AB 807, as amended, Mark Stone. Real estate transfer fees: recorded documents.
Existing law defines a transfer fee as a fee payment requirement imposed in any covenant, restriction, or condition contained in any deed, contract, security instrument, or other document affecting the transfer or sale of real property that requires a fee be paid upon transfer of the real property, with specified exceptions. Existing law, with regard to a transfer fee imposed upon real property on or after January 1, 2008, requires the person or entity imposing the transfer fee, as a condition of payment of the fee, to record a specified document describing the transfer fee concurrently with the instrument creating the transfer fee requirement. Existing law requires these recorded documents to include information on the amount of the fee and actual dollar examples of the fee for a residential property, among other things. Existing law requires a transferor of residential real property subject to transfer fees to make a specified disclosure regarding those fees.
This bill would specify that the required information on the recorded document include the method for calculating the amount of the transfer fee, if not a flat amount or a percentage of the sales price and include the actual dollar examples of the fee for a residential property if the amount of the fee is based on the price of the real property. The bill would also require the transferor of residential real property subject to transfer fees to make the specified disclosure regarding those fees if the recorded document describing the transfer fees has not already been provided. The bill would also clarify the definition of a transfer fee.
begin insertExisting law excludes from the definition of a transfer fee any fee reflected in a document recorded against the property on or before December 31, 2007, that is separate from any covenants, conditions, and restrictions, and that provides a prospective transferee notice of specified information, including the amount or method of calculation of the fee.
end insertbegin insertThis bill would specify that the information shall be set forth in a single document and may not be incorporated by reference from any other document.
end insertThis bill would also make a legislative finding that this bill is clarifying and declaratory of existing law.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1098 of the Civil Code is amended to
2read:
begin insert(a)end insertbegin insert end insert A “transfer fee” is any fee payment requirement
4imposed within a covenant, restriction, or condition contained in
5any deed, contract, security instrument, or other document affecting
6the transfer or sale of, or any interest in, real property that requires
7a fee be paid as a result of transfer of the real property. A transfer
8fee does not include any of the following:
9(a)
end delete10begin insert(1)end insert Fees or taxes imposed by a governmental entity.
11(b)
end delete12begin insert(2)end insert Fees pursuant to mechanics’ liens.
13(c)
end delete
14begin insert(3)end insert Fees pursuant to court-ordered transfers,
payments, or
15judgments.
16(d)
end delete
17begin insert(4)end insert Fees pursuant to property agreements in connection with a
18legal separation or dissolution of marriage.
P3 1(e)
end delete
2begin insert(5)end insert Fees, charges, or payments in connection with the
3administration of estates or trusts pursuant to Division 7
4(commencing with Section 7000),
Division 8 (commencing with
5Section 13000), or Division 9 (commencing with Section 15000)
6of the Probate Code.
7(f)
end delete
8begin insert(6)end insert Fees, charges, or payments imposed by lenders or purchasers
9of loans, as these entities are described in subdivision (c) of Section
1010232 of the Business and Professions Code.
11(g)
end delete
12begin insert(7)end insert Assessments, charges, penalties, or fees authorized by the
13Davis-Stirling Common Interest Development Act (Part 5
14(commencing with Section 4000) of Division 4) or by the
15Commercial and Industrial Common Interest Development Act
16(Part 5.3 (commencing with Section 6500) of Division 4).
17(h)
end delete
18begin insert(8)end insert Fees, charges, or payments for failing to comply with, or
19for transferring the real property prior to satisfying, an obligation
20to construct residential improvements on the real property.
21(i)
end delete
22begin insert(9)end insert Any fee reflected in a document recorded against the
23property on or before December 31, 2007, that is separate from
24any covenants, conditions, and restrictions, and that substantially
25complies with subdivision (a) of Section 1098.5 by providing a
26prospective transferee notice of the following:
27(1)
end delete28begin insert(A)end insert Payment of a transfer fee is required.
29(2)
end delete30begin insert(end insertbegin insertB)end insert The amount or method of calculation of the fee.
31(3)
end delete
32begin insert(C)end insert The date or circumstances under which the transfer fee
33payment requirement expires, if any.
34(4)
end delete35begin insert(D)end insert The entity to which the fee will be paid.
36(5)
end delete37begin insert(E)end insert The general purposes for which the fee will be used.
begin insert
38(b) The information in paragraph (9) of subdivision (a) shall
39be set forth in a single document and may not be incorporated by
40reference from any other document.
