Amended in Senate April 13, 2015

Senate Bill No. 290

Introduced by Senator Vidak

February 23, 2015

An act to amend begin delete Sections 5710 and 6822 end delete begin insert Section 5705 end insert of the Civil Code, relating to common interest developments.

LEGISLATIVE COUNSEL’S DIGEST

SB 290, as amended, Vidak. Common interest begin delete developments. end delete begin insert developments: assessment collection: foreclosure: notice. end insert

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The Davis-Stirling Common Interest Development Act defines and regulates common interest developments and requires that a development be managed by an association. The 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 foreclosure of a lien for delinquent assessments. The existing procedure requires the board of directors of an association to provide notice by personal service 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, as specified.

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This bill would additionally allow the board to serve an owner or owner’s representative with notice by substituted service, as provided.

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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 trustee sale.

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This bill would make technical, nonsubstantive changes to these procedures.

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

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

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begin insert SECTION 1. end insert   

end insert

begin insert Section 5705 of the end insert begin insert Civil Code end insert begin insert is amended to
read: end insert

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) The board shall provide notice by personal service begin insert or
substituted service end insert 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.

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SECTION 1.  

Section 5710 of the Civil Code is amended to
read:

5710.  

(a) A 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) 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.

(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. 2.  

Section 6822 of the Civil Code is amended to read:

6822.  

(a) A 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) 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.

(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).

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