California Law Updates

"Covered loan" means a consumer loan in which the original principal balance of the loan does not exceed the most current conforming loan limit for a single-family first mortgage loan established by the Federal National Mortgage Association in the case of a mortgage or deed of trust, and where one of the following conditions are met: (1) For a mortgage or deed of trust, the annual percentage rate at consummation of the transaction will exceed by more than eight percentage points the yield on Treasury securities having comparable periods of maturity on the 15th day of the month immediately preceding the month in which the application for the extension of credit is received by the creditor. (2) The total points and fees payable by the consumer at or before closing for a mortgage or deed of trust will exceed 6 percent of the total loan amount."

Consumer Loan : A consumer credit transaction that is secured by real property located in California, which is used, or intended to be used or occupied, as the principal dwelling of the consumer that is improved by a one-to-four residential unit. Original Principal Balance : The total initial amount the consumer is obligated to repay on the loan. Licensing Agency: For licensed real estate brokers, this refers to the Bureau of Real Estate; For licensed residential mortgage lenders and licensed finance lenders and brokers, this refers to the Department of Corporations; For commercial and industrial banks and savings associations and credit unions organized in California, this term refers to the Department of Financial Institutions.

A real estate broker licensed under the Real Estate Law, a finance lender or broker licensed under the California Finance Lenders Law, a residential mortgage lender licensed under the California Residential Mortgage Lending Act, a commercial or industrial bank organized under the Banking Law, a savings association organized under the Savings Association Law, and a credit union organized under the California Credit Union Law.

To arrange, negotiate, or make a consumer loan.

Any California county board of supervisors has the authority to adopt a resolution to add a fee of up to $2.00 (in addition to any other recording fees already collected) to the recording fee of EVERY real estate instrument*, paper, or notice that is required or permitted by law to be recorded within that specific county. This excludes any document expressly exempted from the payment of recoding fees. These fees, AFTER any "actual and necessary" administrative costs to the county in carrying out this law are paid to the county, are to be paid quarterly to the County Auditor or the Director of Finance, to be placed in the Real Estate Fraud Prosecution Trust Fund.

60% of the funds distributed to district attorneys subject to review as specified under this section of the Code, and 40% of the funds distributed to local law enforcement agencies within the county as specified within this section of the law. NOTE: In those counties where the investigation of real estate fraud is conducted exclusively by the district attorney, after deduction of the actual and necessary administrative costs, 100% of the funds are distributed to the district attorney, subject to review under this law. The funds distributed MUST ONLY be used for the EXCLUSIVE purpose of deterring, investigating, and prosecuting real estate fraud crimes. In each county, that county auditor or director of finance distributes the funds in the Real Estate Fraud Prosecution Trust Fund to eligible law enforcement agencies within the county as outlined above. This is where the Real Estate Fraud Prosecution Trust Fund Committee comes into play; its function is to determine which law enforcement agencies are eligible to receive this special funding.

The chief law enforcement officer is a NON-VOTING member of the committee and serves a one-year term, which may be renewed. These members are authorized to appoint representatives of their respective offices to serve on the committee. In the event that a county does not have a chief officer who is specifically responsible for consumer protection, then that county's board of supervisors is given the authority to appoint an appropriate representative to serve on the committee.

The committee's determination to award funds to a law enforcement agency MUST BE based on, but not be limited to: The number of real estate fraud cases filed in the prior year; The number of real estate fraud cases investigated in the prior year; The number of victims involved in the cases filed; and The total aggregated monetary loss suffered by victims. These victims include not only individuals, but also associations, institutions, or corporations, as a result of the real estate fraud cases filed, and those under active investigation by that law enforcement agency. For each law enforcement agency that has already been awarded funds in the previous year, such agency must file a reapplication for funds to the committee in each successive year. In addition to the other information required, this agency must ALSO submit a FULL and detailed accounting of the funds received in the previous year, and how those funds were expended. This includes the AMOUNT of funds received and expended; the ways in which those funds were utilized, including the payment of salaries, expenses, equipment and supply purchases; and other expenditures categorized according to "type." This accounting must also detail the number of filed complaints, investigations, arrests, and convictions, and any other relevant information the committee reasonably requires. The county board of supervisors must annually review the effectiveness of the district attorney in deterring, investigating, and prosecuting real estate fraud crimes. This review is to be based on information provided by the district attorney in an annual report that is submitted to the board and to the Legislative Analyst's Office, which must compile these results and report them to the Legislature. (The bold-faced text above is a new requirement that was recently added to Government Code Section 27388 (d).)

Legislature's intent in setting forth so many rules through its enactment of this section is to have an impact on real estate fraud involving the largest number of victims. Under this section, it has further been set forth that "to the extent possible," an emphasis should be placed on fraud against those individuals whose residences are in foreclosure, OR are in danger of foreclosure. Case filing decisions continue to be at the discretion of the prosecutor. The Government Code also notes that a district attorney's office or a local enforcement agency that has undertaken investigations and prosecutions that will continue into the FOLLOWING program year is allowed to receive those funds from the previous fiscal year that were not previously spent. This is provided AFTER the annual report of information detailing the accounting of funds received and expended in the prior year has been submitted. Under this law, NONE of the monies collected under this section may be used in ANY WAY to offset a reduction in ANY OTHER SOURCE of funds. Real Estate Fraud Prosecution Trust Fund monies MUST ONLY BE USED in connection with criminal investigations or prosecutions involving recorded real estate documents. Many counties in California have already enacted laws within their county providing for the Real Estate Fraud Protection Trust Fund. You can find out if your county of real estate practice is one of those with a Real Estate Fraud Protection Trust Fund by checking with the county government or recorded legislation, or by searching online.

