Amended in Senate June 22, 2016

Amended in Senate June 6, 2016

Amended in Assembly May 10, 2016

Amended in Assembly April 28, 2016

Amended in Assembly April 11, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2693


Introduced by Assembly Member Dababneh

(Coauthors: Assembly Members Travis Allen, Hadley, and Linder)

February 19, 2016


An act to amend Section 53328.1 of the Government Code, and to amend Section 5898.15 of, to amend, renumber, and add Section 5898.16 of, and to add Section 5898.17 to, the Streets and Highways Code, relating to property improvements.

LEGISLATIVE COUNSEL’S DIGEST

AB 2693, as amended, Dababneh. Financing requirements: property improvements.

(1) Existing law authorizes the legislative body of a public agency, as defined, to determine that it would be convenient, advantageous, and in the public interest to designate an area within which authorized public agency officials and property owners may enter into voluntary contractual assessments to finance certain improvements, including the installation of distributed generation renewable energy sources or energy or water efficiency improvements that are permanently fixed to real property, as specified.

Existing law prohibits a public agency from permitting a property owner to participate in any program established pursuant to these provisions if the owner’s participation would result in the total amount of any annual property taxes and assessments exceeding 5% of the property’s market value, as determined at the time of approval of the owner’s contractual assessment.

This bill would also prohibit a public agency from permitting a property owner to participate in a program pursuant to these provisions unless the property ownerbegin delete has been provided with a completed financing estimate document or a substantially equivalent documentend deletebegin insert satisfies certain conditionsend insert and the property owner is given the right to cancel the contractual assessment at any time prior to midnight on the 3rd business day afterbegin delete the date of the transaction to enter into the agreementend deletebegin insert certain events occurend insert without penalty or obligation, consistent with certain requirements.begin delete The bill would provide that the failure of a public agency to comply with these prohibitions renders the contractual obligations of the property owner for the contractual assessment void.end deletebegin insert The bill would require a financing estimate document or a substantially equivalent document to be completed and delivered to a property owner at least 3 business days before the property owner consummates a voluntary contractual assessment pursuant to one of these programs. The bill would prohibit a public agency or other party to a voluntary contractual assessment pursuant to one of these programs to make any representations to a property owner regarding the effect the financed improvements will have on the market value of the property unless the public agency or other party derives its estimates of market value using specified methods.end insert

begin delete

This bill would also prohibit a public agency from permitting a property owner to participate in a program pursuant to these provisions if the total mortgage-related debt and contractual assessment-related debt on the underlying property would exceed the fair market value of the property at the time of the owner’s contractual assessment, if the mortgage-related debt on the property alone is equal to 90% or greater of the property’s fair market value at the time of the approval of the owner’s contractual assessment, or if the owner is unable to meet specified requirements.

end delete

This bill would limit these provisions to a property owner who seeks to participate in a programbegin insert established to finance the installation of distributed generation renewable energy sources or energy or water efficiency improvements that are permanently fixed to real propertyend insert pursuant to these provisions for a residential property with 4 or fewer units.

(2) The Mello-Roos Community Facilities Act of 1982 specifies the requirements for the establishment of a community facilities district, including, among other things, a petition, a hearing, the establishment of the boundaries of the community facilities district, and an election on the question. Existing law authorizes a community facilities district formed pursuant to an alternative procedure under which the district initially consists solely of territory proposed for annexation to the community facilities district in the future and territory is annexed and subjected to special taxes only upon unanimous approval of the owners, to finance and refinance the acquisition, installation, and improvement of energy efficiency, water conservation, and renewable energy improvements.

This bill would require a legislative body to comply with the requirements described above prior to the annexation of a parcel or parcels to a community facilities district formed pursuant to the alternative procedure.begin insert The bill would prohibit a parcel or parcels from being annexed to a community facilities district formed pursuant to the alternative procedure unlessend insertbegin insert the parcel satisfies specified conditions.end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

P3    1

SECTION 1.  

