Amended in Senate September 6, 2013

Amended in Senate September 3, 2013

Amended in Senate July 8, 2013

Amended in Senate June 24, 2013

Amended in Assembly April 10, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 1024


Introduced by Assembly Memberbegin delete Torresend deletebegin insert Gonzalezend insert

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(Coauthors: Assembly Members Alejo, Bocanegra, Ian Calderon, Campos, Eggman, Garcia, Gomez, Roger Hernández, Medina, Perea, V. Manuel Pérez, Quirk-Silva, Rendon, and Salas)

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(Coauthors: Senators Calderon, Correa, De León, Hernandez, Hueso, Lara, Padilla, and Torres)

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February 22, 2013


An act to amendbegin delete Sections 11003.4 and 11013.1 of, and to add Section 11013.6 to, the Business and Professions Code, and to amend Section 5100 of the Civil Code, relating to land use.end deletebegin insert Section 6064 of the Business and Professions Code, relating to attorneys.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1024, as amended, begin deleteTorresend delete begin insertGonzalezend insert. begin deleteReal property: divided lands. end deletebegin insertAttorneys: aend insertbegin insertdmission to practice.end insert

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Existing law authorizes the Supreme Court to admit an applicant as an attorney at law in all the courts of the state, upon certification by the examining committee of the State Bar of California that the applicant has fulfilled the requirements for admission to practice law, as specified.

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This bill would additionally authorize the Supreme Court to admit to the practice of law an applicant who is not lawfully present in the United States, upon certification by the committee that the applicant has fulfilled those requirements for admission, as specified.

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(1) Existing law exempts a limited-equity housing cooperative or a workforce housing cooperative trust from provisions of existing law governing subdivided land transactions that are applicable to stock cooperatives if the limited-equity housing cooperative or workforce housing cooperative trust complies with specified conditions.

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This bill would revise the conditions for the exemption to, among other things, require that every party that executes a regulatory agreement with the cooperative satisfy itself that the rights of the cooperative members are provided adequate protection, as specified. By expanding the applicability of a crime, this bill would impose a state-mandated local program.

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(2) Existing law prohibits the sale or lease of lots or parcels within a subdivision that is subject to a blanket encumbrance unless the encumbrance includes a specified release clause or certain conditions are met.

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This bill would authorize the sale or lease of an individual interest in a defined stock cooperative or limited housing cooperative that is subject to a blanket encumbrance if specified conditions are met.

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(3) The Davis-Stirling Common Interest Development Act establishes procedures for elections.

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This bill would exempt a stock cooperative with bylaws that provide that all members and shareholders automatically become directors of the homeowners’ association from the procedures applicable to the election of directors of the homeowners’ association.

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(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteyes end deletebegin insertnoend insert.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

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begin insertSection 6064 of the end insertbegin insertBusiness and Professions
2Code
end insert
begin insert is amended to read:end insert

P3    1

6064.  

begin insert(a)end insertbegin insertend insertUpon certification by the examining committee that
2the applicant has fulfilled the requirements for admission to
3practice law, the Supreme Court may admitbegin delete suchend deletebegin insert theend insert applicant as
4an attorney at law in all the courts of thisbegin delete Stateend deletebegin insert stateend insert and may direct
5an order to be entered upon its records to that effect. A certificate
6of admission thereupon shall be given to the applicant by the clerk
7of the court.

begin insert

8(b) Upon certification by the examining committee that an
9applicant who is not lawfully present in the United States has
10fulfilled the requirements for admission to practice law, the
11Supreme Court may admit that applicant as an attorney at law in
12all the courts of this state and may direct an order to be entered
13upon its records to that effect. A certificate of admission thereupon
14shall be given to the applicant by the clerk of the court.

end insert
begin delete
15

SECTION 1.  

Section 11003.4 of the Business and Professions
16Code
is amended to read:

17

11003.4.  

(a) A “limited-equity housing cooperative” or a
18“workforce housing cooperative trust” is a corporation that meets
19the criteria of Section 11003.2 and that also meets the criteria of
20Sections 817 and 817.1 of the Civil Code, as applicable. Except
21as provided in subdivision (b), a limited-equity housing or
22workforce housing cooperative trust shall be subject to all the
23requirements of this chapter pertaining to stock cooperatives.

24(b) A limited-equity housing cooperative or a workforce housing
25cooperative trust shall be exempt from the requirements of this
26chapter if the limited-equity housing cooperative or workforce
27housing cooperative trust complies with all the following
28conditions:

29(1) The United States Department of Housing and Urban
30Development, the United States Department of Agriculture, the
31National Consumers Cooperative Bank, the California Housing
32Finance Agency, the Public Employees’ Retirement System
33(PERS), the State Teachers’ Retirement System (STRS), the
34Department of Housing and Community Development, the Federal
35Home Loan Bank System or any of its member institutions, a state
36or federally chartered credit union, a state or federally certified
37community development financial institution, or the city, county,
38school district, or redevelopment agency in which the cooperative
39is located, alone or in any combination with each other, directly
40finances or subsidizes at least 50 percent of the total construction
P4    1or development cost or one hundred thousand dollars ($100,000),
2whichever is less; or the real property to be occupied by the
3cooperative was sold or leased by the Transportation Agency, other
4state agency, a city, a county, or a school district for the
5development of the cooperative and has a regulatory agreement
6approved by the Department of Housing and Community
7Development for the term of the permanent financing,
8notwithstanding the source of the permanent subsidy or financing.

9(2) No more than 20 percent of the total development cost of a
10limited-equity mobilehome park, and no more than 10 percent of
11the total development cost of other limited-equity housing
12cooperatives, is provided by purchasers of membership shares.

