COURTSIDE NEWSLETTER
TO: MEMBERS AND AFFILIATES OF THE ASSOCIATION OF REALTORS®
FROM: JOHN V. GIARDINELLI and SYLVIA J. SIMMONS,
ASSOCIATION COUNSEL
NEW FORMS
Seven new forms were released by C.A.R. the first week of November 2006. Here is a description of those forms and one released in July 2006, and information on which old forms can still be used and which may not:
Brand new forms:
Vacant Land Questionnaire (VLQ)
Provides sellers of vacant land with a means to make material disclosures, similar to the TDS for residential properties. The form has a list of questions about the seller’s knowledge of the property.
Buyer Inspection Waiver (BIW)
When the buyer decides not to have inspections done, this form documents that the buyer has been advised to obtain the inspections but declined to do so.
REALTORS® Acknowledgment (RA)
Promotes he value offered to a client when working with a REALTOR®.
Okay to use old form until December 31, 2007:
Notice of Termination of Tenancy (NTT)
Landlords must give 60 days’ notice to terminate a periodic tenancy, except that 30 days’ notice may be given if the tenant has resided in the property for less than a year or a tenant-occupied single family home or condo is being sold to a buyer who intends to live in the property. [See discussion of new laws -- AB1169 below.]
Okay to use old form:
Cooperating Broker Compensation Agreement and Escrow Instructions (CBC)
Now contains language regarding the listing broker’s obligation to pay the cooperating broker that mirrors the requirements in the MLS for MLS listed property and a section allowing a cooperating broker on a lease transaction to receive compensation if the tenant purchases the property.
Disclosure and Consent for Representation of More Than One Buyer or Seller (DA)
To conform to NAR Standard of Practice 1-13, now contains a notice to a buyer that the offer may not be kept confidential.
Cancellation of Listing (COL)
To conform to the listing agreement, language has been modified.
Seller’s Affidavit of Nonforeign Status and/or California Withholding Exemption (AS)
If the property is sold at a small gain and withholding will be limited, there is now a paragraph that can be checked.
SOME OF THE NEW LAWS FOR 2007
Licensing
AB 790 - Falsely Claiming to be a REALTOR®
California Business & Professions Code § 10177 is amended to authorize the Real Estate Commissioner to suspend or revoke the license of a real estate agent falsely claiming membership in trade organizations or falsely claiming to have special designations or certifications. Prohibited will be knowingly authorizing, directing, conniving at or aiding in the publication, advertisement or distribution or circulation of any material false statement or representation concerning his or her designation or a certification, or special education, credential, or trade organization membership.
AB 2429 – Changes to Real Estate Licensing Requirements
Effective October 1, 2007
California law* is amended to increase the minimum requirements for a salesperson to obtain a real estate license. The conditional salesperson licenses will no longer be available for new licensees, but the exception for attorneys and others qualified to take the broker exam will still apply.
*California Business & Professions Code §§ 10151, 10153.3, 10153.4, and 10153.5; repeals California Business & Professions Code § 10153.9.
Common Interest Developments and Homeowners’ Associations
AB2100 – HOA Disclosures
Effective January 1, 2007*
The Davis-Sterling Act is amended to require additional reporting on reserves for common interest developments (CIDs) and to extend disclosures for self-dealing by homeowner associations (HOAs), as follows:
a. Any deficiency in reserve funding must in the pro-forma operating budget on a per unit basis;
b. The HOA must provide a statement if it defers or decides not to repair/replace major components;
c. The HOA must provide a statement of its outstanding loans;
d. The HOA must have a reserve funding plan indicating how it will fund any deficiencies in reserve funding; and
e. The HOA must distribute the reserve funding plan to all members.
f. The assessments and reserve funding disclosure form is slightly revised.
g. When contracting with a board member, or an entity controlled by a board member or an entity in which a board member has material financial interest, the HOA must make certain disclosures and voting rules must be followed, regardless of whether the HOA is a corporation. (Non-corporate HOAs are no longer exempt from disclosure and voting rules.)
*Except that distribution of the reserve funding plan becomes effective January 1, 2009.
Environmental Hazards/Issues
AB 2861 - Lead-Based Paint Violations
Effective January 1, 2007
The California Health & Safety Code § 195256 is amended to increase the penalty for repeat violations of lead-based paint hazard laws. Violation will now be a misdemeanor with a fine of up to $5,000 and/or six months imprisonment. Now, a second or any subsequent violation of a cease and desist order to the owner when there is a lead hazard created by an "activity" at the premises would be a misdemeanor punishable by a fine not to exceed $5,000, or by imprisonment in county jail for up to six (6) months, or both (up from a fine of up to $1,000 under prior law).
