Determination of Agency Funding
Each law enforcement agency that seeks funds must submit a written application to the committee setting forth a DETAILED proposal of the agency's proposed use of these funds.
In order to qualify for receipt of funds, each law enforcement agency submitting an application MUST provide written evidence that the agency either:
Has a unit, division, or section ALREADY devoted to the investigation and/or prosecution of real estate fraud, AND that this unit, division, or section has been in existence for A MINIMUM OF ONE YEAR prior to the application date; OR
Has, ON A REGULAR BASIS, during the 3 years immediately preceding the application date, accepted for investigation or prosecution, or both, AND assigned to specific persons employed by the agency, cases of suspected real estate fraud, and actively investigated and prosecuted those cases.
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).)
This report must detail the following:
Facts, based upon, but not 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;
The number of convictions obtained in the prior year; and
The total aggregated monetary loss suffered by victims, including individuals, associations, institutions, corporations, and other relevant public entities, according to the number of cases filed, investigations, prosecutions, and convictions obtained;
An accounting of funds received and expended in the prior year, including:
The amount of funds received and expended;
The uses to which those funds were put, including payment of salaries and expenses, purchase of equipment and supplies, and other expenditures by type;
The number of filed complaints, investigations, prosecutions, and convictions that resulted from the expenditure of funds; AND
Other relevant information provided at the district attorney's discretion.
Civil Code Changes: The Unruh Civil Rights Act
Under the Civil Code, there have been several amendments to existing statutes. The first set of these changes concerns the Unruh Civil Rights Act. Previously, the Unruh Civil Rights Act protected people from being discriminated against because of their sex, race, color, religion, ancestry, national origin, disability, or medical condition. However, recent changes have added "marital status" and "sexual orientation" to the other classes protected under this legislation in California. Here is the updated version of this law, under the Civil Code:
51. (a) This section shall be known, and may be cited, as the Unruh Civil Rights Act.
(b) All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.
(c) This section shall not be construed to confer any right or privilege on a person that is conditioned or limited by law or that is applicable alike to persons of every sex, color, race, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation.
(d) Nothing in this section shall be construed to require any construction, alteration, repair, structural or otherwise, or modification of any sort whatsoever, beyond that construction, alteration, repair, or modification that is otherwise required by other provisions of law, to any new or existing establishment, facility, building, improvement, or any other structure, nor shall anything in this section be construed to augment, restrict, or alter in any way the authority of the State Architect to require construction, alteration, repair, or modifications that the State Architect otherwise possesses pursuant to other laws."
This law has been altered to prohibit as a basis for discrimination either marital status, OR sexual orientation. Any text within this Civil Code section that prohibits discrimination based on the following reasons: sex, race, color, religion, ancestry, national origin, disability, or medical condition, will now have "marital status" and "sexual orientation" added to that list.
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.
The Civil Rights Act and Added Categories
You were already aware of the Unruh Civil Rights Act, which prohibits discrimination based on a person's specific characteristics with regard to sex, race, color, religion, ancestry, national origin, disability, and medical condition. In addition to those categories, the recent amendments to the Unruh Civil Rights act have added the following two categories:
Marital status and
Sexual orientation (regarding a person's heterosexuality, homosexuality, or bisexuality).
This brings the total number of protected classes under the California Unruh Civil Rights Act to TEN. These are listed in full as follows:
Marital status; or
Under Assembly Bill 1400, regarding the Unruh Civil Rights Act, keep in mind that an amendment to this act states that the items on the preceding list are not the ONLY bases on which discrimination may occur, since the California law does not allow any arbitrary discrimination. AB 1400 states clearly that, "It is the intent of the Legislature that these enumerated b
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.
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."
Subdivided Lands Public Report Notice of Intention
A true statement or reasonable estimate, if applicable, of the amount of any indebtedness which has been incurred by, OR is proposed to be incurred by, any of the following items:
An existing or proposed special district;
An existing or proposed entity;
An existing or proposed taxing area;
An existing or proposed assessment district;
An existing or proposed community facilities district within the boundaries of which the subdivision, or any part of the subdivision, is located;
AND that is to pay for the construction or installation of any improvement or to furnish community or recreational facilities to that subdivision, AND which amounts are to be obtained by ad valorem tax or assessment, or by a special assessment or tax upon the subdivision, or any part thereof.
