BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 771|
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CONSENT
Bill No: AB 771
Author: Butler (D)
Amended: 7/12/11 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 7-0, 6/28/11
AYES: DeSaulnier, Gaines, Kehoe, Lowenthal, Pavley, Rubio,
Simitian
NO VOTE RECORDED: Harman, Huff
SENATE JUDICIARY COMMITTEE : 5-0, 7/5/11
AYES: Evans, Harman, Blakeslee, Corbett, Leno
ASSEMBLY FLOOR : 76-0, 5/26/11 - See last page for vote
SUBJECT : Common interest developments: provision of
sale-related documents
SOURCE : California Association of Realtors
DIGEST : This bill requires a common interest development
to provide an estimate of the fees that it will assess for
providing the documents required for the sale of a unit and
to distinguish these fees from any other fees, fines, or
assessments associated with the sale.
ANALYSIS : A common-interest development (CID) is a form
of real estate in which each homeowner has an exclusive
interest in a unit or lot and a shared or undivided
interest in common area property. Condominiums, planned
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AB 771
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unit developments, stock cooperatives, community
apartments, and many resident-owned mobilehome parks all
fall under the umbrella of common interest developments. A
homeowners' association with an elected board of directors
governs each CID. The Davis-Stirling Common Interest
Development Act provides the legal framework under which
common interest developments are established and operate.
Current law requires the seller of a unit in a CID to
provide a prospective purchaser with various documents
related to the CID, including:
1. The CID's governing documents.
2. A statement regarding any age restrictions in the CID.
3. The CID's most recent budget, financial audit, reserve
funding plan, and insurance policy summary.
4. The amount of the CID's current regular and special
assessments and fees, as well as any unpaid assessments,
fees, or fines related to the unit.
5. Notice of any change in the CID's current regular and
special assessments and fees that the board has approved
but which have not yet become due.
6. A summary of any pending rule violations related to the
unit.
7. The preliminary list of any construction defects that is
the subject of potential or actual litigation against
the developer and, if applicable, a summary of any
settlement.
Because the CID, rather than the unit owner, maintains
these documents, current law requires the CID to provide
the selling owner with a copy of these documents within ten
days of a request. The CID may charge a reasonable fee
based upon its actual cost to procure, prepare, and
reproduce the documents.
This bill:
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1. Adds to the list of documents the seller must provide a
prospective purchaser the minutes of the most recent 12
months' worth of meetings, excluding meetings held in
executive session, of the CID's board of directors, if
requested by the purchaser.
2. Requires the CID to provide the documents to any
recipient the selling owner authorizes.
3. Requires the CID to provide a written or electronic
estimate of the fees that it will assess for providing
the documents, upon receipt of a written request. The
CID must provide this estimate on a statutory form that
this bill creates, which lists each document and the
aggregate fee associated with the provision of all the
documents.
4. Prohibits a CID from charging additional fees for
electronic transmission of the documents.
5. Requires a CID to distinguish the fees associated with
the provisions of these documents from any other fees,
fines, or assessments the CID bills as part of the sale.
6. Prohibits a CID from withholding or conditioning the
provision of the documents for any reason other than
non-payment of the associated fees.
7. Contains double-jointing language with SB 150 (Correa),
Chapter 62, Statutes of 2011.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/12/11)
California Association of Realtors (source)
ARGUMENTS IN SUPPORT : According to the sponsor,
California Association of Realtors, many CIDs "bundle" the
fees for the provision of the documents listed above with
other unrelated fees due to the CID upon sale. This bill
explicitly prohibits such bundling and also requires
disclosure of the fee associated only with these documents.
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The sponsor asserts that the lack of such disclosure has
created difficulties when closing real estate transactions.
ASSEMBLY FLOOR : 76-0, 5/26/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Conway, Cook, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hern�ndez, Hill,
Huber, Hueso, Huffman, Jeffries, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Cedillo, Davis, Gorell, Jones
JJA:kc 7/12/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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