1368-1368.1 Documents to Purchaser Prior to Sale

CALIFORNIA CODES

CIVIL CODE

SECTION 1368-1368.1

1368. (a) The owner of a separate interest, other than an owner

subject to the requirements of Section 11018.6 of the Business and

Professions Code, shall, as soon as practicable before transfer of

title to the separate interest or execution of a real property sales

contract therefor, as defined in Section 2985, provide the following

to the prospective purchaser:

(1) A copy of the governing documents of the common interest

development, including any operating rules, and including a copy of

the association's articles of incorporation, or, if not incorporated,

a statement in writing from an authorized representative of the

association that the association is not incorporated.

(2) If there is a restriction in the governing documents limiting

the occupancy, residency, or use of a separate interest on the basis

of age in a manner different from that provided in Section 51.3, a

statement that the restriction is only enforceable to the extent

permitted by Section 51.3 and a statement specifying the applicable

provisions of Section 51.3.

(3) A copy of the most recent documents distributed pursuant to

Section 1365.

(4) A true statement in writing obtained from an authorized

representative of the association as to the amount of the association'

s current regular and special assessments and fees, any assessments

levied upon the owner's interest in the common interest development

that are unpaid on the date of the statement, and any monetary fines

or penalties levied upon the owner's interest and unpaid on the date

of the statement. The statement obtained from an authorized

representative shall also include true information on late charges,

interest, and costs of collection which, as of the date of the

statement, are or may be made a lien upon the owner's interest in a

common interest development pursuant to Section 1367 or 1367.1.

(5) A copy or a summary of any notice previously sent to the owner

pursuant to subdivision (h) of Section 1363 that sets forth any

alleged violation of the governing documents that remains unresolved

at the time of the request. The notice shall not be deemed a waiver

of the association's right to enforce the governing documents against

the owner or the prospective purchaser of the separate interest with

respect to any violation. This paragraph shall not be construed to

require an association to inspect an owner's separate interest.

(6) A copy of the initial list of defects provided to each member

of the association pursuant to Section 1375, unless the association

and the builder subsequently enter into a settlement agreement or

otherwise resolve the matter and the association complies with

Section 1375.1. Disclosure of the initial list of defects pursuant to

this paragraph does not waive any privilege attached to the

document. The initial list of defects shall also include a statement

that a final determination as to whether the list of defects is

accurate and complete has not been made.

(7) A copy of the latest information provided for in Section

1375.1.

(8) Any change in the association's current regular and special

assessments and fees which have been approved by the association's

board of directors, but have not become due and payable as of the

date disclosure is provided pursuant to this subdivision.

(9) If there is a provision in the governing documents that

prohibits the rental or leasing of any of the separate interests in

the common interest development to a renter, lessee, or tenant, a

statement describing the prohibition and its applicability.

(10) If requested by the prospective purchaser, a copy of the

minutes of the meetings, excluding meetings held in executive

session, of the association's board of directors, conducted over the

previous 12 months, that were approved by the association's board of

directors.

(b) (1) Upon written request, the association shall, within 10

days of the mailing or delivery of the request, provide the owner of

a separate interest, or any other recipient authorized by the owner,

with a copy of the requested documents specified in paragraphs (1) to

(10), inclusive, of subdivision (a). Upon receipt of a written

request, the association shall provide, on the form described in

Section 1368.2, a written or electronic estimate of the fees that

will be assessed for providing the requested documents. The documents

required to be made available pursuant to this section may be

maintained in electronic form, and may be posted on the association's

Internet Web site. Requesting parties shall have the option of

receiving the documents by electronic transmission if the association

maintains the documents in electronic form. The association may

collect a reasonable fee based upon the association's actual cost for

the procurement, preparation, reproduction, and delivery of the

documents requested pursuant to the provisions of this section.

(2) No additional fees may be charged by the association for the

electronic delivery of the documents requested.

(3) Fees for any documents required by this section shall be

distinguished from other fees, fines, or assessments billed as part

of the transfer or sales transaction. Delivery of the documents

required by this section shall not be withheld for any reason nor

subject to any condition except the payment of the fee allowed

pursuant to paragraph (1).

