BILL NUMBER: AB 512 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 29, 2003
AMENDED IN SENATE AUGUST 25, 2003
AMENDED IN SENATE JULY 22, 2003
AMENDED IN SENATE JULY 14, 2003
AMENDED IN SENATE JUNE 23, 2003
AMENDED IN ASSEMBLY APRIL 30, 2003
INTRODUCED BY Assembly Member Bates
(Coauthors: Assembly Members Maze and Pacheco)
(Coauthor: Senator Denham)
FEBRUARY 18, 2003
An act to amend Sections 1363, 1363.6, 1368, and 1373
of, to add Sections 1350.5 and 1350.7 to, to add Article 4
(commencing with Section 1357.100) to, and to add chapter and article
headings to Title 6 (commencing with Section 1350) of Part 4 of
Division 2 of, the Civil Code, relating to common interest
developments.
LEGISLATIVE COUNSEL'S DIGEST
AB 512, as amended, Bates. Common interest developments.
The Davis-Stirling Common Interest Development Act defines and
regulates common interest developments. The act requires that a
common interest development have a recorded declaration, as
specified, and permits the declaration to be amended according to the
act's provisions or those of the governing documents, as defined.
The act requires that a common interest development be managed by an
association, and that a member of the association may attend meetings
of the board of directors of the association, except when they meet
in executive session to consider specified matters. The act excepts
certain common interest developments expressly zoned as industrial or
commercial developments, as specified, from certain of its
requirements. The act requires common interest development
associations to submit specified information to the Secretary of
State to assist with the identification of common interest
developments.
This bill would revise the Davis-Stirling Common Interest
Development Act to add chapter and article headings to its
provisions. The bill would specify that these headings do not change
the scope, meaning, or intent of the bill.
This bill would also add provisions concerning procedural fairness
in decisionmaking and rulemaking by associations. The bill would
add requirements regarding operating rules relating to the use of the
common area, the use of a separate interest, member discipline,
standards for delinquent assessment payment plans, and the resolution
of assessment disputes, as specified. Among other things, the bill
would establish criteria for valid operating rules, require that
members have notice of a proposed rule change, except as specified,
and establish a procedure for reversing a rule. The bill would
revise the provisions regarding common interest developments that are
zoned as industrial or commercial developments, as described above,
and would except certain of its provisions from application to these
developments. The bill would further provide general document
delivery rules, to be applicable when specified.
This bill would also require the association to include the name
of the president of the association with the information that it is
required to submit to the Secretary of State.
This bill would incorporate additional changes in Section 1368 of
the Civil Code proposed by AB 1086, to become operative if both bills
are enacted and take effect on or before January 1, 2004, and this
bill is enacted last.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. A chapter heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1350, to read:
CHAPTER 1. GENERAL PROVISIONS
SEC. 2. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1350, to read:
Article 1. Preliminary Provisions
SEC. 3. Section 1350.5 is added to the Civil Code, to read:
1350.5. Division, part, title, chapter, and section headings do
not in any manner affect the scope, meaning, or intent of this title.
SEC. 4. Section 1350.7 is added to the Civil Code, to read:
1350.7. (a) This section applies to delivery of a document to the
extent the section is made applicable by another provision of this
title.
(b) A document shall be delivered by one or more of the following
methods:
(1) Personal delivery.
(2) First-class mail, postage prepaid, addressed to a member at
the address last shown on the books of the association or otherwise
provided by the member. Delivery is deemed to be complete on deposit
into the United States mail.
(3) E-mail, facsimile, or other electronic means, if the recipient
has agreed to that method of delivery. If a document is delivered by
electronic means, delivery is complete at the time of transmission.
(4) By publication in a periodical that is circulated primarily to
members of the association.
(5) If the association broadcasts television programming for the
purpose of distributing information on association business to its
members, by inclusion in the programming.
(6) A method of delivery provided in a recorded provision of the
governing documents.
(7) Any other method of delivery, provided that the recipient has
agreed to that method of delivery.
(c) A document may be included in or delivered with a billing
statement, newsletter, or other document that is delivered by one of
the methods provided in subdivision (b).