(a) The Legislature finds and declares all of the
2following:

3(1) The Property Assessed Clean Energy program has been
4promoted in California widely as an innovative and alternative
5form of financing for environmental improvements for the benefit
6of the public and California’s environment.

7(2) The promotion of the Property Assessed Clean Energy
8financing is now a popular and widespread form of alternative
9financing for consumers seeking solar energy, water conservation,
10energy efficiency, and earthquake retrofitting improvements to the
11benefit of all Californians.

12(3) The consumer obligation to repay voluntary contractual
13assessments created by the Property Assessed Clean Energy
P4    1program is sometimes misunderstood and may affect the
2consumer’s ability to refinance their loan or sell their property.

3(4) Making residential real estate secured loans to consumers
4through Property Assessed Clean Energy financing for home
5improvements has grown rapidly, raising questions as to whether
6the Property Assessed Clean Energy program is adequately
7supported by government regulation.

8(5) The passage of this act is essential to promote standardized
9disclosures and protections for consumers to ensure that the
10Property Assessed Clean Energy program can continue to be widely
11used to offset the adverse impacts of years of climate change.

12(b) This act shall be known, and may be cited, as the PACE
13Preservation and Consumer Protections Act.

14

SEC. 2.  

Section 53328.1 of the Government Code is amended
15to read:

16

53328.1.  

(a) As an alternate and independent procedure for
17forming a community facilities district, the legislative body may
18form a community facilities district that initially consists solely
19of territory proposed for annexation to the community facilities
20district in the future, with the condition that a parcel or parcels
21within that territory may be annexed to the community facilities
22district and subjected to the special tax only with the unanimous
23approval of the owner or owners of the parcel or parcels at the
24time that the parcel or parcels are annexed. In that case, the
25legislative body shall follow the procedures set forth in this article
26for the formation of a community facilities district, with the
27following exceptions:

28(1) The legislative body shall not be obligated to specify the
29rate or rates of special tax in the resolution of intention or the
30resolution of formation, provided that both of the following are
31met:

32(A) The resolution of intention and the resolution of formation
33include a statement that the rate shall be established in an amount
34required to finance or refinance the authorized improvements and
35to pay the district’s administrative expenses.

36(B) The maximum rate of special tax applicable to a parcel or
37parcels shall be specified in the unanimous approval described in
38this section relating to the parcel or parcels.

39(2) The legislative body shall not be obligated to specify in the
40resolution of intention the conditions under which the obligation
P5    1to pay the specified special tax may be prepaid and permanently
2satisfied. Instead, a prepayment provision may be included in the
3unanimous approval of the owner or owners of each parcel or
4parcels at the time that the parcel or parcels are annexed to the
5community facilities district.

6(3) In lieu of approval pursuant to an election held in accordance
7with the procedures set forth in Sections 53326, 53327, 53327.5,
8and 53328, the appropriations limit for the community facilities
9district, the applicable rate of the special tax and the method of
10apportionment and manner of collection of that tax, and the
11authorization to incur bonded indebtedness for the community
12facilities district shall be specified and be approved by the
13unanimous approval of the owner or owners of each parcel or
14parcels at the time that the parcel or parcels are annexed to the
15community facilities district. No additional hearings or procedures
16are required, and the unanimous approval shall be deemed to
17constitute a unanimous vote in favor of the appropriations limit
18for the community facilities district, the authorization to levy the
19special tax on the parcel or parcels, and the authorization to incur
20bonded indebtedness for the community facilities district.

21(4) Notwithstanding Section 53324, this paragraph establishes
22the applicable protest provisions in the event a local agency forms
23a community facilities district pursuant to the procedures set forth
24in this section. If 50 percent or more of the registered voters, or
25six registered voters, whichever is more, residing within the
26territory proposed to be annexed to the community facilities district
27in the future, or if the owners of one-half or more of the area of
28land proposed to be annexed in the future and not exempt from
29the special tax, file written protests against establishment of the
30community facilities district, and protests are not withdrawn so as
31to reduce the protests to less than a majority, no further proceedings
32to form the community facilities district shall be undertaken for a
33period of one year from the date of decision of the legislative body
34on the issues discussed at the hearing. If the majority protests of
35the registered voters or of the landowners are only against the
36furnishing of a specified type or types of facilities or services
37within the district, or against levying a specified special tax, those
38types of facilities or services or the specified special tax shall be
39eliminated from the resolution of formation.