Unruh Civil Rights Act Amendments and Additions Under this section of the Civil Code, these terms pertinent to the Unruh Civil Rights Act have been defined as follows: (1) "Disability" means any mental or physical disability as defined in Sections 12926 and 12926.1 of the Government Code. (2) "Medical condition" has the same meaning as defined in subdivision (h) of Section 12926 of the Government Code. (3) "Religion" includes all aspects of religious belief, observance, and practice. (4) "Sex" has the same meaning as defined in subdivision (p) of Section 12926 of the Government Code. (5) "Sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation" includes a perception that the person has any particular characteristic or characteristics within the listed categories or that the person is associated with a person who has, or is perceived to have, any particular characteristic or characteristics within the listed categories. (6) "Sexual orientation" has the same meaning as defined in subdivision (q) of Section 12926 of the Government Code. * (f) A violation of the right of any individual under the Americans with Disabilities Act of 1990 (Public Law 101-336) shall also constitute a violation of this section. * Note that Section 12926 of the Government Code defines "sexual orientation" as "heterosexuality, homosexuality, and bisexuality." The same definition applies herein.

Amendments of Civil Code Section 53 Civil Code Section 53 has been amended as a result of the aforementioned changes to the Unruh Civil Rights Act, with the additions of "marital status" and "sexual orientation" to the list of those personal characteristics on which discrimination may NOT be based in California. Under Section 53, the specifics of written contracts or other agreements are the focus, including any written instrument OR any portion of any instrument, that is somehow used to discriminate against any of the parties protected by the Unruh Civil Rights Act - sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation. Here is the amended law in its most current form. The portions in bold font are those that have been added as of the most recent update. 53. (a) Every provision in a written instrument relating to real property that purports to forbid or restrict the conveyance, encumbrance, leasing, or mortgaging of that real property to any person because of any characteristic listed or defined in subdivision (b) or (e) of Section 51 is void, and every restriction or prohibition as to the use or occupation of real property because of any characteristic listed or defined in subdivision (b) or (e) of Section 51 is void. (b) Every restriction or prohibition, whether by way of covenant, condition upon use or occupation, or upon transfer of title to real property, which restriction or prohibition directly or indirectly limits the acquisition, use or occupation of that property because of any characteristic listed or defined in subdivision (b) or (e) of Section 51 is void. (c) In any action to declare that a restriction or prohibition specified in subdivision (a) or (b) is void, the court shall take judicial notice of the recorded instrument or instruments containing the prohibitions or restrictions in the same manner that it takes judicial notice of the matters listed in Section 452 of the Evidence Code. The laws set forth in this section state, in essence, that any provision, restriction, prohibition, or other covenant that is placed within a contract, OR in any other manner, that takes any of the following actions based on the fact that a person is a certain sex, race, color, religion, ancestry, national origin, disability, and medical condition, is VOID because of this basis for discrimination. Such a restriction might include anything from an encumbrance, mortgage, lease, conveyance, or other acquisition of a property, and it might be placed through a conditional use restriction, a covenant, or with the transfer of title.

Before the county recorder records the modification document, he must submit both the modification document and the original document (with the restrictive language) to the county counsel. It is the responsibility of the county counsel to determine if, in fact, an illegal restriction and illegally restrictive language DO exist. Once he makes this determination, he returns the documents to the recorder with his assessment. In a situation in which the county counsel does NOT find restrictive language, the modification document is NOT recorded. The following requirements are also set forth under GC Section 12956.2: The modification document must be indexed in the same way as the original document. The effective date of the modification document will be the same as the original document's effective date. The Restrictive Covenant Modification forms are available to the public from the county recorder.

The previous law had required that certain disclosures be made upon the transfer of residential property, and had set forth the manner and form of the disclosures. While these disclosures are still necessary under the amended, current laws, there has been one addition to this set of disclosures. We will look at this law mandated under this code in full, and then discuss the amended requirements. After we've completed these discussions, we will review the new law (referenced in the Business and Professions Code) adopted under the Civil Code as Section 1102.6c.

The subdivision "Notice of Intention" must include true statements of all of the following: The owner's name and address; The subdivider's name and address; The legal description and area of lands; The condition of the title to the land, especially concerning ALL encumbrances to this title; The terms and conditions on which the person(s) intends to dispose of the land, ALONG WITH copies of any contracts intended to be used. Any provisions that have already been made for public utilities in the proposed subdivision, including water, electricity, gas, telephone, and sewerage facilities. Note that for those subdivisions referred to under the Government Code Section 66473.7(b), this statement of provisions is satisfied by submitting a copy of the written verification of the available water supply required under GC Section 66473.7. The use(s) for which the proposed subdivision is to be offered. Any provision(s) that have been made to limit the use or occupancy of the parcels in the subdivision. The amount of indebtedness that is a lien upon the subdivision or any part of the subdivision, which was incurred to pay for the construction of any onsite or offsite improvement, or any community or recreational facility."

Notice of Intention - Airport in Vicinity and Other Mandates The location of all existing airports, and of all proposed airports shown on the general plan of any city or county, located within two statute miles of the subdivision. Note that if the property is located within an airport influence area, the Notice of Intention must include the following statement: "NOTICE OF AIRPORT IN VICINITY This property is presently located in the vicinity of an airport, within what is known as an airport influence area. For that reason, the property may be subject to some of the annoyances or inconveniences associated with proximity to airport operations (for example: noise, vibration, or odors). Individual sensitivities to those annoyances can vary from person to person. You may wish to consider what airport annoyances, if any, are associated with the property before you complete your purchase and determine whether they are acceptable to you." (Note that an "airport influence area," or "airport referral area," as it is also known, is the area in which current or future airport-related noise, overflight, safety, or airspace protection factors may significantly affect land uses or necessitate restrictions on those uses as determined by an airport land use commission." References to any soils and/or geologic report(s) that were prepared specifically for that subdivision, if applicable. A statement regarding whether or not fill is used, or proposed to be used, within the subdivision, including a statement with the name and location of the public agency where the subdivision's soil condition information is available. The subdivided lands public report Notice of Intent must, finally, include the following two final true statements: A statement about any property located within the jurisdiction of the San Francisco Bay Conservation and Development Commission, which says that the property is so located. This must also include the following notice: NOTICE OF SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSION JURISDICTION This property is located within the jurisdiction of the San Francisco Bay Conservation and Development Commission. Use and development of property within the commission's jurisdiction may be subject to special regulations, restrictions, and permit requirements. You may wish to investigate and determine whether they are acceptable to you and your intended use of the property before you complete your transaction. Any other information that the owner, his or her agent, or the subdivider may desire to present.

