CALIFORNIA SUBDIVIDED
LANDS ACT
BUSINESS AND PROFESSIONS
CODE
SECTION 11000-11023
11000. (a)
"Subdivided lands" and "subdivision" refer to improved
or unimproved land or
lands, wherever situated within California,
divided or proposed to
be divided for the purpose of sale or lease or
financing, whether
immediate or future, into five or more lots or
parcels. However, land
or lands sold by lots or parcels of not less
than 160 acres which are
designated by lot or parcel description by
government surveys and
appear as such on the current assessment roll
of the county in which
the land or lands are situated shall not be
deemed to be
"subdivided lands" or "a subdivision" within the meaning
of this section, unless
the land or lands are divided or proposed to
be divided for the
purpose of sale for oil and gas purposes, in
which case the land or
lands shall be deemed to be "subdivided lands"
or "a
subdivision" within the meaning of this section. This chapter
also does not apply to
the leasing of apartments, offices, stores,
or similar space within
an apartment building, industrial building,
commercial building, or
mobilehome park, as defined under Section
18214 of the Health and
Safety Code, except that the offering of
leases for a term in
excess of five years to tenants within a
mobilehome park as a
mandatory requirement and prerequisite to
tenancy within the
mobilehome park shall be subject to the provisions
of this chapter. The
leasing of apartments in a community apartment
project, as defined in
Section 11004 in an apartment or similar
space within a
commercial building or complex, shall be subject to
the provisions of this
chapter.
(b) Nothing in this
section shall in any way modify or affect any
of the provisions of Section
66424 of the Government Code.
(c) Subdivisions, as
defined in Section 10249.1, which are located
entirely outside
California shall be exempt from the provisions of
this part.
11000.1. (a)
"Subdivided lands" and "subdivision," as defined by
Sections 11000 and
11004.5, also include improved or unimproved land
or lands, a lot or lots,
or a parcel or parcels, of any size, in
which, for the purpose
of sale or lease or financing, whether
immediate or future,
five or more undivided interests are created or
are proposed to be
created.
(b) This section does
not apply to the creation or proposed
creation of undivided
interests in land if any one of the following
conditions exists:
(1) The undivided
interests are held or to be held by persons
related one to the other
by blood or marriage.
(2) The undivided
interests are to be purchased and owned solely
by persons who present
evidence satisfactory to the Real Estate
Commissioner that they
are knowledgeable and experienced investors
who comprehend the
nature and extent of the risks involved in the
ownership of these
interests. The Real Estate Commissioner shall
grant an exemption from
this part if the undivided interests are to
be purchased by no more
than 10 persons, each of whom furnishes a
signed statement to the
commissioner that he or she (A) is fully
informed concerning the
real property to be acquired and his or her
interest in that
property including the risks involved in ownership
of undivided interests,
(B) is purchasing the interest or interests
for his or her own
account and with no present intention to resell or
otherwise dispose of the
interest for value, and (C) expressly
waives protections
afforded to a purchaser by this part.
(3) The undivided
interests are created as the result of a
foreclosure sale.
(4) The undivided
interests are created by a valid order or decree
of a court.
(5) The offering and
sale of the undivided interests have been
expressly qualified by
the issuance of a permit from the Commissioner
of Corporations pursuant
to the Corporate Securities Law of 1968
(Division 1 (commencing
with Section 25000) of Title 4 of the
Corporations Code).
11000.2. (a) A person
who has made an offer to purchase an interest
in an undivided-interest
subdivision specified in subdivision (a)
of, and not exempted by
subdivision (b) of, Section 11000.1 shall
have the right to
rescind any contract resulting from the acceptance
of that offer until
midnight of the third calendar day following the
day on which the
prospective purchaser executed the offer to
purchase.
(b) The owner of a
subdivision subject to this section or his or
her agent shall, in
accordance with regulations adopted by the Real
Estate Commissioner,
clearly and conspicuously disclose to all
prospective purchasers
of undivided interests the right of rescission
provided for in
subdivision (a), and shall furnish to each offeror a
form, as prescribed by
regulations of the commissioner, for the
exercise of the right of
rescission.
(c) Any certificate
bearing the signature of the purchaser of an
interest in an
undivided-interest subdivision subject to this section
which contains an
adequate description of the interest or interests
sold and a statement by
the purchaser that he or she has not
exercised the right of
rescission within the time limit set forth in
subdivision (a) shall
constitute conclusive evidence that the right
of rescission has not
been exercised in any matter involving the
rights of a third party
who has acted in good faith in reliance upon
representations in the
certificate.
11001. The Real Estate
Commissioner (hereafter referred to in this
chapter as the
commissioner) may adopt, amend, or repeal such rules
and regulations as are
reasonably necessary for the enforcement of
this chapter. He may
issue any order, permit, decision, demand or
requirement to effect
this purpose. Such rules, regulations, and
orders shall be adopted
pursuant to the provisions of the
Administrative Procedure
Act.
11003. "Planned
development" has the same meaning as specified in
subdivision (k) of
Section 1351 of the Civil Code.
11003.2. "Stock
cooperative" has the same meaning as specified in
subdivision (m) of
Section 1351 of the Civil Code, except that, as
used in this chapter, a
"stock cooperative" does not include a
limited-equity housing
cooperative.
11003.4. (a) A
"limited-equity housing cooperative" is a
corporation which meets
the criteria of Section 11003.2 and which
also meets the criteria
of Section 33007.5 of the Health and Safety
Code. Except as provided
in subdivision (b), a limited-equity
housing cooperative
shall be subject to all the requirements of this
chapter pertaining to
stock cooperatives.
(b) A limited-equity
housing cooperative shall be exempt from the
requirements of this
chapter if the limited-equity housing
cooperative complies
with all the following conditions:
(1) The United States
Department of Housing and Urban Development,
the Farmers Home
Administration, the National Consumers Cooperative
Bank, the California
Housing Finance Agency, or the Department of
Housing and Community
Development, alone or in any combination with
each other, or with the
city, county, or redevelopment agency in
which the cooperative is
located, directly finances or subsidizes at
least 50 percent of the
total construction or development cost or one
hundred thousand dollars
($100,000), whichever is less; or the real
property to be occupied
by the cooperative was sold by the Department
of Transportation for
the development of the cooperative and has a
regulatory agreement
approved by the Department of Housing and
Community Development
for the term of the permanent financing,
notwithstanding the
source of the permanent subsidy or financing.
(2) No more than 20
percent of the total development cost of a
limited-equity
mobilehome park, and no more than 10 percent of the
total development cost
of other limited-equity housing cooperatives,
is provided by
purchasers of membership shares.
(3) A regulatory
agreement which covers the cooperative for a term
of at least as long as
the duration of the permanent financing or
subsidy, notwithstanding
the source of the permanent subsidy or
financing has been duly
executed between the recipient of the
financing and either (A)
one of the federal or state agencies
specified in paragraph
(1) or (B) a local public agency which is
providing financing for
the project under a regulatory agreement
meeting standards of the
Department of Housing and Community
Development. The
regulatory agreement shall make provision for at
least all of the
following:
(A) Assurances for
completion of the common areas and facilities
to be owned or leased by
the limited-equity housing cooperative,
unless a construction
agreement between the same parties contains
written assurances for
completion.
(B) Governing
instruments for the organization and operation of
the housing cooperative
by the members.
(C) The ongoing fiscal
management of the project by the
cooperative, including
an adequate budget, reserves, and provisions
for maintenance and
management.
(D) Distribution of a
membership information report to any
prospective purchaser of
a membership share, prior to purchase of
that share. The
membership information report shall contain full
disclosure of the
financial obligations and responsibilities of
cooperative membership,
the resale of shares, the financing of the
cooperative including
any arrangements made with any partners,
membership share
accounts, occupancy restrictions, management
arrangements, and any
other information pertinent to the benefits,
risks, and obligations
of cooperative ownership.
(4) The federal, state,
or local public agency which executes the
regulatory agreement
shall satisfy itself that the bylaws, articles
of incorporation,
occupancy agreement, subscription agreement, any
lease of the regulated
premises, any arrangement with partners, and
arrangement for
membership share accounts provide adequate protection
of the rights of
cooperative members.
