New Rules 2008

By Sonia M. Younglove

The January/February issue of California Real Estate magazine discussed several new laws affecting the real estate industry in 2008. But there are more! Read on for a summary of additional new laws that are sure to affect REALTORS®.

"Mobile Home" and "Manufactured Home" Defined (SB 538)

In the past, the terms "mobile home" and "manufactured home" had been used interchangeably in various California statutes. Now the legislature has decided to give them separate definitions in the hope of improving the ease of financing manufactured homes. According to the California legislature: "Continued use of the term 'mobile home' in various statutes, as well as the implication that the terms are interchangeable, exacerbates the confusion between the two products and deters affordable financing, discourages use in certain localities, and perpetuates incorrect perceptions as to codes and standards."

"Manufactured home" now generally means (with a few exceptions stated in the California Health & Safety Code Section 18007) " structure that was constructed on or after June 15, 1976, is transportable in one or more sections, is eight body feet or more in width, or 40 body feet or more in length, in the traveling mode, or, when erected on-site, is 320 or more square feet, is built on a permanent chassis and designed to be used as a single-family dwelling with or without a foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems."

"Mobile home" is now defined as "a structure that was constructed prior to June 15, 1976, "with the rest of the definition identical to the definition of a manufactured home. However, the reason for the selection of June 15, 1976, as the cutoff date is that all such housing built on or after June 15, 1976, is in compliance with the standards of the United States Department of Housing and Urban Development, promulgated under the federal National Manufactured Housing Construction and Safety Standards Act of 1974.

The new law also creates a definition for the term "multifamily manufactured home" as either of the following:
 (1) A structure transportable under permit in one or more sections, designed and equipped to contain not more than two dwelling units, a dormitory, or an efficiency unit, to be used with either a support system as defined in Section 18613 or a foundation system as defined in Section 18551(a).
 (2) A structure transportable under permit in one or more sections, designed to be used with a foundation system for three or more dwelling units, as defined by Section 18003.3.

Regulation of Subprime Loans and Financing (SB 385)

This new law provides more authority to the Department of Real Estate (DRE), the Department of Corporations, and the Department of Financial Institutions to regulate subprime and other non-traditional mortgages. As part of this increased regulation, this law creates a new definition of real estate broker in California Business & Professions Code Section 10131.1 by requiring principals, who make eight or more loans in a year of their own money secured directly or collaterally by a lien on residential real property consisting of one-to-four units, to become licensed with the DRE.

Private Transfer Fee Disclosure (AB 980)

Under the new law, if a developer imposes private transfer fees, a document must be recorded with the county recorder's office titled "Payment of Transfer Fee Required." This document must include all of the following information:

· the names of all current owners subject to the transfer fee;
· the legal description of the parcel and the assessor's parcel number (APN):
· the amount or percentage of the fee;
· examples of calculations of the transfer fee;
· the date and circumstances of expiration, if such transfer fee expires;
· the purpose for which the fees will be used;
· the entity to whom the fee will be paid, and contact information; and
· the signature of an authorized representative of the entity receiving the fee.

If the fee is imposed prior to January 1, 2008, then the recorded document must be filed by December 31, 2008, in order to enforce collection of the private transfer fee after January 1, 2009.

Furthermore, this law also requires a separate disclosure of this private transfer fee whenever the law requires a Transfer Disclosure Statement. C.A.R. standard form NTF ("Notice of Transfer Fees") assists with compliance with this portion of the law.

Q&A

Q. I'm a new real estate licensee. Do I have to print my Department of Real Estate (DRE) number on my business cards or advertising flyers?

A. The answer depends on whether you do real estate sales or mortgage loan brokerage work. A law passed by the state senate and assembly, SB 226, would have authorized the DRE to require that all real estate sales agents display their DRE license numbers on business cards and other consumer first-contact materials, but it was not signed by Governor Schwarzenegger. The governor supported this aspect of Senate Bill 226, but vetoed the bill on other grounds. It's not yet the law for those real estate agents doing real estate sales.

However, existing law for real estate agents who do mortgage loan brokerage work does require the DRE license number on all advertisements, including business cards (Cal. Bus. & Prof. Code § 10236.4(a)).

Sonia M. Younglove, Esq., is C.A.R. senior counsel.