Bill Text: CA AB1139 | 2017-2018 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Real property: transfer fees: notices.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2017-07-31 - Chaptered by Secretary of State - Chapter 148, Statutes of 2017. [AB1139 Detail]

Download: California-2017-AB1139-Introduced.html

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CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 1139

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Introduced by Assembly Member Reyes

February 17, 2017

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An act to amend Section 1098 of the Civil Code, relating to real property.

LEGISLATIVE COUNSEL'S DIGEST

AB 1139, as introduced, Reyes. Real property: transfer fees: notices.

Existing law defines a transfer fee with respect to real property and requires the receiver of the fee as a condition of the payment of the fee, on and after January 1, 2009, to record specified information in the chain of title. Existing law provides that certain fees in a document recorded against the property on or before December 31, 2007, are not transfer fees if a prospective transferee is given notice that describes specified characteristics of the fee. Existing law requires that this information be set forth in a single document and prohibits incorporation by reference from any other document.

This bill would require the single document, described above, also to include a notice describing potential prohibitions on federal financing for property encumbered by a private transfer fee that does not provide a direct benefit to the property.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 1098 of the Civil Code is amended to read:

1098.

 (a) A “transfer fee” is any fee payment requirement imposed within a covenant, restriction, or condition contained in any deed, contract, security instrument, or other document affecting the transfer or sale of, or any interest in, real property that requires a fee be paid as a result of transfer of the real property. A transfer fee does not include any of the following:

(1) Fees or taxes imposed by a governmental entity.

(2) Fees pursuant to mechanics’ liens.

(3) Fees pursuant to court-ordered transfers, payments, or judgments.

(4) Fees pursuant to property agreements in connection with a legal separation or dissolution of marriage.

(5) Fees, charges, or payments in connection with the administration of estates or trusts pursuant to Division 7 (commencing with Section 7000), Division 8 (commencing with Section 13000), or Division 9 (commencing with Section 15000) of the Probate Code.

(6) Fees, charges, or payments imposed by lenders or purchasers of loans, as these entities are described in subdivision (c) of Section 10232 of the Business and Professions Code.

(7) Assessments, charges, penalties, or fees authorized by the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4) or by the Commercial and Industrial Common Interest Development Act (Part 5.3 (commencing with Section 6500) of Division 4).

(8) Fees, charges, or payments for failing to comply with, or for transferring the real property prior to satisfying, an obligation to construct residential improvements on the real property.

(9) (A) Any fee reflected in a document recorded against the property on or before December 31, 2007, that is separate from any covenants, conditions, and restrictions, and that substantially complies with subdivision (a) of Section 1098.5 by providing a prospective transferee notice of the following:

(i) Payment of a transfer fee is required.

(ii) The amount or method of calculation of the fee.

(iii) The date or circumstances under which the transfer fee payment requirement expires, if any.

(iv) The entity to which the fee will be paid.

(v) The general purposes for which the fee will be used.

(B) A fee reflected in a document recorded against the property on or before December 31, 2007, that is not separate from any covenants, conditions, and restrictions, or that incorporates by reference from another document, is a “transfer fee” for purposes of Section 1098.5. A transfer fee recorded against the property on or before December 31, 2007, that complies with subparagraph (A) and incorporates by reference from another document is unenforceable unless recorded against the property on or before December 31, 2016, in a single document that complies with subdivision (b) and with Section 1098.5.

(b) The information in paragraph (9) of subdivision (a) shall be set forth in a single document and shall not be incorporated by reference from any other document. The document setting forth this information shall include a notice describing potential prohibitions on federal financing for property encumbered by a private transfer fee that does not provide a direct benefit to the property.