(5) The federal or state
agency shall receive from the attorney
for the recipient of the
financing or subsidy a legal opinion that
the cooperative meets
the requirements of Section 33007.5 of the
Health and Safety Code
and the exemption provided by this section.
(c) Any limited-equity
cooperative which meets the requirements
for exemption pursuant
to subdivision (b) may elect to be subject to
all provisions of this
chapter.
(d) The developer of the
cooperative shall notify the Department
of Real Estate, on a
form provided by the department, that an
exemption is claimed
under this section. The Department of Real
Estate shall retain this
form for at least four years for statistical
purposes.
11004. "Community
apartment project" has the same meaning as
specified in subdivision
(d) of Section 1351 of the Civil Code.
11004.5. In addition to
any provisions of Section 11000 of this
code the reference
therein to "subdivided lands" and "subdivision"
shall include all of the
following:
(a) Any planned
development, as defined in Section 11003 of this
code, containing five or
more lots.
(b) Any community
apartment project, as defined by Section 11004
of this code, containing
five or more apartments.
(c) Any condominium
project containing five or more condominiums
as defined in Section
783 of the Civil Code.
(d) Any stock
cooperative as defined in Section 11003.2, including
any legal or beneficial
interests therein, having or intended to
have five or more
shareholders.
(e) Any limited-equity
housing cooperative, as defined in Section
11003.4.
(f) In addition, the
following interests shall be subject to the
provisions of this
chapter and the regulations of the commissioner
adopted pursuant
thereto:
(1) Any accompanying
memberships or other rights or privileges
created in, or in
connection with, any of the forms of development
referred to in
subdivision (a), (b), (c), (d), (e), or (f) above by
any deeds, conveyances,
leases, subleases, assignments, declarations
of restrictions,
articles of incorporation, bylaws or contracts
applicable thereto.
(2) Any interests or
memberships in any owners' association as
described in Section
11003.1 created in connection with any of the
forms of the development
referred to in subdivision (a), (b), (c),
(d), (e), or (f) above.
(g) Notwithstanding this
section, time-share plans, exchange
programs, incidental
benefits, and short term product subject to
Chapter 2 (commencing
with Section 11210) of Part 2 of Division 4 of
the Business and
Professions Code are not "subdivisions" or
"subdivided
lands" subject to this chapter.
11007. Every nonresident
subdivider shall file with the
questionnaire an
irrevocable consent that if, in any action commenced
against him in this
State, personal service of process upon him
cannot be made in this
State after the exercise of due diligence, a
valid service may
thereupon be made upon him by delivering the
process to the Secretary
of State.
Insofar as possible, the
provisions of Section 1018 of the Code of
Civil Procedure relating
to the service of process on the Secretary
of State are applicable
to this section.
11008. No provision of
this part which makes a violation of this
part a crime shall be
construed to preclude application of any other
criminal provision of
the law of this state to an act or omission
which constitutes a
violation of this part.
11010. (a) Except as otherwise provided
pursuant to subdivision (c)
or
elsewhere in this chapter, any person who intends to offer
subdivided
lands within this state for sale or lease shall file with
the
Department of Real Estate an application for a public report
consisting
of a notice of intention and a completed questionnaire on
a
form prepared by the department.
(b) The notice of intention shall
contain the following
information
about the subdivided lands and the proposed offering:
(1) The name and address of the
owner.
(2) The name and address of the
subdivider.
(3) The legal description and
area of lands.
(4) A true statement of the
condition of the title to the land,
particularly
including all encumbrances thereon.
(5) A true statement of the terms
and conditions on which it is
intended
to dispose of the land, together with copies of any
contracts
intended to be used.
(6) A true statement of the
provisions, if any, that have been
made
for public utilities in the proposed subdivision, including
water,
electricity, gas, telephone, and sewerage facilities. For
subdivided
lands that were subject to the imposition of a condition
pursuant
to subdivision (b) of Section 66473.7 of the Government
Code,
the true statement of the provisions made for water shall be
satisfied
by submitting a copy of the written verification of the
available
water supply obtained pursuant to Section 66473.7 of the
Government
Code.
(7) A true statement of the use
or uses for which the proposed
subdivision
will be offered.
(8) A true statement of the
provisions, if any, limiting the use
or
occupancy of the parcels in the subdivision.
(9) A true statement of the
amount of indebtedness that is a lien
upon
the subdivision or any part thereof, and that was incurred to
pay
for the construction of any onsite or offsite improvement, or any
community
or recreational facility.
(10) A true statement or
reasonable estimate, if applicable, of
the
amount of any indebtedness which has been or is proposed to be
incurred
by an existing or proposed special district, entity, taxing
area,
assessment district, or community facilities district within
the
boundaries of which, the subdivision, or any part thereof, is
located,
and that is to pay for the construction or installation of
any
improvement or to furnish community or recreational facilities to
that
subdivision, and which amounts are to be obtained by ad valorem
tax
or assessment, or by a special assessment or tax upon the
subdivision,
or any part thereof.
(11) (A) As to each school
district serving the subdivision, a
statement
from the appropriate district that indicates the location
of
each high school, junior high school, and elementary school
serving
the subdivision, or documentation that a statement to that
effect
has been requested from the appropriate school district.
(B) In the event that, as of the
date the notice of intention and
application
for issuance of a public report are otherwise deemed to
be
qualitatively and substantially complete pursuant to Section
11010.2,
the statement described in subparagraph (A) has not been
provided
by any school district serving the subdivision, the person
who
filed the notice of intention and application for issuance of a
public
report shall immediately provide the department with the name,
address,
and telephone number of that district.
(12) (A) The location of all
existing airports, and of all
proposed
airports shown on the general plan of any city or county,
located
within two statute miles of the subdivision. If the property
is
located within an airport influence area, the following statement
shall
be included in the notice of intention:
NOTICE
OF AIRPORT IN VICINITY
This property
is presently located in the vicinity of an
airport,
within what is known as an airport
influence area. For that
reason,
the property may be subject to some of
the annoyances or
inconveniences
associated with proximity to airport
operations (for example:
noise,
vibration, or odors). Individual sensitivities to those
annoyances
can
vary from person to person. You may wish to consider what airport
annoyances, if any, are associated with
the property before you
complete your purchase and determine
whether they are acceptable to
you.
(B) For purposes of this section,
an "airport influence area,"
also
known as an "airport referral area," is the area in which
current
or future airport-related noise, overflight, safety, or
airspace
protection factors may significantly affect land uses or
necessitate
restrictions on those uses as determined by an airport
land
use commission.
(13) A true statement, if applicable,
referencing any soils or
geologic
report or soils and geologic reports that have been prepared
specifically
for the subdivision.
(14) A true statement of whether
or not fill is used, or is
proposed
to be used in the subdivision and a statement giving the
name
and the location of the public agency where information
concerning
soil conditions in the subdivision is available.
(15) On or after July 1, 2005, as
to property located within the
jurisdiction
of the San Francisco Bay Conservation and Development
Commission,
a statement that the property is so located and the
following
notice:
NOTICE OF SAN
FRANCISCO BAY CONSERVATION AND DEVELOPMENT
COMMISSION
JURISDICTION
This property is located within
the jurisdiction of the San
Francisco
Bay Conservation and Development Commission. Use and
development
of property within the commission's jurisdiction may be
subject
to special regulations, restrictions, and permit
requirements. You may wish to investigate and
determine whether they
are
acceptable to you and your intended use of the property before
you
complete your transaction.
(16) Any other information that
the owner, his or her agent, or
the
subdivider may desire to present.
(c) The commissioner may, by regulation,
or on the basis of the
particular
circumstances of a proposed offering, waive the
requirement
of the submission of a completed questionnaire if the
commissioner
determines that prospective purchasers or lessees of the
subdivision
interests to be offered will be adequately protected
through
the issuance of a public report based solely upon information
contained
in the notice of intention.