P6    1(5) The legislative body shall not record a notice of special tax
2lien against any parcel or parcels in the community facilities district
3until the owner or owners of the parcel or parcels have given their
4unanimous approval of the parcel’s or parcels’ annexation to the
5community facilities district, at which time the notice of special
6tax lien shall be recorded against the parcel or parcels as set forth
7in Section 53328.3.

8(b) Notwithstanding the provisions of Section 53340, after
9adoption of the resolution of formation for a community facilities
10district described in subdivision (a), the legislative body may, by
11ordinance, provide for the levy of the special taxes on parcels that
12will annex to the community facilities district at the rate or rates
13to be approved unanimously by the owner or owners of each parcel
14or parcels to be annexed to the community facilities district and
15for apportionment and collection of the special taxes in the manner
16specified in the resolution of formation. No further ordinance shall
17be required even though no parcels may then have annexed to the
18community facilities district.

19(c) The local agency may bring an action to determine the
20validity of any special taxes levied pursuant to this chapter and
21authorized pursuant to the procedures set forth in this section
22pursuant to Chapter 9 (commencing with Section 860) of Title 10
23of Part 2 of the Code of Civil Procedure. Notwithstanding Section
2453359, if an action is brought by an interested person pursuant to
25Section 863 of the Code of Civil Procedure to determine the
26validity of any special taxes levied against a parcel pursuant to
27this chapter and authorized pursuant to the procedures set forth in
28this section, the action shall be brought pursuant to Chapter 9
29(commencing with Section 860) of Title 10 of Part 2 of the Code
30of Civil Procedure, but shall, notwithstanding the time limits
31specified in Section 860 of the Code of Civil Procedure, be
32commenced within 15 days after the date on which the notice of
33special tax lien is recorded against the parcel. Any appeal from a
34judgment in any action or proceeding described in this subdivision
35shall be commenced within 30 days after entry of judgment.

36(d) A community facilities district formed pursuant to this
37section may only finance facilities pursuant to subdivision (l) of
38Section 53313.5.

39(e) begin insert(1)end insertbegin insertend insert The legislative body shall comply with the requirements
40specified in Sections 5898.16 and 5898.17 of the Streets and
P7    1Highways Code prior to the annexation of a parcel or parcels to a
2community facilities district formed pursuant to this section.

begin insert

3
(2) A parcel or parcels shall not be annexed to a community
4facilities district formed pursuant to this section unless the parcel
5complies with the conditions specified in subdivision (a) of Section
626063 of the Public Resources Code and in subdivision (b) of
7Section 10081 of Title 4 of the California Code of Regulations.

end insert

8(f) In connection with formation of a community facilities
9district and annexation of a parcel or parcels to the community
10 facilities district pursuant to this section, and the conduct of an
11election on the proposition to authorize bonded indebtedness
12pursuant to the alternate procedures set forth in Section 53355.5,
13the local agency may, without additional hearings or procedures,
14designate a parcel or parcels as an improvement area within the
15community facilities district. After the designation of a parcel or
16parcels as an improvement area, all proceedings for approval of
17the appropriations limit, the rate and method of apportionment and
18manner of collection of special tax and the authorization to incur
19bonded indebtedness for the parcel or parcels shall apply only to
20the improvement area.

21(g) In connection with a community facilities district formed
22under this section, as an alternate and independent procedure for
23making the changes described in Section 53330.7, the changes
24may be made with the unanimous approval of the owner or owners
25of the parcel or parcels that will be affected by the change and
26with the written consent of the local agency. No additional hearings
27or procedures are required, and the unanimous approval shall be
28deemed to constitute a unanimous vote in favor of the proposed
29changes. If the proceeds of a special tax are being used to retire
30any debt incurred pursuant to this chapter and the unanimous
31approval relates to the reduction of the special tax rate, the
32unanimous approval shall recite that the reduction or termination
33of the special tax will not interfere with the timely retirement of
34that debt.

