This concludes Chapter 27. Below is a brief summary which you can review before you take your chapter quiz. 

Covered Loans (amended):

• The ORIGINAL principal loan balance does NOT EXCEED the MOST CURRENT loan limit for a single-family first mortgage
  1. Mortgage/deed of trust - the APR must be more than 8% over the yield on Treasury securities with comparable periods of maturity.
  2. The total points and fees payable by the consumer must be higher than 6% of the total loan amount. 

Finance Code Section 4970:

• Points and fees: items required to be disclosed as finance charges, not including interest; all compensation paid to mortgage brokers in connection with the loan transaction.
• Consumer Loan: consumer credit transaction secured by real property located in California, which is used as the principal dwelling of the consumer.
• Original Principal Balance: The total initial amount the consumer is obligated to repay on the loan. 

Real Estate Fraud Prosecution Trust Fund money MUST ONLY BE USED in connection with investigations involving recorded real estate documents.

The Unruh Civil Rights Act protects people from being discriminated against because of their sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status and sexual orientation.

It is illegal to discriminate against another person based on where that person gets her income.

If a person believes that her property has been placed under an unlawful restriction, then she can record the Restrictive Covenant Modification document. 

Amendments to the Subdivided Lands Public Report

“Notice of Intention” must include:

1. The owner’s and subdivider’s name and address;  
2. The legal description and area of lands; copies of contracts to be used;
3. Any provisions that have already been made for public utilities in the proposed subdivision.
4. The location of all existing airports located within two statute miles of the subdivision. 

Bankruptcy Abuse Prevention and Consumer Act. Exceptions from the "automatic stay" law:

• If the lessor took the action to obtain possession of the property BEFORE the date the lessee/debtor's bankruptcy petition was filed, the previously-filed proceeding taken by the lessor will remain in effect.
• The landlord MAY LEGALLY EVICT the lessee and take possession of the property (provided that the lessor files a certification, under penalty of perjury), based on some type of endangerment on the property or on the illegal use of controlled substances on the property. 

Davis-Stirling Common Interest Development Act:

1. Condominium project: A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit.
2. Community apartment project:"A development in which an undivided interest in land is coupled with the right of exclusive occupancy of any apartment located thereon."
3. Stock Cooperative:"A development in which a corporation is formed for the purpose of holding title to real property, and the shareholders receive a right of occupancy in a portion of the real property.
4. Planned Development: the common area is owned either by an association or in common by the owners of the separate interests, and/or a power exists in the association to enforce an obligation of an owner of a separate interest, by means of an assessment which may become a lien upon the separate interests.

The homeowner association (HOA) of a common interest development must make ALL association records available to ANY owner who belongs to the HOA.

Requirements:

• Make available to members records from the previous 2 fiscal years.
• The current association recordsmust be made available within 10 business days of receipt of the member’s request.  
• Minutes of member AND board meetings must be made PERMANENTLY available.   

CID Amendments

In order to grant the exclusive use of a common area to an owner, there must be a passing affirmative vote of 67% of the owners in a common interest development.

Elections are inspected by an independent third party, which MAY NOT be a candidate for OR a member (or related to one) of the board of directors; a person employed to the common interest development association.

CID association’s board of directors

Fiscal responsibilities:

• A current reconciliation of the association’s operating accounts, the current year's actual reserve revenues and expenses compared to the current year budget, an income and expense statement for the CID association’s operating and reserve accounts, all in at least a quarterly basis.
• The latest account statements prepared by the financial institutions where the association has its accounts.
• In order to withdraw money from the association’s reserve accounts, the signatures of a minimum of 2 peopleare necessary.
• May temporary transfer funds (must be restored within one year of the date of the initial transfer) from the reserve fund into the general operating fund of the association, if necessary to meet short-term cash flow needs or other expenses
• Authority to levy a special assessment. 

At least once every 3 years, the board of directors must have an inspection conducted, which must Identify and estimate the cost of the major components that the association is obligated to maintain that have a remaining useful life of less than 30 years.

Estimated Remaining Useful Life: The time reasonably calculated to remain before a major component will require replacement.

Major Component: Components with an estimated remaining useful life of more than 30 years may be included in a study as a capital asset or disregarded from the reserve calculation. 