11010.05. A person who proposes to create a
senior citizen housing
development,
as defined in Section 51.3 or 51.11 of the Civil Code,
shall
include in the application for a public report a complete
statement
of the restrictions on occupancy that are to be applicable
in
the development. Any public report
issued for a senior housing
development
shall also include a complete statement of the
restrictions
on occupancy to be applicable in the development. This
section
shall become operative on July 1, 2001, and shall apply to
all
applications for a public report for a senior housing development
submitted
to the department on or after July 1, 2001.
11010.1. Prior to the issuance of promissory
notes secured by
individual
lots in an unrecorded subdivision, the owner, his agent or
subdivider
shall notify the commissioner in writing of his intention
to
issue such notes.
The notice of intention shall
contain the following information:
(a) The name and address of the
owner.
(b) The name and address of the
subdivider.
(c) The legal description and
area of lands.
(d) A true statement of the condition
of the title to the land,
particularly
including all encumbrances thereon.
(e) A true statement of the terms
and conditions on which it is
intended
to issue the promissory notes.
(f) A true statement of the
provisions, if any, that have been
made
for public utilities in the proposed subdivision, including
water,
electricity, gas and telephone facilities.
(g) Such other information as the
owner, his agent or subdivider,
may
desire to present.
11010.2. (a) As used in this section:
(1) "Quantitative"
means the number and type of documents required
to
make the filing substantially complete, as defined in the
regulations
of the commissioner, without regard to the content of
those
requirements.
(2) "Qualitatively
complete" means that all deficiencies and
substantive
inadequacies contained in the documents that were
required
to make the filing substantially complete have been
corrected.
(3) "Substantially
complete" means that a notice and application
contain
all requirements as set forth in the regulations of the
commissioner.
(b) Upon receipt of a notice of
intention pursuant to Section
11010
and an application for issuance of a public report, the
commissioner
shall review the notice and application to determine if
the
notice and application are substantially complete, with respect
to
quantitative requirements. The
commissioner shall notify the
applicant
in writing of that determination within 10 days of receipt
of
the notice and application.
(1) If the notice and application
are not substantially complete
with
respect to the quantitative requirements pursuant to this
subdivision,
the notification shall specify the information needed to
make
the notice and application substantially complete. Upon
receipt
of any resubmittal of a notice and application, the
commissioner
shall notify the applicant in writing of that
determination
within 10 days of receipt of the notice and
application.
(2) If the commissioner
determines that the notice and application
are
substantially complete with respect to the quantitative
requirements
pursuant to this subdivision, the commissioner shall
provide
the applicant with a list of all deficiencies and substantive
inadequacies
necessary for the notice and application to be
qualitatively
complete, within 60 days of that determination, in the
case
of subdivisions specified in Section 11000.1 or 11004.5, and
within
20 days of that determination, in the case of other
subdivisions.
(c) Upon receipt of all documents,
materials, writings, and other
information
submitted in response to the list in paragraph (2) of
subdivision
(b), the commissioner shall notify the applicant whether
the
notice and application are qualitatively complete within 30 days,
in
the case of subdivisions specified in Section 11000.1 or 11004.5,
and
within 20 days of receipt, in the case of other subdivisions.
If
the application and notice are not qualitatively complete, the
notification
shall include a list of any remaining deficiencies and
substantive
inadequacies. Upon receipt of any
resubmittal of
documents,
materials, writings, and other information in response to
a
list of any remaining deficiencies and substantive inadequacies,
the
commissioner shall provide notification within the time limits
specified
in this subdivision.
(d) The commissioner shall issue
a public report within 15 days,
in
the case of a subdivision specified in Section 11000.1 or 11004.5,
or
10 days, in the case of other subdivisions, after the notice and
application
are determined to be qualitatively and substantially
complete,
and submittal of recorded or filed instruments and evidence
of
financial arrangements required by the commissioner.
(e) Upon receipt of an
application for approval of a declaration
as
provided in Section 11010.10, the commissioner shall notify the
applicant
of any deficiency or inadequacy in the declaration within
60
days of its receipt. The
commissioner shall notify the applicant
of
any deficiency or inadequacy in a declaration that has been
revised
following the first notice of deficiency or inadequacy within
30
days of its receipt.
(f) The commissioner shall adopt
regulations, in accordance with
Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3
of
Title 2 of the Government Code, that define "substantially
complete"
and that list all the requirements necessary for a notice
of
intention and application to be considered "substantially
complete."
(g) The commissioner may adopt
emergency regulations, in
accordance
with Chapter 3.5 (commencing with Section 11340) of Part 1
of
Division 3 of Title 2 of the Government Code, to increase, as set
forth
below, those time periods specified in subdivisions (b), (c),
and
(d), upon a showing that the number of notices of intention and
applications
for a subdivision public report filed with the
department
for any immediately preceding six-month period has
increased
by more than 15 percent over the monthly average number of
notices
and applications filed for the base period commencing July 1,
1983,
and ending June 30, 1986:
(1) The time for issuing the
notice provided in subdivision (b)
shall
increase to 15 days.
(2) The time for providing the
listing required by paragraph (2)
of
subdivision (b) shall increase to 90 days, in the case of
subdivisions
specified in Sections 11000.1 and 11004.5, and to 30
days,
in the case of other subdivisions.
(3) The time period provided in
subdivision (c) for responding to
receipt
of documents intended to correct deficiencies shall be 30
days
without regard to the type of subdivision being processed.
(4) The time periods provided in
subdivision (d) within which the
commissioner
is required to issue a public report in the case of
subdivisions
specified in Sections 11000.1 and 11004.5, shall
increase
to 30 days and in the case of other subdivisions shall
increase
to 15 days.
This section does not apply to
filings made exclusively under
Section
11010.1. Nothing in this section
requires the commissioner
to
issue a public report where grounds for denial exist, provided
that
issuance of a public report shall not be denied for inadequate
information
if the cause thereof is the commissioner's failure to
comply
with this section.
Notwithstanding other provisions
of this section, the commissioner
shall
not be required to issue a public report if grounds for denial
exist
under Section 11018 or 11018.5.
However, the commissioner may
not
base the denial of a public report on the lack of adequate
information
if the commissioner has not acted within the time periods
prescribed
in this section.
11010.3. The provisions of this chapter shall
not apply to the
proposed
sale or lease of lots or other interests in a subdivision in
which lots or other interests are (a) limited
to industrial or
commercial
uses by zoning or (b) limited to industrial or commercial
uses
by a declaration of covenants, conditions, and restrictions,
which
declaration has been recorded in the official records of the
county
or counties in which the subdivision is located.
11010.35. (a) The provisions of this chapter
shall not apply to the
proposed
sale or lease of five or more lots, parcels, or other
interests
in a subdivision or the sale of one or more lots or parcels
in
a subdivision where the lot or lots or parcel or parcels are
intended
to be further subdivided into five or more lots, parcels, or
other
subdivision interests as defined in Sections 11000, 11000.1,
and
11004.5, to any person who acquires the lots, parcels, or other
subdivision
interests for the purpose of engaging in the business of
constructing
residential, commercial, or industrial buildings, or for
the
purpose of resale or lease of the lots, parcels, or other
subdivision
interests to persons engaged in this business, provided
that
the purchase or lease agreement or a separate disclosure
document
includes a statement or provision that the purchaser or
lessee
is required to comply with the applicable provisions of this
chapter
prior to offering for sale or lease any lot, parcel, or other
subdivision
interest acquired pursuant to the exemption granted by
this
subdivision.
(b) The exemption provided by
subdivision (a) does not apply to a
proposed
sale or lease of lots, parcels, or other subdivision
interests
that is done for the purpose of evading any other provision
of
this chapter.
(c) The provisions of subdivision
(a) are intended to clarify the
application
of this chapter to the commercial sale or lease of
residential
subdivision interests and should not be interpreted to
impose
requirements on transactions entered into prior to the date on
which
this section became operative.
11010.4. The notice of intention specified in
Section 11010 is not
required
for a proposed offering of subdivided land that satisfies
all
of the following criteria:
(a) The owner, subdivider, or
agent has complied with Sections
11013.1,
11013.2, and 11013.4, if applicable.
(b) The subdivided land is not a
subdivision as defined in Section
11000.1
or 11004.5.
(c) Each lot, parcel or unit of
the subdivision is located
entirely
within the boundaries of a city.
