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SB1026:v97#DOCUMENT

Amended  IN  Senate  April 28, 2014
Amended  IN  Senate  March 24, 2014

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Senate Bill No. 1026


Introduced by Senator Vidak

February 14, 2014


An act to amend Sections 5705, 5710, and 6822 of the Civil Code, relating to common interest developments.


LEGISLATIVE COUNSEL'S DIGEST


SB 1026, as amended, Vidak. Common interest developments: assessment collection: notice.
The Davis-Stirling Common Interest Development Act governs the management and operation of common interest developments, except for those developments limited to industrial or commercial uses, which are governed by the Commercial and Industrial Common Interest Development Act. Each act requires specified procedures for the collection of delinquent assessments, including, but not limited to, a procedure for giving notice to an owner of a separate interest of collection actions.
This bill would allow, would, until January 1, 2019, authorize, under certain circumstances, an association governed by either act to serve an owner or owner’s representative with notice of a foreclosure action to collect delinquent assessments by posting a copy of the notice on the owner’s separate interest in a manner most likely to give actual notice to the party to be served and mailing a copy of the notice, as specified. The bill would also, until January 1, 2019, authorize, under certain circumstances the notice of foreclosure to be published.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 5705 of the Civil Code is amended to read:

5705.
 (a) Notwithstanding any law or any provisions of the governing documents to the contrary, this section shall apply to debts for assessments that arise on and after January 1, 2006.
(b) Prior to initiating a foreclosure on an owner’s separate interest, the association shall offer the owner and, if so requested by the owner, participate in dispute resolution pursuant to the association’s “meet and confer” program required in Article 2 (commencing with Section 5900) of Chapter 10 or alternative dispute resolution as set forth in Article 3 (commencing with Section 5925) of Chapter 10. The decision to pursue dispute resolution or a particular type of alternative dispute resolution shall be the choice of the owner, except that binding arbitration shall not be available if the association intends to initiate a judicial foreclosure.
(c) The decision to initiate foreclosure of a lien for delinquent assessments that has been validly recorded shall be made only by the board and may not be delegated to an agent of the association. The board shall approve the decision by a majority vote of the directors in an executive session. The board shall record the vote in the minutes of the next meeting of the board open to all members. The board shall maintain the confidentiality of the owner or owners of the separate interest by identifying the matter in the minutes by the parcel number of the property, rather than the name of the owner or owners. A board vote to approve foreclosure of a lien shall take place at least 30 days prior to any public sale.
(d) (1) The board shall provide notice by personal service in accordance with the manner of service of summons in Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure to an owner of a separate interest who occupies the separate interest or to the owner’s legal representative, if the board votes to foreclose upon the separate interest. The board shall provide written notice to an owner of a separate interest who does not occupy the separate interest by first-class mail, postage prepaid, at the most current address shown on the books of the association. In the absence of written notification by the owner to the association, the address of the owner’s separate interest may be treated as the owner’s mailing address.
(2) If after reasonable diligence the notice is not able to be served on an owner or owner’s representative in accordance with the manner of service set forth in paragraph (1), the association may post a copy of the notice on the owner’s separate interest in a manner most likely to give actual notice to the party to be served and mail a copy of the notice by first-class mail to all known addresses of the owner or owner’s representative. If the association effects service by posting and mailing in accordance with this paragraph, the association shall record provide to the owner or owner’s representative a declaration of diligence, specifying in reasonable detail the efforts made to effect service in accordance with the manner of service of summons in Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure. The declaration shall contain the name, address, and telephone number of the association, as well as the legal description and assessor’s parcel number of the separate interest subject to the notice. The declaration shall be sent by first-class mail to all known addresses of the owner or owner’s representative.
(3) If after reasonable diligence the notice is not able to be served on an owner or owner’s representative in accordance with the manner of service set forth in paragraph (1), and after posting and mailing a copy of the notice and providing a declaration as set forth in paragraph (2), the association may publish the notice once per week for three consecutive calendar weeks, and except for the reference to the time period, shall otherwise conform to the requirements of paragraph (2) of subdivision (b) of Section 2924f.
(4) For purposes of this subdivision, “diligence” means an attempt to effect personal service by a process server who is not affiliated with the common interest development, the homeowners association, or its managers, attorneys, or agents, registered pursuant to Section 22350 of the Business and Professions Code, on three separate days at three different times of day, including at least one attempt after normal business hours. At least one attempt at personal service shall occur on a weekday, and at least one attempt shall occur on a weekend day.
(5) Paragraphs (2) to (4), inclusive, of this subdivision shall become inoperative on January 1, 2019.

SEC. 2.

