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AB-643 Common interest developments: community association assessments.(2001-2002)

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AB643:v90#DOCUMENT

Assembly Bill No. 643
CHAPTER 1117

An act to amend Section 1368 of, and to amend, renumber, and add Section 1363.6 of, the Civil Code, and to amend Sections 12176 and 12191 of the Government Code, relating to common interest developments.

[ Filed with Secretary of State  September 30, 2002. Approved by Governor  September 30, 2002. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 643, Lowenthal. Common interest developments: community association assessments.
(1) Existing law requires a common interest development association’s articles of incorporation filed with the Secretary of State on or after January 1, 1995, to include a statement of information identifying the corporation as a common interest development, specified information about the corporate office, and specified information about the association’s managing agent. Existing law further requires that the statement of principal business activity in the annual statement filed by an incorporated association with the Secretary of State also include this information.
This bill would require a common interest development association, whether incorporated or unincorporated, to submit to the Secretary of State, on a form and for a fee not to exceed $30 to be prescribed by that office, information regarding the common interest development. The fee would be deposited in the Secretary of State’s Business Fees Fund, as specified. Among other things, and in addition to the information described above, this information would include the address and either the daytime telephone number or the e-mail address of the president of the association, specified information about the location of the common interest development, and the number of separate interests in the development. The bill would require this information to be submitted according to specified criteria and within certain timeframes. The bill would limit access to specified information concerning the directors of the association, making it available only for governmental purposes and to members of the Legislature and the Business, Transportation and Housing Agency. The bill would provide for the suspension of the unincorporated association’s rights, privileges, and powers as a corporation and would subject it to monetary penalties for failure to comply with those provisions. The bill would also make related changes.
(2) Existing law requires an owner of a separate interest, as specified, to provide the prospective purchaser with a copy of the governing documents of the common interest development.
This bill would additionally require an owner to provide the purchaser with a statement from an authorized representative of the common interest development’s association indicating if the association is not incorporated, as specified.
(3) This bill would incorporate additional changes in Section 1368 of the Civil Code proposed by AB 2289, to be operative if AB 2289 and this bill become effective on or before January 1, 2003, and this bill is enacted last.

The people of the State of California do enact as follows:


SECTION 1.

 Section 1363.6 of the Civil Code is amended and renumbered to read:

1366.2.
 (a) In order to facilitate the collection of regular assessments, special assessments, transfer fees, and similar charges, the board of directors of any association is authorized to record a statement or amended statement identifying relevant information for the association. This statement may include any or all of the following information:
(1) The name of the association as shown in the conditions, covenants, and restrictions or the current name of the association, if different.
(2) The name and address of a managing agent or treasurer of the association or other individual or entity authorized to receive assessments and fees imposed by the association.
(3) A daytime telephone number of the authorized party identified in paragraph (2) if a telephone number is available.
(4) A list of separate interests subject to assessment by the association, showing the assessor’s parcel number or legal description, or both, of the separate interests.
(5) The recording information identifying the declaration or declarations of covenants, conditions, and restrictions governing the association.
(6) If an amended statement is being recorded, the recording information identifying the prior statement or statements which the amendment is superseding.
(b) The county recorder is authorized to charge a fee for recording the document described in subdivision (a), which fee shall be based upon the number of pages in the document and the recorder’s per-page recording fee.

SEC. 2.

 Section 1363.6 is added to the Civil Code, to read:

