isle Homeowner's Association
          Golden Rain Foundation
          Southwest California Legislative Council
          Sun City Palm Desert
          Sun City Roseville Association

           ARGUMENTS IN SUPPORT  :    According to the author:

             AB 2273 seeks to streamline the existing process for the 
             mortgagee or trustee to provide this information in a 
             timely manner to the HOAÝ(homeowner's association)], a 
             process which was established with the participation of 
             HOAs, banks, and other stakeholders through discussions 
             over SB 1511 (Ducheny) of 2008.  Since SB 1511 became 
             law, HOAs have reported continued difficulties in 
             obtaining the information they need to invoice the new 
             owner its fair share of assessments, and this proposed 
             amendment is intended to address the negative impact to 
             HOAs that reportedly arises from excessive delays in 
             recording the deed. 

             AB 2273 addresses the above problem by making the 
             purchaser/new owner of property in a common interest 

                                                           CONTINUED





                                                               AB 2273
                                                                Page 
          4

             subdivision responsible for informing the homeowners 
             association of its interest, so that the party 
             responsible for property maintenance may be found and 
             assessed.  This amendment will place a minimal burden on 
             the new owner/purchaser, while providing a significant 
             benefit to the association and its other members by 
             ensuring timely collection of association dues from the 
             proper owner of the property.  In an effort to encourage 
             foreclosing lenders to record a deed of trust after 
             foreclosure, AB 2273 requires the trustee to record the 
             deed within 30 days of the sale in the county in which 
             the foreclosed property is located.  


           ASSEMBLY FLOOR  :  50-24, 5/21/12
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Blumenfield, 
            Bonilla, Bradford, Brownley, Buchanan, Butler, Charles 
            Calderon, Campos, Carter, Cedillo, Chesbro, Davis, 
            Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Gatto, 
            Gordon, Gorell, Hall, Hayashi, Hill, Huber, Hueso, 
            Huffman, Jeffries, Lara, Bonnie Lowenthal, Ma, Mendoza, 
            Mitchell, Monning, Pan, V. Manuel Pérez, Portantino, 
            Skinner, Solorio, Swanson, Torres, Wieckowski, Williams, 
            Yamada, John A. Pérez
          NOES:  Achadjian, Bill Berryhill, Conway, Donnelly, Beth 
            Gaines, Garrick, Grove, Hagman, Halderman, Harkey, Jones, 
            Knight, Logue, Mansoor, Miller, Morrell, Nestande, 
            Nielsen, Norby, Olsen, Silva, Smyth, Valadao, Wagner
          NO VOTE RECORDED:  Block, Cook, Fletcher, Galgiani, Roger 
            Hernández, Perea


          RJG:k  7/5/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****








                                                           CONTINUED