A notice pursuant to Section 1102.6c of the Civil Code. (Note that this is the only additional requirement mandated under the newest changes to this section of the B & P Code. It will be explained in detail once we've completed explaining the additional disclosures mandated under this Notice of Intention.)
Regarding each school district that serves the subdivision, a statement from the appropriate district that indicates the location of each high school, junior high school, and elementary school serving the subdivision, or documentation that a statement to that effect has been requested from the appropriate school district.
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.
Federal Bankruptcy Abuse Prevention and Consumer Act
Let's take a quick look at the new Bankruptcy Abuse Prevention and Consumer Act of 2005 ("BAPCPA"), 11 U.S.C. § 101 et seq., as it affects real estate professionals. The multitude of procedural changes set forth in the BAPCPA is considered to represent the most sweeping changes to the federal insolvency system in more than 25 years. This law legislation has resulted in myriad changes that affect not only creditors and debtors, but also bankruptcy court, clerks, trustees, and other parties in interest. While the changes brought about by the Bankruptcy Abuse Prevention and Consumer Act of 2005 are numerous, we will limit our focus to those laws that you, the real estate agent-to-be, should know. Keep in mind that most of the provisions under this act have gone into effect as of October 17, 2005.
Under the Bankruptcy Abuse Prevention and Consumer Act of 2005, residential landlords should be aware of the change in the law regarding the "automatic stay," under 11 U.S.C. Section 362(b).
Exceptions to Automatic Stay Rule
As we discussed on the previous screen, the new law under the Bankruptcy Abuse Prevention and Consumer Act of 2005 sets forth two important exceptions from the "automatic stay" law, offering residential landlords some protection against bankruptcy claims filed by their debtors/lessees.
Explained simply, the first of these two exceptions occurs when the lessor, or landlord, has filed an eviction, illegal detainer action, or other similar action against the tenant/debtor. As long as the lessor took the action and obtained a judgment to obtain possession of the property BEFORE the date the lessee/debtor's bankruptcy petition was filed, the previously-filed eviction, illegal detainer action, or other proceeding taken by the lessor will remain in effect.
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."
CID Association Records
Under Section 1365.2, the term "Association records" refers to ALL of the following:
Any financial document required to be provided to a member, as set forth under Civil Code Section 1365. These documents include but are not limited to a pro forma budget, a review of the association's financial statement, a statement of the association's policies and practices in enforcing lien rights or other default remedies, and a summary of the types of property, general liability, earthquake, flood and fidelity insurance policies.
Any financial document or statement required to be provided under Civil Code Section 1368.
Interim unaudited financial statements, periodic or as compiled, containing any of the following:
(i) Balance sheet.
(ii) Income and expense statement.
(iii) Budget comparison.
(iv) General ledger - a report that shows all transactions that occurred in an association account over a specified period of time
(D) Executed contracts not otherwise privileged under law.
(E) Written board approval of vendor or contractor proposals or invoices.
(F) State and federal tax returns.
(G) Reserve account balances and records of payments made from reserve accounts.
Agendas and minutes of meetings of the members, the board of directors and any committees appointed by the board of directors; excluding, however, agendas, minutes, and other information from executive sessions of the board of directors (this is described in full under Civil Code Section 1363.05).
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
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.
Civil Code Section 1365.1 states that the homeowner association must distribute a written notice entitled, "NOTICE ASSESSMENTS AND FORECLOSURE" to EACH member of the common interest development association, and this must be distributed during the 60-day period IMMEDIATELY preceding the beginning of the association's fiscal year. The notice must be printed in at least 12-point font, and read exactly as follows. (A portion of this notice text will continue onto the following screen.)
"NOTICE ASSESSMENTS AND FORECLOSURE
This notice outlines some of the rights and responsibilities of owners of property in common interest developments and the associations that manage them. Please refer to the sections of the Civil Code indicated for further information. A portion of the information in this notice applies only to liens recorded on or after January 1, 2003. You may wish to consult a lawyer if you dispute an assessment.