 Section 5710 of the Civil Code is amended to read:

5710.
 (a) Any sale by the trustee shall be conducted in accordance with Sections 2924, 2924b, and 2924c applicable to the exercise of powers of sale in mortgages and deeds of trust.
(b) (1) In addition to the requirements of Section 2924, the association shall serve a notice of default on the person named as the owner of the separate interest in the association’s records or, if that person has designated a legal representative pursuant to this subdivision, on that legal representative. Service shall be in accordance with the manner of service of summons in Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure. An owner may designate a legal representative in a writing that is mailed to the association in a manner that indicates that the association has received it.
(2) If after reasonable diligence the notice is not able to be served on an owner or owner’s representative in accordance with the manner of service set forth in paragraph (1), the association may post a copy of the notice on the owner’s separate interest in a manner most likely to give actual notice to the party to be served and mail a copy of the notice by first-class mail to all known addresses of the owner or owner’s representative. If the association effects service by posting and mailing in accordance with this paragraph, the association shall record provide to the owner or owner’s representative a declaration of diligence, specifying in reasonable detail the efforts made to effect service in accordance with the manner of service of summons in Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure. The declaration shall contain the name, address, and telephone number of the association, as well as the legal description and assessor’s parcel number of the separate interest subject to the notice. The declaration shall be sent by first-class mail to all known addresses of the owner or owner’s representative.
(3) If after reasonable diligence the notice is not able to be served on an owner or owner’s representative in accordance with the manner of service set forth in paragraph (1), and after posting and mailing a copy of the notice and providing a declaration as set forth in paragraph (2), the association may publish the notice once per week for three consecutive calendar weeks, and except for the reference to the time period, shall otherwise conform to the requirements of paragraph (2) of subdivision (b) of Section 2924f.
(4) For purposes of this section, “diligence” means an attempt to effect personal service by a process server who is not affiliated with the common interest development, the homeowners association, or its managers, attorneys, or agents, registered pursuant to Section 22350 of the Business and Professions Code, on three separate days at three different times of day, including at least one attempt after normal business hours. At least one attempt at personal service shall occur on a weekday, and at least one attempt shall occur on a weekend day.
(5) Paragraphs (2) to (4), inclusive, of this subdivision shall become inoperative on January 1, 2019.
(c) The fees of a trustee may not exceed the amounts prescribed in Sections 2924c and 2924d, plus the cost of service for either of the following:
(1) The notice of default pursuant to subdivision (b).
(2) The decision of the board to foreclose upon the separate interest of an owner as described in subdivision (d) of Section 5705.

SEC. 3.

 Section 6822 of the Civil Code is amended to read:

6822.
 (a) Any sale by the trustee shall be conducted in accordance with Sections 2924, 2924b, and 2924c applicable to the exercise of powers of sale in mortgages and deeds of trust.
(b) (1) In addition to the requirements of Section 2924, the association shall serve a notice of default on the person named as the owner of the separate interest in the association’s records or, if that person has designated a legal representative pursuant to this subdivision, on that legal representative. Service shall be in accordance with the manner of service of summons in Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure. An owner may designate a legal representative in a writing that is mailed to the association in a manner that indicates that the association has received it.
(2) If after reasonable diligence the notice is not able to be served on an owner or owner’s representative in accordance with the manner of service set forth in paragraph (1), the association may post a copy of the notice on the owner’s separate interest in a manner most likely to give actual notice to the party to be served and mail a copy of the notice by first-class mail to all known addresses of the owner or owner’s representative. If the association effects service by posting and mailing in accordance with this paragraph, the association shall record provide to the owner or owner’s representative a declaration of diligence, specifying in reasonable detail the efforts made to effect service in accordance with the manner of service of summons in Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure. The declaration shall contain the name, address, and telephone number of the association, as well as the legal description and assessor’s parcel number of the separate interest subject to the notice. The declaration shall be sent by first-class mail to all known addresses of the owner or owner’s representative.
(3) If after reasonable diligence the notice is not able to be served on an owner or owner’s representative in accordance with the manner of service set forth in paragraph (1), and after posting and mailing a copy of the notice and providing a declaration as set forth in paragraph (2), the association may publish the notice once per week for three consecutive calendar weeks, and except for the reference to the time period, shall otherwise conform to the requirements of paragraph (2) of subdivision (b) of Section 2924f.
(4) For purposes of this section, “diligence” means an attempt to effect personal service by a process server who is not affiliated with the common interest development, the homeowners association, or its managers, attorneys, or agents, registered pursuant to Section 22350 of the Business and Professions Code, on three separate days at three different times of day, including at least one attempt after normal business hours. At least one attempt at personal service shall occur on a weekday, and at least one attempt shall occur on a weekend day.
(5) Paragraphs (2) to (4), inclusive, of this subdivision shall become inoperative on January 1, 2019.
(c) The fees of a trustee may not exceed the amounts prescribed in Sections 2924c and 2924d, plus the cost of service for the notice of default pursuant to subdivision (b).