Liaisons: Ruth Hayle, 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 B. Overview of the C.A.R. policy formation process C. Member mobilization
III. Sponsored Legislation
A. Anti-Deficiency protections - C.A.R.’s Board of Directors has directed C.A.R. to re-introduce C.A.R. sponsored SB 1178 (Corbett, 2010), which was vetoed by Governor Schwarzenegger. Anti-Deficiency rules protect a borrower from personal liability on a purchase money mortgage which goes into default and eventually Judicial foreclosure. Due in part to declining interest rates, many purchase money mortgages have been refinanced and have lost their characterization as "purchase money". C.A.R. will “SPONSOR” legislation in 2011 to extend anti-deficiency protections to homeowners who have refinanced “purchase money” loans and are now facing foreclosure. The bill will extend anti-deficiency protections to cover the refinance of purchase money mortgages that include debt incurred to acquire, construct or improve the home. Any portion of a loan which was not used in the original acquisition, construction or subsequent improvement of the real property (i.e. vacations, education, hospital bills, vehicle purchases, etc.) will not enjoy the same anti-deficiency protections.
B. DRE designated manager rule - Under current law, the Department of Real Estate (DRE) is technically 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.’s Board of Directors has directed C.A.R. to “SPONSOR” legislation to 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 and principal brokers to notify the DRE of their office manager appointment. DRE will also be permitted to subject office managers to disciplinary action for failing to properly supervise the licensed activities within their jurisdiction. Principal brokers will still be held responsible for the supervision of their designated office managers.
C. DRE citation 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 the infraction, no matter how minor, is then published in the DRE bulletin, which is widely circulated among real estate agents. C.A.R.’s Board of Directors has directed C.A.R. to “SPONSOR” legislation to allow the DRE to instead 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.
D. Common Interest Development document fees - Home Owner Association’s (HOA’s) are required by law to provide specific documents to prospective purchasers of homes in a common interest developments (CIDs). Current law prohibits HOA’s from charging an amount 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 venders or contractors that, as determined by 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 inflated fees. C.A.R.’s Board of Directors has directed C.A.R. to “SPONSOR” legislation to extend the existing fee limitation for providing documents and materials to companies retained by HOA’s, which will assure that CID document costs are kept at a reasonable level.
E. Public agency agenda (Brown Act) reform - Current law requires local government agendas to be made available to the public 72 hours prior to a scheduled meeting. Most local governments provide hard copies of these materials at a designated location, but many do not make the materials available electronically. C.A.R.’s Board of Directors has directed C.A.R. to “SPONSOR” legislation to amend the Brown Act to require local governments to post meeting agendas as well as any staff reports on their website, if they have one, 72 hours prior to a scheduled meeting. This legislation will allow interested parties to obtain complete information on agenda items under consideration by local governments in a timely matter.
IV. Reports of Standing Committees
A. Housing B. Land Use and Environmental C. Taxation and Government Finance D. Transactions and Regulatory