Agenda Summary - Common Interest Development CommitteeSheraton Hotel, Grand Main Ballroom-Magnolia Room Sacramento, California January 8, 2006 10:00 AM – 12:00 PMPresiding: Dona Crowder, Chair Steve Delmartini, Vice Chair Janet Halliburton, Vice Chair Jeanette Way, Committee LiaisonC.A.R. Staff: Ron Kingston Natalie CardenasIII. AB 2100 (Laird) Reserve Account Funding Disclosures and Decision Making Progress,A CAR Sponsored Bill – As amended, this bill requires Home Owner Association (HOA) Boards of Directors to prepare a reserve funding payment plan that will identify when and how much each homeowner will pay for the replacement and repair of major components within the common interest development. The bill will also cleanup legislation that became effective July 1, 2005, requiring Associations to complete a new disclosure form for sellers. Finally, the bill memorializes in the Davis Sterling Common Interest Development Act a prohibition of boards of directors to vote where they have a financial conflict of interest. AB 2100 is supported by all the major CID organizations. The bill recently passed out of the Assembly on a bipartisan vote and is now in the Senate, awaiting committee assignment. CAR Position – SPONSOR. Status: Senate Rules Committee.IV. Condominium ConversionsA. AB 2464 (Saldana) CEQA Requirements for Conversions – The bill would have required condominium conversions in the City of San Diego to be subject to the requirements of the California Environmental Quality Act (CEQA). C.A.R. was the only property management organization to oppose the bill in committee. C.A.Ropposed the bill on the theory that property owners that apply for a conversion would never meet CEQA mitigation requirements and as a consequence a conversion would be denied. C.A.R. Position: OPPOSE. Status: Defeated in Assembly Local Government Committee.B. AB 2562 (Saldana) Local Government Approval Requirements – This bill makes several substantive changes to the condominium conversion process. AB 2562 proposes to require numerous new disclosure notices to tenants if aproperty owner seeks to convert a rental development to condominiums. Additionally, the bill would prohibit local government from approving the development application in almost every circumstance. Finally, improvements could not be undertaken to the property during the application process. CAR Position – OPPOSE. Status: Assembly FloorC. SB 1052 (Kehoe) Spot Bill – Senator Kehoe will use SB 1052 as a vehicle to address the appeals process when a residential rental property is to be converted into a condominium. C.A.R. Position: Not Rated File. Status: Assembly Local Government Committee.D. SB 1676 (Ducheny) Rent Control/Just Cause Eviction - Western Center on Law and Poverty is sponsoring SB 1676 whichwould require owners who wish to convert their units to condominiums to give tenants 180 days notice of their “intent” to sell to the general public. The bill will impose statewide rent control and just cause eviction for 6 months on units subject to condo conversion. C.A.R. Position: OPPOSE. Status: Senate FloorV. Removing Illegally Parked Cars from Private PropertyA. AB 2210 (Goldberg) Requirement for Owner’s Presence at Time of Removal – Existing law requires landlords/property managers OR AGENTS OF THE OWNER OR MANAGER to be present when an illegally parked vehicle is removed from private property. The bill is designed to give owners of vehicles that are illegally parked new rights. Itrequires tow truck operators to immediately and unconditionally release a vehicle not yet removed from a private property at the request of the vehicle owner which could result in NEVER moving the illegally parked vehicle. Second, owners and property managers would have to be present on the property to authorize a tow, which unnecessarily exposes landlords to assault. Illegally parked vehicles that block another, could not be removed for at least one hour. See also SB 1593 (Runner/Lowenthal). C.A.R. Position: OPPOSE. Status: Assembly Floor.B. SB 1593 (Runner) Spot Bill – The bill is sponsored by the California Tow Truck Association. According to the sponsors, it is to address the issue of “bandit” tow truckoperators. The bill was recently stripped back to intent language. C.A.R. is working with the author and sponsors to resolve concerns about removing illegally parked cars from private property. See also AB 2210 (Goldberg). C.A.R.Position: Not Rated File. Status: Senate FloorVI. Megan’s Law UpdateA. State Attorney General Opinion –As background, the Department of Justice makes available, through its Megan's Law Web site, access to information about registered sex offenders. The law, however, prohibits the use of this information for purposes relating to, among other things, housing or accommodations, loans, credit, or employment, unless the decision is to protect a person at risk or as authorized by law. The law requires specific disclosures at the time a residential property (1-4 units) is transferred or rented. Attorney General Bill Lockyer released a significant opinion addressing the issue of whether sex offenders are a “protectedclass” under the state’s anti-discrimination statutes. The Attorney General opined: the prohibition against the unauthorized use of information on the Megan's Law Web site does not in itself qualify registered sex offenders as a class