C.A.R.-Sponsored Bills, 2011

July 11, 2011

AB 278 (Hill) DRE Citation and Fine 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 discipline, no matter how minor the infraction, is published in the DRE bulletin, widely circulated among real estate agents. AB 278 would allow the DRE to issue a “civil citation” with a maximum fine of $1,000 for minor infractions. Licensees would be permitted to contest the citation through the current hearing process if they wish. The action would not be published in the DRE bulletin, unless there is a contested hearing and judgment, although it could still be discovered in the public record. C.A.R. is sponsoring this legislation so DRE field staff can take immediate action on minor infractions without having to complete the lengthy and expensive hearing process. Amendments to this measure have raised the maximum fine form $1,000 to $2,500 in order to reconcile this bill with a similar provision in SB 53.


Status: Senate Floor


AB 392 (Alejo) Brown Act – The Brown Act currently requires local government entities to post their agendas 72 hours in advance of scheduled meetings; however, there is no requirement that staff reports be similarly posted. The Brown Act can be satisfied by posting a hard copy of the agenda at a location accessible to the public.  This can present a formidable obstacle for individuals and organizations attempting to follow the actions of local governments. C.A.R. is sponsoring AB 392 which would require all local government entities governed by the Brown Act to post their agendas as well as staff reports relating to agenda items on their website (if they have a website – the measure does not require the establishment of a website) allowing individuals and organizations to more easily track proposed government actions.


Status: Assembly Appropriations Committee


AB 771 (Butler) HOA Agents and Fees – Home Owner Associations (HOAs) are required by law to provide specific documents to prospective purchasers of homes in common interest developments (CIDs). Current law prohibits HOAs from charging fees in excess of what is “reasonable” based on the actual cost of processing and producing these documents. HOAs are increasingly delegating document preparation to outside third party vendors or contractors who, under a 2007 court decision, are not subject to this fee limitation. This delegation of responsibility by HOAs sometimes results in home purchasers being forced to pay additional fees for other documents which are“bundled” with the required documents. AB 771 says that ONLY the fees for the required documents can be charged upon receipt, effectively prohibiting the “bundling” of fees for other documents with fees for the required documents. The bill also creates a form, which must accompany the documents, detailing the documents that are required.   This will eliminate any uncertainty for the prospective purchaser as to exactly which documents are being provided.

Status: Senate Floor


SB 150 (Correa) CID Right-to-Rent – There has been a trend among some homeowner associations to adopt restrictions that limit the ability of unit owners to rent their dwellings in Common Interest Developments (CIDs). The imposition of these rental restrictions diminishes an owner’s property rights by removing options that were available when the unit was purchased. C.A.R. is sponsoring SB 150, a re-introduction of C.A.R.’s AB 2259 (Mullin) of 2008, to protect the right of a CID owner to rent his or her unit, if that right existed at the time the owner purchased the unit.


Status: Signed by the Governor on July 8, 2011 (Chapter 62, 2011 Statutes)


SB 458 (Corbett) Anti-Deficiency – C.A.R .initially sponsored SB 458 to revisit the “anti-deficiency” issue of SB 1178 (Corbett, 2010), which was vetoed by Governor Schwarzenegger. As introducedSB 458 would have extended existing anti-deficiencyprotections to cover the refinance of purchase money mortgages, and new debt (cash out) incurred to acquire, construct or improve the home. C.A.R. and the lender groups reached an agreement to amend SB 458 to instead expand the provisions of existing law (SB 931 of 2010) which became effective this year. SB 931 requires a first mortgage holder to accept an agreed upon short sale payment as full payment for the outstanding balance of the loan, but does not apply to junior lien holders. SB 458 will extend the protections of SB 931 to junior liens effectively providing that any lender that agrees to a short sale must accept the agreed upon short sale payment as full paymentof the outstanding balance of all loans.  In addition, this measure will clarify that this rule applies only to residences.


Status: To Governor


SB 510 (Correa) Designated Office Managers within DRE – Under current law, the Department of Real Estate (DRE) is only permitted to hold the broker of record accountable for failure to supervise, even if the broker of record has delegated supervisorial responsibility to an office manager. C.A.R. is sponsoring SB 510 which would 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 (2 years of experience) 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 in writing and a notice is delivered to DRE. While principal brokers would remain accountable for their supervisorial responsibilities, DRE would also be able to discipline managers for failure to supervise. This measure was recommended by a DRE Task Force containing REALTOR® members and would go into effect on July 1, 2012.


Status: Assembly Appropriations Committee


SB 837 (Blakeslee) Transfer Disclosure Statement Update – SB 407 (Padilla), signed into law by the Governor in 2009, requires that all residential properties be retrofitted with low-flow toilets, shower heads and faucets starting with remodels in 2014, all remaining homes by 2017. Additionally, all commercial properties and multi-family homes will need to be retrofitted by 2019. C.A.R. is sponsoring SB 837 to add language to the Transfer Disclosure Statement (TDS) notifying the purchaser of a property of these impending requirements. The inclusion of this information in the TDS will ensure that sellers and buyers are aware of these water efficiency retrofit requirements and provide disclosure liability protection to REALTORS®.


Status: Signed by the Governor on June 30, 2011 (Chapter 61, 2011 Statutes)


Degree Brokers – C.A.R.’s Board of Directors directed C.A.R. to pursue legislative opportunities, as they arise, to clarify the law to require “degree brokers” to have an undergraduate degree in real estate or two years of “general real estate” experience. C.A.R. is actively seeking an opportunity to insert the proposal in appropriate legislation; if legislative opportunities do not present themselves in 2011, C.A.R. will “SPONSOR” legislation to achieve the change in 2012.