35

SEC. 3.  

Section 5898.15 of the Streets and Highways Code is
36amended to read:

37

5898.15.  

(a) A public agency shall not permit a property owner
38to participate in any program established pursuant to this chapter
39if the owner’s participation would result in the total amount of any
40annual property taxes and assessments exceeding 5 percent of the
P8    1property’s market value, as determined at the time of approval of
2the owner’s contractual assessment.

3(b) Nothing in this chapter shall be construed to void or
4otherwise release a property owner from the contractual obligations
5incurred by a contractual assessment on a property, particularly in
6the event that the total amount of annual property taxes and
7assessments exceeds 5 percent of a property’s market value after
8the property owner has entered into a contractual assessment
9pursuant to this chapter.

10(c) This section applies to a property owner who seeks to
11participate in a program established pursuant to this chapter for
12types of property not subject to the requirements of Sections
135898.16 and 5898.17.

14

SEC. 4.  

Section 5898.16 of the Streets and Highways Code is
15amended and renumbered to read:

16

5898.18.  

All references to financing in this chapter shall be
17deemed to also refer to refinancing, except that with respect to
18refinancing, the legislative body shall conclude that providing the
19refinancing will result in an increased adoption of the
20improvements authorized to be financed by this chapter. This
21section does not constitute a change in, but is declaratory and a
22clarification of existing law.

23

SEC. 5.  

Section 5898.16 is added to the Streets and Highways
24Code
, to read:

25

5898.16.  

(a) A public agency shall not permit a property owner
26to participate in any program established pursuant to this chapter
27begin insert for the purposes specified in paragraph (2) of subdivision (a) of
28Section 5898.20end insert
if any of the following apply:

29(1) The property owner’s participation would result in the total
30amount of the annual property taxes and assessments exceeding 5
31percent of the property’sbegin delete fairend delete market value, as determined at the
32time of approval of the property owner’s contractual assessment.

begin delete

33(2) The total mortgage-related debt and contractual
34assessment-related debt on the underlying property would exceed
35the fair market value of the property, as determined at the time of
36the property owner’s contractual assessment.

37(3) The total mortgage-related debt on the property alone is
38equal to 90 percent or greater of the property’s fair market value,
39as determined at the time of approval of the property owner’s
40contractual assessment.

P9    1(4) The property owner is unable to meet all of the following
2criteria:

3(A) The property owner shall certify that the property taxes for
4the property are current and that there is no more than one late
5payment during the previous three years or the period of time
6during which the property owner has owned the property,
7whichever is less.

8(B) The property owner shall certify that he or she is not
9currently in default on any debt secured by the property and that
10there is no more than one late payment during the 12-month period
11preceding the time of the property owner’s contractual assessment
12and that late payment, if any, was submitted no later than 30 days
13after the due date.

14(C) The property owner has not had any active bankruptcies
15within the last seven years. This criterion can be met if a property
16owner’s bankruptcy was discharged between two and seven years
17before the application date and the property owner has not had any
18mortgage or nonmortgage payments past due for more than 60
19days in the most recent 24 months.

20(D) The property owner does not have an involuntary lien
21recorded against the property in excess of one thousand dollars
22($1,000).

end delete
begin insert

23
(2) The property does not comply with the conditions specified
24in subdivision (a) of Section 26063 of the Public Resources Code
25and in subdivision (b) of Section 10081 of Title 4 of the California
26Code of Regulations.

end insert

27(b) A public agency shall not permit the property owner to
28participate in any program established pursuant to this chapterbegin insert for
29the purposes specified in paragraph (2) of subdivision (a) of
30Section 5898.20end insert
unlessbegin delete both of the following requirements are met:end deletebegin insert end insert
31
begin insertthe property owner is given the right to cancel the contractual
32assessmentend insert
begin insert without penalty or obligation, consistent with the
33following:end insert

begin delete

34(1) The property owner has been provided with a completed
35financing estimate document set forth in Section 5898.17, or a
36substantially equivalent document that displays the same
37information in a substantially similar format.

