Real Estate Principles-Chapter 27: California Law Updates

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."

Feasible:

"Capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors."

Mobilehome Residency Law:

* A rental agreement must NOT include any provision that offers the management of a mobile home park the first right of refusal. * The person selling the mobilehome would have received this home after the death of its original owner.

Bankruptcy Abuse Prevention and Consumer Act. Exceptions from the "automatic stay" law:

* If the lessor took the action to obtain possession of the property BEFORE the date the lessee/debtor's bankruptcy petition was filed, the previously-filed proceeding taken by the lessor will remain in effect. * The landlord MAY LEGALLY EVICT the lessee and take possession of the property (provided that the lessor files a certification, under penalty of perjury), based on some type of endangerment on the property or on the illegal use of controlled substances on the property.

HOA Requirements:

* Make available to members records from the previous 2 fiscal years. * The current association records must be made available within 10 business days of receipt of the member's request. * Minutes of member AND board meetings must be made PERMANENTLY available.

The laws generally limit ad valorem taxes on real property to

1% of the full cash value of that property.

Regulations for assessments:

1. Annual increases in regular assessments may NOT be imposed (except with specific provision or a quorum); 2. The board must not impose a regular assessment that is more than 20% of preceding one. 3. The board must not impose special assessments that will be more than 5% of the budgeted expenses, unless there is a quorum affirmative vote of the owners.

Davis-Stirling Common Interest Development Act:

1. Condominium project: 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. 2. Community apartment project:"A development in which an undivided interest in land is coupled with the right of exclusive occupancy of any apartment located thereon." 3. Stock Cooperative:"A development in which a corporation is formed for the purpose of holding title to real property, and the shareholders receive a right of occupancy in a portion of the real property. 4. Planned Development: the common area is owned either by an association or in common by the owners of the separate interests, and/or a power exists in the association to enforce an obligation of an owner of a separate interest, by means of an assessment which may become a lien upon the separate interests.

Amendments to the Subdivided Lands Public Report "Notice of Intention" must include:

1. The owner's and subdivider's name and address; 2. The legal description and area of lands; copies of contracts to be used; 3. Any provisions that have already been made for public utilities in the proposed subdivision. 4. The location of all existing airports located within two statute miles of the subdivision.

Delinquent assessments

1. When an association of a CID seeks to collect delinquent assessments that are LESS THAN $1,800.00, it may not foreclose on the lien. 2. 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.

The person authorized to record a notice of default or notice of sale must, within

10 business days, deposit in the US mail an envelope to be sent with the postage prepaid.

A real estate broker who arranges the purchase of a fractionalized interest in a trust deed must record it within

10 days of the purchase.

If the board approves the decision to initiate foreclosure, 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 law now permits ANY number of postponements of the sale proceedings at ANY time to the completion of the sale, for any period of time that may not exceed a total of

365 days from the date which was set forth in the notice of sale.

The total points and fees payable by the consumer must be higher than

6% of the total loan amount.

In order to grant the exclusive use of a common area to an owner, there must be a passing affirmative vote of

67% of the owners in a common interest development.

Mortgage/deed of trust - the APR must be more than

8% over the yield on Treasury securities with comparable periods of maturity.

Active solar energy system:

A system that uses solar devices to provide for the distribution of solar energy.

7 of 10 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. How long immediately preceding the beginning of the association's fiscal year must this notice be distributed? A. 60 days B. 90 days C. 3 months D. 4 months

A. 60 days

QUIZ: 6 of 10 Each of the following types of housing, with one exception, falls under the heading of Common Interest Development. Which is the exception to this? A. A manufactured housing community. B. A condominium project. C. A community apartment project. D. A stock cooperative.

A. A manufactured housing community.

QUIZ: 2 of 10 Certain disclosures must be made within the Subdivided Lands Public Report Notice of Intention. Recently, an amendment to these disclosures has added which of the following to the required disclosures under this notice? A. Supplemental Property Tax Notice B. Automatic Stay Disclosures C. Brownfield Disclosures D. All of the above

A. Supplemental Property Tax Notice

CID Fiscal responsibilities:

Authority to levy a special assessment.

QUIZ: 1 of 10 Under the amended Davis-Stirling Common Interest Development Act, in order to grant the exclusive use of a common area to one or more owner, there must be a passing affirmative vote of what percentage of the owners of that common interest development? A. 51% B. 67% C. 69% D. 75%

B. 67%

QUIZ: 4 of 10 Under California Finance Code, what is defined as 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? A. Vacant land loan B. Consumer loan C. Commercial loan D. Land development loan

B. Consumer loan

QUIZ: 9 of 10 San Diego tenant Jack Stone is a full-time slacker. The guy has not paid rent in months and refuses to give up possession of the property. After many attempts to solve the problem outside of a courtroom, landlord Tom Crick gives up, files an eviction notice, and obtains a judgment to obtain possession of the property. Three weeks later, however, Jack tells Tom that just that morning he's filed for bankruptcy--so the eviction is off. Which of the following statements is true of this situation? A. Tom is out of luck and should get in line behind Jack's other creditors. As for the apartment, Jack cannot be forced out of it when he's in bankruptcy. B. Tom is in luck. Since he has already taken the appropriate actions and obtained a judgment to obtain possession of the property before Jack filed his bankruptcy petition, the previously filed eviction remains in effect. C. Tom and Jack must retain lawyers to sort out this mess, because there is no set way of handling this type of situation. D. Because Jack was able to successfully file a bankruptcy petition, he may not have to move out yet. He must attempt to file a Retroactive Petition for Bankruptcy, with the required documentation from that time period. If he obtains a judgment stating that.