13(3) A regulatory agreement that covers the cooperative for a
14term of at least as long as the duration of the permanent financing
15or subsidy, notwithstanding the source of the permanent subsidy
16or financing, has been duly executed between the recipient of the
17financing and either (A) one of the federal or state agencies
18specified in paragraph (1) or (B) a local public agency that is
19 providing financing for the project under a regulatory agreement
20meeting standards of the Department of Housing and Community
21Development. The regulatory agreement shall make provision for
22at least all of the following:

23(A) Assurances for completion of the common areas and
24facilities to be owned or leased by the limited-equity housing
25cooperative, unless a construction agreement between the same
26parties contains written assurances for completion.

27(B) Governing instruments for the organization and operation
28of the housing cooperative by the members.

29(C) The ongoing fiscal management of the project by the
30cooperative, including an adequate budget, reserves, and provisions
31for maintenance and management.

32(D) Distribution of a membership information report to any
33prospective purchaser of a membership share, prior to purchase
34of that share. The membership information report shall contain
35full disclosure of the financial obligations and responsibilities of
36cooperative membership, the resale of shares, the financing of the
37cooperative including any arrangements made with any partners,
38membership share accounts, occupancy restrictions, management
39arrangements, and any other information pertinent to the benefits,
40risks, and obligations of cooperative ownership.

P5    1(4) Every party that executes the regulatory agreement shall
2satisfy itself that the bylaws, articles of incorporation, occupancy
3agreement, subscription agreement, any lease of the regulated
4premises, any arrangement with partners, and arrangement for
5membership share accounts provide adequate protection of the
6rights of cooperative members.

7(5) Every provider of financing or subsidies shall receive from
8the attorney for the recipient of the financing or subsidy a legal
9opinion that the cooperative meets the requirements of Section
10817 of the Civil Code and the exemption provided by this section.

11(c) Any limited-equity cooperative, or workforce housing
12cooperative trust that meets the requirements for exemption
13pursuant to subdivision (b) may elect to be subject to all provisions
14of this chapter.

15(d) The developer of the cooperative shall notify the Bureau of
16Real Estate, on a form provided by the bureau, that an exemption
17is claimed under this section. The Bureau of Real Estate shall retain
18this form for at least four years for statistical purposes.

19

SEC. 2.  

Section 11013.1 of the Business and Professions Code
20 is amended to read:

21

11013.1.  

It shall be unlawful, except as provided in Section
2211013.2 or 11013.6, for the owner, subdivider, or agent to sell or
23lease lots or parcels within a subdivision that is subject to a blanket
24encumbrance unless there exists in the blanket encumbrance or
25other supplementary agreement a provision, hereinafter referred
26to as a release clause, which by its terms shall unconditionally
27provide that the purchaser or lessee of a lot or parcel can obtain
28legal title or other interest contracted for, free and clear of the
29blanket encumbrance, upon compliance with the terms and
30conditions of the purchase or lease.

31

SEC. 3.  

Section 11013.6 is added to the Business and
32Professions Code
, to read:

33

11013.6.  

Notwithstanding Sections 11013.1 and 11013.2, an
34individual interest in a stock cooperative, as defined in Section
354190 of the Civil Code, or a limited equity housing cooperative,
36as defined in Section 817 of the Civil Code, may be sold or leased
37subject to a blanket encumbrance if all of the following conditions
38are met:

P6    1(a) The notice required pursuant to Section 1133 of the Civil
2Code is provided to every prospective purchaser and lessee of the
3interest and is included in every purchase and lease contract.

4(b) The property subject to the sale or lease has obtained a public
5report from the Bureau of Real Estate that accounts for the blanket
6encumbrance.

7(c) The governing documents for the association require the
8association to create within one year of the sale of at least 50
9percent of the individual interests in the stock cooperative or
10limited-equity housing cooperative and maintain during the term
11of the blanket encumbrance a financing reserve amount equal to
12at least three months of the amount of the debt service payments
13due on the blanket encumbrance or a lesser amount acceptable to
14the commissioner.

15

SEC. 4.  

Section 5100 of the Civil Code is amended to read:

16

5100.  

(a) Notwithstanding any other law or provision of the
17governing documents, elections regarding assessments legally
18requiring a vote, election and removal of directors, amendments
19to the governing documents, or the grant of exclusive use of
20common area pursuant to Section 4600 shall be held by secret
21ballot in accordance with the procedures set forth in this article.

22(b) This article also governs an election on any topic that is
23expressly identified in the operating rules as being governed by
24this article.

25(c) The provisions of this article apply to both incorporated and
26unincorporated associations, notwithstanding any contrary
27 provision of the governing documents.

28(d) The procedures set forth in this article shall apply to votes
29cast directly by the membership, but do not apply to votes cast by
30delegates or other elected representatives.

31(e) In the event of a conflict between this article and the
32provisions of the Nonprofit Mutual Benefit Corporation Law (Part
333 (commencing with Section 7110) of Division 2 of Title 1 of the
34Corporations Code) relating to elections, the provisions of this
35article shall prevail.

36(f) Directors shall not be required to be elected pursuant to this
37article if the governing documents provide that one member from
38each separate interest is a director.

39

SEC. 5.  

No reimbursement is required by this act pursuant to
40Section 6 of Article XIII B of the California Constitution because
P7    1the only costs that may be incurred by a local agency or school
2district will be incurred because this act creates a new crime or
3infraction, eliminates a crime or infraction, or changes the penalty
4for a crime or infraction, within the meaning of Section 17556 of
5the Government Code, or changes the definition of a crime within
6the meaning of Section 6 of Article XIII B of the California
7Constitution.

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