NEW CALIFORNIA STATE LAWS
A few new state laws went into effect on January 1st that affect condominium projects and homeowners associations (“HOAs” ). While not groundbreaking, the new laws may be of interest to our readers in the condominium industry. Below is a brief overview:
AB 2273: When a condo unit owner is in default on its mortgage and facing foreclosure, the owner is typically also in default on its payment of assessments to the HOA. This may leave the HOA without sufficient funding to perform its maintenance and other obligations. In the event a condo unit is foreclosed upon and sold at a foreclosure sale, it may be difficult for an HOA to quickly identify and bill the new owner in order to avoid a lapse in collection of assessments for that unit. To facilitate an HOA’s ability to identify the new owner after a foreclosure sale, this law amends the Davis-Stirling Common Interest Development Act (“Act”) by adding Section 2924.1 to the Civil Code, and by amending Civil Code Section 2924b. The law requires that (i) a trustee’s deed must be recorded within 30 days of the foreclosure sale (thereby making the new owner’s name public record), and (ii) information requested by the HOA about the new unit owner must be mailed to the HOA within 15 days after date of the sale. These rules are intended to enable HOAs to minimize gaps in the collection of assessments in order to maintain financial stability.
AB 1838: Under the Act, HOAs must provide certain documents to a prospective condominium purchaser before transfer of title to the unit. In connection with a request for such documents, the HOA must prepare a required form that contains an estimate of the fees and costs associated with providing the requested documents. This law amends Civil Code Sections 1368 and 1368.2 of the Act in response to perceived overcharging of such costs and related fees to condo unit owners and prospective purchasers. In the event such a document request is rescinded, the new law generally prohibits cancellation fees and requires the HOA to refund related fees and costs, so long as sufficient notice was given and the document copying has not already taken place.
SB 880: This law is intended to further promote use of electric vehicles in the state by clarifying existing provisions in the Act to facilitate installation and use of electric vehicle charging stations in condominium projects. The new law amends Civil Code Sections 1353.9 and 1363.07 to provide that the governing documents of a condo project may not prohibit the installation or use of an electric vehicle charging station, subject to certain limitations. The law applies to electric vehicle charging stations both in an owner’s exclusive use parking space, and in the general project common area.
Note: The laws described above are not intended to be an exhaustive list of all new state laws that may affect condominium projects or HOAs. This list merely represents those laws that we believe will be of the most interest to our clients and readers of this Update. The laws also apply to other types of common interest developments in California.
UPDATE ON PROPOSED SAN FRANCISCO CONDOMINIUM CONVERSION ORDINANCE
Condominium Conversion Impact Fee: The new ordinance sponsored by Supervisors Farrell and Wiener was discussed at the meeting of the Board of Supervisors Land Use and Economic Development Committee this Monday, January 28th. After nearly 4 hours of public comment where the Committee heard impassioned statements from both tenancy-in-common (“TIC”) owners in support of the legislation, and tenants and tenants rights advocates in opposition of the legislation, the Committee voted to postpone its vote and continue the matter until February 25th in order to give the opposing interests time to attempt to negotiate a compromise. As we reported in last week’s Update, the ordinance would provide qualifying TIC owners a one-time opportunity to bypass the onerous condominium conversion lottery upon payment of a fee to the City. We will continue to monitor the legislation and provide future updates on its progress. Those interested in this issue should contact their Supervisor to voice their opinion.
Correction: Last week’s Update erroneously stated that “the conversion of a building with more than six (6) apartment or tenancy-in-common units to condominium subdivisions is limited to 200 units annually, which are selected in a condominium lottery.” In San Francisco, conversions of buildings with more than six (6) apartment or tenancy-in-common units to condominium subdivisions are not permitted. The lottery is held for condominium conversions of buildings with six (6) or fewer apartment or tenancy-in-common units. The maximum number of units that can be converted to condominiums City-wide in any given year is 200. Certain qualifying conversions of buildings with two (2) apartment or tenancy-in-common units may bypass the lottery.
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information
contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions
and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.