Real Estate Principles - Chapter 27: CA Law Updates
Condominium Project (Condos)
Undivided interest in common spaces of real property coupled with separate interest in space (called a unit)
What 4 things must be included in a "Notice of Intention"? (formal document announcing the intention of a landowner/developer to subdivide a piece of land for developmental purposes)
- Owner and subdivider's name and address - Legal description and area of lands and copies of contracts - Provisions that've been made for public utilities in proposed subdivision - Location of all existing airports within 2 miles of subdivision
The laws generally limit ad valorem taxes (according to value; property taxes) on real property to ?% of the full cash value of that property.
1
A CID's board of directors may temporary transfer funds from their reserve fund into the general operating fund of the association (if it's necessary to meet short-term cash flow needs or other expenses). From the point that this money is transferred out to be borrowed, how long does the board have to restore these funds?
1 year (from date of initial transfer)
A real estate broker who arranges the purchase of a fractionalized interest in a trust deed must record it within ? days of the purchase.
10
The person authorized to record a notice of default or notice of sale must, within ? business days, deposit in the US mail an envelope to be sent with the postage prepaid.
10
If air conditioning or heating ducts show a ?% or higher leakage, then they MUST BE REPAIRED.
15
In regards to a CID's board of directors, in order to withdraw money from the association's reserve accounts, the signatures of a minimum of ? people are necessary.
2
Members records from the previous ? fiscal years must be made available in a HOA (Davis-Stirling Common Interest Development Act).
2
At least once every ? years, the 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 ? years.
3, 30
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 ? days before any public sale.
30
Landlords are authorized to give a ?-day notice if they want to terminate their month-to-month tenants.
30
In a covered loan, the total points and fees payable by the consumer must be higher than ?% of the total loan amount.
6%
In a covered loan, on its mortgage/deed of trust - the APR must be more than ?% over the yield on treasury securities with comparable periods of maturity.
8%
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
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
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 notices to the required disclosures under this the Subdivided Lands Public Report? a) Supplemental Property Tax Notice b) Automatic Stay Disclosures c) Brownfield Disclosures d) All of the above
A (Supplemental Property Tax Notice: Requires a seller/his agent to deliver to the prospective purchaser a disclosure notice that the law requires the Assessor to revalue real property at the time ownership changes, resulting in receipt of supplemental tax bills)
San Diego tenant, Jack, 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 gives up, files an eviction notice, and obtains a judgment to obtain possession of the property. 3 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.
B
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
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
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
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
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 (updated version of the Unruh Civil Rights Act includes marital status and sexual orientation in addition to sex, race, color, religion, ancestry, national origin, disability, and medical condition as protected classes)
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)
Consumer Loan
Consumer credit transaction secured by real property in CA, which is used as principal dwelling of consumer
Section 4970 of the Financial Code is amended to read that a "covered loan" is defined as:
Consumer loans in which the ORIGINAL principal loan balance does not EXCEED the most CURRENT loan limit for a single-family first mortgage
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
Density bonus
Developers allowed to build more units than normal (than would be typically permitted under local zoning regulations) if they include a certain % of affordable units in their development
Regulations MUST be used as a means of disapproving a housing development project, even 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. True/False?
False (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)
An association is NOT PERMITTED to foreclose on a foreclosure due to a delinquent assessment UNTIL the amount equals or exceeds $1,800.00, OR UNTIL the assessments are more than 24 months delinquent. True/False?
False (... OR UNTIL the assessments are more than 12 months delinquent)
To protect consumer privacy, the homeowner association (HOA) of a common interest development can not make ALL association records available to ANY owner who belongs to the HOA. True/False?
False. (HOA of a CID must make ALL association records available to ANY owner who belongs to the HOA)
Assessments
Fees charged by HOAs/CIDs to cover maintenance costs of shared facilities/common areas (ex: landscaping fees, security fees, upkeep of amenity fees, etc.)
It is illegal to discriminate against another person based on where that person: (income-related)
GETS their income
Community Apartment Project
Individual interest in land and exclusive right of occupancy of an apartment on the land (as opposed to a condominium project, there may not be individual deeds/titles for each unit, as residents have shares instead)
Points and Fees
Items required to be disclosed as finance charges, (not including interest) all compensation paid to mortgage brokers in connection with loan transaction
Can a rental agreement include any provision that offers the management of a mobile home park the first right of refusal?
No (A rental agreement must NOT include any provision that offers the management of a mobile home park the first right of refusal; aka, the option to buy something before anyone else)
The following are regulations for assessments, regulations held firm and strong through nearly anything: - Annual increases in regular assessments may NOT be imposed (except with specific provision or a quorum; # of property owners); - The board must not impose a regular assessment that is more than 20% of preceding one. - 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. In case of an emergency situation, does the board limit an assessment increase that's necessary to resolve them?
No (does not limit)
CID association's board of directors have fiscal responsibilities. One of them includes making an income and expense statement for the CID association's operating and reserve accounts. On what basis (how often) should these be made?
Quarterly basis (at least)
Which type of partners are treated the same as spouses, and are allowed to transfer property to each other without having to have the property reassessed and taxed at the current market value?
Registered domestic partners
What's the Davis-Stirling Common Interest Development Act?
Regulates management, operation, and governance of CIDs (common interest developments; like condos, planned communities, stock cooperatives)
If a person believes that her property has been placed under an unlawful restriction, then she can record/modify the ? document.
Restrictive Covenant Modification
Unruh Civil Rights Act
State law prohibiting discrimination by businesses
A county tax assessor is prohibited from assigning parcel numbers OR preparing a separate assessment/separate valuation to divide any existing residential structure into a subdivision, until WHAT has been recorded as required by law?
Subdivision final/parcel map
What does the "First Right of Refusal" mean?
The option to buy something before it's offered to anyone else
Estimated Remaining Useful Life
Time calculated to remain before major component will require replacement
What is the Bankruptcy Abuse Prevention and Consumer Act's main purpose?
To prevent individuals from taking advantage of bankruptcy laws (they'd try and take advantage of these laws in order to avoid paying debts or committing fraud)
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. True/False?
True (election would be inspected by neutral 3rd party; can't be candidate/member of board of directors)
Points
Upfront fees paid to lender in exchange for lower interest rate on loan (ea. point typically costs 1% of loan amount; ex: if borrowing $200k and lender charges 1 point, you pay $2k upfront)
In regards to the Bankruptcy Abuse Prevention and Consumer Act, if the landlord started the process to take back the property before the tenant filed for bankruptcy, will the process continue even after the bankruptcy is filed? Or will the process need to start over?
Will be continued
How long does a HOA have to provide the current association records after a member's request?
Within 10 business days of receipt
As a real estate examinee, you will always be tested on the most ? law at the time of the examination.
current
CID association's board of directors have fiscal responsibilities. One of them includes comparing the current year's actual reserve revenues and expenses to the:
current year budget
The local government shall provide the housing developer with a density bonus and other incentives for the production of ?
lower income housing units
Real Estate Fraud Prosecution Trust Fund money MUST ONLY BE USED in connection with investigations involving:
recorded real estate documents