ASSESSMENTS AND FORECLOSURE
Assessments become delinquent 15 days after they are due, unless the governing documents provide for a longer time. The failure to pay association assessments may result in the loss of an owner's property through foreclosure. Foreclosure may occur either as a result of a court action, known as judicial foreclosure or without court action, often referred to as nonjudicial foreclosure. For liens recorded on and after January 1, 2006, an association may not use judicial or nonjudicial foreclosure to enforce that lien if the amount of the delinquent assessments or dues, exclusive of any accelerated assessments, late charges, fees, attorney's fees, interest, and costs of collection, is less than one thousand eight hundred dollars ($1,800). For delinquent assessments or dues in excess of one thousand eight hundred dollars ($1,800) or more than 12 months delinquent, an association may use judicial or nonjudicial foreclosure subject to the conditions set forth in Section 1367.4 of the Civil Code. When using judicial or nonjudicial foreclosure, the association records a lien on the owner's property. The owner's property may be sold to satisfy the lien if the amounts secured by the lien are not paid. (Sections 1366, 1367.1, and 1367.4 of the Civil Code) In a judicial or nonjudicial foreclosure, the association may recover assessments, reasonable costs of collection, reasonable attorney's fees, late charges, and interest. The association may not use nonjudicial foreclosure to collect fines or penalties, except for costs to repair common areas damaged by a member or a member's guests, if the governing documents provide for this. (Sections 1366 and 1367.1 of the Civil Code)"
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.
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)"
Fiscal Responsibilities of the CID Association's Board of Directors
Civil Code Section 1365.5 sets forth the law regarding the fiscal responsibilities of the common interest development association's board of directors, which includes reviewing each of the following statements or reports:
On at least a quarterly basis, a current reconciliation of the association's operating accounts.
On at least a quarterly basis, the current year's actual reserve revenues and expenses compared to the current year budget.
On at least a quarterly basis, an income and expense statement for the CID association's operating and reserve accounts.
The latest account statements prepared by the financial institutions where the association has its operating and reserve accounts.
In order to withdraw money from the association's reserve accounts, the signatures of a minimum of 2 people are necessary. These 2 people must be EITHER association board of director members, OR, one must be a member of the association board of directors, and the other must be an officer who is NOT a member of the board of directors.
Under this section of the Civil Code, "reserve accounts" are defined as:
"(1) Moneys that the association's board of directors has identified for use to defray the future repair or replacement of, or additions to, those major components which the association is obligated to maintain;" OR
"(2) The funds received and not yet expended or disposed from either a compensatory damage award or settlement to an association from any person or entity for injuries to property, real or personal, arising from any construction or design defects. These funds shall be separately itemized from funds described in paragraph (1)."
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.)
Special Assessments and the Board of Directors
As set forth under Civil Code Section 1365, at least once every 3 years, the board of directors must have a "reasonably competent and diligent visual inspection" conducted. This inspection must focus on the accessible areas of the major components that the association is obligated to repair, replace, restore, or maintain as part of a study of the reserve account requirements of the common interest development, if the current replacement value of the major components is equal to or greater than ½ of the gross budget of the association (excluding the association's reserve account for that period).
Once this inspection is completed, the board will either review this study itself, or have it reviewed annually. At this time, the board must take into consideration any necessary adjustments to the board's analysis of the reserve account requirements as a result of that review, and then implement such adjustments if necessary.
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.
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.
Notice of Lien
If a common interest development association determines that a lien is to be recorded against the separate interest of an owner who has NOT paid the mandated regular or special assessment, then the association must notify the owner of this. The owner must be notified in writing, via certified mail, at least 30 days before such a lien is recorded. This notice must include the following:
A general description of the collection and lien enforcement procedures of the association, as well as how the amount was collected.
Collection of Delinquent Assessments
Civil Code Section 1367.4 - a new addition to the Civil Code - became operative on January 1, 2006.
Under Senate Bill 137, which is, in part, set forth under this section of the Civil Code, the procedures used for collecting delinquent assessments for certain debts - IF those debts come about ON OR AFTER July 1, 2006 - have been revised. The new law sets forth these amendments. The law states that when an association of a common interest development seeks to collect delinquent assessments that are LESS THAN $1,800.00, it may not foreclose on the lien unless it meets the set conditions. (Note that these "delinquent assessments" do not, under Civil Code Section 1367.4, include any of the following changes: accelerated assessments, late charges, fees, and costs of collection, attorney's fees, or interest.) Then the association must take one of two actions:
File a civil action in small claims court OR
Record a lien.