The supplemental tax bills are not mailed to your lender. If you have arranged for your property tax payments to be paid through an impound account, the supplemental tax bills will not be paid by your lender. It is your responsibility to pay these supplemental bills directly to the Tax Collector. If you have any question concerning this matter, please call your local Tax Collector's Office." A title, in at least 14-point type or a contrasting color, that reads as follows: "Notice of Your 'Supplemental' Property Tax Bill." Keep in mind that including the required information in the Mello-Roos disclosure may satisfy the disclosure notice requirements of this section. Supplemental taxes may be assessed whether a new loan is obtained or an existing loan is assumed to accomplish the purchase of the property, or whether the property is purchased without financing.

In residential lease situations, there are 2 new exceptions to the automatic stay rule, which states that the automatic stay is NOT in effect, and therefore will NOT prevent or otherwise stop a detainer action, in general. These exceptions are as follows: Under the U. S. Code Section 362(b)(22): The automatic stay does not apply in unlawful detainer actions and the Act allows the continued prosecution of any eviction proceeding in which the landlord obtained a judgment of possession prior to the filing of the bankruptcy petition. Section 362(b)(23): With respect to evictions based on "endangerment" of the rented property or "illegal use of controlled substances" on the property, the Act excludes the eviction proceeding from the automatic stay if it was commenced before the filing of the bankruptcy case and the endangerment or illegal use occurred within the 30 days before the bankruptcy filing.

The second of these exceptions addresses the legality of the landlord's retaking possession of the property based on some type of endangerment on the property OR based on the illegal use of controlled substances on the property. Under the new law, the landlord in such a case MAY LEGALLY EVICT the lessee and take possession of the property, provided that the lessor files a certification, under penalty of perjury, stating: That the landlord must file and serve on the debtor a certification that such eviction action has been filed, OR That in the preceding 30-day period (before the date of the certification filing), has somehow endangered the property, OR has illegally used himself, OR has allowed another person/persons to use a controlled substance on the property. While there are many other changes noted under this law, the above amendments are of the most importance to you at this time.

Under the Civil Code, these terms are defined as follows: Condominium project: "A development consisting of condominiums. A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof. The area within these boundaries may be filled with air, earth, or water, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support. The description of the unit may refer to (1) boundaries described in the recorded final map, parcel map, or condominium plan, (2) physical boundaries, either in existence, or to be constructed, such as walls, floors, and ceilings of a structure or any portion thereof, (3) an entire structure containing one or more units, or (4) any combination thereof. The portion or portions of the real property held in undivided interest may be all of the real property, except for the separate interests, or may include a particular three-dimensional portion thereof, the boundaries of which are described on a recorded final map, parcel map, or condominium plan. The area within these boundaries may be filled with air, earth, or water, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support. An individual condominium within a condominium project may include, in addition, a separate interest in other portions of the real property."

The owners' interest in the corporation, whether evidenced by a share of stock, a certificate of membership, or otherwise, shall be deemed to be an interest in a common interest development and a real estate development for purposes of subdivision (f) of Section 25100 of the Corporations Code. A "stock cooperative" includes a limited equity housing cooperative which is a stock cooperative that meets the criteria of Section 33007.5 of the Health and Safety Code." A Planned Development: "A development (other than a community apartment project, a condominium project, or a stock cooperative) having either or both of the following features: The common area is owned either by an association or in common by the owners of the separate interests who possess appurtenant rights to the beneficial use and enjoyment of the common area.

A power exists in the association to enforce an obligation of an owner of a separate interest with respect to the beneficial use and enjoyment of the common area by means of an assessment which may become a lien upon the separate interests in accordance with Section 1367 or 1367.1." The Davis-Stirling Common Interest Development Act, beginning with Civil Code Section 1350, requires that common interest developments have a recorded declaration that includes specified information, and permits the developments to levy assessments when necessary. Further, this act sets forth voting requirements for such things as declaration amendments and the levying of assessments. Under this act, every common interest development must be managed by an association, which is commonly known as a community association, or homeowners' association (HOA). This nonprofit association may be incorporated or not incorporated.

Under Section 1365.2, the term "Association records" also refers to the following: Membership lists, including name, property address, and mailing address, if the conditions set forth herein are met and except as otherwise provided. Keep in mind that the member requesting the list MUST state the purpose for which the list is requested, and this purpose must be considered "reasonably related" to the requester's interest as a member. (Note that under this section, if the association has reason to REASONABLY believe that the information in the list will be used for some other reason other than the one given by the member, it is within the association's authority to deny that request. Should the request be denied, in any subsequent action brought by the member under this section, it is the ASSOCIATION that will bear the burden of proof that the member would have allowed the requested information to be used in the wrong way. Any member of the association has the authority to opt out of the sharing of his name, property address, and mailing address by notifying the association in writing that he prefers to be contacted via an alternative process, and this opt-out condition will remain in effect until the member himself changes it. (For specifics of the "alternative process" of contact, check out subdivision (c) of Section 8330 of the Corporations Code); AND Check registers. There is another related term set forth under Civil Code Section 1365.2, concerning records. This term is "Enhanced association records," and is defined as "invoices, receipts and canceled checks for payments made by the association, purchase orders approved by the association, credit card statements for credit cards issued in the name of the association, statements for services rendered, and reimbursement requests submitted to the association, provided that the person submitting the reimbursement request shall be solely responsible for removing all personal identification information from the request." On the following screen, we will look at another requirement set forth under this same bill, regarding the granting of exclusive use of a common interest development to one or more homeowners.