(d) Each lot, parcel or unit of
the subdivision will be sold or
offered
for sale improved with a completed residential structure and
with
all other improvements completed that are necessary to occupancy
or
with financial arrangements determined to be adequate by the city
to
ensure completion of the improvements.
11010.5. The filing of a second notice of
intention to sell and a
second
report of the commissioner under this article shall not be
required
when all the following conditions have been met: (a) where
there
has been a previous subdivision report and the lots are
subsequently
acquired through any foreclosure action, or by a deed in
lieu
of foreclosure, by a bank, life insurance company, industrial
loan
company, credit union, or savings and loan association licensed
or
operating under the provisions of a state or federal law if the
acquired
lots, either improved or unimproved, will be sold in
conformance
with the previously issued subdivision public report; (b)
the
original public report is given to the first purchasers of the
lots
in the foreclosed subdivision; and (c) the commissioner is
notified
of the change of ownership within 30 days of the acquisition
of
the title to such property.
11010.6. The provisions of this chapter shall
not be applicable to
subdivided
land which is offered or proposed to be offered for sale,
lease,
or financing by a state agency, including the University of
California,
a local agency, or other public agency.
11010.7. The notice of intention specified in
Section 11010 shall
not
apply to nonbinding expressions of intent to purchase or lease
which
an owner, agent, or subdivider is required to obtain from the
tenants
of units which are proposed to be converted to a condominium,
community
apartment project, or stock cooperative project, by
ordinance,
or as a condition to the approval of a tentative or parcel
map
pursuant to Division 2 (commencing with Section 66410) of Title
7
of the Government Code.
11010.8. (a) The requirement that a notice of
intention be filed
pursuant
to Section 11010 is not applicable to the purchase of a
mobilehome
park by a nonprofit corporation if all of the following
occur:
(1) A majority of the
shareholders or members of the nonprofit
corporation
constitute a majority of the homeowners of the mobilehome
park,
and a majority of the members of the board of directors of the
nonprofit
corporation are homeowners of the mobilehome park.
(2) All members of the
corporation are residents of the mobilehome
park. Members of the nonprofit corporation
may enter into leases
with
the corporation that are greater than five years in length.
"Homeowners"
or "residents" of the mobilehome park shall include a
bona
fide secured party who has, pursuant to a security interest in a
membership,
taken title to the membership by means of foreclosure,
repossession,
or voluntary repossession, and who is actively
attempting
to resell the membership to a prospective resident or
homeowner
of the mobilehome park, in accordance with subdivision (f)
of
Section 7312 of the Corporations Code.
(3) A permit to issue securities
under Section 25113 of the
Corporations
Code is obtained from the Department of Corporations.
In
the case of a nonissuer transaction (as defined by Section 25011
of
the Corporations Code) involving the offer to resell or the resale
of
memberships by a bona fide secured party as described in
paragraph
(2) of this section, a permit is not required where the
transaction
is exempt from the qualification requirements of Section
25130
of the Corporations Code pursuant to subdivision (e) of Section
25104
of the Corporations Code. The
exemption from qualification
pursuant
to subdivision (e) of Section 25104 of the Corporations Code
available
to a bona fide secured party does not eliminate the
requirement
of this section that the nonprofit corporation shall
either
file a notice of intention pursuant to Section 11010 or obtain
a
permit pursuant to Section 25113 of the Corporations Code.
(4) All funds of tenants for the
purchase of the mobilehome park
are
deposited in escrow until the document transferring title of the
mobilehome
park to the nonprofit corporation is recorded. The escrow
also
shall include funds of homeowners that shall be available to
the
homeowners association nonprofit corporation for payment of any
and
all costs reasonably associated with the processing and
conversion
of the mobilehome park into condominium interests.
Payment
of these costs may be made from the funds deposited in escrow
prior
to the close of escrow upon the direction of the homeowners
association
nonprofit corporation.
(b) The funds described by
paragraph (4) of subdivision (a), or
any
other funds subsequently received from tenants for purposes other
than
the purchase of a separate subdivided interest in any portion
of
the mobilehome park, are not subject to the requirements of
Section
11013.1, 11013.2, or 11013.4.
11010.9. (a) Notwithstanding any other provision
of law, the
subdivider
of a mobilehome park that is proposed to be converted to
resident
ownership, prior to filing a notice of intention pursuant to
Section
11010, shall disclose to homeowners and residents of the
park,
by written notice, the tentative price of the subdivided
interest
proposed to be sold or leased.
(b) The disclosure notice
required by subdivision (a) shall
include
a statement that the tentative price is not binding, could
change
between the time of disclosure and the time of governmental
approval
to commence the actual sale or lease of the subdivided
interests
in the park, as the result of conditions imposed by the
state
or local government for approval of the park conversion,
increased
financing costs, or other factors and, in the absence of
bad
faith, shall not give rise to a claim for liability against the
provider
of this information.
(c) The disclosure notice
required by subdivision (a) shall not be
construed
to authorize the subdivider of a mobilehome park that is
proposed
to be converted to resident ownership to offer to sell or
lease,
sell or lease, or accept money for the sale or lease of,
subdivided
interests in the park, or to engage in any other
activities
that are otherwise prohibited, with regard to subdividing
the
park into ownership interests, prior to the issuance of a public
report
pursuant to this chapter.
11010.10. A person who plans to offer for sale or
lease lots or
other
interests in a subdivision which sale or lease (a) is not
subject
to the provisions of this chapter, (b) does not require the
submission
of a notice of intention as provided in Section 11010, or
(c)
is subject to this chapter and for which the local jurisdiction
requires
review and approval of the declaration, as defined in
subdivision
(h) of Section 1351 of the Civil Code, prior to or
concurrently
with the recordation of the subdivision map and prior to
the
approval of the declaration pursuant to a notice of intention
for
a public report, may submit an application requesting review of
the
declaration, along with any required supporting documentation, to
the
commissioner, without the filing of a notice of intention for
the
subdivision for which the declaration is being prepared. Upon
approval,
the commissioner shall give notice to the applicant that
the
declaration shall be approved for a subsequent notice of intent
filing
for any public report for the subdivision identified in the
application,
provided that the subdivision setup is substantially the
same
as that originally described in the application for review of
the
declaration.
11010.11. Notwithstanding any provision in the
purchase contract to
the
contrary, if the subdivision is to be used for residential
purposes,
the subdivision public report shall disclose that a
prospective
buyer has the right to negotiate with the seller to
permit
inspections of the property by the buyer, or the buyer's
designee,
under terms mutually agreeable to the prospective buyer and
seller.
11011. (a) The commissioner may by regulation
prescribe filing fees
in
connection with applications to the Department of Real Estate
pursuant
to this chapter that are lower than the maximum fees
specified
in subdivision (b) if the commissioner determines that the
lower
fees are sufficient to offset the costs and expenses incurred
in
the administration of this chapter.
The commissioner shall hold
at
least one hearing each calendar year to determine if lower fees
than
those specified in subdivision (b) should be prescribed.
(b) The filing fee for an
application for a public report to be
issued
under authority of this chapter shall not exceed the following
for
each subdivision or phase of a subdivision in which interests
are
to be offered for sale or lease:
(1) A notice of intention without
a completed questionnaire: One
hundred
fifty dollars ($150).
(2) An original public report for
subdivision interests described
in
Section 11004.5: One thousand
seven hundred dollars ($1,700) plus
ten
dollars ($10) for each subdivision interest to be offered.
(3) An original public report for
subdivision interests other than
those
described in Section 11004.5: Six
hundred dollars ($600) plus
ten
dollars ($10) for each subdivision interest to be offered.
(4) A conditional public report
for subdivision interests
described
in Section 11004.5: Five hundred
dollars ($500).
(5) A conditional public report
for subdivision interests other
than
those described in Section 11004.5:
Five hundred dollars
($500).
(6) A preliminary public report
for subdivision interests
described
in Section 11004.5: Five hundred
dollars ($500).
(7) A preliminary public report
for subdivision interests other
than
those described in Section 11004.5:
Five hundred dollars
($500).
(8) A renewal public report for
subdivision interests described in
Section
11004.5: Six hundred dollars
($600).