end delete
begin delete

38(2) The property owner is given the right to cancel the
39contractual assessment at any time prior to midnight on the third
40business day after the date of the transaction to enter into the
P10   1agreement without penalty or obligation, consistent with the
2following:

end delete
begin delete

3 3(A)

end delete

4begin insert(1)end insert The property owner shall receive two copies of the right to
5cancel document set forth below or a substantially similar
6document that displays the same information in a substantially
7similar format.


8

 

Right to Cancel

 
Property Owner:
 [Owner Full Name], [Phone], [Email] 
Property Address:
 [Property Address] 


Your Right to Cancel:

You are entering into a contractual assessment with
[Provider]
for financing that will result in a lien on the property at
[Property Address]
. You may cancel this transaction, without cost,begin delete within three business days from the date on which you signed the contractual assessment.end deletebegin insert until midnight on the third business day after whichever of the following events occurs last:end insertbegin insert

 (1) The date on which you signed the contractual assessment.

end insert
begin insert

 (2) The date you received your Financing Estimate and Disclosure.

end insert
begin insert

 (3) The date you received this notice of your right to cancel.

end insert
begin insert

 

end insert
begin insert

If you cancel the transaction,
[Provider]
, within 20 calendar days after
[Provider]
receives notice of cancellation, must take the steps necessary to reflect the fact that, if recorded, the lien on your property has been discharged or reconveyed, and
[Provider]
must return to you any money you have given in connection with your application, not including the application processing fee. After
[Provider]
has done the things mentioned above, you must return any money paid to you or on your behalf, whether to your contractor or any other person. All money must be returned to the address below.

end insert


If you cancel the transaction:
● You will not be charged a cancellation fee; and
● You will be refunded any money you have given, excluding application and processing fees as applicable.
 
To cancel this transaction, you may submit this form to
[Provider]
in writing at:
Provider: __________
Attn: Right to Cancel Notification
Address: __________
 
Deadline to Cancel:
 
If you want to cancel this transaction, you must submit this form on or before [Insert date].
 
begin insertYou may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. end insertIf you cancel bybegin delete mailend deletebegin insert mail, fax,end insert or email, you must send the notice no later than midnight of the third business day following the date on which you signed the contractual assessment. If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than the time indicated above.begin insert

 

end insert
begin insert

I WISH TO CANCEL

end insert
begin insert

 

end insert
begin insert


Property Owner  

end insert
begin insert

 

end insert
begin insert


Date 

end insert
begin insert

 

end insert

 

begin delete

7 38(B)

end delete

39begin insert(2)end insert The property owner is deemed to have given notice of
40cancellation at the moment that the property owner sends the notice
P12   1bybegin delete mail or emailend deletebegin insert mail, email, or faxend insert or at the moment that the
2property owner otherwise delivers the notice, as applicable.

begin delete

3(c) Failure to comply with the requirements of subdivision (b)
4renders the contractual obligations of a property owner for a
5contractual assessment entered into pursuant to this chapter void.

end delete
begin delete

6(d) Except as provided in subdivision (b), nothing in this chapter
7shall be construed to void or otherwise release a property owner
8from the contractual obligations incurred by a contractual
9assessment on a property.

end delete
begin delete

10(e)

end delete

11begin insert(end insertbegin insertc)end insert This section only applies to a property owner who seeks to
12participate in a program established pursuant to this chapterbegin insert for
13the purposes specified in paragraph (2) of subdivision (a) of
14Section 5898.20end insert
for a residential property with four or fewer units.

begin insert

15
(d) For the purposes of this section, “property owner” shall
16include all persons listed on the title to the property.

end insert
17

SEC. 6.  

Section 5898.17 is added to the Streets and Highways
18Code
, to read:

19

5898.17.  