More CID Amendments Another requirement set forth in the same bill requires that in order to grant the exclusive use of a common area to one or more owner, there must be a passing affirmative vote of 67% of the owners in a common interest development to grant this right of exclusive use to the member. (If the HOA of the common interest development requires a different percentage, then that percentage is acceptable under the law.) Note that there are some exceptions to this rule. Under Senate Bill 61, homeowner associations (HOA) are required to hold elections for specific matters by use of a secret ballot. The secret ballot is to be used in the cases of elections regarding assessments, selection of members of the association board of directors, amendments to the governing documents, or the grant of exclusive use of common area property. This regulation prohibits the use of any funds of the HOA for the personal campaign mailings of any association official. The bill also prohibits any mass mailing, as defined, by an association official or candidate for campaign purposes within 60 days of any election of association officials. Senate Bill 61 requires that homeowner associations utilize an independent third party or parties as "inspector of elections." The number of inspectors of election may either be one or three. Under this law, an independent third party includes, but is not limited to, a volunteer poll worker with the county registrar of voters, a licensee of the California Board of Accountancy, or a notary public. This independent third party may be a member of the association, but MAY NOT be any of the following: A member of the board of directors; A candidate for the board of directors; Related to a member of the board of directors; A person who is currently employed by or under contract to the common interest development association, as required by specific rules of the association.

Notice Assessments and Foreclosure This continues the text from the previous screen: "The association must comply with the requirements of Section 1367.1 of the Civil Code when collecting delinquent assessments. If the association fails to follow these requirements, it may not record a lien on the owner's property until it has satisfied those requirements. Any additional costs that result from satisfying the requirements are the responsibility of the association. (Section 1367.1 of the Civil Code) At least 30 days prior to recording a lien on an owner's separate interest, the association must provide the owner of record with certain documents by certified mail, including a description of its collection and lien enforcement procedures and the method of calculating the amount. It must also provide an itemized statement of the charges owed by the owner. An owner has a right to review the association's records to verify the debt. (Section 1367.1 of the Civil Code) If a lien is recorded against an owner's property in error, the person who recorded the lien is required to record a lien release within 21 days, and to provide an owner certain documents in this regard. (Section 1367.1 of the Civil Code) The collection practices of the association may be governed by state and federal laws regarding fair debt collection. Penalties can be imposed for debt collection practices that violate these laws. PAYMENTS When an owner makes a payment, he or she may request a receipt, and the association is required to provide it. On the receipt, the association must indicate the date of payment and the person who received it. The association must inform owners of a mailing address for overnight payments. (Section 1367.1 of the Civil Code) An owner may dispute an assessment debt by submitting a written request for dispute resolution to the association as set forth in Article 5 (commencing with Section 1368.810) of Chapter 4 of Title 6 of Division 2 of the Civil Code. In addition, an association may not initiate a foreclosure without participating in alternative dispute resolution with a neutral third party as set forth in Article 2 (commencing with Section 1369.510) of Chapter 7 of Title 6 of Division 2 of the Civil Code, if so requested by the owner. Binding arbitration shall not be available if the association intends to initiate a judicial foreclosure. An owner is not liable for charges, interest, and costs of collection, if it is established that the assessment was paid properly on time. (Section 1367.1 of the Civil Code) MEETINGS AND PAYMENT PLANS An owner of a separate interest that is not a timeshare may request the association to consider a payment plan to satisfy a delinquent assessment. The association must inform owners of the standards for payment plans, if any exist. (Section 1367.1 of the Civil Code) The board of directors must meet with an owner who makes a proper written request for a meeting to discuss a payment plan when the owner has received a notice of a delinquent assessment. These payment plans must conform to the payment plan standards of the association, if they exist. (Section 1367.1 of the Civil Code)"

Temporary Transfer or Special Assessment? Under this section of the Civil Code, the board must NOT expend ANY FUNDS that have been designated as "reserve funds" UNLESS they are used for the repair, restoration, replacement, or maintenance of the major components that the association is responsible to repair, restore, replace, or maintain, as these items are the reason for the establishment of such a reserve fund. However, in the case of a temporary transfer from the reserve fund, the board IS permitted to authorize this temporary transfer from the reserve fund into the general operating fund of the association, IF necessary to meet short-term cash flow needs or other expenses. In such a situation, the board must provide a notice of intent to consider the transfer. This notice must include the following: Why the transfer is necessary; The repayment options; and Whether a special assessment might be considered for this need. Transferred funds as described herein must be restored to the reserve account within one year of the date of the initial transfer, unless the board provides written notice and documentation showing that a delay in replacing these moneys would be in the best interest of the common interest development. The board must take seriously its duty to exercise wise financial management in the maintenance of this reserve account. If necessary, the board has the authority to levy a special assessment, which is subject to those limitations in Section 1366. The board may, at its discretion, extend the date the payment on the special assessment is due. (However, keep in mind that even if the board does choose to extend the payment due date, this does NOT affect or prevent the board from pursuing any legal remedy to enforce the collection of that unpaid special assessment.)

This study must, at a minimum: (1) Identify the major components that the association is obligated to repair, replace, restore, or maintain that (as of the study date) have a remaining useful life of less than 30 years; (2) Identify the probable remaining useful life of the aforementioned components as of the date of the study; (3) Estimate the cost of repair, replacement, restoration, or maintenance of these components; AND (4) Estimate the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain these components during AND at the end of their useful life, after subtracting total reserve funds as of the date of the study. Note: This section does not apply to an association that does not have a common area.

