BILL NUMBER: SB 1026 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 28, 2014
AMENDED IN SENATE MARCH 24, 2014
INTRODUCED BY Senator Vidak
FEBRUARY 14, 2014
An act to amend Sections 5705, 5710, and 6822 of the Civil Code,
relating to common interest developments.
LEGISLATIVE COUNSEL'S DIGEST
SB 1026, as amended, Vidak. Common interest developments:
assessment collection: notice.
The Davis-Stirling Common Interest Development Act governs the
management and operation of common interest developments, except for
those developments limited to industrial or commercial uses, which
are governed by the Commercial and Industrial Common Interest
Development Act. Each act requires specified procedures for the
collection of delinquent assessments, including, but not limited to,
a procedure for giving notice to an owner of a separate interest of
collection actions.
This bill would allow, would, until
January 1, 2019, authorize, under certain circumstances, an
association governed by either act to serve an owner or owner's
representative with notice of a foreclosure action to collect
delinquent assessments by posting a copy of the notice on the owner's
separate interest in a manner most likely to give actual notice to
the party to be served and mailing a copy of the notice, as
specified. The bill would also, until January 1, 2019,
authorize, under certain circumstances the notice of foreclosure to
be published.
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 5705 of the Civil Code is amended to read:
5705. (a) Notwithstanding any law or any provisions of the
governing documents to the contrary, this section shall apply to
debts for assessments that arise on and after January 1, 2006.
(b) Prior to initiating a foreclosure on an owner's separate
interest, the association shall offer the owner and, if so requested
by the owner, participate in dispute resolution pursuant to the
association's "meet and confer" program required in Article 2
(commencing with Section 5900) of Chapter 10 or alternative dispute
resolution as set forth in Article 3 (commencing with Section 5925)
of Chapter 10. The decision to pursue dispute resolution or a
particular type of alternative dispute resolution shall be the choice
of the owner, except that binding arbitration shall not be available
if the association intends to initiate a judicial foreclosure.
(c) The decision to initiate foreclosure of a lien for delinquent
assessments that has been validly recorded shall be made only by the
board and may not be delegated to an agent of the association. The
board shall approve the decision by a majority vote of the directors
in an executive session. The board shall record the vote in the
minutes of the next meeting of the board open to all members. The
board shall maintain the confidentiality of the owner or owners of
the separate interest by identifying the matter in the minutes by the
parcel number of the property, rather than the name of the owner or
owners. A board vote to approve foreclosure of a lien shall take
place at least 30 days prior to any public sale.
(d) (1) The board shall provide notice by personal service in
accordance with the manner of service of summons in Article 3
(commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of
the Code of Civil Procedure to an owner of a separate interest who
occupies the separate interest or to the owner's legal
representative, if the board votes to foreclose upon the separate
interest. The board shall provide written notice to an owner of a
separate interest who does not occupy the separate interest by
first-class mail, postage prepaid, at the most current address shown
on the books of the association. In the absence of written
notification by the owner to the association, the address of the
owner's separate interest may be treated as the owner's mailing
address.
(2) If after reasonable diligence the notice is not able to be
served on an owner or owner's representative in accordance with the
manner of service set forth in paragraph (1), the association may
post a copy of the notice on the owner's separate interest in a
manner most likely to give actual notice to the party to be served
and mail a copy of the notice by first-class mail to all known
addresses of the owner or owner's representative. If the association
effects service by posting and mailing in accordance with this
paragraph, the association shall record
provide to the owner or owner's representative a declaration of
diligence, specifying in reasonable detail the efforts made to
effect service in accordance with the manner of service of summons in
Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5
of Part 2 of the Code of Civil Procedure. The declaration shall
contain the name, address, and telephone number of the association,
as well as the legal description and assessor's parcel number of the
separate interest subject to the notice. The declaration shall
be sent by first-class mail to all known addresses of the owner or
owner's representative.
(3) If after reasonable diligence the notice is not able to be
served on an owner or owner's representative in accordance with the
manner of service set forth in paragraph (1), and after posting and
mailing a copy of the notice and providing a declaration as set forth
in paragraph (2), the association may publish the notice once per
week for three consecutive calendar weeks, and except for the
reference to the time period, shall otherwise conform to the
requirements of paragraph (2) of subdivision (b) of Section 2924f.
(4) For purposes of this subdivision, "diligence" means an attempt
to effect personal service by a process server who is not affiliated
with the common interest development, the homeowners association, or
its managers, attorneys, or agents, registered pursuant to Section
22350 of the Business and Professions Code, on three separate days at
three different times of day, including at least one attempt after
normal business hours. At least one attempt at personal service shall
occur on a weekday, and at least one attempt shall occur on a
weekend day.
(5) Paragraphs (2) to (4), inclusive, of this subdivision shall
become inoperative on January 1, 2019.
SEC. 2. Section 5710 of the Civil Code is amended to read:
5710. (a) Any sale by the trustee shall be conducted in
accordance with Sections 2924, 2924b, and 2924c applicable to the
exercise of powers of sale in mortgages and deeds of trust.