(9) A renewal public report for subdivision interests other
than
those
described in Section 11004.5: Six
hundred dollars ($600).
(10) An amended public report for
subdivision interests described
in
Section 11004.5: Five hundred
dollars ($500) plus ten dollars
($10)
for each subdivision interest to be offered under the amended
public
report for which a fee has not previously been paid.
(11) An amended public report to
offer subdivision interests other
than
those described in Section 11004.5:
Five hundred dollars
($500)
plus ten dollars ($10) for each subdivision interest to be
offered
under the amended public report for which a fee has not
previously
been paid.
(c) The filing fee to review a
declaration as described in Section
11010.10
shall not exceed two hundred dollars ($200).
(d) The actual subdivision fees
established by regulation under
authority
of this section and Section 10249.3 shall not exceed the
amount
reasonably required by the department to administer this part
and
Article 8 (commencing with Section 10249) of Chapter 3 of Part 1.
(e) All fees collected by the
department under authority of this
chapter
shall be deposited into the Real Estate Fund under Chapter 6
(commencing
with Section 10450) of Part 1. All
fees received by the
department
pursuant to this chapter shall be deemed earned upon
receipt. No part of any fee is refundable unless
the commissioner
determines
that it was paid as the result of a mistake or
inadvertence.
This section shall remain in
effect unless it is superseded
pursuant
to Section 10226 or subdivision (a) of Section 10226.5,
whichever
is applicable.
11012. It is unlawful for the owner, his
agent, or subdivider, of
the
project, after it is submitted to the Department of Real Estate,
to
materially change the setup of such offering without first
notifying
the Department of Real Estate in writing of such intended
change. This section only applies to those
changes of which the
owner,
his agent, or subdivider has knowledge or constructive
knowledge.
11013. For the purposes of this part, a
blanket encumbrance shall
be
considered to mean a trust deed or mortgage or any other lien or
encumbrance,
mechanics' lien or otherwise, securing or evidencing the
payment
of money and affecting land to be subdivided or affecting
more
than one lot or parcel of subdivided land, or an agreement
affecting
more than one such lot or parcel by which the owner or
subdivider
holds said subdivision under an option, contract to sell,
or
trust agreement.
11013.1. It shall be unlawful, except as
provided in Section
11013.2,
for the owner, subdivider, or agent to sell or lease lots or
parcels
within a subdivision that is subject to a blanket
encumbrance
unless there exists in such blanket encumbrance or other
supplementary
agreement a provision, hereinafter referred to as a
release
clause, which by its terms shall unconditionally provide that
the
purchaser or lessee of a lot or parcel can obtain legal title or
other
interest contracted for, free and clear of such blanket
encumbrance,
upon compliance with the terms and conditions of the
purchase
or lease.
11013.2. Should there not exist in the blanket
encumbrance or
supplementary
agreement a release clause as set forth in Section
11013.1,
then it shall be unlawful for the owner, subdivider, or
agent
to sell or lease lots or parcels within such subdivision unless
one
of the following conditions is complied with:
(a) The entire sum of money paid
or advanced by the purchaser or
lessee
of any such lot or parcel, or such portion thereof as the
commissioner
shall determine is sufficient to protect the interest of
the
purchaser or lessee, shall be deposited into an escrow
depository
acceptable to the commissioner until either (1) a proper
release
is obtained from such blanket encumbrance; or (2) either the
owner,
subdivider, or agent or the purchaser or lessee may default
under
their contract of sale or lease and there is a determination as
to
the disposition of such moneys; or (3) the owner, subdivider, or
agent
orders the return of such moneys to such purchaser or lessee.
(b) The title to the subdivision
is to be held in trust under an
agreement
of trust acceptable to the commissioner until a proper
release
from such blanket encumbrance is obtained.
(c) A bond to the State of
California is furnished to the
commissioner
for the benefit and protection of purchasers or lessees
of
such lots or parcels, in such amount and subject to such terms as
may
be approved by the commissioner, which shall provide for the
return
of the moneys paid or advanced by any purchaser or lessee, for
or
on account of the purchase or lease of any such lot or parcel if
a
proper release from such blanket encumbrance is not obtained;
provided,
however, that if it should be determined that such
purchaser
or lessee, by reason of default or otherwise, is not
entitled
to the return of such moneys, or any portion thereof, then
such
bond shall be exonerated to the extent of the amount of such
moneys
to which such purchaser or lessee is not entitled.
(d) There is conformance to such
other alternative requirement or
method
which the commissioner may deem acceptable to carry into
effect
the intent and provisions of this part.
11013.3. Taxes and assessments levied by public
authority shall not
be
considered a blanket encumbrance within the meaning of Section
11013.
11013.4. If a subdivision is not subject to a
blanket encumbrance,
as
defined in Section 11013, it is unlawful for the owner,
subdivider,
or agent to sell or lease lots or parcels within a
subdivision
unless one of the following conditions is complied with:
(a) The entire sum of money paid
or advanced by the purchaser or
lessee
of any lot or parcel, or such portion thereof as the
commissioner
determines is sufficient to protect the interest of the
purchaser
or lessee, is deposited into an escrow depository
acceptable
to the commissioner or into a trust account acceptable to
the
commissioner to be held in the escrow depository or trust account
until
the legal title or other interest contracted for, whether
title
of record or other interest, is delivered to the purchaser or
lessee
or until (1) either the owner, subdivider, or agent or the
purchaser
or lessee defaults under the contract of sale or lease and
a
determination is made as to the disposition of the money; or (2)
the
owner, subdivider, or agent orders the return of the money to the
purchaser
or lessee.
(b) A bond to the State of
California is furnished to the
commissioner
for the benefit and protection of purchasers or lessees
of
the lots or parcels, in such amount and subject to such terms as
may
be approved by the commissioner, which provides for the return of
the
money paid or advanced by any purchaser or lessee, for or on
account
of the purchase or lease of any lot or parcel in the event
that
the owner, subdivider, or agent does not, within the time
specified
in the contract to sell or lease, or any extension thereof,
deliver
the legal title or other interest contracted for, whether
title
of record or other interest, to the purchaser or lessee for any
reason
other than an uncured default of the purchaser or lessee.
(c) An association, approved by
the commissioner, files with the
commissioner
a certificate in which it certifies that the owner,
subdivider,
or agent is a member of the association and that there is
on
file with the commissioner a bond, of the kind specified in
subdivision
(b), which has been approved by the commissioner as to
amount,
terms and coverage, and which is for the benefit and
protection
of all purchasers and lessees of subdivided lots or
parcels
to be sold or leased by members of the association (all which
the
commissioner may, at the commissioner's option, verify or
require
to be verified).
(d) Proof, satisfactory to the
commissioner, is furnished: (1)
that
security provided or contemplated to be given pursuant to the
provisions
of Section 66493 and Chapter 5 (commencing with Section
66499)
of Division 2 of Title 7 of the Government Code, has been
given
in an amount, the commissioner approves, or that the giving of
such
security is unnecessary; and (2) that a lien and completion bond
or
bonds, approved by the commissioner as to amount, terms and
coverage
and including within its scope all onsite construction work
to
be undertaken on the lots or parcels, has been written and issued
by
an admitted surety insurer; provided, however, that this
subdivision
applies only to an owner, subdivider, or agent who
proposes
to sell or lease the lots or parcels with improvements
thereon
in the nature of residential structures.
(e) The entire sums of moneys
paid or advanced by the purchasers
or
lessees of the lots or parcels, or such portion of the money as
the
commissioner determines is sufficient to protect the interest of
the
purchaser or lessee, is deposited into an escrow depository or
other
agency, acceptable to the commissioner, to be held, in whole or
in
part, by the escrow depository or other agency as provided by
subdivision
(a) or, at the election of the owner, subdivider, or
agent,
to be disbursed, in whole or in part, for the construction of
residential
or other structures to be built on the lots or parcels
within
the subdivision, or such unit or units thereof as the
commissioner
determines, in such manner and pursuant to such
instructions
as the commissioner approves; provided, however, that
the
provisions of this subdivision apply only to an owner,
subdivider,
or agent who proposes to sell or lease the lots or
parcels
with improvements thereon in the nature of residential
structures.