(a) The disclosure set forth below, or a substantially
20equivalent document that displays the same information in a
21substantially similar format, shall be completed and delivered to
22a property owner at least three business days before the property
23owner consummates a voluntary contractual assessment described
24in this chapterbegin insert for purposes specified in paragraph (2) of
25subdivision (a) of Section 5898.20end insert
or a special tax described in
26Section 53328.1 of the Government Code. The disclosure shall be
27provided to the property owner as a printed copy, if requested by
28the property owner. A sample of the disclosure set forth below
29shall be maintained on a public Internet Web site available to
30property owners.

31(b) This section only applies to disclosure to a property owner
32who seeks to participate in a program established pursuant to this
33chapterbegin insert for the purposes specified in paragraph (2) of subdivision
34(a) of Section 5898.20end insert
for a residential property with four or fewer
35units.


36

 

Financing Estimate and Disclosure

 

Notice to Property Owner: You have the right to request that a hard copy of this document be provided to you before and after reviewing and signing. The financing arrangement described below will result in an assessment against your property which will be collected along with your property begin delete taxes. The lien against your property may jeopardize your ability to sell or refinance your property unless you repay the underlying debt. You may request a subordination of the lien in order to address complications in your ability to refinance or sell your property. end delete

begin deleteThere may be cheaper alternative financing arrangements available.end delete begin insert taxes and will result in a lien on your property.end insert You should read and review the terms carefully, and if necessary, consult with a tax professional or attorney.


 

Customer Service Toll-Free telephone number and email:

In the event you have a consumer complaint, questions about your financing obligations related to the contractual assessment or your contractual rights under the terms of this contract, you can contact either this toll-free telephone number or email address provided below and receive a response within 24 hours or one business day.

 

Toll-Free telephone number: ___________

Customer service email address: ___________


Products and Costs


Product costs (including

labor/installation)

 $________

 

Description

1.

2.

3.

 

Financing Costs

Application fees and costs

Prepaid Interest

Other Costs

Total Amount Financed

 

 

  $________

  $________

  $________

  $________

  

Annual Percentage Rate (APR)

 

Simple Interest Rate

 

Total Annual Principal, Interest, and

Administrative Fees

 

 

  ______%

 

  ______%

 $______

 

Note: If your property taxes are paid through an impound account, your lender may apportion the amount and add it to your monthly payment.

 

See “Other important considerations,” below

 

Total Amount you will have paid over the life of the loan

 

 $________

  

Other Costs

Appraisal Fees

Bond related costs

Annual Administrative fees

Estimated closing costs

Credit Reporting Fees

Recording Fees

 $________

 $________

 $________

 

 $________

 $________

 $________


Total Financing Costs and Closing Costs

 


 $________

Estimated Cash (out of pocket) to close

 $________


Other Terms

Prepayment fee

Assumable by new owner

 


◻ No

◻ No


◻ Yes ______

◻ Yes ______


Additional Information About These Financing

Comparisons [Use this information to compare to other financing options]

 

   

  

 

 

  In 10 years

 

 

 $________ Principal you will have paid off.

 $________ Amount of interest you have paid.

 $________ Amount of financing and other costs

        you will have paid.

 $________ Total you will have paid.

   

  

 

Annual Percentage Rate

 

 

 ______%

 

 

   

 
   

 

Total Interest Paid (as a percentage of all the payments you have made)

 

 

 

 ______%

  
begin delete

Estimated market value of home without the improvement:__________

end delete
begin delete

Estimated market value of home with the improvement:__________

end delete
 
begin deleteThe estimated market value of your home is derived using one of the following: 1) an automated valuation model, which is a computerized property valuation system that is used to derive a real property value; 2) a broker’s price opinion conducted by a real estate broker licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code; or, 3) an appraisal conducted by a state licensed real estate appraiser licensed pursuant to Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code.end delete
  

Other Important Considerations

Assumption by New Buyer

 

 

 

◻ Yes - Allowed on original terms

◻ No - Not Allowed on original terms

 

I understand that if I refinance my home, my mortgage company may require me to pay off the full remaining balance of this obligation, unless I request that the lien be subordinated to an existingbegin delete mortgage.end deletebegin insert mortgage and the holder of the lien agrees to subordinate (allow the mortgage lien to take a higher priority).end insert If I sell my home, the buyer or their mortgage company may require me to pay off the full remaining balance of this obligation.