Under Section 1365.2.5, the terms used on the previous screen are defined. These are as follows: Estimated Remaining Useful Life: The time reasonably calculated to remain before a major component will require replacement. Major Component: Components with an estimated remaining useful life of more than 30 years may be included in a study as a capital asset or disregarded from the reserve calculation, so long as the decision is revealed in the reserve study report and reported in the Assessment and Reserve Funding Disclosure Summary.

Any regular assessments that are imposed and collected to meet the association's obligation are exempt from execution by the association's judgment creditor only to the extent necessary for the association to perform essential services, such as paying for utilities and insurance. This exemption does NOT apply to any consensual pledges, liens, or encumbrances that have been approved by the owners of an association, OR to any lien for labor or materials supplied to the common area. The following regulations also apply to the assessments: The association must notify the owners of separate interests, between 30 and 60 days before the increased assessment is due (no more or no less), of this increased assessment by first-class mail. Regular and special assessments are delinquent 15 days after they become due, unless the declaration provides a longer time period, in which case the longer time period shall apply. If an assessment is delinquent the association may recover all of the following: Reasonable costs incurred in collecting the delinquent assessment, including reasonable attorney's fees. A late charge not exceeding 10% of the delinquent assessment or $10.00, whichever is greater, with some exceptions. Interest on all sums imposed under this section of the Civil Code, which include delinquent assessments, reasonable fees, collection costs, and reasonable attorney's fees, at an annual interest rate of not more than 12%, which begins 30 days after the assessment becomes due, unless the declaration specifically notes the interest recovery rate at a lower rate, in which case the lesser of the two amounts will apply.

Should the owner not pay these debts, then the association will record a notice of delinquent assessment, and the debts will become a lien on the owner's separate interest. The Davis-Stirling Common Interest Development Act authorizes the common interest development association to enforce such a lien in any legal manner. This might include turning to a nonjudicial foreclosure, also known as a sale by a trustee. Note that an owner of a separate interest in a common interest development should pay the assessment "in full under protest" even if that assessment is under DISPUTE. Under the current law, the right of redemption allows a judgment debtor to redeem his or her property after a judicial foreclosure only if the decree of foreclosure finds that a deficiency judgment may be ordered against that debtor.

The HOA's board of directors is the sole decision-maker when it comes to whether or not a lien foreclosure will be initiated. Under no circumstance may this decision be delegated to another party, such as an agent of the association. If the board approves the decision to initiate foreclosure, which must be made by the majority vote, this vote to approve the lien foreclosure MUST be completed a minimum of 30 days before any public sale. The Civil Code Section 1367.1 provides for a secondary address for an owner to receive collection notices. As set forth under Civil Code Section 1367.1 (k), if the owner submits a written request identifying a second address for the purposes of collection notices, then the association must send additional copies to the provided secondary address where correspondence/notices from the homeowner association must also be sent. Reminder: Civil Code Section 1367.1 ONLY applies to liens recorded AFTER JULY 1, 2003.

A statement that this owner does have the legal right to inspect the association records. The following statement in 14-point boldface type, if the notice is printed, or in capital letters, if the notice is typed: "IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS, IT MAY BE SOLD WITHOUT COURT ACTION. " An itemized statement of the charges owed by the owner. (This statement must include those items on the statement that show the amount of any delinquent assessments, the fees and reasonable costs of collection, reasonable attorney's fees, any late charges, and interest, if any.) 6. The right to request a meeting with the board as specified in this subdivision of the California Civil Code. 7. The right to dispute the assessment debt by submitting a written request for dispute resolution to the association under the association's "meet and confer" program, as previously discussed herein. 8. The right to request alternative dispute resolution with a neutral third party BEFORE the association may initiate foreclosure against the owner's separate interest, as previously discussed. Under this section of the Civil Code, any payments made against this debt, by the owner of a separate interest, must be paid in a certain order. First, the payment must be applied toward the assessments owed. Once this assessment is paid in full, the payments will be applied to the fees, collection costs, attorney's fees, late charges, and interest. If an owner does make such a payment, the association must provide a receipt for the payment at the owner's request. This receipt must state the date of the payment, as well as the person who received the payment. The common interest development association must provide a mailing address for members who wish to make an overnight payment of these assessments. A designated member of the association must sign the notice of delinquent assets. A copy of the recorded notice of delinquent assessment must be sent via certified mail to every person whose name is shown as an owner of the separate interest in the association's records. Such notice must be mailed no later than 10 calendar days after the notice is recorded. Within 21 days of the payment in full of the sums, the association must record or have the county recorder record specified in the notice of delinquent assessment, the association must record in the office of the county recorder in which the notice of delinquent assessment has been recorded a lien release OR notice of rescission. The association must then provide the owner with a copy of the lien release or the notice that the delinquent assessment has been satisfied.

Code Section 1376, as follows: The association must set forth a fair, reasonable, and expeditious procedure for making its decision, and this procedure, including prompt deadlines, must be included in the governing documents of the association. A decision on a proposed change must be made in good faith, and may NOT be unreasonable, capricious, or arbitrary. Any decision on a proposed change must not violate ANY provision of the law, including but NOT limited to: the Fair Employment and Housing Act, a building code, or other applicable law that governs land use or public safety. The decision must be given in writing; if the change is NOT approved, this written decision must include WHY it was not approved, and how to go about getting the board of directors to reconsider the decision. As stated above, if the association disapproves a proposed change, the applicant is entitled to have this decision reconsidered by the association's board of directors that made the decision. Such a reconsideration must be held at an open meeting of the board.

