BILL NUMBER: AB 807 CHAPTERED
BILL TEXT
CHAPTER 634
FILED WITH SECRETARY OF STATE OCTOBER 8, 2015
APPROVED BY GOVERNOR OCTOBER 8, 2015
PASSED THE SENATE SEPTEMBER 8, 2015
PASSED THE ASSEMBLY SEPTEMBER 9, 2015
AMENDED IN SENATE SEPTEMBER 3, 2015
AMENDED IN SENATE JUNE 16, 2015
AMENDED IN ASSEMBLY APRIL 8, 2015
INTRODUCED BY Assembly Member Mark Stone
(Principal coauthor: Assembly Member Gatto)
FEBRUARY 26, 2015
An act to amend Sections 1098, 1098.5, and 1102.6e of the Civil
Code, relating to real estate transfer fees.
LEGISLATIVE COUNSEL'S DIGEST
AB 807, 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.
Existing 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.
This 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.
This bill would provide that a fee reflected in a document
recorded against the property on or before December 31, 2007, that is
not separate from any covenants, conditions, and restrictions, or
that incorporates by reference from another document, constitutes a
transfer fee for the purposes of requirements relating to these fees.
The bill would make unenforceable a transfer fee recorded against
the property on or before December 31, 2007, that complies with the
provisions described above and that incorporates by reference from
another document unless it is recorded against the property on or
before December 31, 2016, in a single document that complies with the
provisions described above.
This bill would also make a legislative finding that certain
changes made by this bill are clarifying and declaratory of existing
law.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1098 of the Civil Code is amended to read:
1098. (a) A "transfer fee" is any fee payment requirement imposed
within a covenant, restriction, or condition contained in any deed,
contract, security instrument, or other document affecting the
transfer or sale of, or any interest in, real property that requires
a fee be paid as a result of transfer of the real property. A
transfer fee does not include any of the following:
(1) Fees or taxes imposed by a governmental entity.
(2) Fees pursuant to mechanics' liens.
(3) Fees pursuant to court-ordered transfers, payments, or
judgments.
(4) Fees pursuant to property agreements in connection with a
legal separation or dissolution of marriage.
(5) Fees, charges, or payments in connection with the
administration of estates or trusts pursuant to Division 7
(commencing with Section 7000), Division 8 (commencing with Section
13000), or Division 9 (commencing with Section 15000) of the Probate
Code.
(6) Fees, charges, or payments imposed by lenders or purchasers of
loans, as these entities are described in subdivision (c) of Section
10232 of the Business and Professions Code.
(7) Assessments, charges, penalties, or fees authorized by the
Davis-Stirling Common Interest Development Act (Part 5 (commencing
with Section 4000) of Division 4) or by the Commercial and Industrial
Common Interest Development Act (Part 5.3 (commencing with Section
6500) of Division 4).
(8) Fees, charges, or payments for failing to comply with, or for
transferring the real property prior to satisfying, an obligation to
construct residential improvements on the real property.
(9) (A) 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 substantially
complies with subdivision (a) of Section 1098.5 by providing a
prospective transferee notice of the following:
(i) Payment of a transfer fee is required.
(ii) The amount or method of calculation of the fee.
(iii) The date or circumstances under which the transfer fee
payment requirement expires, if any.
(iv) The entity to which the fee will be paid.
(v) The general purposes for which the fee will be used.
(B) A fee reflected in a document recorded against the property on
or before December 31, 2007, that is not separate from any
covenants, conditions, and restrictions, or that incorporates by
reference from another document, is a "transfer fee" for purposes of
Section 1098.5. A transfer fee recorded against the property on or
before December 31, 2007, that complies with subparagraph (A) and
incorporates by reference from another document is unenforceable
unless recorded against the property on or before December 31, 2016,
in a single document that complies with subdivision (b) and with
Section 1098.5.
(b) The information in paragraph (9) of subdivision (a) shall be
set forth in a single document and shall not be incorporated by
reference from any other document.
