Marriott Hotel
San Jose, California
Thursday, October 8, 2009
9:30 am - 11:30 am

Presiding:
Mike Riley, Chair
Vicki Carpenter, Vice Chair
Gary Macrides, Vice Chair
Bill Jansen, Committee Liaison

C.A.R. Staff:
Dave Milton

I. Opening Comments

II. Introduction/Discussion of 2010 Housing Committee Structure

Housing Committee Mission Statement: This Committee is a Policy Committee. Its mission is to develop C.A.R.'s housing policy. It has original jurisdiction to evaluate housing legislation and regulation in the following issue areas:

Common Interest Developments
Fair Housing/Equal Opportunity
Housing Policy
Manufactured Housing
Multifamily Housing
Property Management
Real Estate Finance

Presiding:
LeFrancis Arnold, Chair
John Torres, Vice Chair

Issue Chairs:
Rana Linka, Common Interest Development
Miguel Garcia, Fair Housing/ Equal Opportunity
Georgia Richardson, Housing Policy
Diane Conaway, Manufactured Housing
Mike Riley, Multifamily Housing
Tica O'Neill, Property Management
Winnie Davis, Real Estate Finance

Committee Liaisons Staff Coordinators:
Dave Milton
Kevin Brown Matt Roberts
Annette Graw

III. State Legislation

A. C.A.R.- sponsored Bill on the "Right-to-Rent" Issue for Introduction in 2010 Session of Legislature

At the January, 2009 C.A.R. meetings, in light of the Governor's veto of AB 2259 in 2008, the CID Committee Chair appointed a Working Group to examine the issue of rental restrictions being imposed upon CID property owners. The CID Committee requested the Working Group to consider for recommendation to the Board of Directors whether an effort to legislate around the Governor's veto was worthy of pursuing by C.A.R. The Working Group conducted two conference call meetings between the January and June meetings in 2009 and unanimously approved the following recommendation:

That the California Association of REALTORS® sponsor legislation in 2010 providing that a governing document shall not be adopted or amended to prohibit the rental or lease of a separate interest in a common interest development, unless the provision that imposes the prohibition was enacted, pursuant to a written ballot, by a vote of all owners of separate interests in the common interest development (CID) and is approved by not less than 2/3 of the owners of separate interests in the CID.
This motion was adopted by the C.A.R. Board of Directors during the June, 2009 Meetings. C.A.R. will sponsor such legislation during the 2010 session of the Legislature.

B. 2009 Bills of Interest

AB 313 (Fletcher) Common Interest Development (CID) Assessment Procedures - This bill would prohibit an association from levying assessments on separate interests within the common interest development based on the taxable value of the separate interests unless the association, on or before December 31, 2009, in accordance with its declaration, levied assessments based on taxable value as determined by the local tax assessor. The bill does provide an exception to this prohibition for an association that is responsible for paying taxes on the separate interests within the development.
Position: Watch    Status: Enrolled to the Governor

AB 899 (Torres) CID Disclosure Requirements - Current law requires a homeowners association (HOA) to provide specific documents to a purchaser of a unit in a CID. This bill initially proposed to require HOAs to annually distribute to all owners of a separate interest in a CID a "Disclosure Documents Index" that lists each document and where it can be found in the Davis-Stirling Act. AB 899 also proposed to require HOAs to include the assumed interest rate earned on reserves in the existing reserve funding summary and the assumed rate of inflation for the repair and replacement of major components. C.A.R. originally opposed AB 899 because it was duplicative and would have unnecessarily increased costs for homeowners residing in an HOA. Due to C.A.R.'s opposition, the author amended AB 899 to eliminate any duplication with current law, only require distribution of the index to HOA members who request it, and permit these documents to be distributed to the requesting HOA members electronically. With these amendments, C.A.R. removed its opposition.
Position: Watch as Amended   Status: Enrolled to the Governor

AB 927 (C. Calderon) Construction Defect Claims in CIDs - The Davis-Stirling Common Interest Development Act requires, until July 1, 2010, that certain conditions be satisfied by a CID before an HOA of the CID files a complaint for damages against the builder, developer, or general contractor of the development based upon a claim for defects in the design or construction of the development, including filing a notice regarding the commencement of legal proceedings, participating in a dispute resolution process, and preparing a case management statement. This bill would change the expiration date for these provisions to July 1, 2017.
Position: Watch    Status: Enacted; Chapter 7, 2009 Statutes