Under this bill, the requirement for the recording of an investor's interest in a note is consistent with that requirement for the recording of whole notes. Senate Bill 833 has passed a law that governs "junk faxes." Effective January 1, 2006, this law prohibits the sending of unsolicited advertising faxes either FROM someone in California OR TO someone in California. The damages for violations of this law are a minimum of $500.00 per violation.

Regarding landlords and tenants, beginning January 1, 2006, landlords are authorized to give a 30-day notice if they want to terminate their month-to-month tenants. Remember that the previous law had mandated that this notice be a 60-day notice, but that law EXPIRED as of December 31, 2005. Operative as of October 1, 2005, the Building Energy Efficiency Standards (under Title 24) requires that air conditioning ducts and heating ducts must be tested for leaks whenever a central air conditioner or a furnace is installed or replaced. The current standards state that if these ducts show a 15% or higher leakage, then they MUST BE REPAIRED.

Government Code Section 65589.5 sets forth the critical problem of lack of housing in California. This problem is considered critical in that it threatens the economic, environmental, and social quality of life in California. Housing in California has become THE most expensive in the United States, and the "excessive cost" of the state's housing supply is partially caused by activities and policies of many local governments. Many of these local governments limit the approval of housing, increase the cost of land for housing, and require that producers of housing pay high fees and exactions. Unfortunately, the results of these activities and policies include the following: Discrimination against low-income and minority households; Lack of housing to support employment growth; Imbalance in jobs and housing; Reduced mobility; Urban sprawl; Excessive commuting; and Deterioration of the air quality.

Housing Development Disapproval The current version of Government Code Section 65589.5 requires that a local agency must NOT disapprove a housing development, including farmworker housing, for very low-, low-, or moderate-income households or condition approval, including through the use of design review standards, in a manner that renders the project infeasible for development for the use of very low-, low-, or moderate-income households unless it makes written findings (that must be based on substantial evidence in the record) as to one of the following: The jurisdiction has adopted a housing element under this section that is in substantial compliance with this article, AND that jurisdiction has already met OR exceeded its share of the regional housing need allocation for the planned period, FOR that specific income category, as has been proposed for the housing development project, BUT ONLY IF any disapproval or conditional approval is NOT based on any of the reasons prohibited by Title 7, Section 65008, of the Government Code, which is entitled, "Planning and Land Use." These reasons include the following: race, sex, color, religion, ethnicity, national origin, ancestry, lawful occupation, familial status, disability, or the age of the individuals OR group of individuals. (Note: If the housing development project includes a mix of income categories, and the jurisdiction has not met or exceeded its share of the regional housing need for one or more of those categories, then this paragraph may NOT be used to either disapprove or conditionally approve the project. The share of regional housing need met is to be calculated in accordance with the forms and definitions that may be adopted by the Department of Housing and Community Development.) The development project as it has been proposed would have a specific, adverse impact upon the public health or safety, if there is no feasible way to mitigate that specific impact in a manner that is both satisfactory AND will not cost so much to mitigate that it renders the development too expensive to serve as housing for low- and moderate-income households. (As used herein, a "specific, adverse impact" is defined under this section as a "significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete." Note that inconsistency with the zoning ordinance OR general plan land use designation does NOT qualify as having a "specific, adverse impact upon the public health or safety.) Remember that, as stated on the previous screen, a local agency must NOT disapprove a housing development for very low, low-, or moderate-income households or condition the approval of such development in a manner that makes the project infeasible for its development for the use of very low-, low-, or moderate-income households unless it makes written findings (that must be based on substantial evidence in the record), as to one of the following: 3. That the denial of the project or imposition of conditions is required, because the project must comply with specific state or federal law, and such compliance will be too costly, rendering that development unaffordable to low- and moderate-income households. 4. That the development project has been proposed on a land that has been zoned for agriculture or resource preservation, IF: That land is surrounded on at least 2 sides by land already being used for these same purposes (agricultural or resource preservation); OR That land does not have the necessary adequate water or wastewater facilities to serve the development project. 5. That the development project is shown to be inconsistent with both the jurisdiction's zoning ordinance and general plan land use designation, which is specified in an element of the general plan as it existed on the date the application was deemed complete, IF this jurisdiction has, SINCE THAT DATE, adopted a revised housing element.

Housing Development Terms Defined Under this section, the following definitions have been set forth for the terms used herein: Feasible: "Capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors." Housing Development Project: "A use consisting of either of the following: Residential units only OR Mixed-use developments consisting of residential and nonresidential uses in which nonresidential uses are limited to neighborhood commercial uses and to the first floor of buildings that are two or more stories. As used in this paragraph, "neighborhood commercial" means small-scale general or specialty stores that furnish goods and services primarily to residents of the neighborhood." Housing for Very Low-, Low-, or Moderate-Income Households: "Either (A) at least 20 percent of the total units shall be sold or rented to lower income households, as defined in Section 50079.5 of the Health and Safety Code, OR (B) 100 percent of the units shall be sold or rented to moderate-income households as defined in Section 50093 of the Health and Safety Code, or middle-income households, as defined in Section 65008 of this code. Housing units targeted for lower income households shall be made available at a monthly housing cost that does not exceed 30% to 60% of area median income with adjustments for household size made in accordance with the adjustment factors on which the lower income eligibility limits are based. Housing units targeted for persons and families of moderate income shall be made available at a monthly housing cost that does not exceed 30% of 100% of area median income with adjustments for household size made in accordance with the adjustment factors on which the moderate income eligibility limits are based." Area Median Income: "Area median income as periodically established by the Department of Housing and Community Development pursuant to Section 50093 of the Health and Safety Code. The developer shall provide sufficient legal commitments to ensure continued availability of units for very low- or low-income households in accordance with the provisions of this subdivision for 30 years." Neighborhood: "A planning area commonly identified in a community's planning documents, and identified as a neighborhood by the individuals residing and working within the neighborhood."