(d) For the purposes of this section, an unrecorded provision of
the governing documents providing for a particular method of delivery
does not constitute agreement by a member of the association to that
method of delivery.
SEC. 5. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1351, to read:
Article 2. Definitions
SEC. 6. A chapter heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1352, to read:
CHAPTER 2. GOVERNING DOCUMENTS
SEC. 7. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1352, to read:
Article 1. Creation
SEC. 8. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1354, to read:
Article 2. Enforcement
SEC. 9. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1355, to read:
Article 3. Amendment
SEC. 10. Article 4 (commencing with Section 1357.100) is added to
Title 6 of Part 4 of Division 2 of the Civil Code, immediately
following Section 1357, to read:
Article 4. Operating Rules
1357.100. As used in this article:
(a) "Operating rule" means a regulation adopted by the board of
directors of the association that applies generally to the management
and operation of the common interest development or the conduct of
the business and affairs of the association.
(b) "Rule change" means the adoption, amendment, or repeal of an
operating rule by the board of directors of the association.
1357.110. An operating rule is valid and enforceable only if all
of the following requirements are satisfied:
(a) The rule is in writing.
(b) The rule is within the authority of the board of directors of
the association conferred by law or by the declaration, articles of
incorporation or association, or bylaws of the association.
(c) The rule is not inconsistent with governing law and the
declaration, articles of incorporation or association, and bylaws of
the association.
(d) The rule is adopted, amended, or repealed in good faith and in
substantial compliance with the requirements of this article.
(e) The rule is reasonable.
1357.120. (a) Sections 1357.130 and 1357.140 only apply to an
operating rule that relates to one or more of the following subjects:
(1) Use of the common area or of an exclusive use common area.
(2) Use of a separate interest, including any aesthetic or
architectural standards that govern alteration of a separate
interest.
(3) Member discipline, including any schedule of monetary
penalties for violation of the governing documents and any procedure
for the imposition of penalties.
(4) Any standards for delinquent assessment payment plans.
(5) Any procedures adopted by the association for resolution of
assessment disputes.
(b) Sections 1357.130 and 1357.140 do not apply to the following
actions by the board of directors of an association:
(1) A decision regarding maintenance of the common area.
(2) A decision on a specific matter that is not intended to apply
generally.
(3) A decision setting the amount of a regular or special
assessment.
(4) A rule change that is required by law, if the board of
directors has no discretion as to the substantive effect of the rule
change.
(5) Issuance of a document that merely repeats existing law or the
governing documents.
1357.130. (a) The board of directors shall provide written notice
of a proposed rule change to the members at least 30 days before
making the rule change. The notice shall include the text of
the proposed rule change and a description of the purpose and effect
of the proposed rule change. Notice is not required under this
subdivision if the board of directors determines that an immediate
rule change is necessary to address an imminent threat to public
health or safety or imminent risk of substantial economic loss to the
association.
(b) A decision on a proposed rule change shall be made at a
meeting of the board of directors, after consideration of any
comments made by association members.
(c) As soon as possible after making a rule change, but not more
than 15 days after making the rule change, the board of directors
shall deliver notice of the rule change to every association member.
If the rule change was an emergency rule change made under
subdivision (d), the notice shall include the text of the rule
change, a description of the purpose and effect of the rule change,
and the date that the rule change expires.
(d) If the board of directors determines that an immediate rule
change is required to address an imminent threat to public health or
safety, or an imminent risk of substantial economic loss to the
association, it may make an emergency rule change; and no notice is
required, as specified in subdivision (a). An emergency rule change
is effective for 120 days, unless the rule change provides for a
shorter effective period. A rule change made under this subdivision
may not be readopted under this subdivision.
(e) A notice required by this section is subject to Section
1350.7.
1357.140. (a) Members of an association owning 5 percent or more
of the separate interests may call a special meeting of the
members to reverse a rule change.