AB 1020 (Emerson) Anti-Entrapment Requirements for Swimming Pools - The federal "Pool & Spa Safety Act," (ACT) enacted in 2007 and effective at the end of 2008, requires all "public pools and spas" to be equipped with anti-entrapment drain devices. The definition of "public pools and spas" includes pools open to the public as well as pools in apartment complexes, residential real estate developments, and multi-family apartment buildings. AB 1020 proposes to enact the substantive portions of the federal ACT in state law, in order to allow these requirements to be enforced by state and local agencies. Specifically, this bill would require a "public swimming pool" constructed or renovated after December 18, 2009 to be equipped with an anti-entrapment device or system that meets federal safety requirements. Any pool constructed prior to December 18, 2009 must install an anti-entrapment device by December 19, 2011. C.A.R. favors AB 1020 because it seeks to make state and federal law consistent.
Position: Favor    Status: Enrolled to the Governor

AB 1061 (Lieu) Water-efficient Landscapes in CIDs - Existing law requires a local agency to adopt either an updated model ordinance regarding water-efficient landscapes or a
water-efficient landscape ordinance that is at least as effective in conserving water as the updated model ordinance. The Davis-Stirling Common Interest Development Act provides that the architectural guidelines of a common interest development shall not prohibit the use of low water-using plants. This bill states that any provision of a CID's governing documents shall be void and unenforceable if it prohibits, or includes conditions that have the effect of prohibiting, the use of low water-using plants.
Position: Favor Status: Enrolled to the Governor

AB 1328 (Salas) Contract Authority for HOAs in CIDs - In order to take advantage of energy and water efficiency technologies in CIDs, AB 1328 proposes to allow homeowner associations to enter into long term contracts with a maximum duration of 5 years for energy and water conservation. C.A.R. supports AB 1328 because it will remove unnecessary barriers to energy and water conservation in common interest developments, thus, helping the environment and enhancing the value of homes in CIDs.
Position: Support    Status: Enrolled to the Governor

IV. HOA Registry- An Update
The HOA Registry Working Group sought to have the Secretary of State add more informational fields to its website that contains information about CIDs in California. The current State Budget morass has placed any such projects on a "hold" status. This effort will be "tabled" until the State Budget picture improves to the point that new programs can be added by the Secretary of State.

V. C.A.R. Course on CIDs- An Update
The course material is now ready. The first class, on October 13th, will be a Beta test held at the Solano AOR (A friendly, local audience; this is the association that created the first CID class for REALTORS® and collaborated with C.A.R. on creation of the state-wide class.). As a result of this first live class with the new material, last minute tweaks will be made the last two weeks of October and "roll out" of the new C.A.R. CID Class will begin in November.

VI. CID Guide Noted in C.A.R. Forms - An Update
The Standard Forms Advisory Committee (SFAC) has approved the inclusion of a reference to the CID Guide on the SBSA form in April of 2010 when that form undergoes its periodic update.

VII. FHA Condo Approval Process - An Update
In accordance with the passage of the Housing and Economic Recovery Act (HERA) of 2008, the Federal Housing Administration (FHA) is implementing a new approval process for Condominium Projects to insure mortgages on individual units under Section 203(b) of the National Housing Act, as described in the HUD Mortgagee Letter. FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations. HUD will continue to maintain a list of Approved Condominium Projects. The requirements contained in this Mortgagee Letter are effective for all case numbers assigned on or after October 1, 2009 except as noted.

The purpose of this Mortgagee Letter is to provide guidelines and instructions on options available to lenders to receive mortgage insurance on condominium units which are located in a project. The lender will be required to retain all the project legal documents, contracts, conveyances, plats, plans, insurance coverage, presale and owner occupancy conditions and other documentation in connection with their review and approval of the condominium project.

For a copy of the HUD mortgagee letter, go to http://www.car.org/legal/2009-archive-news/archive/reg-new-fha-loans-condo-process/

VIII. Other Business

IX. Adjournment