However, an association is NOT PERMITTED to foreclose on this lien UNTIL the amount equals or exceeds $1,800.00, OR UNTIL the assessments are more than 12 months delinquent.
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:
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.
Housing Problems in California
Under Government Code Section 65589.5, the Legislature states that there are many local governments that do not give adequate attention to the economic, environmental, and social costs of decisions that result in disapproval of housing projects, reduction in density of housing projects, and excessive standards for housing projects.
This law states that it is the California State policy that local governments not reject or make infeasible those housing developments that contribute to meeting the housing need determined within this section of law, without a THOROUGH ANALYSIS of the full economic, social, and environmental effects of the action and without complying with the other requirements set forth in this law.
Another point made by the Legislature is that it also recognizes that premature and unnecessary development of agricultural lands for urban uses continues to have negative effects on the availability of those lands for food and fiber production, as well as negative effects on the California economy. Therefore, the state policy states that development should be guided away from prime agricultural lands. To implement this section of the law, the Legislature says that local jurisdictions should encourage, within reason, filling existing urban areas.
As noted earlier, under the most current set of amendments, the conditions upon which a disapproval or a conditional approval of the housing development project is based have been revised.
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.
More Housing Development Projects
Note that the regulations we've discussed herein must NOT be used as a means of disapproving OR conditionally approving a housing development project if the development project is proposed on a site that is identified as suitable or available for very low-, low-, or moderate-income households in the jurisdiction's housing element, and consistent with the density specified in the housing element, even though it is inconsistent with both the jurisdiction's zoning ordinance and general plan land use designation.
If the local agency has failed to identify in its land any sites that can be developed for housing within the planning period AND that are sufficient to provide for the jurisdiction's share of the regional housing need for all income levels, then this law may NOT to be used to disapprove or conditionally approve a housing development project. This applies in the case of a housing project proposed for a site that has been designated in any element of the general plan for residential uses or designated in any element of the general plan for commercial uses if residential uses are permitted or conditionally permitted within commercial designations. Regarding any court action, the local agency bears the burden of proof to SHOW that its housing element does identify adequate sites with appropriate zoning and development standards and with services and facilities to accommodate the local agency's share of the regional housing need for the very low- and low-income categories.
This section of law must not be construed to relieve a local agency from complying with the Congestion Management Program or the California Environmental Quality Act. Nor does this section in any way prohibit a local agency from requiring that the development project comply with objective, quantifiable, written development standards, conditions and policies appropriate to, and consistent with, meeting the jurisdiction's share of the regional housing need.
Note that this section of the Government Code applies to charter cities (in addition to other established areas), because of the Legislature's determination that the lack of housing is a "critical statewide problem."
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."
Eligibility for Court Action
The current version of Government Code Section 65589.5, as amended under Senate Bill 575, expressly authorizes the applicant for the housing development project OR any person who would be eligible to apply for residency in that project to bring an action in court pursuant to specified provisions and would also authorize the court to vacate the decision of the local agency, as specified, deem the application complete, and impose fines pursuant to specified procedures if the court finds that the local agency acted in bad faith and failed to carry out the court's order or judgment within the 60-day period. The bill would also specify procedures for appeal of the court's order.
Under Senate Bill 326, the previous law set forth under "Rental Housing and Government Code" stated that low and moderate rental housing developments that consisted of 100 units OR LESS could NOT be denied a permit, provided that these housing developments followed the regulations set forth under local government development standards. In addition, the housing development was required to receive either a negative declaration, OR a mitigated declaration, as set forth under the California Environmental Quality Act.
The newest amendment to this law, which became effective January 1, 2006, has expanded the coverage of this law, as you read on the preceding screens. Currently, this law also applies to duplexes, triplexes and fourplexes, and it expands the law to charter cities, as well.
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.
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.
Recording a Notice of Default or a Notice of Sale
The mortgagee, trustee, or other person who is authorized to record a notice of default or notice of sale must perform each of the following tasks:
Within 10 business days following the aforementioned recording, either deposit or cause to be deposited in the United States mail an envelope to be sent via registered or certified mail with the postage prepaid. This envelope must include the following:
A copy of the notice with the recording date shown, addressed to each person whose name and address are set forth in a duly recorded request and sent to the address that has been designated in the request AND to each trustor or mortgagor at his or her last known address if that last known address is different than the address specified in the deed of trust or mortgage with power of sale.