Assessments

Regulations for assessments:

1. Annual increases in regular assessments may NOT be imposed (except with specific provision or a quorum);
2. The board must notimpose a regular assessment that is more than 20% of preceding one.
3. The board mustnot impose special assessments that will be more than 5% of the budgeted expenses, unless there is a quorum affirmative vote of the owners.

The board DOES NOT limit assessment increases that are necessary for emergency situations.

Any regular assessments imposed to meet the association's obligation are exempt from execution only to the extent necessary for the association to perform essential services.

Should the board levy an assessment, it becomes the owner's responsibility to pay it.

• Regular or special assessments of the association; late charges; reasonable collection costs/ attorney's fees and interest are considered debt of the owner.

If the board approves the decision to initiate foreclosure, made by the majority vote, this vote to approve the lien foreclosure MUST be completed a minimum of 30 days before any public sale.

Delinquent assessments

1. When an association of a CID seeks to collect delinquent assessments that are LESS THAN $1,800.00, it may not foreclose on the lien.
2. However, an association is NOT PERMITTED to foreclose on this lien UNTIL the amount equals or exceeds $1,800.00, OR UNTIL the assessments are more than 12 months delinquent. 

Notice of Lien: The owner must be notified in writing, via certified mail, at least 30 days before a lien is recorded.

Physical Changes

• Proposed physical changes must be consistent with any governing provision of law, including the Fair Employment and Housing Act.
• Nothing under thes law authorizes any type of physical change to the common area, if that change is inconsistent with the association's governing documents, unless the change is required by law. 

Miscellaneous Law Amendments:

• A real estate broker who arranges the purchase of a fractionalized interest in a trust deed must record it within 10 days of the purchase.
• The sending of unsolicited advertising faxes FROM OR TO someone in California is prohibited.
• Landlords are authorized to give a 30-day notice if they want to terminate their month-to-month tenants.
• If air conditioning or heating ducts show a 15% or higher leakage, then they MUST BE REPAIRED. 

The local government shall provide the housing developer with a density bonus and other incentives for the production of lower income housing units.

Housing in California

• Regulations must NOT be used as a means of disapproving a housing development project if it is proposed on a site identified as suitable or available for very low-, low-, or moderate-income households in the jurisdiction's housing element, and consistent with the density specified in the housing element, even though it is inconsistent with both the jurisdiction's zoning ordinance and general plan land use designation.
• Feasible: "Capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors."
• Neighborhood: "A planning area commonly identified in a community's planning documents, and identified as a neighborhood by the individuals residing and working within the neighborhood." 

The person authorized to record a notice of default or notice of sale must, within 10 business days, deposit in the US mail an envelope to be sent with the postage prepaid.

The law now permits ANY number of postponements of the sale proceedings at ANY time to the completion of the sale, for any period of time that may not exceed a total of 365 days from the date which was set forth in the notice of sale.

Mobilehome Residency Law:

• A rental agreement must NOT include any provision that offers the management of a mobile home park the first right of refusal.
• The person selling the mobilehome would have received this home after the deathof its original owner. 

Registered domestic partners (treated the same as spouses) are allowed to transfer property to each other without having to have the property reassessed and taxed at the current market value.

The laws generally limit ad valorem taxes on real property to 1% of the full cash value of that property.

Active solar energy system: A system that uses solar devices to provide for the distribution of solar energy.

A county tax assessor is prohibited from assigning parcel numbers OR preparing a separate assessment or separate valuation to divide any existing residential structure into a subdivision, UNTIL a subdivision final or parcel map has been recorded as required by law. 

If there is one constant within the world of California real estate law, it is that you can count on the laws being forever fluid. Remember what we said earlier in this chapter. The laws and regulations MUST continue to change in order to accommodate the community for which they are intended. After all, you wouldn't expect to see laws governing the treatment of cavemen, for example, would you? Or, on the other side, wouldn't you be shocked if the real estate laws did not address the world of electronic communications? Few real estate licensees can remember their lives before the Internet; yet, without specific laws and requirements to address electronic communications, that aspect of the real estate business could run amok.

Remember to always keep current with the laws, even if it means spending a couple of extra hours a week studying the newest proposed changes and Assembly or Senate bills. Doing your homework - and getting a little extra credit in the way of providing your clients and customers with the most up-to-the-minute information - will reward you in more ways than one.