(b) A special meeting of the members may be called by delivering a
written request to the president or secretary of the board of
directors, after which the board shall deliver notice of the meeting
to the association's members and hold the meeting in
conformity with Section 7511 of the Corporations Code. The written
request may not be delivered more than 30 days after the members of
the association are notified of the rule change. Members are deemed
to have been notified of a rule change on delivery of notice of the
rule change, or on enforcement of the resulting rule, whichever is
sooner. For the purposes of Section 8330 of the Corporations Code,
collection of signatures to call a special meeting under this section
is a purpose reasonably related to the interests of the members of
the association. A member request to copy or inspect the membership
list solely for that purpose may not be denied on the grounds that
the purpose is not reasonably related to the member's interests as a
member.
(c) The rule change may be reversed by the affirmative vote of a
majority of the votes represented and voting at a duly held meeting
at which a quorum is present (which affirmative votes also constitute
a majority of the required quorum), or if the declaration or bylaws
require a greater proportion, by the affirmative vote or written
ballot of the proportion required. In lieu of calling the meeting
described in this section, the board may distribute a written ballot
to every member of the association in conformity with the
requirements of Section 7513 of the Corporations Code.
(d) Unless otherwise provided in the declaration or bylaws, for
the purposes of this section, a member may cast one vote per separate
interest owned.
(e) A meeting called under this section is governed by Chapter 5
(commencing with Section 7510) of Part 3 of Division 2 of Title 1 of,
and Sections 7612 and 7613 of, the Corporations Code.
(f) A rule change reversed under this section may not be readopted
for one year after the date of the meeting reversing the rule
change. Nothing in this section precludes the board of directors
from adopting a different rule on the same subject as the rule change
that has been reversed.
(g) As soon as possible after the close of voting, but not more
than 15 days after the close of voting, the board of directors shall
provide notice of the results of a member vote held pursuant to this
section to every association member. Delivery of notice under this
subdivision is subject to Section 1350.7.
(h) This section does not apply to an emergency rule change made
under subdivision (d) of section 1357.120
Section 1357.130 .
1357.150. (a) This article applies to a rule change commenced on
or after January 1, 2004.
(b) Nothing in this article affects the validity of a rule change
commenced before January 1, 2004.
(c) For the purposes of this section, a rule change is commenced
when the board of directors of the association takes its first
official action leading to adoption of the rule change.
SEC. 11. A chapter heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1358, to read:
CHAPTER 3. OWNERSHIP RIGHTS AND INTERESTS
SEC. 12. A chapter heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1363, to read:
CHAPTER 4. GOVERNANCE
SEC. 13. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1363, to read:
Article 1. Association
SEC. 14. Section 1363 of the Civil Code is amended to read:
1363. (a) A common interest development shall be managed by an
association which may be incorporated or unincorporated. The
association may be referred to as a community association.
(b) An association, whether incorporated or unincorporated, shall
prepare a budget pursuant to Section 1365 and disclose information,
if requested, in accordance with Section 1368.
(c) Unless the governing documents provide otherwise, and
regardless of whether the association is incorporated or
unincorporated, the association may exercise the powers granted to a
nonprofit mutual benefit corporation, as enumerated in Section 7140
of the Corporations Code, except that an unincorporated association
may not adopt or use a corporate seal or issue membership
certificates in accordance with Section 7313 of the Corporations
Code.
The association, whether incorporated or unincorporated, may
exercise the powers granted to an association by Section 383 of the
Code of Civil Procedure and the powers granted to the association in
this title.
(d) Meetings of the membership of the association shall be
conducted in accordance with a recognized system of parliamentary
procedure or any parliamentary procedures the association may adopt.
(e) Notwithstanding any other provision of law, notice of meetings
of the members shall specify those matters the board intends to
present for action by the members, but, except as otherwise provided
by law, any proper matter may be presented at the meeting for action.
(f) Members of the association shall have access to association
records, including accounting books and records and membership lists,
in accordance with Article 3 (commencing with Section 8330) of
Chapter 13 of Part 3 of Division 2 of Title 1 of the Corporations
Code. The members of the association shall have the same access to
the operating rules of the association as they have to the accounting
books and records of the association.