(f) There is conformance to such
other alternative requirement or
method
the commissioner deems acceptable to carry into effect the
intent
and provisions of this part.
11013.5. The public report of the commissioner,
when issued, shall
indicate
the method or procedure selected by the owner or subdivider
to
comply with the provisions of Sections 11013.1, 11013.2 or
11013.4.
11014. The commissioner may investigate any
subdivision being
offered
for sale or lease in this State.
For the purposes of such
investigations
the commissioner may use and rely upon any relevant
information
or data concerning a subdivision obtained by him from the
Federal
Housing Administration, the United States Veterans
Administration
or any other federal agency having comparable duties
and
functions in relation to subdivisions or property therein.
11018. The Real Estate Commissioner shall make
an examination of
any
subdivision, and shall, unless there are grounds for denial,
issue
to the subdivider a public report authorizing the sale or lease
in
this state of the lots or parcels within the subdivision. The
report
shall contain the data obtained in accordance with Section
11010
and which the commissioner determines are necessary to
implement
the purposes of this article. The
commissioner may publish
the
report.
The grounds for denial are:
(a) Failure to comply with any of
the provisions in this chapter
or
the regulations of the commissioner pertaining thereto.
(b) The sale or lease would
constitute misrepresentation to or
deceit
or fraud of the purchasers or lessees.
(c) Inability to deliver title or
other interest contracted for.
(d) Inability to demonstrate that adequate financial
arrangements
have
been made for all offsite improvements included in the offering.
(e) Inability to demonstrate that
adequate financial arrangements
have
been made for any community, recreational or other facilities
included
in the offering.
(f) Failure to make a showing
that the parcels can be used for the
purpose
for which they are offered; and in the case of a subdivision
being
offered for residential purposes failure to make a showing
that
vehicular access and a source of potable domestic water either
is
available or will be available.
(g) Failure to provide in the
contract or other writing the use or
uses
for which the parcels are offered, together with any covenants
or
conditions relative thereto.
(h) Agreements or bylaws to
provide for management or other
services
pertaining to common facilities in the offering, which fail
to
comply with the regulations of the commissioner.
(i) Failure to demonstrate that
adequate financial arrangements
have
been made for any guaranty or warranty included in the offering.
11018.1. (a) A copy of the public report of the
commissioner, when
issued,
shall be given to the prospective purchaser by the owner,
subdivider
or agent prior to the execution of a binding contract or
agreement
for the sale or lease of any lot or parcel in a
subdivision. The requirement of this section extends
to lots or
parcels
offered by the subdivider after repossession. A receipt
shall
be taken from the prospective purchaser in a form and manner as
set
forth in regulations of the Real Estate Commissioner.
(b) A copy of the public report
shall be given by the owner,
subdivider
or agent at any time, upon oral or written request, to any
member
of the public. A copy of the
public report and a statement
advising
that a copy of the public report may be obtained from the
owner,
subdivider or agent at any time, upon oral or written request,
shall
be posted in a conspicuous place at any office where sales or
leases
or offers to sell or lease lots within the subdivision are
regularly
made.
(c) At the same time that a
public report is required to be given
by
the owner, subdivider, or agent pursuant to subdivision (a) with
respect
to a common interest development, as defined, in subdivision
(c)
of Section 1351 of the Civil Code, the owner, subdivider, or
agent
shall give the prospective purchaser a copy of the following
statement:
"COMMON
INTEREST DEVELOPMENT GENERAL INFORMATION
The project described in the
attached Subdivision Public Report is
known
as a common-interest development.
Read the public report
carefully
for more information about the type of development. The
development
includes common areas and facilities which will be owned
or
operated by an owners' association.
Purchase of a lot or unit
automatically
entitles and obligates you as a member of the
association
and, in most cases, includes a beneficial interest in the
areas
and facilities. Since membership
in the association is
mandatory,
you should be aware of the following information before
you
purchase:
Your ownership in this
development and your rights and remedies as
a
member of its association will be controlled by governing
instruments
which generally include a Declaration of Restrictions
(also
known as CC&R's), Articles of Incorporation (or association)
and
bylaws. The provisions of these
documents are intended to be,
and
in most cases are, enforceable in a court of law. Study these
documents
carefully before entering into a contract to purchase a
subdivision
interest.
In order to provide funds for
operation and maintenance of the
common
facilities, the association will levy assessments against your
lot
or unit. If you are delinquent in
the payment of assessments,
the
association may enforce payment through court proceedings or your
lot
or unit may be liened and sold through the exercise of a power
of
sale. The anticipated income and
expenses of the association,
including
the amount that you may expect to pay through assessments,
are
outlined in the proposed budget.
Ask to see a copy of the budget
if
the subdivider has not already made it available for your
examination.
A homeowner association provides
a vehicle for the ownership and
use
of recreational and other common facilities which were designed
to
attract you to buy in this development.
The association also
provides
a means to accomplish architectural control and to provide a
base
for homeowner interaction on a variety of issues. The
purchaser
of an interest in a common-interest development should
contemplate
active participation in the affairs of the association.
He
or she should be willing to serve on the board of directors or on
committees
created by the board. In short,
"they" in a common
interest
development is "you."
Unless you serve as a member of the
governing
board or on a committee appointed by the board, your
control
of the operation of the common areas and facilities is
limited
to your vote as a member of the association. There are
actions
that can be taken by the governing body without a vote of the
members
of the association which can have a significant impact upon
the
quality of life for association members.
Until there is a sufficient number
of purchasers of lots or units
in
a common interest development to elect a majority of the governing
body,
it is likely that the subdivider will effectively control the
affairs
of the association. It is
frequently necessary and equitable
that
the subdivider do so during the early stages of development.
It
is vitally important to the owners of individual subdivision
interests
that the transition from subdivider to resident-owner
control
be accomplished in an orderly manner and in a spirit of
cooperation.
When contemplating the purchase
of a dwelling in a common interest
development,
you should consider factors beyond the attractiveness
of
the dwelling units themselves.
Study the governing instruments
and
give careful thought to whether you will be able to exist happily
in
an atmosphere of cooperative living where the interests of the
group
must be taken into account as well as the interests of the
individual. Remember that managing a common
interest development is
very
much like governing a small community ...
the management can
serve
you well, but you will have to work for its success."
Failure to provide the statement
in accordance with this
subdivision
shall not be deemed a violation subject to Section 10185.
11018.2. No person shall sell or lease, or offer
for sale or lease
in
this state any lots or parcels in a subdivision without first
obtaining
a public report from the Real Estate Commissioner. This
section
shall not apply to subdivisions for which a notice of
intention
is not required under the provisions of this chapter.
11018.3. Any subdivider objecting to the denial
of a public report
may,
within 30 days after receipt of the order of denial, file a
written
request for a hearing. The
commissioner shall hold the
hearing
within 20 days thereafter unless the party requesting the
hearing
requests a postponement. If the hearing is not held within 20
days
after request for a hearing is received plus the period of the
postponement
or if a proposed decision is not rendered within 45 days
after
submission and an order adopting or rejecting the proposed
decision
is not issued within 15 days thereafter, the order of denial
shall
be rescinded and a public report issued.
11018.5. With respect to the subdivisions and interests
of the type
described
in Section 11004.5, and in addition to the other grounds
for
denial of a public report as set forth in this code, the
commissioner
shall issue a public report if the commissioner finds
the
following with respect to any such subdivision or interest:
(a) (1) Reasonable arrangements
have been made to assure
completion
of the subdivision and all offsite improvements included
in
the offering.
(2) If the condominium or
community apartment project, stock
cooperative
or planned development, or premises or facilities within
the
common area are not completed prior to the issuance of a final
subdivision
public report on the project, the subdivider shall
specify
a reasonable date for completion and shall comply with one of
the
following conditions:
(A) Arranges for lien and
completion bond or bonds in an amount
and
subject to such terms, conditions and coverage as the
commissioner
may approve to assure completion of the improvements
lien
free.
(B) All funds from the sale of lots or parcels or such
portions
thereof
as the commissioner shall determine are sufficient to assure
construction
of the improvement or improvements, shall be impounded
in
a neutral escrow depository acceptable to the commissioner until
the
improvements have been completed and all applicable lien periods
have
expired; provided, however, the commissioner determines the time
for
the completion is reasonable.
