BILL ANALYSIS Ó
AB 2273
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2273 (Wieckowski)
As Amended July 3, 2012
Majority vote
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|ASSEMBLY: |50-24|(May 21, 2012) |SENATE: |37-0 |(August 13, |
| | | | | |2012) |
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Original Committee Reference: H. & C.D.
SUMMARY : Streamlines the process for the mortgagee or trustee
for a separate interest in a common interest development (CID)
to provide information about the new owner to the homeowner
association (HOA) necessary for the purpose of invoicing HOA
assessments.
The Senate amendments are minor and technical.
AS PASSED BY THE ASSEMBLY , this bill streamlined the process for
the mortgagee or trustee for a separate interest in a common
interest development (CID) to provide information about the new
owner to the homeowner association (HOA) necessary for the
purpose of invoicing HOA assessments. Specifically, this bill :
1)Required the sale of a property in a CID, executed under the
power of sale contained in a deed of trust or mortgage, to be
recorded within 30 days after the date of the sale in the
recorder's office of the county where the property is located,
except that failure to comply shall not affect the validity of
a sale in favor of a bona fide purchaser.
2)Required a mortgagee, trustee, or other person authorized to
record a notice of default regarding a separate interest in a
CID to mail to the association a copy of any trustee's deed
upon sale of the separate interest, and to do so within 15
business days following the date of the trustee's sale,
provided that the HOA has filed a proper request, as
specified, with the county recorder.
FISCAL EFFECT : None
COMMENTS : According to the author, "even prior to the current
AB 2273
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housing crisis, it has been a struggle for homeowners
associations in CIDS to keep track of new owners within the
development. All too often, in the current market, a
beneficiary under a deed of trust will acquire title to a
separate interest through foreclosure, or under a deed in lieu,
and will provide no notice to the HOA whose interest is of
record that the beneficiary has acquired title. Following
foreclosure the acquiring beneficiary may fail to maintain the
property or comply with the HOA's Covenants, Conditions, and
Restrictions (CC&Rs)."
HOAs are funded solely through the assessments paid by owners in
the CID. When a foreclosing lender fails to record a deed after
the sale, the HOA does not know who to collect assessments from.
As a result, HOAs are left with limited choices, including
increasing the assessments on the existing homeowners to cover
the loss or defer the expenses of the CID.
Foreclosing lenders are not required to record a trustee deed
when taking a property back as a credit bidder, which prevents
the HOA from determining who is responsible for the assessments.
This bill requires the mortgagee or trustee to mail the HOA a
copy of any trustee's deed upon sale of the separate interest,
and to do so within 15 business days following the date of the
trustee's sale. The bill also requires, in any case, the sale
to be recorded no later than 30 days after the date of the sale
in the recorder's office of the county where the property is
located.
The bill seeks to streamline the existing process for the
mortgagee or trustee to provide this information in a timely
manner to the HOA, a process which was established with the
participation of HOAs, banks, and other stakeholders through
discussions over SB 1511 (Ducheny), Chapter 527, Statutes of
2008. Existing law, provided that the HOA has filed a proper
request with the county recorder, as specified, the mortgagee or
trustee is required to mail the requested information (i.e., a
copy of the trustee's deed) to the HOA within 15 business days
following the date the trustee's deed is recorded. This bill
instead requires the same mailing of the requested information
to occur within 15 business days following the date of the
trustee's sale itself-an earlier point in time that is no longer
conditioned upon recordation of the deed.
AB 2273
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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 bill is
intended to address the negative impact to HOAs that reportedly
arises from excessive delays in recording the deed. The bill
also requires in every case the sale to be recorded no later
than 30 days after the date of the sale, but without liability
for any liens for unpaid assessments on the foreclosed property.
This is intended to ensure that the HOA may obtain that
information about the new owner from the record of the deed no
later than 30 days after the sale, even in cases where the
15-day requirement was not complied with.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0004432