(g) If an association adopts or has adopted a policy imposing any
monetary penalty, including any fee, on any association member for a
violation of the governing documents or rules of the association,
including any monetary penalty relating to the activities of a guest
or invitee of a member, the board of directors shall adopt and
distribute to each member, by personal delivery or first-class mail,
a schedule of the monetary penalties that may be assessed for those
violations, which shall be in accordance with authorization for
member discipline contained in the governing documents. The board of
directors shall not be required to distribute any additional
schedules of monetary penalties unless there are changes from the
schedule that was adopted and distributed to the members pursuant to
this subdivision.
(h) When the board of directors is to meet to consider or impose
discipline upon a member, the board shall notify the member in
writing, by either personal delivery or first-class mail, at least 10
days prior to the meeting. The notification shall contain, at a
minimum, the date, time, and place of the meeting, the nature of the
alleged violation for which a member may be disciplined, and a
statement that the member has a right to attend and may address the
board at the meeting. The board of directors of the association
shall meet in executive session if requested by the member being
disciplined.
If the board imposes discipline on a member, the board shall
provide the member a written notification of the disciplinary action,
by either personal delivery or first-class mail, within 15 days
following the action. A disciplinary action shall not be effective
against a member unless the board fulfills the requirements of this
subdivision.
(i) Whenever two or more associations have consolidated any of
their functions under a joint neighborhood association or similar
organization, members of each participating association shall be
entitled to attend all meetings of the joint association other than
executive sessions, (1) shall be given reasonable opportunity for
participation in those meetings and (2) shall be entitled to the same
access to the joint association's records as they are to the
participating association's records.
(j) Nothing in this section shall be construed to create, expand,
or reduce the authority of the board of directors of an association
to impose monetary penalties on an association member for a violation
of the governing documents or rules of the association.
SEC. 15. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1363.05, to read:
Article 2. Common Interest Development Open Meeting Act
SEC. 16. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1363.1, to read:
Article 3. Managing Agents
SEC. 17. An article heading is added to Title 6 (commencing with
Section 1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1363.5, to read:
Article 4. Public Information
SEC. 18. Section 1363.6 of the Civil Code is amended to read:
1363.6. (a) To assist with the identification of common interest
developments, each association, whether incorporated or
unincorporated, shall submit to the Secretary of State, on a form and
for a fee not to exceed thirty dollars ($30) that the Secretary of
State shall prescribe, the following information concerning the
association and the development that it manages:
(1) A statement that the association is formed to manage a common
interest development under the Davis-Stirling Common Interest
Development Act.
(2) The name of the association.
(3) The street address of the association's onsite office, or, if
none, of the responsible officer or managing agent of the
association.
(4) The name, address , and either the
daytime telephone number or e-mail address of the president of the
association, other than the address, telephone number, or e-mail
address of the association's onsite office or managing agent of the
association.
(5) The name, street address, and daytime telephone number of the
association's managing agent, if any.
(6) The county, and if in an incorporated area, the city in which
the development is physically located. If the boundaries of the
development are physically located in more than one county, each of
the counties in which it is located.
(7) If the development is in an unincorporated area, the city
closest in proximity to the development.
(8) The nine-digit ZIP Code, front street, and nearest cross
street of the physical location of the development.
(9) The type of common interest development, as defined in
subdivision (c) of Section 1351, managed by the association.
(10) The number of separate interests, as defined in subdivision
(l) of Section 1351, in the development.
(b) The association shall submit the information required by this
section as follows:
(1) By incorporated associations, within 90 days after the filing
of its original articles of incorporation, and thereafter at the time
the association files its biennial statement of principle
principal business activity with the Secretary
of State pursuant to Section 8210 of the Corporations Code.
(2) By unincorporated associations, in July of 2003, and in that
same month biennially thereafter. Upon changing its status to that
of a corporation, the association shall comply with the filing
deadlines in paragraph (1).
(c) The association shall notify the Secretary of State of any
change in the street address of the association's onsite office or of
the responsible officer or managing agent of the association in the
form and for a fee prescribed by the Secretary of State, within 60
days of the change.
(d) On and after January 1, 2006, the penalty for an incorporated
association's noncompliance with the initial or biennial filing
requirements of this section shall be suspension of the association's
rights, privileges, and powers as a corporation and monetary
penalties, to the same extent and in the same manner as suspension
and monetary penalties imposed pursuant to Section 8810 of the
Corporations Code.