SB841 – Firebreaks for State Responsibility Areas
Effective January 1, 2007
Section 4291.3 of the Public Resources Code is amended regarding state responsibility area lands under the authority of the Department of Forestry and Fire Protection, to authorize, in addition to the property owner, a state or local fire official, at his or her discretion, to permit an owner of property to construct a firebreak or implement appropriate vegetation management techniques, to ensure that defensible space is adequate for the protection of a hospital, adult residential care facility, school, aboveground storage tank, hazardous materials facility, or similar facility on the property. This law authorizes the firebreak to be for a radius of up to 300 feet from the facility, or to the property line, whichever distance is shorter.
Fair Housing
AB2800 - Anti-discrimination Provisions
Effective on January 1, 2007
Several California statutes* are amended relating to non-discrimination in housing to conform with the California Fair Employment and Housing Act. Specifically, provisions of existing law (including California Business & Professions Code § 10177) which prohibit discrimination on the basis of race, color, sex, religion or the marital status of a person are expanded to include national origin, ancestry, familial status, disability or sexual orientation.
State law has prohibited discrimination in housing, including real estate licensure, mortgage lending, club membership, development projects, and community redevelopment on the basis of race, color, gender, religion, or marital status. Now the following additional categories are protected under the Fair Employment and Housing Act: national origin, ancestry, familial status, disability, and sexual orientation.
*California Business & Professions Code §§ 10177 and 23428.20, California Civil Code §§ 782, 782.5, 798.20 and 800.25, California Government Code § 65008, California Health & Safety Code §§ 33050, 33435, 33436, 33724, 33769, 35811, 37630, 37923, 50955 and 51602.
Foreclosure
AB 2624 – Non-Judicial Foreclosures (including by HOAs)
Minor changes have been made to the Civil Code and the Code of Civil Procedure *regarding foreclosures of CID units in an HOA, including who gets notice, information to be in the notice of sale, fees a trustee can charge, privileged communications, and who can conduct foreclosures and information to be on the certificate of sale.
*California Civil Code §§ 882.020, 1367.1, 1367.4, 2924 and 2924a; California Code of Civil Procedure §§ 729.040, 729.050, 729.070 and 729.080.
Landlord/Tenant
AB 1169 - 60-Day Notice to Terminate Lease
Effective on January 1, 2007 [will sunset on January 1, 2010 unless extended by the California Legislature]
New California Civil Code § 1946.1 provided that month-to-month residential tenants are again entitled to a 60‑day notice when the tenants have been living in the property for at least one year. A 30‑day notice is still allowed in cases where any tenant or resident has been residing in the property for less than one year, then thirty (30) days notice is sufficient. An exception is still available for a thirty (30) day notice for certain qualifying properties for sale, under all of the following conditions:
1. The dwelling is a separately alienable unit (e.g. condo, single family residence, townhouse; but not a duplex, triplex or other multi-unit property);
2. The owner of the unit is being sold to a bona fide purchaser for value;
3. Escrow has been established with a licensed escrow agent or licensed real estate broker;
4. The buyer is a natural person (or persons);
5. Notice is given within 120 days after escrow is opened;
6. Notice was not previously given to the tenant; and
7. The buyer intends to live in the property for at least one full year.
Small Claims Court
AB 2618 – Jurisdiction Increased to $7,500
Effective on January 1, 2007.
When the general limits for small claims court were increased from $5,000 to $7,500 last year, there were some loose ends. The law has been amended by “clean-up” legislation which increases the jurisdictional limit in small claims court to $7,500 on certain issues which were left unchanged. The following areas (previously limited to $5,000) are now increased to $7,500:
1. Specified acts of discrimination, including boycotting, blacklisting, violence, and the threat of violence;
2. Specified enforcement actions relating to common interest developments for declaratory, injunctive or writ relief in conjunction with monetary damages;
3. Specified actions in landlord-tenant law;
4. A claim or counterclaim in a class action lawsuit;
5. Complaints to the PUC (Public Utilities Commission) through its website;
6. Complaints to the PUC against any electrical, gas, water, heat or telephone company;
7. Specified juvenile law claims against a minor, or a minor’s parents.
If you would like to see certain questions answered or topics you would like to see explored in this monthly column, please feel free to e‑mail your questions or comments. All opinions expressed are those of the writers and may not reflect the Association’s point of view. Specific legal issues should be addressed to competent legal counsel. The information contained in this Newsletter is general in nature.
John V. Giardinelli and Sylvia J. Simmons, Attorneys at Law
GIARDINELLI, DUKE & SIMMONS, LLP
31594 Railroad Canyon Road
Canyon Lake, California 92587
e-mail: office@gdslaw.org; sylvia@gdslaw.org