October 4, 2012
The following is for study only and has NOT been approved by the Housing, Legislative or Executive Committees, or the Board of Directors.
Housing Committee
Legislative Committee
Issue:
Should C.A.R. sponsor legislation that states: A prospective purchaser of a unit in a CID shall only pay for documents required by law; should not pay for required documents in possession of the seller; and be provided a document-specific disclosure of fees assessed by the document provider?
Options:
1. Sponsor legislation.
2. Take no action.
3. Other
Status/Summary:
AB 771 (Butler) went into effect on January 1, 2012. Sponsored by C.A.R., this legislation was intended to eliminate the "bundling" of charges for other documents required in an escrow for the pending sale of unit in a common interest development (CID) with charges for documents required to be provided to a prospective purchaser by Civil Code Section 1368. During the year following the effective date of AB 771 it has become apparent that several clarifying amendments could assist achievement of the goals that were sought to be achieved by enactment of AB 771.
Discussion:
C.A.R. Members who specialize in CID transactions have informed C.A.R. that several "abuses" continue to be experienced in the provision of documents required by Section 1368. Such abuses include:
1) Continuing to "bundle" non-Section 1368 documents with those required by Section 1368 and imposing charges not related to the requirements of this section.
2) Requiring the prospective purchaser to pay for documents that the seller has in his or her possession and that could be provided directly to the prospective purchaser by seller at no cost.
3) "Padding" of charges for the documents being provided to the prospective purchaser, making the total charge indicated in a completed Section 1368.2 Form more than the accumulated individual costs of providing the documents required by Section 1368.
What action, if any, should C.A.R. take with respect to addressing the issues noted above that have surfaced as AB 771 of 2011 went into effect?