 

   _______________

   [Borrower initials]

 

Monthly Mortgage Payments

 

 

Your payments will be added to your property tax bill. Whether you pay your property taxes through your mortgage payment, using an impound account, or if you pay them directly to the tax collector, you will need to save an estimated $_______ for your first tax installment. If you pay your taxes through an impound account you should notify your lender, so that your monthly mortgage payment can be adjusted by your lender to cover your increased property tax bill.

 

   _______________

   [Borrower initials]


 

Tax Benefits: Consult your tax advisor regarding tax credits, credits and deductions, tax deductibility, and other tax benefits available. Making an appropriate application for the benefit is your responsibility.

 

   _______________

   [Borrower initials]

 

Three Day Right to Cancel


You, the property owner, may cancel the contract at any time prior to midnight on the third business day after the date of the transaction to enter into the agreement without any penalty or obligation. To cancel this transaction, you may mail or deliver a signed and dated copy of the contract with notice of cancellation to:

 

___________ [name of business] at

___________ [address]

You may also cancel the contract by sending notification of cancellation by email to the following email address: _________________[email address of business].

   _______________

   [Borrower initials]

 
begin deleteSenior Lien Resulting from This Transaction

This contractual assessment will result in a senior lien on your property. A lien occurs when an assessment, obligation, or claim (debt) is secured by the value of your property, such as a mortgage. Once the debt associated with the lien is paid in full, the lien can be released. If you fail to pay the debt, a lien permits the foreclosure (sale) of your property in order to pay the amount owed. If the property is sold or refinanced, the debt must generally be paid from the proceeds. If you have more than one lien on your property, the priority of liens will determine which debts must be paid first from the sale proceeds. The lien attached to your property in connection with assessment has “senior” lien status, which means that it has priority and must be satisfied before any other private liens, including a mortgage. The existence of this senior lien may jeopardize your ability to refinance or sell your property unless the debt is paid in full or the holder of the lien agrees to subordinate (allow another lien to take a higher priority). The foreclosure of a property subject to a senior lien will terminate all other liens on the property with a lower priority. A senior lien may be in conflict with the terms of your mortgage contract with your lender. It is your responsibility to ensure that you are authorized to enter into this transaction.

end delete
begin delete

   _______________

end delete
begin delete

   [Borrower initials]

end delete

Confirmation of Receipt

This confirms the receipt of the information in this form. You do not have to accept this financing just because you acknowledge that you have received or signed this form, and it is NOT a contract.


__________________________

[Property Owner Signature - Date]


__________________________

[Property Owner Signature - Date]

P17   5

 

begin insert

6
(c) A public agency or other party to a voluntary contractual
7assessment described in this chapter for the purposes specified in
8paragraph (2) of subdivision (a) of Section 5898.20 or a special
9tax described in Section 53328.1 of the Government Code shall
10not make any representations to a property owner regarding the
11effect the financed improvements will have on the market value of
12the property unless that public agency or other party derives its
13estimates of the market value using one of the following:

end insert
begin insert

14
(1) An automated valuation model, which is a computerized
15property valuation system that is used to derive a real property
16value.

end insert
begin insert

17
(2) A broker’s price opinion conducted by a real estate broker
18licensed pursuant to Part 1 (commencing with Section 10000) of
19Division 4 of the Business and Professions Code.

end insert
begin insert

20
(3) An appraisal conducted by a state licensed real estate
21appraiser licensed pursuant to Part 3 (commencing with Section
2211300) of Division 4 of the Business and Professions Code.

end insert
begin insert

23
(d) For the purposes of this section, “property owner” shall
24include all persons listed on the title to the property.

end insert


O

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