1363.6.
 (a) To assist with the identification of common interest developments, each association, whether incorporated or unincorporated, shall submit to the Secretary of State, on a form and for a fee not to exceed thirty dollars ($30) that the Secretary of State shall prescribe, the following information concerning the association and the development that it manages:
(1) A statement that the association is formed to manage a common interest development under the Davis-Stirling Common Interest Development Act.
(2) The name of the association.
(3) The street address of the association’s onsite office, or, if none, of the responsible officer or managing agent of the association.
(4) The address and either the daytime telephone number or e-mail address of the president of the association, other than the address, telephone number, or e-mail address of the association’s onsite office or managing agent of the association.
(5) The name, street address, and daytime telephone number of the association’s managing agent, if any.
(6) The county, and if in an incorporated area, the city in which the development is physically located. If the boundaries of the development are physically located in more than one county, each of the counties in which it is located.
(7) If the development is in an unincorporated area, the city closest in proximity to the development.
(8) The nine-digit ZIP Code, front street, and nearest cross street of the physical location of the development.
(9) The type of common interest development, as defined in subdivision (c) of Section 1351, managed by the association.
(10) The number of separate interests, as defined in subdivision (l) of Section 1351, in the development.
(b) The association shall submit the information required by this section as follows:
(1) By incorporated associations, within 90 days after the filing of its original articles of incorporation, and thereafter at the time the association files its biennial statement of principle business activity with the Secretary of State pursuant to Section 8210 of the Corporations Code.
(2) By unincorporated associations, in July of 2003, and in that same month biennially thereafter. Upon changing its status to that of a corporation, the association shall comply with the filing deadlines in paragraph (1).
(c) The association shall notify the Secretary of State of any change in the street address of the association’s onsite office or of the responsible officer or managing agent of the association in the form and for a fee prescribed by the Secretary of State, within 60 days of the change.
(d) On and after January 1, 2006, the penalty for an incorporated association’s noncompliance with the initial or biennial filing requirements of this section shall be suspension of the association’s rights, privileges, and powers as a corporation and monetary penalties, to the same extent and in the same manner as suspension and monetary penalties imposed pursuant to Section 8810 of the Corporations Code.
(e) The Secretary of State shall make the information submitted pursuant to paragraph (4) of subdivision (a) available only for governmental purposes and only to members of the Legislature and the Business, Transportation and Housing Agency, upon written request. All other information submitted pursuant to this section shall be subject to public inspection pursuant to the California Public Records Act, Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code. The information submitted pursuant to this section shall be made available for governmental or public inspection, as the case may be, on or before July 1, 2004, and thereafter.

SEC. 3.

 Section 1368 of the Civil Code is amended to read:

1368.
 (a) The owner of a separate interest, other than an owner subject to the requirements of Section 11018.6 of the Business and Professions Code, shall, as soon as practicable before transfer of title to the separate interest or execution of a real property sales contract therefor, as defined in Section 2985, provide the following to the prospective purchaser:
(1) A copy of the governing documents of the common interest development, including a copy of the association’s articles of incorporation, or, if not incorporated, a statement in writing from an authorized representative of the association that the association is not incorporated.
(2) If there is a restriction in the governing documents limiting the occupancy, residency, or use of a separate interest on the basis of age in a manner different from that provided in Section 51.3, a statement that the restriction is only enforceable to the extent permitted by Section 51.3 and a statement specifying the applicable provisions of Section 51.3.
(3) A copy of the most recent documents distributed pursuant to Section 1365.
(4) A true statement in writing obtained from an authorized representative of the association as to the amount of the association’s current regular and special assessments and fees, any assessments levied upon the owner’s interest in the common interest development that are unpaid on the date of the statement, and any monetary fines or penalties levied upon the owner’s interest and unpaid on the date of the statement. The statement obtained from an authorized representative shall also include true information on late charges, interest, and costs of collection which, as of the date of the statement, are or may be made a lien upon the owner’s interest in a common interest development pursuant to Section 1367.
(5) A copy or a summary of any notice previously sent to the owner pursuant to subdivision (h) of Section 1363 that sets forth any alleged violation of the governing documents that remains unresolved at the time of the request. The notice may not be deemed a waiver of the association’s right to enforce the governing documents against the owner or the prospective purchaser of the separate interest with respect to any violation. This paragraph may not be construed to require an association to inspect an owner’s separate interest.
(6) A copy of the preliminary list of defects provided to each member of the association pursuant to Section 1375, unless the association and the builder subsequently enter into a settlement agreement or otherwise resolve the matter and the association complies with Section 1375.1. Disclosure of the preliminary list of defects pursuant to this paragraph shall not waive any privilege attached to the document. The preliminary list of defects shall also include a statement that a final determination as to whether the list of defects is accurate and complete has not been made.
(7) A copy of the latest information provided for in Section 1375.1.
(8) Any change in the association’s current regular and special assessments and fees, which have been approved by the association’s board of directors, but have not become due and payable as of the date disclosure is provided pursuant to this subdivision.
(b) Upon written request, an association shall, within 10 days of the mailing or delivery of the request, provide the owner of a separate interest with a copy of the requested items specified in paragraphs (1) to (7), inclusive, of subdivision (a). The association may charge a fee for this service, which may not exceed the association’s reasonable cost to prepare and reproduce the requested items.
(c) An association may not impose or collect any assessment, penalty, or fee in connection with a transfer of title or any other interest except the association’s actual costs to change its records and that authorized by subdivision (b).
(d) Any person or entity who willfully violates this section shall be liable to the purchaser of a separate interest which is subject to this section for actual damages occasioned thereby and, in addition, shall pay a civil penalty in an amount not to exceed five hundred dollars ($500). In an action to enforce this liability, the prevailing party shall be awarded reasonable attorneys’ fees.
(e) Nothing in this section affects the validity of title to real property transferred in violation of this section.
(f) In addition to the requirements of this section, an owner transferring title to a separate interest shall comply with applicable requirements of Sections 1133 and 1134.