protected from housing discrimination under the Fair Employment and Housing Act (the "Act").The Attorney General was asked to render an opinion as to whether this prohibition against unauthorized use qualified registered sex offenders as a class protectedfrom housing discrimination. The Attorney General concluded that it did not. "Registered sex offenders may be subject to housing discrimination 'to protect a person at risk' and as authorized by 'any provision of law,' but for no other reason," accordingto the Attorney General. "Under the Act, on the other hand, a claimant falling under a non-enumerated classification must satisfy the three-prong Harris test to prove unlawful housing discrimination in the particular circumstances" (citing Harris v. Capital Growth Investors XIV (1991) 52 Cal. 3d 1142). Briefly, the three-prong Harris test involves whether a claim of discrimination is based on a classification involving personal characteristics, whether the alleged discriminatory act at issue serves a legitimate business interest, and what the policy considerations are.The Attorney General's opinion in this matter is fully set forth at its Web site at http://ag.ca.gov/opinions/published/05-301.pdf. Opinions of the Attorney General are not binding law, but they are entitled to great respect by the courts.B. AB 2603 (Parra) California Apt. Assoc. Sponsored Bill – Spot Bill – AB 2603, was amended to only express the Legislature’s interest in how Megan’s law can be utilized in residential rental housing. Previously, the bill stated that former sex offenders who are required to register under Megan's law are not protected against discrimination onthat basis under the Unruh Civil Rights Act or the Fair Employment and Housing Act. C.A.R. opposed this language but removed opposition when the bill was stripped to intent language. C.A.R. Position: Not Rated File. Status: Assembly Rules Committee.C. AB 2712 (Leno) Cal. Housing Council Sponsored bill to address Landlord Liability – This bill may be amended to address landlord liability issues related to sex offenders in residential rental housing. C.A.R. Position: Not Rated File. Status: Senate Rules Committee.VII. Other Bills of InterestA. AB 770 (Mullin) Creation of a State Level CID Ombudsperson – The bill proposes to create the Office of the Common Interest Development Ombudsmanas a pilot project within the Dept. of Consumer Affairs to provide education, dispute resolution and data collection on CID issues. The author has promised C.A.R. that language will be inserted into the bill that will bar the Ombudsman from advising or collecting data on any issue involving real estate license activities. Also, please see SB 551 (Lowenthal). C.A.R. Position: Support if Amended. Status: Senate Business, Professions and Economic Development Committee.B. AB 2624 (Houston) Nonjudicial Foreclosures by Homeowner Associations – This bill is a clean-up measure to a technical aspect of legislation that was signed into law last year known as SB 137 (Ducheny) which established a new collection process for late payment of a homeowner assessment. This measure will change the law related to rights of redemption. CAR Position – WATCH. Status: Senate Rules Committee.C. AB 2851 (DeVore) Condominium Plan Amendments – This bill is sponsored by Leisure World, Laguna Niguel. It authorizes the amendment of the condominium plan to repair/replace major components of the Association provided that owners have achieved a simply majority of the Association’s membership to approve the amendment and the Association shall hold a meeting of owners to discuss change prior to the vote being held. The amendment must be reasonable and not eliminate an owner’s rights or privileges or impair the security interest of a mortgagee. Those owners directly affected by the changes must give written consent. Finally, the amendment shall be recorded in the county where the CID is located. CAR Position – Not Rated File. Pending hearing before: awaiting committee assignment as of 3/10/06D. SB 551 (Lowenthal) Creation of a State Level CID Ombudsperson The bill is identical to AB 770. However, the author is considering amendments that would authorize the Ombudsperson to impose fines against Associations for failure to comply with state law.E. SB 1560 (Battin) Clean-up Legislation on CID Election law passed in 2005 – This bill is designed to clean-up a measure Senator Battin successfully carried last year. Last year’s bill left a numberof confusing elements relating to how homeowner associations are to conduct elections. The author indicates that his bill will make nominal changes in a law which he carried last year. Administration of proxies, vote counting, and conduct ofthe election process should be at the heart of this measure. CAR Position – Not Rated File. Status: Assembly Rules Committee.VIII. Governing Documents Restrictions: Impact on SalesIX. Work Group Progress Report – A Consumers Guide: Owning a Home in a Common Interest Development* - A copy of the Consumers Guide is available to the CID committee and the committee is to provide all changes that would be appropriate in the document.X. Question and Answer Session on Tenancies in Common, Guests: Mark Skolnick, Circle Bank and Andy Sirkin, Attorney – The committee will hear from two guest speakers on recent trends in the area of Residential Tenancies in Common.