At least 20 days before the date of sale, deposit or cause to be deposited in the United States mail an envelope, sent by registered or certified mail with postage prepaid, containing a copy of the notice of the time and place of sale, addressed to each person whose name and address are set forth in a duly recorded request for such, and directed to the address designated in the request and to each trustor or mortgagor at his or her last known address if different than the address specified in the deed of trust or mortgage with power of sale.
Now, here is where the latest amendment under Assembly Bill 885 comes into play, regarding the above term, "last known address," which has since been revised. According to the current version of Civil Code Section 2924b, the "last known address" of each trustor or mortgagor is defined to mean "the last business or residence physical address actually known by the mortgagee, beneficiary, trustee, or other person authorized to record the notice of default. For the purposes of this subdivision, an address is "actually known" if it is contained in the original deed of trust or mortgage, or in any subsequent written notification of a change of physical address from the trustor or mortgagor pursuant to the deed of trust or mortgage. For the purposes of this subdivision, "physical address" does not include an e-mail or any form of electronic address for a trustor or mortgagor. The beneficiary shall inform the trustee of the trustor's last address actually known by the beneficiary. However, the trustee shall incur no liability for failing to send any notice to the last address unless the trustee has actual knowledge of it."
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.
Residential Insurance Amendment
Insurance Code 10103.5 sets forth the California Residential Property Insurance Bill of Rights, which must accompany the California Residential Property Insurance Disclosure when the insurer provides the latter. This law sets forth the regulations concerning the manner in which insurers maintain the information related to adverse underwriting decisions. Under Assembly Bill 1640, this section of the Insurance Code - 10103.5 - has been amended.
As another result of Assembly Bill 1640, Insurance Code Section 791.28 has been added to the Insurance Code. Both changes are operative on July 1, 2006. Insurance Code Section 791.28 states that any insurer under a personal lines residential property insurance policy, if it reports the claims history or loss experience of insureds under those policies to an insurance-support organization, must provide a specific disclosure to the insured party at the time that it provides the disclosure required under Section 790.034 (b) (1). This additional disclosure is set forth as follows:
"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.)"
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.)"
Small Claims Court Jurisdictional Amounts
Senate Bill 422, which became effective as of January 1, 2006, has amended Sections 116.240, 116.610, and 116.940 of the Code of Civil Procedure, as well as ADDED two new sections, 116.221 and 116.222, to this Code. These amendments and additions all relate to small claims court. We aren't going to delve into each of these sections, but rather, we'll take a quick look at the overall changes that apply here.
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:
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.
Amendment to Labor Code
Senate Bill 101, which took effect in 2005, was presented to amend Section 226 of the Labor Code, which relates to employee compensation. This law does not exclusively relate to real estate, but does INCLUDE the real estate industry. The Labor Code Section 226 sets forth requirements for ALL employers to implement in paying their employees. The amended law requires that BY JANUARY 1, 2008, ALL EMPLOYERS must ONLY furnish the last four digits of the social security number, OR use an existing employee identification number (that is NOT the employee's social security number), ON ANY check, draft, or voucher paying the employee's wages, OR ON ANY itemized statement that would accompany said check, draft, or voucher.
Tax Break for Registered Domestic Partners
Before we address the specific changes to the California property tax laws, let's take a look at the Legislature's findings that precede these laws, as found under the Revenue and Taxation Code, to understand why these changes have been necessitated.
The Legislature's intent in enacting Section 62 of the Revenue and Taxation Code is "to guarantee equality for all Californians, regardless of gender or sexual orientation, and to further the state's interests in protecting Californians from the potentially severe economic and social consequences of abandonment, separation, the death of a partner, and other life crises."
To achieve its intent of equality for ALL, the Legislature has ruled to enact various related statutes, in an attempt to move California closer to fulfilling the promise of inalienable rights, liberty, and equality that are pledged to ALL people in the California Constitution.
The Legislature has acknowledged that many lesbian, gay, and bisexual Californians have continued to deal with economic discrimination based on their sexual orientation, despite forming lasting, committed, and caring relationships with persons of the same sex under the California laws.
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.
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.