(4) An association may contract with any person or entity to

facilitate compliance with the requirements of this subdivision on

behalf of the association.

(5) The association shall also provide a recipient authorized by

the owner of a separate interest with a copy of the completed form

specified in Section 1368.2 at the time the required documents are

delivered.

association nor a community service organization or similar entity

may impose or collect any assessment, penalty, or fee in connection

with a transfer of title or any other interest except for the

following:

(A) An amount not to exceed the association's actual costs to

change its records.

(B) An amount authorized by subdivision (b).

(2) The prohibition in paragraph (1) does not apply to a community

service organization or similar entity, or to a nonprofit entity

that provides services to a common interest development under a

declaration of trust, that is described in subparagraph (A) or (B):

(A) The community service organization or similar entity satisfies

both of the following requirements:

(i) The community service organization or similar entity was

established prior to February 20, 2003.

(ii) The community service organization or similar entity exists

and operates, in whole or in part, to fund or perform environmental

mitigation or to restore or maintain wetlands or native habitat, as

required by the state or local government as an express written

condition of development.

(B) The community service organization or similar entity, or a

nonprofit entity that provides services to a common interest

development under a declaration of trust, satisfies all of the

following requirements:

(i) The organization or entity is not an organization or entity

described in subparagraph (A).

(ii) The organization or entity was established and received a

transfer fee prior to January 1, 2004.

(iii) On and after January 1, 2006, the organization or entity

offers a purchaser the following payment options for the fee or

charge it collects at time of transfer:

(I) Paying the fee or charge at the time of transfer.

(II) Paying the fee or charge pursuant to an installment payment

plan for a period of not less than seven years. If the purchaser

elects to pay the fee or charge in installment payments, the

organization or entity may also collect additional amounts that do

not exceed the actual costs for billing and financing on the amount

owed. If the purchaser sells the separate interest before the end of

the installment payment plan period, he or she shall pay the

remaining balance prior to transfer.

(3) For the purposes of this subdivision, a "community service

organization or similar entity" means a nonprofit entity, other than

an association, that is organized to provide services to residents of

the common interest development or to the public in addition to the

residents, to the extent community common areas or facilities are

available to the public. A "community service organization or similar

entity" does not include an entity that has been organized solely to

raise moneys and contribute to other nonprofit organizations that

are qualified as tax exempt under Section 501(c)(3) of the Internal

Revenue Code and that provide housing or housing assistance.

(d) Any person or entity who willfully violates this section is

liable to the purchaser of a separate interest that is subject to

this section for actual damages occasioned thereby and, in addition,

shall pay a civil penalty in an amount not to exceed five hundred

dollars ($500). In an action to enforce this liability, the

prevailing party shall be awarded reasonable attorneys' fees.

(e) Nothing in this section affects the validity of title to real

property transferred in violation of this section.

(f) In addition to the requirements of this section, an owner

transferring title to a separate interest shall comply with

applicable requirements of Sections 1133 and 1134.

(g) For the purposes of this section, a person who acts as a

community association manager is an agent, as defined in Section

2297, of the association.

1368.1. (a) Any rule or regulation of an association that

arbitrarily or unreasonably restricts an owner's ability to market

his or her interest in a common interest development is void.

(b) No association may adopt, enforce, or otherwise impose any

rule or regulation that does either of the following:

(1) Imposes an assessment or fee in connection with the marketing

of an owner's interest in an amount that exceeds the association's

actual or direct costs. That assessment or fee shall be deemed to

violate the limitation set forth in Section 1366.1.

(2) Establishes an exclusive relationship with a real estate

broker through which the sale or marketing of interests in the

development is required to occur. The limitation set forth in this

paragraph does not apply to the sale or marketing of separate

interests owned by the association or to the sale or marketing of

common areas by the association.

listing, advertising, or obtaining or providing access to show the

owner's interest in the development.

(d) This section does not apply to rules or regulations made

pursuant to Section 712 or 713 regarding real estate signs.