(e) The Secretary of State shall make the information submitted
pursuant to paragraph (4) of subdivision (a) available only for
governmental purposes and only to members of the Legislature and the
Business, Transportation and Housing Agency, upon written request.
All other information submitted pursuant to this section shall be
subject to public inspection pursuant to the California Public
Records Act, Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code. The information submitted
pursuant to this section shall be made available for governmental or
public inspection, as the case may be, on or before July 1, 2004, and
thereafter.
SEC. 19. A chapter heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1364, to read:
CHAPTER 5. OPERATIONS
SEC. 19.
SEC. 20. An article heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1364, to read:
Article 1. Common Areas
SEC. 20.
SEC. 21. An article heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1365, to read:
Article 2. Fiscal Matters
SEC. 21.
SEC. 22. An article heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1365.7, to read:
Article 3. Insurance
SEC. 22.
SEC. 23. An article heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1366, to read:
Article 4. Assessments
SEC. 23.
SEC. 24. A chapter heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1368, to read:
CHAPTER 6. TRANSFER OF OWNERSHIP INTERESTS
SEC. 24.
SEC. 25. Section 1368 of the Civil Code is amended to read:
1368. (a) The owner of a separate interest, other than an owner
subject to the requirements of Section 11018.6 of the Business and
Professions Code, shall, as soon as practicable before transfer of
title to the separate interest or execution of a real property sales
contract therefor, as defined in Section 2985, provide the following
to the prospective purchaser:
(1) A copy of the governing documents of the common interest
development, including any operating rules, and including a copy of
the association's articles of incorporation, or, if not incorporated,
a statement in writing from an authorized representative of the
association that the association is not incorporated.
(2) If there is a restriction in the governing documents limiting
the occupancy, residency, or use of a separate interest on the basis
of age in a manner different from that provided in Section 51.3, a
statement that the restriction is only enforceable to the extent
permitted by Section 51.3 and a statement specifying the applicable
provisions of Section 51.3.
(3) A copy of the most recent documents distributed pursuant to
Section 1365.
(4) A true statement in writing obtained from an authorized
representative of the association as to the amount of the association'
s current regular and special assessments and fees, any assessments
levied upon the owner's interest in the common interest development
that are unpaid on the date of the statement, and any monetary fines
or penalties levied upon the owner's interest and unpaid on the date
of the statement. The statement obtained from an authorized
representative shall also include true information on late charges,
interest, and costs of collection which, as of the date of the
statement, are or may be made a lien upon the owner's interest in a
common interest development pursuant to Section 1367 or 1367.1.
(5) A copy or a summary of any notice previously sent to the owner
pursuant to subdivision (h) of Section 1363 that sets forth any
alleged violation of the governing documents that remains unresolved
at the time of the request. The notice shall not be deemed a waiver
of the association's right to enforce the governing documents against
the owner or the prospective purchaser of the separate interest with
respect to any violation. This paragraph shall not be construed to
require an association to inspect an owner's separate interest.
(6) A copy of the preliminary list of defects provided to each
member of the association pursuant to Section 1375, unless the
association and the builder subsequently enter into a settlement
agreement or otherwise resolve the matter and the association
complies with Section 1375.1. Disclosure of the preliminary list of
defects pursuant to this paragraph shall not waive any privilege
attached to the document. The preliminary list of defects shall also
include a statement that a final determination as to whether the
list of defects is accurate and complete has not been made.
(7) A copy of the latest information provided for in Section
1375.1.
(8) Any change in the association's current regular and special
assessments and fees which have been approved by the association's
board of directors, but have not become due and payable as of the
date disclosure is provided pursuant to this subdivision.
(b) Upon written request, an association shall, within 10 days of
the mailing or delivery of the request, provide the owner of a
separate interest with a copy of the requested items specified in
paragraphs (1) to (8), inclusive, of subdivision (a). The
association may charge a fee for this service, which shall not exceed
the association's reasonable cost to prepare and reproduce the
requested items.
(c) An association shall not impose or collect any assessment,
penalty, or fee in connection with a transfer of title or any other
interest except the association's actual costs to change its records
and that authorized by subdivision (b).
