Bill Text: CA SB150 | 2011-2012 | Regular Session | Chaptered
Bill Title: Common interest developments.
Spectrum: Bipartisan Bill
Status: (Passed) 2011-07-08 - Chaptered by Secretary of State. Chapter 62, Statutes of 2011. [SB150 Detail]
Download: California-2011-SB150-Chaptered.html
BILL NUMBER: SB 150 CHAPTERED
BILL TEXT
CHAPTER 62
FILED WITH SECRETARY OF STATE JULY 8, 2011
APPROVED BY GOVERNOR JULY 7, 2011
PASSED THE SENATE JUNE 27, 2011
PASSED THE ASSEMBLY JUNE 23, 2011
AMENDED IN ASSEMBLY JUNE 9, 2011
AMENDED IN SENATE MAY 17, 2011
AMENDED IN SENATE APRIL 25, 2011
AMENDED IN SENATE APRIL 7, 2011
INTRODUCED BY Senator Correa
(Coauthor: Assembly Member Knight)
FEBRUARY 1, 2011
An act to amend Sections 1368 and 1373 of, and to add Section
1360.2 to, the Civil Code, relating to common interest developments.
LEGISLATIVE COUNSEL'S DIGEST
SB 150, Correa. Common interest developments.
Existing law, the Davis-Stirling Common Interest Development Act,
requires the declaration of a common interest development recorded on
or after January 1, 1986, to contain a legal description of the
development and the restrictions on the use or enjoyment of any
portion of the development. Existing law also provides that the
covenants and restrictions in the declaration of a common interest
development shall be enforceable equitable servitudes, unless
unreasonable.
This bill would prohibit the owner of a separate interest in a
common interest development from being subject to a provision in a
governing document, or a provision in an amendment to a governing
document, that prohibits the rental or leasing of all or any of the
separate interests in that common interest development to a renter,
lessee, or tenant unless that governing document, or amendment
thereto, was effective prior to the date the owner acquired title to
his or her separate interest. The bill would also authorize that
owner to expressly consent to be subject to a governing document or
amendment thereto with that specified prohibition.
Existing law requires the owner of a separate interest, except as
specified, to provide specified documents and information to a
prospective purchaser as soon as practicable before transfer of title
to the separate interest or execution of a real property sales
contract therefor.
This bill would, in addition, require the owner of a separate
interest to provide a statement describing any provision in the
governing documents that prohibits the rental or leasing of any of
the separate interests in the common interest development to a
renter, lessee, or tenant, and its applicability, if there is such a
provision.
This bill would incorporate additional changes to Civil Code
Section 1368 proposed by AB 771 that would become operative only if
both this bill and AB 771 are chaptered and take effect on or before
January 1, 2012, and this bill is chaptered last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares that the rights of
owners of separate interests in a common interest development to rent
or lease their properties, as the rights existed at the time the
owners acquired them, should be protected by the State of California,
and the rights of subsequent owners should be governed by the status
of those rights at the time the subsequent owners acquired their
rights.
SEC. 2. Section 1360.2 is added to the Civil Code, to read:
1360.2. (a) An owner of a separate interest in a common interest
development shall not be subject to a provision in a governing
document or an amendment to a governing document that prohibits the
rental or leasing of any of the separate interests in that common
interest development to a renter, lessee, or tenant unless that
governing document, or amendment thereto, was effective prior to the
date the owner acquired title to his or her separate interest.
(b) Notwithstanding the provisions of this section, an owner of a
separate interest in a common interest development may expressly
consent to be subject to a governing document or an amendment to a
governing document that prohibits the rental or leasing of any of the
separate interests in the common interest development to a renter,
lessee, or tenant.
(c) For purposes of this section, the right to rent or lease the
separate interest of an owner shall not be deemed to have terminated
if the transfer by the owner of all or part of the separate interest
meets at least one of the following conditions:
(1) Pursuant to Section 62 or 480.3 of the Revenue and Taxation
Code, the transfer is exempt, for purposes of reassessment by the
county tax assessor.
(2) Pursuant to subdivision (b) of, solely with respect to probate
transfers, or subdivision (e), (f), or (g) of, Section 1102.2, the
transfer is exempt from the requirements to prepare and deliver a
Real Estate Transfer Disclosure Statement, as set forth in Section
1102.6.
(d) Prior to renting or leasing his or her separate interest as
provided by this section, an owner shall provide the association
verification of the date the owner acquired title to the separate
interest and the name and contact information of the prospective
tenant or the prospective tenant's representative.
(e) Nothing in this section shall be deemed to revise, alter, or
otherwise affect the voting process by which a common interest
development adopts or amends its governing documents.
(f) This section shall apply only to a provision in a governing
document or a provision in an amendment to a governing document that
becomes effective on or after January 1, 2012.