SEC. 3.5.

 Section 1368 of the Civil Code is amended to read:

1368.
 (a) The owner of a separate interest, other than an owner subject to the requirements of Section 11018.6 of the Business and Professions Code, shall, as soon as practicable before transfer of title to the separate interest or execution of a real property sales contract therefor, as defined in Section 2985, provide the following to the prospective purchaser:
(1) A copy of the governing documents of the common interest development, including a copy of the association’s articles of incorporation, or, if not incorporated, a statement in writing from an authorized representative of the association that the association is not incorporated.
(2) If there is a restriction in the governing documents limiting the occupancy, residency, or use of a separate interest on the basis of age in a manner different from that provided in Section 51.3, a statement that the restriction is only enforceable to the extent permitted by Section 51.3 and a statement specifying the applicable provisions of Section 51.3.
(3) A copy of the most recent documents distributed pursuant to Section 1365.
(4) A true statement in writing obtained from an authorized representative of the association as to the amount of the association’s current regular and special assessments and fees, any assessments levied upon the owner’s interest in the common interest development that are unpaid on the date of the statement, and any monetary fines or penalties levied upon the owner’s interest and unpaid on the date of the statement. The statement obtained from an authorized representative shall also include true information on late charges, interest, and costs of collection which, as of the date of the statement, are or may be made a lien upon the owner’s interest in a common interest development pursuant to Section 1367 or 1367.1.
(5) A copy or a summary of any notice previously sent to the owner pursuant to subdivision (h) of Section 1363 that sets forth any alleged violation of the governing documents that remains unresolved at the time of the request. The notice shall not be deemed a waiver of the association’s right to enforce the governing documents against the owner or the prospective purchaser of the separate interest with respect to any violation. This paragraph shall not be construed to require an association to inspect an owner’s separate interest.
(6) A copy of the preliminary list of defects provided to each member of the association pursuant to Section 1375, unless the association and the builder subsequently enter into a settlement agreement or otherwise resolve the matter and the association complies with Section 1375.1. Disclosure of the preliminary list of defects pursuant to this paragraph shall not waive any privilege attached to the document. The preliminary list of defects shall also include a statement that a final determination as to whether the list of defects is accurate and complete has not been made.
(7) A copy of the latest information provided for in Section 1375.1.
(8) Any change in the association’s current regular and special assessments and fees which have been approved by the association’s board of directors, but have not become due and payable as of the date disclosure is provided pursuant to this subdivision.
(b) Upon written request, an association shall, within 10 days of the mailing or delivery of the request, provide the owner of a separate interest with a copy of the requested items specified in paragraphs (1) to (8), inclusive, of subdivision (a). The association may charge a fee for this service, which shall not exceed the association’s reasonable cost to prepare and reproduce the requested items.
(c) An association shall not impose or collect any assessment, penalty, or fee in connection with a transfer of title or any other interest except the association’s actual costs to change its records and that authorized by subdivision (b).
(d) Any person or entity who willfully violates this section shall be liable to the purchaser of a separate interest which is subject to this section for actual damages occasioned thereby and, in addition, shall pay a civil penalty in an amount not to exceed five hundred dollars ($500). In an action to enforce this liability, the prevailing party shall be awarded reasonable attorneys’ fees.
(e) Nothing in this section affects the validity of title to real property transferred in violation of this section.
(f) In addition to the requirements of this section, an owner transferring title to a separate interest shall comply with applicable requirements of Sections 1133 and 1134.