(d) Any person or entity who willfully violates this section shall
be liable to the purchaser of a separate interest which is subject
to this section for actual damages occasioned thereby and, in
addition, shall pay a civil penalty in an amount not to exceed five
hundred dollars ($500). In an action to enforce this liability, the
prevailing party shall be awarded reasonable attorneys' fees.
(e) Nothing in this section affects the validity of title to real
property transferred in violation of this section.
(f) In addition to the requirements of this section, an owner
transferring title to a separate interest shall comply with
applicable requirements of Sections 1133 and 1134.
SEC. 25.
SEC. 25.5. Section 1368 of the Civil Code is amended to read:
1368. (a) The owner of a
separate interest, other than an owner subject to the requirements of
Section 11018.6 of the Business and Professions Code, shall, as soon
as practicable before transfer of title to the separate interest or
execution of a real property sales contract therefor, as defined in
Section 2985, provide the following to the prospective purchaser:
(1) A copy of the governing documents of the common interest
development, including any operating rules, and including
a copy of the association's articles of incorporation, or, if not
incorporated, a statement in writing from an authorized
representative of the association that the association is not
incorporated.
(2) If there is a restriction in the governing documents limiting
the occupancy, residency, or use of a separate interest on the basis
of age in a manner different from that provided in Section 51.3, a
statement that the restriction is only enforceable to the extent
permitted by Section 51.3 and a statement specifying the applicable
provisions of Section 51.3.
(3) A copy of the most recent documents distributed pursuant to
Section 1365.
(4) A true statement in writing obtained from an authorized
representative of the association as to the amount of the association'
s current regular and special assessments and fees, any assessments
levied upon the owner's interest in the common interest development
that are unpaid on the date of the statement, and any monetary fines
or penalties levied upon the owner's interest and unpaid on the date
of the statement. The statement obtained from an authorized
representative shall also include true information on late charges,
interest, and costs of collection which, as of the date of the
statement, are or may be made a lien upon the owner's interest in a
common interest development pursuant to Section 1367 or 1367.1.
(5) A copy or a summary of any notice previously sent to the owner
pursuant to subdivision (h) of Section 1363 that sets forth any
alleged violation of the governing documents that remains unresolved
at the time of the request. The notice shall not be deemed a waiver
of the association's right to enforce the governing documents against
the owner or the prospective purchaser of the separate interest with
respect to any violation. This paragraph shall not be construed to
require an association to inspect an owner's separate interest.
(6) A copy of the preliminary list of defects provided to each
member of the association pursuant to Section 1375, unless the
association and the builder subsequently enter into a settlement
agreement or otherwise resolve the matter and the association
complies with Section 1375.1. Disclosure of the preliminary list of
defects pursuant to this paragraph shall does
not waive any privilege attached to the document. The
preliminary list of defects shall also include a statement that a
final determination as to whether the list of defects is accurate and
complete has not been made.
(7) A copy of the latest information provided for in Section
1375.1.
(8) Any change in the association's current regular and special
assessments and fees which have been approved by the association's
board of directors, but have not become due and payable as of the
date disclosure is provided pursuant to this subdivision.
(b) Upon written request, an association shall, within 10 days of
the mailing or delivery of the request, provide the owner of a
separate interest with a copy of the requested items specified in
paragraphs (1) to (8), inclusive, of subdivision (a). The
association may charge a fee for this service , which shall
that may not exceed the association's reasonable
cost to prepare and reproduce the requested items.
(c) An association shall not (1) Subject
to the provisions of paragraph (2), neither an association nor a
community service organization or similar entity may impose or
collect any assessment, penalty, or fee in connection with a transfer
of title or any other interest except for the following:
(A) An amount not to exceed the association's actual costs
to change its records and that .
(B) An amount authorized by subdivision (b).
(2) The amendments made to this subdivision by the act adding this
paragraph do not apply to a community service organization or
similar entity that is described in subparagraph (A) or (B):
(A) The community service organization or similar entity satisfies
both of the following requirements:
(i) The community service organization or similar entity was
established prior to February 20, 2003.