SEC. 3. 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 initial 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 initial list of defects pursuant to
this paragraph does not waive any privilege attached to the
document. The initial 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.
(9) If there is a provision in the governing documents that
prohibits the rental or leasing of any of the separate interests in
the common interest development to a renter, lessee, or tenant, a
statement describing the prohibition and its applicability.
(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 (9), inclusive, of subdivision (a). The items
required to be made available pursuant to this section may be
maintained in electronic form and requesting parties shall have the
option of receiving them by electronic transmission or machine
readable storage media if the association maintains these items in
electronic form. The association may charge a reasonable fee for this
service based upon the association's actual cost to procure,
prepare, and reproduce the requested items.
(c) (1) Except as provided in 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.
(B) An amount authorized by subdivision (b).
(2) The prohibition in paragraph (1) does not apply to a community
service organization or similar entity, or to a nonprofit entity
that provides services to a common interest development under a
declaration of trust, 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, or a
nonprofit entity that provides services to a common interest
development under a declaration of trust, satisfies all of the
following requirements:
(i) The organization or entity is not an organization or entity
described in subparagraph (A).
(ii) The organization or entity was established and received a
transfer fee prior to January 1, 2004.
(iii) On and after January 1, 2006, the organization or 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
organization or 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 moneys 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 is
liable to the purchaser of a separate interest 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.
SEC. 3.5. 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 initial 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 initial list of defects pursuant to
this paragraph does not waive any privilege attached to the
document. The initial 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.
(9) If there is a provision in the governing documents that
prohibits the rental or leasing of any of the separate interests in
the common interest development to a renter, lessee, or tenant, a
statement describing the prohibition and its applicability.
(10) A copy of the most recent 12 months of minutes of the regular
meetings of the association's board of directors that were approved
by the association's board of directors.
(b) (1) Upon written request, the association shall, within 10
days of the mailing or delivery of the request, provide the owner of
a separate interest, or any other recipient authorized by the owner,
with a copy of the requested documents specified in paragraphs (1) to
(10), inclusive, of subdivision (a). Upon receipt of a written
request, the association shall provide a written or electronic
estimate of the fees that will be assessed for providing the
requested documents. The documents required to be made available
pursuant to this section may be maintained in electronic form, and
may be posted on the association's Internet Web site. Requesting
parties shall have the option of receiving the documents by
electronic transmission if the association maintains the documents in
electronic form. The association may collect a reasonable fee for
the procurement, preparation, reproduction, and delivery of the
documents requested pursuant to the provisions of this section.
(2) No additional fees may be charged by the association for the
electronic delivery of the documents requested.
(3) Fees for any documents required by this section shall be
distinguished from other fees, fines, or assessments billed as part
of the transfer or sales transaction. Delivery of the documents
required by this section shall not be conditioned upon, or required
to be combined with, any other documents, items, or services.
(4) An association may contract with any person or entity to
facilitate compliance with the requirements of this subdivision on
behalf of the association, subject to the same standards required of
the association.
(5) The association shall also provide a recipient authorized by
the owner of a separate interest with a copy of the completed form
specified in Section 1368.2 at the time the required documents are
delivered.
(c) (1) Except as provided in 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.
(B) An amount authorized by subdivision (b).
(2) The prohibition in paragraph (1) does not apply to a community
service organization or similar entity, or to a nonprofit entity
that provides services to a common interest development under a
declaration of trust, 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, or a
nonprofit entity that provides services to a common interest
development under a declaration of trust, satisfies all of the
following requirements:
(i) The organization or entity is not an organization or entity
described in subparagraph (A).
(ii) The organization or entity was established and received a
transfer fee prior to January 1, 2004.
(iii) On and after January 1, 2006, the organization or 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
organization or 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 moneys 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 is
liable to the purchaser of a separate interest 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.
SEC. 4. 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 a declaration of covenants, conditions, and
restrictions that has been recorded in the official records of each
county in which the common interest development is located:
(1) Section 1356.
(2) Article 4 (commencing with Section 1357.100) of Chapter 2 of
Title 6 of Part 4 of Division 2.
(3) Section 1360.2.
(4) Subdivision (b) of Section 1363.
(5) Section 1365.
(6) Section 1365.5.
(7) Subdivision (b) of Section 1366.
(8) Section 1366.1.
(9) Section 1368.
(10) Section 1378.
(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. 5. Section 3.5 of this bill incorporates amendments to
Section 1368 of the Civil Code proposed by both this bill and AB 771.
It shall only become operative if (1) both bills are enacted and
become effective on or before January 1, 2012, (2) each bill amends
Section 1368 of the Civil Code, and (3) this bill is enacted after AB
771, in which case Section 3 of this bill shall not become
operative.
