Thursday May 5, 2011 3:00 p.m. - 5:00 p.m. Sacramento Convention Center
Mission Statement: The mission of the committee is to monitor and supervise the state implementation of C.A.R. public policy in legislation and regulation; and to evaluate policy recommendations that arise in C.A.R.'s four public policy committees: Transaction and Regulatory, Taxation and Government Finance, Land Use and Environmental, and Housing. The Legislative Committee reports to the Executive Committee and the Board of Directors. (January 2010)
Presiding: Steve White, Chair Wendy Furth, Vice Chair
Liaisons: Ruth Hayles, Executive Committee Mike Riley, Executive Committee William Brown, NAR
Staff: Alex Creel Stan Wieg
I. Introduction and Welcome - Steve White
II. Legislative Update A. Legislature and state budget developments – Oral update from staff. B. Member mobilization – Update on Broker Involvement Program, member mobilization issues and a recap of Legislative Day.
III. Sponsored Legislation
A. SB 150, Correa - Right to Rent Common Interest Development unit - This measure, is a re-introduction of C.A.R.’s AB 2259 (Mullin) of 2008 and protects the right of a CID unit owner to rent his or her unit, if that right existed at the time the owner purchased the unit.
B. SB 458, Corbett - Anti-Deficiency protections - C.A.R.-sponsored SB 458 revisited the “anti-deficiency” issue of SB 1178 (Corbett, 2010), which was vetoed by Governor Schwarzenegger. As introduced SB 458 would have extended existing anti-deficiency protections to cover the refinance of purchase money mortgages that include debt (cash out) incurred to acquire, construct or improve the home. C.A.R. and the lender groups have reached an agreement to amend SB 458 to instead expand the provisions of existing law (SB 931 of 2010) which became effective this year. Existing law (SB 931) requires a first mortgage holder to accept an agreed upon short sale payment as full payment for the outstanding balance of the loan, but does not apply to junior lien holders. SB 458 will extend the protections of SB 931 to junior liens effectively providing that any lender that agrees to a short sale must accept the agreed upon short sale payment as
full payment of the outstanding balance of all loans.
C. SB 510, Correa - DRE designated manager rule - Under current law, the Department of Real Estate (DRE) is only permitted to hold the broker of record accountable for any misconduct of a salesperson, even if the broker of record has delegated supervisorial responsibility to an office manager. C.A.R. is sponsoring SB 510 which would establish a designated office manager requirement for those licensees managing real estate offices. Under this legislation, a broker of record would be permitted to appoint an eligible real estate broker or salesperson to supervise branch office operations, provided that a contract detailing the duties and responsibilities to be performed by the office manager is delivered to DRE. The bill will allow DRE to create an office manager registration form for principal brokers to use to notify the DRE of their office manager appointment. DRE will also be able to discipline managers for failing to properly supervise the licensed activities within their jurisdiction. Principal brokers remain accountable for their own supervisorial responsibilities.
D. SB 837, Blakeslee - TDS water device disclosure conformity - SB 407 (Padilla), signed into law by the Governor in 2009, requires that all residential properties be retrofitted with low-flow toilets, shower heads and faucets starting with remodels in 2014, all remaining homes by 2017. Additionally, all commercial properties and multi-family homes will need to be retrofitted by 2019. C.A.R. is sponsoring SB 837 to add language to the Transfer Disclosure Statement (TDS) notifying the purchaser of a property of these impending requirements. The inclusion of this information in the TDS will ensure that sellers and buyers are aware of these water efficiency retrofit requirements and provide disclosure liability protection to REALTORS®.
E. AB 278, Hill - DRE citation and fine authority - Currently, real estate licensees subject to discipline for any violation must go through the Department of Real Estate’s (DRE) administrative hearing process. Notice of discipline, no matter how minor the infraction, is published in the DRE bulletin, widely circulated among real estate agents. AB 278 would allow the DRE to issue a “civil citation” with a maximum fine of $1,000 for minor infractions. Licensee would be permitted to contest the citation through the current hearing process. The action would not be published in the DRE bulletin, unless there is a contested hearing and judgment, although it could still be discovered in the public record. C.A.R. is sponsoring this legislation so DRE field staff can take immediate action on minor infractions without having to complete the lengthy and expensive hearing process.
F. AB 392, Alejo - Public agency agenda (Brown Act) reform - The Brown Act currently requires local government entities to post their agendas 72 hours in advance of scheduled meetings; however there is no requirement that staff reports be similarly posted and the Brown Act can be satisfied by posting a hard copy of the agenda at a location accessible to the public. This can present a formidable obstacle for individuals and organizations attempting to follow the actions of local governments. C.A.R. is sponsoring AB 392 which would require all local government entities governed by the Brown Act to post their agendas as well as staff reports relating to agenda items on their website (if they have a website – the measure does not require the establishment of a website). Requiring that agendas and staff reports be posted on the locality’s website will allow individuals and organizations to more easily track proposed governmental actions.
G. AB 771, Butler - Common Interest Development document fees - Home Owner Associations (HOAs) are required by law to provide specific documents to prospective purchasers of homes in common interest developments (CIDs). Current law prohibits HOA’s from charging fees in excess of what is “reasonable” based on the actual cost of processing and producing these documents. HOA’s are increasingly delegating document preparation to outside third party vendors or contractors that, under a 2007 4th Appellate District Court decision, are not subject to this fee limitation. This delegation of responsibility by HOA’s sometimes results in home purchasers being forced to pay additional fees which are “bundled” with the document costs. C.A.R.-sponsored AB 771 specifically provides which disclosures are required to be provided to a prospective HOA unit purchaser. This measure also states that ONLY fees for the required documents can be charged upon receipt, effectively prohibiting the bundling of fees with other documents which can be paid for at close of escrow or as agreed upon by the parties.
H. Broker pre-license experience clarification (2012 legislation) – C.A.R.’s Board of Directors directed C.A.R. to pursue legislative opportunities, as they arise, to clarify the law to require "degree brokers" to have an undergraduate degree in real estate or two years of "general real estate" experience. C.A.R. is actively seeking an opportunity to insert the proposal in appropriate legislation; if legislative opportunities do not present themselves in 2011, C.A.R. will "SPONSOR" legislation to achieve the change in 2012.
IV. Reports of Standing Committees – Standing policy committees report to Legislative Committee on actions involving state law or policy. Note that federal issues will be reported by the same committees to the Federal Committee.
A. Housing – Allen Okomoto
B. Land Use and Environmental – Greg Haas
C. Taxation and Government Finance – Patricia Bouie-Hinds
D. Transactions and Regulatory - Steve Rosco
E. DRE Commissioner Selection Task Force – Steve White