Real Property Sale Foreclosures Beginning with Civil Code Section 2924, the topic of nonjudicial foreclosure sales for mortgages is set forth. The following sections regulate the various aspect of such nonjudicial foreclosure sales under either mortgages and Under Civil Code Section 2924 (b), the law is set forth regarding mortgages - and in particular, the topics of notice of default or sale. This law requires a person recording a notice of default OR a notice of sale, under any deed of trust or mortgage, with power of sale, to perform specified actions. Under Assembly Bill 885, this law has been modified to include an amended definition of the term, "last known address" under this provision. Let's take a look at this particular portion of Civil Code Section 2924 (b), as follows: 2924b. (a) Any person desiring a copy of any notice of default and of any notice of sale under any deed of trust or mortgage with power of sale upon real property or an estate for years therein, as to which deed of trust or mortgage the power of sale cannot be exercised until these notices are given for the time and in the manner provided in Section 2924 may, at any time subsequent to recordation of the deed of trust or mortgage and prior to recordation of notice of default thereunder, cause to be filed for record in the office of the recorder of any county in which any part or parcel of the real property is situated, a duly acknowledged request for a copy of the notice of default and of sale. This request shall be signed and acknowledged by the person making the request, specifying the name and address of the person to whom the notice is to be mailed, shall identify the deed of trust or mortgage by stating the names of the parties thereto, the date of recordation thereof, and the book and page where the deed of trust or mortgage is recorded or the recorder's number, and shall be in substantially the following form: "In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any notice of default and a copy of any notice of sale under the deed of trust (or mortgage) recorded ______, ____, in Book_____ page ____ records of ____ County, (or filed for record with recorder's serial number ____, _______County) California, executed by ____ as trustor (or mortgagor) in which ________ is named as beneficiary (or mortgagee) and ______________ as trustee be mailed to _________________ at ____________________________. ( Name, Address) NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the address contained in this recorded request. If your address changes, a new request must be recorded. Signature _________________" Upon the filing for record of the request, the recorder shall index in the general index of grantors the names of the trustors (or mortgagor) recited therein and the names of persons requesting copies.

Real Property Trustee Sale Foreclosure Amendments Now let's look at the amendments that have been made to the Civil Code 2924g, under Assembly Bill 885. Under the former version of this law, it was set forth that all sales of property under the power of sale contained in any deed of trust or mortgage must begin at a time and location that were specified in the notice of sale. It also required that any postponement of this sale be announced at THAT specific time and location, OR that it be announced at ANY time before the sale completion, to be determined at the discretion of the trustee, or if the trustee's beneficiary instructed that the sale proceedings be postponed. The previous law in this regard set forth a limit on the number of postponements allowed, at a maximum of 3 postponements. The previous law also required a new notice of sale to be given before any further sale proceedings were scheduled. Further, the former version of Civil Code Section 2924g set forth a requirement that the trustee was to postpone the sale upon the order of any court of competent jurisdiction, or where stayed by operation of law, or by the mutual agreement of any trustor and any beneficiary or any mortgagor and any mortgagee. However, according to this former requirement, it was noted that such a postponement did NOT COUNT in determining the maximum number of postponements permitted without giving a new notice of sale.

The California Finance Lenders Law sets forth the requirements for the licensing and the regulation of finance lenders by the Commissioner of Corporations. Finance Code Sections 22102, 22103, 22109, and 22153, which address the finance lender application requirements and the denial of such applications, have been amended by Assembly Bill 1419, which became effective January 1, 2006. The current regulations that have been enacted include the following: Any licensee under this law who wishes to operate at an additional location may file a short form license application. This law authorizes such licensee to operate at that new location 10 days after the date of mailing the application. The Commissioner is required to investigate any person responsible for the conduct of the lending activities of a licensure applicant; the law also authorizes the Commissioner to deny an application based on the unlawful activities of that person. Since the bill specifies additional requirements under the California Finance Lenders Law - the violation of which is a CRIME -- then a state-mandated local program is to be imposed. Senate Bill 36 (SB 36), which was signed into law in October 2009, was enacted in order to bring California into compliance with the federal Secure and Fair Enforcement Mortgage License Act (SAFE Act) of the Housing and Economic Recovery Act of 2008 (Public Law 110-289). Since December 31, 2009, new SB 36 requirements for those intending to engage in mortgage loan activities have been in effect. Pursuant to SB 36, B&P Section 10166.02, Real estate brokers who make, arrange, or service loans secured by real property and any salespersons who act in a similar capacity under the supervision of a broker must submit a report, Mortgage Loan Activity Notification (RE 866), to the Department by January 31, 2010 or within 30 days of commencing the activity, whichever is later. The report must be completed on-line after January 1, 2010. This means that each licensed broker, licensed real estate corporation and licensed salesperson who conducts mortgage loan activities as described below must submit a report. Licensees will provide identifying information, including their name and real estate license number. If the licensee is a real estate corporation, then the name and license number of the designated officer will also be provided. The notification will identify the mortgage loan activities being performed as well as any mortgage loan originator activities. Penalty fees apply for failure to submit this required notification. Penalties are fifty dollars ($50) per day for the first 30 days the report is not filed and one hundred dollars ($100) per day for every day thereafter for a maximum of $10,000

The basics of this addition to the Mobilehome Residency Law are as follows: This regulation is valid for any rental agreement that occurs on OR after January 1, 2006. A rental agreement must NOT include any provision that offers the management of a mobile home park the first right of refusal with in regard to purchasing a mobile home that is already in this mobile home park, if that owner is offering said mobile home for sale to a "third party." Under Section 798.70, as referenced in the above-quoted law, the person selling the mobilehome would have received this home after the death of its original owner, who would be one of the following: a homeowner, heir, joint tenant, or personal representative of the estate of the original owner, OR the agent of any of the aforementioned individuals. This law does allow for a separate agreement for SEPARATE consideration between the mobile home owner and the park owner/management, in which the current owner WOULD grant the park management the right of first refusal to purchase this mobile home for sale.