(C) An amount sufficient to cover
the costs of construction shall
be
deposited in a neutral escrow depository acceptable to the
commissioner
under a written agreement providing for disbursements
from
that escrow as work is completed.
(D) If the project is a
condominium situated on a single parcel as
shown
on an approved final subdivision map, arrange for (i) lien and
completion
bond or bonds in an amount sufficient to assure lien-free
completion
of all common area improvements not located in a
residential
structure, and (ii) placement of all funds, or such
portions
thereof as the commissioner shall determine are sufficient,
from
the sales of condominium interests in a neutral escrow
depository
acceptable to the commissioner.
The funds for purchase or
lease
of the condominium interest shall remain in the escrow account
until
the residential structure in which the purchaser's separate
unit
is located has been completed, and all lien periods applicable
to
the purchaser's separate and undivided interests in the entire
project
arising out of the work of improvement performed by either
the
subdivider or any successor in interest to the subdivider have
expired
or have been insured against in a manner satisfactory to the
commissioner.
(E) Such other alternative plan
as may be approved by the
commissioner.
(b) The deeds, conveyances,
leases, subleases, or instruments or
assignment
to be used are adequate to transfer to the purchasers the
legal
interests and uses which the owner or subdivider represents the
purchasers
will receive.
(c) After transfer of title to
the first lot, apartment, or
condominium
in the subdivision to any purchaser, the provisions of
the
declaration of restrictions, articles of incorporation, bylaws,
management
contracts (and the provisions of any and all other
documents
establishing, in whole or in part, the plan for use,
enjoyment,
maintenance, and preservation of the subdivision) as last
submitted
to the commissioner prior to issuance of the final public
report,
shall be binding upon the purchaser and occupant of every
other
lot, apartment, or condominium in the subdivision, including,
except
with regard to a limited-equity housing cooperative,
purchasers
acquiring title by foreclosure, whether judicial or
nonjudicial,
or by deed in lieu thereof, under any mortgage or deed
of
trust, whether or not the mortgage or deed of trust was recorded
prior
to recordation of the covenants, conditions and restrictions
applicable
to the first lot, apartment, or condominium.
(d) Reasonable arrangements have
been made for delivery of control
over
the subdivision and all offsite land and improvements included
in
the offering, to the purchasers of lots, apartments, or
condominiums
in the subdivision.
(e) Reasonable arrangements have
been or will be made as to the
interest
of each of the purchasers of lots, apartments, or
condominiums
in the subdivision with respect to the management,
maintenance,
preservation, operation, use, right of resale, and
control
of their lots, apartments, or condominiums, and such other
areas
or interests, whether or not within, or pertaining to, areas
within
the boundaries of the subdivision, as have been or will be
made
subject to the plan of control proposed by the owner and
subdivider,
and which are included in the offering.
"Purchaser," as used in
this section, shall include within its
meaning
a lessee of the legal interests described in Section 11003 of
this
code.
11018.6. Any person offering to sell or lease
any interest subject
to
the requirements of subdivision (a) of Section 11018.1 in a
subdivision
described in Section 11004.5 shall make a copy of each of
the
following documents available for examination by a prospective
purchaser
or lessee before the execution of an offer to purchase or
lease
and shall give a copy thereof to each purchaser or lessee as
soon
as practicable before transfer of the interest being acquired by
the
purchaser or lessee:
(a) The declaration of covenants,
conditions, and restrictions for
the
subdivision.
(b) Articles of incorporation or
association for the subdivision
owners
association.
(c) Bylaws for the subdivision
owners association.
(d) Any other instrument which
establishes or defines the common,
mutual,
and reciprocal rights, and
responsibilities of the owners or
lessees
of interests in the subdivision as shareholders or members
of
the subdivision owners association or otherwise.
(e) To the extent available, the
current financial information and
related
statements as specified in subdivision (a) of Section 1365
of
the Civil Code, for subdivisions subject to those provisions.
(f) A statement prepared by the
governing body of the association
setting
forth the outstanding delinquent assessments and related
charges
levied by the association against the subdivision interests
in
question under authority of the governing instruments for the
subdivision
and association.
11018.7. (a) No amendment or modification of
provisions in the
declaration
of restrictions, bylaws, articles of incorporation or
other
instruments controlling or otherwise affecting rights to
ownership,
possession, or use of interests in subdivisions as defined
in
Sections 11000.1 and 11004.5 which would materially change those
rights
of an owner, either directly or as a member of an association
of
owners, is valid without the prior written consent of the Real
Estate
Commissioner during the period of time when the subdivider or
his
or her successor in interest holds or directly controls as many
as
one-fourth of the votes that may be cast to effect that change.
(b) The commissioner shall not
grant his or her consent to the
submission
of the proposed change to a vote of owners or members if
he
or she finds that the change if effected would create a new
condition
or circumstance that would form the basis for denial of a
public
report under Sections 11018 or 11018.5.
An application for consent may be
filed by any interested person
on
a form prescribed by the commissioner.
A filing fee to be fixed
by
regulation, but not to exceed twenty-five dollars ($25), shall
accompany
each application.
There shall be no official
meeting of owners or members nor any
written
solicitation of them for the purpose of effectuating a change
referred
to herein except in accordance with a procedure approved by
the
commissioner after the application for consent has been filed
with
him or her; provided, however, that the governing body of the
owners
association may meet and vote on the question of submission of
the
proposed change to the commissioner.
11018.12. (a) The commissioner may issue a
conditional public
report
for a subdivision specified in Section 11004.5 if the
requirements
of subdivision (e) are met, all deficiencies and
substantive
inadequacies in the documents that are required to make
an
application for a final public report for the subdivision
substantially
complete have been corrected, the material elements of
the
setup of the offering to be made under the authority of the
conditional
public report have been established, and all requirements
for
the issuance of a public report set forth in the regulations of
the
commissioner have been satisfied, except for one or more of the
following
requirements, as applicable:
(1) A final map has not been
recorded.
(2) A condominium plan pursuant
to subdivision (e) of Section 1351
of
the Civil Code has not been recorded.
(3) A declaration of covenants,
conditions, and restrictions
pursuant
to Section 1353 of the Civil Code has not been recorded.
(4) A declaration of annexation
has not been recorded.
(5) A recorded subordination of
existing liens to the declaration
of
covenants, conditions, and restrictions or declaration of
annexation,
or escrow instructions to effect recordation prior to the
first
sale, are lacking.
(6) Filed articles of incorporation
are lacking.
(7) A current preliminary report
of a licensed title insurance
company
issued after filing of the final map and recording of the
declaration
covering all subdivision interests to be included in the
public
report has not been provided.
(8) Other requirements the
commissioner determines are likely to
be
timely satisfied by the applicant, notwithstanding the fact that
the
failure to meet these requirements makes the application
qualitatively
incomplete.
(b) The commissioner may issue a
conditional public report for a
subdivision
not referred to or specified in Section 11000.1 or
11004.5
if the requirements of subdivision (e) are met, all
deficiencies
and substantive inadequacies in the documents that are
required
to make an application for a final public report for the
subdivision
substantially complete have been corrected, the material
elements
of the setup of the offering to be made under the authority
of
the conditional public report have been established, and all
requirements
for issuance of a public report set forth in the
regulations
of the commissioner have been satisfied, except for one
or
more of the following requirements, as applicable:
(1) A final map has not been
recorded.
(2) A declaration of covenants, conditions,
and restrictions has
not
been recorded.
(3) A current preliminary report
of a licensed title insurance
company
issued after filing of the final map and recording of the
declaration
covering all subdivision interests to be included in the
public
report has not been provided.
(4) Other requirements the
commissioner determines are likely to
be
timely satisfied by the applicant, notwithstanding the fact that
the
failure to meet these requirements makes the application
qualitatively
incomplete.
(c) A decision by the
commissioner to not issue a conditional
public
report shall be noticed in writing to the applicant within
five
business days and that notice shall specifically state the
reasons
why the report is not being issued.