(b) (1) In addition to the requirements of Section 2924, the
association shall serve a notice of default on the person named as
the owner of the separate interest in the association's records or,
if that person has designated a legal representative pursuant to this
subdivision, on that legal representative. Service shall be in
accordance with the manner of service of summons in Article 3
(commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of
the Code of Civil Procedure. An owner may designate a legal
representative in a writing that is mailed to the association in a
manner that indicates that the association has received it.
(2) If after reasonable diligence the notice is not able to be
served on an owner or owner's representative in accordance with the
manner of service set forth in paragraph (1), the association may
post a copy of the notice on the owner's separate interest in a
manner most likely to give actual notice to the party to be served
and mail a copy of the notice by first-class mail to all known
addresses of the owner or owner's representative. If the association
effects service by posting and mailing in accordance with this
paragraph, the association shall record
provide to the owner or owner's representative a declaration of
diligence, specifying in reasonable detail the efforts made to
effect service in accordance with the manner of service of summons in
Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5
of Part 2 of the Code of Civil Procedure. The declaration shall
contain the name, address, and telephone number of the association,
as well as the legal description and assessor's parcel number of the
separate interest subject to the notice. The declaration shall
be sent by first-class mail to all known addresses of the owner or
owner's representative.
(3) If after reasonable diligence the notice is not able to be
served on an owner or owner's representative in accordance with the
manner of service set forth in paragraph (1), and after posting and
mailing a copy of the notice and providing a declaration as set forth
in paragraph (2), the association may publish the notice once per
week for three consecutive calendar weeks, and except for the
reference to the time period, shall otherwise conform to the
requirements of paragraph (2) of subdivision (b) of Section 2924f.
(4) For purposes of this section, "diligence" means an attempt to
effect personal service by a process server who is not affiliated
with the common interest development, the homeowners association, or
its managers, attorneys, or agents, registered pursuant to Section
22350 of the Business and Professions Code, on three separate days at
three different times of day, including at least one attempt after
normal business hours. At least one attempt at personal service shall
occur on a weekday, and at least one attempt shall occur on a
weekend day.
(5) Paragraphs (2) to (4), inclusive, of this subdivision shall
become inoperative on January 1, 2019.
(c) The fees of a trustee may not exceed the amounts prescribed in
Sections 2924c and 2924d, plus the cost of service for either of the
following:
(1) The notice of default pursuant to subdivision (b).
(2) The decision of the board to foreclose upon the separate
interest of an owner as described in subdivision (d) of Section 5705.
SEC. 3. Section 6822 of the Civil Code is amended to read:
6822. (a) Any sale by the trustee shall be conducted in
accordance with Sections 2924, 2924b, and 2924c applicable to the
exercise of powers of sale in mortgages and deeds of trust.
(b) (1) In addition to the requirements of Section 2924, the
association shall serve a notice of default on the person named as
the owner of the separate interest in the association's records or,
if that person has designated a legal representative pursuant to this
subdivision, on that legal representative. Service shall be in
accordance with the manner of service of summons in Article 3
(commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of
the Code of Civil Procedure. An owner may designate a legal
representative in a writing that is mailed to the association in a
manner that indicates that the association has received it.
(2) If after reasonable diligence the notice is not able to be
served on an owner or owner's representative in accordance with the
manner of service set forth in paragraph (1), the association may
post a copy of the notice on the owner's separate interest in a
manner most likely to give actual notice to the party to be served
and mail a copy of the notice by first-class mail to all known
addresses of the owner or owner's representative. If the association
effects service by posting and mailing in accordance with this
paragraph, the association shall record
provide to the owner or owner's representative a declaration of
diligence, specifying in reasonable detail the efforts made to
effect service in accordance with the manner of service of summons in
Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5
of Part 2 of the Code of Civil Procedure. The declaration shall
contain the name, address, and telephone number of the association,
as well as the legal description and assessor's parcel number of the
separate interest subject to the notice. The declaration shall
be sent by first-class mail to all known addresses of the owner or
owner's representative.
(3) If after reasonable diligence the notice is not able to be
served on an owner or owner's representative in accordance with the
manner of service set forth in paragraph (1), and after posting and
mailing a copy of the notice and providing a declaration as set forth
in paragraph (2), the association may publish the notice once per
week for three consecutive calendar weeks, and except for the
reference to the time period, shall otherwise conform to the
requirements of paragraph (2) of subdivision (b) of Section 2924f.
(4) For purposes of this section, "diligence" means an attempt to
effect personal service by a process server who is not affiliated
with the common interest development, the homeowners association, or
its managers, attorneys, or agents, registered pursuant to Section
22350 of the Business and Professions Code, on three separate days at
three different times of day, including at least one attempt after
normal business hours. At least one attempt at personal service shall
occur on a weekday, and at least one attempt shall occur on a
weekend day.
(5) Paragraphs (2) to (4), inclusive, of this subdivision shall
become inoperative on January 1, 2019.
(c) The fees of a trustee may not exceed the amounts prescribed in
Sections 2924c and 2924d, plus the cost of service for the notice of
default pursuant to subdivision (b).