(ii) The community service organization or similar entity exists
and operates, in whole or in part, to fund or perform environmental
mitigation or to restore or maintain wetlands or native habitat, as
required by the state or local government as an express written
condition of development.
(B) The community service organization or similar entity satisfies
all of the following requirements:
(i) The community service organization or similar entity is not an
organization or entity described in subparagraph (A).
(ii) The community service organization or similar entity was
established and received a transfer fee prior to January 1, 2004.
(iii) On and after January 1, 2006, the community service
organization or similar entity offers a purchaser the following
payment options for the fee or charge it collects at time of
transfer:
(I) Paying the fee or charge at the time of transfer.
(II) Paying the fee or charge pursuant to an installment payment
plan for a period of not less than seven years. If the purchaser
elects to pay the fee or charge in installment payments, the
community service organization or similar entity may also collect
additional amounts that do not exceed the actual costs for billing
and financing on the amount owed. If the purchaser sells the
separate interest before the end of the installment payment plan
period, he or she shall pay the remaining balance prior to transfer.
(3) For the purposes of this subdivision, a "community service
organization or similar entity" means a nonprofit entity, other than
an association, that is organized to provide services to residents of
the common interest development or to the public in addition to the
residents, to the extent community common areas or facilities are
available to the public. A "community service organization or
similar entity" does not include an entity that has been organized
solely to raise money and contribute to other nonprofit organizations
that are qualified as tax exempt under Section 501(c)(3) of the
Internal Revenue Code and that provide housing or housing assistance.
(d) Any person or entity who willfully violates this section
shall be is liable to the purchaser of
a separate interest which that is
subject to this section for actual damages occasioned thereby and, in
addition, shall pay a civil penalty in an amount not to exceed five
hundred dollars ($500). In an action to enforce this liability, the
prevailing party shall be awarded reasonable attorneys' fees.
(e) Nothing in this section affects the validity of title to real
property transferred in violation of this section.
(f) In addition to the requirements of this section, an owner
transferring title to a separate interest shall comply with
applicable requirements of Sections 1133 and 1134.
(g) For the purposes of this section, a person who acts as a
community association manager is an agent, as defined in Section
2297, of the association.
A chapter heading is added to Title 6 (commencing with Section
1350) of Part 4 of Division 2 of the Civil Code, immediately
preceding Section 1368.4, to read:
CHAPTER 7. CIVIL ACTIONS AND LIENS
SEC. 26.
SEC. 27. A chapter heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1370, to read:
CHAPTER 8. CONSTRUCTION OF INSTRUMENTS AND ZONING
SEC. 27.
SEC. 28. A chapter heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1375, to read:
CHAPTER 9. CONSTRUCTION DEFECT LITIGATION
SEC. 28.
SEC. 29. A chapter heading is added to Title 6 (commencing
with Section 1350) of Part 4 of Division 2 of the Civil Code,
immediately preceding Section 1376, to read:
CHAPTER 10. IMPROVEMENTS
SEC. 29.
SEC. 30. Section 1373 of the Civil Code is amended to read:
1373. (a) The following provisions do not apply to a common
interest development that is limited to industrial or commercial uses
by zoning or by its declaration:
(1) Section 1356.
(2) Article 4 (commencing with Section 1357.100) of Chapter 2 of
Title 6 of Part 4 of Division 2 of the Civil Code
.
(3) Subdivision (b) of Section 1363.
(4) Section 1365.
(5) Section 1365.5.
(6) Subdivision (b) of Section 1366.
(7) Section 1366.1.
(8) Section 1368.
(b) The Legislature finds that the provisions listed in
subdivision (a) are appropriate to protect purchasers in residential
common interest developments, however, the provisions may not be
necessary to protect purchasers in commercial or industrial
developments since the application of those provisions could result
in unnecessary burdens and costs for these types of developments.
SEC. 31. Section 25.5 of this bill incorporates amendments to
Section 1368 of the Civil Code proposed by both this bill and AB
1086. It shall only become operative if (1) both bills are enacted
and become effective on or before January 1, 2004, (2) each bill
amends Section 1368 of the Civil Code, and (3) this bill is enacted
after AB 1086, in which case Section 25 of this bill shall not become
operative.