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Entries in Legislative Update (4)

Tuesday
Oct302012

CA A.B. 2273 - HOA Assessments and Foreclosed Property

Homeowners Associations (HOA) have been financially impacted during the current economic downturn, especially with the foreclosures that have been occuring throughout the state.  When a foreclosure occurs, the former owner's responsibility to pay HOA assessments stops and the new owner (usually the bank) must begin paying the current assessments from the time of foreclosure.  Until now, it has been very difficult for HOAs to determine the status of foreclosure sales and who the foreclosing party was in order to reestablish their assessments from the new owner.  This has changed now that Assembly Bill 2273 has passed which amends Section 2924b of the Civil Code and adds Section 2924.1. 

The newly passed bill will accomplish two things:

1. The foreclosing parties will be required to record a sale within 30 days of the sale and

2. The length of time has been shortened for foreclosing parties to notify the association that they are the new owners, as long as the HOA has recorded a "Request for Notice" prior to the property receiving a Notice of Default.  If a "Request for Notice" has been filed, the foreclosing party must notify the HOA within 15 days after the sale.

 

Although AB 2273 is a step towards helping HOA reduce the financial impact the economy is having on their budgets, it is important that the HOA record the "Request for Notice" when a home in the association is being foreclosed upon.  HOA boards should contact their attorneys when properties are being foreclosed upon to ensure that the appropriate steps are taken to protect the HOA's interests.

 

AB 2273 will be effective on January 1, 2013.  For more information about AB 2273 please go here.

Friday
Sep212012

Federal Housing Administration Condo Update

The Community Association Institute (CAI) has reported that the Federal Housing Administration (FHA) has just released a revision of its condominium guidelines and the FHA has made temporary adjustments to its condominium standards in response to the current market conditions.

 

CAI's preliminary analysis of the FHA's policy changes are as follows:

1. Delinquencies - no more than 15 percent of units may be more than 60 days delinquent.  The previous threshold was a 30 day delinquency.

2. Employee dishonesty insurance - all new and established condominium projects with more than 20 units shall obtain and maintain employee dishonesty insurance coverage and must cover all officers, directors, and employees of the association.

3. Project certification - individuals submitting a condominium project for approval must certify that (a) all information in the request is accurate, (b) they have reviewed the project application and it meets all State and local laws and current FHA condominium approval requirements, and (c) they have no knowledge of circumstances or conditions that may have an adverse impact on the project.

4. Commercial space limitations - FHA will consider condominium projects with commercial space of between 25 and 35 percent for projects through the HRAP process only.  Mixed-use condominiums with commercial space of up to 50 percent will be considered, but requires substantial documentation.

 

For a further review of the updated FHA guidelines, please click here.

Wednesday
Aug292012

The Davis-Stirling Act Is Going To Be Reorganized

On August 17, the Davis-Stirling Reorganization Bill (Assembly Bills 805 and 806) was signed into law.  Assembly Bill 805 will relocate the Davis-Stirling Act to a different part of the California Civil Code and Assembly Bill 806 will update the many references to the Act in other parts of the statutes to reflect the new statute numbers.

 

The purpose of this Bill is to reorganize and clarify the law governing common interest developments.  There will also be a few changes made to the laws governing common interest developments, such as governing document amendments, granting exclusive use of common areas to members, board member conflicts of interest, and obtaining reimbursement for common area damages.  The new Assembly Bills will not go into affect until January 1, 2014, to allow time for homeowners, Board members, and industry professionals to become acquainted with the reorganization.

 

The Judge Law Firm looks forward to assisting our clients and management companies in 2013 with undertanding the changes and how the changes will impact their communities.

 

To learn more about the changes to The Davis-Stirling Act, please go here.

Friday
May042012

Real Property Blight Prevention Bill (A.B. 2314) Passes

On May 3. 2012, an anti-blight bill was passed by California legislators.  This bill is part of a set of proposals that will help prevent blight in communities with a high rate of foreclosures.  A.B. 2314 allows the city where the property is located to issue up to $1,000 in fines, per day, against the owners of blighted property until the violations are fixed and extends the power to fine owners indefinitely.  The bill also offers a 60-day grace period to new property owners who have purchased the property and are diligently correcting any violations that may exist.

 

What do you think about this bill?  Will it help the prevention of blight in communities?

 

To read more about Assembly Bill 2314 Real Property: Blight, click here.