The disclosure added under Section 791.28, by Assembly Bill 1640 requires the amendment to Section 10103.5 that we discussed above. Therefore, the amended version of Section 10103.5, as of July 1, 2006, includes this disclosure (with nearly identical text as the law above) under subsection (b)(2), as such: "(2) (A) If the insurer under a personal lines residential property insurance policy reports claims history or loss experience of insureds under those policies to an insurance-support organization, the insurer shall include the following disclosure in the California Residential Property Insurance Bill of Rights: "This insurer reports claim information to one or more claims information databases. The claim information is used to furnish loss history reports to insurers. If you are interested in obtaining a report from a claims information database, you may do so by contacting: (Insert the name, toll-free telephone number, and, if applicable, Internet Web site address of each claims information database to which the insurer reports the information covered by this section.)"

Previously, small claims courts would hear various actions, but these actions, with very few exceptions, could NOT surpass the jurisdictional amount of $5,000.00. However, the amendments to these regulations now allow the small claims court jurisdictional amount to $7,500.00. As with the earlier amount limit, the $7,500.00 limit also holds some exceptions to this requirement. This jurisdictional increase does not apply to legal entities that are not natural persons, including the following: Corporations; Unincorporated Associations; Partnerships; or Government Entities. These changes also require that, on or after July 1, 2006, before an individual may serve as a temporary judge in small claims court, AND again at least every 3 years thereafter, EACH temporary judge MUST take the course of study offered by the courts on ethics and substantive law under rules adopted by the Judicial Council. This course must include (but is not limited to) the following topics: state and federal consumer laws, landlord-tenant law along with any applicable county specific rent deposit law, the state and federal Fair Debt Collection Practices Acts, the federal Truth in Lending Act, the federal Fair Credit Billing Act, the federal Electronic Fund Transfer Act, tort law, and contract law, including defenses to contracts and defenses to debts.

This bill and the resulting law amendments would clarify this law to require that this mandate be imposed on ALL employers, including all state, or any city, county, city and county, district, or any other governmental entity. Although this bill took effect immediately as an "urgency statute" when it was imposed in 2005, the law states that the deadline for the imposition of the above requirements was January 1, 2008. Remember that a violation of these requirements is considered a misdemeanor.

As with heterosexual spouses, these lesbian, gay or bisexual couples build lives together, as do spouses, through the purchase of property and the creation and operation of family businesses. According to the Legislature, expanding the rights of registered domestic partners with respect to property ownership would further California's interests in promoting family relationships and protecting family members during life crises, and would reduce discrimination on the bases of sex and sexual orientation in a manner consistent with the California Constitution. Senate Bill 565, which took effect immediately in 2005 as a tax levy, has amended Section 62 of the Revenue and Taxation Code. Under this amended law, and beginning the lien date for the 2006-2007 fiscal year, registered domestic partners are allowed to transfer property to each other without having to have the property reassessed and taxed at the current market value.

(1) Transfers to a trustee for the beneficial use of a registered domestic partner, or the surviving registered domestic partner of a deceased transferor, or by a trustee of such a trust to the registered domestic partner of the trustor. (2) Transfers that take effect upon the death of a registered domestic partner. (3) Transfers to a registered domestic partner or former registered domestic partner in connection with a property settlement agreement or decree of dissolution of a registered domestic partnership or legal separation. (4) The creation, transfer, or termination, solely between registered domestic partners, of any co-owner's interest. (5) The distribution of a legal entity's property to a registered domestic partner or former registered domestic partner in exchange for the interest of the registered domestic partner in the legal entity in connection with a property settlement agreement or a decree of dissolution of a registered domestic partnership or legal separation." In other words, Senate Bill 565 states that, under California property tax laws, registered domestic partners will be treated THE SAME AS SPOUSES.

Note the definitions of the terms as used in this Section of the Code: Active solar energy system: A system that uses solar devices, which are thermally isolated from living space or any other area where the energy is used, to provide for the collection, storage, or distribution of solar energy. This does NOT include solar swimming pool heaters OR hot tub heaters. Under the scope of this law, an active solar system may be used for any of the following: (A) Domestic, recreational, therapeutic, or service water heating. (B) Space conditioning. (C) Production of electricity. (D) Process heat. (E) Solar mechanical energy.

327.5. Notwithstanding any other provision of law, the assessor shall not assign any parcel numbers or prepare a separate assessment or separate valuation to divide any existing residential structure into a subdivision, as defined in Section 66424 of the Government Code, until a subdivision final map or parcel map, as described in Sections 66434 and 66445, respectively, of the Government Code has been recorded as required by law. If the requirement for a parcel map is waived pursuant to subdivision (b) of Section 66428 of the Government Code, then the assessor shall not assign any parcel numbers or prepare a separate assessment or separate valuation, unless the applicant provides a copy of the finding made by the legislative body or advisory agency, as required by that subdivision. Note that the term "subdivision" is defined under Government Code Section 66424 (the Subdivision Map Act), as referenced above, to mean "the division, by any subdivider, of any unit or units of improved or unimproved land, or any portion thereof, shown on the latest equalized county assessment roll as a unit or as contiguous units, for the purpose of sale, lease or financing, whether immediate or future. Property shall be considered as contiguous units, even if it is separated by roads, streets, utility easement or railroad rights-of-way." Under this definition, the term "subdivision" includes all of the following: A condominium project, a community apartment project, or the conversion of five or more existing dwelling units to a stock cooperative.