SEC. 4.

 Section 12176 of the Government Code is amended to read:

12176.
 (a) Commencing July 1, 1992, all fees collected by the Secretary of State’s office pursuant to the Business and Professions Code, Civil Code, Code of Civil Procedure, Commercial Code, Corporations Code, Food and Agricultural Code, Harbors and Navigation Code, and this code, excluding Section 81008 of this code, shall be paid into the Secretary of State’s Business Fees Fund which was created by former Section 12181 and is hereby continued in existence in the State Treasury for the administration of that portion of the Secretary of State’s functions under these codes.
(b) It is the intent of the Legislature that moneys deposited into the Secretary of State’s Business Fees Fund shall be used to support the programs from which fees are collected. It is further the intent of the Legislature that fees shall be sufficient to cover the costs of these programs and shall be expended, commencing in the 1992-93 fiscal year, to the extent that appropriations are made in the annual Budget Act. Of the fees collected, and any interest earned thereon, in excess of the authority of the Secretary of State to expend pursuant to the annual Budget Act, up to one million dollars ($1,000,000) may remain in the Secretary of State’s Business Fee Fund. Any additional excess fees and interest earned shall be transferred to the General Fund at the end of each fiscal year.
At least weekly, all fees collected by the Secretary of State shall be paid into the State Treasury.

SEC. 5.

 Section 12191 of the Government Code is amended to read:

12191.
 The miscellaneous business entity filing fees are the following:
(a) Foreign Associations, as defined in Sections 170 and 171 of the Corporations Code:
(1) Filing the statement and designation upon the qualification of a foreign association pursuant to Section 2105 of the Corporations Code: One hundred dollars ($100).
(2) Filing an amended statement and designation by a foreign association pursuant to Section 2107 of the Corporations Code: Thirty dollars ($30).
(3) Filing a certificate showing the surrender of the right of a foreign association to transact intrastate business pursuant to Section 2112 of the Corporations Code: No fee.
(b) Unincorporated Associations:
(1) Filing a statement in accordance with Section 24003 of the Corporations Code as to principal place of office or place for sending notices or designating agent for service: Twenty-five dollars ($25).
(2) Insignia Registrations: Ten dollars ($10).
(c) Community Associations and Common Interest Developments:
(1) Filing a statement by a community association in accordance with Section 1363.6 of the Civil Code to register the common interest development that it manages: An amount not to exceed thirty dollars ($30).
(2) Filing an amended statement by a community association in accordance with Section 1363.6 of the Civil Code: No fee.

SEC. 6.

 Section 3.5 of this bill incorporates amendments to Section 1368 of the Civil Code proposed by both this bill and AB 2289. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2003, (2) each bill amends Section 1368 of the Civil Code, and (3) this bill is enacted after AB 2289, in which case Section 3 of this bill shall not become operative.