(d) Notwithstanding the
provisions of Section 11018.2, a person
may
sell or lease, or offer for sale or lease, lots or parcels in a
subdivision
pursuant to a conditional public report if, as a
condition
of the sale or lease or offer for sale or lease, delivery
of
legal title or other interest contracted for will not take place
until
issuance of a public report and provided that the requirements
of
subdivision (e) are met.
(e) (1) Evidence shall be
supplied that all purchase money will be
deposited
in compliance with subdivision (a) of Section 11013.2 or
subdivision
(a) of Section 11013.4, and in the case of a subdivision
referred
to in subdivision (a) of this section, evidence shall be
given
of compliance with paragraphs (1) and (2) of subdivision (a) of
Section
11018.5.
(2) A description of the nature
of the transaction shall be
supplied.
(3) Provision shall be made for
the return of the entire sum of
money
paid or advanced by the purchaser if a subdivision public
report
has not been issued during the term of the conditional public
report,
or as extended, or the purchaser is dissatisfied with the
public
report because of a change pursuant to Section 11012.
(f) A subdivider, principal, or
his or her agent shall provide a
prospective
purchaser a copy of the conditional public report and a
written
statement including all of the following:
(1) Specification of the
information required for issuance of a
public
report.
(2) Specification of the
information required in the public report
that
is not available in the conditional public report, along with a
statement
of the reasons why that information is not available at
the
time of issuance of the conditional public report.
(3) A statement that no person
acting as a principal or agent
shall
sell or lease, or offer for sale or lease, lots or parcels in a
subdivision
for which a conditional public report has been issued
except
as provided in this article.
(4) Specification of the
requirements of subdivision (e).
(g) The prospective purchaser
shall sign a receipt that he or she
has
received and has read the conditional public report and the
written
statement provided pursuant to subdivision (f).
(h) The term of a conditional
public report shall not exceed six
months,
and may be renewed for one additional term of six months if
the
commissioner determines that the requirements for issuance of a
public
report are likely to be satisfied during the renewal term.
(i) The term of a conditional
public report for attached
residential
condominium units, as defined pursuant to Section 783 of
the
Civil Code, consisting of 25 units or more as specified on the
approved
tentative tract map, shall not exceed 30 months and may be
renewed
for one additional term of six months if the commissioner
determines
that the requirements for issuance of a public report are
likely
to be satisfied during the renewal term.
11018.13. (a) After written notice to the
subdivider, or the
subdivider's
representative, the commissioner may abandon any
application
for a subdivision public report if the data required by
Section
11010 has not been furnished within three years from the date
a
notice of intention is filed for a subdivision public report.
(b) The commissioner shall adopt
regulations establishing time
periods
for notifying the subdivider, or the subdivider's
representative,
of the intention to abandon a file, and establishing
hardship
or justifiable extenuating circumstances the commissioner
deems
acceptable.
11018.14. The commissioner shall not be a
responsible agency for
purposes
of the California Environmental Quality Act (Division 13
(commencing
with Section 21000), Public Resources Code). Receipt by
the
commissioner of a copy of an environmental impact report or
negative
declaration prepared pursuant to the California
Environmental
Quality Act shall be conclusive evidence of compliance
with
that act for purposes of issuing a subdivision public report.
11019. (a) Whenever the commissioner
determines from available
evidence
that a person has done any of the following, the
commissioner
may order the person to desist and refrain from those
acts
and omissions or from the further sale or lease of interests in
the
subdivision until the condition has been corrected:
(1) Has violated or caused the
violation of any provision of this
part
or the regulations pertaining thereto.
(2) Has violated or caused a
violation of Section 17537, 17537.1,
or
17539.1, in advertising or promoting the sale of subdivision
interests.
(3) Has failed to fulfill
representations or assurances with
respect
to the subdivision or the subdivision offering upon which the
department
relied in issuing a subdivision public report.
(4) Has failed to inform the
department of material changes that
have
occurred in the subdivision or subdivision offering which have
caused
the subdivision public report to be misleading or inaccurate
or
which would have caused the department to deny a public report if
the
conditions had existed at the time of issuance.
(b) Upon receipt of such an
order, the person or persons to whom
the
order is directed shall immediately discontinue activities in
accordance
with the terms of the order.
(c) Any person to whom the order
is directed may, within 30 days
after
service thereof upon him, file with the commissioner a written
request
for hearing to contest the order.
The commissioner shall
after
receipt of a request for hearing assign the matter to the
Office
of Administrative Hearings to conduct a hearing for findings
of
fact and determinations of the issues set forth in the order. If
the
hearing is not commenced within 15 days after receipt of the
request
for hearing, or on the date to which continued with the
agreement
of the person requesting the hearing, or if the decision of
the
commissioner is not rendered within 30 days after completion of
the
hearing, the order shall be deemed to be vacated.
(d) Service and proof of service
of an order issued by the
commissioner
pursuant to this section may be made in a manner and
upon
such persons as prescribed for the service of summons in Article
3
(commencing with Section 415.10), Article 4 (commencing with
Section
416.10) and Article 5 (commencing with Section 417.10) of
Chapter
4 of Title 5 of Part 2, of the Code of Civil Procedure.
11020. (a) It shall be unlawful for any person
to make, issue,
publish,
deliver, or transfer as true and genuine any public report
which
is forged, altered, false, or counterfeit, knowing it to be
forged,
altered, false, or counterfeit or to cause to be made or
participate
in the making, issuance, delivery, transfer, or
publication
of a public report with knowledge that it is forged,
altered,
false, or counterfeit.
(b) Any person who violates
subdivision (a) is guilty of a public
offense
punishable by a fine not exceeding ten thousand dollars
($10,000)
or by imprisonment in the state prison, or in the county
jail
not exceeding one year, or by both that fine and imprisonment.
(c) The penalty provided by this
section is not an exclusive
penalty,
and does not affect any other penalty, relief, or remedy
provided
by law.
11021. For the purpose of calculating the
period of any applicable
statute
of limitations in any action or proceeding, either civil or
criminal
involving any violation of this chapter, the cause of action
shall
be deemed to have accrued not earlier than the time of
recording
with the county recorder of the county in which the
property
is situated of any deed, lease or contract of sale conveying
property
sold or leased in violation of this chapter and which
describes
a lot or parcel so wrongfully sold or leased.
This section does not prohibit
the maintenance of any such action
at
any time before the recording of such instruments.
11022. (a) It is unlawful for an owner, subdivider, agent or
employee
of a subdivision or other person, with intent directly or
indirectly
to sell or lease subdivided lands or lots or parcels
therein,
to authorize, use, direct, or aid in the publication,
distribution,
or circularization of an advertisement, radio
broadcast,
or telecast concerning subdivided lands, that contains a
statement,
pictorial representation, or sketch that is false or
misleading.
(b) An owner, subdivider, agent,
or employee of an owner or
subdivider
may, prior to the use, publication, distribution, or
circulation
of any advertisement concerning subdivided lands, submit
the
same to the department for approval.
The submission shall be
accompanied
by a fee of not more than seventy-five dollars ($75).
The
commissioner shall prescribe by regulation the amount of the fee.
If disapproval of the proposed
advertisement is not communicated
by
the department to the owner, subdivider, agent, or employee within
15
calendar days after receipt of the copy of the proposed
advertisement,
the advertisement shall be deemed approved, but the
department
shall not be estopped from disapproving a later
distribution,
circulation, or use of the same or similar advertising.
(c) Nothing in this section shall
be construed to hold the
publisher
or employee of any newspaper, or any job printer, or any
broadcaster,
or telecaster, or any magazine publisher, or any of the
employees
thereof, liable for any publication herein referred to
unless
the publisher, employee, or printer has actual knowledge of
the
falsity thereof or has an interest either as an owner or agent in
the
subdivided lands so advertised.
11023. Any person who violates Section 11010,
11010.1, 11010.8,
11013.1,
11013.2, 11013.4, 11018.2, 11018.7, 11018.9, 11018.10,
11018.11,
11019, or 11022 is guilty of a public offense punishable by
a
fine not exceeding ten thousand dollars ($10,000) or by
imprisonment
in the state prison, or in a county jail not exceeding
one year, or by both
that fine and imprisonment.