B. Tom is in luck. Since he has already taken the appropriate actions and obtained a judgment to obtain possession of the property before Jack filed his bankruptcy petition, the previously filed eviction remains in effect.

QUIZ: 10 of 10 Formerly, 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 two new bases for discrimination that are illegal in California. These are: A. Marital status and legal source of income. B. Marital status and source of income. C. Marital status and sexual orientation. D. Legal source of income and sexual orientation.

C. Marital status and sexual orientation.

QUIZ: 5 of 10 In some counties, certain funds are collected and then distributed to be used only for the exclusive purpose of deterring, investigating, and prosecuting real estate fraud crimes. This fund is the: A. Real Estate Advisory Commission Fund. B. Real Estate Recovery Account. C. Real Estate Fraud Prosecution Trust Fund. D. Real Estate Fraud Investigation Fund.

C. Real Estate Fraud Prosecution Trust Fund.

QUIZ: 3 of 10 Assembly Bill 1099 does not require a property tax reassessment for the construction or addition of A. a beachfront home. B. a separate building such as a guest home or workshop measuring less than 1,500 square feet. C. an active "solar energy system" in a new subdivision. D. a barn or horse corral built on a parcel of land two acres or larger.

C. an active "solar energy system" in a new subdivision.

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.

QUIZ: 8 of 10 If a person believes that her property has been placed under an unlawful restriction, covenant, or other provision, based on an arbitrary reason as defined in the Government Code, she may: A. Refuse to pay her rent or mortgage. B. File suit against the parties that sold her or rented her the property. C. File a civil suit against the party/parties that so placed this unlawful restriction. D. Record a Restrictive Covenant Modification document.

D. Record a Restrictive Covenant Modification document.

Proposed physical changes must be consistent with any governing provision of law, including the

Fair Employment and Housing Act.

If air conditioning or heating ducts show a 15% or higher leakage, then they MUST BE

REPAIRED.

If a person believes that her property has been placed under an unlawful restriction, then she can record the

Restrictive Covenant Modification document.

Covered Loans (amended):

The ORIGINAL principal loan balance does NOT EXCEED the MOST CURRENT loan limit for a single-family first mortgage

Fiscal responsibilities include:

The latest account statements prepared by the financial institutions where the association has its accounts.

Notice of Lien:

The owner must be notified in writing, via certified mail, at least 30 days before a lien is recorded.

Estimated Remaining Useful Life:

The time reasonably calculated to remain before a major component will require replacement.

Original Principal Balance:

The total initial amount the consumer is obligated to repay on the loan.

CID (Common Interest Development) board of director elections are inspected by an independent third party, which MAY NOT be

a candidate for OR a member (or related to one) of the board of directors; a person employed to the common interest development association.

A county tax assessor is prohibited from assigning parcel numbers OR preparing a separate assessment or separate valuation to divide any existing residential structure into a subdivision, UNTIL

a subdivision final or parcel map has been recorded as required by law.

Registered domestic partners (treated the same as spouses) are

allowed to transfer property to each other without having to have the property reassessed and taxed at the current market value.

The homeowner association (HOA) of a common interest development must make ALL association records

available to ANY owner who belongs to the HOA.

Real Estate Fraud Prosecution Trust Fund money MUST ONLY BE USED in

connection with investigations involving recorded real estate documents.

Consumer Loan:

consumer credit transaction secured by real property located in California, which is used as the principal dwelling of the consumer.

A current reconciliation of the association's operating accounts the

current year's actual reserve revenues and expenses compared to the current year budget, an income and expense statement for the CID association's operating and reserve accounts, all in at least a quarterly basis

The Unruh Civil Rights Act protects people from being

discriminated against because of their sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status and sexual orientation.

At least once every 3 years, the CID board of directors must have an inspection conducted, which must Identify and

estimate the cost of the major components that the association is obligated to maintain that have a remaining useful life of less than 30 years.

Any regular assessments imposed to meet the association's obligation are

exempt from execution only to the extent necessary for the association to perform essential services.

Should the board levy an assessment

it becomes the owner's responsibility to pay it.

Points and fees:

items required to be disclosed as finance charges, not including interest; all compensation paid to mortgage brokers in connection with the loan transaction.

Regular or special assessments of the association that incur

late charges; reasonable collection costs/ attorney's fees and interest are considered debt of the owner.

The board DOES NOT limit assessment increases that are

necessary for emergency situations.

The local government shall provide the housing developer with a density bonus and

other incentives for the production of lower income housing units.

The sending of unsolicited advertising faxes FROM OR TO someone in California is

prohibited.

Regulations must NOT be used as a means of disapproving a housing development project if it is

proposed on a site 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.

CID Fiscal responsibilities: may temporary transfer funds (must be restored within one year of the date of the initial 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

Landlords are authorized to give a 30-day notice if they want to

terminate their month-to-month tenant

Nothing under the law authorizes any type of physical change to the common area, if that change is inconsistent with the association's governing documents, unless

the change is required by law.

In order to withdraw money from the CID association's reserve accounts

the signatures of a minimum of 2 people are necessary.

It is illegal to discriminate against another person based on

where that person gets her income.