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