SEC. 2. Section 1098.5 of the Civil Code is amended to read:
1098.5. (a) For transfer fees, as defined in Section 1098,
imposed prior to January 1, 2008, the receiver of the fee, as a
condition of payment of the fee on or after January 1, 2009, shall
record, on or before December 31, 2008, against the real property in
the office of the county recorder for the county in which the real
property is located a separate document that meets all of the
following requirements:
(1) The title of the document shall be "Payment of Transfer Fee
Required" in at least 14-point boldface type.
(2) The document shall include all of the following information:
(A) The names of all current owners of the real property subject
to the transfer fee, and the legal description and assessor's parcel
number for the affected real property.
(B) The amount, if the fee is a flat amount, or the percentage of
the sales price constituting the cost of the fee.
(C) If the real property is residential property, actual
dollar-cost examples of the fee for a home priced at two hundred
fifty thousand dollars ($250,000), five hundred thousand dollars
($500,000), and seven hundred fifty thousand dollars ($750,000).
(D) The date or circumstances under which the transfer fee payment
requirement expires, if any.
(E) The purpose for which the funds from the fee will be used.
(F) The entity to which funds from the fee will be paid and
specific contact information regarding where the funds are to be
sent.
(G) The signature of the authorized representative of the entity
to which funds from the fee will be paid.
(b) When a transfer fee, as defined in Section 1098, is imposed
upon real property on or after January 1, 2008, the person or entity
imposing the transfer fee, as a condition of payment of the fee,
shall record in the office of the county recorder for the county in
which the real property is located, concurrently with the instrument
creating the transfer fee requirement, a separate document that meets
all of the following requirements:
(1) The title of the document shall be "Payment of Transfer Fee
Required" in at least 14-point boldface type.
(2) The document shall include all of the following information:
(A) The names of all current owners of the real property subject
to the transfer fee, and the legal description and assessor's parcel
number for the affected real property.
(B) The amount, if the fee is a flat amount, the percentage of the
sales price constituting the cost of the fee, or the method for
calculating the amount.
(C) If the real property is residential property and the amount of
the fee is based on the price of the real property, actual
dollar-cost examples of the fee for a home priced at two hundred
fifty thousand dollars ($250,000), five hundred thousand dollars
($500,000), and seven hundred fifty thousand dollars ($750,000).
(D) The date or circumstances under which the transfer fee payment
requirement expires, if any.
(E) The purpose for which the funds from the fee will be used.
(F) The entity to which funds from the fee will be paid and
specific contact information regarding where the funds are to be
sent.
(G) The signature of the authorized representative of the entity
to which funds from the fee will be paid.
(c) The recorder shall only be responsible for examining that the
document required by subdivision (a) or (b) contains the information
required by subparagraphs (A), (F), and (G) of paragraph (2) of
subdivision (a) or (b). The recorder shall index the document under
the names of the persons and entities identified in subparagraphs (A)
and (F) of paragraph (2) of subdivision (a) or (b). The recorder
shall not examine any other information contained in the document
required by subdivision (a) or (b).
SEC. 3. Section 1102.6e of the Civil Code is amended to read:
1102.6e. If a property being transferred on or after January 1,
2008, is subject to a transfer fee, as defined in Section 1098, the
transferor shall provide, at the same time as the transfer disclosure
statement required pursuant to Section 1102.6 is provided if the
document required by subdivision (b) of Section 1098.5 has not
already been provided, an additional disclosure statement containing
all of the following:
(a) Notice that payment of a transfer fee is required as a result
of transfer of the property.
(b) The amount of the fee required for the asking price of the
real property, if the amount of the fee is based on the price of the
real property, and a description of how the fee is calculated.
(c) Notice that the final amount of the fee may be different if
the fee is based upon a percentage of the final sale price.
(d) The entity to which funds from the fee will be paid.
(e) The purposes for which funds from the fee will be used.
(f) The date or circumstances under which the obligation to pay
the transfer fee expires, if any.
SEC. 4. The Legislature finds and declares that the addition of
subdivision (b) to Section 1098 of, and the amendments to Sections
1098.5 and 1102.6e of, the Civil Code made by this act are clarifying
and declaratory of existing law.