Section 1098.5 of the Civil Code is amended to read:
(a) For transfer fees, as defined in Section 1098,
3imposed prior to January 1, 2008, the receiver of the fee, as a
4condition of payment of the fee on or after January 1, 2009, shall
5record, on or before December 31, 2008, against the real property
6in the office of the county recorder for the county in which the real
7property is located a separate document that meets all of the
8following requirements:
9(1) The title of the document shall be “Payment of Transfer Fee
10Required” in at least 14-point boldface type.
11(2) The document shall include all of the following information:
12(A) The names of all current owners of the real property subject
13to the transfer fee, and the legal description and assessor’s parcel
14number for the affected real property.
15(B) The amount, if the fee is a flat amount, or the percentage
16of the sales price constituting the cost of the fee.
17(C) If the real property is residential property, actual dollar-cost
18examples of the fee for a home priced at two hundred fifty thousand
19dollars ($250,000), five hundred thousand dollars ($500,000), and
20seven hundred fifty thousand dollars ($750,000).
21(D) The date or circumstances under which the transfer fee
22payment requirement expires, if any.
23(E) The purpose for which the funds from the fee will be used.
24(F) The entity to which funds from the fee will be paid and
25specific contact information regarding where the funds are to be
26sent.
27(G) The signature of the authorized representative of the entity
28to which funds from the fee will be paid.
29(b) When a transfer fee, as defined in Section 1098, is imposed
30upon real property on or after January 1, 2008, the person or entity
31imposing the transfer fee, as a condition of payment of the fee,
32shall record in the office of the county recorder for the county in
33which the real property is located, concurrently with the instrument
34creating the transfer fee
requirement, a separate document that
35meets all of the following requirements:
36(1) The title of the document shall be “Payment of Transfer Fee
37Required” in at least 14-point boldface type.
38(2) The document shall include all of the following information:
P5 1(A) The names of all current owners of the real property subject
2to the transfer fee, and the legal description and assessor’s parcel
3number for the affected real property.
4(B) The amount, if the fee is a flat amount, the percentage of
5the sales price constituting the cost of the fee, or the method for
6calculating the amount.
7(C) If the real property is
residential property and the amount
8of the fee is based on the price of the real property, actual
9dollar-cost examples of the fee for a home priced at two hundred
10fifty thousand dollars ($250,000), five hundred thousand dollars
11($500,000), and seven hundred fifty thousand dollars ($750,000).
12(D) The date or circumstances under which the transfer fee
13payment requirement expires, if any.
14(E) The purpose for which the funds from the fee will be used.
15(F) The entity to which funds from the fee will be paid and
16specific contact information regarding where the funds are to be
17sent.
18(G) The signature of the authorized representative of the entity
19to which funds from
the fee will be paid.
20(c) The recorder shall only be responsible for examining that
21the document required by subdivision (a) or (b) contains the
22information required by subparagraphs (A), (F), and (G) of
23paragraph (2) of subdivision (a) or (b). The recorder shall index
24the document under the names of the persons and entities identified
25in subparagraphs (A) and (F) of paragraph (2) of subdivision (a)
26or (b). The recorder shall not examine any other information
27contained in the document required by subdivision (a) or (b).
Section 1102.6e of the Civil Code is amended to read:
If a property being transferred on or after January 1,
302008, is subject to a transfer fee, as defined in Section 1098, the
31transferor shall provide, at the same time as the transfer disclosure
32statement required pursuant to Section 1102.6 is provided if the
33document required by subdivision (b) of Section 1098.5 has not
34already been provided, an additional disclosure statement
35containing all of the following:
36(a) Notice that payment of a transfer fee is required as a
result
37of transfer of the property.
38(b) The amount of the fee required for the asking price of the
39real property, if the amount of the fee is based on the price of the
40real property, and a description of how the fee is calculated.
P6 1(c) Notice that the final amount of the fee may be different if
2the fee is based upon a percentage of the final sale price.
3(d) The entity to which funds from the fee will be paid.
4(e) The purposes for which funds from the fee will be used.
5(f) The date or circumstances under which the obligation to pay
6the transfer fee expires, if any.
The Legislature finds and declares that the amendments
8made by this act to Sections 1098, 1098.5, and 1102.6e of the Civil
9Code are clarifying and declaratory of existing law.
O
98