BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 918


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          SENATE THIRD READING


          SB  
          918 (Vidak)


          As Amended  June 16, 2016


          Majority vote


          SENATE VOTE:  37-0


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Housing         |7-0  |Chiu, Steinorth,      |                    |
          |                |     |Burke, Chau, Beth     |                    |
          |                |     |Gaines, Lopez, Mullin |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
           ------------------------------------------------------------------ 


          SUMMARY:  Requires the owner of a separate interest and the  
          homeowner association (HOA) in a common interest development  
          (CID) to annually verify the mailing address or addresses to  
          which notices from the HOA are to be delivered. Specifically,  
          this bill:  












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          1)Requires an owner of a separate interest to, on an annual  
            basis, provide written notice to the association of all of the  
            following:




             a)   The mailing address or addresses to which notices from  
               the HOA are to be delivered;




             b)   An alternate or secondary address to which notices from  
               the HOA are to be delivered; 




             c)   The name and address of an owner's legal representative,  
               if any, including any person with power of attorney or  
               other person who can be contacted in the event of the  
               owner's extended absence from the separate interest; and




             d)   Whether the separate interest is owner-occupied, is  
               rented out, if the parcel is developed but vacant, or if  
               the parcel is undeveloped land. 




          1)Requires an HOA to solicit these annual disclosures of each  
            owner and enter the data into its books and records at least  
            30 days prior to making its own required annual disclosures to  
            members.









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          2)Specifies that if an owner fails to provide the information  
            specified in the above provision, the property address shall  
            be deemed to be the mailing address to which notices are to be  
            delivered.


          FISCAL EFFECT:  None




          COMMENTS:  


          Background:  There are over 50,220 CIDs in the state that  
          comprise over 4.8 million housing units, or approximately one  
          quarter of the state's housing stock.  CIDs include  
          condominiums, community apartment projects, housing  
          cooperatives, and planned unit developments.  They are  
          characterized by a separate ownership of dwelling space coupled  
          with an undivided interest in a common property, restricted by  
          covenants and conditions that limit the use of the common area  
          and separate ownership interests, and the management of common  
          property and enforcement of restrictions by a HOA.  CIDs are  
          governed by the Davis Stirling Act (the Act) as well as the  
          governing documents of the HOA, including bylaws, declaration,  
          and operating rules.  




          This bill requires the owner of a separate interest and a HOA to  
          annually verify the mailing address or addresses to which  
          notices from the association are to be delivered.












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          Purpose of this bill:  According to the author, "currently HOA  
          unit owners are supposed to provide the association with the  
          best known mailing address for the association to mail required  
          disclosures and other documents that current law requires to be  
          shared with unit owners.  There may be a situation where mailing  
          address previously provided, if any was ever provided, may not  
          be current and the owner is not receiving any of the required  
          documents."




          Previous Legislation:




          SB 290 (Vidak) of 2015, would have allowed the board of  
          directors of an association formed under the Davis-Stirling Act  
          to provide notice by personal service or by substitute 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.  The bill died in  
          the Senate Judiciary Committee.




          SB 1026 (Vidak) of 2014, would have permitted associations  
          subject to the Commercial and Industrial Common Interest  
          Development Act and the Davis-Stirling Act to serve an owner  
          with a Notice of Default, the first step in the non-judicial  
          foreclosure process, for failure to pay required assessments  
          through posting, mailing, and publishing the notices, as  
          specified, when those notices cannot be personally served after  
          reasonable diligence, as specified.  The bill died in the Senate  
          Judiciary Committee.










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          SB 1244 (Harman) of 2012, would have allowed an owner in a CID  
          to be served certain notices in the non-judicial foreclosure  
          process by both posting and mailing the notices, as specified,  
          when those notices cannot be personally served after reasonable  
          diligence.  The bill died in the Senate Judiciary Committee.




          SB 137 (Ducheny), Chapter 452, Statutes of 2005, among other  
          things, permits an association of a CID seeking to collect  
          delinquent regular or special assessments of $1,800 or more, or  
          any assessments that are more than 12 months delinquent, to use  
          foreclosure subject to specified conditions.  These conditions  
          include requiring the board of directors of an association to  
          make the decision to foreclose upon an assessment lien at an  
          executive meeting of the board, by a majority vote, at least 30  
          days prior to any public sale, to record the results of the  
          vote, and to provide notice of the decision to foreclose.




          AB 1317 (Speier), Chapter 1101, Statutes of 1996, imposed  
          specified requirements with respect to the collection of debts  
          based on assessments of owners by a CID, and removed a  
          requirement that an association, prior to a sale by a trustee,  
          make at least one bona fide attempt to serve the owner with a  
          notice of sale by trustee.


          Analysis Prepared by:                                             
                          Lisa Engel / H. & C.D. / (961) 319-2085  FN:  
          0003861











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